GRILL CONCEPTS, INC.
AND
XXXXXX CAPITAL GROUP, LTD.
WARRANT AGREEMENT
Dated as of December , 1996
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WARRANT AGREEMENT, dated as of December , 1996 by and between GRILL
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CONCEPTS, INC., a Delaware corporation (the "Company"), and XXXXXX CAPITAL
GROUP, LTD. ("Placement Agent").
The Company proposes to issue to the Placement Agent warrants as
hereinafter described (the "Warrants") to purchase that number of common shares
of the Company, $0.00001 par value per share ("Common Stock"), calculated
pursuant to the formula set forth in Section 4 hereof, subject to adjustment as
provided in Section 8 hereof (such number of shares, as adjusted, being
hereinafter referred to as the "Shares"), each Warrant entitling the holder
("Holder") thereof to purchase one share of Common Stock. All capitalized
terms used herein and not otherwise defined herein shall have the same meanings
as assigned thereto in that certain placement agency agreement, dated as of
December 4, 1996, by and between the Company and the Placement Agent.
NOW THEREFORE, in consideration of the premises and the mutual
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. ISSUANCE OF WARRANTS; FORM OF WARRANT. On the Closing Date
the Company will issue, sell and deliver the Warrants to the Placement Agent or
its bona fide officers or principals for an aggregate price of $100. The form
of the Warrant and of the form of election to purchase Shares to be attached
thereto shall be substantially as set forth on Exhibit A attached hereto. The
Warrants shall be executed on behalf of the Company by the manual or facsimile
signature of the present or any future Chairman or Co-Chairman, President or
any Vice President of the Company, under its corporate seal, affixed or in
facsimile, and attested by the manual or facsimile signature of the present or
any future Secretary or Assistant Secretary of the Company.
2. REGISTRATION. The Warrants shall be numbered and shall be
registered in a Warrant register (the "Warrant Register"). The Company shall
be entitled to treat the registered holder of any Warrant on the Warrant
Register as the owner in fact thereof for all purposes and shall not be bound
to recognize any equitable or other claim to or interest in such Warrant on the
part of any other person, and shall not be liable for any registration or
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transfer of Warrants which are registered or are to be registered in the name
of a fiduciary or the nominee of a fiduciary unless made with the actual
knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration or transfer, or with such knowledge or such facts
that its participation therein amounts to bad faith. The Warrants shall be
registered initially in the name of the Placement Agent in such denominations
as the Placement Agent may request in writing to the Company; provided,
however, that the Placement Agent may designate that all or a portion of the
Warrants be issued in varying amounts directly to its bona fide officers or
principals and not to itself. Such designation will only be made by the
Placement Agent if it determines that such issuances would not violate the
interpretation of the Board of Governors of the National Association of
Securities Dealers, Inc. (the "NASD"), relating to the review of corporate
financing arrangements.
3. TRANSFER OF WARRANTS. The Holder of a Warrant Certificate, by
its acceptance thereof, acknowledges that the Warrants are "restricted
securities" which have not been registered under the Securities Act, and
represents that the Warrants are being acquired as an investment and not with a
view to the distribution thereof and will not transfer such Warrants, except to
bona fide officers, directors, shareholders, principals, employees or
registered representatives of the Holder upon written request to the Company
delivered in accordance with Section 12 hereof and upon delivery of the Warrant
Certificate duly endorsed by the Holder or by his duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney, the original
power of attorney, duly approved, or an official copy thereof, duly certified,
shall be deposited with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited with the Company in its discretion. Upon any registration of
transfer, the Company shall deliver a new Warrant or Warrants to the persons
entitled thereto. The Warrants may be exchanged at the option of the Holder
thereof for other Warrants of different denominations, of like tenor and
representing in the aggregate the right to purchase a like number of shares of
Common Stock upon surrender to the Company or its duly authorized agent. The
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Company may require payment of a sum sufficient to cover all taxes and other
governmental charges that may be imposed in connection with any voluntary
transfer, exchange or other disposition of the Warrants. Notwithstanding the
foregoing, the Company shall have no obligation to cause Warrants to be
transferred on its books to any person, if such transfer would violate the
Securities Act or applicable state securities laws.
