FORM OF SUBSCRIPTION AGENT AGREEMENT
Exhibit 99.7
FORM OF SUBSCRIPTION AGENT AGREEMENT
THIS SUBSCRIPTION AGENT AGREEMENT (“Agreement”) between Kona Grill, Inc., a Delaware
corporation (the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation
(“Continental”), is dated as of
, 2009.
1. Appointment.
(a) The Company is distributing at no charge (the “Rights Offering”) to its
stockholders of record at the close of business on [ ], 2009 (the “Record Date”),
non-transferable subscription rights (the “Rights”) to purchase up to an aggregate of
[ ] shares of the Company’s common stock, par value $0.01 per share (the “Common
Stock”). Each stockholder will receive one Right for each shares of Common Stock
owned, and any fractional Rights will be rounded down to the nearest whole number. Each
Right entitles the stockholder to purchase one share of Common Stock at a purchase price of
$ per share (the “Subscription Price”). The term “Subscribed” shall mean submitted for
purchase from the Company by a stockholder in accordance with the terms of the Rights
Offering, and the term “Subscription” shall mean any such submission.
(b) The Rights Offering will expire on [ ], 2009 at 5:00 p.m. Eastern Daylight
Savings Time (the “Expiration Time”), unless the Company shall have extended the period of
time for which the Rights Offering is open, in its sole discretion for up to 15 days, in
which event the term “Expiration Time” shall mean the latest time and date at which the
Rights Offering, as so extended by the Company from time to time, shall expire.
(c) The Company filed a Registration Statement on Form S-3 (File No. 333- )
relating to the Rights Offering with the Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended, on March [___], 2009 (the “Registration
Statement”). The terms of the Rights Offering are more fully described in the Prospectus
(the “Prospectus”) forming part of the Registration Statement as such Registration Statement
may be declared effective by the SEC. A copy of the Prospectus is attached hereto as
Exhibit 1. All terms used and not defined herein shall have the same meaning as in
the Prospectus. Promptly after the Record Date, Continental, in its capacity as transfer
agent, will generate a list of holders of Common Stock as of the Record Date (the “Record
Stockholders List”).
(d) The Company hereby appoints Continental to act as subscription agent (the
“Subscription Agent”) for the Rights Offering in accordance with and subject to the
following terms and conditions.
2. Subscription of Rights.
(a) The Rights are evidenced by subscription rights certificates (the “Certificates”),
a copy of the form of which is attached hereto as Exhibit 2. The Certificates
entitle the holders to subscribe, upon payment of the Subscription Price, for shares of
Common Stock at the rate of one share per Right evidenced by a Certificate (the “Basic
Subscription Right”). No fractional shares will be issued.
(b) The Rights Offering includes an over-subscription right entitling four of the
Company’s noteholders, who are also Company stockholders, to subscribe and pay the
Subscription Price for Rights that are not subscribed for under the Basic Subscription
Rights on a pro rata basis based on the aggregate amounts of notes outstanding (the
“Over-Subscription Right”). Reference is made to the Prospectus for a complete description
of the Basic Subscription Right and the Over-Subscription Right and the allocation thereof.
3. Duties of Subscription Agent. As Subscription Agent, Continental is authorized and
directed to perform the following:
(a) Issue the Certificates in accordance with this Agreement in the names of the
holders of the Common Stock of record or other nominees on the Record Date, keep such
records as are necessary for the purpose of recording such issuance, and furnish a copy of
such records to the Company. The Certificates may be signed on behalf of the Subscription
Agent by the manual or facsimile signature of a Vice President or Assistant Vice President
of the Subscription Agent, or by the manual signature of any of its other authorized
officers.
(b) Promptly after Continental receives the Record Stockholders List, Continental
shall:
(i) mail or cause to be mailed, by first class mail, or deliver (which delivery
may be done electronically through the facilities of the Depository Trust Company
(“DTC”) or otherwise) to each holder of Common Stock of record on the Record Date
whose address of record is within the United States and Canada, (i) a Certificate
evidencing the Rights to which such stockholder is entitled under the Rights
Offering, (ii) a copy of the Prospectus, and (iii) a return envelope addressed to
the Subscription Agent; and
(ii) mail or cause to be mailed, to each holder of Common Stock of record on
the Record Date whose address of record is outside the United States and Canada, or
is an A.P.O. or F.P.O. address, a copy of the Prospectus. Continental shall refrain
from mailing Certificates issuable to any holder of Common Stock of record on the
Record Date whose address of record is outside the United States and Canada, or is
an A.P.O. or F.P.O. address, and hold such Certificates for the account of such
stockholder subject to such stockholder making satisfactory arrangements with the
Subscription Agent for the exercise of the Rights evidenced thereby, and follow the
instructions of such stockholder for the exercise of such Rights if such
instructions are received at or before 11:00 a.m., Eastern Daylight Savings Time, at
least three business days prior to the Expiration Time.
