EXHIBIT 10.3


 


December 6, 2007


 


Granite City Food & Brewery Ltd.


5402 Parkdale Drive, Suite 101


Minneapolis, MN 55416


 


ATTN:  Steven J. Wagenheim

Chief Executive Officer


 


Re:       Amendment
of Stock Purchase Agreement


 


Dear Mr. Wagenheim:


 


Reference is made to that certain Stock Purchase
Agreement made and entered into as of March 8, 2007 (the “Agreement”) by and
between Granite City Food & Brewery Ltd. (the “Company”) and investors who
are parties thereto, including the undersigned William Blair Small Cap Growth
Fund; Booth & Co FFC Hartman Retirement Income Trust; Booth & Co FFC
Rush University Medical Center Endowment Account; Booth & Co FFC Rush
University Medical Center Pension & Retirement; Calhoun & Co FFC City
of Dearborn General Employees Retirement System; Calhoun & Co FFC City of
Dearborn Policemen & Firemen Revised Retirement Systems; and Mac & Co. All
initially capitalized terms below shall have the meanings set forth in the
Agreement.


 


The Company desires to obtain financing  from DHW Leasing, L.L.C. (“DHW”) in the
amount of up to $16,000,000 for a term of not more than 5 years at an interest
rate not exceeding 12% (the “Financing”). The Financing is generally described
in a term sheet which the Company has received from DHW, a copy of which is attached
hereto as Schedule A. The proceeds of the Financing will be used by the
Company in its business for expansion through the development of additional
restaurant units. The Company’s indebtedness to DHW will be collateralized by
security interests in furniture, fixtures and equipment of the additional
restaurant units.


 


Each of the principals of DHW will be required to
personally guaranty amounts due to lenders who provide the funding to DHW (the “Guarantees”)
which DHW will use for the Financing. Steven J. Wagenheim is one of the
principals of DHW and is an Interested Party under the Agreement. The Financing
and the Guarantees are Interested Party Transactions under the Agreement.


 


Mr. Wagenheim will not receive any compensation,
securities, options, warrants or benefit of any kind from the Company or any
compensation, income, distribution, share of profits or benefits of any kind
from DHW (collectively, “Restricted Payments”) in connection with the Financing
or the Guarantees. Notwithstanding the foregoing, Restricted Payments shall not
include any payment or other receipt of property by Mr. Wagenheim to reimburse
or indemnify him for his actual payments and costs to a lender or DHW on
account of a default by the Company 
under a lease or other financing arrangement with DHW. All definitive
agreements relating to the Financing and the Guarantees will be subject to
approval by the Company’s Audit Committee, which will consist only of
independent directors of the Company.


 


Based upon the foregoing,
including the agreements of  Mr.
Wagenheim and DHW as set forth herein, the Investors agree that the covenants
contained in  Section 6(ii) of the
Agreement shall not apply to the Financing and the Guarantees.


 

















 


Agreed to this 6th day of December, 2007


 


	
  Granite City Food & Brewery Ltd.

  	
   

  	
  William Blair Small Cap Growth Fund

  
	
   

  	
   

  	
  Booth & Co FFC Hartmarx Retirement Income

  
	
   

  	
   

  	
  Trust

  
	
  By:

  	
  /s/ Steven J. Wagenheim

  	
   

  	
   

  	
  Booth & Co FFC Rush University Medical Center

  
	
   

  	
  Steven J. Wagenheim

  	
   

  	
   

  	
  Endowment Account

  
	
   

  	
  Chief Executive Officer

  	
   

  	
   

  	
  Booth & Co FFC Rush University Medical Center

  
	
   

  	
   

  	
   

  	
   

  	
  Pension & Retirement

  
	
   

  	
   

  	
   

  	
  Calhoun & Co FFC City of Dearborn General

  
	
  DHW Leasing, L.L.C.

