EFTA00614243.pdf

EXHIBIT A Initial Capital Contributions and Initial Capital Accounts Initial Senior Initial Junior Initial Common Preferred Capital Preferred Capital Capital Initial Capital Member Contribution Contribution Contribution Account BRG Member $0 $0 $31,099,728 $31,099,728 I Janson Member S0 $0 $10,656,083 $10,656,083 Starwood $66,000,000 $0 $35,755,811 $101,755,811 Management Committee Representatives Starwood: Barry Stemlicht Jeffrey Dishner Dan Yih Edd Hendee BRG: Stephen Hanson Howard Muchnick Michael Jacobs Stacy Gilbert NEWYORK 6911111 (71C) EFTA00614243  EXHIBIT B Definitions For the purposes of this Agreement, the following terms shall have meanings set forth below. "AAA" shall have the meaning provided in Section LQ. "Act' shall mean the Delaware Limited Liability Company Act (currently Chapter 18 of Title 6 of the Delaware Code), as amended from time to time. "Additional Capital Contribution" shall have the meaning provided in Section "Adjusted EBITDA" shall have the meaning given to such term in the Master Restaurant Purchase Agreement. "Advisor" shall mean any accountant, attorney or other advisor retained by a Member. "Affiliate" shall mean, with respect to a specified Person, (i) any Person directly or indirectly owning, controlling or holding with power to vote 50% or more of the outstanding voting securities or other ownership interests of the specified Person, (ii) any Person 50% or more of whose outstanding voting securities or other ownership interests are directly or indirectly owned, controlled or held with power to vote by the specified Person, and (iii) any Person directly or indirectly controlling, controlled by, or under common control with the specified Person. In addition, "Affiliate" shall include as to any Person, any other Person related to such Person within the meaning of Code Sections 267(b) or 707(b)(1). Without limiting the foregoing, BRG Member, Hanson Member, the BRG Key Individual and each Person that-is-an Affiliate of any of such Persons shall each be deemed to be an Affiliate of the other. For purposes of this Agreement, the Company and the Investment Vehicles shall not be deemed Affiliates of Starwood, BRG or any of their respective Affiliates. "Agreed Upon Value" shall mean the fair market value (net of any liability secured by such property that the Company assumes or takes subject to) agreed upon pursuant to a written agreement between the Members of property contributed by a Member to the capital of the Company, which shall for all purposes hereunder be deemed to be the amount of the Capital Contribution applicable to such property contributed. The Agreed Upon Value of the Initial Capital Contributions of Starwood, the BRG Member and the Hanson Member is set forth in exhibit A. "Agreement" shall mean this Limited Liability Company Agreement, as amended from time to time. "Aggregate Acquisition Percentage" shall mean one hundred percent (100%). "Aggregate Closing Purchase Price" shall have the meaning provided in the Master Restaurant Purchase Agreement. NblrfORX 6941111 (21() EFTA00614244  EXHIBIT B Page 2 "Alternate Shortfall Amount" shall mean the positive difference (if any) between (A) the Initial Restaurant Adjusted EBITDA Amount and (B) the Applicable Restaurant Value as of the Cut-Off Date. "Annual Business Plan" shall have the meaning provided in Section 9.3. "Applicable Debt Amount" shall mean an amount equal to $60,000,000. "Applicable Restaurant Value" shall mean an amount equal to the sum of (i) the Initial Restaurant Value (ii) the Stand Alone Restaurant EBITDA Amount and (iii) the amount of any reductions to the Initial Restaurant Value and/or the Stand Alone Restaurant EBITDA Amount, in each case resulting from Uncontrollable Events. "Appraised Value" shall have the meaning provided in exhibit I attached hereto. "Asset Sale" shall have the meaning provided in Section 12.5. "Assignees" shall have the meaning provided in Section 12.4(6). "Bankruptcy Code" shall mean Title 11 of the United States Code, as amended or any other applicable bankruptcy or insolvency statute or similar law. "Bankruptcy/Dissolution Event" shall mean, with respect to the affected party, (i) the entry of an Order for Relief under the Bankruptcy Code, (ii) the admission by such party of its inability to pay its debts generally as they mature, (iii) the making by it of an assignment for the benefit of creditors generally, (iv) the filing by it of a petition in bankruptcy or a petition for relief under the Bankruptcy Code or any other applicable Federal or state bankruptcy or insolvency statute or any similar law, (v) the expiration of ninety (90) days after the filing of an involuntary petition under the Bankruptcy Code without such petition being vacated, set aside or stayed during such period, (vi) an application by such party for the appointment of a receiver for the assets of such party, (vii) an involuntary petition seeking liquidation, reorganization, arrangement or readjustment of its debts under any other Federal or state insolvency law, provided that the same shall not have been vacated, set aside or stayed within ninety (90) days after filing, (viii) the imposition of a judicial or statutory lien on all or a substantial part of