Magellan Restaurant Systems announces exchange with Grill Concepts to proceed subject to final shareholder and debenture holder approval

Business Wire, Jan 25, 1995

TABERNACLE, N.J.--(BUSINESS WIRE)--Jan. 25, 1995--Magellan Restaurant Systems Inc. (NASDAQ:MGRS) today announced that all of the conditions set out in its Exchange Agreement with Grill Concept Inc. ("GCI"), with the exception of the requisite approval of shareholders of each company and the conversion or assumption of outstanding debentures of GCI, have been satisfied or waived.

Pursuant to the Exchange Agreement, Magellan was originally obligated to have certain cash balances totaling at least $700,000 and to raise an additional $2.5 million through the issuance of shares. As of Jan. 24, 1995, Magellan had cash balances in excess of $1.7 million. Based on such cash balances, GCI and Magellan have mutually agreed to amend the Exchange Agreement to eliminate the requirement that Magellan raise $2.5 million.

Assuming consummation of the Exchange, Magellan will issue 8.5 million shares of common stock in exchange for all of the outstanding shares of GCI. An additional 614,391 shares may be issued to the GCI shareholder if certain conditions are met.

Magellan presently anticipates that the Exchange will be submitted to the shareholders of both Magellan and GCI for approval during February of 1995 with closing of the Exchange, assuming shareholder approval and convertion of the GCI debentures, anticipated to occur on or about March 7, 1995.

GCI, a privately held company based in Los Angeles, owns and operates a chain of six full service "Daily Grill" restaurants in Southern California.

Magellan Restaurant Systems Inc. is a franchisee and owner/operator of three Pizzeria Uno restaurants in New Jersey and Pennsylvania and is the controlling partner of Jo Jo Players Original Sports Grill in Neptune, N.J.

CONTACT: Magellan Restaurant Systems Inc.

Robert L. Wechsler, 212/355-7287