Form of Warrant
Exhibit
4.10
Form of Warrant
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.
March 6, 2009
KONA GRILL, INC.
Warrant for the Purchase of Shares of Common Stock
No. CW-___
For value received, this Warrant is hereby issued by Kona Grill, Inc., a Delaware corporation
(the “Company”), to
(the “Holder”). Subject to the provisions of
this Warrant, the Company hereby grants to Holder the right to purchase from the Company
( )
fully paid and non-assessable shares of Common Stock, at
a price per share equal to the Exercise Price. The “Exercise Price” shall be equal to
$ . per share.
The term “Common Stock” means the Common Stock, par value $.01 per share, of the
Company as set forth in the Company’s Amended and Restated Certificate of Incorporation, as
amended. The number of shares of Common Stock to be received upon the exercise of this Warrant may
be adjusted from time to time as hereinafter set forth. The shares of Common Stock deliverable
upon such exercise, and as adjusted from time to time, are hereinafter referred to as “Warrant
Stock.” The term “Other Securities” means any other equity or debt securities that may
be issued by the Company in addition thereto or in substitution for the Warrant Stock.
1
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. The
date of this Warrant shall be referred to as the “Base Date”.
1. Exercise of Warrant. Subject to the terms and conditions set forth herein, this
Warrant may be exercised in whole or in part, pursuant to the procedures provided below, at any
time on or before March 6, 2012 (the “Expiration Date”) or, if such day is a day on which
banking institutions in Arizona are authorized by law to close, then on the next succeeding day
that shall not be such a day. To exercise this Warrant the Holder shall present and surrender this
Warrant to the Company at its principal office, with the Warrant Exercise Form attached hereto
duly executed by the Holder and accompanied by payment (either (a) in cash or by check,
payable to the order of the Company, (b) by cancellation by the Holder of indebtedness or other
obligations of the Company to the Holder, or (c) by a combination of (a) or (b)), of the aggregate
Exercise Price for the total aggregate number of shares for which this Warrant is exercised. Upon
receipt by the Company of this Warrant, together with the executed Warrant Exercise Form and
payment of the Exercise Price for the Warrant Stock to be acquired, in proper form for exercise,
and subject to the Holder’s compliance with all requirements of this Warrant for the exercise
hereof, the Holder shall be deemed to be the holder of record of the shares of Common Stock (or
Other Securities) issuable upon such exercise, notwithstanding that the stock transfer books of the
Company shall then be closed or that certificates representing such shares of Common Stock shall
not then be actually delivered to the Holder; provided, however, that no exercise
of this Warrant shall be effective, and the Company shall have no obligation to issue any Common
Stock or Other Securities to the Holder upon any attempted exercise of this Warrant, unless the
Holder shall have first delivered to the Company, in form and substance reasonably satisfactory to
the Company, appropriate representations so as to provide the Company reasonable assurances that
the securities issuable upon exercise may be issued without violation of the registration
requirements of the Securities Act and applicable state securities laws, including without
limitation representations that the exercising Holder is an “accredited investor” as defined in
Regulation D under the Securities Act and that the Holder is familiar with the Company and its
business and financial condition and has had an opportunity to ask questions and receive documents
relating thereto to his reasonable satisfaction.
2. Net Issue 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 Notice of Exercise 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) |
||||
| 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 exercise) | |||||
| A = | the fair market value of one share of the Company’s Common Stock (at the date of such exercise) | |||||
| B = | Exercise Price (as adjusted to the date of such exercise) |
2
3. Reservation of Shares. The Company will at all times reserve for issuance and
delivery upon exercise of this Warrant all shares of Common Stock or other shares of capital stock
of the Company (and Other Securities) from time to time receivable upon exercise of this Warrant.
All such shares (and Other Securities) shall be duly authorized and, when issued upon such
exercise, shall be validly issued, fully paid, and non-assessable and free of all preemptive
rights.
4. Fractional Shares. No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant, but the Company shall pay the Holder an amount
equal to the Fair Market Value (as defined below) of such fractional share of Common Stock in lieu
of each fraction of a share otherwise called for upon any exercise of this Warrant.
