EXHIBIT 10.20
THIS WARRANT AND THE SHARES Of COMMON STOCK OF GRILL CONCEPTS, INC. TO BE ISSUED
UPON ANY EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS
WARRANT AND THE UNDERLYING SHARES OF COMMON STOCK MAY NOT BE SOLD, TRANSFERRED
OR ASSIGNED UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
WARRANT
to Purchase Shares
of
Common Stock (.00001 par value)
of
GRILL CONCEPTS, INC.
February 1, 1999
This certifies that, for value received, The Michigan Avenue Group, a
general partnership ("MAG"), and any subsequent transferee pursuant to the terms
hereof (each, a "Holder") is entitled to purchase, subject to the provisions of
this Warrant, from Grill Concepts, Inc., a Delaware corporation (the "Issuer"),
at any time or from time to time on or after April 1, 2000 (subject to
adjustment pursuant to Section 5(d))(the "Warrant Vesting Date") and on or
before April 1, 2005 (the "Expiration Date"), seven hundred eight thousand three
hundred thirty-three (708,333) fully paid and nonassessable shares of common
stock, $.00001 par value (the "Common Stock"), of the Issuer at a fixed exercise
price equal to $1.75 per share, subject to adjustment pursuant to the terms
hereunder (the "Fixed Exercise Price") plus the Percentage Interest Exercise
Price (hereinafter defined) (such shares of Common Stock and other securities
issued and issuable upon exercise of this Warrant, the "Warrant Shares"). The
Fixed Exercise Price and the Percentage Interest Exercise Price are collectively
called the Exercise Price.
Section 1. Exercise of Warrant.
(a) Subject to the provisions hereof, this Warrant may be exercised, in
whole or in part, but not as to a fractional share, at any time or from time to
time on or after the Warrant Vesting Date and on or before the Expiration Date,
by presentation and surrender hereof to the Issuer at the address which, in
accordance with the provisions of Section 10 hereof, is then effective for
notices to the Issuer, with the Election to Purchase Form annexed hereto as
Schedule One, duly executed and accompanied by payment to the Issuer as further
set forth below in this Section 1, for the account of the Issuer, of the
Exercise Price for the number of Warrant Shares specified in such form. If this
Warrant should be exercised in part only, the Issuer shall, upon surrender of
this Warrant, execute and deliver a new Warrant evidencing the rights of the
Holder hereof to purchase the balance of the Warrant Shares purchasable
hereunder. The Issuer shall maintain at its principal place of business a
register for the registration of this Warrant and registration of transfer of
the Warrant.
(b) The Fixed Exercise Price for the number of Warrant Shares specified in
the Election to Purchase Form shall be payable first by assignment to Issuer for
each such Warrant Share of the sum of 1/708,333 of (i) Holder's right to receive
a Preferred Return pursuant to Section 6.12(b)(i) of the Operating Agreement for
Chicago - The Grill on the Alley LLC, an Illinois limited liability Company
("LLC"), which shall be deemed to be valued in the amount of the accrued but
unpaid Preferred Return at the time of exercise; (ii) Holder's right to receive
Distributions pursuant to Section 6.12(b)(ii) of the Operating Agreement, which
shall be deemed to be valued at the then-balance of Holder's Non-Manager-Members
Adjusted Capital Contributions; and (ii) Holder's interest in the MAG Loan, as
evidenced by the Senior Convertible Promissory Note issued to Holder by LLC,
which shall be deemed to be valued at its then-principal balance plus accrued
but unpaid interest thereon. Any balance of the Fixed Exercise Price for the
number of Warrant Shares specified in the Election to Purchase Form shall be
payable (i) in United States Dollars by certified or official bank check payable
to the order of the Issuer or by wire transfer of immediately available funds to
an account specified by the issuer for that purpose; or (ii) if permitted by the
Issuer as evidenced by written notice to such effect, by means of a "cashless
exercise." In the event the Issuer permits "cashless exercise," the Holder may
deliver in payment of the Fixed Exercise Price (x) certificates representing
shares of Common Stock theretofore owned by the Holder having a fair market
value equal to the balance of the Fixed Exercise Price; (y) an election by the
Holder to have the Issuer withhold the number of shares of Common Stock the fair
market value, less the Fixed Exercise Price, of which is equal to the aggregate
balance of the Fixed Exercise Price of the Warrant Shares specified in the
Election to Purchase Form, or (z) any combination of the preceding and cash,
equal in value to the full amount of the balance of the Fixed Exercise Price.
