EXHIBIT A
EXHIBIT
10.2
EXHIBIT
A
THIS
WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT AND LAWS OR, SUBJECT TO SECTION 5.3 HEREOF, AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT
TO PURCHASE STOCK
Issuer:
Famous Uncle Al’s Hot Dogs & Grille, Inc., a Delaware
corporation
Number of
Shares: XXXX, subject to adjustment
Class of
Stock: Common Stock
Exercise
Price: $2.75, subject to adjustment
Issue
Date: October 18, 2010
Expiration
Date: February 18, 2011
FOR THE
AGREED UPON VALUE of $1.00, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, this Warrant is issued
to ____________________________ (together with its successors and permitted
assigns, "Holder") by Famous Uncle Al’s Hot Dogs & Grille, Inc., a Delaware
corporation (the "Company").
Subject
to the terms and conditions hereinafter set forth, the Holder is entitled upon
surrender of this Warrant and the duly executed Notice of Exercise form annexed
hereto as Appendix 1 ("Notice of Exercise"), at the principal office of the
Company, 00 Xxxx Xxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxx, XX 00000 or such other
office as the Company shall notify the Holder of in writing, to purchase from
the Company up to _________________________ fully paid and non-assessable shares
(the "Shares") of the Company's common stock, ("Common Stock") at a purchase
price per Share of Two Dollars and Seventy-Five Cents ($2.75) (the "Exercise
Price"). This Warrant may be exercised in whole or in part at any time and from
time to time until 5:00
PM,
Eastern time, on the Expiration Date, and shall be void thereafter. Until such
time as this Warrant is exercised in full or expires, the Exercise Price and the
Shares are subject to adjustment from time to time as hereinafter
provided.
ARTICLE
1. EXERCISE.
1.1 Method
of Exercise. Holder may exercise this Warrant by delivering a duly executed
Notice of Exercise to the principal office of the Company.
1.2 Delivery
of Certificate and New Warrant. Promptly after Holder exercises or converts this
Warrant, the Company shall deliver to Holder certificates for the Shares
acquired and, if this Warrant has not been fully exercised or converted and has
not expired, a new Warrant representing the right to purchase the Shares not so
acquired.
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1.3 Replacement
of Warrants. 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 amount 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.
ARTICLE
2. ADJUSTMENTS TO THE SHARES.
2.1 Stock
Dividends, Splits, Etc. If the Company declares or pays a dividend on the
outstanding shares of Common Stock, payable in Common Stock or other securities,
or subdivides the outstanding Common Stock into a greater amount of Common
Stock, then upon exercise of this Warrant, for each Share acquired, Holder shall
receive, without cost to Holder, the total number and kind of securities to
which Holder would have been entitled had Holder owned the Shares of record as
of the date the dividend or subdivision occurred.
2.2 Reclassification,
Exchange or Substitution. Upon any reclassification, exchange, substitution, or
other event that results in a change of the number and/or class of the
securities issuable upon exercise or conversion of this Warrant, Holder shall be
entitled to receive, upon exercise or conversion of this Warrant, the number and
kind of securities and property that Holder would have received for the Shares
if this Warrant had been exercised immediately before such reclassification,
exchange, substitution, or other event. The Company or its successor shall
promptly issue to Holder a new Warrant for such new securities or other
property. The new Warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
2 including, without limitation, adjustments to the Exercise Price and to the
number of securities or property issuable upon exercise of the new Warrant. The
provisions of this Section 2.2 shall similarly apply to successive
reclassifications, exchanges, substitutions, or other events.
2.3 Adjustments
for Combinations, Etc. If the outstanding shares of Common Stock are combined or
consolidated, by reclassification or otherwise, into a lesser number of shares,
the Exercise Price shall be proportionately increased and the number of Shares
shall be proportionately decreased.
2.4 No
Impairment. The Company shall not, by amendment of its Certificate of
Incorporation or by-laws, or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed under this Warrant by the Company, but
shall at all times in good faith assist in carrying out of all the provisions of
this Article 2 and in taking all such action as may be necessary or appropriate
to protect Holder's rights under this Article against impairment.
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2.5 Fractional
Shares. No fractional Shares shall be issuable upon exercise or conversion of
the Warrant and the number of Shares to be issued shall be rounded down to the
nearest whole Share. If a fractional Share interest arises upon any exercise or
conversion of this Warrant, the Company shall eliminate such fractional Share
interest by paying Holder an amount computed by multiplying such fractional
interest by the Fair Market Value of one Share.
2.6 Certificate
as to Adjustments. Upon each adjustment of the Exercise Price, number of Shares
or class of security for which this Warrant is exercisable, the Company at its
expense shall promptly compute such adjustment, and furnish Holder with a
certificate of its chief financial officer setting forth such adjustment and the
facts upon which such adjustment is based. The Company shall, upon written
request, furnish Holder a certificate setting forth the Exercise Price, number
of Shares and class of security for which this Warrant is exercisable in effect
upon the date thereof and the series of adjustments leading to such Exercise
Price, number of Shares and class of security.
ARTICLE
3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations
and Warranties. The Company hereby represents and warrants to the Holder as
follows:
(a) All
Shares which may be issued upon the due exercise of this Warrant shall, upon
issuance, be duly authorized, validly issued, fully paid and non-assessable, and
free of any liens and encumbrances except for restrictions on transfer provided
for herein or under applicable federal and state securities laws.