  	
   

  	
   

  	
  Employees Retirement Systems

  
	
   

  	
   

  	
   

  	
  Calhoun & Co FFC City of Dearborn Policemen

  
	
  By:

  	
  /s/ Donald A. Dunham, Jr.

  	
   

  	
   

  	
  and Firemen Revised Retirement Systems

  
	
   

  	
  Manager

  	
   

  	
   

  	
  Mac & Co

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: William Blair & Company LLC

  
	
  /s/ Steven J. Wagenheim

  	
   

  	
   

  	
   

  
	
  Steven J. Wagenheim

  	
   

  	
   

  	
  By:

  	
  /s/ Karl W. Brewer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Karl W. Brewer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Portfolio Manager

  
									



 

















 


SCHEDULE A


 


	
  TO:

  	
  Granite City Food &
  Brewery, Ltd.

  
	
   

  	
  Board of Directors

  
	
   

  	
   

  
	
  FROM:

  	
  Donald A. Dunham, Jr.;
  Charles J. Hey; Steven J. Wagenheim

  
	
   

  	
  dba DHW Leasing, LLC

  
	
   

  	
   

  
	
  SUBJ:

  	
  Equipment Lease
  Financing

  



 


DATE: November
28, 2007


 


DHW Leasing, LLC is
pleased to present the following proposal to the Board of Directors of Granite
City Food & Brewery, Ltd. for the purpose of providing FF&E leasing in
the amount of up to sixteen million dollars ($16,000,000) for furniture,
fixtures and equipment financing for up to sixteen Granite City Food &
Brewery restaurants in the average amount of one million dollars ($1,000,000)
per store (including sales tax if/as applicable).


 


Terms of this financing
are as follows:


 


	
  Lessor:

  	
  DHW Leasing, LLC

  
	
   

  	
   

  
	
  Lessee:

  	
  Granite City Food &
  Brewery, Ltd.

  
	
   

  	
   

  
	
  Purpose:

  	
  Lease furniture, fixtures
  and equipment for up to sixteen Granite City locations

  
	
   

  	
   

  
	
  Amount:

  	
  Each Equipment Lease will
  be in the average amount of $1,000,000, for a total of up to sixteen leases
  or $16,000,000

  
	
   

  	
   

  
	
  Lease

  Payments:

  	
  Lease payments shall be
  based on a five-year amortization period at a fixed interest rate to be
  determined by formula off the rate being charged to DHW Leasing by their
  lenders. The formula is as follows:

  
	
   

  
	
   

  	
   

  
	
   

  	
  Lease Rate = Bank Base Rate plus (6% x 80%) plus
  (3% x 20%)

  
	
   

  	
   

  
	
   

  	
  Monthly principal and
  interest payments plus sales tax (if applicable) will be required. In
  addition, Lessee shall also be responsible for fees related to license,
  registration and taxes required as a result of the lease contemplated
  hereunder.

  
	
   

  	
   

  
	
   

  	
  At the end of the lease,
  Lessee shall have the option to purchase the FF&E for $1.00.

  
	
   

  	
   

  
	
  Term:

  	
  Each $1,000,000 lease
  shall be for a term of five (5) years.

  
	
   

  	
   

  
	
  Fees:

  	
  Granite City Food &
  Brewery, Ltd. shall pay DHW a loan origination fee equal to .25% of the lease
  amount when each lease is signed. Additionally, Lessee shall pay all filing,
  recording and any other fees connected with the origination and/or
  pre-payment of each term loan.

  



 


A-1

















 


	
  Title:

  	
  For tax purposes, Granite
  City Food & Brewery, Ltd. shall be treated as owner of the FF&E and
  shall receive the depreciation. For all other purposes, DHW Leasing, LLC
  shall be owner of the Equipment.

  
	
   

  	
   

  
	
  Capital Lease:

  	
  Lessee agrees to enter
  into an Equipment Lease Agreement for each store location reflecting the
  above referenced terms.