its assets unless such lien is discharged or vacated or the enforcement thereof stayed within ninety (90) days after its effective date, (ix) an inability to meet its financial obligations generally as they accrue, or (x) a dissolution or liquidation. "beneficial owner" shall have the meaning provided in Sections i and12.3(b). "Base Shortfall Amount" shall mean the positive difference (if any) between (A) the Initial Restaurant Adjusted EBITDA Amount and (B) the Applicable Restaurant Value as of the date of the Venture Termination Event "Tirane shall mean any name, brand, mark, trademark, service mark, trade name, symbol, logo, insignia, indicia of origin, slogan or design (whether registered or unregistered, whether used alone or in connection with any other words, trademarks, service marks, trade names, symbols, logos, insignias, indicia of origin, slogans and designs), or any programs, NEWYORK (MI III (2K) EFTA00614245  EXHIBIT B Page 3 processes, procedures or systems (including, without limitation, any philosophy that drives customer satisfaction, business management model, business strategy, or employee selection, training and career development approach), in each case, together with any goodwill associated therewith. "BRG" shall have the meaning provided in the recitals. "BRG Change of Control" shall mean, if at any time, other than as a result of the death or Disability of the BRG Key Individual, BRG Member ceases to be directly or indirectly (i) wholly-controlled by the BRG Key Individual and (ii) owned (legally, beneficially and economically) at least 75% by the BRG Key Individual. "BRG Covered Party" shall have the meaning provided in Section 14.3(a). "BRG Credit Event" shall mean any claim or potential claim under any Non-Recourse Carveout Credit Enhancement for which Starwood (or any of its Affiliates) may have liability and which claim or potential claim has arisen as a result of the actions or inactions of any BRG Covered Party in violation of the terms of such Non-Recourse Carveout Credit Enhancement and/or the financing extended to the Company or an Investment Vehicle in respect of which the Non-Recourse Carveout Credit Enhancement was provided. "BRG Elected Amount" shall have the meaning provided in Section 5.2(a). "BRG Excluded Investments" shall mean (i) any Company Asset acquired by BRG pursuant to a ROFO Sale, (ii) any investment constituting not more than five percent (5%) of the outstanding equity of any Person whose equity securities are publicly traded, and (iii) Avalon Restaurant Associates, In "BRG Holdings Sub" shall have the meaning provided in the recitals. "DRG Indirect Permitted Transferee" shall mean (i) any Family Member of the Key Individual, (ii) any trust created solely for the benefit of the BRG Key Individual and any Family Member of the BRG Key Individual which is wholly-controlled by the BRG Key Individual, or (iii) any partnership, limited liability company or corporation that at all times is and remains wholly-owned and wholly-controlled, directly or indirectly, by the BRG Key Individual. "BRG Key Individual" shall mean Stephen P. Hanson. "BRG Member" shall have the meaning provided in the first paragraph of this Agreement. "ERG Parent Contribution Agreement" shall have the meaning provided in the recitals. "BRG Permitted Transferee" shall mean any Person that is directly or indirectly (i) wholly-controlled by the BRG Key Individual, (ii) wholly-owned (legally, beneficially and economically) by the BRG Key Individual alone or together with one or more BRG Indirect NEWYORK 69411.1(2K) EFTA00614246  EXHIBIT B Page 4 Permitted Transferees, and (iii) owned (legally, beneficially and economically) at least 75% by the BRG Key Individual. "BRO Related Agreement" shall mean the Master Restaurant Purchase Agreement, the Contribution Agreement, the Hanson Employment Agreement, the Hanson Note and the DC3 Management Agreement, the New Projects Option Agreement and any other agreement entered into between the Company or any Investment Vehicle with BRG, BRG Member, Hanson Member or any of their Affiliates which are subject to the terms of 9.5(aI (including any provision of any agreement deemed to be a BRG Related Agreement in the proviso set forth in the definition of Starwood Related Agreement); provide4, however, that to the extent performance is owed by Starwood or an Affiliate of Starwood to the Company, an Investment Vehicle, BRG, BRG Member, Hanson Member or any of their Affiliates under any provision of such agreement, such provision of the agreement to the extent of such performance shall be deemed to be a Starwood Related Agreement. "BRG Representatives" shall have the meaning provided in Section 9.2(4 "BRG Resignation Event" shall mean any termination by the BAG Key Individual of his employment with the Company at any time prior to the expiration of the initial term of the Hanson Employment Agreement other than for Good Reason that is not preceded by a BRO Trigger Event. "BRG Restricted Period" shall mean the period commencing on February 23, 2007, and ending on the earliest to occur of (i) the liquidation and termination of the Company, (ii) a Company Sale, (iii) an Asset Sale involving a sale of all or substantially all of the Company