4. TERM OF WARRANTS; EXERCISE OF WARRANTS. The Placement Agent is
hereby granted that number of warrants equal to ten percent (10%) of the
aggregate gross proceeds raised in the Placement divided by the average
closing bid price of the Common Stock (the "Closing Date Average") as
calculated over the five (5) trading day period ending on the Closing Date, at
any time from the first anniversary of the Closing Date until 5:00 p.m., Los
Angeles time, on December , 1999. Each Warrant entitles the registered
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owner thereof to purchase one Share at a purchase price equal to two hundred
percent (200%) of the Closing Date Average, but in no event less than $3.00
per share (as adjusted from time to time pursuant to the provisions hereof, the
"Exercise Price"). The Exercise Price and the Shares issuable upon exercise of
Warrants are subject to adjustment upon the occurrence of certain events,
pursuant to the provisions of Section 8 of this Agreement. Subject to the
provisions of this Agreement, each Holder shall have the right, which may be
exercised as set forth in such Warrants, to purchase from the Company (and the
Company shall issue and sell to such Holder) the number of fully paid and
nonassessable Shares of Common Stock (rounded up to the nearest full share)
specified in such Warrants, upon surrender to the Company, or its duly
authorized agent, of such Warrants, with the form of election to purchase
attached thereto duly completed and signed, with signatures guaranteed by a
member firm of a nationalsecurities exchange, a commercial bank (not a savings
bank or savings and loan association) or trust company located in the United
States or a member of the NASD and upon payment to the Company of the Exercise
Price, as adjusted in accordance with the provisions of Section 8 of this
Agreement, for the number of Shares in respect of which such Warrants are then
exercised. Payment of such Exercise Price may be made in cash or by certified
check or official bank check payable to the order of the Company. No
adjustment shall be made for any
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dividends on any Shares issuable upon exercise of a Warrant. Upon each
surrender of Warrants and payment of the Exercise Price as aforesaid, the
Company shall issue and cause to be delivered with all reasonable dispatch to
or upon the written order of the Holder of such Warrants and in such name or
names as such Holder may designate, a certificate or certificates for the
number of full Shares so purchased upon the exercise of such Warrants. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
record of such Shares as of the date of the surrender of Warrants and payment
of the Exercise Price as aforesaid; provided, however, that if, at the date of
surrender of such Warrants and payment of such Exercise Price, the transfer
books for the Common Stock or other class of securities issuable upon the
exercise of such Warrants shall be closed, the certificates for the Shares
shall be issuable as of the date on which such books shall next be opened and
until such date the Company shall be under no duty to deliver any certificate
for such Shares; provided, further, however, that the transfer books or record,
unless otherwise required by law, shall not be closed at any one time for a
period longer than twenty (20) days. The rights of purchase represented by
the Warrants shall be exercisable, at the election of the Holder(s) thereof,
either in full or from time to time in part and, in the event that any Warrant
is exercised in respect of less than all of the Shares issuable upon such
exercise, a new Warrant or Warrants will be issued for the remaining number of
Shares specified in the Warrant so surrendered.
5. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the issuance of Shares upon the exercise of
Warrants; provided, however, that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer involved in the
issue or delivery of any certificates for Shares in a name other than that of
the Holder of Warrants in respect of which such Shares are issued.
6. MUTILATED OR MISSING WARRANTS. In case any of the Warrants shall
be mutilated, lost, stolen or destroyed, the Company shall issue and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrant,
or in lieu of and substitution for the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and representing an equivalent right or interest, but
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only upon receipt of evidence reasonably satisfactory to the Company of such
mutilation, loss, theft or destruction of such Warrant and indemnity, if
requested, reasonably satisfactory to the Company. An applicant for such
substitute Warrants shall also comply with such other reasonable regulations
and pay such other reasonable charges and expenses as the Company may
prescribe.
