THE WARRANTS ISSUABLE PURSUANT TO THIS WARRANT AGREEMENT AND THE SHARES ISSUABLE
UPON EXERCISE OF SUCH WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE SECURITIES ACT OF ANY STATE (COLLECTIVELY, THE
"ACTS"). NEITHER THE WARRANTS NOR ANY INTEREST THEREIN 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.
WARRANT AGREEMENT
This Warrant Agreement (this "Agreement") is entered into as of the
21st day of December, 1999 by and between Host Funding, Inc., a Maryland
corporation (the "Company"), and XxxXxxxxx Xxxxxxxxx, Inc., a California
corporation ("MPI").
R E C I T A L S
A. The Company and MPI have entered into that certain Stock Purchase
Agreement (the "Purchase Agreement") dated effective as of December 21, 1999.
B. Pursuant to the terms and conditions of the Purchase Agreement, the
Company has agreed to issue and deliver Warrants (as hereinafter defined) to
MPI, representing the right to purchase in the aggregate up to 500,000 shares of
the Class A Common Stock, $0.01 par value, of the Company (the "Common Stock"),
on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements of the parties contained in this Agreement, the receipt and
sufficiency of which are hereby agreed and acknowledged, the parties hereto
agree as follows:
ARTICLE I
Terms Defined
As used in this Agreement, the following terms have the respective
meanings set forth in this Article I. All terms used in this Agreement that are
not defined in this Article I shall have the meaning set forth elsewhere in this
Agreement.
"Affiliate" means, with respect to any Person, any other Person who
controls, is controlled by or is under common control with such Person.
"Board of Directors" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Convertible Securities" shall have the meaning set forth in Section
4.2 (b) of this Agreement.
"Current Market Price" shall have the meaning set forth in Section 4.1
(b) of this Agreement.
"Date of Issuance" means December 21, 1999.
"Election to Exercise" shall have the meaning set forth in Section 2.4
of this Agreement.
"Exercise Date" shall have the meaning set forth in Section 2.4 of this
Agreement.
"Exercise Price" means $3.00 per share of Common Stock payable by a
Warrantholder upon exercise of a Warrant, as such Exercise Price may be adjusted
from time to time in accordance with the provisions of Article IV of this
Agreement.
"Expiration Date" means December 21, 2005.
"Outstanding" when used with reference to Common Stock at any date,
means all issued shares of Common Stock at such date, except shares then held in
the treasury of the Company.
"Person" means any individual, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, organization, government (or an agency or
political subdivision thereof) or other entity of any kind, and shall include
any successor (by merger or otherwise) of such entity.
"Securities Acts" means 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 promulgated thereunder, all as the same shall be in
effect at the time.
"Warrant" or "Warrants" means the warrant or warrants and any successor
or replacement warrant or warrants issued and delivered in accordance with the
terms and conditions of this Agreement and initially representing the right to
purchase in the aggregate up to 500,000 shares of Common Stock.
2
"Warrant Certificate" or "Warrant Certificates" shall have the meaning
set forth in Section 2.2 of this Agreement.
"Warrantholder" means any Person in whose name a Warrant Certificate
shall be registered in the Warrant Register.
"Warrant Certificate" or "Warrant Certificates" shall have the meanings
set forth in Section 2.1 of this Agreement.
"Warrant Office" shall have the meaning set forth in Section 3.1 of
this Agreement.
"Warrant Register" shall have the meaning set forth in Section 3.1 of
this Agreement.
"Warrant Shares" means the shares of Common Stock purchased or
purchasable by a Warrantholder or the permitted assignees of a Warrantholder
upon exercise of a Warrant pursuant to Article II of this Agreement.
ARTICLE II
Issuance and Exercise of Warrants
2.1 Grant of Warrants. Subject to the terms and conditions of this
Agreement, the Company hereby grants to MPI, warrants to purchase 500,000 shares
of Common Stock of the Company.
