Document:

exv10w3

Exhibit 10.3

INK ACQUISITION LLC

INK ACQUISITION II LLC

c/o Cerberus Real Estate Capital Management, LLC

299 Park Avenue, 23rd Floor

New York, New York 10171

May 16, 2011

Innkeepers USA Trust

340 Royal Poinciana Way, Suite 306

Palm Beach, Florida 33480

Attn:   Marc Beilinson

            Chief Restructuring Officer

Amended and Restated

Binding Commitment Agreement

Regarding the Acquisition and Restructuring

of Certain Subsidiaries of Innkeepers USA Trust

INK
Acquisition LLC (“INK_1”) and INK Acquisition II LLC (“INK II”, and together with INK 1,
individually or collectively, as the context may require, “New
HoldCo”), Cerberus Series Four
Holdings, LLC (“Cerberus”) and Chatham Lodging Trust
(“Chatham”, and together with Cerberus, the
“Plan Sponsors”), are pleased to present this amended and restated letter (the “Amended and
Restated Commitment Letter”) to certain wholly owned direct and indirect subsidiaries of Innkeepers
USA Trust (together with all of its wholly owned direct and indirect
subsidiaries, “Innkeepers” or
the “Company”), that are identified on Exhibit A attached hereto (collectively, the “Fixed/Floating
Debtors”), which sets forth, among other things, the Plan Sponsors’ binding and irrevocable
commitment to provide equity capital (the “Commitment”) for the restructuring of the debt and
equity of the Fixed/Floating Debtors (the
“Transaction”), resulting in New HoldCo directly or
indirectly owning all of the equity interests in the Fixed/Floating Debtors on the terms and
subject to the conditions set forth in the amended and restated term sheet (the “Amended and
Restated Term Sheet”) attached hereto as Exhibit B. This Amended and Restated Commitment Letter,
together with the Amended and Restated Term Sheet, the other Exhibits hereto and the other
documents submitted herewith, constitute our Investment Documents and Bid (each as defined in the
Bidding Procedures
Order;1
the “Bid”). The undersigned hereto are collectively referred to as
“Parties” and each a “Party.”

We believe that the Commitment provides substantial value to the Fixed/Floating Debtors and puts
the Company on the path towards a consensual emergence from chapter 11 on an enterprise basis
pursuant to a confirmed chapter 11 plan. There are no due diligence or financing contingencies of
any kind in connection with the Commitment, other than the availability of the Midland Financing
(as defined in the Bidding Procedures Order).

The Sponsors

The Plan
Sponsors are each uniquely qualified to consummate the Transaction. Established in 1992,
Cerberus Capital Management, L.P. is one of the world’s leading
private investment firms with
approximately $23 billion under management in funds and accounts. Cerberus’ investors include

 

			
	1	 	All capitalized terms used herein and not otherwise defined shall have the meanings set forth in
the Debtors’ Plans of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code, dated May 12,
2011,(the “Fixed/Floating Plan”).

 

 

prominent state and local pension funds, charitable foundations, university endowments and
insurance companies, as well as family savings. Cerberus is headquartered in New York City, with
affiliate and/or advisory offices in the U.S., Europe and Asia. Cerberus’ dedicated team of
investment and operations professionals is active in private equity, distressed investments
(corporate debt, mortgage, NPLs, structured products) lending/loans and real estate. On the lodging
side, Cerberus, through an affiliate, currently owns 5,160 keys including the Sheraton Waikiki
(Waikiki, HI), Moana Surfrider (Waikiki, HI), Royal Hawaiian (Waikiki, HI), Princess Kaiulani
(Waikiki, HI), Sheraton Maui (Maui, HI) and the Palace Hotel (San Francisco, CA). Additionally,
Cerberus is in contract to acquire Silverleaf Resorts, a time-share vacation company.

Chatham is a self-advised real estate investment trust that invests in upscale extended-stay hotels
and premium-branded select-service hotels. Chatham currently owns 13 hotels with an aggregate of
1,650 rooms/suites in nine states and has one additional hotel under contract to purchase in
Pittsburgh, PA. Island Hospitality Management, Inc. and its affiliates (collectively, “IHM”) are
engaged in the management of hotels throughout the United States and is experienced in the various
phases of hotel operations. IHM currently provides comprehensive hotel management services to all
but one of the hotels owned by the Fixed/Floating Debtors. Chatham currently has the capacity to
invest over $300 million in new hotel assets. Additional information about Chatham may be found at
www.chathamlodgingtrust.com.

The specific elements of our Commitment are set forth in this Amended and Restated
Commitment Letter, the Amended and Restated Term Sheet and the other Investment
Documents. This Amended and Restated Commitment Letter is not an offer or a solicitation with
respect to any securities of Innkeepers or a solicitation of acceptances of a chapter 11 plan.

          1. Conditions. The Transaction is subject to the satisfaction of the terms and conditions contained
in the Amended and Restated Term Sheet and the Fixed/Floating Plan.

          2. Confidentiality. The Investment Documents are being delivered to you on the understanding that
neither the Investment Documents, nor any of the terms or substance thereof, shall be disclosed,
directly or indirectly, to any other person except (i) to your officers, directors, employees,
attorneys, accountants and financial, legal and other advisors on a confidential and need-to-know
basis; (ii) as required by applicable law, including the Bankruptcy Code or compulsory legal
process (in which case you agree to inform us promptly thereof); (iii) in connection with any
exercise of remedies under or in connection with a breach of this Amended and Restated Commitment
Letter; (iv) to Midland Loan Services, a division of PNC Bank, National Association, or any
successor thereto, solely in its capacity as special servicer for the C6 and C7 Trusts that own and
hold the Fixed Rate Pool Mortgage Loan Agreement Claims (“Midland”) and its officers, directors,
employees, attorneys, accountants and financial, legal and other advisors on a confidential and
need-to-know basis, and Lehman ALI, Inc. (“Lehman”), or (v) as otherwise agreed by the Parties
hereto. Notwithstanding the foregoing, the Investment Documents may be (a) disclosed to other
parties in interest in the Chapter 11 Cases in connection with the Fixed/Floating Auction (as
defined in the Bidding Procedures Order), and (b) filed with the Bankruptcy Court in connection
with approval of the Disclosure Statement and the Fixed/Floating Plan as a result of New HoldCo
being declared the Successful Bidder at the Fixed/Floating Auction.

          3. Due Diligence/Financing. We have completed our diligence review, and intend to utilize the
Midland Financing. The form of the Binding Commitment Regarding the Acquisition and Restructuring
of Certain Subsidiaries of Innkeepers USA Trust addressed to Midland, that we are prepared to
execute (the “New HoldCo/Midland Commitment”) is attached

- 2 -

 

hereto as Exhibit C. As a result, the Commitment is not subject to diligence contingencies or
financing contingencies of any kind, other than the availability of the Midland Financing.

          4. Commitment; Financial Capability. The Plan Sponsors hereby commit to provide the entire amount
of the Commitment upon the Effective Date of the Fixed/Floating Plan, upon the terms and subject to
the conditions set forth in this Amended and Restated Commitment Letter, the Amended and Restated
Term Sheet and the Fixed/Floating Plan. 100% of the equity of New HoldCo is owned by Cerberus
(through CRE-Ink REIT Member, LLC and CRE-INK Member II, Inc., the “Cerberus Members”) and Chatham
(through Chatham Lodging, LP and Chatham TRS Holding, Inc., the “Chatham Members”), with the
Cerberus Members initially owning 90.8% of such equity and the Chatham Members owning the remaining
9.2% of such equity. The current limited liability company agreement of Ink I, executed by the
applicable Cerberus Member and the applicable Chatham Member, as amended, is attached hereto as
Exhibit D. The aggregate commitment of Cerberus is $363,527,644.35, and the aggregate commitment of
Chatham is $37,000,000.00. As discussed above, Cerberus has approximately $23 billion under
management and Chatham currently has the capacity to invest over $300 million in new hotel assets,
which we believe is sufficient evidence of our financial capability to close the transaction.

          5. Means of Implementation. As the Successful Bidder (as defined in the Bidding Procedures Order),
the funding from our Commitment will be used to finance and otherwise implement the restructuring
of the Fixed/Floating Debtors pursuant to the Fixed/Floating Plan (as amended to reflect the
transactions contemplated by this Bid).

     The Fixed/Floating Plan (i) shall be acceptable in all respects to the Plan Sponsors and Midland in
each of their respective reasonable discretion; (ii) will provide for the treatment of claims
against and interests in the Fixed/Floating Debtors and in all other respects be in accordance
with the Amended and Restated Term Sheet; and (iii) will otherwise comply with applicable
disclosure requirements and rules of procedure and contain terms and treatment of claims and
interests consistent with the applicable provisions of the Bankruptcy Code. For the avoidance of
doubt, the Anaheim Plan, the Ontario Plan and the Reorganizing Debtor Plan are not subject to this
Amended and Restated Commitment Letter, the Amended and Restated Term Sheet or the other Investment
Documents.

          6. Deposit. In accordance with the Bidding Procedures Order, the Plan Sponsors have deposited cash
in an amount equal to $20 million (the “Deposit”) to:

Wells Fargo Bank, NA

420 Montgomery Street

San Francisco, CA 94163

Swift Code: WFBIUS6S

ABA # 121-000-248

Credit: Corporate Trust Clearing

Account #0001038377

F/F/C/: Innkeepers USA/INK Acq. Escrow

Account # 85503100

Attn: Tim Martin

          7. Structure. The anticipated structure of New HoldCo immediately after consummation of the
Fixed/Floating Plan will be as shown on the pro forma structure chart attached hereto as Exhibit E,
subject to finalization of the corporate structure as determined by the Plan

- 3 -

 

Sponsors in their sole discretion and described in a plan supplement document to be filed before
the scheduled date of confirmation of the Fixed/Floating Plan, with pro forma capitalization as
shown on Exhibit F. We have used the financial, operational and other material assumptions that
underlie Innkeepers’ business plan with respect to the Fixed/Floating Debtors, except for the
differences, including, without limitation, differences with respect to working capital and capital
expenditure requirements, set forth on Exhibit G attached hereto.

          8. Approvals. New HoldCo and the Plan Sponsors have obtained all necessary internal authorizations
or approvals for the submission, execution, delivery and closing of the Bid, including this
Commitment, and the transactions contemplated hereby. Without limiting the foregoing, the
Transaction has received the approval of the Members of New HoldCo, the Investment Committee of
Cerberus and the Board of Trustees of Chatham.

          9. Termination. Unless otherwise agreed by the Plan Sponsors in writing, the
Plan Sponsors may terminate this Amended and Restated Commitment Letter by written notice to the
Company and Midland upon the earliest occurrence of a Termination Event (as defined in the
Amended and Restated Term Sheet).