Assets, (iv) the occurrence of a Starwood Trigger Event, (v) the date on which the Company terminates the BRG Key Individual's employment with the Company without Clang(' and which termination is not preceded by a BRG Trigger Event, (vi) the date on which the BRG Key Individual terminates his employment with the Company for Good Reason and which termination is not preceded by a BRG Trigger Event, (vii) two (2) years following the later of (a) the date on which the Company terminates the BRO Key Individual's employment with the Company for Cause and (b) the occurrence of a BRG Trigger Event and (viii) February 23, 2012. "BRG Restricted Person" shall mean any of (i) BRG; (ii) the BRG Key Individual; (iii) any Family Member of the BRG Key Individual; (iv) any trust created for the benefit of any of the Persons referred to in the preceding clauses (i)-(iii); or (v) any Person directly or indirectly controlled or co-controlled by, or under common control with, any of the Persons referred to in the preceding clauses (i)-(iv), which shall not in any event be deemed to include any employee of the Company or any Company Portfolio Investment other than employees who fall within any of clauses (ii) and (iii) above. "BRG Vegas" shall mean B.R. Guest Vegas, Inc. a Nevada corporation. "BRG Trigger Event" shall mean the occurrence of any of the following events, in each case following the receipt of written notice of the occurrence of such event from Starwood and the Failure to Cure such event by BRG (except in the case of an event described in clauses (iii), (iv) or (v) below which shall be a non-curable event): (i) a final finding by a court of NFIVA'ORX 644 MI OK) EFTA00614247  EXHIBIT B Page 5 competent jurisdiction of willful misconduct or act of fraud by, or criminal conviction constituting a felony of, BR() or any of its Affiliates, in connection with or relating to the Company, any Investment Vehicle or any Company Asset; (ii) the occurrence of a BRG Change of Control; (iii) the occurrence of a Bankruptcy/Dissolution Event with respect to BRG or the BRG Key Individual; (iv) the occurrence of a BRG Resignation Event or (v) the termination of the BR() Key Individual's employment with the Company for Cause. "B.R. Guest Brands" shall mean each of the Brands listed in Exhibit K. "I355" shall mean Barry S. Sternlicht. "BSS Controlled Party" shall mean any Person directly or indirectly controlled by BSS. "Business Day" shall mean any day that is not Saturday, Sunday or a day on which banks are required or permitted to be closed in the State of New York. "Capital Account" shall have the meaning provided in Section 5.6. "Capital Contribution" shall mean, with respect to any Member, the aggregate amount of (i) cash, and (ii) the Agreed Upon Value of other property contributed (or as the context requires, to be contributed) by such Member to the capital of the Company. "Capital Requirement Allocated Amount" shall have the meaning provided in Section 5.2(4 "Cash Flow" shall mean, for any period for which Cash Flow is being calculated, gross cash receipts (including the proceeds of any Asset Sale or the financing or refinancing proceeds of any Company Assets) of the Company (but excluding Capital Contributions and Company Loans) plus any amounts released from reserves and not applied to the relevant obligation or liability for which such reserves were established or to other costs and expenses of the Company, less the following payments and expenditures (i) all payments of operating expenses of the Company, (ii) all payments of principal of, interest on and any other amounts duc with respect to indebtedness, leases or other commitments or obligations of the Company (including DC3 Loans, Company Loans, Credit Enhancement Loans, other loans by Members to the Company and the Guaranty Fee), (iii) all sums expended by the Company for capital expenditures, (iv) all prepaid expenses of the Company, and (v) all sums expended by the Company which are otherwise capitalized. "Cause" shall have the meaning provided in the Hanson Employment Agreement. "Certificate of Formation" shall mean the Certificate of Formation of the Company, as amended from time to time. "CFO" shall mean the chief financial officer of the Company. "CFO Cause Event" shall mean (i) embezzlement, theft or misappropriation by the CFO of any property of the Company or any Investment Vehicles; (ii) any failure or refusal PO3WYORK bellIII (2K) EFTA00614248  EXHIBIT B Page 6 by the CFO to perform any directive of the Management Committee or the President of the Company or the duties of his employment (including any reporting obligations) which continues for a period of thirty (30) days following written notice thereof by the Company or the President, as the case may be, to the CFO and the Management Committee; (iii) any act by the CFO constituting a felony or otherwise involving theft, fraud, dishonesty, misrepresentation or moral turpitude; (iv) indictment of, conviction of, or plea of nob contendere (or a similar plea) to, any criminal offense; (v) gross negligence or willful misconduct on the part of the CFO in the performance of his duties as an employee, officer or director of the Company or any Investment Vehicle; (vi) any act or omission to act of the CFO intended to hann or damage the business, property, operations, financial condition or reputation of the Company or any Investment Vehicle; (vii) any chemical dependence of the CFO which adversely affects the performance of his duties and responsibilities to the Company or any Investment Vehicle; or (ix) the CFO's violation of the Company's or any Investment Vehicle's code of ethics, code of business conduct or similar policies applicable to the CFO. "Claiming Party" shall have the meaning provided in Section 15.13. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, including the corresponding provisions of any successor law. "Collateral Agreement" shall mean any agreement, instrument, document or covenant concurrently or hereafter made or entered into under, pursuant to, or in connection with this Agreement and any certifications made in connection therewith or amendment or amendments made at any time or times heretofore or hereafter to any of the same (including, without limitation, the Master Restaurant Purchase Agreement, the Contribution Agreement, the Hanson Employment Agreement, the Hanson Note, the New Projects Option Agreement, the Starwood Note and the DC3 Management Agreement). "Common Capital Contribution" shall mean a Capital Contribution made by a Member to the Company in accordance with the terms of this Agreement which is not a Senior Preferred Capital Contribution or a Junior Preferred Capital Contribution. "Company" shall mean B.R. Guest Parent Holdings, LLC, a limited liability company organized under the Act "Company Assets" shall mean all right, title and interest of the Company in and to all or any portion of the assets of the Company and any property of any type (whether real, personal, tangible or intangible) or estate or interest acquired in exchange therefor or in connection therewith, including, without limitation, the Company Portfolio Investments and the Company's interest in any Investment Vehicle. "Company Loan" shall have the meaning provided in Section 5.2(d). "Company Portfolio Investment" and "Company Portfolio Investments" shall mean any Portfolio Investment owned, leased or managed by the Company or any Investment Vehicle or in which the Company or any Investment Vehicle has a direct of indirect interest (including, without limitation, the Initial Restaurants, DC3 and the B.R. Guest Brands). NF.WYORK 6941111 (1K) EFTA00614249  EXHIBIT B Page 7 "Company Sale" shall have the meaning provided in Section 12.5. "Confidential Information" shall have the meaning provided in Section 10(a). "Contributing Member" shall have the meaning provided in Section 5.2(d). "Contribution Agreement" shall mean that certain Contribution Agreement, dated as of November 29, 2006, among Starwood, Hanson Member, SPH Enterprises, Inc. (Mk B.R. Guest, Inc.), B.R. Guest Trademark Company, Inc., PH 2000, Inc. and BRG Holdings Sub, as the same may be amended, restated or supplemented from time to time. "control", "controlled", "controls" or "controlling" shall mean in the case of any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting equity interests, by contract, or otherwise. "Credit Enhancement" shall have the meaning provided in Section al. "Credit Enhancement Funding Percentage" shall mean, (i) in the case of any Credit Enhancement Loan other than a Non-Recourse Carveout Credit Enhancement Loan or an Initial Financing Credit Enhancement Loan, (x) fifty percent (50%) with respect to BRG and (y) fifty percent (50%) with respect to Starwood, (ii) in the case of a Non-Recourse Carveout Credit Enhancement Loan that is not made as a result of the actions or inactions of the Non-Credit Provider in violation of the terms of the Non-Recourse Carveout Credit Enhancement or the financing extended to the Company or Investment Vehicle in respect of which the Non-Recourse Carveout Credit Enhancement was provided, (x) fifty percent (50%) with respect to BRO. and (y) fifty percent (50%) with respect to Starwood, (iii) in the case of a Non-Recourse Carveout Credit Enhancement Loan that is made as a result of the actions or inactions of the Non-Credit Provider in violation of the terms of the Non-Recourse Carveout Credit Enhancement or the financing extended to the Company or Investment Vehicle in respect of which the Non-Recourse Carveout Credit Enhancement was provided, (x) one hundred percent (100%) with respect to the Member who is the Non-Credit Provider and (y) zero percent (0%) with respect to the Member who is (or who is Affiliated with) the Credit Provider, (iv) in the case of an Initial Financing Credit Enhancement Loan or a Credit Enhancement Loan in respect of Credit Enhancement approved by the Management Committee pursuant to Section 9A3 subsequent to a BRG Trigger Event (x) one hundred percent (100%) with respect to Starwood and (y) zero percent (0%) with respect to BRG, and (v) in the case of a Credit Enhancement Loan in respect of Credit Enhancement approved by the Management Committee pursuant to Section 2,12 subsequent to a Starwood Trigger Event (x) one hundred percent (100%) with respect to BRG and (y) zero percent (0%) with respect to BRG. "Credit Enhancement Loan" shall have the meaning provided in Section 9.13. "Credit Provide?' shall have the