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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
GENISYS RESERVATION SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.0001 PER SHARE
- --------------------------------------------------------------------------------
(Title of Class of Securities)
372299107
- --------------------------------------------------------------------------------
(CUSIP Number)
HARRY SHUSTER, 1990 WESTWOOD BOULEVARD, LOS ANGELES, CALIFORNIA 90025
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
JULY 23, 1998
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box [ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240-13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED
IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY
VALID OMB CONTROL NUMBER.
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CUSIP No. 372299107
________________________________________________________________________________
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
UNITED LEISURE INTERACTIVE, INC.
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________________________________________________________________________________
2. Check the Appropriate Box if a Member of a Group
(See Instructions)
(a)
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(b) X
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________________________________________________________________________________
3. SEC Use Only
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________________________________________________________________________________
4. Source of Funds (See Instructions) OO
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________________________________________________________________________________
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
---------------------------------------------
________________________________________________________________________________
6. Citizenship or Place of Organization DELAWARE
-------------------------------------
________________________________________________________________________________
7. Sole Voting Power
------------------------------------------
Number of ________________________________________________________________
Shares Bene-
ficially 8. Shared Voting Power 2,000,000
Owned by Each ----------------------------------------
Reporting ________________________________________________________________
Person With
9. Sole Dispositive Power
-------------------------------------
________________________________________________________________
10. Shared Dispositive Power 2,000,000
-----------------------------------
________________________________________________________________________________
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,000,000
----------------------------------------------------------------
________________________________________________________________________________
12. Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
-------------------------------------
________________________________________________________________________________
13. Percent of Class Represented by Amount in Row (11) 30
-------------
________________________________________________________________________________
14. Type of Reporting Person (See Instructions)
CO
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INSTRUCTIONS FOR COVER PAGE
(1) Names and I.R.S. Identification Numbers of Reporting Persons -- Furnish the
full legal name of each person for whom the report is filed - i.e., each
person required to sign the schedule itself - including each member of a
group. Do not include the name of a person required to be identified in the
report but who is not a reporting person. Reporting persons that are
entities are also requested to furnish their I.R.S. identification numbers,
although disclosure of such numbers is voluntary, not mandatory (see
"SPECIAL INSTRUCTIONS FOR COMPLYING WITH SCHEDULE 13D" below).
(2) If any of the shares beneficially owned by a reporting person are held as a
member of a group and the membership is expressly affirmed, please check
row 2(a). If the reporting person disclaims membership in a group or
describes a relationship with other persons but does not affirm the
existence of a group, please check row 2(b) [unless it is a joint filing
pursuant to Rule 13d-1(k)(1) in which case it may not be necessary to check
row 2(b)].
(3) The 3rd row is for SEC internal use; please leave blank.
2
<PAGE> 3
CUSIP No. 372299107
________________________________________________________________________________
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
UNITED LEISURE CORPORATION
----------------------------------------------------------------
________________________________________________________________________________
2. Check the Appropriate Box if a Member of a Group
(See Instructions)
(a)
------------------------------------------------------------
(b) X
------------------------------------------------------------
________________________________________________________________________________
3. SEC Use Only
---------------------------------------------------
________________________________________________________________________________
4. Source of Funds (See Instructions) AF
-----------------------------
________________________________________________________________________________
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
---------------------------------------------
________________________________________________________________________________
6. Citizenship or Place of Organization DELAWARE
-------------------------------------
________________________________________________________________________________
7. Sole Voting Power
------------------------------------------
Number of ________________________________________________________________
Shares Bene-
ficially by 8. Shared Voting Power 2,000,000
Owned by Each ----------------------------------------
Reporting ________________________________________________________________
Person With
9. Sole Dispositive Power
-------------------------------------
________________________________________________________________
10. Shared Dispositive Power 2,000,000
-----------------------------------
________________________________________________________________________________
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,000,000
----------------------------------------------------------------
________________________________________________________________________________
12. Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
-------------------------------------
________________________________________________________________________________
13. Percent of Class Represented by Amount in Row (11) 30
-------------
________________________________________________________________________________
14. Type of Reporting Person (See Instructions)
CO
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INSTRUCTIONS FOR COVER PAGE
(1) Names and I.R.S. Identification Numbers of Reporting Persons -- Furnish the
full legal name of each person for whom the report is filed - i.e., each
person required to sign the schedule itself - including each member of a
group. Do not include the name of a person required to be identified in the
report but who is not a reporting person. Reporting persons that are
entities are also requested to furnish their I.R.S. identification numbers,
although disclosure of such numbers is voluntary, not mandatory (see
"SPECIAL INSTRUCTIONS FOR COMPLYING WITH SCHEDULE 13D" below).
(2) If any of the shares beneficially owned by a reporting person are held as a
member of a group and the membership is expressly affirmed, please check
row 2(a). If the reporting person disclaims membership in a group or
describes a relationship with other persons but does not affirm the
existence of a group, please check row 2(b) [unless it is a joint filing
pursuant to Rule 13d-1(k)(1) in which case it may not be necessary to check
row 2(b)].
