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. July 11, 2001
No. 1 Date: July 11, 2000
---
Warrant to Purchase Fifty Thousand (50,000) Shares of Common Stock
THIS IS TO CERTIFY, that, for value received, Continental Capital &
Equity Corporation, 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 July 11, 2001
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 $11.00 (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., July 11, 2001 (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:
-2-
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to the Holder
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.
-3-
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 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.
-4-
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 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.
-5-
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.
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 PIGGYBACK REGISTRATION RIGHTS. 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.
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
-6-
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 July 11, 2000.
CREATIVE HOST SERVICES, INC.
By:
--------------------------------
▇▇▇▇▇ ▇▇▇, President
-7-
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:
----------------------------
-1-
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:
-------------------------------
-------------------------------
---------------------------------