THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES ACT OF ANY STATE (COLLECTIVELY, THE "ACTS").
NEITHER THIS WARRANT NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACTS OR AN OPINION OF COUNSEL SATISFACTORY
TO COUNSEL OF HOST FUNDING, INC. TO THE EFFECT THAT SUCH REGISTRATIONS ARE
NOT REQUIRED. THIS WARRANT IS SUBJECT TO CERTAIN OTHER LIMITATIONS ON
TRANSFER.
SERIES B WARRANT
TO PURCHASE COMMON STOCK OF
HOST FUNDING, INC.
THIS IS TO CERTIFY THAT, for value received, HMR Capital, LLC, a Delaware
limited liability company, or permitted assigns, is entitled to purchase from
Host Funding, Inc., a Maryland corporation (the "Company"), at the Warrant
Office (hereinafter defined), at a purchase price per share of $10.80,
subject to adjustment as provided below (the "Exercise Price"),225,000 shares
of duly authorized, validly issued, fully paid and nonassessable shares of
the Company's Class A Common Stock, $0.01 par value ("Common Stock"), and is
entitled also to exercise the other appurtenant rights, powers and privileges
hereinafter set forth. The number of shares of Common Stock purchasable
hereunder and the Exercise Price are subject to adjustment in accordance with
Article IV hereof.
This Warrant is issued pursuant to the terms of that certain Agreement,
dated effective February 3, 1997, by and among the Company, HMR Capital and
Host Funding Advisors, Inc., a Delaware corporation. Subject to the
limitations and requirements contained herein, the holders of these Warrants
may transfer or exchange such Warrants or a portion thereof in the manner
specified herein.
Certain terms used in this Warrant are defined in Article I.
ARTICLE I
TERMS DEFINED
As used in this Warrant, unless the context otherwise requires, the
following terms have the respective meanings set forth below or in the
Section indicated:
ACTS -- shall mean the Securities Act of 1933 and any applicable state
securities or blue sky laws, as they may be amended from time to time, and the
rules and regulations thereunder, all as the same shall be in effect at the
time.
BOARD OF DIRECTORS -- shall mean the Board of Directors of the Company.
COMMON STOCK -- shall mean the Company's Class A Common Stock, $0.01 par
value per share.
CODE -- shall mean the Internal Revenue Code of 1986, and the rules and
regulations promulgated thereunder.
COMPANY -- shall mean Host Funding, Inc., a Maryland corporation, and its
successors and assigns.
DATE OF ISSUANCE -- shall mean February 3, 1997.
EXPIRATION DATE -- shall mean February 2, 2001 (i. e. four years from the
Date of Issuance).
EXERCISE PRICE -- shall mean the purchase price per share of Common Stock
payable by the holder hereof upon exercise of this Warrant, as it may be
adjusted from time to time in accordance with the provisions of Article IV
hereof.
OUTSTANDING -- when used with reference to Common Stock at any date, shall
mean all issued shares of Common Stock at such date, except shares then held in
the treasury of the Company.
PERSON -- shall mean any individual, corporation, partnership, trust,
organization, association or other entity or individual.
REIT QUALIFICATION RULES -- shall mean any and all provisions of the Code
the compliance with which is necessary for the Company to maintain its status
as a qualified real estate investment trust in accordance with the Code.
REGISTRATION PERIOD. -- shall mean that period of time commencing ten (10)
business days after the Company gives written notice to the holder of this
Warrant that within twenty-four (24)
2
months after the Date of Issuance the Company intends to file an application
with the Securities and Exchange Commission to register and sell common
stock of the Company pursuant to an underwritten public offering with net
proceeds (after underwriting discounts and commissions but before other
expenses of the offering) to the Company of not less than $50,000,000 and
ending on the earlier to occur of (i) sixty (60) days after the effective
date of such public offering or (ii) twenty-four (24) months after the Date
of Issuance.
WARRANT -- shall mean this Warrant and any successor or replacement
Warrant delivered in accordance herewith.
