THIS SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933 (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
OFFERED OR SOLD UNLESS REGISTERED AND QUALIFIED PURSUANT TO THE APPLICABLE
PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM
SUCH REGISTRATION OR QUALIFICATION APPLIES. THEREFORE, NO SALE OR TRANSFER OF
THIS SECURITY SHALL BE MADE, NO ATTEMPTED SALE OR TRANSFER SHALL BE VALID,
AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE ANY EFFECT TO ANY SUCH
TRANSACTION UNLESS (A) SUCH TRANSACTION HAS BEEN DULY REGISTERED UNDER THE
ACT AND QUALIFIED OR APPROVED UNDER APPROPRIATE STATE SECURITIES LAWS, OR (B)
THE ISSUER HAS FIRST RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO IT THAT SUCH REGISTRATION, QUALIFICATION OR APPROVAL IS NOT REQUIRED.
WARRANT
For the Purchase of Shares of Common Stock
of
CREATIVE HOST SERVICES, INC.
Void After 5 P.M. November 19, 2004
No. 1 Date: November 19, 1999
Warrant to Purchase One Hundred and Twenty Thousand (120,000) Shares of Common
Stock
THIS IS TO CERTIFY, that, for value received, ▇▇▇▇▇ ▇. ▇▇▇▇▇, or
registered assigns (the "Holder"), is entitled, subject to the terms and
conditions hereinafter set forth, on or after the date hereof, and at any
time prior to 5 P.M., Pacific Standard Time ("PST"), on November 19, 2004 but
not thereafter, to purchase such number of shares of Common Stock, no par
value ("Common Stock" or the "Shares"), of Creative Host Services, Inc. (the
"Company"), from the Company as set forth above and upon payment to the
Company of an amount per Share of $1.375 (the "Purchase Price"), if and to
the extent this Warrant is exercised, in whole or in part, during the period
this Warrant remains in force, subject in all cases to adjustment as provided
in Section 2 hereof, and to receive a certificate or certificates
representing the Shares so purchased, upon presentation and surrender to the
Company of this Warrant, with the form of Subscription Agreement attached
hereto, including changes thereto reasonably requested by the Company, duly
executed and accompanied by payment of the Purchase Price of each Share.
SECTION 1.
TERMS OF THIS WARRANT
1.1 TIME OF EXERCISE. This Warrant may be exercised at any time and
from time to time after 9:00 A.M., PST, on the date hereof, (the "Exercise
Commencement Date"), but no later than 5:00 P.M., November 19, 2004 (the
"Expiration Time") at which time this Warrant shall become void and all
rights hereunder shall cease.
1.2 MANNER OF EXERCISE.
1.2.1 The Holder may exercise this Warrant, in whole or in
part, upon surrender of this Warrant, with the form of Subscription Agreement
attached hereto duly executed, to the Company at its corporate office in San
Diego, California, and upon payment to the Company of the full Purchase Price
for each Share to be purchased in lawful money of the United States, or by
certified or cashier's check, or wired funds, and upon compliance with and
subject to the conditions set forth herein.
1.2.2 Upon receipt of this Warrant with the form of
Subscription Agreement duly executed and accompanied by payment of the
aggregate Purchase Price for the Shares for which this Warrant is then being
exercised, the Company shall cause to be issued certificates for the total
number of whole Shares for which this Warrant is being exercised in such
denominations as are required for delivery to the Holder, and the Company
shall thereupon deliver such certificates to the Holder or its nominee.
1.2.3 In case the Holder shall exercise this Warrant with
respect to less than all of the Shares that may be purchased under this
Warrant, the Company shall execute a new Warrant for the balance of the
Shares that may be purchased upon exercise of this Warrant and deliver such
new Warrant to the Holder.
1.2.4 The Company covenants and agrees that it will pay
when due and payable any and all taxes which may be payable in respect of the
issue of this Warrant, or the issue of any Shares upon the exercise of this
Warrant. The Company shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issuance or delivery of
this Warrant or of the Shares in a name other than that of the Holder at the
time of surrender, and until the payment of such tax the Company shall not be
required to issue such Shares.
1.3 "CASHLESS" NET ISSUE EXERCISE.
1.3.1 Notwithstanding any provisions herein to the
contrary, if the Current Market Price of one Share is greater than the
Purchase Price, in lieu of exercising this Warrant by payment with cash,
certified check, or wired funds, the Holder may elect to receive that number
of Shares (as determined below) equal to the value of this Warrant (or the
portion thereof being exercised) by surrender of this Warrant at the
corporate office of the Company together with the duly executed form of
Subscription Agreement and notice of such election, in which event the
Company shall issue to the Holder a number of shares of Common Stock computed
using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be
issued to the Holder
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Y = the total number of shares of Common Stock
to be purchased
A = the Current Market Price of one Share of
the Company's Common Stock on the day prior
to exercise hereunder.
