<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (date of earliest event reported): April 24, 2000
UNITED LEISURE CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-6106 13-2652243
(State or other jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) I.D. Number)
1990 Westwood Boulevard, California 90025
(Address of Principal Executive Offices) (Zip Code)
(310)441-0900
(Registrant's Telephone Number,
Including Area Code)
N/A
(Former name or former address, if changed from last report)
Item 5. Other Events.
The registrant hereby incorporates by reference herein the information set
forth in its filing on Schedule 13D filed in connection with its holdings in
netcruise.com, inc.
Item 7. Exhibits.
Exhibit 99 Amendment No. 2 to Schedule 13D filed by registrant in connection
with its shareholdings in netcruise.com, inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
Dated: May 10, 2000 UNITED LEISURE CORPORATION
By /s/ Brian Shuster
-----------------
Brian Shuster,
President and Chief
Executive Officer
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
99 Amendment No. 2 to Schedule 13D filed by registrant in
connection with its shareholdings in netcruise.com, inc.
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EXHIBIT 99
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
NETCRUISE.COM, INC.
- -----------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.0001 PER SHARE
- -----------------------------------------------------------------------------
(Title of Class of Securities)
372299107
- -------------------------------------------------------------------------------
(CUSIP Number)
BRIAN SHUSTER, 1990 WESTWOOD BOULEVARD, LOS ANGELES, CALIFORNIA 90025
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 24, 2000
- --------------------------------------------------------------------------------
(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-l(e), 240.13d-l(f) or
240.13d-l(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).
CUSIP No.....372299107................................................
- --------------------------------------------------------------------------------
1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons
(entities only).
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UNITED INTERNET TECHNOLOGIES, INC.
(fka UNITED LEISURE INTERACTIVE, INC.)
- --------------------------------------------------------------------------------
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) ..............................00
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) ................................................
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization: .....................DELAWARE
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Number of 7. Sole Voting Power .................................
Shares Bene-
ficially -------------------------------------------------------
Owned by Each
Reporting 8. Shared Voting Power ........................900,000
Person With
-------------------------------------------------------
9. Sole Dispositive Power ............................
-------------------------------------------------------
10. Shared Dispositive Power ...................900,000
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person .....
900,000
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) ................................................
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) .............4.3
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)......................CO
- --------------------------------------------------------------------------------
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
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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-l(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.
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power..................................
Shares Bene-
ficially -------------------------------------------------------
Owned by Each
Reporting 8. Shared Voting Power ........................900,000
Person With
-------------------------------------------------------
9. Sole Dispositive Power.............................
-------------------------------------------------------
10. Shared Dispositive Power ...................900,000
- --------------------------------------------------------------------------------
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11. Aggregate Amount Beneficially Owned by Each Reporting Person .......900,000
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) .............................................................
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) .....................4.3
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) .............................CO
- --------------------------------------------------------------------------------
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-l(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.
INTRODUCTORY NOTE
-----------------
The information contained in this Amendment No. 2 to Statement on Schedule
13D of United Internet Technologies, Inc. (formerly known as United Leisure
Interactive, Inc.) and United Leisure Corporation is reflected as of April 24,
2000, the date of the event which required the filing thereof.
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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 netcruise.com, inc., a New Jersey corporation (the "Issuer"
or "netcruise"). The address of the principal executive offices of the Issuer is
2401 Morris Avenue, Union, New Jersey 07083.
ITEM 2. Identity and Background
This Amendment to Statement on Schedule 13D is being filed by United
Internet Technologies, Inc. (formerly known as United Leisure Interactive,
Inc.), a Delaware corporation ("UIT"), and its parent corporation, United
Leisure Corporation ("ULC"). UIT is in the business of developing and marketing
Internet-based multimedia software applications. The address of the principal
executive offices of UIT and ULC is 1990 Westwood Boulevard, Penthouse, Los
Angeles, California 90025.
During the last five years, neither UIT nor ULC has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors), nor
has either UIT 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 UIT and ULC are set forth in Exhibits A and B
hereto. To the best knowledge of UIT 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, UIT and ULC entered into an agreement with
netcruise (formerly known as Genisys Reservation Systems, Inc.)and Netcruise
Interactive, Inc. ("NII")in connection with UIT's sale of certain assets, the
license of certain assets and the license of certain proprietary software to
NII(the "Asset Purchase Agreement").
