SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended MARCH 31, 1997
OR
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File No. 2-90939C
AMERIHOST PROPERTIES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 36-3312434
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2400 EAST DEVON AVE., SUITE 280, DES PLAINES, ILLINOIS 60018
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 298-4500
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No
As of May 14, 1997, 6,301,397 shares of the Registrant's Common Stock were
outstanding.
AMERIHOST PROPERTIES, INC.
FORM 10-Q
FOR THE THREE MONTHS ENDED MARCH 31, 1997
INDEX
PART I: Financial Information Page
Consolidated Balance Sheets as of March 31, 1997
and December 31, 1996 4
Consolidated Statements of Operation for the Three
Months Ended March 31, 1997 and 1996 6
Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1997 and 1996 7
Notes to Consolidated Financial Statements 9
Management's Discussion and Analysis 11
Schedule of Earnings Before Interest/Rent, Taxes
and Depreciation/Amortization for the Three
Months Ended March 31, 1997 and 1996 17
PART II: Other Information
Item 6 - Exhibits and Reports on Form 8-K 18
Signatures 18
Part I: Financial Information
Item 1: Financial Statements
AMERIHOST PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,049,475 $ 3,029,039
Accounts receivable (including $1,284,846
and $3,119,905 from related parties) 3,925,022 5,083,973
Notes receivable (including $1,957,718
and $1,354,461 from related parties) 2,110,533 1,507,276
Prepaid expenses and other current assets 520,214 223,136
Refundable income taxes 744,123 30,629
Costs and estimated earnings in excess of
billings on uncompleted contracts
(including $4,629,209 and
$2,048,259 from related parties) 4,715,209 2,083,259
Total current assets 15,064,576 11,957,312
Investments 1,325,202 1,595,858
Property and equipment:
Land 7,722,730 7,334,562
Buildings 31,314,614 27,885,463
Furniture, fixtures and equipment 10,962,960 10,984,572
Construction in progress 3,809,652 4,709,064
Leasehold improvements 1,774,147 2,404,060
55,584,103 53,317,721
Less accumulated depreciation and amortization 7,000,865 7,481,889
48,583,238 45,835,832
Long-term notes receivable (including $631,644
and $1,120,888 from related parties) 3,420,142 3,831,504
Costs of management contracts acquired, net
of accumulated amortization of $1,225,058
and $1,158,379 957,590 907,404
Other assets (including deferred taxes of $221,000
and $171,000), net of accumulated
amortization of $2,320,060 and $2,082,450 2,839,850 2,773,246
7,217,582 7,512,154
$ 72,190,598 $ 66,901,156
(continued)
AMERIHOST PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, December 31,
1997 1996
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,281,005 $ 5,293,184
Bank line-of-credit 4,335,668 1,707,424
Accrued payroll and related expenses 785,930 935,120
Accrued real estate and other taxes 748,122 685,796
Other accrued expenses and current liabilities 1,049,709 828,596
Current portion of long-term debt 1,125,799 1,554,200
Total current liabilities 13,326,233 11,004,320
Long-term debt, net of current portion 34,943,487 32,785,108
Deferred income 624,776 630,899
Commitments
Minority interests 1,514,843 1,569,200
Shareholders' equity:
Preferred stock, no par value; authorized 100,000 shares;
none issued - -
Common stock, $.005 par value; authorized 25,000,000 shares;
issued 6,292,197 shares at March 31, 1997, and
6,036,921 shares at December 31, 1996 31,461 30,185
Additional paid-in capital 18,504,160 17,170,154
Retained earnings 4,638,805 5,104,457
23,174,426 22,304,796
Less:
Stock subscriptions receivable (436,875) (436,875)
Notes receivable (956,292) (956,292)
21,781,259 20,911,629
$ 72,190,598 $ 66,901,156
See notes to consolidated financial statements.
</TABLE>
AMERIHOST PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31,
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Revenue:
Hotel operations:
AmeriHost Inn hotels $ 2,396,566 $ 1,306,138
Other hotels 4,032,034 4,277,358
Development and construction 6,133,742 3,979,802
Management services 604,643 489,682
Employee leasing 2,902,305 2,591,588
16,069,290 12,644,568
Operating costs and expenses:
Hotel operations:
AmeriHost Inn hotels 1,862,554 885,766
Other hotels 3,682,857 3,853,085
Development and construction 5,175,470 3,113,679
Management services 412,390 372,651
Employee leasing 2,831,611 2,525,909
13,964,882 10,751,090
2,104,408 1,893,478
Depreciation and amortization 1,156,293 802,815
Leasehold rents - hotels 534,632 446,130
Corporate general and administrative 582,150 484,652
Operating (loss) income (168,667) 159,881
Other income (expense):
Interest expense (810,007) (665,173)
Interest income 135,449 154,359
Other income 3,810 41,909
Gain on sale of property 1,744,599 -
Contractual termination expenses (1,697,448) -
Equity in net income and losses of affiliates (241,101) (144,638)
Loss before minority interests and income taxes (1,033,365) (453,662)
Minority interests in (income) loss of
consolidated subsidiaries and partnerships 158,713 204,001
Loss before income tax (874,652) (249,661)
Income tax benefit 409,000 102,000
Net loss $ (465,652) $ (147,661)
Loss per share $ (0.08) $ (0.02)
See notes to consolidated financial statements.
</TABLE>
AMERIHOST PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 14,664,611 $ 11,839,312
Cash paid to suppliers and employees (15,466,686) (11,868,154)
Interest received 72,956 59,039
Interest paid (814,297)(639,973)
Income taxes paid (110,352) (44,882)
Net cash used in operating activities (1,653,768) (654,658)
Cash flows from investing activities:
Distributions from affiliates 21,515 107,044
Purchase of property and equipment (5,238,136) (1,327,158)
Purchase of investments (100) (250,000)
Increase in notes receivable (1,128,914) (1,121,233)
Collections on notes receivable 1,037,019 1,050,766
Pre-opening and management contract costs (116,865) (169,827)
Proceeds from sales of property 3,390,576 -
Contractual termination costs (1,443,891) -
Net cash used in investing activities (3,478,796) (1,710,408)
Cash flows from financing activities:
Proceeds from issuance of long-term debt 3,348,584 1,699,638
Principal payments of long-term debt (1,581,144) (223,572)
Proceeds from exercise of common stock options 789,075 -
Proceeds from line-of-credit 4,828,244 1,559,128
Payments on line-of-credit (2,200,000) (500,000)
Decrease in minority interests (31,759) (13,259)
Net cash provided from financing activities 5,153,000 2,521,935
Net increase in cash 20,436 156,869
Cash and cash equivalents, beginning of period 3,029,039 1,371,278
Cash and cash equivalents, end of period $ 3,049,475 $ 1,528,147
</TABLE>
(Continued)
AMERIHOST PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
<S> <C> <C>
Reconciliation of net loss to net cash used
in operating activities:
Net loss $ (465,652) $ (147,661)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 1,156,293 802,815
Equity in net loss (income) of affiliates and
amortization of deferred income 241,101 144,638
Minority interests in net income of subsidiaries (158,713) (204,001)
Amortization of deferred interest and loan discount 9,940 9,940
Increase in deferred income 3,425 -
Gain on sale of property (1,744,599) -
Increase in deferred tax asset (50,000) -
Contractual termination costs 1,697,448 -
Compensation paid through issuance of common stock and
common stock options 302,065 -
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 1,220,036 (1,272,382)
Increase in interest receivable (61,082) (93,912)
Increase in prepaid expenses and other
current assets (297,078) (66,515)
(Increase) decrease in costs and estimated earnings in
excess of billings on uncompleted contracts (2,631,950) 425,217
Increase in other assets (274,164) (45,027)
Increase in refundable income taxes (469,352) (146,882)
Decrease in accounts payable (12,179) (166,827)
(Decrease) increase in accrued expenses and other
current liabilities (103,669) 92,087
(Decrease) increase in accrued interest (15,638) 13,852
Net cash used in operating activities $ (1,653,768) $ (654,658)
See notes to consolidated financial statements.
</TABLE>
1. BASIS OF PREPARATION:
The financial statements included herein have been prepared by the Company,
without audit. In the opinion of the Company, the accompanying unaudited
financial statements contain all adjustments, which consist only of recurring
adjustments necessary to present fairly the financial position of Amerihost
Properties, Inc. and subsidiaries as of March 31, 1997 and December 31, 1996
and the results of its operations for the three months ended March 31, 1997
and 1996 and cash flows for the three months ended March 31, 1997 and 1996.
The results of operations for the three months ended March 31, 1997, are not
necessarily indicative of the results to be expected for the full year. It
is suggested that the accompanying financial statements be read in
conjunction with the financial statements and the notes thereto included in
the Company's 1996 Annual Report on Form 10-K. Certain reclassifications
have been made to the 1996 financial statements in order to conform with the
1997 presentation.
2. PRINCIPLES OF CONSOLIDATION:
The consolidated financial statements include the accounts of the Company,
its wholly-owned subsidiaries, and partnerships in which the Company has a
majority ownership interest. Significant intercompany accounts and
transactions have been eliminated.
3. INCOME TAXES:
Deferred income taxes are provided on the differences in the bases of the
Company's assets and liabilities determined for tax and financial reporting
purposes.
The income tax benefit for the three months ended March 31, 1997 and 1996 was
based on the Company's estimate of the effective tax rate expected to be
applicable for the full year and a $50,000 reduction in the deferred tax
asset reserve. The Company expects the effective tax rate to approximate the
Federal and state statutory rates.
