Exhibit 10.16
NEITHER THE WARRANTS NOR THE PARITICIPATION INTEREST TO BE ISSUED UPON THE
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION, AND MAY NOT BE SOLD,
TRANSFERRED, OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT,
UNLESS IN THE OPINION OF COUNSEL TO THE COMPANY SUCH REGISTRATION IS NOT
REQUIRED.
WARRANT
For the Purchase of a Participation Interest in
SOUTH BEACH RESORTS, LLC,
A FLORIDA LIMITED LIABILITY COMPANY
WARRANT NO. 1 WARRANT TO PURCHASE
DATED DECEMBER 22, 2006 % PARTICIPATION INTEREST
THIS WARRANT CERTIFIES THAT, for value received, ; or its
--------------
registered assigns (the "HOLDER") is entitled to acquire from South Beach
------
Resorts, LLC, a Florida limited liability company, whose address is 0000 Xxxx
Xxxx Xxxx, Xxxxxxx, Xxxxxxx 00000 (the "COMPANY"), a % participation interest in
-------
the Net Proceeds (as defined below) realized by the Company or its successors or
assigns upon the disposition of the real property owned by the Company and
located at 000 Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxx and known as the Boulevard
Hotel (the "PROPERTY") at any time on or prior to the closing date of the sale
--------
or other disposition of the Property (the "EXPIRATION DATE"), at such price and
---------------
upon such terms and conditions as set forth herein. If not exercised prior to
the Expiration Date, this Warrant and all rights granted under this Warrant
shall expire and lapse. As used herein, "Net Proceeds" shall mean the proceeds
realized upon the disposition or refinancing of the Property less the Company's
cost basis in the Property; provided, however, that for purposes of the
calculation of Net Proceeds, all operating losses or operating profits relating
to the Property shall be excluded.
The term "Warrant" as used herein shall include this Warrant and any
warrants issued in substitution for or replacement of this Warrant, or any
warrant into which this Warrant may be divided or exchanged. The %
-----
participation interest purchasable upon exercise of this Warrant shall be
referred to hereinafter collectively as the "PARTICIPATION INTEREST."
------------------------
1. EXERCISE.
(a) PURCHASE PRICE. The aggregate purchase price of the Participation
Interest issuable upon exercise of this Warrant shall be $1.00 ("PURCHASE
--------
PRICE").
-----
(b) WARRANT EXERCISE. The purchase rights represented by this Warrant
may be exercised by the Holder, in whole or in part, at any time, and from
time to time prior to the Expiration Date, by the surrender and presentment
of this Warrant accompanied by a duly executed Notice of Exercise in the
form attached hereto (the "EXERCISE NOTICE"), together with the payment of
---------------
the Purchase Price, all of which shall be presented to the Company, at its
principal office as set forth on page 1 of this Warrant, or at such other
place as the Company may designate by notice in writing to the Holder.
(c) PAYMENT OF NET PROCEEDS. As soon as practicable after the closing
of the sale or other disposition of the Property, but in no event later
than two business days thereafter, the Company pay to the Holder and its
assigns their respective share of the Net Proceeds in cash, and such
payment shall be accompanied by a statement in reasonable detail setting
forth the Company's calculation of Net Proceeds. All Net Proceeds shall be
held in escrow by the Company's attorneys pending payment of the Net
Proceeds. This Warrant shall be deemed to have been exercised, and the
Participation Interest acquired thereby shall be deemed issued, and the
Holder or any person(s) designated by the Holder shall be deemed to have
become holders of record of such Participation Interest for all purposes,
as of the close of business on the date that this Warrant, the duly
executed and completed Exercise Notice, and full payment of the Purchase
Price has been presented and surrendered to the Company in accordance with
the provisions of Section 1(b).
2. EXCHANGE, ASSIGNMENT, OR LOSS OF WARRANT.
(a) This Warrant is exchangeable, without expense other than as
provided in this Section 2, at the option of the Holder upon presentation
and surrender hereof to the Company for other Warrants of different
denominations entitling the Holder thereof to acquire a portion of the
Participation Interest that may be acquired hereunder.
(b) All of the covenants and provisions of this Warrant by or for the
benefit of the Holder shall be binding upon and shall inure to the benefit
of its successors and permitted assigns hereunder. This Warrant may be
sold, transferred, assigned, or hypothecated only in compliance with
Section 4 herein. If permitted under Section 4, any such assignment shall
be made by surrender of this Warrant to the Company, together with a duly
executed assignment in the form attached hereto ("ASSIGNMENT FORM"),
---------------
whereupon the Company shall, without charge, execute and deliver a new
Warrant containing the same terms and conditions of this Warrant in the
name of the assignee as named in the Assignment Form, and this Warrant
shall be canceled at that time. This Warrant, if properly assigned, may be
exercised by a new Holder without first having the new Warrant issued.
