Exhibit 10.26
OMNIBUS STOCK PURCHASE,
RESTRUCTURING AND GENERAL RELEASE AGREEMENT
This Omnibus Stock Purchase, Restructuring and General Release
Agreement (the "Agreement") is made and entered into as of the 24th day of
April, 2000, by and between United Leisure Corporation, a Delaware corporation
("ULC"), United Internet Technologies, Inc., a Delaware corporation and
wholly-owned subsidiary of ULC (formerly known as United Leisure Interactive,
Inc. and hereinafter referred to as "UIT"), Xxxxx Xxxxxxx ("X. Xxxxxxx"), Xxxxx
Xxxxxxx ("X. Xxxxxxx"), xxxxxxxxx.xxx, inc., a New Jersey corporation (formerly
known as Genisys Reservations Systems, Inc. and hereinafter referred to as
"Netcruise"), Netcruise Interactive, Inc., a New Jersey corporation and
wholly-owned subsidiary of Netcruise ("NII"), and Xxxxxx Xxxxx ("Perri"), with
reference to the following facts:
Recitals:
1. ULC, UIT, Netcruise and NII heretofore entered into that certain Asset
Purchase Agreement, dated as of June 30th, 1998 (together with all exhibits
thereto and all documents and instruments of every type which were executed in
connection therewith, the "APA"), pursuant to which, among other things, UIT
sold, to NII, all of UIT's right, title and interest in and to the License (as
defined in the APA) and the other Assets (as defined in the APA), in exchange
for, among other things, (i) 2,000,000 shares (the "Shares") of the common
shares (the "Common Stock") of Netcruise, and (ii) two common stock purchase
warrants collectively exercisable for the purchase of up to an additional
1,600,000 shares of Common Stock (collectively, the "Old UIT Warrants").
Pursuant to the APA, Netcruise also issued, to X. Xxxxxxx, two common stock
purchase warrants collectively exercisable for the purchase of up to 400,000
shares of Common Stock (collectively, the "Old X. Xxxxxxx Warrants").
2. The APA was subsequently amended pursuant to that certain Agreement, dated as
of the 28th day of October, 1998 (the "First Amendment"); and the APA and the
First Amendment were subsequently amended pursuant to that certain Agreement,
dated as of January 25, 1999 (the "Second Amendment"). The APA, the First
Amendment and the Second Amendment, together with any and all documents and
instruments of every type which have heretofore been executed in connection
therewith, and all amendments to the foregoing, are sometimes hereinafter
collectively referred to as the "Amended APA."
3. Certain disputes have arisen between the parties (other than Perri) in
respect of the Amended APA, which all of the parties wish to fully, finally and
forever resolve pursuant to this Agreement.
4. Perri desires to purchase from UIT, and UIT desires to sell to Perri,
1,500,000 of the Shares (the "Perri Shares") pursuant to this Agreement; and
Netcruise and NII have consented to such purchase and sale.
5. UIT represents that it has not sold, encumbered or otherwise transferred any
of the Shares or any of the Old UIT Warrants, or any interest therein, except to
the extent contemplated by the Amended APA.
6. X. Xxxxxxx represents that he either has never received, or has misplaced,
the requisite instruments representing the Old X. Xxxxxxx Warrants
(collectively, the "Old X. Xxxxxxx Certificates"); but that he has not sold,
encumbered or otherwise transferred any of the Old X. Xxxxxxx Warrants, or any
interest therein.
