Document:

DC1971.pdf -- Converted by SEC Publisher 4.2, created by BCL Technologies Inc., for SEC Filing

	
EXHIBIT 4.2

     THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

	
MARRIOTT INTERNATIONAL, INC.
	
	
6.375% Series I Notes due June 15, 2017
	
	
 
	
	
No. R-1 
		
 		
 
		
 		
$350,000,000.00 
	
	
CUSIP 571903 AG 8 
		
 		
 
		
 		
 
	

     MARRIOTT INTERNATIONAL, INC., a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises
to pay to Cede & Co., or registered assigns, the principal sum of Three Hundred Fifty Million Dollars on June 15, 2017 and to pay interest thereon from June 25, 2007, semi-annually on June 15 and December 15 in each year, commencing December 15,
2007, at the rate of 6.375% per annum, until the principal hereof is paid or made available for payment. All such payments of principal, interest and premium, if any, shall be paid in immediately available funds. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the May 31 or November 30 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. 

     Payment of the principal of (and premium, if any) and interest on this Security will be made at the office or agency of the Trustee maintained for that purpose in Dallas, Texas, in such coin or
currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register; and provided, further, that notwithstanding the foregoing, the Person in whose name this Security is registered may elect to receive payments of interest on this Security (other than at Maturity) by electronic funds transfer of immediately available funds
to an account maintained by such Person, provided such Person so elects by giving written notice to a Paying Agent designating such account, no later than the May 15 or the November 15 immediately preceding the June 15 or December 15 Interest
Payment Date, as the case may be. Unless such designation is revoked by such Person, any such designation made by such Person with respect to such Securities shall remain in effect with respect to any future payments with respect to such Securities
payable to such Person.

     Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this
place.

     Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose. 

     IN WITNESS WHEREOF, the
Company has caused this instrument to be duly executed under its corporate seal.

	
Dated: June 25, 2007

	
MARRIOTT INTERNATIONAL, INC.

	
By: /s/ Carl T. Berquist

Carl T. Berquist

Executive Vice President

	
Attest:

	
/s/ W. David Mann

Assistant Secretary

     This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

	
THE BANK OF NEW YORK

as Trustee

	
By: /s/ Francine Kincaid

Francine Kincaid

Authorized Officer

	
[Reverse of Security]

     This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of
November 16, 1998 (herein called the “Indenture”, which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York, successor to JPMorgan Chase Bank, N.A. (formerly known as The Chase
Manhattan Bank), as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face
hereof, limited initially in aggregate principal amount to $350,000,000. The Company may subsequently issue additional securities as part of this series of Securities under the
Indenture.

     The Company may, at its option, redeem the Securities in whole or in part at any time at a Redemption Price equal to the greater of (A) 100% of the principal amount of the Securities to be redeemed,
plus accrued interest to the Redemption Date, and (B) as determined by the Independent Investment Banker (as defined below), the sum of the present values of the principal amount of, and remaining scheduled payments of interest on, the Securities to
be redeemed (not including any interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis at the Treasury Rate (as defined below) plus 20 basis points plus accrued interest to, but not including, the
redemption date for the Securities.

     The Redemption Price will be calculated assuming a 360-day year consisting of twelve 30-day months.

     The Company will mail notice of any redemption at least 30 days but not more than 60 days before the Redemption Date to each Holder of the Securities to be redeemed.

     Unless the Company defaults in payment of the Redemption Price, on and after the Redemption Date, interest will cease to accrue on the Securities or portions of the Securities called for
redemption.

     In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.

     “Comparable Treasury Issue” means the United States Treasury security selected by the Independent Investment Banker as having a
maturity comparable to the remaining term of the Securities that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining
term of the Securities.

     “Comparable Treasury Price” means, with respect to any Redemption Date, (1) the average of the Reference Treasury Dealer Quotations
for that Redemption Date, after excluding 

the highest and lowest of the Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than three Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so
received.

