Contract
Exhibit 10.18
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE SOLD, OFFERED
FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE
PROVISIONS OF THE SECURITIES ACT OR AN OPINION OF COUNSEL IS OBTAINED STATING THAT SUCH DISPOSITION
IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
February 4, 2008
KONA GRILL, INC.
Warrant for the Purchase of Shares of Common Stock
For value received, Xxxxxxx X. Xxxxxx, his successors or assigns (“Holder”), is
entitled to purchase from Kona Grill, Inc., a Delaware corporation (the “Company”), up to 100,000
fully paid and nonassessable shares of the Company’s Common Stock, $.01 par value per share (the
“Common Stock”) at the price of $5.00 per share, subject to adjustments as noted below (the
“Exercise Price”). This Warrant was transferred from that certain Warrant issued to Kona MN, LLC
for the purchase of 200,000 shares of Common Stock, which amended and restated that certain Warrant
issued by the Company on July 23, 2004.
The Holder agrees with the Company that this Warrant is issued, and all the rights hereunder
shall be held, subject to all of the conditions, limitations and provisions set forth herein.
X = | Y (A-B) 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)
A = the fair market value of one share of the Company’s Common Stock (at the
date of such calculation)
B = Exercise Price (as adjusted to the date of such calculation)
(a) If the Common Stock is listed on a national securities exchange or admitted to unlisted
trading privileges on such exchange or listed for trading on the NASDAQ system, the Fair Market
Value shall be the last reported sale price of the security on such exchange or system on the last
business day prior to the Value Date or if no such sale is made on such day, the average of the
closing bid and asked prices for such day on such exchange or system; or
(b) If the Common Stock is not so listed or so admitted to unlisted trading privileges, the
Fair Market Value shall be the mean of the last reported bid and asked prices reported by the
National Quotation Bureau, Inc. on the last business day prior to the Value Date.
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8. Adjustments.
8.1 Adjustment for Recapitalization. If the Company shall at any time after the date
of this Warrant subdivide its outstanding shares of Common Stock (or
Other Securities at the time
receivable upon the exercise of the Warrant) by recapitalization, reclassification or split-up
thereof, or if the Company shall declare a stock dividend or distribute shares of Common Stock to
its shareholders, the number of shares of Common Stock (or Other Securities) subject to this
Warrant immediately prior to such subdivision shall be proportionately increased, and if the
Company shall at any time after the date of this Warrant combine the outstanding shares of Common
Stock by recapitalization, reclassification or combination thereof, the number of shares of Common
Stock subject to this Warrant immediately prior to such combination shall be proportionately
decreased. Any such adjustment and adjustment to the Exercise Price pursuant to this Section
8.1 shall be effective at the close of business on the effective date of such subdivision or
combination or if any adjustment is the result of a stock dividend or distribution then the
effective date for such adjustment based thereon shall be the record date therefor.
8.2 [Intentionally Omitted]
8.3 Adjustment in number of shares of Common Stock. Upon each adjustment of the
Exercise Price pursuant to Section 8.1, the Holder shall thereafter be entitled to purchase, at the
Exercise Price resulting from such adjustment, the number of shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing the product thereof by the
Exercise Price resulting from such adjustment.
8.4 Adjustment for Reorganization, Consolidation, Merger, Etc. In case of any
reorganization of the Company (or any other corporation, the securities of which are at the time
receivable on the exercise of this Warrant) after the date of this Warrant or in case after such
date the Company (or any such other corporation) shall consolidate with or merge into another
corporation or convey all or substantially all of its assets to another corporation, then, and in
each such case, the Holder of this Warrant upon the exercise thereof as provided in Section
1 at any time after the consummation of such reorganization, consolidation, merger or
conveyance, shall be entitled to receive, in lieu of the securities and property receivable upon
the exercise of this Warrant prior to such consummation, the securities or property to which such
Holder would have been entitled upon such consummation if such Holder had exercised this Warrant
immediately prior thereto; in each such case, the terms of this Warrant shall be applicable to the
securities or property receivable upon the exercise of this Warrant after such consummation.
