EXHIBIT 10.1 CONTRIBUTION AGREEMENT

 

                                                                    EXHIBIT 10.1

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                             CONTRIBUTION AGREEMENT

 

 

         This CONTRIBUTION AGREEMENT ("AGREEMENT") is made and entered into this

29th day of December, 2005, by and among Buffets Holdings, Inc., a Delaware

corporation (the "COMPANY"), Caxton-Iseman Investments, L.P., a Delaware limited

partnership ("CAXTON-ISEMAN"), the other stockholders of the Company executing

this Agreement and designated as Other Investors (the "OTHER INVESTORS"), the

management stockholders of the Company executing this Agreement and designated

as Management Stockholders (the "MANAGEMENT STOCKHOLDERS," and together with

Caxton-Iseman and the Other Investors, the "CONTRIBUTORS") and Buffets

Restaurants Holdings, Inc., a Delaware corporation ("HOLDCO").

 

                                 R E C I T A L S

 

         WHEREAS, the Contributors and Holdco have entered into a Stockholders'

Agreement, dated the date hereof, as amended, supplemented or modified from time

to time (the "HOLDCO STOCKHOLDERS AGREEMENT");

 

         WHEREAS, upon the terms and conditions set forth in this Agreement, the

Contributors propose to contribute to Holdco all of their shares of the

Company's common stock, par value $0.01 per share (the "COMPANY COMMON STOCK"),

as set forth opposite the applicable Contributor's name on EXHIBIT A hereto, and

Holdco proposes to issue to each Contributor, in exchange for such contribution,

a like amount of shares of common stock of Holdco, par value $0.01 per share

(the "HOLDCO COMMON STOCK"), as set forth opposite the applicable Contributor's

name on EXHIBIT A hereto;

 

         WHEREAS, the Contributors intend that the exchange of Company Common

Stock for Holdco Common Stock be a transaction that is described in Sections 351

and 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended from time to

time;

 

         WHEREAS, the Contributors and the Company have entered into the

Stockholders' Agreement of the Company, dated September 29, 2000, as amended,

supplemented or modified from time to time (the "COMPANY STOCKHOLDERS'

AGREEMENT");

 

         WHEREAS, pursuant to Section 7.3 of the Company Stockholders'

Agreement, the Company Stockholders' Agreement may be amended only by a written

instrument duly executed by Caxton-Iseman, the Company and holders of more than

50% of the shares of Company Common Stock not held by Caxton-Iseman;

 

         WHEREAS, the parties to this Agreement include Caxton-Iseman, the

Company and holders of more than 50% of the shares of Company Common Stock not

held by Caxton-Iseman; and

 

         WHEREAS, solely with respect to the Contribution (as defined below),

the Contributors and the Company desire to amend the Company Stockholders'

 

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Agreement to exempt the Contribution from any and all transfer restrictions in

the Company Stockholders' Agreement, including, without limitation, the transfer

restrictions in Section 3 thereof and the right of first refusal in Section 4

thereof;

 

         NOW, THEREFORE, in consideration of the foregoing and the agreements

set forth herein, the parties hereto agree as follows:

 

                                   ARTICLE I.

 

                  CONTRIBUTION; ISSUANCE OF HOLDCO COMMON STOCK

 

         1.1.      CONTRIBUTION OF COMPANY COMMON STOCK TO HOLDCO. On the terms

and subject to the conditions contained in this Agreement, at the Closing (as

defined in Section 2.1(a)), each Contributor agrees to contribute, assign,

transfer, convey and deliver to Holdco, and Holdco agrees to accept from the

Contributors, the amount of Company Common Stock set forth opposite the

applicable Contributor's name on EXHIBIT A hereto (the "CONTRIBUTION").

 

         1.2.      ISSUANCE OF HOLDCO COMMON STOCK BY HOLDCO. On the terms and

subject to the conditions contained in this Agreement, at the Closing, in

consideration of the Contribution, Holdco agrees to issue, sell and deliver to

the Contributors, the number of shares of Holdco Common Stock set forth opposite

the applicable Contributor's name on EXHIBIT A hereto.

 

         1.3.      AMENDMENT TO THE COMPANY STOCKHOLDERS' AGREEMENT.

 

         (a)        Notwithstanding anything to the contrary in the Company

Stockholders' Agreement, the Company Stockholders' Agreement is hereby amended

to exempt the Contribution from any and all transfer restrictions, including,

without limitation, the transfer restrictions in Section 3 thereof and the right

of first refusal in Section 4 thereof.

 

         (b)       The Transferee Agreement set forth as EXHIBIT B hereto, is

hereby approved as the Transferee Agreement whereby Holdco joins the Company

Stockholders' Agreement as a Sponsor. To the extent that the Company

Stockholders' Agreement is inconsistent with the Transferee Agreement, the

Company Stockholders' Agreement is hereby amended to comply with the provisions

of the Transferee Agreement.

