Document:

ex10-20.htm

Exhibit 10.20

 

Employment Agreement

This Employment Agreement (“Agreement”) is entered into effective May 11, 2012 by and between Buffalo Wild Wings, Inc., a Minnesota corporation (the “Company”), and Andrew Block, a resident of Minnesota (“Executive”).

Background

 

A.        Executive is currently employed by the Company as its Senior Vice President, Talent Management Services  The Company desires to continue to employ Executive under the terms and conditions set forth in this Agreement.

B.        The Company and Executive are also parties to the 2003 Equity Incentive Plan and the 2007 Equity Incentive Plan.

C.        Executive is a key member of the management of the Company and is expected to devote substantial skill and effort to the affairs of the Company, and the Company desires to recognize the significant personal contribution that Executive makes and is expected to continue to make to further the best interests of the Company and its shareholders.

D.        It is desirable and in the best interests of the Company and its shareholders to continue to obtain the benefits of Executive’s services and attention to the affairs of the Company.  It is desirable and in the best interests of the Company and its shareholders to provide inducement for Executive (1) to remain in the service of the Company in the event of any proposed or anticipated change in control of the Company and (2) to remain in the service of the Company in order to facilitate an orderly transition in the event of a change in control of the Company.

E.         It is desirable and in the best interests of the Company and its shareholders that Executive be in a position to make judgments and advise the Company with respect to proposed changes in control of the Company without regard to the possibility that Executive’s employment may be terminated without compensation in the event of certain changes in control of the Company.

F.         In Executive’s position, Executive will have access to confidential, proprietary and trade secret information of the Company.  It is desirable and in the best interests of the Company and its shareholders to protect confidential, proprietary and trade secret information of the Company, to prevent unfair competition by former executives of the Company following separation of their employment with the Company and to secure cooperation from former executives with respect to matters related to their employment with the Company.

 

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Agreement

In consideration of the foregoing premises and the respective agreements of the Company and Executive set forth below, the Company and Executive, intending to be legally bound, agree as follows:

1.         Term.  The term of Executive’s employment under this Agreement shall commence on the Effective Date and shall continue in effect until the last day of the Company’s fiscal year 2012, unless earlier terminated in accordance with Section 8 of this Agreement.  Thereafter, unless earlier terminated in accordance with Section 8 hereof, the term of Executive’s employment with the Company shall be automatically extended for successive one-year periods, each ending on the last day of the Company’s fiscal year, unless either party gives written notice to the other party at least four (4) months prior to the expiration of such term that such party elects not to extend the term of this Agreement.  The term of Executive’s employment, beginning on the Effective Date of this Agreement, together with any automatic extensions thereof, shall collectively be the “Term.”

2.         Position and Duties.  During Executive’s employment under this Agreement, Executive will have the following position, duties and responsibilities:

(a)             Position with the Company.  Executive will serve as Senior Vice President, Talent Management Services of the Company, or in such other executive position of a similar nature, and will perform such duties and responsibilities as the EVP, North American Operations and/or the Chief Executive Officer or President of the Company (the “CEO”) may assign Executive from time to time.

(b)           Performance of Duties and Responsibilities.  Executive will serve the Company faithfully and to the best of Executive’s ability and will devote Executive’s full working time, attention, and efforts to the business of the Company.  Executive will report to the EVP, North American Operations or to her designee.  Executive will follow and comply with applicable policies and procedures adopted by the Company from time to time, including without limitation policies relating to business ethics, conflict of interest, non-discrimination, confidentiality and protection of trade secrets, and insider trading.  Executive will not engage in other employment or other material business activity, except as approved in writing by the General Counsel or the Chief Executive Officer and President.  Executive hereby represents and confirms that Executive is under no contractual or legal commitments that would prevent Executive from fulfilling Executive’s duties and responsibilities as set forth in this Agreement.

3.         Compensation.  During Executive’s employment under this Agreement, Executive will be provided with the following compensation and benefits:

(a)           Base Salary.  The Company will pay to Executive for services provided hereunder a base salary paid in accordance with the Company’s normal payroll policies and procedures.  The Board of Directors of the Company (or any authorized committees of the Board, together hereafter the “Board”) will review Executive’s performance on an annual basis and determine any adjustments to Executive’s base salary in its sole discretion; provided, however, that any reduction shall be permitted only if the Company then reduces the base compensation of all its executive officers generally and shall not exceed the average percentage reduction for all such executive officers.

 

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(b)           Incentive Compensation. Executive will be eligible to participate in the Buffalo Wild Wings, Inc. Cash Incentive Plan in accordance with its terms, as may be amended and in effect from time to time (the “CIP”).

(c)           Equity.  Executive will be eligible to participate in such programs under the Buffalo Wild Wings, Inc. 2003 Equity Incentive Plan and the 2012 Equity Incentive Plan as determined by the Board and in accordance with the terms of such plans as may be in effect from time to time.

(d)           Employee Benefits.  Executive will be entitled to participate in all employee benefit plans and programs generally available to executive employees of the Company, to the extent that Executive meets the eligibility requirements for each individual plan or program.  Executive’s participation in any plan or program will be subject to the provisions, rules, and regulations of, or applicable to, the plan or program.  The Company provides no assurance as to the adoption or continuation of any particular employee benefit plan or program.

(e)           Expenses.  The Company will reimburse Executive for all reasonable and necessary out-of-pocket business, travel, and entertainment expenses incurred by Executive in the performance of Executive’s duties and responsibilities to the Company during the Term.  Such reimbursement shall be subject to the Company’s normal policies and procedures for expense verification, documentation, and reimbursement; provided, however, that Executive shall submit verification of expenses within 30 days after the date the expense was incurred, and the Company shall reimburse Executive for such expenses eligible for reimbursement within 30 days thereafter.

4.         Confidential Information.  Except as authorized in writing by the Board or as necessary in carrying out Executive’s responsibilities for the Company, Executive will not at any time divulge, furnish, or make accessible to anyone or use in any way, any confidential, proprietary, or secret knowledge or information of the Company that Executive has acquired or will acquire about the Company, whether developed by himself or by others, concerning (i) any trade secrets, (ii) any confidential, proprietary, or secret recipes, designs, inventions, discoveries, programs, processes, formulae, plans, devices, or material (whether or not patented or patentable) directly or indirectly useful in any aspect of the business of the Company, (iii) any customer or supplier lists, (iv) any confidential, proprietary, or secret development or research work, (v) any strategic or other business, marketing, or sales plans, systems or techniques, (vi) any financial data or plans, or (vii) any other confidential or proprietary information or secret aspects of the business of the Company.  Executive acknowledges that the above-described knowledge and information constitute a unique and valuable asset of the Company and represent a substantial investment of time and expense by the Company, and that any disclosure or other use of such knowledge or information other than for the sole benefit of the Company would be wrongful and would cause irreparable harm to the Company.  Executive will refrain from intentionally committing any acts that would materially reduce, and shall take reasonable steps to protect, the value of such knowledge and information to the Company.  The foregoing obligations of confidentiality shall not apply to any knowledge or information that (i) at the time of Executive’s use or disclosure is generally publicly known, other than as a direct or indirect result of the breach by Executive of this Agreement, (ii) is independently made available to Executive in good faith by a third party who has not violated a confidential relationship with the Company, or (iii) is required to be disclosed by law or legal process.  Executive understands and agrees that Executive’s obligations under this Agreement to maintain the confidentiality of the Company’s confidential information are in addition to any obligations of Executive under applicable statutory or common law.