WARRANT OFFICE -- shall have the meaning set forth in Section 3.1.
WARRANT SHARES -- shall mean the shares of Common Stock purchased or
purchasable by the registered holder of this Warrant or the permitted
assignees of such holder upon exercise hereof pursuant to Article II hereof.
ARTICLE II
EXERCISE OF WARRANT
2.1 TERM. Subject to the limitations and requirements contained herein,
this Warrant may be exercised as a whole at any time or in part from time to
time commencing on the Date of Issuance and terminating at 5:00 p. m.,
Dallas, Texas time on the Expiration Date.
2.2 METHOD OF EXERCISE. To exercise this Warrant, the registered holder
hereof or permitted assignees of all rights of the registered holder hereof
shall deliver to the Company, at the Warrant Office (a) a written notice in
the form of the Subscription Notice attached hereto, stating therein the
election of such holder or such permitted assignees to exercise this Warrant
in the manner provided in the Subscription Notice, (b) payment in full of the
Exercise Price (in the manner described below) for all Warrant Shares
purchased hereunder, and (c) this Warrant. This Warrant shall be deemed to
be exercised on the date of receipt by the Company of the Subscription
Notice, accompanied by payment for the Warrant Shares and surrender of this
Warrant, as aforesaid, and such date is referred to herein as the "Exercise
Date". Upon such exercise, the Company shall issue and deliver to such
holder a certificate for the full number of the Warrant Shares purchasable by
such holder hereunder, against the receipt by the Company of this Warrant and
the total Exercise Price payable hereunder for all such Warrant Shares, in
accordance with Section 2.4 below. Upon any partial exercise of this Warrant,
the Company shall forthwith issue and deliver to or upon the order of the
exercising holder a new Series B Warrant To Purchase Common Stock of Host
Funding, Inc. of like tenor, in the name of the holder thereof, or as such
holder may request, calling in the aggregate on the face or faces thereof for
the number of Warrant Shares equal to the number of such shares called for on
the face of the original Warrant minus the number of such shares designated
by the holder in the Subscription Notice. The person in whose name the
certificate(s) for Common
3
Stock is to be issued shall be deemed to have become a holder of record of
such Common Stock on the Exercise Date. Each certificate representing the
Warrant Shares shall upon issuance bear the restrictive legend set forth on
Exhibit A attached to this Warrant.
2.3 FRACTIONAL SHARES. No fractional shares of Common Stock are to be
issued upon the exercise of this Warrant, but in lieu of such fractional share,
the Company shall make a cash payment therefor equal to the Exercise Price then
in effect multiplied by such fractional share.
2.4 PAYMENT OF EXERCISE PRICE. Upon exercise of this Warrant, the
Exercise Price then in effect shall be payable, at the holder's election, by
delivering to the Company, in accordance with this Article II, certified or
cashier's check or wire transfer of good funds in an amount equal to the
Exercise Price then in effect multiplied by the number of Warrant Shares with
respect to which this Warrant is then being exercised.
ARTICLE III
WARRANT OFFICE; TRANSFER
3.1 WARRANT OFFICE. The Company shall maintain an office for certain
purposes specified herein (the "Warrant Office"), which office shall initially
be 0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000 Attention:
Xxxxxxx X. XxXxxxx, and may subsequently be such other office of the Company or
of any transfer agent of the Common Stock in the continental United States as to
which written notice has previously been given to the registered holder of this
Warrant. The Company shall maintain, at the Warrant Office, a register for the
Warrant, in which the Company shall record the name and address of the person in
whose name this Warrant has been issued, as well as the name and address of each
permitted assignee of the registered holder hereof.
3.2 OWNERSHIP OF WARRANT. The Company may deem and treat the person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in this Article III. The Warrants shall be evidenced by a
"Certificate of Warrant" issued by the Company to the holder of the Warrant and
containing the appropriate legend relating to restrictions on sale and transfer
under the Acts.