Thereafter, UIT, the Issuer and certain principal stockholders of the
Issuer entered into an agreement dated October 28, 1998 (the "First Amendment"),
pursuant to which the terms of the Asset Purchase Agreement were amended to
allow the Issuer to comply with certain NASD Marketplace Rules.
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Subsequently, UIT, ULC, the Issuer, and NII entered into a second amendment
to the Asset Purchase Agreement dated as of January 25, 1999 (the "Second
Amendment"), pursuant to which the terms of the Asset Purchase Agreement were
amended yet again. (The Asset Purchase Agreement, First Amendment and Second
Amendment are collectively referred to herein as the "Amended Asset Purchase
Agreement")
Due to the fact that certain of the parties alleged that other parties had
not performed their obligations under the Amended Asset Purchase Agreement, a
dispute arose amongst the parties. After a series of settlement negotiations,
the parties decided to enter into a settlement agreement the terms of which are
set forth below in Items 4 and 5.
ITEM 4. Purpose of Transaction.
Pursuant to an Omnibus Stock Purchase, Restructuring and General Release
Agreement dated as of April 24, 2000 (the "Omnibus Agreement"), by and among
UIT, ULC, netcruise and NII and Joseph Perri, the parties amended and
restructured the relationship previously contemplated by the Amended Asset
Purchase Agreement.
In accordance with the Omnibus Agreement: (i) UIT sold 1,500,000 shares of
the Issuer's Common Stock to Joseph Perri in exchange for $600,000 leaving UIT
with 500,000 shares of Common Stock of netcruise, (ii) the warrants previously
issued to UIT (which were not exercisable) were replaced with warrants to
purchase 400,000 shares of common stock of netcruise at an exercise price of
$1.00 per share ("UIT Warrants"), (iv) the warrants previously issued to Brian
Shuster (which were not exercisable) were replaced with new warrants to Brian
Shuster to purchase 100,000 shares of common stock at an exercise price of $1.00
per share ("Brian Shuster Warrants"), (v) the license agreement previously
executed in connection with the Asset Purchase Agreement was replaced by a new
software license and domain assignment agreement, and (vi) certain of the
parties released one other from their obligations arising out of the Amended
Asset Purchase Agreement.
The UIT Warrants are immediately exercisable and expire on April 23, 2005.
The Brian Shuster Warrants are also immediately exercisable and expire on April
23, 2005.
ITEM 5. Interest in Securities of the Issuer.
(a) Upon consummation of the transactions described in the Omnibus
Agreement, UIT will beneficially own (i) 500,000 shares of the Issuer's Common
Stock, representing approximately 2.4% of the issued and outstanding shares of
the Issuer's Common Stock; and (ii) warrants to purchase 400,000 shares of the
Issuer's Common Stock, representing approximately 1.9% of the Issuer's Common
Stock, which securities are not registered under the Securities Act of 1933.
Because UIT is a wholly-owned subsidiary of ULC, ULC may also be deemed to
beneficially own the shares held by UIT.
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Upon consummation of the transactions described in the Omnibus Agreement
Brian Shuster will beneficially own warrants to purchase 100,000 shares of the
Issuer's Common Stock, representing less than 1% of the Issuer's Common Stock,
which securities are not registered under the Securities Act of 1933.
Brian Shuster is the Chairman and Chief Executive Officer of ULC and is
also the sole director of UIT. Because of UIT's status as a wholly-owned
subsidiary of ULC, the number of shares beneficially owned listed includes the
shares of both UIT and ULC. UIT and ULC have disclaimed beneficial ownership of
the Brian Shuster Warrants. Brian Shuster has disclaimed beneficial ownership
of the 500,000 shares of Issuer's Common Stock held by UIT and the UIT Warrants.
(b) UIT and ULC share the power to vote and dispose of the shares held by
UIT.
(c) See Item 4 above.
(d) On April 24, 2000, UIT and ULC ceased to be the beneficial owners of
more than five percent of the Issuer's Common Stock as a result of transactions
described herein.
