Document:

Exhibit 10.2

 

EMPLOYMENT AGREEMENT (this “Agreement”), dated as of February 6, 2013, between BUNGE LIMITED, a Bermuda company (the “Company”), and SOREN SCHRODER (the “Executive”).

 

WHEREAS, the Executive currently serves as Chief Executive Officer of Bunge North America, a subsidiary of the Company;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the Executive should become Chief Executive Officer of the Company; and

 

WHEREAS, the Company and the Executive hereto desire to provide for the continued employment of the Executive on the terms set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the covenants and agreements set forth below, the parties hereto agree to amend this Agreement as of the date hereof as follows:

 

1.                                      EFFECTIVENESS OF AGREEMENT

 

1.1.                            Effective Date and Employment Term.  The Executive’s employment under this Agreement shall commence as of June 1, 2013 (the “Effective Date”) and shall continue in effect until the earlier of (a) the termination of the Executive’s employment pursuant to the terms of this Agreement or (b) May 31, 2016; provided, however, that on the first anniversary of the Effective Date and on each subsequent anniversary of the Effective Date, the term of employment under this Agreement shall be automatically extended for one additional year so that such employment period shall continue for three years following such anniversary date, unless (i) either party provides written notice to the other no less than 90 days prior to such anniversary of the Effective Date that it does not wish to extend the term or (ii) the Executive’s employment has terminated pursuant to the terms of this Agreement (such period of employment shall hereinafter be referred to as the “Employment Term”).

 

2.                                      EMPLOYMENT AND DUTIES

 

2.1.                            General.  The Company hereby agrees to employ the Executive, and the Executive agrees to serve, as Chief Executive Officer of the Company upon the terms and conditions herein contained.  The Executive shall perform the customary duties of a chief executive officer and perform such other duties and services for the Company commensurate with the Executive’s position, as further described in the Terms of Reference agreed between the parties and as may be designated from time to time by the Board.  The Executive shall report to the Board and agrees to serve the Company faithfully and to the best of his ability under the direction of the Board.

 

2.2.                            Services.

 

2.2.1.                  Exclusive Services.  Except as may otherwise be approved in advance by the Board, and except during vacation periods and reasonable periods of absence due to sickness, personal injury or other disability, the Executive shall devote substantially all of his working time throughout the Employment Term to the services required of him hereunder.  During the Employment Term, the Executive shall render his services exclusively to the Company and, as

 

 

determined by the Company, its Subsidiaries (as defined below) (such Subsidiaries, together with the Company, the “Bunge Group”) and shall use his best efforts, judgment and energy to improve and advance the business and interests of the Bunge Group in a manner consistent with the duties of his position.  For purposes of this Agreement, “Subsidiary” shall mean (a) a corporation or other entity with respect to which the Company, directly or indirectly, has the power, whether through the ownership of voting securities, by contract or otherwise, to elect at least a majority of the members of such corporation’s board of directors or analogous governing body or (b) any other corporation or other entity in which the Company, directly or indirectly, has an equity or similar interest.

 

2.2.2.                  Board and Community Service.  Notwithstanding anything to the contrary set forth in Section 2.2.1 above, but subject to Section 8, the Executive may (a) serve on any corporate, civic or charitable board upon obtaining the prior written consent of the Board, except that no such consent shall be required for boards on which the Executive serves as of the Effective Date, (b) engage in charitable activities, (c) perform outside speaking, lecturing or teaching engagements and (d) manage personal investments, provided that none of the foregoing activities interferes in any material respect with the performance by the Executive of his duties under this Agreement.

 

2.3.                            Location.  The Executive will relocate by September 1, 2013 to the New York City metropolitan area and be based in the Company’s headquarters, currently in White Plains, New York, during the Employment Term.

 

2.4                               Reimbursement of Expenses.  The Company shall reimburse the Executive for reasonable travel and other business expenses incurred by him during the Employment Term in the fulfillment of his duties hereunder upon presentation by the Executive of an itemized account of such expenditures, in accordance with Company practices, but in no event shall the Company reimburse the Executive later than the last day of the calendar year following the calendar year in which the related expense was incurred, and no such reimbursement during any calendar year shall affect the amounts eligible for reimbursement in any other calendar year.

 

3.                                      COMPENSATION

 

3.1.                            Base Salary.  During the Employment Term, the Executive shall be entitled to receive a base salary (“Base Salary”) at a rate of U.S.$1,000,000 per annum, payable in arrears in substantially equal installments in accordance with the Company’s payroll practices, as in effect from time to time.  Any adjustments in Base Salary shall be made by the Compensation Committee of the Board (the “Compensation Committee”) in its sole discretion; provided, however, that such Base Salary may be increased but not decreased.

 

3.2.                            Short-Term Annual Bonus.  During the Employment Term, the Executive shall be entitled to participate in the Company’s annual performance bonus plan (the “Short-Term Annual Bonus Plan”), under which the Executive shall be entitled to receive, subject to the satisfaction of applicable performance criteria, an annual target bonus equal to 140% of his Base Salary, at the annual rate in effect for most of the calendar year to which such bonus relates.  Any adjustments to the Executive’s annual target bonus shall be made by the Compensation Committee in its sole discretion.  The other terms and conditions of the short-term annual bonus

 

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described in this Section 3.2 (the “Short-Term Annual Bonus”) shall be as determined under the Short-Term Annual Bonus Plan and payable in accordance with the timing set forth in the Short-Term Annual Bonus Plan.

 

3.3.                            Long-Term Equity Incentive.  During the Employment Term, the Executive shall be entitled to participate in the Bunge Limited Equity Incentive Plan, as amended from time to time (such plan, together with any successor or replacement plan(s), shall hereinafter be referred to as the “Bunge Equity Plan”).  Awards, if any, granted to the Executive shall be determined by the Compensation Committee in its sole discretion.  The other terms and conditions of such Awards shall be as determined under the terms of the Bunge Equity Plan.  An initial Award with a fair market value, determined as of the March 2013 Board meeting, equal to U.S.$3,891,667 shall be proposed to the Compensation Committee in accordance with the Company’s standard annual grant process in March, 2013. Such initial Award shall be in the form of time-based restricted stock units (“RSUs”) with a fair market value of $2,000,000, which shall cliff vest on the third anniversary of the grant date, and the balance of such initial Award in the form of performance-based RSUs and stock options.  The performance-based RSUs and stock options shall be subject to the same terms and vesting and performance conditions as those applicable to other senior executives of the Company.

 

4.                                      EMPLOYEE BENEFITS

 

4.1.                            General.  During the Employment Term, the Executive shall be, or, where applicable, continue to be, included to the extent eligible thereunder in all employee benefit plans, programs or arrangements (including, without limitation, any plans, programs or arrangements providing retirement benefits, profit sharing, disability benefits, health and life insurance, or paid holidays) that shall be established by the Company for, or made available to, its senior executives.  In addition, the Company shall furnish the Executive with coverage by the Company’s customary director and officer indemnification arrangements, subject to applicable law.

 

4.2.                            Vacation.  During the Employment Term, the Executive shall be eligible for 20 business days of paid vacation each calendar year, which number of days may be increased, but not decreased, on an annual basis in the sole discretion of the Compensation Committee.  If the Executive’s employment ends for any reason, the Executive shall only be paid for unused vacation that accrued during the calendar year in which his Date of Termination (as defined below) occurs.

 

4.3.                            Relocation Expenses.  The Executive shall be entitled to relocation benefits in accordance with the Company’s relocation policies in effect from time to time, including reimbursement of all reasonable costs incurred in relocating himself and his family and their possessions from St. Louis, Missouri to the New York metropolitan.

 

5.                                      TERMINATION OF EMPLOYMENT

 

5.1.                            Termination Without Cause; Resignation for Good Reason.

 

5.1.1.                  General.  Subject to the provisions of Sections 5.1.2 and 5.1.3, if, prior to the expiration of the Employment Term, the Executive’s employment with the Company is

 

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terminated by the Company without Cause or by the Executive for Good Reason, subject to the Executive’s execution of a general release of claims in substantially the form attached hereto as Exhibit A (the “Release”) that becomes irrevocable not later than the 60th calendar day following the Executive’s Date of Termination, the Company shall:

 

(a)                                 pay the Executive an amount (the “Severance Payment”) equal to two  times the sum of (i) the highest annual rate of Base Salary paid to the Executive with respect to the two calendar years immediately preceding the Executive’s Date of Termination and (ii) the average structural (grid-based) Short-Term Annual Bonus (excluding any long-term, supplemental or special bonuses) actually paid to the Executive for the two calendar years immediately preceding the Executive’s Date of Termination, payable in substantially equal monthly installments for the 24-month period following the Executive’s Date of Termination (the “Severance Period”); provided, however, that, if the Executive’s employment with the Company is terminated by the Company without Cause or by the Executive for Good Reason during the Change of Control Period, the Severance Payment shall equal three times the sum of (i) the highest annual rate of Base Salary paid to the Executive with respect to the three calendar years immediately preceding the Executive’s Date of Termination and (ii) the target Short-Term Annual Bonus (excluding any long-term, supplemental or special bonuses) in effect as of the Executive’s Date of Termination, and the Severance Period shall be 36 months; and, provided, further, that if any monthly installments are due prior to the Release becoming irrevocable, such installments shall be paid with the first installment payable on or following the date the Release becomes irrevocable;

 

(b)                                 pay the Executive his Base Salary, to the extent not yet paid, through and including the Executive’s Date of Termination;

 

(c)                                  pay the Executive a pro  rata portion (through the Date of Termination) of the Short-Term Annual Bonus that the Executive would have been entitled to receive for the then applicable performance period pursuant to Section 3.2 had the Executive remained employed for the entire performance period.  The Compensation Committee may, in its sole discretion, elect to pay the amount described in this subsection (c) (i) no later than 30 business days following the Executive’s Date of Termination, in which case, such amount shall be calculated in good faith by the Compensation Committee based on the Company’s performance results for the last full calendar quarter immediately preceding his Date of Termination or (ii) at the time bonuses under the Short-Term Annual Bonus Plan are paid to the Company’s executives generally, in which case, such amount shall be calculated in good faith by the Compensation Committee based on the Company’s performance results for the calendar year to which the bonus relates.  For purposes of calculating the amount described in this subsection (c), the Executive’s performance results shall be determined on a target-level basis;

 

