Document:

Exhibit 10.3

 

This
Warrant was originally issued on August 22, 2001, and has not been
registered under the Securities Act of 1933, as amended (the “Act”).  This Warrant may not be transferred in
violation of the Act, the rules and regulations thereunder or the provisions of
this Warrant.  This Warrant is also
subject to a Limited Liability Company Agreement and a Members Agreement, each
dated as of August 22, 2001, and among the members of McCormick &
Schmick Holdings LLC (the “Company”). 
A copy of each such agreement will be furnished without charge by the
Company to the holder hereof upon request.

 

CLASS A-2
COMMON UNITS PURCHASE WARRANT

 

	
  Date of Issuance: 
  August 22, 2001

  	
   

  	
  Certificate No. C W-1

  

 

For value received, MCCORMICK &
SCHMICK HOLDINGS LLC, a Delaware limited liability company (the “Company”),
hereby grants to Mellon Bank, N.A., as Trustee for The Bell Atlantic Master
Trust (the “Trustee”), the right to purchase from the Company a total of
103,896.10 units of Class A-2 Common Units of the Company (the “Class A
Units”) at a price of $0.01 per unit (the “Initial Exercise Price”).  The exercise price and number of Class A
Units (and the amount and kind of other securities) for which this Warrant is
exercisable shall be subject to adjustment as provided herein.  Certain capitalized terms used herein are
defined in Section 4 hereof.

 

This Warrant is subject to the following
provisions:

 

SECTION 1.  Exercise of Warrant.

 

IA.                               Exercise Period.  The purchase rights represented by this
Warrant may be exercised, in whole or in part, at any time and from time to
time after the date hereof, to and including 5:00 p.m., New York City time, on
August 22, 2011, or, if such day is not a business day, on the next
business day (the “Exercise Period”).

 

IB.                                 Exercise Procedure.

 

(i)                                     This Warrant shall
be deemed to have been exercised when all of the following items have been
delivered to the Company (the “Exercise Time”):

 

(a)                                  a completed Exercise
Agreement, as described in Section IC below, executed by the Person
(the “Purchaser”) exercising all or part of the purchase

 

 

rights
represented by this Warrant;

 

(b)                                 this Warrant;

 

(c)                                  if the Purchaser is
not the Registered Holder, an Assignment or Assignments in the form set forth
in Exhibit II hereto evidencing the assignment of this Warrant to such
Purchaser (and together with any other documents required pursuant to Section 6
below); and

 

(d)                                 either (1) a check
payable to the Company in an amount equal to the product of the Exercise Price
(as such term is defined in Section 2) multiplied by the number of
Class A Units being purchased upon such exercise (the “Aggregate Exercise
Price”), (2) the surrender to the Company of securities of the Company
having a value equal to the Aggregate Exercise Price of the Class A Units being
purchased upon such exercise, as determined in good faith by the Company’s
board of advisors, or (3) the delivery of a notice to the Company that the
Purchaser is exercising the Warrant by authorizing the Company to reduce the
number of Class A Units subject to the Warrant by the number of units having an
aggregate value equal to the Aggregate Exercise Price, as determined in good
faith by the Company’s board of advisors.

 

(ii)                                  Certificates for
units of Class A Units purchased upon exercise of this Warrant, if any, shall
be delivered by the Company to the Purchaser within five days after the date of
the Exercise Time together with any cash payable in lieu of a fraction of a
unit pursuant to Section 14 hereof.  Unless this Warrant has expired or all of the purchase rights
represented hereby have been exercised, the Company shall prepare a new
Warrant, substantially identical hereto, representing the rights formerly
represented by this Warrant which have not expired or been exercised and shall,
within such five-day period, deliver such new Warrant to the Person designated
for delivery in the Exercise Agreement.

 

(iii)                               Except as contemplated
by Section 1B(vi), the Class A Units issuable upon the exercise of
this Warrant shall be deemed to have been issued to the Purchaser at the
Exercise Time, and the Purchaser shall be deemed for all purposes to have
become the recordholder of such Class A Units at such Exercise Time.

 

(iv)                              The issuance of
certificates for Class A Units, if any, upon exercise of this Warrant shall be
made without charge to the Registered Holder or the Purchaser for any issuance
tax in respect thereof or other cost incurred by the Company in connection with
such exercise and the related issuance of Class A Units.

 

(v)                                 The Company shall not
close its books against the transfer of this Warrant or of any Class A Units
issued or issuable upon the exercise of this Warrant in any manner which
interferes with the timely exercise of this Warrant.

 

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(vi)                              Notwithstanding any other
provision hereof, if an exercise of any portion of this Warrant is to be made
in connection with a public offering or a sale of the Company (pursuant to a
merger, sale of units or otherwise), such exercise may, at the election of the
holder, be conditioned upon the consummation of such transaction, in which case
such exercise shall not be deemed to be effective until the consummation of
such transaction.

 

(vii) All Class A Units which are issuable
upon exercise of this Warrant shall, when issued and upon the payment of the
applicable Exercise Price, be duly and validly issued and free from all taxes,
liens and charges.  The Company shall
take all such actions as may be necessary to ensure that all such Class A Units
may also be issued without violation by the Company of the LLC Agreement, any
applicable law or governmental regulation or any requirements of any domestic
securities exchange upon which such Class A Units or other securities into
which the Class A Units have been converted may be listed (except for official
notice of issuance which shall be immediately delivered by the Company upon
each such issuance).  In the event that
any of the class of equity securities for which this Warrant may be exercised
becomes registered on any domestic securities exchange, the Company will use
its best efforts to cause such equity securities, immediately upon such
exercise, to be listed on any domestic securities exchange upon which such
class of equity securities is listed at the time of such exercise.

 

(viii) If the Class A Units issuable by
reason of exercise of this Warrant are convertible into or exchangeable for any
stock or other securities of the Company (or any successor of the Company), the
Company shall, at the Purchaser’s option and upon surrender of this Warrant by
such Purchaser as provided above together with any notice, statement or payment
required to effect such conversion or exchange of Class A Units, deliver to
such Purchaser (or as otherwise specified by such Purchaser) a certificate or
certificates representing the stock or securities into which the Class A Units
issuable by reason of such conversion are convertible or exchangeable,
registered in such name or names and in such denomination or denominations as
such Purchaser has specified.

