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Exhibit 4.3
OFFSHORE
WARRANT AGREEMENT
BETWEEN
CINEMASTAR LUXURY THEATERS, INC.
AND
WARRANT HOLDER
Dated as of August 6, 1996
THESE WARRANTS AND THE SHARES OF COMMON STOCK OFFERED UNDERLYING THESE WARRANTS
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). UNTIL THE FORTY-FIFTH (45TH) DAY AFTER THE SALE OF SUCH
WARRANTS IS COMPLETED, NONE OF SUCH WARRANTS OR UNDERLYING SHARES MAY BE
OFFERED, SOLD OR TRANSFERRED (INCLUDING ANY INTERESTS THEREIN) IN THE UNITED
STATES OR TO A "U.S. PERSON" (AS DEFINED IN REGISTRATION S PROMULGATED UNDER THE
ACT) OR FOR THE ACCOUNT AND BENEFIT OF U.S. PERSON, EXCEPT AS PROVIDED IN
REGULATION S PROMULGATED UNDER THE ACT. ANY RESALE THEREAFTER MUST BE PURSUANT
TO REGISTRATION UNDER THE ACT OR AN AVAILABLE EXEMPTION. FURTHER, THE WARRANTS
MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSONS, UNLESS REGISTERED
UNDER THE ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
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WARRANT AGREEMENT
WARRANT AGREEMENT dated as of August 6, 1996, between
CINEMASTAR LUXURY THEATERS, INC., a California corporation (the "Company"), and
the Warrantholder set forth on Annex I hereto (the "Warrantholder").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue a maximum aggregate of
17,142 warrants, each warrant to purchase one share (collectively, the "Warrant
Shares") of the Company's Common Stock (the "Common Stock"), pursuant to an
Offshore Securities Subscription Agreement between the Company and the
Warrantholder (the "Purchase Agreements"); and
WHEREAS, the Company and the Warrantholder desire to set forth
in this Warrant Agreement, among other things, the form and provisions of the
Warrants as set forth in certificates representing the Warrants (the "Warrant
Certificates") and the terms and conditions under which they may be issued,
transferred, exchanged, replaced, redeemed and surrendered in connection with
the exercise and redemption of the Warrants;
NOW, THEREFORE, in consideration of the promises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE 1
WARRANT CERTIFICATES
1.1 Form of Warrant Certificates. The Warrant Certificates
shall be substantially in the form of Exhibit A attached hereto and, in
addition, may have such letters, numbers or other marks of identification or
designation and such legends, summaries or endorsements stamped or printed,
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement or as, in any particular case, may be required, in
the opinion of counsel for the Company, to comply with any law or with any rule
or regulation of any regulatory authority or agency or to conform to customary
usage.
1.2 Execution of Warrant Certificates. The Warrant
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, Chief Executive Officer or President or any Vice President, and by its
Chief Financial Officer, Secretary or any Assistant Secretary, either manually
or by facsimile signature printed thereon.
ARTICLE 2
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
2.1 Exercise Price. Each Warrant Certificate shall, when
signed by the Chairman, Chief Executive Officer or President or any Vice
President, and by the Chief Financial Officer or Treasurer or any Assistant
Treasurer, or Secretary or any Assistant Secretary, of the Company, entitle the
registered holder thereof to purchase from the Company one share of Common Stock
for each Warrant evidenced thereby, at the purchase price of $7.00 per share
(the "Initial Exercise Price"), or such adjusted number of shares at such
adjusted purchase price as may be established from time to time
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pursuant to the provisions of Article 3 hereof, payable in full at the time of
exercise of the Warrant. Except as the context otherwise requires, the term
"Exercise Price" as used in this Agreement shall mean the purchase price of one
share of Common Stock upon the exercise of a Warrant as the context requires,
reflecting all appropriate adjustments made in accordance with the provisions of
Article 3 hereof.
2.2 Exercisability of Warrants. Each Warrant may be exercised
at any time until August 6, 2001. The term "Exercise Deadline" as used in this
Agreement shall mean the latest time and date at which the Warrants may be
exercised.
This Warrant may not be exercised (i) by or on behalf of a
person who is a U.S. person (as defined in Regulation S promulgated under the
Securities Act of 1933, as amended (the "Securities Act")), (ii) if a U.S.
person has any interest in the Warrants being exercised or the underlying
securities to be issued upon exercise, or (iii) by any person if exercised
within the United States or if the Warrant Shares are to be delivered within the
United States. If the above cannot be complied with, then the Warrant can be
exercised only if a written opinion of counsel, the form and substance of which
is acceptable to the Company, is delivered to the Company prior to exercise to
the Warrants being exercised, and the underlying securities delivered upon
exercise have been registered under the Securities Act, or the securities are
exempt from registration thereunder.
