FORM OF WARRANT

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR SATISFACTORY ASSURANCES
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED WITH RESPECT TO SUCH SALE,
OFFER, PLEDGE OR HYPOTHECATION.

 

WARRANT TO PURCHASE COMMON STOCK

 

of

 

THE GRILLED CHEESE TRUCK, INC.

 

Void after ____________, 2016

 

Warrant No. ___ Date of Issuance: ____________, 2013

 

This certifies that, for value received, Deepak Devaraj or his registered
assigns (the “Holder”) is entitled, subject to the terms set forth below, to
purchase from The Grilled Cheese Truck, Inc., a Nevada corporation (the
“Company”), Two Hundred Fifty Thousand (250,000) shares of the Common Stock of
the Company (the “Warrant Shares”), upon surrender hereof, at the principal
office of the Company referred to below and simultaneous payment therefor in
lawful money of the United States or otherwise as hereinafter provided, at the
Exercise Price as set forth in Section 2 below.

 

This warrant (the “Warrant”) is issued pursuant to the “Asset Purchase
Agreement,” dated as of ___________, 2013, among the Company, GCT Texas Master,
LLC, Hook & Ladder Draught House, LLC, KOW Leasing, LLC and Deepak Devaraj (the
“Asset Purchase Agreement”). The number, character and Exercise Price of such
shares of Common Stock (the “Common Stock”) are subject to adjustment as
provided below. The term “Warrant” as used herein shall include this Warrant and
any warrants delivered in substitution or exchange therefor as provided herein.
Unless otherwise separately defined herein, all capitalized terms used in this
Warrant shall have the same meaning as is set forth in the Asset Purchase
Agreement.

 

The following terms shall apply to this Warrant:

 

1.                  Term of Warrant. Subject to the terms and conditions set
forth herein, this Warrant shall be exercisable, in whole or in part, during the
term commencing on the Date of Issuance, and ending at _______________, 2016.

 

 

 

 

2.                  Exercise Price. The Exercise Price per share of Common Stock
at which this Warrant may be exercised shall be equal to $1.00 per share as
adjusted from time to time pursuant to Section 10 below (the “Exercise Price”).
If the Exercise Price is adjusted, then the number of Warrant Shares issuable
pursuant to this Warrant shall be appropriately adjusted, using the formula set
forth in Section 10 hereof.

 

3.                  Exercise of Warrant.

 

(a)          The purchase rights represented by this Warrant are exercisable by
the Holder in whole or in part, at any time, or from time to time, by the
surrender of this Warrant and the Notice of Exercise annexed hereto duly
completed and executed on behalf of the Holder, at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to the Holder at the address of the Holder appearing on the books of the
Company), upon payment in cash or by check acceptable to the Company.

 

(b)          Notwithstanding anything to the contrary set forth herein, upon
exercise of this Warrant, the Holder may, at the Holder’s election exercise this
Warrant by paying to the Company an amount equal to the aggregate Exercise Price
of the Warrant Shares being purchased.

 

(c)          This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for exercise as
provided above, and the person entitled to receive the shares of Common Stock
issuable upon such exercise shall be treated for all purposes as the holder of
record of such shares as of the close of business on such date. As promptly as
practicable on or after such date, the Company at its expense shall issue and
deliver to the person or persons entitled to receive the same a certificate or
certificates for the number of shares issuable upon such exercise. In the event
that this Warrant is exercised in part, the Company at its expense will execute
and deliver a new Warrant of like tenor exercisable for the number of shares for
which this Warrant may then be exercised.

 

4.                  No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Exercise Price
multiplied by such fraction.

 

5.                  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 loss, theft, or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and substance to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor and amount.

 

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6.                  Rights of Stockholders. Until the Holder exercises this
Warrant and the Company issues the Holder Warrant Shares purchasable upon the
exercise hereof, as provided herein, the Holder shall not be entitled to vote or
receive dividends or be deemed the holder of Common Stock or any other
securities of the Company that may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold consent
or assert dissenter’s rights with respect to any corporate action (whether upon
any recapitalization, issuance of stock, reclassification of stock, change of
par value, or change of stock to no par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise.

 

7.                  Transfer of Warrant.

 

(a)          Warrant Register. The Company will maintain a register (the
“Warrant Register”) containing the names and addresses of the Holder. The Holder
may change his address as shown on the Warrant Register by written notice to the
Company requesting such change. Any notice or written communication required or
permitted to be given to the Holder may be delivered or given by mail to the
Holder as shown on the Warrant Register and at the address shown on the Warrant
Register. Until this Warrant is transferred on the Warrant Register, the Company
may treat the Holder as shown on the Warrant Register as the absolute owner of
this Warrant for all purposes, notwithstanding any notice to the contrary.

