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EXHIBIT 10.4
EXECUTION COPY
MANAGEMENT SERVICES AGREEMENT
MANAGEMENT SERVICES AGREEMENT, made as of July 1, 1998, by and between
Romacorp, Inc. (formerly known as Romacorp Operating Company, Inc.) (the
"Company"), and Sentinel Capital Partners, L.L.C. (the "Consultant").
WHEREAS, the Company has retained and availed itself of Consultant, and
Consultant has performed for the Company, Roma Restaurant Holdings, Inc.
(formerly known as Romacorp, Inc.) ("Holdings"), and their subsidiaries
(together with the Company and Holdings, the "Company Group"), certain services
in connection with the recapitalization (the "Recapitalization") of the capital
stock of Holdings pursuant to that certain Recapitalization Agreement, dated as
of April 24, 1998, by and among Holdings, Sentinel Capital Partners, L.P., NPC
International, Inc. and NPC Restaurant Holdings, Inc., as amended (with certain
rights assigned to certain other parties);
WHEREAS, the Company desires to retain and avail itself of the
Consultant, and the Consultant desires to perform for the Company and its
affiliates certain services; and
WHEREAS, the Consultant, by and through its officers, employees, agents
and affiliates, has developed, in connection with the conduct of their
businesses and affairs, expertise in the fields of management, finance,
marketing and strategic planning.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties do hereby agree as follows:
1. TERM. This Agreement shall remain in effect so long as Sentinel
Capital Partners, L.P. and/or Sentinel Capital Partners II, L.P. owns any shares
of capital stock of Holdings and unless the Company and the Consultant terminate
this Agreement by mutual agreement; provided that Sections 7 and 8 shall survive
any termination of this Agreement.
2. APPOINTMENT. The Company hereby retains the Consultant to render
management and consulting services to the Company (or to such subsidiaries of
the Company as the Company may from time to time request) during the Term as
herein contemplated.
3. CONSULTANT SERVICES. The Consultant hereby agrees that during the
term of this Agreement it shall render to the Company Group by and through such
of its officers, employees, agents, representatives and affiliates as the
Consultant, in its sole discretion, shall designate from time to time advisory
and consulting services in relation to the affairs of the Company Group in
connection with strategic financial planning, and other services not referred to
in the next sentence, including, without limitation, advisory and consulting
services relating to the selection, supervision and retention of independent
auditors, the selection, retention and supervision of outside legal
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counsel, and the selection, retention and supervision of investment bankers or
other financial advisors or consultants. It is expressly agreed that the
services to be performed under this paragraph 3 shall not include financial
advisory services rendered by the Consultant to the Company Group in connection
with acquisitions and divestitures by the Company Group, hiring of executive
personnel, refinancings, initial public offerings, sales of stock by the Company
Group or "exit" transactions. In the event services contemplated by the
preceding sentence are requested by the Company, the Consultant may be entitled
to receive additional compensation.
4. CONSULTANTS' FEES. In consideration of the Consultant's agreement to
provide the above-described consulting services, the Company shall pay to the
Consultant a fee of $300,000 per year for the first two years following the date
hereof and $500,000 per year for each year thereafter, in each case payable
quarterly in advance. In addition, the Company agrees to reimburse the
Consultant for any out-of-pocket expenses incurred by it or its affiliates in
connection with any services performed hereunder.
5. CLOSING PAYMENT. In consideration of the Consultant's provision of
services in connection with the Acquisition, the Company shall, upon the closing
of the Acquisition, pay to the Consultant, its out-of-pocket expenses incurred
by it or its affiliates in connection with the Acquisition.
6. PERSONNEL. Consultant shall provide and devote to the performance of
this Agreement such partners, employees and agents as Consultant shall deem
appropriate to the furnishing of the services required; provided, that if a
partner, employee or agent of the Consultant becomes an officer or an employee
of the Company Group, the Company may pay compensation to such partner, employee
or agent which shall not be deemed to be compensation to the Consultant
hereunder.