          10. Governing Law. This Amended and Restated Commitment Letter shall be governed by, and
interpreted and enforced in accordance with, the laws in force in the state of New York. The
parties to this Amended and Restated Commitment Letter waive any right to a trial by jury, to the
extent lawful, and agree that either of them may file a copy of this paragraph with any court as
written evidence of the knowing, voluntary and bargained-for agreement among each Party irrevocably
to waive its right to trial by jury in any claims whatsoever between them relating to this Amended
and Restated Commitment Letter.

          11. Jurisdiction; Waiver of Jury Trial. Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive jurisdiction of the
Innkeepers Bankruptcy Court, in any action or proceeding arising out of or relating to this Amended
and Restated Commitment Letter, the Term Sheet, the other Investment Documents, the Fixed/Floating
Rate Auction, and the construction and enforcement of the Bidding Procedures Order, including the
qualification of bids thereunder. Each of the parties acknowledges and agrees that any controversy
which may arise under this Amended and Restated Commitment Letter, the Amended and Restated Term
Sheet, the other Investment Documents, the Fixed/Floating Rate Auction or the Bidding Procedures
Order is likely to involve complicated and difficult issues, and therefore each such party hereby
irrevocably and unconditionally waives any right such party may have to a trial by jury in respect
of any litigation directly or indirectly arising out of or relating to (a) this Amended and
Restated Commitment Letter, the Amended and Restated Term Sheet, or the other Investment Documents,
(b) the breach, termination or validity of this Amended and Restated Commitment Letter, the Amended
and Restated Term Sheet, the other Investment Documents, (c) the Fixed/Floating Rate Auction, or
(d) the construction and enforcement of the Bidding Procedures Order, including the qualification
of bids thereunder.

          12. Assignments; No Third Party Beneficiaries. This Amended and Restated Commitment Letter (i)
shall not be assignable by any party hereto without the prior written consent of each other party
hereto (and any attempted assignment without such consent shall be null and void ab initio); provided,
however, that New HoldCo may, without the consent of any other party hereto, assign its rights and
obligations hereunder and under the New HoldCo/Midland Commitment to acquire the equity interests
of any or all of the Fixed/Floating Debtors to any entity with the same ownership as New HoldCo,
and provided, further, that such assignment shall not be in derogation of the Midland loan
documents; (ii) is intended to be solely for the benefit of the Parties hereto; and (iii) is

- 4 -

 

not intended nor shall be construed to confer any benefits upon, or create any rights in favor of
any person or entity other than the Parties hereto. Notwithstanding anything to the contrary
contained in this Paragraph 12, any assignment by NewHoldCo as contemplated under this Paragraph 12
shall not relieve New HoldCo of its obligations under the Amended and Restated Commitment Letter
or the Amended and Restated Term Sheet attached thereto.

          13. Counterparts. This Amended and Restated Commitment Letter and
Amended and Restated Term Sheet may be executed in counterparts, each of which shall be deemed to
be an original, but all of which together shall constitute one agreement.

          14. Midland/Lehman. Provided that there has not been an occurrence of a Termination Event under
this Amended and Restated Commitment Letter or the Term Sheet or a “Termination Event” (as defined
in the New HoldCo/Midland Commitment), Midland undertakes to actively support the Amended and
Restated Term Sheet, the provisions of the Amended and Restated Term Sheet, and approval of the
Disclosure Statement and the Fixed/Floating Plan. Lehman has agreed in the amended commitment and
term sheet dated as of March 9, 2011 submitted by Lehman and Five Mile Capital II Pooling REIT LLC
with respect to the Fixed/Floating Debtors (the “Five Mile/Lehman Bid”) to the Revised Agreements
Provision (as defined in the Amended and Restated Term Sheet).

          15. Entire Agreement. This Amended and Restated Commitment Letter and the Amended and Restated Term
Sheet, together with the Appendices and Exhibits thereto, represent the entire understanding and
agreement among the parties hereto with respect to the subject matter hereof and supercedes all
prior and contemporaneous agreements and understandings among the parties hereto, both written and
oral, with respect to the subject matter hereof, including without limitation the Commitment Letter
and Term Sheet dated April 25, 2011 by the Plan Sponsors and New HoldCo.

          16. Survival. Notwithstanding the termination of this Amended and Restated Commitment Letter in
accordance with its terms, the following agreements and obligations of the parties shall survive
such termination and shall continue in full force and effect for the benefit of the parties hereto
in accordance with the terms hereof: Sections 2 (Confidentiality), 6 (Deposit), 10 (Governing Law),
11 (Jurisdiction; Waiver of Jury Trial), and 12 (Assignments; No Third Party Beneficiaries) of this
Amended and Restated Commitment Letter.

          17. Contacts. Should you have any questions concerning this Amended and Restated Commitment Letter,
the Amended and Restated Term Sheet or the other Investment Documents please contact any of the
following individuals:

	 	 	 	 	 

	 

	 	Cerberus:
	 	Chatham:
	 
	 	 	 	 
	 

	 	Tom Wagner
	 	Jeff Fisher
	 

	 	Cerberus Real Estate Management,
	 	Chatham Lodging Trust
	 

	 	LLC
	 	50 Cocoanut Row
	 

	 	299 Park Avenue, 23nd Floor
	 	Palm Beach, FL 33480
	 

	 	New York, NY 10171
	 	Phone: (561) 227-1309
	 

	 	Phone: (212) 891-2158
	 	Email: jfisher@cl-trust.com
	 

	 	Email: twagner@cerberusre.com	 	 

- 5 -

 

	 	 	 	 	 

	 

	 	Counsel to Cerberus:
	 	Counsel to Chatham:
	 
	 	 	 	 
	 

	 	Stuart Freedman and
	 	Scott Charles and
	 

	 	Adam Harris
	 	Scott Golenbock
	 

	 	Schulte Roth & Zabel LLP
	 	Wachtell, Lipton, Rosen & Katz
	 

	 	919 Third Avenue
	 	51 West 52nd Street
	 

	 	New York, NY 10022
	 	New York, NY 10019
	 

	 	Phone: (212) 756-2000
	 	Phone: (212) 403-1000
	 

	 	Email: stuart.freedman@srz.com
	 	Email: SKCharles@wlrk.com
	 

	 	            adam.harris@srz.com
	 	            SWGolenbock@wlrk.com

- 6 -

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Commitment
Letter, effective as of the date first above written.

	 	 	 	 	 
	 	INK ACQUISITION LLC

By: Chatham Lodging LP, its Managing Member

 	 
	 	By:  	/s/ Eric Kentoff
 	 
	 	 	Name:  	Eric Kentoff 	 
	 	 	Title:  	Vice President 	 
	 
	 	INK ACQUISITION II LLC

By: Chatham TRS Holding Inc., its Managing Member

 	 
	 	By:  	/s/ Eric Kentoff
 	 
	 	 	Name:  	Eric Kentoff 	 
	 	 	Title:  	Vice President 	 
	 
	 	CERBERUS SERIES FOUR HOLDINGS, LLC

By: Cerberus institutional Partners, L.P. —

Series Four, its Managing Member

By: Cerberus Institutional Associates, L.L.C.,

its General Partner

 	 
	 	By:  	/s/ Mark A. Neporent
 	 
	 	 	Name:  	Mark A. Neporent 	 
	 	 	Title:  	Senior Managing Director 	 
	 
	 	CHATHAM LODGING TRUST

 	 
	 	By:  	/s/ Eric Kentoff
 	 
	 	 	Name:  	Eric Kentoff 	 
	 	 	Title:  	Vice President & General Counsel 	 
	 

Amended and Restated Innkeepers Commitment Letter

 

 

Accepted and agreed:

INNKEEPERS USA TRUST

(solely on behalf of the Fixed/Floating Debtors,

its wholly owned direct and indirect subsidiaries)

	 	 	 	 	 
	 	By:  	/s/ Marc A. Beilinson
 	 
	 	 	Name:  	Marc A. Beilinson 	 
	 	 	Title:  	 	 

MIDLAND LOAN SERVICES, a DIVISION OF PNC BANK,

NATIONAL ASSOCIATION (as Special Servicer for U.S. Bank

National Association as Trustee for the Registered Holders of

LB-UBS Commercial Mortgage Trust 2007-C6, LB-UBS Commercial Mortgage Trust 2007-C7,

Commercial Pass Through Certificates successor trustee to Bank of America

National Association)

	 	 	 	 	 
	 	By:  	/s/ Kevin C. Donahue
 	 
	 	 	Name:  	KEVIN C. DONAHUE 	 
	 	 	Title:  	SUP,. SERVICING OFFICER 	 

	 	 	 	 	 
	 	APOLLO INVESTMENT CORPORATION

 	 
	 	By:  	/s/ James Zelter
 	 
	 	 	Name:  	James Zelter 	 
	 	 	Title:  	[ILLEGIBLE] 	 
	 

Amended and Restated Innkeepers Commitment Letter

 

 

EXHIBIT A

Fixed/Floating Debtors

The “Floating Rate Debtors” are Grand Prix Atlantic City LLC; Grand Prix Montvale LLC;
Grand Prix Ft. Wayne LLC; Grand Prix Grand Rapids LLC; Grand Prix Harrisburg LLC; Grand Prix Ontario
LLC; Grand Prix Troy (Central) LLC; Grand Prix Troy (SE) LLC; KPA/GP Valencia LLC; Grand
Prix Albany LLC; Grand Prix Woburn LLC; KPA/GP Louisville (HI) LLC; KPA/GP Ft. Walton
LLC; Grand Prix Rockville LLC; Grand Prix Morristown LLC; Grand Prix Addison (SS) LLC; Grand
Prix Bulfinch LLC; Grand Prix East Lansing LLC; Grand Prix Indianapolis LLC; and Grand Prix West
Palm Beach, LLC.