2.3 Procedure for Exercise of Warrants. During the period
specified in Section 2.2 hereof, the Warrants may be exercised by surrendering
the Warrant Certificates representing such Warrants to the Company, with the
election to purchase form set forth on the Warrant Certificate duly completed
and executed, accompanied by payment in full of the Exercise Price as provided
in Section 2.1 in effect at the time of such exercise, together with such taxes
as are specified in Section 7.1 hereof, for each share of Common Stock with
respect to which such Warrants are being exercised. Such Exercise Price and
taxes shall be paid in full by certified check or money order, payable in United
States currency, to the Company. The date on which Warrants are exercised in
accordance with this Section 2.3 is sometimes referred to herein as the Date of
Exercise of such Warrants.
2.4 Issuance of Warrant Shares. As soon as practicable after
the Date of Exercise of any Warrants, the Company shall issue, or cause its
transfer agent for the Common Stock, if any, to issue a certificate or
certificates for the number of full shares of Common Stock to which such holder
is entitled, registered in accordance with the instructions set forth in the
election to purchase. All Warrant Shares shall be validly authorized and issued,
fully paid and nonassessable and free from all taxes, liens and charges created
by the Company in respect of the issue thereof, and shall be previously unissued
shares. Each person in whose name any such certificate for Warrant Shares is
issued shall for all purposes be deemed to have become the holder of record of
the Warrant Shares represented thereby on the Date of Exercise of the Warrants
resulting in the issuance of such shares, irrespective of the date of issuance
or delivery of such certificate for the Warrant Shares.
2.5 Certificates for Unexercised Warrants. In the event that
less than all of the Warrants represented by a Warrant Certificate are
exercised, the Company shall execute and mail, by first-class mail, within 30
days of the Date of Exercise, to the registered holder of such Warrant
Certificate, or such other person as shall be designated in the election to
purchase, a new Warrant Certificate representing the number of full Warrants not
exercised. In no event shall a fraction of a Warrant be exercised, and the
Company shall distribute no Warrant Certificates representing fractions of
Warrants under this or any other section of this Agreement. Final fractions of
shares shall be treated as provided in Section 3.12.
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2.6 Reservation of Shares. The Company shall at all times
reserve and keep available for issuance upon the exercise of Warrants a number
of its authorized but unissued shares of Common Stock that will be sufficient to
permit the exercise in full of all outstanding Warrants.
ARTICLE 3
ADJUSTMENTS AND NOTICE PROVISIONS
3.1 Adjustment of Exercise Price. Subject to the provisions of
this Article 3, the Exercise Price in effect from time to time shall be subject
to adjustment, as follows:
(a) In case the Company shall at any time after the date
hereof (i) declare a dividend on the outstanding Common Stock payable in shares
of its capital stock, (ii) subdivide the outstanding Common Stock, (iii) combine
the outstanding Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock by reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then, in each case, the Exercise
Price in effect, and the number of shares of Common Stock issuable upon exercise
of the Warrants outstanding, at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification,
shall be proportionately adjusted so that the holders of the Warrants after such
time shall be entitled to receive the aggregate number and kind of shares which,
if such Warrants had been exercised immediately prior to such time, such holders
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.
(b) In case the Company shall distribute to all holders
of Common Stock (including any such distribution made to the shareholders of the
Company in connection with a consolidation or merger in which the Company is the
continuing corporation) evidences of its indebtedness, cash or assets (other
than distributions and dividends payable in shares of its capital stock), or
rights, options or warrants to subscribe for or purchase Common Stock, or
securities convertible into or exchangeable for shares of Common Stock, then, in
each case, the Exercise Price shall be adjusted by multiplying the Exercise
Price in effect immediately prior to the record date for the determination of
shareholders entitled to receive such distribution by a fraction, the numerator
of which shall be the Current Market Price (as determined pursuant to Section
3.1(c) hereof) per share for the thirty (30) trading days before the record date
of said distribution of Common Stock on such record date, less the fair market
value (as determined in good faith by the board of directors of the Company,
whose determination shall be conclusive absent manifest error) of the portion of
the evidences of indebtedness or assets so to be distributed, or of such rights,
options, or warrants or convertible or exchangeable securities, or the amount of
such cash, applicable to one share, and the denominator of which shall be such
Current Market Price per share of Common Stock. Such adjustment shall become
effective at the close of business on such record date.