(d)                                 (i) if the Executive meets the eligibility requirements for the Company’s retiree medical plan (at least 55 years of age and 10 years of service) and the Executive elects to immediately begin receiving his annuity under the Bunge U.S. Pension Plan, in lieu of COBRA coverage, offer to the Executive retiree medical benefits in accordance with the Company’s retiree medical plan at the Executive’s sole cost, which retiree

 

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medical coverage shall include the Executive’s spouse (if any) that is enrolled in the Company’s medical plan for active employees as of the Executive’s Date of Termination; or (ii) if the Executive is not yet eligible for such benefits under the Company’s retiree medical plan, offer the Executive continuing coverage under the Company’s health and medical insurance plans and programs for the period that the Executive is entitled to coverage under Section 4980B(f) of the Internal Revenue Code of 1986, as amended (the “Code”) (relating to “COBRA” coverage) (at the Executive’s sole cost during such COBRA benefit continuation period) and, in addition, pay to the Executive within 60 days following the Date of Termination a lump sum amount which, in the Company’s reasonable determination, provides sufficient funds to cover the after-tax cost for the Executive to obtain medical insurance for himself and his dependents for the period beginning upon the expiration of the COBRA benefits continuation period and ending at the completion of the Severance Period (with such funds calculated as if the Executive were contributing for such coverage in the same amount he would pay for COBRA coverage); provided, however, that the Executive’s coverage under the Company’s retiree medical plan shall cease as of the date on which the Executive is eligible to receive health, medical or other insurance benefits under a subsequent employer’s plan and that, if the Executive is eligible to receive health, medical or other insurance benefits under a subsequent employer’s plan, the health, medical and other insurance benefits described herein shall be secondary to those provided under such other plans

 

(e)                                  provide the Executive with accelerated vesting of any unvested benefits in the Company’s defined contribution and defined benefit retirement plans, unless such acceleration is prohibited by law;

 

(f)                                   deem any vesting or service under any outstanding stock option, restricted stock or other equity-based awards fully satisfied;

 

(g)                                  deem any Company performance requirements under any outstanding stock option, restricted stock or other equity-based awards to be satisfied to the extent such performance requirements are satisfied as of the Executive’s Date of Termination; and

 

(h)                                 except with respect to cash severance and the other categories of compensation or benefits dealt with above in this Section 5.1.1, provide substantially similar other benefits that are provided to other senior executives of the Company upon termination (the benefits described in this subsection (h), together with those described in subsections (b) through (g) above, shall hereinafter be referred to as “Severance Benefits”).

 

The Executive shall have no further right to receive any other compensation or benefits after such termination or resignation of employment, except as determined in accordance with the terms of the Company’s benefit plans and programs.

 

5.1.2.                  Conditions Applicable to the Severance Period.  If, during the Severance Period, the Executive breaches any of his obligations under Section 8, the Company may, upon written notice to the Executive, terminate the Severance Period, cease to make any further

 

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payments of the Severance Payment and cease to provide any Severance Benefits, except as required by applicable law.  If the Employment Term expires in the manner contemplated by Section 1.1 following the Executive’s attainment of age 65, no Severance Payment or Severance Benefits shall be payable to the Executive.

 

5.1.3.                  Death During Severance Period.  Subject to Section 4.1, in the event of the Executive’s death during the Severance Period, payments of the Severance Payment shall continue to be made during the remainder of the Severance Period, and any unpaid bonus payments under Section 5.1.1(c) shall be paid on the terms set forth therein, to the beneficiary designated in writing for this purpose by the Executive or, if no such beneficiary is specifically designated, to the Executive’s estate.  Except for the medical benefits described in Section 5.1.1(d) or as otherwise required by law, the provision of Severance Benefits by the Company shall end on the date of the Executive’s death.

 

5.1.4.                  Date of Termination.  For purposes of this Agreement, “Date of Termination” shall mean (a) the expiration of the Employment Term after either party has provided written notice of non-renewal to the other party in accordance with Section 1.1; (b) with respect to the termination of the Executive’s employment without Cause, the date specified in a written notice of termination from the Company to the Executive; and (c) with respect to the termination by the Executive of his employment for Good Reason, the date specified in a written notice of resignation from the Executive to the Company; provided, however, that in connection with a termination without Cause or for Good Reason, no such written notice from the Executive shall be effective unless the cure period specified in the proviso in Section 5.4 has expired without the Company having corrected, in all material respects, the event or events subject to cure; provided  further that, if no date of termination is specified in the written notice from the Executive, the Date of Termination shall be the first day following the expiration of such cure period.

 

5.2.                            Termination for Cause; Resignation Without Good Reason.

 

5.2.1.                  General.  If, prior to the expiration of the Employment Term, the Executive’s employment with the Company is terminated by the Company for Cause or the Executive resigns from his employment hereunder other than for Good Reason, the Executive shall be entitled only to payment of his Base Salary as is then in effect through and including the Date of Termination.  The Executive shall have no further right to receive any other compensation or benefits after such termination of or resignation from employment, except as determined in accordance with the terms of the Company’s equity plans and related award agreements and benefit plans and programs.

 

5.2.2.                  Date of Termination.  For purposes of this Agreement, “Date of Termination” shall mean (a) the expiration of the Employment Term after either party has provided written notice of non-renewal to the other party in accordance with Section 1.1; (b) with respect to the termination of the Executive’s employment for Cause or Disability, the date specified in a written notice of termination from the Company to the Executive; provided, however, that, in connection with a termination for Cause, no such written notice from the Company shall be effective unless the cure period specified in the proviso in Section 5.3 has expired without the Executive having corrected, in all material respects, the event or events

 

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subject to cure; (c) with respect to the termination by the Executive of his employment without Good Reason, the later of (i) the date specified in a written notice of resignation from the Executive to the Company or (ii) 120 days after receipt by the Company of a written notice of resignation from the Executive; and (d) with respect to the termination of the Executive’s employment due to death, the date of the Executive’s death.

 

5.3.                            Cause.  Termination for “Cause” shall mean termination of the Executive’s employment because of:

 

(a)                                 any willful act or omission or any act of gross negligence that constitutes a material breach by the Executive of this Agreement;

 

(b)                                 the willful and continued failure or refusal of the Executive to substantially perform the duties required of him as an employee of the Company;

 

(c)                                  any willful and material violation by the Executive of any law or regulation applicable to any business of the Bunge Group that could reasonably be expected to have an adverse impact on the business or reputation of any member of the Bunge Group, or the Executive’s conviction of, or a plea of nolo  contendere to, a felony, or any willful perpetration by the Executive of a common law fraud; or

 

(d)                                 any other willful misconduct by the Executive that is materially injurious to the financial condition, business or reputation of, or is otherwise materially injurious to, any member of the Bunge Group;

 

provided, however, that, if any such Cause relates to subsections (a) or (b) of this Section 5.3, the Company may not terminate the Executive’s employment for Cause unless (i) the Company first gives the Executive notice of its intention to terminate and of the grounds for such termination within 90 days following such event and (ii) the Executive has not, within 30 days following receipt of such notice, cured such Cause in a manner that is reasonably satisfactory to the Compensation Committee, or in the event such Cause is not susceptible to cure within such 30-day period, the Compensation Committee reasonably determines that the Executive has not taken all reasonable steps within such 30-day period to cure such Cause as promptly as practicable thereafter.

 

5.4.                            Good Reason.  For purposes of this Agreement, “Good Reason” shall mean any of the following (without the Executive’s prior written consent):

 

(a)                                 a failure by the Company to pay material compensation due and payable to the Executive in connection with his employment;

 

(b)                                 a material diminution of the authority, responsibilities or positions of the Executive from those set forth in Section 2.1;

 

(c)                                  the occurrence of acts or conduct on the part of the Company, its officers, representatives or stockholders that prevent the Executive from, or substantially hinder the Executive in, performing his duties or responsibilities pursuant to Section 2.1; or

 

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(d)                                 if immediately prior to the Change of Control Period the Executive’s principal place of employment is located within the metropolitan New York area, any relocation during the Change of Control Period at the request of the Company of the Executive’s principal place of employment to a location outside of the metropolitan New York area;

 

provided, however, that no event or condition described in clauses (a) and (b) of this Section 5.4 shall constitute Good Reason unless (i) the Executive gives the Company written notice of his objection to such event or condition within 90 days following the occurrence of such event or condition, (ii) such event or condition is not corrected, in all material respects, by the Company in a manner that is reasonably satisfactory to the Executive within 30 days following the Company’s receipt of such notice (or in the event that such event or condition is not susceptible to correction within such 30-day period, the Executive reasonably determines that the Company has not taken all reasonable steps within such 30-day period to correct such event or condition as promptly as practicable thereafter) and (iii) the Executive resigns from his employment with the Company not more than 30 days following the expiration of the 30-day period described in the foregoing clause (ii).

 

6.                                      DEATH OR DISABILITY

 

6.1.                            Payments and Benefits.  In the event of the Executive’s termination of employment with the Company by reason of his death or Disability, the Executive (or his estate, as applicable) shall be entitled to the following:

 

(a)                                 the payment of his Base Salary, to the extent not yet paid, through and including his Date of Termination; and

 

(b)                                 an amount equal to that set forth in Section 5.1.1(c).

 

Other benefits shall be determined in accordance with the terms of the Company’s equity plans and related award agreements and benefit plans and programs, and the Company shall have no further obligation hereunder, including, without limitation, with respect to any long-term, supplemental or special bonuses.  For purposes of this Agreement, “Disability” means a physical or mental disability or infirmity of the Executive, as determined by a physician of recognized standing selected by the Company, that prevents (or, in the opinion of such physician, is reasonably expected to prevent) the normal performance by the Executive of his duties as an employee of the Company for any continuous period of 180 days or for 180 days during any one 12-month period.