 

1C.                               Exercise Agreement.  Upon any exercise of this Warrant, the
Purchaser shall deliver to the Company an Exercise Agreement in substantially
the form set forth in Exhibit I hereto, except that if the Class A
Units are not to be issued in the name of the Registered Holder, the Exercise
Agreement shall also state the name of the Person to whom the certificates for
the units of Class A Units are to be issued, and if the number of Class A Units
to be issued does not include all of the Class A Units purchasable hereunder,
it shall also state the name of the Person to whom a new Warrant for the
unexercised portion of the rights hereunder is to be issued.

 

SECTION 2.  Adjustment of Exercise Price and Number of Units.  In order to prevent dilution of the rights
granted under this Warrant, the Initial Exercise Price shall be subject to
adjustment from time to time as provided in this Section 2 (as so
adjusted, the “Exercise Price”), and the number of Class A Units
obtainable upon exercise of this Warrant shall be subject to adjustment from
time to time, each as provided in this Section 2.

 

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2A.                             Adjustment of Exercise
Price and Number of Units upon Issuance of Common Units.  If and whenever the Company issues or sells,
or in accordance with Section 2B, is deemed to have issued or sold,
other than pursuant to a Permitted Issuance, any Common Units for a
consideration per unit less than the Fair Market Value per unit of the Common
Units determined as of the date of such issuance or sale, then immediately upon
such issuance or sale, the Exercise Price shall be reduced to equal the amount
determined by multiplying the Exercise Price in effect immediately prior to
such issuance or sale by a fraction, (x) the numerator of which will be
the sum of (1) the number of Common Units Deemed Outstanding immediately
prior to such issuance or sale multiplied by the Fair Market Value per unit of
the Common Units determined as of the date of such issuance or sale, plus
(2) the consideration, if any, received by the Company upon such issuance or
sale, and (y) the denominator of which will be the product derived by multiplying
such Fair Market Value per unit of the Common Units by the number of Common
Units Deemed Outstanding immediately after such issuance or sale.  Upon each such adjustment of the Exercise
Price hereunder, the number of Class A Units acquirable upon exercise of this
Warrant shall be adjusted to equal the number of units determined by multiplying
the Exercise Price in effect immediately prior to such adjustment by the number
of Class A Units acquirable upon exercise of this Warrant immediately prior to
such adjustment and dividing the product thereof by the Exercise Price
resulting from such adjustment.

 

2B.                               Effect on Exercise
Price of Certain Events.  For
purposes of determining the adjusted Exercise Price under Section 2A,
the following shall be applicable:

 

(i)                                     Issuance of
Rights or Options.  If the Company
in any manner (A) grants any rights or options (other than Purchase Rights
covered by Section 3 hereof or a Permitted Issuance) to subscribe
for or to purchase Common Units (such rights or options being herein called “Options”)
or (B) issues or sells any stock or other securities convertible into or exchangeable
for Common Units (such convertible or exchangeable stock or securities being
herein called “Convertible Securities”), and the price per unit for
which such Common Units are issuable upon the exercise of such Options or upon
conversion or exchange of such Convertible Securities is less than the Fair
Market Value per unit of such Common Units then in effect, then the total
maximum number of units of Common Units issuable upon the exercise of such
Options or upon conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options shall be
deemed to be outstanding and to have been issued and sold by the Company for
such price per unit.  For purposes of
this paragraph, the “price per unit for which Common Units are issuable upon
exercise of such Options or upon conversion or exchange of such Convertible
Securities” is determined by dividing (x) the total amount, if any,
received or receivable by the Company as consideration for the granting of such
Options or the issuance or sale of such Convertible Securities, plus the
minimum aggregate amount of additional consideration payable to the Company
upon the exercise of all such Options or the conversion or exchange of such
Convertible Securities, plus, in the case that Options are issued in
connection with Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the issuance or
sale of such Convertible Securities and the conversion or exchange

 

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thereof,
by (y) the total maximum number of units of Common Units issuable upon exercise
of such Options or upon the conversion or exchange of all such Convertible
Securities.  No further adjustment of the
Exercise Price shall be made upon the actual issuance of Common Units or
Convertible Securities upon the exercise of such Options or upon the actual
issuance of Common Units upon conversion or exchange of such Convertible
Securities.

 

(ii)                                  Change in Option
Price or Conversion Rate.  If (x)
the purchase price provided for in any Options, (y) the additional
consideration, if any, payable upon the issuance, conversion or exchange of any
Convertible Securities, or (z) the rate at which any Convertible Securities are
convertible into or exchangeable for Common Units shall change at any time, the
Exercise Price in effect at the time of such change shall be adjusted to the
Exercise Price which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or changed conversion rate, as the case may be,
at the time initially granted, issued or sold and the number of Class A Units
shall be correspondingly readjusted.

 

(iii)                               Treatment of Expired
Options and Unexercised Convertible Securities.  Upon the expiration of any Option or the termination of any right
to convert or exchange any Convertible Securities, in either case, without the
exercise of such Option or right, the Exercise Price then in effect and the
number of Class A Units acquirable hereunder shall be adjusted to the Exercise
Price and the number of units which would have been in effect at the time of
such expiration or termination had such Option or Convertible Securities, to
the extent outstanding immediately prior to such expiration or termination,
never been issued.

 

(iv)                              Calculation of
Consideration Received.  If any
Common Units, Options or Convertible Securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received therefor shall be
deemed to be the net amount received by the Company therefor.  In case any Common Units, Options or
Convertible Securities are issued or sold for a consideration other than cash,
the amount of the consideration other than cash received by the Company shall
be the fair value of such consideration, except where such consideration
consists of marketable securities, in which case the amount of consideration
received by the Company shall be the market price thereof as of the date of
receipt.  In the case that any Common
Units, Options or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger or other business
combination in which the Company is the surviving entity, the amount of
consideration therefor shall be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such Common Units, Options or Convertible Securities, as the case may be.  The fair value of any consideration other
than cash or marketable securities shall be determined in good faith by the
Company’s board of advisors, and prompt notice of such determination shall be given
to the Warrantholders.  If the Required
Holders object to such valuation within 30 days after receipt of such
notice, fair value shall be determined by an appraiser jointly selected by the
Company and such Required Holders, whose determination shall be final and
binding on the Company and all holders of warrants.  The fees and expenses of such appraiser shall

 

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be
paid by the Company in the event that the appraised fair value is less than the
valuation of the board of advisors, and shall be borne by the Warrantholders in
all other cases.