(c) Mail or deliver (which delivery may be done electronically through the facilities
of DTC or otherwise) a copy of the Prospectus with certificates for shares of Common Stock
when such are issued to persons other than the registered holder of the Certificate.
(d) Accept Subscriptions upon the due exercise (including payment of the Subscription
Price) on or prior to the Expiration Time of Rights in accordance with the terms of the
Certificates and the Prospectus.
(e) Subject to the next sentence, accept Subscriptions from stockholders whose
Certificates are alleged to have been lost, stolen, or destroyed upon receipt by Continental
of an affidavit of theft, loss, or destruction and a bond of indemnity in form and substance
reasonably satisfactory to Continental, accompanied by payment of the Subscription Price for
the total number of Rights Subscribed. Upon receipt of such affidavit and bond of indemnity
and compliance with any other applicable requirements, stop orders shall be placed on said
Certificates and Continental shall withhold delivery of the Rights Subscribed for until
after the Certificates have expired and it has been determined that the Rights evidenced by
the Certificates have not otherwise been purported to have been exercised or otherwise
surrendered.
(f) Accept Subscriptions, without further authorization or direction from the Company,
without procuring supporting legal papers or other proof of authority to sign (including
without limitation proof of appointment of a fiduciary or other person acting in a
representative capacity), and without signatures of co-fiduciaries, co-representatives, or
any other person:
(i) if the Certificate is registered in the name of a fiduciary and is executed
by, and the Rights are to be issued in the name of, such fiduciary;
(ii) if the Certificate is registered in the name of joint tenants and is
executed by one of the joint tenants, provided the certificate representing the
Rights is issued in the names of, and is to be delivered to, such joint tenants;
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(iii) if the Certificate is registered in the name of a corporation and is
executed by a person in a manner which appears or purports to be done in the
capacity of an officer, or agent thereof, provided the Rights are to be issued in
the name of such corporation; or
(iv) if the Certificate is registered in the name of an individual and is
executed by a person purporting to act as such individual’s executor, administrator,
or personal representative, provided, the Rights are to be registered in the name of
the subscriber as executor or administrator of the estate of the deceased registered
holder and there is no evidence indicating the subscriber is not the duly authorized
representative that he purports to be.
(g) Accept Subscriptions not accompanied by Certificates if submitted by a firm having
membership in the New York Stock Exchange or another national securities exchange or by a
commercial bank or trust company having an office in the United States and accompanied by
proper payment for the total number of Rights Subscribed.
(h) Refer to the Company, for specific instructions as to acceptance or rejection,
Subscriptions received after the Expiration Time, Subscriptions not authorized to be
accepted, and Subscriptions otherwise failing to comply with the requirements of the
Prospectus and the terms and conditions of the Certificates. No acceptance of such
Subscriptions shall be effective without the Company’s approval under this Section 3(h).
4. Acceptance of Subscriptions. Upon acceptance of a Subscription, Continental shall
from time to time during the offering:
(a) Hold all monies received in a dedicated, non-interest bearing account for the
benefit of the Company. Promptly following the Expiration Time, Continental shall, upon the
receipt of the Distribution Letter in the form attached hereto as Exhibit 3 and
executed by the Company, distribute to the Company the funds from exercise of the Basic
Subscription Rights and Over-Subscription Rights in such account and following the
Expiration Date issue (in physical form or electronically through the facilities of DTC, in
each case in a manner approved by the Company) certificates for shares of Common Stock
issuable with respect to Subscriptions that have been accepted. Continental will not be
obligated to calculate or pay interest to any holder or any other party claiming through a
holder or otherwise. It is hereby agreed immediately following the effective date of the
Subscription, immediately available funds, represented by certified check, money order, or
wire transfer but not personal check, will be deposited with Continental. In the event that
the Rights Offering is not consummated because the Company has withdrawn, cancelled or
terminated the Rights Offering, Continental shall, upon the receipt of the Liquidation
Letter in the form attached hereto as Exhibit 4 and executed by the Company,
liquidate the segregated account in which the subscription monies were held as promptly as
practicable and distribute the funds to each respective subscribing stockholder who elected
to exercise its Rights.