 

7.                                      CHANGE OF CONTROL

 

7.1.                            Change of Control.  For purposes of this Agreement, “Change of Control” shall mean the occurrence of any of the following:

 

(a)                                 the acquisition by any Person (as defined below) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, and the applicable rulings and regulations thereunder (the “Exchange Act”)) of 35% or more of the common shares of the Company (the “Common Stock”)

 

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then outstanding, but shall not include any such acquisition by any employee benefit plan of any member of the Bunge Group, or any Person or entity organized, appointed or established by any member of the Bunge Group for or pursuant to the terms of any such employee benefit plan;

 

(b)                                 the consummation after approval by the shareholders of the Company of either (i) a plan of complete liquidation or dissolution of the Company or (ii) a merger, amalgamation or consolidation of the Company with any other corporation, the issuance of voting securities of the Company in connection with a merger, amalgamation or consolidation of the Company, a sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another corporation (each, a “Business Combination”), unless, in each case of a Business Combination, immediately following such Business Combination, all or substantially all of the individuals and entities who were the beneficial owners of the Common Stock outstanding immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then outstanding shares of common stock and more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Common Stock; or

 

(c)                                  the failure for any reason of the Approved Members to constitute at least a majority of the Board;

 

; provided, however, that with respect to any distribution that is subject to Section 409A of the Code (“Section 409A”) and payment is to be accelerated in connection with the Change of Control, no event(s) set forth in clauses (a), (b) or (c) above shall constitute a Change of Control for purposes of this Agreement unless such event(s) also constitutes a “change in the ownership”, “change in the effective control” or a “change in the ownership of a substantial portion of the assets” of the Company as defined under Section 409A.

 

7.2.                            Approved Member.  For purposes of this Section 7, “Approved Members” shall mean the individuals who, as of the Effective Date, constitute the Board and subsequently elected members of the Board whose election is approved or recommended by at least a majority of such current members or their successors whose election was so approved or recommended (other than any subsequently elected members whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board).

 

7.3.                            Person.  For purposes of this Section 7, “Person” shall mean any person, entity or “group” within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, except that such term shall not include (a) Bunge International Limited, (b) any member of the Bunge Group, (c) a trustee or other fiduciary holding securities under an employee benefit plan of any member of the Bunge Group, (d) an underwriter temporarily holding securities

 

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pursuant to an offering of such securities or (e) an entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.

 

7.4.                            Change of Control Period.  For purposes of this Agreement, “Change of Control Period” shall mean (a) the period occurring on the date of a Change of Control and continuing for 30 months thereafter and (b) to the extent that the Executive is terminated without Cause within the 12-month period immediately prior to the date of a Change of Control and there is a reasonable basis to conclude that such termination was at the request or direction of any person acquiring control of the Company in such Change of Control, the 12-month period immediately prior to the date of such Change of Control.

 

7.5                               Limitation on Payments.  In the event that the Executive receives any payments or distributions, whether payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, that constitute “parachute payments” within the meaning of Section 280G of the Code, and, but for this Section 7.5, would be subject to the excise tax imposed by Section 4999 of the Code, the Company shall reduce the aggregate amount of such payments and distributions such that the present value thereof (as determined under the Code and the applicable regulations) is equal to 2.99 times the Executive’s “base amount” as defined in Section 280G(b)(3) of the Code.  The determinations to be made with respect to this Section 7.5 shall be made by a certified public accounting firm designated by the Company and reasonably acceptable to the Executive.

 

8.                                      CONFIDENTIALITY; NONCOMPETITION; NONSOLICITATION

 

8.1.                            Confidentiality.  The Executive agrees with the Company that he shall not at any time, except in the performance of his obligations to the Company hereunder or with the prior written consent of the Company, directly or indirectly, reveal to any person, entity or other organization (other than the Bunge Group, or its employees, officers, directors, shareholders or agents) or use for his own benefit any information deemed to be confidential (prior to its disclosure to the Executive) by the Bunge Group (“Confidential Information”) relating to the assets, liabilities, employees, goodwill, business or affairs of any member of the Bunge Group, including, without limitation, any information concerning past, present or prospective customers, manufacturing processes, marketing data, or other confidential information used by, or useful to, any member of the Bunge Group and known (whether or not known with the knowledge and permission of any member of the Bunge Group and whether or not, at any time prior to the Effective Date, developed, devised, or otherwise created in whole or in part by the efforts of the Executive) to the Executive by reason of his employment by, shareholdings in or other association with any member of the Bunge Group.  The Executive further agrees that he shall retain all copies and extracts of any written Confidential Information acquired or developed by him during any such employment, shareholding or association in trust for the sole benefit of the Bunge Group and its successors and assigns.  The Executive further agrees that he shall not, without the prior written consent of the Company, remove or take from the Bunge Group’s premises (or, if previously removed or taken, he shall, at the Company’s request, promptly return) any written Confidential Information or any copies or extracts thereof.  Upon the request and at the expense of the Company, the Executive shall promptly make all disclosures, execute all instruments and papers and perform all acts reasonably necessary to vest and confirm in the

 

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Bunge Group, fully and completely, all rights created or contemplated by this Section 8.1.  The term “Confidential Information” shall not include information that is or becomes generally available to the public other than as a result of a disclosure by, or at the direction of, the Executive.

 

8.2.                            Noncompetition and Nonsolicitation.

 

8.2.1.                  Noncompetition.  The Executive agrees with the Company that, for so long as the Executive is employed by the Company and continuing thereafter for the longer of (a) 18 months following the Executive’s Date of Termination for any reason or (b) where applicable, the Severance Period (the “Restricted Period”), he shall not, without the prior written consent of the Company, directly or indirectly, and whether as principal or investor or as an employee, officer, director, manager, partner, consultant, agent or otherwise, alone or in association with any other person, firm, corporation or other business organization, carry on a Competing Business (as defined below) in any geographic area in which any member of the Bunge Group has engaged, or engages during the Restricted Period, in a Competing Business (including, without limitation, any area in which any customer of any member of the Bunge Group may be located).

 

8.2.2.                  Nonsolicitation.  As a separate and independent covenant, the Executive agrees with the Company that, during the Restricted Period, he shall not in any way, directly or indirectly (except in the course of his employment with the Company), for the purpose of conducting or engaging in any Competing Business, call upon, solicit, advise or otherwise do, or attempt to do, business with any person who is, or was, during the then most recent 12-month period, a customer of any member of the Bunge Group, or take away or interfere or attempt to take away or interfere with any custom, trade, business, patronage or affairs of any member of the Bunge Group, or interfere with or attempt to interfere with any person who is, or was during the then most recent 12-month period, an employee, officer, representative or agent of any member of the Bunge Group, or solicit, induce, hire or attempt to solicit, induce or hire any of them to terminate service with any member of the Bunge Group or violate the terms of their contracts, or any employment arrangements, with any member of the Bunge Group.

 

8.2.3.                  Competing Business.  For purposes of this Section 8.2, “Competing Business” means any business then engaged in by any member of the Bunge Group; provided, however, that nothing herein shall limit the right of the Executive to own not more than 1% of any of the debt or equity securities of any business organization that is then filing reports with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Exchange Act.

 

8.3.                            Cooperation of the Executive.  During and after the Executive’s employment with the Company, the Executive shall reasonably cooperate with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company and in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company or any former or current member of the Bunge Group.  The Company shall reimburse the Executive for all reasonable costs and expenses incurred in connection with his performance under this Section 8.3, including, without limitation, all reasonable attorneys’ fees and costs.

 

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8.4                               Exclusive Property.  The Executive confirms that all confidential information is and shall remain the exclusive property of the Bunge Group.  All business records, papers and documents kept or made by the Executive relating to the business of the Bunge Group shall be and remain the property of the Bunge Group.

 

8.5.                            Certain Remedies.  Without intending to limit the remedies available to the Bunge Group, the Executive agrees that a breach of any of the covenants contained in this Section 8 may result in material and irreparable injury to the Bunge Group for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, any member of the Bunge Group shall be entitled to seek a temporary restraining order or a preliminary or permanent injunction, or both, without bond or other security, restraining the Executive from engaging in activities prohibited by this Section 8 or such other relief as may be required specifically to enforce any of the covenants in this Section 8.  Such injunctive relief in any court shall be available to the Bunge Group in lieu of, or prior to or pending determination in, any arbitration proceeding.

 

9.                                      ARBITRATION

 

9.1.                            General Terms.  Except as provided in Section 8.5 above, any future dispute, controversy or claim between the parties arising from or relating to this Agreement, its breach or any matter addressed by the Agreement shall be resolved through binding, confidential arbitration to be conducted by a panel of three arbitrators that is mutually agreeable to both the Executive and the Company, all in accordance with the arbitration rules of the American Arbitration Association set forth in its National Rules for the Resolution of Employment Disputes then in effect (the “AAA’s Arbitration Rules”).  If the Executive and the Company cannot agree upon the panel of arbitrators, the arbitration shall be settled before a panel of three arbitrators, one to be selected by the Company, one by the Executive and the third to be selected by the two persons so selected, all in accordance with the AAA’s Arbitration Rules.  The arbitration proceeding shall be held in New York City or such other location as is mutually agreed in writing by the parties.  The arbitrators shall base their award on the terms of this Agreement, and the arbitrators shall strictly follow the law and judicial precedents that a United States District Judge sitting in the Southern District of the State of New York would apply in the event the dispute were litigated in such court.  The arbitration shall be governed by the substantive laws of the State of New York applicable to contracts made and to be performed therein, without regard to conflicts of law rules, and by the arbitration law chosen by the arbitrators, and the arbitrator shall have no power or authority to order or grant any remedy or relief that a court could not order or grant under applicable law.  Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  Nothing contained in this Section 9.1 shall be construed to preclude the Company from exercising its rights under Section 8.5 above.

 

9.2.                            Costs and Attorneys’ Fees.  The Company shall bear the cost of the arbitrators.  Costs and expenses associated with the arbitration that are not otherwise assignable to one of the parties shall be allocated equally between the parties.  In every other respect, the parties shall each pay their own costs and expenses, including, without limitation, attorneys’ fees and costs.

 

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10.                               MISCELLANEOUS

 

10.1.                     Communications.  All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made (a) if delivered by hand, upon receipt, (b) if sent by telecopy or facsimile transmission, upon confirmation of receipt by the sender of such transmission or (c) if mailed by registered or certified mail (postage prepaid, return receipt requested), on the fifth business day after mailed to the appropriate party at the following address (or at such other address for a party as shall be specified by like notice, except that notices of changes of address shall be effective upon receipt):

 

(a)                                 if to the Company:

 

Bunge Limited

Attn:  Chief Personnel Officer

50 Main Street, 6th Floor

White Plains, New York 10606

Fax:  (914) 684-3458

 

(b)                                 if to the Executive:

 

To his home address then on file with the Company.

 

10.2.                     Waiver of Breach.  The waiver by the Executive or the Company of a breach of any provision of this Agreement by the other party hereto shall not operate or be construed as a waiver of any subsequent breach by either party.