3.3 RESTRICTIONS ON EXERCISE AND TRANSFER OF WARRANTS. The Company
agrees to maintain at the Warrant Office books for the registration and
transfer of this Warrant. Subject to the restrictions on transfer of
Warrants in this Section 3.3, the Company, from time to time, shall register
the transfer of this Warrant in such books upon surrender of this Warrant at
the Warrant Office properly endorsed or accompanied by appropriate
instruments of transfer and written instructions for transfer satisfactory to
the Company. Upon any such transfer, a new Warrant shall be issued to the
transferee and the surrendered Warrant shall be canceled by the Company. The
Company shall
4
pay all expenses, taxes (other than transfer or income taxes incurred by the
holder) and other charges payable in connection with the transfer of Warrants
pursuant to this Section 3.3.
(a) RESTRICTIONS IN GENERAL. Notwithstanding any provisions
contained in this Warrant to the contrary, this Warrant shall not be
exercisable or transferable and the Warrant Shares shall not be
transferable except upon the conditions specified in this Section 3.3 ,
which conditions are intended, among other things, to insure compliance
with the provisions of the Acts and the REIT Qualification Rules in respect
of the exercise or transfer of this Warrant or transfer of Warrant Shares.
The registered holder of this Warrant agrees that except for transfers of
this Warrant expressly permitted by Section 3.3 (b) below, he will neither
transfer this Warrant nor transfer Warrant Shares prior to delivery to the
Company of the opinion of counsel referred to in, and to the effect
described in, clause (A) of Section 3.3(d).
(b) PERMITTED TRANSFERS. HMR Capital, as the original registered
holder of this Warrant, shall have the right to transfer and assign all or
any portion of this Warrant to (i) the members of HMR Capital existing as
of the Date of Issuance and (ii) the Profit Holders, as defined in that
certain Profit Percentage Agreement dated effective as of November 1, 1996
by and among HMR Capital and HFG Acquisition Group, Inc. (as assignee of La
Jolla Securities Corporation),Strategic Property Advisors, Inc. (as
assignee of Capital Equities of La Jolla, Inc.) and Xxxx Xxxxxxxx
(collectively, the "Permitted Transferees"); provided, that each such
Permitted Transferee shall have executed and delivered to the Company an
Investment Letter Agreement effective on or before the date of the
assignment or transfer, in form and substance acceptable to the Company.
(c) RESTRICTIONS ON TRANSFER DURING REGISTRATION PERIOD. This
Warrant shall not be exercisable during any Registration Period.
(d) OPINION OF COUNSEL. The registered holder of this Warrant, by
his acceptance hereof, agrees that prior to any transfer of this Warrant or
any transfer of the related Warrant Shares, said holder will deliver to the
Company a statement setting forth either said holder's intention with
respect to the disposition of this Warrant or any Warrant Shares, or the
intention of said holder's prospective transferee with respect to his
acquisition of this Warrant or of said Warrant Shares (whichever is
involved in such transfer), in either such case, together with a signed
copy of the opinion of said holder's counsel, such opinion and counsel to
be reasonably acceptable to the Company, as to (i) the necessity or
non-necessity for registration under the Acts in connection with such
exercise or such transfer and (ii) whether or not the effect of such
exercise or transfer would disqualify the Company as a qualified real
estate investment trust pursuant to the REIT Qualification Rules.
The following provisions shall then apply:
(A) If, in the opinion of said holder's counsel, the proposed
transfer of this Warrant or the proposed transfer of such Warrant
Shares may be effected without (i)
5
registration under the Acts of this Warrant or such Warrant Shares,
as the case may be, and (ii) disqualification of the Company as a
qualified real estate investment trust pursuant to the REIT
Qualification Rules, then the registered holder of this Warrant shall
be entitled to transfer this Warrant or such Warrant Shares in
accordance with the statement of intention delivered by said holder
to the Company.
