Exhibit 10.2
dated as of March 10, 2006
CONFIDENTIAL
Diamond Creek Investment Partners, as Agent
under the below-referenced Credit Agreement
00 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Re: FEE LETTER
----------
Ladies and Gentlemen:
Reference hereby is made to that certain Credit Agreement, dated as of even
date herewith (the "Credit Agreement"), by and among the lenders identified on
----------------
the signature pages thereof (such lenders, together with their respective
successors and permitted assigns, are referred to hereinafter each individually
as a "Lender" and collectively as the "Lenders"), DIAMOND CREEK INVESTMENT
-------
PARTNERS, LLC, a Delaware limited liability company ("Diamond Creek"), as the
-------------
arranger and administrative agent for the Lenders (together with its successors
and assigns in such capacity, "Agent"), and GRILL CONCEPTS, INC., a Delaware
-----
corporation (the "Borrower".) Capitalized terms used herein shall have the
--------
meanings set forth in the Credit Agreement unless specifically defined herein.
In connection with the Credit Agreement, Borrower hereby agrees to pay to
Agent the following fees, which fees shall be for its sole and separate account
and not the account of any Lender:
1. Closing Fee. A closing fee of $120,000, which fee shall be due and
------------
payable on the Closing Date.
2. Loan Servicing Fee. A monthly servicing fee of $3,000, which fee shall
-------------------
be due and payable, in arrears, on the first day of each month, commencing with
the first day of the month immediately following the Closing Date, through the
Termination Date, provided, however, that (a) the servicing fee that is due, in
-------- -------
arrears, on the first day of the month immediately following the Closing Date
shall be an amount equal to (i) $3,000 times (ii) the result of the total number
of days in the prior month that elapsed from and including the Closing Date up
to and including the last day of such month divided by the total number of days
in such month, and (b) the servicing fee that is due, in arrears, on the
Termination Date shall be an amount equal to (i) $3,000 times (ii) the result of
the total number of days in the month that elapsed to and including the
Termination Date divided by the total number of days in the month of
termination.
3. Unused Line Fee. On the first day of each month prior to the Termination
---------------
Date, an unused line fee in an amount equal to 0.50% per annum times the result
of (i) the Maximum Revolver Amount, less (ii) the average Daily Balance of
Advances that were outstanding during the immediately preceding month.
4. Audit, Appraisal, and Valuation Charges. Field examination, audit,
-------------------------------------------
appraisal, and valuation fees and charges as follows (i) a fee of $1,250 per
day, per auditor/examiner, plus out-of-pocket expenses for each examination or
financial audit of Borrower performed by personnel employed by Agent and (ii)
the actual charges paid or incurred by Agent if it elects to employ the services
of one or more third Persons to perform financial audits of Borrower or their
Subsidiaries, to appraise the Collateral, or any portion thereof, or to assess
Borrower' or their Subsidiaries' business valuation; provided, however, that so
-------- -------
long as no Event of Default shall have occurred and be continuing, Borrower
shall not be obligated to reimburse Agent for more than $5,000 in fees and
charges in connection with field examinations, audits, appraisals, or valuations
during any calendar year.
5. Prepayment Premium. If Borrower has sent a notice of termination
-------------------
pursuant to the provisions of Section 3.6 of the Credit Agreement, then on the
-----------
date set forth as the date of termination of the Credit Agreement in such
notice, Borrower shall pay to Agent, in cash, the Applicable Prepayment Premium.
In the event of the termination of the Credit Agreement and repayment of the
Obligations at any time prior to the Maturity Date, for any other reason,
including (a) termination upon the election of the Required Lenders to terminate
after the occurrence and during the continuation of an Event of Default, (b)
foreclosure and sale of Collateral, (c) sale of the Collateral in any Insolvency
Proceeding, or (d) restructure, reorganization, or compromise of the Obligations
by the confirmation of a plan of reorganization or any other plan of compromise,
restructure, or arrangement in any Insolvency Proceeding, then, in view of the
impracticability and extreme difficulty of ascertaining the actual amount of
damages to the Lender Group or profits lost by the Lender Group as a result of
such early termination, and by mutual agreement of the parties as to a
reasonable estimation and calculation of the lost profits or damages of the
Lender Group, Borrower shall pay to Agent on such date of termination, in cash,
the Applicable Prepayment Premium, measured as of the date of such termination.
For purposes of this section, "Applicable Prepayment Premium" means, as of any
-----------------------------
date of determination, an amount equal to (a) during the period from and after
the Closing Date through and including the date that is the first anniversary of
the Closing Date, 3% times the Maximum Revolver Amount, (b) during the period
after the date that is the first anniversary of the Closing Date through and
including the date that is the second anniversary of the Closing Date, 1% times
the Maximum Revolver Amount, and (c) thereafter, $0. The foregoing to the
contrary notwithstanding, if (i) Diamond Creek, together with its Affiliates and
Related Funds, shall cease to constitute the Required Lenders or (ii) Diamond
Creek shall cease to be the Agent, then the Applicable Prepayment Premium shall
be $0.
Borrower shall pay all amounts due and payable hereunder to Agent in the
manner set forth in the Credit Agreement. Agent hereby is expressly authorized
by Borrower to (i) charge such amounts due and owing to the Loan Account, and
(ii) designate such amounts as an Advance under the Credit Agreement.
Borrower hereby acknowledges and agrees that each fee payable hereunder is
fully earned and non-refundable on the date such fee is due and payable as
provided above and that each such fee constitutes Obligations and is in addition
to any other fees payable by Borrower under the Credit Agreement or any other
Loan Document.
This letter agreement is the Fee Letter referred to in the Credit
Agreement, shall be construed under and governed by the laws of the State of New
York, and may be executed in any number of counterparts and by different parties
on separate counterparts. Each of such counterparts shall be deemed to be an
original, and all of such counterparts, taken together, shall constitute but one
and the same agreement. Delivery of an executed counterpart of this letter by
telefacsimile or other electronic method of transmission shall be equally
effective as delivery of a manually executed counterpart.
[signature page follows]
The contents of this letter are confidential. This letter shall not be
disclosed or displayed or its contents otherwise disclosed to any third Person
without the prior written consent of Agent, except as required by law.
Very truly yours,
GRILL CONCEPTS, INC.,
a Delaware corporation
By:
-----------------------------
Name:
Title:
Accepted and agreed to
as of the date first above written:
DIAMOND CREEK INVESTMENT PARTNERS, LLC,
as Agent
By:
------------------------
Name:
Title:
