UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 24, 2006
AMERICAN LEISURE HOLDINGS, INC.
-------------------------------
(Exact name of registrant as specified in its charter)
Nevada 333-48312 75-2877111
------- ---------- -----------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2462 Sand Lake Road, Orlando, FL, 32809
---------------------------------------
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code (407) 251-2240
N/A
---
(Former name or former address,
if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On February 24, 2006, American Leisure Holdings, Inc. (the "Company"),
-------
American Leisure Equities Corporation ("ALEC") and Around The World Travel, Inc.
----
("AWT") entered into a settlement agreement effective as of December 31, 2005
---
(the "Settlement Agreement"). ALEC is a wholly-owned subsidiary of the Company.
--------------------
Background
----------
The Company, ALEC and AWT previously entered into an Asset Purchase
Agreement dated as of December 30, 2004 (the "Original Purchase Agreement"),
---------------------------
pursuant to which AWT sold to ALEC substantially all of the assets of AWT. The
parties subsequently entered into a First Amendment to Asset Purchase Agreement
dated as of March 31, 2005 (the "First Amendment"), pursuant to which the
---------------
parties agreed to modify certain of the provisions of the Original Purchase
Agreement. (The Original Purchase Agreement as amended by the First Amendment is
referred to in this Form 8-K as the "Amended Purchase Agreement").
----------------------------
Under the terms of the Amended Purchase Agreement, the purchase price for
the AWT assets was to be $17,500,000, which amount was to be allocated as
follows:
Form of Consideration Amount
----------------------- ------
Assumption of designated liabilities $4,242,051
Forgiveness of loans and indebtedness owed
by AWT to the Company $4,774,619
Issuance of note by ALEC to AWT
(the "Purchaser Note") $8,483,330
Prior to December 31, 2005, ALEC paid a portion of the principal amount of
the Purchaser Note through: (i) the transfer of certain assets by ALEC to AWT
(consisting of certain accounts receivable, prepaid expenses and deposits); (ii)
the retention by AWT of the proceeds from certain accounts receivable sold by
AWT to ALEC; and (iii) payments made by ALEC to AWT. As of December 31, 2005,
the outstanding balance of the Purchaser Note was $5,297,788.
The Company has previously reported its entry into the Original Purchase
Agreement on a Form 8-K filed with the Securities and Exchange Commission (the
"SEC") on January 6, 2005 and amended on a Form 8-K/A on January 13, 2005 and
reported its entry into the First Amendment in its quarterly report on Form
10-QSB for the quarter ended March 31, 2005, which was filed with the SEC on May
23, 3005, which First Amendment is described in greater detail in a Form 8-K/A
filed with the SEC on August 19, 2005.
Settlement Agreement
--------------------
On or about November 14, 2005, the Company and ALEC asserted certain claims
against AWT with respect to the alleged breach of the Purchase Agreement and the
Management Agreement dated as of December 31, 2005 between ALEC and AWT (the
"Management Agreement"). After negotiations among the parties, the parties
agreed to settle the claims made by the Company and ALEC pursuant to the terms
of the Settlement Agreement.
The Settlement Agreement provides that the purchase price under the Amended
Purchase Agreement will be reduced from $17,500,000 to $9,000,000. The parties
agreed to implement the reduction of the purchase price by eliminating the
remaining balance of the Purchaser Note (which had a balance of $5,297,788 as of
December 31, 2005) and by establishing an obligation of AWT to pay to ALEC the
amount of $3,185,548 as of December 31, 2005. This amount is payable on demand.
Under the terms of the Settlement Agreement, the Company, ALEC and AWT
agreed to release each other (and their respective officers and directors) from
all claims based upon the Purchase Agreement and the Management Agreement.
Additionally, the parties agree to waive any right to indemnity or contribution
which they may have against each other (and their respective officers and
directors) for any liability which they might incur to certain plaintiff's in
certain pending litigation including Simon Hassine and Seamless Technologies,
provided that the waiver does not cover any liability incurred by the releasing
party which is attributable to any act or omission of the person providing the
release which constitutes bad faith or is not known to the releasing party. The
litigation involving Simon Hassine and Seamless Technologies is described in the
Company's Form 10-QSB for the quarter ended September 30, 2005, which was filed
with the SEC on November 21, 2005.
As a result of the Settlement Agreement, the revised purchase price of
$9,000,000 has been allocated among the following assets acquired from AWT as
follows:
Asset Amount
----- ------
Current assets $1,850,109
Property and equipment $ 287,975
Deposits $ 276,481
Tradename $1,000,000
Goodwill $5,585,435
----------
Total $9,000,000
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit Number Description
---------------- ------------------
Exhibit 10.1(1) Original Purchase Agreement
Exhibit 10.2(2) First Amendment to Asset Purchase Agreement
Exhibit 10.3* Settlement Agreement effective as of December 31, 2005
by and among American Leisure Holdings, Inc., American
Leisure Equities Corporation and Around The World Travel,
Inc.
(1) Filed as Exhibit 10.1 to the Company's report on Form 8-K, which was filed
with the SEC on January 6, 2005, and is incorporated herein by reference.
(2) Filed as Exhibit 10.44 to the Company's report on Form 10-QSB for the
quarter ended March 31, 2005, which was filed with the SEC on May 23, 2005,
and is incorporated herein by reference.
* Attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN LEISURE HOLDINGS, INC.
By: /s/ Malcolm J. Wright
---------------------
Malcolm J. Wright
Chief Executive Officer
Dated: March 2, 2006