ITEM 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
Because UIT's status as a wholly-owned subsidiary of ULC, UIT can be
considered to share its voting and investment decisions with respect to the
shares and warrants it holds with its parent corporation, ULC. See Item 5(a)
above.
ITEM 7. Material to Be Filed as Exhibits.
Exhibit 99. Omnibus Stock Purchase, Restructuring and General Release
Agreement, by and among United Leisure Corporation, United Internet
Technologies, Inc., Harry Shuster, Brian Shuster, netcruise.com, inc., Netcruise
Interactive, Inc., and Joseph Perri dated April 24, 2000.
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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: May 3, 2000
UNITED INTERNET TECHNOLOGIES, INC.
/s/ Brian Shuster
- -----------------
Brian Shuster, Director
UNITED LEISURE CORPORATION
/s/ Brian Shuster
- -----------------
Brian Shuster, President
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EXHIBIT A
OFFICERS AND DIRECTORS OF UIT
Sonia Mikic- Chief Executive Officer
Chris Riley- Chief Financial Officer, Secretary and Treasurer
Brian Shuster- Director
The business address of the officers and director is 1990 Westwood
Boulevard, Los Angeles, California 90025.
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EXHIBIT B
OFFICERS AND DIRECTORS OF ULC
Brian Shuster- Chief Executive Officer, President and Chairman of the Board
Julie Lepere- Secretary
Alvin Cassel- Director
J. Brooke Johnston, Jr.- Director
The business address of the officers and directors is 1990 Westwood
Boulevard, Los Angeles, California 90025.
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EXHIBIT 99
Execution Copy
--------------
OMNIBUS STOCK PURCHASE,
-----------------------
RESTRUCTURING AND GENERAL RELEASE AGREEMENT
-------------------------------------------
This Omnibus Stock Purchase, Restructuring and General Release Agreement
(the "Agreement") is made and entered into as of the 24/th/ day of April, 2000,
by and between United Leisure Corporation, a Delaware corporation ("ULC"),
United Internet Technologies, Inc., a Delaware corporation and wholly-owned
subsidiary of ULC (formerly known as United Leisure Interactive, Inc. and
hereinafter referred to as "UIT"), Harry Shuster ("H. Shuster"), Brian Shuster
("B. Shuster"), netcruise.com, inc., a New Jersey corporation (formerly known as
Genisys Reservations Systems, Inc. and hereinafter referred to as "Netcruise"),
Netcruise Interactive, Inc., a New Jersey corporation and wholly-owned
subsidiary of Netcruise ("NII"), and Joseph Perri ("Perri"), with reference to
the following facts:
Recitals:
--------
A. ULC, UIT, Netcruise and NII heretofore entered into that certain Asset
Purchase Agreement, dated as of June 30th, 1998 (together with all exhibits
thereto and all documents and instruments of every type which were executed in
connection therewith, the "APA"), pursuant to which, among other things, UIT
sold, to NII, all of UIT's right, title and interest in and to the License (as
defined in the APA) and the other Assets (as defined in the APA), in exchange
for, among other things, (i) 2,000,000 shares (the "Shares") of the common
shares (the "Common Stock") of Netcruise, and (ii) two common stock purchase
warrants collectively exercisable for the purchase of up to an additional
1,600,000 shares of Common Stock (collectively, the "Old UIT Warrants").
Pursuant to the APA, Netcruise also issued, to B. Shuster, two common stock
purchase warrants collectively exercisable for the purchase of up to 400,000
shares of Common Stock (collectively, the "Old B. Shuster Warrants").
B. The APA was subsequently amended pursuant to that certain Agreement,
dated as of the 28/th/ day of October, 1998 (the "First Amendment"); and the APA
and the First Amendment were subsequently amended pursuant to that certain
Agreement, dated as of January 25, 1999 (the "Second Amendment"). The APA, the
First Amendment and the Second Amendment, together with any and all documents
and instruments of every type which have heretofore been executed in connection
therewith, and all amendments to the foregoing, are sometimes hereinafter
collectively referred to as the "Amended APA."
C. Certain disputes have arisen between the parties (other than Perri) in
respect of the Amended APA, which all of the parties wish to fully, finally and
forever resolve pursuant to this Agreement.
