INDEMNIFICATION AGREEMENT


     THIS  INDEMNIFICATION  AGREEMENT  (this  "Agreement") is entered into as of
this _______ day of  _____________,  2000, by and among LEWIS N. WOLFF and LEWIS
N. WOLFF, TRUSTEE OF THE WOLFF REVOCABLE TRUST OF 1993 (hereinafter collectively
AWolff@)  and  MICHAEL S.  WEINSTOCK  and MICHAEL S.  WEINSTOCK,  TRUSTEE OF THE
MICHAEL S. WEINSTOCK LIVING TRUST (hereinafter  collectively AWeinstock@) (Wolff
and Weinstock are hereinafter  collectively referred to as AGuarantors.@) on the
one hand and GRILL CONCEPTS,  INC. (AGCI@) and GRILL CONCEPTS,  INC., A DELAWARE
CORPORATION,  (AGCID@) and THE GRILL ON THE ALLEY, INC. (AGA@) (GCI, GCID AND GA
shall  hereinafter  collectively be referred to as the ACompanies@) on the other
hand, in light of the following facts and circumstances:

     A. The  Companies  entered into those  certain Loan  Agreements  with Wells
Fargo  Bank (the  ALoan  Agreements@)  as more fully  described  on Exhibit  AA@
attached hereto and incorporated herein by this reference.

     B. Wolff and  Weinstock  have,  as set forth in the Loan  Agreements,  each
unconditionally  guaranteed one of the Companies= loans from Wells Fargo Bank in
the principal amount of Seven Hundred Fifty Thousand Dollars  ($750,000) each (a
AGuaranteed Loan@).

     C.  As a  condition  of  each  Guarantors'  guaranteeing  their  respective
Guaranteed  Loan,   Guarantors  have  required  that  the  Companies   indemnify
Guarantors  from and  against  any and all  liability  Guarantors  may have with
regard to their respective Guaranteed Loans.

     NOW THEREFORE, in consideration of the foregoing, and for good and valuable
consideration,  the receipt of which is hereby acknowledged,  the parties hereto
agree as follows:

     1. INDEMNITY.  The Companies  hereby assume  liability for, hereby agree to
pay, protect,  defend and save Guarantors harmless from and against,  and hereby
indemnify  Guarantors  from and  against any and all  liabilities,  obligations,
losses, damages, costs and expenses (including,  without limitation,  attorneys=
fees), causes of action,  suits, claims,  demands and judgments of any nature or
description whatsoever (collectively, ACosts@) which may at any time be incurred
by them (or either of them), directly or indirectly,  in connection with the two
respective  Guaranteed Loans.  Without limiting the generality of the foregoing,
it is expressly understood that the Companies shall be obligated  immediately to
reimburse  Guarantors for any and all payments they, or either of them, may make
to  Wells  Fargo  Bank or  otherwise  in  respect  of  their  guarantees  of the
Guaranteed  Loan.  Such  payments by  Guarantors  shall be deemed to be included
within the term  ACosts.@  For  purposes  hereof,  such Costs shall be deemed to
include an administrative charge equal to two percent (2%) annually on all other
unreimbursed Cost items so incurred by Guarantors (the AAdministrative Charge@).
Such Costs  shall be in addition to the Loan  Guarantee  payment due  Guarantors
from the Companies  pursuant to and as defined in that certain letter  agreement
between GCI and Guarantors  dated July __,  2000, which shall continue until all
obligations  hereunder are satisfied in full. To the extent  Guarantors  pay off
all or any portion of a Guaranteed Loan,  Guarantor shall receive in addition to
the above,  interest on the sums so paid at the then prevailing Wells Fargo Bank
interest rate being charged to the Companies for the Guaranteed  Loan. It is the
intent of the parties in the execution of this Indemnification Agreement and all
other documents and instruments executed in connection herewith,  to contract in
strict compliance with applicable usury laws governing the obligations evidenced
or covered  by this  Indemnification  Agreement  and such  other  documents  and
instruments.  In furtherance  thereof, the parties stipulate and agree that none
of the terms and provisions  contained in this  Indemnification  Agreement or in
any other document or instrument  executed in connection  herewith shall ever be
construed  to create a contract for the use,  forbearance  or detention of money
that  requires  payment of interest at a rate in excess of the maximum  interest
rate permitted to be charged in connection  therewith under any applicable usury
laws. Companies shall never be required to pay interest on such obligations at a
rate in excess of the maximum interest rate that may be so lawfully charged, and
the provisions of this paragraph shall control over all of the provisions hereof
and of any other  document or instrument  executed in connection  herewith which
may be in apparent conflict  herewith.  If any person shall collect monies which
are deemed to constitute  interest which would otherwise  increase the effective
interest  rate on any  obligations  to a rate in excess of that  permitted to be
charged by such applicable laws, all such sums deemed to constitute  interest in
excess of such maximum rate shall,  at the option of such  recipient,  be either
credited to the payment of principal of the obligations  evidenced or covered by
this Indemnification  Agreement and all other documents and instruments executed
in connection herewith, or returned to Companies.