(c) For purposes of this Agreement, the term "Current
Market Price" shall mean (i) if the Common Stock is traded on the Nasdaq
National Market ("NNM") or on a national securities exchange, the per share
closing price of the Common Stock on the date in question as reported by the NNM
or on the principal stock exchange on which it is listed, or (ii) if the Common
Stock is traded in the over-the-counter market and not in the NNM or on any
national securities exchange, the closing bid price of the Common Stock on the
date in question, as reported by The Nasdaq Small Cap Market (or an equivalent
generally accepted reporting service if quotations are not reported on The
Nasdaq Small Cap Market). The closing price referred to in clause (i) above
shall be the last reported
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sale price or, in the case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices, in either case in the NNM
or on the principal stock exchange on which the Common Stock is then listed. For
purposes of clause (ii) above, if trading in the Common Stock is not reported by
The Nasdaq Small Cap Market, the bid price referred to in said clause shall be
the highest bid price as reported in the Nasdaq Electronic Bulletin Board or, if
not reported thereon, as reported in the "pink sheets" published by National
Quotation Bureau, Incorporated, and, if such Preferred Stock is not so reported,
shall be the price of a share of Common Stock determined by the Company's Board
of Directors in good faith.
3.2 No Adjustments to Exercise Price. No adjustment in the
Exercise Price shall be required if such adjustment is less than $.05; provided,
however, that any adjustments which by reason of this Article 3 are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Article 3 shall be made to the nearest
cent or to the nearest one hundredth of a share, as the case may be.
3.3 Deferral of Adjustments to Exercise Price. In any case in
which this Article 3 shall require that an adjustment in the Exercise Price be
made effective as of a record date for a specified event, the Company may elect
to defer, until the occurrence of such event, issuing to the holders of the
Warrants, if any holder has exercised a Warrant after such record date, the
shares of Common Stock, if any, issuable upon such exercise over and above the
shares of Common Stock, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such exercising holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
3.4 Adjustment to Number of Shares. Upon each adjustment of
the Exercise Price as a result of the calculations made in Section 3.1(b)
hereof, the Warrants shall thereafter evidence the right to purchase, at the
adjusted Exercise Price, that number of shares (calculated to the nearest
hundredth) obtained by dividing (A) the product obtained by multiplying the
number of shares purchasable upon exercise of the Warrants prior to adjustment
of the number of shares by the Exercise Price in effect prior to adjustment of
the Exercise Price by (B) the Exercise Price in effect after such adjustment of
the Exercise Price.
3.5 Reorganizations. In case of any capital reorganization,
other than in the cases referred to in Section 3.1 hereof, or the consolidation
or merger of the Company with or into another corporation (other than a merger
or consolidation in which the Company is the continuing corporation and which
does not result in any reclassification of the outstanding shares of Common
Stock or the conversion of such outstanding shares of Common Stock into shares
of other stock or other securities or property), or in the case of any sale,
lease or conveyance to another corporation of the property and assets of any
nature of the Company as an entirety or substantially as an entirety (such
actions being hereinafter collectively referred to as "Reorganizations"), there
shall thereafter be deliverable upon exercise of any Warrant (in lieu of the
number of shares of Common Stock theretofore deliverable) the number of shares
of stock or other securities or property to which a holder of the number of
shares of Common Stock which would otherwise have been deliverable upon the
exercise of such Warrant would have been entitled upon such Reorganization if
such Warrant had been exercised in full immediately prior to such
Reorganization. In case of any Reorganization, appropriate adjustment, as
determined in good faith by the Board of Directors of the Company, shall be made
in the application of the provisions herein set forth with respect to the rights
and interests of Warrant holders so that the provisions set forth herein shall
thereafter be applicable, as nearly as possible, in relation to any shares or
other property thereafter deliverable upon exercise of Warrants. Any such
adjustment shall be made by and set forth in
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a notice to the holders of the Warrant Certificates and shall for all purposes
hereof conclusively be deemed to be an appropriate adjustment. The Company shall
not effect any such Reorganization unless upon or prior to the consummation
thereof the successor corporation, or if the Company shall be the surviving
corporation in any such Reorganization and is not the issuer of the shares of
stock or other securities or property to be delivered to holders of shares of
the Common Stock outstanding at the effective time thereof, then such issuer,
shall assume by written instrument the obligation to deliver to the registered
holder of any Warrant Certificate such shares of stock, securities, cash or
other property as such holder shall be entitled to purchase in accordance with
the foregoing provisions. In the event of sale, lease or conveyance or other
transfer of all or substantially all of the assets of the Company as part of a
plan for liquidation of the Company, all rights to exercise any Warrant shall
terminate 30 days after the Company gives written notice to each registered
holder of a Warrant Certificate that such sale or conveyance or other transfer
has been consummated.
