**Exhibit 10.4**

 

THESECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACTOF 1933, OR APPLICABLE STATE SECURITIES LAW. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BEOFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ASSIGNED OR  OTHERWISE DISPOSED OF, AND NO TRANSFER OFTHE SECURITIES WILL BE MADE BY THE COMPANY OR ITS TRANSFER AGENT, IN THEABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANYTHAT SUCH REGISTRATION IS NOT REQUIRED.

 

 

**GRANITE CITY FOOD& BREWERY LTD.**

 

**COMMON STOCKPURCHASE WARRANT**

**Warrant No.2002-         **

 

GraniteCity Food & Brewery Ltd., a Minnesota corporation (the**“Company”**), hereby agrees that, for valuereceived,                     ,or his assigns, is entitled, subject to the terms set forth below, to purchasefrom the Company at any time or from time to time after the date hereof andbefore 5:00 P.M., Central Time, on                 ,2007,                           (           ) shares ofthe common stock of the Company (the**“CommonStock”**), at an exercise price of $1.58 per share, subject toadjustment as provided herein (the **“WarrantExercise Price”**).

 

1.             Exerciseof Warrant.  The purchaserights granted by this Warrant shall be exercised (in minimum quantities of 100shares) by the holder surrendering this Warrant with the form of exerciseattached hereto duly executed by such holder, to the Company at its principaloffice, accompanied by payment, in cash or by cashier’s check payable to theorder of the Company, of the purchase price payable in respect of the CommonStock being purchased.  If less than allof the Common Stock purchasable hereunder is purchased, the Company will, uponsuch exercise, execute and deliver to the holder hereof a new Warrant (datedthe date hereof) evidencing the number of shares of Common Stock not sopurchased.  As soon as practicable afterthe exercise of this Warrant and payment of the purchase price, the Companywill cause to be issued in the name of and delivered to the holder hereof, oras such holder may direct, a certificate or certificates representing theshares purchased upon such exercise. The Company may require that such certificate or certificates contain onthe face thereof a legend substantially as follows:

 

“Thetransfer of the shares represented by this certificate is restricted pursuantto the terms of a Common Stock Purchase Warrant dated                  ,2002, issued by Granite City Food & Brewery Ltd., a copy of which isavailable for inspection at the offices of Granite City Food & BreweryLtd.  Transfer may not be made except inaccordance with the terms of the Common Stock Purchase Warrant.  In addition, no sale, offer to sell ortransfer of the shares represented by this certificate shall be made unless aregistration statement under the Securities Act of 1933, as amended, withrespect to such shares is then in effect or an exemption from registration isthen in fact applicable to such shares.”

 

2.             Negotiabilityand Transfer.  This Warrant isissued upon the following terms, to which each holder hereof consents andagrees:

 

(a)           Untilthis Warrant is duly transferred on the books of the Company, the Company maytreat the registered holder of this Warrant as absolute owner hereof for allpurposes without being affected by any notice to the contrary.

 

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(b)           Eachsuccessive holder of this Warrant, or of any portion of the rights representedthereby, shall be bound by the terms and conditions set forth herein.

 

3.             AntidilutionAdjustments.

 

(a)           The Warrant Exercise Price shall besubject to adjustment from time to time as hereinafter provided.  Upon each adjustment of the Warrant ExercisePrice the holder of this Warrant shall thereafter be entitled to purchase thenumber of shares of Common Stock of the Company obtained by multiplying theWarrant Exercise Price in effect immediately prior to such adjustment by thenumber of shares issuable pursuant to exercise immediately prior to suchadjustment and dividing the product thereof by the Warrant Exercise Priceresulting from such adjustment.

