Exhibit 10.31
WARRANT
NEITHER THIS WARRANT NOR THE COMMON STOCK FOR WHICH IT MAY BE EXERCISED HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER
SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF,
EXCEPT AS PROVIDED IN ARTICLE 3, UNLESS SO REGISTERED OR UNLESS SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF PURSUANT TO AN EXEMPTION THEREFROM.
No. 1 May 29, 1996
CLEARVIEW CINEMA GROUP, INC.
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COMMON STOCK PURCHASE WARRANT
This CERTIFIES that, for value received THE PROVIDENT BANK, or its
registered assignee (the "Holder") is entitled to subscribe for and purchase
from Clearview Cinema Group, Inc. a Delaware corporation (the "Company"), 65
shares (subject to adjustment as set forth in Article 2 below, the "Warrant
Shares") of Common Stock of the Company, par value $0.01 per share ("Common
Stock"), at the price of $.01 per share (subject to adjustment as set forth in
Article II below, the "Warrant Purchase Price"), at any time on or after the
date of this Warrant but on or before the Expiration Date, subject to the terms
provided herein. This Warrant is issued in connection with the Warrant Agreement
dated as of the date hereof between the Company and the Holder.
Capitalized terms used herein, and not otherwise defined, shall
have the meanings specified in Article 4. This Warrant is subject to the
following provisions, terms and conditions:
ARTICLE 1
EXERCISE; RESERVATION OF SHARES
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Section 1.01. Warrant Exercise. The rights represented by this
Warrant may be exercised in whole or in part by the Holder by the surrender of
this Warrant at any time on or after the date of this Warrant, but in no event
later than the Expiration Date, at the principal office of the Company, together
with a duly executed Subscription in the form annexed as Exhibit "1" hereto
(each a "Subscription Agreement"), and by payment to the Company by certified
check or bank draft of the
Warrant Purchase Price (as adjusted as set forth in Article 2 below, if
applicable) for such shares; provided, however, that if the issuance of the
Underlying Common Stock upon the exercise of this Warrant requires registration
under the Securities Act in the reasonable judgment of the Company or its
counsel, this Warrant shall not be exercisable by the Holder and no subscription
of or payment for shares will be acceptable by the Company prior to the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), covering the issuance of the Underlying Common
Stock by the Company to the holder of this Warrant. The shares so purchased
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
exercised as hereinabove provided.
Section 1.02. Net Issue Exercise. Notwithstanding any
provisions herein to the contrary, if the Market Price (as defined below) for
one share of Common Stock is greater than the Purchase Price (on the date of
exercise of all or a part of this Warrant), in lieu of exercising this Warrant
for cash, the Holder may elect to receive Common Stock equal to the value (as
determined below) of this Warrant (or the portion hereof being exercised) by
surrender of this Warrant at the principal office of the Company, together with
a Subscription Agreement fully executed, in which event the Company shall issue
to the Holder that number of Shares of Common Stock computed using the following
formula:
X = Y x [(A-B) / A]
Where Y = the aggregate number of Shares of Common Stock
purchasable under this Warrant or, if only a
portion of this Warrant is being exercised, the
number of Shares of Common Stock for which this
Warrant is being exercised (at the date of such
calculation)
A = Market Price of one Share of Common Stock (at the
date of such calculation)
B = Purchase Price (as adjusted to the date of such
calculation).
For purposes of this Section 1.02, "Market Price" shall mean, if
the Underlying Common Stock is traded on a national securities exchange, the
NASDAQ National Market System or the over-the-counter market, the last reported
price on the date of valuation at which the Underlying Common Stock has traded
on such exchange or the average of the bid and asked prices on the
over-the-counter market on the date of valuation or, if no sale took place on
such date, the last date on which a sale took place. If
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the Underlying Common Stock is not so traded, "Market Price" shall be the value
of one share of Underlying Common Stock as determined by agreement of the
parties hereto, or if the parties hereto cannot reach agreement, then such value
shall be determined by appraisal by an independent investment banking firm
selected by the Company and acceptable to the Holder; provided, however, that if
the Holder and the Company cannot agree on such investment banking firm, such
appraised value shall be determined by averaging the appraised values calculated
by (i) an independent investment banking firm selected by the company; (ii) an
independent investment banking firm selected by the Holder; and (iii) an
independent investment banking firm selected by the investment banking firms
selected by the Company and the Holder. Such appraisals shall be at the Holder's
expense.
