Document:

As of May 1, 1996

 

 

 

 

 

July 6, 2007

Nicholas D. Trbovich, Jr.

28 Tanglewood Drive, West

Orchard Park, NY 14127

Dear Mr. Nicholas D. Trbovich, Jr.:

You and Servotronics, Inc. (the "Company") are parties to an Amended Employment Agreement, dated July 1, 2005 and ratified on June 30, 2006 pursuant to which you are employed by the Company. This letter confirms such Amended Employment Agreement and subsequent ratification and subsequent Amendments dated August 4, 2006 (the "Amended Agreement").

This letter will also confirm your agreement and that of the Company (pursuant to resolutions of the Board of Directors passed at a meeting held on June 29, 2007) to (i) amend Paragraph 1 of the Amended Agreement to delete "July 1, 2011" and insert in its place "July 1, 2012" and (ii) amend Paragraph 3 of the Amended Agreement to delete "$188,820" and insert in its place "$250,000" (to be effective May 1, 2007) subject to your acceptance which will be indicated by your signature below.

If the foregoing meets with your approval and you are willing to become bound hereby, please sign and return to the undersigned the enclosed copy of this letter.

Very truly yours,

SERVOTRONICS, INC.

/s/ Michael D. Trbovich

Michael D. Trbovich,

Corporate Secretary

 

ACCEPTED AND AGREED

	
/s/ Nicholas D. Trbovich, Jr.

Nicholas D. Trbovich, Jr.
	
7/6/07

DateForm of Placement Agent Warrants

 EXHIBIT 4.1 
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN APPLICABLE EXEMPTION THEREFROM. 
 GRILL CONCEPTS, INC. 
 WARRANT TO PURCHASE         
SHARES OF COMMON STOCK 
 Warrant No.:
                     
 Date of Issuance:
July [    ], 2007 
 Grill Concepts, Inc., a Delaware corporation (the “Company”), hereby certifies
that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,                     , the registered
holder hereof or its permitted assigns, is entitled, subject to the terms and conditions of this Warrant, to purchase from the Company, upon surrender of this Warrant (as defined below) at its principal office at 11661 San Vicente Blvd., Suite 404,
Los Angeles, California 90049 (or such other location as the Company may advise the holder hereof in writing), at any time prior to 5:00 p.m., Pacific Time, on the Expiration Date (as defined below),
                     fully paid nonassessable shares of Common Stock (as defined below) of the Company at the Exercise Price per share
provided in Section 1(d) of this Warrant, such Exercise Price and such number of shares of Common Stock to be delivered upon exercise of this Warrant being subject to adjustment as provided in Section 8 of this Warrant. 
 Section 1. Definitions. The following terms as used in this Warrant shall have the following meanings: 
 “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City of Los Angeles, California
are required by law to remain closed. 
 “Common Stock” means (i) the common stock, par value $0.00004 per share, of
the Company, and (ii) any capital stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock. 
 “Designated Office” has the meaning specified in Section 7(a) hereof. 
 “Distributed Assets” has the meaning specified in Section 8(c) hereof. 
 “DTC” has the meaning specified in Section 6(b) hereof. 
  

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 “Exchange Act” means the Securities Exchange Act of 1934, as amended and the rules and
regulations promulgated thereunder. 
 “Exercise Delivery Documents” has the meaning specified in Section 2(a) hereof.

 “Exercise Notice” has the meaning specified in Section 2(a) hereof. 
 “Exercise Price” shall be equal to
                    , subject to further adjustment as hereinafter provided. 
 “Expiration Date” means July [__], 2010 or, if such date does not fall on a Business Day, then the next Business Day. 