 

(b)           Except for (i) options, warrants orother rights to purchase securities outstanding on the date of the issuance ofthis Warrant (provided there is no adjustment to the terms of such options,warrants or other securities on or after the date of issuance of this Warrant);(ii) options to purchase shares of Common Stock and the issuance of awards ofCommon Stock pursuant to stock option or employee stock purchase plans adoptedby the Company and shares of Common Stock issued upon the exercise of suchoptions granted pursuant to such plans (provided there is no adjustment to theterms of such options, awards or other securities on or after the date ofissuance of this Warrant) (appropriately adjusted to reflect stock splits,combinations, stock dividends, reorganizations, consolidations and similarchanges); or (iii) Common Stock issued to holders of the Company’s Series AConvertible Preferred Stock or upon conversion or in lieu of cash dividends onthe Company’s Series A Convertible Preferred Stock, if and whenever the Companyshall issue any additional securities, warrants or rights or any securityconvertible or exchangeable into equity, securities, warrants or rights(collectively, “Convertible Securities”) without consideration or for aconsideration per share less than the Warrant Exercise Price in effectimmediately prior to the time of such issue or sale, then, forthwith upon suchissue or sale, the Warrant Exercise Price shall be adjusted to a pricedetermined by multiplying such Warrant Exercise Price by a fraction, thenumerator of which shall be the number of shares of Common Stock outstandingimmediately prior to such issuance plus the number of shares of Common Stockthat the aggregate consideration received by the Company for such issuancewould purchase at such Warrant Exercise Price; and the denominator of whichshall be the number of shares of such additional Common Stock and the number ofshares of Common Stock outstanding prior to such issuance.  For the purpose of the above calculation,the number of shares of Common Stock immediately prior to such issuance shallbe calculated on a fully-diluted basis, as if this Warrant and any otheroutstanding warrants, options or other rights for the purchase of shares ofstock or Convertible Securities had been fully exercised as of such date.  Except as provided in Section 3(e)below, no further adjustments of the Warrant Exercise Price shall be made uponthe actual issuance of Common Stock or of any Convertible Securities upon theexercise of such rights or options or upon the actual issue of such CommonStock upon conversion or exchange of such Convertible Securities.

 

(c)           For purposes of this Section 3,in case any shares of Common Stock or Convertible Securities or any rights oroptions to purchase any such Common Stock or Convertible Securities shall beissued or sold for cash, the consideration received therefor shall be deemed tobe the amount received by the Company therefor, without deducting therefrom anyexpenses incurred or any underwriting commissions, discounts or concessionspaid or allowed by the Company in connection therewith.  In case any shares of Common Stock orConvertible Securities or any rights or options to purchase any such CommonStock or Convertible Securities shall be issued or sold for a considerationother than cash, the amount of the consideration other than cash received bythe Company shall be deemed to be the fair value of such consideration asdetermined by the Board of Directors of the Company, without deductingtherefrom any expenses incurred or any underwriting commissions, discounts orconcessions paid or allowed by the Company in connection therewith.  In case any shares of Common Stock orConvertible Securities or any rights or options to purchase such Common Stock

 

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or Convertible Securitiesshall be issued in connection with any merger or consolidation in which theCompany is the surviving corporation, the amount of consideration thereforshall be deemed to be the fair value as determined by the Board of Directors ofthe Company of such portion of the assets and business of the non-survivingcorporation or corporations as such Board shall determine to be attributable tosuch Common Stock, Convertible Securities, rights or options, as the case maybe.  In the event of any consolidationor merger of the Company in which the Company is not the surviving corporationor in the event of any sale of all or substantially all of the assets of theCompany for stock or other securities of any other corporation, the Companyshall be deemed to have issued a number of shares of its Common Stock for stockor securities of the other corporation computed on the basis of the actualexchange ratio on which the transaction was predicated and for a considerationequal to the fair market value on the date of such transaction of such stock orsecurities of the other corporation, and if any such calculation results inadjustment of the Warrant Exercise Price, the determination of the number ofshares of Common Stock issuable upon exercise immediately prior to such merger,conversion or sale, for purposes of Section 3(f) below, shall be madeafter giving effect to such adjustment of the Warrant Exercise Price.

