Document:

Letter Agreement, dated December 30, 2005

 Exhibit 10.1 
  
 December 30, 2005 
  

Allen J. Bernstein 
 c/o Morton’s Restaurant Group, Inc. 

3333 New Hyde Park Road, Suite 210 
 New Hyde Park, New York 11042

  
 Dear Allen: 
  
 This letter agreement (the “Agreement”) confirms our understanding and agreement with respect to your retirement
from Morton’s Restaurant Group, Inc. (the “Company”) as follows: 
  
 1.    Termination Of Employment.    Effective as of December 31, 2005 (the
“Termination Date”), your employment with the Company and its affiliates shall be terminated and you shall have no further obligation to the Company or its affiliates. You hereby retire, effective as of the Termination Date, from all
positions that you hold with the Company and any of its affiliates, including, without limitation, any position on the Company’s board of directors or the board of directors of any affiliate of the Company. As of the Termination Date, you shall
have the title of Chairman Emeritus of the Company. 
  
 2.    Severance Payments/Benefits.    In consideration for your entering into this Agreement, specifically including the immediate termination of your employment and the General Release and
covenants contained herein, you shall, subject to the expiration of the Revocation Period without your revocation of the General Release, be entitled to the following: 
  
 a.    A payment of $7 million, payable in twelve equal quarterly installments beginning
January 3, 2006; 
  
 b.    Your annual bonus for calendar year 2005, payable when such bonus is paid to executives of the Company. In no event will you be entitled to any annual bonus with respect to calendar year 2006; and 
  
 c.    You shall have the option, within
thirty days following the Termination Date, to acquire the Company’s interest in any insurance policy the Company acquired for its own benefit on your life, to the extent permitted by such policy or policies, upon the payment to the Company of
such policy’s or policies’ then cash surrender value. If you exercise the option, the Company will take whatever reasonable steps are necessary to assign all the rights in the entire policy or policies to you, to the extent permitted by
such policy or policies, and to deliver physical possession of the policy or policies to you; and 

 3.    Equity.    Reference is made to the
Employee Subscription Agreement, dated as of August 27, 2003, between you and Morton’s Holdings, LLC (the “LLC”), a Delaware limited liability company (the “Subscription Agreement”). Capitalized terms not otherwise defined
in this Section 3 shall have the same meanings as set forth in the Subscription Agreement. Notwithstanding the terms of the Subscription Agreement, (i) as of the Termination Date, all the Time Vesting Employee Securities granted pursuant to the
Subscription Agreement shall be deemed to be Vested Common Units under the Subscription Agreement and (ii) you shall continue to be eligible to vest in the Performance Vesting Employee Securities pursuant to the terms of the Subscription Agreement,
without regard to the requirement that your employment continue through the Final Test Event; provided, however, that, to the extent the terms of the Performance Vesting Employee Securities held by the senior executives of the Company are adjusted
or amended or the Performance Vesting Employee Securities are cancelled and/or replaced with other awards or compensation, the Company and you agree that your Performance Vesting Employee Securities will be treated in the same manner. 
  
 4.    Full
Satisfaction.    You hereby acknowledge and agree that, except for the payments and benefits under Sections 2 and 3 of this Agreement, that will become payable to you hereunder if you do not revoke this Agreement as described
in Section 7(c), you will not be entitled to any other compensation or benefits from the Company or its affiliates, including, without limitation, any other severance or termination benefits; provided that it is agreed that nothing in this
Agreement shall constitute a waiver of your rights to vested benefits, if any, under the Company’s employee benefit plans in respect of your services to the Company prior to the Termination Date. You hereby acknowledge and agree that, as of the
Termination Date, the Third Amended and Restated Employment Agreement between you and the Company, dated as of January 1, 2003 shall be terminated and of no further force or effect, including, without limitation, any provision requiring (x) the
Company to give you notice of termination and (y) you to mitigate any of the severance benefits payable hereunder. You further agree that you will reimburse the Company, within ten (10) days following a request for reimbursement from the Company,
for any payments made or expenses incurred (including with respect to any medical benefits) on behalf of you or your affiliates. 
  