 

(v)                                 Integrated
Transactions.  In the case that any
Option is issued in connection with the issuance or sale of other securities of
the Company, together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the Options
shall be deemed to have been issued for their fair value as determined by the
board of advisors, and any objection to such determination shall be made in the
manner described in the last two sentences of Section 2B(iv) above.

 

(vi)                              Treasury Units.  The number of units of Common Units
outstanding at any given time shall not include units owned or held by or for
the account of the Company or any subsidiary of the Company and the disposition
of any units so owned or held shall be considered an issuance or sale of Common
Units.

 

(vii) Record Date.  If the Company takes a record of the holders
of Common Units for the purpose of entitling them (A) to receive a dividend or
other distribution payable in Common Units, Options or Convertible Securities
or (B) to subscribe for or purchase Common Units, Options or Convertible
Securities, then such record date shall be deemed to be the date of the
issuance or sale of the units of Common Units deemed to have been issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

 

2C.                               Subdivision or
Combination of Common Units.  If the
Company at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) the Common Units into a greater number of units
or pays a dividend or makes a distribution to holders of the Common Units in
the form of units of Common Units, the Exercise Price in effect immediately
prior to such subdivision shall be proportionately reduced and the number of
units of Class A Units obtainable upon exercise of this Warrant shall be
proportionately increased.  If the
Company at any time combines (by reverse stock split or otherwise) the Common
Units into a smaller number of units, the Exercise Price in effect immediately
prior to such combination shall be proportionately increased and the number of
units of Class A Units obtainable upon exercise of this Warrant shall be
proportionately decreased.

 

2D.                              Reorganization,
Reclassification, Consolidation, Merger or Sale.  Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company’s assets
or other transaction, in each case, which is effected in such a way that
holders of Common Units are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Units is referred to herein as an “Organic Change.”  Prior to the consummation of any Organic
Change, the Company shall make appropriate provision to ensure that each holder
of Warrants shall thereafter have the right to acquire and receive upon
exercise thereof, in lieu of or addition to (as the case may be and as
determined by

 

6

 

the
board of advisors) the Class A Units immediately theretofore acquirable and
receivable upon exercise of such holder’s Warrants, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for the number of Class A Units immediately theretofore acquirable and
receivable upon exercise of such holder’s Warrants prior to such Organic
Change.  In any such case, the Company
shall make appropriate provision with respect to such holder’s rights and
interests to insure that the provisions hereof shall thereafter be applicable
to the Warrants (including, but not limited to, in the case that, after giving
effect to an Organic Change.  the
successor or purchasing entity is an entity other than the Company, an
immediate adjustment of the Exercise Price to the value for the Common Units
reflected by the terms of such Organic Change and a corresponding immediate
adjustment in the number of Class A Units acquirable and receivable upon
exercise of the Warrants, if the value so reflected is less than the Fair
Market Value of the Common Units in effect immediately prior to such Organic
Change).  The Company shall not effect
any Organic Change unless, prior to the consummation thereof, the successor
entity (if other than the Company) resulting from such Organic Change
(including a purchaser of all or substantially all the Company’s assets)
assumes by written instrument the obligation to deliver to each holder of
Warrants such shares of stock, securities or assets as, in accordance with the
foregoing provisions, such holder may be entitled to acquire upon exercise of
Warrants.

 

2E.                                Certain Events.  If any event occurs of the type contemplated
by the provisions of this Section 2 but not expressly provided
herein (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company’s board of advisors shall make an appropriate adjustment in the
Exercise Price and the number of Class A Units obtainable upon exercise of this
Warrant so as to protect the rights of the holder of this Warrant.

 

2F.                                Notices.

 

(i)                                     Immediately upon
any adjustment of the Exercise Price, the Company shall give written notice
thereof to the Registered Holder, setting forth in reasonable detail and
certifying the calculation of such adjustment and setting forth the number of
Class A Units issuable upon exercise of this Warrant following such adjustment.

 

(ii)                                  The Company shall
give written notice to the Registered Holder at least 30 days prior to the
date on which the Company closes its books or takes a record (A) with respect
to any dividend or distribution upon the Common Units, (B) with respect to any
pro rata subscription offer to holders of Common Units, or (C) for determining
rights to vote with respect to any Organic Change, dissolution or liquidation.

 

(iii)                               The Company shall also
give written notice to the Registered Holder at least 45 days prior to the
date on which any Organic Change, dissolution or liquidation shall take place.

 

2G.                               Minimum Adjustment of
Exercise Price.  If the amount of
any adjustment of

 

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the
Exercise Price required pursuant to this Section 2 would be less
than one percent (1%) of the Exercise Price in effect at the time such
adjustment is otherwise so required to be made, such amount shall be carried
forward and an adjustment with respect thereto shall be made by the Company at
the time of and together with any subsequent adjustment which, together with
such amount and any other amount or amounts so carried forward, shall aggregate
at least one percent (1%) of such Exercise Price.

 

SECTION 3.  Purchase Rights. 
If at any time the Company grants or issues any options, convertible
securities or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of the Common Units (“Purchase Rights”),
then the Company shall distribute to the Registered Holder the aggregate
Purchase Rights that such holder would have acquired if such holder had
exercised such Warrants immediately before the date on which a record is taken
for the grant or issuance of such Purchase Rights, or if no such record is
taken, the date that the record holders of Common Units shall be determined for
the grant or issuance of such Purchase Rights.

 

SECTION 4.  Definitions.  The
following terms have the meanings set forth below:

 

“Class A Units” has the meaning set
forth in the preamble above and includes any securities into which such Class A
Units are hereafter converted or exchanged.

 

“Common Units” means the Class A-1
Common Units of the Company (including any securities into which such Class A-I
Common Units are hereafter converted or exchanged), Class A Units and Class B
Units, but excluding any Class C Common Units of the Company (including any
securities into which such Class C Common Units are hereafter converted or
exchanged).

 

“Class B Units” means the Class B
Common Units of the Company and includes any securities into which such Class B
Common Units are hereafter converted or exchanged.