     “Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Trustee after consultation with the
Company.

     “Reference Treasury Dealer” means (a) each of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Barclays Capital Inc. and
its successors, unless it ceases to be a primary U.S. government securities dealer in New York City (a “Primary Treasury Dealer”), in which case the Company shall substitute another Primary Treasury Dealer, and (b) any other Primary
Treasury Dealer selected by the Company.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average,
as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by that Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding that Redemption Date.

     “Treasury Rate” means, with respect to any Redemption Date, the rate per year equal to the semiannual equivalent yield to maturity
of the Comparable Treasury Issue, calculated on the third business day preceding the Redemption Date, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for
that Redemption Date.

     If a Change of Control Repurchase Event (as defined below) occurs, unless the Company has exercised its right to redeem the Securities of this series, the Company will make an offer to each Holder of
the Securities of this series to repurchase all or any part (in integral multiples of $1,000) of that Holder’s Securities of this series at a repurchase price in cash equal to 101% of the aggregate principal amount of the Securities of this
series repurchased plus any accrued and unpaid interest on the Securities of this series repurchased to the date of purchase. Within 30 days following any Change of Control Repurchase Event or, at the Company’s option, prior to any Change of
Control (as defined below), but after the public announcement of the Change of Control, the Company will mail a notice to each Holder, with a copy to the Trustee, describing the transaction or transactions that constitute or may constitute the
Change of Control Repurchase Event and offering to repurchase the Securities of this series on the payment date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed. The
notice shall, if mailed prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Repurchase Event occurring on or prior to the payment date specified in the notice. The
Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Securities of
this series as a result of a Change of Control Repurchase Event. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control Repurchase Event provisions herein, the 

Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control Repurchase Event provisions herein by virtue of such conflict.

     On the Change of Control Repurchase Event payment date, the Company will, to the extent lawful:

     1. accept for payment all Securities of this series or portions of Securities of this series properly tendered pursuant to the Company’s offer;

     2. deposit with the Paying Agent an amount equal to the aggregate purchase price in respect of all Securities of this series or portions of Securities of this series properly tendered; and

     3. deliver or cause to be delivered to the Trustee the Securities of this series properly accepted, together with an Officers’ Certificate stating the aggregate principal amount of the Securities
being purchased by the Company.

     The Paying Agent will promptly mail to each Holder of the Securities of this series properly tendered the purchase price for the Securities, and the Trustee will promptly authenticate and mail (or
cause to be transferred by book-entry) to each Holder a new Security equal in principal amount to any unpurchased portion of any Securities surrendered; provided that each new Security will be in a principal amount of $1,000 or an integral
multiple of $1,000.

     The Company will not be required to make an offer to repurchase the Securities of this series upon a Change of Control Repurchase Event if a third party makes such an offer in the manner, at the times
and otherwise in compliance with the requirements for an offer made by the Company and such third party purchases all Securities properly tendered and not withdrawn under its offer.

     “Below Investment Grade Rating Event” means the Securities of this series are rated below Investment Grade (as defined below) by
both Rating Agencies (as defined below) on any date from the date of the public notice of an arrangement that could result in a Change of Control until the end of the 60-day period following public notice of the occurrence of a Change of Control
(which period shall be extended so long as the rating of the Securities of this series is under publicly announced consideration for possible downgrade by either of the Rating Agencies); provided that a Below Investment Grade Rating Event otherwise
arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes of the definition of Change of
Control Repurchase Event herein) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at its request that the reduction was the
result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below
Investment Grade Rating Event).

     “Change of Control” means the consummation of any transaction (including, without limitation, any merger or consolidation) the
result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of more than 50% of the Company’s Voting Stock, measured by voting power rather
than number of shares. Notwithstanding the foregoing, a transaction effected to create a holding company for the Company will not be deemed to involve a change of control if: (1) pursuant to such transaction the Company becomes a direct or indirect
wholly owned subsidiary of such holding company and (2)(A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s Voting Stock
immediately prior to that transaction or (B) immediately following that transaction no person (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting
Stock of such holding company, measured by voting power rather than number of shares.

