ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of June 30th, 1998
(together with the Exhibits attached hereto, the "Agreement"), by
and among United Leisure Interactive, Inc., a Delaware corporation
("Seller"), NetCruise Interactive, Inc., a New Jersey Corporation
and a wholly-owned subsidiary of Genisys ("Purchaser"), GENISYS
RESERVATION SYSTEMS, INC., a New Jersey corporation ("Genisys"),
and United Leisure Corporation, A Delaware corporation ("ULC").
W I T N E S S E T H:
WHEREAS, ULC is the sole shareholder of Seller and the owner
of certain interactive technology which is the subject of a patent
application (No. 08/899.712) filed by ULC with the United States
Patent Office in July, 1997 (the "Technology"); and which amongst
other things allows the consumer to "Be Your Own Travel Agent," and
WHEREAS, ULC has granted to Seller an exclusive, world-wide
and perpetual license to use the Technology for all travel related
applications (but for no other applications whatsoever), which
grant has been confirmed by a writing between ULC and Seller dated
June 19, 1998, a copy of which is attached as Exhibit A hereto (the
"License"); and
WHEREAS, Seller wishes to sell to Purchaser, and Purchaser
wishes to purchase from Seller, all of Seller's right, title and
interest in and to (i) the business of Netcruise and technology
which allows the consumer to "Be Your Own Travel Agent" (ii) the
License, and (iii) the assets owned by Seller and described in
Exhibit B hereto (collectively, the "Assets") upon the terms and
subject to the conditions set forth herein;
NOW, THEREFORE, the parties hereby agree as follows:
1. Upon the terms and subject to the conditions of this
Agreement, Seller shall sell to Purchaser, and Purchaser shall
purchase from Seller, the Assets, free and clear of all liens and
encumbrances, for an aggregate price of 2,000,000 shares of Genisys
Restricted Common Stock (the "Shares") as described hereinafter.
Upon tender to Purchaser of a xxxx of sale for the Assets,
Purchaser shall deliver to Seller certificates for the shares which
shall bear the appropriate legends describing the restrictions
which shall apply (see Exhibit E).
2. As an inducement to the Purchaser to enter into this
Agreement, Seller hereby represents and warrants to the Purchaser
as follows:
(a) Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has all necessary corporate power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder. Seller has its shareholder approval to consummate this
Agreement. This Agreement constitutes the valid and legally
binding obligation of Seller and ULC, enforceable in accordance
with its terms and conditions. This transaction does not involve
the sale of a significant percentage of the business or assets of
ULC and does not require the approval of the ULC shareholders.
(b) Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any constitution, statute, regulation,
rule, injunction, judgement, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or court
to which Seller or ULC are subject or any provision of Seller or
ULC's charter or bylaws or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under any agreement, contract, lease,
license, instrument or other arrangement to which Seller or ULC are
a party or by which they are bound or to which any of their assets
are subject (or result in the imposition of any Security Interest
upon any of their assets) other than in connection with the
provisions of the Securities Exchange Act, the Securities Act and
states securities laws. Neither Seller nor ULC need to give any
notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in
order for the parties to consummate the transactions contemplated
by this Agreement.
(c) Attached as Exhibit B hereto is a true, correct
and complete copy of the list of Assets and the cost incurred by
Seller of acquiring each of such Assets. Seller is the sole owner
of the Assets and such Assets are free and clear of any Security
interests. Such assets consist of all material assets necessary to
conduct the business being purchased pursuant to this Agreement.
(d) The Seller will provide to Purchaser
substantially all invoices, accounting records and such other
evidence supporting the information contained in Exhibit B.
(e) Exhibit B attached hereto sets forth a true and
complete list and a brief description of all intellectual property
owned by or licensed to Seller which are being transferred to
Purchaser. All owned intellectual property is owned by the Seller
free and clear of any encumbrance, and the Seller has a valid
license to use all licensed intellectual property in the manner in
which it is currently being used. No claims have been made,
asserted or threatened against the Seller relating to its ownership
or use of any intellectual property. The Seller has the right to
transfer any licenses included in this transaction.
(f) There are no claims, actions, suits,
proceedings or investigations pending before any federal, state,
municipal or other court, governmental body or arbitration
tribunal, or threatened against or affecting Seller's business or
assets or the transactions contemplated by this Agreement, or any
of the other documents or agreements among the parties referred to
in this Agreement. There is no order, decree or judgement of any
kind in existence enjoining or restraining Seller or its officers
or employees or requiring any of them to take any action of any
kind in respect of Seller's business.
(g) Purchaser shall be indemnified and held
harmless by Seller for any losses or liabilities incurred by
Purchaser arising out of or resulting from the inaccuracy of any
representation or warranty contained in this Section 2.
(h) Seller and ULC have prepared and filed and
will file on a timely basis with the appropriate federal, state,
local and foreign governmental agencies all tax returns required to
be filed; such returns as filed were true and correct in all
material respects and Seller has paid or made provision for the
payment of all taxes shown on such returns to be payable or which
have or may become due pursuant to any assessment heretofore
received by it.