“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated
organization or association and a government or any department or agency thereof. 
 “Principal Market” means the Nasdaq
Capital Market, or if the Common Stock is not traded on the Nasdaq Capital Market, then the principal securities exchange or trading market for the Common Stock. 
 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 
 “Trading Day” shall mean (x) a day on which the Principal Market is open for business or (y) if the applicable security is not so listed on a Principal Market or admitted for trading or
quotation, a Business Day. 
 “Trading Price” of a security on any date of determination means: 
 (1) the closing sales price as reported by the Principal Market on such date; 
 (2) if such security is not listed for trading on the Principal Market on any such date, the closing sales price as reported in the
composite transactions for the principal U.S. securities exchange on which such security is so listed; 
 (3) if such security
is not listed on a U.S. national or regional securities exchange, the last price quoted by Interactive Data Corporation for such security on such date or, if Interactive Data Corporation is not quoting such price, a similar quotation service
selected by the Company; 
 (4) if such security is not so quoted, the average of the mid-point of the last bid and ask prices
for such security on such date from at least two dealers recognized as market-makers for such security selected by the Company for this purpose; or 
  

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 (5) if such security is not so quoted, the average of that last bid and ask prices for
such security on such date from a dealer engaged in the trading of securities selected by the Company for this purpose. 
 “Transfer
Agent” has the meaning specified in Section 2(a) hereof. 
 “Warrant” means this Warrant and all warrants
issued in exchange, transfer or replacement thereof. 
 “Warrant Date” has the meaning specified in Section 3 hereof.

 “Warrant Register” has the meaning specified in Section 7(a) hereof. 
 “Warrant Shares” means all shares of Common Stock issuable upon exercise of this Warrant. 
 The definition of certain other terms are specified in Section 8 hereof. 
 Section 2. Exercise of Warrant. 
 (a) Subject to the terms and conditions hereof, including, without limitation,
Section 2(c), this Warrant may be exercised by the holder hereof then registered as such on the books of the Company, in whole or in part, at any time on any Business Day prior to the Expiration Date by: (i) delivery of a written notice,
in the form of the subscription notice attached as Exhibit A hereto or a reasonable facsimile thereof (the “Exercise Notice”), to the Company and the Company’s designated transfer agent (the “Transfer
Agent”), of such holder’s election to exercise all or a portion of this Warrant, (ii) the surrender of this Warrant to the Company and (iii) either (A) the payment of the aggregate Exercise Price to the Company by wire
transfer or by certified bank check payable to the order of the Company in United States dollars or (B) an election, as evidenced by checking the “cashless exercise” box on Exhibit A (a “Cashless Exercise Election”),
to receive from the Company the number of Warrant Shares as determined pursuant to Section 2(b) below (the items to be delivered pursuant to clauses (i), (ii) and (iii) above collectively are referred to herein as the
“Exercise Delivery Documents”); provided, however, that if such Warrant Shares are to be issued in any name other than that of the registered holder of this Warrant, such issuance shall be deemed a transfer and the provisions
of Section 7 of this Warrant shall be applicable. In the event of any exercise of the rights represented by this Warrant in compliance with this Section 2(a) and Section 2(d), the Company shall, within three (3) Business Days
after receipt of the Exercise Delivery Documents, execute an acknowledgment to the Exercise Notice, in the form attached to the Exercise Notice, and issue and deliver, or cause the Transfer Agent to issue and deliver, to the address specified
in the Exercise Notice, a certificate or certificates in such denominations as may be requested by the holder in the Exercise Notice, registered in the name of the holder or its designee, for the number of shares of Common Stock to which the holder
shall be entitled upon such exercise. Upon delivery of the Exercise Delivery Documents, the holder of this Warrant shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this
Warrant has been exercised, irrespective of the date of delivery the certificates evidencing such Warrant Shares. 
  