 

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5.         Ventures.  If, during Executive’s employment with the Company, Executive participates in the planning or implementing of any project, program, or venture involving the Company, all rights in such project, program, or venture belong to the Company.  Except as approved in writing by the Board, Executive will not be entitled to any interest in any such project, program, or venture or to any commission, finder’s fee, or other compensation in connection therewith.  Executive will have no interest, direct or indirect, in any customer or supplier that conducts business with the Company.  Ownership by Executive, as a passive investment, of less than one percent of the outstanding shares of capital stock of any corporation listed on a national securities exchange or publicly traded in the over-the-counter market shall not constitute a breach of this Section 5.

6.         Intellectual Property.

(a)           Disclosure and Assignment.  As of the Effective Date, Executive hereby transfers and assigns to the Company (or its designee) all right, title, and interest of Executive in and to every idea, concept, invention, and improvement (whether patented, patentable or not) conceived or reduced to practice by Executive whether solely or in collaboration with others while Executive is employed by the Company, and all copyrighted or copyrightable matter created by Executive whether solely or in collaboration with others while Executive is employed by the Company, in each case, that relates to the Company’s business (collectively, “Creations”).  Executive shall communicate promptly and disclose to the Company, in such form as the Company may request, all information, details, and data pertaining to each Creation.  Every copyrightable Creation, regardless of whether copyright protection is sought or preserved by the Company, shall be a “work made for hire” as defined in 17 U.S.C. § 101, and the Company shall own all rights in and to such matter throughout the world, without the payment of any royalty or other consideration to Executive or anyone claiming through Executive.

 

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(b)           Trademarks.  All right, title, and interest in and to any and all trademarks, trade names, service marks, and logos adopted, used, or considered for use by the Company during Executive’s employment (whether or not developed by Executive) to identify the Company’s business or other goods or services (collectively, the “Marks”), together with the goodwill appurtenant thereto, and all other materials, ideas, or other property conceived, created, developed, adopted, or improved by Executive solely or jointly during Executive’s employment by the Company and relating to its business shall be owned exclusively by the Company.  Executive shall not have, and will not claim to have, any right, title, or interest of any kind in or to the Marks or such other property.

(c)           Documentation.  Executive shall execute and deliver to the Company such formal transfers and assignments and such other documents as the Company may request to permit the Company (or its designee) to file and prosecute such registration applications and other documents it deems useful to protect or enforce its rights hereunder.  Any patentable invention relating to the Company’s business and disclosed by Executive prior to the first anniversary of the effective date of Executive’s termination of employment shall be deemed to be governed by the terms of this Section 6 unless proven by Executive to have been first conceived and made after such termination date.

(d)           Non-Applicability.  Executive is hereby notified that this Section 6 does not apply to any invention for which no equipment, supplies, facility, confidential information, or other trade secret information of the Company was used and which was developed entirely on Executive’s own time, unless (1) the invention relates (a) directly to the business of the Company or (b) to the Company’s actual or demonstrably anticipated research or development, or (2) the invention results from any work performed by Executive for the Company.

7.         Noncompetition and Nonsolicitation Covenants.

(a)           Agreement Not to Compete.  During Executive’s employment with the Company and for a period of twelve (12) consecutive months from and after the termination of Executive’s employment, whether such termination is with or without Cause, is at the instance of Executive or the Company or occurs before or after expiration of the Term, Executive will not, directly or indirectly, in any manner or capacity, including without limitation as a proprietor, principal, agent, partner, officer, director, investor, stockholder, employee, member of any association, consultant, or otherwise, engage or participate in any Competitive Business.  “Competitive Business” means any person, entity or business operation (other than the Company) that operates, manages or franchises, in the United States (i) a sports-themed restaurant that operates, manages or franchises two or more restaurants, markets the public viewing of sports and has alcohol sales of 20% or more, (ii) a restaurant that operates, manages or franchises two or more restaurants and features chicken wings that account for 10% or more of food sales, or (iii) any other business concept being operated by or under consideration by the Company as of the date of the Executive’s employment termination.  Ownership by Executive, as a passive investment, of less than one percent of the outstanding shares of capital stock of any corporation listed on a national securities exchange or publicly traded in the over-the-counter market shall not constitute a breach of this Section 7(a).

 

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(b)           Agreement Not to Hire. During Executive’s employment with the Company and for a period of twelve (12) consecutive months from and after the termination of Executive’s employment, whether such termination is with or without Cause, is at the instance of Executive or the Company or occurs before or after expiration of the Term, Executive will not, directly or indirectly, in any manner or capacity, including without limitation as a proprietor, principal, agent, partner, officer, director, investor, stockholder, employee, member of any association, consultant, or otherwise, hire, engage, or solicit any person who is then an employee of the Company at a director level or above, or who was such an employee of the Company at any time during the six-month period immediately preceding Executive’s termination of employment.

(c)           Agreement Not to Solicit. During Executive’s employment with the Company and for a period of twelve (12) consecutive months from and after the termination of Executive’s employment, whether such termination is with or without Cause, is at the instance of Executive or the Company or occurs before or after expiration of the Term, Executive will not, directly or indirectly, in any manner or capacity including without limitation as a proprietor, principal, agent, partner, officer, director, stockholder, employee, member of any association, consultant, or otherwise, solicit, request, advise, or induce any current or potential customer, supplier, vendor or other business contact of the Company to cancel, curtail, or otherwise change its relationship adversely to the Company, or interfere in any manner with the relationship between the Company and any of its customers, suppliers, vendors or other business contacts.

(d)           Modification.  If the duration of, the scope of, or any business activity covered by, any provision of this Section 7 exceeds that which is valid and enforceable under applicable law, such provision will be construed to cover only that duration, scope, or activity that is determined to be valid and enforceable.  Executive hereby acknowledges that this Section 7 will be construed so that its provisions are valid and enforceable to the maximum extent, not exceeding its express terms, possible under applicable law.

(e)           No Adequate Remedy at Law.  Executive hereby acknowledges that the provisions of this Section 7 are reasonable and necessary to protect the legitimate interests of the Company and that any violation of this Section 7 by Executive will cause substantial and irreparable harm to the Company to such an extent that monetary damage alone would be an inadequate remedy therefor.  Accordingly, in the event of any actual or threatened breach of any such provisions, the Company will, in addition to any other remedies it may have, be entitled to injunctive and other equitable relief to enforce such provisions, and such relief may be granted without the necessity of proving actual monetary damages.

 

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8.         Termination of Employment.

(a)       The Executive’s employment with the Company under this Agreement will terminate upon:

(i)           Expiration of the Term following notice of non-renewal pursuant to Section 1 of this Agreement;

(ii)          The Company providing written notice to Executive of the termination of Executive’s employment, effective as of the date stated in such notice;

(iii)         The Company’s receipt of Executive’s written resignation from the Company, effective not earlier than 30 days after delivery of such written notice of resignation, provided that the Board may waive such notice or relieve Executive of Executive’s duties during such notice period;

(iv)          Executive’s Disability; or

(v)           Executive’s death.

(b)       The date upon which Executive’s termination of employment with the Company is effective is the “Termination Date.”  For purposes of Section 9 of this Agreement only, the Termination Date shall mean the date on which a “separation from service” has occurred for purposes of Section 409A of the Internal Revenue Code and the regulations and guidance thereunder (the “Code”).