 

“Common Units Deemed Outstanding”
means, at any given time, the number of Common Units actually outstanding at
such time, plus the number of units of Common Units deemed to be outstanding
pursuant to Section 2B(i) or 2B(ii) hereof.

 

“Common Warrants” means the purchase
rights represented by this Class A-2 Common Units Purchase Warrant evidenced
hereby, initially issued to Mellon Bank, N.A., as Trustee for The Bell Atlantic
Master Trust on August 22, 2001, that remain outstanding and unexercised.

 

“Fair Market Value” means (i) the
average of the closing sales prices of the Common Units on all domestic securities
exchanges on which the Common Units are listed, or (ii) if there have been no
sales on any such exchange on any day, the average of the highest bid and
lowest asked

 

8

 

prices
on all such exchanges at the end of such day, or (iii) if on any day the Common
Units are not so listed, the sales price for the Common Units as of 4:00 P.M.,
New York time, as reported on the NASDAQ National Market System, or (iv) if the
Common Units are not reported on the NASDAQ National Market System, the average
of the representative bid and asked quotations for the Common Units as of 4:00
P.M., New York time, as reported on the NASDAQ interdealer quotation system, or
any similar successor organization, in each such case averaged over a period of
21 trading days consisting of the day as of which “Fair Market Value” is being
determined and the 20 consecutive trading days prior to such day.  Notwithstanding the foregoing, if at any
time of determination the Common Units are not registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended, listed on a
national securities exchange nor authorized for quotation in the NASDAQ
National Market System, then “Fair Market Value” shall mean the price that
would be paid for the entire common equity interest in the Company in an
orderly sale transaction between a willing buyer and a willing seller, without
regard to lack of liquidity of the Company’s securities and without any
discount for the minority position represented by the Warrants and Class A
Units issued hereunder, using valuation techniques then prevailing in the
securities industry and assuming full disclosure of all relevant information
and a reasonable period of time for effectuating such sale.  In all cases, “Fair Market Value” shall be
determined in good faith by the Company’s board of advisors in accordance with
the terms set forth herein, and prompt notice of such determination shall be
given to the holders of the Warrants. 
If the Required Holders object to such valuation within 30 days
after receipt of such notice, Fair Market Value shall be determined by an
appraiser jointly selected by the Company and such Required Holders, whose
determination shall be final and binding on the Company and all holders of Warrants.  The fees and expenses of such appraiser
shall be paid by the Company in the event that the appraised value is less than
the valuation of the board of advisors, and shall be paid by the holders of the
Warrants in all other cases.

 

“Permitted Issuance” means (i) any
issuance of Common Units in connection with a registered public offering of
Common Units by the Company, (ii) any issuance of Class B Common Units to the
management employees of the Company or any of its subsidiaries pursuant to a
compensation or incentive arrangement established by the board of advisors of
the Company, (iii) any issuance of Common Units upon the conversion or exchange
of any Common Units, any class of Common Units, or in connection with any
Common Unit split, reverse Common Unit split, recapitalization,
reclassification, Common Unit combination or similar reorganization, (iv) any
issuance of Common Units in connection with the exercise of this Warrant in
accordance with the terms hereof and (v) pursuant to the Management
Subscription Agreements (as defined in the Members Agreement).

 

“Person” means any individual,
partnership, joint venture, corporation, trust, unincorporated organization or
government or department or agency thereof.

 

“Registered Holder” means the holder
of this Warrant as reflected in the records of the Company maintained pursuant
to Section 13.

 

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“Required Holders” means the holders
of a majority of the purchase rights represented by this Class A-2 Common Units
Purchase Warrant as originally issued that remain outstanding and unexercised.

 

SECTION 5.  No Voting Rights; Limitations of Liability.  Except as set forth herein, this Warrant
shall not entitle the holder hereof to any voting rights or other rights as a
unitholder of the Company.  No provision
hereof, in the absence of affirmative action by the Registered Holder to
purchase Class A Units, and no enumeration herein of the rights or privileges
of the Registered Holder shall give rise to any liability of such holder for
the Exercise Price of Class A Units acquirable by exercise hereof or as a
stockholder of the Company.

 

SECTION 6.  Warrant Transferable. 
This Warrant and all rights hereunder are transferable, in whole or in
part, without charge to the Registered Holder (i) upon surrender of this
Warrant with a properly executed Assignment (in the form of Exhibit II
hereto) at the principal office of the Company, and (ii) pursuant to the terms
and conditions of the LLC Agreement and the Members Agreement.

 

SECTION 7.  Warrant Exchangeable for Different Denominations.  This Warrant is exchangeable upon the
surrender hereof by the Registered Holder at the principal office of the
Company for new Warrants with the same terms and conditions set forth herein
and in denominations as requested by the Registered Holder.  At the request of the Registered Holder
(pursuant to a transfer of Warrants or otherwise), this Warrant may be
exchanged for one or more Warrants.  All
Warrants representing portions of the rights hereunder are referred to herein
as the “Warrants.”

 

SECTION 8.  Replacement.  Upon
receipt of evidence reasonably satisfactory to the Company (an affidavit of the
Registered Holder shall be satisfactory) of the ownership and the loss, theft,
destruction or mutilation of any certificate evidencing this Warrant, and in
the case of any such loss, theft or destruction, upon receipt of indemnity
reasonably satisfactory to the Company (provided that if the holder is a
financial institution or other institutional investor its own agreement shall
be satisfactory), or in the case of any such mutilation, upon surrender of such
certificate, the Company shall (at its expense) execute and deliver, in lieu of
such certificate, a new certificate of like kind representing the same rights
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate.

 

SECTION 9.  Notices.  Except as
otherwise expressly provided herein, all notices and deliveries referred to in
this Warrant shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid and
shall be deemed to have been given when so delivered (or when received, if delivered
by any other method) if sent (i) to the Company at its principal executive
offices and (ii) to the Registered Holder at such holder’s address as it
appears in the records of the Company (unless otherwise indicated by any such
holder in writing prior to the date of such notice).

 

10

 

SECTION 10.  Amendment and Waiver. 
Except as otherwise provided herein, the provisions of this Warrant may
be amended and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company has
obtained the prior written consent of the Registered Holders.