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 (b) In the event the holder makes a Cashless Exercise Election, the Company shall issue to the holder
hereof the number of Warrant Shares determined as follows: 
 X = Y [(A-B)/A] 
 where: 
 X = the number of Warrant Shares to
be issued to the holder hereof. 
 Y = the number of Warrant Shares with respect to which this Warrant is being exercised. 
 A = the Trading Price of a share of Common Stock for the Trading Day immediately prior to the date this Warrant is being exercised. 
 B = the Exercise Price. 
 For purposes of
Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the holder hereof, and the holding period for the
Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued. 
 (c) Unless the rights represented by
this Warrant shall not have taken effect, shall have expired or shall have been fully exercised, the Company shall, within five (5) Business Days after receipt of the Exercise Delivery Documents, and at its own expense, issue a new Warrant
identical in all respects to this Warrant exercised except it shall represent rights to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which
this Warrant is exercised. 
 (d) Notwithstanding anything contained in this Warrant to the contrary, the Company shall not be required to
issue fractions of shares of Common Stock upon exercise of this Warrant or to distribute certificates evidencing such fractional shares. If more than one Warrant shall be presented for exercise in full at the same time by the same holder, the number
of full shares of Common Stock shall be issuable upon the exercise thereof shall be computed on the basis of the aggregate number of shares of Common Stock purchasable on exercise of all Warrants so presented. In lieu of any fractional shares, there
shall be paid to the holder an amount of cash equal to the same fraction of the current market value of a share of Common Stock. For purposes of this Section 2(d), the current market value of a share of Common Stock shall be the Trading Price
of a share of Common Stock for the Trading Day immediately prior to the date of such exercise. 
 Section 3. Date; Duration. The issue date of
this Warrant is July [__], 2007 (the “Warrant Date”). This Warrant, in all events, shall be wholly void and of no effect at 5:00 pm Pacific Time on the Expiration Date. 
  

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 Section 4. Taxes. 
 (a) The Company shall pay any and all documentary, stamp, transfer and other similar taxes that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. 
 (b) Notwithstanding any other provision of this Warrant, for income tax purposes, the holder or any assignee or transferee shall agree that the Company
and the Transfer Agent shall be permitted to withhold from any amounts payable to such assignee or transferee any taxes required by law to be withheld from such amounts. Unless exempt from the obligation to do so, each assignee or transferee shall
execute and deliver to the Company or the Transfer Agent, as applicable, a properly completed Form W-8 or W-9, indicating that such assignee or transferee is not subject to back-up withholding for United States federal income tax purposes. Each
assignee or transferee that does not deliver such a form pursuant to the preceding sentence shall have the burden of proving to the Company’s reasonable satisfaction that it is exempt from such requirement. 
 (c) The issuance of certificates for shares of Common Stock upon the exercise of this Warrant shall be made without charge to the holder of this Warrant
for any issue tax in respect thereof; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that
of the holder hereof, and the Company shall not be required to issue or deliver such certificates or other securities unless and until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has been paid. 
 Section 5. Warrant Holder Not Deemed a Stockholder.
Except as otherwise specifically provided herein, prior to the exercise of this Warrant represented hereby, the holder of this Warrant shall not be entitled, as such, to any rights of a stockholder of the Company, including, without limitation, the
right to vote or to consent to any action of the stockholders of the Company, to receive dividends or other distributions, to exercise any preemptive right or to receive any notice of meetings of stockholders of the Company, and shall not be
entitled to receive any notice of any proceedings of the Company. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on such holder to purchase any securities (upon exercise of this Warrant or otherwise) or
as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. 
 Section 6. Compliance with
Securities Laws. 
 (a) The holder of this Warrant, by the acceptance hereof, represents and warrants that it is acquiring this Warrant
and the Warrant Shares issuable upon exercise of this Warrant for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or
exempted under the Securities Act; provided, however, that by making the representations herein, the holder does not agree to hold this Warrant or any of the Warrant Shares for any minimum or other specific term and reserves the right to
dispose of this Warrant and Warrant Shares at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act. The holder of this Warrant further 

  