3.6 Reclassifications. In case of any reclassification or
change of the shares of Common Stock issuable upon exercise of the Warrants
(other than a change in par value or from no par value to a specified par value,
or as a result of a subdivision or combination, but including any change in the
shares into two or more classes or series of shares), or in case of any
consolidation or merger of another corporation into the Company in which the
Company is the continuing corporation and in which there is a reclassification
or change (including a change to the right to receive cash or other property) of
the shares of Common Stock (other than a change in par value, or from no par
value to a specified par value, or as a result of a subdivision or combination,
but including any change in the shares into two or more classes or series of
shares), the holders of the Warrants shall have the right thereafter to receive
upon exercise of the Warrants solely the kind and amount of shares of stock and
other securities, property, cash, or any combination thereof receivable upon
such reclassification, change, consolidation or merger by a holder of the number
of shares of Common Stock for which the Warrants might have been exercised
immediately prior to such reclassification, change, consolidation or merger.
Thereafter, appropriate provision shall be made for adjustments which shall be
as nearly equivalent as practicable to the adjustments in Article 3. The above
provisions of this Section 3.6 shall similarly apply to successive
reclassifications and changes of shares of Common Stock.
3.7 Verification of Computations. Whenever the exercise price
is adjusted as provided in this Article 3, the Company will promptly obtain a
certificate of its Chief Financial Officer setting forth the exercise price as
so adjusted and a brief statement of the facts accounting for such adjustment,
and will make available a brief summary thereof to the holders of the Warrant
Certificates, at their addresses listed on the register maintained for that
purpose by the Company (which summary may be included in any notice of
adjustment required by Section 3.1 hereof).
3.8 Notice of Certain Actions. In case at any time the Company
shall propose:
(a) to pay any dividend or make any distribution on
shares of Common Stock in shares of Common Stock or make any
other distribution (other than regularly scheduled cash
dividends which are not in a greater amount per share than the
most recent such cash dividend) to all holders of Common
Stock; or
(b) to issue any rights, warrants or other securities
to all holders of Common Stock entitling them to purchase any
additional shares of Common Stock or any other rights,
warrants or other securities; or
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(c) to effect any consolidation, merger, sale, lease,
or conveyance of property, described in Section 3.5, or any
reclassification or change of outstanding shares of Common
Stock described in Section 3.6; or
(d) to effect any liquidation, dissolution or
winding-up of the Company; or
(e) to take any other action which would cause an
adjustment to the Exercise Price;
then, in each such case, the Company shall cause notice of such proposed action
to be mailed to the holders of the Warrant Certificates. Such notice shall
specify the date on which the books of the Company shall close, or a record
shall be taken, for determining holders of Common Stock entitled to receive such
stock dividend or other distribution or such rights or warrants, or the date on
which such reclassification, change, consolidation, merger, sale, lease, other
disposition, liquidation, dissolution, winding up or exchange or other action
shall take place or commence, as the case may be, and the date as of which it is
expected that holders of record of Common Stock shall be entitled to receive
securities or other property deliverable upon such action, if any such date has
been fixed. Such notice shall be mailed, in the case of any action covered by
Subsection 3.8(a) or 3.8(b) above, at least 15 days prior to the record date for
determining holders of the Common Stock for purposes of receiving such payment
or offer; in the case of any action covered by Subsection 3.8(c) or 3.8(d)
above, at least 15 days prior to the earlier of the date upon which such action
is to take place or any record date to determine holders of Common Stock
entitled to receive such securities or other property; and in the case of any
action covered by Subsection 3.8(e) above, no more than 15 days after such
action. Notwithstanding anything to the contrary contained in this Warrant
Agreement, the failure of the Company to provide the notice(s) required by this
Section 3.8 shall not serve to invalidate the action taken.
3.9 Notice of Adjustments. Whenever any adjustment is made
pursuant to this Article 3, the Company shall cause written notice of such
adjustment to be sent by registered mail, postage prepaid to the holders of
Warrant Certificates within 15 days thereafter, such notice to include in
reasonable detail (i) the events precipitating the adjustment, (ii) the
computation of any adjustments, and (iii) the Exercise Price, and the number of
shares or the securities or other property purchasable upon exercise of each
Warrant after giving effect to such adjustment.
3.10 Warrant Certificate Amendments. Irrespective of any
adjustments pursuant to this Article 3, Warrant Certificates theretofore or
thereafter issued need not be amended or replaced but certificates thereafter
issued shall bear an appropriate legend or other notice of any adjustments.