For purposes hereof, the "fair market value" of shares of Common Stock shall
equal the closing sales price of the Issuer's Common Stock on the last trading
day immediately preceding the date on which the Election to Purchase Form is
delivered to the Issuer along with the Warrant and payment of the Fixed Exercise
Price. Capitalized terms not defined herein shall have the same meaning as in
the Operating Agreement.
(c) The Percentage Interest Exercise Price for each share shall consist of
that portion of Holder's Membership Interest in LLC which constitutes 1/708,333
of 40% of the Percentage Interests in the LLC, whether or not the Members other
than Manager hold more than 40% of the Percentage Interests of the Members in
the LLC. The Percentage Interest Exercise Price for the number of Warrant Shares
specified in the Election to Purchase Form shall be payable by assignment of the
applicable portion of Holder's Membership Interest in LLC.
(d) Certificates representing Warrant Shares shall bear the following
restrictive legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
EITHER AN EFFECTIVE REGISTRATION STATEMENT FOR THESE SHARES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
2
Section 2. Reservation of Shares: Preservation of Rights of Holder. The
Issuer hereby agrees that there shall be reserved for issuance and/or delivery
upon exercise of this Warrant, such number of Warrant Shares as shall be
required for issuance or deliver upon full exercise of this Warrant. The Warrant
surrendered upon exercise shall be canceled by the Issuer. After the Expiration
Date no shares of Common Stock shall be subject to reservation in respect of
this Warrant. The Issuer further agrees (i) that it will not, by amendment of
its Articles of Incorporation or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act, avoid or seek to
avoid the observation or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder by the Issuer, (ii) promptly to
take all action as may from time to time be required in order to permit the
Holder to exercise this Warrant and the Issuer duly and effectively to issue
shares of its Common Stock or other securities as provided herein upon the
exercise hereof, and (iii) promptly to take all action required or provided
herein to protect the rights of the Holder granted hereunder against dilution.
Without limiting the generality of the foregoing, should the Warrant Shares at
any time consist in whole or in part of shares of capital stock having a par
value, the Issuer agrees that before taking any action which would cause an
adjustment of the Fixed Exercise Price so that the same would be less than the
then par value of such Warrant Shares, the Issuer shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Issuer may validly and legally issue fully paid and nonassessable shares of such
Common Stock at the Fixed Exercise Price as so adjusted. The Issuer further
agrees that it will not establish a par value for its Common Stock while this
Warrant is outstanding in an amount greater than the Fixed Exercise Price.
Section 3. Exchange, Transfer, Assignment or Loss of Warrant. This Warrant
is not transferable or assignable except to the partners of MAG or to members of
the family of such partners, including trusts and/or family partnerships for the
benefit of said family members. Any attempted transfer of this Warrant, the
Warrant Shares or any new Warrant not in accordance with this Section shall be
null and void, and the Issuer shall not in any way be required to give effect to
such transfer. No transfer of this Warrant shall be effective for any purpose
hereunder until (i) written notice of such transfer and of the name and address
of the transferee has been received by the Issuer, and (ii) the transferee shall
first agree in a writing deposited with the Secretary of the Issuer to be bound
by all the provisions of this Warrant. Upon surrender of this Warrant to the
Issuer by any transferee authorized under the provisions of this Section 3, the
Issuer shall, without charge, execute and deliver a new Warrant registered in
the name of such transferee at the address specified by such transferee, and
this Warrant shall promptly be canceled. The Issuer may deem and treat the
registered holder of any Warrant as the absolute owner thereof for all purposes,
and the Issuer shall not be affected by any notice to the contrary. Any Warrant
if presented by an authorized transferee, may be exercised by such transferee
without prior delivery of a new Warrant issued in the name of the transferee.
Upon receipt by the Issuer of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Issuer will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute a separate contractual obligation on the
part of the Issuer, whether or not the Warrant so lost, stolen destroyed or
mutilated shall be at any time enforceable by anyone.
3
Section 4. Rights of Holder. Neither a Holder nor his transferee by devise
or the laws of descent and distribution or otherwise shall be, or have any
rights or privileges of, a shareholder of the Issuer with respect to any Warrant
Shares, unless and until certificates representing such Warrant Shares shall
have been issued and delivered thereto.
Section 5. Adjustments in Fixed Exercise Price and Warrant Shares. The
Fixed Exercise Price and Warrant Shares shall be subject to adjustment from time
to time as provided in this Section 5.