(b) Advise the Company daily by facsimile transmission and confirm by letter to the
attention of Xxxx Xxxxxxx (the “Company Representative”) as to the total number of shares of
Common Stock Subscribed for and the amount of funds received, with cumulative totals for
each; and in addition advise the Company Representative, by telephone at (000) 000-0000,
confirmed by facsimile transmission ((000) 000-0000), of the amount of funds received
identified in accordance with (a) above, deposited, available, or transferred in accordance
with (a) above, with cumulative totals; and
(c) As promptly as possible but in any event on or before 3:30 p.m., Eastern Daylight
Savings Time, on the first full business day following the Expiration Time, advise the
Company Representative in accordance with (b) above of the number of shares Subscribed and
the number of shares of Common Stock unsubscribed.
5. Completion of Rights Offering. Upon completion of the Rights Offering:
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(a) Continental shall issue (in physical form or electronically through the facilities
of DTC, in each case in a manner approved by the Company) certificates for the Common Stock
for which Subscriptions have been received.
(b) The Certificates may be physical certificates but may, as instructed by the Company
be issued electronically through the facilities of DTC. The Company shall appoint and have
in office at all times a Transfer Agent and Registrar for the Certificates, which may be
Continental and which shall keep books and records of the registration and transfers and
exchanges of Certificates (such books and records are hereinafter called the “Certificate
Register”). The Company shall promptly notify the Transfer Agent and Registrar of the
exercise of any Certificates. The Company shall promptly notify Continental of any change
in the Transfer Agent and Registrar of the Certificates.
(c) All Certificates issued upon any registration of transfer or exchange of
Certificates shall be the valid obligations of the Company, evidencing the same obligations,
and entitled to the same benefits under this Agreement, as the Certificates surrendered for
such registration of transfer or exchange.
(d) For so long as this Agreement shall be in effect, the Company will reserve for
issuance and keep available free from preemptive rights a sufficient number of shares of
Common Stock to permit the exercise in full of all Rights issued pursuant to the Rights
Offering. Subject to the terms and conditions of this Agreement, Continental will request
the Transfer Agent for the Common Stock to issue (in physical form or electronically through
the facilities of DTC, in each case in a manner approved by the Company) certificates
evidencing the appropriate number of shares of Common Stock as required from time to time in
order to effectuate the Subscriptions.
(e) The Company shall take any and all action, including without limitation obtaining
the authorization, consent, lack of objection, registration, or approval of any governmental
authority, or the taking of any other action under the laws of the United States of America
or any political subdivision thereof, to insure that all shares of Common Stock issuable
upon the exercise of the Certificates at the time of delivery of the certificates therefor
(subject to payment of the Subscription Price) will be duly and validly issued and fully
paid and non-assessable shares of Common Stock, free from all preemptive rights and taxes,
liens, charges, and security interests created by or imposed upon the Company with respect
thereto.
(f) The Company shall from time to time take all action necessary or appropriate to
obtain and keep effective all registrations, permits, consents, and approvals of the SEC and
any other governmental agency or authority and make such filings under federal and state
laws which may be necessary or appropriate in connection with the issuance and delivery of
Certificates or the issuance, sale, transfer, and delivery of Common Stock issued upon
exercise of Certificates.
6. Procedure for Discrepancies. Continental shall follow its regular procedures to
attempt to reconcile any discrepancies between the number of shares of Common Stock that any
Certificate may indicate are to be issued to a stockholder and the number that the Record
Stockholders List indicates may be issued to such stockholder. In any instance where Continental
cannot reconcile such discrepancies by following such procedures, Continental will consult with the
Company for instructions as to the number of shares of Common Stock, if any, it is authorized to
issue. In the absence of such instructions, Continental is authorized not to issue any shares of
Common Stock to such stockholder.