The “Fixed Rate Debtors” are Grand Prix Ft. Lauderdale LLC; Grand Prix Addison (RI) LLC;
Grand Prix Altamonte LLC; Grand Prix Arlington LLC; Grand Prix Atlanta (Peachtree Corners) LLC; Grand
Prix Atlanta LLC; Grand Prix Bellevue LLC; Grand Prix Binghamton LLC; Grand Prix Bothell LLC;
Grand Prix Campbell / San Jose LLC; Grand Prix Cherry Hill LLC; Grand Prix Chicago LLC; Grand
Prix Denver LLC; Grand Prix Englewood / Denver South LLC; Grand Prix
Fremont LLC; Grand Prix
Gaithersburg LLC; Grand Prix Lexington LLC; Grand Prix Livonia LLC; Grand Prix Louisville
(RI) LLC; Grand Prix Lynnwood LLC; Grand Prix Mountain View LLC; Grand Prix Portland
LLC; Grand Prix Richmond LLC; Grand Prix Richmond (Northwest) LLC; Grand Prix Saddle River
LLC; Grand Prix San Jose LLC; Grand Prix San Mateo LLC; Grand Prix
Shelton LLC; Grand Prix Sili
I LLC; Grand Prix Sili II LLC; Grand Prix Tukwila LLC; Grand Prix
Windsor LLC; Grand Prix
Horsham LLC; Grand Prix Columbia LLC; Grand Prix Germantown LLC; Grand Prix Islandia LLC;
Grand Prix Lombard LLC; Grand Prix Naples LLC; Grand Prix Schaumburg LLC; Grand Prix
Westchester LLC; Grand Prix Willow Grove LLC; Grand Prix Belmont LLC; Grand Prix El Segundo
LLC; Grand Prix Las Colinas LLC; and Grand Prix Mt. Laurel LLC.

The “Other Plan Debtors” are Grand Prix Floating Lessee LLC; Grand Prix Fixed Lessee LLC;
Grand Prix Mezz Borrower Floating, LLC; Grand Prix Mezz Borrower Floating 2, LLC; Grand Prix Mezz
Borrower Fixed, LLC; and GP AC Sublessee LLC.

The “Fixed/Floating Debtors” are the Floating Rate Debtors, the Fixed Rate Debtors, and the
Other Plan Debtors. The Fixed/Floating Debtors own and/or operate the assets that serve as
collateral for the Floating Rate Mortgage Loan and the Fixed Rate Mortgage Loan.

 

 

EXHIBIT B

Amended and Restated Term Sheet

[See Attached]

 

 

AMENDED AND RESTATED

TERM SHEET

THIS AMENDED AND RESTATED TERM SHEET IS NOT AN OFFER OR A SOLICITATION WITH RESPECT TO ANY
SECURITIES OF INNKEEPERS OR A SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN.

	 	 	 

	Plan of
Reorganization:

	 	The recapitalization and debt restructuring (the “Transaction”) of the
Fixed/Floating Debtors is to be effectuated through the Fixed/Floating
Plan filed in the Bankruptcy Court with the support of the Plan Sponsors
and Midland.
	 
	 	 
	 

	 	The Fixed/Floating Plan shall be acceptable in all respects to the
Company, Plan Sponsors and Midland 111 each of their respective
reasonable discretion. The Debtors shall not amend, withdraw, or revoke
the Fixed/Floating Plan or waive or amend any provision thereof without
the consent of the Plan Sponsors and Midland, which consent shall not be
unreasonably withheld, conditioned, or delayed. Any plane(s) filed by the
Company with respect to the Excluded Debtors (as defined below) shall be
acceptable in all respects to the Company in its reasonable sole discretion.
	 
	 	 
	Treatment of
Debt:

	 	Consummation of the Transaction is subject to the restructuring of the
Fixed/Floating Debtors’ debt in amounts and with the treatment terms
provided herein, or with such other terms that are (i) acceptable to the
Debtors, and (ii) acceptable to the Plan Sponsors and Midland (a) in each
of the Debtors’, Plan Sponsors’, and Midland’s respective sole discretion
with respect to the economic and treatment terms set forth herein and (b)
otherwise in each of the Debtors’, Plan Sponsors’, and Midland’s
respective reasonable discretion.
	 
	 	 
	New Equity:

	 	Holders of common, preferred, and any other equity interests in the
Fixed/Floating Debtors shall receive no distributions under the
Fixed/Floating Plan on account of such interests. INK Acquisition LLC
and INK Acquisition II LLC, entities that are newly formed by the Plan
Sponsors ( collectively “New HoldCo”), will acquire the indirect and
direct equity of reorganized Grand Prix Mezz Borrower Fixed, LLC,
reorganized Grand Prix Mezz Borrower Floating, LLC, reorganized Grand
Prix Fixed Lessee, LLC, and Grand Prix Floating Lessee, LLC (and their
respective subsidiaries), and such other assets as may be subsequently
identified as necessary to the operation of the Fixed/Floating Debtors,
provided, however, that no assets of the Anaheim Hotel Debtors, the
Ontario Hotel Debtors or the Reorganizing Debtors (collectively, the
“Excluded Debtors”), including, without limitation, cash or cash
equivalents, shall be included in the Transaction, except to the extent
provided in the Transition Services Agreement.

 

 

	 	 	 

	 

	 	The ultimate corporate structure for the reorganized Fixed/Floating Debtors
shall be determined by the Plan Sponsors, in their sole discretion, and
will be described in a plan supplement document to be filed before the
scheduled date of confirmation of the Fixed/Floating Plan.
	 
	 	 
	Equity Purchase
Price /Treatment
of Floating Rate
Mortgage Loan:

	 	The Plan Sponsors shall contribute to New HoldCo, as an equity
investment, $400,527,644.35 in cash to be used by New HoldCo to,
among other things, satisfy its obligations under the Amended and
Restated Commitment Letter, this Amended and Restated Term Sheet and the
Fixed/Floating Plan.
	 
	 	 
	 

	 	In full and final satisfaction of the Floating Rate Pool Mortgage Loan
Claims outstanding against the Fixed/Floating Debtors, on the Effective
Date New HoldCo shall pay to Lehman, in cash, $233,489,097.04, subject to
increase or decrease based on accrued default interest and unpaid fees and
expenses due in accordance with the Floating Rate Mortgage Loan Agreement
through the Effective Date of the Fixed/Floating Plan. Such increase or
decrease in cash payable in respect of the Floating Rate Mortgage Loan will
create a reciprocal increase or decrease in the recovery of the Floating
Rate Mezzanine Loan holders such that the aggregate cash paid in respect of
the Floating Rate Mortgage Loan and the Floating Rate Mezzanine Loan will
not change.
	 
	Treatment of
Claims Fixed
Mortgage Loan:

	 	In full and final satisfaction of the Fixed claims Pool Mortgage Loan
Rate against the Fixed/Floating Debtors outstanding under the Fixed Rate
Mortgage Pool Loan Agreement, on the Effective Date the holder of the
Fixed Rate Mortgage Loan Claims shall receive the following treatment:
	 
	 	 
	 

	 	•     A new non-recourse mortgage loan of
$723,797,238.03, which shall have the following terms: (i) no change
to the interest rate of 6.71%; (ii) no change to the maturity date of
July 9,2017; (iii) during the first 48 months after the Effective
Date, interest only will be payable monthly and amortization will
begin 48 months after the Effective Date and will be based on a
30-year amortization schedule; (iv) prepayment shall be permitted at
par without penalty and defeasance requirements will be waived; and
(v) property release provision whereby the properties serving as
collateral under the Fixed Rate Mortgage Loan may be released at 108%
of the new allocated loan amount, so long as the debt service coverage
ratio thereunder, after giving effect to such release, is no worse
than such ratio prior to such release or if the foregoing is not
consistent with the then-applicable REMIC rules and regulations, such
other provision that is acceptable to the Plan Sponsors and Midland
that is consistent with then applicable REMIC rules and regulations,
the grantor trust rules and regulations, and the pooling and servicing
agreement. Notwithstanding anything to the contrary, any property
release

- 2 -

 

	 	 	 

	 

	 	contemplated herein can only be effected in accordance with
applicable REMIC rules and regulations, the grantor trust rules and
regulations, and the pooling and servicing agreement. The applicable
loan and credit documents evidencing and securing the Fixed Rate
Mortgage Loan shall be assumed, amended, restated, and/or supplemented
as Midland shall reasonably require as reasonably acceptable to New
HoldCo and the Plan Sponsors and as is consistent with this Term
Sheet.

	 
	 	 
	 

	 	•     $12,802,450.37 of cash.

	 
	 	 
	 

	 	•     Contemporaneously with the occurrence of the
Effective Date, and as a condition thereto, the Plan Sponsors will
direct New HoldCo to make a cash payment of $2,500,000 to Midland as
consideration for effecting the restructuring of the Fixed Rate
Mortgage Loan on behalf of the C6 and C7 Trusts contemplated herein.
In addition, Midland shall continue to be entitled to collect any and
all monthly or periodic fees and other compensation payable to it
under the pooling and servicing agreement, including, without
limitation, any monthly or periodic workout fee payable in connection
with the restructuring of the Fixed Rate Mortgage Loan contemplated
herein and same becoming a “corrected mortgage loan” except for the
portion of such workout fee that would be payable in connection with
the final principal payment of the Fixed Rate Mortgage Loan at the
maturity date or upon the earlier prepayment of same. For purposes of
clarification, the preceding sentence does not create any additional
obligation or otherwise modify the obligations, if any, of the
Fixed/Floating Debtors or New HoldCo to pay any of such fees or other
compensation or any other amounts under the Fixed Rate Mortgage Loan
documents, including an appropriate review fee.

	 
	 	 
	 

	 	•     The lender under the Fixed Rate Mortgage Loan
will receive limited guaranties from each of New HoldCo and Cerberus
on terms acceptable to New HoldCo, Cerberus and Midland (and
substantially similar to those set forth in the Five Mile/Midland
Commitment and with appropriate modifications to reflect the corporate
structure of New HoldCo).

	 
	 

	 	•     Payment of $3,000,000 and the Global Release
(as defined below) as set forth in the “Releases” section
herein.

	 
	 	 
	Treatment of
Floating Rate
Mezzanine Debt
and Unsecured
Debt:

	 	SASCO 2008-C2, LLC, as 100% participant and owner of all economic
and beneficial interests in the mezzanine loan relating to the assets in the
floating rate pool, serviced by TriMont Real Estate Advisors, Inc. as
special servicer, shall receive $2,363,001.42 in cash, subject to increase or
decrease based on accrued default interest and unpaid fees and expenses

- 3 -

 

	 	 	 

	 

	 	due in accordance with the Floating Rate Mortgage Loan Agreement through
the Effective Date of the Fixed/Floating Plan. Such increase or decrease in
cash payable in respect of the Floating Rate Mezzanine Loan will create a
reciprocal increase or decrease in the recovery of Lehman as lender under
the Floating Rate Mortgage Loan such that the aggregate cash paid in
respect of the Floating Rate Mortgage Loan and the Floating Rate Mezzanine
Loan will not change; and
	 
	 	 
	 

	 	Cash (of which Apollo Investment Corporation will fund $375,000, subject to
receipt of each of the releases described below) in the amount of
$4,750,000 shall be available for distribution to the holders of general
unsecured claims against the Fixed/Floating Debtors (excluding any
deficiency claims) that are not otherwise paid pursuant to a “first day”
order (the “Unsecured Claims Fund”); further, the Fixed/Floating
Debtors shall release and waive all preferences under section 547 of the
Bankruptcy Code and, to the extent related thereto, section 550 of the
Bankruptcy Code.
	 
