Contract
Exhibit 10.3
THIS
INSTRUMENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT BY AMERICAN
LEISURE EQUITIES CORPORATION, D/B/A TRAVELEADERS, INC. IN FAVOR OF JPMORGAN
CHASE BANK, N.A., AS AGENT FOR THE BANKS AS SUCH TERM IS DEFINED FROM TIME TO
TIME IN THAT CERTAIN CREDIT AGREEMENT DATED AS OF JANUARY 28, 2008 BY AND
BETWEEN, AMONG OTHER PARTIES, TL ACQUISITION GROUP LLC, THE AGENT AND THE
BANKS.
$8,000,000,
as may be adjusted as set forth below March 21, 2008
FOR VALUE
RECEIVED, TL ACQUISITION GROUP LLC, a Delaware limited liability company (the
“Maker”),
promises to pay to the order of AMERICAN LEISURE EQUITIES CORPORATION d/b/a
TRAVELEADERS, INC., a Florida corporation (the “Holder”),
at the Holder’s address at 0000 Xxxx Xxxx Xxxx, Xxxxxxx,
Xxxxxxx 00000, or such other place as the Holder may designate, in
lawful money of the United States of America, the principal sum of Eight Million
Dollars ($8,000,000), or such lesser amount as may be determined as provided in
Section 2(a) below, plus interest as calculated below, due and payable upon, and
subject to, the terms and conditions contained in this guaranteed promissory
note (this “Note”). This
Note is made in connection with that certain Asset Purchase Agreement (the
“Purchase
Agreement”), dated the date hereof, by and among Maker, Holder and
American Leisure Holdings, Inc., a Nevada corporation. Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed
thereto in the Purchase Agreement.
1. Interest
Rate. Beginning on the First Payment Date, interest shall
accrue on the outstanding principal balance at a rate equal to seven percent
(7%) per annum, simple interest, which interest shall accrue daily, calculated
on the basis of a 360-day year. Notwithstanding the foregoing, upon
an Event of Default (as defined below), this Note shall bear interest on and
after the date of such Event of Default pursuant to Section 6
below.
2. Payment
Terms.
(a) The
aggregate amount due under this Note shall be Eight Million Dollars ($8,000,000)
plus or minus the EBITDA Price Adjustment determined as provided in the Purchase
Agreement.
(b) Subject
to the other terms of this Note, this Note shall be paid as
follows: (i) on the First Payment Date,
a principal payment shall be due and payable in an amount equal to (x) the
lesser of Two Million Dollars ($2,000,000) or the amount due under this Note as
determined pursuant to Section 2(a) minus (y) the amount, not to exceed
$2,000,000, of any Purchase Price reduction (if any) made pursuant to Section
2.2(a) of the Purchase Agreement; (ii) on each of the dates which are three
months, six months, nine months and twelve months after the First Payment Date,
an amount equal to all accrued and unpaid interest on the remaining principal
balance of this Note, if any, shall be due and payable; (iii) on the Second
Payment Date, an amount equal to the lesser of (x) Four Million Dollars
($4,000,000), minus the sum of all prior principal payments made on this Note
and (y) the amount remaining unpaid under this Note shall be due and payable;
(iv) on each of the dates which are three months, six months, nine months and
twelve months after the Second Payment Date, an amount equal to all accrued and
unpaid interest on the remaining principal balance of this Note, if any, shall
be due and payable; and (v) on the date which is the first anniversary of the
Second Payment Date, all remaining principal amounts due under this Note, if
any, plus all accrued and unpaid interest under this Note, if any, shall be due
and payable. Payments shall be made by wire transfer of immediately
available funds to the account of the Holder or by certified or official bank
check payable to the Holder delivered to the Holder at the address of the Holder
set forth above or such other business address as shall be designated in writing
by the Holder.
(c) Maker and Holder may agree that payments of principal or
interest under this Note may be made in such non-cash consideration (including
equity interests) as Maker and Holder may so agree.
3. Application of
Payments. Each payment (including prepayments) received by the
Holder shall be applied first to accrued interest, and then to
principal. Any valid set-off properly made by the Maker pursuant to
Section 10.9 of the Purchase Agreement shall be applied to reduce the
outstanding principal amount of the this Note as of the effective date of the
set-off, with such reduction being applied to the principal payments due
hereunder in the order in which they become due.
4. Prepayments. The
Maker may prepay the outstanding principal amount of this Note, in whole or in
part, at any time without penalty.