 5.    Confidential Information; Confidentiality of this Agreement. 
  
 a.    You will keep secret and retain in
strictest confidence and will not release or divulge either orally or in writing to any person, firm or entity except as may be required by law or regulation or by order of any court, and will not use for the benefit of yourself or others, any
confidential matters of the Company or its affiliates including, without limitation, (i) “know-how,” trade secrets, details of client or consultant contracts, pricing policies, compensation arrangements, business acquisition plans, new
personnel acquisition plans, and other projects and inventions and research projects of the Company or its affiliates learned by you heretofore, and (ii) each and every term of this Agreement. 
  
 b. You acknowledge and agree that the remedies available to
the Company at law for a breach or threatened breach of any of the provisions of this Section 5 would be inadequate and, in recognition of this fact, you agree that, in the event of a breach or threatened breach, in addition to any remedies at
law, the Company shall be entitled to obtain equitable relief in the form of specific performance, temporary restraining order or permanent injunction or any other equitable remedy that may be available. 
  
 6.    Return of Property to the
Company.    All memoranda, notes, lists, records and other documents or papers (and all copies thereof), including items stored in computer memories, on microfilm or by other means, made or compiled by you, or made available
to you relating to the Company or its affiliates or its business, are and shall remain the property of the Company and shall be delivered to the Company promptly upon the execution of this Agreement. 
  
  

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 7.    General Release. 
  
 a.    For and in consideration of the
payments and benefits hereunder, you hereby agree on behalf of yourself, your agents, assignees, attorneys, successors, assigns, heirs and executors, to, and you do hereby, fully and completely forever release the Company and its affiliates,
predecessors and successors and all of their respective past and/or present officers, directors, partners, members, managing members, managers, employees, agents, representatives, administrators, attorneys, insurers and fiduciaries in their
individual and/or representative capacities (hereinafter collectively referred to as the “Releasees”), from any and all causes of action, suits, agreements, promises, damages, disputes, controversies, contentions, differences, judgments,
claims, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialities, covenants, contracts, variances, trespasses, extents, executions and demands of any kind whatsoever, which you or your heirs, executors, administrators, successors
and assigns ever had, now have or may have against the Releasees or any of them, in law, admiralty or equity, whether known or unknown to you, for, upon, or by reason of, any matter, action, omission, course or thing whatsoever occurring up to the
date this Agreement is signed by you, including, without limitation, in connection with or in relationship to your employment or other service relationship with the Company or its affiliates, the termination of any such employment or service
relationship and any applicable employment, compensatory or equity arrangement with the Company or its respective affiliates; provided that such released claims shall not include any claims to enforce your rights under, or with respect to,
this Agreement or any claim you have to indemnification from the Company (such released claims are collectively referred to herein as the “Released Claims”). 
  
 b.    Notwithstanding the generality of clause (a) above, the Released Claims
include, without limitation, (i) any and all claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Civil Rights Act of 1971, the Civil Rights Act of 1991, the Fair Labor Standards Act, the
Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, and any and all other federal, state or local laws, statutes, rules and regulations pertaining to employment or
otherwise, and (ii) any claims for wrongful discharge, breach of contract, fraud, misrepresentation or any compensation claims, or any other claims under any statute, rule or regulation or under the common law, including compensatory damages,
punitive damages, attorney’s fees, costs, expenses and all claims for any other type of damage or relief. 
  
