AGREEMENT
1. Initial Transaction. Reference is made to that certain Asset
Purchase Agreement dated as of June 30, 1998, pursuant to which United Internet
Technologies, Inc. (formerly known as United Leisure Interactive, Inc. and
hereafter referred to as "United") sold certain assets to Netcruise Interactive,
Inc. ("Netcruise"), in consideration of, among other things, (i) 2,000,000
shares (the "Shares") of the Common shares (the "Common Stock") of Genisys
Reservation Systems, Inc. ("Genisys"), and (ii) two warrants (the "Warrants")
each entitling the holder to purchase 800,000 shares of Common Stock.
2. Curative Action and Reasons Therefor. Genisys has advised United
that (i) the foregoing matter has caused Genisys to be in inadvertent violation
of Nasdaq Marketplace Rule 4310 (c) (25) (H) (the "Rule"), because the issuance
of the Shares and the Warrants was not approved by Genisys' shareholders as
required by the Rule; and (ii) Nasdaq has informed Genisys that it will delist
the Common Stock absent the undersigned parties taking curative action (the
"Curative Action") acceptable to Nasdaq. Accordingly, Genisys and United, by
this Agreement, have, subject to the execution of this Agreement by all
individuals and entities reflected on the signature page hereto, agreed to take
the following Curative Action:
(a) Subject to compliance by Genisys with the provisions of Section 2
(b) below, United will return (the "Return") to Genisys
(i) 11100,000 of the Shares for cancellation (the remaining Shares are
hereinafter referred to as the "Retained Shares"), and (ii) the Warrants.
(b) Simultaneously with the Return, Genisys will duly and validly
authorize, issue and deliver (the "Delivery") to United 1,100,000 Preferred
shares of Genisys having the following rights, preferences, privileges and
restrictions (the "United Preferred Shares"): (i) a par value of $.000l per
United Preferred Share; (ii) no voting rights except (A) as required by law, and
(B) that the rights, preferences, privileges and restrictions of the United
Preferred Shares shall not be amended, modified or affected without the prior
written consent of the holders thereof; (iii) the following dividend rights
(with all dividends to accrue pro rata on a daily basis from the first day of
the period with respect to which they are payable): (A) one mandatory dividend
at the total annual rate of $275,000 (accruing from October 1, 1998), payable on
September 30, 1999, (B) mandatory dividends at the total quarterly rate of
$68,750 (accruing from the first day of the relevant calendar quarter), payable
on the last day of each calendar quarter commencing with the calendar quarter
ending December 31, 1999, and (C) additional mandatory dividends computed at the
rate of 10% per annum on the amount of any dividends not paid when due (accruing
from and after such relevant due dates), payable as and when (and to the full
extent of) funds become legally available for such purpose (all of the foregoing
being referred to as the "Dividend
Payment Rights"); (iv) a mandatory liquidation preference equal to the sum of
$2,750,000 plus all accrued and unpaid dividends in respect of the Dividend
Payment Rights, but not to exceed the maximum permitted by New Jersey Law,
payable upon any liquidation or dissolution of Genisys (the "Liquidation
Preference"); (v) first seniority rights for the United Preferred Shares over
all other classes and series of Genisys' capital stock in respect of dividends
or other distributions on or with respect to any shares of Genisys' capital
stock, including without limitation amounts payable upon any dissolution or
liquidation of Genisys (and, in furtherance and not by way of limitation of the
foregoing, a prohibition on Genisys paying any dividend or making any other
distribution on or with respect to or redeeming or purchasing any shares of its
capital stock, other than the United Preferred Shares, while any of the United
Preferred Shares are outstanding); (vi) automatic, mandatory conversion of the
United Preferred Shares into an equal number of shares of Common Stock (with
full anti-dilution protection), immediately prior to the consummation of any
merger, consolidation, reorganization or sale of all or substantially all of the
assets of or any similar transaction involving Genisys or any of its
subsidiaries except that Genisys can sell its travel related business, provided
that such business represents less than 30~ of the assets of Genisys on a
consolidated basis; and (vii) automatic, mandatory conversion of the United
Preferred Shares into an equal number of shares of Common Stock (with full
anti-dilution protection) upon Genisys obtaining the requisite approval of its
shareholders (other than the holders of the United Preferred Shares and the
holders of the Retained Shares) to the Transaction as contemplated by Section 4
below, hereinafter the "Requisite Approval"), with all accrued and unpaid
dividends in respect of the Dividend Payment Rights to be immediately due and
payable by Genisys to the holders of the United Preferred Shares whether or not
such dividends are otherwise yet payable (unless the Requisite Approval has been
obtained and the United Preferred Shares have been converted, as aforesaid, on
or before June 30, 1999, in which event no such dividends shall be due or
payable). For purposes of this Agreement, the term "full anti-dilution
protection" shall be applied in the same manner as the anti-dilution provisions
are to be applied in the Warrants.