7. Based upon the respective representations of UIT and X. Xxxxxxx contained in
Recital E and Recital F above, and Netcruise's and NII's failure to effect the
Delivery (as defined in the First Amendment) of the United Preferred Shares (as
defined in the First Amendment) to UIT (which failure, together with all other
outstanding issues between the parties, is being fully, finally and forever
resolved pursuant to this Agreement), Netcruise and NII represent that (i) the
Shares, the Old UIT Warrants and the Old X. Xxxxxxx Warrants are duly and
validly authorized, issued, outstanding and fully paid and nonassessable; (ii)
UIT owns all of the Shares and the Old UIT Warrants, of record and beneficially,
free and clear of all liens, claims and encumbrances of every type
(collectively, "Encumbrances"); (iii) X. Xxxxxxx owns all of the Old X. Xxxxxxx
Warrants, of record and beneficially, free and clear of all Encumbrances; (iv)
UIT has the right to sell the Perri Shares to Perri pursuant to this Agreement;
and (v) when the Perri Shares have been purchased by and sold to Perri pursuant
to the terms of this Agreement, Perri will own the Perri Shares free and clear
of all Encumbrances. Based upon the same reasons and also in reliance upon the
representation of Netcruise and NII contained in Recital G(i), UIT joins in the
representations made with respect to it by Netcruise and NII in Recital G(ii),
(iv) and (v), and X. Xxxxxxx joins in the representations made with respect to
him by Netcruise and NII in Recital G(iii).
8. Each of the parties represents that such party's execution and delivery of
this Agreement, and the performance by such party of such party's obligations
hereunder, have been duly and validly authorized by all necessary corporate and
other action, and that this Agreement is binding upon and enforceable against
such party in accordance with its terms.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Incorporation by Reference of Recitals. The foregoing Recitals are
incorporated herein by this reference; and the statements contained therein
shall be deemed to constitute representations, warranties, covenants and
agreements of the parties to which they relate.
2. Perri Shares; Etc.
(1) Purchase and Sale. In reliance upon the truth and accuracy of the
representations and warranties of Perri, Netcruise and NII contained in this
Agreement, but subject to UIT's receipt from Perri of the full Perri Shares
Purchase Price (hereinafter defined) by wire transfer (the "Wire Transfer") into
a bank account designated by UIT for such purpose to Xxxxxxx X. Xxxxx, Esq.
("Xxxxx"), of Scheichet & Xxxxx, P.C. (the "Account"), and further subject to
compliance by Netcruise and NII with their obligations contained in this Section
2 and in Sections 3(a)(ii)(B), 3(a)(ii)(C) and 3(ii)(D) hereof, UIT agrees to,
and hereby does, sell, transfer and convey to Perri all of UIT's right, title
and interest in and to the Perri Shares. Similarly, Perri agrees to, and hereby
does, purchase from UIT all of UIT's right, title and interest in and to the
Perri Shares for the aggregate purchase price of $600,000 (the "Perri Shares
Purchase Price"), which amount Perri agrees to immediately pay to UIT by Wire
Transfer of the full Perri Shares Purchase Price to the Account in immediately
available funds. Each of Netcruise and NII hereby consent to and approve of the
purchase and sale of the Perri Shares pursuant to this Agreement.
(2) New Certificates. In furtherance of its transfer of the Perri Shares to
Perri pursuant to Section 2(a) hereof, promptly after the date hereof UIT will,
by delivering the same to Xxxxx, deliver to Netcruise (for the benefit of Perri
and UIT) UIT's stock certificate (the "Old UIT Certificate") evidencing the
Shares, accompanied by (i) an appropriate assignment separate from certificate
(the "Stock Assignment") covering the Perri Shares, and (ii) a copy of a written
consent (the "Board Consent") of UIT's sole director adopting resolutions
approving the sale of the Perri Shares to Perri. Promptly following receipt by
Xxxxx of the foregoing, Netcruise shall (i) validly issue two new stock
certificates evidencing the Shares, one in the amount of 1,500,000 of the Shares
(the "Perri Related New Certificate") and one in the amount of 500,000 of the
Shares (the "New UIT Certificate"); and (ii) deliver the Perri Related New
Certificate to Perri and the New UIT Certificate to UIT. Each of Perri and
Netcruise acknowledges and agrees that UIT will be deemed to have satisfied its
obligations to Perri under Section 2(a) above and this Section 2(b) upon
delivery of the Old UIT Certificate, Stock Assignment and Board Consent to Xxxxx
in such manner and at such time as may be agreed to by Xxxxx and counsel for
UIT.
