THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933
SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE EXERCISED
IN THE UNITED STATES (AS DEFINED IN REGULATION S UNDER THE 1933 SECURITIES ACT),
NOR MAY THIS WARRANT OR THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT
BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED, UNLESS THE WARRANT AND
THE COMMON SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE
1933 SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND THE CORPORATION RECEIVES AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO IT TO SUCH EFFECT.

 

  Right to Purchase [AMT] Common Shares of Chanticleer Holdings, Inc. (subject
to adjustment as provided herein)

 

COMMON STOCK WARRANT

 

Issue Date: ___________, 2013

 

CHANTICLEER HOLDINGS, INC., a corporation organized under the laws of the State
of Delaware (the “Company”), hereby certifies that [INVESTOR], or his permitted
assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company at any time twelve (12) months after the issue date of
this Warrant (the “Issue Date”) until 5:00 p.m., Eastern Standard Time on
_____________, 2018 (the “Expiration Date”), [AMT] fully paid and non-assessable
Common Shares of the Company, at a per share purchase price of five dollars (USD
$5.00). The purchase price per share, as adjusted from time to time as herein
provided, is referred to herein as the “Purchase Price.” The number and
character of such Common Shares and the Purchase Price are subject to adjustment
as provided herein.

 

As used herein the following terms, unless the context otherwise requires, have
the following respective meanings:

 

(a)           The term “Company” shall include Chanticleer Holdings, Inc. and
any corporation which shall succeed or assume the obligations of Chanticleer
Holdings, Inc. hereunder.

 

(b)           The term “Common Shares” includes (a) the Company’s Common Shares,
$.0001 par value per share, as authorized on the date hereof, and (b) any other
securities into which or for which any of the securities described in (a) may be
converted or exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.

 

(c)           The term “Other Securities” refers to any stock (other than Common
Shares) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Shares, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Shares or Other
Securities pursuant to Section 4 herein or otherwise.

 

(d)           The term “Warrant Shares” shall mean the Common Shares issuable
upon exercise of this Warrant.

 

 

 

 

1.Exercise of Warrant.

 

1.1.      Number of Shares Issuable upon Exercise. From and after the Issue Date
through and including the Expiration Date, the Holder hereof shall be entitled
to receive, upon exercise of this Warrant in whole in accordance with the terms
of subsection 1.2 or upon exercise of this Warrant in part in accordance with
subsection 1.3, Common Shares of the Company, subject to adjustment pursuant to
Section 3.

 

1.2.      Full Exercise. This Warrant may be exercised in full by the Holder
hereof by delivery of an original or facsimile copy of the form of subscription
attached as Exhibit A hereto (the “Subscription Form”) duly executed by such
Holder and simultaneously surrender of the original Warrant to the Company at
its principal office, accompanied by payment, in cash, wire transfer or by
certified or official bank check payable to the order of the Company, in the
amount obtained by multiplying the number of Common Shares for which this
Warrant is then exercisable by the Purchase Price then in effect.

 

1.3.      Partial Exercise. This Warrant may be exercised in part (but not for a
fractional share) by surrender of this Warrant in the manner and at the place
provided in subsection 1.2 except that the amount payable by the Holder on such
partial exercise shall be the amount obtained by multiplying (a) the number of
whole shares designated by the Holder in the Subscription Form by (b) the
Purchase Price then in effect. On any such partial exercise, the Company, at its
expense, will forthwith issue and deliver to or upon the order of the Holder
hereof a new Warrant of like tenor, in the name of the Holder hereof or as such
Holder (upon payment by such Holder of any applicable transfer taxes) may
request, the whole number of Common Shares for which such Warrant may still be
exercised.

 

1.4.      Company Acknowledgment. The Company will, at the time of the exercise
of the Warrant, upon the request of the Holder hereof acknowledge in writing its
continuing obligation to afford to such Holder any rights to which such Holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant.

