July 11, 2000
Xxxx Family Trust Under Agreement
Dated November 18, 1993
Xxxxxxx Xxxx, Co-Trustee
Xxxxxx Xxxx, Co-Trustee
0000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Re: Loan to Grill Concepts, Inc. (the ACompany@)
Dear Trustees:
Concurrently herewith you are loaning the Company Two Hundred Thousand
Dollars ($200,000) pursuant to the terms of the Promissory Note attached hereto
(the ANote@), Exhibit A hereto. Additionally, the Company is concurrently
granting you warrants to purchase up to twenty thousand (20,000) shares of its
Common Stock as set forth in the AWarrant No. 1 to Purchase Shares of Common
Stock of Grill Concepts, Inc. of even date (the AWarrant@), Exhibit B hereto.
The purpose of this letter is to also confirm to you the Company=s
agreement that you shall receive an additional warrant to purchase additional
shares of the Company=s Common Stock equal to that number of shares of the
Company=s common stock representing ten percent (10%) of the outstanding balance
remaining due under the Note, if any, at the end of twelve (12) months from the
date of the Note (the AAnniversary Date@) at the then Market Price of said
Common Stock ( AWarrant No. 2@). For purposes of the above, Market Price shall
be the average closing bid price of the Company=s Common Stock over the five (5)
trading day period preceding the Anniversary Date. The form of Warrant No. 2 is
enclosed as Exhibit C hereto.
The Company consents to you assigning your interest in the Note and Warrant
No. 1 and Warrant No. 2 to the Mazel Trust as well as any assignment of any such
interests to any of your affiliates and family members and to any trusts or
other entities established for the benefit of such affiliates or family members.
July 11, 2000
Page 2
In the event from and after the date hereof, the Company borrows funds (a
ABorrowing@) in an aggregate amount of more than one million dollars in excess
of the aggregate balance of its Existing Borrowings, you shall have the option,
upon thirty (30) days prior written notice to the Company, to call for immediate
payment of any sums remaining due under your Note, in which case the entire
unpaid principal and accrued interest due under the Note shall become due and
payable. For purposes hereof, Existing Borrowings shall mean all of the
Company=s loans and other credit facilities and shall expressly include, without
limitation the Company=s existing credit facility with Bank of America and of
the replacement therefor being provided by a pending financing with Xxxxx Fargo
Bank and the loans from the Mazel Trust and from the Xxxx Trust. The Company=s
future ordinary course of business transactions, such as real estate and
equipment leases as well as the financing of furniture, fixtures and equipment
shall not be deemed a Borrowing.
The parties acknowledge that documents incidental to this transaction has
been prepared by the law firm of Herzog, Fisher, Xxxxxxx & Xxxxx, a Law
Corporation (the AFirm@), at the request of the Company to document certain
relationships among the parties. In view of the fact that the Firm has in the
past rendered legal services to and represented and may continue to render legal
services to and represent the Company and your affiliates in connection with
other matters, there is a potential for conflicts of interest. The parties
acknowledge that they are aware of such conflicts of interest and the potential
adverse effects to them which may result therefrom, and, notwithstanding same,
hereby reaffirm their request and consent to the Firm=s preparation of these
documents, and waive any potential conflicts of interest with respect to or
against the Firm in connection therewith. Further, both parties acknowledge that
the terms of this transaction and the documents were negotiated by the parties
without the Firm=s participation in same, both parties being advised by the Firm
that independent legal advisors should be consulted relative to same.
If the above accurately reflects our understanding, please acknowledge same
in the space provided below and this letter shall then constitute our agreement
with regard to the above, superseding all prior communications between us.
Very truly yours,
GRILL CONCEPTS, INC.
By:
Its:
THE FOREGOING IS ACKNOWLEDGED AND AGREED TO EFFECTIVE THIS 11th DAY OF JULY,
2000:
XXXX FAMILY TRUST UNDER AGREEMENT DATED NOVEMBER 18, 1993:
By:
Xxxxxxx Xxxx, Co-Trustee
By:
Xxxxxx Xxxx, Co-Trustee
cc: Xxxxxx Xxxxxxxxxx, Esq.