  
	
   

  	
   

  
	
  Pre-payment Penalty:

  	
  Lessee shall be
  responsible for any pre-payment penalties which may be charged by Lessor’s
  lender upon pre-payment of the Equipment Lease Agreement.

  
	
   

  
	
   

  	
   

  
	
  Due on Sale Clause:

  	
  Upon the sale of the
  Equipment or the merger, liquidation or sale of substantially all of the
  store or stock of Granite City Food & Brewery, Ltd., the leases will
  immediately become due and payable.

  
	
   

  
	
   

  	
   

  
	
  Financials:

  	
  Lessee shall provide
  Lessor with annual financial reports, as well as any other financial
  information Lessor may require from time to time to ensure the financial
  condition of Lessee is fairly represented.

  
	
   

  	
   

  
	
  Other:

  	
  If/as required by Lessor’s
  lender, Lessee agrees to allow Lessor’s lender to issue payment directly to
  vendors for the FF&E leased through this agreement. If, however, Lessee
  has already paid for/purchased the FF&E, Lender shall allow payment
  directly to Lessee. Additionally, Lessee agrees to allow Lessor’s lender to
  place a purchase money security interest on the FF&E purchased under each
  lease.

  
	
   

  	
   

  
	
  Subject To:

  	
  This offer of financing is
  subject to Lessee’s agreement of rental increases for the following Granite
  City locations:

  
	
   

  	
   

  
	
   

  	
  Des Moines, IA

  	
  Cedar
  Rapids, IA

  
	
   

  	
  Davenport, IA

  	
  Lincoln,
  NE

  
	
   

  	
  Wichita, KS

  	
  Eagan,
  MN

  
	
   

  	
  Zona Rosa- KC, MO

  	
  Olathe,
  KS

  
	
   

  	
   

  
	
   

  	
  Such rental increases
  shall begin on a staggered basis beginning January 1, 2013 and reflect a 10%
  increase in the base rent every five years for the balance of the original 20
  year lease (see attached recap.)

  



 


The terms set forth above
shall be valid through December 5th, 2007 at 5:00 P.M. CST. In the event the
terms are not accepted by such time, unless agreed to in writing by DHW
Leasing, L.L.C., this term sheet shall expire.


 


	
   

  	
  /s/ Donald A. Dunham,
  Jr.

  	
   

  
	
   

  	
  Donald A. Dunham, Jr.

  
	
   

  	
  DHW LEASING, LLC

  



 


A-2

















 


ACKNOWLEDGEMENT:


 


The undersigned hereby
agrees to the terms summarized above and will proceed in good faith to finalize
agreements to document the same.


 


	
  GRANITE CITY FOOD & BREWERY, LTD.

  
	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
					



 


A-3

















 


GRANITE CITY FOOD & BREWERY RESTAURANTS


RECAP OF LAND AND BUILDING COSTS BY LOCATION


 


	
   

  	
   

  	
  RESTAURANT

  	
   

  	
  LEASE

  	
   

  	
  CURRENT

  	
   

  	
  PROPOSED
  INCREASES

  	
   

  	
  LEASE END

  	
   

  
	
   

  	
   

  	
  LOCATION

  	
   

  	
  COMMENCEMENT

  	
   

  	
  ANNUAL RENT

  	
   

  	
  1-Jan-2013

  	
   

  	
  1-Jan-2018

  	
   

  	
  1-Jan-2023

  	
   

  	
  (ORIGINAL TERM)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (1)

  	
   

  	
  Des Moines
  (Clive), IA

  	
   

  	
  September 3, 2003

  	
   

  	
  $

  	
  294,000.00

  	
   

  	
  $

  	
  323,400.00

  	
   

  	
  $

  	
  355,740.00

  	
   

  	
  $

  	
  391,314.00

  	
   

  	
  September 2, 2023

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  Cedar Rapids, IA

  	
   

  	
  December 1, 2003

  	
   

  	
  $

  	
  315,000.00

  	
   