7. Procedure for Deficient Items. Continental shall examine the Certificates
received by it as Subscription Agent to ascertain whether they appear to have been properly
completed and executed. In the event Continental determines that any Certificate does not appear
to have been properly completed or executed, or where the Certificates do not appear to be in
proper form for Subscription, or any other irregularity in connection with the Subscription appears
to exist, Continental shall follow, where possible, its regular procedures to attempt to cause such
irregularity to be corrected. Continental is not authorized to waive any irregularity in
connection with the Subscription, unless Continental shall have received from the Company the
Certificate which was delivered, duly dated and signed by an authorized officer of the Company,
indicating that any irregularity in such Certificate has been cured or waived and that such
Certificate has been accepted by the Company. If any such irregularity is neither
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corrected nor waived, Continental will return to the subscribing stockholder (at its option by
either first class mail under a blanket surety bond or insurance protecting Continental and the
Company from losses or liabilities arising out of the non-receipt or nondelivery of Certificates or
by registered mail insured separately for the value of such Certificates) to such stockholder’s
address as set forth in the Subscription any Certificates surrendered in connection therewith and
any other documents received with such Certificates, and a letter of notice to be furnished by the
Company explaining the reasons for the return of the Certificates and other documents.
8. Date/Time Stamp. Each document received by Continental relating to its duties
hereunder shall be dated and time stamped when received.
9. Transfer Procedures. If certificates representing shares of Common Stock are to
be delivered by Continental to a person other than the person in whose name a surrendered
Certificate is registered, Continental shall issue no certificate for Common Stock until the
Certificate so surrendered has been properly endorsed (or otherwise put in proper form for
transfer).
10. Tax Reporting. Should any issue arise regarding federal income tax reporting or
withholding, Continental shall take such action as the Company reasonably instructs in writing.
11. Termination. The Company may terminate this Agreement at any time by so
notifying Continental in writing. Continental may terminate this Agreement upon 60 days’ prior
written notice to the Company. Upon any such termination, Continental shall be relieved and
discharged of any further responsibilities with respect to its duties hereunder. Upon payment of
all Continental’s outstanding fees and expenses, Continental shall forward to the Company or its
designee promptly any Certificate or other document relating to Continental’s duties hereunder that
Continental may receive after its appointment has so terminated. Sections 12, 13, 14, and 19 of
this Agreement shall survive any termination of this Agreement.
12. Authorizations and Protections. As agent for the Company, Continental:
(a) shall have no duties or obligations other than those specifically set forth herein
or as may subsequently be agreed to in writing by Continental and the Company;
(b) shall have no obligation to issue any shares of Common Stock unless the Company
shall have provided a sufficient number of certificates for such Common Stock;
(c) shall be regarded as making no representations and having no responsibilities as to
the validity, sufficiency, value, or genuineness of any Certificates surrendered to
Continental hereunder or shares of Common Stock issued in exchange therefor, and will not be
required to or be responsible for and will make no representations as to, the validity,
sufficiency, value or genuineness of the Rights Offering;
(d) shall not be obligated to take any legal action hereunder; if, however, Continental
determines to take any legal action hereunder, and where the taking of such action might, in
Continental’s judgment, subject or expose it to any expense or liability, Continental shall
not be required to act unless it shall have been furnished with an indemnity reasonably
satisfactory to it;
(e) may rely on and shall be fully authorized and protected in acting or failing to act
upon any certificate, instrument, opinion, notice, letter, telegram, telex, facsimile
transmission, or other document or security delivered to Continental and believed by it to
be genuine and to have been signed by the proper party or parties;
(f) shall not be liable or responsible for any recital or statement contained in the
Prospectus or any other documents relating thereto;
(g) shall not be liable or responsible for any failure on the part of the Company to
comply with any of its covenants and obligations relating to the Rights Offering, including
without limitation obligations under applicable securities laws;
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(h) may rely on and shall be fully authorized and protected in acting or failing to act
upon the written, telephonic, or oral instructions of officers of the Company with respect
to any matter relating to Continental acting as Subscription Agent covered by this Agreement
(or supplementing or qualifying any such actions);
(i) may consult with counsel satisfactory to Continental, including internal counsel,
and the advice of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered, or omitted by Continental hereunder in good faith and
in reliance upon the advice of such counsel; and
(j) is not authorized, and shall have no obligation, to pay any brokers, dealers, or
soliciting fees to any person.