(B) If, in the opinion of said counsel, either the proposed
transfer of this Warrant or the proposed transfer of such Warrant
Shares may not be effected without (i) registration under the Acts of
this Warrant or such Warrant Shares, as the case may be, or (ii)
disqualification of the Company as a qualified real estate investment
trust pursuant to the REIT Qualification Rules, the registered holder
of this Warrant shall not be entitled to transfer this Warrant or such
Warrant Shares, as the case may be, until such registration is
effected or disqualification remedied.
(e) TERMINATION OF RESTRICTIONS. If, in the opinion of counsel to
the holder of this Warrant, a copy of which shall be furnished, and
reasonably acceptable, to the Company, this Warrant may be freely
transferred pursuant to the provisions of the Securities Act of 1933, as
amended, or other applicable provisions of the Acts, the restrictions set
forth in this Section 3.3 shall terminate and, upon request by said
holder, the Company shall cause the restrictive legends on the face hereof
to be removed.
3.4 ACKNOWLEDGMENT OF RIGHTS. The Company will, at the time of any
exercise of this Warrant in accordance with the terms hereof, upon the request
of the registered holder hereof, acknowledge in writing its 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, provided, that if the holder of this Warrant 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.
3.5 EXPENSES OF DELIVERY OF WARRANTS. The Company shall pay all expenses,
taxes (other than transfer or income taxes incurred by the holder) and other
charges payable in connection with the preparation, issuance and delivery of
Warrants and related Warrant Shares hereunder (except as otherwise provided in
Section 5.5 hereof).
ARTICLE IV
ADJUSTMENT PROVISIONS
4.1 ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The
Exercise Price shall be subject to adjustment from time to time as provided
in this Article IV. Upon each adjustment of the Exercise Price, the
registered holder hereof shall thereafter be entitled to purchase, upon
exercise hereof, at the Exercise Price resulting from such adjustment, the
number of shares of Common Stock (calculated to the nearest whole shares
pursuant to Section 4.1(a)(v)) obtained by multiplying the Exercise Price in
effect immediately prior to such adjustment by the number of
6
shares of Common Stock purchasable pursuant hereto immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting
from such adjustment.
(a) ADJUSTMENTS. The Exercise Price and the number of Warrant Shares
shall be subject to adjustment from time to time as follows:
(i) STOCK DIVIDENDS. If the number of shares of Common Stock
outstanding at any time after the date of this Warrant is increased by
a stock dividend payable in shares of Common Stock or by a subdivision
or split-up of shares of Common Stock, then immediately after the
record date fixed for the determination of holders of Common Stock
entitled to receive such stock dividend or the effective date of such
subdivision or split-up, as the case may be, the Exercise Price shall
be appropriately adjusted so that the adjusted Exercise Price shall
bear the same relation to the Exercise Price in effect immediately
prior to such adjustment as the total number of shares of Common Stock
outstanding immediately prior to such action shall bear to the total
number of shares of Common Stock outstanding immediately after such
action.
(ii) COMBINATION OF STOCK. If the number of shares of Common
Stock outstanding at any time after the date of issuance of this
Warrant is decreased by a combination of the outstanding shares of
Common Stock, then, immediately after the effective date of such
combination, the Exercise Price shall be appropriately adjusted so
that the adjusted Exercise Price shall bear the same relation to the
Exercise Price in effect immediately prior to such adjustment as the
total number of shares of Common Stock outstanding immediately prior
to such action shall bear to the total number of shares of Common
Stock outstanding immediately after such action.