	 	 
	Transition 

Services 

Agreement:

	 	The Company will develop a separation plan and transition services
agreement for the Fixed/Floating Debtors and the Excluded Debtors,
which shall address the uses of certain assets including, without
limitation, intellectual property, licenses, IT resources, book and
records and permits, and address cash management, cash collateral, and
other cash issues, which separation plan and transition services agreement
shall be outlined in the plan supplement and be reasonably satisfactory to
the Plan Sponsors, the Fixed/Floating Debtors, and the Excluded Debtors.
	 
	 	 
	Employee Costs

	 	The Plan Sponsors agree to fund at closing $3,500,000 cash in wired
funds to certain members of the Company’s existing management, officers, and employees, as
directed by the existing Board in its sole and absolute discretion.
	 
	 	 
	DIP Financings:

	 	The debtor-in-possession financing provided by Solar Finance, Inc. (the
“Solar DIP”), which is secured by liens on the assets of the Floating Rate Debtors,
and Tranche A of the debtor-in-possession financing provided by Five Mile Capital II Pooling
International LLC, which is secured by liens on the assets of the Fixed Rate Debtors (solely
with respect to Tranche A, the “Five Mile DIP”) shall be repaid in cash on the
Effective Date.
	 
	 	 
	Payment of Five
Mile Expenses:

	 	In accordance with the Bidding Procedures Order, up to $3,000,000 of the
cash provided by New HoldCo will be used to provide Expense
Reimbursement to Five Mile.
	 
	 	 
	Payment of
Lehman Expenses:

	 	Lehman’s advisors’ and counsel’s reasonable and documented fees and
expenses shall continue to be paid until the Effective Date in
accordance with the Final Cash Collateral Order.

- 4 -

 

	 	 	 

	Required Cash:

	 	Upon consummation of the Transaction and on the Effective Date, New
	 

	 	HoldCo will have at least $22,800,000 to fund future PIP
work and FF&E reserves (if necessary, as determined by New HoldCo),
sufficient capital to pay off the Solar DIP (in the principal
amount then outstanding, of up to approximately $17,498,096) and the Five
Mile DIP (in the principal amount then outstanding, of up to
approximately $46,600,000),1 sufficient capital to pay all
administrative and other claims and expenses not paid pursuant to the Final
Cash Collateral Order [Docket No. 402], as amended (the “Final Cash
Collateral Order”), that are necessary for the Fixed/Floating Debtors
to emerge from bankruptcy, and at least $41,600,000 of cash on hand.
	 
	 	 
	Reimbursement of
Plan Sponsor
Expenses:

	 	On or after the Effective Date, New HoldCo shall reimburse each of the
Plan Sponsors for their reasonable and documented fees and expenses.
	 
	 	 
	Pro Forma Equity 

 Ownership:

	 	Following the Effective Date, the equity of New HoldCo will initially be
allocated among the new ownership as follows:
	 
	 	 
	 

	 	Cerberus Members: 90.8%
	 

	 	Chatham Members: 9.2%
	 
	 	 
	Commitments:

	 	Subject to the conditions set forth in this Term Sheet, the Plan Sponsors, the
Debtors and Midland, as applicable, agree and covenant that:
	 
	 	 
	 

	 	The Plan Sponsors, the Debtors and Midland shall (i) use reasonable
efforts to prepare or cause the preparation of the Fixed/Floating Plan,
Disclosure Statement, other Fixed/Floating Plan related documents, and
other Fixed/Floating Plan-related pleadings (collectively, the
“Fixed/Floating Plan Documents”), which shall be consistent
in all material respects with the Amended and Restated
Commitment Letter and this Amended and Restated Term Sheet, and cause the
filing and seek the approval of such pleadings, (ii) take all reasonably
necessary and appropriate actions to support and achieve confirmation and
consummation of the Fixed/Floating Plan and the Transaction contemplated in
the Amended and Restated Commitment Letter and this Amended and Restated
Term Sheet, and (iii) not take any actions (either by affirmative action or
omission) (a) inconsistent with the Amended and Restated Commitment Letter
or this Amended and Restated Term Sheet or (b) that would materially delay
the confirmation or consummation of the

 

			
	1	 	This number assumes that both the Solar DIP and the Five Mile DIP have been
fully funded. If the Solar DIP has not been fully funded, or funded amounts have not been used by
the Fixed/Floating Debtors, cash in an amount equal to the amount then unfunded or unused under the
Solar DIP shall be placed into an account held by New HoldCo for the benefit of the Post-Effective
Date Fixed/Floating Debtors. Likewise, if the Five Mile DIP has not been fully funded, or funded
amounts have not been used by the Fixed/Floating Debtors, cash in an amount equal to the amount
then unfunded or unused under the Five Mile DIP shall be placed into an account held by New HoldCo
for the benefit of the Post-Effective Date Fixed/Floating Debtors.

- 5 -

 

	 	 	 

	 

	 	Fixed/Floating Plan or the Transaction contemplated in the Amended and
Restated Commitment Letter and this Amended and Restated Term Sheet.
	 
	 	 
	 

	 	The Plan Sponsors, the Debtor, and Midland each hereby covenant and
agree to negotiate in good faith the Fixed/Floating Plan Documents, each of
which shall (i) contain the same treatment and economic terms
as set forth herein (subject to adjustment as agreed to by the Parties in
each of their reasonable sole discretion) and other terms consistent in all
respects with the terms set forth in the Amended and Restated Commitment
Letter and this Amended and Restated Term Sheet, and (ii) be acceptable in
all other respects to the Plan Sponsors, the Debtors and Midland in each of
their respective reasonable discretion.
	 
	 	 
	 

	 	The Plan Sponsors hereby commit to provide the entire principal amount
of the Commitment upon the Effective Date, upon the terms and subject to
the conditions set forth in the Amended and Restated Commitment Letter and
this Amended and Restated Term Sheet.
	 
	 	 
	Fiduciary Out:

	 	Upon the determination by the Company’s directors, trustees, or members, as
applicable, and upon advice of counsel, no term or provision of this Term Sheet or the
Commitment Letter shall prevent, amend, alter, or reduce the Company’s ability to exercise its
fiduciary duties under applicable law (the “Fiduciary Out”), provided however, that
Company shall not exercise such Fiduciary Out except to pursue an Alternative Restructuring
Transaction (as defined in the Disclosure Statement and Solicitation Procedures Order) with a
party other than the Plan Sponsors.
	 
	 	 
	Bid Protections

	 	The Plan Sponsors and New HoldCo shall be entitled to the protections contained
in the order (a) approving the adequacy of the Disclosure Statement for the Debtors’ Plans of
Reorganization Pursuant to Chapter 11 of the Bankruptcy Code; (b) approving certain dates
related to confirmation of the Debtors’ Plans of Reorganization Pursuant to Chapter 11 of the
Bankruptcy Code; (c) approving certain voting procedures and the form of certain documents to
be distributed in connection with the solicitation of the Plan; (d) approving proposed voting
and general tabulation procedures with respect to an Alternative Restructuring Transaction.
	 
	 	 
	Termination:

	 	Unless otherwise agreed by the Plan Sponsors in writing, the Plan Sponsors may
terminate the Amended and Restated Commitment Letter and Amended and Restated Term Sheet by
written notice to the Debtors and Midland upon the earliest occurrence of the following events
(each a “Termination Event”):
	 
	 

	 	•     June 30, 2011, if a Confirmation Order for
the Fixed/Floating Plan has not been entered by the Bankruptcy Court;
provided, however,

- 6 -

 

	 	 	 

	 

	 	       that this Termination Event shall not apply to the chapter 11 case of
Grand Prix West Palm Beach LLC;

	 
	 	 
	 

	 	•     The dismissal or conversion to chapter 7 of any of the Fixed/Floating
Debtors’ Chapter 11 cases or any of the Chapter 11 cases of Grand
Prix Holdings LLC, Innkeepers USA Trust, Innkeepers Financial
Corporation, and Innkeepers USA Limited Partnership (collectively,
the “Parent Companies”); provided, however, that this Termination
Event shall not apply to the chapter 11 case of Grand Prix West Palm
Beach LLC;

	 
	 	 
	 

	 	•     The termination of exclusivity for any of the Fixed/Floating Debtors
or the Parent Companies unless supported or sought by the Plan
Sponsors; provided, however, that this Termination Event shall not
apply to the chapter 11 case of Grand Prix West Palm Beach LLC;

	 
	 	 
	 

	 	•     Approval by the Bankruptcy Court with respect to the assets of the
Fixed/Floating Debtors of any bidding procedures, sale procedures
for sales other than of de minimis assets, disclosure statement, or plan
other than the Bidding Procedures Order, the Disclosure Statement,
and the Fixed/Floating Plan;

	 
	 	 
	 

	 	•     The granting of stay relief with respect to any of the Fixed/Floating
Debtors’ assets, other than immaterial assets; provided, however, that
this Termination Event shall not apply to the chapter 11 case of
Grand Prix West Palm Beach LLC;

	 
	 	 
	 

	 	•     The occurrence of any condition, change or development that could
reasonably be expected to have a material adverse effect on the
business, assets, liabilities (actual or contingent), or operations,
condition (financial or otherwise) or prospects of the Fixed/Floating
Debtors taken as a whole; provided, however, that this Termination
Event shall not apply to the chapter 11 case of Grand Prix West Palm
Beach LLC;

	 
	 	 
	 

	 	•     In the exercise of the Parties’ reasonable best efforts, failure to
execute, deliver, or obtain all related documents (including customary
representations, warranties, covenants, conditions, opinions,
including an opinion by Midland’s REMIC counsel with respect to
the structure of the contemplated transaction, corporate and other
governance documents and indemnities) and rating agency
confirmations necessary to effectuate (i) the Transaction with respect
to the Fixed Rate Mortgage Loan or otherwise affecting the treatment,
including the economics, thereof, in each case in form and substance
satisfactory to Midland and the Plan Sponsors in each of their
respective reasonable discretion and (ii) the Transaction, in such case

-7-

 

	 	 	 

	 

	 	       in form and substance satisfactory to the Plan Sponsors in each of
their respective reasonable discretion; provided, however, that this
Termination Event shall not apply to the chapter 11 case of Grand
Prix West Palm Beach LLC;

	 
	 	 
	 

	 	•     Termination (other than by expiration of the term in the normal
course) or rejection of any franchise agreement reasonably deemed
necessary by the Plan Sponsors or Midland prior to the Effective Date
without the Plan Sponsors and Midland’s written approval with
respect to the assets of the Fixed/Floating Debtors; provided,
however, that this Termination Event shall not apply to the chapter 11
case of Grand Prix West Palm Beach LLC;

	 
	 	 
	 

	 	•     Failure by the Fixed/Floating Debtors to assume and, if necessary,
assign all franchise agreements pursuant to an order of the
Bankruptcy Court satisfactory to the Plan Sponsors and Midland in
all material respects on or before the Effective Date with respect to
the assets of the Fixed/Floating Debtors; provided, however, that this
Termination Event shall not apply to the chapter 11 case of Grand
Prix West Palm Beach LLC;

	 
	 	 
	 

	 	•     Such earlier date as may be agreed upon in writing by the Company
and the Plan Sponsors; or

	 
	 	 
	 

	 	•     The Company materially breaches its obligations under the Amended
and Restated Term Sheet or the Amended and Restated Commitment
Letter, including, without limitation, if the Company materially
breaches its obligations, whether or not through its exercise of the
Fiduciary Out.