 5 

 
represents, by acceptance hereof, that, as of this date, such holder is an “accredited investor” as such term is defined in Rule 501(a) of
Regulation D promulgated by the Securities and Exchange Commission under the Securities Act and was not organized for the specific purpose of acquiring this Warrant or the Warrant Shares. 
 (b) The holder of this Warrant understands that this Warrant (and all securities issued in exchange therefor or in substitution thereof, including
Warrant Shares) shall bear a legend in substantially the following form: 
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION THEREFROM. 
 The legend set forth above shall be removed and the Company shall issue a
new certificate evidencing a new Warrant (or any securities issued in exchange therefor or in substitution thereof, including Warrant Shares) of like tenor and aggregate number of shares and which shall not bear the restrictive legends required by
this Section 6(b): (i) with respect to the Warrant Shares, if the Warrant Shares have been resold or transferred pursuant to a registration statement that was effective at the time of such transfer, (ii) if, in connection with a sale
transaction, such holder provides the Company with an opinion of counsel reasonably acceptable to the Company to the effect that a public sale, assignment, pledge or transfer of this Warrant (or any securities issued in exchange therefor or in
substitution thereof, including Warrant Shares), may be made without registration under the Securities Act. The Company shall not require such opinion of counsel for the sale of this Warrant (or any securities issued in exchange therefor or in
substitution thereof, including Warrant Shares) in accordance with Rule 144(k) of the Securities Act in the event that the holder provides such representations that the Company shall reasonably request confirming compliance with the
requirements of Rule 144(k). Whenever a certificate representing the Warrant Shares is required to be issued to a the holder without a legend, in lieu of delivering physical certificates representing the Warrant Shares, provided the
Company’s transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, the Company shall use its reasonable best efforts to cause its transfer agent to electronically
transmit the Warrant Shares to the holder by crediting the account of the holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission system (to the extent not inconsistent with any provisions of this Warrant). 
  

 6 

 Section 7. Ownership and Transfer. 
 The Company shall maintain at its principal executive offices or such other office or agency of the Company as it may designate by notice to the holder hereof (a “Designated Office”), a register for
this Warrant (the “Warrant Register”), in which the Company shall record the name and address of the person in whose name this Warrant has been issued. Upon the transfer of this Warrant in accordance with the provisions of
Section 6 hereof, the Company shall record the name and address of such new holder(s) as well as the name and address of each transferee. The Company may treat the person in whose name this Warrant is registered on the Warrant Register as the
owner and holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any transfers made in accordance with the terms of this Warrant. 
 Section 8. Adjustment of Exercise Price and Number of Shares Issuable Upon Exercise Upon Certain Corporate Events. 
 The Exercise Price and the number of Warrant Shares issuable upon the exercise are subject to adjustment from time to time upon the occurrence of the events enumerated in this Section 8. 
 (a) In case the Company shall hereafter pay a dividend or make a distribution to all holders of the outstanding Common Stock in shares of Common Stock,
the Exercise Price in effect at the opening of business on the date following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be reduced by multiplying such Exercise Price by a
fraction of which (i) the numerator shall be the number of shares of Common Stock outstanding at the close of business on the record date of this Warrant fixed for such determination and (ii) the denominator shall be the sum of such number
of shares of Common Stock referred to in (i) above plus the total number of shares constituting such dividend or other distribution. Such reduction in the Exercise Price shall become effective immediately after the opening of business on the
day following the record date. If any dividend or distribution of the type described in this Section 8(a) is declared but not so paid or made, the Exercise Price shall again be adjusted to the Exercise Price that otherwise then be in
effect if such dividend or distribution had not been declared. 
 (b) In case the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Exercise Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately reduced, and conversely, in case the outstanding
shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Exercise Price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as applicable, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. 
 (c) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock shares of any class of capital stock of the
Company or evidences of its indebtedness or other property (including cash or assets or securities, but excluding (i) dividends or distributions to which Section 8(a) applies, (ii) any dividend or distribution paid exclusively in
cash, or (iii) any consideration distributed in connection with reclassification, change, merger, consolidation, statutory 

  

