AMERICAN LEISURE HOLDINGS, INC.
A NEVADA CORPORATION
WARRANT PURCHASE AGREEMENT
THIS WARRANT PURCHASE AGREEMENT, dated as of June 17, 2004 (the
"AGREEMENT"), is entered into by and between American Leisure Holdings, Inc., a
Nevada corporation (the "COMPANY") and Stanford Venture Capital Holdings, Inc.,
a Delaware corporation (the "PURCHASER").
W I T N E S S E T H:
WHEREAS, of even date herewith, the Purchaser, American Leisure Marketing
& Technology, Inc. ("ALMT"), Orlando Holidays, Inc. ("OHI"), American Leisure,
Inc. ("AL"), Welcome to Orlando, Inc. ("WTO"), American Travel & Marketing
Group, Inc. ("ATMG"), Caribbean Leisure Marketing, Ltd. ("CLM"), CastleCharts
Ltd. ("CC"), Hickory Travel Systems, Inc. ("HTS") and the Company (ALMT, OHI,
AL, CLM, WTO, CC, HTS and the Company are collectively referred to herein as,
the "Makers") have entered into a Credit Agreement of even date herewith
pursuant to which, among other things, the Company and the Makers borrowed from
the Purchaser up to an aggregate of Four Million Dollars (the "CREDIT
AGREEMENT"); and
WHEREAS, as partial consideration for the Purchaser entering into the
Credit Agreement and upon the terms and conditions of this Agreement, the
Purchaser has agreed to purchase, and the Company wishes to issue and sell,
warrants to purchase up to an aggregate of 500,000 of the Company's common stock
$0.001 par value per share (the "COMMON STOCK"), at an exercise price of $5.00
per share for warrants to purchase 500,000 shares of the Common Stock, on a pro
rata basis in accordance with Schedule A attached hereto, expiring May 26, 2009
(the "WARRANTS"); and
WHEREAS, the Company and the Purchaser are executing and delivering this
Agreement in reliance upon the exemptions from registration provided by
Regulation D ("REGULATION D") promulgated by the Securities and Exchange
Commission (the "COMMISSION") under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and/or Section 4(2) of the Securities Act.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. AGREEMENT TO PURCHASE; PURCHASE PRICE
(a) Capitalized terms used herein not otherwise defined herein shall
have the same meaning ascribed to such terms as in the Credit Agreement.
(b) Subject to the terms and conditions in this Agreement, the
Purchaser hereby agrees to purchase from the Company, and the Company hereby
agrees to issue and sell to the Purchaser, the Warrants as additional
consideration for the execution and delivery of the Credit Agreement on the date
hereof.
(c) With each Borrowing, in accordance with the Credit Agreement,
the Company shall issue to Purchaser the Warrants, in such numbers and
exercisable at such exercise price as is set forth on Exhibit A attached hereto.
2. ACCESS TO INFORMATION; INDEPENDENT INVESTIGATION
The Purchaser represents and warrants to, and covenants and agrees with,
the Company as follows:
(a) QUALIFIED INVESTOR. The Purchaser is (i) experienced in making
investments of the kind described in this Agreement and the related documents,
(ii) able to afford the entire loss of its investment in the Warrants, and (iii)
an "ACCREDITED INVESTOR" as defined in Rule 501(a) of Regulation D and knows of
no reason to anticipate any material change in its financial condition for the
foreseeable future.
(b) RESTRICTED WARRANTS. The Warrants are "restricted Securities" as
defined in Rule 144 promulgated under the Securities Act. All subsequent offers
and sales by the Purchaser of the Warrants and the Common Stock issuable upon
exercise of the Warrants shall be made pursuant to an effective registration
statement under the Securities Act or pursuant to an applicable exemption from
such registration.
(c) RELIANCE ON REPRESENTATIONS. The Purchaser understands that the
Warrants are being offered and sold to it in reliance upon exemptions from the
registration requirements of the United States federal Securities laws, and that
the Company is relying upon the truthfulness and accuracy of the Purchaser's
representations and warranties, and the Purchaser's compliance with its
covenants and agreements, each as set forth herein, in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire
the Warrants.
(d) LEGALITY. The Purchaser has the requisite corporate power and
authority to enter into this Agreement.
(e) AUTHORIZATION. This Agreement and any related agreements, and
the transactions contemplated hereby and thereby, have been duly and validly
authorized by the Purchaser, and such agreements, when executed and delivered by
each of the Purchaser and the Company will each be a valid and binding agreement
of the Purchaser, enforceable in accordance with their respective terms, except
to the extent that enforcement of each such agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors rights
generally and to general principles of equity.