  	
  $

  	
  346,500.00

  	
   

  	
  $

  	
  381,150.00

  	
   

  	
  $

  	
  419,265.00

  	
   

  	
  November 30, 2023

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RESTAURANT

  	
   

  	
  LEASE

  	
   

  	
  CURRENT

  	
   

  	
  PROPOSED INCREASES

  	
   

  	
  LEASE END

  	
   

  
	
   

  	
   

  	
  LOCATION

  	
   

  	
  COMMENCEMENT

  	
   

  	
  ANNUAL RENT

  	
   

  	
  1-Jan-2014

  	
   

  	
  1-Jan-2019

  	
   

  	
  1-Jan-2024

  	
   

  	
  (ORIGINAL TERM)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  Davenport, IA

  	
   

  	
  February 1, 2004

  	
   

  	
  $

  	
  341,250.00

  	
   

  	
  $

  	
  375,375.00

  	
   

  	
  $

  	
  412,912.50

  	
   

  	
  $

  	
  454,203.75

  	
   

  	
  January 31, 2024

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (4)

  	
   

  	
  Lincoln, NE

  	
   

  	
  June 1, 2004

  	
   

  	
  $

  	
  168,000.00

  	
   

  	
  $

  	
  184,800.00

  	
   

  	
  $

  	
  203,280.00

  	
   

  	
  $

  	
  223,608.00

  	
   

  	
  May 31, 2024

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RESTAURANT

  	
   

  	
  LEASE

  	
   

  	
  CURRENT

  	
   

  	
  PROPOSED INCREASES

  	
   

  	
  LEASE END

  	
   

  
	
   

  	
   

  	
  LOCATION

  	
   

  	
  COMMENCEMENT

  	
   

  	
  ANNUAL RENT

  	
   

  	
  1-Jan-2015

  	
   

  	
  1-Jan-2020

  	
   

  	
  1-Jan-2025

  	
   

  	
  (ORIGINAL TERM)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (5)

  	
   

  	
  Wichita, KA

  	
   

  	
  July 1, 2005

  	
   

  	
  $

  	
  336,000.00

  	
   

  	
  $

  	
  369,600.00

  	
   

  	
  $

  	
  406,560.00

  	
   

  	
  $

  	
  447,216.00

  	
   

  	
  June 30, 2025

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (6)

  	
   

  	
  Eagan, MN

  	
   

  	
  October 1, 2005

  	
   

  	
  $

  	
  396,375.00

  	
   

  	
  $

  	
  436,012.50

  	
   

  	
  $

  	
  479,613.75

  	
   

  	
  $

  	
  527,575.13

  	
   

  	
  September 30,
  2025

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (7)

  	
   

  	
  Zona Rosa, KC, MO

  	
   

  	
  December 1, 2005

  	
   

  	
  $

  	
  446,250.00

  	
   

  	
  $

  	
  490,875.00

  	
   

  	
  $

  	
  539,962.50

  	
   

  	
  $

  	
  593,958.75

  	
   

  	
  November 30, 2025

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RESTAURANT

  	
   

  	
  LEASE

  	
   

  	
  CURRENT

  	
   

  	
  PROPOSED INCREASES

  	
   

  	
  LEASE END

  	
   

  
	
   

  	
   

  	
  LOCATION

  	
   

  	
  COMMENCEMENT

  	
   

  	
  ANNUAL RENT

  	
   

  	
  1-Jan-2015

  	
   

  	
  1-Jan-2020

  	
   

  	
  1-Jan-2025

  	
   

  	
  (ORIGINAL TERM)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (8)

  	
   

  	
  Olathe, KS

  	
   

  	
  April 1, 2006

  	
   

  	
  $

  	
  414,750.00

  	
   

  	
  $

  	
  456,225.00

  	
   

  	
  $

  	
  501,847.50

  	
   

  	
  $

  	
  552,032.25

  	
   

  	
  March 30, 2026

  	
   

  
																											



 


A-4