8.5 Certificate as to Adjustments. The adjustments provided in this Section 8
shall be interpreted and applied by the Company in such a fashion so as to reasonably preserve the
applicability and benefits of this Warrant (but not to increase or diminish the benefits
hereunder). In each case of an adjustment in the number of shares of Common Stock receivable on
the exercise of the Warrant, the Company at its expense will promptly compute such adjustment in
accordance with the terms of the Warrant and prepare a certificate executed by two executive
officers of the Company setting forth such adjustment and showing in detail the facts upon which
such adjustment is based. The Company will forthwith mail a copy of each such certificate to each
Holder.
8.6 Notices of Record Date, Etc. In the event that:
(a) the Company shall declare any dividend or other distribution to the holders of Common
Stock, or authorizes the granting to Common Stock holders of any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities; or
(b) the Company authorizes any capital reorganization of the Company, any reclassification of
the capital stock of the Company, any consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the assets of the Company to another
corporation or entity; or
(c) the Company authorizes any voluntary or involuntary dissolution, liquidation or winding up
of the Company; or
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(d) the Company shall have filed, or shall have entered into an understanding with an
underwriter to prepare, a registration statement that would, once declared effective, cause
termination of this Warrant in accordance with clause (ii) of Section 1,
then, and in each such case, the Company shall mail or cause to be mailed to the holder of this
Warrant at the time outstanding a notice specifying, as the case may be, (i) the date on which a
record is to be taken for the purpose of such dividend, distribution or right, and stating the
amount and character of such dividend, distribution or right, or (ii) the date on which such
reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding up is to take place, and the time, if any is to be fixed, as to which the holders of record
of Common Stock (or such other securities at the time receivable upon the exercise of the Warrant)
shall be entitled to exchange their shares of Common Stock (or such Other Securities) for
securities or other property deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding up. Such notice shall be mailed at least
20 days prior to the date therein specified.
8.7 No Impairment. The Company will not, by any voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or performed hereunder by
the Company, but will at all times in good faith assist in the carrying out of all the provisions
of this Section 8 and in the taking of all such action as may be necessary or appropriate
in order to protect the rights of the Holder of this Warrant against impairment.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED, OR OTHERWISE
DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THAT
ACT OR UNLESS AN OPINION OF COUNSEL TO THE CORPORATION IS OBTAINED
STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE
EXEMPTION FROM SUCH REGISTRATION.
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KONA GRILL, INC. | ||||||
By: | /s/ Xxxx Xxxxxxx | |||||
Xxxx Xxxxxxx, Chief Financial Officer | ||||||
Address: | Kona Grill, Inc. | |||||
0000 X. Xxxxxxxxx Xxxx, | ||||||
Xxxxx 000 | ||||||
Xxxxxxxxxx, Xxxxxxx 00000 |
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WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to (i) exercise the within Warrant to purchase
shares of the Common Stock of Kona Grill, Inc., Delaware corporation, pursuant to the
provisions of Section 1 of the attached Warrant, and hereby makes payment of $ in
payment therefor, or (ii) exercise this Warrant for the purchase of shares of
Stock, pursuant to the provisions of Section 2 of the attached Warrant. The undersigned’s
execution of this form constitutes the undersigned’s agreement to all the terms of the Warrant and
to comply therewith.
Signature | ||||||
Print Name: | ||||||
Signature, if jointly held | ||||||
Print Name: | ||||||
Date |
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ASSIGNMENT FORM
FOR
VALUE
RECEIVED
(“Assignor”) hereby sells, assigns and
transfers unto
(“Assignee”) all of Assignor’s right, title
and interest in, to and under Warrant No. W-
_____
issued by
, dated
.
DATED:
ASSIGNOR: | ||
Signature | ||
Print Name: | ||
Signature, if jointly held | ||
Print Name: | ||
ASSIGNEE: |
The undersigned agrees to all of the terms of the Warrant and to comply therewith.
Signature | ||
Print Name: | ||
Signature, if jointly held | ||
Print Name: |
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