**Exhibit 10.1**

** **

**AMENDMENTNO. 2**

**TO**

**WARRANTAGREEMENT**

** **

THIS AMENDMENT is madeand entered into effective May 4, 2005, by and between Granite City Food &Brewery Ltd. (f/k/a Founders Food & Firkins Ltd.), a Minnesotacorporation (the “Company”), and Wells Fargo Bank, National Association (f/k/aNorwest Bank Minnesota, National Association), as the Warrant Agent (the “WarrantAgent”).

 

WHEREAS, the Companyappointed the Warrant Agent to provide certain services in connection with andfollowing the Company’s initial public offering of units, each unit consistingof one share of common stock and one redeemable Class A Warrant topurchase one share of common stock (“Warrant”);

 

WHEREAS, the Company andthe Warrant Agent entered into an agreement (the “Warrant Agreement”) withrespect to such appointment on June 6, 2000, as amended by the firstamendment thereto dated September 12, 2002;

 

WHEREAS, the Company hasextended the expiration date of the Warrants from June 6, 2005 to December 15,2005;

 

WHEREAS, the Companywishes to amend the Warrant Agreement to correspond with the new term of theWarrants.

 

NOW, THEREFORE, inconsideration of the premises and agreements set forth herein, the partieshereto agree to restate (i) Sections 2.1, 2.2 and 4.1 of the Warrant Agreementas follows and (ii) Exhibit A of the Warrant Agreement as attachedhereto:

 

Section 2.1  EXERCISE. Any or all of the Warrants represented by each Warrant Certificate maybe exercised by the holder thereof on or before 5:00 p.m., Minneapolistime, on December 15, 2005 (unless extended by the Company), by surrenderof the Warrant Certificate with the purchase form, which is printed on thereverse thereof (or a reasonable facsimile thereof), duly executed by suchholder, to the Warrant Agent at its principal office in South St. Paul,Minnesota.  The purchase form must beaccompanied by payment, in cash or by certified check payable to the Company,in an amount equal to the product of the number of shares of Common Stockissuable upon exercise of the Warrant represented by such Warrant Certificate,as adjusted pursuant to the provisions of Article III hereof (as a resultof such adjustments, each Warrant is exercisable for 1.072962 shares as of thedate hereof), multiplied by the exercise price of $5.00, as adjusted pursuantto the provisions of Article III hereof (as a result of such adjustments,the exercise price is $4.66 per share as of the date hereof) (such price as soadjusted from time to time being herein called the “Purchase Price”), and suchholder shall be entitled to receive such number of fully paid and nonassessableshares of Common Stock, as so adjusted, at the time of such exercise.

 

Section 2.4  EXTENSION OF EXERCISE PERIOD; CHANGE OFEXERCISE PRICE.  The Company may, uponnotice given to the Warrant Agent, and without the consent of the holders ofthe Warrant Certificates, (a) reduce the Purchase Price during all or anyportion of the originally stated exercise period, (b) extend the periodover which the Warrants are exercisable beyond December 15, 2005, and (c) increaseor decrease the Purchase Price for any period the Warrant exercise period is

 

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extended. Within a reasonable time prior to the effective time of such change orextension, the Company shall provide the Warrant Agent and Warrantholders ofrecord with written notice of any change in the Purchase Price or extension ofthe exercise period, as the case may be, specifying the time to which suchexercise period is extended, or the new Purchase Price and the periods forwhich such new Purchase Price is in effect.

 

Section 4.1  REDEMPTION PRICE.  The Warrants may be redeemed at the option ofthe Company, at any time, upon notice as set forth in Section 4.2, at theredemption price equal to $0.01 per warrant, provided that the closing bidprice of the Common Stock on the Nasdaq system exceeds $6.25 per share (suchprice subject to adjustment from time to time in the same manner as thePurchase Price pursuant to the provisions of Article III hereof) (as aresult of such adjustments, such level is $5.83 per share as of the datehereof) for any 45 consecutive trading days prior to the date such notice ofredemption is given.

 

IN WITNESS WHEREOF, thisAmendment has been duly executed by the parties hereto effective as of the dayand year first above written.

 
|   | GRANITE CITY  FOOD & BREWERY LTD. |
|--------|--------------------------------------------|
|   |                                       |
|   |                                       |
|   | By                                         | /s/ Monica A.  Underwood |   |
|   |                                       | Monica A.  Underwood |
|   |                                       | Interim Chief  Financial Officer and  Corporate Controller |
|   |                                       |   |
|   |                                       |   |
|   | WELLS FARGO  BANK,                         |
|   | NATIONAL  ASSOCIATION                      |
|   |                                       |   |
|   |                                       |   |
|   | By                                         | /s/ Cindy Gesme |   |
|   |                                       | Cindy Gesme |
|   |                                       | Account Manager |

