EXHIBIT 10.3
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 SENTINEL CAPITAL PARTNERS, L.L.C. a Delaware limited liability company
("Sentinel").
WHEREAS, the Company desires for Sentinel to provide certain
ongoing advisory and management services to the Company, and Sentinel 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 when a
representative of Sentinel acts as a member of the Board of Directors of the
Company or Buffets Holdings, Inc. ("Buffets Holdings"), Sentinel 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; recommending positions in or securities of
selected entities; identifying bank, institutional and other sources of
financing needed or appropriate in connection with any proposed transaction,
arranging appropriate introductions; and review of all documents required to
complete each transaction.
Section 2. Compensation. In consideration of the Services
previously provided and to be provided in accordance with Section 1, the Company
shall pay to Sentinel an advisory and management fee equal to $200,000 for each
fiscal year. All fees shall be pro-rated for partial years. The Company shall
pay Sentinel fees in arrears within 15 days of the end of each month.
Section 3. Reimbursement. Sentinel shall be entitled to
reimbursement of all reasonable out-of-pocket travel expenses incurred in
connection with the performance of this Agreement and all other reasonable
expenses as agreed in advance with the Company, which amounts shall be promptly
reimbursed by the Company upon request.
Section 4. Indemnity. (a) None of Sentinel 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.
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(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 Sentinel, not to
exceed in any event the amount of fees paid to Sentinel 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 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 Sentinel, to:
Sentinel Capital Partners, L.L.C.
777 Third Avenue, 32nd Floor
New York, NY 10017
Attention: David Lobel
Telephone: (212) 688-3100
Facsimile: (212) 688-6513
with a copy to:
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Kirkland & Ellis
153 East 53rd Street, 39th Floor
New York, New York
Attention: Frederick Tanne, Esq.
Telephone: (212) 446-4831
Facsimile: (212) 446-4900
(b) if to the Company, to:
Buffets, Inc.
1460 Buffet Way
Eagan, MN 55121
Attention: Kerry A. Kramp
Telephone: (651) 365-2757
Facsimile: (651) 365-0911
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. This Agreement shall terminate
automatically upon the sale change of control of the Company or the sale of all
or substantially all of the Companies assets. In addition, if Sentinel ceases to
have a representative who acts as a member of the Board of Directors of Buffets
Holdings, the Company or any successor thereto, this Agreement shall terminate.
The provisions of Section 4 and the obligations of the Company under Section 2
with respect to any accrued but unpaid compensation and Section 3 with respect
to unpaid expenses shall survive any termination of this Agreement.
[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. Michael Andrews, Jr.
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Name: R. Michael Andrews, Jr.
Title: Chief Financial Officer
SENTINEL CAPITAL PARTNERS, L.L.C.
By: /s/ David Lobel
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Name: David Lobel
Title: