Exhibit 10.2 

 

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: November 7, 2013

 

CHANTICLEER HOLDINGS, INC., a corporation organized under the laws of the State
of Delaware (the “Company”), hereby certifies that [SUBSCRIBER] or his permitted
assigns (the “Holder”), is entitled, subject to the terms set forth below and
subject to Company shareholder approval as provided herein, 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 November 7, 2019 (the
“Expiration Date”), [AMT] fully paid and non-assessable Common Shares of the
Company, at a per share purchase price of [seven dollars (USD $7.00) or five
dollars and fifty cents ($5.50)]. 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 November 4, 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
November 3, 2013 requires Shareholder approval. The Company intends to seek
required Shareholder approval if necessary.

 

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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.

 

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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: Michael D. Pruitt    
  Title: Chief Executive Officer

 

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.

 

  Date:                  

(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: ______________, _______

 

Signed in the presence of:

 

________________________________________________

(Name)

 

ACCEPTED AND AGREED:

[TRANSFEREE]

 

_________________________________________________

(Name)

 

_______________________________________________________________

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

 

_______________________________________________________________

________________________________________________________________

(address)

 

 

________________________________________________________________

________________________________________________________________

(address)