July 11, 2000


Wolff Revocable Trust of 1993
Lewis N. Wolff, Trustee (AWolff@)
11828 LaGrange Avenue
Los Angeles, CA  90025

Michael S. Weinstock Living Trust
Michael Weinstock, Trustee (AWeinstock@)
11661 San Vicente Blvd. Suite 404
Los Angeles, CA  90049

                      AGREEMENT WITH REGARD TO GUARANTEE OF
            WELLS FARGO BANK FINANCING (the AWells Fargo Financing@)
                                 TO THE COMPANY

Gentlemen:

     The Company is in the process of refinancing  the existing  credit facility
with the Bank of America in the aggregate  amount of  approximately  One Million
Nine Hundred Thousand Dollars  ($1,900,000) (the AExisting Loan@). To enable the
Existing  Loan to be paid  off,  the  Company  is in the  process  of  receiving
$400,000 in the aggregate from two individual  private  lenders  pursuant to two
promissory  notes (the ANew Notes@).  In conjunction with these New Notes and to
enable the payoff of the  Existing  Loan,  each of you have agreed to  guarantee
$750,000 of the One Million  Five Hundred  Thousand  Dollar  ($1,500,000)  Wells
Fargo  Financing  made  available  to the Company  (each  respectively,  a "Loan
Guarantee").

     As a  condition  of you each  agreeing  to  provide  your  respective  Loan
Guarantee, the Company is concurrently providing you with the following:

     1.   One warrant for each of you to purchase seventy-five thousand (75,000)
          shares of the Company=s  Common Stock at an exercise price of $1.40625
          per share,  in the form of the  Warrant  No. 1 to  Purchase  Shares of
          Common Stock of Grill  Concepts,  Inc.,  attached  hereto as Exhibit A
          (the AWarrant@);

     2.   The Indemnification Agreement attached hereto as Exhibit B;

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July 11, 2000
Page 4



     3.   The Security Agreement and UCC-1 Financing  Statements attached hereto
          as Exhibit C.


     Additionally:

     1.   In the event your  respective Loan Guarantees have not been terminated
          within twelve (12) months of date of the original Loan  Guarantee (the
          AAnniversary Date@), or in the event either of you have paid any money
          pursuant  to the Loan  Guarantee  and such  money,  together  with any
          costs,  expenses and fees incurred or payable in connection therewith,
          has not been paid in full prior to the Anniversary Date, you will each
          receive a warrant to  purchase  an  additional  seventy-five  thousand
          (75,000) shares of the Company=s Common Stock at the then Market Price
          of said Common Stock (AWarrant No. 2@). For this purpose, Market Price
          shall be the average  closing bid price of the  Company  Common  Stock
          over the five (5) day trading period  preceding the Anniversary  Date.
          The form of Warrant No. 2 is enclosed as Exhibit D hereto.

     2.   On each  Anniversary  Date of your  Loan  Guarantee,  you  shall  each
          receive a cash payment equal to two percent (2%) of the average of the
          outstanding  quarterly  balances of Wells Fargo Financing which is the
          subject  of  your   respective  Loan  Guarantees  (a  ALoan  Guarantee
          Payment@),  i.e., if $750,000 is outstanding,  each quarter on each of
          the Wells Fargo  loans  underlying  your  respective  Loan  Guarantees
          during each quarter of the twelve (12) month  period in question,  you
          would  each  receive  $15,000  on  such  Anniversary  Date.  The  Loan
          Guarantee  Payments shall be made on each  Anniversary Date at the end
          of any twelve month period  during which a Loan  Guarantee,  or monies
          paid by you pursuant to a Loan Guarantee, had been outstanding for all
          or any portion of such  period,  whether or not the Loan  Guarantee is
          outstanding, or monies are owed to you, as of the Anniversary Date.

     As a further  inducement and condition to each of you making the respective
Loan Guarantees, the Company agrees as follows:

<PAGE>

     I.   Until such time as your respective Loan Guarantees are terminated,  or
          in the event  either of you have paid any monies  pursuant to the Loan
          Guarantee, until such monies and all costs, expenses and fees incurred
          or payable in connection therewith,  have been paid in full, you shall
          each have the right to approve any new Company restaurant locations to
          the  extent  such  new  locations  require  leases,   joint  ventures,
          syndications or similar  transactions that would result in dilution of
          the  Company=s  existing  stock  ownership  by virtue of  issuance  of
          additional  stock warrants or securities (a ANew  Location@).  Company
          shall not open any New Location without the prior written consent from
          each of you.

     II   Until the Wolff Loan Guarantee is terminated or in the event Wolff has
          paid any monies pursuant to the Loan Guarantee,  until such monies and
          all  costs,  expenses  and fees  incurred  or  payable  in  connection
          therewith,  have been paid in full,  Lew Wolff shall have the right to
          require  the  Company to enter  into an  agreement  with  Keith  Wolff
          according to the terms set forth on attached Exhibit E; and

     III. Commencing  January  1,  2001 and  continuing  thereafter  until  your
          respective  Loan  Guarantees  are terminated or in the event either of
          you have paid any monies  pursuant to the Loan  Guarantee,  until such
          monies  and all  costs,  expenses  and fees  incurred  or  payable  in
          connection therewith, have been paid in full, 100% of the cash flow to
          the Company from the Burbank Daily Grill and the San Jose Fairmont-The
          Grill shall be utilized to pay down principal on the New Notes and the
          Wells  Fargo  Financing.  No  principal  reduction  of the Wells Fargo
          Financing is required during the year 2000.

     IV.  If at any time prior to the termination of the Loan Guarantees, as the
          result of a default under the Wells Fargo  Financing or the New Notes,
          either (i) Wolff and Weinstock are compelled to pay off some or all of
          the  Wells  Fargo  Financing  whether  or not  such  compulsion  is by
          judgment,  other  legal  process  or  simply a  request  to honor  the
          guarantee,  or (ii) a judgment is entered against Wolff and Weinstock,
          the  Company  agrees  that the  covenants  set  forth on the  attached
          Exhibit F shall become  effective and continue  until such time as the
          Loan Guarantees are  terminated,  the Wells Fargo Financing is paid in
          full  and any  monies  paid by  either  of you  pursuant  to the  Loan
          Guarantee,  and all costs,  expenses  and fees  incurred or payable in
          connection therewith, have been paid in full.

<PAGE>


     Your obligations are conditioned upon unanimous  approval of this Agreement
and of all  the  agreements,  warrants  and  other  documents  related  to  this
Agreement,  by the  Board  of  Directors  of the  Company  and by the  Board  of
Directors of Grill Concepts,  Inc., a Delaware  corporation and The Grill on the
Alley,  Inc.  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.

     If this properly reflects the agreement between each of you and the Company
with regard to the above,  please  confirm  same in the space  indicated  below,
returning  an executed  copy to me for my files;  it shall then  constitute  the
binding  agreement  between us and shall  supersede all previous  agreements and
communications relative to same.

                                                 Very truly yours,

                                                 GRILL CONCEPTS, INC.


                                                 By:

                                                 Its:



THE FOREGOING IS ACKNOWLEDGED AND AGREED TO THIS           DAY OF        , 2000:

WOLFF REVOCABLE TRUST OF 1993

By:
          Lewis N. Wolff, Trustee


MICHAEL S. WEINSTOCK LIVING TRUST

By:
          Michael S. Weinstock, Trustee