(3) The 3rd row is for SEC internal use; please leave blank.
2
<PAGE> 4
SCHEDULE 13D
INTRODUCTORY NOTE
The information contained in this Statement on Schedule 13D of United
Leisure Interactive, Inc. and United Leisure Corporation is reflected as of July
23, 1998, the date of the event which required the filing thereof.
ITEM 1. SECURITY AND ISSUER.
The title of the class of equity securities to which this Statement on
Schedule 13D relates is the Common Stock, par value $.0001 per share (the
"Common Stock"), of Genisys Reservation Systems, Inc., a New Jersey corporation
(the "Issuer"). The address of the principal executive offices of the Issuer is
2401 Morris Avenue, Union, New Jersey 07083.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement on Schedule 13D is being filed by United Leisure
Interactive, Inc., a Delaware corporation ("ULI") and its parent corporation,
United Leisure Corporation ("ULC"). ULI is in the business of developing and
marketing Internet-based multimedia software applications. The address of the
principal executive offices of ULI and ULC is 1990 Westwood Boulevard,
Penthouse, Los Angeles, California 90025. During the last five years, neither
ULI nor ULC has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), nor has either ULI or ULC been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or state securities laws or finding any violation
with respect to such laws.
The names, business addresses and occupational information for each
executive officer and director of ULI and ULC are set forth in Exhibits A and B
hereto. To the best knowledge of ULI and ULC, none of the individuals listed on
Exhibits A and B has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), nor has any such person been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or state securities laws or finding any violation
with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Effective July 23, 1998, ULI acquired 2,000,000 shares of the Issuer's
Common Stock as consideration for the sale of certain assets and the license
of certain assets and the license of certain proprietary software.
<PAGE> 5
ITEM 4. PURPOSE OF TRANSACTION.
Pursuant to an Asset Purchase Agreement dated as of June 30, 1998 (the
"Purchase Agreement"), by and among ULI, ULC, the Issuer, and Netcruise
Interactive, Inc., a New Jersey corporation and a wholly-owned subsidiary of the
Issuer ("Netcruise"), ULI transferred to Netcruise all of ULI's right, title and
interest in and to (i) an exclusive, world-wide and perpetual license from ULC
with respect to the travel-related applications of certain interactive
technology, and (ii) certain physical assets to be used in connection with the
exploitation of the licensed technology.
In consideration for the receipt of the foregoing, the Issuer issued to
ULI (i) 2,000,000 shares of the Issuer's Common Stock (the "Shares"), (ii) a
warrant to purchase up to 800,000 shares of the Issuer's Common Stock at $2.50
per share if the total pre-tax profits of Netcruise ("Total Pre-tax Profits")
for the years 1999, 2000, and 2001 equal or exceed $5,000,000 and (iii) a
warrant to purchase up to 800,000 shares of the Issuer's Common Stock at $6.00
per share if Total Pre-tax Profits for the years 1999, 2000, and 2001 equal or
exceed $10,000,000.
The Shares were acquired for investment purposes. Harry Shuster, Chairman
of the Board, President and Chief Executive Officer of ULI, shall be Chairman of
Netcruise for three years following the date of the Purchase Agreement. Brian
Shuster, Executive Vice President of ULI, shall be President of Netcruise for
such period. Each of them shall be elected to the Board of Directors of the
Issuer for such period.
In addition, Brian Shuster received a warrant to purchase up to 400,000
shares of the Issuer's Common Stock, exercisable between April 1, 2002 and June
30, 2002. Of the 400,000 shares, 200,000 shares may be purchased at $2.50 per
share if Total Pre-tax Profits equal or exceed $5,000,000 for the years 1999,
2000, and 2001. The remaining 200,000 shares may be purchased at $6.00 per share
if Total Pre-tax Profits equal or exceed $10,000,000.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Upon consummation of the transactions described in the Purchase
Agreement, ULI beneficially owns 2,000,000 shares of the Issuer's Common Stock,
representing approximately 29.8% of the issued and outstanding shares of the
Issuer's Common Stock. Because ULI is a wholly-owned subsidiary of ULC, ULC may
also be deemed to beneficially own the Shares.
(b) ULI and ULC share the power to vote and dispose of the Shares.
(c) Neither ULI nor ULC has entered into any transactions with respect
to the Issuer's Common Stock in the past 60 days other than the Purchase
Agreement.
2
<PAGE> 6
(d) None.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Pursuant to the Purchase Agreement, ULI has agreed not to sell any of
the Shares for at least two years from the date of the Purchase Agreement.
Because of the overlap in the Board of Directors of ULI and ULC and
ULI's status as a wholly-owned subsidiary of ULC, ULI can be considered to
share its voting and investment decisions with respect to the Shares with its
parent corporation, ULC.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
A. Executive Officers and Directors of United Leisure Interactive, Inc.
B. Executive Officers and Directors of United Leisure Corporation.
C. Asset Purchase Agreement dated as of June 30, 1998 by and among ULI,
ULC, the Issuer and Netcruise.