7. LIABILITY. Neither the Consultant nor any of its respective
affiliates, partners, employees or agents shall be liable to the Company or its
subsidiaries or affiliates for any loss, liability, damage or expense arising
out of or in connection with the performance of services contemplated by this
Agreement, unless such loss, liability, damage or expense shall be proven to
result directly from gross negligence, willful misconduct or bad faith on the
part of such Consultant, its affiliates, partners, employees or agents acting
within the scope of their employment or authority, in which event such
Consultant will be liable to the extent of its individual culpability as proven.
In no event will Consultant be liable for consequential or incidental damages
(including any damages for lost profits or opportunity).
8. INDEMNITY. The Company Group shall defend, indemnify and hold
harmless the Consultant, its affiliates, partners, employees, agents, directors,
officers and controlling persons (collectively, the "Indemnified Parties") from
and against any and all loss, liability, damage or expense (including attorney
fees and expenses incurred in connection with the investigation, defense or
negotiation of a settlement thereof or otherwise) (collectively, "Losses")
arising from any claim (threatened or actual, just or unjust) (a "Claim") by any
person with respect to, or in any way related to the Recapitalization (including
Sentinel Capital Partners, L.P.'s and/or Sentinel Capital Partners
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II, L.P.'s investment in Holdings), this Agreement or the services (including,
without limitation, the engagement of such Consultant pursuant to this Agreement
and the performance by such Consultant of services pursuant to this Agreement)
contemplated by this Agreement. The Company Group shall, if requested by the
Consultant, defend at its own cost and expense such Claims with attorneys
reasonably satisfactory to the Consultant (in which case the Company shall
consult with Consultant on all material decisions in connection with such Claim
and shall not settle any such Claim without the consent of the Consultant,
consent not to be unreasonably withheld), and, if not so requested, advance to
the Indemnified Party the costs of such defense. No Indemnified Party shall be
entitled to indemnification for Losses under this Section 8 to the extent it is
proven that such Losses arose as the direct result of gross negligence, bad
faith or willful misconduct by such of the Indemnified Parties; provided that if
such determination is proven, the applicable Indemnified Party(s) shall
reimburse the Company for the costs of defense advanced by the Company.
9. NOTICES. All notices hereunder shall be dated and in writing and
shall be deemed to have been given (i) when delivered, if delivered personally,
(ii) one day following the date sent, if sent by reputable overnight courier,
fee prepaid or (iii) upon receipt of confirmation, if sent by facsimile
transmission (with receipt confirmed and original sent by first class mail), to
the party to whom it is directed, at the addresses or the facsimile number set
forth for such party below:
To the Consultant:
Sentinel Capital Partners, L.L.C.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxx
Xxxx X. XxXxxxxxx
Xxxx X. Xxxxxx
To the Company:
Romacorp, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxx
10. ASSIGNMENT. No party may assign any obligations hereunder to any
other party without the prior written consent of the other two parties; such
consent shall not be unreasonably withheld; provided, however, that the
Consultant may assign its rights and obligations
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under this Agreement to any of its respective affiliates without the consent of
any party. The assignor shall remain liable for the performance of any assignee.
11. SUCCESSORS. This Agreement and all the obligations and benefits
hereunder shall inure to the successors and assigns of the parties.
12. ENTIRE AGREEMENT. Except as otherwise expressly set forth herein,
the terms and conditions of this document constitute the complete agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersede and preempt any prior communications, understandings, warranties,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.
13. AMENDMENT. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by either party from any such provision,
shall in any event be effective unless the same shall be in writing and signed
by an authorized representative of each of the parties to this Agreement and
then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
14. COUNTERPARTS. This Agreement may be executed and delivered by each
party hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original and all of which taken together shall
constitute but one and the same Agreement.
15. GOVERNING LAW. ALL PROVISIONS OF THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF CONFLICTS OF LAW OR CHOICE OF LAW OF
THE STATE OF NEW YORK OR ANY OTHER JURISDICTION WHICH WOULD CAUSE THE
APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties have executed this Management Services
Agreement as of the date first written above.
SENTINEL CAPITAL PARTNERS, L.L.C.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Secretary
ROMACORP, INC.
By: /s/ Xxxxxx X. Page
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Name: Xxxxxx X. Page
Title: President