 

(d)           In case the Company shall at any timesubdivide its outstanding shares of Common Stock into a greater number ofshares, the Warrant Exercise Price in effect immediately prior to suchsubdivision shall be proportionately reduced, and conversely, in case theoutstanding shares of Common Stock of the Company shall be combined into asmaller number of shares, the Warrant Exercise Price in effect immediatelyprior to such combination shall be proportionately increased.

 

(e)           If (i) the purchase price providedfor in any right or option referred to in Section 3(b), or (ii) theadditional consideration, if any, payable upon the conversion or exchange ofConvertible Securities, or (iii) the rate at which any Convertible Securitiesare convertible into or exchangeable for Common Stock, shall change at any time(other than under or by reason of provisions designed to protect againstdilution), or any Convertible Securities shall terminate, expire or cease to beoutstanding without exercise thereof, the Warrant Exercise Price then in effecthereunder shall forthwith be increased or decreased to such Warrant ExercisePrice as would have applied had the adjustments made upon the issuance of suchrights, options or Convertible Securities been made upon the basis of(a) the issuance of the number of shares of Common Stock theretoforeactually delivered upon the exercise of such options or rights or upon theconversion or exchange of such Convertible Securities, and the totalconsideration received therefor, and (b) the issuance at the time of suchchange of any such options, rights, or Convertible Securities then stilloutstanding for the consideration, if any, received by the Company therefor andto be received on the basis of such changed price; and on the expiration of anysuch option or right or the termination of any such right to convert orexchange such Convertible Securities, the Warrant Exercise Price then in effecthereunder shall forthwith be increased to such Warrant Exercise Price as wouldhave been obtained had the adjustments made upon the issuance of such rights oroptions or Convertible Securities been made upon the basis of the issuance ofthe shares of Common Stock theretofore actually delivered (and the totalconsideration received therefor) upon the exercise of such rights or options orupon the conversion or exchange of such Convertible Securities.  If the purchase price provided for in anyright or option referred to in Section 3(b), or the rate at which anyConvertible Securities referred to in Section 3(b) are convertible into orexchangeable for Common Stock, shall decrease at any time under or by reason ofprovisions with respect thereto designed to protect against dilution, then incase of the delivery of Common Stock upon the exercise of any such right oroption or upon conversion or exchange of any such Convertible Security, theWarrant Exercise Price then in effect hereunder shall forthwith be decreased tosuch Warrant Exercise Price as would have applied had the adjustments made uponthe issuance of such right, option or Convertible Security been made upon thebasis of the issuance of (and the total consideration received for) the sharesof Common Stock delivered as aforesaid.

 

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(f)            If any capital reorganization orreclassification of the capital stock of the Company, or consolidation ormerger of the Company with another corporation, or the sale of all orsubstantially all of its assets to another corporation shall be effected insuch a way that holders of Common Stock shall be entitled to receive stock,securities or assets with respect to or in exchange for Common Stock, then, asa condition of such reorganization, reclassification, consolidation, merger orsale, and except as otherwise provided herein, lawful and adequate provisionshall be made whereby the holder of this Warrant shall thereafter have the right to receive upon the basis andupon the terms and conditions specified herein and in lieu of the shares of theCommon Stock of the Company immediately theretofore receivable upon theexercise of this Warrant, such shares of stock, securities or assets as may beissued or payable with respect to or in exchange for a number of outstandingshares of such Common Stock equal to the number of shares of such stockimmediately theretofore receivable upon the exercise of this Warrant had suchreorganization, reclassification, consolidation, merger or sale not takenplace, and in any such case appropriate provision shall be made with respect tothe rights and interests of the holder of this Warrant to the end that theprovisions hereof (including without limitation provisions for adjustments ofthe Warrant Exercise Price and of the number of shares receivable upon theexercise hereof) shall thereafter be applicable, as nearly as may be inrelation to any shares of stock, securities or assets thereafter receivableupon the exercise of this Warrant.  TheCompany shall not effect any such consolidation, merger or sale, unless priorto the consummation thereof the successor corporation (if other than theCompany) resulting from such consolidation or merger or the corporationpurchasing such assets shall assume by written instrument executed and mailedto the registered holder of this Warrant, at the last address of such holderappearing on the books of the Company, the obligation to deliver to such holdersuch shares of stock, securities or assets as, in accordance with the foregoingprovisions, such holder may be entitled to receive.