3. As an inducement to the Seller to enter into this
Agreement, Purchaser and Genisys hereby represent and warrant to
the Seller as follows:
(a) Purchaser and Genisys are corporations duly
organized, validly existing and in good standing under the laws of
the State of New Jersey and have all necessary corporate power and
authority to execute and deliver this Agreement and to perform
their obligations hereunder. This Agreement constitutes the valid
and legally binding obligation of Purchaser and Genisys,
enforceable in accordance with its terms and conditions.
(b) The Shares shall be issued as fully paid and
non-assessable Common Stock, having a par value of $.0001 per share
out of authorized and unissued stock of Genisys, subject to the
provisions of Exhibit E.
(c) Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any constitution, statute, regulation,
rule, injunction, judgement, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or court
to which Purchaser or Genisys are subject or any provision of
Purchaser's or Genisys' charter or bylaws or (ii) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument or other
arrangement to which Purchaser or Genisys is a party or by which
they are bound or to which any of their assets are subject (or
result in the imposition of any Security Interest upon any of their
assets) other than in connection with the provisions of the
Securities Exchange Act, the Securities Act and states securities
laws. Neither Purchaser nor Genisys needs to give any notice to,
make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the
parties to consummate the transactions contemplated by this
Agreement.
(d) Purchaser and Genisys have prepared and filed
and will file on a timely basis with the appropriate federal,
state, local and foreign governmental agencies all tax returns
required to be filed; such returns as filed were true and correct
in all material respects and Purchaser and Genisys have paid or
made provision for the payment of all taxes shown on such returns
to be payable or which have or may become due pursuant to any
assessment heretofore received by them.
4. ULC agrees to cooperate and assist Purchaser to maintain
and operate the Technology in consideration of the two common stock
purchase warrants attached hereto as Exhibit C to be issued to
Seller for the purchase of restricted shares of Genisys common
stock. Both warrants are exercisable between April 1, 2002 and
June 30, 2002. The services of Xxxxxx Xxxx shall be made available
full time for a period of three months commencing on July 15th,
1998, and thereafter as and when required by Purchaser and Genisys.
(a) The "X" warrant is for 800,000 shares
exercisable at $2.50 per share if the total pretax profits, as
defined in the warrant, for the years 1999, 2000 and 2001 from the
business and assets being purchased equal or exceed $5,000.000.
(b) The "Y" warrant is for 800,000 shares
exercisable at $6.00 per share if the total pretax profits, as
defined in the warrant, for the years 1999, 2000 and 2001 from the
business and assets being purchased equal or exceed $10,000,000.
5. For a period of three years from the date hereof,
Xxxxx Xxxxxxx shall be Chairman of the Purchaser and Xxxxx Xxxxxxx
shall be President. Each of them shall be elected to the Board of
Directors of Genisys promptly after the closing of the transaction
referred to herein. The Board of Directors shall nominate and
recommend to the Genisys shareholders the election of Xxxxx Xxxxxxx
and Xxxxx Xxxxxxx as Directors of Genisys for each of the three
years following the date hereof. Xxxxx Xxxxxxx shall receive $5,000
per month for his services and will be expected to devote
approximately 30 - 40% of his time to the affairs of Genisys. In
addition, Xxxxx Xxxxxxx shall receive two stock purchase warrants
attached hereto as Exhibit D each for 200,000 restricted shares of
Genisys common stock exercisable between April 1, 2002 and June
30th, 2002. The "V" warrant is exercisable at $2.50 per share if
the total pretax profits, as defined in the warrant attached hereto
as Exhibit D equal or exceed $5,000,000 for the years 1999, 2000
and 2001. The "W" Warrant is for 200,000 shares and is exercisable
at $6.00 per share if such total pretax profits equal or exceed
$10,000,000.
6. Seller has no liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to
the transaction contemplated by this Agreement.
7. Subject to obtaining the required consent of the
Landlord, Seller shall assign to Purchaser, and Purchaser shall
assume all of Seller's obligations under, that certain Commercial
Lease dated March 1, 1996 between Seller and 0000 Xxxxxxxx Xxxx.,
Inc., a copy of which is attached as Exhibit F hereto.
8. This Agreement shall be governed by and interpreted
in accordance with, the laws of the State of New Jersey. Any
litigation which may be brought by either party will be filed in a
Court of Law in the State of New Jersey.
9. ULC hereby agrees with Purchaser that now and
forever it will not enter any facet of the travel industry in
competition with Genisys or the business being purchased.
10. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date written above.
UNITED LEISURE CORPORATION UNITED LEISURE INTERACTIVE, INC.
SELLER
Xxxxx Xxxxxxx Xxxxx Xxxxxxx
Chairman and Chief Executive Chairman and Chief Executive
Officer Officer
NETCRUISE INTERACTIVE,INC. GENISYS RESERVATION SYSTEMS,INC.
PURCHASER
Xxxxx Xxxx Xxxxx Xxxx
President and Chief Executive President and Chief Executive
Officer Officer