(f) BROKER'S FEES AND COMMISSIONS. Neither the Purchaser nor any of
its officers, partners, employees or agents has employed any investment banker,
broker, or finder in connection with the transactions contemplated by the
Primary Documents.
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3. REPRESENTATIONS OF THE COMPANY
The Company represents and warrants to, and covenants and agrees with, the
Purchaser that:
(a) ORGANIZATION. The Company is a corporation duly organized and
validly existing and in good standing under the laws of the State of Nevada and
has all requisite corporate power and authority to carry on its business as now
conducted and as proposed to be conducted after the consummation of the
transactions contemplated by this Agreement. The Company is duly qualified as a
foreign corporation and in good standing in all jurisdictions in which either
the ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification. The minute books and
stock record books and other similar records of the Company have been provided
or made available to the Purchaser or its counsel prior to the execution of this
Agreement, are complete and correct in all material respects and have been
maintained in accordance with sound business practices. Such minute books
contain true and complete records of all actions taken at all meetings and by
all written consents in lieu of meetings of the directors, stockholders and
committees of the board of directors of the Company from the date of
organization through the date hereof. The Company has, prior to the execution of
this Agreement, delivered to the Purchaser true and complete copies of the
Company's Articles of Incorporation, and Bylaws, each as amended through the
date hereof. The Company is not in violation of any provisions of its Articles
of Incorporation or Bylaws.
(b) CAPITALIZATION. On the date hereof, the authorized capital of
the Company consists of: (i)100,000,000 shares of Common Stock, par value $0.001
per share, of which 7,488,983 shares are issued and outstanding and the
preferred stock set forth in the Company's most recently filed Form 10-QSB.
Except as set forth on Schedule 3(b), the Company has no authorized or
outstanding options or warrants issued and outstanding except for the Warrants
to purchase 1,950,000 shares of Common Stock previously issued to the Purchaser
and the Warrants to purchase 500,000 shares of Common Stock to be issued to the
Purchaser hereunder, there are no outstanding rights, agreements, arrangements
or understandings to which the Company is a party (written or oral) which would
obligate the Company to issue any equity interest, option, warrant, convertible
note, or other types of Warrants or to register any shares in a registration
statement filed with the Commission. There is no agreement, arrangement or
understanding between or among any entities or individuals which affects,
restricts or relates to voting, giving of written consents, dividend rights or
transferability of shares with respect to any voting shares of the Company,
including without limitation any voting trust agreement or proxy. There are no
outstanding obligations of the Company to repurchase, redeem or otherwise
acquire for value any outstanding shares of capital stock or other ownership
interests of the Company or to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in any other entity. There
are no anti-dilution or price adjustment provisions regarding any security
issued by the Company (or in any agreement providing rights to security holders)
that will be triggered by the issuance of the Warrants.
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(c) CONCERNING THE WARRANTS. The Common Stock issuable upon exercise
of the Warrants, shall be duly and validly issued, fully paid and non-assessable
and will not subject the holder thereof to personal liability by reason of being
such a holder.
(d) AUTHORIZED SHARES. The Company has available and has reserved a
sufficient number of authorized and unissued shares of Common Stock as may be
necessary to effect exercise of the Warrants. The Company understands and
acknowledges the potentially dilutive effect to the Common Stock of the issuance
of shares of Common Stock upon the exercise of the Warrants. The Company further
acknowledges that its obligation to issue shares of Common Stock upon exercise
of the Warrants is absolute and unconditional regardless of the dilutive effect
that such issuance may have on the ownership interests of other stockholders of
the Company.
(e) LEGALITY. The Company has the requisite corporate power and
authority to enter into this Agreement, and to issue and deliver the Common
Stock issuable upon exercise of the Warrants.