 

SECTION 11.  Limited Liability Company Agreement and Members Agreement.  The Registered Holder shall be entitled to
the rights set forth in that certain Limited Liability Company Agreement of the
Company, dated as of August 22, 2001, among the Company and its members,
as amended (the “LLC Agreement”) and that certain Members Agreement,
dated as of August 22, 2001, among the Company and the members thereto
(the “Members Agreement”).  In
the event of any conflict between the terms of this Warrant and the LLC
Agreement or Members Agreement, the terms of the LLC Agreement or Members
Agreement, as applicable, shall be controlling.

 

SECTION 12.  Dividend Requirements. 
So long as any Common Warrants are outstanding, the Company will not pay
any dividends or other distributions, including issuance of rights, on any
class of Common Units unless identical per unit dividends or distributions are
paid on the Class A Units.

 

SECTION 13.  Warrant Register. 
The Company shall maintain at its principal executive offices books for
the registration of ownership and transfer of Warrants.  The Company may deem and treat the Registered
Holder as the absolute owner hereof (notwithstanding any notation of ownership
or other writing thereon made by anyone) for all purposes and shall not be
affected by any notice to the contrary.

 

SECTION 14.  Fractions of Units. 
The Company may, but shall not be required to, issue a fraction of a
unit of Common Units upon the exercise of this Warrant in whole or in
part.  As to any fraction of a unit
which the Company elects not to issue, the Company shall make a cash payment in
respect of such fraction in an amount equal to the same fraction of the Fair
Market Value of such Common Unit on the date of such exercise.

 

SECTION 15.  Descriptive Headings; Governing Law.  The descriptive headings of the several
Sections and paragraphs of this Warrant are inserted for convenience only and
do not constitute a part of this Warrant. 
This Warrant shall be governed by and
construed in accordance with the domestic laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York, except that, as to matters of corporate law, the Delaware General
Corporation Law shall govern.

 

* * * * *

 

11

 

IN WITNESS WHEREOF, the Company
has caused this Warrant to be signed and attested by its duly authorized
officers under its corporate seal and to be dated the date hereof.

 

	
   

  	
  MCCORMICK & SCHMICK HOLDINGS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DOUGLAS SCHMICK

  	
   

  
	
   

  	
   

  	
  Name:  Douglas Schmick

  
	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DOUGLAS SCHMICK

  	
   

  	
   

  
	
  Name:  Douglas Schmick

  	
   

  
	
  Title:  Secretary

  	
   

  
					

 

 

EXHIBIT I

 

EXERCISE AGREEMENT

 

	
  To:

  	
   

  	
  Dated:

  

 

The undersigned, pursuant to the provisions
set forth in the attached Warrant (Certificate No. C
W-           ) hereby
agrees to subscribe for the purchase of
              
units of Class A Units (as defined therein) covered by such Warrant and
makes payment herewith in full therefor at the price per unit provided by such
Warrant.  The undersigned requests that
a certificate, if any, for such units of Class A Units be registered in the
name of                           
whose address is
                                     
and whose social security number or other identifying number is
                      
and that such certificate, if any, be delivered to whose address is
                                     .  If said number of units of Class A Units is
less than all of the units of Class A Units purchasable hereunder, the
undersigned requests that a new Warrant evidencing the right to purchase the
remaining balance of units of Class A Units for which this Warrant is
exercisable be registered in the name of                       
whose address is
                                     
and whose social security number or other identifying number is
                      
and that such certificate be delivered to
                     
whose address
is                                         .

 

	
   

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address

  	
   

  	
   

  
					

 

 

EXHIBIT II

 

ASSIGNMENT

 

FOR VALUE RECEIVED,
                                                           
hereby sells, assigns and transfers all of the rights of the undersigned under
the attached Warrant (Certificate No. C
W-          ) with respect to
the number of the units of Class A Units (as defined therein) covered thereby
set forth below, unto:

 

	
  Names of Assignee

  	
   

  	
  Address

  	
   

  	
  No. of
  Units

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  Dated:

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WitnessExhibit 10.4

 

This
Warrant was originally issued on August 22, 2001, and has not been
registered under the Securities Act of 1933, as amended (the “Act”).  This Warrant may not be transferred in
violation of the Act, the rules and regulations thereunder or the provisions of
this Warrant.  This Warrant is also
subject to a Limited Liability Company Agreement and a Members Agreement, each
dated as of August 22, 2001, and among the members of McCormick &
Schmick Holdings LLC (the “Company”). 
A copy of each such agreement will be furnished without charge by the
Company to the holder hereof upon request.

 

PREFERRED
UNITS PURCHASE WARRANT

 

	
  Date of Issuance: 
  August 22, 2001

  	
   

  	
  Certificate No. P W-1

  

 

For value received, MCCORMICK &
SCHMICK HOLDINGS LLC, a Delaware limited liability company (the “Company”),
hereby grants to Mellon Bank, N.A., as Trustee for The Bell Atlantic Master
Trust (the “Trustee”), the right to purchase from the Company a total of
4,956.52 units of Preferred Units (as hereinafter defined) at a price of $1.00
per unit (the “Initial Exercise Price,” and as otherwise adjusted
pursuant to the terms herein, the “Exercise Price”).  The exercise price and number of Preferred
Units (and the amount and kind of other securities) for which this Warrant is exercisable
shall be subject to adjustment as provided herein.  Certain capitalized terms used herein are defined in Section 3
hereof.

 

This Warrant is subject to the following
provisions:

 

SECTION 1.  Exercise of Warrant.

 

IA.  Exercise
Period.  The purchase rights
represented by this Warrant may be exercised, in whole or in part, at any time
and from time to time after the date hereof, to and including 5:00 p.m., New
York City time, on August 22, 2011, or, if such day is not a business day,
on the next business day (the “Exercise Period”).

 

I B.                              Exercise Procedure.

 

(i)                                     This Warrant shall
be deemed to have been exercised when all of the following items have been
delivered to the Company (the “Exercise Time”):

 

(a)                                  a completed Exercise
Agreement, as described in Section 1C below,

 

 

executed
by the Person (the “Purchaser”) exercising all or part of the purchase
rights represented by this Warrant;

 

(b)                                 this Warrant;

 

(c)                                  if the Purchaser is
not the Registered Holder, an Assignment or Assignments in the form set forth
in Exhibit II hereto evidencing the assignment of this Warrant to such
Purchaser (and together with any other documents required pursuant to Section 5
below); and

 

(d)                                 either (1) a check
payable to the Company in an amount equal to the product of the Exercise Price
multiplied by the number of Preferred Units being purchased upon such exercise
(the “Aggregate Exercise Price”), (2) the surrender to the Company of
securities of the Company having a value equal to the Aggregate Exercise Price
of the Preferred Units being purchased upon such exercise, as determined in
good faith by the Company’s board of advisors, or (3) the delivery of a notice
to the Company that the Purchaser is exercising the Warrant by authorizing the
Company to reduce the number of Preferred Units subject to the Warrant by the
number of units having an aggregate value equal to the Aggregate Exercise
Price, as determined in good faith by the Company’s board of advisors.

 

(ii)                                  Certificates for
units of Preferred Units purchased upon exercise of this Warrant, if any, shall
be delivered by the Company to the Purchaser within five days after the date of
the Exercise Time together with any cash payable in lieu of a fraction of a
unit pursuant to Section 13 hereof.  Unless this Warrant has expired or all of the purchase rights
represented hereby have been exercised, the Company shall prepare a new
Warrant, substantially identical hereto, representing the rights formerly
represented by this Warrant which have not expired or been exercised and shall,
within such five-day period, deliver such new Warrant to the Person designated
for delivery in the Exercise Agreement.

 

(iii)                               Except as contemplated
by Section 1B(vi), the Preferred Units issuable upon the exercise
of this Warrant shall be deemed to have been issued to the Purchaser at the
Exercise Time, and the Purchaser shall be deemed for all purposes to have
become the recordholder of such Preferred Units at such Exercise Time.

 

(iv)                              The issuance of
certificates for Preferred Units, if any, upon exercise of this Warrant shall
be made without charge to the Registered Holder or the Purchaser for any
issuance tax in respect thereof or other cost incurred by the Company in
connection with such exercise and the related issuance of Preferred Units.

 

(v)                                 The Company shall not
close its books against the transfer of this Warrant or of any Preferred Units
issued or issuable upon the exercise of this Warrant in any manner which

 

2

 

interferes
with the timely exercise of this Warrant.

 

(vi)                              Notwithstanding any other
provision hereof, if an exercise of any portion of this Warrant is to be made
in connection with a public offering or a sale of the Company (pursuant to a
merger, sale of units or otherwise), such exercise may, at the election of the
holder, be conditioned upon the consummation of such transaction, in which case
such exercise shall not be deemed to be effective until the consummation of
such transaction.

 

(vii)                           All Preferred Units which
are issuable upon exercise of this Warrant shall.  when issued and upon the payment of the applicable Exercise
Price, be duly and validly issued and free from all taxes, liens and
charges.  The Company shall take all
such actions as may be necessary to ensure that all such Preferred Units may
also be issued without violation by the Company of the LLC Agreement, any
applicable law or governmental regulation or any requirements of any domestic
securities exchange upon which such Preferred Units or other securities into
which the Preferred Units have been converted may be listed (except for
official notice of issuance which shall be immediately delivered by the Company
upon each such issuance).  In the event
that any of the class of equity securities for which this Warrant may be
exercised becomes registered on any domestic securities exchange, the Company
will use its best efforts to cause such equity securities, immediately upon
such exercise, to be listed on any domestic securities exchange upon which such
class of equity securities is listed at the time of such exercise.

 

(viii)                        If the Preferred Units issuable
by reason of exercise of this Warrant are convertible into or exchangeable for
any stock or other securities of the Company (or any successor of the Company),
the Company shall, at the Purchaser’s option and upon surrender of this Warrant
by such Purchaser as provided above together with any notice, statement or
payment required to effect such conversion or exchange of Preferred Units,
deliver to such Purchaser (or as otherwise specified by such Purchaser) a
certificate or certificates representing the stock or securities into which the
Preferred Units issuable by reason of such conversion are convertible or
exchangeable, registered in such name or names and in such denomination or
denominations as such Purchaser has specified.

 

1C.                               Exercise Agreement.  Upon any exercise of this Warrant, the
Purchaser shall deliver to the Company an Exercise Agreement in substantially
the form set forth in Exhibit I hereto, except that if the Preferred
Units are not to be issued in the name of the Registered Holder, the Exercise
Agreement shall also state the name of the Person to whom the certificates for
the units of Preferred Units are to be issued, and if the number of Preferred
Units to be issued does not include all of the Preferred Units purchasable
hereunder, it shall also state the name of the Person to whom a new Warrant for
the unexercised portion of the rights hereunder is to be issued.

 

ID.                                Subdivision or
Combination of Preferred Units.  If
the Company at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) the Preferred Units into

 

3

 

a
greater number of units or pays a dividend or makes a distribution to holders
of the Preferred Units in the form of units of Preferred Units, the Exercise
Price in effect immediately prior to such subdivision shall be proportionately
reduced and the number of units of Preferred Units obtainable upon exercise of
this Warrant shall be proportionately increased.  If the Company at any time combines (by reverse stock split or
otherwise) the Preferred Units into a smaller number of units, the Exercise
Price in effect immediately prior to such combination shall be proportionately
increased and the number of units of Preferred Units obtainable upon exercise
of this Warrant shall be proportionately decreased.

 

1E.                                Reorganization,
Reclassification, Consolidation, Merger or Sale.  Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company’s assets
or other transaction, in each case, which is effected in such a way that
holders of Preferred Units are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Preferred Units is referred to herein as an “Organic Change.”  Prior to the consummation of any Organic
Change, the Company shall make appropriate provision to ensure that each holder
of Warrants shall thereafter have the right to acquire and receive upon
exercise thereof, in lieu of or addition to (as the case may be and as
determined by the board of advisors) the Preferred Units immediately
theretofore acquirable and receivable upon exercise of such holder’s Warrants,
such shares of stock, securities or assets as may be issued or payable with
respect to or in exchange for the number of Preferred Units immediately
theretofore acquirable and receivable upon exercise of such holder’s Warrants
prior to such Organic Change.  In any
such case, the Company shall make appropriate provision with respect to such
holder’s rights and interests to insure that the provisions hereof shall
thereafter be applicable to the Warrants (including, but not limited to, in the
case that, after giving effect to an Organic Change, the successor or
purchasing entity is an entity other than the Company, an immediate adjustment
of the Exercise Price to the value for the Preferred Units reflected by the
terms of such Organic Change and a corresponding immediate adjustment in the
number of Preferred Units acquirable and receivable upon exercise of the
Warrants, if the value so reflected is less than the Fair Market Value of the
Preferred Units in effect immediately prior to such Organic Change).  The Company shall not effect any Organic
Change unless, prior to the consummation thereof, the successor entity (if
other than the Company) resulting from such Organic Change (including a
purchaser of all or substantially all the Company’s assets) assumes by written
instrument the obligation to deliver to each holder of Warrants such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to acquire upon exercise of Warrants.