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D. Perri desires to purchase from UIT, and UIT desires to sell to Perri,
1,500,000 of the Shares (the "Perri Shares") pursuant to this Agreement; and
Netcruise and NII have consented to such purchase and sale.
E. UIT represents that it has not sold, encumbered or otherwise
transferred any of the Shares or any of the Old UIT Warrants, or any interest
therein, except to the extent contemplated by the Amended APA.
F. B. Shuster represents that he either has never received, or has
misplaced, the requisite instruments representing the Old B. Shuster Warrants
(collectively, the "Old B. Shuster Certificates"); but that he has not sold,
encumbered or otherwise transferred any of the Old B. Shuster Warrants, or any
interest therein.
G. Based upon the respective representations of UIT and B. Shuster
contained in Recital E and Recital F above, and Netcruise's and NII's failure to
effect the Delivery (as defined in the First Amendment) of the United Preferred
Shares (as defined in the First Amendment) to UIT (which failure, together with
all other outstanding issues between the parties, is being fully, finally and
forever resolved pursuant to this Agreement), Netcruise and NII represent that
(i) the Shares, the Old UIT Warrants and the Old B. Shuster Warrants are duly
and validly authorized, issued, outstanding and fully paid and nonassessable;
(ii) UIT owns all of the Shares and the Old UIT Warrants, of record and
beneficially, free and clear of all liens, claims and encumbrances of every type
(collectively, "Encumbrances"); (iii) B. Shuster owns all of the Old B. Shuster
Warrants, of record and beneficially, free and clear of all Encumbrances; (iv)
UIT has the right to sell the Perri Shares to Perri pursuant to this Agreement;
and (v) when the Perri Shares have been purchased by and sold to Perri pursuant
to the terms of this Agreement, Perri will own the Perri Shares free and clear
of all Encumbrances. Based upon the same reasons and also in reliance upon the
representation of Netcruise and NII contained in Recital G(i), UIT joins in the
representations made with respect to it by Netcruise and NII in Recital G(ii),
(iv) and (v), and B. Shuster joins in the representations made with respect to
him by Netcruise and NII in Recital G(iii).
H. Each of the parties represents that such party's execution and
delivery of this Agreement, and the performance by such party of such party's
obligations hereunder, have been duly and validly authorized by all necessary
corporate and other action, and that this Agreement is binding upon and
enforceable against such party in accordance with its terms.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Incorporation by Reference of Recitals. The foregoing Recitals are
--------------------------------------
incorporated
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herein by this reference; and the statements contained therein shall be deemed
to constitute representations, warranties, covenants and agreements of the
parties to which they relate.
2. Perri Shares; Etc.
-----------------
(a) Purchase and Sale. In reliance upon the truth and accuracy of the
-----------------
representations and warranties of Perri, Netcruise and NII contained in this
Agreement, but subject to UIT's receipt from Perri of the full Perri Shares
Purchase Price (hereinafter defined) by wire transfer (the "Wire Transfer") into
a bank account designated by UIT for such purpose to William J. Davis, Esq.
("Davis"), of Scheichet & Davis, P.C. (the "Account"), and further subject to
compliance by Netcruise and NII with their obligations contained in this Section
2 and in Sections 3(a)(ii)(B), 3(a)(ii)(C) and 3(ii)(D) hereof, UIT agrees to,
and hereby does, sell, transfer and convey to Perri all of UIT's right, title
and interest in and to the Perri Shares. Similarly, Perri agrees to, and hereby
does, purchase from UIT all of UIT's right, title and interest in and to the
Perri Shares for the aggregate purchase price of $600,000 (the "Perri Shares
Purchase Price"), which amount Perri agrees to immediately pay to UIT by Wire
Transfer of the full Perri Shares Purchase Price to the Account in immediately
available funds. Each of Netcruise and NII hereby consent to and approve of the
purchase and sale of the Perri Shares pursuant to this Agreement.