(f) TRANSACTION AGREEMENTS. This Agreement, the Warrants, the
Registration Rights Agreement of even date herewith among the Company and the
Purchaser (the "REGISTRATION RIGHTS AGREEMENT"), (collectively, the "PRIMARY
DOCUMENTS"), and the transactions contemplated hereby and thereby, have been
duly and validly authorized by the Company; this Agreement has been duly
executed and delivered by the Company and this Agreement is, and the other
Primary Documents, when executed and delivered by the Company, will each be, a
valid and binding agreement of the Company, enforceable in accordance with their
respective terms, except to the extent that enforcement of each of the Primary
Documents may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect relating
to creditors' rights generally and to general principles of equity. (f)
(g) SEC FILINGS. As of the date hereof, none of the filings made
with the SEC by the Company since January 1, 2000 (the "ALHI SEC FILINGS"),
contained any untrue statement of a material fact or to the best of Company's
knowledge, omitted any material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances in which they
were made, not misleading, except to the extent such filings have been all prior
to the date of this Agreement corrected, updated or superseded by a document
subsequently filed with Commission. The Company has furnished or made available
to the Purchaser true and complete copies of all the documents it has filed with
the Commission since January 1, 2000, all in the forms so filed.
As of May 26, 2004, the Company shall have made all filings with the
Securities and Exchange Commission (the "COMMISSION") that it has been required
to make under the Securities Act of 1933 (the "SECURITIES ACT") and the
Securities and Exchange Act of 1934 (the "EXCHANGE ACT"), as amended (the
"COMPANY SEC FILINGS") and will have furnished or made available to the
Purchaser true and complete copies of all the documents it has filed with the
Commission since its inception, all in the forms so filed. As of May 26, 2004,
filings by the Company will comply in all material respects with the
requirements of the Securities Act and the Exchange Act, and the rules and
regulations of the Commission promulgated thereunder, as the case may be, and
none of the filings with the Commission contained or will contain any untrue
statement of a material fact or omitted or will omit any material fact required
to be stated therein or necessary to make the statements made therein, in light
of the circumstances in which they were made, not misleading, except to the
extent such filings have been all prior to the date of this Agreement corrected,
updated or superseded by a document subsequently filed with Commission. To the
best of the Company's knowledge, the confidential informal investigation
presently underway by the Commission does not form, provide or give rise to any
basis for, or cause, a material adverse effect on the Company or any of its
officers and/or directors.
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(h) FINANCIAL STATEMENTS. The Company's financial statements and
related notes thereto, as delivered to Purchaser (the "COMPANY FINANCIALS") are
correct and complete in all material respects and have been prepared in
accordance with United States generally accepted accounting principles applied
on a basis consistent throughout the periods indicated and consistent with each
other. The Company Financials present fairly and accurately the financial
condition and operating results of the Company in all material respects as of
the dates and during the periods indicated therein and are consistent with the
books and records of the Company. Except as set forth in the Company Financials,
the Company has no material liabilities, contingent or otherwise.
(i) NON-CONTRAVENTION. The execution and delivery of this Agreement
and each of the other Primary Documents, and the consummation by the Company of
the transactions contemplated by this Agreement and each of the other Primary
Documents, do not and will not conflict with, or result in a breach by the
Company of, or give any third party any right of termination, cancellation,
acceleration or modification in or with respect to, any of the terms or
provisions of, or constitute a default under, (A) its Articles of Incorporation
or Bylaws, as amended through the date hereof, (B) any material indenture,
mortgage, deed of trust, lease or other agreement or instrument to which the
Company is a party or by which it or any of its properties or assets are bound,
or (C) any existing applicable law, rule, or regulation or any applicable
decree, judgment or order of any court or federal, state, Warrants industry or
foreign regulatory body, administrative agency, or any other governmental body
having jurisdiction over the Company or any of their properties or assets
(collectively, "LEGAL REQUIREMENTS"), other than those which have been waived or
satisfied on or prior to the First Closing Date.
(j) APPROVALS AND FILINGS. No authorization, approval or consent of
any court, governmental body, regulatory agency, self-regulatory organization,
stock exchange or market or the stockholders of the Company is required to be
obtained by the Company for the entry into or the performance of this Agreement
and the other Primary Documents.
(k) COMPLIANCE WITH LEGAL REQUIREMENTS. The Company has not violated
in any material respect, and is not currently in material default under, any
Legal Requirement applicable to the Company, or any of the assets or properties
of the Company, where such violation could reasonably be expected to have
material adverse effect on the business or financial condition of the Company.
(l) ABSENCE OF CERTAIN CHANGES. There has been no material adverse
change nor any material adverse development in the business, properties,
operations, financial condition, prospects, outstanding Warrants or results of
operations of the Company, and no event has occurred or circumstance exists that
may result in such a material adverse change.
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(m) INDEBTEDNESS TO OFFICERS, DIRECTORS AND STOCKHOLDERS. Except as
set disclosed in the Company Financials, the Company is not indebted to any of
the Company's stockholders, officers or directors or their Affiliates in any
amount whatsoever (including, without limitation, any deferred compensation,
salaries or rent payable).