	 
	 	 
	 

	 	Time is of the essence with respect to the Termination Events.
	 
	 	 
	 

	 	Upon termination of the Amended and Restated Commitment Letter and
Amended and Restated Term Sheet as a result of a Termination Event, the
Deposit (as defined in the Bidding Procedures Order) shall be returned to
the Plan Sponsors with any interest accrued thereon in accordance with the
terms of the escrow agreement among the Company, New HoldCo and the
escrow agent with respect to such Deposit.
	 
	 	 
	Effective 

Date/Outside Date 

Termination:

	 	•     The occurrence of the Effective Date shall be subject to the
satisfaction of customary conditions, including, without limitation,
entry of a Confirmation Order with respect to the Fixed/Floating Plan
by the Bankruptcy Court that has become final and non- appealable,
and the Fixed/Floating Plan will also include customary provisions
with respect to waiver of conditions to the Effective Date.

- 8 -

 

	 	 	 

	 

	 	•     Notwithstanding anything contained herein to the contrary, unless
otherwise agreed by the Company, the Plan Sponsors, and Midland in
writing, the Amended and Restated Commitment Letter and
Amended and Restated Term Sheet shall automatically terminate and
be of no further force or effect and the Confirmation Order for the
Fixed/Floating Plan will provide that both confirmation and such
Confirmation Order will be automatically revoked (with a reversion
to the status quo ante) on September 15,2011 (the “Outside Date”) if
the Effective Date has not occurred and all of the transactions
contemplated under the Amended and Restated Commitment Letter,
this Amended and Restated Term Sheet, and the Fixed/Floating Plan
have not been closed and consummated as contemplated thereunder,
all on or before September 14, 2011 (the “Outside Date Termination
Event”); provided, however, that this Termination Event shall not
apply to the chapter 11 case of Grand Prix West Palm Beach LLC.

	 
	 	 
	 

	 	Time is of the essence with respect to the Outside Date Termination
Event.
	 
	 	 
	Releases:

	 	Releasing Parties.
	 
	 	 
	 

	 	•     The “Releasing Parties” shall be the Fixed/Floating Debtors, the Plan
Sponsors, Midland (including the master servicer for the Fixed Rate
Mortgage Loan, the C6 and the C7 Trusts, and trustees), and Apollo
Investment Corporation (and together with its predecessors,
successors and assigns, shareholders, affiliates, subsidiaries,
principals, employees, agents, officers, directors, and professionals,
“Apollo”), and other holders of claims against and interests in the
Fixed/Floating Debtors, and each of the foregoing parties’ respective
predecessors, successors and assigns, shareholders, affiliates,
subsidiaries, principals, employees, agents, officers and directors,
trustees, members, master servicers, special servicers, trusts and
trustees, and professionals (including the officers, directors, trustees,
and members of the Parent Companies, in their capacity as such).

	 
	 	 
	 

	 	Midland Servicer Release.
	 
	 	 
	 

	 	•     The Fixed/Floating Plan shall provide that Midland, as special
servicer and on behalf of the C6 and C7 Trusts, shall (i) settle,
release, and waive all of Midland’s claims against Apollo, related in
any way to that certain Required Capital Improvements Guaranty
executed by Apollo on June 29, 2007 (the “Apollo Guaranty”) and
(ii) if an action remains pending in the State Courts of New York or
elsewhere, Midland shall dismiss its claims against Apollo with
prejudice. The effectiveness of such settlement, release, and waiver is
conditioned on the receipt by Midland of indefeasible payment as

- 9 -

 

	 	 	 

	 

	 	      provided in the next sentence and such settlement, waiver, and release
shall be embodied in, and shall not be effective unless and until the
Global Release (as defined herein) has been embodied in, a
Confirmation Order for the Fixed/Floating Plan entered by the
Bankruptcy Court that has become final and non-appealable.
Contemporaneously with the occurrence of the Effective Date, the
Plan Sponsors will direct New HoldCo to make a cash payment of
$3,000,000 to Midland, on behalf of the C6 and C7 Trusts, as
settlement of Midland’s claims against Apollo with respect to the
Apollo Guaranty, which have been the subject of litigation pending in
New York Supreme Court. The settlement, release, and waiver shall
be embodied in the Fixed/Floating Plan and shall be in form and
substance reasonably satisfactory to Midland and Apollo, and-shall be
conditioned on the above-described payment and the occurrence of
the Effective Date.

	 
	 	 
	 

	 	Apollo Release.
	 
	 	 
	 

	 	•     Apollo shall agree to (i) waive all rights to receive any recovery or
distribution under the Fixed/Floating Plan; and (ii) settle and provide
a complete general release and waiver of any of its claims against the
Releasing Parties. Apollo shall provide such waiver of rights and such
general release and waiver of claims against the Releasing Parties in
exchange for such entities settling, releasing, and waiving any claims
they may have against Apollo to the extent provided herein. Such
release by the Releasing Parties shall include (but shall not be limited
to) Midland, as special servicer and on behalf of the C6 and C7
Trusts, settling, releasing, and waiving all of Midland’s claims
against Apollo, that are related in any way to the Apollo Guaranty;
provided that, the effectiveness of such settlement, release, and
waiver is conditioned on the receipt by Midland of indefeasible
payment as provided for herein and shall not be effective until the
occurrence of the Effective Date.

	 
	 	 
	 

	 	Global Release.
	 
	 	 
	 

	 	•     The Fixed/Floating Plan shall include a mutual full discharge, release
and exculpation of liability, and injunction (the “Global Release”), to
the maximum extent of applicable law, by and among the Releasing
Parties (each against one another), other than a release of the
obligations undertaken herein and in the Fixed/Floating Plan and
other Transaction documents, from the following: (i) any and all
claims and causes of action relating to the Company arising at any
time prior to the Effective Date, and in connection therewith, the
Global Release shall confirm and adjudicate the validity,
enforceability and perfection, in all respects, of the liens, claims,

-10-

 

	 	 	 

	 

	 	      interests, mortgages and encumbrances of the Fixed Rate Mortgage
Loan, the C6 and the C7 Trusts; and (ii) any and all claims arising
from the actions taken or not taken in good faith in connection with
the Transaction and the Chapter 11 cases. It is expressly understood
and agreed, that notwithstanding anything otherwise contained in this
Term Sheet, the (i) releases of Apollo and the stipulation of
discontinuance of the Apollo Guaranty litigation and (ii) the waivers
and releases to be given by Apollo that are described herein shall not
be effective until Midland has received the $3,000,000 cash payment
provided for herein and the occurrence of the Effective Date.

	 
	 	 
	 

	 	Reservation of Rights.
	 
	 	 
	 

	 	•     The Releasing Parties reserve all of their respective rights, claims, and
interests with respect to the Excluded Debtors and all assets of the
Excluded Debtors.

	 
	 	 
	 

	 	•     Whatever rights, claims, and interests the Excluded Debtors may have
with respect to the Fixed/Floating Debtors and their assets are also
preserved.

- 11 -exv10w1

Exhibit 10.1

Execution Version

O’CHARLEY’S INC.

AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

(the “Agreement”)

O’CHARLEY’S INC.

(the “Company”)

and

R. Jeffrey Williams

(“Executive”)

August 10, 2011

(“Effective Date”)

BACKGROUND

     A. Executive is currently employed as the Company’s Interim Chief Financial Officer and
Treasurer, in addition to Executive’s position as Principal Accounting Officer, Corporate
Controller and Assistant Secretary.

     B. Executive and the Company are currently parties to that certain: (i) Executive Employment
Agreement dated as of December 13, 2007 (as amended, the “Employment Agreement”); and (ii) Tuition
Reimbursement Agreement dated as of August 1, 2009 (the “Tuition Agreement”).

     C. On the date hereof, the Company’s Board of Directors has appointed Executive to be the
Company’s Chief Financial Officer, Treasurer and Assistant Secretary, and in connection therewith,
the Company desires to amend and restate the Employment Agreement as more fully provided herein.

     NOW, THEREFORE, in consideration of the promises contained herein, and for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and
Executive agree as follows:

ARTICLE I.

EMPLOYMENT, DUTIES AND TERM

     1.1 Employment. Upon the terms and conditions set forth in this Agreement, the Company hereby
employs Executive as Chief Financial Officer, Treasurer and Assistant Secretary. Additionally,
Executive agrees to continue to function in the capacity of Principal Accounting Officer and
Corporate Controller until Executive’s successor is duly named and appointed or Executive is
relieved of such responsibilities by the Company’s Chief Executive Officer. The position is based
in Nashville, Tennessee; and accordingly, the Executive shall maintain Executive’s domicile in the
greater metropolitan Nashville, Tennessee area for the duration of the Term (with the determination
of “domicile” to be made by the Company in the reasonable exercise of its discretion, considering
all relevant and appropriate factors and circumstances).

     1.2 Duties. Executive shall devote Executive’s full-time and best efforts to the Company and
to fulfilling the duties of Executive’s position, which shall include such duties as may from time
to time be assigned to Executive by the Company. The Executive may devote reasonable time and
attention to civic, charitable, business and social organizations so long as such activities do not
interfere with the performance of Executive’s obligations and responsibilities under this Agreement
and provided that

 

 

Executive shall obtain the prior written approval of the Company’s Chief Executive Officer
prior to joining the Board of Directors or other governing body of any such entity, including any
civic, charitable, business or social organization. Executive shall comply with the Company’s
policies and procedures to the extent they are not inconsistent with this Agreement, and in the
case of such inconsistency, the provisions of this Agreement shall prevail. The Executive agrees
to serve as requested without any additional compensation as an officer and/or director of the
board of directors of any subsidiary of the Company as requested. If the Executive’s employment
terminates for any reason, the Executive shall resign as an officer of the Company and as an
officer and director of all of its subsidiaries, such resignation to be effective no later than the
date of termination of Executive’s employment hereunder.