(b) The
Company covenants that it shall at all times cause to be reserved and kept
available out of its authorized and unissued shares such number of shares of its
Common Stock and other securities as will be sufficient to permit the exercise
in full of this Warrant and the conversion or exchange of such Common Stock into
or for such other securities.
3.2 Notice
of Certain Events. If the Company proposes at any time (a) to declare any
dividend or distribution upon any of its Common Stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of Common Stock any
additional shares of stock of any class or series or other rights; (c) to effect
any reclassification or recapitalization of any of its Common Stock; or (d) to
merge or consolidate with or into any other corporation, or sell, lease, or
convey all or substantially all of its assets, or to liquidate, dissolve or wind
up, then, in connection with each such event, the Company shall give Holder (1)
at least 10 days prior written notice of the date on which a record will be
taken for such dividend, distribution, or subscription rights (and specifying
the date on which the holders of securities of the Company shall be entitled to
receive such dividend, distribution or rights) or for determining rights to
vote, if any, in respect of the matters referred to in (c) and (d) above; and
(2) in the case of the matters referred to in (c) and (d) above at least 10 days
prior written notice of the date when the same will take place (and specifying
the date on which the holders of securities of the Company will be entitled to
exchange their securities of the Company for securities or other property
deliverable upon the occurrence of such event).
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ARTICLE
4. REPRESENTATIONS AND WARRANTIES OF THE HOLDER.
4.1 Purchase
for Own Account. This Warrant and the Shares to be acquired upon exercise hereof
will be acquired for investment for Holder's account, not as nominee or agent,
and not with a view to sale or distribution in violation of applicable federal
and state securities laws.
4.2 Investment
Experience. Holder understands that the purchase of this Warrant and the Shares
covered hereby involves substantial risk. Holder (a) has experience as an
investor in unregistered securities, (b) has sufficient knowledge and experience
in financial and business affairs that it evaluate the risks and merits of its
investment in this Warrant and the Shares, and (c) can bear the economic risk of
such Holder's investment in this Warrant and the Shares.
4.3 Accredited
Investor. Holder is an "accredited investor" as such term is defined in
Regulation D under the Securities Act of 1933, as amended.
ARTICLE
5. MISCELLANEOUS.
5.1 Automatic
Conversion upon Expiration. In the event that, upon the Expiration Date, the
Fair Market Value of one Share (or other security issuable upon the exercise
hereof) is greater than the Exercise Price in effect on such date, then this
Warrant shall automatically be deemed on and as of such date to be converted
pursuant to Section 1.2 above as to all Shares (or such other securities) for
which it shall not previously have been exercised or converted, and the Company
shall promptly deliver a certificate representing the Shares (or such other
securities) issued upon such conversion to the Holder.
5.2 Legends.
This Warrant and the Shares shall be imprinted with a legend in substantially
the following form:
“THE ISSUANCE AND SALE OF THE PURCHASED SECURITIES
REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, NOR APPLICABLE STATE SECURITIES
LAWS. THE PURCHASED SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE PURCHASED SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL
BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT OR PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT, OR
OTHERWISE. NOTWITHSTANDING THE FOREGOING, THE PURCHASED SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE PURCHASED
SECURITIES.”
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5.3 Compliance
with Securities Laws on Transfer. This Warrant and the Shares may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably
requested by the Company).
5.4 Notices.
All notices and other communications from the Company to the Holder, or vice
versa, shall be deemed delivered and effective when given personally, or mailed
by first-class registered or certified mail, postage prepaid, or sent via
reputable overnight courier service, fee prepaid, at such address as may have
been furnished to the Company or the Holder, as the case may be, in writing by
the Company or such holder from time to time.
5.6 Waiver.
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.
5.7 Attorneys
Fees. In the event of any dispute between the parties concerning the terms and
provisions of this Warrant, the party prevailing in such dispute shall be
entitled to collect from the other party all costs incurred in such
dispute, including reasonable attorneys' fees.
5.8 Governing
Law. This Warrant shall be governed by and construed in accordance with the laws
of the State of Arizona, without giving effect to its principles regarding
conflicts of law.
5.9 No
Rights as a Shareholder. Except as specifically provided in this Warrant, Holder
shall have no rights as a shareholder of the Company in respect of the Shares
issuable hereunder unless and until Holder exercises this Warrant as to all or
any of such Shares.
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IN WITNESS WHEREOF, the
Company has caused this Warrant to Purchase Stock to be executed as an
instrument under seal by its duly authorized representative as of the date first
above written.
ATTEST:
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"COMPANY"
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Famous
Uncle Al’s Hot Dogs & Grille, Inc.
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By:
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By:
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Name:
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Name:
Xxxxx Xxxxxxxxxx
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Title:
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Title:
Chief Executive Officer
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APPENDIX
1
NOTICE OF
EXERCISE
1. The
undersigned hereby elects to purchase_______ shares of the common stock of the
Company pursuant to Section 1.1 of the attached Warrant, and tenders herewith
payment of the Exercise Price of such shares in full.
2. Please
issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name as is specified below:
(Name)
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(Address)
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3. The
undersigned represents it is acquiring the shares solely for its own account and
not as a nominee for any other party and not with a view toward the resale or
distribution thereof except in compliance with applicable securities
laws.
(Signature)
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(Date)
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