4. LOSS PER SHARE:
Loss per share of common stock is computed by dividing adjusted net loss by
the weighted average number of shares of common stock and dilutive common
stock equivalents outstanding. The weighted average number of shares used in
the computations were 7,031,219 for the three months ended March 31, 1997,
and 5,976,293 for the three months ended March 31, 1996.
5. SUPPLEMENTAL CASH FLOW DATA:
The following represents the supplemental schedule of noncash investing and
financing activities for the three months ended March 31, 1997 and 1996:
Three Months Ended
March 31,
1997 1996
Purchase of investments through issuance of
common stock and decrease in notes and
accrued interest receivable $ - $ 143,929
Accrued contractual termination costs $ 253,557 $ -
6. HOTEL LEASES:
The Company, through its subsidiaries and consolidated partnerships, has
leasehold interests ranging from 50.35% to 100% in seven hotels, the
operations of which are included in the Company's consolidated financial
statements. All of these leases provide for an option to purchase the
hotel. Some of the purchase prices are based upon a multiple of gross room
revenues for the preceding twelve months and the others are based upon a
fixed amount, typically with annual increases based upon the change in the
consumer price index. At March 31, 1997, the aggregate purchase price for
these seven hotels was approximately $21,505,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The Company is engaged in the development of AmeriHost Inn hotels, its
proprietary brand, and the ownership, operation and management of AmeriHost Inn
hotels and other mid-price hotels. As of March 31, 1997, there were 45
AmeriHost Inn hotels open, of which 16 were wholly-owned, two were majority
owned, 25 were minority-owned, and two were managed for unrelated third parties.
The Company intends to use primarily the AmeriHost Inn brand when expanding its
hotel operations segment. All of the hotels currently under construction will
be AmeriHost Inn hotels. As of March 31, 1997, 17 AmeriHost Inn hotels were
under construction, of which 11 will be wholly-owned, five will be minority-
owned, and one which will be owned by an unrelated third party. Same room
revenues for all AmeriHost Inns increased approximately 4.1% in the first
quarter of 1997 compared to the first quarter of 1996, attributable to an
increase of $2.44 in average daily rate and a 0.3% increase in occupancy.
Revenues from hotel operations consist of the revenues from all hotels in which
the Company has a 100% or controlling ownership or leasehold interest
("Consolidated Hotels"). Investments in other entities in which the Company has
a minority ownership interest are accounted for using the equity or cost method.
As a result of the Company's focus on increasing the number of Consolidated
Hotels, the Company expects that revenues from the hotel operations segment will
increase over time as a percentage of the Company's overall revenues.
Development and construction revenues consist of one-time fees for new
construction, acquisition and renovation activities performed by the Company for
minority-owned hotels and unrelated third parties. The Company also receives
management services revenue for management services provided to minority-owned
hotels and unrelated third parties. Employee leasing revenues consist of
revenues the Company receives for leasing its employees to minority-owned hotels
and unrelated third parties. All revenues attributable to development,
construction, management and employee leasing services with respect to
Consolidated Hotels have been eliminated in consolidation.
Revenues increased 27.1% to $16.1 million during the three months ended March
31, 1997, from $12.6 million during the three months ended March 31, 1996, due
primarily to expanded hotel operations and significant hotel development and
construction activity. Net loss for the first quarter increased to ($465,652),
or ($0.08) per share in 1997, from ($147,661), or ($0.02) per share in 1996.
The Company sold two Consolidated Hotels during the first quarter of 1997,
resulting in a total gain, net of minority interests, of $1.7 million. These
gains were offset by a non-recurring charge of $1.7 million from the termination
of a consulting agreement with Urban 2000 Corp. (a company owned by the
Company's Chairman of the Board and a former officer/director) and the departure
of an officer/director. The Company incurred an operating loss of ($168,667)
during the three months ended March 31, 1997, compared to operating income of
$159,881 during the three months ended March 31, 1996. The decrease in
operating income was primarily attributable to the impact of seasonality
associated with a greater number of Consolidated Hotels and the significant
number of hotels operating during their initial stabilization period immediately
after opening.
The Company uses EBITDA as a supplemental performance measure along with net
income to report its operating results. EBITDA is defined as net income,
adjusted to eliminate the impact of (i) interest expense; (ii) interest and
other income; (iii) leasehold rents for hotels, which the Company considers to
be financing costs similar to interest; (iv) income tax expense (benefit), (v)
depreciation and amortization; (vi) gains or losses from property transactions;
and (vii) non-recurring charges. EBITDA should not be considered as an
alternative to net income or cash flows from operating activities as a measure
of liquidity. EBITDA for both the first quarter of 1997 and 1996 was $1.5
million. An EBITDA schedule is included herein.
The Company is currently in the process of evaluating certain unsolicited
proposals received for the acquisition of its common stock. During this
evaluation process, the Company has postponed the development of additional
hotels for minority-owned entities which were expected to begin construction
during the second quarter of 1997. Consequently, the Company does not expect to
realize the anticipated levels of revenues and profits in the second quarter of
1997 from the development and construction of hotels for minority-owned
entities.
Amerihost had an ownership interest in 63 hotels at March 31, 1997 versus 49
hotels at March 31, 1996 (excluding hotels under construction). This increased
ownership was achieved primarily through the development of AmeriHost Inn hotels
for the Company's own account and for minority-owned entities. These figures
include an increase in Consolidated Hotels from 24 at March 31, 1996 to 28 at
March 31, 1997.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THE
THREE MONTHS ENDED MARCH 31, 1996
Revenues increased 27.1% to $16.1 million during the three months ended March
31, 1997, from revenues of $12.6 million during the three months ended March 31,
1996. These increases were due primarily to significant increases in the
Company's hotel development and hotel operations segments.
Hotel operations revenue increased 15.1% to $6.4 million during the three months
ended March 31, 1997, compared to $5.6 million during the three months ended
March 31, 1996. This increase was primarily attributable to the net addition of
four Consolidated Hotels to the hotel operations segment from April 1, 1996
through March 31, 1997. The Company opened seven newly constructed Consolidated
AmeriHost Inn hotels during this twelve month period, and acquired the remaining
ownership interest in one hotel causing it to become a Consolidated Hotel.
These eight additions were offset by the sale of three Consolidated Hotels and
the lease termination of one Consolidated Hotel during this same period. The
hotel operations segment included the operations of 28 Consolidated Hotels
comprising 2,531 rooms at March 31, 1997, compared to 24 Consolidated Hotels
comprising 2,516 rooms at March 31, 1996. After considering the Company's
ownership interest in the majority-owned Consolidated Hotels, this translates to
2,216 and 2,143 equivalent owned rooms as of March 31, 1997 and 1996,
respectively, or an increase of 3.4%.
Hotel development revenue increased 54.1% to $6.1 million during the three
months ended March 31, 1997, from $4.0 million during the three months ended
March 31, 1996. The Company was constructing eight hotels for minority-owned
entities or unrelated third parties during the first quarter of 1997, compared
to fourteen hotels during the three months ended March 31, 1996. The Company
also had several additional projects in various stages of pre-construction
development during both three month periods. The increase in segment revenue
was due primarily to the significant progress achieved during the first quarter
of 1997 on the eight hotels compared to the progress achieved on the 14 hotels
during the first quarter of 1996, and the nature of five construction contracts
in progress during the 1996 first quarter whereby the Company recognized only a
construction management fee instead of the full development revenues.
Hotel management revenue increased 23.5% to $604,643 during the three months
ended March 31, 1997, from $489,682 during the three months ended March 31,
1996. The number of hotels managed for third parties and minority-owned
entities increased from 36 hotels, representing 3,447 rooms, at March 31, 1996
to 45 hotels, representing 3,767 rooms, at March 31, 1997. The addition of
management contracts for 16 newly constructed hotels (968 rooms) was partially
offset by the termination of four management contracts (426 rooms) with
minority-owned entities as a result of the sale of the hotel, the termination of
two management contracts (113 rooms) with minority-owned hotels which became
Consolidated Hotels due to the Company acquiring additional ownership interests,
and the termination of one management contract with an unrelated third party.
Management fee revenues were also impacted in the first quarters of 1997 and
1996 by newly constructed hotels operating during their initial stabilization
period when revenues are typically lower. The management contracts terminated,
all of which were for hotels other than the AmeriHost Inn brand, were typically
for larger hotels compared to the 16 hotels added during the twelve months ended
March 31, 1997. The Company does not recognize management fees from
Consolidated Hotels.
Employee leasing revenue increased 12.0% to $2.9 million during the three months
ended March 31, 1997, from $2.6 million during the three months ended March 31,
1996, due primarily to the addition of hotels managed for third parties and
minority-owned entities as described above, and the associated increase in
payroll costs which is the basis for the employee leasing revenue.
Total operating costs and expenses increased 29.9% to $14.0 million (86.9% of
total revenues) during the three and months ended March 31, 1997, from $10.8
million (85.0% of total revenues) during the three months ended March 31, 1996.
Operating costs and expenses in the hotel operations segment increased 17.0% to
$5.5 million during the three months ended March 31, 1997, from $4.7 million
during the three months ended March 31, 1996, resulting primarily from the net
addition of four Consolidated Hotels to this segment and is directly related to
the 15.1% increase in segment revenue during the three months ended March 31,
1997. Hotel operations segment operating costs and expenses as a percentage of
segment revenue increased to 86.3% during the three months ended March 31, 1997,
from 84.9% during the three months ended March 31, 1996, due primarily to a
significant number of hotels operating during their initial stabilization period
when revenues are typically lower.