(b) New Certificates. In furtherance of its transfer of the Perri
----------------
Shares to Perri pursuant to Section 2(a) hereof, promptly after the date hereof
UIT will, by delivering the same to Davis, deliver to Netcruise (for the benefit
of Perri and UIT) UIT's stock certificate (the "Old UIT Certificate") evidencing
the Shares, accompanied by (i) an appropriate assignment separate from
certificate (the "Stock Assignment") covering the Perri Shares, and (ii) a copy
of a written consent (the "Board Consent") of UIT's sole director adopting
resolutions approving the sale of the Perri Shares to Perri. Promptly
following receipt by Davis of the foregoing, Netcruise shall (i) validly issue
two new stock certificates evidencing the Shares, one in the amount of
1,500,000 of the Shares (the "Perri Related New Certificate") and one in the
amount of 500,000 of the Shares (the "New UIT Certificate"); and (ii) deliver
the Perri Related New Certificate to Perri and the New UIT Certificate to UIT.
Each of Perri and Netcruise acknowledges and agrees that UIT will be deemed to
have satisfied its obligations to Perri under Section 2(a) above and this
Section 2(b) upon delivery of the Old UIT Certificate, Stock Assignment and
Board Consent to Davis in such manner and at such time as may be agreed to by
Davis and counsel for UIT.
(c) [Intentionally omitted].
(d) Certain Representations and Warranties of Perri. In order to
-----------------------------------------------
induce UIT to consummate the purchase and sale of the Perri Shares to Perri
pursuant to this Agreement, Perri represents and warrants to UIT and ULC, as
follows: (i) he is an "accredited investor" (as such term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act of 1933, as
amended), and his net worth exceeds $1,000,000; (ii) he already, independent of
his acquisition of
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the Perri Shares pursuant to this Agreement, is a significant investor in the
Company, and, as such, already is thoroughly familiar with the Company and its
status, business, prospects and financial condition; (iii) he has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of his investment in the Perri Shares; (iv) neither UIT,
ULC, H. Shuster or B. Shuster has provided him with any information or
representations of any type in respect of the Company or its status, business,
prospects or financial condition, and, instead, he has, for purposes of his
investment in the Perri Shares, relied solely upon his own knowledge of the
Company and its status, business and financial condition and upon disclosures
which have been provided to him by others (in respect of which disclosures, he
agrees, UIT, ULC, H. Shuster and B. Shuster shall have no responsibility
whatsoever); (v) he has been given the opportunity to ask questions of, and
receive answers from, Netcruise and its representatives concerning the Company
and its status, business, prospects and financial condition, and obtained all
such information as he deems necessary to verify the accuracy of the information
which has been provided to him in order for him to be able, on a fully informed
basis, to evaluate the merits and risks of his investment in the Perri Shares
(in respect of which, he agrees, UIT, ULC, H. Shuster and B. Shuster shall have
no responsibility whatsoever); (vi) he understands that his investment in the
Perri Shares involves a high degree of risk; (vii) he has, in connection with
his investment in the Perri Shares, independently retained and utilized such
financial, legal and other advisors as he deems necessary for purposes of
evaluating the merits and risks of his investment in the Perri Shares; (viii) he
has determined that his investment in the Perri Shares is a suitable investment
for him in view of his actual and anticipated financial needs, and he can afford
to bear the complete loss of such investment without affecting his lifestyle;
(ix) he is acquiring the Perri Shares for investment purposes only and without a
view to any distribution, subdivision or fractionalization thereof, and he has
no plans, or agreements or arrangements with any person, firm or entity in
respect of any sale, transfer, pledge or other disposition of any of the Perri
Shares or any interest therein; (x) he understands that the sale of the Perri
Shares to him pursuant to this Agreement has not been registered or qualified
under applicable federal and state securities laws, and agrees not to sell,
encumber or otherwise transfer any of the Perri Shares, or any interest therein,
without compliance with the registration and qualification requirements of such
laws unless and except to the extent that applicable exemptions therefrom exist
(and he further understands and agrees that no one has any obligation to
register or qualify under federal or state securities laws any disposition by
him of the Perri Shares); (xi) he understands that, by virtue of the foregoing,
he must bear the economic risk of his investment in the Perri Shares for an
indefinite period of time; (xii) he understands that Netcruise will be entitled
to impose an appropriate legend on his stock certificate(s) evidencing the Perri
Shares to reflect the foregoing, and issue appropriate stop transfer
instructions to its transfer agent (in respect of which, he agrees, UIT, ULC, H.