5. Fair Market Value. For purposes of this Warrant, the Fair Market Value of a share
of Common Stock (or Other Security) shall be determined as of any date (the “Value Date”)
by the Company’s Board of Directors in good faith; provided, however, that where
there exists a public market for the Company’s Common Stock on the Value Date, the fair market
value per share shall be either:
(a) If the Common Stock is listed on a national securities exchange or admitted to unlisted
trading privileges on such exchange, 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.
6. Assignment or Loss of Warrant. The Holder may not assign or transfer this Warrant
without the consent of the Company. Subject to receipt of such written consent by the Company and
subject to the transfer restrictions herein (including Section 9), upon surrender of this
Warrant to the Company or at the office of its stock transfer agent, if any, with the Assignment
Form annexed hereto duly executed and funds sufficient to pay any transfer tax, the Company shall,
without charge, execute and deliver a new Warrant in the name of the assignee named in such
instrument of assignment and this Warrant shall promptly be canceled. Upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, destruction, or mutilation of this
Warrant, and of reasonably satisfactory indemnification by the Holder, and upon surrender and
cancellation of this Warrant, if mutilated, the Company shall execute and deliver a replacement
Warrant of like tenor and date.
7. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any
rights of a stockholder in the Company, either at law or in equity, and the rights of the Holder
are limited to those expressed in this Warrant.
3
8. Adjustments.
8.1 Adjustment for Recapitalization. If the Company shall at any time after the Base
Date 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
stockholders, 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 Base Date 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.
Whenever the number of shares of Common Stock purchasable upon the exercise of this Warrant is
adjusted, as provided in this Section 8.1, the Exercise Price shall be adjusted to the
nearest cent by multiplying such Exercise Price immediately prior to such adjustment by a fraction
(x) the numerator of which shall be the number of shares of Common Stock purchasable upon the
exercise immediately prior to such adjustment, and (y) the denominator of which shall be the number
of shares of Common Stock so purchasable immediately thereafter.
8.2 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 Base Date 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.
8.3 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.
4
8.4 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, 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.
8.5 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.
9. Transfer to Comply with the Securities Act. Subject to obtaining the written
consent of the Company as provided in Section 6, this Warrant and any Warrant Stock or
Other Securities may not be sold, transferred, pledged, hypothecated, or otherwise disposed of
except as follows: (a) to a person who, in the opinion of counsel to the Company, is a person to
whom this Warrant or the Warrant Stock or Other Securities may legally be transferred without
registration and without the delivery of a current prospectus under the Securities Act with respect
thereto and then only against receipt of an agreement of such person to comply with the provisions
of this Section 9 with respect to any resale or other disposition of such securities; or
(b) to any person upon delivery of a prospectus then meeting the requirements of the Securities Act
relating to such securities and the offering thereof for such sale or disposition, and thereafter
to all successive assignees.
5
10. Legend. Unless the shares of Warrant Stock or Other Securities have been
registered under the Securities Act, upon exercise of any of the Warrants and the issuance of any
of the shares of Warrant Stock, all certificates representing shares shall bear on the face thereof
substantially the following legend:
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.
11. Notices . All notices required hereunder shall be in writing and shall be deemed
given when telegraphed, delivered personally, or within two days after mailing when mailed by
certified or registered mail, return receipt requested, to the Company or the Holder, as the case
may be, for whom such notice is intended, if to the Holder, at the address of such party shown on
the books of the Company, or if to the Company, to 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx,
XX 00000, at the address set forth on the signature page hereof, Attn: President, or at such other
address of which the Company or the Holder has been advised by notice hereunder.
12. Applicable Law. The Warrant is issued under and shall for all purposes be
governed by and construed in accordance with the laws of the state of Delaware, without regard to
the conflict of laws provisions of such state.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
6
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on its behalf, in its
corporate name, by its duly authorized officer, all as of the day and year first above written.
| KONA GRILL, INC. | ||||
| By: | ||||
| Xxxx X. Xxxxxxx, Chief Financial Officer | ||||
| Address: | ||||
| 0000 X. Xxxxxxxxx Xxxx, Xxxxx 000 Xxxxxxxxxx, Xxxxxxx 00000 |
||||
7
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., a 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 Common 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 | ||||
8
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. CW- issued by Kona Grill, Inc., dated March
, 2009.
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: | ||||
Accepted and agreed (pursuant to Sections 6 and 9 of the Warrant):
| KONA GRILL, INC. | ||||||
By: |
||||||
| Name: | ||||||
| Title: | ||||||
9