(n) RELATIONSHIPS WITH RELATED PERSONS. Except as set forth in the
SEC filings of the Company, no officer, director, or principal stockholder of
the Company nor any Related Person (as defined below) of any of the foregoing
has had any interest in any property (whether real, personal, or mixed and
whether tangible or intangible) used in or pertaining to the business of the
Company. No officer, director, or principal stockholder of the Company nor any
Related Person of the any of the foregoing is or has owned an equity interest or
any other financial or profit interest in, a Person (as defined below) that has
(i) had business dealings or a material financial interest in any transaction
with the Company, or (ii) engaged in competition with the Company with respect
to any line of the merchandise or services of such company (a "COMPETING
BUSINESS") in any market presently served by such company except for ownership
of less than one percent of the outstanding capital stock of any Competing
Business that is publicly traded on any recognized exchange or in the
over-the-counter market. No director, officer, or principal stockholder of the
Company nor any Related Person of any of the foregoing is a party to any
Contract with, or has claim or right against, the Company. As used in this
Agreement, "PERSON" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or any governmental body; "RELATED PERSON" means, (X) with respect to a
particular individual, (a) each other member of such individual's Family (as
defined below); (b) any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family; (c) any Person in
which such individual or members of such individual's Family hold (individually
or in the aggregate) a Material Interest (as defined below); and (d) any Person
with respect to which such individual or one or more members of such
individual's Family serves as a director, officer, partner, executor, or trustee
(or in a similar capacity); (Y) with respect to a specified Person other than an
individual, (a) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control with
such specified Person; (b) any Person that holds a Material Interest in such
specified Person; (c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity); (d)
any Person in which such specified Person holds a Material Interest; (e) any
Person with respect to which such specified Person serves as a general partner
or a trustee (or in a similar capacity); and (f) any Related Person of any
individual described in clause (b) or (c). For purposes of the foregoing
definition, (a) the "FAMILY" of an individual includes (i) the individual, (ii)
the individual's spouse and former spouses, (iii) any other natural person who
is related to the individual or the individual's spouse within the second
degree, and (iv) any other natural person who resides with such individual, and
(b) "MATERIAL INTEREST" means direct or indirect beneficial ownership of voting
Warrants or other voting interests representing at least 1% of the outstanding
voting power of a Person or equity Warrants or other equity interests
representing at least 1% of the outstanding equity Warrants or equity Warrants
in a Person.
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(o) TITLE TO PROPERTIES; LIENS AND ENCUMBRANCES. Except as set forth
in the SEC filings of the Company, the Company has good and marketable title to
all of its material properties and assets, both real and personal, and has good
title to all its leasehold interests. All material properties and assets
reflected in the Company Financials are free and clear of all Encumbrances (as
defined below) except liens for current Taxes not yet due and except as
disclosed in the Company Financials. As used in this Agreement, "ENCUMBRANCE"
means any charge, claim, community property interest, condition, equitable
interest, lien, pledge, security interest, right of first refusal, or
restriction of any kind, including any restriction on use, voting, transfer,
receipt of income, or exercise of any other attribute of ownership.
(p) PERMITS. The Company has all permits, licenses and any similar
authority necessary for the conduct of its business as now conducted, the lack
of which would materially and adversely affect the business or financial
condition of such company. The Company is not in default in any respect under
any of such permits, licenses or similar authority.
(q) ABSENCE OF LITIGATION. Except as set forth in the Company SEC
Filings, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board or body, or arbitration tribunal pending or, to
the Knowledge of the Company, threatened against or affecting the Company, in
which an unfavorable decision, ruling or finding would have a material adverse
effect on the properties, business, condition (financial or other) or results of
operations of the Company, taken as a whole, or the transactions contemplated by
the Primary Documents, or which would adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its
obligations under, the Primary Documents. All references to the "KNOWLEDGE OF
THE COMPANY" in this Agreement shall mean the actual knowledge of the Company or
any of its officers or the knowledge that the Company or any of its officers
could reasonably be expected to have, after reasonable investigation and due
diligence.
(r) NO DEFAULT. The Company is not in default in the performance or
observance of any obligation, covenant or condition contained in any indenture,
mortgage, deed of trust or other instrument or agreement to which it is a party
or by which it or its property may be bound.
(s) TAXES.