13. Indemnification. The Company agrees to indemnify Continental for, and hold it
harmless from and against, any loss, liability, claim, or expense (“Loss”) arising out of or in
connection with Continental’s performance of its duties under this Agreement or this appointment,
including the costs and expenses of defending itself against any Loss or enforcing this Agreement,
except to the extent that such Loss shall have been determined by a court of competent jurisdiction
to be a result of Continental’s negligence or intentional misconduct.
14. Limitation of Liability.
(a) In the absence of negligence or intentional misconduct on its part, Continental
shall not be liable for any action taken, suffered, or omitted by it or for any error of
judgment made by it in the performance of its duties under this Agreement. Anything in this
agreement to the contrary notwithstanding, in no event shall Continental be liable for
special, indirect, incidental, or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if Continental has been advised of the
likelihood of such damages and regardless of the form of action. Any liability of
Continental will be limited to the amount of fees paid by the Company hereunder.
(b) In the event any question or dispute arises with respect to the proper
interpretation of this Agreement or Continental’s duties hereunder or the rights of the
Company or of any holders surrendering certificates for shares of Common Stock pursuant to
the Rights Offering, Continental shall not be required to act and shall not be held liable
or responsible for refusing to act until the question or dispute has been judicially settled
(and Continental may, if it deems it advisable, but shall not be obligated to, file a suit
in interpleader or for a declaratory judgment for such purpose) by final judgment rendered
by a court of competent jurisdiction, binding on all stockholders and parties interested in
the matter which is no longer subject to review or appeal, or settled by a written document
in form and substance satisfactory to Continental and executed by the Company and each such
stockholder and party. In addition, Continental may require for such purpose, but shall not
be obligated to require, the execution of such written settlement by all the stockholders
and all other parties that may have an interest in the settlement.
15. Representations, Warranties and Covenants. The Company represents, warrants, and
covenants that (a) it is duly incorporated, validly existing, and in good standing under the laws
of its jurisdiction of incorporation, (b) the making and consummation of the Rights Offering and
the execution, delivery, and performance of all transactions contemplated thereby (including
without limitation this Agreement) have been duly authorized by all necessary corporate action and
will not result in a breach of or constitute a default under the certificate of incorporation or
bylaws of the Company or any indenture, agreement, or instrument to which either is a party or is
bound, (c) this Agreement has been duly executed and delivered by the Company and constitutes a
legal, valid, binding obligation of the Company, enforceable against the Company in accordance with
its terms, (d) the Rights Offering will comply in all material respects with all material
applicable requirements of law, and (e) to the best of its knowledge, there is no litigation
pending as of the date hereof in connection with the Rights Offering.
16. Notices. All notices, demands, and other communications given pursuant to the
terms and provisions hereof shall be in writing, shall (except as provided for in Section 18
hereof) be deemed effective on the date of receipt, and may be sent by facsimile, overnight
delivery services, or by certified or registered mail, return receipt requested to:
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| If to the Company: | ||
| Kona Grill, Inc. | ||
| 0000 X. Xxxxxxxxx Xxxx, Xxxxx 000 | ||
| Xxxxxxxxxx, Xxxxxxx 00000 | ||
| Telephone: (000) 000-0000 | ||
| Facsimile: (000) 000-0000 | ||
| Attn: Xxxx X. Xxxxxxx | ||
| with a copy to: | ||
| Xxxxxxxxx Xxxxxxx, LLP | ||
| 0000 X. Xxxxxxxxx Xxxx, Xxxxx 000 | ||
| Xxxxxxx, Xxxxxxx 00000 | ||
| Telephone: (000) 000-0000 | ||
| Facsimile: (000) 000-0000 | ||
| Attn: Xxxxx X. Xxxxx | ||
| If to Continental: | ||
| Continental Stock Transfer & Trust Company | ||
| 00 Xxxxxxx Xxxxx, 0xx Xxxxx | ||
| Xxx Xxxx, XX 00000 | ||
| Telephone: (000) 000-0000, extension 536 | ||
| Facsimile: (000) 000-0000 | ||
| Attn: Compliance Department | ||
17. Specimen Signatures. Set forth in Exhibit 5 hereto is a list of the names
and specimen signatures of the persons authorized to act for the Company under this Agreement. The
Secretary of the Company shall, from time to time, certify to Continental the names and signatures
of any other persons authorized to act for the Company, as the case may be, under this Agreement.