 

10.3.                     Severability.  The parties hereto recognize that the laws and public policies of various jurisdictions may differ as to the validity and enforceability of covenants similar to those set forth herein.  It is the intention of the parties that the provisions hereof be enforced to the fullest extent permissible under the laws and policies of each jurisdiction in which enforcement may be sought, and that the unenforceability (or the modification to conform to such laws or policies) of any provisions hereof shall not render unenforceable, or impair, the remainder of the provisions hereof.  Accordingly, if at the time of enforcement of any provision hereof, a court of competent jurisdiction holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographic area reasonable under such circumstances shall be substituted for the stated period, scope or geographical area and that such court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and geographical area permitted by law.

 

10.4.                     Assignment; Successors.  No right, benefit or interest hereunder shall be assigned, encumbered, charged, pledged, hypothecated or be subject to any setoff or recoupment by the Executive.  This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company, and the Company shall cause its obligations remaining under this Agreement to be assumed by any entity that succeeds to all or substantially all of the Company’s business or assets; provided, however, that no such assumption shall relieve the Company of its obligations under this Agreement to the extent such obligations are not satisfied

 

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by the entity assuming the Company’s obligations hereunder, unless the Company obtains the written consent of the Executive at the time of such assumption.

 

10.5.                     Entire Agreement.  This Agreement represents the entire agreement of the parties and shall supersede any and all previous contracts, arrangements or understandings between the Company and the Executive with respect to the subject matter set forth herein; provided, however, that this Agreement shall not supersede any of the Executive’s pension entitlements in existence as of the Effective Date or, subject to Sections 5.1.1(g) and (h), any Awards granted to the Executive under the Bunge Equity Plan that are outstanding as of the Effective Date.  This Agreement may be amended at any time by mutual written agreement of the parties hereto.

 

10.6.                     Withholding.  The payment of any amount pursuant to this Agreement shall be subject to applicable withholding and payroll taxes and such other deductions as may be required under the Company’s employee benefit plans, if any.

 

10.7.                     Governing Law.  This Agreement shall be governed by, and construed with, the law of the State of New York.

 

10.8.                     Headings.  The headings in this Agreement are for convenience only and shall not be used to interpret or construe any of its provisions.

 

10.9.                     Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

10.10.              Separate Payments.  For the purposes of Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

 

10.11.              Specified Employee.  Notwithstanding any provision of this Agreement to the contrary, if, at the time of the Executive’s termination of employment he is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i), as determined under the Company’s established methodology for determining specified employees, the Executive shall not be entitled to any payments or benefits the right to which provides for a “deferral of compensation” within the meaning of Section 409A, and whose payment or provision is triggered by the termination of the Executive’s employment (whether such payments or benefits are provided to the Executive under this Agreement or under any other plan, program or arrangement of the Company), until the date which is the first business day following the six-month anniversary of the Executive’s Date of Termination, at which time such delayed payments will be paid to the Executive in a lump sum; provided, however, that a payment delayed pursuant to this Section 10.11 shall commence earlier in the event of the Executive’s death prior to the six-month anniversary of his Date of Termination.

 

10.12.          Section 409A Compliance.  (i) Notwithstanding any contrary provision in this Agreement, if any provision of this Agreement contravenes any regulations or guidance promulgated under Section 409A or would cause any person to be subject to additional taxes, interest and/or penalties under Section 409A, such provision may be modified by the Committee

 

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without notice and consent of any person in any manner the Committee deems reasonable or necessary.  In making such modifications the Committee shall attempt, but shall not be obligated, to maintain, to the maximum extent practicable, the original intent of the applicable provision without contravening the provisions of Section 409A.

 

(ii) If any payment or benefit owed to the Executive under this Agreement is considered for purposes of Section 409A to be owed to the Executive by virtue of his termination of employment, such payment or benefit shall be paid if and only if such termination constitutes a “separation from service” with the Company, determined using the default provisions set forth in Treasury Regulation §1.409A-1(h) or any successor regulation thereto; provided, however for the purposes of determining which entity is a service recipient or employer, “at least 20 percent” is substituted for “at least 80 percent” in each place it appears in Treasury Regulation §1.414(c)-2.

 

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Executive has hereunto set his hand, as of the day and year first written above.

 

 

	
 
    	
BUNGE LIMITED
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EXECUTIVE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Soren   Schroder
    

 

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EXHIBIT A

 

Form of Release

 

I, Soren Schroder, hereby understand and agree to the terms of this release (the “Release”) in consideration for certain obligations undertaken by the Company under the Employment Agreement between me and the Company, dated February 6, 2013 (the “Agreement”).  Capitalized terms used, but not defined, in this Release will have the meanings assigned to such terms in the Agreement.

 

(a)                                 General Release.  In consideration of my receipt of the payments and benefits provided to me under the Agreement, I hereby release and forever discharge the Bunge Group and its respective employees, officers, directors, shareholders and agents (each, a “Released Party”) from any and all claims, actions, causes of action, complaints, charges and grievances (collectively, “Claims”), including, without limitation, any Claims arising under any applicable federal, state, local or foreign law, that I may have, or in the future may possess, arising from or relating to (i) my employment relationship with and service as an employee of any member of the Bunge Group and the termination of such relationship or service and (ii) any event, condition, circumstance or obligation that occurred, existed or arose on or prior to the date hereof; provided, however, that I retain my rights, if any, (x) to seek indemnification from the Company for any and all costs incurred by me as a result of any liability imposed in connection with my service as an employee, officer or director of the Company or (y) arising under the Agreement.  I further agree that my receipt of the payments and benefits described in the Agreement will be in full satisfaction of any and all Claims for payments or benefits that I may have against the Bunge Group.

 

(b)                                 Specific Release of ADEA Claims.  In consideration of my receipt of the payments and benefits provided to me under this Agreement, I hereby release and forever discharge each Released Party from any and all Claims that I may have as of the date of this Release arising under the Federal Age Discrimination in Employment Act of 1967, as amended, and the applicable rules and regulations promulgated thereunder (“ADEA”).  By signing this Release, I hereby acknowledge and confirm the following:  (i) I was advised by the Company in connection with my termination of employment to consult with an attorney of my choice prior to signing this Release and to have such attorney explain to me the terms of this Release, including, without limitation, the terms relating to my release of claims arising under ADEA; (ii) I have been given a period of not fewer than 21 days to consider the terms of this Release and to consult with an attorney of my choosing with respect thereto; (iii) I am providing the release and discharge set forth in this paragraph (b) in exchange for the consideration provided by the Agreement; and (iv) I have knowingly and voluntarily accepted the terms of this Release.

 

(c)                                  No Legal Claim.  I hereby agree and represent that I have not and will not commence or join any legal action, including, without limitation, any complaint to any federal, state or local agency, to assert any Claim against any Released Party.  If I commence or join any such legal action against a Released Party, I will indemnify such Released Party for its reasonable costs and attorneys’ fees incurred in defending such action, as well as for any monetary judgment obtained by me against any Released Party in such action.  Nothing in this paragraph (c) is intended to reflect any party’s belief that my waiver of Claims under ADEA is

 

 

invalid or unenforceable under this Agreement, it being the intent of the parties that such Claims are waived.

 

(d)                                 Revocation.  I hereby understand and acknowledge that this Release may be revoked by me within the 7-day period commencing on the date that I sign this Release (the “Revocation Period”).  In the event of any such revocation by me, all obligations of the Company remaining under the Agreement will terminate and be of no further force and effect as of the date of such revocation.  No such revocation by me will be effective unless it is in writing and signed by me and received by the Company prior to the expiration of the Revocation Period.

 

ACCEPTED AND AGREED:

 

	
 
    	
 
    
	
Soren   Schroder
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    

 

2Exhibit 10.1

 

JOINT COMMITMENT LETTER

 

February 6, 2013

 

Ignite Restaurant Group, Inc.

9900 Westpark Drive, Suite 300

Houston, Texas 77063

Attention: Michael J. Dixon

Chief Financial Officer

 

Re:                             $150,000,000 Credit Facilities for Ignite Restaurant Group, Inc.

 

Ladies and Gentlemen:

 

The Company has advised KeyBank National Association (“KeyBank”), Bank of America, N.A. (“Bank of America”), Wells Fargo Bank, National Association (“Wells Fargo” and, together with KeyBank and Bank of America, collectively, the “Underwriting Lenders”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any of its designated affiliates, “MLPFS” and, together with KeyBank, collectively, the “Lead Arrangers”) that Ignite Restaurant Group, Inc., a Delaware corporation (the “Company”), desires to establish senior secured credit facilities in an aggregate principal amount of $150,000,000, comprised of a $100,000,000 revolving credit facility and a $50,000,000 term loan (the “Facilities”), to provide, among other things, financing for the purchase of certain assets of Macaroni Grill (the “Target”) by the Company (the “Acquisition”), and for other corporate purposes.

 

In connection with the foregoing, the Company has requested that (a) KeyBank underwrite $62,500,000 of the Facilities, having the terms described in the attached Summary of Terms and Conditions (the “Term Sheet”), (b) Bank of America underwrite $62,500,000 of the Facilities, having the terms described in the attached Term Sheet, (c) Wells Fargo underwrite $25,000,000 of the Facilities, having the terms described in the attached Term Sheet, (d) the Lead Arrangers structure, arrange and syndicate the Facilities to additional lenders, (e) KeyBank serve as administrative agent, joint lead arranger and joint book runner for the Facilities, (f) Bank of America serve as syndication agent for the Facilities, (g) Wells Fargo serve as documentation agent for the Facilities, and (h) MLPFS serve as joint lead arranger and joint book runner for the Facilities.  This letter, together with the Term Sheet and all exhibits, annexes and schedules attached hereto or thereto shall be referred to as the “Joint  Commitment Letter”.  Capitalized terms used in this Joint Commitment Letter and not otherwise defined herein shall have the meaning given to them in the Term Sheet.

 

Commitment

 

KeyBank is pleased to advise the Company of its commitment (the “KeyBank  Commitment”) to provide $62,500,000 of the Facilities upon the terms and subject to the conditions set forth

 

 

or referred to in this Joint Commitment Letter.  Bank of America is pleased to advise the Company of its commitment (the “Bank of America  Commitment”) to provide $62,500,000 of the Facilities upon the terms and subject to the conditions set forth or referred to in this Joint Commitment Letter.  Wells Fargo is pleased to advise the Company of its commitment (the “Wells Fargo Commitment” and, together with the KeyBank Commitment and the Bank of America Commitment, collectively, the “Commitments”) to provide $25,000,000 of the Facilities upon the terms and subject to the conditions set forth or referred to in this Joint Commitment Letter.