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     The liability of the  Companies  under this  Agreement  shall be direct and
immediate and not  conditional  or  contingent  upon the pursuit of any remedies
against any other person (including,  without limitation,  other guarantors,  if
any). The Companies waive any right to require that an action be brought against
any other person.

2.   INDEMNIFICATION PROCEDURES.

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     (a) If any action shall be brought against each Guarantor based upon any of
the matters for which said  Guarantor is indemnified  hereunder,  such Guarantor
shall notify the Companies in writing  thereof and the Companies  shall promptly
assume the defense thereof,  including,  without  limitation,  the employment of
counsel acceptable to Guarantor and the negotiation of any settlement; provided,
however,  that any failure of Guarantor  to notify the  Companies of such matter
shall not impair or reduce the  obligations  of the  Companies  hereunder.  Each
Guarantor shall have the right,  at the expense of the Companies  (which expense
shall be included in Costs),  to employ separate  counsel in any such action and
to participate in the defense thereof.  In the event the Companies shall fail to
discharge or undertake to defend Guarantor  against any claim, loss or liability
for which Guarantors are indemnified hereunder,  such Guarantor may, at its sole
option  and  election,  defend or settle  such  claim,  loss or  liability.  The
liability of the Companies to each  Guarantor  hereunder  shall be  conclusively
established by such settlement,  provided such settlement is made in good faith,
the amount of such  liability to include both the settlement  consideration  and
the costs and  expenses,  including,  without  limitation,  attorneys=  fees and
disbursements,  incurred by such Guarantor in effecting such settlement. In such
event,  such settlement  consideration,  costs and expenses shall be included in
Costs  and  the  Companies  shall  pay  the  same  as  hereinafter  provided.  A
Guarantor=s good faith in any such settlement shall be conclusively  established
if the  settlement is made on the advice of  independent  legal counsel for such
Guarantor.

     (b)  The  Companies  shall  not,  without  the  prior  written  consent  of
Guarantor:  (i) settle or compromise  any action,  suit,  proceeding or claim or
consent to the entry of any judgment  that does not include as an  unconditional
term thereof the  delivery by the  claimant or plaintiff to such  Guarantor of a
full and  complete  written  release  of such  Guarantor  (in  form,  scope  and
substance  satisfactory  to such  Guarantor  in its  sole  discretion)  from all
liability in respect of such action,  suit,  proceeding or claim and a dismissal
with  prejudice of such action,  suit,  proceeding  or claim;  or (ii) settle or
compromise  any  action,  suit,  proceeding  or  claim  in any  manner  that may
adversely affect such Guarantor or obligate  Guarantor to pay any sum or perform
any obligation as determined by Guarantor in its sole discretion.

     (c)  All  Costs  (including,  without  limitation,  any  payments  made  by
Guarantors upon their  guarantees of the Guaranteed Loan and the  Administrative
Charge) shall be immediately reimbursable to each Guarantor when and as incurred
and,  in the event of any  litigation,  claim or other  proceeding,  without any
requirement  of waiting for the ultimate  outcome of such  litigation,  claim or
other proceeding, and the Companies shall pay to each Guarantor any and all such
Costs within ten (10) days after written  notice from such  Guarantor  itemizing
the amounts  thereof  incurred  to the date of such  notice.  Nothing  contained
herein shall require Guarantors to await legal process of any kind, or to notify
Companies  of any  claim  or  demand  for  payment  of all or any  portion  of a
Guaranteed Loan, but Guarantors may make payment upon a Guaranteed Loan upon the
request of the lender and shall be entitled to immediate reimbursement therefor.

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     3. SECURITY/COLLATERAL. The Companies= obligations to Guarantors under this
Agreement will be secured by the collateral as defined in the Security Agreement
executed concurrently herewith and attached hereto as Exhibit AB@.