 

(g)           Upon any adjustment of the WarrantExercise Price, the Company shall give written notice thereof, by first-classmail, postage prepaid, addressed to the registered holder of this Warrant, asshown on the books of the Company, which notice shall state the Warrant ExercisePrice resulting from such adjustment and the increase or decrease, if any, inthe number of shares purchasable at such price upon the exercise of thisWarrant, setting forth in reasonable detail the method of calculation and thefacts upon which such calculation is based. No adjustment to the Warrant Exercise Price shall be required unlesssuch adjustment would require an increase or decrease of at least five cents($0.05); provided, however, that any adjustments which by reason of thisSection 3(g) are not required to be made shall be carried forward andtaken into account in any subsequent adjustment; and, provided further, thatadjustment shall be required and made in accordance with the provisions of thisSection 3 (other than this Section 3(g)) not later than such time asmay be required in order to preserve the tax-free nature of a distribution tothe holders of shares of Common Stock. All calculations under this Section 3 shall be made to the nearestcent or to the nearest one-hundredth of a share, as the case may be.  Anything in this Section 3 to thecontrary notwithstanding, the Company shall be entitled to make such increasesin the conversion rate in addition to those required by this Section 3 asit in its discretion shall determine to be advisable in order that any stockdividends, subdivisions of shares, distribution of rights to purchase stock orsecurities, or distribution of securities convertible into or exchangeable forstock hereafter made by the Company to its stockholders shall not be taxable.

 

(h)           In case at any time: (i) there shallbe any capital reorganization, or reclassification of the capital stock of theCompany, or consolidation or merger of the Company with, or sale of all orsubstantially all of its assets to, another corporation; or (ii) there shall bea voluntary or involuntary dissolution, liquidation or winding up of theCompany; then, in any one or more of said cases, the Company shall give writtennotice, by first-class mail, postage prepaid, addressed to the registeredholder of this Warrant at the address of such holder as shown on the books ofthe Company, of the date on which (a) the books of the Company shall closeor a record shall be taken for such dividend, distribution or subscriptionrights, or (b) such reorganization, reclassification, consolidation, merger,sale, dissolution, liquidation or winding up shall take place, as the case maybe.  Such notice shall also

 

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specify the date as of whichthe holders of Common Stock of record shall participate in such dividend,distribution or subscription rights, or shall be entitled to exchange theirCommon Stock for securities or other property deliverable upon suchreorganization, reclassification, consolidation, merger, sale, dissolution,liquidation, or winding up, as the case may be.  Such written notice shall be given at least twenty (20) daysprior to the action in question and not less than twenty (20) days prior to therecord date or the date on which the Company’s transfer books are closed inrespect thereto.

 

(i)            If any event occurs as to which inthe opinion of the Board of Directors of the Company the other provisions ofthis Section 3 are not strictly applicable or if strictly applicable wouldnot fairly protect the rights of the holder of this Warrant in accordance withthe essential intent and principles of such provisions, then the Board ofDirectors shall make an adjustment in the application of such provisions, inaccordance with such essential intent and principles, so as to protect suchrights as aforesaid.

 

(j)            As used in this Section 3 theterm “Common Stock” shall mean and include the Company’s presently authorizedCommon Stock and any additional Common Stock that may be authorized by dueaction of the Company’s Board of Directors and shareholders entitled to votethereon.

