Exhibit
10.12
AMERICAN LEISURE HOLDINGS, INC.
A NEVADA CORPORATION
REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION
RIGHTS AGREEMENT, dated as of December 28, 2005 (the
"AGREEMENT"), is
entered into by and among American Leisure
Holdings, Inc., a
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Nevada corporation
(the "COMPANY"), and the holders (the "INVESTORS")
of the
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Company's Warrants set forth on the signature page hereof.
Capitalized terms not
defined herein shall
have the meanings ascribed to them in the Credit Agreement
(as hereinafter defined).
WHEREAS,
simultaneously with the execution and delivery of this
Agreement,
pursuant to
the Credit Agreement dated as of December 28, 2005 between
the
Company's subsidiary
TIERRA DEL SOL RESORT, INC., and STANFORD
INTERNATIONAL
BANK LTD., an Antiguan
banking corporation (the "CREDIT AGREEMENT") the Company
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is required to issue
to the Investors Warrants to purchase up to 462,000 shares
of the Company's common stock, par value $.001 (the "Common
Stock"); and
WHEREAS, the
Company desires to grant to the Investors the
registration
rights set forth herein with respect to the shares of Common Stock
issuable upon
exercise of
the Warrants (the "WARRANT SHARES"), the shares of
Common Stock
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issuable upon
the exercise of the warrants issuable in the event of a
registration default pursuant to Section 4(e) (the "DEFAULT WARRANT
SHARES") and
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the shares
of Common Stock issued as a dividend or other
distribution with
respect to
the Warrant Shares or Default Warrant Shares (the
"DISTRIBUTION
------------
SHARES") (all
of the Warrant Shares, the Default Warrant Shares and the
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Distribution Shares, collectively and interchangeably, are referred
to herein as
the "SECURITIES").
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NOW,
THEREFORE, the parties hereto mutually agree as follows:
1.
CERTAIN DEFINITIONS
As
used herein the term "REGISTRABLE SECURITY"
means the Warrant Shares,
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Default Warrant
Shares and the
Distribution Shares, until (i) the Registration
Statement (as
defined below) has
been declared effective by the Securities and
Exchange Commission (the "COMMISSION"), and all Securities have
been disposed of
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pursuant to the Registration Statement, (ii) all Securities have
been sold under
circumstances under
which all of the applicable conditions
of Rule 144 ("RULE
----
144") (or any similar provision then in force) under the Securities
Act of 1933,
---
as amended (the "SECURITIES ACT") are met, or (iii) such time as,
in the opinion
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of counsel
to the Company reasonably satisfactory to the
Investors and upon
delivery to
the Investors of such
executed opinion, all Securities may be sold
without any
time, volume or manner limitations pursuant to
Rule 144 (or any
similar provision
then in effect). In
the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate
structure affecting
the Common
Stock, such adjustment
shall be deemed to be made in the definition
of "Registrable
Security" as is appropriate in order to prevent any dilution or
<PAGE>
enlargement of the rights granted pursuant to this Agreement. As
used herein the
term "HOLDER" means any Person owning or having the right to
acquire Registrable
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Securities or any assignee thereof in accordance with Section 10
hereof. As used
herein "TRADING
DAY" shall mean any business day on
which the market on which
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the Common Stock trades is open for business.
2.
RESTRICTIONS ON TRANSFER
Each
of the Investors acknowledges and understands that prior to the
registration of
the Securities as provided herein, the Securities are
"restricted
securities" as
defined in Rule 144. Each of the Investors
understands that no disposition or transfer of the Securities may
be made by any
of the Investors in the absence of (i) an
opinion of counsel to such Investor,
in form and substance reasonably satisfactory to the Company, that
such transfer
may be made without registration under the Securities Act or (ii) such
registration.
3.
COMPLIANCE WITH REPORTING REQUIREMENTS
With
a view to making available to the
Investors the benefits of Rule 144
or any other similar rule or regulation
of the Commission that may at any time
permit the
holders of the Securities to sell
securities of the Company to the
public pursuant to Rule 144, the Company agrees to:
(a) comply with the provisions of paragraph (c)(1) of Rule 144;
(b) file with the
Commission in a timely manner all reports and other
documents required
to be filed with the
Commission pursuant to Section 13
or
15(d) under the
Securities Exchange Act of 1934 (the "EXCHANGE ACT") by
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companies subject
to either of such
sections, irrespective of whether the
Company is then subject to such reporting requirements; and
(c) Upon request by any Holder or the Company's
transfer agent, the
Company shall
provide an opinion of counsel, which opinion shall be
reasonably acceptable
to the Holder and/or the Company's
transfer agent
that
the such Holder has complied with the
applicable conditions of Rule
144
(or any similar provision then in force).