(a) If the Issuer is recapitalized through the subdivision or combination
of its outstanding shares of Common Stock into a larger or smaller number of
shares, the number of shares of Common Stock for which this Warrant may be
exercised shall be increased or reduced, as of the record date for such
recapitalization, in the same proportion as the increase or decrease in the
outstanding shares of Common Stock and the Fixed Exercise Price shall be
adjusted so that the aggregate amount payable for the purchase of all Warrant
Shares issuable hereunder immediately after the record date for such
recapitalization shall equal the aggregate amount so payable immediately before
such record date.
(b) If the Issuer declares a dividend on Common Stock or makes a
distribution to holders of Common Stock and such dividend or distribution is
payable or made in Common Stock or securities convertible into or exchangeable
for Common Stock or rights to purchase Common Stock or securities convertible
into or exchangeable for Common Stock the number of shares of Common Stock for
which this Warrant may be exercised shall be increased, as of the record date
for determining which holders of Common Stock shall be entitled to receive such
dividend or distribution, in proportion to the increase in the number of
outstanding shares (and shares of Common Stock issuable upon conversion of all
such securities convertible into Common Stock) of Common Stock as a result of
such dividend or distribution, and the Fixed Exercise Price shall be adjusted so
that the aggregate amount payable for the purchase of all the Warrant Shares
issuable hereunder immediately after the record date for such dividend or
distribution shall equal the aggregate amount so payable immediately before such
record date.
(c) If the Issuer declares a dividend on Common Stock (other than a
dividend covered by subsection (b) above) or distributes to holders of its
Common Stock, other than as part of its dissolution or liquidation or the
winding up of its affairs, any shares of its capital stock any evidence of
indebtedness or any cash or other of its assets (other than for Common Stock),
the Holder shall receive notice of such event as set forth in Section 7 below.
(d) In case of any consolidation of the Issuer with, or merger of the
Issuer into, any other corporation (other than a consolidation or merger in
which the Issuer is the continuing corporation and in which no change occurs in
its outstanding Common Stock), or in case of any sale or transfer of all or
substantially all of the assets of the Issuer, or in the case of any statutory
exchange of securities with another corporation (including any exchange effected
in connection with a merger of a third corporation into the Issuer, except where
the Issuer is the surviving entity and no change occurs in its outstanding
Common Stock), the corporation formed by such consolidation or the corporation
resulting from such merger or the corporation which shall have
4
acquired such assets or securities of the Issuer, as the case may be, shall
execute and deliver to the Holder simultaneously therewith a new Warrant,
satisfactory in form and substance to the Holder, together with such other
documents as the Holder may reasonably request, entitling the Holder thereof to
receive upon exercise of such Warrant the kind and amount of shares of stock and
other securities and property receivable upon such consolidation, merger, sale,
transfer, or exchange of securities, or upon the dissolution following such sale
or other transfer, by a holder of the number of shares of Common Stock
purchasable upon exercise of this Warrant immediately prior to such
consolidation, merger, sale, transfer, or exchange. Such new Warrant shall
contain the same basic other terms and conditions as this Warrant and shall
provide for adjustments which, for events subsequent to the effective date of
such written instrument, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section 5. If any such consolidation,
merger, sale, transfer or exchange should occur prior to the Warrant Vesting
Date, the Warrant Vesting Date shall be adjusted to the date which is one
business day prior to the closing of any such consolidation, merger, sale,
transfer or exchange. The above provisions of this paragraph (d) shall similarly
apply to successive consolidations, mergers, exchanges, sales or other transfers
covered hereby.
(e) If the Issuer shall, at any time before the expiration of this Warrant
dissolve, liquidate or wind up its affairs, the Holder shall, upon exercise of
this Warrant have the right to receive, in lieu of the shares of Common Stock of
the Issuer that the Holder otherwise would have been entitled to receive, the
same kind and amount of assets as would have been issued, distributed or paid to
the Holder upon any such dissolution, liquidation or winding up with respect to
such shares of Common Stock of the Issuer had the Holder been the holder of
record of such shares of Common Stock receivable upon exercise of this Warrant
on the date for determining those entitled to receive any such distribution. If
any such dissolution, liquidation or winding up results in any cash distribution
in excess of the Fixed Exercise Price provided by this Warrant for the shares of
Common Stock receivable upon exercise of this Warrant, the Holder may, at the
Holder's option, exercise this Warrant without making payment of the Fixed
Exercise Price and, in such case, the Issuer shall, upon distribution to the
Holder, consider the Fixed Exercise Price to have been paid in full and, in
making settlement to the Holder, shall obtain receipt of the Fixed Exercise
Price by deducting an amount equal to the Fixed Exercise Price for the shares of
Common Stock receivable upon exercise of this Warrant from the amount payable to
the Holder. For purposes of this paragraph, the sale of all or substantially all
of the assets of the Issuer and distribution of the proceeds thereof to the
Issuer's shareholders shall be deemed liquidation.