 

(k)           No fractional shares of Common Stockshall be issued upon exercise, but, instead of any fraction of a share whichwould otherwise be issuable, the Company shall pay a cash adjustment in respectof such fraction in an amount equal to the same fraction of the market priceper share of Common Stock as of the close of business on the day ofexercise.  “Market price” shall mean ifthe Common Stock is traded on a securities exchange or on the NASDAQ StockMarket, the closing sale price of the Common Stock on such exchange or theNASDAQ Stock Market, or, if the Common Stock is otherwise traded in theover-the-counter market, the closing bid price, in each case averaged over aperiod of twenty (20) consecutive trading days prior to the date as of which“market price” is being determined.  Ifat any time the Common Stock is not traded on an exchange or the NASDAQ StockMarket, or otherwise traded in the over-the-counter market, the “market price”shall be deemed to be the higher of (i) the book value thereof asdetermined by any firm of independent public accountants of recognized standingselected by the Board of Directors of the Company as of the last day of anymonth ending within sixty (60) days preceding the date as of which thedetermination is to be made, or (ii) the fair value thereof determined ingood faith by the Board of Directors of the Company as of a date which iswithin fifteen (15) days of the date as of which the determination is to bemade.

 

4.             Transferability;Registration Rights.  Prior tomaking any disposition of the Warrant or of any Common Stock purchased uponexercise of the Warrant, the holder will give written notice to the Companydescribing briefly the manner of any such proposed disposition.  The holder will not make any suchdisposition until (i) the Company has notified the holder that, in the opinionof its counsel, registration under the Act is not required with respect to suchdisposition, or (ii) a registration statement covering the proposeddistribution has been filed by the Company and has become effective.  The holder then will make any dispositiononly pursuant to the conditions of such opinion or registration.  The Company agrees that, upon receipt of writtennotice from the holder hereof with respect to such proposed distribution, itwill use its best efforts, in consultation with the holder’s counsel, toascertain as promptly as possible whether or not registration is required, andwill advise the holder promptly with respect thereto, and the holder willcooperate in providing the Company with information necessary to make suchdetermination.  If a state and federalregistration of the Common Stock purchased upon exercise of the Warrant is notin effect such that the Common Stock purchased upon exercise of the Warrant isnot freely transferable by the holder of the Warrant or, in the absence of suchan effective state and federal registration, if an exemption from state andfederal registration of the exercising of the Warrant and sale of the CommonStock is not available during the term of this Warrant when the holder of theWarrant seeks to exercise the Warrant and sell the

 

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CommonStock so acquired, the exercise period of the Warrant will automatically beextended until such time as either state and federal registration of the CommonStock purchased upon exercise of the Warrant becomes effective and applicableto the holder of the Warrant or an exemption for the exercise of the Warrantand sale of the Common Stock by the holder, in the absence of such an effectivestate and federal registration, is available to the holder of the Warrant, and,if so extended, the Warrant shall then remain exercisable for a period of atleast thirty (30) calendar days from the date the Company delivers to theholder of the Warrant written notice of the availability of such state andfederal registration or exemption from such registration.  In no event will the exercise period of theWarrant expire before                    ,2007.

 

Theholder of this Warrant is entitled to the registration rights specified in theSubscription Agreement for the Company’s Series A Convertible Preferred Stock.

 

5.             CashlessExercise Option.

 

(a)           Theholder of this Warrant shall have the right to require the Company to convertthis Warrant (the **“Conversion Right”**),at any time after it is exercisable, but prior to its expiration, into sharesof Common Stock as provided for in this Section 5.  Upon exercise of the Conversion Right, theCompany shall deliver to the holder (without payment by the holder of anyexercise price) that number of shares of Common Stock equal to the quotientobtained by dividing (x) the value of the Warrant at the time the ConversionRight is exercised (determined by subtracting the aggregate exercise price forthe Warrant in effect immediately prior to the exercise of the Conversion Rightfrom the aggregate Fair Market Value (as determined below) for the Warrantimmediately prior to the exercise of the Conversion Right) by (y) the FairMarket Value of one share of Common Stock immediately prior to the exercise ofthe Conversion Right.  No fractionalshares shall be issuable upon exercise of the Conversion Right, and if thenumber of shares to be issued in accordance with the foregoing formula is otherthan a whole number, the Company shall pay to the holder of this Warrant anamount in cash equal to the fair market value of the resulting fractionalshare.