B = Purchase Price.
1.3.2 The Current Market Price shall be determined as follows:
(a) if the security at issue is listed on a
national securities exchange or admitted to unlisted trading privileges on
such an exchange or quoted on either the National Market System or the Small
Cap Market of the automated quotation service operated by Nasdaq, Inc.
("NASDAQ"), the current value shall be the last reported sale price of that
security on such exchange or system on the day for which the Current Market
Price is to be determined or, if no such sale is made on such day, the
average of the highest closing bid and lowest asked price for such day on
such exchange or system; or
(b) if the security at issue is not so listed or
quoted or admitted to unlisted trading
privileges and bid and asked prices are not reported, the current market
value shall be determined in good faith and in such reasonable manner as may
be prescribed from time to time by the Board of Directors of the Company.
1.4 EXCHANGE OF WARRANT. This Warrant may be divided into,
combined with or exchanged for another Warrant or Warrants of like tenor to
purchase a like aggregate number of Shares. If the Holder desires to divide,
combine or exchange this Warrant, he shall make such request in writing
delivered to the Company at its corporate office and shall surrender this
Warrant and any other Warrants to be so divided, combined or exchanged. The
Company shall execute and deliver to the person entitled thereto a Warrant or
Warrants, as the case may be, as so requested. The Company shall not be
required to effect any division, combination or exchange which will result in
the issuance of a Warrant entitling the Holder to purchase upon exercise a
fraction of a Share. The Company may require the Holder to pay a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any division, combination or exchange of Warrants.
1.5 HOLDER AS OWNER. Prior to surrender of this Warrant in
accordance with Section 1.6 for registration of assignment, the Company may
deem and treat the Holder as the absolute owner of this Warrant
(notwithstanding any notation of ownership or other writing hereon) for the
purpose of any exercise hereof and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
1.6 METHOD OF ASSIGNMENT. Any assignment or transfer of any
portion or all of this Warrant shall be made by surrender of this Warrant to
the Company at its principal office with the form of assignment attached
hereto duly executed and accompanied by funds sufficient to pay any transfer
tax. In such event, the Company shall, without charge, execute and deliver a
new Warrant
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in the name of the assignee named in such instrument of assignment and this
Warrant shall promptly be canceled.
1.7 RIGHTS OF HOLDER. Nothing contained in this Warrant shall be
construed as conferring upon the Holder the right to vote, consent or receive
notice as a shareholder in respect of any meetings of shareholders for the
election of directors or any other matter, or as having any rights whatsoever as
a shareholder of the Company.
1.8 LOST CERTIFICATES. If this Warrant is lost, stolen, mutilated
or destroyed, the Company shall, on such reasonable terms as to indemnity or
otherwise as it may impose (which shall, in the case of a mutilated Warrant,
include the surrender thereof), issue a new Warrant of like denomination and
tenor as, and in substitution for, this Warrant, which shall thereupon become
void. Any such new Warrant shall constitute an additional contractual obligation
of the Company, whether or not the Warrant so lost, stolen, destroyed or
mutilated shall be at any time enforceable by anyone.
1.9 COVENANTS OF THE COMPANY. The Company covenants and agrees
as follows:
1.9.1 At all times the Company shall reserve and keep
available for the exercise of this Warrant such number of authorized shares of
Common Stock as are sufficient to permit the exercise in full of this Warrant.
1.9.2 The Company covenants that all Shares when issued upon
the exercise of this Warrant will be validly issued, fully paid, nonassessable
and free of preemptive rights.
SECTION 2.
ADJUSTMENT OF PURCHASE PRICE
AND NUMBER OF SHARES PURCHASABLE UPON EXERCISE
2.1 STOCK SPLITS. If the Company at any time or from time to time
after the issuance date of this Warrant effects a subdivision of the outstanding
Common Stock, the Purchase Price then in effect immediately before that
subdivision shall be proportionately decreased, and conversely, if the Company
at any time or from time to time after the issuance date of this Warrant
combines the outstanding shares of Common Stock, the Purchase Price then in
effect immediately before the combination shall be proportionately increased.
Any adjustment under this subsection 2.1 shall become effective at the close of
business on the date the subdivision or combination becomes effective.