 

1.5.      Delivery of Stock Certificates, etc. on Exercise. The Company agrees
that the Common Shares purchased upon exercise of this Warrant shall be deemed
to be issued to the Holder hereof as the record owner of such shares as of the
close of business on the date on which this Warrant shall have been surrendered
and payment made for such shares as aforesaid. As soon as practicable after the
exercise of this Warrant in full or in part, and in any event within ten (10)
business days thereafter, the Company at its expense will cause to be issued in
the name of and delivered to the Holder hereof, or as such Holder (upon payment
by such Holder of any applicable transfer taxes) may direct in compliance with
applicable securities laws, a certificate or certificates for the number of duly
and validly issued, fully paid and non-assessable Common Shares (or Other
Securities) to which such Holder shall be entitled on such exercise, plus, in
lieu of any fractional share to which such Holder would otherwise be entitled,
cash equal to such fraction multiplied by the then Fair Market Value of one full
Common Share, together with any other stock or other securities and property
(including cash, where applicable) to which such Holder is entitled upon such
exercise pursuant to Section 1 or otherwise.

 

1.6.      Limitations. The Company stock is subject to a nineteen and nine
tenths percent (19.9%) beneficial ownership limitation; any ownership by one
individual investor of more than nineteen and nine tenths percent (19.9%) of the
Company stock requires approval by the Company’s shareholders. Additionally, the
Company is subject to a nineteen and nine tenths percent (19.9%) issuance
limitation for the issuance referred to in the Subscription Agreement dated
September 30, 2013. Any issuance of Company common stock from this particular
transaction above nineteen and nine tenths percent (19.9%) of the total
outstanding shares as of September 29, 2013 requires Shareholder approval. The
Company intends to seek required Shareholder approval if necessary.

 

2

 

 

1.7.      Floor. Any conversion is subject to a one dollar (USD $1.00) floor.

 

2.Adjustment for Reorganization, Consolidation, Merger, etc.

 

2.1.      Reorganization, Consolidation, Merger, etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other person or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1, at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Shares (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if such
Holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 3.

 

2.2.      Continuation of Terms. Upon any reorganization, consolidation, merger
or transfer (and any dissolution following any transfer) referred to in this
Section 2, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the Other Securities and property receivable on
the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any Other
Securities, including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the Company, whether or
not such person shall have expressly assumed the terms of this Warrant as
provided in Section 3.

 

3.             Extraordinary Events Regarding Common Stock. In the event that
the Company shall (a) issue additional Common Shares as a dividend or other
distribution on outstanding Common Shares, (b) subdivide its outstanding Common
Shares, or (c) combine its outstanding Common Shares into a smaller number of
Common Shares, then, in each such event, the Purchase Price shall,
simultaneously with the happening of such event, be adjusted by multiplying the
then Purchase Price by a fraction, the numerator of which shall be the number of
Common Shares outstanding immediately prior to such event and the denominator of
which shall be the number of Common Shares outstanding immediately after such
event, and the product so obtained shall thereafter be the Purchase Price then
in effect. The Purchase Price, as so adjusted, shall be readjusted in the same
manner upon the happening of any successive event or events described herein in
this Section 3. The number of Common Shares that the Holder of this Warrant
shall thereafter, on the exercise hereof as provided in Section 1, be entitled
to receive shall be adjusted to a number determined by multiplying the number of
Common Shares that would otherwise (but for the provisions of this Section 3) be
issuable on such exercise by a fraction of which (a) the numerator is the
Purchase Price that would otherwise (but for the provisions of this Section 3)
be in effect, and (b) the denominator is the Purchase Price in effect on the
date of such exercise.

 

4.             Certificate as to Adjustments. In each case of any adjustment or
readjustment in the Common Shares (or Other Securities) issuable on the exercise
of the Warrants, the Company at its expense will promptly cause its Chief
Financial Officer or other appropriate designee to compute such adjustment or
readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional Common Shares (or Other Securities) issued or sold or deemed to have
been issued or sold, (b) the number of Common Shares (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and the
number of Common Shares to be received upon exercise of this Warrant, in effect
immediately prior to such adjustment or readjustment and as adjusted or
readjusted as provided in this Warrant. The Company will forthwith mail a copy
of each such certificate to the Holder of the Warrant.

