Exhibit 10.3
SETTLEMENT AGREEMENT
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This Settlement Agreement (this "Agreement"), effective as of December 31,
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2005, is made by and among American Leisure Equities Corporation, a Florida
corporation (the "Purchaser"); American Leisure Holdings Inc., a Nevada
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corporation (the "Parent"); and Around The World Travel, Inc., a Florida
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corporation (the "Seller").
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RECITALS
A. The Purchaser, the Parent and the Seller have entered into a certain
Asset Purchase Agreement dated as of December 30, 2004 (the "Original Purchase
Agreement"), pursuant to which the Seller sold and the Purchaser purchased
certain of the assets of the Seller (the "Assets").
B. The Purchaser, the Parent and the Seller have also entered into a
certain First Amendment to Asset Purchase Agreement dated as of March 31, 2005
(the "First Amendment"), pursuant to which the parties agreed to modify certain
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of the provisions of the Original Purchase Agreement. (The Original Purchase
Agreement, as amended by the First Amendment, is hereinafter referred to as the
"Purchase Agreement").
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C. On or about November 14, 2005, the Purchaser and Parent asserted certain
claims against the Seller (the "Purchaser Claims") with respect to the alleged
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breach of the Purchase Agreement and the Management Agreement dated January 1,
2005, by and among the Purchaser and the Seller (the "Management Agreement").
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D. After negotiations among the parties, the parties have agreed to settle
the Purchaser Claims on the terms set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual promises set forth in this
Agreement, and other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties hereby agree as follows:
1. Defined Terms. Capitalized terms used in this Agreement, unless
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otherwise defined in this Agreement, have the meanings given to them in the
Purchase Agreement.
2. Certain Acknowledgements. The parties hereby acknowledge the following:
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(a) Under the terms of the Purchase Agreement, the Purchase Price for
the Assets was to be $17,500,000, which amount was to be paid by the
Purchaser as follows:
Form of Consideration Amount
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Assumption of designated liabilities $4,242,051
Forgiveness of loans and indebtedness
owed by Seller to Parent $4,774,619
Issuance of note by Purchaser to Seller
(the "Purchaser Note") $8,483,330
(b) The Purchaser has previously repaid a portion of the principal
amount of the Purchaser Note through: (i) the transfer of certain assets by
the Purchaser to the Seller (consisting of certain accounts receivable,
prepaid expenses and deposits); (ii) the retention of the proceeds from
certain accounts receivable sold by Seller to Purchaser; and (iii) payments
made by the Purchaser to the Seller. The parties acknowledge and agree that
the outstanding balance of the Purchaser Note as of December 31, 2005 was
$5,297,788.
(c) Based upon negotiations between the parties with respect to the
Purchaser Claims, the parties have agreed to reduce the Purchase Price from
$17,500,000 to $9,000,000 in consideration of the release of the Purchaser
Claims pursuant to Section 4 of this Agreement.
3. Reduction of Purchase Price. The parties hereby agree:
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(a) to reduce the Purchase Price from $17,500,000 to $9,000,000 (the
"Amended Purchase Price"), effective as of December 31, 2005; and
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(b) to implement the reduction of the Purchase Price by:
(i) eliminating the remaining balance of the Purchaser Note; and
(ii) establishing an obligation of the Seller to pay the
Purchaser the amount of $3,185,542, effective as of December 31, 2005.
This obligation will be payable on demand.
4. Mutual Release.
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(a) Subject to the provisions of Section 4(c), the Purchaser and
Parent (in such capacity, each a "Releasor") hereby releases and forever
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discharges Seller and its directors and officers (collectively, the
"Released Group") from any and all actions, causes of action, and claims,
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which such Releasor may now have or ever had against any member of the
Released Group based upon the Purchase Agreement or the Management
Agreement, including but not limited to the Purchaser Claims. Each Releasor
further waives any right to indemnity and contribution which the Releasor
may have against any member of the Released Group for any liability
incurred by such Releasor to the plaintiffs in the litigation described on
Schedule 1to this Agreement, provided that such waiver will not cover any
liability incurred by the Releasor which is attributable to any act or
omission of any member of the Released Group which constitutes bad faith or
is not known to the Releasor.
(b) The Seller (in such capacity, a "Releasor") hereby releases and
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forever discharges the Purchaser and the Parent and their respective
directors and officers (collectively, the "Released Group") from any and
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all actions, causes of action and claims, which such Releasor may now
have or have ever had against any member of the Released Group based upon
the Purchase Agreement or the Management Agreement. Each Releasor further
waives any right to indemnity and contribution which the Releasor may have
against any member of the Released Group for any liability incurred by such
Releasor to the plaintiffs in the litigation described on Schedule 1 to
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this Agreement, provided that such waiver will not cover any liability
incurred by the Releasor which is attributable to any act or omission of
any member of the Released Group which constitutes bad faith or is not
known to the Releasor.