Operating costs and expenses for the hotel development segment increased 66.2%
to $5.2 million during the three months ended March 31, 1997, from $3.1 million
during the three months ended March 31, 1996, consistent with the 54.1% increase
in hotel development revenues. Operating costs and expenses in the hotel
development segment as a percentage of segment revenue increased to 84.4% during
the three months ended March 31, 1997, from 78.2% during the three months ended
March 31, 1996. The first quarter of 1997 contained a significant level of
construction activity which has high operating costs in relation to the revenue
recognized. The first quarter of 1996 also contained a significant level of
construction activity, however certain contracts were accounted for as a
construction manager where the operating costs are significantly lower in
relation to the revenue recognized. Hotel management segment operating costs
and expenses increased 10.7% to $412,390 during the three months ended March 31,
1997, from $372,651 during the three months ended March 31, 1996 consistent with
the 23.5% increase in segment revenues, and partially offset by the termination
in the first quarter of 1997 of certain contractual payments which had been made
to co-managers. Employee leasing operating costs and expenses increased 12.1%
to $2.8 million during the three months ended March 31, 1997, from $2.5 million
during the three months ended March 31, 1996, and is consistent with the 12.0%
increase in segment revenue.
Depreciation and amortization expense increased 44.0% to $1.2 million during the
three months ended March 31, 1997, from $802,815 during the three months ended
March 31, 1996. This increase was primarily attributable to the net addition of
four Consolidated Hotels to the hotel operations segment and the resulting
depreciation and amortization therefrom.
Leasehold rents - hotels increased 19.8% to $534,632 during the three months
ended March 31, 1997, from $446,130 during the three months ended March 31,
1996. The increase during the first quarter of 1997 compared to the first
quarter of 1996 was due primarily to the increase in percentage rents for
certain hotels which are based on the hotel's operating revenues. During March
1997, one leased Consolidated Hotel was sold and the lease for another
Consolidated Hotel was terminated.
Corporate general and administrative expense increased 20.1% to $582,150 during
the three months ended March 31, 1997, from $484,652 during the three months
ended March 31, 1996. The increase was due primarily to the Company's overall
growth.
The Company incurred an operating loss of ($168,667) during the three months
ended March 31, 1997, compared to operating income of $159,881 during the three
months ended March 31, 1996. Operating loss from the hotel operations segment
increased to ($683,946) during the three months ended March 31, 1997 from
($303,039) during the three months ended March 31, 1996, resulting primarily
from the increased impact of seasonality associated with the net addition of
four Consolidated Hotels from April 1, 1996 to March 31, 1997 and the impact of
the significant number of Consolidated Hotels operating during their initial
stabilization period during the first quarter of 1997. Operating income from
the hotel development segment increased 10.7% to $940,214 during the first
quarter of 1997 compared to $848,996 during the first quarter of 1996. Although
more hotels were under construction during the first quarter of 1996, the
Company made greater progress on the projects under construction and development
during the 1997 first quarter, compared to the progress made on the projects
under construction and development during the 1996 first quarter. The hotel
management segment generated operating income of $115,014 during the three
months ended March 31, 1997 compared to $61,379 during the three months ended
March 31, 1996. This increase was due primarily to the net addition of nine
hotel management contracts with minority-owned entities during the twelve month
period ended March 31, 1997. Employee leasing operating income increased
slightly during the first quarter, to $69,795 in 1997 from $64,105 in 1996.
Interest expense was $810,007 during the three months ended March 31, 1997, as
compared to $665,173 during the three months ended March 31, 1996. This
increase was primarily attributable to the increase in mortgage financing for
newly constructed Consolidated Hotels.
The Company's share of equity in income (loss) of affiliates increased 66.7% to
($241,101) during the three months ended March 31, 1997, from ($144,638) during
the three months ended March 31, 1996. The decrease in equity of affiliates was
primarily due to the significant number of newly constructed minority-owned
hotels which were operating during their initial stabilization period when
revenues are typically lower and the increasing impact of seasonality as the
number of minority-owned hotels increases. Distributions from affiliates were
$21,515 in the first quarter of 1997 compared to $107,044 in the first quarter
of 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company has four main sources of cash from operating activities: (i)
revenues from hotel operations; (ii) fees from development, construction and
renovation projects; (iii) fees from management contracts; and (iv) fees from
employee leasing services. Cash from hotel operations is typically received at
the time the guest checks out of the hotel. A portion of the Company's hotel
operations revenues is generated through other businesses and contracts and are
usually paid within 30 to 45 days from billing. Fees from development,
construction and renovation projects are typically received within 15 to 45 days
from billing. Due to the procedures in place for processing its construction
draws, the Company typically does not pay its contractors until the Company
receives its draw from the equity or lending source. Management fee revenues
are typically received by the Company within five working days from the end of
each month. Cash from the Company's employee leasing segment is typically
received 24 to 48 hours prior to the pay date.
During the first three months of 1997, the Company used cash for operations of
$1.7 million, compared to $654,658 in the first three months of 1996, or an
increase in cash used in operations of $999,110. The decrease in cash flow from
operations during the first three months of 1997, when compared to 1996, can be
attributed to the increasing impact of seasonality and the significant number of
hotels operating during their initial stabilization period as the number of
Consolidated Hotels increased from 24 hotels at March 31, 1996 to 28 hotels at
March 31, 1997. The impact from hotel operations was partially offset by a
significant amount of hotel development and construction activity in both the
first quarter of 1997 and 1996.
The Company invests cash in three principal areas: (i) the purchase of property
and equipment through the construction and renovation of Consolidated Hotels;
(ii) the purchase of equity interests in hotels; and (iii) loans to affiliated
and non-affiliated hotels for the purpose of construction, renovation and
working capital. During the first three months of 1997, the Company used $3.5
million in investing activities compared to $1.7 million in the first three
months of 1996. During the first three months of 1997, the Company used $5.2
million to purchase property and equipment for Consolidated Hotels, used $1.4
million for the termination of certain contractual agreements, used $91,895 for
loans, net of loan collections, and received $3.4 million from the sale of
hotels. During the first three months of 1996, the Company used cash primarily
for the purchase of $1.3 million in property and equipment for Consolidated
Hotels, used $250,000 for the purchase of minority equity interests in hotels,
and used $70,467 for loans, net of repayments from minority-owned hotels. In
addition, the Company received distributions from investments in minority-owned
hotels of $21,515 in the first three months of 1997, compared to $107,044 in the
first three months of 1996.
Cash received from financing activities was $5.2 million during the first three
months of 1997 compared to $2.5 million during the first three months of 1996.
In 1997, the primary factors were net proceeds of $1.8 million from the mortgage
financing of Consolidated Hotels, net of principal repayments, net proceeds of
$789,075 from the exercise of common stock purchase options, and $2.6 million in
net proceeds from the Company's operating line-of-credit. In 1996, the
contributing factors were proceeds of $1.5 million from the mortgage financing
of Consolidated Hotels, net of principal repayments, and net proceeds of $1.1
million from the Company's operating line-of-credit.
At March 31, 1997, the Company had $4.3 million outstanding under its operating
line-of-credit. The Company's line-of-credit was renewed and increased
effective May 1, 1996 to $5.0 million. The operating line-of-credit (i) is
collateralized by a security interest in certain of the Company's assets,
including its interest in various joint ventures; (ii) bears interest at an
annual rate equal to the lending bank's base rate plus 1/2% (with a minimum
interest rate of 7.5%); and (iii) matures June 1, 1997. The same bank providing
the operating line-of-credit also provides a $7.5 million line-of-credit to be
used for construction financing on hotel projects, of which $5.0 million must be
used on contracts which have firm commitments for permanent mortgage financing
when the construction is completed. There was no balance outstanding on the
construction line-of-credit at March 31, 1997. At March 31, 1997, the Company
also had outstanding $2.25 million of its 7% Subordinated Notes which are
unsecured obligations due October 9, 1999 and which pay interest quarterly.
Pursuant to the terms of the 7% Subordinated Notes, no dividends may be paid on
any capital stock of the Company until the 7% Subordinated Notes have been paid
in full. At the Company's sole discretion, the 7% Subordinated Notes may be
prepaid at any time without prepayment penalty.
The Company expects cash from operations to be sufficient to pay all operating
and interest expenses in 1997.
SEASONALITY
The lodging industry, in general, is seasonal in nature. The Company's hotel
revenues are generally greater in the second and third calendar quarters than in
the first and fourth quarters due to weather conditions in the markets in which
the Company's hotels are located and general business and leisure travel trends.
This seasonality can be expected to continue to cause quarterly fluctuations in
the Company's revenues, and is expected to have an increased impact as the
number of Consolidated Hotels increases. Quarterly earnings may also be
adversely affected by events beyond the Company's control such as extreme
weather conditions, economic factors and other factors affecting travel. In
addition, hotel construction is seasonal, depending upon the geographic location
of the construction projects. Construction activity in the Midwest may be
slower in the first and fourth calendar quarters due to weather conditions.
INFLATION
Management does not believe that inflation has had, or is expected to have, any
significant adverse impact on the Company's financial condition or results of
operations for the periods presented.