 c.    You represent that you have read carefully and fully understand the terms of this Agreement, and that you have
been advised to consult with an attorney and have had the opportunity to consult with an attorney prior to signing this Agreement. You acknowledge that you are executing this Agreement voluntarily and knowingly and that you have not relied on any
representations, promises or agreements of any kind made to you in connection with your decision to accept the terms of this Agreement, other than those set forth in this Agreement. You acknowledge that you have been given at least twenty-one days
to consider whether you want to sign this Agreement and that the Age Discrimination in Employment Act gives you the right to revoke this Agreement within seven (7) days after it is signed, and you understand that you will not receive any payments or
benefits due you under this Agreement until such seven (7) day revocation period (the “Revocation Period”) has passed and then, only if you have not revoked this Agreement. To the extent you have executed this Agreement within less than
twenty-one (21) days after its delivery to you, you hereby acknowledge that your decision to execute this Agreement prior to the expiration of such twenty-one (21) day period was entirely voluntary. 
  
 8.    Non-Disparagement.    You agree that you will not, for a period of three years following the Termination Date, take any action to disparage or criticize to any third parties any of the
products, services or any of the employees, officers, directors, members or equity holders of the Company, the 

  

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LLC or any of their subsidiaries, or to commit any other action that materially injures or hinders the business relationship of the Company, the LLC or their
subsidiaries or any of their respective officers, members, directors, equity holders or employees. 
  
 9.    Withholding Taxes.    The Company may withhold from any amounts payable under this
Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. You agree that you will indemnify the Company if any liability is imposed on the Company as a result of (i) the Company
honoring your request to reduce the amount withheld for taxes on any payment hereunder or (ii) your failure to pay your income taxes when due. 
  
 10.    Governing Law.    This Agreement will be governed, construed and interpreted under
the laws of the State of New York, without regard to the conflicts of laws provisions thereof. 
  
 11.    Entire Agreement/Counterparts.    This constitutes the entire agreement between the
parties. It may not be modified or changed except by written instrument executed by all parties. This Agreement may be executed in counterparts, each of which shall constitute an original and which together shall constitute a single instrument.

  

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 If this letter correctly sets forth your understanding of our agreement with respect to the foregoing
matters, please so indicate by signing below on the line provided for your signature. 
  

			
	 Very truly yours,

	
	 Morton’s Restaurant Group, Inc.

		
	By:	 	/s/ Thomas J. Baldwin
	Name:	 	Thomas J. Baldwin
	Title:	 	 Executive Vice President
 Chief Financial
Officer

  
 Reviewed, approved and agreed:

  
 /s/ Allen J.
Bernstein                     
 Allen J. Bernstein

  

			
	 For purposes of Section 3 of the Agreement only:

	
	 Morton’s Holdings, LLC

		
	By:	 	/s/ Thomas J. Baldwin
	Name:	 	Thomas J. Baldwin
	Title:	 	 Executive Vice President
 Chief Financial
OfficerForm of Warrant to Purchase Common Stock

 Exhibit 4.1 
  

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED. 
  
 Issue Date: December
    , 2005 
  
 AKESIS
PHARMACEUTICALS, INC. 
  
 WARRANT TO PURCHASE COMMON STOCK

  
 This Warrant to Purchase Common Stock (the
“Warrant”) is issued to [                        ] (the “Holder”) by
Akesis Pharmaceuticals, Inc., a Nevada corporation (the “Company”), pursuant to the terms of that certain Common Stock and Warrant Purchase Agreement (the “Purchase Agreement”) dated as of
December 30, 2005 between the Company and certain purchasers of the Company’s Common Stock. 
  
 1. Purchase of Shares. Subject to the terms and conditions hereinafter set forth and set forth in the Purchase Agreement, the Holder of this
Warrant is entitled during the Exercise Period, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the Holder hereof in writing), to purchase, in whole or in part, from the
Company [                        ] fully paid and nonassessable Shares, at an exercise price per share equal to the
Exercise Price (as defined below). 
  
 2. Definitions.

  
 (a) “Act” shall mean
the Securities Act of 1933, as amended. 
  
 (b)
“Exercise Price” shall mean $3.00. 
  
 (c) “Exercise Period” shall mean the term commencing on the date of issuance of this Warrant and ending on the expiration of this Warrant pursuant to Section 14 hereof. 
  
