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EXHIBIT 4.4
HOTEL MEXICO, INC.
COMMON STOCK PURCHASE WARRANT
Hotel Mexico, Inc., an Ohio corporation (the "COMPANY"), hereby agrees
that, for value received, X. XXXXXXX XXXXXXX & COMPANY, or its assigns, is
entitled, subject to the terms set forth below, to purchase from the Company at
any time or from time to time after July 30, 1998, and before 5:00 p.m.,
Minneapolis, Minnesota time, on July 30, 2002, Fifteen Thousand Seven Hundred
Fifty (15,750) shares of the no par value Common Stock of the Company (the
"COMMON STOCK"), at an exercise price of $3.75 per share, subject to adjustment
as provided herein.
1. EXERCISE OF WARRANT. The purchase rights granted by this Warrant
shall be exercised (in minimum quantities of 100 shares) by the holder
surrendering this Warrant with the form of exercise attached hereto duly
executed by such holder, to the Company at its principal office, accompanied by
payment, in cash or by cashier's check payable to the order of the Company, of
the purchase price payable in respect of the Common Stock being purchased. If
less than all of the Common Stock purchasable hereunder is purchased, the
Company will, upon such exercise, execute and deliver to the holder hereof a new
Warrant (dated the date hereof) evidencing the number of shares of Common Stock
not so purchased. As soon as practicable after the exercise of this Warrant and
payment of the purchase price, the Company will cause to be issued in the name
of and delivered to the holder hereof, or as such holder may direct, a
certificate or certificates representing the shares purchased upon such
exercise. The Company may require that such certificate or certificates contain
on the face thereof a legend substantially as follows:
"The transfer of the shares represented by this certificate is
restricted pursuant to the terms of a Common Stock Purchase Warrant
dated July 30, 1997, issued by Hotel Mexico, Inc., a copy of which is
available for inspection at the offices of Hotel Mexico, Inc. Transfer
may not be made except in accordance with the terms of the Common Stock
Purchase Warrant. In addition, no sale, offer to sell or transfer of
the shares represented by this certificate shall be made unless a
registration statement under the Federal Securities Act of 1933, as
amended (the "ACT"), with respect to such shares is then in effect or
an exemption from the registration requirements of the Act is then in
fact applicable to such shares."
2. NEGOTIABILITY AND TRANSFER. This Warrant is issued upon the
following terms, to which each holder hereof consents and agrees:
(a) Until this Warrant is duly transferred on the books
of the Company, the Company may treat the registered
holder of this Warrant as absolute owner hereof for
all purposes without being affected by any notice to
the contrary.
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(b) Each successive holder of this Warrant, or of any
portion of the rights represented thereby, shall be
bound by the terms and conditions set forth herein.
3. ANTIDILUTION ADJUSTMENTS. If the Company shall at any time hereafter
subdivide or combine its outstanding shares of Common Stock, or declare a
dividend payable in Common Stock, the exercise price in effect immediately prior
to the subdivision, combination or record date for such dividend payable in
Common Stock shall forthwith be proportionately increased, in the case of
combination, or proportionately decreased, in the case of subdivision or
declaration of a dividend payable in Common Stock, and each share of Common
Stock purchasable upon exercise of this Warrant, immediately preceding such
event, shall be changed to the number determined by dividing the then current
exercise price by the exercise price as adjusted after such subdivision,
combination or dividend payable in Common Stock.
No fractional shares of Common Stock are to be issued upon the exercise
of the Warrant, but the Company shall pay a cash adjustment in respect of any
fraction of a share which would otherwise be issuable in an amount equal to the
same fraction of the market price per share of Common Stock on the day of
exercise as determined in good faith by the Company.
In case of any capital reorganization or any reclassification of the
shares of Common Stock of the Company, or in the case of any consolidation with
or merger of the Company into or with another corporation, or the sale of all or
substantially all of its assets to another corporation, which is effected in
such a manner that the holders of Common Stock shall be entitled to receive
stock, securities or assets with respect to or in exchange for Common Stock,
then, as a part of such reorganization, reclassification, consolidation, merger
or sale, as the case may be, lawful provision shall be made so that the holder
of the Warrant shall have the right thereafter to receive, upon the exercise
hereof, the kind and amount of shares of stock or other securities or property
which the holder would have been entitled to receive if, immediately prior to
such reorganization, reclassification, consolidation, merger or sale, the holder
had held the number of shares of Common Stock which were then purchasable upon
the exercise of the Warrant. In any such case, appropriate adjustment (as
determined in good faith by the Board of Directors of the Company) shall be made
in the application of the provisions set forth herein with respect to the rights
and interest thereafter of the holder of the Warrant, to the end that the
provisions set forth herein (including provisions with respect to adjustments of
the exercise price) shall thereafter be applicable, as nearly as reasonably may
be, in relation to any shares of stock or other property thereafter deliverable
upon the exercise of the Warrant.
When any adjustment is required to be made in the exercise price,
initial or adjusted, the Company shall forthwith determine the new exercise
price, and
(a) prepare and retain on file a statement describing in
reasonable detail the method used in arriving at the new
exercise price; and
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(b) cause a copy of such statement to be mailed to the holder of
the Warrant as of a date within ten (10) days after the date
when the circumstances giving rise to the adjustment occurred.
4. TRANSFERABILITY; REGISTRATION RIGHTS. Prior to making any
disposition of the Warrant or of any Common Stock purchased upon exercise of the
Warrant, the holder will give written notice to the Company describing briefly
the manner of any such proposed disposition. The holder will not make any such
disposition until (i) the Company has notified him that, in the opinion of its
counsel, registration under the Act is not required with respect to such
disposition, or (ii) a registration statement covering the proposed distribution
has been filed by the Company and has become effective. The holder then will
make any disposition only pursuant to the conditions of such opinion or
registration. The Company agrees that, upon receipt of written notice from the
holder hereof with respect to such proposed distribution, it will use its best
efforts, in consultation with the holder's counsel, to ascertain as promptly as
possible whether or not registration is required, and will advise the holder
promptly with respect thereto, and the holder will cooperate in providing the
Company with information necessary to make such determination.
If, at any time one (1) year after the date hereof and prior to the
expiration of seven (7) years from the date hereof, the Company shall propose to
file any registration statement under the Securities Act of 1933, as amended,
covering a public offering of the Company's Common Stock and permitting the
inclusion of shares of selling shareholders, it will notify the holder hereof at
least thirty (30) days prior to each such filing and will include in the
registration statement (to the extent permitted by applicable regulation) the
Common Stock purchased by the holder or purchasable by the holder upon the
exercise of the Warrant to the extent requested by the holder hereof.
Notwithstanding the foregoing, the number of shares of the holders of the
Warrants proposed to be registered thereby shall be reduced pro rata with any
other selling shareholder (other than the Company) upon the request of the
managing underwriter of such offering. If the registration statement or offering
statement filed pursuant to such forty-five (45) day notice has not become
effective within six months following the date such notice is given to the
holder hereof, the Company must again notify such holder in the manner provided
above.
At any time one (1) year after the date hereof and prior to the
expiration of four (4) years from the date hereof, and provided that a
registration statement on Form S-3 (or its equivalent) is then available to the
Company, and on a one-time basis only, if the holders of 51% or more of the
warrants and the shares acquired upon exercise of the Warrants request the
registration of the shares on Form S-3 (or its equivalent), the Company shall
promptly thereafter use its best efforts to effect the registration under the
Securities Act of 1933, as amended, of all such shares which such holders
request in writing to be so registered, and in a manner corresponding to the
methods of distribution described in such holders' request.
All expenses of any such registrations referred to in this Section 4,
except the fees of counsel to such holders and underwriting commissions or
discounts shall be borne by the Company.
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The Company will mail to each record holder, at the last known post
office address, written notice of any exercise of the rights granted under this
Section 4, by certified or registered mail, return receipt requested, and each
holder shall have thirty (30) days from the date of deposit of such notice in
the U.S. Mail to notify the Company in writing whether such holder wishes to
join in such exercise.
The Company will furnish the holder hereof with a reasonable number of
copies of any prospectus included in such filings and will amend or supplement
the same as required during the period of required use thereof. The Company will
maintain the effectiveness of any registration statement or the offering
statement filed by the Company, whether or not at the request of the holder
hereof, for at least six (6) months following the effective date thereof.
In the case of the filing of any registration statement, and to the
extent permissible under the Act and controlling precedent thereunder, the
Company and the holder hereof shall provide cross indemnification agreements to
each other in customary scope covering the accuracy and completeness of the
information furnished by each.
The holder of the Warrant agrees to cooperate with the Company in the
preparation and filing of any such registration statement or offering statement,
and in the furnishing of information concerning the holder for inclusion
therein, or in any efforts by the Company to establish that the proposed sale is
exempt under the Act as to any proposed distribution.
5. CASHLESS EXERCISE OPTION.
(a) Provided the Company's Common Stock shall then be traded
on an exchange or quoted by NASDAQ or otherwise traded as
described in 5(d) hereof, the holder of this Warrant shall
have the right to require the Company to convert this
Warrant (the "CONVERSION RIGHT"), at any time from July
30, 1998 and prior to its expiration, into shares of
Common Stock as provided for in this Section 5. Upon
exercise of the Conversion Right, the Company shall
deliver to the holder (without payment by the holder of
any exercise price) that number of shares of Common Stock
equal to the quotient obtained by dividing (x) the value
of the Warrant at the time the Conversion Right is
exercised (determined by subtracting the aggregate
exercise price for the Warrant Shares in effect
immediately prior to the exercise of the Conversion Right
from the aggregate Fair Market Value (as determined below)
for the Warrant Shares immediately prior to the exercise
of the Conversion Right) by (y) the Fair Market Value of
one share of Common Stock immediately prior to the
exercise of the Conversion Right.
(b) The Conversion Right may be exercised by the holder,
at any time or from time to time, prior to its
expiration, on any business day, by delivering a
written notice (the "CONVERSION NOTICE") to the
Company at the offices of
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the Company exercising the Conversion Right and
specifying (i) the total number of shares of Stock
the Warrantholder will purchase pursuant to such
conversion, and (ii) a place, and a date not less
than five (5) nor more than twenty (20) business days
from the date of the Conversion Notice for the
closing of such purchase.
(c) At any closing under Section 5(b) hereof, (i) the
holder will surrender the Warrant, (ii) the Company
will deliver to the holder a certificate or
certificates for the number of shares of Common Stock
issuable upon such conversion, together with cash, in
lieu of any fraction of a share, and (iii) the
Company will deliver to the holder a new Warrant
representing the number of shares, if any, with
respect to which the Warrant shall not have been
exercised.
(d) "FAIR MARKET VALUE" of a share of Common Stock as of
a particular date (the "DETERMINATION DATE") shall
mean:
(i) If the Company's Common Stock is traded on
an exchange or is quoted on the National
Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") National
Market System, or the Small Cap Market, then
the average closing or last sale prices,
respectively, reported for the ten (10)
business days immediately preceding the
Determination Date.
(ii) If the Company's Common Stock is not traded
on an exchange or on the NASDAQ National
Market System, or the Small Cap Market, but
is traded in the over-the-counter market,
then the average of the closing bid and
asked prices reported for the ten (10)
business days immediately preceding the
Determination Date.
6. NOTICES. The Company shall mail to the registered holder of the
Warrant, at his last known post office address appearing on the books of the
Company, not less than fifteen (l5) days prior to the date on which (a) a record
will be taken for the purpose of determining the holders of Common Stock
entitled to dividends (other than cash dividends) or subscription rights, or (b)
a record will be taken (or in lieu thereof, the transfer books will be closed)
for the purpose of determining the holders of Common Stock entitled to notice of
and to vote at a meeting of stockholders at which any capital reorganization,
reclassification of shares of Common Stock, consolidation, merger, dissolution,
liquidation, winding up or sale of substantially all of the Company's assets
shall be considered and acted upon.