 

Subject to the Funds Certain Provision (as defined below), the Facilities shall be evidenced by definitive loan documents relating to the Facilities (the “Loan Documents”) containing terms, conditions, covenants, representations, warranties, events of default and other provisions set forth herein and in the Term Sheet, or as otherwise negotiated in good-faith by and reasonably satisfactory to both the Company and the Lead Arrangers, as customary for transactions of this type and consistent with the existing credit documentation.

 

Appointment

 

The Company hereby appoints KeyBank to act as the administrative agent, joint book-runner, and joint lead arranger for the Company in connection with the Facilities. The Company hereby appoints Bank of America to act as syndication agent for the Company in connection with the Facilities.  The Company hereby appoints Wells Fargo to act as documentation agent for the Company in connection with the Facilities.  The Company hereby appoints MLPFS to act as joint lead arranger and joint book-runner for the Company in connection with the Facilities.  In such capacities, KeyBank, Bank of America, Wells Fargo and MLPFS shall perform the duties and exercise the authority customarily performed and exercised in such roles.  No other titles shall be awarded and no compensation shall be paid in connection with the Facilities, except as expressly set forth in this Joint Commitment Letter or the Fee Letters (as defined below) or as otherwise agreed to by the Lead Arrangers and the Company in writing.  To the extent any such additional titles are awarded with the consent of the Lead Arrangers and the Company, KeyBank shall always have “left” placement in all marketing materials and other documentation used in connection with the Facilities.

 

Syndication

 

While the Commitments are not contingent upon syndication, the Company acknowledges that a Successful Syndication of the Facilities is an integral part of this transaction.  As used herein, a “Successful Syndication” means the syndication of the Facilities that results in KeyBank and Bank of America holding, in the aggregate, not more than $80,000,000 of the Facilities.  Any syndication of the Facilities shall reduce the Commitments of KeyBank and Bank of America on a pro-rata basis; provided that either KeyBank or Bank of America, in their respective sole discretion, may choose to further reduce its Commitment in an amount that is less than their respective pro-rata share.

 

The Lead Arrangers intend to immediately commence syndication to arrange a syndicate of lenders (the “Lenders”) selected by the Lead Arrangers and the Company to provide commitments for the Facilities.  The Lead Arrangers will manage all aspects of the

 

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syndication in consultation with the Company, including selection of Lenders (with the approval of the Company; provided that such approval shall not be unreasonably withheld), determination of when the Lead Arrangers will approach potential Lenders, any naming rights and the final allocations of the commitments among the Lenders.  In connection with the syndication, the Lead Arrangers may elect to appoint certain Lenders to agency positions (such as co-agents) with the consent of the Company.  The Company will not appoint any Lender as an agent without the prior written consent of the Lead Arrangers.

 

The Company will take all such action as the Lead Arrangers may reasonably request to assist the Lead Arrangers in achieving a Successful Syndication until the earlier of (a) 120 days after the Closing Date or (b) achievement of a Successful Syndication.  Such assistance shall include, but not be limited to, (a) using commercially reasonable efforts to ensure that such syndication efforts materially benefit from the existing lending relationships of the Company; (b) providing the Lead Arrangers, promptly upon request, with all information that is available to the Company with respect to the Company, the Target, their respective subsidiaries (and the Acquisition and any other transactions contemplated hereby), and reasonably deemed necessary by the Lead Arrangers, including, but not limited to, information and projections (the “Projections”) prepared by the Company or its advisors; (c) the hosting, with the Lead Arrangers, of one or more meetings between the Company’s senior officers and representatives and the proposed Lenders, at times and places as the Lead Arrangers may reasonably request; and (d) assisting the Lead Arrangers in the preparation of a confidential information memorandum (“Confidential Information Memorandum”) and other marketing materials (together with the Confidential Information Memorandum, collectively, the “Marketing Materials”) to be used in connection with the syndication.

 

Clear Market

 

To ensure an orderly and effective syndication of the Facilities, from the date hereof until the earlier of (a) 120 days after the Closing Date, or (b) achievement of a Successful Syndication, the Company will not, and will not permit any of its affiliates or any other party acting on its behalf to, syndicate or issue, attempt to syndicate or issue, announce or authorize the announcement of the syndication or issuance of, or engage in discussions concerning the syndication or issuance of, any debt or credit facility or debt security (including any renewals thereof) in the commercial banking or private placement markets, in each case with respect to the Company, except as may be done with the prior written consent of the Lead Arrangers.

 

Information

 

The Company hereby represents and covenants that (a) all written information, including all Marketing Materials but excluding the Projections (collectively, the “Information”), that has been or will be made available to the Lead Arrangers by or on behalf of the Company or any of its representatives, is or will be, when furnished, complete and correct in all material respects, and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements

 

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are made, and (b) the Projections that have been or will be made available to the Lead Arrangers by or on behalf of the Company, or any of its representatives, have been or will be prepared in good faith based upon assumptions that are believed by management of the Company to be reasonable at the time made and at the time the related Projections are made available to the Lead Arrangers (it being recognized that such projections are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results, such differences may be material and no assurance can be given that the projected results will be realized).  The Company agrees that, if at any time prior to the later of (i) the closing of the Facilities (the “Closing Date”), and (ii) the earlier of (A) 120 days after the Closing Date, or (B) the completion of a Successful Syndication, any of the representations in the preceding sentence would be incorrect if the Information and Projections were being furnished, and such representations were being made, at such time, then the Company will promptly supplement the Information and the Projections so that such representations will be correct in all material respects under those circumstances.  In arranging and syndicating the Facilities, the Lead Arrangers will be entitled to use and rely on the Information and the Projections without responsibility for independent verification thereof.

 

Fees

 

Upon acceptance of this Joint Commitment Letter, the Company agrees to pay (a) to KeyBank, Bank of America and MLPFS, for their respective accounts, the nonrefundable fees set forth in the fee letter among the Company, KeyBank, Bank of America and MLPFS of even date herewith (the “Lead Arrangers  Fee Letter”), and (b) to Wells Fargo, for its account, the nonrefundable fees set forth in the fee letter among the Company, Wells Fargo and Wells Fargo Securities, LLC of even date herewith (the “Wells Fargo Fee Letter” and, together with the Lead Arrangers Fee Letter, collectively, the “Fee Letters”).  The terms of the Fee Letters are an integral part of the commitment and undertaking of KeyBank, Bank of America, Wells Fargo and MLPFS hereunder.  Payment by the Company of the fees described in the Fee Letters, and compliance by the Company with the terms thereof, are express conditions to any of the obligations of KeyBank, Bank of America, Wells Fargo and MLPFS under this Joint Commitment Letter.

 

Confidentiality

 

By accepting delivery of this Joint Commitment Letter, the Company agrees that neither this Joint Commitment Letter or the Fee Letters, nor any of the terms and conditions set forth or referred to herein or therein, shall under any circumstances be disclosed by the Company or its agents, representatives or advisors, directly or indirectly, to any other financial institution.  The Company further agrees that this Joint Commitment Letter and the Fee Letters are only for the confidential use of the Company, and that neither their existence nor any of the terms thereof will be disclosed by the Company to any person or entity, except that the Joint Commitment Letter and the Fee Letters may be disclosed (a) to the Company’s officers, directors, employees, accountants, majority shareholder, attorneys and other advisors on a “need to know” basis, each of whom will agree to keep the information set forth in this Joint Commitment Letter and the Fee Letters confidential, (b) to the extent required by law,

 

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regulation, or other applicable judicial or governmental order, (c) to the extent consented to by the Lead Arrangers, and (d) to the extent that such information becomes publicly available other than by reason of breach of the confidentiality provisions contained herein; provided that this Joint Commitment Letter may be shared (on a confidential basis) with the Sellers (as hereinafter defined) as part of the Company’s efforts to acquire the Target, each of whom will agree to keep the information set forth in this Joint Commitment Letter confidential; provided further that notwithstanding the foregoing, the Company may disclose this Joint Commitment Letter in any required filings, as determined by the Company in its reasonable discretion, with the Securities and Exchange Commission and other applicable regulatory authorities and stock exchanges.

 

All non-public information furnished by the Company to the Lead Arrangers, and clearly marked as such, shall be for the confidential use of the Lead Arrangers and of the prospective Lenders and each of their respective officers, directors, employees, attorneys and other advisors, in accordance with each Lead Arranger’s customary procedures for handling confidential information, except that any such confidential information may be disclosed (a) to the extent required by law, regulation, supervisory authority or other applicable judicial or governmental order, (b) to the extent such information becomes generally available to the public other than as a result of a disclosure by such Lead Arranger or its representatives, (c) to the attorneys, accountants, advisors, officers or other representatives of such Lead Arranger, and (d) to potential Lenders in connection with the syndication of the proposed financing so long as each such Lender has agreed to keep such information confidential on confidentiality terms comparable to those set forth in this paragraph.  Notwithstanding the foregoing, the Company acknowledges and agrees that the Lead Arrangers may share certain information relating to the transactions contemplated hereby with standard industry database companies (such as Loan Pricing Corporation, Standard & Poor’s LCD and Portfolio Management Data) in accordance with customary industry practice.

 

The Company agrees that neither the Lead Arrangers nor the Underwriting Lenders are providing accounting, tax or legal advice to the Company in connection with the Facilities or otherwise.  Notwithstanding anything in this Joint Commitment Letter, the Fee Letters or any other document executed in connection herewith or related hereto, the Company and the Lead Arrangers hereby agree that each of the Company and the Lead Arrangers (and each of their respective officers, directors, employees, accountants, attorneys and other advisors, agents and representatives) may disclose to any person or entity with taxing authority, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of the transactions contemplated hereby and all materials of any kind (including opinions and other tax analyses) that are provided to any of them relating to such U.S. tax treatment and U.S. tax structure.

 

After the Closing Date, the Lead Arrangers, with the prior written consent of the Company, may place customary advertisements in financial and other newspapers and periodicals or on a home page or similar place for dissemination of information on the Internet or worldwide web as it may choose, and circulate similar promotional materials, including in the form of a “tombstone” or otherwise describing the names of the Company and its affiliates (or any of them), and the amount, type and Closing Date.