meaning provided in Section 9.13. "Curative Contribution" shall have the meaning provided in Section 5.2(d). "Cure Period" shall have the meaning provided in Section 5.2(d). NRWYOQX 69411B I (IX) EFTA00614250  EXHIBIT B Page 8 "Cut-Off Date" shall mean February 23, 2014. "Damages" shall have the meaning provided in Section 14.2. "DC3" chall mean the restaurant known as "Dos Caminos Third Avenue" located at 825 Third Avenue, New York, New York. "DO Acquisition" shall have the meaning provided in the recitals. "PC3 Acquisition Amendment( shall mean (i) that certain Assignment and Assumption of Limited Liability Company Interests and Amendment to the Master Restaurant Purchase Agreement, dated as of the date hereof, by and among Hanson Member, RDM Associates, LLC, a New York limited liability company, Donald Bernstein, Saul Victor, the Trusts and the Company, (ii) that certain Novation Agreement, dated the date hereof, by and among BRG Holdings Sub, the Company and Hanson Member, and (iii) that certain Assignment and Assumption Agreement, dated as of the date hereof, by and among BRG Holdings Sub, the Company and Hanson Member. "DC3 LLC" shall have the meaning provided in the recitals. "DC3 Loans" shall have the meaning provided in the recitals. "DC3 Management Agreement" shall have the meaning provided in the Contribution Agreement. "Default Amount" shall have the meaning provided in Section 5.2(d). "Default Amount Allocated Amount" shall have the meaning provided in Section 5.2(4 "Default Loan Rate" shall mean the per annum rate equal to the lower of (i) the LIBOR Rate plus 1000 basis points and (ii) the highest rate permitted by applicable laws. "Deficient Amount" shall have the meaning provided in Section al. "Delaware UCC" shall mean the Uniform Commercial Code as in effect in the State of Delaware from time to time. "Determination Date" shall mean, with respect to any Interest Period, the date which is two (2) Eurodollar Business Days before the commencement of such Interest Period. "Disability" shall have the meaning provided in the Hanson Employment Agreement. "Dissolution Event" shall have the meaning provided in Section 13.2. "Distributable Funds" shall mean, with respect to any Fiscal Quarter or other period, as applicable, an amount equal to the Cash Flow of the Company for such Fiscal Quarter or other period, as applicable, as reduced by reserves for anticipated capital expenditures, future NIIWYORK 6941111 OX) EFTA00614251  EXHIBIT B Page 9 working capital needs and operating expenses, contingent obligations and other purposes, the amounts of which shall be reasonably determined from time to time by the Management Committee. "Distributions" shall mean the distributions payable (or deemed payable) to a Member (including, without limitation, its allocable portion of Distributable Funds). "EBITDA" shall mean, with respect to any Stand Alone Restaurant, for any period, an amount equal to (i) operating income of such Stand Alone Restaurant for such period as set forth in the statement of operations contained in the applicable financial statements of such Stand Alone Restaurant plus (ii) depreciation and amortization expenses of such Stand Alone Restaurant for such period as set forth in the statement of cash flows in the applicable financial statements of such Stand Alone Restaurant. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. "Eurodollar Business Day" shall mean a Business Day on which banks in the City of London, England are open for interbank or foreign exchange transactions. "Exempt Member" shall have the meaning provided in Section 5.2(O "Exigent Circumstances" shall mean any Capital Contribution called in order to do any of the following or, where the context so requires, shall mean the following circumstance(s) which were the basis for the calling of the Capital Contribution: (i) to prevent a forfeiture or foreclosure with respect to (x) any material asset of the Company and the Investment Vehicles, within the next thirty (30) days, under any loan or indenture or as a result of the non payment of taxes or (y) any other asset of the Company and the Investment Vehicles, within the next thirty (30) days, if such forfeiture or foreclosure would constitute, or upon notice or passage of time would constitute, an event of default under any loan or indenture; (ii) to pay for insurance required hereunder or approved by the Management Committee; or (iii) to make any emergency repairs to any material asset of the Company or the Investment Vehicles; in each case where the Management Committee or management of the Company has been or it appears reasonably likely will be unable or unwilling to obtain or expend the funds required for such action within the required time period. For purposes of this definition "material" means material to the Company and the Investment Vehicles taken as a whole except in the case of an emergency repairs that relates to health or safety. NE YORK 69411P (2K) EFTA00614252  EXHIBIT B Page 10 "Failure to Cure" shall mean, with respect to any Trigger Event, (i) in the case of an event described in clause (i) of the definition of BRG Trigger Event or Starwood Trigger Event (as applicable), the Person whose conduct is alleged to have resulted in