3.11 Fractional Shares. The Company shall not be required upon
the exercise of any Warrant to issue fractional shares of Common Stock which may
result from adjustments in accordance with this Article 3 to the Exercise Price
or number of shares of Common Stock purchasable under each Warrant. If more than
one Warrant is exercised at one time by the same registered holder, the number
of full shares of Common Stock which shall be deliverable shall be computed
based on the number of shares deliverable in exchange for the aggregate number
of Warrants exercised. With respect to any final fraction of a share called for
upon the exercise of any Warrant or Warrants, the Company shall pay a cash
adjustment in respect of such final fraction in an amount equal to the same
fraction of the Current Market Price of a share of Common Stock on the day
before the receipt of the exercise of the Warrants.
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ARTICLE 4
OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS OF WARRANT CERTIFICATES
4.1 Rights of Warrant Holders. No Warrant Certificate shall
entitle the registered holder thereof to any of the rights of a shareholder of
the Company, including, without limitation, the right to vote, to receive
dividends and other distributions, or to receive any notice of, or to attend,
meetings of shareholders or any other proceedings of the Company.
4.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates.
If any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the
Company shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated Warrant Certificate, or in lieu of or in
substitution for a lost, stolen or destroyed Warrant Certificate, a new Warrant
Certificate for the number of Warrants represented by the Warrant Certificate so
mutilated, lost, stolen or destroyed but only upon receipt of evidence of such
loss, theft or destruction of such Warrant Certificate, and of the ownership
thereof, and indemnity, if requested, all satisfactory to the Company.
Applicants for such substitute Warrant Certificates shall also comply with such
other reasonable regulations and pay such other reasonable charges incidental
thereto as the Company may prescribe. Any such new Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall be at
any time enforceable by anyone.
ARTICLE 5
SPLIT UP, COMBINATION, EXCHANGE, TRANSFER
AND CANCELLATION OF WARRANT CERTIFICATES
5.1 Split Up, Combination, Exchange and Transfer of Warrant
Certificates. Prior to the Exercise Deadline, Warrant Certificates, subject to
the provisions of Section 5.2, may be split up, combined or exchanged for other
Warrant Certificates representing a like aggregate number of Warrants or may be
transferred in whole or in part. Any holder desiring to split up, combine or
exchange a Warrant Certificate or Warrant Certificates shall make such request
in writing delivered to the Company arid shall surrender the Warrant Certificate
or Warrant Certificates so to be split up, combined or exchanged at said office.
Subject to any applicable laws, rules or regulations restricting
transferability, any restriction on transferability that may appear on a Warrant
Certificate in accordance with the terms hereof, or any "stop-transfer"
instructions the Company may give to implement any such restrictions (which
instructions the Company is expressly authorized to give), transfer of
outstanding Warrant Certificates may be effected from time to time upon the
books of the Company, upon a surrender of the Warrant Certificate to the
Company, with the assignment form set forth in the Warrant Certificate duly
executed. Upon any such surrender for split up, combination, exchange or
transfer, the Company shall execute and deliver to the person entitled thereto a
Warrant Certificate or Warrant Certificates, as the case may be, as so
requested. The Company may require the holder to pay a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any split
up, combination, exchange or transfer of Warrant Certificates prior to the
issuance of any new Warrant Certificate.
5.2 Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered upon the exercise of Warrants or for split up,
combination, exchange or transfer, or purchased or otherwise acquired by the
Company, shall be canceled and shall not be reissued by the Company; and, except
as provided (i) in Section 2.5, in case of the exercise of less than all of the
Warrants evidenced by a Warrant Certificate, or (ii) in Section 5.1, in case of
a split up, combination, exchange or transfer of the
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Warrants evidenced by a Warrant Certificate, or (iii) as provided for in Section
4.2, no Warrant Certificate shall be issued hereunder in lieu of such canceled
Warrant Certificate.
5.3 Agreement of Warrant Certificate Holders. Every holder of
a Warrant Certificate by accepting the same consents and agrees with the Company
and with every other holder of a Warrant Certificate that:
(a) transfer of the Warrant Certificates shall be
registered on the books of the Company maintained for that purpose, duly
endorsed or accompanied by a proper instrument of transfer; and
(b) prior to due presentment for registration of
transfer, the Company may deem and treat the person in whose name the Warrant
Certificate is registered as the absolute owner thereof and of the Warrants
evidenced thereby (notwithstanding any notations of ownership or writing on the
Warrant Certificates made by anyone other than the Company) for all purposes
whatsoever, and the Company shall not be affected by any notice to the contrary.