(iii) REORGANIZATIONS, CONSOLIDATIONS, MERGERS AND SALES. In
case of any capital reorganization of the Company, or of any
reclassification of the Common Stock, or in case of the consolidation
of the Company with or the merger of the Company with any other Person
or of the sale, or other transfer of all or substantially all of the
assets of the Company to any other Person, this Warrant shall, after
such capital reorganization, reclassification, consolidation, merger,
sale, or other transfer, be exercisable for the number of shares of
stock or other securities or property to which the Common Stock
issuable (at the time of such capital reorganization,
reclassification, consolidation, merger, sale, or other transfer) upon
exercise of this Warrant would have been entitled to receive upon such
capital reorganization, reclassification, consolidation, merger, sale,
or other transfer if such exercise had taken place; and in any such
case, if necessary, the provisions set forth herein with respect to
the rights and interests thereafter of the holder of this Warrant
shall be appropriately adjusted so as to be applicable, as nearly as
may reasonably be, to any shares of stock or other securities or
property thereafter deliverable on the exercise of this Warrant. The
subdivision or combination of shares of Common Stock
7
issuable upon exercise of this Warrant at any time outstanding into a
greater or lesser number of shares of Common Stock (whether with or
without par value) shall not be deemed to be a reclassification of the
Common Stock of the Company for the purposes of this clause (iii).
(iv) REGISTRATION PERIOD ADJUSTMENT. If within twenty-four
months after the Date of Issuance, the Company shall be successful in
consummating a public offering during the Registration Period,
pursuant to which the net proceeds (after underwriting discounts and
commissions but before other expenses of the offering) to the Company
are not less than $50,000,000 (the "Public Offering"), the Exercise
Price shall be adjusted to equal the greater of (A) 110% of the public
per share offering price on the effective date of the Public Offering
or (B) the per share Exercise Price (including any adjustments
pursuant to Sections 4(a) (i), (ii) or (iii) above) on the date
immediately preceding the effective date of the Public Offering.
(v) ROUNDING OF CALCULATIONS; MINIMUM ADJUSTMENT. All
calculations under this Section 4.1(a) shall be made to the nearest
cent or to the nearest whole share (as provided in Section 2.3), as
the case may be.
(b) STATEMENT REGARDING ADJUSTMENTS. Whenever the Exercise Price
shall be adjusted as provided in Section 4.1(a), the Company shall
forthwith file at the Warrant Office a statement showing in detail the
facts requiring such adjustment and the Exercise Price and new number of
shares issuable that shall be in effect after such adjustment, and the
Company shall also cause a copy of such statement to be given to the
registered holder of this Warrant. Each such statement shall be signed by
the Company's chief financial or accounting officer. Where appropriate,
such copy may be given in advance and may be included as part of a notice
required to be mailed under the provisions of Section 4.1(c).
(c) NOTICE TO HOLDERS. In the event the Company shall propose to
take any action of the type described in clause (i), (ii) or (iii) of
Section 4.1(a), the Company shall give notice to the registered holder of
this Warrant, in the manner set forth in Section 7.6, which notice shall
specify the record date, if any, with respect to any such action and the
approximate date on which such action is to take place. Such notice shall
also set forth such facts with respect thereto as shall be reasonably
necessary to indicate the effect of such action (to the extent such effect
may be known at the date of such notice) on the Exercise Price and the
number, kind or class of shares or other securities or property which shall
be deliverable upon exercise of this Warrant. In the case of any action
which would require the fixing of a record date, such notice shall be given
at least 10 days prior to the date so fixed, and in case of all other
action, such notice shall be given at least 15 days prior to the taking of
such proposed action.
4.2. COSTS. Except as otherwise provided in Section 5.5, the Company shall
pay all documentary, stamp, transfer or other transactional taxes attributable
to the issuance or delivery of
8
shares of Common Stock upon exercise of this Warrant; PROVIDED, HOWEVER, that
the Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any
certificate for such shares in a name other than that of the holder of this
Warrant in respect of which such shares are being issued.