(f) If an event occurs which is similar in nature to the events described
in this Section 5, but is not expressly covered hereby, the Board of Directors
of the Issuer shall make or arrange for an equitable adjustment to the number of
Warrant Shares and the Fixed Exercise Price.
(g) The term "Common Stock" shall mean the Common Stock, $.00001 par value,
of the Issuer as the same exists at the date of issuance of this Warrant or as
such stock may be constituted from time to time, except that for the purpose of
this Section 5, the term "Common Stock" shall include any stock of any class of
the Issuer which has no preference in respect of dividends or of amounts payable
in the event of any voluntary or involuntary liquidation, dissolution or winding
up of the Issuer and which is not subject to redemption by the Issuer.
5
(h) The Issuer shall retain a firm of independent public accountants of
recognized standing (who may be any such firm regularly employed by the Issuer)
to make any computation required under this Section 5, and a certificate signed
by such firm shall be conclusive evidence of the correctness of any computation
made under this Section 5.
(i) Whenever the number of Warrant Shares or the Fixed Exercise Price shall
be adjusted as required by the provisions of this Section 5, the Issuer
forthwith shall file in the custody of its secretary or an assistant secretary,
at its principal office, and furnish to each Holder hereof, a certificate
prepared in accordance with paragraph (h) above, showing the adjusted number of
Warrant Shares and the Fixed Exercise Price and setting forth in reasonable
detail the circumstances requiring the adjustments.
(j) Notwithstanding any other provision, this Warrant shall be binding upon
and inure to the benefit of any successors and assigns of the Issuer.
(k) No adjustment in the Fixed Exercise Price in accordance with the
provisions of this Section 5 need be made if such adjustment would amount to a
change in such Fixed Exercise Price of less than $.01 provided however, that the
amount by which any adjustment is not made by reason of the provisions of this
paragraph (k) shall be carried forward and taken into account at the time of any
subsequent adjustment in the Fixed Exercise Price.
(l) If an adjustment is made under this Section 5 and the event to which
the adjustment relates does not occur, then any adjustments in accordance with
this Section 5 shall be readjusted to the Fixed Exercise Price and the number of
Warrant Shares which would be in effect had the earlier adjustment not been
made.
Section 6. Taxes on Issue or Transfer of Common Stock and Warrant. The
Issuer shall pay any and all documentary stamp or similar issue or transfer
taxes payable in respect of the issue or delivery of shares of Common Stock or
other securities on the exercise of this Warrant. The Issuer shall not be
required to pay any tax which may be payable in respect of any transfer of this
Warrant or in respect of any transfers involved in the issue or delivery of
shares or the exercise of this Warrant in a name other than that of the Holder
and the person requesting such transfer, issue or delivery shall be responsible
for the payment of any such tax (and the Issuer shall not be required to issue
or deliver said shares until such tax has been paid or provided for).
Section 7. Notice of Adjustment. So long as this Warrant shall be
outstanding, (a) if the Issuer shall propose to pay any dividends or make any
distribution upon the Common Stock, or (b) if the Issuer shall offer generally
to the holder of Common Stock the right to subscribe to or purchase any shares
of any class of Common Stock or securities convertible into Common Stock or any
other similar rights, or (c) if there shall be any proposed capital
reorganization of the Issuer in which the Issuer is not the surviving entity,
recapitalization of the capital stock of the Issuer, consolidation or merger of
the Issuer with or into another corporation, sale, lease or other transfer of
all or substantially all of the property and assets of the Issuer, or voluntary
or involuntary dissolution, liquidation or winding up of the Issuer, or (d) if
the Issuer shall give to its stockholders any notices, report or other
communication respecting any significant or special action or event, then in
such event, the Issuer shall give to the Holder, at least ten days prior to
6
the relevant date described below (or such sooner period as is reasonably
possible if ten days is not reasonably possible), a notice containing a
description of the proposed action or event and stating the date or expected
date on which a record of the Issuer's stockholders is to be taken for any of
the foregoing purposes, and the date or expected date on which any such
dividend, distribution, subscription, reclassification, reorganization,
consolidation, combination, merger, conveyance, sale, lease or transfer,
dissolution, liquidation or winding up is to take place and the date or expected
date, if any is to be fixed, as of which the holders of Common Stock for
securities or other property deliverable upon such event.