 

(b)           TheConversion Right may be exercised by the holder, at any time or from time totime after this Warrant is exercisable, prior to its expiration, on anybusiness day, by delivering a written notice in the form attached hereto (the **“Conversion Notice”**) to the Company at theoffices of the Company exercising the Conversion Right and specifying (i) thetotal number of shares of Stock the holder of this Warrant will purchasepursuant to such conversion, and (ii) a place, and a date not less than one (1)nor more than twenty (20) business days from the date of the Conversion Noticefor the closing of such purchase.

 

(c)           Atany closing under Section 5(b) hereof, (i) the holder will surrender theWarrant, (ii) the Company will deliver to the holder a certificate orcertificates for the number of shares of Common Stock issuable upon suchconversion, together with cash in lieu of any fraction of a share, and (iii)the Company will deliver to the holder a new Warrant representing the number ofshares, if any, with respect to which the Warrant shall not have beenconverted.

 

(d)           **“Fair Market Value”** of a share of Common Stockas of a particular date (the **“DeterminationDate”**) shall mean:

 

(i)            Ifthe Company’s Common Stock is traded on an exchange or is quoted on TheNational Association of Securities Dealers, Inc. Automated Quotation (**“Nasdaq”**) National Market, or The NasdaqSmallCap Market, then the average closing or last sale prices, respectively,reported for the ten (10) business days immediately preceding the DeterminationDate.

 

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(ii)           If the Company’s Common Stock is not traded on an exchangeor on The Nasdaq National Market, or The Nasdaq SmallCap Market, but is tradedin the over-the-counter market, then the average of the closing bid and askedprices reported for the ten (10) business days immediately preceding theDetermination Date.

 

(iii)          If the Company’s Common Stock is not publicly traded andthere has been a bona fide sale for cash on an arm’s-length basis within 45days prior to the Determination Date of such Common Stock by the Companyprivately to one or more investors unaffiliated with the Company (a “QualifyingSale”), then the most recent such sales price.

 

(iv)          If the Company’s Common Stock is not publicly traded andthere has been no Qualifying Sale, then the appraised fair market value of suchstock, as determined by mutual agreement of the Company and the holder of theWarrant; or if the parties cannot agree to such valuation, then the Board ofDirectors, acting in good faith, shall determine the Fair Market Value.

 

6.             Redemption.  Upon the occurrence of an event that givesrise to an Automatic Conversion of the Company’s Series A Convertible PreferredStock as provided in the Certificate of Designation for the Company’s Series AConvertible Preferred Stock, the Company may redeem this Warrant, upon not lessthan 20 days’ prior written notice, at the redemption price of $0.01 perWarrant.

 

7.             Notices.  The Company shall mail to the registeredholder of the Warrant, at his last known post office address appearing on thebooks of the Company, not less than fifteen (15) days prior to the date onwhich (a) a record will be taken for the purpose of determining the holders ofCommon Stock entitled to dividends (other than cash dividends) or subscriptionrights, or (b) a record will be taken (or in lieu thereof, the transfer bookswill be closed) for the purpose of determining the holders of Common Stockentitled to notice of and to vote at a meeting of stockholders at which anycapital reorganization, reclassification of shares of Common Stock,consolidation, merger, dissolution, liquidation, winding up or sale ofsubstantially all of the Company’s assets shall be considered and acted upon.

 

8.             Reservationof Common Stock.  A number ofshares of Common Stock sufficient to provide for the exercise of the Warrantupon the basis herein set forth shall at all times be reserved for the exercisethereof.

 

9.             Miscellaneous.  Whenever reference is made herein to theissue or sale of shares of Common Stock, the term**“Common Stock”** shall include any stock of any class of theCompany other than preferred stock with a fixed limit on dividends and a fixedamount payable in the event of any voluntary or involuntary liquidation,dissolution or winding up of the Company.