7. RESERVATION OF SHARES, ETC. There have been reserved, and the
Company shall at all times keep reserved, out of the authorized and unissued
Common Stock of the Company, a number of shares of Common Stock sufficient to
provide for the exercise of the rights of purchase represented by the
outstanding Warrants. Securities Transfer Corporation, transfer agent for the
Common Stock (the "Transfer Agent"), and every subsequent transfer agent, if
any, for the Company's securities issuable upon the exercise of the Warrants
will be irrevocably authorized and directed at all times to reserve such number
of authorized and unissued shares as shall be required for such purpose. The
Company will keep a copy of this Agreement on file with the Transfer Agent and
with every subsequent transfer agent for any shares of the Company's securities
issuable upon the exercise of the Warrants. The Company will supply the
Transfer Agent or any subsequent transfer agent with duly executed certificates
for such purpose. All Warrants surrendered in the exercise of the rights
thereby evidenced shall be canceled, and such canceled Warrants shall
constitute sufficient evidence of the number of Shares that have been issued
upon the exercise of such Warrants.
8. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SHARES. The Exercise
Price and the number and kind of securities issuable upon exercise of each
Warrant shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
(a) In case the Company shall (i) declare a dividend on its
Common Stock in shares of Common Stock or make a distribution in shares of
Common Stock, (ii) subdivide its outstanding shares of Common Stock,
(iii) combine its outstanding shares of Common Stock into a smaller number
of shares of Common Stock or (iv) issue by reclassification of its shares
of Common Stock other securities of the Company (including any such
reclassification in connection with a consolidation or merger in which the
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Company is the continuing corporation), the number of Shares purchasable
upon exercise of each Warrant immediately prior thereto shall be adjusted
so that the Holder of each Warrant shall be entitled to receive the kind
and number of Shares or other securities of the Company which he would
have owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective immediately after the effective date of such event retroactive
to immediately after the record date, if any, for such event.
(b) In case the Company shall issue rights, options or warrants
to all holders of its shares of Common Stock, without any charge to such
holders, entitling them (for a period expiring within 45 days after the
record date mentioned below in this paragraph (b)) to subscribe for or to
purchase shares of Common Stock at a price per share that is lower at the
record date mentioned below than the then current market price per share
of Common Stock (as defined in paragraph (d) below), the number of shares
thereafter purchasable upon exercise of each Warrant shall be determined
by multiplying the number of Shares theretofore purchasable upon exercise
of each Warrant by a fraction, of which the numerator shall be the number
of shares of Common Stock outstanding on such record date plus the number
of additional shares of Common Stock offered for subscription or purchase,
and of which the denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares which the
aggregate offering price of the total number of shares of Common Stock so
offered would purchase at the then current market price per share of
Common Stock. Such adjustment shall be made whenever such rights, options
or warrants are issued, and shall become effective retroactively to
immediately after the record date for the determination of shareholders
entitled to receive such rights, options or warrants.
(c) In case the Company shall distribute to all holders of its
shares of Common Stock shares of stock other than Common Stock or
evidences of its indebtedness or assets (excluding cash dividends payable
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out of consolidated earnings or retained earnings and dividends or
distributions referred to in paragraph (a) above) or rights, options or
warrants or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock (excluding those referred
to in paragraph (b) above), then in each case the number of Shares
thereafter issuable upon the exercise of each Warrant shall be determined
by multiplying the number of Shares theretofore issuable upon the exercise
of each Warrant, by a fraction, of which the numerator shall be the
current market price per share of Common Stock (as defined in paragraph
(d) below) on the record date mentioned below in this paragraph (c), and
of which the denominator shall be the current market price per share of
Common Stock on such record date, less the then fair value (as determined
in good faith by the Board of Directors of the Company, whose
determination shall be conclusive) of the portion of the shares of stock
other than Common Stock or assets or evidences of indebtedness so
distributed or of such subscription rights, options or warrants, or of
such convertible or exchangeable securities applicable to one share of
Common Stock. Such adjustment shall be made whenever any such
distribution is made, and shall become effective on the date of
distribution retroactive to immediately after the record date for the
determination of shareholders entitled to receive such distribution.
