EXHIBIT 10.68
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE
OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO HOST AMERICA CORPORATION THAT SUCH REGISTRATION
IS NOT REQUIRED.
Right to Purchase up to 450,000 Shares of Common Stock of
Host America Corporation
-------------------------
(subject to adjustment as provided herein)
COMMON STOCK PURCHASE WARRANT
No. _________________ Issue Date: June 23, 0000
XXXX XXXXXXX CORPORATION, a corporation organized under the laws of
the State of Colorado ("CAFE"), hereby certifies that, for value
received, LAURUS MASTER FUND, LTD., or assigns (the "Holder"), is
entitled, subject to the terms set forth below, to purchase from the
Company (as defined herein) from and after the Issue Date of this Warrant
and at any time or from time to time before 5:00 p.m., New York time,
through the close of business June 23, 2014 (the "Expiration Date"), up
to 450,000 fully paid and nonassessable shares of Common Stock (as
hereinafter defined), $0.01 par value per share, at the applicable
Exercise Price per share (as defined below). The number and character of
such shares of Common Stock and the applicable Exercise Price per share
are subject to adjustment as provided herein.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" shall include CAFE and any corporation
which shall succeed, or assume the obligations of, CAFE hereunder.
(b) The term "Common Stock" includes (i) the Company's Common
Stock, par value $0.01 per share; and (ii) any other securities into
which or for which any of the securities described in (a) may be
converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other
than Common Stock) and other securities of the Company or any other
person (corporate or otherwise) which the holder of the Warrant at
any time shall be entitled to receive, or shall have received, on
the exercise of the Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.
(d) The "Exercise Price" applicable under this Warrant shall
be as follows:
(i) a price of $5.98 for the first 300,000 shares
acquired hereunder; and
(ii) a price of $6.23 for any additional shares acquired
hereunder.
1. EXERCISE OF WARRANT.
1.1 NUMBER OF SHARES ISSUABLE UPON EXERCISE. From and after
the date hereof through and including the Expiration Date, the Holder
shall be entitled to receive, upon exercise of this Warrant in whole or
in part, by delivery of an original or fax copy of an exercise notice in
the form attached hereto as Exhibit A (the "Exercise Notice"), shares of
Common Stock of the Company, subject to adjustment pursuant to Section 4.
1.2 FAIR MARKET VALUE. For purposes hereof, the "Fair Market
Value" of a share of Common Stock as of a particular date (the
"Determination Date") shall mean:
(a) If the Company's Common Stock is traded on the American
Stock Exchange or another national exchange or is quoted on the
National or SmallCap Market of The Nasdaq Stock Market,
Inc.("Nasdaq"), then the closing or last sale price, respectively,
reported for the last business day immediately preceding the
Determination Date.
(b) If the Company's Common Stock is not traded on the
American Stock Exchange or another national exchange or on the
Nasdaq but is traded on the NASD OTC Bulletin Board, then the mean
of the average of the closing bid and asked prices reported for the
last business day immediately preceding the Determination Date.
(c) Except as provided in clause (d) below, if the Company's
Common Stock is not publicly traded, then as the Holder and the
Company agree or in the absence of agreement by arbitration in
accordance with the rules then in effect of the American Arbitration
Association, before a single arbitrator to be chosen from a panel of
persons qualified by education and training to pass on the matter to
be decided.
(d) If the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a liquidation,
dissolution or winding up pursuant to the Company's charter, then
all amounts to be payable per share to holders of the Common Stock
pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of
the shares of Common Stock then issuable upon exercise of the
Warrant are outstanding at the Determination Date.
1.3 COMPANY ACKNOWLEDGMENT. The Company will, at the time of
the exercise of the Warrant, upon the request of the holder hereof
acknowledge in writing its
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continuing obligation to afford to such holder any rights to which such
holder shall continue to be entitled after such exercise in accordance
with the provisions of this Warrant. If the holder shall fail to make any
such request, such failure shall not affect the continuing obligation of
the Company to afford to such holder any such rights.
1.4 TRUSTEE FOR WARRANT HOLDERS. In the event that a bank or
trust company shall have been appointed as trustee for the holders of the
Warrant pursuant to Subsection 3.2, such bank or trust company shall have
all the powers and duties of a warrant agent (as hereinafter described)
and shall accept, in its own name for the account of the Company or such
successor person as may be entitled thereto, all amounts otherwise
payable to the Company or such successor, as the case may be, on exercise
of this Warrant pursuant to this Section 1.