Section 8. Registration Rights.
(a) Demand Registration Rights. The Issuer covenants and agrees with the
holders of Warrants and Warrant Shares that, subject to the availability of
audited financial statements which would comply with Regulation S-X under the
Securities Act, upon written request of the then Holder(s) of at least a
majority of the Warrants Shares (including Warrant Shares underlying Warrants
not yet exercised), made at any time within the period commencing on the Vesting
Date and ending one year after the Expiration Date, the Issuer will file as
promptly as practicable and, in any event, within 60 days after receipt of such
written request, at its expense (other than the fees of counsel and sales
commissions for such Holders), no more than once, a post-effective amendment
(the "Amendment") to a registration statement, or a new registration statement
under the Securities Act, registering or qualifying the Warrant Shares for sale.
Within fifteen (15) days after receiving any such notice, the Issuer shall give
notice to the other Holders of the Warrants or Warrant Shares, if any, advising
that the Issuer is proceeding with such Amendment or registration statement and
offering to include therein the Warrant Shares of such Holders. The Issuer shall
not be obligated to any such other Holder unless such other Holder shall accept
such offer by notice in writing to the Issuer within ten (10) days thereafter.
The Issuer will use its best efforts through its officers, directors, auditors
and counsel in all matters necessary or advisable, to file and cause to become
effective such Amendment or registration statement as promptly as practicable
and for a period of one year thereafter to reflect in the Amendment or
registration statement financial statements which are prepared in accordance
with Section 10(a)(3) of the Securities Act and any facts or events arising
that, individually, or in the aggregate, represent a fundamental and/or material
change in the information set forth in the Amendment or registration statement
to enable any Holders of the Warrants to exercise such Warrants and sell Warrant
Shares, or to enable any holders of Warrant Shares to sell such Warrant Shares,
during said one year period. If any registration pursuant to this paragraph 8(a)
is an underwritten offering, the Holders of a majority of the Warrant Shares to
be included in such registration shall be entitled to select the underwriter or
managing underwriter (in the case of a syndicated offering) of such offering,
subject to the Issuer's approval which shall not be unreasonably withheld.
(b) Piggyback Registration Rights. The Issuer covenants and agrees with any
holder of the Warrants and Warrant Shares that if, at any time within the period
commencing on the Warrant Vesting Date and ending on the Expiration Date, it
proposes to file a registration statement with respect to any class of equity or
equity-related security (other than in connection with an offering to the
Issuer's employees or in connection with an acquisition, merger or similar
transaction) under the Securities Act in a primary registration on behalf of the
Issuer and/or in a secondary registration on behalf of holders of such
securities and the registration form to be used
7
may be used for registration of the Warrant Shares, the Issuer will give prompt
written notice (which, in the case of a registration statement pursuant to the
exercise of demand registration rights shall be within ten (10) business days
after the Issuer's receipt of notice of such exercise and, in any event, shall
be at least 30 days prior to such filing) to the holders of Warrants and Warrant
Shares at the addresses appearing on the records of the Issuer of its intention
to file a registration statement and will offer to include in such registration
statement all, but not less than 20% of the Warrant Shares, subject to
paragraphs i and ii of this Section 8(b) such number of Warrant Shares with
respect to which the Issuer has received written requests for inclusion therein
within ten (10) days after the giving of notice by the Issuer. All registrations
requested pursuant to this Section 8(b) are referred to herein as "Piggyback
Registrations". All Piggyback Registrations pursuant to this Section 8 will be
made solely at the Issuer's expense. This Section is not applicable to a
registration statement filed by the Issuer on Forms S-4 or S-8 or any successor
forms.
i. Priority on Primary Registrations. If a Piggyback Registration
includes an underwritten primary registration on behalf of the Issuer and the
underwriter(s) for such offering determines in good faith and advises the Issuer
in writing that in its/their opinion the number of Warrant Shares requested to
be included in such registration exceeds the number that can be sold in such
offering without materially adversely affecting the distribution of such
securities by the Issuer, the Issuer will include in such registration (A)
first, the securities that the Issuer proposes to sell and (B) second, the
Warrant Shares requested to be included in such registration, apportioned pro
rata among the holders of the Warrant Shares and holders of other securities
requesting registration.