     “Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating
Event.

     “Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of
Moody’s); a rating of BBB- or better by S&P (or its equivalent under any successor rating categories of S&P); and the equivalent investment grade credit rating from any replacement rating agency or rating agencies selected by the
Company.

“Moody’s” means Moody’s Investors Service Inc.

     “Rating Agency” means (1) each of Moody’s and S&P; and (2) if either of Moody’s or S&P ceases to rate the
Securities of this series or fails to make a rating of the Securities of this series publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Rule
15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Company (as certified by a resolution of the Company’s board of directors) as a replacement agency for Moody’s or S&P, or both, as the case may be.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

     “Voting Stock” of any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date
means the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.

     The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security or certain restrictive covenants and Events of Default with respect to this Security, in each
case upon compliance with certain conditions set forth in the Indenture.

     If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with
the effect provided in the Indenture.

     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of 50% in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

     As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of
a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in
principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the
Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days
after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after
the respective due dates expressed herein.

     No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the
principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Trustee in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or transferees.

     The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture
and subject to certain limitations therein set forth, Securities of this series are 

exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

     Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

     All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

The following abbreviations, when used in the inscription on the face of the within Security, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM --TEN ENT --JT TEN --

	
as tenants in common 
		
 		
UNIF GIFT MIN Act –
______
Custodian
______ 
	
	
as tenants by the entireties 
		
 		
                                                  (Cust) 
		
 		
(Minor) 
	
	
as joint tenants with right of 
		
 		
                                                  under Uniform Gifts
to 
	
	
survivorship and not as 
		
 		
                                                  Minors
Act 
		
 		
 
	
	
		
		
		
		

	
	
tenants in common 
		
 		
 
		
 		
(State) 
	

Additional abbreviations may also be used though not in the above list 
_____________________________

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

	
PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE

______________________________________________________________________________________________________
 (Name and Address of Assignee, including zip code, must be printed or typewritten)

the within Security, and all rights thereunder, hereby irrevocably constituting and appointing

_______________________________________________________________________________________________
 Attorney to transfer said Security on the books of the Company, with full power of substitution in the premises.

	
Dated:

     NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Security in every particular, without alteration or enlargement of any change
whatever.Forbearance Agreement dated June 12, 2007.

 Exhibit 10.1 
 T. SCOTT AVILA, TRUSTEE 
 Class 4 Creditor Trust 
 c/o Corporate Revitalization Partners, LLC 
 11400 West Olympic Blvd. Suite 269 
 Los Angeles, CA 90064 
 May 31, 2007 
 Steakhouse Partners, Inc. 
 Paragon Steakhouse Restaurants, Inc. 
 Paragon of Michigan, Inc. 
 10200 Willow Creek Road 
 San Diego, CA 92131 
 Attn: A. Stone Douglass, President 
  

	 	Re:	Forbearance Agreement 

 Dear Mr. Douglass: 
 Reference is hereby made to that certain Amended Class 4 Security Agreement, dated as of May 31, 2006, and as the same may be further amended,
restated, supplemented, or otherwise modified from time to time (the “Security Agreement”), by and among Steakhouse Partners, Inc., a Delaware corporation, Paragon Steakhouse Restaurants, Inc., a Delaware corporation, Paragon of Michigan,
Inc., a Wisconsin corporation (collectively, the “Debtors”) and T. Scott Avila (“Secured Party”), solely in his capacity as trustee of the Class 4 Creditor Trust established pursuant to the First Amended Joint Plan of
Reorganization of Steakhouse Partners, Inc., Paragon Steakhouse Restaurants, Inc., and Paragon of Michigan, Inc., administratively consolidated under Case No. RS 02-12648-MG in the United States Bankruptcy Court for the Central District of
California, Riverside Division and the Creditor Trust Agreement executed by Secured Party and the Debtors in connection therewith. Capitalized terms not defined herein have the meanings ascribed to such terms hi the Security Agreement. 