 7 

 
share exchange, combination, sale or conveyance to which Section 9 of this Warrant applies (the foregoing hereinafter in this Section 8(c) called
the “Distributed Assets”)), the Exercise Price shall be reduced so that the same shall be equal to the price determined by multiplying the Exercise Price in effect immediately prior to the close of business on the Record Date with
respect to such distribution by a fraction of which (i) the numerator shall be the Current Market Price (as defined in Section 8(d) of this Warrant) on such date less the fair market value (as determined in good faith by the Company’s
Board of Directors, whose determination shall be conclusive and set forth in a board resolution) on such date of the portion of the Distributed Assets so distributed applicable to one share of Common Stock (determined on the basis of the number of
shares of Common Stock outstanding on the Record Date (as defined in Section 8(d) of this Warrant)), and (ii) the denominator shall be such Current Market Price, such reduction to become effective immediately prior to the opening of
business on the day following the Record Date. 
 Such reduction in the Exercise Price shall become effective immediately prior to the
opening of business on the day following the Record Date. However, in the event the then fair market value (as so determined) of the portion of the Distributed Assets so distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the Record Date, in lieu of the foregoing adjustment, adequate provision shall be made so that the holder of this Warrant shall have the right to receive upon exercise of this Warrant (or any portion thereof) the amount
of Distributed Assets such holder would have received had such holder converted this Warrant (or portion thereof) immediately prior to such Record Date. In the event that such dividend or distribution is not so paid or made, the Exercise Price shall
again be adjusted to be the Exercise Price which would then be in effect if such dividend or distribution had not been declared. 
 If the
Company’s Board of Directors determines the fair market value of any distribution for purposes of this Section 8(c) by reference to the actual trading market for any securities comprising all or part of such distribution, it must in doing
so consider the prices in such market over the same period (the “Reference Period”) used in computing the Current Market Price pursuant to Section 8(d) of this Warrant to the extent possible, unless a majority of the
independent members of the Company’s Board of Directors determines in good faith that determining the fair market value during the Reference Period would not be in the best interest of the holders. 
 With respect to any rights that may be issued or distributed pursuant to any rights plan that the Company implements after the date of issuance of this
Warrant (a “Rights Plan”), upon exercise of this Warrant into Common Stock, to the extent such Rights Plan is in effect upon such exercise, the holder of this Warrant will receive, in addition to the Common Stock, the rights
described therein (whether or not the rights have separated from the Common Stock prior to the time of exercise), subject to the limitations set forth in any such Rights Plan. In the event the holder receives such rights, there will be no adjustment
to the Exercise Price or the number of shares issuable upon exercise of this Warrant pursuant to this Section 8(c). In the event the holder does not receive such rights upon exercise of this Warrant for any reason, then an adjustment shall be
made to the Exercise Price to the extent provided for in the other provisions of this Section 8(c). 
 For purposes of this
Section 8(c) and Section 8(a) of this Warrant, any dividend or distribution to which this Section 8(c) is applicable that also includes shares of Common Stock, or rights or warrants to subscribe for or purchase shares of Common Stock
to which Section 8(a) of this 

  

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Warrant apply (or both), shall be deemed instead to be (1) a dividend or distribution of the evidences of indebtedness, assets, shares of capital stock,
rights or warrants immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights or warrants (and any further Exercise Price reduction required by Section 8(a) of this Warrant with respect to
such dividend or distribution shall then be made, except (A) the Record Date of such dividend or distribution shall be substituted as “the date fixed for the determination of stockholders entitled to receive such dividend or other
distribution,” “Record Date fixed for such determination” and “Record Date” within the meaning of Section 8(a) of this Warrant, and (B) any shares of Common Stock included in such dividend or distribution
shall not be deemed “outstanding at the close of business on the date fixed for such determination” within the meaning of Section 8(a) of this Warrant and any reduction or increase in the number of shares of Common Stock
resulting from such subdivision or combination shall be disregarded in connection with such dividend or distribution. 
 (d) For purposes of
this Section 8, the following terms shall have the meaning indicated: 
 (1) “Current Market Price” shall mean the
closing price per share of Common Stock on the date immediately prior to the date in question. 
 (2) “Record Date” shall
mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is
exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of stockholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors
or by statute, contract or otherwise). 
 (e) The Company may make such reductions in the Exercise Price, in addition to those required by
Sections 8(a) or (b) of this Warrant, as the Board of Directors considers to be advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax purposes. 
 (f) No adjustment in the Exercise Price shall be
required under this Section 8 unless such adjustment would require an increase or decrease of at least 1% in the Exercise Price; provided, however, that any adjustments which by reason of this Section 8(f) are not required to
be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 8 shall be made by the Company and shall be made to the nearest cent or to the nearest one hundredth of a share, as the
case may be. No adjustment need be made for a change in the no par value of the Common Stock. 
 (g) Notice to Holders of Warrants Prior
to Certain Actions. In case: 
 (1) the Company shall declare a dividend (or any other distribution) on its Common Stock that would
require an adjustment in the Exercise Price pursuant to this Section 8; 
 (2) of any reclassification of the Common Stock of the
Company (other than a subdivision or combination of its outstanding Common Stock, a change in par value, a change from 