ARTICLE 6
REGISTRATION RIGHTS
6.1 Piggy-Back Registration Rights. If at any time prior to
the Exercise Deadline (i) the Company proposes to register any of its securities
under the Securities Act (other than in connection with a merger, acquisition or
exchange offer or pursuant to Form S-8 or successor form), it will give written
notice by registered mail, at least thirty (30) days prior to the filing of the
registration statement to each holder of record of the Warrants (the "Registered
Holders") of its intention to do so. Upon the written request of any Registered
Holder, given within fifteen (15) days after receipt of any such notice of his,
her, its or their desire to include any Warrants and underlying Warrant Shares
in such proposed registration statement, the Company shall afford such
Registered Holder(s) the opportunity to have such Registered Holder's
unexercised Warrants and underlying Warrant Shares registered under such
registration. The "piggyback" registration rights described in this Article 6
shall terminate on the earlier of the Exercise Deadline or at such time as all
Warrants have been exercised in full; provided, however, that a Registered
Holder shall only be entitled to register this Warrant and Warrant Shares.
Notwithstanding anything to the contrary contained in
the provisions of this Section 6.1, the Company shall have the right at any time
after it shall have given written notice pursuant to this Section 6.1
(irrespective of whether a written request for inclusion of any securities shall
have been made) to elect not to file any such proposed registration statement,
or to withdraw the same after the filing but prior to the effective date
thereof.
6.2 Indemnification. The Company shall indemnify and hold
harmless each Registered Holder who registers Warrants and Warrant Shares
pursuant to this Article 6, from and against any and all losses, claims, damages
and liabilities caused by any untrue statement of a material fact contained in
any registration statement filed by the Company under the Securities Act in
accordance with this Article 6, any post-effective amendment to such
registration statement, or any prospectus included therein, or caused by any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission based upon information furnished or required to be furnished in
writing to the Company by a Registered Holder (or the authorized representatives
or agents of the Registered Holder) expressly for use therein, which
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indemnification shall include each person, if any, who controls the Registered
Holder within the meaning of the Securities Act and each officer, director,
employee and agent of the Registered Holder; provided, however, that the
indemnification in this Section 6.2 with respect to any prospectus shall not
inure to the benefit of the Registered Holder (or to the benefit of any person
controlling the Registered Holder) on account of any such loss, claim, damage or
liability arising from the sale of Warrants or Warrant Shares by such Registered
Holder, if a copy of a subsequent prospectus correcting the untrue statement or
omission in such earlier prospectus was provided to such Registered Holder by
the Company prior to the subject sale and the subsequent prospectus was not
delivered or sent by the Registered Holder to the purchaser of such securities
prior to such sale; and provided further, that the Company shall not be
obligated to so indemnify the Registered Holder or any other person referred to
above unless the Registered Holder or other person, as the case may be, shall at
the same time indemnify the Company, its directors, each officer signing the
registration statement and each person, if any, who controls the Company within
the meaning of the Securities Act, from and against any and all losses, claims,
damages and liabilities caused by any untrue statement of a material fact
contained in any registration statement or any prospectus required to be filed
or furnished in connection with such public offering or caused any omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or omission based upon
information furnished in writing to the Company by the Registered Holder
expressly for use therein.
If for any reason the indemnification provided for in
the preceding subparagraph is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss, claim, damage,
liability or expense referred to therein, then the indemnifying party, in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations.
6.3 Offering Expenses. All expenses, filing fees and other
costs incurred by the Company in connection with any registration of securities
pursuant to this Article 6 (exclusive of underwriting discounts and selling
commissions applicable to any sale of registered securities and any fees and
costs of legal counsel engaged by the Registered Holder(s) shall be borne by the
Company.
6.4 Delivery of Prospectus. In the case of each registration
effected by the Company pursuant to the provisions of this Article 6, the
Company will (i) furnish to the Registered Holders of the Warrants and Warrant
Shares registered such numbers of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as such Registered Holders may reasonably request
in order to facilitate the disposition of the Warrants and Warrant Shares so
registered, and (ii) notify each Registered Holder of securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
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ARTICLE 7
OTHER MATTERS
7.1 Payment of Taxes and Charges Any transfer taxes due in
connection with the issuance of Warrant Certificates or certificates for shares
of Common Stock in any name other than that of the registered holder of the
Warrant Certificate surrendered shall be paid by such registered holder; and, in
such case, the Company shall not be required to issue or deliver any Warrant
Certificate or certificate for shares of Common Stock until such taxes shall
have been paid or it has been established to the Company's satisfaction that no
tax is due.
7.2 Assignment. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrantholder shall bind
and inure to the benefit of their respective successors and assigns.