 

3

 

 

5.             Reservation of Stock, etc. Issuable on Exercise of Warrant. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrants, all Common Shares (or Other
Securities) from time to time issuable on the exercise of the Warrant.

 

6.             Assignment; Exchange of Warrant. Subject to compliance with
applicable securities laws, this Warrant, and the rights evidenced hereby, may
be transferred by any registered holder hereof (a “Transferor”). On the
surrender for exchange of this Warrant, with the Transferor’s endorsement in the
form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and
together with an opinion of counsel reasonably satisfactory to the Company that
the transfer of this Warrant will be in compliance with applicable securities
laws, the Company at its expense, but with payment by the Transferor of any
applicable transfer taxes, will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a “Transferee”), calling in the aggregate on the face or faces
thereof for the number of Common Shares called for on the face or faces of the
Warrant so surrendered by the Transferor. No such transfers shall result in a
public distribution of the Warrant.

 

7.             Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of this Warrant, the Company at its
expense, , will execute and deliver, in lieu thereof, a new Warrant of like
tenor.

 

8.             Transfer on the Company’s Books. Until this Warrant is
transferred on the books of the Company, the Company may treat the registered
holder hereof as the absolute owner hereof for all purposes, notwithstanding any
notice to the contrary.

 

9.             Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur or (c) three
business days after deposited in the mail if delivered pursuant to subsection
(ii) above. The addresses for such communications shall be: (i) if to the
Company to: 11220 Elm Lane, Suite 203, Charlotte, NC  28277, facsimile number
(704) 366-2463; and (ii) if to the Holder: [NAME, ADDRESS]. The Company and the
Holder may change their respective addresses for notices by like notice to the
other party.

 

10.           Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of Delaware without regard to the conflicts of laws
provisions thereof. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof. The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.

 

4

 

 

IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.

 

  CHANTICLEER HOLDINGS, INC.           By:               Name:              
Title:    

 

5

 

  

Exhibit A

FORM OF SUBSCRIPTION

(to be signed only on exercise of Warrant)

 

TO: CHANTICLEER HOLDINGS, INC.

 

The undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby irrevocably elects to purchase:

 

___ ________ Common Shares covered by such Warrant.

The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or boxes):

 

___$__________ in lawful money of the United States.

 

The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to _____________________________________________________
whose address is
__________________________________________________________________________________________________________________________

 

The undersigned represents and warrants that the representations and warranties
in Section 2 of the Subscription Agreement (as defined in this Warrant) are true
and accurate with respect to the undersigned on the date hereof.

 

The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Shares under the Securities Act
of 1933, as amended (the “Securities Act”), or pursuant to an exemption from
registration under the Securities Act.

 

Dated:                                        

 

 

         

(Signature must conform to name of holder as specified on the fact of the
Warrant.)

                          (Address)  

 

 

 

 

Exhibit B

 

FORM OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer of Warrant)

 

For value received, the undersigned hereby sells, assigns, and transfers unto
the person(s) named below under the heading “Transferees” the right represented
by the within Warrant to purchase the percentage and number of Common Shares of
CHANTICLEER HOLDINGS, INC. to which the within Warrant relates specified under
the headings “Percentage Transferred” and “Number Transferred,” respectively,
opposite the name(s) of such person(s) and appoints each such person Attorney to
transfer its respective right on the books of CHANTICLEER HOLDINGS, INC. with
full power of substitution in the premises.

 

Transferees Percentage Transferred Number Transferred                  

 

 

Dated: ______________, _______      

(Signature must conform to name of holder as specified on the fact of the
Warrant.)

            Signed in the presence of:               (Name)     (Address)      
    ACCEPTED AND AGREED:     [TRANSFEREE]       (Address)             (Name)