ii. Priority on Secondary Registrations. If a Piggyback Registration
consists only of an underwritten secondary registration on behalf of holders of
securities of the Issuer, and the underwriter(s) for such offering advises the
Issuer in writing that in its/their opinion the number of Warrant Shares
requested to be included in such registration exceeds the number which can be
sold in such offering without materially adversely affecting the distribution of
such securities, the Issuer will include in such registration (A) first, the
securities requested to be included therein by the holders requesting such
registration, and (B) second, the Warrant Shares requested to be included in
such registration and securities of holder of other securities requested to be
included in such registration statement, pro rata among all such holders on the
basis of the number of shares requested to be included by each such holder,
provided, however, the Issuer will use its best efforts to include not less
than 20% of the Warrant Shares.
Notwithstanding the foregoing, if any such underwriter shall determine in
good faith and advise the Issuer in writing that the distribution of the Warrant
Shares requested to be included in the registration concurrently with the
securities being registered by the Issuer would materially adversely affect the
distribution of such securities by the Issuer, then the holders of such Warrant
Shares shall delay their offering and sale for such period ending on the
earliest of (1) 90 days following the effective date of the Issuer's
registration statement, (2) the day upon which the underwriting syndicate, if
any, for such offering shall have been disbanded or, (3) such date as the
Issuer, managing underwriter and holders of Warrant Shares shall otherwise
agree. In the event of such delay, the Issuer shall file such supplements, post-
effective amendments and take any such other steps as may be necessary to permit
such holders to make their proposed offering
8
and sale for a period of 120 days immediately following the end of any such
period of delay. If any party disapproves the terms of any such underwriting, it
may elect to withdraw therefrom by written notice to the Issuer, the
underwriter, and the holder. Notwithstanding the foregoing, the Issuer shall not
be required to file a registration statement to include shares pursuant to this
Section 8 if independent counsel, reasonably satisfactory to the Issuer, renders
an opinion to the Issuer that the Warrant Shares proposed to be disposed of may
be transferred pursuant to the provisions of Rule 144 under the Securities Act
or otherwise without registration under the Securities Act.
(c) Actions to be taken by the Issuer. In connection with the registration
of Warrant Shares hereunder, the Issuer agrees to (i) bear the expenses of any
registration; provided, however, that in no event shall the Issuer be obligated
to pay (A) any fees and disbursements of special counsel for holders of Warrant
Shares, (B) any underwriters' discount or commission in respect of such Warrant
Shares, and (C) any stock transfer taxes attributable to the sale of the Warrant
Shares; (ii) use its best efforts to register or qualify the Warrant Shares for
offer or sale under state securities or Blue Sky laws of such jurisdiction in
which such holders shall reasonably request, provided, however, that no
qualification shall be required in any jurisdiction where, as a result thereof,
the Issuer would be subject to service of general process or to taxation as a
foreign corporation doing business in such jurisdiction to which it is not then
subject; and (iii) enter into a cross-indemnity agreement, in customary form,
with each underwriter, if any, and each holder of securities included in such
registration statement.
(d) Action to be Taken by the Holders. The Issuer's obligations under this
Section 8 shall be conditioned upon a timely receipt by the Issuer in writing
of: (i) information as to the terms of such public offering furnished by or on
behalf of each holder of Warrant Shares intending to make a public offering of
his, her or its Warrant Shares, and (ii) such other information as the Issuer
may reasonably require from such holders, or any underwriter for any of them,
for inclusion in such registration statement.
Section 9. Notices All communications hereunder shall be in writing and, if
sent to the Holder shall be sufficient in all respects if delivered, sent by
registered mail, or by facsimile and confirmed to the Holder at:
The Michigan Avenue Group c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Telephone:
Facsimile:
The Michigan Avenue Group
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: 310/▇▇▇-▇▇▇▇
Facsimile: 310/477-2522
9
or if to any other Holder, addressed to such Holder at such address as it shall
have specified to the Issuer in writing or, if sent to the Issuer, shall be
delivered, sent by registered mail or by facsimile and confirmed to the Issuer
at:
Grill Concepts, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Vice Chairman
Telephone: 310/▇▇▇-▇▇▇▇
Facsimile: 310/820-6530
Section 10. Governing Law. This Warrant shall be governed by, and
interpreted in accordance with, the laws of the State of California.
Dated: _________________, 1999
GRILL CONCEPTS, INC.
By: /s/
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
ATTEST:
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Secretary
10