1. The Debtors and Secured Party agree that certain Defaults and/or Events of Default have occurred and are continuing under the Security Agreement
without cure and 

 
certain Defaults and/or Events of Default are reasonably expected to occur prior to the Forbearance Termination Date without cure (as defined below), which
Defaults and Events of Default are set forth on Schedule A hereto (the “Forbearance Events of Default”). 
 2.
Pursuant to Section 8.a. of the Security Agreement, Secured Party is entitled to declare all obligations (as set forth in the Security Agreement) immediately due and payable to Secured Party, without notice to or demand on Debtors.
Secured Party is entitled to exercise these rights and remedies under the Security Agreement, including, without limitation, rights and remedies of a secured party under the California Uniform Commercial Code and other applicable law in addition to
rights and remedies set forth in the Security Agreement. 
 3. So long as this Forbearance Agreement is executed by the Debtor on or before
June 15, 2007, and subject to the conditions and covenants set forth in this Forbearance Agreement, Secured Party hereby agrees that, prior to and on the “Forbearance Termination Date” (as defined below), Secured Party
will forbear from exercising rights and remedies arising by reason of the Forbearance Events of Default, notwithstanding the Forbearance Events of Default (including, without limitation, as a result of the failure of any representation or warranty
to be true and correct in all material respects by virtue of any one or more of the Forbearance Events of Default) or as a result of the failure of any representation or warranty contained therein so long as the Debtors covenant to perform
all of the following: 
 a. tender a forbearance fee of $25,000 payable to Secured Party (the “Forbearance
Fee”). The Forbearance Fee shall be added to all amounts due and owing to Secured Party under paragraph 3.b., below. The Forbearance Fee shall not be credited towards any principal, interest or other amounts due and owing under the Amended
Class 4 Note or Security Agreement. 

 b. Debtors shall either tender payments, in good funds, in the amounts and by the dates
set forth in this paragraph in items i) through v), below, or, the Debtors shall have executed agreements to sell the Debtors’ assets that total the cumulative lump sum of the following: a) all amounts due and owing to iDine Restaurant
Group f/k/a Transmedia Restaurant Company, Inc. (“iDine”), if any; b) all amounts due and owing to Secured Party under the “Alternative Settlement Payment” provided for in Section II.C.3 of the Settlement Agreement dated
May 31, 2006 and approved by the Bankruptcy Court by order entered August 10, 2006 (the “Settlement Agreement”); c) all amounts due and owing under the Amended Class 4 Note (the principal amounts due and owing under the
Settlement Agreement, the Amended Class 4 Note, and Security Agreement collectively referred to as the “Secured Party’s Principal Debt”); and d) any and all of the Secured Party’s reasonable fees and expenses as provided for in
the Settlement Agreement and as amended by the Parties; e) the Forbearance Fee; f) ten percent interest on items b), c) and d) running from September 21, 2006; and ten percent interest on item e) running from the execution date of this
Agreement (the “Total Debt”) until paid in full. Regardless of the exact amount of the Total Debt, under no circumstances shall the Debtors tender, in good funds, less than i) $2 Million by June 30, 2007; ii) $3 Million by
August 31, 2007; iii) $4 Million by September 30, 2007; iv) $5 Million by October 31, 2007, and v) the balance of the Total Debt no later than November 15, 2007. Alternatively, the Debtors shall have executed agreements in these
amounts by the corresponding dates. 