the ERG Trigger Event or Starwood Trigger Event (as applicable) does not cease to have any direct or indirect interest in (economic or otherwise), rights, responsibilities or duties relating to, or employment, involvement or association with, the Company, each Investment Vehicle and the Company Assets, within thirty (30) days after receipt of written notice from BRG or Starwood (as applicable) of the occurrence of such event and (ii) in the case of an event described in clause (ii) of the definition of BRG Trigger Event or Starwood Trigger Event (as applicable), such Stanwood Change of Control or ERG Change of Control (as applicable) is not cured within thirty (30) days after receipt of written notice from BRG or Starwood (as applicable) of the occurrence of such event. "Family Member" shall mean, with respect to any individual, any spouse or lineal descendant or spouse of a lineal descendant, whether by adoption or marriage, of such individual. "Fiscal Month" shall mean with respect to each Fiscal Quarter, each 4-week period occurring in such Fiscal Quarter commencing as of the first Monday of such Fiscal Quarter and ending on the Sunday of the 4th week of such Fiscal Quarter; provided, that the last Fiscal Month of each Fiscal Quarter shall be 5 weeks long and shall end on the Sunday of the 13th week of such Fiscal Quarter and provided, further, that, if there is a 53rd week in any Fiscal Year, the First Fiscal Month of the First Fiscal Quarter of such Fiscal Year shall consist of a 5- week period and shall end on the Sunday of the 5th week of such Fiscal Quarter. "Fiscal Quarter" shall mean with respect to each Fiscal Year, each 13-week period occurring in such Fiscal Year commencing as of the first Monday of such Fiscal Year and ending on the Sunday of the 13th week of such Fiscal Year and every 13-week period thereafter; provided, however, that if there is a 53rd week in any Fiscal Year, the first Fiscal Quarter of such Fiscal Year shall end on the Sunday of the 14th week of such Fiscal Year. "Fiscal Year" shall mean, each period commencing on the Monday following Sunday closest to December 31st, and ending on the Sunday closest to December 31st of the following year (for clarity, which such period shall be either 52-weeks or 53-weeks, depending on the calendar year). "flow-through entity" shall have the meaning provided in Sections _5 7 and 12.3(b). "Foreip Corrupt Practices Act" shall mean the Foreign Corrupt Practices Act of the United States, 15 U.S.C. Sections 78a, 78m, 78dd-1, 78dd-2, 78dd-3, and 78ff, as amended, if applicable, or any similar law of any jurisdiction where one or more properties owned or leased by the Company or an Investment Vehicle are located or where the Company or any of the Investment Vehicles transacts business or any other jurisdiction, if applicable. "Gaming Approvals" shall mean all licenses, permits, approvals, authorizations, registrations, findings of suitability, franchises, entitlements, waivers and exemptions issued by NITWYOIUC 6941ISI (2K) EFTA00614253  EXHIBIT B Page 11 any Gaming Authority necessary for or relating to the conduct of activities by any party hereto or any of its Affiliates, including, without limitation, the ownership, operation, management and development of any Gaming Entity. "Gaming Authorities" shall mean those federal, state, local, or other governmental, regulatory and administrative authorities, agencies, boards and officials responsible for or involved in the regulation of gaming or gaming activities in any jurisdiction within the 50 states of the United States, the United Kingdom, Bahamas, Bermuda, Mexico, Canada, and any other sovereign nation which regulates gaming. "Gaming Entity" shall mean Starwood, its Affiliates or any Person in which Starwood or any Affiliate of Starwood has any direct or indirect economic or other financial interest in a Person which conducts, or participates in, any gaming business or activities, as set forth on the list to be provided to BRG on the date of this Agreement or notified in writing by Starwood to BRG from time to time either voluntarily or promptly following a written request of BRG. "Gaming Trigger Event" shall have the meaning provided in Section En. "Good Reason" shall have the meaning set forth in the Hanson Employment Agreement. "Guaranty Fee" shall mean the fee payable to the Starwood VII Funds and the Starwood I lotel Funds pursuant to that certain letter agreement dated as of September 27, 2007 between B.R. Guest, LLC and the Starwood VII Funds and the Starwood Hotel Funds, as amended by that certain letter agreement dated as of the date hereof between B.R. Guest, LLC and the Starwood VII Funds and the Starwood Hotel Funds. "Hanson Employment Agreement" shall mean that certain Employment Agreement, dated as of February 23, 2007, between BRG Holdings Sub and the BRG Key Individual, as novated by that certain Novation Agreement, dated the date hereof, by and among BRG Holdings Sub, the Company and Hanson Member. - "Hanson Loan" shall have the meaning provided in the recitals. "Hanson Member" shall have the meaning provided in the first paragraph of this Agreement. "Hanson Note" shall have the meaning given to such term in the Master Restaurant Purchase