 

IF.                                  Certain Events.  If any event occurs of the type contemplated
by the provisions of this Section 1 but not expressly provided
herein (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company’s board of advisors shall make an appropriate adjustment in the
Exercise Price and the number of Preferred Units obtainable upon exercise of
this Warrant so as to protect the rights of the holder of this Warrant.

 

4

 

1G.                               Notices.

 

(i)                                     Immediately upon
any adjustment of the Exercise Price, the Company shall give written notice
thereof to the Registered Holder, setting forth in reasonable detail and
certifying the calculation of such adjustment and setting forth the number of
Preferred Units issuable upon exercise of this Warrant following such
adjustment.

 

(ii)                                  The Company shall
give written notice to the Registered Holder at least 30 days prior to the
date on which the Company closes its books or takes a record (A) with respect
to any dividend or distribution upon the Preferred Units, (B) with respect to
any pro rata subscription offer to holders of Preferred Units, or (C) for
determining rights to vote with respect to any Organic Change, dissolution or
liquidation.

 

(iii)                               The Company shall also
give written notice to the Registered Holder at least 45 days prior to the
date on which any Organic Change, dissolution or liquidation shall take place.

 

IH.                                Minimum Adjustment
of Exercise Price.  If the amount of
any adjustment of the Exercise Price required pursuant to this Section 1
would be less than one percent (1%) of the Exercise Price in effect at the time
such adjustment is otherwise so required to be made, such amount shall be
carried forward and an adjustment with respect thereto shall be made by the
Company at the time of and together with any subsequent adjustment which,
together with such amount and any other amount or amounts so carried forward,
shall aggregate at least one percent (1%) of such Exercise Price.

 

SECTION 2.  Purchase Rights. 
If at any time the Company grants or issues any options, convertible
securities or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of the Preferred Units (“Purchase Rights”),
then the Company shall distribute to the Registered Holder the aggregate
Purchase Rights that such holder would have acquired if such holder had
exercised such Warrants immediately before the date on which a record is taken
for the grant or issuance of such Purchase Rights, or if no such record is
taken, the date that the record holders of Preferred Units shall be determined
for the grant or issuance of such Purchase Rights.

 

SECTION 3.  Definitions.  The
following terms have the meanings set forth below:

 

“Fair Market Value” means (i) the
average of the closing sales prices of the Preferred Units on all domestic
securities exchanges on which the Preferred Units are listed, or (ii) if there
have been no sales on any such exchange on any day, the average of the highest
bid and lowest asked prices on all such exchanges at the end of such day, or
(iii) if on any day the Preferred Units are not so listed, the sales price for
the Preferred Units as of 4:00 P.M., New York time, as reported on the NASDAQ
National Market System, or (iv) if the Preferred Units are not reported on the
NASDAQ

 

5

 

National
Market System, the average of the representative bid and asked quotations for
the Preferred Units as of 4:00 P.M., New York time, as reported on the NASDAQ
interdealer quotation system.  or any
similar successor organization, in each such case averaged over a period of 21
trading days consisting of the day as of which “Fair Market Value” is being
determined and the 20 consecutive trading days prior to such day.  Notwithstanding the foregoing, if at any
time of determination the Preferred Units are not registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended, listed on a
national securities exchange nor authorized for quotation in the NASDAQ
National Market System, then “Fair Market Value” shall mean the price that
would be paid for the entire preferred equity interest in the Company in an
orderly sale transaction between a willing buyer and a willing seller, without
regard to lack of liquidity of the Company’s securities and without any
discount for the minority position represented by the Warrants and Preferred
Units issued hereunder, using valuation techniques then prevailing in the
securities industry and assuming full disclosure of all relevant information
and a reasonable period of time for effectuating such sale.  In all cases, “Fair Market Value” shall be determined
in good faith by the Company’s board of advisors in accordance with the terms
set forth herein, and prompt notice of such determination shall be given to the
holders of the Warrants.  If the
Required Holders object to such valuation within 30 days after receipt of
such notice, Fair Market Value shall be determined by an appraiser jointly
selected by the Company and such Required Holders, whose determination shall be
final and binding on the Company and all holders of Warrants.  The fees and expenses of such appraiser
shall be paid by the Company in the event that the appraised value is less than
the valuation of the board of advisors, and shall be paid by the holders of the
Warrants in all other cases.

 

“Person” means any individual,
partnership, joint venture, corporation, trust, unincorporated organization or
government or department or agency thereof.

 

“Preferred Units” means the Company’s
Preferred Units and includes any securities into which such Preferred Units are
hereafter convened or exchanged.

 

“Preferred Warrants” means the purchase
rights represented by this Preferred Unit Warrant, initially issued to Mellon
Bank, N.A., as Trustee for The Bell Atlantic Master Trust on August 22,
2001, that remain outstanding and unexercised.

 

“Registered Holder” means the holder
of this Warrant as reflected in the records of the Company maintained pursuant
to Section 12.

 

“Required Holders” means the holders
of a majority of the purchase rights represented by this Preferred Units
Purchase Warrant as originally issued that remain outstanding and unexercised.

 

SECTION 4.  No Voting Rights; Limitations of Liability.  Except as set forth herein, this Warrant
shall not entitle the holder hereof to any voting rights or other rights as a
unitholder of the Company.  No provision
hereof, in the absence of affirmative action by the Registered Holder

 

6

 

to
purchase Preferred Units, and no enumeration herein of the rights or privileges
of the Registered Holder shall give rise to any liability of such holder for
the Exercise Price of Preferred Units acquirable by exercise hereof or as a
unitholder of the Company.

