Exhibit 10.1
 
SERVICES AGREEMENT
This Services Agreement (this "Agreement") is made and entered into as of
September 15, 2017 by and among Biglari Holdings Inc., an Indiana corporation
("BH"), Biglari Enterprises LLC, a Delaware limited liability company, and
Biglari Capital LLC, a Texas limited liability company (formerly Biglari Capital
Corp.) ("BCC," and together with Biglari Enterprises LLC, the "Biglari
Entities").
RECITALS
A.          BH and BCC entered into a Shared Services Agreement (the "Prior
Agreement") on July 1, 2013, pursuant to which BH provided specified services to
BCC.
B.          BCC is the general partner of each of The Lion Fund, L.P., a
Delaware limited partnership ("TLF I"), and The Lion Fund II, L.P., a Delaware
limited partnership ("TLF II" and, together with TLF I, "TLF"), and provides
certain services to TLF in such capacity.
C.          BH is a limited partner of each of TLF I and TLF II.
D.          The Biglari Entities are solely owned by Sardar Biglari ("Mr.
Biglari"), the Chairman and Chief Executive Officer of BH.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
together with other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1.          Definitions.  As used in this Agreement, the following terms shall
have the following meanings:
(a)          "Affiliates" shall mean (solely for purposes of this Agreement and
for no other purpose) (i) with respect to BH, its subsidiaries, and (ii) with
respect to the Biglari Entities, Mr. Biglari and TLF.
(b)          "Effective Date" shall mean October 1, 2017.
(c)          "Representatives" shall mean, with respect to any person or entity,
the members, partners, officers, directors, employees, agents and
representatives (including attorneys, accountants, consultants and other
advisors) of such person or entity.
2.          Termination of the Prior Agreement.  BH and BCC agree that the Prior
Agreement is terminated as of the Effective Date and BH is no longer obligated
to provide or cause to be provided services pursuant to the Prior Agreement.
3.          Term and Termination.
(a)          Term.  This Agreement shall commence on the Effective Date and
shall continue through September 30, 2022 (the "Initial Term").  This Agreement
shall automatically renew for