(i) All Tax Returns (as defined below) required to have been
filed by or with respect to the Company (including any extensions) have been
filed. All such Tax Returns are true, complete and correct in all material
respects. All Taxes (as defined below) due and payable by the Company, whether
or not shown on any Tax Return, or claimed to be due by any Taxing Authority (as
defined below), have been paid.
(ii) The Company does not have any material liability for Taxes
outstanding.
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(iii) The Company is not a party to any agreement extending the
time within which to file any Tax Return. No claim has ever been made by a
Taxing Authority of any jurisdiction in which the Company does not file Tax
Returns that the Company is or may be subject to taxation by that jurisdiction.
(iv) The Company has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
creditor or independent contractor.
(v) There has been no action by any Taxing Authority in
connection with assessing additional Taxes against, or in respect of, the
Company for any past period. There is no dispute or claim concerning any Tax
liability of the Company either (i) claimed, raised or, to the Knowledge of the
Company, threatened by any Taxing Authority or (ii) of which the Company is
otherwise aware. There are no liens for Taxes upon the assets and properties of
the Company other than liens for Taxes not yet due.
(vi) There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any Tax Returns required to be
filed by, or which include or are treated as including, the Company or with
respect to any Tax assessment or deficiency affecting the Company.
(vii) The Company has not received any written ruling related to
Taxes or entered into any agreement with a Taxing Authority relating to Taxes.
(viii) The Company does not have any liability for the Taxes of
any person or entity other than the Company (i) under Section 1.1502-6 of the
Treasury regulations (or any similar provision of state, local or foreign Legal
Requirements), (ii) as a transferee or successor, (iii) by contract or (iv)
otherwise.
(ix) The Company (i) has not agreed to make nor is required to
make any adjustment under Section 481 of the Internal Revenue Code by reason of
a change in accounting method and (ii) is not a "consenting corporation" within
the meaning of Section 341(f)(1) of the Internal Revenue Code.
(x) The Company is not a party to or bound by any obligations
under any tax sharing, tax allocation, tax indemnity or similar agreement or
arrangement.
(xi) The Company is not involved in, subject to, or a party to
any joint venture, partnership, contract or other arrangement that is treated as
a partnership for federal, state, local or foreign Tax purposes.
(xii) The Company was not included nor is includible, in the Tax
Return of any other entity.
As used in this Agreement, a "TAX RETURN" means any return, report, information
return, schedule, certificate, statement or other document (including any
related or supporting information) filed or required to be filed with, or, where
none is required to be filed with a Taxing Authority, the statement or other
document issued by, a Taxing Authority in connection with any Tax; "TAX" means
any and all taxes, charges, fees, levies or other assessments, including,
without limitation, income, gross, receipts, excise, real or personal property,
sales, withholding, social security, retirement, unemployment, occupation, use,
service, service use, license, net worth, payroll, franchise, transfer and
recording taxes, fees and charges, imposed by Taxing Authority, whether computed
on a separate, consolidated, unitary, combined or any other basis; and such term
includes any interest whether paid or received, fines, penalties or additional
amounts attributable to, or imposed upon, or with respect to, any such taxes,
charges, fees, levies or other assessments; and "TAXING AUTHORITY" means any
governmental agency, board, bureau, body, department or authority of any United
States federal, state or local jurisdiction or any foreign jurisdiction, having
or purporting to exercise jurisdiction with respect to any Tax.
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(t) CERTAIN PROHIBITED ACTIVITIES. Neither the Company nor any of
its directors, officers or other employees has (i) used any Company funds for
any unlawful contribution, endorsement, gift, entertainment or other unlawful
expense relating to any political activity, (ii) made any direct or indirect
unlawful payment of Company funds to any foreign or domestic government official
or employee, (iii) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977, as amended, or (iv) made any bribe, rebate,
payoff, influence payment, kickback or other similar payment to any person.
(u) CONTRACTS. As used in this Agreement, "CONTRACT" means any
agreement, contract, obligation, promise, or undertaking (whether written or
oral and whether express or implied) that is legally binding; or any Contract
(a) under which the Company has or may acquire any rights, (b) under which the
Company has or may become subject to any obligation or liability, or (c) by
which the Company or any of the assets owned or used by it is or may become
bound.
With respect to each Contract (i) the Company is, and has been, in material
compliance with all applicable terms and requirements of each Contract under
which the Company has or had any obligation or liability or by which the Company
or any of the assets owned or used by it is or was bound; (ii) each other person
or entity that has or had any obligation or liability under any Contract under
which the Company has or had any rights is, and has been, in material compliance
with all applicable terms and requirements of such Contract; (iii) no event has
occurred or circumstance exists that (with or without notice or lapse of time)
may contravene, conflict with, or result in a material violation or breach of,
or give the Company or other person or entity the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Contract; and (iv) the Company has not
given to or received from any other person or entity any notice or other
communication (whether oral or written) regarding any actual, alleged, possible,
or potential violation or breach of, or default under, any Contract.
Each Contract is valid, in full force, and binding on and enforceable against
the other party or parties to such contract in accordance with its terms and
provisions.
There have been no renegotiation of, attempts to renegotiate, or outstanding
rights to renegotiate any material amounts paid or payable to the Company under
current or completed Contracts with any person or entity and no such person or
entity has made written demand for such renegotiation.
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(v) AGENT FEES. Except for the fee paid solely by the Company to
Xxxxxx Xxxxxx, with regard to which the Company shall indemnify and hold
Purchaser harmless for any amounts due thereunder, the Company has not incurred
any liability for any finder's or brokerage fees or agent's commissions in
connection with the transactions contemplated by this Agreement.
(w) EMPLOYEES. The Company has no accrued vacation or sick pay due
any employees.
(x) EMPLOYEE BENEFITS.
(i) The Company does not have, and has not at any time had, any
Plans (as defined below).
As used in this Agreement, "PLAN" means (i) each of the "employee benefit plans"
(as such term is defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA")), of which any of the Company or any member of
the same controlled group of businesses as the Company within the meaning of
Section 4001(a)(14) of ERISA (an "ERISA AFFILIATE") is or ever was a sponsor or
participating employer or as to which the Company or any of its ERISA Affiliates
makes contributions or is required to make contributions, and (ii) any similar
employment, severance or other arrangement or policy of any of the Company or
any of its ERISA Affiliates (whether written or oral) providing for health,
life, vision or dental insurance coverage (including self-insured arrangements),
workers' compensation, disability benefits, supplemental unemployment benefits,
vacation benefits or retirement benefits, fringe benefits, or for profit
sharing, deferred compensation, bonuses, stock options, stock appreciation or
other forms of incentive compensation or post-retirement insurance, compensation
or benefits.
(y) PRIVATE OFFERING. Subject to the accuracy of the Purchaser's
representations and warranties set forth in Section y2 hereof, (i) the offer,
sale and issuance of the Warrants, and (ii) the issuance of Common Stock
pursuant to the exercise of the Warrants as contemplated by the Primary
Documents, are exempt from the registration requirements of the Securities Act.
The Company agrees that neither the Company nor anyone acting on its behalf will
offer any of the Warrants or any similar Warrants for issuance or sale, or
solicit any offer to acquire any of the same from anyone so as to render the
issuance and sale of such Warrants subject to the registration requirements of
the Securities Act
(z) MERGERS, ACQUISITIONS AND DIVESTITURES. Except as set forth in
the SEC filings of the Company, the Company has never acquired any equity
interest in or any major assets of any other Person, or sold the equity interest
or any major asset owned by it in a transaction the terms of which were not
based on arms' length negotiations. None of the officers and directors of the
Company has received any benefit in connection with any of the foregoing
transactions or is under any agreement or understanding with any Person
(including agreements or understandings among themselves) with respect to the
receipt of or entitlement to any such benefit.
(aa) FULL DISCLOSURE. There is no fact known to the Company (other
than general economic conditions known to the public generally) that has not
been disclosed to the Purchaser that could (i) reasonably be expected to have a
material adverse effect upon the condition (financial or otherwise) or the
earnings, business affairs, properties or assets of the Company or (ii)
reasonably be expected to materially and adversely affect the ability of the
Company to perform the obligations set forth in the Primary Documents. The
representations and warranties of the Company set forth in this Agreement do not
contain any untrue statement of a material fact or omit any material fact
necessary to make the statements contained herein, in light of the circumstances
under which they were made, not misleading.
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4. CERTAIN COVENANTS, ACKNOWLEDGMENTS AND RESTRICTIONS
(a) TRANSFER RESTRICTIONS. The Purchaser acknowledges that (i)
neither the Warrants nor the Common Stock issuable upon exercise of the Warrants
have been registered under the Securities Act, and such Warrants may not be
transferred unless (A) subsequently registered thereunder or (B) they are
transferred pursuant to an exemption from such registration, and (ii) any sale
of the Warrants or the Common Stock issuable upon exercise or exchange thereof
(collectively, the "COVERED WARRANTS") made in reliance upon Rule 144 under the
Securities Act ("RULE 144") may be made only in accordance with the terms of
said Rule 144. The provisions of Section y4(a) and y4(b) hereof, together with
the rights of the Purchaser under this Agreement and the other Primary
Documents, shall be binding upon any subsequent transferee of the Common Stock.