9.         Payments Upon Involuntary Termination Without Cause or Resignation for Good Reason.  If Executive’s employment with the Company is terminated (i) involuntarily at the initiative of the Company without Cause (including termination upon expiration of the Term following notice of non-renewal by the Company pursuant to Section 1) or (ii) on the initiative of Executive for Good Reason such that Executive’s Termination Date occurs within six months after the first occurrence of a condition giving rise to Good Reason (as described in Section 13(d)(i) – (iv) below), then, unless such Termination Date occurs upon or within one year following a Change in Control, in addition to such base salary and any incentive compensation for the last completed fiscal year that has been earned but not paid to Executive as of the Termination Date, the Company shall provide to Executive the severance payments and benefits set forth in Sections 9(a), (b), (c) and (d) below, subject to the conditions in Section 11:

 

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(a)       Base Salary Continuation.  The Company shall pay to Executive an amount equal to six months of Executive’s base salary in effect as of the Termination Date, but not to exceed a maximum amount under this Section 9(a) of two times the lesser of:

(i)         The Code § 401(a)(17) compensation limit for the year in which the Termination Date occurs; or

(ii)        Executive’s annualized compensation based upon the annual rate of pay for services to the Company for the calendar year prior to the calendar year in which the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely if Executive had not separated from service).

Subject to Section 11, such salary continuation shall be paid to Executive in accordance with the Company’s regular payroll schedule, at the regular base salary payroll rate in effect as of the Termination Date, commencing on the first regular payroll date of the Company that occurs following the Termination Date and continuing for six months.  The Company and Executive intend the payments under this Section 9(a) to be a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii).

(b)       Supplemental Salary Continuation.  The Company shall pay to Executive an additional amount equal to (i) if Executive has been employed continuously with the Company as of the Termination Date for less than five years, six months of Executive’s base salary in effect as of the Termination Date, or (ii) if Executive has been employed continuously with the Company as of the Termination Date for five years or more, twelve months of Executive’s base salary in effect as of the Termination Date.  Subject to Section 11, such supplemental salary continuation shall be paid to Executive in accordance with the Company’s regular payroll schedule, at the regular base salary payroll rate in effect as of the Termination Date, commencing on the first regular payroll date of the Company that occurs following the completion of all payments under Section 9(a) and continuing for six months (or twelve months as applicable if Executive has been employed continuously for five years or more).  The Company and Executive intend the payments under this Section 9(b) to be deferred compensation payable in compliance with the requirements of Section 409A of the Code.

(c)       Incentive Pay.  If the Termination Date is any day other than the last day of the plan year under the CIP, the Company shall pay to Executive an amount equal to a prorated portion of the award that would have been payable to Executive under the CIP for such plan year based on actual performance towards objectives, prorated based on the number of days of the plan year occurring through the Termination Date divided by 365. Any individual performance objectives applicable to Executive for the fiscal year shall be deemed to have been met at a level resulting in payout of 50% of the award amount allocated to such individual objectives.  The payment shall be paid to Executive at the same time and in the same manner as CIP awards are paid to other executives of the Company pursuant to the CIP, but not later than 21⁄2 months following the end of the fiscal year in which the Termination Date occurs, provided that Executive has satisfied the conditions set forth in Section 11.  Any separation pay that may become payable pursuant to this Section 9(c) is intended to be a short-term deferral not subject to the requirements of Section 409A of the Code.

 

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(d)       Medical Benefits.  If Executive (and/or Executive’s covered dependents) is eligible for and properly elects to continue group medical insurance coverage, as in place immediately prior to the Termination Date, and if Executive continues to pay the employee portion of such medical coverage, the Company will pay or reimburse the employer portion of such coverage until the earlier of (i) (A) if Executive has been employed continuously with the Company as of the Termination Date for less than five years, twelve months after the Termination Date, or (B) if Executive has been employed continuously with the Company as of the Termination Date for five years or more, eighteen months after the Termination Date, or (ii) the date Executive (and Executive’s covered dependents) are no longer eligible for medical continuation coverage under COBRA.

10.       Payment Timing Following Change in Control.  If Executive’s employment with the Company is terminated (i) involuntarily at the initiative of the Company without Cause (including termination upon expiration of the Term following notice of non-renewal by the Company pursuant to Section 1) or (ii) on the initiative of Executive for Good Reason such that Executive’s Termination Date occurs within six months after the first occurrence of a condition giving rise to Good Reason (as described in Section 13(d)(i) – (iv) below), and if such Termination Date occurs upon or within one year following a Change in Control, then, in addition to such base salary and any incentive compensation for the last completed fiscal year that has been earned but not paid to Executive as of the Termination Date, the Company shall provide to Executive the severance payments and benefits set forth in Sections 9(a), (b), (c) and (d) above, subject to the conditions in Section 11, except that the salary continuation payments set forth in Sections 9(a) and (b) shall be paid to Executive in a single lump sum as soon as administratively feasible following the Termination Date, but in no event more than 21⁄2 months following the Termination Date.  Any such lump sum payment pursuant to this Section 10 is intended to be a short-term deferral not subject to the requirements of Section 409A of the Code.

11.       Conditions.  Notwithstanding anything above to the contrary, the Company will not be obligated to make any payments to Executive under Section 9 or Section 10 hereof unless:  Executive has signed a release of claims in favor of the Company and its affiliates and related entities, and their directors, officers, insurers, employees and agents, in a form prescribed by the Company (but such release will not require Executive to release any rights under any qualified employee benefit plan of the Company in which Executive is a participant or any rights to indemnification as an employee, officer, or director of the Company); all applicable rescission periods provided by law for releases of claims shall have expired and Executive shall have signed and not rescinded the release of claims; and Executive is in material compliance with the terms of this Agreement as of the dates of such payments.

 

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12.       Other Termination.  If Executive’s employment with the Company is terminated:

(a)       by reason of Executive’s abandonment of Executive’s employment or resignation for any reason other than Good Reason;

(b)       by reason of termination of Executive’s employment by the Company for Cause;

(c)       upon death or Disability; or

(d)       upon or following expiration of the Term following notice of non-renewal by Executive pursuant to Section 1,

then the Company will pay to Executive, or Executive’s beneficiary or Executive’s estate, as the case may be, such base salary that has been earned but not paid to Executive as of the Termination Date, payable pursuant to the Company’s normal payroll practices and procedures, and such incentive compensation that has been earned as of the Termination Date, payable as provided in the applicable plans or programs.

13.       Definitions.

(a)       Cause.  “Cause” hereunder means:

(i)           Executive’s commission of any act constituting a felony, or Executive’s conviction or guilty or no contest plea to any criminal misdemeanor involving fraud, misrepresentation or theft;

(ii)          gross misconduct or any act of fraud, disloyalty or dishonesty by Executive related to or connected with Executive’s employment by the Company or otherwise likely to cause material harm to the Company or its reputation;

(iii)         a material violation by Executive of the Company’s policies or codes of conduct; or

(iv)         the willful or material breach of this Agreement by Executive.

(b)       Change in Control.  “Change in Control” hereunder shall mean any change in effective control or ownership of the Company that (i) constitutes a Change in Control as such term is defined under the Buffalo Wild Wings, Inc. 2003 Equity Incentive Plan, as in effect from time to time, and (ii) constitutes a change in ownership or effective control, or a change in the ownership of a substantial portion of the assets, of the Company under Code Section 409A.

 

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(c)       Disability.  “Disability” hereunder means any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Executive to be unable to perform the duties of Executive’s position of employment or any substantially similar position of employment.