18. Instructions. Any instructions given to Continental orally, as permitted by any
provision of this Agreement, shall, upon the request of Continental, be confirmed in writing by the
Company (which for these purposes only may be undertaken by e-mail transmission) as soon as
practicable. Continental shall not be liable or responsible and shall be fully authorized and
protected for acting, or failing to act, in accordance with any oral instructions which do not
conform with the written confirmation received in accordance with this Section.
19. Fees. Whether or not any Certificates are surrendered to Continental, for its
services as Subscription Agent hereunder, the Company shall pay to Continental a fee of Ten
Thousand Dollars ($10,000.00), together with reimbursement for reasonable out-of-pocket expenses.
All amounts owed to Continental hereunder are due upon receipt of the invoice.
20. Force Majeure. Continental shall not be liable for any failure or delay arising
out of conditions beyond its reasonable control including, but not limited to, work stoppages,
fires, civil disobedience, riots, rebellions, storms, electrical, mechanical, computer or
communications facilities failures, acts of God or similar occurrences.
21. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with the laws of
the State of New York without giving effect to conflict of laws, rules, or principles.
(b) No provision of this Agreement may be amended, modified, or waived, except in
writing signed by all of the parties hereto.
(c) Except as expressly set forth elsewhere in this Agreement, all notices,
instructions, and communications under this Agreement shall be in writing, shall be
effective upon receipt and shall be addressed as provided in Section 16 to such other
address as a party hereto shall notify the other parties in writing.
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(d) In the event that any claim of inconsistency between this Agreement and the terms
of the Rights Offering arise, as they may from time to time be amended, the terms of the
Rights Offering shall control, except with respect to Continental’s duties, liabilities, and
rights, including without limitation compensation and indemnification, which shall be
controlled by the terms of this Agreement.
(e) If any provision of this Agreement shall be held illegal, invalid, or unenforceable
by any court, this Agreement shall be construed and enforced as if such provision had not
been contained herein and shall be deemed an Agreement among the parties hereto to the full
extent permitted by applicable law.
(f) This Agreement shall be binding upon, inure to the benefit of, and be enforceable
by, the respective successors and assigns of the parties hereto.
(g) This Agreement may not be assigned by any party without the prior written consent
of all parties.
(h) This Agreement may be executed in counterparts, each of which, when taken together,
shall constitute one and the same agreement, and each of which may be delivered by the
parties by facsimile or other electronic transmission, which shall not impair the validity
of such counterparts.
(Signature page follows)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized
officers as of the day and year above written.
| KONA GRILL, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | Executive Vice President, Chief Financial Officer, and Secretary |
|||||
| CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Subscription Agent |
||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Exhibit 1
|
Prospectus | |
Exhibit 2
|
Form of Subscription Rights Certificate | |
Exhibit 3
|
Distribution Letter | |
Exhibit 4
|
Liquidation Letter | |
Exhibit 5
|
List of Authorized Representatives |
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Form of Subscription Rights Certificate
| RIGHTS CERTIFICATE #: | NUMBER OF RIGHTS |
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY’S PROSPECTUS
DATED __, 2009 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF
THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM XXXXXX & CO., LLC, THE INFORMATION AGENT.
DATED __, 2009 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF
THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM XXXXXX & CO., LLC, THE INFORMATION AGENT.
Kona Grill, Inc.
Incorporated under the laws of the State of Delaware
SUBSCRIPTION RIGHTS CERTIFICATE
Evidencing Subscription Rights to Purchase Shares of Common Stock of Kona Grill, Inc.
Subscription Price: $[___] per Share
THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE 5:00 P.M., EASTERN DAYLIGHT SAVINGS TIME,
ON [ ], 2009, UNLESS EXTENDED BY THE COMPANY
REGISTERED
OWNER:
OWNER:
THIS CERTIFIES THAT the registered owner
whose name is inscribed hereon is the
owner of the number of subscription rights
(“Rights”) set forth above. Each whole
Right entitles the holder thereof to
subscribe for and purchase one share of
Common Stock, with a par value of $0.01
per share, of Kona Grill, Inc., a Delaware
corporation, at a subscription price of
$[___] per share (the “Basic Subscription
Right”), pursuant to a rights offering
(the “Rights Offering”), on the terms and
subject to the conditions set forth in the
Prospectus.
|
Four of the Company’s noteholders are entitled to subscribe for additional shares of Common Stock that remain unsubscribed for as a result of any unexercised Basic Subscription Rights pursuant to the terms and conditions of the Rights Offering, subject to proration, as described in the Prospectus (the “Over-Subscription Privilege”). The Rights represented by this Subscription Rights Certificate may be exercised by completing Form 1 and any other appropriate forms on the reverse side hereof and by returning the full payment of the subscription price for each share of Common Stock. | |
This Subscription Rights Certificate is not
valid unless countersigned by the
subscription agent and registered by the
registrar.