(d) For the purpose of any computation under paragraphs (b) and
(c) of this Section 8, the current market price per share of Common Stock
at any date (the "Current Market Price") shall be the average of the daily
closing prices for fifteen (15) consecutive trading days commencing
twenty (20) trading days before the date of such computation. The closing
price for each day shall be the last reported sale price regular way or,
in case no such reported sale takes place on such day, the average of the
closing bid and asked prices regular way for such day, in either case on
the principal national securities exchange on which the shares are listed
or admitted to trading, or if they are not listed or admitted to trading
on any national securities exchange, but are traded in the over-the-
counter market, the closing sale price of the Common Stock or, in case no
sale is publicly reported, the average of the representative closing bid
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and asked quotations for the Common Stock, on the NASDAQ system or any
comparable system, or if the Common Stock is not listed on the NASDAQ
system or a comparable system, the closing sale price of the Common Stock
or, in case no sale is publicly reported, the average of the closing bid
and asked prices as furnished by two members of the NASD selected from
time to time by the Company for that purpose.
(e) No adjustment in the number of Shares purchasable hereunder
shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the number of Shares purchasable
upon the exercise of each Warrant; provided, however, that any adjustments
which by reason of this paragraph (e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment but
not later than three years after the happening of the specified event or
events. All calculations shall be made to the nearest one thousandth of a
share.
(f) Whenever the number of Shares purchasable upon the exercise
of each Warrant is adjusted, as herein provided, the Exercise Price shall
be adjusted by multiplying the Exercise Price in effect immediately prior
to such adjustment by a fraction, of which the numerator shall be the
number of Shares purchasable upon the exercise of each Warrant immediately
prior to such adjustment, and of which the denominator shall be the number
of Shares so purchasable immediately thereafter.
(g) For the purpose of this Section 8, the term "shares of
Common Stock" shall mean (i) the class of stock designated as the Common
Stock of the Company at the date of this Agreement or (ii) any other class
of stock resulting from successive changes or reclassifications of such
shares consisting solely of changes in par value, or from no par value to
par value, or from par value to no par value. In the event that at any
time, as a result of an adjustment made pursuant to paragraph (a) above,
the Holders shall become entitled to purchase any shares of capital stock
of the Company other than shares of Common Stock, thereafter the number of
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such other shares so purchasable upon exercise of each Warrant and the
Exercise Price of such shares shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Shares contained in paragraphs (a) through
(f), inclusive, and paragraphs (h) through (m), inclusive, of this Section
8, and the provisions of Sections 4, 5, 7 and 10, with respect to the
Shares, shall apply on like terms to any such other shares.
(h) Upon the expiration of any rights, options, warrants or
conversion rights or exchange privileges, if any thereof shall not have
been exercised, the Exercise Price and the number of shares of Common
Stock purchasable upon the exercise of each Warrant shall, upon such
expiration, be readjusted and shall thereafter be such as it would have
been had it originally been adjusted (or had the original adjustment not
been required, as the case may be) as if (i) the only shares of Common
Stock so issued were the shares of Common Stock, if any, actually issued
or sold upon the exercise of such rights, options, warrants or conversion
rights or exchange privileges and (ii) such shares of Common Stock, if
any, were issued or sold for the consideration actually received by the
Company upon such exercise plus the aggregate consideration, if any,
actually received by the Company for the issuance, sale or grant of all of
such rights, options, warrants or conversion rights or exchange privileges
whether or not exercised; provided, however, that no such readjustment
shall have the effect of decreasing the number of shares issuable upon the
exercise of each Warrant or increasing the Exercise Price by an amount in
excess of the amount of the adjustment initially made in respect of the
issuance, sale or grant of such rights, options, warrants or conversion
rights or exchange privileges.
(i) The Company may, at its option at any time during the term
of the Warrants, reduce the then current Exercise Price to any amount
deemed appropriate by the Board of Directors of the Company.
(j) Whenever the number of Shares issuable upon the exercise of
each Warrant or the Exercise Price of such Shares is adjusted, as herein
provided, the Company shall promptly mail by first class mail, postage
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prepaid, to each Holder, notice of such adjustment or adjustments. The
Company shall retain a firm of independent public accountants (who may be
the regular accountants employed by the Company) to make any computation
required by this Section 8 and shall cause such accountants to prepare a
certificate setting forth the number of Shares issuable upon the exercise
of each Warrant and the Exercise Price of such Shares after such
adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was
made. Such certificate shall be conclusive as to the correctness of such
adjustment and each Holder shall have the right to inspect such
certificate during reasonable business hours.