(d)       Good Reason.  “Good Reason” hereunder means any of the following conditions arising without the consent of Executive, provided that Executive has first given written notice to the Company of the existence of the condition within 90 days of its first occurrence, and the Company has failed to remedy the condition within 30 days thereafter:

(i)           a material diminution in the Executive’s base salary (other than a reduction permitted by Section 3(a) above in the case of a general reduction for all executive officers);

(ii)          a material diminution in the Executive’s authority, duties, or responsibilities;

(iii)         relocation of Executive’s principal office more than 50 miles from its current location; or

(iv)          any other action or inaction that constitutes a material breach by the Company of any terms or conditions of this Agreement, which breach has not been caused by Executive.

14.       Other Post-Termination Obligations.

(a)        Other Obligations. In the event of termination of Executive’s employment, the sole obligation of the Company under this Agreement will be its obligation to make the payments called for by Sections 9, 10 or 12 hereof, as the case may be, and the Company will have no other obligation to Executive or to Executive’s beneficiary or Executive’s estate, except as otherwise provided by law or by the terms of any employee benefit plans or programs, or of any incentive compensation or stock ownership plans, then maintained by the Company in which Executive participates.

(b)        Immediately upon termination of Executive’s employment with the Company for any reason, Executive will resign all positions then held as a director or officer of the Company and of any subsidiary, parent or affiliated entity of the Company.

(c)        Upon termination of Executive’s employment with the Company, Executive shall promptly deliver to the Company any and all Company records and any and all Company property in Executive’s possession or under Executive’s control, including without limitation manuals, books, blank forms, documents, letters, memoranda, notes, notebooks, reports, printouts, computer disks, flash drives or other digital storage media, source codes, data, tables or calculations and all copies thereof, documents that in whole or in part contain any trade secrets or confidential, proprietary or other secret information of the Company and all copies thereof, and keys, access cards, access codes, passwords, credit cards, personal computers, handheld personal computers or other digital devices, telephones and other electronic equipment belonging to the Company.

 

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(d)        Following termination of Executive’s employment with the Company for any reason, Executive will, upon reasonable request of the Company or its designee, cooperate with the Company in connection with the transition of Executive’s duties and responsibilities for the Company; consult with the Company regarding business matters that Executive was directly and substantially involved with while employed by the Company; and be reasonably available, with or without subpoena, to be interviewed, review documents or things, give depositions, testify, or engage in other reasonable activities in connection with any litigation or investigation, with respect to matters that Executive then has or may have knowledge of by virtue of Executive’s employment by or service to the Company or any related entity.

(e)        Executive will not malign, defame or disparage the reputation, character, image, products or services of the Company, or the reputation or character of the Company’s directors, officers, employees or agents.  Officers or Directors of the Company shall not make any public statement that disparages or defames Executive’s reputation or character.  Nothing in this Section 14(e) shall be construed to limit or restrict Executive or the Company from taking any action that such party in good faith reasonably believes is necessary to fulfill such party’s fiduciary obligations to the Company, from making any statement internal to the Company’s operations for legitimate business reasons, or from providing truthful information in connection with any legal proceeding, government investigation or other legal matter.

15.       Miscellaneous.

(a)        Tax Withholding.  The Company may withhold from any amounts payable under this Agreement such federal, state and local income and employment taxes as the Company shall determine are required to be withheld pursuant to any applicable law or regulation.  The Company makes no assurances to Executive as to the tax treatment of any payments hereunder and, except with respect to tax amounts withheld by the Company, Executive will be responsible for payment and remittance of all taxes due with respect to compensation received or imputed under this Agreement.

(b)        Section 409A.  This Agreement and the payments hereunder are intended to be exempt from or to satisfy the requirements of Section 409A(a)(2), (3) and (4) of the Internal Revenue Code of 1986, as amended, including current and future guidance and regulations interpreting such provisions, and should be interpreted accordingly.

 

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(c)        Governing Law.  All matters relating to the interpretation, construction, application, validity, and enforcement of this Agreement will be governed by the laws of the State of Minnesota without giving effect to any choice or conflict of law provision or rule, whether of the State of Minnesota or any other jurisdiction, that would cause the application of laws of any jurisdiction other than the State of Minnesota.

(d)        Jurisdiction and Venue.  Executive and the Company consent to jurisdiction of the courts of the State of Minnesota and/or the United States District Court, District of Minnesota, for the purpose of resolving all issues of law, equity, or fact arising out of or in connection with this Agreement.  Any action involving claims of a breach of this Agreement must be brought in such courts.  Each party consents to personal jurisdiction over such party in the state and/or federal courts of Minnesota and hereby waives any defense of lack of personal jurisdiction.  Venue, for the purpose of all such suits, will be in Hennepin County, State of Minnesota.

(e)        Waiver of Jury Trial.  To the extent permitted by law, Executive and the Company waive any and all rights to a jury trial with respect to any dispute arising out of or relating to this Agreement.

(f)        Entire Agreement.  This Agreement contains the entire agreement of the parties relating to Executive’s employment with the Company and supersedes all prior agreements and understandings with respect to such subject matter, including without limitation the Prior Agreement, and the parties hereto have made no agreements, representations, or warranties relating to the subject matter of this Agreement that are not set forth herein.  The RSU Agreement remains in full force and effect as amended.

(g)       No Violation of Other Agreements.  Executive hereby represents and agrees that neither (i) Executive’s entering into this Agreement nor (ii) Executive’s carrying out the provisions of this Agreement, will violate any other agreement (oral, written, or other) to which Executive is a party or by which Executive is bound.

(h)       Assignment.  This Agreement shall not be assignable, in whole or in party, by either party without the written consent of the other party, except that the Company may, without the consent of Executive, assign or delegate all or any portion of its rights and obligations under this Agreement to any corporation or other business entity (i) with which the Company may merge or consolidate, (ii) to which the Company may sell or transfer all or substantially all of its assets or capital stock, or (iii) of which 50% or more of the capital stock or the voting control is owned, directly or indirectly, by the Company or which is under common ownership or control with the Company.  Any such current or future successor, parent, affiliate or other joint venture partner to which any right or obligation has been assigned or delegated shall be deemed to be the “Company” for purposes of such rights or obligations of this Agreement.

(i)        Amendments.  No amendment or modification of this Agreement will be effective unless made in writing and signed by the parties hereto.

 

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(j)        Counterparts.  This Agreement may be executed by facsimile signature and in any number of counterparts, and such counterparts executed and delivered, each as an original, will constitute but one and the same instrument.

(k)       Severability.  Subject to Section 7(d) hereof, to the extent that any portion of any provision of this Agreement is held invalid or unenforceable, it will be considered deleted herefrom and the remainder of such provision and of this Agreement will be unaffected and will continue in full force and effect.

(l)        Survival.  The provisions of this Agreement that by their terms or implication extend beyond the Term, including without limitation Sections 4, 6, 7, 14, and 15 of this Agreement, shall survive the termination or expiration of the Term and termination of Executive’s employment with the Company for any reason.

(m)      Captions and Headings.  The captions and paragraph headings used in this Agreement are for convenience of reference only and will not affect the construction or interpretation of this Agreement or any of the provisions hereof.

(n)       Notices.  Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given when (i) delivered personally; (ii) sent by facsimile or other similar electronic device with confirmation; (iii) delivered by reliable overnight courier; or (iv) three business days after being sent by registered or certified mail, postage prepaid, and in the case of (iii) and (iv) addressed as follows:

If to the Company:                Buffalo Wild Wings, Inc.

5500 Wayzata Boulevard, Suite 1600

Minneapolis, MN  55416

Fax: (952) 593-9787

Attention:  Chief Executive Officer and President

copy to: General Counsel

 

 

 

If to Executive:                      Latest address of Executive in the formal records of the Company

 

 

Executive and the Company have executed this Agreement effective as of the date set forth in the first paragraph.