The Delivery shall, in form and substance, be satisfactory to United.
3. Return of Warrants. If the Requisite Approval is obtained, Genisys
will immediately redeliver the Warrants to United.
4. Shareholders Meeting. Genisys will, in accordance with all
applicable legal and Nasdaq requirements, call a meeting (the "Shareholders
Meeting") of all of the holders of its voting capital stock to consider and
approve the issuance of 1,100,000 Shares and the Warrants, as well as any other
matters that may properly come before the Shareholders Meeting.
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At the Shareholders Meeting, each of the undersigned shareholders of
Genisys agrees to vote all of its, his or her shares of Genisys' capital stock
(whether owned of record and/or beneficially), and Genisys agrees to use its
best efforts to cause all of Genisys' other shareholders to vote all of their
shares of Genisys capital stock, in favor of the issuance of the 1,100,000
Shares and the Warrants.
If, for any reason whatsoever, the aforesaid 1,100,000 Shares and the
Warrants are not issued to Netcruise on or before June 30, 1999, then, in
addition to any and all other rights and remedies available to United at
United's option, up to four (4) members of the Board of Directors of Genisys
("Board"), which members shall be selected by United, shall forthwith resign
and, concurrently therewith, all of the remaining members of the Board shall
elect those persons chosen by United to replace them. By their signatures below,
those shareholders of Genisys who are also members of the Board agree to take
such action as to carry out the terms of this provision.
5. Attorneys Fees and Other Expenses. Genisys will bear all of its own
expenses (including, without limitation, attorneys' fees and expenses) in
connection with this Agreement, the subject matter hereof and the consummation
of the transactions contemplated hereby. Genisys shall also be responsible, and
shall promptly reimburse United upon demand, for all expenses (including,
without limitation, attorneys' fees and expenses) incurred by United and its
affiliates in connection with this Agreement, the subject matter hereof and the
consummation of the transactions contemplated hereby (including, without
limitation, such thereof as may be incurred by such persons in connection with
complying with any SEC reporting requirements attendant to the foregoing); and,
in furtherance and not by way of limitation of the foregoing, Genisys shall,
simultaneously with the execution hereof by United, deliver to United the sum of
$5,000 as an advance to be used against such expenses (any unused portion
thereof to be refunded by United to Genisys following the completion of the
Shareholders Meeting).
IN WITNESS WHEREOF, for good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, each of the undersigned has
executed and delivered this Agreement as of the
day of October, 1998.
UNITED INTERNET TECHNOLOGIES, GENISYS RESERVATION SYSTEMS,
INC. INC.
BY:_____________________ BY:__________________
PRINCIPAL GENISYS SHAREHOLDERS:
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XXXXXX X. BAGATELLE XXXX X. XXXXX
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LOEB HOLDING CORPORATION XXXX X. XXXXX
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LOEB PARTNERS CORP. XXXX X. XXXXX
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HSB CAPITAL XXXXXXXX X. XXXX
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XXXXX X. XXXX S. XXXXXXX XXXXX
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