2.2 Form of Warrant Certificates. The Warrants shall be evidenced by
certificates in the form of Exhibit A attached to this Agreement (the "Warrant
Certificates" or individually, a "Warrant Certificate"). Each Warrant
Certificate shall evidence the right, subject to the provisions of this
Agreement and the Warrant Certificate, to purchase the number of shares of
Common Stock set forth therein, adjusted as provided in Article IV of this
Agreement, upon payment of the Exercise Price.
2.3 Term. Subject to the limitations and requirements contained in this
Agreement, a 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.,
PDT San Francisco, California time, on the Expiration Date. Any Warrant not
exercised prior to the Expiration Date shall become void, and all rights
thereunder and all rights in respect thereof under this Agreement shall cease.
2.4 Method of Exercise. To exercise a Warrant, the Warrantholder shall
deliver to the Company, at the Warrant Office (a) the Election to Exercise form
(the "Election to Exercise") attached to the Warrant Certificate duly completed
and signed, (b) payment in full of the Exercise Price (in the manner described
in Section 2.6 below) for all Warrant Shares purchased pursuant to the Election
to Exercise, and (c) the Warrant Certificate. A Warrant shall be deemed to be
exercised on the date of receipt by the Company of the Election to Exercise,
accompanied by payment for the Warrant Shares and surrender of the Warrant
Certificate, and such date is referred to herein as the "Exercise Date." Upon
such exercise, the Company shall issue and deliver (or shall cause the transfer
3
agent of the Common Stock to issue and deliver) to the Warrantholder a
certificate for the full number of the Warrant Shares purchased by the
Warrantholder, against the receipt by the Company of the Warrant Certificate and
the payment of the total Exercise Price for all such Warrant Shares. Upon any
partial exercise of a Warrant, the Company shall forthwith issue and deliver to
or upon the order of the exercising Warrantholder a new Warrant Certificate, in
the name of the exercising Warrantholder, or as such Warrantholder 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 Certificate minus the number of such shares designated by the
Warrantholder in the Election to Exercise. The Company will cancel all Warrants
and related Warrant Certificates surrendered for exercise pursuant to this
Section 2.4. The Person in whose name the certificate(s) for Common 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 Company's standard restrictive legend.
2.5 Fractional Shares. No fractional shares of Common Stock are to be
issued upon the exercise of a 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.
2.6 Payment of Exercise Price. Upon exercise of a Warrant, the Exercise
Price shall be payable by the Warrantholder to the Company by (i) a certified or
cashier's check, or (ii) a wire transfer of immediately available funds, or
(iii) the surrender to the Company by the Warrantholder of unexercised Warrants,
or (iv) any combination of the foregoing, in an amount equal to the Exercise
Price then in effect multiplied by the number of Warrant Shares with respect to
which a Warrant is then being exercised. For purposes of paying the aggregate
Exercise Price, each unexercised Warrant surrendered to the Company shall be
valued at the difference between the Current Market Price on the date of
surrender thereof and the Exercise Price then in effect. Upon such surrender of
an unexercised Warrant, the Company shall immediately cancel such Warrant on the
Warrant Register and all rights with respect to such surrendered Warrant shall
immediately cease. If a Warrantholder surrenders unexercised Warrants valued in
an amount in excess of the aggregate Exercise Price, only the amount of the
unexercised Warrants so surrendered which is not in excess of the aggregate
Exercise Price shall be applied to the payment thereof and the balance of such
Warrant shall be returned to the Warrantholder.
2.7 Costs. The Company shall pay all documentary, stamp, transfer or
other transactional taxes attributable to the issuance or delivery of the
Warrants or the Warrant Shares; 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 Warrant Shares in a
name other than that of the Warrantholder.
4
ARTICLE III
Warrant Office; Transfer
3.1 Warrant Office. The Company shall maintain an office for certain
purposes specified in this Agreement (the "Warrant Office"), which office shall
initially be 0000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000 Attention: Xxxx
Xxxxxx, and may subsequently be such other office of the Company or of any
transfer agent of the Common Stock of the Company as to which written notice has
previously been given to the Warrantholders. The Company shall maintain, at the
Warrant Office, appropriate books for the registration and transfer of the
Warrant Certificates (the "Warrant Register").