(c) Nothing in this Agreement shall be construed to release or waive
any obligations of the Seller pursuant to any of the agreements listed on
Schedule 2 to this Agreement, including the obligations of the Seller to
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repay the loans evidenced by the agreements listed on Schedule 2 (the
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"Seller Loans"), and the Seller hereby ratifies and confirms all of its
obligations with respect to such Seller Loans.
5. Allocation of Amended Purchase Price. The Amended Purchase Price will be
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allocated among the Assets as follows:
Asset Amount
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Current assets $ 1,850,109
Property and equipment $ 287,975
Deposits $ 276,481
Tradename $ 1,000,000
Goodwill $ 5,585,435
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TOTAL $ 9,000,000
6. Miscellaneous.
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(a) Consent to Jurisdiction. The parties hereby agree that the United
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States Federal or Florida State Court located in Miami-Dade County ,
Florida shall have jurisdiction to hear any and all claims relating to this
Agreement and that venue is proper Miami-Dade County, Florida and further
irrevocably submit to the exclusive jurisdiction of any U.S. Federal or
Florida State court sitting in Miami-Dade County, Florida in any action or
proceeding arising out of or relating to this Agreement, and hereby agree
that all claims in respect of such action or proceeding shall be heard and
determined in any such U.S. Federal or Florida State court.
(b) Entire Agreement. This Agreement constitutes the entire agreement
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and understanding between the parties with respect to the matters addressed
in this Agreement.
(c) Legal Fees. If any party should be required to seek judicial
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relief to enforce the terms of this Agreement, the prevailing party in
those proceedings shall be entitled to recover its legal fees and court
costs from the non-prevailing party, including any appellate fees.
(d) Separate Counsel. Each of the parties acknowledges that it has
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consulted with its own counsel as to the meaning, effect and interpretation
of this Agreement and has not relied on any promises, representations or
warranties whatsoever expressed or implied not contained in this Agreement.
(e) Headings. The division of this Agreement into Articles, Sections,
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Subsections and other subdivisions and the insertion of headings are for
convenience of reference only and will not affect or be utilized in the
construction or interpretation of this Agreement.
(f) Governing Law. This Agreement will be interpreted and construed in
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accordance with the Laws of the State of Florida and the laws of the United
States of America applicable therein.
(g) No Third Party Beneficiaries. Except as provided in Section 4 of
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this Agreement, nothing in this Agreement or the Agreement is intended or
shall be construed to give any person (including employees of the parties),
other than the parties hereto, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained
herein.
(h) Expenses. Each party will bear and pay all costs, expenses and
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fees (including, without limitation, legal counsel and accounting fees and
disbursements) incurred by such party in connection with the preparation,
execution and consummation of this Agreement and the transactions
contemplated hereunder.
(i) Counterparts. This Agreement may be executed in one or more
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counterparts, each of which when so executed will be deemed an original,
and such counterparts together will constitute one and the same instrument.
(j) Ratification. Except as amended by the terms of this Agreement,
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all of the terms of the Purchase Agreement are hereby ratified, confirmed
and approved.
(k) WAIVER OF TRIAL BY JURY. THE PARTIES HEREBY KNOWINGLY AND
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VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY WITH RESPECT TO ANY LITIGATION ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR THE PURCHASE AGREEMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS ON THE PART OF ANY PARTY RELATED TO THIS AGREEMENT. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE PARTIES ACCEPTANCE OF THIS AGREEMENT.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties have executed this Settlement Agreement as
of the date first above written.
PURCHASER:
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AMERICAN LEISURE EQUITIES
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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Its: CEO
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Name: Xxxxxxx X. Xxxxxx
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PARENT:
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AMERICAN LEISURE HOLDINGS, INC.
By: /s/ Xxxxxxxxx X. Xxxxxx
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Its: Chief Operating Officer
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Name: Xxxxxxxxx X. Xxxxxx
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SELLER:
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AROUND THE WORLD TRAVEL, INC.
By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx, President
The foregoing agreement has been approved by the undersigned, as holder of
a majority of the outstanding shares of the common stock of the Seller.
Around The World Holdings LLC
By: /s/ Xxxxx St. Clair
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Xxxxx St. Clair, Managing Member