 c. All other terms and obligations set forth in the Amended Class 4 Note and the Security
Agreement are reinstated and incorporated herein, including, but not limited to, reporting requirements and access to the Debtors’ books and records. 
 d. In furtherance of this Forbearance Agreement, and specifically in furtherance of this paragraph 3, the Debtors shall make all payments of the Total Debt to the Creditor Trustee, and shall be delivered to the
Creditor Trustee c/o Corporate Revitalization Partners, LLC, 11400 West Olympic Blvd., Suite 269, Los Angeles, CA 90064 or via wire transfer to the Trust’s account at Union Bank of California, wire instructions to follow. The Creditor Trustee
shall reserve the first $900,000 for the benefit of iDine (the “iDine Reserve”). The Creditor Trustee agrees not to distribute any funds from the iDine Reserve without the written consent from the Debtors and iDine, or court order. To the
extent iDine’s claim is either rendered void or may be satisfied in an amount less than the iDine Reserve, the Creditor Trustee may apply such unused proceeds from the iDine Reserve to the Creditor Trust. Moreover, any and all proceeds paid to
the Creditor Trustee of the Total Debt, including money held by the Creditor Trustee in the iDine Reserve, all are the secured collateral of iDine and the Creditor Trustee as provided for in the Inter-creditor Agreement between iDine and the
Creditor Trustee. In addition, the Debtors shall pay to the Creditor Trustee, within 5 business days of receipt, 100% of any and all funds paid by iDine to the Debtors, if any, except for any sums recovered as reimbursement of legal fees payable to
Latham and Watkins. 

 e. The Forbearance Termination Date shall be the first to occur of the following
dates: (i) November 15, 2007, (ii) the date on which a breach any covenant in this letter agreement shall take place (such breach to be effective upon the occurrence of such breach without regard to any notice by the Secured Party),
or (iii) the date of any Default or Event of Default under the Security Agreement other the Forbearance Events of Default. 
 4. Subject
to the terms of this paragraph 4, Secured Party hereby consents to the sale of all or substantially all of the Restaurants or its assets subject to the Restaurant Disposition (the “Restaurant Disposition Assets”) and agrees that such sale
shall be deemed a “Permitted Disposition” so long as the terms and conditions of such disposition are reasonably acceptable to Secured Party. The Debtors shall provide written notice of any Restaurant Disposition to the Creditor Trustee
including information regarding the escrow company. To the extent the Debtors have discretion regarding the selection of the escrow company, the Debtors shall also obtain the Creditor Trustee’s consent to select the escrow company. Moreover,
the Debtors warrant and represent that they will provide all relevant escrow documentation, including the proposed closing statement and closing statement, to the Creditor Trustee, including written evidence that the Debtors have provided a demand
in escrow on behalf of the Creditor Trustee for 100% of the net proceeds of each Restaurant Disposition. The purchase price for the sale of all or substantially all of the Restaurant Disposition Assets shall be deemed acceptable to Secured Party if
the Net Cash Proceeds of such sale(s) are equal to the sum of the Total Debt. Secured Party hereby agrees that, if the Restaurant Disposition Assets are sold in a Permitted Disposition, then, concurrently with 

 
Restaurant Disposition Assets sold in such Permitted Disposition shall automatically be released. Secured Party will, promptly upon request (i) amend,
or cause to be amended, each financing statement naming Secured Party as secured party so as to delete the Restaurant Disposition Assets sold in such Permitted Disposition from the collateral indicated on such financing statement, (ii) record,
or cause to be recorded, a release or satisfaction, in form and substance reasonably satisfactory to Debtors, of each mortgage, deed of trust, or other Lien of Secured Party or any of them encumbering all or any part of the Restaurant Disposition
Assets consisting of real property sold in such Permitted Disposition, and (iii) make and do such other things, and execute and deliver such other writings, as Debtor may from time to time reasonably requests so as to release or evidence the
release of any Liens of Secured Party or any of them upon the Restaurant Disposition Assets sold in such Permitted Disposition. Secured Party shall not be responsible to obtain releases from iDine. Notwithstanding anything to the contrary
contained in the Security Agreement, Secured Party hereby agrees that the Restaurant Disposition proceeds from such sale shall be applied as follows: first, an amount necessary to satisfy iDine’s debt under the Agreement dated June, 2002
between iDine and the Debtors and the Subordination and Intercreditor Agreement dated January 2, 2004 between iDine and Secured Party, if any; second, amount equal to any and all of the Secured Party’s reasonable fees and
expenses as provided for in the Settlement Agreement, the Amended Class 4 Note and the Security Agreement, as amended by the Parties. Said fees and expenses include the fees and cost of the Secured Party and his general counsel, and any and all
additional fees of the Creditor Trustee and his professionals incurred after September 21, 2006, third any and all applicable interest, fourth, to satisfy the Forbearance Agreement, fifth, to satisfy the Secured
Party’s Principle Debt until paid in full. The Secured Creditor will be deemed fully satisfied after payment of the Total Debt. 