  

 9 

 
par value to no par value or a change from no par value to par value), or any merger, consolidation, statutory share exchange or combination to which the
Company is a party and for which approval of any stockholders of the Company is required, or the sale, transfer or conveyance of all or substantially all of the assets of the Company; or 
 (3) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company, 
 the Company shall cause to be provided to the holder of this Warrant at such address appearing in the Warrant Register at least ten (10) days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, rights or warrants, or, if a record is not to be taken, the date as of which the holders of shares of Common Stock of
record to be entitled to such dividend, distribution, rights or warrants are to be determined, or (y) the date on which such reclassification, merger, consolidation, statutory share exchange, combination, sale, transfer, conveyance,
dissolution, liquidation or winding-up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, merger, consolidation, statutory share exchange, combination, sale, transfer, dissolution, liquidation or winding-up. Failure to give such notice, or any defect therein, shall not affect the legality or
validity of the proceedings or actions described in clauses (1) through (3) of this Section 8(g). In addition, whenever the Exercise Price is adjusted as provided in this Section 8, the Company shall prepare a notice of such
adjustment of the Exercise Price setting forth the adjusted Exercise Price and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Exercise Price to the holder of this Warrant at his last address
in the Warrant Register within twenty (20) days following the effective date of such adjustment. Failure to deliver such notice or any defect therein shall not effect the legality or validity of any such adjustment. 
 (h) In any case in which this Section 8 provides that an adjustment shall become effective immediately after a record date for an event, the Company
may defer until the occurrence of such event (i) issuing to the holder of this Warrant exercised after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such exercise by reason of the
adjustment required by such event over and above the Common Stock issuable upon such exercise before giving effect to such adjustment and (ii) paying to such holder any amount in cash in lieu of any fraction pursuant to
Section 2(d) of this Warrant. 
 (i) Upon each adjustment of the Exercise Price pursuant to this Section 8, this Warrant shall
thereupon evidence the right to purchase that number of Warrant Shares (calculated to the nearest hundredth of a share) obtained by multiplying the number of Warrant Shares purchasable immediately prior to such adjustment upon exercise of this
Warrant by the Exercise Price in effect immediately prior to such adjustment and dividing the product so obtained by the Exercise Price in effect immediately after such adjustment. The adjustment pursuant to this Section 8(i) to the number of
Warrant Shares purchasable upon exercise of this Warrant shall be made each time an adjustment of the Exercise Price is made pursuant to this Section 8 (or would be made but for Section 8 of this Warrant). 
  