D. Genisys Reservation Systems, Inc. Class V Common Stock Purchase
Warrant, dated June 30, 1998.
E. Genisys Reservation Systems, Inc. Class W Common Stock Purchase
Warrant, dated June 30, 1998.
F. Genisys Reservation Systems, Inc. Class X Common Stock Purchase
Warrant, dated June 30, 1998.
G. Genisys Reservation Systems, Inc. Class Y Common Stock Purchase
Warrant, dated June 30, 1998.
SIGNATURE.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement on Schedule 13D is
true, complete and correct.
Date: August 3, 1998 UNITED LEISURE INTERACTIVE, INC.
/s/ Harry Shuster
----------------------------------------
Harry Shuster, President
UNITED LEISURE CORPORATION
/s/ Harry Shuster
----------------------------------------
Harry Shuster, President
3
<PAGE> 1
Exhibit 7A
Executive Officer and Directors of United Leisure Interactive, Inc.
Directors: Harry Shuster
Brian Shuster
Officers: Harry Shuster Chairman of the Board, President and
Chief Executive Officer
Brian Shuster Executive Vice President
The business address for the foregoing individuals is 1990 Westwood
Boulevard, Penthouse, Los Angeles, CA 90025.
<PAGE> 1
Exhibit 7B
Executive Officer and Directors of United Leisure Corporation
Directors: Harry Shuster
Brian Shuster
Alvin Alexander
Alvin Cassel
J. Brooke Johnston
Officers: Harry Shuster Chairman, President and Chief
Executive Officer
Alvin Cassel Secretary and Treasurer
The business address for the foregoing individuals is 1990 Westwood
Boulevard, Penthouse, Los Angeles, CA 90025.
<PAGE> 1
Exhibit 7C
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 bill 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:
<PAGE> 2
(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.
<PAGE> 3
(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
<PAGE> 4
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 Robert Eady 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, Harry
Shuster shall be Chairman of the Purchaser and Brian Shuster 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 Harry
Shuster and Brian Shuster as Directors of Genisys for each of the three years
following the date hereof. Brian Shuster 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, Brian Shuster 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
<PAGE> 5
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 1990 Westwood Blvd., 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.
<PAGE> 6
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/ HARRY SHUSTER /s/ HARRY SHUSTER
- ---------------------------------- ------------------------------------
Harry Shuster Harry Shuster
Chairman and Chief Executive Chairman and Chief Executive
Officer Officer
NEWCO GENISYS RESERVATION SYSTEMS,INC.
PURCHASER
/s/ LAWRENCE E. BURK /s/ LAWRENCE E. BURK
- ---------------------------------- ------------------------------------
Larry Burk Larry Burk
President and Chief Executive President and Chief Executive
Officer Officer
<PAGE> 1
Exhibit 7D
Warrant to Purchase up to 200,000
shares of Common Stock
GENISYS RESERVATION SYSTEM, INC.
Class V Common Stock Purchase Warrant
June 30, 1998
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), NOR UNDER ANY STATE SECURITIES LAW AND SHALL NOT BE
TRANSFERRED, SOLD, ASSIGNED OR HYPOTHECATED IN VIOLATION THEREOF UNTIL EITHER
(i) A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER
THE ACT AND APPLICABLE STATE SECURITIES LAW OR (ii) THE COMPANY RECEIVES AN
OPINION OF COUNSEL TO THE COMPANY OR OTHER COUNSEL TO THE HOLDER OF SUCH
SECURITIES WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY AND ITS
COUNSEL THAT SUCH SECURITIES MAY BE TRANSFERRED, SOLD, ASSIGNED OR HYPOTHECATED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS.
THIS CERTIFIES THAT Brian Shuster (herein after sometimes called the
"Holder") is entitled to purchase from Genisys Reservation Systems, Inc., a New
Jersey corporation (the "Company"), at the price and during the periods as
hereinafter specified, up to 200,000 shares of the Company's Common Stock (the
"Common Stock").
1. The rights represented by this Warrant shall be exercisable only if
the total pretax profits, as defined herein, for the years 1999, 2000 and 2001
from the business and assets being purchased pursuant to the Asset Purchase
Agreement between the parties hereto dated as of June 30, 1998 (the "Business")
equal or exceed $5,000,000. Pretax profits shall be defined as all net sales
derived from the products and services of the Business less all direct and
allocated expenses as determined by the Company to be applicable to the
operation of the Business, including interest on money used in the operation of
the Business computed at a rate of 9% per annum and an allocation of corporate
overhead of the Company.
2. The rights represented by this Warrant shall be exercised, subject
to adjustment in accordance with Section 7 of this Warrant, between April 1,
2002 and June 30, 2002 inclusive (the "Exercise Period") , at a purchase price
of $2.50 per share (the "Exercise Price"). For purposes of the adjustments
under Paragraph 7 hereof, the per share Exercise Price shall be deemed to be
$2.50 subject to further adjustment as provided in such Paragraph 7. After the
expiration date of the Warrant, the Holder shall have no right to purchase any
shares of Common Stock underlying this Warrant.