     1.3 Term. Subject to the provisions of Articles III, IV and V herein,
this Agreement and Executive’s employment shall continue until September 30, 2014 (the “Initial
Term”) and shall automatically renew for successive one year periods (each, a “Renewal Term”) upon
all terms, conditions and obligations set forth herein unless either party shall provide written
notice to the other not less than ninety (90) days nor more than one hundred eighty (180) days
prior to the expiration of the Initial Term or any Renewal Term, as applicable (the “Notice of
Non-Renewal”). For purposes hereof, the Initial Term, together with any Renewal Term, are
hereinafter referred to as the “Term.”

ARTICLE II.

COMPENSATION AND EXPENSES

     2.1 Base Salary. For services rendered under this Agreement during the Term, the Company
shall pay Executive a base salary at the rate of $300,000 per annum commencing on the Effective
Date, pro-rated for the balance of the 2011 fiscal year, and to also remain fixed for the Company’s
2012 fiscal year. Executive’s base salary shall be reviewed annually by the Compensation and Human
Resources Committee of the Board (the “Committee”), with the first such review effective for the
Company’s 2013 fiscal year, and may be increased in the sole discretion of the Committee (such base
salary, as it may be increased from time to time during the Term, is hereinafter referred to as the
“Base Salary”).

     2.2 Bonus and Incentive. The Executive shall be eligible to participate in such bonus and
incentive plans during the Term as the Committee, in the sole exercise of its discretion, may
determine appropriate. For the balance of the Company’s 2011 fiscal year, Executive’s bonus plan
shall remain fixed at the current percentage of Base Salary for those levels of Company
performance/bonus previously established by the Committee (which percentages shall be calculated
based on Base Salary referenced in Section 2.1 herein), and commencing with the Company’s 2012
fiscal year, Executive’s bonus plan shall be increased to 60% of Base Salary at the “Target” level
of performance, with the calculation of “Target” together with the performance and relevant
parameters and metrics in determining bonus eligibility, being on such terms as may from time to
time be determined by the Committee in the sole exercise of its discretion. All bonuses (including
bonuses for the 2011 fiscal year) shall be payable in accordance with the Company’s then current
policies and procedures, which shall include, without limitation, that Executive be an employee in
good standing on the date such bonuses are paid (which date is currently within the first two weeks
in February following the fiscal year in which such bonuses were earned, but is subject to change
in the Committee’s sole discretion).

     2.3 Long-Term Incentive. On the date of this Agreement, Executive shall be granted a
restricted stock award (the “RSA”) pursuant to the Company’s 2008 Equity and Incentive Plan (the
“Plan”) equal to 30,000 shares of the Company’s common stock. The RSA shall “cliff” vest on the
third (3rd) anniversary of the Effective Date. The full terms and conditions with
respect to the RSA shall be as set forth herein, in the Plan, and in the award agreement evidencing
the grant thereunder. Without limiting the generality of the foregoing, it shall be a condition
precedent to the vesting of the RSA that Executive be employed with the Company on the date the RSA
is scheduled to vest.

2

 

     2.4 Business Expenses. The Company shall, consistent with its policies in effect from time to
time, bear all ordinary and necessary business expenses incurred by Executive in performing
Executive’s duties as an employee of the Company, provided, that Executive incurs and
accounts promptly for such expenses to the Company in accordance with the Company’s policies in
place from time to time during the Term. Executive shall submit all expense reimbursement requests
to the Chief Executive Officer for approval.

     2.5 Benefits. During the Term, the Company shall provide Executive with those health, life,
disability and other benefits provided generally to members of senior management (subject to change
or revision as applicable to other senior executives generally).

     2.6 Additional Perquisites. During the Term, the Company shall also provide Executive with a
car allowance in the amount of $25,000 annually (and pro-rated for the balance of the 2011 fiscal
year).

ARTICLE III.

SEVERANCE PRIOR TO CHANGE IN CONTROL

     3.1 Severance. This Article III shall not apply to termination following a Change in
Control (as hereinafter defined), which is governed solely by Article IV.

     3.2 Severance Payment.

          (a) It is understood and agreed that, except as provided in Section 3.2(b) below, if
Executive’s employment with the Company should be terminated at any time prior to the expiration of
the Term as a result of a Termination Without Cause (defined below) or a Termination With Good
Reason (defined below), and if Executive is not then or thereafter in material breach of this
Agreement, and upon the execution and delivery to the Company by Executive of an agreement, in a
form presented by the Company and accepted by Executive, which acceptance shall not be unreasonably
withheld or delayed, releasing all claims which Executive may have against the Company (other than
claims for indemnification pursuant to Section 6.7 hereunder, claims under this Agreement,
claims for vested benefits including deferred compensation and 401k balances, claims under COBRA,
and claims for any vested equity interests in the Company) (the “Severance Agreement”), Executive
shall receive (commencing with the first pay period following the execution of the Severance
Agreement), in full and complete settlement of any claims for compensation which Executive may
have, and in lieu of any severance pay under any policy of the Company or otherwise, the following:

          (i) continued weekly payments, in accordance with the Company’s regular payroll
practices, for a period of fifty-two (52) weeks equal to one-fifty second
(1/52nd) of Executive’s then current Base Salary (less all applicable withholding
and deductions); and

          (ii) any payments and benefits which Executive or Executive’s spouse, dependents,
beneficiaries or estate would have been entitled to receive pursuant to any employee health
benefit plan of the Company for a twelve (12)-month period had Executive remained an
employee during that period, with such benefits provided to Executive at no less than the
same coverage level and at no more of a cost to Executive as in effect as of the date of
Executive’s termination subject to such reduction in coverage or increases in cost as shall
become in effect for senior executive employees of the Company generally (“Health Benefit
Continuation”), provided, however, that such continued payments and benefits
shall terminate on the date or dates Executive receives substantially similar coverage and
benefits, without waiting period or pre-existing condition limitations, under the plans and
programs of a subsequent employer (such coverage and benefits to be determined on a
coverage-by-coverage or benefit-by-benefit basis).

3

 

          (b) The provisions of Section 3.2(a) above notwithstanding, should the Company provide the
Executive with a Notice of Non-Renewal, and thereafter elect to terminate Executive’s employment
with the Company on or prior to the expiration of the Term, Executive shall be entitled to the
following benefits and concessions upon the execution of a Severance Agreement if such termination
is a Termination Without Cause and if Executive is not then or thereafter in material breach of
this Agreement: (i) continued weekly payments of Base Salary and the provision of health benefits
from the date of termination through the stated expiration date of the Agreement, as fully as if
the Company had not elected to terminate Executive; and (ii) commencing upon the stated expiration
of the Agreement, the following: (X) continued weekly payments, in accordance with the Company’s
regular payroll practices, for a period of twenty-six (26) weeks, equal to one-fifty second (1/52)
of Executive’s then current Base Salary (less all applicable withholding and deductions), (Y) the
Health Benefit Continuation as set forth in Section 3.2(a)(ii) above but for a period of twenty-six
weeks; and (Z) a reduction in the non-compete restriction in Section 5.2(b) from fifty-two (52)
weeks to twenty-six (26 weeks). Additionally, should the Company provide Executive with a Notice
of Non-Renewal but not elect to terminate Executive on or prior to the expiration of the Term, then
upon any subsequent termination of Executive by Company, where the same is deemed to be a
Termination Without Cause, Executive shall receive the greater of those benefits referenced in this
subsection (b)(ii)(X) and (Y) or those benefits provided by any formal severance policy of the
Company in effect at the time of such termination; provided that, such benefits
shall be conditioned upon the parties’ execution of a Severance Agreement.

          (c) As used in this Article III, “Termination Without Cause” means any termination of
Executive’s employment by the Company other than a Termination With Cause (defined below).

          (d) As used in this Article III, “Termination With Cause” means termination
by the Company of Executive’s employment at any time after the Company believes in good faith it
has actual knowledge of the occurrence of any of the following events on the part of Executive:
indictment or conviction for fraud, misappropriation or embezzlement (or any other felony or crime
of moral turpitude), gross neglect of duty, material breach of this Agreement, a material act of
dishonesty or disloyalty, the inability by Executive to discharge Executive’s material duties due
to alcohol or drug addiction, or gross misconduct inimical to the best interests of the Company;
provided, however, that termination of employment solely due to unsatisfactory job
performance shall not be considered a Termination With Cause.

          (e) As used in this Article III, “Termination with Good Reason” means Executive’s
termination of employment at any time after Executive has actual knowledge of the occurrence,
without Executive’s written consent, of a material reduction in Executive’s Base Salary or a
material reduction in the health and welfare insurance, retirement and other benefits available to
Executive as of the Effective Date, except for reductions in such benefits as shall become in
effect for senior executive employees of the Company generally; provided that Executive shall have
notified the Company of the existence of the condition described above within ninety (90) days of
Executive’s actual knowledge of the initial existence of the condition, and the Company shall have
failed to remedy the condition within thirty (30) days of receiving such notice (and any such
election on the part of Executive to thereafter terminate employment for “Good Reason” as
contemplated under this subsection 3.2(e) must occur within ten (10) days following the Company’s
failure to remedy such condition, or Executive’s rights thereafter to terminate on account of such
condition shall be waived). For the avoidance of doubt, subsequent occurrences of these events
shall start new time periods described in this paragraph.

          (f) In the event Executive’s employment pursuant to this Agreement terminates for any reason
other than a Termination Without Cause or a Termination With Good Reason, Executive shall be
entitled to receive, in full and complete settlement of any claims for compensation which Executive
may have, and in lieu of any severance pay under any policy of the Company or otherwise, Base
Salary and benefits to be paid or provided by the Company through the date of termination. The
parties agree and acknowledge that the Company may from time to time elect to amend or restate its
senior executives’

4

 

contracts at the expiration of any Initial Term or Renewal Term, and a decision to extend the
Executive’s term of employment but on terms and conditions which do not vary in any manner which is
materially adverse to the Executive from the terms and conditions set forth in this Agreement shall
not constitute an election on the part of the Company (constructively or otherwise) not to extend
any Initial Term or Renewal Term hereunder. The amounts payable to Executive under this Article
III are not eligible earnings under any pension, savings, deferred compensation, bonus,
incentive, supplemental retirement benefit or other benefit plan of the Company.

ARTICLE IV.