7.3 Successor to Company. Except as provided in the last
sentence 4.5, the Company will not merge or consolidate with or into any other
corporation or sell or otherwise transfer its property, assets and business
substantially as an entirety to a successor corporation, unless the corporation
resulting from such merger, consolidation, sale or transfer (if not the Company)
shall expressly assume, by supplemental agreement, the due and punctual
performance and observance of each and every covenant and condition of this
Agreement to be performed and observed by the Company.
7.4 Notices. Any notice or demand required by this Agreement
to be given or made by the registered holder of any Warrant Certificate to or on
the Company shall be sufficiently given or made if sent by first-class or
registered mail, postage prepaid, addressed (until another address is given in
writing by the Company to each registered holder of a Warrant Certificate) as
follows:
CinemaStar Luxury Theaters, Inc.
431 College Boulevard
Oceanside, California 92057
Attention: President
Any notice or demand required by this Agreement to be given or made by the
Company to or on the registered holder of any Warrant Certificate shall be
sufficiently given or made, whether or not such holder receives the notice, if
sent by first-class or registered mail, postage prepaid, addressed to such
registered holder at his last address as shown on the books of the Company.
Otherwise such notice or demand shall be deemed given when received by the party
entitled thereto.
7.5 Defects in Notice. Failure to file any certificate or
notice or to mail any notice, or any defect in any certificate or notice
pursuant to this Agreement, shall not affect in any way the rights of any
registered holder of a Warrant Certificate or the legality or validity of any
adjustment made pursuant to Article 3 hereof, or any transaction giving rise to
any such adjustment, or the legality or validity of any action taken or to be
taken by the Company.
7.6 Governing Law. The laws of the State of California shall
govern this Warrant Agreement and the Warrant Certificates.
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7.7 Standing. Nothing in this Agreement expressed and nothing
that may be implied from any of the provisions hereof is intended, or shall be
construed, to confer upon, or give to, any person or corporation other than the
Company, and the registered holders of the Warrant Certificates any right,
remedy or claim under or by reason of this Agreement or of any covenant,
condition, stipulation, promise or agreement contained herein; and all
covenants, conditions, stipulations, promises and agreements contained in this
Agreement shall be for the sole and exclusive benefit of the Company and its
successors and assigns, and the registered holders of the Warrant Certificates.
7.8 Headings. The descriptive headings of the articles and
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
7.9 Counterparts. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original;
bat such counterparts shall together constitute but one and the same instrument.
7.10 Amendment Waiver. Any provision of this Agreement may be
waived or amended by a written instrument signed by the Company and the
registered holders of Warrant Certificates representing a majority of the
Warrant Shares then unissued.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the day and year first above written.
CINEMASTAR LUXURY THEATERS, INC.
By: /s/ ALAN GROSSBERG
------------------------------------------
Alan Grossberg
Executive Vice President
WARRANTHOLDER
SWAN ALLEY (NOMINEES) LIMITED
By: /s/ ANTON McGOVERN
-----------------------------------------
Name:
Title:
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THESE WARRANTS AND THE SHARES OF COMMON STOCK OFFERED UNDERLYING THESE WARRANTS
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). UNTIL THE FORTY-FIFTH (45TH) DAY AFTER THE SALE OF SUCH
WARRANTS IS COMPLETED, NONE OF SUCH WARRANTS OR UNDERLYING SHARES MAY BE
OFFERED, SOLD OR TRANSFERRED (INCLUDING ANY INTERESTS THEREIN) IN THE UNITED
STATES OR TO A "U.S. PERSON" (AS DEFINED IN REGISTRATION S PROMULGATED UNDER THE
ACT) OR FOR THE ACCOUNT AND BENEFIT OF U.S. PERSON, EXCEPT AS PROVIDED IN
REGULATION S PROMULGATED UNDER THE ACT. ANY RESALE THEREAFTER MUST BE PURSUANT
TO REGISTRATION UNDER THE ACT OR AN AVAILABLE EXEMPTION. FURTHER, THE WARRANTS
MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSONS, UNLESS REGISTERED
UNDER THE ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
No. 1
Certificate for 17,142 Warrants
NOT EXERCISABLE AFTER 5:00 P.M., LOS ANGELES TIME, ON AUGUST 6, 2001
CINEMASTAR LUXURY THEATERS, INC.