(3) [Intentionally omitted].
(4) Certain Representations and Warranties of Perri. In order to induce UIT to
consummate the purchase and sale of the Perri Shares to Perri pursuant to this
Agreement, Perri represents and warrants to UIT and ULC, as follows: (i) he is
an "accredited investor" (as such term is defined in Rule 501(a) of Regulation D
promulgated under the Securities Act of 1933, as amended), and his net worth
exceeds $1,000,000; (ii) he already, independent of his acquisition of the Perri
Shares pursuant to this Agreement, is a significant investor in the Company,
and, as such, already is thoroughly familiar with the Company and its status,
business, prospects and financial condition; (iii) he has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of his investment in the Perri Shares; (iv) neither UIT, ULC,
X. Xxxxxxx or X. Xxxxxxx has provided him with any information or
representations of any type in respect of the Company or its status, business,
prospects or financial condition, and, instead, he has, for purposes of his
investment in the Perri Shares, relied solely upon his own knowledge of the
Company and its status, business and financial condition and upon disclosures
which have been provided to him by others (in respect of which disclosures, he
agrees, UIT, ULC, X. Xxxxxxx and X. Xxxxxxx shall have no responsibility
whatsoever); (v) he has been given the opportunity to ask questions of, and
receive answers from, Netcruise and its representatives concerning the Company
and its status, business, prospects and financial condition, and obtained all
such information as he deems necessary to verify the accuracy of the information
which has been provided to him in order for him to be able, on a fully informed
basis, to evaluate the merits and risks of his investment in the Perri Shares
(in respect of which, he agrees, UIT, ULC, X. Xxxxxxx and X. Xxxxxxx shall have
no responsibility whatsoever); (vi) he understands that his investment in the
Perri Shares involves a high degree of risk; (vii) he has, in connection with
his investment in the Perri Shares, independently retained and utilized such
financial, legal and other advisors as he deems necessary for purposes of
evaluating the merits and risks of his investment in the Perri Shares; (viii) he
has determined that his investment in the Perri Shares is a suitable investment
for him in view of his actual and anticipated financial needs, and he can afford
to bear the complete loss of such investment without affecting his lifestyle;
(ix) he is acquiring the Perri Shares for investment purposes only and without a
view to any distribution, subdivision or fractionalization thereof, and he has
no plans, or agreements or arrangements with any person, firm or entity in
respect of any sale, transfer, pledge or other disposition of any of the Perri
Shares or any interest therein; (x) he understands that the sale of the Perri
Shares to him pursuant to this Agreement has not been registered or qualified
under applicable federal and state securities laws, and agrees not to sell,
encumber or otherwise transfer any of the Perri Shares, or any interest therein,
without compliance with the registration and qualification requirements of such
laws unless and except to the extent that applicable exemptions therefrom exist
(and he further understands and agrees that no one has any obligation to
register or qualify under federal or state securities laws any disposition by
him of the Perri Shares); (xi) he understands that, by virtue of the foregoing,
he must bear the economic risk of his investment in the Perri Shares for an
indefinite period of time; (xii) he understands that Netcruise will be entitled
to impose an appropriate legend on his stock certificate(s) evidencing the Perri
Shares to reflect the foregoing, and issue appropriate stop transfer
instructions to its transfer agent (in respect of which, he agrees, UIT, ULC, X.
