Exhibit 10.1
OPTION EXERCISE AGREEMENT
THIS OPTION EXERCISE AGREEMENT (this "Agreement") is made and entered into
as of the 27th day of December 2005, by and among AMERICAN LEISURE XXXXX CREEK,
INC., a Florida corporation ("ARC"); STANFORD FINANCIAL GROUP COMPANY, a Florida
corporation ("SFG"); and AMERICAN LEISURE HOLDINGS, INC., a Nevada corporation
("AMLH").
R E C I T A L S
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A. SFG is the owner of a 99% membership interest (the "Interest") in Xxxxx
Creek Acquisition Company, LLC, a Florida limited liability company (the
"Company").
B. ARC, SFG and AMLH are parties to a certain Option Agreement dated as of
July 8, 2005 (the "Option Agreement"), pursuant to which SFG has granted ARC an
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option to purchase the Interest (the "Option").
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C. ARC has notified SFG of its intention to exercise the Option.
X. Xxxxxxxx International Bank, Ltd. ("SIBL"), an affiliate of SFG, is the
holder of: (i) a certain Mortgage made by the Company in favor of SIBL dated
July 29, 2005 recorded in Official Records Book 2855, Page 1243, of the Public
Records of Osceola County, Florida; (ii) a certain Assignment of Rents recorded
in Official Records Book 2855, Page 1280 of the Public Records of Osceola
County; and (iii) the U.C.C. 1 Financing Statement recorded in Official Records
Book 2855, Page 1291, of the Public Records of Osceola County (collectively the
"Existing SIBL Mortgage").
E. The Existing SIBL Mortgage secures the obligations of the Company under
a certain Note in the amount of $7,150,000 dated July 8, 2005 made by the
Company in favor of SIBL (the "Existing SIBL Note").
F. SIBL has agreed to make an additional loan of $850,000 to the Company
(the "Additional SIBL Loan"), which will be secured by the Existing SIBL
Mortgage.
G. The Company is the owner of a certain parcel of real property located in
Osceola County, Florida which is more fully described in the SIBL Mortgage
referenced in Recital D above (the "Property").
H. The Company has arranged to receive a loan in the amount of $7,000,000
(the "Bankers Credit Loan") from Bankers Credit Corporation ("Bankers Credit").
I. It is a condition to the funding of the Bankers Credit Loan that the
loan be secured by a first mortgage on the Property.
J. SIBL has agreed to subordinate the Existing SIBL Mortgage to the Bankers
Credit Loan.
K. The parties desire to set forth their agreement with respect to the
exercise of the Option by ARC and certain related matters.
NOW, THEREFORE, in consideration of the mutual promises set forth in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:
1. Transfer of Interest. Upon the execution of this Agreement,SFG will
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transfer to ARC all its right, title and interest in and to the Interest, free
and clear of all liens, claims and encumbrances of any kind or nature
(collectively, the "Liens"). In connection with the transfer of the Interest,
SFG will execute and deliver to ARC an Assignment in the form of Exhibit A to
this Agreement (the "Assignment").
2. Additional Loan from SIBL. The parties acknowledge that SIBL has agreed
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to make the Additional Loan to the Company. Upon the execution of this
Agreement, the parties will cause the Company to execute and deliverto SIBL
an amended renewal note evidencing the Additional Loan in the form of
Exhibit B to this Agreement(the "New Note")and a Mortgage Modification
Agreement in the form of Exhibit C to this Agreement (the "Mortgage
Modification").
3. Payment of Exercise Price of Option.
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3.1 The parties acknowledge and agree that: (i) the exercise price of the
Option has been reduced to $600,000 (the "Exercise Price"), and (ii) ARC has
agreed to pay SIBL's affiliate Stanford Group Company ("SGC") a placement fee of
$250,000 (the "Placement Fee").
3.2 ARC will pay the Exercise Price and the Placement Fee by assigning to
SFG the proceeds of the Additional Loan. In this connection, ARC hereby assigns
to SFG its right to receive the proceeds of the Additional Loan, and SFG hereby
accepts such assignment in payment of the Exercise Price and the Placement Fee,
the latter of which it will deliver to its affiliate SGC.
4. Issuance of Warrants. Upon the execution of this Agreement, AMLH will
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execute and deliver to SIBL, or its assigns, Warrants in the form of Exhibit D
and Exhibit E (the "Warrants"), pursuant to which AMLH will issue to SIBL
five-year warrants to purchase an aggregate of 462,000 shares of the common
stock of AMLH, with 308,000 at an exercise price of $5.00 per share and 154,000
at $.001 per share.