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 Section 9. Effect of Reclassification, Consolidation, Merger or Sale. If any of the following events occur,
namely (i) any reclassification or change of the outstanding shares of Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), as a
result of which holders of Common Stock shall be entitled to receive capital stock, securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, (ii) any consolidation, merger, statutory share
exchange or combination of the Company with another Person as a result of which holders of Common Stock shall be entitled to receive stock, securities or other property or assets (including cash) with respect to or in exchange for such Common Stock
(other than as a result of a change in name, a change in par value or a change in the jurisdiction of incorporation), (iii) any sale or conveyance of the properties and assets of the Company as, or substantially as, an entirety to any other
Person as a result of which holders of Common Stock shall be entitled to receive stock, securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, then the Company or the successor or purchasing
person, as the case may be, shall issue a replacement Warrant providing that this Warrant shall be exercisable for the kind and amount of shares of stock and other securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, statutory share exchange, sale or conveyance by a holder of a number of shares of Common Stock issuable upon exercise of such Warrants (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock available for issuance upon exercise of all such Warrants) immediately prior to such reclassification, change, consolidation, merger, combination, statutory share exchange, sale or conveyance assuming such holder of
Common Stock did not exercise his rights of election, if any, that holders of Common Stock who were entitled to vote or consent to such transaction had as to the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, combination, statutory share exchange, sale or conveyance (provided that, if the kind or amount of securities, cash or other property receivable upon such consolidation, merger, combination, statutory share exchange, sale or
conveyance is not the same for each share of Common Stock in respect of which such rights of election shall not have been exercised (“non-electing share”), then for the purposes of this Section 9 the kind and amount of securities,
cash or other property receivable upon such consolidation, merger, combination, statutory share exchange, sale or conveyance for each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). Such replacement Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in Section 8 of this Warrant. If, in the case of any such reclassification,
change, consolidation, merger, combination, statutory share exchange, sale or conveyance, the stock or other securities and assets receivable thereupon by a holder of shares of Common Stock shall include shares of stock or other securities and
assets of a corporation other than the successor or purchasing person, as the case may be, in such reclassification, change, consolidate, merger, combination, statutory share exchange, sale or conveyance, then such replacement Warrant shall also be
executed by such other person and shall contain such additional provisions to protect the interests of the holder of the Warrants as the Company’s Board of Directors shall reasonably consider necessary by reason of the foregoing. The Exercise
Price for the stock and other securities, property and assets (including cash) so receivable upon such event shall be an amount equal to the Exercise Price immediately prior to such event. 
  

 11 

 The Company shall mail such replacement Warrant to the holder of this Warrant, at such holder’s
address appearing in the Warrant Register within twenty (20) days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such replacement Warrant. 
 The above provisions of this Section 9 shall similarly apply to successive or series of related reclassifications, changes, consolidations, mergers,
statutory shares exchanges, combinations, sales and conveyances. 
 If this Section 9 applies to any event or occurrence, Section 8
of this Warrant shall not apply, provided that such other provisions shall continue to apply to all other issuances. 
 Section 10. Lost,
Stolen, Mutilated or Destroyed Warrants. If this Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly, on receipt of an indemnification undertaking or other form of security reasonably acceptable to the Company (or in the
case of a mutilated Warrant, the Warrant), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed. 
 Section 11. Reservation of Common Stock. The Company hereby represents and warrants that there have been reserved, and the Company shall at all applicable times keep reserved until issued (if necessary) as contemplated by this
Section 11, out of the authorized and unissued shares of Common Stock, sufficient shares to provide for the exercise of the rights of purchase represented by this Warrant. The Company agrees that all Warrant Shares issued upon exercise of the
Warrant shall be, at the time of delivery of the certificates for such Warrant Shares upon the due exercise of this Warrant, duly authorized, validly issued, fully paid and non-assessable shares of Common Stock of the Company. 
 Section 12. Benefits. Nothing in this Warrant shall be construed to give any person, firm or corporation (other than the Company and the holder of this
Warrant) any legal or equitable right, remedy or claim, it being agreed that this Warrant shall be for the sole and exclusive benefit of the Company and the holder of this Warrant. 
 Section 13. Notice. All notices, requests, consents and other communications hereunder shall be in writing, shall be mailed (A) if within United States by first-class registered or certified airmail,
or nationally recognized overnight express courier, postage prepaid, or by facsimile, or (B) if delivered from outside the United States, by International Federal Express or facsimile, and shall be deemed given (i) if delivered by
first-class registered or certified mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express,
two business days after so mailed, and (iv) if delivered by facsimile, upon electric confirmation of receipt, and shall be delivered as addressed as follows: 
  

	
	 If to the Company:

	
	         Mr. Philip Gay

	         President and CEO

	         Grill Concepts, Inc.