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successive five-year periods ending on September 30 (each, a "Renewal Term")
unless and until terminated pursuant to the terms hereof.  Together, the Initial
Term and all of the Renewal Terms constitute the "Term" of the Agreement.
(b)          Termination.  This Agreement may be terminated by either the
Biglari Entities, on the one hand, or by BH, effective on the last day of the
Initial Term or any such Renewal Terms, as applicable, upon written notice to
the other parties given not less than 60 days prior thereto.
4.          Services.
(a)          The Biglari Entities shall provide or cause to be provided for
themselves and their Affiliates, consistent with past practice pursuant to the
Prior Agreement or otherwise, the general and administrative services, including
but not limited to those described in Exhibit A hereto (the "Services"), that
were previously provided by BH.
(b)          The parties agree that there shall be no material change in the
scope or level of the Services provided by the Biglari Entities during the Term
(as hereinafter defined) without the mutual written agreement of the parties;
provided, however, that (i) the Biglari Entities may make changes from time to
time in the manner of performing Services without obtaining BH's prior written
consent if (A) such changes are reasonably necessary in the Biglari Entities'
reasonable judgment to comply with applicable laws, rules, regulations and
orders or (B) such changes are to address an emergency and are on a temporary
and short-term basis and (ii) if the Biglari Entities reasonably believe they
are unable to provide any Service because of a failure to obtain any third-party
contractor consents or because the provision of such Service would, in the
Biglari Entities' reasonable judgment, require the Biglari Entities to violate
any applicable law, rule, regulation or order, the Biglari Entities will notify
BH promptly after the Biglari Entities become aware of such fact and the parties
will cooperate to determine the best alternative approach to be provided by the
Biglari Entities.
5.          Fixed Monthly Payments; Annual Review.
(a)          BH shall pay or cause to be paid to the Biglari Entities (in the
aggregate) a fixed fee (the "Fixed Fee") of $700,000 per month for the first
year of the Initial Term.  For each subsequent year of the Initial Term and for
each year of each Renewal Term, the Fixed Fee shall be adjusted by an amount
equal to the change in the annual consumer price index.
(b)          For each year after the first year of the Initial Term and for each
year of each Renewal Term, the Governance, Compensation and Nominating Committee
of the BH board of directors (the "Committee") may conduct a review of the
services provided pursuant to this Agreement and the Fixed Fee.  The Biglari
Entities agree to provide supporting documentation and other information
reasonably requested by the Committee in connection with a review.  In the event
the Committee believes that an adjustment of the Fixed Fee is appropriate
(including, but not limited to, due to any failure by the Biglari Entities to
provide supporting documentation or other information on a timely basis), the
parties shall engage in negotiations to reach agreement on a new Fixed Fee and
an amendment to this Agreement with respect thereto. 
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6.          Hurdle Rate.  The "Hurdle Rate," as defined and provided in each of
the partnership agreements of TLF I and TLF II, by which the Incentive
Reallocation (as defined in such partnership agreements) to BCC is determined
shall remain 6% per annum with respect to the limited partner interests of BH
and its subsidiaries in each of TLF I and TLF II.
7.          Performance of Services.
(a)          Standard of Care.  The Biglari Entities shall provide the Services
in accordance with this Agreement and shall exercise the same care and skill as
they exercise in performing other services for themselves.
(b)          Compliance with Law.  Each party shall comply with all applicable
laws, rules, regulations and governmental orders, now or hereafter in effect,
relating to its performance under this Agreement.  For the avoidance of doubt,
neither this Agreement nor the Biglari Entities' performance of Services
hereunder is intended to cause the Biglari Entities to become subject to, or
render the Biglari Entities responsible for compliance with, any laws, rules and
regulations, including, without limitation, the federal securities laws,
applicable to BH and as to which the Biglari Entities are not otherwise subject.
(c)          Cooperation.  The Biglari Entities and BH will, and will cause
their respective Affiliates and Representatives to, use good faith efforts to
cooperate with each other in all matters relating to the provision and receipt
of the Services, including (i) exchanging information and (ii) obtaining any
required third-party contractor consents, licenses, sublicenses and approvals
reasonably necessary to permit each party to perform its obligations hereunder.
(d)          Use of Third Parties.  The Biglari Entities may use any Affiliate
or any unaffiliated third-party contractor to provide the Services.
8.          Limitations on Liability and Indemnification.
(a)          Limitations on Liability.  No party shall have any liability under
this Agreement (including any liability for its own negligence) for claims,
liabilities, damages, losses or expenses suffered by the other party or any of
its Affiliates or Representatives as a result of the performance or
non-performance of such party's obligations hereunder, unless such claims,
liabilities, damages, losses or expenses are caused by or arise out of the
willful misconduct or gross negligence of such party or a material breach by
such party of any of the express provisions hereof.  In no event shall any party
have any liability to the other party for indirect, incidental, punitive,
special or consequential damages (including, without limitation, business
interruption, lost business, lost profits or lost savings) that such other party
or any third party may incur or experience on account of the performance or
non-performance of such party's obligations hereunder, even if it has been
advised of the possible existence thereof.  Notwithstanding anything in this
Agreement to the contrary, each party and its Affiliates and
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Representatives may reasonably rely in good faith on (i) any instructions of the
other party or any person or entity designated by such other party and (ii) any
document of any kind prima facie properly executed and submitted by the other
party or any person or entity designated by such other party respecting any
matters arising hereunder and which it reasonably believes in good faith to be
genuine.  Notwithstanding anything to the contrary contained herein, neither
party shall have any liability under this Agreement to any person or entity
other than to the other party and its Affiliates and Representatives.
(b)          Indemnification.  Subject to the limitations on liability set forth
in Section 8(a) hereof, each party shall indemnify, defend and hold harmless the
other parties from and against any and all claims, liabilities, damages, losses
and expenses (including reasonable attorneys' fees and expenses) incurred by the
other party or any of its Affiliates or Representatives caused by or arising out
of the willful misconduct or gross negligence of such indemnifying party in the
performance or non-performance of its obligations hereunder or the breach by
such indemnifying party of any of the express provisions hereof.  The Affiliates
and Representatives of each of the parties shall be express and intended
third-party beneficiaries of this Section 8(b).  Notwithstanding anything to the
contrary contained herein, the liability of any party under this Section 8(b)
shall not exceed the aggregate amount of Fixed Fees paid by BH during the Term.
(c)          Survival.  The provisions of this Section 8 shall survive any
expiration or termination of this Agreement.
9.          Confidentiality.
(a)          Each party will hold in trust and maintain confidential and, except
as otherwise expressly permitted in this Section 9 or required by applicable
law, rule, regulation, court order, subpoena or other compulsory process, or
stock exchange requirement, not disclose to others without the prior written
approval of the other party, any non-public information received by it from the
other party or otherwise obtained by it in connection with the performance of
this Agreement (the "Information").
(b)          Promptly after the termination of this Agreement, each party will
return to the other party or destroy all documents, data and other materials of
whatever nature containing Information or otherwise relating to the businesses
of the other that it obtained in connection with the performance of this
Agreement, provided that the parties may retain any Information to the extent
reasonably necessary to comply with applicable tax, accounting, regulatory or
financial reporting requirements or to resolve any legal issues identified at
the time of termination.
(c)          Nothing contained herein will prevent the use (subject, to the
extent possible, to a protective order) of Information in connection with the
assertion or defense of any claim by or against the other party.
(d)          The provisions of this Section 9 shall survive any expiration or
termination of this Agreement.
 