<PAGE> 2
3. The rights represented by this warrant may be exercised at any time
within the Exercise Period above specified, in whole or in part, by (i) the
surrender of this Warrant (with the purchase form at the end hereof properly
executed) at the principal executive office of the Company (or such other office
or agency of the Company as it may designate by notice in writing to the Holder
at the address of the Holder appearing on the books of the Company); and (ii)
payment to the Company of the Exercise Price then in effect for the number of
shares of Common Stock specified in the above-mentioned purchase form together
with applicable stock transfer taxes, if any in the form of a certified check,
cashier's check or money order. This Warrant shall be deemed to have been
exercised, in whole or in part to the extent specified, immediately prior to the
close of business on the date this Warrant is surrendered and payment is made in
accordance with the foregoing provisions of this Section 3, and the person or
persons in whose name or names the certificates for shares of Common Stock shall
be issuable upon such exercise shall become the holder or holders of the record
of such shares of Common Stock at that time and date. The certificate or
certificates for the shares of Common Stock so purchased shall be delivered to
such person or persons within a reasonable time, not exceeding thirty (30) days,
after this Warrant shall have been exercised.
4. This Warrant may not be transferred without the written agreement of
the Board of Directors of the Company. Neither this Warrant nor the shares of
Common Stock issuable upon exercise hereof have been registered under the Act
nor under any state securities law and shall not be transferred, sold, assigned
or hypothecated in violation thereof. If permitted by the foregoing, any such
transfer, sale, assignment or hypothecation shall be effected by the Holder
surrendering this Warrant for cancellation at the office of the Company referred
to in Section 3 hereof, accompanied by an opinion of counsel satisfactory to the
Company and its counsel, stating that such transferee is a permitted transferee
under this section 4 and that such transfer does not violate the Act or such
state securities laws.
5. The Company covenants and agrees that all shares of Common Stock
which may be issued upon exercise of this Warrant will, upon issuance, be duly
and validly issued, fully paid and nonassessable and no personal liability will
attach to the holder thereof. The Company further covenants and agrees that
during the periods within which this Warrant may be exercised, the Company will
at all times have authorized and reserved a sufficient number of shares of its
Common stock to provide for the exercise of this Warrant.
6. The Warrant shall not entitle the Holder to any rights,
<PAGE> 3
including, without limitation, voting rights, as a stock holder of the Company.
7. The Exercise Price in effect at any time and the number and kind of
securities purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the happening of certain events as follows:
a) If the company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into
a greater number of shares, or (iii) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the Exercise Price in
effect at the time of the effective date or record date, as the case may be, for
such sale, dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that it shall
equal the price determined by multiplying the Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock outstanding
after giving effect to such action, and the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such action;
b) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to subsection 7 a) above, the number of shares of
Common Stock purchasable upon exercise of this Warrant shall simultaneously be
adjusted by multiplying the number of shares of Common Stock initially issuable
upon exercise of this Warrant by the Exercise Price in effect on the date hereof
and dividing the product so obtained by the Exercise Price, as adjusted.
c) Notwithstanding any adjustment in the Exercise Price or the
number or kind of shares of Common Stock purchasable upon the Exercise of this
Warrant, certificates for Warrants issued prior or subsequent to such adjustment
may continue to express the same price and number and kind of shares of Common
Stock as are initially issuable pursuant to this Warrant.
B. This Agreement shall be governed by and in accordance with the laws
of the State of Jersey.
IN WITNESS WHEREOF, GENISYS RESERVATION SYSTEMS, INC. has caused
this Warrant to be signed by its duly authorized officers and is to be dated
June 30, 1998.
<PAGE> 4
GENISYS RESERVATION SYSTEMS, INC.
By: /s/ LAWRENCE E. BURK
------------------------------------
Lawrence Burk
President
<PAGE> 5
FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to purchase:
_______________shares of Common Stock
and herewith tenders in payment for such securities a certified or cashier's
check or money order payable to the order of Genisys Reservation Systems, Inc.
in the amount of $________, all in accordance with the terms hereof. The
undersigned requests that a certificate for such securities be registered in the
name of __________________________whose address is___________________________and
that such Certificate be delivered to___________________________________________
Dated:
Signature____________________________
(Signature must conform in
all respects to the name of
holder as specified on the
face of the Warrant
Certificate.)
(Insert Social Security or Other
Identifying Number of Holder)
<PAGE> 1
Exhibit 7E
Warrant to Purchase up to 200,000
shares of Common Stock
GENISYS RESERVATION SYSTEMS, INC.