CHANGE IN CONTROL

     4.1 Change In Control. No compensation shall be payable under this Article IV unless
and until (a) there shall have been a Change in Control of the Company during the Term and (b)
Executive’s employment by the Company thereafter shall have been terminated in accordance with
Section 4.2. For purposes of this Agreement, a Change in Control means the happening of any
of the following:

          (a) any person or entity, including a “group” as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, other than the Company, a wholly-owned subsidiary thereof, any employee
benefit plan of the Company or any of its Subsidiaries becomes the beneficial owner of the
Company’s securities having 50% or more of the combined voting power of the then outstanding
securities of the Company that may be cast for the election of directors of the Company (other than
as a result of an issuance of securities initiated by the Company in the ordinary course of
business); or

          (b) as the result of, or in connection with, any cash tender or exchange offer, merger or
other business combination, sale of assets or contested election, or any combination of the
foregoing transactions, less than a majority of the combined voting power of the then outstanding
securities of the Company or any successor corporation or entity entitled to vote generally in the
election of the directors of the Company or such other corporation or entity after such transaction
are held in the aggregate by the holders of the Company’s securities entitled to vote generally in
the election of directors of the Company immediately prior to such transaction.

     4.2 Termination. If a Change in Control of the Company shall have occurred during the Term,
Executive shall be entitled to the compensation provided in Section 4.3 upon the
subsequent: (i) expiration of this Agreement (if the expiration occurs within eighteen months of
the Change of Control and the Company, as opposed to Executive, elects not to extend the Term for a
period at least equal to eighteen months following a Change of Control), or (ii) termination of
Executive’s employment with the Company by Executive or by the Company within eighteen months of
the Change in Control of the Company unless such termination is as a result of (I) Executive’s
death; (II) Termination by Reason of Disability (as defined in Section 4.2(a)); (III)
Termination by Reason of Retirement (as defined in Section 4.2(b); (IV) Termination With
Cause (as defined in Section 4.2(c)); or (V) termination by the Executive other than a
Termination for Good Reason (as defined in Section 4.2(d)).

          (a) As used in this Article IV, “Termination by Reason of Disability” means a
termination of the Executive by the Company by reason of Executive’s inability, as determined by
the Board, to perform Exective’s regular duties and responsibilities due to physical or mental
illness which has lasted for six months and, within 30 days after written notice of termination is
thereafter given by the Company, Executive shall not have returned to the full-time performance of
Executive’s duties.

          (b) As used in this Article IV, “Termination by Reason of Retirement” means a
termination by the Company or Executive of Executive’s employment based on Executive’s having
reached age 65 or such other age as shall have been fixed in any arrangement established with
Executive’s consent with respect to Executive; and in all instances subject to applicable law.

5

 

          (c) As used in this Article IV, “Termination With Cause” means the termination by the
Company of Executive’s employment at any time after the Company believes in good faith it has
actual knowledge of the occurrence of any of the following events on the part of Executive:
indictment or conviction for fraud, misappropriation or embezzlement (or any other felony or crime
of moral turpitude), gross neglect of duty, material breach of this Agreement, a material act of
dishonesty or disloyalty, the inability by Executive to discharge Executive’s material duties due
to alcohol or drug addiction, or gross misconduct inimical to the best interests of the Company;
provided, however, that termination of employment solely due to unsatisfactory job
performance shall not be considered a Termination With Cause.

          (d) As used in this Article IV, “Termination for Good Reason” means a termination by
the Executive upon the occurrence of (without Executive’s express written consent): (i) the failure
of a successor entity to assume the Company’s obligations under this Agreement (as more fully
provided in Section 6.8 hereunder), (ii) a material reduction in Executive’s Base Salary or a
material reduction in the health and welfare insurance, retirement and other benefits available to
Executive as of the Effective Date, except for reductions in such benefits as shall become in
effect for senior executive employees of the Company generally, or (iii) the relocation of
Executive’s principal office to a location more than fifty (50) miles from Nashville, Tennessee;
provided that Executive shall have notified the Company of the existence of the condition(s)
referenced above within ninety (90) days of Executive’s actual knowledge of the initial existence
of such condition, and the Company shall have failed to remedy such condition within thirty (30)
days of receiving such notice (and any such election on the part of Executive to thereafter
terminate employment for “Good Reason” as contemplated under this subsection 4.2(d) must occur
within ten (10) days following the Company’s failure to remedy such condition, or Executive’s
rights thereafter to terminate on account of such condition shall be waived). For the avoidance of
doubt, subsequent occurrences of these events shall start new time periods described in this
paragraph.

          (e) Notice of Termination. Any termination by the Company under this Article
IV shall be communicated by a Notice of Termination. For purposes of this Agreement, a “Notice
of Termination” shall mean a written notice which indicates those specific termination provisions
in this Agreement relied upon and which sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive’s employment under the provisions so
indicated. For purposes of this Agreement, no such purported termination by the Company shall be
effective without such Notice of Termination.

          (f) Date of Termination. “Date of Termination” shall mean (a) if Executive’s
employment is terminated by the Company, the date on which a Notice of Termination is given (or if
the Agreement expires, the last day of the Term), or (b) if Executive terminates Executive’s
employment pursuant to Section 4.2(d), the expiration of the thirty (30) day cure period
without the Company remedying the applicable condition described in Section 4.2(d)
(provided Executive has timely elected to terminate employment following such thirty (30) day
cure period having passed without appropriate remedy).

     4.3 Compensation Upon Termination of Employment / Expiration of Agreement.

     If the Company shall terminate Executive’s employment within eighteen months following a
Change in Control other than pursuant to Section 4.2(a), 4.2(b) or 4.2(c)
or if Executive shall terminate Executive’s employment within eighteen months following a Change in
Control by reason of a Termination for Good Reason (as defined in Section 4.2(d)), or if the
Company permits the Agreement to expire within eighteen months following a Change in Control, then
the Company shall:

     (i) pay to Executive as severance pay in a lump sum, in cash (minus applicable
withholdings and deductions), on the fifth day following the Date of Termination, an amount
equal to one hundred fifty percent (150%) of Executive’s then current Base Salary;
provided,

6

 

however, that if the lump sum severance payment under this Section 4.3,
either alone or together with other payments which Executive has the right to receive from
the Company, would constitute a “parachute payment” (as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”)), at the written election of the
Executive such lump sum severance payment shall be reduced to the largest amount as shall
result in no portion of the lump sum severance payment under this Section 4.3 being
subject to the excise tax imposed by Section 4999 of the Code; and

     (ii) provide Executive with the Health Benefit Continuation Benefit for a period of
twelve (12) months following the Date of Termination; provided however, that
such continued benefits shall terminate on the date or dates Executive receives
substantially similar coverage and benefits, without waiting period or pre-existing
condition limitations, under the plans and programs of a subsequent employer (such coverage
and benefits to be determined on a coverage-by-coverage or benefit-by-benefit basis).

ARTICLE V.

NONCOMPETITION, NONSOLICITATION AND CONFIDENTIALITY

     5.1 Noncompetition.

          (a) So long as Executive remains employed by the Company, Executive shall not compete,
directly or indirectly, with the Company. In accordance with this restriction, but without limiting
its terms, Executive shall not:

          (i) enter into or engage in any business which competes with the business of the
Company; or

          (ii) promote or assist, financially or otherwise, any person, firm, association or
corporation or any other entity engaged in any business which competes with the business of
the Company.

          (b) For a period of twelve (12) months following termination of Executive’s employment with
the Company for any reason (the “Non-compete Period”), Executive shall not enter into or engage in
any business that competes with the Company’s business; provided however, upon the
occurrence of the condition noted in Section 3.2(b) hereunder, the Non-compete Period shall be
shortened to twenty-six (26) weeks following the termination of Executive’s employment.

          (c) During the Non-compete Period, Executive shall not promote or assist financially or
otherwise, any person, firm, association, partnership, corporation, or any other entity engaged in
any business which competes with the Company’s business.

          (d) For the purposes of this Section 5.1, Executive understands that Executive shall
be competing if Executive engages in any or all of the activities set forth herein directly as an
individual on Executive’s own account, or indirectly as a partner, joint venturer, employee, agent,
consultant, officer and/or director of any firm, association, corporation, or other entity, or as a
stockholder of any corporation in which Executive owns, directly or indirectly, individually or in
the aggregate, more than one percent (1%) of the outstanding stock; provided,
however, that at such time as Executive is no longer employed by the Company, Executive’s
direct or indirect ownership as a stockholder of less than five percent (5%) of the outstanding
stock of any publicly traded corporation shall not by itself constitute a violation of this
Section 5.1.

7

 

          (e) For the purposes of this Section 5.1, the Company’s business is defined as
owning, operating and/or franchising restaurants in either the service casual dining segment,
steakhouse segment (with an average check in excess of $25.00), high-end / polished casual segment
of the restaurant industry, or any other segment of the restaurant industry in which the Company
shall own, operate or franchise restaurants during the Term and as of the date of termination of
Executive’s employment with the Company. Executive understands that the activities described in
this Section 5.1, shall be prohibited only to the extent that the company or concept
competing / potentially competing with the Company has a restaurant operating or under development
(or contemplated for development) within the parameters set forth above and within a 25 mile radius
of any Company restaurant in operation, franchised or actively under development or contemplated
for development by the Company at any relevant time of determination. If it shall be judicially
determined that Executive has violated any of Executive’s obligations under this Section
5.1, then the period applicable to the obligation which Executive shall have been determined to
have violated shall automatically be extended by a period of time equal in length to the period
during which said violation(s) occurred.

     5.2 Nonsolicitation. Executive agrees that, for a period of eighteen (18) months following
Executive’s termination of employment with the Company for any reason, Executive shall not directly
or indirectly at any time solicit or induce or attempt to solicit or induce any employee(s) of the
Company or any of its parent, subsidiary or affiliate entities to terminate their employment with
the Company or such entity; provided such limitation shall only apply to those employees of
the Company who are at the level of director or above.