Agreement. "Income" shall mean the gross income of the Company for any month, Fiscal Year or other period, as applicable, including gains realized on the sale, exchange or other disposition of the Company's assets. "Indemnified Party" shall have the meaning provided in Section 14.4(a). "Indemnifying Party" shall have the meaning provided in Section 14.4(a) NaWYORK 6911111O1Q EFTA00614254  EXHIBIT B Page 12 "Initial Capital Contributions" shall have the meaning provided in Section _5 1. "Initial Financing" shall mean the financing obtained by the Company and the Investment Vehicles in connection with the acquisition of the Initial Restaurants and DC3, including, without limitation, the Starwood Bridge Financing, the Refinancable Starwood Preferred Capital or any refinancing thereof, which shall not exceed the Applicable Debt Amount (in the case of the initial financing) and the Maximum Refinancing Amount (in the case of the refinancing of such initial financing). "Initial Financing Credit Enhancement Loan" shall mean a Credit Enhancement Loan made in respect of Credit Enhancement provided in respect of the Initial Financing (including any Credit Enhancement given by Starwood or any of its Affiliates to any Lender in connection with obtaining funds for the purpose of providing the Starwood Bridge Financing (if any) or any refinancing thereof). "Initial LLC Agreement" shall have the meaning provided in the recitals. Stanwood Preferred Capital" shall have the meaning provided in the recitals. "Initial Restaurant Adjusted EBITDA Amount" shall mean an amount equal to (i) nine (9) multiplied by (ii) the sum of (x) the sum of the Adjusted EBITDA for each of the Initial Restaurants (excluding BRG Vegas) used to determine the final Aggregate Closing Purchase Price pursuant to the Master Restaurant Purchase Agreement multiplied by the Aggregate Acquisition Percentage for such restaurant, (y) the Adjusted EBITDA for DC3 used to determine the DC3 Purchase Price (as defined in the Master Restaurant Purchase Agreement) multiplied by the Aggregate Acquisition Percentage for DC3 and (z) in the event the assets and liabilities of BRG Vegas were contributed pursuant to the Contribution Agreement, the Adjusted EBITDA of BRG Vegas as calculated pursuant to Section 2.1 of the Master Restaurant Purchase Agreement. Initial Restaurant Value" shall mean (i) if the Venture Termination Event occurs prior to the Cut-Off Date, an amount equal to the sum of (x) the total value ascribed to the Initial Restaurants still owned by the Company or any Investment Vehicle as of the date of the Venture Termination Event pursuant to a valuation opinion obtained from an Investment Bank at the time of the Venture Termination Event plus (y) the purchase price received by the Company or an Investment Vehicle in respect of the sale of any Initial Restaurant sold prior to the date of the Venture Termination Event, or (ii) if the Venture Termination Event occurs after the Cut-Off Date, an amount equal to the sum of (x) the total value ascribed to the Initial Restaurants still owned by the Company or any Investment Vehicle as of the Cut-Off Date pursuant to a valuation opinion obtained from an Investment Bank at the time of the Cut-Off Date plus (y) the purchase price received by the Company or an Investment Vehicle in respect of the sale of any Initial Restaurant sold prior to the Cut-Off Date. In connection with valuing any Initial Restaurant pursuant to this definition, the Investment Bank shall determine the price at which such Initial Restaurant would be sold in its as-is condition for cash by a willing seller, not compelled to sell, to a willing buyer, not compelled to buy, with each of the seller and buyer being apprised of all relevant facts, in an arm's length, negotiated transaction with an unaffiliated third party without Nerroluc 6941111 (2K) EFTA00614255  EXHIBIT B Page 13 time constraints. Without limiting the foregoing, in valuing such Initial Restaurant, the Investment Bank shall take into account (1) the EBITDA of such Initial Restaurant and the potential for a decrease or increase thereof, (2) the occupancy arrangements of such Initial Restaurant, including, without limitation (i) the remaining term of any lease or management agreement and (ii) the likelihood that such lease or management agreement may be renewed, extended or replaced with another such agreement, (3) any consents or other approvals required to be obtained (or costs and expenses that might be incurred in order to obtain such consents or other approvals), whether pursuant to any leases, management agreements or otherwise, in order for the applicable Initial Restaurants (or direct or indirect interests therein) to be transferred and (4) any terminations of, or penalties, fees or other payments or premiums required to be paid under, any leases, management agreements or other agreements to which such Initial Restaurant is a party that would result from effectuating such Venture Termination Event. Any Investment Bank shall be chosen by the BRG Member from a list of three Investment Banks selected by Starwood. "Initial Restaurants" shall mean each of the restaurants listed in Exhibit I; provided that (i) for purposes of the definition "Initial Restaurant Adjusted