Class W Common Stock Purchase Warrant
June 30, 1998
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), NOR UNDER ANY STATE SECURITIES LAW AND SHALL NOT BE
TRANSFERRED, SOLD, ASSIGNED OR HYPOTHECATED IN VIOLATION THEREOF UNTIL EITHER
(i) A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER
THE ACT AND APPLICABLE STATE SECURITIES LAW OR (ii) THE COMPANY RECEIVES AN
OPINION OF COUNSEL TO THE COMPANY OR OTHER COUNSEL TO THE HOLDER OF SUCH
SECURITIES WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY AND ITS
COUNSEL THAT SUCH SECURITIES MAY BE TRANSFERRED, SOLD, ASSIGNED OR HYPOTHECATED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS.
THIS CERTIFIES THAT Brian Shuster (herein after sometimes called the
"Holder") is entitled to purchase from Genisys Reservation Systems, Inc., a New
Jersey corporation (the "Company"), at the price and during the periods as
hereinafter specified, up to 200,000 shares of the Company's Common Stock (the
"Common Stock").
1. The rights represented by this Warrant shall be exercisable
only if the total pretax profits, as defined herein, for the years 1999, 2000
and 2001 from the business and assets being purchased pursuant to the Asset
Purchase Agreement between the parties hereto dated as of June 30, 1998 (the
"Business") equal or exceed $10,000,000. Pretax profits shall be defined as all
net sales derived from the products and services of the Business less all direct
and allocated expenses as determined by the Company to be applicable to the
operation of the Business, including interest on money used in the operation of
the Business computed at a rate of 9% per annum and an allocation of corporate
overhead of the Company.
2. The rights represented by this Warrant shall be exercised,
subject to adjustment in accordance with Section 7 of this Warrant, between
April 1, 2002 and June 30, 2002 inclusive (the "Exercise Period"), at a purchase
price of $6.00 per share (the "Exercise Price"). For purposes of the adjustments
under Paragraph 7 hereof, the per share Exercise Price shall be deemed to
<PAGE> 2
be $6.00 subject to further adjustment as provided in such Paragraph 7. After
the expiration date of the Warrant, the Holder shall have no right to purchase
any shares of Common stock underlying this Warrant.
3. The rights represented by this Warrant may be exercised at any
time within the Exercise Period above specified, in whole or in part, by (i) the
surrender of this Warrant (with the purchase form at the end hereof properly
executed) at the principal executive office of the Company (or such other office
or agency of the Company as it may designate by notice in writing to the Holder
at the address of the Holder appearing on the books of the Company); and (ii)
payment to the Company of the Exercise Price then in effect for the number of
shares of Common Stock specified in the above-mentioned purchase form together
with applicable stock transfer taxes, if any in the form of a certified check,
cashier's check or money order. This Warrant shall be deemed to have been
exercised, in whole or in part to the extent specified, immediately prior to the
close of business on the date this Warrant is surrendered and payment is made in
accordance with the foregoing provisions of this Section 3, and the person or
persons in whose name or names the certificates for shares of Common stock shall
be issuable upon such exercise shall become the holder or holders of the record
of such shares of Common Stock at that time and date. The certificate or
certificates for the shares of Common Stock so purchased shall be delivered to
such person or persons within a reasonable time, not exceeding thirty (30) days,
after this Warrant shall have been exercised.
4. This Warrant may not be transferred without the written
agreement of the Board of Directors of the Company. Neither this Warrant nor the
shares of Common Stock issuable upon exercise hereof have been registered under
the Act nor under any state securities law and shall not be transferred, sold,
assigned or hypothecated in violation thereof. If permitted by the foregoing,
any such transfer, sale, assignment or hypothecation shall be effected by the
Holder surrendering this Warrant for cancellation at the office of the Company
referred to in Section 3 hereof, accompanied by an opinion of counsel
satisfactory to the Company and its counsel, stating that such transferee is a
permitted transferee under this Section 4 and that such transfer does not
violate the Act or such state securities laws.
5. The Company covenants and agrees that all shares of Common
Stock which may be issued upon exercise of this Warrant will, upon issuance, be
duly and validly issued, fully paid and nonassessable and no personal liability
will attach to the holder thereof. The Company further covenants and agrees that
during the periods within which this Warrant may be exercised, the Company will
at all times have authorized and reserved a sufficient number of shares of its
Common Stock to provide for the exercise of this Warrant.
<PAGE> 3
6. The Warrant shall not entitle the Holder to any rights, including,
without limitation, voting rights, as a stock holder of the Company.
7. The Exercise Price in effect at any time and the number and kind of
securities purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the happening of certain events as follows:
a) If the company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into
a greater number of shares, or (iii) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the Exercise Price in
effect at the time of the effective date or record date, as the case may be, for
such sale, dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that it shall
equal the price determined by multiplying the Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock outstanding
after giving affect to such action, and the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such action;
b) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to subsection 7 a) above, the number of shares of
Common Stock purchasable upon exercise of this warrant shall simultaneously be
adjusted by multiplying the number of shares of Common Stock initially issuable
upon exercise of this Warrant by the Exercise Price in effect on the date hereof
and dividing the product so obtained by the Exercise Price, as adjusted.
c) Notwithstanding any adjustment in the Exercise Price or the
number or kind of shares of Common Stock purchasable upon the Exercise of this
Warrant, certificates for Warrants issued prior or subsequent to such adjustment
may continue to express the same price and number and kind of shares of Common
Stock as are initially issuable pursuant to this Warrant.