 

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Conditions Precedent

 

The Commitments hereunder and the agreements by the Lead Arrangers and the Underwriting Lenders to perform the services set forth herein are, in each case, subject to (a) the consummation of the Acquisition concurrently with the closing of the Facilities on the terms and conditions, and for a purchase price, set forth in the purchase agreement dated February 6, 2013, among the Target, Restaurant Holdings LLC - Series A, a Delaware limited liability company (“Restaurant Holdings”), Brinker Services Corporation, a Colorado corporation (“Brinker”), Mac Management Investors LLC, a Delaware limited liability company (“Mac Management Investors” and, collectively with Restaurant Holdings and Brinker, the “Sellers”), the Company, and Restaurant Holdings, as representative (the “Purchase Agreement”); (b) since the date of this Joint Commitment Letter, there shall not have been any Target Material Adverse Effect (as hereinafter defined); (c) the Company’s compliance, in all material respects, with the terms of this Joint Commitment Letter and the Fee Letters, including the payment in full of all fees, expenses and other amounts payable hereunder and under the Fee Letters; and (d) a closing of the Facilities on or before May 6, 2013 (such date, as the same may be extended by the Lead Arrangers and the Underwriting Lenders in writing in their sole discretion, the “Commitment Expiration Date”).  As used herein, “Target Material Adverse Effect” means the term “Material Adverse Effect”, as defined in the Purchase Agreement.

 

Notwithstanding anything in this Joint Commitment Letter, the Fee Letters or the agreements and other documentation for the Facilities to the contrary, (a) the only representations relating to the Company and its subsidiaries, the Target and its subsidiaries and their respective businesses, the accuracy of which shall be a condition to availability of the Facilities on the Closing Date, shall be the Specified Representations (as defined below), that shall be true and correct in all material respects (without duplication of any materiality qualifier applicable thereto); and (b) the terms of the Facilities shall be in a form such that they do not impair availability of the Facilities on the Closing Date if the conditions set forth in this Commitment Letter are satisfied (it being understood that to the extent any security interest in the intended collateral (other than any collateral the security interest in which may be perfected by the filing of a UCC financing statement or intellectual property security agreement or the delivery of stock certificates) is not perfected on the Closing Date after the use of commercially reasonable efforts to do so, the perfection of such security interest(s) will not constitute a condition precedent to the availability of the Facilities on the Closing Date, but such security interest(s) will be required to be perfected within 30 days after the Closing Date (unless a longer period is agreed to by KeyBank, as administrative agent, in writing).  As used herein, “Specified Representations” means the representations, as applicable to the Company and its Subsidiaries, relating to incorporation or formation; organizational power and authority to enter into the Loan Documents; due execution, delivery and enforceability of such Loan Documents; solvency on a consolidated basis as of the Closing Date; no conflicts of the Loan Documents with material laws or charter documents; Federal Reserve margin regulations; the Investment Company Act; use of proceeds and, subject to the limitations on perfection of security interests set forth in the preceding sentence, the creation and perfection of the security interests granted in the

 

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proposed collateral.  This paragraph, and the provisions herein, shall be referred to as the “Funds Certain Provisions”.

 

Indemnification

 

The Company agrees to indemnify and hold harmless the Lead Arrangers and the Underwriting Lenders, and their respective affiliates, partners, officers, directors, employees, agents, advisors, controlling persons, members and successors and assigns (each, an “Indemnified Person”) from and against any and all losses, claims, damages, liabilities and expenses to which any such Indemnified Person may become subject arising out of or in connection with this Joint Commitment Letter, the Fee Letters, the Acquisition, the Facilities or any related transaction, or any claim, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any such Indemnified Person is a party thereto (and regardless of whether such matter is initiated by a third party or the Company or any of its affiliates or equity holders), and to reimburse each such Indemnified Person upon demand for any reasonable legal or other reasonable out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing; provided that the foregoing indemnity will not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or related expenses to the extent they are found by a final, nonappealable judgment of a court of competent jurisdiction to arise from the willful misconduct or gross negligence of such Indemnified Person.  Notwithstanding any other provision of this Joint Commitment Letter, no Indemnified Person shall be liable for any indirect, special, punitive or consequential damages in connection with its activities related to the Facilities, this Joint Commitment Letter or the Fee Letters.  In addition, no Indemnified Person shall be liable for any damages arising from the use by unauthorized persons of Information, Projections or other material sent through electronic, telecommunications or other information transmission systems (including IntraLinks, SyndTrak or via e-mail) that are intercepted by such persons.

 

The Company agrees to reimburse the Lead Arrangers and the Underwriting Lenders from time to time for all reasonable out-of-pocket costs and expenses (including charges of legal counsel) incurred in connection with the Facilities and the preparation, negotiation and enforcement of this Joint Commitment Letter, the Fee Letters, the Loan Documents and the other definitive documentation for the Facilities, regardless of whether the transactions contemplated hereby are consummated or the Loan Documents are actually executed.  The Company hereby authorizes KeyBank to immediately incur such expenses, including, but not limited to, reasonable expenses of legal documentation.  It is understood and agreed by the Lead Arrangers and the Underwriting Lenders that, to the extent possible, the Facilities will be documented as an amendment to the existing credit documentation.

 

No Fiduciary Relationship; Affiliates

 

The Company acknowledges and agrees that no fiduciary, advisory or agency relationship between the Company and the Lead Arrangers (or the Underwriting Lenders) is intended to be or has been created in respect of any of the transactions contemplated by this Joint Commitment Letter, and the Company waives, to the fullest extent permitted by law, any claims the Company may have against the Lead Arrangers or the Underwriting Lenders (or

 

7

 

any of their respective affiliates) for breach of fiduciary duty or alleged breach of fiduciary duty in connection with this Joint Commitment Letter, the Lead Arrangers Fee Letter, the Facilities or any transactions contemplated hereby or thereby, and agrees that none of the Lead Arrangers or the Underwriting Lenders, their respective affiliates or any other Indemnified Person shall have any liability (whether direct or indirect) to the Company in respect of such a fiduciary duty claim or to any person or entity asserting a fiduciary duty claim on behalf of or in right of the Company, including its equity holders, employees or creditors.

 

The Company acknowledges that the Lead Arrangers, the Underwriting Lenders, or any of their respective affiliates may provide financing, debt or equity capital, financial advisory and other services to parties whose interests may conflict with the interests of the Company.  Neither the Lead Arrangers, the Underwriting Lenders, nor any of their respective affiliates have any duty to disclose to the Company, or use for the benefit of the Company, any information acquired in the course of providing services to any other person or entity, or engaging in any other transaction or otherwise carrying on the business of the Lead Arrangers, the Underwriting Lenders or their respective affiliates.  Neither the Lead Arrangers, the Underwriting Lenders nor any of their respective affiliates have assumed any obligation to the Company other than as expressly provided herein.

 

The Company further acknowledges that KeyBank and its affiliates (and Bank of America and Wells Fargo, and their respective affiliates) are full service securities firms engaged in securities trading and brokerage activities as well as providing investment banking and other financial services.  In the ordinary course of business, KeyBank and its affiliates (and Bank of America and Wells Fargo, and their respective affiliates) may provide investment banking and other financial services to, and acquire, hold or sell, for its own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of, the Company and other legal entities with which the Company may have commercial or other relationships.  With respect to any securities or financial instruments so held by KeyBank or any of its affiliates (and Bank of America and Wells Fargo, and their respective affiliates) or any of their respective customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of the rights, in its sole discretion.

 

Assignments; Effectiveness

 

This Joint Commitment Letter and the Commitments and other undertakings hereunder are intended solely for the benefit of the Company and shall not be assignable by the Company without the prior written consent of the Lead Arrangers.  This Joint Commitment Letter may not be amended or any provision hereof waived or modified except in writing signed by the party against whom enforcement of the same is sought.  This Joint Commitment Letter may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement.  Delivery of an executed counterpart of a signature page of this Joint Commitment Letter by facsimile transmission or other electronic transmission (including .pdf) shall be effective as delivery of a manually executed counterpart of this Joint Commitment Letter.  Section headings used herein are for

 

8

 

convenience of reference only, are not part of this Joint Commitment Letter and are not to affect the construction of, or to be taken into consideration in interpreting, this Joint Commitment Letter.  This Joint Commitment Letter is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person or entity other than the parties hereto.  By executing this Joint Commitment Letter, the Company acknowledges that this Joint Commitment Letter and the Fee Letters are the only agreements between the Company, the Lead Arrangers and the Underwriting Lenders, as the case may be, with respect to the Facilities (other than the Loan Documents to be executed on the Closing Date in connection with the Facilities) and set forth the entire understanding of the parties with respect to the subject matter thereof.

 

Governing Law

 

This Joint Commitment Letter and the Fee Letters shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of laws that would result in the application of the laws of any other jurisdiction; provided that (a) the interpretation of the definition of Target Material Adverse Effect and the determination of whether there shall have occurred a Target Material Adverse Effect, (b) the determination of whether the Acquisition has been consummated as contemplated by the Purchase Agreement, and (c) the determination of whether the representations and warranties made by the Target in the Purchase Agreement are accurate, and whether any inaccuracy thereof entitles the Company to terminate its obligations under the Purchase Agreement or not to consummate the Acquisition, shall be determined in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws that would result in the application of the laws of any other jurisdiction.

 

Acceptance and Termination

 

If the foregoing correctly sets forth the agreement of the Company and the Lead Arrangers, please indicate the Company’s acceptance of the terms hereof by returning an executed counterpart of this Joint Commitment Letter and the Fee Letters not later than 5:00 p.m., Central Time, on February 7, 2013, at which time this Joint Commitment Letter and the Commitments and other undertakings hereunder, if not so accepted prior thereto, will automatically expire.

 

The Commitments and the undertakings of KeyBank, Bank of America, Wells Fargo, and MLPFS in this Joint Commitment Letter will terminate on the Commitment Expiration Date.  Notwithstanding anything in the preceding sentence or elsewhere in this Joint Commitment Letter to the contrary, the provisions set forth above under “Confidentiality”, “Indemnification” and “Governing Law”, and the Jury Trial Waiver shall remain in full force and effect regardless of whether the Closing Date occurs and notwithstanding any termination of this Joint Commitment Letter.

 

PATRIOT Act

 

The Lead Arrangers and the Underwriting Lenders hereby notify the Company that, pursuant to the requirements of the USA PATRIOT Improvement and Reauthorization Act, Pub. L.

