Exhibit 28.1
October 22, 1996
Xxxxxx Xxxxxxx Xxxx X. Xxxxx
00 Xxxxxxx Xxxxx 00 Xxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000 Xxxxxxx, Xxx Xxxxxx 00000
RE: ISSUANCE OF GENISYS COMMON SHARES
Dear Sirs:
The purpose of this letter is to set forth the understanding between Genisys
Reservation Systems, Inc. (Genisys), Xxxxxx Xxxxxxx (Xxxxxxx) and Xxxx X.
Xxxxx (Xxxxx) relating to the issuance of shares of common stock by Genisys to
Xxxxxxx and/or Xxxxx in repayment of certain shares of Genisys common stock
which have been, or will be, sold or transferred by Xxxxxxx and/or Xxxxx for the
benefit of the business of either Genisys or Corporate Travel Link, Inc., a
wholly- owned subsidiary of Genisys (CTL). In order to assist in the
furtherance of the development of the business of Genisys and CTL, Xxxxxxx
and/or Xxxxx have heretofore sold or transferred, and may in the future further
sell or transfer, shares of Genisys common stock owned by them individually to
third parties (all such shares so sold or transferred by Xxxxxxx and/or Xxxxx
being hereinafter referred to as the "Transferred Shares"). Attached to this
letter as Exhibit A is a description of certain milestone events (each a
"Milestone Event") relating to the future development of the Genisys
computerized reservation system for ground transportation service reservations,
the Genisys computerized payment system and the general business of Genisys and
CTL. In consideration of the sale or transfer of the Transferred Shares by
Xxxxxxx and/or Xxxxx and upon the satisfactory attainment or completion by
Genisys and CTL of each Milestone Event by no later than the corresponding date
set forth on Exhibit A and in accordance with the other terms and conditions set
forth on Exhibit A and in accordance with the other terms and conditions set
forth on Exhibit A, Genisys will issue to Xxxxxxx and/or Xxxxx an amount of
shares of Genisys common stock equal to one-sixth (1/6th) of the Transferred
Shares. If for any reason a particular Milestone Event is not attained or
completed by the corresponding date or in accordance with the other terms and
conditions set forth on Exhibit A, Genisys shall have no obligation whatsoever
to issue any common shares to Xxxxxxx and/or Xxxxx or otherwise reimburse
Xxxxxxx and/or Xxxxx in an amount equal to one-sixth (1/6th) of the Transferred
Shares and Xxxxxxx and Xxxxx shall have no right whatsoever to receive any
Genisys common shares or any other consideration in reimbursement for such
Transferred Shares. Any shares of Genisys common stock which are issued to
Xxxxxxx and/or
________________ Xxxxx in accordance with this paragraph are hereinafter
collectively referred to as the "Genisys Shares." Xxxxxxx and Xxxxx acknowledge
that the Genisys Shares (i) will not be registered under the Securities Act of
1933, as amended (the "Securities Act"), or the securities laws of any state and
the Genisys Shares may not be sold, transferred, pledged or hypothecated to any
person or entity unless they have been so registered or Genisys shall have
received an opinion of counsel satisfactory to Genisys to the effect that
registration thereof for purposes of transfer is not required under the
Securities Act, (ii) shall contain a legend stating that the Genisys Shares have
not been registered under the Securities Act or the securities laws of any state
and repeating the restrictions on transferability set forth in clause (i) above,
and (iii) shall be registered in the name of Xxxxxxx and/or Xxxxx. In addition
to the restrictions on transferability set forth in the preceding paragraph,
Xxxxxxx and Xxxxx hereby agree that, if (i) Genisys files a registration
statement with the United States Securities and Exchange Commission to register
shares of its common stock in connection with a public offering within two (2)
years after the date of transfer of any of the Genisys Shares to Xxxxxxx and/or
Xxxxx, and (ii) the underwriter(s) for such public offering so requests, Xxxxxxx
and/or Xxxxx will execute and deliver an agreement, in form and substance
reasonably satisfactory to Xxxxxxx and/or Xxxxx will execute and deliver an
agreement, in form and substance reasonably satisfactory to Xxxxxxx and/or
Xxxxx, Genisys and the underwriter(s), pursuant to which Xxxxxxx and/or Xxxxx
will agree not to, directly or indirectly, sell, offer or contract to sell or
grant any option to purchase, transfer, assign or pledge, or otherwise encumber,
or dispose of any of the Genisys Shares (or any securities convertible into or
exercisable or exchangeable for any Genisys Shares) without the prior written
consent of the underwriter(s) for the same period of time after the effective
date of such registration statement as other holders of 5% or more of the
outstanding shares of common stock of Genisys shall have agreed in writing with
such underwriter(s) not to so sell or otherwise transfer or dispose of their
shares of Genisys common stock. If Genisys does not file a registration
statement to register shares of its common stock in connection with a public
offering within two (2) years after the date of transfer of the Genisys Shares
to Xxxxxxx and/or Xxxxx, then Xxxxxxx and Xxxxx agree that, for a period of two
(2) years after the date of the transfer of the Genisys Shares to Xxxxxxx and/or
Xxxxx, Xxxxxxx and/or Xxxxx will not, directly or indirectly, sell, offer or
contract to sell or grant any option to purchase, transfer, assign or pledge, or
otherwise encumber, or dispose of any
of the Genisys Shares (or any securities
convertible into or exercisable or exchangeable for any Genisys Shares) without
the prior written consent of Genisys. Very truly yours, GENISYS RESERVATION
SYSTEMS, INC. By:___________________________________ Name Title Acknowledged,
agreed and accepted this ____ day of October, 1996. ____________________________
Xxxxxx Xxxxxxx ____________________________ Xxxx X. Xxxxx
EXHIBIT A MILESTONE
EVENT COMPLETION DATE
1. Successful beta testing of the February 1, 1997
Genisys Reservation System with
the SABRE airline reservation
system
2. Successful completion and operation March 1, 1997
of the Genisys Payment System
3. At least twelve (12) major corporate
customers July 1, 1997
utilizing the Genisys
Reservation System For their
ground transportation reservations
4. Successful beta testing of the Genisys July 1, 1997
Reservation System with the Apollo
airline reservation system
5. Maintenance of a cash and short term July 1, 1998
investment reserve of at least $500,000
through and including July 1, 1998
6. Attainment by Genisys of quarterly net December 31, 1998
operating income of at
least $300,000 for the quarter ended
December 31, 1998 income of at least
$300,000 for the quarter ended
December 31, 1998
