400,000 SHARES OF GRANITE CITY'S
COMMON STOCK, BASED ON THE PORTION OF THE AGGREGATE LOAN COMMITMENT ADVANCED BY
SUCH LENDER HEREUNDER; SUCH WARRANT SHALL BE IN THE FORM ATTACHED HERETO AS
EXHIBIT B, AND SHALL HAVE A PER SHARE EXERCISE PRICE EQUAL TO 110% OF THE
CLOSING SALES PRICE OF GRANITE CITY'S COMMON STOCK REPORTED ON THE NASDAQ STOCK
MARKET ON THE DATE OF THIS AGREEMENT, WHICH EXERCISE PRICE WILL REMAIN THE SAME
FOR ANY WARRANTS ISSUED UPON THE FUNDING OF ADDITIONAL LOANS COMMITTED TO BY THE
LENDERS PURSUANT TO SECTION 2.1 OF THIS AGREEMENT;
(IV)
AN INVESTORS' RIGHTS AGREEMENT EXECUTED BY GRANITE CITY AND EACH
LENDER A PARTY HERETO IN THE FORM ATTACHED HERETO AS EXHIBIT C;
(V)
THE IP AGREEMENT BY AND BETWEEN GRANITE CITY AND ADMINISTRATIVE
AGENT SETTING FORTH THE RIGHTS WITH RESPECT TO THE USE OF GRANITE CITY'S
INTELLECTUAL PROPERTY;
(VI)
THE TRANSITION SERVICES AGREEMENT BY AND AMONG THE BORROWERS AND
ADMINISTRATIVE AGENT;
7
(VII)
THE SECURITY AGREEMENT AND THE PATENT AND TRADEMARK SECURITY
AGREEMENT;
(VIII)
THE LESSOR'S CONSENT EXECUTED BY DHW LEASING, L.L.C. IN FAVOR OF
AGENT ACKNOWLEDGING THE SECURITY INTEREST GRANTED BY GRANITE CITY IN FAVOR OF
ADMINISTRATIVE AGENT;
(IX)
THE SECURED PARTY'S CONSENT EXECUTED BY GREAT WESTERN BANK
(X)
THE LEASEHOLD MORTGAGE;
(XI)
A MEMORANDUM OF LEASE AND CONSENT TO ENCUMBRANCE AND ASSIGNMENT
OF LEASES AND RENTS EXECUTED BY DOUGLAS J. JOHNSON AND GRANITE CITY IN FAVOR OF
ADMINISTRATIVE AGENT;
(XII)
COPIES OF ANY EXISTING LEASES BETWEEN EITHER BORROWER AND THE
LANDLORD OF THE SIOUX FALLS RESTAURANT (THE "REAL ESTATE LEASES");
(XIII)
COPIES OF ANY EXISTING EQUIPMENT LEASES FOR ANY EQUIPMENT LOCATED
AT OR USED IN THE OPERATION OF THE RESTAURANT, (THE "EQUIPMENT LEASES");
(XIV)
A CERTIFICATE OF EACH BORROWER'S SECRETARY OR ASSISTANT SECRETARY
CERTIFYING THAT ATTACHED TO SUCH CERTIFICATE ARE:
(I) RESOLUTIONS OF SUCH
BORROWER'S BOARD OF DIRECTORS AND, IF REQUIRED, THE SHAREHOLDERS, AUTHORIZING
THE EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS; (II) TRUE,
CORRECT AND COMPLETE COPIES OF SUCH BORROWER'S CONSTITUENT DOCUMENTS, AND
(III) EXAMPLES OF THE SIGNATURES OF SUCH BORROWER'S OFFICERS OR AGENTS
AUTHORIZED TO EXECUTE AND DELIVER THE LOAN DOCUMENTS AND OTHER INSTRUMENTS,
AGREEMENTS AND TO REQUEST THE LOANS HEREUNDER; AND
(XV)
SUCH OTHER DOCUMENTATION OR AGREEMENTS REQUESTED BY ADMINISTRATIVE
AGENT.
(B)
COMPLIANCE. THE BORROWERS SHALL HAVE PERFORMED AND COMPLIED WITH
ALL AGREEMENTS, TERMS AND CONDITIONS CONTAINED IN THIS AGREEMENT REQUIRED TO BE
PERFORMED OR COMPLIED WITH BY THE BORROWERS PRIOR TO OR SIMULTANEOUSLY WITH THE
FUNDING OF THE LOAN CONTEMPLATED HEREIN.
(C)
INSURANCE.
EACH BORROWER SHALL HAVE DELIVERED TO ADMINISTRATIVE
AGENT EVIDENCE OF INSURANCE COVERAGE ON ALL SUCH BORROWER'S PROPERTY, IN FORM,
SUBSTANCE, AMOUNTS, COVERING RISKS AND ISSUED BY COMPANIES SATISFACTORY TO
ADMINISTRATIVE AGENT, AND WITH RESPECT TO THE SIOUX FALLS RESTAURANT, WITH LOSS
PAYABLE ENDORSEMENTS IN FAVOR OF ADMINISTRATIVE AGENT AS ITS INTEREST APPEARS,
INCLUDING WITHOUT LIMITATION, POLICIES OF FIRE AND EXTENDED COVERAGE INSURANCE
COVERING THE SIOUX FALLS RESTAURANT ANY COLLATERAL LOCATED THEREIN.
(D)
TITLE INSURANCE.
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED AN ALTA
POLICY OF