4.
REGISTRATION RIGHTS WITH RESPECT TO THE REGISTRABLE SECURITIES
(a) The Company agrees that it will prepare and file with the
Commission, (i)
within 180 calendar days from the date of demand, a
registration statement
(on Form S-1 or SB-2, or other appropriate
registration statement
form) under the Securities Act (the
"REGISTRATION
------------
STATEMENT"), and (ii) if at least 20% of the Registrable Securities
covered
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under the Registration Statement filed under
(i) remain unsold during the
effective period
of such Registration Statement, then within 20 days
following receipt
of a written notice from the holders representing
a
majority of
such unsold Registrable Securities, another Registration
Statement so
as to permit a resale
of the Securities under the Securities
Act
by the Holders as selling stockholders and not as underwriters.
The Company shall use
diligent best efforts to cause the Registration
Statement to become effective as soon as
practical following the filing of
the
Registration
Statement.
The Company will notify the Holders
and its
transfer agent
of the effectiveness of the
Registration Statement within
one
Trading Day of such event.
<PAGE>
(b) The Company will maintain the Registration Statement or
post-effective
amendment filed
under this Section 4 effective under
the
Securities Act
until the earlier of (i) the date that none of the
Registrable Securities
covered by such Registration Statement are
or may
become issued
and outstanding, (ii) the date that
all of the Registrable
Securities have
been sold pursuant to such Registration
Statement, (iii)
the
date all the Holders receive an opinion of counsel to
the Company,
which counsel
shall be reasonably acceptable to the Holders, that the
Registrable Securities may be sold under the provisions of Rule 144
without
limitation as
to volume, (iv) all Registrable Securities have been
otherwise transferred
to persons who may trade such shares without
restriction under
the Securities Act,
and the Company has delivered a new
certificate or other
evidence of ownership for such securities not bearing
a
restrictive legend, or (v) two years from the Effective Date.
(c) All fees, disbursements and out-of-pocket expenses and costs
incurred by
the Company in connection with the
preparation and filing of
the
Registration
Statement under this Section 4 and in complying with
applicable securities and blue sky laws (including, without
limitation, all
attorneys' fees of the
Company) shall be borne by the Company. The Company
shall also
reimburse the fees and expenses of counsel to the Holders
incurred in
connection
with such counsel's review of the Registration
Statement and
advice concerning the
Registration Statement and its filing
subject to
a cap of $15,000. The Holders shall bear the cost of
underwriting and/or
brokerage discounts, fees and commissions, if any,
applicable to the
Registrable Securities being registered. The Holders and
their counsel
shall have a reasonable period, not to exceed
15 Trading
Days, to review the proposed Registration Statement or any amendment
thereto, prior to filing with the Commission, and the Company shall
provide
the
Holders with copies of any comment letters received from the
Commission
with
respect thereto within two Trading Days of receipt thereof. The
Company shall
qualify any of the Registrable Securities
for sale in such
states as the Holders reasonably designate and shall furnish
indemnification in
the manner provided in Section 7
hereof. However, the
Company shall not be required to qualify in any state which will
require an
escrow or other
restriction relating to the Company and/or the Holders, or
which will
require the Company to
qualify to do business in such state or
require the
Company to file therein any general consent to service
of
process. The Company
at its expense will supply each of the Investors with
copies of the applicable Registration Statement and the prospectus
included
therein and other related documents in such quantities as may be
reasonably
requested by any of the Investors.
(d) The Company shall not be required by this Section 4 to include
the
Registrable Securities
in any Registration
Statement which is to be filed
if,
in the opinion of counsel for both the Holders
and the Company (or,
should they
not agree, in the opinion of another counsel
experienced in
securities law
matters acceptable to counsel for the Holders and the
Company) the
proposed offering or other transfer as to which such
registration is
requested is exempt from applicable federal and state
securities laws and would result in all purchasers or transferees
obtaining
securities which are not "restricted securities," as defined in
Rule 144.
(e) In the event that (i) the
Registration Statement is not filed by
the
Company in a timely manner as set forth in
Section 4(a); or (ii) such
Registration Statement
is not maintained as effective by the
Company for
the
period set forth in Section 4(b) above (each a "REGISTRATION
DEFAULT"),
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then
the Company will issue to each of the
Holders as of the first day of
<PAGE>
such
Registration
Default and for every
consecutive quarter in which such
Registration Default
is occurring, as liquidated damages, and not as
a
penalty, warrants to
purchase 10% of the Warrants originally issued to the
Holders pursuant to the Credit Agreement upon the same terms and
conditions
therein stated
("DEFAULT WARRANTS")
until such corresponding Registration
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Default no
longer exists ("LIQUIDATED DAMAGES");
provided, however, that
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the
issuance of such Default Warrants shall not
relieve the Company from
its
obligations
to register the Registrable Securities
pursuant to this
Section.
If the Company does not issue the Default
Warrants to the Holders as
set
forth above, the
Company will pay any Holder's reasonable costs of any
action in a court of law to cause compliance with this Section
4(e),
including reasonable
attorneys' fees, in addition to the Default Warrants.
The
registration
of the Registrable Securities pursuant to
this Section
shall not affect or
limit a Holder's other rights or remedies as set forth
in
this Agreement.
(f) The Company shall
be precluded from including in any Registration
Statement which it is required to file pursuant to this Section 4
any other
securities apart from the Registrable Securities, without the prior
written
consent of the Holders.
(g) If, at any time any Registrable Securities
are not at the time
covered by any effective Registration Statement, the Company shall
determine to
register under the Securities Act (including
pursuant to a
demand of any stockholder of the Company
exercising registration rights)
any
of its shares of the Common Stock (other than in
connection with a
merger or other business combination transaction or pursuant to
Form (S-8),
it
shall send to each Holder written notice
of such determination and, if
within 20 days after receipt of such notice,
such Holder shall so request
in
writing, the Company shall its best efforts to include in such
registration statement
all or any part of the
Registrable Securities that
such
Holder requests to be registered.
Notwithstanding the foregoing, if,
in
connection
with any offering involving an underwriting
of the Common
Stock to by issued by
the Company, the managing underwriter shall impose a
limitation on the number of shares of the Common Stock included in
any such
registration statement
because, in such underwriter's judgment, such
limitation is necessary based on market conditions: (a) if the
registration
statement is
for a public offering
of common stock on a "firm commitment"
basis with
gross proceeds to the Company of at least $30,000,000 (a
"QUALIFIED PUBLIC
OFFERING"),
the Company may exclude, to the extent
so
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advised by
the underwriters, the Registrable Securities from the
underwriting;
provided, however,
that if the underwriters do not entirely
exclude the Registrable Securities from such Qualified Public
Offering, the
Company shall be
obligated to include in such registration statement, with
respect to the
requesting Holder, only an amount of Registrable Securities
equal to the product of (i) the number of Registrable
Securities that
remain available for
registration after the underwriter's cutback and (ii)
such
Holder's percentage of ownership of all the Registrable
Securities
then
outstanding (on an as-converted basis) (the "REGISTRABLE
PERCENTAGE");
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and
(b) if the registration statement is not for a Qualified Public
Offering, the
Company shall be obligated to include in
such registration
statement, with
respect to the requesting Holder, only an amount of
Registrable Securities
equal to the product of (i) the number of
Registrable Securities
that remain available for registration after
the
underwriter's cutback
and (ii) such Holder's Registrable Percentage;
provided, however,
that the aggregate
value of the Registrable Securities
to
be included in such
registration may not be so reduced to less than 30%
<PAGE>
of
the total value of all
securities included in such registration. If any
Holder disapproves
of the terms of any underwriting referred
to in this
paragraph, it
may elect to withdraw therefrom by written
notice to the
Company and the underwriter. No incidental right under this
paragraph shall
be
construed to limit any
registration required under the other provisions
of
this Agreement.
5.
COOPERATION WITH COMPANY
Each
Holder will cooperate with the Company in
all respects in connection
with this Agreement, including timely supplying all information reasonably
requested by
the Company (which shall include all
information regarding such
Holder and proposed
manner of sale of the Registrable Securities required to be
disclosed in
any Registration Statement) and executing and returning all
documents reasonably
requested in
connection with the registration and sale of
the Registrable
Securities
and entering into and performing its
obligations
under any underwriting agreement, if the
offering is an underwritten offering,
in usual and customary form, with the managing
underwriter or underwriters of
such underwritten
offering. Nothing in this Agreement shall obligate any Holder
to consent
to be named as an underwriter in any
Registration Statement. The
obligation of
the Company to register the Registrable Securities shall
be
absolute and
unconditional
as to those Registrable Securities which the
Commission will
permit to be registered without naming any Holder as
underwrite