 

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**EXHIBIT A**

** **

THIS WARRANT CERTIFICATE MAY BE TRANSFERRED SEPARATELY FROM THECOMMON STOCK CERTIFICATE WITH WHICH IT IS INITIALLY ISSUED

 

EXERCISABLE ON OR BEFORE, AND VOID AFTER, 5:00 P.M. MINNEAPOLISTIME, ON DECEMBER 15, 2005

 
| No. W- |   | Warrants          |   |
|-------------|--------|-------------------|--------|
|        |   |              |   |
|        |   | CUSIP 38724Q 11 5 |   |

** **

**GRANITE CITY FOOD & BREWERY LTD.**

** **

INCORPORATED UNDER THE LAWS OF THE STATE OF MINNESOTA

 

WARRANTS TO PURCHASE COMMON STOCK

 

THIS CERTIFIES THAT                                                                                                       or assigns, is the owner of the number of Warrants set forth above, each ofwhich represents the right to purchase from GRANITE CITY FOOD &BREWERY LTD., a Minnesota corporation (the “Company”), at any time on or before5:00 p.m., Minneapolis time, on December 15, 2005, upon compliancewith and subject to the conditions set forth herein and in the WarrantAgreement hereinafter referred to, one share (subject to adjustments referredto below) of common stock of the Company (the “Shares”), by surrendering thisWarrant Certificate, with the purchase form on the reverse side duly executed,at the principal office of Wells Fargo Bank, National Association, or itssuccessor, as warrant agent (the “Warrant Agent”), and by paying, in full, incash or by certified check payable to the order of the Company, the purchaseprice of $5.00 per Share, subject to adjustment.

 

Upon any exercise of lessthan all the Warrants evidenced by this Warrant Certificate, there shall be issuedto the holder a new Warrant Certificate in respect of the Warrants as to whichthis Warrant Certificate was not exercised.

 

Upon the surrender fortransfer or exchange hereof, properly endorsed, to the Warrant Agent, theWarrant Agent (at the Company’s expense) will issue and deliver to the order ofthe holder hereof, a new Warrant Certificate or Warrant Certificates of liketenor, in the name of such holder or as such holder (upon payment by suchholder of any applicable transfer taxes) may direct, calling in the aggregateon the face thereof for the number of Shares called for on the face hereof.

 

The Warrant Certificatesare issued only as registered Warrant Certificates.  Until this Warrant Certificate is transferredin the Warrant Register, the Company and the Warrant Agent may treat the personin whose name this Warrant Certificate is registered as the absolute ownerhereof and of the Warrants represented hereby for all purposes, notwithstandingany notice to the contrary.

 

This Warrant Certificateis issued under the Warrant Agreement dated as of June 6, 2000, betweenthe Company and the Warrant Agent and is subject to the terms and provisionscontained in said Warrant Agreement, to all of which terms and provisions theregistered holder of this Warrant Certificate consents by acceptancehereof.  Copies of said Warrant Agreementare on file at the principal office of the Warrant Agent in South St. Paul,Minnesota, and may be obtained by written request to the Warrant Agent.

 

The number of Shares receivableupon the exercise of the Warrants represented by this Warrant Certificate andthe purchase price per Share are subject to adjustment upon the happening ofcertain events specified in the Warrant Agreement (which provisions arecontained in Article III of the Warrant Agreement and are herebyincorporated by reference).

 

No fractional Shares willbe issued upon the exercise of Warrants. As to any final fraction of a Share which a holder of Warrants exercisedin the same transaction would otherwise be entitled to purchase on suchexercise, the Company shall pay a cash adjustment in lieu of any fractionalShare determined as provided in the Warrant Agreement.

 

The Warrants may beredeemed by the Company at any time, upon notice of such redemption as setforth below, at the redemption price equal to $0.01 per Warrant, provided thatthe closing bid price of the Shares on the

 

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Nasdaq systemexceeds $6.25 per Share (subject to adjustment as provided in the WarrantAgreement) for any 45 consecutive trading days prior to the date such notice ofredemption is given.  Notice ofredemption shall be mailed not less than 20 days prior to the date fixed forredemption to the holders of Warrants at their last registered addresses.  If notice of redemption shall have been givenas provided in the Warrant Agreement and cash sufficient for the redemptionshall have been deposited by the Company for that purpose, the exercise rightsof the Warrants identified for redemption shall expire at the close of businesson such date of redemption unless extended by the Company.

 

This Warrant Certificateshall not entitle the holder hereof to any of the rights of a holder of Shares,including, without limitation, the right to vote, to receive dividends andother distributions, to exercise any preemptive right, or to receive any noticeof or to attend meetings of holders of Shares or any other proceedings of theCompany.

 

Shares may not be issuedto holder upon exercise of this Warrant if, at the time of exercise, aregistration statement with respect to such Shares is not effective under theSecurities Act or if the Shares underlying the Warrant are not qualified orexempt from qualification in the state wherein the holder of the Warrantresides.

 

This Warrant Certificateshall be void and the Warrants and any rights represented hereby shall ceaseunless exercised on or before 5:00 p.m., Minneapolis time, on December 15,2005.

 

This Warrant Certificateshall not be valid for any purpose until it shall have been countersigned bythe Warrant Agent.

 

WITNESSthe facsimile signatures of the Company’s duly authorized officers.

 

 
| Dated: |   |                    | GRANITE CITY  FOOD & BREWERY LTD. |
|--------|--------|-------------------------|--------------------------------------------|
|   |   |
|   | By     |                    |                                       |
|   |   | Steven J. Wagenheim     |                                       |
|   |   | Chief Executive Officer |                                       |

 

Attest:

 
|                           |   |
|--------------------------------|--------|
| Monica A. Underwood, Secretary |

 

 

COUNTERSIGNED AND REGISTERED:

WELLS FARGO BANK, N.A.

asWarrant Agent

 
| By     |                 |   |
|--------|----------------------|--------|
|   | Authorized Signature |   |

 

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**TheArticles of Incorporation of the Corporation grant to the Board of Directorsthe power to establish more than one class or series of shares and to fix the relativerights and preferences of any such different class or series.  The Corporation will furnish to anyshareholder upon request and without charge a full statement of thedesignation, preferences, limitations and relative rights of the shares of eachclass or series authorized to be issued, so far as they have been determined,and the authority of the Board to determine the relative rights and preferencesof subsequent classes or series.**

 

PURCHASE FORM

 

(To Be Executed by the Registered Holder in Order to Exercise theWarrant)

 

The undersignedhereby irrevocably elects to exercise                                *of the Warrants represented by this Warrant Certificate and to purchase forcash the Shares issuable upon the exercise of said Warrants, and herewith makespayment of $                    therefor, and requests that certificates for such Shares be issued in the nameof

 

 
| PLEASE INSERT  SOCIAL SECURITY OR |                    |      |
|-----------------------------------|-------------------------|-----------|
| OTHER  IDENTIFYING NUMBER OF      | (Print Name)            |      |
| REGISTERED  HOLDER OF CERTIFICATE |                    |      |
|                              |                    | (Address) |   |
|                              |                    |      |
|                              | (City, State, Zip Code) |      |
| Dated:                            |                    |      |   |   |
|                              | (Signature)             |      |
|                              |                    |      |
|                              | (Signature)             |      |
|                                   |                         |           |  |  |  |

 

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*                                         Inserthere the number of Warrants evidenced on the face of this Warrant Certificate(or, in the case of a partial exercise, the portion thereof being exercised)without making any adjustment for additional Shares or any other securities orproperty or cash which, pursuant to the adjustment provisions referred to inthis Warrant Certificate, may be deliverable upon exercise.

 

**NOTICE**

** **

**The Signature(s) to the Purchase Form must correspond tothe name(s) as written upon the face of this Warrant Certificate in everyparticular without alteration or enlargement or any damage whatsoever.**

 

ASSIGNMENT FORM

(To Be Executed by the Registered Holder in Order to Transfer theWarrant)

 

FOR VALUERECEIVED, the undersigned hereby sells, assigns and transfers                        **of the Warrants represented by this Warrant Certificate unto

 
| PLEASE INSERT  SOCIAL SECURITY OR |                    |      |
|-----------------------------------|-------------------------|-----------|
| OTHER  IDENTIFYING NUMBER OF      | (Print name)            |      |
| ASSIGNEE                          |                    |      |
|                              |                    | (Address) |   |
|                              |                    |      |
|                              | (City, State, Zip Code) |      |
|                                   |                         |           |  |

 

and does hereby irrevocably constitute and appoint                                                                Attorney to transfer this Warrant on the records of the Company with full powerof substitution in the premises.

 
| Dated: |                      |   |   |   |
|--------|---------------------------|--------|--------|--------|
|   | (Signature)               |   |
|   |                      |   |
|   | (Signature)               |   |
|   |                      |   |
|   | (Signature(s) Guaranteed) |   |

 

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**                                  Inserthere the number of Warrants evidenced on the face of this Warrant Certificate(or, in the case of a partial assignment, the portion thereof being assigned)without making any adjustment for additional Shares or any other securities orproperty or cash which, pursuant to the adjustment provisions referred to inthis Warrant Certificate, may be deliverable upon exercise.

 

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**NOTICE**

** **

**The Signature(s) to the Assignment Form must correspondto the name(s) as written upon the face of this Warrant Certificate in everyparticular without alteration or enlargement or any damage whatsoever.**

 

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