AGREEMENT EXHIBIT 2.2
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Final 10/27/98
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1. Initial Transaction. Reference is made to that certain Asset Purchase
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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 Reason Therefor. Genisys has advised United that
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(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) 1,100,000 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 $.0001 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
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will immediately redeliver the Warrants to United.
4. Shareholders Meeting. Genisys will, in accordance with all applicable
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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
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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).
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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 28th day of October, 1998.
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UNITED INTERNET TECHNOLOGIES, GENISYS RESERVATION SYSTEMS, INC.
INC.
By /s/ Xxxxx Xxxxxxx By /s/ Xxxxxxxx X. Xxxx
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PRINCIPAL GENISYS SHAREHOLDERS:
/s/ Xxxxxx X. Bagatelle /s/ Xxxx X. Xxxxx
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XXXXXX X. BAGATELLE XXXX X. XXXXX
/s/ Xxxxxx X. Bagatelle,Mg.Dir /s/ Xxxx X. Xxxxx
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LOEB HOLDING CORPORATION XXXX X. XXXXX
/s/ Xxxxxx X. Bagatelle,Mg.Dir /s/ Xxxx X. Xxxxx
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LOEB PARTNERS CORP. XXXX X. XXXXX
/s/ Xxxxxx X.Bagatelle,Partner /s/ Xxxxxxxx X. Xxxx
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HSB CAPITAL XXXXXXXX X. XXXX
/s/ Xxxxx X. Xxxx /s/ S. Xxxxxxx Xxxxx
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XXXXX X. XXXX S. XXXXXXX XXXXX
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