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Exhibit 10.34
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH WARRANTS AND SHARES MAY NOT BE
SOLD, OFFERED FOR SALE, TRANSFERRED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH SECURITIES UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
CINEMASTAR LUXURY THEATERS, INC.
WARRANT
DATED: February 12, 1996
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Holder: The Boston Group, L.P.
Number of Warrants: 400,000
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THIS CERTIFIES THAT Holder is the owner of the number of
Warrants set forth above of CinemaStar Luxury Theaters, Inc., a California
corporation (hereinafter called the "Company"). Each Warrant entitles the
registered holder to purchase for $6.50 (as adjusted, the "Exercise Price") one
share of Common Stock of the Company ("Common Stock").
1. Right to Exercise Warrants. The rights represented by this
Warrant may be exercised at the Holder's option at any time commencing six (6)
months from the date of this Warrant (the "Exercise Date"), and terminating at
2:00 p.m., Los Angeles time, forty-eight (48) months after the Exercise Date.
2. Exercise of Warrants. Subject to the other provisions of
this Warrant, the rights represented by this Warrant may be exercised by (i)
surrender of this Warrant (with the purchase form at the end hereof properly
executed) at the principal executive office of the Company (or such other office
or agency of the Company as it may designate by notice in writing to Holder at
the address of Holder appearing on the books of the Company); and (ii) payment
to the Company of the exercise price for the number of shares specified in the
above-mentioned purchase form together with applicable stock transfer taxes, if
any. This Warrant shall be deemed to have been exercised
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immediately prior to the close of business on the date the Warrant is
surrendered and payment is made in accordance with the foregoing provisions of
this Section 3, and the person or persons in whose name or names the
certificates for shares of Common Stock shall be issuable upon such exercise
shall become the holder or holders of record of such Common Stock at that time
and date. The certificates for the Common Stock so purchased shall be delivered
to Holder within a reasonable time, not exceeding ten (10) business days, after
the rights represented by this Warrant shall have been so exercised, and shall
bear a legend substantially similar to the following restrictive legend:
"This security has not been registered under the Securities
Act of 1933 and may not be sold or offered for sale unless
registered under said Act and any applicable state securities
laws or unless the Company has received an opinion of counsel
satisfactory to the Company that such registration is not
required."
3. Assignment. This Warrant may be transferred, sold, assigned
or hypothecated, only pursuant to a valid and effective registration statement
or if the Company has received from counsel to the Company a written opinion, in
a form reasonably acceptable to the Company, to the effect that registration of
the Warrant or the Common Stock underlying the Warrant is not necessary in
connection with such transfer, sale, assignment or hypothecation. Any such
assignment shall be effected by Holder by (i) executing the form of assignment
at the end hereof; (ii) surrendering the Warrant for cancellation to the
Company, accompanied by the opinion of counsel to the Company referred to above;
and (iii) delivery to the Company of a statement by the transferee Holder (in a
form acceptable to the Company and its counsel) that such Warrant is being
acquired by such Holder for investment and not with a view to its distribution
or resale; whereupon the Company shall issue, in the name or names specified by
Holder (including Holder) new Warrants representing in the aggregate rights to
purchase the same number of Shares as are purchasable under the Warrant
surrendered. The term "Holder" shall be deemed to include any person to whom
this Warrant is transferred in accordance with the terms herein.
4. Registration Rights. The Holder shall be entitled to
certain demand and piggy-back registration rights with respect to this Warrant
and the Warrant Shares pursuant to the provisions of Section 8 of that certain
Consulting Agreement, dated as of February 9, 1996, between Holder and the
Company (the "Agreement"). The registration rights granted with respect to this
Warrant and the Warrant Shares shall be subject to the limitations and
restrictions set forth in the Agreement.
5. Common Stock. The Company covenants and agrees that all
shares of Common Stock which may be issued upon exercise hereof will, upon
issuance, be duly and validly issued, fully paid and non-assessable and no
personal liability will attach to
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the holder thereof. The Company further covenants and agrees that, during the
periods within which this Warrant may be exercised, the Company will at all
times have authorized and reserved a sufficient number of shares of Common Stock
for issuance upon exercise of this Warrant and all other Warrants.
6. No Stockholder Rights. This Warrant shall not entitle
Holder to any voting rights or other rights as a stockholder of the Company.
7. Adjustment of Rights. In the event that the outstanding
shares of Common Stock of the Company are at any time increased or decreased or
changed into or exchanged for a different number or kind of share or other
security of the Company or of another corporation through reorganization,
merger, consolidation, liquidation, recapitalization, stock split, combination
of shares or stock dividends payable with respect to such Common Stock,
appropriate adjustments in the Exercise Price and the number and kind of such
securities then subject to this Warrant shall be made effective as of the date
of such occurrence so that the position of Holder upon exercise will be the same
as it would have been had he owned immediately prior to the occurrence of such
events the Common Stock subject to this Warrant. Such adjustment shall be made
successively whenever any event listed above shall occur and the Company will
notify Holder of the Warrant of each such adjustment. Any fraction of a share
resulting from any adjustment shall be eliminated and the price per share of the
remaining shares subject to this Warrant adjusted accordingly.