ARTICLE V
REGISTRATION RIGHTS
5.1 SHELF REGISTRATION. The Company agrees that within ninety (90) days
following the earlier to occur of (i) the effective date of a public offering of
the Company's common stock in which the net proceeds to the Company (after
underwriting discounts and commissions but before other expenses of the
offering) ("Net Proceeds") are not less that $50,000,000 or (ii) the effective
date of a public offering of the Company's common stock after expiration of the
Registration Period in which the Net Proceeds to the Company are not less that
$20,000,000, to prepare and file a registration statement on Form S-3 (the
"Shelf Registration Statement") with the Securities and Exchange Commission (the
"SEC") for the public sale of the Warrant Shares. The Company shall use its
reasonable diligent efforts to cause the Shelf Registration Statement to become
effective not later that ninety (90) days after the date of filing and to remain
effective for a period ending on the earlier to occur of (A) two years after the
effective date of the Shelf Registration Statement or (B) the Expiration Date of
this Warrant. The Company shall supply to the registered holder of this Warrant
a reasonable number of copies of all registration materials and related
prospectuses.
5.2 LIMITATIONS ON SHELF REGISTRATION. The obligation of the Company
under Section 5.1 to file a Shelf Registration Statement is subject to each of
the following limitations, conditions and qualifications:
(a) ELIGIBILITY OF FORM S-3. The Company shall be entitled to
postpone the preparation and filing of the Shelf Registration Statement if
the Company delivers to the registered holder of this Warrant an opinion of
counsel that (i) either the Company or the Warrant Shares do not meet the
eligibility requirements for filing a Form S-3 or (ii) there is a
reasonable likelihood that the filing of the Shelf Registration Statement
would not be approved for filing by the SEC. Any postponement pursuant to
this section 5.1 (a) shall continue until such time as counsel to the
Company shall determine that the Company and the Warrant Shares meet the
eligibility requirements for the use of Form S-3 and that the SEC would
accept the filing of the Shelf Registration Statement.
(b) PENDING MATERIAL EVENTS. The Company shall be entitled to
postpone for a reasonable period of time (not exceeding sixty (60) days)
the effectiveness (but not the filing or preparation) of the Shelf
Registration Statement if the underwriter or investment banking firm of the
Company determines (and the Company so notifies the registered holder of
this Warrant) that in its judgment, such registration would materially
interfere with any financing, acquisition, corporate reorganization or
other material transaction involving the Company.
9
(c) FINANCIAL STATEMENTS. The Company shall be entitled to postpone
for a reasonable period of time (not exceeding sixty (60) days) the filing
of the Shelf Registration Statement, as is reasonable necessary, to prepare
the financial statements of the Company for inclusion in the Shelf
Registration Statement.
5.3 RESTRICTIONS ON PUBLIC SALE. To the extent not inconsistent with
public law, the registered holder of this Warrant agrees not to effect any
public sale or distribution of the Warrant Shares under the Shelf Registration
Statement during the fourteen (14) days prior to, and during the ninety (90) day
period beginning on, the effective date of a registration statement filed by the
Company (excluding the Shelf Registration Statement), but only to the extent
requested in writing (with reasonable prior notice) by the managing underwriter
or underwriters in the case of an underwritten public offering by the Company of
securities of the same type as the Warrant Shares; provided, that the period of
time for which the Company is required to keep the Shelf Registration Statement
effective shall be increased by a period of days equal to the requested holdback
period, not to exceed the Expiration Date of this Warrant.
5.4 NOTIFICATION OF MATERIAL EVENTS. The Company will notify the
registered holder of this Warrant or the Warrant Shares during the effective
period of the Shelf Registration Statement of the occurrence of any event, as a
result of which, the Shelf Registration Statement or any related prospectus, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and will prepare and furnish to such holder a
reasonable numer of copies of any amendment to the Shelf Registration Statement
or supplement to any related prospectus as may be necessary so that, as
thereafter delivered to a purchaser of the Warrant Shares, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The registered holder of this Warrant or the Warrant Shares, as
the case may be, agrees not to sell Warrant Shares under the Shelf Registration
Statement during any period when the Company has has advised such holder that
the information in the prospectus relating to the Warrant Shares is not current.