	         11661 San Vicente Blvd, Suite 404

	         Los Angeles, California 90049

	         Facsimile: (310) 820-6530

  

 12 

	
	         with a copy to:

	
	         Michael W. Sanders, Esq.

	         20333 S.H. 249, Suite 600

	         Houston, Texas 77070

	         Facsimile: (832) 446-2424

	
	 If to the Transfer Agent:

	
	         Securities Transfer Corporation

	         2591 Dallas Parkway, Suite 102

	         Frisco, Texas 75034

	         Facsimile: (469) 633-0088

	
	If to the Warrant holder, the address below or at such other address and facsimile as shall be delivered to the Company upon the issuance or transfer of this Warrant:
	
	                                       
                  

	                                       
                  

	                                       
                  

	         Facsimile:
                              
  
         with a copy
to:

	
	                                       
                  

	                                       
                  

	                                       
                  

	         Attention:
                              

	         Facsimile:
                              

 Section 14. Amendments. This Warrant and any term hereof may be amended, changed, waived, discharged,
or terminated only by an instrument in writing signed by the Company and the holders of this Warrant. Such amendment, change, waiver, discharge or termination shall be binding on the Company and all of the Warrant holder’s assignees and
transferees. No waivers of any term, condition or provision of this Warrant in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such term, condition or provision. 
 Section 15. Obligations Binding on Successors. This Warrant will be binding upon any entity succeeding to the Company in one or a series of transactions by
merger, consolidation or acquisition of all or substantially all of the Company’s assets or other similar transactions. 
  

 13 

 Section 16. Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the
State of New York. 
 Section 17. Descriptive Headings. The headings of this Warrant are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof. 
  

 14 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of day and year
first above written. 
  

			
	GRILL CONCEPTS, INC.
		
	By:	 	  

	Its:	 	  

 EXHIBIT A TO WARRANT 
 FORM OF EXERCISE NOTICE 
 The undersigned (“Warrantholder”) hereby
irrevocably elects to exercise the right of purchase represented by the within Warrant (“Warrant”) for, and to purchase thereunder by the payment of the Warrant Price and surrender of the Warrant,
                     shares of Common Stock (“Warrant Shares”) provided for therein by: 
  ̈ payment of the Exercise Price by wire transfer
or certified bank check payable to the order of the Company; or 
  ̈ receipt of the number of Warrant Shares determined pursuant to Section 2(b) of the Warrant (cashless exercise); 
 and requests that certificates for the Warrant Shares be issued as follows: 
  

					
		 	  
	 	
		 	Name	 	
		 	  
	 	
		 	Address	 	
		 	  
	 	
		 	  
	 	
		 	Federal Tax ID or Social Security No.	 	

  

			
	 and delivered by
	  	 ̈ certified mail to the above address, or
		  	 ̈ electronically (provide DWAC
Instructions:                            ), or
		  	 ̈ other
(specify:                                      
                                     
 ).

 and, if the number of Warrant Shares shall not be all the Warrant Shares purchasable upon exercise of the Warrant,
that a new Warrant for the balance of the Warrant Shares purchasable upon exercise of this Warrant be registered in the name of the undersigned Warrantholder or the undersigned’s Assignee as below indicated and delivered to the address stated
below. 
  

					
	Dated:
                    ,            	  	Signature:	  	  

			
	Note: The signature must correspond with the name of the registered holder as written on the first page of the Warrant in every particular, without alteration or any change whatever,
unless the Warrant	  		  	  

	  		  	Name (please print)
	  		  	  

	  		  	  

					
	has been assigned.	  		  	Address
		  		  	  

		  		  	Federal Identification or
		  		  	Social Security No.
			
		  		  	Assignee:
		  		  	  

		  		  	  

		  		  	  

 ACKNOWLEDGMENT 
 The Company hereby acknowledges this Exercise Notice and hereby directs [the Transfer Agent] to issue the above-indicated number of shares of Common Stock issuable upon exercise of the Warrant to the designated
Warrantholder. 
  

			
	GRILL CONCEPTS, INC.
		
	By:	 	  

	Its:

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