IMPACT OF NEW ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings Per Share." The new standard simplifies the methods for computing
earnings per share and requires the presentation of two new amounts, basic and
diluted earnings per share. When the Company adopts SFAS No. 128, it expects to
report the following restated amounts for the three months ended March 31:
1997 1996
Basic $ (0.08) $ (0.02)
Diluted $ (0.08) $ (0.02)
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1996
All statements contained herein that are not historical facts, including but not
limited to, statements regarding the Company's hotels under construction and the
operation of AmeriHost Inn hotels are based on current expectations. These
statements are forward looking in nature and involve a number of risks and
uncertainties. Actual results may differ materially. Among the factors that
could cause actual results to differ materially are the following: the
availability of sufficient capital to finance the Company's business plan on
terms satisfactory to the Company; competitive factors, such as the introduction
of new hotels or renovation of existing hotels in the same markets; changes in
travel patterns which could affect demand for the Company's hotels; changes in
development and operating costs, including labor, construction, land, equipment,
and capital costs; general business and economic conditions; and other risk
factors described from time to time in the Company's reports filed with the
Securities and Exchange Commission. The Company wishes to caution readers not
to place undue reliance on any such forward looking statements, which statements
are made pursuant to the Private Securities Litigation Reform Act of 1996, and
as such, speak only as of the date made.
AMERIHOST PROPERTIES, INC. AND SUBSIDIARIES
SCHEDULE OF EARNINGS BEFORE INTEREST/RENT,
TAXES AND DEPRECIATION/AMORTIZATION
FOR THE THREE MONTHS ENDED MARCH 31,
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Revenue $ 16,069,290 $ 12,644,568
Operating costs and expenses 13,964,882 10,751,090
2,104,408 1,893,478
Corporate general and administrative (582,150) (484,652)
Equity in net income and losses
of affiliates (241,101) (144,638)
Earnings before minority interests 1,281,157 1,264,188
Minority interests in earnings of
consolidated subsidiaries and
partnerships, excluding minority
interest in gain on sale of hotel 205,314 204,001
Earnings before interest/rent, taxes
and depreciation/amortization $ 1,486,471 $ 1,468,189
</TABLE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
Exhibit No.
4.a Warrants to purchase common stock - Michael P. Holtz
4.b Warrants to purchase common stock - Russell J. Cerqua
27.0 Financial Data Schedule
(b)Reports on Form 8-K:
There were no reports on Form 8-K filed during this period
covered by this report.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERIHOST PROPERTIES, INC.
Registrant
Date: May 14, 1997
By: /s/ Russell J. Cerqua
Russell J. Cerqua
Treasurer/Executive Vice President, Finance
By: /s/ James B. Dale
James B. Dale
Vice President, Finance/Corporate Controller
THIS WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY
STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED IN
VIOLATION OF SUCH ACT OR LAWS, THE RULES AND
REGULATIONS THEREUNDER OR THE PROVISIONS
OF THIS WARRANT.
WARRANT TO PURCHASE 50,000 SHARES
OF COMMON STOCK OF
AMERIHOST PROPERTIES, INC.
ISSUED TO
MICHAEL P. HOLTZ
DATED: FEBRUARY 3, 1997
NO. 0297-MPH
(INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE)
THIS IS TO CERTIFY THAT MICHAEL P. HOLTZ (or his or its registered
assigns, herein referred to as the "Warrantholder") is entitled, upon the due
exercise hereof and subject to the terms and conditions hereof, anytime
commencing on the date of this Certificate (the "Commencement Date"), and ending
on the tenth anniversary of the Commencement Date (the "Expiration Date"), to
purchase from AMERIHOST PROPERTIES, INC., a Delaware corporation (the
"Company"), and the Company shall issue and sell to the Warrantholder, the
number of shares of common stock, $.005 par value per share (the "Common
Stock"), of the Company (the "Shares") set forth above upon surrender hereof,
with the form of election to purchase included herein completed and duly
executed, at the office of the Company, and upon simultaneous payment therefor
at an exercise price per Share equal to $1.53125 per Share (hereinafter referred
to as the "Purchase Price") in cash and/or check payable to the order of the
Company. The number and Purchase Price of the Shares are subject to adjustment
as provided herein.
1. The Warrantholder acknowledges that it may sell, transfer,
assign, hypothecate or otherwise dispose of this Warrant after the Commencement
Date, provided such sale, transfer, assignment, hypothecation or other
disposition is in accordance with applicable federal and state securities laws
and the Company agrees that the Warrantholder has complied with such laws. In
connection therewith the Company may require an opinion of counsel and/or other
documentation evidencing compliance with such laws. Notwithstanding the
foregoing, the Warrantholder acknowledges that it may not sell, transfer or
assign this Warrant to other than the original holder's estate or heirs prior to
the second anniversary of the Commencement Date.
2. Subject to the restrictions set forth above and in Section 3
hereof, upon surrender of this Warrant, and payment of the Purchase Price as
aforesaid, the Company shall issue and deliver with all reasonable dispatch the
certificate(s) for the Shares to or upon the written order of the holder of this
Warrant and in such name or names as such holder may designate. Such
certificate(s) shall represent the number of Shares issuable upon the exercise
of the Warrants embodied herein, together with a cash amount (if the holder has
so elected in accordance with the provisions of Section 9 hereof) in respect of
any fraction of a Share otherwise issuable upon such surrender.
Certificate(s) representing the Shares shall be deemed to have
been issued and the person so designated to be named therein shall be deemed to
have become a holder of record of such Shares as of the date of the surrender of
this Warrant and payment of the Purchase Price as aforesaid; provided, however
that if, at the date of surrender of this Warrant and payment of such Purchase
Price, the transfer books for the Shares or other classes of stock purchasable
upon the exercise of this Warrant shall be closed, the certificate(s) for the
Shares in respect of which this Warrant is then exercised shall be issuable as
of the date on which such books shall next be opened, and until such date the
Company shall be under no duty to deliver any certificate(s) for such Shares.
This Warrant shall be exercisable, at the election of the registered holder
hereof, either as an entirety or from time to time for part of the number of
Shares specified herein, but in no event shall fractional Shares be issued with
regard to the exercise of this Warrant. In the event that this Warrant is
exercised at any time prior to the close of business on the Expiration Date, a
new Warrant shall be issued to such holder for the remaining number of Shares,
if any, purchasable pursuant hereto. The Company shall cancel this Warrant when
it is surrendered upon exercise.
Prior to due presentment for registration of transfer of this
Warrant, the Company shall deem and treat the Warrantholder in whose name this
Warrant shall be issued as the absolute owner of this Warrant (notwithstanding
any notation of ownership or other writing on this Warrant made by anyone other
than the Company) for the purpose of any exercise hereof, of any distribution to
the holder hereof, and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
3. The Company shall pay all documentary stamp taxes, if any,
attributable to the initial issuance of the Shares issuable upon the exercise of
this Warrant, provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issue or delivery of any certificate(s) for Shares in a name other than that of
the Warrantholder upon the exercise of this Warrant, and in such case the
Company shall not be required to issue or deliver any certificates for Shares
until or unless the person or persons requesting the issuance have paid to the
Company the amount of such tax or have established to the Company's satisfaction
that such tax has been paid.
4. In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue and deliver, in exchange and substitution for
and upon cancellation of a mutilated Warrant, or in lieu of and substitution for
a Warrant lost, stolen or destroyed, a new Warrant of like tenor and
representing an equivalent number of Shares purchasable upon exercise at
equivalent exercise times and exercise prices, but only upon receipt of evidence
satisfactory to the Company of such loss, theft or destruction of such Warrant
and reasonable indemnity or bond, if requested, also satisfactory to the
Company. Applicants for such substitute Warrant shall also comply with such
other reasonable conditions and pay such other reasonable charges as the Company
may prescribe.
5. (a) For the purpose of enabling it to satisfy any obligation to
issue Shares upon the exercise of this Warrant, the Company shall at all times
through the Expiration Date, reserve and keep available, free from pre-emptive
rights and out of its aggregate authorized but unissued shares of Common Stock,
the number of Shares deliverable upon the exercise of this Warrant.
(b) Before taking any action which would cause an adjustment
pursuant to the terms set forth herein reducing the Purchase Price attributable
to any Shares below the then par value (if any) of such Shares, the Company
shall take any corporate action which may, in the opinion of its counsel (which
may be counsel regularly engaged by the Company), be necessary in order that the
Company may validly and legally issue fully paid and nonassessable Shares at the
Purchase Price as so adjusted.
(c) The Company covenants that all Shares issued upon exercise
of the Warrants shall, upon issuance in accordance with the terms hereof, be
fully paid and nonassessable and free from all pre-emptive rights and taxes,
liens, charges and security interests created by the Company with respect to the
issuance and holding thereof.
(d) After the Expiration Date, no Shares shall be subject to
reservation in respect of this Warrant.
6. Unless this Warrant is surrendered and payment made as herein
provided before the Expiration Date, this Warrant will become wholly void and
all rights evidenced hereby will terminate.
7. Subject to the provisions of Section 2 above, this Warrant may be
exchanged for a number of Warrants of the same tenor as this Warrant for the
purchase in the aggregate of the same number of Shares of the Company as are
purchasable upon the exercise of this Warrant, upon surrender hereof at the
office of the Company with written instructions as to the denominations of the
Warrants to be issued in exchange.
8. (a) In case the Company shall at any time after the date of this
Agreement (i) declare a dividend on the Common Stock of the Company payable in
shares of the Company's capital stock (whether in shares of Common Stock or of
capital stock of any other class), (ii) subdivide the outstanding Common Stock,
(iii) reverse split the outstanding Common Stock into a smaller number of shares
or (iv) issue any shares of the Company's capital stock in a reclassification of
the Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation), the
Purchase Price in effect with respect to each Share covered hereby, whether or
not such Share can then be purchased pursuant to the terms of this Warrant, at
the time of the record date for such dividend or of the effective date of such
subdivision, reverse split or reclassification, and/or the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Warrant exercised after such time shall be entitled to
receive the aggregate number and kind of securities which, if such Warrant had
been exercised immediately prior to such date, such holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, reverse split or reclassification. Such adjustments shall be made
successively whenever any event listed above shall occur.