3.2 Ownership of Warrants. The Company may deem and treat the Person in
whose name a Warrant Certificate is registered in the Warrant Register as the
record holder and owner of a Warrant for all purposes, until due presentation of
the Warrant Certificate for registration of transfer as provided in this Article
III.
3.3 Restrictions on Exercise and Transfer of Warrants. Subject to the
restrictions on transfer of Warrants in this Section 3.3, the Company, from time
to time, shall register the transfer of a Warrant in the Warrant Register upon
surrender of the related Warrant Certificate 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 Certificate shall be issued to the transferee and the surrendered
Warrant Certificate shall be canceled by the Company. The Company shall pay all
expenses, taxes (other than transfer or income taxes incurred by the
Warrantholder or the transferee) and other charges payable in connection with
the transfer of Warrants pursuant to this Section 3.3.
(a) Restrictions in General. Each Warrantholder, by acceptance
of a Warrant Certificate, represents and warrants that such
Warrantholder is acquiring the Warrants and any related Warrant Shares
for its own account and for the purpose of investment and not with a
view to the sale or distribution thereof, except for sales pursuant to
an effective registration statement or pursuant to an exemption from
registration under the Securities Acts; provided, the Company
acknowledges that MPI may transfer Warrants to its Affiliates, if, and
only if, such transfer or transfers do not disqualify the Company from
the exempt offering provisions of Regulation D under the Securities Act
of 1933 relating to the issuance of Warrants to MPI by the Company.
(b) Opinion of Counsel. Each Warrantholder, by acceptance of a
Warrant Certificate, covenants and agrees that such Warrantholder will
not sell or otherwise dispose of any Warrants or related Warrant Shares
in the absence of (i) an effective registration statement under the
Securities Acts or (ii) an opinion acceptable in form and substance to
the Company from counsel reasonably acceptable to the Company, or an
opinion of counsel to the Company, to the effect that no registration
of the Warrants or related Warrant Shares is required under the
Securities Acts.
5
(c) Termination of Restrictions. If, in the opinion of counsel
to the Warrantholder, a copy of which shall be furnished and reasonably
acceptable to the Company, a Warrant may be freely transferred pursuant
to the provisions of the Securities Acts, the restrictions set forth in
this Section 3.3 shall terminate and, upon request by the
Warrantholder, the Company shall cause the restrictive legends on the
Warrant Certificate to be removed.
ARTICLE IV
Adjustment Provisions
4.1 Adjustment of Exercise Price and Number of Warrant Shares.
(a) 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 Warrantholder shall thereafter be entitled to
purchase, upon exercise of a Warrant, at the Exercise Price resulting
from such adjustment, the number of shares of Common Stock (calculated
to the nearest whole shares pursuant to Section 4.5) obtained by
multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Common Stock purchasable pursuant
to this Agreement immediately prior to such adjustment and dividing the
resulting product by the Exercise Price resulting from such adjustment.
(b) For purposes of making adjustments to the Exercise Price
pursuant to this Article IV, the "Current Market Price" shall be
determined as of the date of the issuance or sale giving rise to the
adjustment and shall be equal to the last reported sale price with
respect to shares of Common Stock as reported on the principal exchange
on which the Common Stock is then traded on such date. If there are no
reported transactions on such exchange or on such date, the "Current
Market Price" shall be the average of the highest current independent
bid and lowest current independent offer for the Common Stock on such
date.
4.2 Stock Dividends. If the Company shall declare a dividend or any
other distribution upon any capital stock which is payable in shares of Common
Stock, the Exercise Price shall be reduced to the quotient obtained by dividing
(i) the number of shares of Common Stock and Common Stock equivalents
outstanding immediately prior to such declaration multiplied by the then
effective Exercise Price by (ii) the total number of shares of Common Stock and
Common Stock equivalents outstanding immediately after such declaration, and the
number of shares of Common Stock issuable upon exercise of the Warrants shall be
adjusted as provided in Section 4.3. All shares of Common Stock and all
securities convertible into or exchangeable for Common Stock ("Convertible
Securities") issuable in payment of any dividend or other distribution upon the
capital stock of the Company shall be deemed to have been issued or sold without
consideration.
