MANAGEMENT AGREEMENT
                                       FOR
                              THE CITY BAR & GRILL
                          IN THE SAN JOSE HILTON HOTEL


     This Consulting / Management Agreement is entered into as of February 20,
1998,  by and  between  The  Hilton  Hotel  (Hotel)  in San  Jose,  CA and Grill
Concepts, Inc. (GCI) in Los Angeles, CA. The parties agree to the following:

1.   Scope of Agreement
     ------------------
     
     1.1 Hotel wishes to retain GCI as Manager of the restaurant operation known
as The City Bar & Grill ("the  restaurant"),  located in The Hilton Hotel in San
Jose. The scope of operations to be included under this agreement are to include
all food  and  beverages,  and  accompanying  services,  sold  from the  current
operation,  excluding  all  banquet  sales.  Specifically,  Manager  will manage
restaurant  sales  for all  hours of  operations  including:  breakfast,  lunch,
dinner, bar sales and room service sales.

     1.2 Banquet sales will be sold and managed by the Hotel,  however, food and
beverage which is prepared by the restaurant,  will be sold to the Hotel at cost
plus a 10% fee. Additionally, all labor costs associated with banquet sales will
be accounted for and charged  separately  for means of accounting net income for
the restaurant operation. Banquet allocations and the system of accounting shall
be reviewed after 90 days of operation under the Management Contract.

     1.3 This  Agreement  shall  commence  on the date  noted  above,  and shall
continue for a period of ten (10) years unless  earlier  terminated  pursuant to
the provisions contained herein. The Consulting phase of this agreement will not
exceed 90 days.  The  Management  Agreement  will  begin as of the date that the
Consulting phase is complete.

2.   Management Fee
     --------------

     2.1 In return for  management  of the  restaurant,  Manager  will receive a
Management Fee equal to  eight-percent  (8%) of Gross  Receipts  received by the
Hotel in  connection  with or  resulting  from  food and  beverage  sales in the
restaurant and room service,  excluding banquet revenue. In addition,  the Hotel
shall pay  Manager  fifty-percent  (50%) of all annual  profits in excess of the
1997 profit level of $230,000.001, using identical accounting practices to those
used to generate  the 1997  reports.  An  additional  expense line item shall be
added to the  Profit & Loss  report to  reflect  the 8%  Management  Fee paid to
Manager  which  will not alter  the  predetermined  net  income  amount  that is
required for Manager to be eligible to participate in profits.


<PAGE>


     2.2 Other  exclusions  from the Gross  Receipt  calculation  are: 1) Taxes:
sales tax, excise taxes,  gross receipts taxes,  admission taxes, use taxes, and
other  similar  taxes  now or later  imposed  upon  the  sale of food  beverage,
merchandise  or services ; 2)  uncollectible  amounts of any check,  bank draft,
charge or credit  account;  3) the  amount  of any  gratuities  paid or given to
employees of the restaurant;  4) amounts  attributed to meals served or provided
at no  charge  to  employees  of  the  restaurant;  and  5)  Sales  &  Promotion
allowances.  Gross  receipts are to be  calculated  using  identical  accounting
practices to those used to generate the 1997 Profit & Loss reports.

     2.3 The Hotel will  provide to Manager a detailed  Profit & Loss  statement
for the business  year 1997,  which will be on record as the model Profit & Loss
statement from which all future comparisons, as described within this agreement,
will be calculated.  Upon request from Manager,  the Hotel will provide,  within
reason, any "back-up" to the 1997 Profit & Loss statement as it relates directly
to the calculations used in determining payment of the Management Fee.

     2.4 Payment of the  Management  Fee will begin as of the time and date that
all operational changes, as agreed to, have been executed by Manager.  This date
will mark the commencement of the Management  Contract.  Management Fee is to be
paid  monthly,  and will be due by the 10th day of each month for the  preceding
month.

3.   Scope of Responsibility
     -----------------------

     3.1  Manager  shall  oversee  the  operation  of the  restaurant  and shall
supervise  the  General  Manager,  who will remain an employee of Hotel and will
conform  to  overall  hotel  direction  and  policies,  and  who  will  also  be
responsible   for  managing  the  day-to  day   operation  of  the   restaurant.
Additionally,  Manager  day-to-day  operation of the  restaurant.  Additionally,
Manager will advise in the area will advise in the areas of purchasing, facility
maintenance,   advertising  and  public  relations.s  of  purchasing,   facility
maintenance, advertising and public relations.



--------

1    This number has been calculated to include the pre-established  1997 profit
     level of  $200,000.00  plus a $30,000.00  credit for the 10% fee on banquet
     food cost.


                                       2
<PAGE>


     3.2.  Operational  changes are to include: 1) implementation of a new menu,
based upon the menu currently utilized in Daily Grill restaurant operations,  to
the extent  that the  kitchen  facilities  of the  restaurant  are  adequate  to
reproduce the menu in its entirety;  2) management and service staff training as
agreed upon by both parties to  incorporate  the philosophy and style of service
as currently  performed at Daily Grill operations,  and 3) implementation of all
other  elements of Daily  Grill's  operating  system,  as deemed  necessary in a
mutually agreed upon Strategic Plan, as it relates to the successful  management
of the restaurant, which may include modifications to policies and procedures in
various areas of operations.  A detailed  description of the areas to be covered
by this agreement are attached in Exhibit 1: Management Consulting Plan.