 (d) “Shares” shall mean shares of
the Company’s Common Stock. 
  
 (e)
“Change of Control” shall mean (i) a sale, lease or disposition of all or substantially all of the assets of the Company, or (ii) a merger or consolidation (in a single transaction or a series of related
transactions) of the Company with or into any other corporation or corporations or other entity, or any other corporate reorganization, where the stockholders of the Company immediately prior to such event do not retain more than fifty percent
(50%) of the voting power of and interest in the successor entity (excluding any transactions if the primary purpose of the transaction is to obtain financing from new or existing investors). 

 3. Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with
Section 1 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by: 
  
 (a) the surrender of the Warrant, together with a notice of exercise to the Secretary of the Company at its principal offices; and

  
 (b) the payment to the Company of an amount
equal to the aggregate Exercise Price for the number of Shares being purchased. 
  
 4. Net Exercise. In lieu of cash exercising this Warrant, the Holder of this Warrant may elect to receive shares equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this
Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to the Holder hereof a number of Shares computed using the following formula: 
  

			
	 	 	Y (A - B)
	X =	 	      A

  
 Where 
  
 X —     The number of Shares to be issued to the
Holder of this Warrant. 
  
 Y —     The
number of Shares purchasable under this Warrant. 
  
 A —
    The fair market value of one Share. 
  
 B
—     The Exercise Price (as adjusted to the date of such calculations). 
  
 For purposes of this Section 4, the fair market value of a Share shall mean the average of the closing bid and asked prices of Shares quoted in the
over-the-counter market in which the Shares are traded or the closing price quoted on any exchange on which the Shares are listed, whichever is applicable, as published in the Western Edition of The Wall Street Journal for the ten
(10) trading days prior to the date of determination of fair market value (or such shorter period of time during which such stock was traded over-the-counter or on such exchange). If the Shares are not traded on the over-the-counter market or
on an exchange, the fair market value shall be the price per Share that the Company could obtain from a willing buyer for Shares sold by the Company from authorized but unissued Shares, as such prices shall be determined in good faith by the
Company’s Board of Directors. 
  
 5. Certificates for
Shares. Upon the exercise of the purchase rights evidenced by this Warrant, one or more certificates for the number of Shares so purchased shall be issued as soon as practicable thereafter, and in any event within thirty (30) days of the
delivery of the subscription notice. 
  
 6. Issuance of
Shares. The Company covenants that the Shares, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof.

  

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 7. Adjustment of Exercise Price and Number of Shares. The number of and kind of securities
purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows: 
  
 (a) Subdivisions, Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant
subdivide the Shares, by split-up or otherwise, or combine its Shares, or issue additional shares of its Shares as a dividend, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of
a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Shares
purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 7(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of
such dividend, or in the event that no record date is fixed, upon the making of such dividend. 
  
 (b) Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization, or change in the
capital stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 7(a) above), then the Company shall make appropriate provision so that the Holder of this Warrant shall have the right
at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such
reclassification, reorganization, or change by a Holder of the same number of Shares as were purchasable by the Holder of this Warrant immediately prior to such reclassification, reorganization, or change. In any such case appropriate provisions
shall be made with respect to the rights and interest of the Holder of this Warrant so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof,
and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same. 
  
 (c) Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of
the Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of Shares or other securities or property thereafter purchasable upon exercise of this Warrant. 
  
 8. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect. 
  
 9. Representations of the Company and the Holder. The Company
represents that all corporate actions on the part of the Company, its officers, directors and stockholders necessary for the sale and issuance of this Warrant have been taken. The Holder represents and acknowledges that the Warrant may be
transferred in accordance with transfer restrictions set forth in the Purchase Agreement. 
  

 -3- 

 10. Restrictive Legend. The Shares (unless registered under the Act) shall be stamped or imprinted
with a legend in substantially the following form (in addition to any other applicable legends as set forth in the Purchase Agreement): 
  
 THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY AT THE PRINCIPAL EXECUTIVE
OFFICES OF THE COMPANY. 
  