Witness the seal of Kona Grill, Inc. and the
signatures of its duly authorized officers. |
||
Date: |
||
| Chief Executive Officer | Executive Vice President | |||||||
| Continental Stock Transfer & Trust Company |
| RIGHTS CERTIFICATE #: | NUMBER OF RIGHTS |
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY’S PROSPECTUS
DATED __, 2009 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF
THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM XXXXXX & CO., LLC, THE INFORMATION AGENT.
DATED __, 2009 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF
THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM XXXXXX & CO., LLC, THE INFORMATION AGENT.
Kona Grill, Inc.
Incorporated under the laws of the State of Delaware
SUBSCRIPTION RIGHTS CERTIFICATE
Evidencing Subscription Rights to Purchase Shares of Common Stock of Kona Grill, Inc.
Subscription Price: $[___] per Share
THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE 5:00 P.M., EASTERN DAYLIGHT SAVINGS TIME,
ON [ ], 2009, UNLESS EXTENDED BY THE COMPANY
REGISTERED
OWNER:
OWNER:
THIS CERTIFIES THAT the registered owner
whose name is inscribed hereon is the
owner of the number of subscription rights
(“Rights”) set forth above. Each whole
Right entitles the holder thereof to
subscribe for and purchase one share of
Common Stock, with a par value of $0.01
per share, of Kona Grill, Inc., a Delaware
corporation, at a subscription price of
$[___] per share (the “Basic Subscription
Right”), pursuant to a rights offering
(the “Rights Offering”), on the terms and
subject to the conditions set forth in the
Prospectus.
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Four of the Company’s noteholders are entitled to subscribe for additional shares of Common Stock that remain unsubscribed for as a result of any unexercised Basic Subscription Rights pursuant to the terms and conditions of the Rights Offering, subject to proration, as described in the Prospectus (the “Over-Subscription Privilege”). The Rights represented by this Subscription Rights Certificate may be exercised by completing Form 1 and any other appropriate forms on the reverse side hereof and by returning the full payment of the subscription price for each share of Common Stock. | |
This Subscription Rights Certificate is not
valid unless countersigned by the
subscription agent and registered by the
registrar.
Witness the seal of Kona Grill, Inc. and the
signatures of its duly authorized officers. |
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Date: |
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| Chief Executive Officer | Executive Vice President | |||||||
| Continental Stock Transfer & Trust Company |
DELIVERY OPTIONS FOR SUBSCRIPTION RIGHTS CERTIFICATE
Delivery other than in the manner or to the addresses listed below will not constitute valid delivery.
If delivering by Hand/Mail/Overnight Courier:
Continental Stock Transfer & Trust Company
Attn: Reorganization Department
00 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Continental Stock Transfer & Trust Company
Attn: Reorganization Department
00 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY.
FORM 1-EXERCISE OF SUBSCRIPTION RIGHTS
To subscribe for shares pursuant to your Basic Subscription Right, please complete lines (a)
and (c) and sign under Form 4 below. To subscribe for shares pursuant to your
Over-Subscription Privilege, if applicable, please also complete line (b) and sign under Form
4 below. To the extent you subscribe for more shares than you are entitled under either the
Basic Subscription Right or the Over-Subscription Privilege, you will be deemed to have
elected to purchase the maximum number of shares for which you are entitled to subscribe
under the Basic Subscription Right or Over-Subscription Privilege, as applicable.