(b) RESTRICTIVE LEGEND. The Purchaser acknowledges and agrees that,
until such time as the Covered Warrants shall have been registered under the
Securities Act or the Purchaser demonstrates to the reasonable satisfaction of
the Company and its counsel that such registration shall no longer be required,
such Covered Warrants may be subject to a stop-transfer order placed against the
transfer of such Covered Warrants, and such Covered Warrants shall bear a
restrictive legend in substantially the following form:
THESE WARRANTS (INCLUDING ANY UNDERLYING CAPITAL STOCK) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE WARRANTS
UNDER SAID ACT OR AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION SHALL NO LONGER BE
REQUIRED.
(c) RESERVATION OF COMMON STOCK. The Company will at all times have
authorized and reserved for the purpose of issuance a sufficient number of
shares of Common Stock to provide for the conversion of the exercise of the
Warrants.
(d) RETURN OF CERTIFICATES ON CONVERSION. Upon any exercise by any
holder of the Warrants of less than all of the shares of Common Stock into which
such Warrants are exercisable, the Company shall issue and deliver to the holder
thereof, within seven business days of the date of exercise, a new Warrant
exercisable for the total number of shares of Common Stock which the holder has
not yet elected to exercise.
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(e) REPLACEMENT CERTIFICATES. The certificate(s) representing the
Warrants held by the Purchaser shall be exchangeable, at the option of the
Purchaser at any time and from time to time at the office of Company, for
certificates with different denominations representing, as applicable, an equal
aggregate number of Warrants as requested by the holder upon surrendering the
same. No service charge will be made for such registration or transfer or
exchange.
(f) FINANCIAL STATEMENTS. At the expense of the Company, the
Company's accountant shall annually prepare for each calendar year, a report of
the Company, including a balance sheet, annual profit and loss statement, and
annual cash flow statement to be furnished to the Purchaser within one hundred
twenty (120) days after the end of each calendar year. In addition the Company
shall cause to be prepared and distributed to the Purchaser for each calendar
quarter during the term of this Agreement a report of the Company, including a
balance sheet, quarterly profit and loss statement, and quarterly cash flow
statement for such calendar quarter to be furnished to the Purchaser within
forty-five (45) days after the end of each calendar quarter. The Company shall
also cause to be prepared and filed all Federal, state and local income tax
returns and information returns, if any, which the Company is required to file.
5. FEES AND EXPENSES
The Company shall bear its own costs, including attorney's fees, incurred
in the negotiation of this Agreement and consummating of the transactions
contemplated herein and in the corporate proceedings of the Company in
contemplation hereof and thereof. At the date of execution and delivery hereof,
the Company shall reimburse the Purchaser for all of the Purchaser's reasonable
out-of-pocket expenses incurred in connection with the negotiation or
performance of this Agreement, including without limitation reasonable fees and
disbursements of counsel to the Purchaser.
6. SURVIVAL
The agreements, covenants, representations and warranties of the Company
and the Purchaser shall survive the execution and delivery of this Agreement and
the delivery of the Warrants hereunder for a period of two years from the date
of the Final Closing Date, except that:
(a) the Company's representations and warranties regarding Taxes
contained in Section 3(r) of this Agreement shall survive as long as the Company
remains statutorily liable for any obligation referenced in Section 3(r), and
(b) the Company's representations and warranties contained in
Section y3(b) shall survive until the Purchaser and any of its affiliates are no
longer holders of any of the Warrants purchased hereunder.