     5.3 Confidentiality.

          (a) During the Term and at any time thereafter, Executive shall not disclose, furnish,
disseminate, make available or, except in the ordinary course of performing Executive’s duties on
behalf of the Company, use any intellectual property, trade secrets or confidential or proprietary
business and technical information of the Company, or its parent, subsidiaries or affiliated
entities without limitation as to when it was acquired by Executive or whether it was compiled or
obtained by, or furnished to Executive while Executive was employed by the Company. Such
intellectual property, trade secrets and confidential or proprietary business and technical
information are considered to include, without limitation, development plans, financial statistics,
research data, or any other statistics and plans contained in monthly and annual review books,
profit plans, capital plans, critical issues plans, strategic plans, or marketing, real estate, or
store operations plans. Any such information created by Executive during Executive’s tenure,
whether alone or in collaboration with other employees of the Company, shall constitute a “work
made for hire”, shall be owned solely and exclusively by the Company (and afforded the protection
of the confidentiality provisions herein), and the Executive hereby assigns any and all right,
title and interest in and to the same to the Company, and shall execute any such assignments,
certificates, instruments or documents which the Company may reasonably request to document and
effect the provisions of this paragraph. Executive specifically acknowledges that all such
information, whether reduced to writing or maintained in Executive’s mind or memory and whether
compiled by the Company and/or Executive derives independent economic value from not being readily
known to or ascertainable by proper means by others who can obtain economic value from its
disclosure or use, that reasonable efforts have been put forth by the Company to maintain the
confidentiality of such information, that such information is and shall remain the sole property of
the Company and that any retention and use of such information during or after the termination of
Executive’s relationship with the Company (except in the course of Executive’s performance of
Executive’s duties during the Term) shall constitute a misappropriation of the Company’s trade
secrets and related intellectual property and confidential information; provided, however, that
this restriction shall not apply to information which is in the public domain or otherwise made
public by others through no fault of Executive.

          (b) The above restrictions on disclosure and use of confidential information shall not prevent
Executive from: (i) using or disclosing information in the good faith performance of Executive’s

8

 

duties on behalf of the Company; (ii) using or disclosing information to another employee to
whom disclosure is required to perform in good faith the duties of either person on behalf of the
Company; (iii) using or disclosing information to another person or entity bound by a duty or an
agreement of confidentiality as part of the performance in good faith of Executive’s duties on
behalf of the Company or as authorized in writing by the Company; (iv) at any time after the period
of Executive’s employment using or disclosing information to the extent such information is,
through no fault or disclosure of Executive, generally known to the public; (v) using or disclosing
information which was not disclosed to Executive by the Company or otherwise during the period of
Executive’s employment which is then disclosed to Executive after termination of Executive’s
employment with the Company by a third party who is under no duty or obligation not to disclose
such information; or (vi) disclosing information as required by law. If Executive becomes legally
compelled to disclose any of the confidential information, Executive shall (i) provide the Company
with reasonable prior written notice of the need for such disclosure such that the Company may
obtain a protective order; (ii) if disclosure is required, furnish only that portion of the
confidential information which, in the written opinion of Executive’s counsel delivered to the
Company, is legally required; and (iii) exercise reasonable efforts to obtain reliable assurances
that confidential treatment shall be accorded to the confidential information.

          (c) Executive expressly agrees and understands that the remedy at law for any breach by
Executive of this Article V will be inadequate and that the damages flowing from such
breach are not readily susceptible to being measured in monetary terms. Accordingly, it is
acknowledged that upon any violation of any provision of this Article V, the Company will
be entitled to immediate injunctive relief and may obtain a temporary order restraining any
threatened or further breach without the necessity of proof of actual damage. Nothing in this
Agreement shall be deemed to limit the Company’s remedies at law or in equity for any further
breach by Executive of any of the provisions of this Agreement which may be pursued or availed of
by the Company.

ARTICLE VI.

MISCELLANEOUS

     6.1 Notice. For purposes of this Agreement, notices and all other communications provided for
in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or
mailed by United States registered mail, return receipt requested, postage prepaid, as follows:

	 	 	 

	If to the Company:

	 	O’Charley’s Inc.
	 

	 	3038 Sidco Drive
	 

	 	Nashville, Tennessee 37204
	 

	 	Attention: Chief Executive Officer
	 
	 	 
	If to Executive:

	 	R. Jeffrey Williams
	 

	 	3112 Kottas Court
	 

	 	Brentwood, Tennessee 37027

or such other address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.

     6.2 Modification / Integration. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in a writing signed by
Executive and the Company. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to

9

 

the subject matter hereof have been made by either party that are not set forth expressly in
this Agreement.

     6.3 Validity / Survival. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect. The provisions of Section 3.2(b), Section 4.3 and
Article 5 shall continue in full force and effect following the expiration or earlier termination
of this Agreement.

     6.4 Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together shall constitute one and the same
instrument.

     6.5 Legal Fees and Expenses. In the event either party hereto shall institute litigation
against the other party hereto relating to the interpretation or enforcement of this Agreement, the
prevailing party in such litigation (as determined following a final, nonappealable judgment by a
court of competent jurisdiction) shall be entitled to recover from the other party any and all
attorneys’ and related fees and expenses incurred by the prevailing party in such litigation.

     6.6 No Obligation to Mitigate Damages; No Effect on Other Contractual Rights. Executive shall
not be required to mitigate damages or the amount of any payment provided for under this Agreement
by seeking other employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by Executive as the result of employment by
another employer after the Term, or otherwise.

     6.7 Indemnification. It is understood and agreed that the Company will indemnify Executive
(including advancing expenses) to the fullest extent permitted by Tennessee law and the Company’s
Charter and Bylaws for any judgments, amounts paid in settlement and reasonable expenses, including
reasonable attorneys’ fees, incurred by Executive in connection with the defense of any lawsuit or
other claim to which Executive is made a party by reason of being an officer, director or employee
of the Company or any of its subsidiaries.

     6.8 Assignment; Successor to the Company. This Agreement is not assignable by either party
without the prior written consent of the other except that the Company may assign it without such
consent to any parent, subsidiary or affiliated entity, and upon such entity’s assumption of the
Company’s duties and obligations hereunder, such entity shall succeed to each of the Company’s
rights hereunder. Upon such assignment and assumption, Executive agrees to and becomes an employee
of such entity, and all references to the Company in this Agreement shall, as the context requires,
be deemed to be to the entity to which such assignment, assumption and employment relate. The
Company will require any successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Executive, expressly, absolutely
and unconditionally to assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such succession or assignment
had taken place. Any failure of the Company to obtain such agreement prior to the effectiveness of
any such succession or assignment shall be a material breach of this Agreement and shall entitle
the Executive to terminate the Executive’s employment and such termination shall constitute a
Termination for Good Reason under Article IV. As used in this Agreement, “Company” shall
mean the Company as hereinbefore defined and any successor or assign to its business and/or assets
as aforesaid which executes and delivers the agreement provided for in this Section 6.8 or which
otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.
Notwithstanding anything to the contrary herein, this Agreement, in the event of the death of
Executive, shall inure to the benefit of and be enforceable by Executive’s personal and legal
representatives, executors, administrators, successors, heirs, distributes, devisees and legatees.
If Executive should die while any amounts are still payable to Executive hereunder, all such
amounts, unless otherwise provided

10

 

herein, shall be paid in accordance with the terms of this Agreement to Executive’s devisee,
legatee, or other designee or, if there be no such designee, to Executive’s estate.

     6.9 Governing Law; Arbitration. This Agreement and any amendments thereto shall become and
shall be governed by, and construed in accordance with, the internal, substantive laws of the State
of Tennessee. Executive acknowledges that any action for breach of this Agreement or of any term of
this Agreement is subject to that certain Arbitration Agreement in effect between Executive and
Company and executed prior to the date hereof (the “Arbitration Agreement”). Executive reaffirms
the enforceability of the Arbitration Agreement both with respect to this Agreement and his
employment with Company, and agrees not to challenge the enforceability of the same.

     6.10 Section 409A Provisions. It is intended that (i) each payment or installment of payments
provided under this Agreement is a separate “payment” for purposes of Section 409A of the Code and
(ii) that the payments satisfy, to the greatest extent possible, the exemptions from the
application of Code Section 409A, including those provided under Treasury Regulations
1.409A-1(b)(4) (regarding short-term deferrals), 1.409A-1(b)(9)(iii) (regarding the two-times, two
year exception), and 1.409A-1(b)(9)(v) (regarding reimbursements and other separation pay).
Notwithstanding anything to the contrary in this Agreement, if the Company determines (i) that on
the date of Executive’s termination of employment or at such other time that the Company determines
to be relevant, the Executive is a “specified employee” (as such term is defined under Treasury
Regulation 1.409A-1(i)(1)) of the Company and (ii) that any payments to be provided to the
Executive pursuant to this Agreement are or may become subject to the additional tax under Code
Section 409A(a)(1)(B) or any other taxes or penalties imposed under Code Section 409A (“Section
409A Taxes”) if provided at the time otherwise required under this Agreement, then (A) such
payments shall be delayed until the date that is six (6) months after the date of the Executive’s
termination of employment with the Company, or such shorter period that, as determined by the
Company, is sufficient to avoid the imposition of Section 409A Taxes (the “Payment Delay Period”).
Any payments delayed pursuant to this Section 6.10 shall be made in a lump sum on the first day of
the seventh month following the Executive’s termination of employment, or such earlier date that,
as determined by the Company, is sufficient to avoid the imposition of any Section 409A Taxes.

     6.11 Entire Agreement. With the exception of the Tuition Agreement and the Arbitration
Agreement which shall not in any manner be affected, modified or revised by the terms of this
Agreement, this Agreement supersedes the provisions of each and every other agreement or
understanding, whether oral or written, between the undersigned and the Company relating to the
subject matter contained herein (including without limitation, the Employment Agreement), and any
such agreement or understanding shall be of no further force and effect. The provisions of this
Agreement are severable and if any one or more provisions may be determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions and any partially
unenforceable provision, to the extent enforceable in any jurisdiction, shall, nevertheless, be
binding and enforceable. The parties hereto agree that when fully executed, the foregoing shall
constitute a legally enforceable agreement between the parties, which also shall inure the benefit
of the Company’s successors and assigns and Executive’s heirs and personal representatives.

     6.12 Review of Agreement by Executive. Executive represents that prior to signing this
Agreement, Executive has read, fully understands and voluntarily agrees to the terms and conditions
as stated above, that Executive was not coerced to sign this agreement, that Executive was not
under duress at the time Executive signed this Agreement and that, prior to signing this Agreement,
Executive had adequate time to consider entering into this Agreement, including without limitation,
the opportunity to discuss the terms and conditions of this Agreement, as well as its legal
consequences, with an attorney of his choice (and at Executive’s sole expense). This Agreement
shall become effective as of the date hereof.

[Signature Page Follows]

11

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 

	 	 	O’CHARLEY’S INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David Head
	 

	 	 	 	 
	 	 	Name: David Head
	 	 	Title: President and Chief Executive Officer
	 
	 	 	 	 
	 	 	EXECUTIVE
	 
	 	 	 	 
	 	 	/s/ R. Jeffrey Williams
	 	 	 
	 	 	Name: R. Jeffrey Williams

Signature Page to O’Charley’s Inc. Executive Employment Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00193-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00193-of-00352.parquet"}]]