2. PROCEDURE FOR EXERCISE.
2.1 DELIVERY OF STOCK CERTIFICATES, ETC., ON EXERCISE. The
Company agrees that the shares of Common Stock purchased upon exercise of
this Warrant shall be deemed to be issued to the Holder as the record
owner of such shares as of the close of business on the date on which
this Warrant shall have been surrendered and payment made for such shares
in accordance herewith. As soon as practicable after the exercise of
this Warrant in full or in part, and in any event within three (3)
business days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in
the name of and delivered to the Holder, or as such Holder (upon payment
by such Holder of any applicable transfer taxes) may direct in compliance
with applicable securities laws, a certificate or certificates for the
number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled
on such exercise, plus, in lieu of any fractional share to which such
holder would otherwise be entitled, cash equal to such fraction
multiplied by the then Fair Market Value of one full share, together with
any other stock or other securities and property (including cash, where
applicable) to which such Holder is entitled upon such exercise pursuant
to Section 1 or otherwise.
2.2 EXERCISE. Payment may be made either (i) in cash or by
certified or official bank check payable to the order of the Company
equal to the applicable aggregate Exercise Price, (ii) by delivery of the
Warrant, or shares of Common Stock and/or Common Stock receivable upon
exercise of the Warrant in accordance with Section (b) below, or (iii) by
a combination of any of the foregoing methods, for the number of Common
Shares specified in such Exercise Notice (as such exercise number shall
be adjusted to reflect any adjustment in the total number of shares of
Common Stock issuable to the Holder per the terms of this Warrant) and
the Holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully-paid and non-assessable shares of
Common Stock (or Other Securities) determined as provided herein.
Notwithstanding any provisions herein to the contrary, if the Fair Market
Value of one share of Common Stock is greater than the Exercise Price (at
the date of calculation as set forth below), in lieu of exercising this
Warrant for cash, the Holder may elect to receive shares equal to the
value (as determined below) of this Warrant (or the portion thereof being
exercised) by surrender of this Warrant at the principal office of the
Company together with the properly endorsed Exercise Notice in which
event the Company shall issue to the Holder a number of shares of Common
Stock computed using the following formula:
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X=Y (A-B)
-----
A
Where X = the number of shares of Common Stock to be issued to
the Holder
Y = the number of shares of Common Stock purchasable under
the Warrant or, if only a portion of the Warrant is
being exercised, the portion of the Warrant being
exercised (at the date of such calculation)
A = the Fair Market Value of one share of the Company's
Common Stock (at the date of such calculation)
B = Exercise Price (as adjusted to the date of such
calculation)
3. EFFECT OF REORGANIZATION, ETC.; ADJUSTMENT OF EXERCISE PRICE.
3.1 REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case at
any time or from time to time, the Company shall (a) effect a
reorganization, (b) consolidate with or merge into any other person, or
(c) transfer all or substantially all of its properties or assets to any
other person under any plan or arrangement contemplating the dissolution
of the Company, then, in each such case, as a condition to the
consummation of such a transaction, proper and adequate provision shall
be made by the Company whereby the Holder of this Warrant, on the
exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the
effective date of such dissolution, as the case may be, shall receive, in
lieu of the Common Stock (or Other Securities) issuable on such exercise
prior to such consummation or such effective date, the stock and other
securities and property (including cash) to which such Holder would have
been entitled upon such consummation or in connection with such
dissolution, as the case may be, if such Holder had so exercised this
Warrant, immediately prior thereto, all subject to further adjustment
thereafter as provided in Section 4.
3.2 DISSOLUTION. In the event of any dissolution of the
Company following the transfer of all or substantially all of its
properties or assets, the Company, concurrently with any distributions
made to holders of its Common Stock, shall at its expense deliver or
cause to be delivered to the Holder the stock and other securities and
property (including cash, where applicable) receivable by the Holder of
the Warrant pursuant to Section 3.1, or, if the Holder shall so instruct
the Company, to a bank or trust company specified by the Holder and
having its principal office in New York, NY as trustee for the Holder of
the Warrant (the "Trustee").
3.3 CONTINUATION OF TERMS. Upon any reorganization,
consolidation, merger or transfer (and any dissolution following any
transfer) referred to in this Section 3, this Warrant shall continue in
full force and effect and the terms hereof shall be applicable to the
shares of stock and other securities and property receivable on the
exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following
any such transfer, as the case may be, and shall be binding upon the
issuer of any such stock or other securities, including, in the case of
any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall
have expressly assumed the terms of this Warrant as provided in Section
4. In the
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event this Warrant does not continue in full force and effect after the
consummation of the transactions described in this Section 3, then the
Company's securities and property (including cash, where applicable)
receivable by the Holders of the Warrant will be delivered to Holder or
the Trustee as contemplated by Section 3.2.