(k) Except as provided in this Section 8, no adjustment in
respect of any dividends shall be made during the term of a Warrant or
upon the exercise of a Warrant.
(l) In case of any consolidation of the Company with or merger
of the Company with or into another corporation or in case of any sale or
conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, the Company or such successor or
purchasing corporation (or an affiliate of such successor or purchasing
corporation), as the case may be, agrees that each Holder shall have the
right thereafter upon payment of the Exercise Price in effect immediately
prior to such action to purchase upon exercise of each Warrant the kind
and amount of shares and other securities and property (including cash)
which he would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale or conveyance had such
Warrant been exercised immediately prior to such action. The provisions
of this paragraph (l) shall similarly apply to successive consolidations,
mergers, sales or conveyances.
(m) Notwithstanding any adjustment in the Exercise Price or the
number or kind of shares purchasable upon the exercise of the Warrants
pursuant to this Agreement, certificates for Warrants issued prior or
subsequent to such adjustment may continue to express the same price and
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number and kind of Shares as are initially issuable pursuant to this
Agreement.
9. RESERVED.
10. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION RIGHTS. The Company covenants and agrees
with the Placement Agent and any other or subsequent Holders of the Registrable
Securities (as defined in paragraph (f) of this Section 10) 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 or the Registrable Securities,
or both, which were originally issued to the Placement Agent or its
designees, made at any time within the period commencing one year and ending
five years after the Closing Date, the Company 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 or a
Regulation A Offering Statement (an "Offering Statement") under the Securities
Act, registering or qualifying the Registrable Securities for sale. Within
fifteen (15) days after receiving any such notice, the Company shall give
notice to the other Holders of the Registrable Securities advising that the
Company is proceeding with such Amendment, registration statement or Offering
Statement and offering to include therein the Registrable Securities of such
Holders. The Company shall not be obligated to any such other Holder unless
such other Holder shall accept such offer by notice in writing to the Company
within ten (10) days thereafter. The Company 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,
registration statement or Offering Statement as promptly as practicable and for
a period of nine months thereafter to reflect in the Amendment, registration
statement or Offering 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, registration
statement or Offering Statement to
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enable any Holders of the Warrants to either sell such Warrants or to exercise
such Warrants and sell Shares, or to enable any holders of Shares to sell such
Shares, during said nine-month period. The Holders may sell the Registrable
Securities pursuant to the Amendment, registration statement or the Offering
Statement without exercising the Warrants. If any registration pursuant to
this paragraph (a) is an underwritten offering, the Holders of a majority of
the Registrable Securities 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 Company's approval which
shall not be unreasonably withheld.
(b) PIGGYBACK REGISTRATION RIGHTS. The Company covenants and agrees
with the Placement Agent and any other Holders or subsequent Holders of the
Registrable Securities that if, at any time within the period commencing one
year and ending five years after the Closing Date, it proposes to file a
registration statement or Offering 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 Company and/or in a secondary registration on behalf of holders of such
securities and the registration form or Offering Statement to be used may be
used for registration of the Registrable Securities, the Company will give
prompt written notice (which, in the case of a registration statement or
notification pursuant to the exercise of demand registration rights other than
those provided in Section 10(a) of this Agreement, shall be within ten (10)
business days after the Company'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 (regardless of whether some of the Holders shall have
theretofore availed themselves of the right provided in Section 10(a) of this
Agreement) at the addresses appearing on the records of the Company of its
intention to file a registration statement or Offering Statement and will offer
to include in such registration statement or Offering Statement all but not
less than 20% of the Registrable Securities and limited, in the case of a
Regulation A offering, to the amount of the available exemption, subject to
paragraphs (i) and (ii) of this paragraph (b), such number of Registrable
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Securities with respect to which the Company has received written requests for
inclusion therein within ten (10) days after the giving of notice by the
Company. All registrations requested pursuant to this paragraph (b) are
referred to herein as "Piggyback Registrations". All Piggyback Registrations
pursuant to this paragraph (b) will be made solely at the Company's expense.