(a) EXERCISE OF BASIC SUBSCRIPTION RIGHT:
I apply for
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shares x | $ [___] | = | $ | ||||||
| (no. of new shares) | (subscription price) | (amount enclosed) |
(b) EXERCISE OF OVER-SUBSCRIPTION PRIVILEGE:
If you are one of the Company’s four noteholders that is entitled to the Over-Subscription
Right and wish to subscribe for additional shares on a pro rata basis based on the aggregate
amount of notes outstanding:
I apply for
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shares x | $ [___] | = | $ | ||||||
| (no. of new shares) | (subscription price) | (amount enclosed) |
(c) Total Amount of Payment Enclosed = $
METHOD OF PAYMENT (CHECK ONE)
| o | Check or bank draft drawn on a U.S. bank, or postal, telegraphic, or express money order payable to “Continental Stock Transfer & Trust Company, as Subscription Agent.” Funds paid by an uncertified check may take at least five business days to clear. | |
| o | Wire transfer of immediately available funds directly to the account maintained by Continental Stock Transfer & Trust Company, as Subscription Agent, for purposes of accepting subscriptions in this Rights Offering at JPMorgan Chase Bank, ABA #000000000, Account # 475-506979, Continental Stock Transfer & Trust Company FBO Kona Grill, Inc., with reference to the rights holder’s name. |
FORM 2-DELIVERY TO DIFFERENT ADDRESS
If you wish for the Common Stock underlying your subscription right or
certificate representing unexercised subscription rights to be delivered to an address
different from that shown on the face of this Subscription Rights Certificate, please enter
the alternate address below, sign under Form 3 and have your signature guaranteed under Form
4.
FORM 3-SIGNATURE
TO SUBSCRIBE: I acknowledge that I have received the Prospectus for this Rights Offering and I
hereby irrevocably subscribe for the number of shares indicated above on the terms and
conditions specified in the Prospectus.
Signature(s): |
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Signature(s): |
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IMPORTANT: The signature(s) must correspond with the name(s) as printed on the reverse of
this Subscription Rights Certificate in every particular, without alteration or enlargement,
or any other change whatsoever.
FORM 4-SIGNATURE GUARANTEE
This form must be completed if you have completed any portion of Form 2.
Signature Guaranteed: |
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By: |
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IMPORTANT: The signature(s) should be guaranteed by an eligible guarantor institution
(bank, stock broker, savings & loan association or credit union) with membership in an
approved signature guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15.
FOR INSTRUCTIONS ON THE USE OF KONA GRILL, INC. SUBSCRIPTION RIGHTS CERTIFICATES, CONSULT
XXXXXX & CO., LLC, THE INFORMATION AGENT, AT (000) 000-0000 (COLLECT) OR (000) 000-0000
(TOLL-FREE).
Form of Distribution Letter
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: [ ]
Re: Trust Account No. 475-506979 Termination Letter
00 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: [ ]
Re: Trust Account No. 475-506979 Termination Letter
Ladies and Gentlemen:
Pursuant to Section 4(a) of the Subscription Agent Agreement between Kona Grill, Inc., a
Delaware corporation (“Company”) and Continental Stock Transfer & Trust Company (“Subscription
Agent”), dated as of ________, 2009 (“Subscription Agent Agreement”), you are hereby directed and
authorized to transfer the subscription funds held in the segregated account immediately in
accordance with the terms of the Subscription Agent Agreement.
| Very truly yours, KONA GRILL, INC. |
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| By: | ||||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Executive Vice President, Chief Financial Officer, and Secretary |
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Form of Liquidation Letter
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: [ ]
Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: [ ]
Re: Trust Account No. 475-506979 Termination Letter
Ladies and Gentlemen:
Pursuant to Section 4(a) of the Subscription Agent Agreement between Kona Grill, Inc., a
Delaware corporation (“Company”) and Continental Stock Transfer & Trust Company (“Subscription
Agent”), dated as of ________, 2009 (“Subscription Agent Agreement”), this is to advise you that
the Company has withdrawn or otherwise terminated its Rights Offering (as defined in the
Subscription Agent Agreement).
In accordance with the terms of the Subscription Agent Agreement, we hereby authorize you to
commence liquidation of the segregated account in which the subscription monies were held as
promptly as practicable to stockholders who elected to exercise their Rights. You shall commence
distribution of such funds in accordance with the terms of the segregated account and you shall
oversee the distribution of such funds. Upon the payment of all the funds in the segregated
account, your obligations under the Subscription Agent Agreement shall be terminated.
| Very truly yours, KONA GRILL, INC. |
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| By: | ||||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Executive Vice President, Chief Financial Officer, and Secretary |
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Exhibit 5
to
Subscription Agent Agreement
to
Subscription Agent Agreement
List of Authorized Representatives
| Authorized | ||
| Representative | Specimen Signature | |
Xxxx X. Xxxxxxx |
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