Shuster and B. Shuster shall have no responsibility whatsoever); (xiii) on March
6, 2000, he consummated a transaction with Netcruise in connection with which he
purchased from Netcruise an aggregate of 9,487,500 shares of theretofore
unissued Common Stock for a cash purchase price of $1,897,500 and converted
$375,000 of his cash loans to the Company into an aggregate of 2,875,000
additional theretofore unissued shares of Common Stock (the "March 6
Transaction"); (xiv) he received no other Netcruise securities and received no
registration rights in connection with
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the March 6 Transaction, and has no registration rights in respect of any of the
other Netcruise securities owned by him; (xv) all of his representations and
warranties contained in this Agreement are true and correct; and (xvi) his
option from Netcruise to acquire an additional 4,625,000 shares of Common Stock
for $600,000 has not been exercised and will expire unexercised upon the
consummation of the transactions contemplated by this Agreement; (xvii) he has
read and is thoroughly familiar with the Amended APA and this Agreement, and
approves of and consents to this Agreement and all of the transactions
contemplated hereby.
(e) Certain Representations and Warranties of Netcruise and NII. In
-----------------------------------------------------------
order to induce the UIT Parties (hereinafter defined) to enter into this
Agreement and perform their respective obligations hereunder, each of Netcruise
and NII represents and warrants to the UIT Parties that the representations and
warranties of Perri contained in Sections 3(d)(xiii), 3(d)(xiv) and 3(d)(xvi)
and in the parenthetical at the end of Section 3(d)(x) above are true and
correct; and that, attached hereto as Exhibit 2(e) are pro forma financial
------------
statements of Netcruise which accurately reflect the financial condition and
capitalization of Netcruise both immediately before and immediately after the
March 6 Transaction.
3. Restructuring and General Release.
---------------------------------
(a) Restructuring. Each of UIT, ULC, H. Shuster and B. Shuster
-------------
(collectively, the "UIT Parties"), on the one hand, and each of Netcruise and
NII (collectively, the "Netcruise Parties"), on the other hand, hereby agrees
that their past relationships shall be, and they hereby are, restructured, as
follows:
(i) Termination of Amended APA. Except as specifically herein
--------------------------
provided in respect of the Shares, the Amended APA, and all of the respective
rights and obligations of the parties thereunder and in respect thereof, are
hereby terminated in their entirety. By way of illustration only, and not by
way of limitation, (A) all rights and obligations of every type between the UIT
Parties (or any of them), on the one hand, and the Netcruise Parties (or any of
them), on the other hand, under or in respect of the License (and in respect of
the Technology, as defined in the License) are hereby terminated in their
entirety; (B) Netcruise shall be entitled to immediately cancel the Old UIT
Warrants and the Old B. Shuster Warrants (and B. Shuster agrees to promptly
redeliver to Netcruise the Old B. Shuster Certificates at such time(s), if ever,
as he locates them); (C) the June 30, 1998 assignment by UIT of that certain
Commercial Lease, dated March 1, 1996, between 1990 Westwood Blvd., Inc. and ULI
with respect to premises at 1990 Westwood Blvd., Penthouse, Los Angeles, CA
(including the use of furniture in such offices) is hereby terminated; and (D)
all indebtedness and any other payment rights and obligations of every type
(including without limitation, such thereof as exist by virtue of the mandatory
dividend payments contemplated by the First Amendment) between the UIT Parties
(or any of them), on the one hand, and the Netcruise Parties (or any of them),
on the other hand, are hereby terminated; and (E) to the extent that they have
not already done so, each of H. Shuster and B. Shuster resigns from any and all
positions he
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<PAGE>
has heretofore held with either of the Netcruise Parties.
(ii) Continuing Relationship. Notwithstanding the provisions of
-----------------------
Section 3(a)(i) above:
(A) The Shares. UIT shall continue to own the Shares
----------
(until such time(s) as they are disposed of by UIT), except to the extent that
the Perri Shares included therein are being transferred to Perri pursuant to
Section 2 hereof.
(B) The New UIT Warrants. Concurrently with the execution
--------------------
hereof, Netcruise shall execute and deliver to UIT new common stock purchase
warrants (the "New UIT Warrants") pursuant to documents in the form of
Exhibit3 (a)(ii)(B) hereto, exercisable for the purchase of up to 400,000
- -------------------
shares of Common Stock at a purchase price of $1.00 per share (in each case,
subject to adjustment as provided therein) in substitution for the Old UIT
Warrants.