 

Page 14

  

  

  

 

 

	 	
BUFFALO WILD WINGS, INC.

	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Sally Smith	 
	 	 	Sally Smith	 
	 	 	 	 
	 	Its:  	Chief Executive Officer and President	 

 

 

	 	
/s/ Andrew D. Block

	 
	 	
Andrew Block

	 

 

 

Page 15BEE-2012.12.31-EX10.43

Exhibit 10.43

FIRST AMENDMENT TO RESTRUCTURING AGREEMENT 
THIS FIRST AMENDMENT TO RESTRUCTURING AGREEMENT (this “Agreement”) is entered into effective as of December 17, 2012 by and among U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, AS SUCCESSOR IN INTEREST TO BANK OF AMERICA, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF THE CITIGROUP COMMERCIAL MORTGAGE TRUST 2007-FL3 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-FL3 (“Lender”), FMT SCOTTSDALE OWNER, LLC, a Delaware limited liability company (“Borrower”), WALTON/SHR FPH, LLC, a Delaware limited liability company (“Operating Lessee”) and WALTON STREET REAL ESTATE FUND VI, L.P., a Delaware limited partnership, WALTON STREET REAL ESTATE FUND VI-Q, L.P., a Delaware limited partnership, WALTON STREET REAL ESTATE FUND VI-E, L.P., a Delaware limited partnership, WALTON STREET REAL ESTATE INVESTORS VI, L.P., a Delaware limited partnership, WALTON STREET REAL ESTATE PARTNERS VI, L.P., a Delaware limited partnership, WALTON STREET REAL ESTATE PARTNERS VI-NGE, L.P., a Delaware limited partnership, and WSC CAPITAL HOLDINGS VI, L.P., a Delaware limited partnership (individually and collectively, the “Guarantor”).  Borrower, Operating Lessee and Guarantor are sometimes collectively referred to herein as “Borrower Parties.”  Borrower Parties and Lender are sometime collectively referred to herein as the “Parties.”
RECITALS
The following recitals are a material part of this Agreement:
A.    On June 9, 2011, Lender, SHR Scottsdale, L.L.C., a Delaware limited liability company (“Prior Borrower”), DTRS Scottsdale, L.L.C., a Delaware limited liability company (“Prior Operating Lessee”) and Strategic Hotel Funding, L.L.C., a Delaware limited liability company (“Prior Guarantor”) entered into that certain Restructuring Agreement (the “Restructuring Agreement”) with respect to that certain loan in the original principal amount of $140,000,000.00 (the “Loan”) made for the financing of certain property located in Maricopa County, Arizona, as more particularly described in the Restructuring Agreement (the “Property”).
B.    The Loan was made pursuant to that certain Loan and Security Agreement dated September 1, 2006, as amended by that certain Amendment to Loan and Security Agreement dated May 9, 2007 (as amended, the “Loan Agreement”), and is evidenced and/or secured by, among other documents and instruments (i) that certain Note dated September 1, 2006, as amended by that certain Amendment to Promissory Note dated May 9, 2007, in the original principal amount of $140,000,000.00 (as amended, the “Note”), (ii) that certain Fee and Leasehold Deed of Trust, Security Agreement, Financing Statement, Fixture Filing and Assignment of Leases, Rents, Hotel Revenue and Security Deposits dated September 1, 2006, recorded in the real estate records of Maricopa County, Arizona as Document No. 2006-1183787 (as amended, the “Security Instrument”) encumbering the Property, (iii) that certain Assignment of Leases, Rents, Hotel 

Revenues and Security Deposits dated September 1, 2006, recorded in the real estate records of Maricopa County, Arizona as Document No. 2006-1183788, (as amended, the “Assignment of Leases”); (iv) that certain Guaranty of Recourse Obligations dated September 1, 2006 (as amended, the “Prior Recourse Guaranty”), and (v) that certain Environmental Indemnity dated September 1, 2006 (as amended, the “Prior EIA”, and collectively with the Prior Recourse Guaranty, the “Prior Guaranties”). 
C.    Pursuant to that certain Assumption Agreement dated June 9, 2011 (the “Assumption Agreement”) between Lender, Prior Borrower, Prior Operating Lessee, Prior Guarantor, Borrower, Operating Lessee and Guarantor, Borrower and Guarantor assumed all of the obligations of Prior Borrower and Prior Guarantor, respectively, with respect to the Loan and under the Loan Documents (as hereinafter defined), and Guarantor executed and delivered to Lender (i) that certain Guaranty of Recourse Obligations dated June 9, 2011 (the “Guaranty”), and (ii) that certain Environmental Indemnity dated June 9, 2011 (the “EIA” and collectively with the New Guaranty, the “Guaranties”).
D.    The Loan Agreement, the Note, the Security Instrument, the Assignment of Leases, the Prior Guaranties, the Guaranties and all other documents evidencing, securing or executed in connection with the Loan, all as  amended by that certain Omnibus Amendment to Loan Documents dated May 9, 2007 and by the Restructuring Agreement are sometimes referred to in this Agreement collectively as the “Loan Documents.”   All capitalized terms used in this Agreement that are not otherwise defined herein shall have the meanings ascribed to them in the Restructuring Agreement, as in effect on the date of this Agreement.  
E.    Pursuant to the Restructuring Agreement, the Parties established, among other things, the Excess Cash Reserve Account into which all Excess Cash Flow is deposited on each Payment Date, all in accordance with the terms of the Restructuring Agreement.  As of the date of this Agreement, the balance of the Excess Cash Reserve Funds held in the Excess Cash Reserve Account is $7,629,591.72.  
F.    Borrower has requested that Lender amend the terms and provisions of the Restructuring Agreement to allow for disbursement of Excess Cash Reserve Funds from the Excess Cash Reserve Account to Borrower, in an aggregate amount up to but not exceeding $4,300,000.00, to pay certain costs and expenses incurred by Borrower in connection with (i) the construction and opening at the Property of the “Well & Being at Willow Stream Spa” (the “Willow Spring Spa Project”), (ii) installation  of modernized and upgraded laundry equipment at the Property (the “Laundry Project”), (iii) the construction and installation of a living wall concept on the north/south facades of the main building at the Property (the “Living Wall Project”), (iv) the renovation and installation of certain upgraded furniture, fixtures and equipment at the LV Bistro restaurant located on the Property and changing of the concept of such restaurant (the “LV Bistro Project”), (v) the construction of new outdoor bar and grill, fire pit, seating and other patio improvements related to the Bourbon Steak House restaurant located on the Property (the “Bourbon Steak House Project”), and, (vi) if, upon Borrower’s exercise of the Fifth Extension Option, Lender elects in accordance with the terms of this Agreement to retain funds in the Excess Cash Reserve Account rather than applying the entire balance thereof to payment of the Obligations, any additional projects 