EBITDA Amount" the term Initial Restaurants as used in such definitions shall exclude BRG Vegas LLC and 359 Columbus Avenue, LLC and shall include RSV'', Inc., (ii) for purposes of the definition "Initial Financing" the term Initial Restaurants as used in such definition shall exclude BRG Vegas LLC and 359 Columbus Avenue, LIE and shall include B.R. Guest Vegas, Inc. and RSVH, Inc., and (iii) for purposes of the definitions "Initial Restaurant Value", "Stand Alone Restaurants" and "Venture Termination Event", the term Initial Restaurants as used in such definitions shall include DC3. "Jnitial Starwood Contribution" shall have the meaning provided in Section al "Institutional Lender" shall mean any one or more of the following entities: a savings bank, a savings and loan association, a commercial bank or trust company, an insurance company subject to regulation by any governmental authority or body, a real estate investment trust, a union, governmental or secular employees' welfare, benefit, pension or retirement fund, a pension fund property unit trust (whether authorized or unauthorized), an investment company or trust, a merchant or investment bank or any other entity generally viewed as an institutional lender; provided that, any of the foregoing entities may be considered an Institutional Lender only if that entity, together with its Affiliates, has total assets of at least U.S. $1,000,000,000 and stockholders' equity or net worth of at least U.S. $250,000,000 (or, in either case, the equivalent thereof in a foreign currency) as of the date the entity makes a loan to the relevant Person. Any Person otherwise satisfying the foregoing definition will be considered an Institutional Lender whether (i) acting for itself or (ii) as trustee, as general partner of a partnership, in a fiduciary, management or advisory capacity or, in the case of a bank, as agent bank, for any number of lenders, so long as in the case of clause (ii) the day-to-day management decisions relating to the loan made by that Institutional Lender are either exercised by or recommended by that Institutional Lender and, during the life of the loan, the Institutional Lender may only be removed from its clause (ii) capacity if it is replaced by another Institutional Lender also acting in the manner specified in clause (ii). NRWYOAK Oil III ax) EFTA00614256  EXHIBIT B Page 14 "Interest" shall mean, with respect to each Member, the entire limited liability company interest of such Member in the Company, which includes, without limitation, any and all rights, powers and benefits accorded a Member under this Agreement and the duties and obligations of such Member hereunder. For the avoidance of doubt, an interest awarded pursuant to a Management Incentive Program as described in Section 6.3 shall not be considered an Interest for purposes of this Agreement. Interest Period" shall mean each period of time running from and including the first day of each calendar month to but excluding the first day of the next calendar month; provided that the first Interest Period for any loan shall commence on and include that date such loan was made and end on and include the last day of the calendar month in which the date such loan was made occurs. "Interest Transfer" shall have the meaning provided in Section .112. "Interim Budget" shall mean the budget attached hereto as Exhibit Q. "Investment Bank" shall mean any of (i) the Goldman Sachs Group, Inc., JPMorgan Chase, Morgan Stanley, Citigroup and Bank of America and (ii) any other nationally recognized investment bank approved by the Members in writing. "Investment Opportunity" shall have the meaning provided in Section 8.2(e). "Investment Vehicle" shall mean (i) any Subsidiary or (ii) any other Person used for the purpose of pursuing, making or holding Portfolio Investments (including, but not limited to, a limited partnership, limited liability company or real estate investment mist) in which the Company has a direct or indirect interest. "Junior Adjusted Capital Contribution" shall mean, with respect to each Member, such Member's aggregate Junior Preferred Capital Contributions less any distributions previously made to that Member pursuant to Section 6.1(d). "Junior Participation Percentage" shall mean, with respect to any Member at any time, the ratio of (i) the sum of the aggregate Junior Adjusted Capital Contributions made by such Member, to (ii) the sum of the aggregate Junior Adjusted Capital Contributions made by all the Members. "Junior Preferred Capital Contribution" shall mean any Capital Contribution made by a Member pursuant to a capital call made under (i) Section 5.2(a) in the event BRO has contributed at least twenty percent (20%) of the aggregate capital called for pursuant to such capital call under Section 5.2(a) or (ii) Section 5.2(b) (unless deemed a Senior Preferred Capital Contribution pursuant to Section 5.2(d)). "Junior Preferred Return" shall mean, with respect to each Member, as of any date, a ten percent (10%) cumulative, annual return, compounded monthly, on the weighted average of such Member's Junior Adjusted Capital Contribution (calculated by taking into account the amount of such Member's Junior Adjusted Capital Contributions from time to time)