     3.3 The  restaurant  must,  under  Manager,  realize profit levels that are
comparable  to or better than  current  operations,  using the exact  methods of
accounting as currently  utilized by the Hotel.  Manager will be granted a three
month Grace  Period,  from the start date of the  Management  Agreement,  within
which period,  they will not be held  responsible to realize profit levels equal
to that of previous  profits.  In the event that the agreed upon  remodeling has
not been  completed,  the Grace Period will be extended until such time that the
remodeling is complete.

4.   Consulting Phase
     ----------------

     4.1 During the initial  Consultation  Agreement,  not to exceed ninety (90)
days, Manager will be considered a consultant to the Hotel and will be paid on a
daily rate for each employee assigned to the project. The rate for each employee
shall be calculated to a prorated  amount of the employee's  current base salary
plus 25% to cover all fringe benefits for the first 45 days, and shall revert to
only the prorated base salary, less fringe benefits on any days exceeding 45.

     4.2 The Hotel will provide food at the restaurant and lodging for Manager's
supervisory  and  training  personnel  during  the  consultation  phase  of this
agreement.  Additionally,  all  out-of-pocket  expenses  will be  billed  to and
reimbursed by the Hotel.

5.   Hotel's Obligations
     -------------------

     5.1  Hotel  is  obligated  and  solely  liable  to  pay  for  any  and  all
improvements, including capital improvements, to the restaurant. The Hotel shall
be required to maintain, at a minimum, the current condition and standard of the
physical plant.



                                       3
<PAGE>


     5.2 The Hotel shall  provide to Manager,  hotel  rooms,  at no charge,  for
twelve (12) nights per year as well as on-site meals during such occupancy.

     5.3 Within ten (10) days  after the end of each  calendar  month and within
thirty (30) days after the end of each calendar  year, the Hotel shall submit to
Manager a Profit & Loss  statement  which shall  fairly and  accurately  reflect
Gross Receipts, Operating Expenses and Net Income for the period in question. If
Manager  elects  to audit  any  such  statement  and if such  audit  reveals  an
understatement  of Gross  Receipts  and/or Net  Income of more than  two-percent
(2%), the Hotel shall pay the cost of the audit.

     5.4 Hotel agrees to indemnify,  defend,  and hold harmless Manager from all
claims,  loss,  damage or expense  (including  legal  fees and costs)  resulting
directly  or  indirectly  from its  performance  as Manager,  including  without
limitation  claims,  losses,  and/or  damages and expenses  arising  directly or
indirectly from the negligence of Manager's agents and employees.  The foregoing
indemnity  shall not include  indemnification  for acts of gross  negligence  or
willful  misconduct  when  Manager  is in  control  of  such  employees  and has
liability for such conduct,  nor shall it include  indemnification from any acts
which constitute a breach of Manager's obligations hereunder.

     5.5 The Hotel  agrees to preserve and protect the  distinctive  features of
Manager's Operating Systems,  including;  menus;  recipes;  operating procedure;
manuals;  training systems;  marketing plans and all other distinctive  elements
designed by Manager to enhance the  restaurant,  and that all  previously  noted
elements be used  solely in the  restaurant  located in the Hilton  Hotel in San
Jose, CA. It is understood  that this  Operating  System remains the property of
Manager and in the event of termination  of this agreement  shall be returned to
Manager and use by Hotel will be discontinued.



                                       4
<PAGE>



6.   Termination of Agreement
     ------------------------

     6.1  Manager  does not have the  right to  assign  or  delegate  any of its
obligations  contained  herein to any person or entity without the prior written
consent of the Hotel.  If Hotel sells or conveys  the  facility  containing  the
restaurant,  Hotel will notify Manager of the transfer. Manager may, at its sole
option,  terminate the rights and  obligations  of the parties  effective on the
date of such transfer or conveyance.

     6.2 Hotel  maintains the right to terminate this  agreement  should Manager
fail to perform to the current  level of profits as set by the 1997 model Profit
& Loss statement during either, a) two (2) consecutive  accounting quarters,  or
b) in a  calendar  year.  Manager  shall  have the  option  to cure  any  profit
deficiency for the purpose of keeping this agreement in force.

     6.3 Either  party shall have the right to  terminate  this  agreement  with
30-day  written  notice,  with or without  cause.  In the event that Hotel shall
exercise this option,  Hotel shall reimburse Manager for any and all costs which
have not been  recovered by Manager  through  payment of the 8% Management  Fee.
Additionally,  Hotel's use of all Operating Systems shall cease upon termination
(Section 5.5).

7.   No Joint Venture
     ----------------

     7.1 Nothing contained in this Agreement shall be deemed or construed by the
parties hereto or by any third party as creating a relationship  of principal or
agent, a partnership or joint venture between the parties.  It is understood and
agreed that neither any  provision  contained in this  Agreement nor any acts of
the parties shall be deemed to create any  relationship  between them other than
the relationship set forth herein and agents shall at all times be considered an
independent contractor.

     IN  WITNESS  WHEREOF,  this  Consulting  /  Management  Agreement  has been
executed as of the date first set forth above.


                                                    HILTON HOTEL
                                         By:
                                           -------------------------------------
                                        Its:
                                           -------------------------------------

                                                    GRILL CONCEPTS, INC.
                                          By:
                                            ------------------------------------
                                        Its: 
                                            ------------------------------------