8. This Agreement shall be governed by and in accordance with the laws
of the State of Jersey.
IN WITNESS WHEREOF, GENISYS RESERVATION SYSTEMS, INC. has caused
this Warrant to be signed by its duly authorized officers and is to be dated
June 30, 1998.
<PAGE> 4
GENISYS RESERVATION SYSTEMS, INC.
By: /s/ LAWRENCE E. BURK
------------------------------------
Lawrence Burk
President
<PAGE> 5
FORM OF ELECTION TO PURCHASE
The Undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to purchase:
________________ shares of Common Stock
and herewith tenders in payment for such securities a certified or cashier's
check or money order payable to the order of Genisys Reservation Systems, Inc.
in the amount of $_______________________ , all in accordance with the terms
hereof. The undersigned requests that a certificate for such securities be
registered in the name of __________________________________ whose address is
____________________________________________ and that such Certificate be
delivered to __________________________________________________________________.
Dated:
Signature_______________________________
(Signature must conform in all
respects to the name of holder as
specified on the face of the Warrant
Certificate.)
(Insert Social Security or Other
Identifying Number of Holder)
<PAGE> 1
Exhibit 7F
Warrant to Purchase up to 800,000
shares of Common Stock
GENISYS RESERVATION SYSTEMS, INC.
Class X Common Stock Purchase Warrant
June 30, 1998
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), NOR UNDER ANY STATE SECURITIES LAW AND SHALL NOT BE
TRANSFERRED, SOLD, ASSIGNED OR HYPOTHECATED IN VIOLATION THEREOF UNTIL EITHER
(i) A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER
THE ACT AND APPLICABLE STATE SECURITIES LAW OR (ii) THE COMPANY RECEIVES AN
OPINION OF COUNSEL TO THE COMPANY OR OTHER COUNSEL TO THE HOLDER OF SUCH
SECURITIES WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY AND ITS
COUNSEL THAT SUCH SECURITIES MAY BE TRANSFERRED, SOLD, ASSIGNED OR HYPOTHECATED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS.
THIS CERTIFIES THAT United Leisure Interactive, Inc. (herein after
sometimes called the "Holder") is entitled to purchase from Genisys Reservation
Systems, Inc., a New Jersey corporation (the "Company"), at the price and during
the periods as hereinafter specified, up to 800,000 shares of the Company's
Common Stock (the "Common Stock").
1. The rights represented by this Warrant shall be exercisable
only if the total pretax profits, as defined herein, for the years 1999, 2000
and 2001 from the business and assets being purchased pursuant to the Asset
Purchase Agreement between the parties hereto dated as of June 30, 1998 (the
"Business") equal or exceed $5,000,000. Pretax profits shall be defined as all
net sales derived from the products and services of the Business less all direct
and allocated expenses as determined by the Company to be applicable to the
operation of the Business, including interest on money used in the operation of
the Business computed at a rate of 9% per annum and an allocation of corporate
overhead of the Company.
2. The rights represented by this Warrant shall be exercised,
subject to adjustment in accordance with Section 7 of this Warrant, between
April 1, 2002 and June 30, 2002 inclusive (the "Exercise Period"), at a purchase
price of $2.50 per share (the "Exercise Price"). For purposes of the adjustments
under Paragraph 7 hereof, the per share Exercise Price shall be deemed to be
$2.50 subject to further adjustment as provided in such Paragraph 7. After the
expiration date of the Warrant, the Holder shall have no right to purchase any
shares of Common Stock underlying this Warrant.
<PAGE> 2
3. The rights represented by this Warrant may be exercised at any
time within the Exercise Period above specified, in whole or in part, by (i) the
surrender of this Warrant (with the purchase form at the end hereof properly
executed) at the principal executive office of the Company (or such other office
or agency of the Company as it may designate by notice in writing to the Holder
at the address of the Holder appearing on the books of the Company); and (ii)
payment to the Company of the Exercise Price then in effect for the number of
shares of Common Stock specified in the above-mentioned purchase form together
with applicable stock transfer taxes, if any in the form of a certified check,
cashier's check or money order. This Warrant shall be deemed to have been
exercised, in whole or in part to the extent specified, immediately prior to the
close of business on the date this Warrant is surrendered and payment is made in
accordance with the foregoing provisions of this Section 3, and the person or
persons in whose name or names the certificates for shares of Common Stock shall
be issuable upon such exercise shall become the holder or holders of the record
of such shares of Common Stock at that time and date. The certificate or
certificates for the shares of Common Stock so purchased shall be delivered to
such person or persons within a reasonable time, not exceeding thirty (30) days,
after this Warrant shall have been exercised.