2

proposed by Borrower from time to time during the Fifth Extension Term and approved by Lender in its sole and absolute discretion (the “Additional Projects”, and, collectively with the Willow Spring Spa Project, the Laundry Project, the Living Wall Project, the LV Bistro Project and the Bourbon Steak House Project, the “Strategic Improvement Projects”).
G.    Lender is willing to agree to modify and amend the terms of the Restructuring Agreement with respect to the Excess Cash Reserve Account subject to and in accordance with the terms and conditions of this Agreement. 
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:
1.    Strategic Improvement Projects; Plans; Budget; Schedule.  Prior to commencing any alterations or improvements at the Property with respect to each Strategic Improvement Project, Borrower shall submit to Lender (i) such plans, specifications and other information as Lender may require, in its sole and absolute discretion, with respect to such Strategic Improvement Project (collectively the “Improvement Plans”), and Lender shall have approved in writing all such Improvement Plans, and (ii) a proposed budget setting forth all of the costs and expenses of such Strategic Improvement Project, together with a complete schedule for the commencement and completion of such Strategic improvement Project, and Lender shall have approved in writing the budget  and schedule for such Strategic Improvement Project.  Upon approval by Lender, each such budget is hereinafter sometimes referred to as a “Project Budget,” and each such schedule is hereinafter sometimes referred to as a “Project Schedule.”  Borrower acknowledges that Lender’s approval of the Improvement Plans, Project Budget and Project Schedule for each Strategic Improvement Project shall be in Lender’s sole and absolute discretion.
2.    Extension of Maturity Date.   Section 5(c)(vii) of the Note is  hereby deleted in its entirety and replaced with the following:
(vii) On the Fourth Extended Maturity Date, Borrower shall have delivered its written request to Lender that Lender disburse from the Excess Cash Reserve Account funds in an amount, when added to the aggregate amount of all Previous Excess Cash Paydowns, equal to the greater of (A) the then-current balance of the Excess Cash Reserve Account, or (B) $16,000,000.00, and Lender shall have  applied such funds to reduce the outstanding Principal Amount in such order and priority as Lender shall determine in its sole discretion, provided that, in lieu of the foregoing, if on the Fourth Extended Maturity Date the then current balance of the Excess Cash Reserve Account exceeds $16,000,000.00, Lender may, in its sole and absolute discretion, elect to require that only a portion of the then current balance of the Excess Cash Reserve Funds (in an amount, when added to the aggregate amount of all Previous Excess Cash Paydowns, equal to not less than $16,000,000.00) be disbursed and applied to reduce the outstanding Principal Amount, with the remaining balance of the Excess Cash Reserve Funds in excess of such amount to continue to be held in the Excess Cash Reserve Account during the Fifth Extension Term in accordance with Section 16.7 of the Loan Agreement; and

3

3.    Excess Cash Reserve Account.  Section 16.7 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:
“Section 16.7  Excess Cash Reserve Account.  (a) Provided that no Event of Default has occurred and is then continuing, on each Payment Date in accordance with Section 3.1.5 and 3.1.6 of this Agreement, Lender shall deposit, or cause to be deposited, all Excess Cash Flow for such month into an account maintained by Lender (the “Excess Cash Reserve Account”).  All amounts deposited into and held in the Excess Cash Reserve Account pursuant to this Section 16.7 shall hereinafter be referred to as the “Excess Cash Reserve Funds”.  Funds held in the Excess Cash Reserve Account shall be held by Lender as additional collateral to secure the payment of the Indebtedness and, except as set forth in paragraph (b) of this Section 16.7, Borrower shall have no right to receive disbursements of or otherwise make use of any such Excess Cash Reserve Funds.  In addition to the disbursements described in paragraph (b) of this Section 16.7, Lender may, but shall have no obligation to,  disburse funds from the Excess Cash Reserve Account from time to time, in Lender’s sole discretion, to (i) prepay the Principal Amount of the Loan or (ii) pay any costs and expenses related to the Property or the Loan, all as may be determined in Lender’s sole discretion.  If Borrower exercises the Fifth Extension Option, then upon Borrower’s written request and provided that no Event of Default shall have occurred and is then continuing, Lender shall disburse and otherwise apply the Excess Cash Reserve Funds in accordance with Section 5(c) of the Note.
(b)    Provided that no Event of Default has occurred and is then continuing, Lender shall disburse Excess Cash Reserve Funds for payment of the costs and expenses of the Strategic Improvement Projects, in an aggregate amount up to but not exceeding $4,300,000.00 for all such Strategic Improvement Projects, upon satisfaction by Borrower of each of the following conditions: (i) Borrower shall submit a request for payment to Lender at least ten (10) days prior to the date on which Borrower requests such payment be made and specifies the Strategic Improvement Project costs and expenses to be paid; (ii) Lender shall have received a certificate from Borrower (A) stating that the items to be funded by the requested disbursement are Strategic Improvement Project costs, (B) stating that all Strategic Improvement Projects to be funded by the requested disbursement have been completed in a good and workmanlike manner and in accordance with the Improvement Plans, the Project Budget, the Project Schedule and all applicable Legal Requirements, such certificate to be accompanied by a copy of any license, permit or other approval required by any Governmental Authority in connection with the Strategic Improvement Project, (C) identifying each Person that supplied materials or labor in connection with the Strategic Improvement Project to be funded by the requested disbursement and certifying that each such Person has been paid in full or will be paid in full upon such disbursement, such certificate to be accompanied by lien waivers, invoices and/or other evidence of payment satisfactory to Lender; (iii) at Lender’s option, Lender may obtain, at Borrower’s expense, a title search for the Property indicating that the Property is free from all liens, claims and other 

4

encumbrances other than Permitted Encumbrances; and (iv) Lender shall have received such other evidence as Lender shall reasonably request that the Strategic Improvement Project to be funded by the requested disbursement has been completed and is paid for or will be paid upon such disbursement to Borrower.  In addition, if, pursuant to Section 5(c)(vii) of the Note, there is a remaining balance in the Excess Cash Reserve Account following the Fourth Extended Maturity Date (the “Remaining Balance”), provided that no Event of Default has occurred and is continuing, Borrower may request that Lender disburse, and Lender, in its sole and absolute discretion, may elect to disburse, such Remaining Balance from time to time to finance the costs of Additional Improvements in excess of the $4,300,000 subject to the terms and conditions (including all disbursement conditions) set forth in this Section 16.7(b).  Lender shall not be required to disburse Excess Cash Reserve Funds, including amounts which constitute the Remaining Balance, more frequently than once each calendar month.
(c)    Borrower Parties acknowledge and agree that, notwithstanding any disbursement of Excess Cash Reserve Funds for Strategic Improvement Projects pursuant to paragraph (b) of this Section 16.7, all of the conditions for exercise of the Fifth Extension Option set forth in Section 5(c)(vi) and (vii) of the Note (as amended hereby) shall remain in full force and effect.” 
4.    Recitals; Status and Effect of Loan Documents.  Each Borrower Party acknowledges, confirms, and agrees as to itself only and to the extent applicable to such Borrower Party, that the matters as to Borrower, Operating Lessee and Guarantor stated in the Recitals set forth above are true and accurate in all respects, are a material part of this Agreement, are hereby incorporated by reference, and may be relied upon for all purposes by the parties and that as of the date hereof:
(a)    The Loan Documents have been duly authorized, executed, and delivered to Lender, remain in full force and effect as originally written or as modified herein or as previously modified by mutual written agreement of the parties, and are valid, binding and enforceable against each Borrower Party, to the extent applicable to such Borrower Party, in accordance with their respective terms, subject only to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, and subject as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).  
(b)    All liens and security interests created in favor of Lender under the Loan Documents have been validly created and duly perfected as encumbrances upon all property and collateral of Borrower in first or other priority expressly represented by the Borrower or other Person in the Loan Documents.  
(c)    All indebtedness created under the Loan Documents is, as of the date hereof, validly and unconditionally owing in full to Lender, in accordance with the terms thereof, as modified hereby, without any defense or offset whatsoever, and Borrower Parties have no defenses, claims, counterclaims, or other rights that could be asserted to impair, delay, or adversely affect Lender’s 