 

         1.4.      CONTINUING EFFECT OF THE COMPANY STOCKHOLDERS' AGREEMENT. This

Agreement shall not constitute an amendment or modification of any other

provision of the Company Stockholders' Agreement not expressly referred to

herein. Except as expressly amended or modified herein, the provisions of the

Company Stockholders' Agreement are and shall remain in full force and effect.

 

 

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                                   ARTICLE II.

 

                                      CLOSING

 

         2.1.      CLOSING.

 

         (a)       The closing (the "CLOSING") of the Contribution and the

issuance of the Holdco Common Stock as contemplated by this Agreement shall take

place at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285

Avenue of the Americas, New York, New York 10019-6064, at 10:00 a.m., local

time, on the date hereof, or at such other location or date as the parties may

mutually agree. The date of the Closing is hereinafter referred to as the

"CLOSING DATE".

 

         (b)       Except as set forth in Section 5.1, at the Closing, each

Contributor shall deliver to Holdco stock certificates representing the amount

of Company Common Stock set forth opposite the applicable Contributor's name on

EXHIBIT A hereto and related blank stock powers.

 

         (c)       At the Closing, Holdco shall duly reflect in the Holdco books

and records the ownership by the Contributors of the number of shares of Holdco

Common Stock set forth opposite the applicable Contributor's name on EXHIBIT A

hereto.

 

                                  ARTICLE III.

 

               REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS

 

         Each Contributor hereby represents and warrants to Holdco as follows:

 

         3.1.      DUE ORGANIZATION AND AUTHORITY. Each Contributor that is an

entity is duly organized, validly existing and in good standing under the laws

of its state of incorporation, having full right, power and authority to execute

and deliver this Agreement, to perform its obligations hereunder and to

consummate the transactions contemplated hereby.

 

         3.2.      AUTHORIZATION AND VALIDITY OF AGREEMENT. The Contributor has

taken all action necessary in order to authorize, execute and deliver this

Agreement and to consummate the transactions contemplated hereby and to perform

the acts contemplated on its part hereunder. This Agreement is a valid and

binding agreement of the Contributor enforceable against it in accordance with

the terms of this Agreement, except as enforceability may be limited by

applicable bankruptcy, insolvency, reorganization, moratorium or similar laws

affecting the enforcement of creditors' rights generally or by equitable

principles relating to enforceability (regardless of whether considered in a

proceeding at law or in equity).

 

         3.3.      GOVERNMENTAL APPROVALS AND CONSENTS. No material

authorizations, consents, approvals, orders, notices, filings, registrations,

qualifications and exemptions of, with or from, or other actions ("APPROVALS")

are required by any

 

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Governmental Authority to which a Contributor may be subject in connection with

the execution and delivery by the applicable Contributor of this Agreement, the

performance by the applicable Contributor of its obligations hereunder and the

consummation of the transactions contemplated hereby. "GOVERNMENTAL AUTHORITY"

means any court, administrative agency or commission, including, without

limitation, the Securities and Exchange Commission, or other federal, state or

local governmental authority or instrumentality of any nation and any agencies,

departments or subdivisions thereof.

 

         3.4.      TITLE TO SECURITIES. Each Contributor has good, valid and

marketable title to the shares of Company Common Stock set forth opposite the

applicable Contributor's name on EXHIBIT A hereto, free and clear of any Liens

(as defined below) whatsoever (other than Liens to be released on the date

hereof) and, upon delivery of such shares of Company Common Stock at the Closing

as herein provided, Holdco will acquire good, valid and marketable title

thereto, free and clear of all liens, pledges, mortgages, security interests,

claims, leases, charges, options, rights of first refusal, transfer restrictions

under any stockholder or similar agreement, encumbrances, other title defects

(including encroachments and survey defects) or any other restrictions or

limitations whatsoever (collectively, "LIENS"), other than any Liens created by

this Agreement, the Company Stockholders' Agreement or the Warrant Agreement,

dated as of September 29, 2000, by and among the Company and each warrantholder

who is a party thereto.

 

         3.5.      INVESTMENT REPRESENTATIONS.

 

         (a)       Each Contributor is acquiring the shares of Holdco Common

Stock set forth opposite its name on EXHIBIT A hereto for its own account for

investment and not with a view to distribution.

 

         (b)       Each Contributor is an "accredited investor" as defined in

Rule 501(a) as currently in effect under the Securities Act of 1933, as amended,

and the rules and regulations promulgated thereunder (the "SECURITIES ACT").

 

         (c)       Each Contributor has such knowledge, sophistication and

experience in business and financial matters so as to be capable of evaluating

the merits and risks of the prospective investment in Holdco, and has so

evaluated the merits and risks of such investment.

 

         (d)       Each Contributor is able to bear the economic risk of an

investment in Holdco and is able to afford a complete loss of such investment.

 

         (e)       Each Contributor understands and acknowledges that (i) the

shares of Holdco Common Stock are being offered and sold to it without

registration under the Securities Act by reason of reliance upon certain

exemptions th