 

(b)          Warrant Agent. The Company may, by written notice to the Holder,
appoint an agent for the purpose of maintaining the Warrant Register referred to
in Section 7(a) above, issuing the Common Stock or other securities then
issuable upon the exercise of this Warrant, exchanging this Warrant, replacing
this Warrant, or any or all of the foregoing. Thereafter, any such registration,
issuance, exchange, or replacement, as the case may be, shall be made at the
office of such agent.

 

(c)          Transferability and Non-negotiability of Warrant. This Warrant may
not be transferred or assigned in whole or in part without compliance with the
terms of this Warrant and all applicable federal and state securities laws by
the transferor and the transferee (including the delivery of investment
representation letters reasonably satisfactory to the Company, if such are
requested by the Company).

 

(d)          Compliance with Securities Laws.

 

(i)          The Warrant and the Warrant Shares are characterized as “restricted
securities” under the Securities Act of 1933, as amended (the “1933 Act”)
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering, and that under the 1933 Act and applicable
regulations thereunder, such securities may be resold without registration under
the 1933 Act only in certain limited circumstances. In this connection, the
Holder represents that it is familiar with the Securities and Exchange
Commission (“SEC”) Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the 1933 Act. The Company is under no
obligation to register any of the securities sold hereunder, except as provided
in Section 11 hereof. No public market now exists for this Warrant or the
Warrant Shares and that it is uncertain whether a public market will ever exist
for this Warrant or the Warrant Shares.

 

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(ii)          This Warrant and all certificates for the Warrant Shares issued
upon exercise hereof shall be stamped or imprinted with a legend in
substantially the following form (in addition to any legend required by state
securities laws):

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THE SECURITES MAY NOT BE SOLD OR OFFERED FOR SALE IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
SUCH ACT, (B) A “NO ACTION” LETTER OF THE SECURITIES AND EXCHANGE COMMISSION
WITH RESPECT TO SUCH SALE OR OFFER OR (C) SATISFACTORY ASSURANCES TO THE
CORPORATION THAT REGISTRATION UNDER SUCH ACT IS NOT REQUIRED WITH RESPECT TO
SUCH SALE OR OFFER.”

 

Certificates evidencing the Warrant shall not contain any legend (including the
legend set forth in this Section): (i) following a sale of such Warrant pursuant
to an effective registration statement or (ii) following a sale of such Warrant
pursuant to Rule 144, or (iii) if such legend is not required under applicable
requirements of the Securities Act of 1934, as amended (the “Securities Act”)
(including judicial interpretations and pronouncements issued by the staff of
the SEC). Following such time as restrictive legends are not required to be
placed on certificates representing the Warrant, the Company will, no later than
three Trading Days following the delivery by a Holder to the Company or the
Company’s transfer agent of a certificate representing the Warrant containing a
restrictive legend, deliver or cause to be delivered to such Holder a
certificate representing such Warrant that is free from the restrictive legend
provided for in this Section. The Company shall cause its counsel to issue a
legal opinion to the Company’s transfer agent promptly after the effective date
of a registration statement covering the Warrant if required by the Company’s
transfer agent to effect the removal of the legend hereunder. The Company may
not make any notation on its records or give instructions to any transfer agent
of the Company that enlarge the restrictions on transfer set forth in this
Section. Certificates for the Warrant subject to legend removal hereunder shall
be transmitted by the transfer agent of the Company to the Holder by crediting
the account of the Holder’s prime broker with the Depository Trust Company
system.

 

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(e)         Disposition of the Holder's Rights.

 

(i)          Transferability. Subject to compliance with any applicable
securities laws, this Warrant and all rights hereunder (including, without
limitation, any registration rights) are transferable, in whole or in part, upon
surrender of this Warrant at the principal office of the Company or its
designated agent, together with a written assignment of this Warrant,
substantially in the form attached hereto, duly executed by the Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required, such payment,
the Company shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees, as applicable, and in the denomination or
denominations specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled. The Warrant, if properly assigned
in accordance herewith, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.

 

(ii)          New Warrants. This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 7(e)(i), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or
exchanges shall be dated the initial exercise date and shall be identical with
this Warrant except as to the number of Warrant Shares issuable pursuant
thereto.

 

(f)           Any entity to whom the Holder transfers any right to purchase the
Warrant Shares pursuant to this Warrant or any of the Warrant Shares issuable
upon the exercise of such right shall become a “Holder” for purposes of this
Section 7.

 

8.                  Reservation of Stock. The Company covenants that during the
term this Warrant is exercisable, the Company will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the
issuance of Common Stock upon the exercise of this Warrant and, from time to
time, will take all steps necessary to amend its Amended and Restated
Certificate of Incorporation (the “Certificate”) as the same may be amended from
time to time to provide sufficient reserves of shares of Common Stock issuable
upon exercise of the Warrant. The Company further covenants that all shares that
may be issued upon the exercise of rights represented by this Warrant, upon
exercise of the rights represented by this Warrant and payment of the Exercise
Price, all as set forth herein, will be free from all taxes, liens, and charges
in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously or otherwise specified herein). The Company agrees
that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock upon the
exercise of this Warrant.