6
4.3 Stock Splits and Reverse Stock Splits. If the Company shall
subdivide its outstanding shares of Common Stock into a greater number of shares
or shall declare a stock dividend, the Exercise Price shall be proportionately
reduced as provided in Section 4.2 and the number of Warrant Shares issuable
upon exercise of each Warrant shall be proportionately increased by multiplying
the number of shares of Common Stock then issuable upon exercise of a Warrant by
a number determined by dividing (i) the total number of shares of Common Stock
and Common Stock equivalents outstanding immediately after such stock split or
stock dividend by (ii) the total number of shares of Common Stock and Common
Stock equivalents outstanding immediately prior to such stock split or stock
dividend. If the Company shall combine the outstanding shares of Common Stock
into a smaller number of shares, the Exercise Price shall be proportionately
increased and the number of Warrant Shares issuable upon exercise of each
Warrant shall be proportionately decreased.
4.4 Reorganizations and Asset Sales. Notwithstanding anything herein to
the contrary, if any capital reorganization or reclassification of the Company,
or any consolidation or merger of the Company with another Person, or the sale
of all or substantially all of the assets of the Company shall be effected in
such a way that the holders of the shares of Common Stock shall be entitled to
receive securities or assets with respect to or in exchange for shares of Common
Stock, adequate provision shall be made, prior to and as a condition of such
reorganization, reclassification, consolidation, merger or sale, whereby each
Warrantholder shall have the right to receive, upon the terms and conditions
specified herein and in lieu of the Warrant Shares otherwise issuable upon the
exercise of such Warrants, such securities or assets as may be issuable or
payable with respect to or in exchange for the number of shares of Common Stock
issuable upon exercise of the Warrants, immediately prior to such
reorganization, reclassification, consolidation, merger or sale. In any such
case, appropriate provision shall be made with respect to the rights and
interests of each Warrantholder so that the provisions of this Agreement shall
be applicable with respect to any securities or assets thereafter deliverable
upon exercise of the Warrants. The Company shall not effect any such
consolidation, merger or sale unless prior to or simultaneously with the
consummation thereof, the surviving or successor Person resulting from such
consolidation or merger or the purchaser of such assets shall assume by written
instrument delivered to each Warrantholder the obligation to deliver to such
Warrantholder such securities or assets as such Warrantholder may be entitled to
receive.
4.5 Rounding of Calculations; Minimum Adjustment. All calculations
under this Article IV, shall be made to the nearest cent or to the nearest whole
share (as provided in Section 2.4), as the case may be.
4.6 Statement Regarding Adjustments. Whenever the Exercise Price shall
be adjusted as provided in this Article IV, the Company shall promptly file at
the Warrant Office a statement showing in detail the facts requiring such
adjustment and the Exercise Price and new number of shares of Common Stock
issuable upon exercise of a Warrant after giving effect to such adjustment, and
the Company shall also cause a copy of such statement to be delivered to the
Warrantholders. Each such statement shall be signed by the Company's president
or chief financial officer.
7
4.7 Notice to Warrantholders. In the event the Company shall propose to
take any action of the type described in Sections 4.2, 4.3 or 4.4, the Company
shall give notice to the Warrantholders, in the manner set forth in Section 6.6,
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 a Warrant. In the case of any action which would
require the fixing of a record date, such notice shall be given at least ten
(10) days prior to the date so fixed, and in case of all other action, such
notice shall be given at least fifteen (15) days prior to the taking of such
proposed action.