8. Cashless Exercise. Notwithstanding any provisions herein to
the contrary, if the fair market value of one share of Common Stock is greater
than the Exercise Price (at the date of calculation as set forth below), in lieu
of exercising this Warrant for cash, the Holder may elect to receive shares
equal to the value (as determined below) of this Warrant (or the portion thereof
being canceled) by surrender of this Warrant at the principal office of the
Company together with the properly endorsed purchase form and notice of such
election in which event the Company shall issue to the Holder a number of shares
of Common Stock computed using the following formula:
X = Y (A-B)
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A
Where X = the number of shares of Common Stock to be
issued to the Holder
Y = the number of shares of Common Stock
purchasable under the Warrant or, if only a
portion of the Warrant is being exercised,
the portion of the Warrant being canceled (at
the date of such calculation)
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A = the fair market value of one share of the
Common Stock (at the date of such
calculation)
B = Exercise Price (as adjusted to the date of
such calculation)
For purposes of the above calculation, fair market value of one share of Common
Stock shall be determined by the Company's Board of Directors in good faith;
provided, however, that in the event that at the time of any such exercise the
Common Stock (i) is listed on any established stock exchange or a national
market system, including without limitation the National Market System of the
National Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ")
System, the fair market value of a share of common stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such system or exchange (or the exchange with the greatest volume of
trading in common stock) on the last market trading day prior to the day of
determination, as reporting in the Wall Street Journal or such other source as
the Board of Directors of the Company deems reliable or (ii) is not listed on
any established stock exchange or a national market system but is quoted on the
NASDAQ System (but not on the National Market System thereof) or is regularly
quoted by a recognized securities dealer but selling prices are not reported,
the fair market value of a share of common stock shall be the mean between the
bid and asked prices for the common stock on the last market trading day prior
to the day of determination, as reported in the Wall Street Journal or such
other source as the Board of Directors of the Company deems reliable.
9. Notices. Unless applicable law requires a different method
of giving notice, any and all notices, demands or other communications required
or desired to be given hereunder by any party shall be in writing. Assuming that
the contents of a notice meet the requirements of the specific Section of this
Warrant which mandates the giving of that notice, a notice shall be validly
given or made to another party if served either personally or if postage
prepaid, or if transmitted by telegraph, telecopy or other electronic written
transmission device or if sent by overnight courier service, and if addressed to
the applicable party as set forth below. If such notice, demand or other
communication is served personally, service shall be conclusively deemed made at
the time of such personal service. If such notice, demand or other communication
is given by mail, service shall be conclusively deemed given upon the earlier of
receipt or seventy-two (72) hours after the deposit thereof in the United States
mail, postage pre-paid. If such notice, demand or other communication is given
by overnight courier, or electronic transmission, service shall be conclusively
made at the time of confirmation of delivery. The addresses for Holder and the
Company are as follows:
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If to Holder:
The Boston Group, L.P.
1999 Avenue of the Stars
Los Angeles, California 90067
Telecopier No.: 310-226-2796
If to the Company:
CinemaStar Luxury Theaters, Inc.
431 College Boulevard
Oceanside, California 92057
Telecopier No.: (619) 630-8593
Attention: John Ellison, Jr.
Any party hereto may change its or his or its address for the purpose of
receiving notices, demands and other communications as herein provided, by a
written notice given in the aforesaid manner to the other parties hereto.
10. Governing Law. This Warrant shall be governed by and
construed in accordance with the internal laws of California.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officers, and to be dated as of the date set forth
above.
CINEMASTAR LUXURY THEATERS, INC.
By: /s/ John Ellison, Jr.
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Name: John Ellison, Jr.
President
ACKNOWLEDGED, AGREED AND ACCEPTED BY HOLDER:
THE BOSTON GROUP, L.P.
By: /s/ Robert DiMinico
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Name: Robert DiMinico
Chairman
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PURCHASE FORM
(To be signed only upon exercise of Warrant)
The undersigned, the holder of the foregoing Warrant, hereby
irrevocably elects to exercise the purchase rights represented by such Warrant
to exercise ___________ Warrants for, and to the purchase thereunder, __________
shares of Common Stock and herewith makes payment of $____________ thereof, and
requests that the certificates for shares of Common Stock be issued in the
name(s) of, and delivered to _______________ whose address(es) is (are)
_________________________.
Dated:____________, ____
______________________________
______________________________
Address
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TRANSFER FORM
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto _______________ the right to purchase shares of Common Stock
represented by _________________________ Warrants, and appoints
_________________________ attorney to transfer such rights on the books of
_________________________, with full power of substitution in the premises.
Dated:____________, ____
______________________________
Holder
______________________________
Address
In the presence of:
_________________________
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