Exhibit 10.1
FIRST AMENDMENT TO DEVELOPMENT AGREEMENT
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FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (this "Amendment"), dated as
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of June 20, 2006 between STARWOOD HOTELS & RESORTS WORLDWIDE, INC., a Maryland
corporation ("Starwood") and GRILL CONCEPTS, INC., a Delaware corporation
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("GCI"). Unless otherwise defined herein, all capitalized terms used herein
shall have the respective meanings provided such terms in the Development
Agreement referred to below.
W I T N E S S E T H:
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WHEREAS, Starwood and GCI are parties to that certain Development
Agreement dated as of July 27, 2001 (the "Development Agreement"); and
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WHEREAS, subject to the terms and conditions of this Amendment,
Starwood and GCI wish to amend certain provisions of the Development Agreement
as herein provided.
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. The Development Agreement is hereby amended by deleting Section 4 in
its entirety and substituting in lieu thereof the following:
"SECTION 4. Development Warrants. GCI shall issue to Starwood, promptly
after the date as of which the aggregate number of GCI Concept Facilities
covered by Management Agreements and/or License Agreements entered into on
or after the date hereof reaches five (the "Development Threshold Date"), a
warrant substantially in the form attached as Exhibit D hereto (the
"Development Warrant") to purchase a number of shares of Common Stock which
amount shall be determined as follows: (i) if the Development Threshold
Date is a date before April 1, 2008, the number of shares shall represent
four percent (4%) of the then outstanding shares of Capital Stock of GCI
and (ii) if the Development Threshold Date is on or after April 1, 2008,
the number of shares shall represent four percent (4%) of the outstanding
shares of Capital Stock of GCI on December 25, 2005 (for purposes of this
Agreement, the term "Capital Stock" shall refer to the aggregate of the
then outstanding shares of Common Stock and the then outstanding shares of
any class or series of preferred stock of GCI).
(a) If the Fair Market Value of the Common Stock as of the Development
Threshold Date is greater than the Fair Market Value of the Common Stock as
of the Closing Date (the "Closing Date Share Price"), the Development
Warrants will have an exercise price equal to the greater of seventy-five
percent (75%) of the Fair Market Value of the Common Stock as of the
Development Threshold Date; and the Closing Date Share Price; or
(b) If the Fair Market Value of the Common Stock as of the Development
Threshold Date is less than the Closing Date Share Price, the Development
Warrants will have an exercise price equal to the Fair Market Value of the
Common Stock as of the Development Threshold Date.
For the avoidance of doubt, the Development Threshold Date shall be the
date of the opening to the public of the relevant GCI Concept Facility that
triggered GCI's obligation to issue the Development Warrants."
2. Miscellaneous Provisions.
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(a) This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Development Agreement.
(b) This Amendment may be executed in any number of counterparts,
each of which counterparts when executed and delivered shall be an original, but
all of which shall together constitute one and the same instrument.
(c) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
[Signatures appear on the following page]
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment as of the date first
above written.
STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.
By: /s/
Name:
Title:
GRILL CONCEPTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇
Title: EVP and CFO