 

9

 

109-177 (signed into law March 9, 2006) (as amended from time to time, the “Patriot Act”), each Lender is required to obtain, verify and record information that identifies the Company and its affiliates, which information includes the name, address, tax identification number and other information that will allow such Lenders to identify the Company and its affiliates in accordance with the Patriot Act.  This notice is given in accordance with the requirements of the Patriot Act and is effective as to the Lead Arrangers and the Lenders. The Company agrees that the Lead Arrangers shall be permitted to share any or all such information with the Lenders.

 

[Remainder of page intentionally left blank]

 

10

 

This Joint Commitment Letter shall not be effective until executed by the Company, KeyBank, Bank of America, Wells Fargo and MLPFS.

 

EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS JOINT COMMITMENT LETTER, THE LEAD ARRANGERS FEE LETTER, THE WELLS FARGO FEE LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

The Lead Arrangers and the Underwriting Lenders are pleased to have been given the opportunity to assist the Company in this important transaction.

 

	
 
    	
Regards,
    
	
 
    	
 
    
	
 
    	
KEYBANK   NATIONAL ASSOCIATION 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jef Fowler 
    
	
 
    	
Name:   Jef Fowler 
    
	
 
    	
Title:   Director
    
	
 
    	
 
    
	
 
    	
BANK   OF AMERICA, N.A. 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   John H. Schmidt 
    
	
 
    	
Name:   John H. Schmidt 
    
	
 
    	
Title:   Senior Vice President 
    
	
 
    	
 
    
	
 
    	
WELLS FARGO BANK, NATIONAL 
   ASSOCIATION 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Stephen A. Leon 
    
	
 
    	
Name:   Stephen A. Leon 
    
	
 
    	
Title:   Managing Director
    
	
 
    	
 
    
	
 
    	
MERRILL LYNCH, PIERCE, FENNER & 
   SMITH INCORPORATED 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   David B. Stith 
    
	
 
    	
Name:   David B. Stith 
    
	
 
    	
Title:   Managing Director
    

 

11

 

	
Accepted   and agreed to as of the date first above written:
    	
 
    
	
 
    	
 
    
	
IGNITE   RESTAURANT GROUP, INC.
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Edward W. Engel
    	
 
    
	
Name:   Edward W. Engel
    	
 
    
	
Title:   SVP and General Counsel
    	
 
    

 

12

 

Summary of Terms and Conditions

February 6, 2013

 

IGNITE RESTAURANT GROUP, INC.

Summary of Terms and Conditions

$100,000,000 5-Year Senior Secured Revolving Credit Facility

$50,000,000 5-Year Senior Secured Term Loan Facility

 

This Summary of Terms and Conditions is intended as an outline of certain of the material terms of the proposed senior secured credit facilities and does not purport to summarize all of the conditions, covenants, representations, warranties and other provisions that would be contained in definitive documentation for the proposed senior secured credit facilities contemplated hereby.  This Summary of Terms and Conditions is provided for internal purposes only and is not to be disclosed to outside third parties (with the exception of the Borrower’s legal and financial advisors) without the consent of the Lead Arrangers.

 

	
BORROWER:
    	
 
    	
Ignite Restaurant Group, Inc., a Delaware   corporation (the “Borrower”)
    
	
 
    	
 
    	
 
    
	
GUARANTORS:
    	
 
    	
All   of the obligations under the senior secured credit facilities will be   guaranteed by each existing and future direct and indirect material domestic   subsidiary of the Borrower (collectively, the “Guarantors”).
    
	
 
    	
 
    	
 
    
	
ADMINISTRATIVE  AGENT:
    	
 
    	
KeyBank   National Association (“Key”) will   act as administrative agent (the  “Administrative Agent”).
    
	
 
    	
 
    	
 
    
	
JOINT   LEAD  ARRANGERS/  JOINT BOOK   RUNNERS:
    	
 
    	
Key   and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPFS”) will act as joint lead arrangers and joint book   runners (the “Lead Arrangers”).
    
	
 
    	
 
    	
 
    
	
SYNDICATION  AGENT:
    	
 
    	
Bank   of America, N.A. (“Bank of America”)   will act as syndication agent.
    
	
 
    	
 
    	
 
    
	
DOCUMENTATION  AGENT:
    	
 
    	
Wells   Fargo Bank, National Association (“Wells Fargo”)   will act as documentation agent.
    
	
 
    	
 
    	
 
    
	
LENDERS:
    	
 
    	
A   syndicate of financial institutions (including Key, Bank of America and Wells   Fargo) acceptable to the Lead Arrangers and the Borrower.
    
	
 
    	
 
    	
 
    
	
FACILITIES:
    	
 
    	
Senior   Secured credit facilities in an aggregate principal amount of $150,000,000   (the “Facilities”). The Facilities will be   structured as follows: 

 

(a)   Revolving Credit Facility. A five year senior secured revolving credit   facility in an aggregate principal amount of $100,000,000 (the “Revolving Credit Facility”) with $15,000,000 sublimit for   letters of credit (each a “Letter of Credit”),   and a $15,000,000 sublimit for swing line loans (each a “Swing   Line Loan”). Letters of credit will be issued by Key and/or any   Lender reasonably acceptable to the Administrative Agent and the Borrower   (the “Letter of Credit Issuing Bank”) and   each Lender will have an irrevocable and unconditional participation in each   Letter of Credit and Swing Line Loan.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Availability   under the Revolving Credit Facility will be reduced by any outstanding   Letters of Credit. 

 

Swing   Line Loans will be made available by Key (the “Swing Line   Lender”) on a same day basis in an aggregate amount not exceeding   $15,000,000 and in minimum amounts of $500,000. The Borrower must repay each   Swing Line Loan in full within ten days or upon demand of the Swing Line   Lender. Borrowings of Swing Line Loans will reduce availability under the   Revolving Credit Facility. 
    

 

1

 

	
 
    	
 
    	
(b)   Term Loan Facility. A five year term loan facility in an aggregate principal   amount of $50,000,000 million (the “Term Loan Facility”).
    
	
 
    	
 
    	
 
    
	
COMMITMENT   INCREASE:
    	
 
    	
During   the term of the Facilities, the Borrower will have the right, but not the   obligation, to increase the commitment under the Revolving Credit Facility or   add an additional term loan facility (each a “Commitment   Increase”) by an aggregate amount (for all Commitment Increases)   not to exceed $50,000,000 (to a new aggregate amount not to exceed   $200,000,000), provided that no Event of Default or event which with the   giving of notice or lapse of time or both would be an Event of Default, has occurred   and is continuing. The Borrower may offer the Commitment Increase to   (i) the existing Lenders, and each Lender will have the right, but no   obligation, to commit to all or a portion of the proposed increase or new   facility, or (ii) banks, third party financial institutions or other   entities that are eligible assignees (to be described in the definitive   documentation for the Facilities) and are reasonably acceptable to the   Administrative Agent, provided that the minimum commitment of each such institution   equals or exceeds $10,000,000
    
	
 
    	
 
    	
 
    
	
USE   OF PROCEEDS:
    	
 
    	
The   Facilities shall be used for: (i) working capital, (ii) general   corporate purposes, (iii) the refinancing of existing indebtedness,   (iv) permitted acquisitions (including the acquisition of certain assets   of Macaroni Grill (the “Target”)),   and (v) certain fees and expenses associated with the closing of the   Facilities.
    
	
 
    	
 
    	
 
    
	
CLOSING   DATE:
    	
 
    	
On   or before May 6, 2013 (the “Closing Date”).
    
	
 
    	
 
    	
 
    
	
MATURITY:
    	
 
    	
The   final maturity of the Revolving Credit Facility will occur on the fifth   anniversary of the Closing Date (the “Revolving Credit   Maturity Date”), and the commitments with respect to the Revolving   Credit Facility will automatically terminate on such date.

 

The   final maturity of the Term Loan Facility will occur on the fifth anniversary   of the Closing Date (the “Term Loan Maturity   Date”).
    
	
 
    	
 
    	
 
    
	
AMORTIZATION:
    	
 
    	
The   Term Loan shall amortize in quarterly amounts commencing on the first full   quarter after the closing and continuing at the end of each quarter   thereafter as follows:
    

 

	
 
    	
 
    	
Year
    	
 
    	
Principal Amortization (per annum)
    
	
 
    	
 
    	
1
    	
 
    	
5%
    
	
 
    	
 
    	
2-3   
    	
 
    	
7.5%
    
	
 
    	
 
    	
4-5
    	
 
    	
10%
    
	
 
    	
 
    	
Term   Loan Maturity Date 
    	
 
    	
Balance
    

 

	
 
    	
 
    	
The   Revolving Credit Facility will be interest only, with the balance due in full   on the Revolving Credit Maturity Date.
    
	
 
    	
 
    	
 
    
	
AVAILABILITY:
    	
 
    	
The   Borrower will be able to repay and, provided no default exists, borrow and   reborrow up to the full amount of the Revolving Credit Facility through the   Revolving Credit Maturity Date.

 

The   proceeds of the Term Loan will be advanced in full on the Closing Date. Once   repaid, no portion of the Term Loan may be reborrowed.
    
	
 
    	
 
    	
 
    
	
REVOLVING   CREDIT 
    	
 
    	
The   Borrower may terminate the Revolving Credit Facility commitments in 
    

 

2

 

	
FACILITY   COMMITMENT TERMINATION:
    	
 
    	
amounts   of at least $5,000,000 at any time with three-business days’ notice.
    
	
 
    	
 
    	
 
    
	
SECURITY:
    	
 
    	
Consistent with the existing credit documentation (the “Existing Credit Agreement”); provided that control   agreements, in form and substance reasonably satisfactory to the   Administrative Agent, shall be required with respect to all material deposit   accounts of the Borrower and its subsidiaries.
    
	
 
    	
 
    	
 
    
	
VOLUNTARY  PREPAYMENTS:
    	
 
    	
The   Borrower may voluntarily prepay all or any part of the Facilities without   premium, subject to concurrent payments of any applicable LIBOR or interest   rate breakage costs.
    
	
 
    	
 
    	
 
    
	
MANDATORY  PREPAYMENT:
    	
 
    	
If   for any reason the Revolving Credit Facility outstandings exceed the maximum   amount of the Revolving Credit Facility, the Borrower shall, no later than   the next business day, prepay the loans outstanding under the Revolving   Credit Facility in an aggregate amount equal to such excess.