(b) In case the Company shall fix a record date for the making
of a distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness or assets
(other than cash dividends or cash distributions payable out of earnings (or
consolidated earnings if the Company shall have one or more subsidiaries) or
earned surplus, dividends payable in Common Stock or distributions of scrip) or
subscription rights, options or warrants, the Purchase Price with respect to
each Share covered hereby to be in effect after such record date (whether or not
such Share can then be purchased pursuant to the terms of this Warrant) shall be
determined by multiplying the Purchase Price for such Share in effect
immediately prior to such record date by a fraction, of which the numerator
shall be the current market price for a Share (as defined in Section 8(c)
hereof) on such record date less the fair market value (as determined by the
Board of Directors of the Company, whose determination shall be conclusive) of
the portion of the assets or evidences of indebtedness so to be distributed or
of such subscription rights, options or warrants applicable to one Share and of
which the denominator shall be the current market price for a Share. Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price with
respect to each Share covered hereby shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(c) For the purpose of any computation under Section 8(b)
hereof, the current market price per Share on any date shall be (i) the average
of the last reported sale prices for the past thirty trading days as reported on
a national securities exchange or (ii) the average of the last reported bid and
asked prices for the past thirty trading days if the Company's Common Stock is
reported on the NASDAQ or (iii) if the Company's Common Stock is not on the
NASDAQ, the average of the last reported sale price for the past thirty trading
days as reported in the "pink sheets" (or an equivalent quotation system) for
over-the-counter stocks or, if the Company's Common Stock is not trading, such
value as the Board of Directors of the Company, in good faith, shall determine.
(d) No adjustment in the Purchase Price with respect to any
Share covered hereby shall be required unless such adjustment would require a
decrease of at least one cent ($0.01) in such price; provided, however, that any
adjustment which (by reason of this Section 8(d)) is not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 8 shall be made to the nearest cent or to
the nearest hundredth of a Share, as the case may be, but in no event shall the
Company be obligated to issue fractional Shares or fractional portions of any
securities upon the exercise of any Warrant.
(e) In the event that at any time, as a result of an adjustment
made pursuant to Section 8(a) hereof, the holder of any Warrant thereafter
exercised shall become entitled to receive any shares of capital stock or
warrants or other securities of the Company other than the Shares, thereafter
the number of such other shares of capital stock or warrants or other securities
so receivable upon exercise of any Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Shares contained in this Section 8, and the
provisions of this Warrant with respect to the Shares shall apply, to the extent
applicable, on like terms to any such other shares of capital stock or warrants
or other securities.
(f) In any case in which this Section 8 shall require that an
adjustment in the Purchase Price with respect to any Shares covered hereby be
made effective as of a record date for a specified event, the Company may elect
to defer until the occurrence of such event the issuing to the holder of any
Warrants exercised after such record date Shares and such other shares of
capital stock or warrants or other securities of the Company, if any, issuable
upon such exercise over and above the Shares, on the basis of the Purchase Price
with respect to such Shares in effect prior to such adjustment; provided,
however that the Company shall deliver to the holder a due bill or other
appropriate instrument evidencing such holder's right to receive such shares of
capital stock or warrants or other securities upon the occurrence of the event
requiring such adjustment.
(g) Upon each adjustment of the Purchase Price with respect to
each Share covered hereby as a result of the calculations made in Section 8(b)
hereof, each Warrant outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase (but only at the
applicable times specified herein), that number of Shares (calculated to the
nearest hundredth) obtained by (A) multiplying the number of Shares purchasable
at the Purchase Price with respect to such Shares upon exercise of a Warrant
immediately prior to such adjustment of the number of Shares by the Purchase
Price with respect to such Shares in effect immediately prior to such adjustment
of the Purchase Price with respect to such Shares and (B) dividing the product
so obtained by the Purchase Price with respect to such Shares in effect
immediately after such adjustment of the Purchase Price with respect to such
Shares. Such adjustments and calculations shall be made with respect to all
Shares covered hereby and not only with respect to Shares which are then
eligible for purchase pursuant to the terms hereof; however, no such adjustment
or calculation shall have the effect of accelerating the vesting schedule set
forth above. Additionally, all such adjustments and calculations shall be made
separately with respect to Shares purchasable at differing exercise prices
pursuant to the terms hereof.
(h) In case of any capital reorganization of the Company, or of
any reclassification of the Common Stock (other than a change in par value, or
from par to no par value, or from no par value to par value, or as a result of
subdivision or combination), or in case of the consolidation of the Company with
or the merger of the Company into any other corporation (other than a
consolidation or merger in which the Company is the continuing corporation) or
of the sale of the properties and assets of the Company as, or substantially as,
an entirety to any other corporation, each Warrant shall after such
reorganization, reclassification, consolidation, merger or sale be exercisable
(but only at the applicable times specified herein), upon the terms and
conditions specified herein, for the number of shares of Common Stock or other
capital stock or warrants or other securities or property to which a holder of
the number of Shares purchasable (at the time of such reorganization,
reclassification, consolidation, merger or sale, whether or not such right to
purchase can then be exercised pursuant to the terms hereof) upon exercise of
such Warrant would have been entitled upon such reorganization,
reclassification, consolidation, merger or sale; and in any such case, if
necessary, the provisions set forth in this Section 8(h) with respect to the
rights and interests thereafter of the registered holders of all Warrants
purchasable upon the exercise of any portion of this Warrant shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably be,
to any Shares of Common Stock or other capital stock or warrants or other
securities or property thereafter deliverable on the exercise of the Warrants.
The subdivision, reverse split or combination of shares of Common Stock at any
time outstanding into a greater or lesser number of shares shall not be deemed
to be a reclassification of the Common Stock for the purposes of this Section
8(h). The Company shall not effect any such consolidation or merger or sale
unless prior to or simultaneously with the consummation thereof, the successor
corporation (if other than the Company) resulting from such consolidation, or
merger or the corporation purchasing such assets or other appropriate
corporation or entity shall assume, by written instrument executed and delivered
to the registered holders of all Warrants, the obligation to deliver to the
holders of all Warrants such shares of Common Stock or other capital stock, or
warrants or securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to purchase, and any other obligations
of the Company under this Warrant.
(i) In no event shall an adjustment be made in the Purchase
Price or the number of Shares purchasable upon the exercise of this Warrant
because the Company issues, in exchange for cash, property or services, Shares,
or any securities convertible into or exchangeable for Shares, or securities
carrying the right to purchase Shares or such convertible or exchangeable
securities; it being understood that the adjustment provided for in this Section
8 shall be made upon the conversion, exchange or exercise (as applicable) of
such securities.
9. (a) Upon exercise the Company shall not be required to issue
fractions of Shares. In lieu of such fractional Shares, the holders of Warrants
shall receive an amount in cash equal to the same fraction of the current market
value of one whole Share. For purposes of this Section 9, the current market
value of one whole Share shall be determined pursuant to Section 8(c) hereof.
All calculations under this Section 9 shall be made to the nearest cent.
(b) The exercise price may be paid by check or, at the option of
the holder, the holder may instruct the Company in writing to retain certain
shares to be received upon exercise and to apply the current value of those
shares (based on the closing bid price reported on NASDAQ on the preceding
business day) to the payment of the total exercise price.
10. The holder of a Warrant shall not be entitled to any rights
of a shareholder of the Company with respect to any Shares purchasable upon the
exercise thereof, including voting, dividend or dissolution rights, until such
Shares have been paid for in full and issued to such holder. As soon as
practicable after such exercise, the Company shall deliver a certificate or
certificates for the securities issuable upon such exercise, all of which shall
be fully paid and nonassessable, to the person or persons entitled to receive
the same; provided, however, that such certificate or certificates delivered to
the holder of the surrendered Warrant shall bear a legend reading substantially
as follows:
No sale, offer to sell or transfer of these securities or this
certificate or of any shares or other securities issued in exchange for or
in respect of these securities shall be made unless a registration
statement under the Securities Act of 1933 (the "Act"), as amended, and any
applicable state securities laws, with respect to such securities, is in
effect or an exemption from the registration requirements of the Act and
such laws is then in fact applicable to such securities, to the Company's
satisfaction.
11. (a) Upon any adjustment of the Purchase Price with respect
to any Share covered hereby pursuant to Section 8 hereof, the Company within
ninety (90) calendar days thereafter shall have on file for inspection by the
holder hereof a certificate of the Board of Directors of the Company setting
forth the Purchase Price with respect to each Share covered hereby after such
adjustment and setting forth in reasonable detail the method of calculation and
the facts upon which such calculations are based and setting forth the number of
Shares purchasable upon exercise of a Warrant after such adjustment in the
Purchase Price, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein.