 11. Rights of Stockholders. No
holder of this Warrant shall be entitled, as a Warrant holder, to vote or receive dividends or be deemed the holder of the Shares or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor
shall anything contained herein be construed to confer upon the Holder of this Warrant, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 
  
 12. Expiration of Warrant; Notice of Certain Events Terminating This
Warrant. 
  
 (a) This Warrant shall expire
and shall no longer be exercisable upon the earliest to occur of: 
  
 (i) 5:00 p.m., California local time, on the date of the third anniversary of the Initial Closing (as defined in the Purchase Agreement); or 
  
 (ii) Any Change of Control. 
  
 (b) The Company shall provide at least ten (10) days prior written notice of any event set forth in
Section 12(a)(ii). 
  
 13. Notices. All notices and
other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given upon receipt or, if earlier, (a) five (5) days after deposit with the U.S. Postal Service
or other applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one business day after the business day of deposit with Federal Express or 

  

 -4- 

 
similar overnight courier, freight prepaid or (d) one business day after the business day of facsimile transmission, if delivered by facsimile
transmission with copy by first class mail, postage prepaid, and shall be addressed (i) if to the Holder, at the Holder’s address as set forth on the Schedule of Investors to the Purchase Agreement, and (ii) if to the Company, at the
address of its principal corporate offices (attention: President), or at such other address as a party may designate by ten days advance written notice to the other party pursuant to the provisions above. 
  
 14. Governing Law. This Warrant and all actions arising out of or in
connection with this Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of law provisions of the State of California or of any other state. 
  
 15. Rights and Obligations Survive Exercise of Warrant. Unless
otherwise provided herein, the rights and obligations of the Company, of the Holder of this Warrant and of the holder of the Shares issued upon exercise of this Warrant, shall survive the exercise of this Warrant. 
  
 [Remainder of page intentionally left blank.] 
  

 -5- 

 This Warrant to Purchase Common Stock is issued as of the date first set forth above. 
  

			
	AKESIS PHARMACEUTICALS, INC.
		
	By:	 	 /s/ Edward B. Wilson

	 	 	Edward B. Wilson, Chief Executive Officer

  
 AKESIS PHARMACEUTICALS, INC. 
 SIGNATURE PAGE
TO WARRANT TO PURCHASE COMMON STOCK 

  
 EXHIBIT A

  
 NOTICE OF EXERCISE 
  

	TO:	Akesis Pharmaceuticals, Inc. 

 Attention: President

  
 1. The undersigned hereby elects to purchase
             Shares of Common Stock of Akesis Pharmaceuticals, Inc. pursuant to the terms of the attached Warrant. 
  
 2. Method of Exercise (Please initial the applicable blank): 
  

			
	  

	  	The undersigned elects to exercise the attached Warrant by means of a cash payment, and tenders herewith payment in full for the purchase price of the shares being purchased, together with
all applicable transfer taxes, if any.
		
	  

	  	The undersigned elects to exercise the attached Warrant by means of the net exercise provisions of Section 4 of the Warrant.

  
 3. Please issue a
certificate or certificates representing said Shares in the name of the undersigned or in such other name as is specified below: 
  
 __________________________________ 
 (Name)

  
 __________________________________ 
  
 __________________________________ 
 (Address) 
  
 4. The undersigned hereby represents and warrants that the aforesaid Shares are being acquired for the account of the undersigned for investment and not
with a view to, or for resale, in connection with the distribution thereof, and that the undersigned has no present intention of distributing or reselling such shares and all representations and warranties of the undersigned set forth in
Section 4 of the Purchase Agreement (as defined in the Warrant) are true and correct as of the date hereof. 
  

					
	  	 	 	 	  
	  	 	 	 	 (Signature)
  
  

	  	 	 	 	 (Name)
  
  

	(Date)	 	 	 	(Title)

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