     4. NOTICE.  Whenever  provision is made in this  Agreement  for the giving,
service or delivery of any notice,  statement or other instrument,  notice shall
be in writing and shall be deemed to have been duly given, served and delivered,
either upon  personal  delivery,  or if mailed,  proper  postage  paid by United
States registered or certified mail,  addressed to the party entitled to receive
the same at that address as set forth below,  or to any other mailing address as
the parties may by written notice designate:

                  If to Wolff:              11828 LaGrange Avenue
                                            Los Angeles, CA  90025

                  If to Weinstock:          23754 Malibu Road
                                            Malibu, CA  90625

                  If to Companies:          11661 San Vicente Blvd., Suite 404
                                            Los Angeles, CA  90049

     5. MISCELLANEOUS PROVISIONS.

     a. This  Agreement  shall be binding and deemed  effective when executed by
all of the parties.

     b.  Paragraph   headings  and  numbers  have  been  set  forth  herein  for
convenience only.  Unless the contrary is compelled by this context,  everything
contained in each paragraph hereof applies equally to this entire Agreement.

     c. Neither this Agreement nor any uncertainty or ambiguity  herein shall be
construed  or  resolved  against  any party  hereto,  whether  under any rule of
construction or otherwise.  On the contrary, this Agreement has been reviewed by
each of the parties and their  counsel and shall be  construed  and  interpreted
according to the ordinary  meaning of the words used so as to fairly  accomplish
the purposes and intentions of all parties hereto.

     d. Each  provision of the  Agreement  shall be  severable  from every other
provision  of  this  Agreement  for  the  purpose  of   determining   the  legal
enforceability of any specific provision.

     e. This  Agreement  may be executed in a number of identical  counterparts,
each of which  shall be deemed an  original  for all  purposes  and all of which
constitute, collectively, one agreement.

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     f. This Agreement contains the parties' sole and entire agreement and shall
supersede any and all other agreements  between them with respect to the subject
matter hereof.

     g.  The  parties   acknowledge   and  agree  that   neither  has  made  any
representations  with respect to the subject  matter of this  Agreement,  or any
representation inducing the execution and delivery of this Agreement,  except as
specifically set forth in this Agreement. Each acknowledges it has relied on its
own judgment in entering into this Agreement.

     h. The parties further  acknowledge that any statements or  representations
that  may have  been  made by  either  of them to the  other  are void and of no
effect,  and that neither has relied on any  statements  or  representations  in
connection with its, his or her dealings with the other.

     i. No  waiver  or  modification  of  this  Agreement,  or of any  covenant,
condition,  or limit contained in this Agreement,  shall be valid unless made in
writing and duly executed by the party to be charged.  No evidence of any waiver
or  modification  shall be offered or received  in  evidence in any  proceeding,
arbitration,  or litigation between the parties arising out of or affecting this
Agreement,  or  the  parties'  rights  or  obligations,  unless  the  waiver  or
modification is in writing and duly executed.

     j.  This  Agreement  shall be  deemed  to have  been  made in the  State of
California  and  the  validity  of  this   Agreement,   and  the   construction,
interpretation,  and enforcement  thereof, and the rights of the parties hereto,
shall be determined  under,  governed by, and  construed in accordance  with the
laws of the State of  California,  without  regard to principles of conflicts of
law.

     k. To the extent permitted by law, the parties to this Agreement agree that
all actions or proceedings  arising in connection with this Agreement,  shall be
tried and litigated  only in the state and federal  courts located in the County
of Los Angeles, State of California.

     l. The parties  acknowledge  that documents  incidental to this transaction
has been  prepared  by the law firm of Herzog,  Fisher,  Grayson & Wolfe,  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 will continue to render
legal  services  to  and  represent  the  Company,  Wolff  and/or  Weinstock  in
connection  with this and 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.

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     6. ATTORNEY  FEES.  In the event of any action  hereunder,  the  prevailing
party shall be entitled to its reasonable attorneys' fees and court costs.

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the _________ day of _________________, 2000.


"WOLFF"

                               LEWIS N. WOLFF, an individual



                               LEWIS N.  WOLFF,  as Trustee of the Wolff
                               Revocable  Trust of 1993


"WEINSTOCK"
                               MICHAEL S. WEINSTOCK, an individual

                               ______________________________________
                               MICHAEL S.  WEINSTOCK,  as Trustee of the Michael
                               S. Weinstock Living Trust


ACOMPANIES@                    GRILL CONCEPTS, INC., a Delaware corporation

                               By:
                               Its:


                               GRILL CONCEPTS, INC.

                               By:
                               Its:


                               THE GRILL ON THE ALLEY, INC.

                               By:
                               Its:


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                                    EXHIBIT A

                                 LOAN AGREEMENTS

<PAGE>



                                    EXHIBIT B

                               SECURITY AGREEMENT