This paragraph is not applicable to a registration statement filed by the
Company with the Commission 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 such Company and
the underwriter(s) for such offering determines in good faith and advises
the Company 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 Company, the Company will
include in such registration (A) first, the securities that the Company
proposes to sell and (B) second, the Registrable Securities requested to be
included in such registration, apportioned pro rata among the Holders of
Registrable Securities, and (C) third, securities of the 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 Company (other than pursuant to
Section 10(a)), and the underwriter(s) for such offering advises the
Company 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 by the Company, the Company will
include in such registration (A) first, the securities requested to be
included therein by the holders requesting such registration and the
Registrable Securities requested to be included in such registration, 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 Company will use
its best efforts to include not less than 20% of the Registrable
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Securities, and (B) second, other securities requested to be included in
such registration.
Notwithstanding the foregoing, if any such underwriter shall
determine in good faith and advise the Company in writing that the distribution
of the Registrable Securities requested to be included in the registration
concurrently with the securities being registered by the Company would
materially adversely affect the distribution of such securities by the Company,
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 Company'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 Company, managing underwriter and Holders of
Registrable Securities shall otherwise agree. In the event of such delay, the
Company 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 such period of delay. If any party disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company, the underwriter, and the Placement Agent. Notwithstanding the
foregoing, the Company shall not be required to file a registration statement
to include Shares pursuant to this Section 10(b) if independent counsel,
reasonably satisfactory to counsel for the Company and counsel for the
Placement Agent, renders an opinion to the Company that the 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) OTHER REGISTRATION RIGHTS. In addition to the rights above
provided, the Company will cooperate with the then Holders of the Registrable
Securities in preparing and signing any registration statement or Offering
Statement, in addition to the registration statements and Offering Statements
discussed above, required in order to sell or transfer the Registrable
Securities and will supply all information required therefor, but such
additional registration statement or Offering Statement, shall be at the then
Holders' cost and expense; provided, however, that if the Company elects to
register or qualify additional shares of Common Stock, the cost and expense of
such registration statement or Offering Statement will be prorated between the
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Company and the Holders of the Registrable Securities according to the
aggregate sales price of the securities being issued. Notwithstanding the
foregoing, the Company will not be required to file a registration statement or
Offering Statement pursuant to this paragraph (c), (i) at a time when the
audited financial statements required to be included therein are not available,
which time shall be limited to the period commencing 45 days after the end of
the Company's last fiscal year and ending 90 days after the end of such fiscal
year, or (ii) within 90 days after completion of a public offering by the
Company of any of its Common Stock or equity-related securities or (iii) if it
would adversely impact the Company it its capital raising plans or otherwise
(in which latter case filing may be delayed no longer than 120 days).
(d) ACTION TO BE TAKEN BY THE COMPANY. In connection with the
registration of Registrable Securities in accordance with paragraphs (a), (b)
or (c) of this Section 10, the Company agrees to:
(i) Bear the expenses of any registration or qualification under
paragraphs (a) or (b) of this Section 10, including but not limited to,
legal, accounting and printing fees; provided, however, that in no event
shall the Company be obligated to pay (A) any fees and disbursements of
special counsel for Holders of Registrable Securities, or (B) any
underwriters' discount or commission in respect of such Registrable
Securities, (C) any stock transfer taxes attributable to the sale of the
Registrable Securities, or (D) upon the exercise of any demand
registration right provided for in paragraph (a) of this Section 10, the
cost of any liability or similar insurance required by an underwriter, to
the extent that such costs are attributable solely to the offering of such
Registrable Securities, payment of which shall, in each case, be the sole
responsibility of the Holders 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 the Placement Agent or such Holders shall
reasonably request, provided, however, that no qualification shall be
required in any jurisdiction where, as a result thereof, the Company would
-16-
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 to do any and all other acts and things which may be
necessary or advisable to enable the holders to consummate the proposed
sale, transfer or other disposition of such securities in any
jurisdiction; and
(iii) Enter into a cross-indemnity agreement, in customary form,
with each underwriter, if any, and each holder of securities included in
such Amendment, registration statement or Offering Statement.