2.2 DIVIDENDS AND DISTRIBUTIONS. In the event the Company at any
time, or from time to time after the issuance date of this Warrant makes, or
fixes a record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in additional shares of Common
Stock, then and in each such event the Purchase Price then in effect shall be
decreased as of the time of such issuance or, in the event such a record date is
fixed, as of the close of business on such record date, by multiplying the
Purchase Price then in effect by a fraction (i) the
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numerator of which is the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date, and (ii) the denominator of which shall be the
total number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date plus
the number of shares of Common Stock issuable in payment of such dividend or
distribution; provided, however, that if such record date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Purchase Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Purchase Price shall be
adjusted pursuant to this subsection 2.2 as of the time of actual payment of
such dividends or distributions.
2.3 RECAPITALIZATION OR RECLASSIFICATION. If the Shares issuable
upon the exercise of the Warrant are changed into the same or a different number
of shares of any class or classes of stock, whether by recapitalization,
reclassification or otherwise (other than a subdivision or combination of shares
or stock dividend or a reorganization, merger, consolidation or sale of assets,
provided for elsewhere in this Section 2), then, and in any such event, the
Holder shall thereafter be entitled to receive upon exercise of this Warrant
such number and kind of stock or other securities or property of the Company to
which a holder of Shares deliverable upon exercise of this Warrant would have
been entitled on such reclassification or other change, subject to further
adjustment as provided herein.
2.4 SALE OF THE COMPANY. If at any time or from time to time
there is a capital reorganization of the Common Stock (other than a
recapitalization, subdivision, combination, reclassification or exchange of
shares provided for elsewhere in this Section 2) or a merger or consolidation
of the Company with or into another Company, or the sale of all or
substantially all of the Company's properties and assets to any other person,
then, as a part of such reorganization, merger, consolidation or sale,
provision shall be made so that the Holder shall thereafter be entitled to
receive upon exercise of this Warrant such number of shares of stock or other
securities or property of the Company, or of the successor Company resulting
from such merger or consolidation or sale, to which a holder of Shares
deliverable upon exercise would have been entitled on such capital
reorganization, merger, consolidation, or sale. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section
2 with respect to the rights of the holders of the Warrants after the
reorganization, merger, consolidation or sale to the end that the provisions
of this Section (including adjustment of the Purchase Price then in effect
and number of shares purchasable upon exercise of the Warrants) shall be
applicable after that event and be as nearly equivalent to the provisions
hereof as may be practicable.
2.5 OBSERVANCE OF DUTIES. 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 to be observed or performed hereunder by the Company but will at all
times in good faith assist in the carrying out of all the provisions of this
Section 2 and in the taking of all such action as may be necessary or
appropriate in order to protect the Exercise Rights of the holders of the
Warrants against dilution or other impairment.
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SECTION 3.
REGISTRATION UNDER THE SECURITIES ACT OF 1933
3.1 REGISTRATION AND LEGENDS. This Warrant and the Shares
issuable upon exercise of this Warrant have not been registered under the
Securities Act of 1933, as amended ("the Act"). Upon exercise, in whole or in
part, of this Warrant, the certificates representing the Shares shall bear
the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933 ("ACT") OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE OFFERED OR SOLD UNLESS REGISTERED AND QUALIFIED
PURSUANT TO THE APPLICABLE PROVISIONS OF FEDERAL AND STATE
SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR
QUALIFICATION APPLIES. THEREFORE, NO SALE OR TRANSFER OF THIS
SECURITY SHALL BE MADE, NO ATTEMPTED SALE OR TRANSFER SHALL BE
VALID, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE ANY EFFECT TO
ANY SUCH TRANSACTION UNLESS (A) SUCH TRANSACTION HAS BEEN DULY
REGISTERED UNDER THE ACT AND QUALIFIED OR APPROVED UNDER
APPROPRIATE STATE SECURITIES LAWS, OR (B) THE ISSUER HAS FIRST
RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH
REGISTRATION, QUALIFICATION OR APPROVAL IS NOT REQUIRED.
3.2 DEMAND REGISTRATION RIGHTS. On one occasion at any time
before the Expiration Date, the Company shall, upon the demand of the holders
of a majority of the Registrable Securities, register such securities and
file all necessary undertakings with the Securities and Exchange Commission
(the "SEC") so as to permit the Holder the right to sell publicly the Shares
issued on exercise of this Warrant.
3.3 PIGGYBACK REGISTRATION RIGHTS. In the event that the right
to demand that the Registrable Securities be registered pursuant to Section
3.2 has not been exercised, the Company agrees to include any Shares issuable
upon exercise of this Warrant in any registration statement filed by the
Company at any time after the Exercise Commencement Date and before the
Expiration Date.
SECTION 4.
OTHER MATTERS
4.1 BINDING EFFECT. All the covenants and provisions of this
Warrant by or for the benefit of the Company shall bind and inure to the
benefit of its successors and assigns hereunder.
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4.2 NOTICES. Notices or demands pursuant to this Warrant to be
given or made by the Holder to or on the Company shall be sufficiently given
or made if sent by certified or registered mail, return receipt requested,
postage prepaid, or facsimile and addressed, until another address is
designated in writing by the Company, as follows:
Creative Host Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇ & ▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇, President
Notices to the Holder provided for in this Warrant shall be deemed given or
made by the Company if sent by certified or registered mail, return receipt
requested, postage prepaid, and addressed to the Holder at his last known
address as it shall appear on the books of the Company.
4.3 GOVERNING LAW. The validity, interpretation and performance
of this Warrant shall be governed by the laws of the State of California. The
venue for any legal proceedings under this Warrant will be in the appropriate
forum in the County of San Diego, State of California.
4.4 PARTIES BOUND AND BENEFITTED. Nothing in this Warrant
expressed and nothing that may be implied from any of the provisions hereof
is intended, or shall be construed, to confer upon, or give to, any person or
corporation other than the Company and the Holder any right, remedy or claim
under any promise or agreement hereof, and all covenants, conditions,
stipulations, promises and agreements contained in this Warrant shall be for
the sole and exclusive benefit of the Company and its successors and of the
Holder, its successors and permitted assigns.
4.5 HEADINGS. The Section headings herein are for convenience
only and are not part of this Warrant and shall not affect the interpretation
thereof.
IN WITNESS WHEREOF, this Warrant has been duly executed by the
Company as of November 19, 1999.
CREATIVE HOST SERVICES, INC.
By:
------------------------
▇▇▇▇▇ ▇▇▇, President
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ASSIGNMENT OF WARRANT
FOR VALUE RECEIVED, _______________________ hereby sells, assigns and
transfers
unto _____________________________ the within Warrant and the rights represented
thereby, and
does hereby irrevocably constitute and appoint _______________________________
Attorney, to
transfer said Warrant on the books of the Company, with full power of
substitution.
Dated: _____________________
Signed:___________________
Signature guaranteed:
----------------------------
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SUBSCRIPTION AGREEMENT
FOR THE EXERCISE OF WARRANTS
The undersigned hereby irrevocably subscribes for the purchase of
_____________ Shares pursuant to and in accordance with the terms and
conditions of this Warrant, which Shares should be delivered to the
undersigned at the address stated below. If said number of Shares are not all
of the Shares purchasable hereunder, a new Warrant of like tenor for the
balance of the remaining Shares purchasable hereunder should be delivered to
the undersigned at the address stated below.
The undersigned elects to pay the aggregate Purchase Price for such
Shares in the following manner:
[ ] by the enclosed cash or check made payable to the
Company in the amount of $________;
[ ] by wire transfer of United States funds to the
account of the Company in the amount of
$____________, which transfer has been made before or
simultaneously with the delivery of this Notice
pursuant to the instructions of the Company; or
[ ] by cashless exercise pursuant to Section 1.3 of the
Warrant.
The undersigned agrees that: (1) the undersigned will not offer,
sell, transfer or otherwise dispose of any Shares unless either (a) a
registration statement, or post-effective amendment thereto, covering the
Shares has been filed with the Securities and Exchange Commission pursuant to
the Securities Act of 1933, as amended (the "Act"), such sale, transfer or
other disposition is accompanied by a prospectus meeting the requirements of
Section 10 of the Act forming a part of such registration statement, or
post-effective amendment thereto, which is in effect under the Act covering
the Shares to be so sold, transferred or otherwise disposed of, and all
applicable state securities laws have been complied with, or (b) counsel
reasonably satisfactory to Creative Host Services, Inc. has rendered an
opinion in writing and addressed to Creative Host Services, Inc. that such
proposed offer, sale, transfer or other disposition of the Shares is exempt
from the provisions of Section 5 of the Act in view of the circumstances of
such proposed offer, sale, transfer or other disposition; (2) Creative Host
Services, Inc. may notify the transfer agent for the Shares that the
certificates for the Shares acquired by the undersigned are not to be
transferred unless the transfer agent receives advice from Creative Host
Services, Inc. that one or both of the conditions referred to in (1)(a) and
(1)(b) above have been satisfied; and (3) Creative Host Services, Inc. may
affix the legend set forth in Section 3.1 of this Warrant to the certificates
for the Shares hereby subscribed for, if such legend is applicable.
Dated:___________________________ Signed:______________________________
Signature guaranteed: Address:_____________________________
_____________________________
---------------------------------
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