Xxxxxxx and X. Xxxxxxx shall have no responsibility whatsoever); (xiii) on March
6, 2000, he consummated a transaction with Netcruise in connection with which he
purchased from Netcruise an aggregate of 9,487,500 shares of theretofore
unissued Common Stock for a cash purchase price of $1,897,500 and converted
$375,000 of his cash loans to the Company into an aggregate of 2,875,000
additional theretofore unissued shares of Common Stock (the "March 6
Transaction"); (xiv) he received no other Netcruise securities and received no
registration rights in connection with the March 6 Transaction, and has no
registration rights in respect of any of the other Netcruise securities owned by
him; (xv) all of his representations and warranties contained in this Agreement
are true and correct; and (xvi) his option from Netcruise to acquire an
additional 4,625,000 shares of Common Stock for $600,000 has not been exercised
and will expire unexercised upon the consummation of the transactions
contemplated by this Agreement; (xvii) he has read and is thoroughly familiar
with the Amended APA and this Agreement, and approves of and consents to this
Agreement and all of the transactions contemplated hereby.
(5) Certain Representations and Warranties of Netcruise and NII. In order to
induce the UIT Parties (hereinafter defined) to enter into this Agreement and
perform their respective obligations hereunder, each of Netcruise and NII
represents and warrants to the UIT Parties that the representations and
warranties of Perri contained in Sections 3(d)(xiii), 3(d)(xiv) and 3(d)(xvi)
and in the parenthetical at the end of Section 3(d)(x) above are true and
correct; and that, attached hereto as Exhibit 2(e) are pro forma financial
statements of Netcruise which accurately reflect the financial condition and
capitalization of Netcruise both immediately before and immediately after the
March 6 Transaction.
3. Restructuring and General Release.
(1) Restructuring. Each of UIT, ULC, X. Xxxxxxx and X. Xxxxxxx (collectively,
the "UIT Parties"), on the one hand, and each of Netcruise and NII
(collectively, the "Netcruise Parties"), on the other hand, hereby agrees that
their past relationships shall be, and they hereby are, restructured, as
follows:
(1) Termination of Amended APA. Except as specifically herein provided in
respect of the Shares, the Amended APA, and all of the respective rights and
obligations of the parties thereunder and in respect thereof, are hereby
terminated in their entirety. By way of illustration only, and not by way of
limitation, (A) all rights and obligations of every type between the UIT Parties
(or any of them), on the one hand, and the Netcruise Parties (or any of them),
on the other hand, under or in respect of the License (and in respect of the
Technology, as defined in the License) are hereby terminated in their entirety;
(B) Netcruise shall be entitled to immediately cancel the Old UIT Warrants and
the Old X. Xxxxxxx Warrants (and X. Xxxxxxx agrees to promptly redeliver to
Netcruise the Old X. Xxxxxxx Certificates at such time(s), if ever, as he
locates them); (C) the June 30, 1998 assignment by UIT of that certain
Commercial Lease, dated March 1, 1996, between 0000 Xxxxxxxx Xxxx., Inc. and ULI
with respect to premises at 0000 Xxxxxxxx Xxxx., Xxxxxxxxx, Xxx Xxxxxxx, XX
(including the use of furniture in such offices) is hereby terminated; and (D)
all indebtedness and any other payment rights and obligations of every type
(including without limitation, such thereof as exist by virtue of the mandatory
dividend payments contemplated by the First Amendment) between the UIT Parties
(or any of them), on the one hand, and the Netcruise Parties (or any of them),
on the other hand, are hereby terminated; and (E) to the extent that they have
not already done so, each of X. Xxxxxxx and X. Xxxxxxx resigns from any and all
positions he has heretofore held with either of the Netcruise Parties.
(2) Continuing Relationship. Notwithstanding the provisions of Section 3(a)(i)
above: (1) The Shares. UIT shall continue to own the Shares (until such time(s)
as they are disposed of by UIT), except to the extent that the Perri Shares
included therein are being transferred to Perri pursuant to Section 2 hereof.
(2) The New UIT Warrants. Concurrently with the execution hereof, Netcruise
shall execute and deliver to UIT new common stock purchase warrants (the "New
UIT Warrants") pursuant to documents in the form of Exhibit 3(a)(ii)(B) hereto,
exercisable for the purchase of up to 400,000 shares of Common Stock at a
purchase price of $1.00 per share (in each case, subject to adjustment as
provided therein) in substitution for the Old UIT Warrants.