 5. If the Restaurant Disposition Assets are not sold within a Permitted Disposition, the Debtors shall
not accept any sale price without first obtaining, in writing, prior approval by the Secured Party. Secured Party’s approval shall not be unreasonably withheld. 
 6. The Debtors hereby acknowledge that the Forbearance Events of Default have occurred and are continuing under the Security Agreement or are reasonably expected to occur prior to the Forbearance Termination Date. In
no event shall this letter agreement, any other action undertaken pursuant to the Security Agreement (including, without limitation, the acceptance of any payments), or any inaction by the Secured Party constitute (a) a waiver, estoppel or
agreement to forbear (except as specifically set forth herein) with respect to Secured Creditor’s rights, defenses, remedies, or privileges at law or in equity under the Security Agreement, the other documents or otherwise; or (b) a waiver
of any Default or Event of Default (including, without limitation, the Forbearance Events of Default). No delay by the Secured Party in exercising any of his respective rights or remedies shall operate as a waiver of any rights or remedies that the
Secured Party may have. Any and all rights and remedies available to the Secured Party shall be cumulative and may be exercised separately, successively or concurrently at the sole discretion of the Secured Party. Without in any way limiting the
foregoing, except as specifically set forth herein, Secured Party expressly reserves the right to exercise any and all rights and remedies in respect of the Security Agreement or under applicable law, including without limitation foreclosure of the
liens and security interests arising under the Security Agreement, and any and all matters related thereto at any time without further notice to any person (except for any such notices required under the terms of the Security Agreement or by
applicable law). 

 7. The Debtors hereby acknowledge and agree that: (a) they have no claim or cause of action against
the Secured Party (or any of the directors, officers, employees, agents, Affiliates, or attorneys of the foregoing) and (b) Secured Party has heretofore properly performed and satisfied in a timely manner all of his obligations (other than the
express obligations of Secured Party under the Security Agreement and the other Documents) to the Debtors. Secured Party wishes (and Debtors agree) to eliminate any possibility that any past conditions, acts, omissions, events or circumstances would
impair or otherwise adversely affect any of their rights, interests, security and/or remedies. For and in consideration of the agreements contained in this letter agreement and other good and valuable consideration, the Debtors (the
“Releasors”) unconditionally and irrevocably release, waive and forever discharge Secured Party, together with their respective successors, assigns, subsidiaries, Affiliates, agents and attorneys (collectively, the “Released
Parties”), from: (x) any and all liabilities, obligations, duties, promises or indebtedness of any kind of the Released Parties to the Releasors or any of them (other than the express obligations of Secured Party under the Security
Agreement and the other Documents) and (y) all claims, offsets, causes of action, suits or defenses of any kind whatsoever (if any), which the Releasors or any of them might otherwise have against the Released Parties or any of them, in either
case (x) or (y) on account of any condition, act, omission, event, contract, liability, obligation, indebtedness, claim, cause of action, defense, circumstance or matter of any kind which existed, arose or occurred at any time from the
beginning of the world to the date hereof, in each case, in connection with the Security Agreement and the other Documents. 
 This letter
and the agreements contained herein shall be effective only upon receipt by the Secured Party and the Debtors’ acknowledgment of the terms and conditions hereof in the space provided below. 