5.5 REGISTRATION EXPENSES. The Company shall bear all expenses relating
to the preparation and filing of the Shelf Registration Statement except for
the following expenses which shall be borne by the registered holder of this
Warrant: (i) fees and expenses of compliance with securities or blue sky laws
(including fees and disbursements of counsel in connection with blue sky
qualification of the Warrant Shares), (ii) fees and expenses incurred, if any,
in connection with the listing of the Warrant Shares on each securities exchange
on which similar securities issued by the Company are then listed, and (iii)
underwriting fees, discounts and commissions relating to the sale of the Warrant
Shares.
5.6 INDEMNIFICATION BY HOLDER OF WARRANT. In connection with the Shelf
Registration Statement, the registered holder of this Warrant agrees to furnish
to the Company in writing such information with respect to the name and address
of the holder, the amount of Warrant Shares issuable to such holder upon
exercise of this Warrant, and such other information as the Company
10
shall reasonable request for use in connection with the preparation and
filing of the Shelf Registration Statement and any related prospectuses. The
holder of this Warrant agrees to indemnify, to the extent permitted by
applicable law, the Company, its directors and officers, and each person or
entity which controls the Company (within the meaning of the Securities Act
of 1933) against any losses, claims, damages, liabilities and expenses
resulting from any untrue statement of a material fact or any omission of a
material fact required to be stated in the Shelf Registration Statement or
any related prospectus or any amendment thereof or supplement thereto, or
necessary not to make the statements therein not misleading, to the extent,
but only to the extent, that such untrue statement or omission is based upon
information with respect to the registered holder of this Warrant furnished
in writing by such holder specifically for inclusion in the Shelf
Registration Statement or any related prospectus.
ARTICLE VI
COVENANTS OF THE COMPANY
6.1 DILUTION OR IMPAIRMENTS. The Company will not, by amendment of its
Articles of Incorporation 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 observance or performance of any of
the terms of this Warrant. Without limiting the generality of the foregoing, the
Company shall at all times reserve and keep available, so long as this Warrant
remains outstanding, free from preemptive rights, the number of shares of Common
Stock equal to the number of shares of Common Stock to be issued upon the
exercise of all of the Warrants issued and outstanding.
ARTICLE VII
MISCELLANEOUS
7.1 ENTIRE AGREEMENT. This Warrant contains the entire agreement between
the holder hereof and the Company with respect to the Warrant Shares purchasable
upon exercise hereof and the related transactions and supersedes all prior
arrangements or understandings with respect thereto.
7.2 GOVERNING LAW. This Warrant shall be interpreted, construed and
governed by the laws of the State of Maryland.
7.3 WAIVER AND AMENDMENT. Any term or provision of this Warrant may be
waived at any time by the party which is entitled to the benefits thereof, and
any term or provision of this Warrant may be amended or supplemented at any time
by agreement of a majority of the holders of Warrants and the Company, except
that any waiver of any term or condition, or any amendment or supplementation,
of this Warrant must be in writing. No course of dealing between the holder
hereof and any other party hereto or any failure or delay on the part of the
holder hereof in exercising any rights or remedies hereunder shall operate as a
waiver of any rights or remedies of the holder under
11
this or any other applicable instrument. No single or partial exercise of any
rights or remedies hereunder shall operate as a waiver or preclude the
exercise of any other rights or remedies hereunder, and a waiver of any
breach or failure to enforce any of the terms or conditions of this Warrant
shall not in any way affect, limit or waive a party's rights hereunder at any
time to enforce strict compliance thereafter with every term or condition of
this Warrant.
7.4 SEVERABILITY. Any provision contained in this Warrant which is
prohibited or unenforceable by law shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
contained in this Warrant.
7.5 COPY OF WARRANT. A copy of this Warrant shall be filed among the
records of the Company.
7.6 NOTICES. Any notices or communications under this Agreement shall be
given by any of the following means: (i) registered, certified or first class
mail, (ii) hand delivery or (iii) telex, telecopy or telegram. Such notice or
communication shall be sent to the respective parties at the address listed
below. Except as expressly provided herein, notice shall be deemed to have been
given when sent to or refused by the party to whom notice is being given.