4. This Warrant may not be transferred without the written
agreement of the Board of Directors of the Company. Neither this Warrant nor the
shares of Common Stock issuable upon exercise hereof have been registered under
the Act nor under any state securities law and shall not be transferred, sold,
assigned or hypothecated in violation thereof. If permitted by the foregoing,
any such transfer, sale, assignment or hypothecation shall be effected by the
Holder surrendering this Warrant for cancellation at the office of the Company
referred to in Section 3 hereof, accompanied by an opinion of counsel
satisfactory to the Company and its counsel, stating that such transferee is a
permitted transferee under this Section 4 and that such transfer does not
violate the Act or such state securities laws.
5. The Company covenants and agrees that all shares of Common
Stock which may be issued upon exercise of this Warrant will, upon issuance, be
duly and validly issued, fully paid and nonassessable and no personal liability
will attach to the holder thereof. The Company further covenants and agrees that
during the periods within which this Warrant may be exercised, the Company will
at all times have authorized and reserved a sufficient number of shares of its
Common Stock to provide for the exercise of this Warrant.
6. The Warrant shall not entitle the Holder to any rights,
<PAGE> 3
including, without limitation, voting rights, as a stock holder of the Company.
7. The Exercise Price in effect at any time and the number and kind of
securities purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the happening of certain events as follows:
a) If the company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into
a greater number of shares, or (iii) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the Exercise Price in
effect at the time of the effective date or record date, as the case may be, for
such sale, dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that it shall
equal the price determined by multiplying the Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock outstanding
after giving effect to such action, and the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such action;
b) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to subsection 7 a) above, the number of shares of
Common Stock purchasable upon exercise of this Warrant shall simultaneously be
adjusted by multiplying the number of shares of Common Stock initially issuable
upon exercise of this Warrant by the Exercise Price in effect on the date hereof
and dividing the product so obtained by the Exercise Price, as adjusted.
c) Notwithstanding any adjustment in the Exercise Price or the
number or kind of shares of Common Stock purchasable upon the Exercise of this
Warrant, certificates for Warrants issued prior or subsequent to such adjustment
may continue to express the same price and number and kind of shares of Common
Stock as are initially issuable pursuant to this Warrant.
8. This Agreement shall be governed by and in accordance with the laws
of the State of Jersey.
IN WITNESS WHEREOF, GENISYS RESERVATION SYSTEMS, INC. has caused
this Warrant to be signed by its duly authorized officers and is to be dated
June 30, 1998.
<PAGE> 4
GENISYS RESERVATION SYSTEMS, INC.
By: /s/ LAWRENCE E. BURK
------------------------------------
Lawrence Burk
President
<PAGE> 5
FORM OF ELECTION TO PURCHASE
The Undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to purchase:
______________ shares of Common Stock
and herewith tenders in payment for such securities a certified or cashier's
check or money order payable to the order of Genisys Reservation Systems, Inc.
in the amount of $______________ , all in accordance with the terms hereof. The
undersigned requests that a certificate for such securities be registered in the
name of _______________________________ whose address is _______________________
_________________________ and that such Certificate be delivered to
_______________________________________________________________________________.
Dated:
Signature_______________________________
(Signature must conform in all
respects to the name of holder as
specified on the face of the warrant
Certificate.)
(Insert Social Security or Other
Identifying Number of Holder)
<PAGE> 1
Exhibit 7G
Warrant to Purchase up to 800,000
shares of Common Stock
GENISYS RESERVATION SYSTEMS, INC.
Class Y Common Stock Purchase Warrant
June 30, 1998
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), NOR UNDER ANY STATE SECURITIES LAW AND SHALL NOT BE
TRANSFERRED, SOLD, ASSIGNED OR HYPOTHECATED IN VIOLATION THEREOF UNTIL EITHER
(i) A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER
THE ACT AND APPLICABLE STATE SECURITIES LAW OR (ii) THE COMPANY RECEIVES AN
OPINION OF COUNSEL TO THE COMPANY OR OTHER COUNSEL TO THE HOLDER OF SUCH
SECURITIES WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY AND ITS
COUNSEL THAT SUCH SECURITIES MAY BE TRANSFERRED, SOLD, ASSIGNED OR HYPOTHECATED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS.
THIS CERTIFIES THAT United Leisure Interactive, Inc. (herein after
sometimes called the "Holder") is entitled to purchase from Genisys Reservation
Systems, Inc., a New Jersey corporation (the "Company"), at the price and during
the periods as hereinafter specified, up to 800,000 shares of the Company's
Common Stock (the "Common Stock").
1. The rights represented by this Warrant shall be exercisable
only if the total pretax profits, as defined herein, for the years 1999, 2000
and 2001 from the business and assets being purchased pursuant to the Asset
Purchase Agreement between the parties hereto dated as of June 30, 1998 (the
"Business") equal or exceed $10,000,000. Pretax profits shall be defined as all
net sales derived from the products and services of the Business less all direct
and allocated expenses as determined by the Company to be applicable to the
operation of the Business, including interest on money used in the operation of
the Business computed at a rate of 9% per annum and an allocation of corporate
overhead of the Company.