COMMON STOCK PURCHASE WARRANT CERTIFICATE
THIS CERTIFIES that: SWAN ALLEY (NOMINEES) LIMITED
or registered assigns is the registered holder (the "Registered Holder") of the
number of Warrants set forth above, each of which represents the right to
purchase one fully paid and nonassessable share of Common Stock (the "Common
Stock"), of CinemaStar Luxury Theaters, Inc., a California corporation (the
"Company"), at the initial exercise price (the "Exercise Price") of $7.00, at
any time, but not after the Expiration Date hereinafter referred to, by
surrendering this Warrant Certificate, with the form of election to purchase set
forth hereon duly executed at the principal off ice of the Company, and by
paying in full the Exercise Price, plus transfer taxes, if any. Payment of the
Exercise Price shall be made in United States currency, by certified check or
money order payable to the Company. No Warrant may be exercised after 5:00 P.M.,
Los Angeles time, on the expiration date (the "Expiration Date") which will be
August 6, 2001. All warrants evidenced hereby shall thereafter become void.
Upon the exercise of less than all of the Warrants evidenced by this
Warrant Certificate, there shall be issued to the Registered Holder a new
Warrant Certificate in respect of the Warrants not exercised.
Prior to the Expiration Date, the Registered Holder shall be entitled
to exchange this Warrant Certificate, with or without other Warrant
Certificates, for another Warrant Certificate or Warrant
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Certificates of the same aggregate number of Warrants, upon surrender of this
Warrant Certificate to the Company.
Upon certain events provided for in the Warrant Agreement, the
Exercise Price, the number of shares of Common Stock issuable upon the exercise
of each Warrant are required to be adjusted.
No fractional shares will be issued upon the exercise of Warrants. As
to any final fraction of a share which the registered holder of one or more
Warrant Certificates, the rights under which are exercised in the same
transaction, would otherwise be entitled to purchase upon such exercise, the
Company shall pay the cash value thereof determined as provided in the Warrant
Agreement.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement and is subject to the terms and provisions contained in said
Warrant Agreement, to all of which terms and provisions the Registered Holder
consents by acceptance hereof.
The Registered Holder of this Warrant shall be entitled to piggy-back
registration rights in certain circumstances described in the Warrant Agreement.
This Warrant Certificate shall not entitle the Registered Holder to
any of the rights of a shareholder of the Company, including, without
limitation, the right to vote, to receive dividends and other distributions, or
to attend or receive any notice of meetings of shareholders or any other
proceedings of the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be duly executed.
CINEMASTAR LUXURY THEATERS, INC.
By:__________________________________________
Alan Grossberg
Executive Vice President
By:__________________________________________
Jon Meloan
Secretary
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[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise ___________ of
the Warrants represented by this Warrant Certificate and to purchase the shares
of Common Stock issuable upon the exercise of said Warrants, and requests that
certificates for such shares be issued and delivered as follows:
This Warrant may not be exercised (i) by or on behalf of a person who
is a U.S. person (as defined in Regulation S promulgated under the Securities
Act of 1933, as amended (the "Securities Act")), (ii) if a U.S. person has any
interest in the Warrants being exercised or the underlying securities to be
issued upon exercise, or (iii) by any person if exercised within the United
States or if the Warrant Shares are to be delivered within the United States. If
the above cannot be complied with, then the Warrant can be exercised only if a
written opinion of counsel, the form and substance of which is acceptable to the
Company, is delivered to the Company prior to exercise to the Warrants being
exercised, and the underlying securities delivered upon exercise have been
registered under the Securities Act, or the securities are exempt from
registration thereunder.
ISSUE AND DELIVER TO:__________________________________________________________
(NAME)
_______________________________________________________________________________
(PLEASE PRINT ADDRESS, WHICH MUST BE OUTSIDE THE UNITED STATES)
_______________________________________________________________________________
(SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER)
If the number of Warrants hereby exercised is less than all the
Warrants represented by this Warrant Certificate, the undersigned requests that
a new Warrant Certificate representing the number of full Warrants not exercised
be issued and delivered as set forth below.
In full payment of the purchase price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
$________ by certified check or money order payable to the order of the Company
in United States currency.
Dated:____________________
__________________________ _____________________________________________
(Insert Social Security or (Signature of registered holder)
other identifying number(s)
of holder(s)) _____________________________________________
(Signature of registered holder, if co-owned)
NOTE: Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.
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[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
represented by the within Warrant Certificate, with respect to the number of
warrants set forth below:
Name of Assignee Address No. of Warrants
and does hereby irrevocably constitute and appoint ___________________ to make
such transfer on the books of CinemaStar Luxury Theaters, Inc. maintained for
that purpose, with full power of substitution in the premises.
Dated: ______________, 19____
_____________________________ _____________________________________________
(Insert Social Security or (Signature of Assignee)
other identifying number(s)
of holder(s)) _____________________________________________
(Signature of Assignee if co-owned)
NOTE: Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.
Signature(s) Guaranteed:
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