Notice given by first class mail shall be deemed received on the third business
day following the date on which it is mailed. Communication by telex, telecopy
or telegram shall be confirmed by posting a copy of the same by registered,
certified or first class mail in an envelope properly addressed to the
respective parties at the address listed below:
If to the Company: Host Funding, Inc.
0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000
Attn: Xxxxxxx X. XxXxxxx
If to the holder hereof: HMR Capital, LLC
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Telecopy No. (000) 000-0000
Attn: Xxx Xxxxxxx-Xxxxx
With a Copy To: Xxxxx X. Xxxxxxx
Attorney at Law
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxxxxx 00000
Any party may, by written notice to the others, change the representative or
the address to which such notices and communications are to be sent.
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7.7 LIMITATION OF LIABILITY; NOT SHAREHOLDERS. No provision of this
Warrant shall be construed as conferring upon the holder hereof the right to
vote, consent, receive dividends or receive notices other than as herein
expressly provided in respect of meetings of shareholders for the election of
directors of the Company or any other matter whatsoever as a shareholder of the
Company. No provision hereof, in the absence of affirmative action by the
holder hereof to purchase shares of Common Stock, and no mere enumeration herein
of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the purchase price of any shares of Common Stock or
as a shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
7.8 EXCHANGE OF WARRANTS. Subject to Section 3.3 hereof, upon surrender
for exchange of this Warrant to the Company, the Company at its expense will
promptly issue and deliver to or upon the order of the holder hereof a new
Warrant of like tenor, in the name of such holder or as such holder may direct,
calling in the aggregate for the purchase of the number of shares of the Common
Stock to be issued upon the exercise of this Warrant so surrendered. The
Company shall pay all taxes (other than securities transfer taxes) and all other
expenses and charges payable in connection with the preparation, execution and
delivery of Warrants pursuant to this Section 7.8.
7.9 REPLACEMENT OF WARRANT. Upon receipt of evidence satisfactory to the
Company of the loss, theft, mutilation or destruction of this Warrant, and in
the case of any such loss, theft or destruction upon delivery of an agreement of
indemnity in such form and amount as shall be reasonably satisfactory to the
Company, or in the event of such mutilation upon surrender and cancellation of
this Warrant, the Company will make and deliver a new Warrant of like tenor, in
the name of the holder hereof, in lieu of such lost, stolen, destroyed or
mutilated Warrant. This Warrant shall be promptly cancelled by the Company upon
the surrender hereof in connection with any exchange or replacement. The
Company shall pay all taxes (other than securities transfer taxes) and all other
expenses and charges payable in connection with the preparation, execution and
delivery of Warrants pursuant to this Section 7.9.
7.10 HEADINGS. The Article and Section and other headings herein are for
convenience only and are not a part of this Warrant and shall not affect the
interpretation thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
effective as of the 3rd day of February, 1997.
HOST FUNDING, INC.
BY:
-------------------------------
Xxx X. Xxxxxxxx
00
SUBSCRIPTION NOTICE
The undersigned, the holder of the foregoing Warrant, hereby elects to
exercise purchase rights represented by said Warrant for, and to purchase
thereunder, ___________ shares of the Common Stock covered by said Warrant and
herewith makes payment in full therefor pursuant to Section 2.1 of such Warrant,
and requests (a) that certificates for such shares (and any securities or other
property issuable upon such exercise) be issued in the name of, and delivered
to, ________________________, and (b) if such shares shall not include all of
the shares issuable as provided in said Warrant, that a new Warrant of like
tenor and date, in the name of the undersigned, for the balance of the shares
issuable thereunder be delivered to the undersigned.
------------------------------
Dated: , 19
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ASSIGNMENT
For value received, _________________ , hereby sells, assigns and
transfers unto __________________________________ the within Warrant,
together with all right, title and interest therein and does hereby
irrevocably constitute and appoint _____________________________ attorney, to
transfer said Warrant on the books of the Company, with full power of
substitution.
--------------------------------
Dated: , 19
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