5

receipt of full payment and performance of all obligations owed to Lender by Borrower Parties with respect to the Loan.  
5.    Warranties and Representations.  Borrower Parties warrant and represent to Lender that:
(a)    Each Borrower Party is duly organized, validly existing, and in good standing under the laws of its state of organization and is duly qualified as a foreign entity and is currently in good standing in each state in which such qualification is required for the conduct of its business as it is currently being conducted (including, as applicable, the state where the Property is located).  
(b)    Each Borrower Party has full authority and due capacity to execute, deliver, and perform this Agreement and all documents, instruments and agreements executed in connection herewith to which it is a party.  Such execution, delivery, and performance has been duly authorized as required under such Borrower Party’s organizational documents (if any) or under applicable law, and the individuals and entities executing this Agreement on such Borrower Party’s behalf have been duly authorized and empowered to bind such Borrower Party by such execution.  
(c)    This Agreement has been duly executed and delivered to Lender by each Borrower Party and is valid, binding, and enforceable against each of them in accordance with its terms, subject only to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, and subject as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).  
(d)    Neither the execution and delivery of this Agreement nor the performance of its terms and compliance with its conditions will conflict with or result in a breach of any of the terms, conditions or provisions of or constitute a violation or default under any organizational document of such Borrower Party or any contract, agreement, or to the knowledge of each Borrower Party, applicable law, regulation, judgment, writ, order or decree to which such Borrower Party or the Property is subject.  
(e)    All documents and information furnished by any Borrower Party to Lender with respect to the Loan in connection with this Agreement are complete and accurate in all material respects, and none contains any misrepresentation or misstatement of a material fact or omits to state a material fact.  
(f)    To the Best of Borrower’s Knowledge, no Event of Default has occurred and is continuing under any Loan Document.  
6.    Ratification of Guarantor Obligations.  Guarantor hereby (i) ratifies the Guaranties and confirms that the Guaranties and all waivers, covenants and agreements therein remain in full force and effect for the benefit of Lender, (ii) reaffirms its continuing liability for payment and/or performance of all obligations owed to Lender under the Guaranties, without any defense or offset whatsoever, to the same extent as if the Guarantor had executed and delivered each Guaranty to Lender again on the date of this Agreement, and (iii) confirms that the Guaranties have not been modified or amended and that Guarantor’s liabilities under the Guaranties have not been limited, 

6

impaired or affected in any manner by this Agreement or any existing or previous event, fact or circumstance.  Guarantor further acknowledges and agrees that Lender has and shall continue to have the right, but shall not be obligated, to further modify any or all of the terms of the Loan, the Restructuring Agreement or the Loan Documents, extend the maturity of the Loan, obtain or release collateral or security for the Loan, pursue or forbear in the pursuit of remedies, and take any or all other actions Lender is authorized to take under the respective Guaranties, this Agreement or any other Loan Document without giving notice to, obtaining any consent, approval or agreement from, or obtaining execution of any document by Guarantor.  
7.    Modifications to Restructuring Agreement and Loan Documents.  The parties agree that the Restructuring Agreement and Loan Documents are hereby modified in all respects necessary to give effect to the provisions of this Agreement, and only in such respects, and the provisions of this Agreement shall control over any contrary or inconsistent provisions of the Restructuring Agreement or any other Loan Document.  In all other respects the Restructuring Agreement and all Loan Documents shall remain in full force and effect and unmodified.  All of Lender’s liens, security interests, priorities, rights, and remedies under the Loan Documents shall continue in full force and effect as security for the Loan following the modification thereof by this Agreement.  All references in any Loan Document to any other Loan Document shall hereafter be construed to refer to such other Loan Document as modified by this Agreement.  For all purposes of all Loan Documents, this Agreement shall be included within the definition of the term “Loan Documents.”
8.    Releases and Indemnifications.  The Borrower Parties and their respective past, present and future partners, shareholders, members, managers, officers, directors, employees, agents, attorneys, representatives, successors, assigns, subsidiaries, affiliates, parents, direct and indirect equity holders, owners, and predecessors in interest and all persons or entities claiming by, through, or under any of them (and their respective successors and assigns the “Borrower Releasing Parties”) hereby:
(a)    acknowledge, agree and affirm that, as of the date hereof, none of them possesses any claims, defenses, offsets, rights of recoupment or counterclaims of any kind or nature against or with respect to the enforcement or administration of the Loan or the Loan Documents (including any aspect of the origination, administration or enforcement thereof) or any knowledge of any facts or circumstances that might give rise to or be the basis of any such claims, defenses, offsets, rights of recoupment or counterclaims;  
(b)    remise, release, acquit and forever discharge (i) each Lender, and its predecessors in interest, affiliates, subsidiaries, participants or assigns, and all of their respective past, present, and future shareholders, members, directors, managers, officers, employees, attorneys, advisers, consultants, servicers, representatives or agents  and (ii) Original Lender and its affiliates, subsidiaries, participants or assigns, and all of their respective past, present, and future shareholders, members, directors, managers, officers, employees, attorneys, advisers, consultants, servicers, representatives or agents (collectively, the “Lender Released Parties”) from any and all manner of debts, accounts, bonds, warranties, representations, covenants, promises, contracts, controversies, agreements, liabilities, obligations, expenses, damages, judgments, executions, actions, claims, 

7

demands and causes of action of any nature whatsoever, whether at law or in equity, whether known or unknown, that any of Borrower Releasing Parties now  have or may hereafter have by reason of any act, omission, matter, cause or thing which has occurred or happened during the period from the beginning of the world to and including the date this Agreement is executed and delivered by all parties hereto, solely with respect to matters arising out of or relating to the Loan and the Loan Documents, including the origination, funding, servicing or administration thereof and any other agreement or transaction between any of the Borrower Releasing Parties and any of the Lender Released Parties concerning the Loan, except as such may have been caused by the gross negligence or willful misconduct of one or more Lender Released Parties (all of the foregoing released claims are sometimes referred to as the “Borrower Party Released Claims”), provided, however, that nothing herein shall be deemed to release Lender from any of its obligations under this Agreement;  
(c)    acknowledge that, subsequent to the execution of this Agreement, they may discover Borrower Party Released Claims that are now unknown to or unanticipated by them, including unknown or unanticipated Borrower Party Released Claims that arise from, are based upon, or relate to one or more of the statements (in the recitals or other provisions of this Agreement) concerning the subject matter of this Agreement that the parties have agreed upon or acknowledged as accurate herein, the existence of which Borrower Party Released Claims, if known to a Borrower Party at the execution of this Agreement, may have materially affected its decision to execute this Agreement.  Borrower Parties acknowledge that they are assuming the risk that such unknown or unanticipated Borrower Party Released Claims exist, and agree that the releases granted by Borrower Parties and the agreements concerning indemnification of the Lender Released Parties made by Borrower Parties in this Agreement shall apply to and are effective with respect to all such Borrower Party Released Claims.  Borrower Parties expressly waive the benefits of any state, federal, or other law providing that a general release does not extend to claims that a releasing party does not know or suspect to exist in its favor when the releasing party executes the release, and that if known by the releasing party must or may have materially affected the releasing party’s settlement with the released party;  and
(d)    agree, jointly and severally, to indemnify and save harmless the Lender Released Parties from and against all liability, loss, cost, expense, or damage, including reasonable attorneys’ and other professional fees and litigation expenses, suffered or incurred by any Lender Released Party with respect to the assertion by any Borrower Releasing Parties after the date of this Agreement against a Lender Released Party of any Borrower Party Released Claim.  
(e)    acknowledge that Lender is specifically relying upon the Borrower Parties’ acknowledgments and agreements in this Section 8 in executing this Agreement, and that in the absence of such agreements Lender would be unwilling to agree to the advances provided for in this Agreement; and  
(f)    agree that all releases and discharges by any of the Borrower Releasing Parties in this Agreement shall have the same effect as if each released or discharged matter had been the subject of a legal proceeding, adjudicated to final judgment from which no appeal could be taken and therein dismissed with prejudice.