 

TheCompany will not, by amendment of its Articles of Incorporation or throughreorganization, consolidation, merger, dissolution or sale of assets, or by anyother voluntary act or deed, avoid or seek to avoid the observance orperformance of any of the covenants, stipulations or conditions to be observedor performed hereunder by the Company, but will, at all times in good faith,assist, insofar as it is able, in the carrying out of all provisions hereof andin the taking of all other action which may be necessary in order to protectthe rights of the holder hereof against dilution.

 

Uponwritten request of the holder of this Warrant, the Company will promptlyprovide such holder with a then current written list of the names and addressesof all holders of warrants originally issued under the terms of, and concurrentwith, this Warrant.

 

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The representations, warranties andagreements herein contained shall survive the exercise of this Warrant.  References to the “holder of” include theimmediate holder of shares purchased on the exercise of this Warrant, and theword “holder” shall include the plural thereof.  This Common Stock Purchase Warrant shall be interpreted under thelaws of the State of Minnesota.

 

Allshares of Common Stock or other securities issued upon the exercise of theWarrant shall be validly issued, fully paid and non-assessable.

 

Notwithstandinganything contained herein to the contrary, the holder of this Warrant shall notbe deemed a stockholder (including, no right to vote on any matters comingbefore the shareholders) of the Company for any purpose whatsoever until andunless this Warrant is duly exercised.

 

**IN WITNESSWHEREOF,** this Warrant has been duly executed by Granite City Food& Brewery Ltd., this          day of                  ,2002.

 
|   | **GRANITE CITY FOOD & BREWERY LTD.**     |
|--------|----------------------------------------------|
|   |                                         |
|   | By:                                          |   |   |
|   | Name: Steven J. Wagenheim                    |
|   | Title: President and Chief Executive Officer |

 

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**WARRANT EXERCISEFORM**

 

To be signed only uponexercise of Warrant.

 

The undersigned, the holderof the within Warrant, hereby irrevocably elects to exercise the purchase rightrepresented by such Warrant for, and to purchase thereunder,                       of the shares of Common Stock of Granite City Food & Brewery Ltd. to whichsuch Warrant relates and herewith makes payment of $                  therefor in cash or by certified check, and requests that such shares be issuedand be delivered to                                          ,the address for which is set forth below the signature of the undersigned.

 
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**ASSIGNMENTFORM**

 

To be signed only uponauthorized transfer of Warrant.

 

FOR VALUE RECEIVED, theundersigned hereby sells, assigns, and transfers unto                                                       the right to purchase shares of Common Stock of Granite City Food & BreweryLtd. to which the within Warrant relates and appoints                                               ,attorney, to transfer said right on the books of Granite City Food &Brewery Ltd. with full power of substitution in the premises.

 
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**CASHLESSEXERCISE FORM**

 

(To be executed uponexercise of Warrant pursuant to Section 5)

 

To:   Granite City Food & Brewery Ltd.

 

The undersigned herebyirrevocably elects a cashless exercise of the right of purchase represented bythe within Common Stock Purchase Warrant for, and to purchase thereunder,                           shares of Common Stock, as provided for in Section 5 therein.

 

If said number of sharesshall not be all the shares purchasable under the within Common Stock PurchaseWarrant, a new Warrant is to be issued in the name of said undersigned for thebalance remaining of the shares purchasable thereunder rounded up to the nexthigher number of shares.

 

Please issue a certificateor certificates for such Common Stock in the name of, and pay any cash for anyfractional shares to:

 
| NAME                |                   |
|---------------------|------------------------|
|                | *(Please Print  Name)* |
|                |                   |
| ADDRESS             |                   |
|                |                   |
|                |                   |
|                |                   |
| SOCIAL SECURITY NO. |                   |
|                |                   |
| SIGNATURE           |                   |
|                     |                        |  |

 

 
|   | **NOTE:**  The above signature should correspond  exactly with the name on the first page of this Common Stock Purchase Warrant  or with the name of the assignee appearing in the assignment form on the  preceding page. |
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