(e) ACTION TO BE TAKEN BY THE HOLDERS. In connection with the
registration of the Registrable Securities in accordance with paragraphs
(a), (b) or (c) of this Section 10, the Company's obligation shall be
conditioned as to each such public offering upon a timely receipt by the
Company in writing of:
(i) Information as to the terms of such public offering furnished by
or on behalf of each Holder intending to make a public offering of his,
her or its Registrable Securities; and
(ii) Such other information as the Company may reasonably require
from such Holders, or any underwriter for any of them, for inclusion in
such registration statement or Notification on Form 1-A.
(f) For purposes of this Section 10, (i) the term "Holder" shall
include holders of Shares, and (ii) the term "Registrable Securities" shall
mean the Shares, if issued.
11. NOTICE TO HOLDERS.
(a) Nothing contained in this Agreement or in any of the Warrants
shall be construed as conferring upon the Holders thereof the right to vote or
to receive dividends or to consent or to receive notice as shareholders in
respect of the meetings of shareholders or the election of directors of the
Company or any other matter, or any rights whatsoever as shareholders of the
Company; provided, however, that in the event that a meeting of shareholders
-17-
shall be called to consider and take action on a proposal for the voluntary
dissolution of the Company, other than in connection with a consolidation,
merger or sale of all, or substantially all, of its property, assets, business
and good will as an entirety, then and in that event the Company shall cause a
notice thereof to be sent by first-class mail, postage prepaid, at least twenty
(20) days prior to the date fixed as a record date or the date of closing the
transfer books in relation to such meeting, to each registered Holder of
Warrants at such Holder's address appearing on the Warrant Register;
but failure to mail or to receive such notice or any defect therein or in the
mailing thereof shall not affect the validity of any action taken in connection
with such voluntary dissolution.
(b) In the event the Company intends to make any distribution on its
Common Stock (or other securities which may be issuable in lieu thereof upon
the exercise of Warrants), including, without limitation, any such distribution
to be made in connection with a consolidation or merger in which the Company is
the continuing corporation, or to issue subscription rights or warrants to
holders of its Common Stock, the Company shall cause a notice of its intention
to make such distribution to be sent by first-class mail, postage prepaid, at
least twenty (20) days prior to the date fixed as a record date or the date of
closing the transfer books in relation to such distribution, to each registered
Holder of Warrants at such Holder's address appearing on the Warrant Register,
but failure to mail or to receive such notice or any defect therein or in the
mailing thereof shall not affect the validity of any action taken in connection
with such distribution.
12. NOTICES. Any notice pursuant to this Agreement to be given or
made by the Holder of any Warrant and/or the holder of any Share to or on the
Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed as follows or to such other address as the Company
may designate by notice given in accordance with this Section 12, to the
Holders of Warrants and/or the holders of Shares:
GRILL CONCEPTS, INC.
00000 Xxx Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Secretary
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Notices or demands authorized by this Agreement to be given or made
by the Company to or on the Holder of any Warrant and/or the holder of any
Share shall be sufficiently given or made (except as otherwise provided in this
Agreement) if sent by first-class mail, postage prepaid, addressed to such
Holder or such holder of Shares at the address of such Holder or such holder of
Shares as shown on the Warrant Register or the books of the Company, as the
case may be.
13. GOVERNING LAW. This Agreement and each Warrant issued hereunder
shall be governed by and construed in accordance with the substantive laws of
the State of California. The Company hereby agrees to accept service of
process by notice given to it pursuant to the provisions of Section 12.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day, month and year first above written.
GRILL CONCEPTS, INC.
(registrant)
By:
--------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Executive Vice President
XXXXXX CAPITAL GROUP, LTD.
By:
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
-19-
No. Warrants
---------- ----------
GRILL CONCEPTS, INC.