(b) In case:
(1) the Company shall authorize the issuance to all holders
of Common Stock of rights, options or warrants to subscribe for or purchase
capital stock of the Company or of any other subscription rights, options
or warrants; or
(2) the Company shall authorize the distribution to all
holders of Common Stock of evidences of its indebtedness or assets (other
than cash dividends or cash distributions payable out of earnings (or
consolidated earnings if the Company shall have one or more subsidiaries)
or earned surplus or dividends payable in Common Stock or distributions of
scrip); or
(3) of any consolidation or merger to which the Company is
a party and for which approval of any stockholders of the Company is
required, or of the conveyance or transfer of the properties and assets of
the Company substantially as an entirety, or of any capital reorganization
or any reclassification of the Common Stock (other than a change in par
value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination); or
(4) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(5) the Company proposes to take any other action which
would require an adjustment of the Purchase Price pursuant to Section 8
hereof;
then the Company shall give to the holder of a Warrant at his, her or
its address appearing below at least twenty (20) calendar days prior
to the applicable record date hereinafter specified in (i) or (ii)
below, by first-class mail, postage prepaid, a written notice stating
(i) the date as of which the holders of record of shares of Common
Stock to be entitled to receive any such rights, options, warrants or
distribution are to be determined or (ii) the date on which any such
consolidation, merger, conveyance, transfer, reorganization,
reclassification, dissolution, liquidation or winding up is expected
to become effective, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to
exchange such shares for securities or other property, if any,
deliverable upon such consolidation, merger, conveyance, transfer,
reorganization, reclassification, dissolution, liquidation or winding
up. The failure to give the notice required by this Section 11(b) or
any defect therein shall not affect the legality or validity of any
distribution right, option, warrant, consolidation, merger,
conveyance, transfer, reorganization, reclassification, dissolution,
liquidation or winding up or the vote upon any action.
(c) Nothing contained herein shall be construed as conferring
upon the holder of a Warrant with respect to the Shares the right to vote or to
consent or to receive notice as a stockholder in respect of the meetings of
stockholders or the election of directors of the Company or any other matter, or
any rights whatsoever as a stockholder of the Company.
12. The Company agrees that if, at any time, within the ten (10)
year period commencing February 3, 1997, it should file a Registration Statement
with the Securities and Exchange Commission (the "Commission") pursuant to the
Act and the underwriter(s) for the prospective offering agrees to permit
shareholders holding Shares or other securities received upon exercise of the
Warrants to include all or a portion of their Shares or other securities in the
Registration Statement and register such Shares or other securities for sale,
the Company, at its own expense, will offer to the holders of Warrants, not less
than 30 days prior to the filing of such Registration Statement, the opportunity
to register all or a portion of the Shares that the holders of Warrants have
received upon exercise of the Warrants prior to the time of such filing pro rata
with all other holders of Shares of the Company that have piggyback registration
rights or are otherwise registering their Shares for sale to the public. The
Company undertakes no obligation to file a Registration Statement. Further, the
Company undertakes no obligation to maintain a current Registration Statement.
The Warrantholder's rights provided for above are not applicable to a
Registration Statement filed by the Company with the Commission on Forms S-4 or
S-8 or any other inapplicable form.
13. Any notice, request, demand or other communication pursuant
to the terms of this Warrant shall be in writing and shall be sufficiently given
or made when delivered or mailed by first-class or registered mail, postage
prepaid, if to the Company addressed to:
AMERIHOST PROPERTIES, INC.
2400 East Devon Avenue
Suite 280
Des Plaines, Illinois 60018
Attention: Secretary
with a copy to:
Helen R. Friedli, P.C.
McDermott, Will & Emery
227 West Monroe Avenue
Chicago, Illinois 60606
or to such other address or such other counsel as the Company may designate by
written notice to the holder of a Warrant, and if to the holder of a Warrant at
his or its registered address on the records of the Company.
14. All the covenants and provisions herein by or for the
benefit of the Company shall bind and inure to the benefit of its respective
successors and assigns to the extent permitted hereunder and all of the
covenants and provisions herein by or for the benefit of the holder hereof shall
inure to the benefit of such holder's successors, legal representatives, heirs
or assigns as permitted herein.
15. This Warrant shall be deemed to be a contract made under the
laws of the State of Illinois for all purposes and shall be construed in
accordance with the internal laws of such State.
16. Nothing in this Warrant shall be construed to give to any
person or corporation other than the Company and the holder of this Warrant any
legal or equitable right, remedy or claim under this Warrant; but this Warrant
shall be for the sole and exclusive benefit of the Company and the holder of
this Warrant.
* * *
IN WITNESS WHEREOF, an authorized officer of the Company has signed
this Warrant.
AMERIHOST PROPERTIES, INC.
By:
President
ELECTION TO PURCHASE
(To be executed by the holder only if he, she or it desires to exercise
Warrants evidenced by the original Warrant attached hereto.)
TO: AMERIHOST PROPERTIES, INC.
2400 East Devon Avenue
Suite 280
Des Plaines, Illinois 60018
The undersigned hereby (1) irrevocably elects to exercise ____________
Warrants, evidenced by the original Warrant attached hereto, for and to purchase
thereunder Shares issuable upon exercise of said Warrants, (2)
makes payment in full of the Purchase Price of such Shares, (3) requests that
certificates for the Shares be issued in the name of:
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
_________________________________________________________________
________________________________
(Please print Social Security or
Tax Identification Number)
and, (4) if said number of Warrants shall not be all the Warrants evidenced by
the attached original Warrant, requests that a new Warrant evidencing Warrants
not so exercised be issued in the name of and delivered to:
__________________________________________________________________
(Please print name and address)
__________________________________________________________________
__________________________________________________________________
In lieu of receipt of a fractional Share the undersigned hereby elects (check
the appropriate line):
(i) to receive a cash payment, and the check representing payment
thereof should be made payable
to_________________________________________________________
__________________________________________________________________________
(Please print name and address)
and should be delivered to
_________________________________________________
________________________________________________________________________
____________________________________________________________________;
or
(ii) to credit the amount of such payment against the Purchase Price
payable for the Shares issuable upon the exercise of said
Warrants.
DATED: ,
Signature:
NOTICE: The above signature must correspond with
the name as written upon the face of the
attached Warrant in every particular,
without alteration or enlargement or any
change whatsoever.
THIS WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY
STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED IN
VIOLATION OF SUCH ACT OR LAWS, THE RULES AND
REGULATIONS THEREUNDER OR THE PROVISIONS
OF THIS WARRANT.
WARRANT TO PURCHASE 15,625 SHARES
OF COMMON STOCK OF
AMERIHOST PROPERTIES, INC.
ISSUED TO
RUSSELL J. CERQUA
DATED: FEBRUARY 3, 1997
NO. 0297-RJC
(INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE)
THIS IS TO CERTIFY THAT RUSSELL J. CERQUA (or his or its registered
assigns, herein referred to as the "Warrantholder") is entitled, upon the due
exercise hereof and subject to the terms and conditions hereof, anytime
commencing on the date of this Certificate (the "Commencement Date"), and ending
on the tenth anniversary of the Commencement Date (the "Expiration Date"), to
purchase from AMERIHOST PROPERTIES, INC., a Delaware corporation (the
"Company"), and the Company shall issue and sell to the Warrantholder, the
number of shares of common stock, $.005 par value per share (the "Common
Stock"), of the Company (the "Shares") set forth above upon surrender hereof,
with the form of election to purchase included herein completed and duly
executed, at the office of the Company, and upon simultaneous payment therefor
at an exercise price per Share equal to $1.53125 per Share (hereinafter referred
to as the "Purchase Price") in cash and/or check payable to the order of the
Company. The number and Purchase Price of the Shares are subject to adjustment
as provided herein.
1. The Warrantholder acknowledges that it may sell, transfer,
assign, hypothecate or otherwise dispose of this Warrant after the Commencement
Date, provided such sale, transfer, assignment, hypothecation or other
disposition is in accordance with applicable federal and state securities laws
and the Company agrees that the Warrantholder has complied with such laws. In
connection therewith the Company may require an opinion of counsel and/or other
documentation evidencing compliance with such laws. Notwithstanding the
foregoing, the Warrantholder acknowledges that it may not sell, transfer or
assign this Warrant to other than the original holder's estate or heirs prior to
the second anniversary of the Commencement Date.
2. Subject to the restrictions set forth above and in Section 3
hereof, upon surrender of this Warrant, and payment of the Purchase Price as
aforesaid, the Company shall issue and deliver with all reasonable dispatch the
certificate(s) for the Shares to or upon the written order of the holder of this
Warrant and in such name or names as such holder may designate. Such
certificate(s) shall represent the number of Shares issuable upon the exercise
of the Warrants embodied herein, together with a cash amount (if the holder has
so elected in accordance with the provisions of Section 9 hereof) in respect of
any fraction of a Share otherwise issuable upon such surrender.
Certificate(s) representing the Shares shall be deemed to have
been issued and the person so designated to be named therein shall be deemed to
have become a holder of record of such Shares as of the date of the surrender of
this Warrant and payment of the Purchase Price as aforesaid; provided, however
that if, at the date of surrender of this Warrant and payment of such Purchase
Price, the transfer books for the Shares or other classes of stock purchasable
upon the exercise of this Warrant shall be closed, the certificate(s) for the
Shares in respect of which this Warrant is then exercised shall be issuable as
of the date on which such books shall next be opened, and until such date the
Company shall be under no duty to deliver any certificate(s) for such Shares.
This Warrant shall be exercisable, at the election of the registered holder
hereof, either as an entirety or from time to time for part of the number of
Shares specified herein, but in no event shall fractional Shares be issued with
regard to the exercise of this Warrant. In the event that this Warrant is
exercised at any time prior to the close of business on the Expiration Date, a
new Warrant shall be issued to such holder for the remaining number of Shares,
if any, purchasable pursuant hereto. The Company shall cancel this Warrant when
it is surrendered upon exercise.