4.8 Minimum Adjustment. Notwithstanding the foregoing, no adjustment to
the Exercise Price shall be made if such adjustment results in a change in the
Exercise Price then in effect of less than one percent (1%) and any adjustment
of less than one percent (1%) of any Exercise Price shall be carried forward and
shall be made at the time of and together with any subsequent adjustment that,
together with the adjustment or adjustments so carried forward, equals one
percent (1%) or more; provided, however, that upon the exercise of a Warrant,
the Company shall have made all necessary adjustments (to the nearest cent) not
theretofore made to the Exercise Price up to and including the date upon which a
Warrant is exercised.
4.9 Statements on Warrants. The form of Warrant Certificate need not be
changed because of any adjustment made pursuant to this Article IV, and Warrant
Certificates issued after such adjustment may state the same Exercise Price and
the same number of shares of Common Stock as are stated in the Warrant
Certificates initially issued pursuant to this Agreement. The Company, however,
may make changes in the form of Warrant Certificate that it deems necessary and
that does not affect the substance thereof or the rights of the holders of the
Warrant Certificates; and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, shall be in the form as so changed.
ARTICLE V
Covenants of the Company
5.1 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 Agreement. Without limiting the generality of the foregoing,
the Company shall at all times reserve and keep available, so long as this
Agreement remains in effect, free from preemptive rights, the number of shares
of Common Stock equal to the number of Warrant Shares to be issued upon the
exercise of all Warrants issued and outstanding.
8
5.2 Registration of Warrant Shares. The company will register the
Warrant Shares in accordance with the terms and conditions of the Registration
Rights Agreement between the Company and MPI of even date with this Agreement.
ARTICLE VI
Miscellaneous
6.1 Entire Agreement. This Agreement and the Warrant Certificate
contain the entire Agreement between the Warrantholder and the Company with
respect to the Warrants and the Warrant Shares and supersedes all prior
agreements or understandings with respect thereto.
6.2 Governing Law. This Agreement shall be interpreted, construed
and governed by the laws of the State of Maryland.
6.3 Waiver and Amendment. Any term or provision of this Agreement may
be waived at any time by the party which is entitled to the benefits thereof,
and any term or provision of this Agreement may be amended or supplemented at
any time by Agreement of the holders of all Warrants and the Company, except
that any waiver of any term or condition, or any amendment or supplementation,
of this Agreement must be in writing. 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 Agreement 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 Agreement.
6.4 Severability. Any provision contained in this Agreement 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 Agreement.
6.5 Copy of Warrant. A copy of this Agreement shall be filed among the
records of the Company and shall be available at all reasonable times for
inspection by any Warrantholder at the principal office of the Company.
6.6 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 facsimile transmission.
Such notice or communication shall be sent to the respective parties at the
addresses 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
9
third business day following the date on which it is mailed. Communication by
telex, telecopy or facsimile 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 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Telecopy No. 925/376-7983
Attn: Xxxx Xxxxxx
If to a Warrantholder: At the last address of the Warrantholder
appearing on the Warrant Register
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.
6.7 Limitation of Liability; Not Shareholders. No provision of this
Agreement shall be construed as conferring upon a Warrantholder the right to
vote, consent, receive dividends or receive notices in respect of meetings of
shareholders, or any other matter whatsoever as a shareholder of the Company. No
provision hereof, in the absence of affirmative action by the Warrantholder to
purchase Warrant Shares, and no mere enumeration herein of the rights or
privileges of the Warrantholder, shall give rise to any liability of such
Warrantholder 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.
6.8 Exchange of Warrant Certificates. Subject to Section 3.3 of this
Agreement, upon surrender for exchange of a Warrant Certificate to the Company,
the Company at its expense will promptly issue and deliver to or upon the order
of a Warrantholder, a new Warrant Certificate of like tenor, in the name of such
Warrant holder or as such Warrantholder 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 the Warrant Certificate 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 Warrant
Certificates pursuant to this Section 6.8.
6.9 Replacement of Warrant Certificates. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of a
Warrant Certificates, 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 a Warrant Certificate, the Company will make and
deliver a new Warrant Certificate of like tenor, in the name of the
Warrantholder, in lieu of such lost, stolen, destroyed or mutilated Warrant
Certificate. A Warrant Certificate 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 Warrant Certificate pursuant to this Section 6.9.