4. EXTRAORDINARY EVENTS REGARDING COMMON STOCK. In the event that
the Company shall (a) issue additional shares of the Common Stock as a
dividend or other distribution on outstanding Common Stock, (b) subdivide
its outstanding shares of Common Stock, or (c) combine its outstanding
shares of the Common Stock into a smaller number of shares of the Common
Stock, then, in each such event, the Exercise Price shall, simultaneously
with the happening of such event, be adjusted by multiplying the then
Exercise Price by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding immediately prior to such event and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event, and the product so obtained
shall thereafter be the Exercise Price then in effect. The Exercise
Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this
Section 4. The number of shares of Common Stock that the holder of this
Warrant shall thereafter, on the exercise hereof as provided in Section
1, be entitled to receive shall be increased to a number determined by
multiplying the number of shares of Common Stock that would otherwise
(but for the provisions of this Section 4) be issuable on such exercise
by a fraction of which (a) the numerator is the Exercise Price that would
otherwise (but for the provisions of this Section 4) be in effect, and
(b) the denominator is the Exercise Price in effect on the date of such
exercise.
5. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment
or readjustment in the shares of Common Stock (or Other Securities)
issuable on the exercise of the Warrant, the Company at its expense will
promptly cause its Chief Financial Officer or other appropriate designee
to compute such adjustment or readjustment in accordance with the terms
of the Warrant and prepare a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment
or readjustment is based, including a statement of (a) the consideration
received or receivable by the Company for any additional shares of Common
Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Exercise Price and
the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment
and as adjusted or readjusted as provided in this Warrant. The Company
will forthwith mail a copy of each such certificate to the holder of the
Warrant and any Warrant agent of the Company (appointed pursuant to
Section 11 hereof).
6. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANT.
The Company will at all times reserve and keep available, solely for
issuance and delivery on the exercise of the Warrant, shares of Common
Stock (or Other Securities) from time to time issuable on the exercise of
the Warrant.
7. ASSIGNMENT; EXCHANGE OF WARRANT. Subject to compliance with
applicable securities laws, this Warrant, and the rights evidenced
hereby, may be transferred by any registered holder hereof (a
"Transferor") in whole or in part. On the surrender for exchange of
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this Warrant, with the Transferor's endorsement in the form of Exhibit B
attached hereto (the "Transferor Endorsement Form") and together with
evidence reasonably satisfactory to the Company demonstrating compliance
with applicable securities laws, which shall include, without limitation,
the provision of a legal opinion from the Transferor's counsel (at the
Company's expense) that such transfer is exempt from the registration
requirements of applicable securities laws, and with payment by the
Transferor of any applicable transfer taxes) will issue and deliver to or
on the order of the Transferor thereof a new Warrant of like tenor, in
the name of the Transferor and/or the transferee(s) specified in such
Transferor Endorsement Form (each a "Transferee"), calling in the
aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant so surrendered by
the Transferor.
8. REPLACEMENT OF WARRANT. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation
of this Warrant and, in the case of any such loss, theft or destruction
of this Warrant, on delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in the case
of any such mutilation, on surrender and cancellation of this Warrant,
the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
9. REGISTRATION RIGHTS. The Holder of this Warrant has been
granted certain registration rights by the Company. These registration
rights are set forth in a Registration Rights Agreement entered into by
the Company and the Holder dated as of even date of this Warrant.
10. MAXIMUM EXERCISE. The Holder shall not be entitled to exercise
this Warrant on an exercise date, in connection with that number of
shares of Common Stock which would be in excess of the sum of (i) the
number of shares of Common Stock beneficially owned by the Holder and its
affiliates on an exercise date, and (ii) the number of shares of Common
Stock issuable upon the exercise of this Warrant with respect to which
the determination of this proviso is being made on an exercise date,
which would result in beneficial ownership by the Holder and its
affiliates of more than 4.99% of the outstanding shares of Common Stock
of the Company on such date. For the purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934,
as amended, and Regulation 13d-3 thereunder. Notwithstanding the
foregoing, the restriction described in this paragraph may be revoked
upon 75 days prior notice from the Holder to the Company and is
automatically null and void upon an Event of Default under either Note,
dated the date hereof, made by the Company to the Holder.
11. WARRANT AGENT. The Company may, by written notice to the each
Holder of the Warrant, appoint an agent for the purpose of issuing Common
Stock (or Other Securities) on the exercise of this Warrant pursuant to
Section 1, exchanging this Warrant pursuant to Section 7, and replacing
this Warrant pursuant to Section 8, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may
be, shall be made at such office by such agent.