5. Registration Rights Agreement. Upon the execution of this Agreement,
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AMLH will execute and deliver to SIBL a Registration Rights Agreement in the
form of Exhibit F to this Agreement with respect to the Warrants (the
"Registration Rights Agreement").
6. Closing Costs. Upon the execution of this Agreement, AMLH will reimburse
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SFG and SIBL for all reasonable legal fees and expenses incurred by them in
connection with the transactions contemplated by this Agreement.
7. Subordination of SIBL Mortgage. Upon the execution of this Agreement,
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SFG will cause SIBL to execute and deliver to Bankers Credit the Subordination
Agreement in the form of Exhibit G to this Agreement, to reflect the
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subordination of the Existing SIBL Mortgage to the Bankers Credit Loan.
8. Representations and Warranties of SFG. SFG represents and warrants to
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ARC and AMLH as follows:
8.1 Organizational Standing. SFG is a corporation duly organized, validly
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existing and in good standing under the laws of its jurisdiction of
organization, with full power and authority to own and to operate its properties
and carry on its business as now conducted and to enter into and carry out the
terms of this Agreement.
8.2 Ownership of Interests. SFG owns the Interest beneficially and of
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record and will deliver its entire right, title and interest in and to the
Interest to ARC, free and clear of all Liens.
8.3 Authority to Enter into Agreement; Enforceability. SFG has the right,
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power, legal capacity and authority to enter into and carry out the terms and
provisions of this Agreement and the other agreements to be entered into by it
in connection with the consummation of this Agreement. This Agreement and such
other agreements constitute the legal, valid and binding obligations of SFG,
enforceable against SFG in accordance with their respective terms.
9. Representations and Warranties of ARC and AMLH. ARC and AMLH hereby
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represent and warrant to SFG as follows:
9.1 Organizational Standing. Each of ARC and AMLH is an entity duly
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organized, validly existing and in good standing under the laws of its state of
organization, with full power and authority to own and to operate its properties
and carry on its business as now conducted and to enter into and carry out the
terms of this Agreement.
9.2 Authority to Enter into Agreement; Enforceability. Each of ARC and AMLH
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has the right, power, legal capacity and authority to enter into and carry out
the terms of this Agreement and the other agreements to be entered into by them
pursuant to the terms of this Agreement. This Agreement and such other
agreements constitute the legal, valid and binding obligations of ARC and AMLH,
enforceable against each of them in accordance with their respective terms.
10. Survival of Representations, Warranties and Covenants. All
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representations, warranties and agreements made by the parties to this Agreement
will survive the execution, delivery and performance of this Agreement and any
investigations, inspections or examinations made by or on behalf of the parties.
11. Miscellaneous.
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11.1 Expenses. Except as expressly set forth in this Agreement, each of the
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parties will pay their own legal and other costs and expenses incurred in
connection with the negotiation, execution and delivery of this Agreement and
the transactions contemplated by this Agreement.
11.2 Entire Agreement. This Agreement and the exhibits to this Agreement
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constitute the entire agreement and understanding between the parties with
respect to the subject matter of this Agreement. All exhibits and schedules to
this Agreement will be deemed a part of this Agreement. This Agreement will not
confer any rights or remedies on any person other than the parties to this
Agreement and their respective successors and permitted assigns.
11.3 Governing Law; Venue. This Agreement will be governed by the laws of
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the State of Florida, without regard to its principles of conflicts of law.
11.4 Assignment. This Agreement may not be assigned by any party without
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the written consent of all other parties. Subject to the preceding sentence,
this Agreement will be binding upon and inure to the benefit of the parties
hereto and their respective successors, heirs and permitted assigns.
11.5 Headings. The headings in this Agreement are solely for convenience of
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reference and will not affect its interpretation.
11.6 Counterparts. This Agreement may be executed in as many counterparts
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as may be deemed necessary or convenient, all of which taken together will
constitute one and the same instrument, and any of the parties hereto may
execute this Agreement by signing any such counterpart.
11.7 Amendments; Waivers. This Agreement may be amended or modified, and
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any of the terms, covenants, representations, warranties or conditions in this
Agreement may be waived, only by written instrument executed by all of the
parties, or in the case of a waiver, by the party waiving compliance. Any waiver
by any party of any condition, or of the breach of any provision, term,
covenant, representation or warranty contained in this Agreement, in any one or
more instances, will not be deemed to be nor construed as a further waiver of
such condition, or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first written above.
ARC:
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AMERICAN LEISURE XXXXX CREEK, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
SFG:
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STANFORD FINANCIAL GROUP COMPANY
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
AMLH:
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AMERICAN LEISURE HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