10
6.10 Headings. The Article and Section and other headings herein are
for convenience only and are not a part of this Agreement and shall not affect
the interpretation thereof.
[SIGNATURE PAGE FOLLOWS]
11
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
COMPANY:
HOST FUNDING, INC.
By: /s/ Xxxxxxx X. XxXxxxx, President
Xxxxxxx X. XxXxxxx, President
XXXXXXXXX XXXXXXXXX, INC.
By: /s/ X.X. Xxxxxxxxx
Name: X.X. Xxxxxxxxx
Title: President
12
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
NO. ------------- ---------- Warrants
WARRANTS
TO PURCHASE SHARES OF CLASS A COMMON STOCK OF
HOST FUNDING, INC.
Host Funding, Inc., a Maryland corporation (the "Company"), for value
received, hereby certifies that
----------------------------------------------------------
or registered assigns, is the owner of the number of Warrants, set
forth above, each of which represents the right, subject to the terms and
conditions hereof and of the Warrant Agreement between the Company and XxxXxxxxx
Xxxxxxxxx, Inc., dated effective as of December __, 1999 (the "Warrant
Agreement"), to purchase from the Company at any time, or from time to time,
from the date of original issuance of the Warrants to December __, 2005 (or, if
such date is not a Business Day (as defined below), the first following Business
Day) (the "Exercise Period"), the number of shares of common stock, par value
$0.01 per share, of the Company (the "Common Stock) described in the Warrant
Agreement (each share of Common Stock issuable upon exercise of a Warrant is
referred to as a "Warrant Share"). Subject to the terms and conditions of the
Warrant Agreement, the price per Warrant Share, with respect to the Warrants
represented by this Warrant Certificate shall be $3.00 per share, adjusted as
provided in Article IV of the Warrant Agreement (the "Exercise Price"), payable
in full as to each Warrant exercised at the time of purchase. The term "Business
Day" as used herein means any day, other than a Saturday or Sunday, that is not
a day in which banking institutions in San Francisco, California are authorized
by law, regulations or executive order to close.
The Warrants may be exercised in whole or in part at any time or from
time to time during the Exercise Period. Any Warrants not exercised during the
Exercise Period shall become void, and all rights hereunder and all rights in
respect hereof and under the Warrant Agreement shall cease at the end of the
Exercise Period.
Each exercise of Warrants shall be made, and shall be deemed effective
for the purpose of determining the date of exercise, only upon surrender hereof
to the Company at the Warrant Office maintained by the Company pursuant to the
Warrant Agreement, with the form of Election to Exercise attached to this
Warrant Certificate duly completed and signed, and upon payment in full to the
Company of the Exercise Price by (i) certified or cashier's check, (ii) a wire
transfer of immediately available funds, (iii) the surrender to the Company by
the Warrantholder of unexercised Warrants, or (iv) any combination of the
foregoing, all as provided in the Warrant Agreement and upon compliance with
and subject to the conditions set forth herein and in the Warrant Agreement.
All shares of Common Stock issued upon exercise of the Warrants will be
validly issued, fully paid and nonassessable shares of Common Stock.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement and is subject to the terms and provisions of the Warrant
Agreement, which terms and provisions are hereby incorporated by reference
herein and made a part hereof. The Warrant Agreement is available for inspection
by the registered holder at the principal office of the Company.
The Company shall not be required upon the exercise of the Warrants
represented hereby to issue fractions of Warrant Shares or to distribute share
certificates that evidence fractional Warrant Shares. The holder of this Warrant
Certificate expressly waives its right to receive any fraction of a Warrant
Share or a share certificate representing a fraction of a Warrant Share.
Fractional Warrant Shares that otherwise would be issuable in respect of such
exercise shall be paid in cash as provided in the Warrant Agreement, and the
number of Warrant Shares issuable shall be rounded down to the next nearest
whole number. If the Warrants represented hereby are not exercised in full, the
Company will issue to an exercising holder a new Warrant Certificate
representing the Warrants not exercised.