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12. TRANSFER ON THE COMPANY'S BOOKS. Until this Warrant is
transferred on the books of the Company, the Company may treat the
registered holder hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.
13. NOTICES, ETC. All notices and other communications from the
Company to the Holder of this Warrant shall be mailed by first class
registered or certified mail, postage prepaid, at such address as may
have been furnished to the Company in writing by such Holder or, until
any such Holder furnishes to the Company an address, then to, and at the
address of, the last Holder of this Warrant who has so furnished an
address to the Company.
14. MISCELLANEOUS. This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of such change,
waiver, discharge or termination is sought. This Warrant shall be
governed by and construed in accordance with the laws of State of New
York without regard to principles of conflicts of laws. Any action
brought concerning the transactions contemplated by this Warrant shall be
brought only in the state courts of New York or in the federal courts
located in the state of New York; provided, however, that the Holder may
choose to waive this provision and bring an action outside the state of
New York. The individuals executing this Warrant on behalf of the
Company agree to submit to the jurisdiction of such courts and waive
trial by jury. The prevailing party shall be entitled to recover from
the other party its reasonable attorney's fees and costs. In the event
that any provision of this Warrant is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be
deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provision of this
Warrant. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof.
The invalidity or unenforceability of any provision hereof shall in no
way affect the validity or enforceability of any other provision hereof.
The Company acknowledges that legal counsel participated in the
preparation of this Warrant and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Warrant to favor
any party against the other party.
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SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written above.
HOST AMERICA CORPORATION
WITNESS:
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
---------------------------
/s/ Xxxx Xxxxxx Title: CFO
------------------------- ---------------------------
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EXHIBIT A
FORM OF SUBSCRIPTION
(To Be Signed Only On Exercise Of Warrant)
TO: Host America Corporation
Attention: Chief Financial Officer
The undersigned, pursuant to the provisions set forth in the
attached Warrant (No.____), hereby irrevocably elects to purchase (check
applicable box):
________ ________ shares of the Common Stock covered by such Warrant; or
________ the maximum number of shares of Common Stock covered by such
Warrant pursuant to the cashless exercise procedure set forth
in Section 2.
The undersigned herewith makes payment of the full Exercise Price
for such shares at the price per share provided for in such Warrant,
which is $___________. Such payment takes the form of (check applicable
box or boxes):
________ $__________ in lawful money of the United States; and/or
________ the cancellation of such portion of the attached Warrant as is
exercisable for a total of _______ shares of Common Stock
(using a Fair Market Value of $_______ per share for purposes
of this calculation); and/or
________ the cancellation of such number of shares of Common Stock as is
necessary, in accordance with the formula set forth in Section
2.2, to exercise this Warrant with respect to the maximum
number of shares of Common Stock purchasable pursuant to the
cashless exercise procedure set forth in Section 2.
The undersigned requests that the certificates for such shares be
issued in the name of, and delivered to _________________________________
whose address is _____________________________________________________.
The undersigned represents and warrants that all offers and sales by
the undersigned of the securities issuable upon exercise of the within
Warrant shall be made pursuant to registration of the Common Stock under
the Securities Act of 1933, as amended (the "Securities Act") or pursuant
to an exemption from registration under the Securities Act.
Dated:_______________________ __________________________________
(Signature must conform to name of
holder as specified on the face of
the Warrant)
Address:__________________________
__________________________
A-1
EXHIBIT B
FORM OF TRANSFEROR ENDORSEMENT
(To Be Signed Only On Transfer Of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto the person(s) named below under the heading "Transferees"
the right represented by the within Warrant to purchase the percentage
and number of shares of Common Stock of Host America Corporation into
which the within Warrant relates specified under the headings "Percentage
Transferred" and "Number Transferred," respectively, opposite the name(s)
of such person(s) and appoints each such person Attorney to transfer its
respective right on the books of Host America Corporation with full
power of substitution in the premises.
Percentage Number
Transferees Address Transferred Transferred
----------- ------- ----------- -----------
___________________ ____________________ ____________ ____________
___________________ ____________________ ____________ ____________
___________________ ____________________ ____________ ____________
___________________ ____________________ ____________ ____________
Dated:_______________________ __________________________________
(Signature must conform to name of
holder as specified on the face of
the Warrant)
Address:__________________________
__________________________
SIGNED IN THE PRESENCE OF:
__________________________________
(Name)
ACCEPTED AND AGREED:
[TRANSFEREE]
__________________________
(Name)
B-1