(c) This Warrant may be divided or combined with other Warrants that
carry the same rights upon presentation and surrender of this Warrant at
the office of the Company, together with a written notice signed by the
Holder, specifying the names and denominations in which new Warrants are to
be issued.
(d) The Company will execute and deliver to the Holder a new Warrant
of like tenor and date upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction, or mutilation of this
Warrant; provided, that (i) in the case of loss, theft, or destruction, the
Company receives a reasonably satisfactory indemnity or bond, or (ii) in
the case of mutilation, the Holder shall provide and surrender this Warrant
to the Company for cancellation.
(e) Any new Warrant executed and delivered by the Company in
substitution or replacement of this Warrant shall constitute a contractual
obligation of the Company regardless of whether this Warrant was lost,
stolen, destroyed or mutilated, and shall be enforceable by any Holder
thereof.
(f) The Holder shall pay all transfer and excise taxes applicable to
any issuance of new Warrants under this Section 2.
3. RIGHTS OF THE HOLDER. Prior to exercise, this Warrant will not entitle
the Holder to any rights of a member in the Company (including, without
limitation, rights to receive distributions, vote or receive notice of
meetings). The Company covenants, however, that for so long as this Warrant is
at least partially unexercised, it will furnish the Holder with copies of all
reports and communications furnished to the members of the Company. The rights
of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein. No
provision of this Warrant, in the absence of affirmative action by the Holder to
exercise this Warrant, and no enumeration in this Warrant of the rights and
privileges of the Holder, will give rise to any liability of such Holder for the
Purchase Price.
4. TRANSFER TO COMPLY WITH THE SECURITIES ACT. This Warrant and the
Participation Interest or any other security issued or issuable upon exercise of
this Warrant may not be offered or sold except in compliance with the Securities
Act of 1933, as amended (the "SECURITIES ACT").
--------------
5. BEST EFFORTS. The Company covenants that it will not, by amendment of
its Articles of Organization or Operating Agreement, or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities, or any other voluntary action, avoid or seek to avoid the
observation or performance of any of the terms of this Warrant, but will at all
times in good faith assist in carrying out all those terms and in taking all
action necessary or appropriate to protect the rights of the Holder.
6. FURTHER ASSURANCES. The Company will take all such action as may be
necessary or appropriate in order that the Company may validly and legally pay
the Participation Interest.
7. NOTICES. All notices, demands, requests, certificates or other
communications by the Company to the Holder and by the Holder to the Company
shall be in writing and shall be deemed to have been delivered, given and
received when personally given or on the third calendar day after it is mailed
by registered or certified mail to the Holder, postage pre-paid and addressed to
the Holder at his last registered address or, if the Holder has designated any
other address by notice in writing to the Company, to such other address; and,
if to the Company, addressed to it at that address appearing on page 1 of this
Warrant. The Company may change its address for purposes of service of notice by
written notice to the Holder at the address provided above, and the Holder may
change his address by written notice to the Company.
8. APPLICABLE LAW. This Warrant shall be governed by, and construed in
accordance with, the laws of the State of Florida.
9. SURVIVAL. The various rights and obligations of the Holder and of the
Company set forth herein shall survive the exercise and surrender of this
Warrant.
10. NO AMENDMENTS OR MODIFICATIONS. Neither this Warrant nor any provision
hereof may be amended, modified, waived or terminated except upon the written
consent of the Company and the Holder of this Warrant.
11. DESCRIPTIVE HEADINGS. The descriptive headings of the several Sections
of this Warrant are inserted for convenience only and do not constitute a part
of this Warrant.
SOUTH BEACH RESORTS, LLC
By: AMERICAN LEISURE HOLDINGS, INC.,
its sole member
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------
Title: Chief Executive Officer
-------------------------
Dated:
--------------------------
SOUTH BEACH RESORTS, LLC
------------------------
EXERCISE NOTICE
---------------
The undersigned hereby irrevocably elects to exercise the Warrant No. 1
dated December 22, 2006 (the "WARRANT"), pursuant to the provisions of Section 1
-------
of the Warrant, to the extent of purchasing the Participation Interest of South
Beach Resorts, LLC and hereby makes a payment of $1.00 in payment therefor. In
exercising the Warrant, the undersigned hereby confirms that the Participation
Interest to be issued hereunder is being acquired for investment and not with a
view to the distribution thereof. Please issue a certificate or certificates
representing said Participation Interest in the name of the undersigned or in
such other name as is specified below. Please issue a new Warrant for the
unexercised portion of the attached Warrant in the name of the undersigned or in
such other name as is specified below.
-----------------------------------------
Name of Holder
-----------------------------------------
Signature of Holder
or Authorized Representative
-----------------------------------------
Signature, if jointly held
-----------------------------------------
Name and Title of Authorized
Representative
-----------------------------------------
-----------------------------------------
Address of Holder
-----------------------------------------
Date