7. RESERVATION OF COMMON STOCK. A number of shares of Common Stock
sufficient to provide for the exercise of the Warrant upon the basis herein set
forth shall at all times be reserved for the exercise thereof.
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8. MISCELLANEOUS. Whenever reference is made herein to the issue or
sale of shares of Common Stock, the term "COMMON STOCK" shall include any stock
of any class of the Company other than preferred stock with a fixed limit on
dividends and a fixed amount payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company.
The Company will not, by amendment of its Articles of Incorporation or
through reorganization, consolidation, merger, dissolution or sale of assets, or
by any other voluntary act or deed, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions to be observed
or performed hereunder by the Company, but will, at all times in good faith,
assist, insofar as it is able, in the carrying out of all provisions hereof and
in the taking of all other action which may be necessary in order to protect the
rights of the holder hereof against dilution.
Upon written request of the holder of this Warrant, the Company will
promptly provide such holder with a then current written list of the names and
addresses of all holders of warrants originally issued under the terms of, and
concurrent with, this Warrant.
The representations, warranties and agreements herein contained shall
survive the exercise of this Warrant. References to the "holder of" include the
immediate holder of shares purchased on the exercise of this Warrant, and the
word "holder" shall include the plural thereof. This Common Stock Purchase
Warrant shall be interpreted under the laws of the State of Minnesota.
All shares of Common Stock or other securities issued upon the exercise
of the Warrant shall be validly issued, fully paid and non-assessable, and the
Company will pay all taxes in respect of the issuer thereof.
Notwithstanding anything contained herein to the contrary, the holder
of this Warrant shall not be deemed a stockholder (including, no right to vote
on any matters coming before the shareholders) of the Company for any purpose
whatsoever until and unless this Warrant is duly exercised.
IN WITNESS WHEREOF, this Warrant has been duly executed by Hotel
Mexico, Inc., this 30th day of July, 1997.
HOTEL MEXICO, INC.
By /s/ Xxxxxxx X. Xxxx
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Title: Chief Executive Officer
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WARRANT EXERCISE FORM
To be signed only upon exercise of Warrant.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, of the shares of Common Stock of Hotel
Mexico, Inc. to which such Warrant relates and herewith makes payment of
$ therefor in cash or by certified check, and requests that such
shares be issued and be delivered to, , the address for
which is set forth below the signature of the undersigned.
Dated:
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(Taxpayer's I.D. Number) (Signature)
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(Address)
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ASSIGNMENT FORM
To be signed only upon authorized transfer of Warrant.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the right to purchase shares of
Common Stock of Hotel Mexico, Inc. to which the within Warrant relates and
appoints , attorney, to transfer said right on the books of
Hotel Mexico, Inc. with full power of substitution in the premises.
Dated:
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(Signature)
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(Address)
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CASHLESS EXERCISE FORM
(To be executed upon exercise of Warrant pursuant to Section 5)
The undersigned hereby irrevocably elects a cashless exercise of the
right of purchase represented by the within Common Stock Purchase Warrant for,
and to purchase thereunder, shares of Common Stock, as
provided for in Section 5 therein.
If said number of shares shall not be all the shares purchasable under
the within Common Stock Purchase Warrant, a new Warrant is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder rounded up to the next higher number of shares.
Please issue a certificate or certificates for such Common Stock in the
name of, and pay any cash for any fractional shares to:
NAME
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(Please Print Name)
ADDRESS
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SOCIAL SECURITY NO.
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SIGNATURE
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NOTE: The above signature should correspond exactly
with the name on the first page of this Common Stock
Purchase Warrant or with the name of the assignee
appearing in the assignment form on the preceding
page.