Section 1.03. Certificates. Certificates for the shares purchased
pursuant to Section 1.01 shall be delivered to the Holder within a reasonable
time, not exceeding 30 days, after the rights represented by this Warrant shall
have been so exercised.
Section 1.04. Reservation of Shares. The Company covenants and
agrees:
(a) That all Common Stock which may be issued upon the exercise of
the rights represented by this Warrant will, upon issuance, be fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof; and
(b) That during the period within which the rights represented by
this Warrant may be exercised, the Company will at all times have authorized,
and reserved for the purpose of issue and delivery upon exercise of the rights
evidenced by this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant.
ARTICLE 2
ADJUSTMENTS
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Section 2.01. Reorganization, Reclassification, Consolidation,
Merger or Sale. If any reorganization or reclassification of the capital stock
of the Company, or any consolidation or merger of the Company with another
corporation in which the Company is not the surviving corporation, or the sale
of all or substantially all of its assets to another corporation or similar
transaction (in any instance, a "Capital Event") shall be effected in such a way
that holders of Common Stock shall be entitled to receive stock, securities or
assets cash with respect to or in exchange for their Common Stock, then, as a
condition of such Capital Event, lawful and adequate provisions shall be made
whereby the Holder hereof shall
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thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions specified in this Warrant and in lieu of the shares of the
Common Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby, an amount of such shares of
stock, securities or assets (including cash) as may have been issued or payable
with respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such stock immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby
had such Capital Event not taken place.
Section 2.02. Subdivision or Combination of Stock. In the event
that the Company shall at any time subdivide or split its outstanding shares of
Common Stock into a greater number of shares, the number of shares subject to
issuance upon exercise of this Warrant shall be proportionately increased. In
the event that the outstanding shares of Common Stock of the Company shall be
combined into a smaller number of shares, the number of shares subject to
issuance upon exercise of this Warrant shall be proportionately reduced.
Section 2.03. Stock Dividends. In the event that the Company shall
at any time declare any dividend upon its Common Stock payable in stock, the
number of shares subject to issuance upon exercise of this Warrant shall be
increased by the number (and the kind) of shares which would have been issued to
the holder of this Warrant if this Warrant were exercised immediately prior to
such dividend.
Section 2.04. Issuance at less than Purchase Price.
(a) Subject to Section 2.04(d) below, in the event that the
Company shall at any time issue or sell any shares of Common Stock for a
consideration per share less than $2,558.48 (the "Purchase Price"), then in any
such event, the holder of this Warrant shall be entitled to receive, in lieu of
the number of shares of Common Stock theretofore receiveable upon the exercise
of this Warrant, a number of shares of Common Stock determined by (a) dividing
the Purchase Price by the Adjusted Purchase Prices (as defined herein) and (b)
multiplying the result by the number of shares of Common Stock called for on the
face of this Warrant. The Adjusted Purchase Prices shall be calculated (to the
nearest full cent) by dividing (i) the sum of (x) the number of shares of Common
Stock outstanding or deemed to be outstanding 2.04(b) below immediately prior to
such issue or sale, multiplied by the Purchase Price in effect immediately prior
to such issue or sale and (y) the aggregate amount of the consideration received
by the Company upon such issue or sale by (ii) the total number of shares of
Common Stock outstanding or deemed to be outstanding pursuant to Section 2.04(b)
below immediately after such issue or sale.
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(b) Subject to Section 2.04(d) below, in case the Company
shall issue or sell options, rights or warrants entitling the holders thereof to
subscribe for or purchase shares of Common Stock, the number of shares of Common
Stock theretofore receiveable upon the exercise of this Warrant shall be
adjusted on the date of such issuance or sale, as set forth in Section 2.04(a)
above, based on a sale price equal to the sum of the price of such instrument
and its minimum exercise price if the total thereof shall be less than the
Purchase Price in effect immediately prior to such issue or sale, and assuming
the exercise or conversion of all such options, rights or warrants so issued or
sold.
