AMERICAN LEISURE HOLDINGS, INC. A NEVADA CORPORATION WARRANT PURCHASE AGREEMENT

 

                         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.

 

 

<PAGE>

 

            (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.

 

 

                                       2

<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.

 

 

                                       3

<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.

 

 

                                       4

<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.

 

 

                                        5

<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