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10.          Independent Contractor Relationship.
(a)          In performing their duties and obligations under this Agreement,
the Biglari Entities shall at all times be independent contractors. Nothing
contained in this Agreement shall be construed to (i) give either the Biglari
Entities or BH the power to direct and control the day-to-day activities of the
other party or any of such other party's Affiliates, or (ii) treat the parties
hereto as partners, joint venturers, co-owners, agents or the like. Each party
hereto agrees that it will not be treated as an employee of the other party for
federal, state or local tax purposes, including but not limited to unemployment
compensation or workers' compensation taxes, or for any other purpose.
(b)          For the avoidance of doubt, nothing in this Agreement shall be
construed as (i) imposing any fiduciary duty on either of the parties hereunder
as a result of the terms and conditions of this Agreement, (ii) imposing any
additional duty, obligation or liability whatsoever on any other parties other
than as provided hereunder, or (iii) imposing any additional duties, obligations
or liabilities on BH pursuant to the partnership agreement of TLF I or TLF II as
a limited partner or otherwise.
11.          Representations and Warranties.  Each of the parties, on behalf of
itself, represents and warrants to the other parties as follows.
(a)           Power and Authority.  Such party is duly formed, validly existing
and in good standing under the laws of the jurisdiction of its organization and
has full legal capacity, power and authority to enter into this Agreement and to
perform its obligations hereunder.
(b)          Authority; Execution and Delivery; Valid and Binding Agreement. 
The execution, delivery and performance of this Agreement by such party and the
performance by such party of its obligations hereunder have been duly and
validly authorized by all requisite action on the part of such party and no
other proceedings on the part of such party are necessary to authorize the
execution, delivery or performance of this Agreement.  This Agreement has been
duly executed and delivered by such party, and, assuming due authorization,
execution and delivery by the other party hereto, constitutes the legal, valid
and binding obligation of such party, enforceable against such party in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, or moratorium
laws, other similar laws affecting creditors' rights and general principles of
equity affecting the availability of specific performance and other equitable
remedies.
(c)          No Conflict.  Such party's execution and delivery of this Agreement
and its performance of its obligations hereunder does not conflict with or
result in a breach or violation of the terms, conditions or provisions of,
constitute a default under, or require any consent of or other action by, or
notice or declaration to, or filing with, any third party or any governmental or
regulatory authority pursuant to (i) the organizational documents of such party
or (ii) any material law, rule, regulation or governmental order to which such
party is subject.
(d)          No Other Representations of the Biglari Entities.  The Biglari
Entities make no other guarantee, representation or warranty of any kind
(whether express or implied) regarding any of the Services provided hereunder,
and expressly disclaim all other guarantees, representations and warranties of
any nature whatsoever, whether statutory, oral, written, express
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or implied, including any warranties of merchantability or fitness for a
particular purpose and any warranties arising from course of dealing or usage of
trade.
12.          Miscellaneous.
(a)          Successors and Assigns.  This Agreement shall be binding upon the
parties hereto and their respective successors and permitted assigns and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.  This Agreement may not be assigned by either party hereto to
any other person or entity without the prior written consent of the other party
hereto; provided, that notwithstanding the foregoing, the Biglari Entities may
retain third-party vendors to perform certain of the Services in accordance with
Section 7(d) hereof.
(b)          No Third-Party Beneficiaries.  Except for the persons and entities
entitled to indemnification pursuant to Section 8 hereof, each of whom is an
intended third-party beneficiary hereunder, nothing expressed or implied in this
Agreement shall be construed to give any person or entity other than the parties
hereto any legal or equitable rights hereunder.
(c)          Entire Agreement.  This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements and
understandings, oral and written, between the parties hereto with respect to the
subject matter hereof.
(d)          Amendment.  This Agreement may not be amended except by an
instrument in writing signed by the parties hereto and, in the case of BH, with
the approval of the Committee.
(e)          Waivers.  Either party hereto may (i) extend the time for the
performance of any of the obligations or other acts of the other party or (ii)
waive compliance with any of the agreements contained herein, provided that any
extensions or waivers by BH relating to Section 5(b) of this Agreement shall
require the approval of the Committee.  No waiver of any term shall be construed
as a waiver of the same term, or a waiver of any other term, of this Agreement. 
The failure of any party to assert any of its rights hereunder will not
constitute a waiver of any such rights.
(f)          Severability.  If any provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, such
provision shall be deemed severable and all other provisions of this Agreement
shall nevertheless remain in full force and effect.
(g)          Headings.  Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
(h)          Notices.  All notices given in connection with this Agreement shall
be in writing and shall be hand delivered, sent by certified or registered mail,
postage prepaid, return receipt requested, sent by overnight courier service, or
sent by facsimile or e-mail, and in each case shall be effective upon receipt. 
Such notices shall be addressed to the parties at the following addresses or at
such other address for a party as shall be specified by like notice:
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If to BH:
Biglari Holdings Inc.
 
