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.
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(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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<PAGE>
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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<PAGE>
(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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<PAGE>
(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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<PAGE>
(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