5. Events of
Default. The occurrence of any one or more of the following
shall constitute an “Event of Default”:
a) The
Maker’s failure to pay to the Holder any amount when and as due under this Note
or the Purchase Agreement, if such failure continues for a period of at least
two (2) days;
b) The
Maker: 1) applies for or consents to the appointment of a receiver,
trustee, custodian or liquidator of it or any of its property; 2) files a
voluntary petition in bankruptcy; 3) files an answer seeking reorganization or
an arrangement with creditors; 4) otherwise seeks to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution,
liquidation or other similar laws or statutes; 5) files any answer admitting the
material allegations of a petition filed against it in any proceeding under any
such laws identified in subsection (iv) above; or 6) makes a general assignment
for the benefit of its creditors;
c) There
shall be filed against the Maker an involuntary petition seeking reorganization
of the Maker or the appointment of a receiver, trustee, custodian or liquidator
of the Maker or a substantial part of its assets, or an involuntary petition
under any bankruptcy, reorganization or insolvency law or any jurisdiction,
whether now or hereafter in effect (any of the foregoing petitions being
hereinafter referred to as an “Involuntary
Petition”) and such Involuntary Petition shall not have been dismissed
within ninety (90) days after it was filed;
d) There is
a Change of Control of the Maker. For purposes of this Note, the term
“Change of
Control” means any of the following events, unless the transaction is a
non-taxable mere change in corporate form of Maker: 1) all or substantially all
of the Maker’s assets are sold or otherwise transferred; 2) a majority of voting
control, whether or not a single person holds such voting control, of the Maker
is transferred or otherwise sold to any person; or 3) the Maker is merged with
another entity or entities and the persons holding a majority of voting control
of the Maker before the transaction no longer hold such voting control of the
surviving entity, regardless of whether the form of control by the third party
is by contract, stock interest, or the existence of rights convertible into
stock or other securities that would effectively control the Maker if exercised;
provided that so long as Maker continues to own substantially all of the assets
constituting the Business, no Event of Default shall occur pursuant to this
paragraph;
e) The
Guarantor is in material breach of the Guaranty; or
f) There is
a material breach by Maker of any provision of the Purchase Agreement relating
to the EBITDA Price Adjustment that is not cured within five (5) days of the
notice of breach to Maker.
6. Default Interest.
Following Holder’s declaration of an Event of Default by notice delivered to
Maker (provided that no notice or declaration are required in the case of an
Event of Default described in Sections 5(a), (b), (c), or (d)), and unless and
until cured, the rate of interest accruing on the unpaid principal balance
following such Event of Default shall be ten percent (10%), independent of
whether the Holder elects to accelerate payment as a result of such
default.
7. Remedies Upon Event of
Default. Upon an Event of Default and at any time thereafter
during the continuance of such Event of Default (unless all Events of Default
have been timely cured by the Maker or waived by the Holder), the Holder may,
solely at its discretion, without presentment, notice, demand, protest or action
of any kind, all of which are hereby waived, declare the entire amount of the
unpaid principal of and accrued and unpaid interest on this Note immediately due
and payable. No failure or delay on the part of the Holder in
exercising any right or remedy hereunder shall operate as a waiver thereof nor
shall any single or partial exercise of any right hereunder preclude other or
further exercise thereof or the exercise of any other right or
remedy. In case any one or more Event of Default shall occur and be
continuing and acceleration of this Note shall have occurred, the Holder may,
inter alia, proceed to protect and enforce its rights by an action at law, suit
in equity or other appropriate proceeding, whether for the specific performance
of any agreement contained in this Note, or for an injunction against a
violation of any of the terms hereof or thereof or in and of the exercise of any
power granted hereby or thereby or by law. No right conferred upon
the Holder hereby shall be exclusive of any other right referred to herein or
hereafter available at law, in equity, by statute or otherwise.
IN ADDITION TO ANY OTHER REMEDY
PROVIDED HEREIN, UPON THE EVENT OF A DEFAULT, MAKER DOES HEREBY AUTHORIZE ANY
CLERK OF ANY COURT OF RECORD OR ANY ATTORNEY TO ENTER IN ANY COURT OF COMPETENT
JURISDICTION IN XXXX COUNTY, ILLINOIS OR ANY OTHER STATE OR TERRITORY OF THE
UNITED STATES JUDGMENT BY CONFESSION AGAINST MAKER AND IN FAVOR OF THE HOLDER OF
THIS NOTE FOR THE ENTIRE AMOUNT OF PRINCIPAL DUE HEREUNDER WITH INTEREST THEREON
AT TEN PERCENT (10%) PER ANNUM, ACCRUING FROM DATE OF THE EVENT OF DEFAULT,
TOGETHER WITH REASONABLE ATTORNEY’S FEES AND COURT COSTS, WITHOUT STAY OF
EXECUTION OR RIGHT OF APPEAL EXPRESSLY WAIVING THE BENEFIT OF ALL EXEMPTION LAWS
AND ALL IRREGULARITY OR ERROR IN ENTERING ALL JUDGMENT OR THE EXECUTION THEREON.
