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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").
WITNESSETH:
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:
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(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.
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(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
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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 "VI" 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
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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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date written above.
UNITED LEISURE CORPORATION UNITED LEISURE INTERACTIVE, INC.
SELLER
/s/ XXXXX XXXXXXX /s/ XXXXX XXXXXXX
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Xxxxx Xxxxxxx Xxxxx Xxxxxxx
Chairman and Chief Executive Chairman and Chief Executive
Officer Officer
NEWCO GENISYS RESERVATION SYSTEMS,INC.
PURCHASER
/s/ XXXXXXXX X. XXXX /s/ XXXXXXXX X. XXXX
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Xxxxx Xxxx Xxxxx Xxxx
President and Chief Executive President and Chief Executive
Officer Officer
Exhibits to Purchase Agreement
Exhibit A - Software License Agreement
Exhibit B - List of Assets
Exhibit C - Genisys Class X and Y Warrants issued to the Company
Exhibit D - Genisys Class V and W Warrants issued to Xxxxx Xxxxxxx
Exhibit E - Investment Letter and Securities Representations
Exhibit F - Office Lease, together with assignment
Exhibit G - Consent
Exhibit H - Patent Application
Exhibit I - Due Diligence Material
Exhibit J - Form of Assumption Agreement and Xxxx of Sale
