EXHIBIT 10.2
MANAGEMENT AND FEE AGREEMENT
MANAGEMENT AND FEE AGREEMENT (this "Agreement"), dated as of
October 2, 2000, between BUFFETS, INC., a Minnesota corporation (the "Company")
and XXXXXX-XXXXXX CAPITAL, INC., a Delaware corporation ("CIC").
WHEREAS, the Company desires for CIC to provide certain
ongoing advisory and management services to the Company, and CIC is willing to
provide such services subject to the terms and conditions contained herein.
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Services. During the term of this Agreement, CIC
shall provide such acquisition and financial advisory services (the "Services")
to the Company and its subsidiaries as the Board of Directors of the Company
shall reasonably request, including without limitation: providing general
business advice, including recommendations as to, and identification of,
acquisitions and dispositions of operating entities; structuring and negotiating
transactions and recommending positions in or securities of selected entities;
identifying, structuring and obtaining bank, institutional and other sources of
financing needed or appropriate in connection with any proposed transaction,
arranging appropriate introductions and marketing the financing proposals; and
supervising the preparation and review of all documents required to complete
each transaction.
Section 2. Compensation. (a) In consideration of the Services
previously provided and to be provided in accordance with Section 1, the Company
shall pay to CIC an advisory and management fee equal to 2% of Consolidated
EBITDA of the Company for each fiscal year. All fees shall be pro-rated for
partial years. The Company shall pay CIC fees in arrears thirteen times a year
within two weeks of the end of each of the Company's thirteen fiscal periods,
subject to the 2% limit described above. For the purposes of this Agreement, the
term "Consolidated EBITDA" shall have the meaning ascribed thereto in the Credit
Agreement among Buffets Holdings, Inc., the Company, as borrower, the several
lenders from time to time parties thereto, Xxxxxx Brothers Inc. and FleetBoston
Xxxxxxxxx Xxxxxxxx Inc., as co-lead arrangers and joint book-running managers,
Xxxxxx Commercial Paper Inc., as administrative agent, Fleet National Bank, as
syndication agent and First Union National Bank, as documentation agent, dated
as of October 2, 2000 (the "Credit Agreement").
(b) Upon the completion of the merger of Buffets Merger
Corporation with the Company, the Company shall pay to CIC a transaction fee
equal to $6,430,000, by wire transfer of immediately available funds.
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(c) If the Company is involved in any acquisitions,
dispositions or sale of the Company or Buffets Holdings, Inc., financings or
similar transactions with respect to which CIC provides services, a 1%
investment banking fee shall also be paid by the Company to CIC.
Section 3. Reimbursement. CIC and its affiliates shall be
entitled to reimbursement of all out-of-pocket expenses (including, without
limitation, legal, accounting, consulting and travel fees and expenses) incurred
in connection with the performance of this Agreement (other than salary expenses
and associated overhead charges), which amounts shall be promptly reimbursed by
the Company upon request.
Section 4. Indemnity. (a) None of CIC or its affiliates or any
of their respective partners, officers, directors, stockholders, affiliates,
agents or employees (each an "Indemnified Party") shall have any liability to
the Company for any services provided pursuant to this Agreement, except as may
result from such Indemnified Party's gross negligence or willful misconduct.
(b) The Company hereby agrees to indemnify each Indemnified
Party from and against all losses, liabilities, damages, deficiencies, demands,
claims, actions, judgments or causes of action, assessments, costs or expenses
(including, without limitation, interest, penalties and reasonable fees,
expenses and disbursements of attorneys, experts, personnel and consultants
reasonably incurred by the Indemnified Party in any action or proceeding between
the Company and the Indemnified Party or between the Indemnified Party and any
third party, or otherwise) based upon, arising out of or otherwise in respect of
this Agreement or any Indemnified Party's equity interest in the Company. To the
extent that the foregoing indemnification is not permitted by law, each of the
Indemnified Parties and the Company shall be subject and entitled to
contribution based upon the relative benefits (in the case of CIC, not to exceed
in any event the amount of fees paid to CIC hereunder) received by each and, if
legally required, based upon the relative fault of each of the Indemnified
Parties and the Company.
Section 5. Assignment. This Agreement may not be assigned by
any party hereto without the written consent of the other party; provided, that
the Company shall be entitled to assign this Agreement to any person that is an
affiliate of the Company or that otherwise assumed or is a successor to
substantially all of the assets and the liabilities of the Company.
Section 6. Modification. This Agreement may not be modified or
amended in any manner other than by an instrument in writing signed by the
parties hereto, or their respective successors or assigns.
Section 7. Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes any prior agreement or understanding among them with respect to
such subject matter.
Section 8. Notices. Any notice or other communication required
or permitted hereunder shall be in writing and shall be delivered personally,
sent by
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facsimile transmission or sent by certified, registered or express mail, postage
prepaid and return receipt requested. Any such notice shall be deemed given when
so delivered personally or sent by facsimile transmission or, if mailed, five
(5) days after the date of deposit in the United States mails, as follows:
(a) if to CIC, to:
Xxxxxx-Xxxxxx Capital, Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) if to the Company, to:
Buffets, Inc.
0000 Xxxxxx Xxx
Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may, by notice given in accordance with this Section to the other
party, designate another address or person for receipt of notices hereunder.
Section 9. Governing Law; Submission to Jurisdiction. All
questions concerning the construction, validity and interpretation of this
Agreement will be governed by and construed in accordance with the internal law
(and not the law of conflicts) of the State of New York.
Section 10. Termination. This Agreement may be terminated by
mutual consent of the parties hereto. The provisions of Section 4 and the
obligations of the
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Company under Section 2 (including, without limitation, rights to future payment
in accordance with Section 2(c)) and Section 3 with respect to any compensation
or reimbursement for expenses shall not be determined without the prior written
consent of CIC.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
BUFFETS, INC.
By: /s/ R. Xxxxxxx Xxxxxxx, Jr.
---------------------------------
Name: R. Xxxxxxx Xxxxxxx, Jr.
Title: Chief Financial Officer
XXXXXX-XXXXXX CAPITAL, INC.
By: /s/ Xxxxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Chairman