NO SINGLE EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT SHALL BE DEEMED TO
EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT
TO BE INVALID, VOIDABLE OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND
IT MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS THE HOLDER OF THIS NOTE SHALL
ELECT UNTIL SUCH TIME AS THE HOLDER OF THIS NOTE SHALL HAVE RECEIVED PAYMENT IN
FULL OF ALL INDEBTEDNESS OF MAKER TO THE HOLDER OF THIS NOTE.
8. Waiver by the
Maker. Maker waives presentment, protest, notice of protest,
demand, notice of demand, notice of dishonor and any and all delays, forbearance
or lack of diligence in connection with the delivery, acceptance, performance or
enforcement of the payment of this Note.
9. [intentionally
left blank]
10. Transfer;
Assignment. This Note may not be transferred or assigned by
Holder without the prior written consent of Maker, which consent shall not be
unreasonably withheld. If this Note is to be transferred, the Holder
shall surrender this Note to the Maker, whereupon the Maker will issue and
deliver upon the order of the Holder a new Note, registered as the Holder may
request, representing the outstanding principal being transferred by the Holder
and, if less then the entire outstanding principal is being transferred, a new
Note to the Holder representing the outstanding principal not being
transferred.
11. Replacement. Upon
receipt by the Maker of evidence satisfactory to it of the loss, theft,
destruction, or mutilation of this Note and (in the case of loss, theft or
destruction) of an indemnity reasonably satisfactory to it, and upon surrender
and cancellation of this Note, if mutilated, the Maker will deliver a new Note
of like tenor in lieu of this Note. Any Note delivered in accordance
with the provisions of this section shall be dated as of the date of this
Note.
12. Costs of
Collection. If this Note
is not paid when due or is referred to an attorney for collection (whether or
not litigation has commenced), or if any legal advice, services or action shall
be necessary to collect any amounts due hereunder, or if any legal advice,
services or action shall be necessary to defend, enforce or protect any of the
rights of Holder hereunder including, but not limited to, legal advice, services
or action with respect to the bankruptcy or insolvency of Maker, Maker agrees to
pay all reasonable attorneys’ fees, costs and expenses incurred by Holder in
connection with the foregoing.
13. Guaranty. As
security for the performance of this Note, Guarantor is executing that certain
Guaranty Agreement, therein guaranteeing the full, complete and punctual
performance of the Maker of its obligations hereunder.
14. Extension. Should
any payment become due and payable on other than a Business Day, such date of
payment shall be extended to the next succeeding Business Day. For
the purposes of this Note, a Business Day shall be any day that is not a
Saturday, Sunday or legal holiday in the State of Florida.
15. Choice of Law and Consent to
Venue and Jurisdiction. This Note shall be governed, construed and
enforced in accordance with the laws of the State of Florida. The
Maker and Holder each consent to the sole and exclusive jurisdiction and venue
of the Florida and Federal courts located in Chicago, Illinois, exclusive of
Florida’s or Illinois’ choice of law provisions, in respect of the enforcement,
construction and litigation arising out of or under this Note. The
parties agree not to contest or otherwise challenge any judgment entered in the
State of Illinois in any other state where enforcement is sought.
16. Waiver of Jury
Trial. MAKER AND HOLDER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
NONCONVERTIBLE NOTE AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR MAKER AND HOLDER ENTERING INTO THIS
AGREEMENT.
17. Invalidity of Any
Part. If any provisions or part of any provision of this Note
shall for any reason be held invalid, illegal, or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provisions or the remaining part of any effective provisions of this Note, and
this Note shall be construed as if such invalid, illegal or unenforceable
provision or part thereof had never been contained herein, but only to the
extent of its invalidity, illegality or unenforceability.
18. Binding
nature. This Note is binding on the parties and their
successors and assigns. For the avoidance of doubt, any place in this
agreement where the word “Holder” appears it shall include any person who shall
be a holder of this Note.
[Signature
Page Follows]
IN WITNESS WHEREOF, the Maker has
executed this Note as of the date first above written.
TL ACQUISITION GROUP
LLC
By: /s/ Xxxxxxxx X. Xxxxx,
Xx.
Name: Xxxxxxxx
X. Xxxxx, Xx.
Title:
Secretary and Treasurer