(3) New X. Xxxxxxx Warrants. Concurrently with the execution hereof, Netcruise
shall execute and deliver to X. Xxxxxxx new common stock purchase warrants (the
"New X. Xxxxxxx Warrants") pursuant to documents in the form of Exhibit
3(a)(ii)(C) hereto, exercisable for the purchase of up to 100,000 shares of
Common Stock at a purchase price of $1.00 per share (in each case, subject to
adjustment as provided therein), in substitution for the Old X. Xxxxxxx
Warrants.
(4) New Software License and Domain Assignment Agreement. Concurrently with the
execution hereof, each of UIT and Netcruise shall execute and deliver to the
other a new Software License and Domain Assignment Agreement in the form of
Exhibit 3(a)(ii)(D) hereto, in substitution for the License and all other rights
of every type that the Netcruise Parties (or any of them) might otherwise be
deemed to have in respect of the Technology.
(5) Current Public Information. For so long as UIT owns any of the Shares and
for so long as UIT or X. Xxxxxxx owns any of the New UIT Warrants or the New X.
Xxxxxxx Warrants or any shares of Common Stock acquired upon exercise of the New
UIT Warrants or the New X. Xxxxxxx Warrants, Netcruise shall cause there to be
available, at all times, adequate current public information with respect to
Netcruise within the meaning of paragraph (c) of Rule 144 promulgated under the
Securities Act of 1933, as amended (or any successor such Rule).
(6) Non-Competition. UIT agrees that, for so long as Netcruise is in compliance
with the terms and provisions of the Software License and Domain Assignment
Agreement referred to in Section 3(a)(ii)(D) above (the "Software License"), UIT
will not utilize or license others to utilize its video technology (i.e., the
video technologies known as "PAV" and "DIVO") for Travel Related Applications
(as defined in Section 2 of the Software License) in competition with Netcruise
except in the territory of the United Kingdom and Europe.
(2) Mutual General Releases.
(1) Release By UIT Parties. The UIT Parties, and each of them, hereby fully,
finally and forever release and discharge the Netcruise Parties, and each of
them, their affiliates and their respective past and present officers,
directors, employees, agents, shareholders, heirs, successors and assigns, from
and against any and all claims of any nature whatsoever, whether known, unknown,
concealed or hidden, which any of them now has or heretofore has had or now or
hereafter may be deemed to have for any reason whatsoever, whether arising under
the Amended APA or otherwise; provided, however, that the foregoing shall be
inapplicable to any claims arising under or by virtue of this Agreement.
(2) Release By Netcruise Parties. The Netcruise Parties, and each of them,
hereby fully, finally and forever release and discharge the UIT Parties, and
each of them, and their respective past and present officers, directors,
employees, agents, shareholders, heirs, successors and assigns, from and against
any and all claims of any nature whatsoever, whether known, unknown, concealed
or hidden, which any of them now has or heretofore has had or now or hereafter
may be deemed to have for any reason whatsoever, whether arising under the
Amended APA or otherwise; provided, however, that the foregoing shall be
inapplicable to any claims arising under or by virtue of this Agreement.
(3) Certain Acknowledgments. Each of the UIT Parties, on the one hand, and each
of the Netcruise Parties, on the other hand, acknowledges that he or it may
hereafter discover facts which are different from or in addition to those known
or believed to be true with respect to the foregoing; and agree that this
Agreement shall be and remain in full force and effect in all respects
notwithstanding such different or additional facts. Each of the UIT Parties, on
the one hand, and each of the Netcruise Parties, on the other hand, represents
and warrants to the others that he or it has not sold, encumbered or otherwise
transferred any of the claims being released pursuant to this Section 3(b); and
agrees to fully indemnify and hold harmless the others in respect thereof.
(4) Waiver of Section 1542 of California Civil Code. Each of the UIT Parties, on
the one hand, and each of the Netcruise Parties, on the other hand, hereby
expressly waives the provisions of Section 1542 of the Civil Code of the State
of California (and of all similar laws), which provides as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
(3) Press Releases. Each of the UIT Parties, on the one hand, and each of the
Netcruise Parties, on the other hand, acknowledges and agrees that it is their
mutual intention and agreement to coordinate all press releases and the filing
of all public documents in respect of the transactions contemplated by this
Agreement. In furtherance thereof, (i) each of the UIT Parties agrees not to
issue any press release or file any public document that refers to this
Agreement or any of the Netcruise Parties without the prior consent of Netcruise
(which consent will be provided promptly and will not unreasonably withheld),
and (ii) each of the Netcruise Parties agrees not to issue any press release or
file any public document that refers to this Agreement or any of the UIT Parties
without the prior consent of UIT and ULC (which consents will be provided
promptly and will not be unreasonably withheld), in either case except to the
extent required by applicable law.
(4) Obligations of UIT Parties. The obligations of the UIT Parties under this
Section 3 are hereby expressly made subject to the prior receipt by UIT of the
full Perri Shares Purchase Price by UIT from Perri pursuant to Section 2(a)
above.
4. Miscellaneous.
(1) Survival. All of the representations, warranties, covenants and agreements
of the parties contained in this Agreement shall survive the execution hereof
and remain in full force and effect until the expiration of all applicable
statutes of limitations.
(2) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California.
(3) Exhibits. Exhibits referred to in this Agreement are hereby made a
part hereof.
(4) Notices. Any notice or other communication given by any of the parties
hereto to any of the other parties hereto pursuant to or in connection with this
Agreement shall be in writing and personally delivered, faxed (with the
transmission of such fax confirmed by a fax transmission report) or mailed by
certified mail, postage prepaid, as follows:
(1) If to Xxxxxx Xxxxx or any of the Netcruise Parties, to such party:
x/x Xxxxxxxxx & Xxxxx, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxx, Esq.
Fax No. (000) 000-0000
and
c/o Xxxxxx Xxxxxxx, Esq.
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Fax No. (000) 000-0000
(2) If to any of the UIT Parties, to such party:
c/o Richman, Mann, Chizever, Xxxxxxxx & Xxxxxx
0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Fax No. (000) 000-0000
or to such other address as hereafter shall be furnished in writing by any of
the parties hereto to the other parties hereto, as aforesaid. Notices shall not
be deemed delivered until received at the address or facsimile number to which
they are sent.
(5) Entire Understanding. This Agreement sets forth the entire understanding of
the parties, and shall not be changed or terminated orally. All prior
discussions between the parties pertaining to the subject matter of this
Agreement, both written and oral, and all prior agreements, both written and
oral, between the parties (whether or not relating to the subject matter of this
Agreement), are superseded by their entirety by and merged into this Agreement.
(6) Headings. The headings herein are inserted only for convenient reference,
and in no way define, limit or describe the scope of this Agreement, or the
intent of any of the provisions hereof; and they shall not be used in construing
this Agreement.
(7) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
(8) Further Acts. Each party to this Agreement agrees to execute any
and all documents and perform any and all acts reasonably requested by
any of the other parties in order to more fully effectuate the
purposes of this Agreement.
[This space intentionally left blank]
(9) Attorneys' Fees. In the event that any party to this Agreement commences
legal proceedings against any of the other parties under or in respect of this
Agreement, the prevailing party shall be entitled to recover its reasonable
attorneys' fees and expenses and court costs.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
/s/ Xxxxxx Xxxxx
UNITED INTERNET TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxx - CEO
UNITED LEISURE CORPORATION
By: /s/ Xxxxx Xxxxxxx - CEO
/s/ Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx
xxxxxxxxx.xxx, inc.
By: /s/ Xxxxxxxx X. Xxxx - President
NETCRUISE INTERACTIVE, INC.
By: /s/ Xxxxxxxx X. Xxxx - President