 

SECTION 5.  Warrant Transferable. 
This Warrant and all rights hereunder are transferable, in whole or in
part, without charge to the Registered Holder (i) upon surrender of this
Warrant with a properly executed Assignment (in the form of Exhibit II
hereto) at the principal office of the Company, and (ii) pursuant to the terms
and conditions of the LLC Agreement and the Members Agreement.

 

SECTION 6.  Warrant Exchangeable for Different Denominations.  This Warrant is exchangeable upon the
surrender hereof by the Registered Holder at the principal office of the
Company for new Warrants with the same terms and conditions set forth herein
and in denominations as requested by the Registered Holder.  At the request of the Registered Holder
(pursuant to a transfer of Warrants or otherwise), this Warrant may be
exchanged for one or more Warrants.  All
Warrants representing portions of the rights hereunder are referred to herein
as the “Warrants.”

 

SECTION 7.  Replacement.  Upon
receipt of evidence reasonably satisfactory to the Company (an affidavit of the
Registered Holder shall be satisfactory) of the ownership and the loss, theft,
destruction or mutilation of any certificate evidencing this Warrant, and in
the case of any such loss, theft or destruction, upon receipt of indemnity
reasonably satisfactory to the Company (provided that if the holder is a
financial institution or other institutional investor its own agreement shall
be satisfactory), or in the case of any such mutilation, upon surrender of such
certificate, the Company shall (at its expense) execute and deliver, in lieu of
such certificate, a new certificate of like kind representing the same rights represented
by such lost, stolen, destroyed or mutilated certificate and dated the date of
such lost, stolen, destroyed or mutilated certificate.

 

SECTION 8.  Notices.  Except as
otherwise expressly provided herein, all notices and deliveries referred to in
this Warrant shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid and
shall be deemed to have been given when so delivered (or when received, if
delivered by any other method) if sent (i) to the Company at its principal
executive offices and (ii) to the Registered Holder at such holder’s address as
it appears in the records of the Company (unless otherwise indicated by any
such holder in writing prior to the date of such notice).

 

SECTION 9.  Amendment and Waiver. 
Except as otherwise provided herein, the provisions of this Warrant may
be amended and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company has
obtained the prior written consent of the Registered Holders.

 

SECTION 10.  Limited Liability Company Agreement and Members Agreement.  The

 

7

 

Registered
Holder shall be entitled to the rights set forth in that certain Limited
Liability Company Agreement of the Company, dated as of August 22, 2001,
among the Company and its members, as amended (the “LLC Agreement”) and
that certain Members Agreement, dated as of August 22, 2001, among the Company
and the members thereto (the “Members Agreement”).  In the event of any conflict between the
terms of this Warrant and the LLC Agreement or Members Agreement, the terms of
the LLC Agreement or Members Agreement, as applicable, shall be controlling.

 

SECTION 11.  Dividend Requirements. 
So long as any Preferred Warrants are outstanding, the Company will not
pay any dividends or other distributions, including issuance of rights, on any
class of Preferred Units unless identical per unit dividends or distributions
are paid on the Preferred Units.

 

SECTION 12.  Warrant Register. 
The Company shall maintain at its principal executive offices books for
the registration of ownership and transfer of Warrants.  The Company may deem and treat the Registered
Holder as the absolute owner hereof (notwithstanding any notation of ownership
or other writing thereon made by anyone) for all purposes and shall not be
affected by any notice to the contrary.

 

SECTION 13.  Fractions of Units. 
The Company may, but shall not be required to, issue a fraction of a
unit of Preferred Units upon the exercise of this Warrant in whole or in
part.  As to any fraction of a unit
which the Company elects not to issue, the Company shall make a cash payment in
respect of such fraction in an amount equal to the same fraction of the Fair
Market Value of such Preferred Unit on the date of such exercise.

 

SECTION 14.  Descriptive Headings; Governing Law.  The descriptive headings of the several
Sections and paragraphs of this Warrant are inserted for convenience only and
do not constitute a part of this Warrant. 
This Warrant shall be governed by and
construed in accordance with the domestic laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York, except that, as to matters of corporate law, the Delaware General
Corporation Law shall govern.

 

* * * * *

 

8

 

IN WITNESS WHEREOF, the Company
has caused this Warrant to be signed and attested by its duly authorized
officers under its corporate seal and to be dated the date hereof.

 

	
   

  	
  MCCORMICK & SCHMICK HOLDINGS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DOUGLAS SCHMICK

  	
   

  
	
   

  	
   

  	
  Name:  Douglas Schmick

  
	
   

  	
   

  	
  Title:  President

  
	
   

  
	
  Attest:

  
	
   

  
	
   

  
	
  /s/ DOUGLAS SCHMICK

  	
   

  
	
  Name:  Douglas Schmick

  
	
  Title:  Secretary

  
					

 

 

 

EXHIBIT I

 

EXERCISE AGREEMENT

 

	
  To:

  	
   

  	
  Dated:

  

 

The undersigned, pursuant to the provisions
set forth in the attached Warrant (Certificate No.
P W-        ) hereby agrees to
subscribe for the purchase of         
units of Preferred Units (as defined therein) covered by such Warrant and makes
payment herewith in full therefor at the price per unit provided by such
Warrant.  The undersigned requests that
a certificate, if any, for such units of Preferred Units be registered in the
name of                  
whose address is
                                       
and whose social security number or other identifying number is
                                    
and that such certificate, if any, be delivered to whose address is
                                          .  If said number of units of Preferred Units
is less than all of the units of Preferred Units purchasable hereunder, the
undersigned requests that a new Warrant evidencing the right to purchase the
remaining balance of units of Preferred Units for which this Warrant is
exercisable be registered in the name of                       
whose address is
                                    
and whose social security number or other identifying number is
                                    
and that such certificate be delivered to
                      
whose address is                                     .

 

	
   

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address

  	
   

  	
   

  

 

 

EXHIBIT H

 

ASSIGNMENT

 

FOR VALUE RECEIVED,
                                       
hereby sells, assigns and transfers all of the rights of the undersigned under
the attached Warrant (Certificate No.
P W-       ) with respect to the number
of the units of Preferred Units (as defined therein) covered thereby set forth
below, unto:

 

	
  Names of Assignee

  	
   

  	
  Address

  	
   

  	
  No. of
  Units

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  Dated:

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Witness

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