This Warrant Certificate may be exchanged either separately or in
combination with other Warrant Certificates at the principal office of the
Company for new Warrant Certificates representing the same aggregate number of
Warrants as were evidenced by the Warrant Certificate or Warrant Certificates
exchanged, upon surrender of this Warrant Certificate and upon compliance with
and subject to the conditions set forth herein and in the Warrant Agreement.
The Warrants represented by this Warrant Certificate may be
transferred, in whole or in part (subject to restrictions set forth in the
Warrant Agreement), at the principal office of the Company by the registered
holder hereof in person or by his attorney duly authorized in writing, upon
surrender of this Warrant Certificate and compliance with and subject to the
conditions set forth herein and in the Warrant Agreement. Upon any such
transfer, a new Warrant Certificate or new Warrant Certificates, representing in
the aggregate the number of Warrants represented by this Warrant Certificate,
will be issued to the transferee. The holder of this Warrant Certificate, by
accepting this Warrant Certificate, consents and agrees with the Company and
with every transferee of Warrants represented by this Warrant Certificate that
until due presentation for the registration of transfer of this Warrant
Certificate on the Warrant Register maintained by the Company, the Company may
deem and treat the person or entity in whose name this Warrant Certificate is
registered as the lawful owner for all purposes whatsoever.
Nothing contained in the Warrant Agreement or in this Warrant
Certificate shall be construed as conferring on the holder of any Warrants or
his transferee any rights whatsoever as a shareholder of the Company.
The Warrant Agreement and this Warrant Certificate shall be deemed a
contract made under the laws of the State of Maryland and for all purposes shall
be construed in accordance with the laws of the State of Maryland without giving
effect to the principles of conflicts of law thereof.
THE WARRANTS REPRESENTED HEREBY AND THE SHARES OF COMMON STOCK ISSUABLE
UPON EXERCISE OF THE WARRANTS ARE SUBJECT TO THE CONDITIONS SPECIFIED IN THE
WARRANT AGREEMENT, DATED DECEMBER ____, 1999 BETWEEN HOST FUNDING, INC. AND
XXXXXXXXX XXXXXXXXX, INC. NO TRANSFER IN VIOLATION OF SAID AGREEMENT SHALL BE
EFFECTIVE. THIS WARRANT MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE AND CURRENT REGISTRATION STATEMENT OR POST-EFFECTIVE AMENDMENT THERETO
FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR AN APPLICABLE
EXEMPTION UNDER THE ACT. THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANTS REPRESENTED HEREBY MAY NOT BE SOLD OR TRANSFERRED WITHOUT AN
EFFECTIVE AND CURRENT REGISTRATION STATEMENT OR POST-EFFECTIVE AMENDMENT THERETO
FOR SUCH SHARES UNDER THE ACT OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated:
HOST FUNDING, INC.
(CORPORATE SEAL)
By:
Name:
Its:
By:
Name:
Its:
ELECTION TO EXERCISE
(To be executed upon exercise of Warrant)
TO HOST FUNDING, INC.:
The undersigned hereby elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
shares of Common Stock, as provided for therein, and tenders herewith payment of
the purchase price in full in the amount of $ .
Please issue a certificate or certificates for such shares of Common
Stock in the name of:
SOCIAL SECURITY OR OTHER Name:
IDENTIFYING NUMBER OF
SHAREHOLDER
Address:
Signature:
Note: The above signature should
correspond exactly with the name
on the face of the Warrant
Certificate or with the name of
assignee appearing is the
assignment form below.
Dated:
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, ------------ hereby sells, assigns and transfer unto
------------ the within Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint -----------
attorney in fact, to transfer said Warrant Certificate on the books of the
Company, with full power of substitution in the premises.
Dated:
-------------------------------
Note: The above signature should
correspond exactly with the name
on the face of the Warrant Certificate
SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF
ASSIGNEE
