EXHIBIT 10.19
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.
W00-A 1
WARRANT
to Purchase Shares
of
Common Stock (.00004 par value)
of
GRILL CONCEPTS, INC.
November 15, 1999
This certifies that, for value received, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ("Roussak") 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 the date hereof (the "Warrant Date") and on or before the
fifth anniversary of the Warrant Date (the "Expiration Date"), Three Thousand
Seven Hundred Fifty (3,750) fully paid and nonassessable shares of common stock,
$.00004 par value (the "Common Stock"), of the Issuer at an exercise price equal
to $2.00 per share, subject to adjustment pursuant to the terms hereunder (the
"Exercise Price") (such shares of Common Stock and other securities issued and
issuable upon exercise of this Warrant, the "Warrant Shares").
Section 1. Exercise of Warrant.
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(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 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 11 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
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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. The Exercise Price for the
number of Warrant Shares specified in the Election to Purchase Form shall
be payable in United States Dollars by (1) 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, (2)
an election by the Holder to have the Issuer withhold shares of Common
Stock issuable upon exercise, (3) certificates representing shares of
Common Stock theretofore owned by the Holder duly endorsed for transfer to
the Issuer, or (4) any combination of the preceding, equal in value to the
aggregate Exercise Price.
(b) 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.
Section 2. Reservation of Shares; Preservation of Rights of Holder. The
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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 delivery upon 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 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 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 Exercise Price.
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Section 3. Exchange, Transfer, Assignment or Loss of Warrant. Any
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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.
Section 4. Rights of Holder. Neither a Holder nor his transferee by
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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 Exercise Price and Warrant Shares. The Exercise
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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
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
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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 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 Common Stock or
securities convertible into or exchangeable 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 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 Date, the Warrant 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
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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 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 Exercise Price and, in such
case, the Issuer shall, upon distribution to the Holder, consider the
Exercise Price to have been paid in full and, in making settlement to the
Holder, shall obtain receipt of the Exercise Price by deducting an amount
equal to the 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 Exercise Price.
(g) The term "Common Stock" shall mean the Common Stock, $.00004 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.
(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 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 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 Exercise Price in accordance with the
provisions of this Section 5 need be made if such adjustment would amount
to a change in such 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 Exercise Price.
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(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 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
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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
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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 the
relevant date described below (or such shorter 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 of record shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such event.
Section 8. Piggyback Registration Rights.
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a. The Corporation covenants and agrees with any holder of the
Warrants or Warrant Shares (the "Registrable Securities") that if, at any time
within the period commencing on the Warrant 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 Company's employees or in connection with an acquisition, merger or similar
transaction) under the Securities Act in a primary registration on behalf of the
Corporation and/or in a secondary registration on behalf of holders of such
securities and the registration form to be used may be used for registration of
the Registrable Securities, the Corporation 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
Corporation'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 Registrable Securities at
the
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addresses appearing on the records of the Corporation 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 Registrable Securities, subject to paragraphs
i and ii of this Section 8.a., such number of Registrable Securities with
respect to which the Corporation has received written requests for inclusion
therein within ten (10) days after the giving of notice by the Corporation. All
registrations requested pursuant to this Section 8.a. are referred to herein as
"Piggyback Registrations". All Piggyback Registrations pursuant to this Section
8 will be made solely at the Corporation's expense. This Section is not
applicable to a registration statement filed by the Corporation 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 Corporation
and the underwriter(s) for such offering determines in good faith and
advises the Corporation in writing that in its/their opinion the number of
Registrable Securities 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 Corporation,
the Corporation will include in such registration (A) first, the securities
that the Corporation proposes to sell and (B) second, the Registrable
Securities requested to be included in such registration, apportioned pro
rata among the holders of the Registrable Securities 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 Corporation, and the underwriter(s) for such
offering advises the Corporation in writing that in its/their opinion the
number of Registrable Securities 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
Corporation will include in such registration (A) first, the securities
requested to be included therein by the holders requesting such
registration, and (B) second, the Registrable Securities 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 Corporation will use its best
efforts to include not less than 20% of the Registrable Securities.
Notwithstanding the foregoing, if any such underwriter shall determine in
good faith and advise the Corporation in writing that the distribution of the
Registrable Securities requested to be included in the registration concurrently
with the securities being registered by the Corporation would materially
adversely affect the distribution of such securities by the Corporation, then
the holders of such Registrable Securities shall delay their offering and sale
for such period ending on the earliest of (1) 90 days following the effective
date of the Corporation'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 Corporation, managing underwriter and holders of
Registrable Securities shall otherwise agree. In the event of such delay, the
Corporation 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 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
Corporation, the underwriter, and the holder.
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Notwithstanding the foregoing, the Corporation shall not be required to file a
registration statement to include shares pursuant to this Section 8 if
independent counsel, reasonably satisfactory to the Corporation, renders an
opinion to the Corporation that the Registrable Securities 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.
b. In connection with the registration of Registrable Securities
hereunder, the Corporation agrees to (i) bear the expenses of any registration;
provided, however, that in no event shall the Corporation be obligated to pay
(A) any fees and disbursements of special counsel for holders of Registrable
Securities, (B) any underwriters' discount or commission in respect of such
Registrable Securities, and (C) any stock transfer taxes attributable to the
sale of the Registrable Securities; (ii) use its best efforts to register or
qualify the Registrable Securities for offer or sale under state securities or
Blue Sky laws of such jurisdictions in which such holders shall reasonably
request, provided, however, that no qualification shall be required in any
jurisdiction where, as a result thereof, the Corporation 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.
c. The Corporation's obligations under this Section 8 shall be
conditioned upon a timely receipt by the Corporation in writing of: (i)
information as to the terms of such public offering furnished by or on behalf of
each holder of Registrable Securities intending to make a public offering of
his, her or its Registrable Securities, and (ii) such other information as the
Corporation 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, other than those
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pursuant to Section 8, 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:
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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Section 10. Governing Law. This Warrant shall be governed by, and
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interpreted in accordance with, the laws of the State of California.
Dated: November 15, 1999
GRILL CONCEPTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
___________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
_________________________
Title: President
________________________
ATTEST:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
______________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Secretary
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