(C) New B. Shuster Warrants. Concurrently with the
-----------------------
execution hereof, Netcruise shall execute and deliver to B. Shuster new common
stock purchase warrants (the "New B. Shuster Warrants") pursuant to documents in
the form of Exhibit 3(a)(ii)(C) hereto, exercisable for the purchase of up to
-------------------
100,000 shares of Common Stock at a purchase price of $1.00 per share (in each
case, subject to adjustment as provided therein), in substitution for the Old B.
Shuster Warrants.
(D) New Software License and Domain Assignment Agreement.
----------------------------------------------------
Concurrently with the execution hereof, each of UIT and Netcruise shall execute
and deliver to the other a new Software License and Domain Assignment Agreement
in the form of Exhibit 3(a)(ii)(D) hereto, in substitution for the License and
-------------------
all other rights of every type that the Netcruise Parties (or any of them) might
otherwise be deemed to have in respect of the Technology.
(E) Current Public Information. For so long as UIT owns
--------------------------
any of the Shares and for so long as UIT or B. Shuster owns any of the New UIT
Warrants or the New B. Shuster Warrants or any shares of Common Stock acquired
upon exercise of the New UIT Warrants or the New B. Shuster Warrants, Netcruise
shall cause there to be available, at all times, adequate current public
information with respect to Netcruise within the meaning of paragraph (c) of
Rule 144 promulgated under the Securities Act of 1933, as amended (or any
successor such Rule).
(F) Non-Competition. UIT agrees that, for so long as
---------------
Netcruise is in compliance with the terms and provisions of the Software License
and Domain Assignment Agreement referred to in Section 3(a)(ii)(D) above (the
"Software License"), UIT will not utilize or license others to utilize its video
technology (i.e., the video technologies known as "PAV" and "DIVO") for Travel
----
Related Applications (as defined in Section 2 of the Software License) in
competition with Netcruise except in the territory of the United Kingdom and
Europe.
6
<PAGE>
(b) Mutual General Releases.
-----------------------
(A) Release By UIT Parties. The UIT Parties, and each of
----------------------
them, hereby fully, finally and forever release and discharge the Netcruise
Parties, and each of them, their affiliates and their respective past and
present officers, directors, employees, agents, shareholders, heirs, successors
and assigns, from and against any and all claims of any nature whatsoever,
whether known, unknown, concealed or hidden, which any of them now has or
heretofore has had or now or hereafter may be deemed to have for any reason
whatsoever, whether arising under the Amended APA or otherwise; provided,
however, that the foregoing shall be inapplicable to any claims arising under or
by virtue of this Agreement.
(B) Release By Netcruise Parties. The Netcruise Parties,
----------------------------
and each of them, hereby fully, finally and forever release and discharge the
UIT Parties, and each of them, and their respective past and present officers,
directors, employees, agents, shareholders, heirs, successors and assigns, from
and against any and all claims of any nature whatsoever, whether known, unknown,
concealed or hidden, which any of them now has or heretofore has had or now or
hereafter may be deemed to have for any reason whatsoever, whether arising under
the Amended APA or otherwise; provided, however, that the foregoing shall be
inapplicable to any claims arising under or by virtue of this Agreement.
(C) Certain Acknowledgments. Each of the UIT Parties, on
-----------------------
the one hand, and each of the Netcruise Parties, on the other hand, acknowledges
that he or it may hereafter discover facts which are different from or in
addition to those known or believed to be true with respect to the foregoing;
and agree that this Agreement shall be and remain in full force and effect in
all respects notwithstanding such different or additional facts. Each of the UIT
Parties, on the one hand, and each of the Netcruise Parties, on the other hand,
represents and warrants to the others that he or it has not sold, encumbered or
otherwise transferred any of the claims being released pursuant to this Section
3(b); and agrees to fully indemnify and hold harmless the others in respect
thereof.