			
	Very truly yours,
		
	By:	 	/s/ T. Scott Avila
	Name:	 	T. SCOTT AVILA
	Title:	 	Creditor Trustee of the Class 4 Trust

 The foregoing terms and conditions are hereby accepted and agreed to as of June, 12, 2007. 
  

			
	STEAKHOUSE PARTNERS, INC.
	a Delaware corporation
		
	By	 	/s/ A. Stone Douglass
		 	A. STONE DOUGLASS
	Its	 	Chairman and Chief Executive Officer
	
	 PARAGON STEAKHOUSE RESTAURANTS, INC.,
 a Delaware corporation

		
	By:	 	/s/ Susan Schulze-Claasen
		 	SUSAN SCHULZE-CLAASEN
	Its:	 	President and General Counsel
	
	PARAGON OF MICHIGAN, INC.,
	a Wisconsin corporation
		
	By:	 	/s/ Susan Schulze-Claasen
		 	SUSAN SCHULZE-CLAASEN
	Its:	 	President and General Counsel

 SCHEDULE A 
 Forbearance Events of Default 
 1. Defaults or Events of Default arising or that may arise under
Section II.C.l. and II.C.2 of the Settlement Agreement by virtue of the failure to tender a lump sum payment of $4,126,159 within 20 days of the entry of an order approving the Settlement Agreement (which was entered on August 10, 2006)
and was not timely cured. 
 2. Defaults or Events of Default arising or that may arise under Section II.C.3 of the Settlement
Agreement by virtue of the failure to tender $5,120,419.03 (the “Adjusted Settlement Payment”) pursuant to Schedule “1” attached hereto and incorporated herein. 
 3. Defaults or Events of Default arising or that may arise under Section II.C.3 of the Settlement Agreement and Schedule “1” (attached
hereto) for the Debtors’ failure to tender the $1 million Deposit, plus all accrued interest, to the Creditor Trustee, plus an additional $100,000 to the Creditor Trustee by September 23, 2006, pursuant to the Settlement Agreement,
Amended Class 4 Note, and Amended Class 4 Security Agreement. 
 4. Defaults or Events of Default arising or that may arise under Section
II.C.3 of the Settlement Agreement by virtue of the failure to pay any and all of the Creditor Trustee’s fees and expenses as provided for in Section II.C.3 of the Settlement Agreement and as amended by the Parties. 
 5. Defaults or Events of Default arising or that may arise under the Amended Class 4 Note by virtue of the failure or anticipated failure to pay
the principal amount of $5,120,419.03 as required under Schedule “1”, attached hereto and incorporated by reference. 
 6. Defaults
or Events of Default arising or that may arise under the Amended Class 4 Note are Schedule “1” (attached hereto) for the Debtors’ failure to tender the $1 

 
million Deposit, plus all accrued interest, to the Creditor, plus an additional $100,000 to the Creditor Trustee by September 23, 2006, pursuant
to the Settlement Agreement, Amended Class 4 Note, and Amended Class 4 Security Agreement. 
 7. Defaults or Events of Default that may arise
under the Security Agreement under Section 7.a.(l) by virtue of the failure to make any payments required to be made to the Secured Party. 
 8. Defaults or Events of Default that may be remedied pursuant to Section 7.a.(1) of the Security Agreement by the payment of money within twenty (20) days after transmission of written notice to cure
such nonpayment. 
 9. Defaults or Events of Default that may arise under the Security Agreement under Section 7.a.(ii) for
breach, violation or nonperformance of any representation, warranty or covenant on the Debtors’ part under the Amended Class 4 Note or Security Agreement.

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