2. The rights represented by this Warrant shall be exercised,
subject to adjustment in accordance with Section 7 of this Warrant, between
April 1, 2002 and June 30, 2002 inclusive (the "Exercise Period"), at a purchase
price of $6.00 per share (the "Exercise Price") For purposes of the adjustments
under Paragraph 7 hereof, the per share Exercise Price shall be deemed to
<PAGE> 2
be $6.00 subject to further adjustment as provided in such Paragraph 7. After
the expiration date of the Warrant, the Holder shall have no right to purchase
any shares of Common Stock underlying this Warrant.
3. The rights represented by this warrant may be exercised at any
time within the Exercise Period above specified, in whole or in part, by (i) the
surrender of this Warrant (with the purchase form at the end hereof properly
executed) at the principal executive office of the company (or such other office
or agency of the Company as it may designate by notice in writing to the Holder
at the address, of the Holder appearing on the books of the Company); and (ii)
payment to the Company of the Exercise Price then in effect for the number of
shares of Common Stock specified in the above-mentioned purchase form together
with applicable stock transfer taxes, if any in the form of a certified check,
cashier's check or money order. This Warrant shall be deemed to have been
exercised, in whole or in part to the extent specified, immediately prior to the
close of business on the date this Warrant is surrendered and payment is made in
accordance with the foregoing provisions of this Section 3, and the person or
persons in whose name or names the certificates for shares of Common Stock shall
be issuable upon such exercise shall become the holder or holders of the record
of such shares of Common Stock at that time and date. The certificate or
certificates for the shares of Common Stock so purchased shall be delivered to
such person or persons within a reasonable time, not exceeding thirty (30) days,
after this Warrant shall have been exercised.
4. This Warrant may not be transferred without the written
agreement of the Board of Directors of the Company. Neither this Warrant nor the
shares of Common Stock issuable upon exercise hereof have been registered under
the Act nor under any state securities law and shall not be transferred, sold,
assigned or hypothecated in violation thereof. If permitted by the foregoing,
any such transfer, sale, assignment or hypothecation shall be effected by the
Holder surrendering this Warrant for cancellation at the office of the Company
referred to in Section 3 hereof, accompanied by an opinion of counsel
satisfactory to the Company and its counsel, stating that such transferee is a
permitted transferee under this Section 4 and that such transfer does not
violate the Act or such state securities laws.
5. The Company covenants and agrees that all shares of Common
Stock which may be issued upon exercise of this Warrant will, upon issuance, be
duly and validly issued, fully paid and nonassessable and no personal liability
will attach to the holder thereof. The Company further covenants and agrees that
during the periods within which this Warrant may be exercised, the Company will
at all times have authorized and reserved a sufficient number of shares of its
Common stock to provide for the exercise of this Warrant.
<PAGE> 3
6. The Warrant shall not entitle the Holder to any rights, including,
without limitation, voting rights, as a stock holder of the Company.
7. The Exercise Price in effect at any time and the number and kind of
securities purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the happening of certain events as follows:
a) If the company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into
a greater number of shares, or (iii) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the Exercise Price in
effect at the time of the effective date or record date, as the case may be, for
such sale, dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that it shall
equal the price determined by multiplying the Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock outstanding
after giving effect to such action, and the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such action;
b) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to subsection 7 a) above, the number of shares of
Common Stock purchasable upon exercise of this Warrant shall simultaneously be
adjusted by multiplying the number of shares of Common Stock initially issuable
upon exercise of this Warrant by the Exercise Price in effect on the date hereof
and dividing the product so obtained by the Exercise Price, as adjusted.
c) Notwithstanding any adjustment in the Exercise Price or the
number or kind of shares of Common Stock purchasable upon the Exercise of this
Warrant, certificates for Warrants issued prior or subsequent to such adjustment
may continue to express the same price and number and kind of shares of Common
Stock as are initially issuable pursuant to this Warrant.
8. This Agreement shall be governed by and in accordance with the laws
of the State of Jersey.
IN WITNESS WHEREOF, GENISYS RESERVATION SYSTEMS, INC. has caused
this Warrant to be signed by its duly authorized officers and is to be dated
June 30, 1998.
<PAGE> 4
GENISYS RESERVATION SYSTEMS, INC.
By: /s/ LAWRENCE E. BURK
------------------------------------
Lawrence Burk
President
<PAGE> 5
FORM OF ELECTION TO PURCHASE
The Undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to purchase:
________________ shares of Common Stock
and herewith tenders in payment for such securities a certified or cashier's
check or money order payable to the order of Genisys Reservation Systems, Inc.
in the amount of $______________ , all in accordance with the terms hereof. The
undersigned requests that a certificate for such securities be registered in the
name of _______________________________ whose address is _______________________
_________________________ and that such Certificate be delivered to
_______________________________________________________________________________.
Dated:
Signature_______________________________
(Signature must conform in all
respects to the name of holder as
specified on the face of the warrant
Certificate.)
(Insert Social Security or other
Identifying Number of Holder)