(D) Waiver of Section 1542 of California Civil Code. Each
-----------------------------------------------
of the UIT Parties, on the one hand, and each of the Netcruise Parties, on the
other hand, hereby expressly waives the provisions of Section 1542 of the Civil
Code of the State of California (and of all similar laws), which provides as
follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
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<PAGE>
(c) Press Releases. Each of the UIT Parties, on the one hand, and
--------------
each of the Netcruise Parties, on the other hand, acknowledges and agrees that
it is their mutual intention and agreement to coordinate all press releases and
the filing of all public documents in respect of the transactions contemplated
by this Agreement. In furtherance thereof, (i) each of the UIT Parties agrees
not to issue any press release or file any public document that refers to this
Agreement or any of the Netcruise Parties without the prior consent of Netcruise
(which consent will be provided promptly and will not unreasonably withheld),
and (ii) each of the Netcruise Parties agrees not to issue any press release or
file any public document that refers to this Agreement or any of the UIT Parties
without the prior consent of UIT and ULC (which consents will be provided
promptly and will not be unreasonably withheld), in either case except to the
extent required by applicable law.
(d) Obligations of UIT Parties. The obligations of the UIT Parties
--------------------------
under this Section 3 are hereby expressly made subject to the prior receipt by
UIT of the full Perri Shares Purchase Price by UIT from Perri pursuant to
Section 2(a) above.
4. Miscellaneous.
-------------
(a) Survival. All of the representations, warranties, covenants and
--------
agreements of the parties contained in this Agreement shall survive the
execution hereof and remain in full force and effect until the expiration of all
applicable statutes of limitations.
(b) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the internal laws of the State of California.
(c) Exhibits. Exhibits referred to in this Agreement are hereby made
--------
a part hereof.
(d) Notices. Any notice or other communication given by any of the
-------
parties hereto to any of the other parties hereto pursuant to or in connection
with this Agreement shall be in writing and personally delivered, faxed (with
the transmission of such fax confirmed by a fax transmission report) or mailed
by certified mail, postage prepaid, as follows:
(i) If to Joseph Perri or any of the Netcruise Parties, to such
party:
c/o Scheichet & Davis, P.C.
505 Park Avenue
New York, New York 10022
Attn: William Davis, Esq.
Fax No. (212) 371-7634
and
8
<PAGE>
c/o Steven Goldman, Esq.
2013 O Street, N.W.
Washington, D.C. 20036
Fax No. (202) 293-2556
(ii) If to any of the UIT Parties, to such party:
c/o Richman, Mann, Chizever, Phillips & Duboff
9601 Wilshire Boulevard, Penthouse
Beverly Hills, CA 90210
Attention: Gerald M. Chizever, Esq.
Fax No. (310) 274-2831
or to such other address as hereafter shall be furnished in writing by any of
the parties hereto to the other parties hereto, as aforesaid. Notices shall not
be deemed delivered until received at the address or facsimile number to which
they are sent.
(e) Entire Understanding. This Agreement sets forth the entire
--------------------
understanding of the parties, and shall not be changed or terminated orally.
All prior discussions between the parties pertaining to the subject matter of
this Agreement, both written and oral, and all prior agreements, both written
and oral, between the parties (whether or not relating to the subject matter of
this Agreement), are superseded by their entirety by and merged into this
Agreement.
(f) Headings. The headings herein are inserted only for convenient
--------
reference, and in no way define, limit or describe the scope of this Agreement,
or the intent of any of the provisions hereof; and they shall not be used in
construing this Agreement.
(g) Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
(h) Further Acts. Each party to this Agreement agrees to execute any
------------
and all documents and perform any and all acts reasonably requested by any of
the other parties in order to more fully effectuate the purposes of this
Agreement.
[This space intentionally left blank]
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<PAGE>
(i) Attorneys' Fees. In the event that any party to this Agreement
---------------
commences legal proceedings against any of the other parties under or in respect
of this Agreement, the prevailing party shall be entitled to recover its
reasonable attorneys' fees and expenses and court costs.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
______________________________________
JOSEPH PERRI
UNITED INTERNET TECHNOLOGIES, INC.
By: ___________________________________
UNITED LEISURE CORPORATION
By: ___________________________________
______________________________________
HARRY SHUSTER
______________________________________
BRIAN SHUSTER
netcruise.com, inc.
By: ___________________________________
NETCRUISE INTERACTIVE, INC.
By: ___________________________________
10