 

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9.                  Amendments.

 

(a)          Any term of this Warrant may be amended, and any waiver of any term
of the Warrants may be granted, with the written consent of the Company and the
Holder of the Warrant. Any amendment or waiver effected in accordance with this
Section 9 shall be binding upon the Holder and each future holder of the Warrant
and the Company, notwithstanding the fact that such future holder did not
consent to such amendment or waiver.

 

(b)          No waivers of or exceptions to any term, condition or provision of
the Warrants, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such term, condition or provision.

 

10.                Adjustments. The Exercise Price and the number of shares
purchasable hereunder are subject to adjustment from time to time as follows:

  

(a)          Reclassification, etc. If the Company at any time while this
Warrant, or any portion thereof, remains outstanding and unexpired shall, by
reclassification of securities or otherwise, change any of the securities as to
which purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities which were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 10.

 

(b)          Split, Subdivision or Combination of Warrant Shares. If the Company
at any time while this Warrant, or any portion thereof, remains outstanding and
unexpired shall split, subdivide or combine the securities as to which purchase
rights under this Warrant exist, into a different number of securities of the
same class, the Exercise Price for such securities shall be proportionately
decreased in the case of a split or subdivision or proportionately increased in
the case of a combination.

 

(c)          Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment pursuant to this Section 10, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Holder of this Warrant a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the
written request, at any time, of such Holder, furnish or cause to be furnished
to such Holder a like certificate setting forth: (i) such adjustments and
readjustments; (ii) the Exercise Price at the time in effect; and (iii) the
number of shares and the amount, if any, of other property which at the time
would be received upon the exercise of the Warrant.

 

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11.                     Piggyback Registration Rights. (a) If at any time the
Company proposes to file a registration statement under the 1933 Act with
respect to an offering of equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into, equity securities, by the
Company for its own account or for security holders of the Company for their
account (or by the Company and by security holders of the Company), other than a
registration statement (i) filed in connection with an offering of securities to
employees or directors of the Company pursuant to any employee stock option or
other benefit plan, (ii) filed on Form S-4 or S-8 or any successor to such
forms, (iii) for an exchange offer or offering of securities solely to the
Company’s existing security holders, (iv) for an offering of debt that is
convertible into equity securities of the Company, (v) for a dividend
reinvestment plan, or (vi) solely in connection with a merger, share capital
exchange, asset acquisition, share purchase, reorganization, amalgamation,
subsequent liquidation, or other similar business transaction that results in
all of the Company’s shareholders having the right to exchange their common
stock for cash, securities or other property of a non-capital raising bona fide
business transaction, then the Company shall: (1) give written notice of such
proposed filing to the Holder as soon as practicable but in no event less than
three (3) business days before the anticipated filing date, which notice shall
describe the amount and type of securities to be included in such offering, the
intended method(s) of distribution, and the name of the proposed managing
underwriter or underwriters, if any, of the offering, and (2) offer to the
Holder in such notice the opportunity to register the sale of such number of the
shares of Common Stock underlying this Warrant as Holder requests (the
“Registrable Securities”) in writing within three (3) business days following
receipt by Holder of such notice (a “Piggy-Back Registration”); provided,
however, the Holder shall only be entitled to one Piggy-Back Registration right.
The Company shall include in such registration statement such Registrable
Securities that are requested to be included therein within three (3) business
days after the receipt by Holder of any such notice. If at any time after giving
written notice of its intention to register any securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to the Holder, and (x) in the case of a
determination not to register, shall be relieved of its obligation to register
the Registrable Securities in connection with such registration, and (y) in the
case of a determination to delay registering, shall be permitted to delay
registering the Registrable Securities for the same period as the delay in
registering such other securities. In the event that the Company determines not
to register or to delay registration of the securities, Holder will retain his
one Piggy-Back Registration right. If the offering pursuant to a Piggy-Back
Registration is to be an underwritten offering, then Holder must permit the sale
or other disposition of such Registrable Securities in accordance with the
intended method(s) of distribution thereof. Holder, if proposing to distribute
his securities through a Piggy-Back Registration that involves an underwriter or
underwriters, shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such Piggy-Back Registration and
Holder shall be responsible for any fees or commissions due to such underwriters
in connection with the sale of such Registrable Securities.