17802 IH 10 West, Suite 400
 
San Antonio, Texas  78257
 
Attention:
Bruce Lewis
 
Facsimile:
(210) 344-3411

 
If to the Biglari Entities:
Biglari Enterprises LLC
 
17503 LaCantera Parkway
 
Suite 104, #616
San Antonio, Texas 78257
 
Attention:
Sardar Biglari
 
Facsimile:
(210) 858-4103

(i)          Governing Law; Jurisdiction; Waiver of Jury Trial.

(1)
This Agreement shall be governed by, and construed in accordance with, the law
of the State of Indiana, without giving effect to the principles of conflict of
laws of such State.

(2)
Each party acknowledges that each controversy that may arise under this
Agreement is likely to involve complicated and difficult issues and, therefore,
it irrevocably and unconditionally waives all rights it may have to a trial by
jury in respect of any litigation directly or indirectly arising out of or
relating to this Agreement or the transactions contemplated hereby. Each party
certifies and acknowledges that (i) it understands and has considered the
implications of such waivers, (ii) it makes such waivers voluntarily, and (iii)
it has been induced to enter into this Agreement by, among other things, the
mutual waivers and certifications in this Section 12(i).

(j)          Expenses. Except as otherwise provided herein in connection with
the provision of the Services, each party will bear its own expenses in
connection with the negotiation, execution and delivery of this Agreement.
(k)          Force Majeure. Neither party will be responsible to the other for
any delay in or failure of performance of its obligations under this Agreement,
to the extent such delay or failure is attributable to any act of God, act of
terrorism, fire, accident, war, embargo or other governmental act, or riot;
provided, however, that the affected party will use its commercially reasonable
efforts to expeditiously overcome the effects of that event and resume
performance.
(l)          Specific Performance.  Each party acknowledges that, in view of the
uniqueness of the subject matter hereof, if it breaches or does not perform in
accordance with the terms hereof its obligations under this Agreement, the other
party would not have an adequate remedy at law for money damages. Accordingly,
such other party, in addition to any other
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remedy to which it may be entitled at law or in equity, is entitled to pursue
any injunction or injunctions to prevent breaches or threatened breaches of this
Agreement and to compel specific performance of this Agreement, without the need
for proof of actual damages or the requirement to post bond or other security.
(m)          Counterparts.  This Agreement may be executed in counterparts
(including by facsimile and .pdf), each of which shall be an original, but all
of which together shall constitute one and the same instrument.

[Signature page follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first written above.

 
BIGLARI HOLDINGS INC.
 
 
 
 
 
 
By:
 
 
 
Name:    
Bruce Lewis
 
 
Title:
Controller

 
BIGLARI ENTERPRISES LLC
 
 
 
 
 
 
By:
 
 
 
Name:  
Sardar Biglari
 
 
Title:
Chairman and Chief Executive Officer

 
BIGLARI CAPITAL LLC
 
 
 
 
 
 
By:
 
 
 
Name:  
Sardar Biglari
 
 
Title:
Chairman and Chief Executive Officer

 

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EXHIBIT A

SERVICES1

1.
legal, tax (including preparation and review of tax returns), accounting,
auditing, administrative, marketing, human resources (including payroll and
benefits), travel and other similar services;

2.
information technology services, including maintenance of computer equipment,
data storage and back-up services, and office software;

3.
services related to compliance with all federal, state and local laws, rules and
regulations and with the registration, reporting and other requirements or
requests of any governmental or regulatory agency;

4.
services related to investments in publicly traded companies, including, without
limitation, in connection with any proxy, consent or other similar solicitation,
and assistance in preparing, filing, printing and mailing any solicitation
materials and other required filings, under the federal securities laws;

5.
services related to preparing, printing and mailing annual reports for TLF I and
TLF II (and other investment partnerships and similar investment vehicles as to
which BCC serves as general partner, investment manager or in a similar
capacity) and other materials in connection with their annual meetings, offering
and subscription documents, and other communications to limited partners; and

6.
services related to the calling, convening and holding of the annual meetings of
limited partners of TLF I and TLF II (and other investment partnerships and
similar investment vehicles as to which BCC serves as general partner,
investment manager or in a similar capacity).

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1
Includes time and services of outside advisors (including counsel, auditors,
bankers, consultants and accountants) and employees of the Biglari Entities and
their affiliates.