Prior to due presentment for registration of transfer of this
Warrant, the Company shall deem and treat the Warrantholder in whose name this
Warrant shall be issued as the absolute owner of this Warrant (notwithstanding
any notation of ownership or other writing on this Warrant made by anyone other
than the Company) for the purpose of any exercise hereof, of any distribution to
the holder hereof, and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
3. The Company shall pay all documentary stamp taxes, if any,
attributable to the initial issuance of the Shares issuable upon the exercise of
this Warrant, provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issue or delivery of any certificate(s) for Shares in a name other than that of
the Warrantholder upon the exercise of this Warrant, and in such case the
Company shall not be required to issue or deliver any certificates for Shares
until or unless the person or persons requesting the issuance have paid to the
Company the amount of such tax or have established to the Company's satisfaction
that such tax has been paid.
4. In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue and deliver, in exchange and substitution for
and upon cancellation of a mutilated Warrant, or in lieu of and substitution for
a Warrant lost, stolen or destroyed, a new Warrant of like tenor and
representing an equivalent number of Shares purchasable upon exercise at
equivalent exercise times and exercise prices, but only upon receipt of evidence
satisfactory to the Company of such loss, theft or destruction of such Warrant
and reasonable indemnity or bond, if requested, also satisfactory to the
Company. Applicants for such substitute Warrant shall also comply with such
other reasonable conditions and pay such other reasonable charges as the Company
may prescribe.
5. (a) For the purpose of enabling it to satisfy any obligation to
issue Shares upon the exercise of this Warrant, the Company shall at all times
through the Expiration Date, reserve and keep available, free from pre-emptive
rights and out of its aggregate authorized but unissued shares of Common Stock,
the number of Shares deliverable upon the exercise of this Warrant.
(b) Before taking any action which would cause an adjustment
pursuant to the terms set forth herein reducing the Purchase Price attributable
to any Shares below the then par value (if any) of such Shares, the Company
shall take any corporate action which may, in the opinion of its counsel (which
may be counsel regularly engaged by the Company), be necessary in order that the
Company may validly and legally issue fully paid and nonassessable Shares at the
Purchase Price as so adjusted.
(c) The Company covenants that all Shares issued upon exercise
of the Warrants shall, upon issuance in accordance with the terms hereof, be
fully paid and nonassessable and free from all pre-emptive rights and taxes,
liens, charges and security interests created by the Company with respect to the
issuance and holding thereof.
(d) After the Expiration Date, no Shares shall be subject to
reservation in respect of this Warrant.
6. Unless this Warrant is surrendered and payment made as herein
provided before the Expiration Date, this Warrant will become wholly void and
all rights evidenced hereby will terminate.
7. Subject to the provisions of Section 2 above, this Warrant may be
exchanged for a number of Warrants of the same tenor as this Warrant for the
purchase in the aggregate of the same number of Shares of the Company as are
purchasable upon the exercise of this Warrant, upon surrender hereof at the
office of the Company with written instructions as to the denominations of the
Warrants to be issued in exchange.
8. (a) In case the Company shall at any time after the date of this
Agreement (i) declare a dividend on the Common Stock of the Company payable in
shares of the Company's capital stock (whether in shares of Common Stock or of
capital stock of any other class), (ii) subdivide the outstanding Common Stock,
(iii) reverse split the outstanding Common Stock into a smaller number of shares
or (iv) issue any shares of the Company's capital stock in a reclassification of
the Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation), the
Purchase Price in effect with respect to each Share covered hereby, whether or
not such Share can then be purchased pursuant to the terms of this Warrant, at
the time of the record date for such dividend or of the effective date of such
subdivision, reverse split or reclassification, and/or the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Warrant exercised after such time shall be entitled to
receive the aggregate number and kind of securities which, if such Warrant had
been exercised immediately prior to such date, such holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, reverse split or reclassification. Such adjustments shall be made
successively whenever any event listed above shall occur.
(b) In case the Company shall fix a record date for the making
of a distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness or assets
(other than cash dividends or cash distributions payable out of earnings (or
consolidated earnings if the Company shall have one or more subsidiaries) or
earned surplus, dividends payable in Common Stock or distributions of scrip) or
subscription rights, options or warrants, the Purchase Price with respect to
each Share covered hereby to be in effect after such record date (whether or not
such Share can then be purchased pursuant to the terms of this Warrant) shall be
determined by multiplying the Purchase Price for such Share in effect
immediately prior to such record date by a fraction, of which the numerator
shall be the current market price for a Share (as defined in Section 8(c)
hereof) on such record date less the fair market value (as determined by the
Board of Directors of the Company, whose determination shall be conclusive) of
the portion of the assets or evidences of indebtedness so to be distributed or
of such subscription rights, options or warrants applicable to one Share and of
which the denominator shall be the current market price for a Share. Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price with
respect to each Share covered hereby shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(c) For the purpose of any computation under Section 8(b)
hereof, the current market price per Share on any date shall be (i) the average
of the last reported sale prices for the past thirty trading days as reported on
a national securities exchange or (ii) the average of the last reported bid and
asked prices for the past thirty trading days if the Company's Common Stock is
reported on the NASDAQ or (iii) if the Company's Common Stock is not on the
NASDAQ, the average of the last reported sale price for the past thirty trading
days as reported in the "pink sheets" (or an equivalent quotation system) for
over-the-counter stocks or, if the Company's Common Stock is not trading, such
value as the Board of Directors of the Company, in good faith, shall determine.
(d) No adjustment in the Purchase Price with respect to any
Share covered hereby shall be required unless such adjustment would require a
decrease of at least one cent ($0.01) in such price; provided, however, that any
adjustment which (by reason of this Section 8(d)) is not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 8 shall be made to the nearest cent or to
the nearest hundredth of a Share, as the case may be, but in no event shall the
Company be obligated to issue fractional Shares or fractional portions of any
securities upon the exercise of any Warrant.
(e) In the event that at any time, as a result of an adjustment
made pursuant to Section 8(a) hereof, the holder of any Warrant thereafter
exercised shall become entitled to receive any shares of capital stock or
warrants or other securities of the Company other than the Shares, thereafter
the number of such other shares of capital stock or warrants or other securities
so receivable upon exercise of any Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Shares contained in this Section 8, and the
provisions of this Warrant with respect to the Shares shall apply, to the extent
applicable, on like terms to any such other shares of capital stock or warrants
or other securities.
(f) In any case in which this Section 8 shall require that an
adjustment in the Purchase Price with respect to any Shares covered hereby be
made effective as of a record date for a specified event, the Company may elect
to defer until the occurrence of such event the issuing to the holder of any
Warrants exercised after such record date Shares and such other shares of
capital stock or warrants or other securities of the Company, if any, issuable
upon such exercise over and above the Shares, on the basis of the Purchase Price
with respect to such Shares in effect prior to such adjustment; provided,
however that the Company shall deliver to the holder a due bill or other
appropriate instrument evidencing such holder's right to receive such shares of
capital stock or warrants or other securities upon the occurrence of the event
requiring such adjustment.
(g) Upon each adjustment of the Purchase Price with respect to
each Share covered hereby as a result of the calculations made in Section 8(b)
hereof, each Warrant outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase (but only at the
applicable times specified herein), that number of Shares (calculated to the
nearest hundredth) obtained by (A) multiplying the number of Shares purchasable
at the Purchase Price with respect to such Shares upon exercise of a Warrant
immediately prior to such adjustment of the number of Shares by the Purchase
Price with respect to such Shares in effect immediately prior to such adjustment
of the Purchase Price with respect to such Shares and (B) dividing the product
so obtained by the Purchase Price with respect to such Shares in effect
immediately after such adjustment of the Purchase Price with respect to such
Shares. Such adjustments and calculations shall be made with respect to all
Shares covered hereby and not only with respect to Shares which are then
eligible for purchase pursuant to the terms hereof; however, no such adjustment
or calculation shall have the effect of accelerating the vesting schedule set
forth above. Additionally, all such adjustments and calculations shall be made
separately with respect to Shares purchasable at differing exercise prices
pursuant to the terms hereof.
(h) In case of any capital reorganization of the Company, or of
any reclassification of the Common Stock (other than a change in par value, or
from par to no par value, or from no par value to par value, or as a result of
subdivision or combination), or in case of the consolidation of the Company with
or the merger of the Company into any other corporation (other than a
consolidation or merger in which the Company is the continuing corporation) or
of the sale of the properties and assets of the Company as, or substantially as,
an entirety to any other corporation, each Warrant shall after such
reorganization, reclassification, consolidation, merger or sale be exercisable
(but only at the applicable times specified herein), upon the terms and
conditions specified herein, for the number of shares of Common Stock or other
capital stock or warrants or other securities or property to which a holder of
the number of Shares purchasable (at the time of such reorganization,
reclassification, consolidation, merger or sale, whether or not such right to
purchase can then be exercised pursuant to the terms hereof) upon exercise of
such Warrant would have been entitled upon such reorganization,
reclassification, consolidation, merger or sale; and in any such case, if
necessary, the provisions set forth in this Section 8(h) with respect to the
rights and interests thereafter of the registered holders of all Warrants
purchasable upon the exercise of any portion of this Warrant shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably be,
to any Shares of Common Stock or other capital stock or warrants or other
securities or property thereafter deliverable on the exercise of the Warrants.