8

9.    Waiver of Automatic Stay; Supplemental Stay.  The Borrower Parties unconditionally and irrevocably acknowledge and agree that:
(a)    if any bankruptcy proceeding is commenced by or against any Borrower Party, Borrower is a “single asset real estate entity” and “cause” for termination of the automatic stay exists and Lender shall be entitled, subject to the approval of a court of competent jurisdiction, to the immediate entry of an order granting Lender relief from the automatic stay imposed by Section 362 of the United States Bankruptcy Code (the “Bankruptcy Code”).  Borrower Parties consent to the entry of such order and Borrower Parties agree that in no event will they object to or oppose Lender’s motion seeking relief from the automatic stay.  Borrower Parties further agree that upon Lender’s request from time to time they shall execute and file all documents and take all other actions Lender may deem necessary or appropriate to enable Lender to obtain stay relief and exercise all of its rights and remedies for collection and enforcement of the Loan.  
(b)    Borrower Parties shall not seek or request any other party to seek a supplemental stay or any other relief, whether injunctive or otherwise, under Section 105 or any other provision of the Bankruptcy Code, to stay, interdict, condition, reduce or inhibit the ability of Lender to enforce any rights it has, under the Loan Documents or otherwise, against any Borrower Party or against the Property.  
(c)    Lender, as a material inducement to enter into this Agreement, has specifically bargained for the concessions set forth in this Section 9 and that this Agreement may be deemed conclusive evidence as to such negotiated ongoing intention of the Parties and that it is intended to be the primary element in determining if cause exists for granting such concessions.  
10.    Additional Documents; Further Assurances.  Each party to this Agreement shall at any time, and from time to time, upon the written request of any other party to this Agreement, sign and deliver such further documents and do such further acts and things as the other party may reasonably request to effect the purposes of this Agreement.  
11.    Time is of the Essence.  Time is of the essence with respect to all agreements and obligations of the parties to this Agreement contained herein.  
12.    Entire Agreement; Written Modifications Only.  This Agreement, the exhibits attached hereto, and the Loan Documents constitute the sole and entire agreement between the parties with respect to the subject matter hereof, and there are no other covenants, promises, agreements or understandings regarding the same.  This Agreement, including the provisions of this Section 12, may not be modified except by written amendment to this Agreement signed by the parties affected by the same.  
13.    Severability.  If any one or more of the provisions of this Agreement are deemed unenforceable, the remainder of this Agreement shall, at the sole option of Lender, remain enforceable in accordance with its original terms to the fullest extent possible.  
14.    Successors and Assigns.  This Agreement shall be binding on and shall inure to the benefit of each party’s permitted successors and assigns.  

9

15.    Counterparts.  This Agreement may be executed in more than one counterpart, each of which shall be deemed an original and all of which together shall constitute one and the same document, binding upon all the parties hereto notwithstanding that all such parties are not signatories to the same counterpart.  This Agreement shall become effective when all parties hereto have executed a counterpart hereof.  A signature of a party by facsimile or other electronic transmission shall be deemed to constitute an original and fully effective signature of such party.  
16.    Governing Law; Jurisdiction. The provisions of Section 19.3 of the Loan Agreement are incorporated herein by reference. 
17.    Costs and Expenses.  Without limiting any other provision of this Agreement or any other Loan Document relating to payment of expenses, Borrower shall, pay or reimburse Lender on the date of this Agreement and, thereafter, promptly after written demand, all fees, costs and expenses actually incurred by Lender and its loan servicers, attorneys, Rating Agencies, advisors and consultants in connection with this Amendment, including, without limitation, recording fees, title insurance premiums and other title charges (collectively the “Costs and Expenses”).

[Remainder of Page Intentionally Left Blank]
 

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Restructuring Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.
		
	BORROWER:
	FMT SCOTTSDALE OWNER, LLC, a Delaware limited liability company

By: /s/    Robert T. McAllister
Name:    Robert T. McAllister
Title:    Senior Vice President, Tax 

		
	GUARANTOR:
	WALTON STREET REAL ESTATE FUND VI, L.P., a Delaware limited partnership 

    
		
	By:  
	Walton Street Managers VI, L.P., its general   partner 

		
	By:
	WSC Managers VI, Inc., its general partner

    

By: /s/ Justin Leonard
Name:  Justin Leonard
Title:    Vice President

WALTON STREET REAL ESTATE FUND VI-Q, L.P., a Delaware limited partnership 
    
		
	By:  
	Walton Street Managers VI, L.P., its general   partner 

		
	By:
	WSC Managers VI, Inc., its general partner

    

By: /s/ Justin Leonard
Name:  Justin Leonard
Title:    Vice President

[SIGNATURES CONTINUE ON FOLLOWING PAGES]

WALTON STREET REAL ESTATE FUND VI-E, L.P., a Delaware limited partnership 
    
		
	By:  
	Walton Street Managers VI, L.P., its general   partner 

		
	By:
	WSC Managers VI, Inc., its general partner

    

By: /s/ Justin Leonard
Name:  Justin Leonard
Title:    Vice President

WALTON STREET REAL ESTATE INVESTORS VI, L.P., a Delaware limited partnership 
    
		
	By:  
	Walton Street Managers VI, L.P., its general   partner 

		
	By:
	WSC Managers VI, Inc., its general partner

    
By: /s/ Justin Leonard
Name:  Justin Leonard
Title:    Vice President

WALTON STREET REAL ESTATE PARTNERS VI, L.P., a Delaware limited partnership 
    
		
	By:  
	Walton Street Managers VI, L.P., its general   partner 

		
	By:
	WSC Managers VI, Inc., its general partner

    
By: /s/ Justin Leonard
Name:  Justin Leonard
Title:    Vice President

[SIGNATURES CONTINUE ON FOLLOWING PAGES]

WALTON STREET REAL ESTATE PARTNERS VI-NGE, L.P., a Delaware limited partnership 
    
		
	By:  
	Walton Street Managers VI, L.P., its general   partner 

		
	By:
	WSC Managers VI, Inc., its general partner

    

By: /s/ Justin Leonard
Name:  Justin Leonard
Title:    Vice President

WSC CAPITAL HOLDINGS VI, L.P., a Delaware limited partnership 
    
		
	By:  
	Walton Street Managers VI, L.P., its general   partner 

		
	By:
	WSC Managers VI, Inc., its general partner

    

By: /s/ Justin Leonard
Name:  Justin Leonard
Title:    Vice President

		
	OPERATING LESSEE:
	WALTON/SHR FPH, LLC, a Delaware limited liability company

By: /s/ Robert T. McAllister
Name:  Robert T. McAllister
Title:    Senior Vice President, Tax 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

		
	LENDER:
	U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, AS SUCCESSOR IN INTEREST TO BANK OF AMERICA, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF THE CITIGROUP COMMERCIAL MORTGAGE TRUST 2007-FL3 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-FL3 

By: KeyCorp Real Estate Capital Markets, Inc. as
 Special Servicer 
By: /s/ C. Meade Hubby   
    
________________________________     
        Name: C. Meade Hubby
        Title:  Vice President, Special Servicing

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