(c) In case the Company shall issue or sell any other
security or instrument directly or indirectly convertible into or exchangeable
for Common Stock ("Convertible Securities"), the number of shares of Common
Stock theretofore receivable upon the exercise of this Warrant shall be adjusted
on the date of issue or sale, as set forth in Section 2.04(a) above, based on a
sale price equal to the sum of the purchase price of such Convertible Security
and the price at which its conversion to Common Stock may be experienced if the
total thereof shall be less than the Purchase Price immediately prior to such
issue or sale, and assuming the conversion of all such Convertible Securities so
issued or sold.
(d) Notwithstanding any of the provisions contained in this
Section 2.04, in no event shall there be an adjustment of the number of shares
of Common Stock theretofore receivable upon exercise of this Warrant as a result
of (x) the exercise of any warrants, rights, options or conversion privileges
that were outstanding on or prior to the date of the initial issuance of this
Warrant (y) the exercise of any warrants, options, rights or similar instruments
issued after the date hereof for which adjustment has already been made pursuant
to Section 2.04(b) above.
(e) If any rights, options or warrants or Convertible
Securities shall by their terms provide for an increase or decrease, with the
passage of time or the occurrence or non-occurrence of an event, in the minimum
amount of additional consideration payable to the Company upon the exercise
thereof, the number of shares of Common Stock theretofore receivable upon
exercise of this Warrant shall, forthwith upon any such increase or decrease
becoming effective, be readjusted to reflect such increase or decrease in such
minimum amount.
(f) If any rights, options or warrants or Convertible
Securities as to which an adjustment has been previously made pursuant to this
Section 2.04 shall expire without having been exercised, the number of shares of
Common Stock theretofore receivable upon exercise of this Warrant shall
forthwith be
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adjusted to the number of shares of Common Stock which would have been in effect
had an adjustment been made on the basis that the only rights or warrants or
Convertible Securities previously issued or sold were those rights or warrants
or Convertible Securities actually exercised or not yet expired.
(g) No adjustment in the number of shares of Common Stock
receivable upon the exercise of this Warrant need be made unless the adjustment
would require an increase or decrease of at least one whole share of Common
Stock, provided, however, such adjustment shall be carried forward and made at
the time of and together with any subsequent adjustment which, together with
such amount and any other amount or amounts so carried forward, shall aggregate
at one whole share of Common Stock.
(h) No adjustment in the number of shares of Common Stock
receiveable upon exercise of this Warrant need be made under this Section for
any change in the par value of the Common Stock. If an adjustment is made to the
number of shares of Common Stock receiveable upon exercise of this Warrant upon
establishment of a record date for distribution subject to this Section and if
such distribution is subsequently canceled, the number of shares of Common Stock
receivable upon exercise of this Warrant then in effect shall be readjusted,
effective as of the date when the Board of Directors of the Company determines
to cancel such distribution, to the number of shares of Common Stock receivable
upon exercise of this Warrant as would have been in effect is such record date
had not been fixed.
Section 2.05. Record Date. In the event that the Company shall
take a record of the holders of its Common Stock for the purpose of entitling
them to receive a dividend payable in Common Stock, then such record date shall
be deemed for the purposes of this Article 2 to be the date of the issue or sale
of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend.
Section 2.06. Notice of Adjustment. Upon any adjustment, the
Company shall give notice thereof to the Holder, which notice shall state the
increase or decrease, if any, in the number of shares purchasable upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
ARTICLE 3
TRANSFER RESTRICTIONS
Section 3.01. Transfer of Warrants. This Warrant shall not be
transferrable except to an entity that is controlled by, controlling, or under
common control with the Holder (each a "Permitted Transferee"); provided,
however, that the Permitted
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Transferee, as a condition to such transfer, shall execute and deliver a written
agreement, in form and substance satisfactory to the Company, agreeing to be
bound by the provisions of this Warrant.
Section 3.02. Transfer of Stock; Registration Rights. The shares
of stock issuable upon the exercise of this Warrant shall be subject to the
Stockholders and Registration Rights Agreement, including, but not limited to
the restrictions upon transfer contained therein. Any certificate for such
shares of Common Stock issued upon the exercise of this Warrant shall bear an
appropriate legend describing the foregoing restriction.