The subdivision, reverse split or combination of shares of Common Stock at any
time outstanding into a greater or lesser number of shares shall not be deemed
to be a reclassification of the Common Stock for the purposes of this Section
8(h). The Company shall not effect any such consolidation or merger or sale
unless prior to or simultaneously with the consummation thereof, the successor
corporation (if other than the Company) resulting from such consolidation, or
merger or the corporation purchasing such assets or other appropriate
corporation or entity shall assume, by written instrument executed and delivered
to the registered holders of all Warrants, the obligation to deliver to the
holders of all Warrants such shares of Common Stock or other capital stock, or
warrants or securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to purchase, and any other obligations
of the Company under this Warrant.
(i) In no event shall an adjustment be made in the Purchase
Price or the number of Shares purchasable upon the exercise of this Warrant
because the Company issues, in exchange for cash, property or services, Shares,
or any securities convertible into or exchangeable for Shares, or securities
carrying the right to purchase Shares or such convertible or exchangeable
securities; it being understood that the adjustment provided for in this Section
8 shall be made upon the conversion, exchange or exercise (as applicable) of
such securities.
9. (a) Upon exercise the Company shall not be required to issue
fractions of Shares. In lieu of such fractional Shares, the holders of Warrants
shall receive an amount in cash equal to the same fraction of the current market
value of one whole Share. For purposes of this Section 9, the current market
value of one whole Share shall be determined pursuant to Section 8(c) hereof.
All calculations under this Section 9 shall be made to the nearest cent.
(b) The exercise price may be paid by check or, at the option of
the holder, the holder may instruct the Company in writing to retain certain
shares to be received upon exercise and to apply the current value of those
shares (based on the closing bid price reported on NASDAQ on the preceding
business day) to the payment of the total exercise price.
10. The holder of a Warrant shall not be entitled to any rights
of a shareholder of the Company with respect to any Shares purchasable upon the
exercise thereof, including voting, dividend or dissolution rights, until such
Shares have been paid for in full and issued to such holder. As soon as
practicable after such exercise, the Company shall deliver a certificate or
certificates for the securities issuable upon such exercise, all of which shall
be fully paid and nonassessable, to the person or persons entitled to receive
the same; provided, however, that such certificate or certificates delivered to
the holder of the surrendered Warrant shall bear a legend reading substantially
as follows:
No sale, offer to sell or transfer of these securities or this
certificate or of any shares or other securities issued in exchange for or
in respect of these securities shall be made unless a registration
statement under the Securities Act of 1933 (the "Act"), as amended, and any
applicable state securities laws, with respect to such securities, is in
effect or an exemption from the registration requirements of the Act and
such laws is then in fact applicable to such securities, to the Company's
satisfaction.
11. (a) Upon any adjustment of the Purchase Price with respect
to any Share covered hereby pursuant to Section 8 hereof, the Company within
ninety (90) calendar days thereafter shall have on file for inspection by the
holder hereof a certificate of the Board of Directors of the Company setting
forth the Purchase Price with respect to each Share covered hereby after such
adjustment and setting forth in reasonable detail the method of calculation and
the facts upon which such calculations are based and setting forth the number of
Shares purchasable upon exercise of a Warrant after such adjustment in the
Purchase Price, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein.
(b) In case:
(1) the Company shall authorize the issuance to all holders
of Common Stock of rights, options or warrants to subscribe for or purchase
capital stock of the Company or of any other subscription rights, options
or warrants; or
(2) the Company shall authorize the distribution to all
holders of Common Stock of evidences of its indebtedness or assets (other
than cash dividends or cash distributions payable out of earnings (or
consolidated earnings if the Company shall have one or more subsidiaries)
or earned surplus or dividends payable in Common Stock or distributions of
scrip); or
(3) of any consolidation or merger to which the Company is
a party and for which approval of any stockholders of the Company is
required, or of the conveyance or transfer of the properties and assets of
the Company substantially as an entirety, or of any capital reorganization
or any reclassification of the Common Stock (other than a change in par
value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination); or
(4) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(5) the Company proposes to take any other action which
would require an adjustment of the Purchase Price pursuant to Section 8
hereof;
then the Company shall give to the holder of a Warrant at his, her or
its address appearing below at least twenty (20) calendar days prior
to the applicable record date hereinafter specified in (i) or (ii)
below, by first-class mail, postage prepaid, a written notice stating
(i) the date as of which the holders of record of shares of Common
Stock to be entitled to receive any such rights, options, warrants or
distribution are to be determined or (ii) the date on which any such
consolidation, merger, conveyance, transfer, reorganization,
reclassification, dissolution, liquidation or winding up is expected
to become effective, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to
exchange such shares for securities or other property, if any,
deliverable upon such consolidation, merger, conveyance, transfer,
reorganization, reclassification, dissolution, liquidation or winding
up. The failure to give the notice required by this Section 11(b) or
any defect therein shall not affect the legality or validity of any
distribution right, option, warrant, consolidation, merger,
conveyance, transfer, reorganization, reclassification, dissolution,
liquidation or winding up or the vote upon any action.
(c) Nothing contained herein shall be construed as conferring
upon the holder of a Warrant with respect to the Shares the right to vote or to
consent or to receive notice as a stockholder in respect of the meetings of
stockholders or the election of directors of the Company or any other matter, or
any rights whatsoever as a stockholder of the Company.
12. The Company agrees that if, at any time, within the ten (10)
year period commencing February 3, 1997, it should file a Registration Statement
with the Securities and Exchange Commission (the "Commission") pursuant to the
Act and the underwriter(s) for the prospective offering agrees to permit
shareholders holding Shares or other securities received upon exercise of the
Warrants to include all or a portion of their Shares or other securities in the
Registration Statement and register such Shares or other securities for sale,
the Company, at its own expense, will offer to the holders of Warrants, not less
than 30 days prior to the filing of such Registration Statement, the opportunity
to register all or a portion of the Shares that the holders of Warrants have
received upon exercise of the Warrants prior to the time of such filing pro rata
with all other holders of Shares of the Company that have piggyback registration
rights or are otherwise registering their Shares for sale to the public. The
Company undertakes no obligation to file a Registration Statement. Further, the
Company undertakes no obligation to maintain a current Registration Statement.
The Warrantholder's rights provided for above are not applicable to a
Registration Statement filed by the Company with the Commission on Forms S-4 or
S-8 or any other inapplicable form.
13. Any notice, request, demand or other communication pursuant
to the terms of this Warrant shall be in writing and shall be sufficiently given
or made when delivered or mailed by first-class or registered mail, postage
prepaid, if to the Company addressed to:
AMERIHOST PROPERTIES, INC.
2400 East Devon Avenue
Suite 280
Des Plaines, Illinois 60018
Attention: Secretary
with a copy to:
Helen R. Friedli, P.C.
McDermott, Will & Emery
227 West Monroe Avenue
Chicago, Illinois 60606
or to such other address or such other counsel as the Company may designate by
written notice to the holder of a Warrant, and if to the holder of a Warrant at
his or its registered address on the records of the Company.
14. All the covenants and provisions herein by or for the
benefit of the Company shall bind and inure to the benefit of its respective
successors and assigns to the extent permitted hereunder and all of the
covenants and provisions herein by or for the benefit of the holder hereof shall
inure to the benefit of such holder's successors, legal representatives, heirs
or assigns as permitted herein.
15. This Warrant shall be deemed to be a contract made under the
laws of the State of Illinois for all purposes and shall be construed in
accordance with the internal laws of such State.
16. Nothing in this Warrant shall be construed to give to any
person or corporation other than the Company and the holder of this Warrant any
legal or equitable right, remedy or claim under this Warrant; but this Warrant
shall be for the sole and exclusive benefit of the Company and the holder of
this Warrant.
* * *
IN WITNESS WHEREOF, an authorized officer of the Company has signed
this Warrant.
AMERIHOST PROPERTIES, INC.
By:
President
ELECTION TO PURCHASE
(To be executed by the holder only if he, she or it desires to exercise
Warrants evidenced by the original Warrant attached hereto.)
TO: AMERIHOST PROPERTIES, INC.
2400 East Devon Avenue
Suite 280
Des Plaines, Illinois 60018
The undersigned hereby (1) irrevocably elects to exercise ____________
Warrants, evidenced by the original Warrant attached hereto, for and to purchase
thereunder Shares issuable upon exercise of said Warrants, (2)
makes payment in full of the Purchase Price of such Shares, (3) requests that
certificates for the Shares be issued in the name of:
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
_________________________________________________________________
________________________________
(Please print Social Security or
Tax Identification Number)
and, (4) if said number of Warrants shall not be all the Warrants evidenced by
the attached original Warrant, requests that a new Warrant evidencing Warrants
not so exercised be issued in the name of and delivered to:
__________________________________________________________________
(Please print name and address)
__________________________________________________________________
__________________________________________________________________
In lieu of receipt of a fractional Share the undersigned hereby elects (check
the appropriate line):
(i) to receive a cash payment, and the check representing payment
thereof should be made payable
to_________________________________________________________
__________________________________________________________________________
(Please print name and address)
and should be delivered to
_________________________________________________
________________________________________________________________________
____________________________________________________________________;
or
(ii) to credit the amount of such payment against the Purchase Price
payable for the Shares issuable upon the exercise of said
Warrants.
DATED:
Signature:
NOTICE: The above signature must correspond with
the name as written upon the face of the
attached Warrant in every particular,
without alteration or enlargement or any
change whatsoever.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,049,476
<SECURITIES> 0
<RECEIVABLES> 10,750,764
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,064,576
<PP&E> 55,584,103
<DEPRECIATION> 7,000,865
<TOTAL-ASSETS> 72,190,598
<CURRENT-LIABILITIES> 13,326,233
<BONDS> 0
0
0
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</TABLE>