7. INDEMNIFICATION
(a) The Company, on the one side, and the Purchaser (each in such
capacity under this section, the "INDEMNIFYING PARTY") agrees to indemnify the
other party and each officer, director, employee, agent, partner, stockholder,
member and affiliate of such other party (collectively, the "INDEMNIFIED
PARTIES") for, and hold each Indemnified Party harmless from and against: (i)
any and all damages, losses, claims, diminution in value and other liabilities
of any and every kind, including, without limitation, judgments and costs of
settlement, and (ii) any and all reasonable out-of-pocket costs and expenses of
any and every kind, including, without limitation, reasonable fees and
disbursements of counsel for such Indemnified Parties (all of which expenses
periodically shall be reimbursed as incurred), in each case, arising out of or
suffered or incurred in connection with any of the following, whether or not
involving a third party claim: (a) any misrepresentation or any breach of any
warranty made by the Indemnifying Party herein or in any of the other Primary
Documents, (b) any breach or non-fulfillment of any covenant or agreement made
by the Indemnifying Party herein or in any of the other Primary Documents, or
(c) any claim relating to or arising out of a violation of applicable federal or
state Warrants laws by the Indemnifying Party in connection with the sale or
issuance of the Warrants by the Indemnifying Party to the Indemnified Party
(collectively, the "INDEMNIFIED LIABILITIES"). To the extent that the foregoing
undertaking by the Indemnifying Party may be unenforceable for any reason, the
Indemnifying Party shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
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8. NOTICES
Any notice required or permitted hereunder shall be given in writing
(unless otherwise specified herein) and shall be effective upon personal
delivery, via facsimile (upon receipt of confirmation of error-free transmission
and mailing a copy of such confirmation, postage prepaid by certified mail,
return receipt requested) or three business days following deposit of such
notice with an internationally recognized courier service, with postage prepaid
and addressed to each of the other parties thereunto entitled at the following
addresses, or at such other addresses as a party may designate by five days
advance written notice to each of the other parties hereto.
COMPANY: American Leisure Holdings, Inc.
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH A COPY TO: Nason, Yeager, Gerson, White & Xxxxx, P.A.
0000 Xxxx Xxxxx Xxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx XX, Esquire
Facsimile No.: (000) 000-0000
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PURCHASER: Stanford Venture Capital Holdings, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH A COPY TO: Xxxxxx & Xxxx, P.A.
0000 X. Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
9. GOVERNING LAW; JURISDICTION
This Agreement shall be governed by and interpreted in accordance with the
laws of the State of Florida, without regard to its principles of conflict of
laws. Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought against any party in the
federal courts of Florida or the state courts of the State of Florida,
Miami-Dade County and each of the parties consents to the jurisdiction of such
courts and hereby waives, to the maximum extent permitted by law, any objection,
including any objections based on forum non conveniens, to the bringing of any
such proceeding in such jurisdictions.
10. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement supersedes all prior agreements
and understandings among the parties hereto with respect to the subject matter
hereof. This Agreement, together with the other Primary Documents, including any
certificate, schedule, exhibit or other document delivered pursuant to their
terms, constitutes the entire agreement among the parties hereto with respect to
the subject matters hereof and thereof, and supersedes all prior agreements and
understandings, whether written or oral, among the parties with respect to such
subject matters.
(b) AMENDMENTS. This Agreement may not be amended except by an
instrument in writing signed by the party to be charged with enforcement.
(c) WAIVER. No waiver of any provision of this Agreement shall be
deemed a waiver of any other provisions or shall a waiver of the performance of
a provision in one or more instances be deemed a waiver of future performance
thereof.
(d) CONSTRUCTION. This Agreement and each of the Primary Documents
have been entered into freely by each of the parties, following consultation
with their respective counsel, and shall be interpreted fairly in accordance
with its respective terms, without any construction in favor of or against
either party.
14
(e) BINDING EFFECT OF AGREEMENT. This Agreement shall inure to the
benefit of, and be binding upon the successors and assigns of each of the
parties hereto, including any transferees of the Warrants.
(f) SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or unenforceability of this
Agreement in any other jurisdiction.
(g) ATTORNEYS' FEES. If any action should arise between the parties
hereto to enforce or interpret the provisions of this Agreement, the prevailing
party in such action shall be reimbursed for all reasonable expenses incurred in
connection with such action, including reasonable attorneys' fees.
(h) HEADINGS. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of this
Agreement.
(i) COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original and all of which, when
taken together, will be deemed to constitute one and the same agreement.
(j) WAIVER OF JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT AND ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY HERETO.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, this Agreement has been duly executed by each of the
undersigned as of the date first written above.
AMERICAN LEISURE HOLDINGS, INC.
By:
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Name:
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Title:
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STANFORD VENTURE CAPITAL HOLDINGS, INC.
By:
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Name:
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Title:
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EXHIBIT INDEX
EXHIBIT A WARRANT
EXHIBIT B CLOSING CERTIFICATE
SCHEDULE INDEX
SCHEDULE A WARRANT SPLIT CHART