 

In   addition, until such time that the Term Loan Facility and any additional term   loan facility shall have been paid in full, the Borrower shall make the   following mandatory prepayments (subject to certain amounts to be negotiated   and reinvestment rights to be agreed upon in the loan documentation):

 

Asset Sales: Prepayments in the   amount of all of the net after tax cash proceeds of any material sale or   other material disposition of any property or assets of the Borrower or its   domestic subsidiaries (subject to exceptions and reinvestment rights to be   negotiated), other than net cash proceeds of sales or other dispositions of   inventory in the ordinary course of business.

 

Casualty   Occurrence: Prepayments in amounts equal to such net   insurance/condemnation proceeds in excess of an amount to be determined, to   the extent such proceeds are not reinvested in the Borrower.

 

Equity Offerings: Prepayments in an amount   equal to 50% of the net cash proceeds received from the issuance of equity   securities of the Borrower after the Closing Date (subject to exceptions to   be negotiated).

 

Incurrence of Indebtedness: Prepayments in an amount   equal to 100% of the net cash proceeds received from the incurrence of   indebtedness by the Borrower or its material domestic subsidiaries (other   than indebtedness permitted under the loan documents).

 

Excess   Cash Flow: Prepayments in amounts and pursuant to mechanics   to be mutually agreed upon by the Company, the Lead Arrangers and Wells   Fargo.

 

All   such prepayments shall be applied without penalty or premium (except for   breakage costs, if any) to the Term Loan Facility (other than with respect to   payments pursuant to the section titled “Exceeding the Commitment” above,   which shall be applied to the Revolving Credit Facility) to reduce the   remaining principal installments thereof on a pro rata basis.
    
	
 
    	
 
    	
 
    
	
APPLICABLE  INTEREST RATE:
    	
 
    	
Consistent   with the Existing Credit Agreement; provided that the Applicable Interest   Rate will be determined based on the following grid presented below.
    

 

3

 

	
 
    	
 
    	
Level
    	
 
    	
Leverage
   Ratio
    	
 
    	
Base Rate
   Margin
   (bps)
    	
 
    	
LIBOR
   Margin (bps)
    	
 
    	
Commitment
   Fee (bps)
    	
 
    
	
 
    	
 
    	
I
    	
 
    	
>5.00x
    	
 
    	
325.00
    	
 
    	
425.00
    	
 
    	
50.00
    	
 
    
	
 
    	
 
    	
II
    	
 
    	
>4.50x   <5.00x
    	
 
    	
250.00
    	
 
    	
350.00
    	
 
    	
50.00
    	
 
    
	
 
    	
 
    	
III
    	
 
    	
>4.00x   <4.50x
    	
 
    	
175.00
    	
 
    	
275.00
    	
 
    	
40.00
    	
 
    
	
 
    	
 
    	
IV
    	
 
    	
>3.50x   <4.00x
    	
 
    	
125.00
    	
 
    	
225.00
    	
 
    	
35.00
    	
 
    
	
 
    	
 
    	
V
    	
 
    	
>3.00x   <3.50x
    	
 
    	
75.00
    	
 
    	
175.00
    	
 
    	
30.00
    	
 
    
	
 
    	
 
    	
VI
    	
 
    	
>2.50x   <3.00x
    	
 
    	
50.00
    	
 
    	
150.00
    	
 
    	
25.00
    	
 
    
	
 
    	
 
    	
VII
    	
 
    	
<2.50x
    	
 
    	
25.00
    	
 
    	
125.00
    	
 
    	
20.00
    	
 
    

 

	
 
    	
 
    	
For   the Facilities, Level II shall be effective at closing through the first day   of the month after the date of receipt of the Compliance Certificate for the   first fiscal quarter of the Borrower after the Closing Date. Thereafter, the   Applicable Interest Rate and commitment fee will be determined quarterly the   first day of the month after the date of receipt of the required quarterly   Compliance Certificate.
    
	
 
    	
 
    	
 
    
	
COMMITMENT   FEE:
    	
 
    	
The   Borrower shall pay a commitment fee, as stated in the above pricing grid, due   quarterly in arrears and calculated on the average unused amount of the   Revolving Credit Facility (for purposes of calculating the commitment fee,   Swing Line loans shall not constitute usage).
    
	
 
    	
 
    	
 
    
	
LETTER   OF  CREDIT FEES:
    	
 
    	
Consistent   with the Existing Credit Agreement.
    
	
 
    	
 
    	
 
    
	
RESERVE   REQUIREMENT/YIELD PROTECTION:
    	
 
    	
Consistent   with the Existing Credit Agreement.
    
	
 
    	
 
    	
 
    
	
DEFAULT   RATE:
    	
 
    	
Consistent   with the Existing Credit Agreement.
    
	
 
    	
 
    	
 
    
	
FINANCIAL  COVENANTS:
    	
 
    	
Financial   covenants will be measured quarterly and will be limited to the following:

 

Leverage   Ratio: (Rent Adjusted Debt to EBITDAR) - No greater than (a) 5.50x at   closing though December 29, 2013, (b) 5.25x on December 30,   2013 through June 15, 2014, (c) 5.00x on June 16, 2014 through   December 28, 2014, and (d) 4.75x on December 29, 2014 and   thereafter.

 

Fixed   Charge Coverage Ratio: No less than (a) 1.35x at closing through   December 29, 2013, and (b) 1.50x on December 30, 2013 and   thereafter.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Financial   covenant definitions to be consistent with the Existing Credit Agreement,   provided that the Consolidated EBITDA definition shall be amended to allow   for the following addbacks: (i)  actual transaction costs and integration   costs relating to the transactions contemplated hereby in an aggregate amount   not to exceed $10,000,000; and (ii) general and administrative expenses   as follows:

 

(A)    $7,115,000 for the measurement period ending June 17, 2013;

(B)    $6,522,250 for the measurement period ending September 9, 2013;

(C)    $5,336,250 for the measurement period ending December 30, 2013;

(D)    $3,557,500 for the measurement period ending March 24, 2014; and

(E)    $1,778,750 for the measurement period ending June 16, 2014.
    

 

4

 

	
FINANCIAL  REPORTING:
    	
 
    	
Consistent   with the Existing Credit Agreement.
    
	
 
    	
 
    	
 
    
	
NEGATIVE  COVENANTS:
    	
 
    	
Consistent   with the Existing Credit Agreement, with the exception that   (i) Section 5.20 will be amended such that the Leverage Ratio   requirement contained therein shall be 0.25x less than that Leverage Ratio   requirement set forth in the Financial Covenants section above, and   (ii) Sections 5.11, 5.13 and 5.15 will be amended in a manner to be   agreed upon by the Company, the Lead Arrangers and Wells Fargo.
    
	
 
    	
 
    	
 
    
	
ADDITIONAL PROVISIONS:
    	
 
    	
The   loan documents will contain terms not set forth herein consistent with the   Existing Credit Agreement and otherwise customary for transactions of this   type, all as reasonably required by the Administrative Agent and the Lenders   in good faith, and as agreed to by the Company.
    
	
 
    	
 
    	
 
    
	
CONDITIONS  PRECEDENT TO  CLOSING AND  FUNDING:
    	
 
    	
Subject   to the Funds Certain Provisions as set forth in the Joint Commitment Letter,   the availability of the Facilities shall be subject to the satisfaction of   the following conditions:
    
	
 
    	
 
    	
1.              Each party   thereto shall have executed and delivered definitive documentation for the   Facilities on terms consistent with the Joint Commitment Letter and otherwise   reasonably satisfactory to the Company, the Lead Arrangers and Wells Fargo,   and the Lenders shall have received customary closing certificates and legal   opinions from counsel to Company.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.              The terms of   the Purchase Agreement (including all exhibits, schedules, annexes and other   attachments thereto and other agreements related thereto) and all related   documents shall be reasonably satisfactory to the Lead Arrangers, it being   agreed that the Purchase Agreement dated February 6, 2013 provided to   the Lead Arrangers prior to the execution of the Commitment Letter is   reasonably satisfactory to the Lead Arrangers. The acquisition of Target (the   “Acquisition”) shall be consummated   pursuant to the Merger Agreement, substantially concurrently with the initial   funding of the Term Loan Facility, and no provision thereof shall have been   amended or waived, and no consent shall have been given thereunder, by the   Company or its affiliates, in any manner adverse to the interests of the Lead   Arrangers or the Lenders without the prior written consent of the Lead   Arrangers and Wells Fargo, which consent shall not to be unreasonably   withheld or delayed.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.              On the   Closing Date, the Specified Representations (as defined in the Joint   Commitment Letter) shall be accurate in all material respects.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
4.              All fees and   expenses due to the Lead Arrangers and the Underwriting Lenders pursuant to   the Joint Commitment Letter and Fee Letters for which an invoice has been   received prior to the Closing Date shall have been paid or shall have been   authorized to be deducted from the proceeds of the initial funding under the   Facilities.
    
	
 
    	
 
    	
 
    
	
EVENTS   OF DEFAULT:
    	
 
    	
Consistent   with the Existing Credit Agreement.
    
	
 
    	
 
    	
 
    
	
REMEDIES:
    	
 
    	
Consistent   with the Existing Credit Agreement.
    

 

5

 

	
ASSIGNMENTS   AND  PARTICIPATIONS:
    	
 
    	
Consistent   with the Existing Credit Agreement.
    
	
 
    	
 
    	
 
    
	
REQUIRED  LENDERS:
    	
 
    	
Consistent   with the Existing Credit Agreement.
    
	
 
    	
 
    	
 
    
	
INDEMNIFICATIONS:
    	
 
    	
Consistent   with the Existing Credit Agreement.
    
	
 
    	
 
    	
 
    
	
FEES &   EXPENSES:
    	
 
    	
The   Borrower will pay all reasonable costs, expenses and charges incurred by the   Lead Arrangers, including but not limited to, fees and expenses of external   legal counsel for the Administrative Agent. In addition, all reasonable out   of pocket expenses and legal fees of counsel to the Administrative Agent   regardless of whether or not the Facilities are closed, and all enforcement   costs and expense of the Administrative Agent and the Lenders.
    
	
 
    	
 
    	
 
    
	
ACCOUNTING  CHANGES:
    	
 
    	
Consistent   with the Existing Credit Agreement.
    
	
 
    	
 
    	
 
    
	
ADMINISTRATIVE   AGENT’S COUNSEL:
    	
 
    	
Thompson   Hine LLP
    
	
 
    	
 
    	
 
    
	
GOVERNING   LAW:
    	
 
    	
State   of New York
    

 

6

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