Warrant Certificate
THIS CERTIFIES THAT for value received ,
---------------------------------
or registered assigns, is the owner of the number of Warrants set forth above,
each of which entitle the owner thereof to purchase one fully paid and
nonassessable share of common stock, $0.0001 par value (the "Common Stock"), of
GRILL CONCEPTS, INC., a Delaware corporation (the "Company"), at the purchase
price equal to the Exercise Price, as defined in the Warrant Agreement, dated
as of December , 1996 (the "Warrant Agreement"), between the Company and
---
Xxxxxx Capital Group, Ltd. upon presentation and surrender of this Warrant
Certificate with the Form of Election to Purchase duly executed. The number of
Warrants evidenced by this Warrant Certificate (and the number of shares which
may be purchased upon exercise thereof, rounded up to the nearest full share)
set forth above, and the Exercise Price per share set forth above, are the
number and Exercise Price as of the date of original issuance of the Warrants,
based on the shares of Common Stock of the Company as constituted at such date.
As provided in the Warrant Agreement, the Exercise Price and the number or kind
of shares which may be purchased upon the exercise of the Warrants evidenced by
this Warrant Certificate are, upon the happening or certain events, subject to
modification and adjustment.
This Warrant Certificate is subject to, and entitled to the benefits
of, all of the terms, provisions and conditions of the Warrant Agreement, which
Warrant Agreement is hereby incorporated herein by reference and made a part
hereof and to which Warrant Agreement reference is hereby made for a full
description of the rights, limitations of rights, duties and immunities
hereunder of the Company and the holders of the Warrant Certificates. Copies
of the Warrant Agreement are on file at the principal office of the Company.
This Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company, may be exchanged for
-1-
another Warrant Certificate or Warrant Certificates of like tenor and date
evidencing Warrants entitling the holder to purchase a like aggregate number of
shares of Common Stock as the Warrants evidenced by the Warrant Certificate or
Warrant Certificates surrendered entitled such holder to purchase. If this
Warrant Certificate shall be exercised in part, the holder hereof shall be
entitled to receive upon surrender hereof another Warrant Certificate or
Warrant Certificates for the number of whole Warrants not exercised.
No holder of this Warrant Certificate shall be entitled to vote,
receive dividends, subscription rights or be deemed the holder of Common Stock
or any other securities of the Company which may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained in the Warrant
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issue of stock, reclassification of stock,
change of par value or change of stock to no par value, consolidation, merger,
conveyance, or otherwise)or, except as provided in the Warrant Agreement, to
receive notice of meetings, until the Warrant or Warrants evidenced by this
Warrant Certificate shall have been exercised and the Shares shall have become
deliverable as provided in the Warrant Agreement.
If this Warrant shall be surrendered for exercise within any period
during which the transfer books for the Company's Common Stock or other class
of stock purchasable upon the exercise of this Warrant are closed for any
purpose, the Company shall not be required to make delivery of certificates for
shares purchasable upon such exercise until the date of the reopening of said
transfer books, provided, however, that such books shall not be closed for
longer than a 20-day period.
-2-
IN WITNESS WHEREOF, THE COMPANY has caused the signature (or
facsimile signature) of its President and its Secretary to be printed hereon
and its corporate seal (or facsimile) to be printed hereon.
Date: December , 1996
-----
GRILL CONCEPTS, INC.
(registrant)
By:
--------------------------------------
Name: Xxxxxx Xxxxxx
Title: President
Attest:
By:
------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Secretary
-3-
FORM OF
ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Warrant Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and
--------------------------
transfers unto this Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
, to transfer the within Warrant Certificate on the
---------------------------
books of the within-named Company, with full power of substitution.
Dated: , 19
------------------- ----
---------------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature of the foregoing Assignment must correspond to the name
as written upon the face of this Warrant Certificate in every particular,
without alteration or enlargement or any change whatsoever.
-4-
FORM OF
ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Warrant Certificate.)
TO: GRILL CONCEPTS, INC.
The undersigned hereby irrevocably elects to exercise Warrants
represented by this Warrant Certificate to purchase shares of Common
--------
Stock issuable upon the exercise of such Warrants and requests that
certificates for such shares be issued in the name of:
(Please insert social security, tax identification or other identifying
number)
------------------------------
------------------------------
------------------------------
(Please print name and address)
Date: , 19
------------------ -----
-------------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this Warrant
Certificate)
Signature Guaranteed:
- 1 -