Section 3.03. Securities Law Transfer Restrictions. By taking and
holding this Warrant, the Holder (i) acknowledges that neither this Warrant nor
any shares of Common Stock issuable upon the exercise of this Warrant have been
registered under the Securities Act or any applicable state securities or blue
sky law (collectively, the "Acts"); and (ii) agrees not to sell, transfer or
otherwise dispose of this Warrant or any such shares of Common Stock without
such registration unless the sale, transfer or disposition can be effected
without such registration and in compliance with the Acts. Any certificate for
shares of Common Stock issued upon exercise of this Warrant shall bear an
appropriate legend describing the foregoing restrictions.
Section 3.04. Provision of Information by Holder. The Holder shall
make available to the Company such written information, presented in form and
content reasonably satisfactory to the Company, as the Company may reasonably
request, from time to time, in order to make the determination provided for in
Section 3.01.
ARTICLE 4
ADDITIONAL DEFINITIONS
As used herein, the following terms shall have the meanings
specified below:
"Expiration Date" shall mean the seventh anniversary of the date
of the Warrant.
"Underlying Common Stock" shall mean the shares of Common Stock
purchasable by the holder of this Warrant upon the exercise thereof, assuming
that this Warrant is then exercisable.
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ARTICLE 5
MISCELLANEOUS
Section 5.01. Holder of Record. Each Holder, by holding this
Warrant, consents and agrees that said Holder shall be treated by the Company
and all other persons dealing with this Warrant as the absolute owner hereof for
any purpose and as the person entitled (i) to exercise the rights represented by
this Warrant, or (ii) to the transfer hereof on the books of the Company, any
notice to the Company to the contrary notwithstanding; but until such transfer
on such books, the Company may treat the registered Holder as the owner for all
purposes.
Section 5.02. Notices. Any notice or communication to be given
pursuant to this Warrant ("Notice") shall be in writing and shall be delivered
in person or by certified mail, return receipt requested, in the United States
mail, postage prepaid. Notices to the Company shall be addressed to the
Company's principal office. Notices to the Holder shall be addressed to the
Holder's address as reflected in the records of the Company. Notices shall be
effective upon delivery in person, or, if mailed, at midnight on the third
business day after mailing.
Section 5.03. Issue Tax. The issuance of certificates for shares
of Common Stock upon the exercise of this Warrant shall be made without charge
to the Holders for any issuance tax in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate name other
than that of the Holder of the Warrant exercised.
Section 5.04. No Stockholder Rights. This Warrant shall not
entitle the Holder to any voting rights or other rights stockholder of the
Company.
Section 5.05. Information. The Company shall furnish each Holder
of Warrants with copies of all reports, proxy statements, and similar materials
that it furnishes generally to Holders of its Stock. In addition, it shall
furnish to each such Holder of Warrants copies of all reports filed by it with
the Securities and Exchange Commission.
Section 5.05. Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware.
Section 5.06. Headings, Interpretation. The section headings used
herein are for convenience of reference only and not intended to define, limit
or describe the scope or intent any
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provision of this Warrant. When used in this Warrant, the term "including" shall
mean "including, without limitation by reason of enumeration".
Section 5.07. Successors. The covenants, agreements and provisions
of this Warrant shall bind the parties hereto and their respective successors
and permitted assigns.
IN WITNESS WHEREOF, the Company has caused this Warrant be issued
this ____ day of May 1996.
CLEARVIEW CINEMA GROUP, INC.
a Delaware corporation
By: ________________________
A. Dale Mayo,
President and Secretary
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EXHIBIT "1"
SUBSCRIPTION
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(To be executed only upon exercise of Warrant)
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for and purchases the number of shares of Common Stock of
Clearview Cinema Group, Inc. purchasable under this Warrant and herewith makes
payment therefor, all at the price and on the terms and conditions specified in
this Warrant. Such shares are to be registered in the name of the registered
holder of this Warrant and certificates evidencing such shares are to be
delivered to it at its address set forth below its signature unless contrary
instructions are herein given.
Register shares in the name of ________________________________________________.
Deliver certificates to _______________________________________________________.
Dated: _______________________ _________________________________________________
(Signature of Registered Owner)
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(Street Address)
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(City) (State) (Zip Code)