 

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(b)         Reduction of Offering. If the managing underwriter or underwriters
for a Piggy-Back Registration that is to be an underwritten offering advises the
Company and Holder in writing that the dollar amount or number of shares of
common stock which the Company desires to sell, (i) as to which registration has
been demanded pursuant to written contractual arrangements with persons other
than the Holder, (ii) the Registrable Securities as to which registration has
been requested under this Section, and (iii) as to which registration has been
requested pursuant to the written contractual Piggy-Back Registration rights of
other the Holder and other securityholders of the Company, exceeds the maximum
dollar amount or maximum number of securities that can be sold in such offering
without adversely affecting the proposed offering price, the timing, the
distribution method, or the probability of success of such offering (such
maximum dollar amount or maximum number of securities, as applicable, the
“Maximum Number of Securities”), then the Company shall include in any such
registration (if the registration is undertaken for the Company’s account):

 

(i)          first, the shares of common stock that the Company desires to sell;
and

 

(ii)          to the extent of the Maximum Number of Securities, the shares of
common stock, pro-rata among holders, for the account of any persons, including
the Holder, for which the Company is obligated to register pursuant to
contractual Piggy-Back Registration rights such as in this Agreement.

 

(c)         Withdrawal. Holder may elect to withdraw his request for inclusion
of Registrable Securities in any Piggy-Back Registration by giving written
notice to the Company of such request to withdraw prior to the effectiveness of
the registration statement. The Company (whether on its own determination or as
the result of a withdrawal by persons making a demand pursuant to written
contractual obligations) may withdraw a registration statement at any time prior
to the effectiveness of the registration statement.

 

(d)         Limitations on Piggy-Back Registration Rights.  Holder’s Piggy-Back
Registration rights granted pursuant to this Section shall expire upon the date
such Registrable Securities are eligible for sale without registration pursuant
to Rule 144.  Further, the Company has the right to exclude the Holder from any
registration statement in the event the Company is contractually obligated not
to include such securities.

 

(e)         Obligations of the Holder.  In connection with any registration
statement utilized by the Company to satisfy the registration rights pursuant to
this Section, the Holder agrees to cooperate with the Company in connection with
the preparation of the registration statement, and Holder through Hook & Ladder
Draught House, LLC and KOW Leasing Co., LLC, as the sole member of each, agrees
that he will (i) respond within three (3) business days to any written request
by the Company to provide or verify information regarding Holder or his
Registrable Securities (including the proposed manner of sale) that may be
required to be included in such registration statement and related prospectus
pursuant to the rules and regulations of the Securities and Exchange Commission,
and (ii) provide in a timely manner information regarding the proposed
distribution by Holder of the Registrable Securities and such other information
as may be requested by the Company from time to time in connection with the
preparation of and for inclusion in the registration statement and related
prospectus.

 

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13.                Miscellaneous.

 

(a)          Additional Undertaking. The Holder hereby agrees to take whatever
additional action and execute whatever additional documents the Company may deem
necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either the Holder or the shares of Common
Stock issued upon exercise hereof pursuant to the provisions of this Warrant.

 

(b)          Governing Law. This Warrant shall be governed by, and construed in
accordance with, the laws of the State of New York without resort to that
State's conflict-of-laws rules.

 

(c)          Successors and Assigns. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Company and its successors and
assigns and upon the Holder, the Holder's permitted assigns and the legal
representatives, heirs and legatees of the Holder's estate, whether or not any
such person shall have become a party to this Warrant and have agreed in writing
to join herein and be bound by the terms hereof.

 

(d)          Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

 

(e)          Jurisdiction. All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Asset Purchase Agreement.

 

(f)           Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Asset Purchase
Agreement.

 

(g)          Limitation of Liability. No provision hereof, in the absence of any
affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder,
shall give rise to any liability of the Holder for the purchase price of any
Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.

 

(h)          Remedies. The Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive and not to assert the defense in any action for specific performance that
a remedy at law would be adequate.

 

(Signatures appear on the following page.)

 

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IN WITNESS WHEREOF, The Grilled Cheese Truck, Inc. has caused this Warrant to be
executed by its officer thereunto duly authorized.

 

Dated as of ___________, 2013.

 

  THE GRILLED CHEESE TRUCK, INC.       By:       Name:     Title:

 

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NOTICE OF EXERCISE

 

To:The Grilled Cheese Truck, Inc.

 

(1)          The undersigned hereby elects to purchase ____________ shares of
Common Stock of The Grilled Cheese Truck, Inc., pursuant to the terms of the
attached Warrant.

 

Such exercise is made pursuant to Section 1(a) and the undersigned herewith
makes payment of the Warrant Price for such shares in full in the amount of
$___________.

 

(2)          In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock have not been registered under the
Securities Act of 1933, as amended (the “1933 Act”), and are restricted
securities under the 1933 Act and that the undersigned will not offer, sell, or
otherwise dispose of any such shares of Common Stock except under circumstances
that will not result in a violation of the 1933 Act or any state securities
laws.

 

(3)          Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:

 

  Name               Name    

 

(4) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:

 

  Name               Name    

 

Signature:           Date:    

 

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