EXHIBIT 10.13
CONSULTING SERVICES AGREEMENT
This Agreement is made as of May 11, 2000, between RED XXXXX INTERNATIONAL,
INC., a Nevada corporation (the "Company") and QUAD-C MANAGEMENT, INC., a
Delaware corporation (the "Consultant").
RECITALS
A. The Company is engaged in the business of the operation and
franchising of the "Red Xxxxx" casual restaurant dining business (the
"Business").
B. Contemporaneously with the execution hereof investment funds and
Affiliates of Consultant have acquired shares of common stock ("Common
Shares") of the Company and have entered into a Shareholders Agreement
dated as of the date hereof with the Company (the "Shareholders
Agreement"). Capitalized terms used, but not defined, herein have the
meaning given to such terms in the Shareholders Agreement.
C. Consultant has expertise in the management and operation of
businesses.
NOW, THEREFORE, in consideration of the agreements set forth herein, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Retention as Consultant. The Company hereby retains Consultant to render
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certain consulting and advisory services to the Company and its subsidiaries and
Consultant hereby agrees to perform the services described herein.
2. Term. The initial term of this Agreement shall be the period commencing
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on the date hereof and ending on the earlier of (i) the tenth anniversary of the
date hereof, (ii) the date on which investment funds affiliated with Consultant
and their Affiliates (and the Related Transferees of such investment funds and
Affiliates) no longer own in the aggregate, directly or indirectly, at least
such number of Common Shares of the Company equal to 50% of the Common Shares
held by them on the date hereof (as such number is equitably adjusted to reflect
stock splits, stock dividends, recaptializations and reclassifications) and
(iii) the consummation of a Qualified Public Offering; provided that this
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Agreement may be terminated at any time by mutual agreement of the Company and
the Consultant. After expiration of the initial term, this Agreement shall
automatically renew for additional one-year periods unless it is terminated by
either party by giving written notice of termination to the other party at least
10 days before the end of the initial term or 10 days before the end of each
one-year renewal period, as the case may be.
3. Services. During the term hereof, Consultant shall consult with and
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advise the Company and its subsidiaries on matters relating to the Business, as
may reasonably be requested from time to time by the Board of Directors of the
Company, including, but not limited to, assistance in:
(i) support, negotiation and analysis of financing alternatives,
including, without limitation, in connection with acquisitions, capital
expenditures and refinancing of existing indebtedness;
(ii) identification, support, negotiation and analysis of acquisitions
and dispositions;
(iii) finance functions, including assistance in the preparation of
financial projections, and monitoring of compliance with financing
agreements;
(iv) strategic planning functions, including evaluating major
strategic alternatives; and
(v) providing persons to serve as directors of the Company and its
subsidiaries.
4. Compensation.
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(a) During the term of this Agreement, subject to the provisions of
the Company's senior credit facility, the Company shall pay Consultant an
aggregate of $200,000.00 per year (the "Consulting Services Fee"), payable
in equal quarterly installments in arrears on the last business day of each
quarter, prorated on a daily basis for any partial calendar year during the
term of this Agreement. The Consulting Services Fee may, in the sole
discretion of a majority of the members of the Company's Board of Directors
who are not affiliated with Consultant, be increased but may not be
decreased without the prior written consent of Consultant. If any employee
of Consultant shall be elected to serve on the Board of Directors of the
Company (a "Designated Director"), in consideration of the Consulting
Services Fee being paid to Consultant, Consultant shall cause such
Designated Director to waive any and all compensation, including without
limitation, fees, stock options, equity participation and other incentives,
to which such director would otherwise be entitled as a director for any
period for which the Consulting Services Fee or any installment thereof is
paid and for which such Designated Director continues to be employed by
Consultant.
(b) The Company shall also reimburse Consultant for all reasonable
out-of-pocket expenses incurred by Consultant in the performance of
services hereunder, including, without limitation, any reasonable fees and
expenses of legal, accounting or other professional advisors to Consultant
in connection with the services provided hereunder. Such expenses shall be
reimbursed promptly upon receipt by the Company, as the case may be, of
expense statements or other supporting documentation.
(c) Nothing herein shall prevent Consultant from receiving from the
Company a transaction fee in connection with the consummation by the
Company or any of its subsidiaries of (i) an acquisition of an additional
business (ii) a divestiture and/or (iii) a financing or refinancing, in
each case, in such amount as shall be determined by a majority of the
members of the Company's Board of Directors who are not affiliated with
Consultant.
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5. Liability. Neither Consultant nor any of its affiliates, directors,
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officers, shareholders, employees or agents shall be liable to the Company or
any of its subsidiaries or affiliates for any loss, liability, damage or expense
arising out of or in connection with the performance of services contemplated by
this Agreement, unless such loss, liability, damage or expense shall be proven
to result directly from gross negligence, willful misconduct or bad faith on the
part of Consultant, its affiliates, directors, officers, shareholders, employees
or agents acting within the scope of their employment or authority.
6. Indemnification.
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(a) The Company agrees that it shall indemnify, defend and hold
harmless Consultant, its successors and assigns and its directors,
officers, shareholders, employees, agents, advisors, representatives and
controlling persons (within the meaning of the Securities Act of 1933, as
amended) and their respective successors and assigns (collectively,
"Indemnitees") from and against any and all claims, obligations,
liabilities, causes of action, actions, suits, proceedings, investigations,
judgments, decrees, losses, damages, fees, costs and expenses (including
without limitation interest, penalties and fees and disbursements of
attorneys, accountants, investment bankers and other professional advisors)
(collectively, "Obligations"), whether incurred with respect to third
parties or otherwise, in any way resulting from, arising out of or in
connection with, based upon or relating to, the performance of the services
hereunder, except to the extent that any such Obligation is found in a
final judgment by a court having jurisdiction to have resulted from the
gross negligence, willful misconduct or bad faith of an Indemnitee.
(b) The Company hereby agrees to advance costs and expenses, including
attorneys' fees, incurred by Consultant (acting on its own behalf or, if
requested by any such Indemnitee other than itself, on behalf of such
Indemnitee) or any Indemnitee in defending any claim relating to any
Obligation in advance of the final disposition of such claim within 30 days
of receipt from Consultant of (i) a notice setting forth the amount of such
costs and expenses and (ii) an undertaking by or on behalf of Consultant or
such Indemnitee to repay amounts so advanced if it shall ultimately be
determined that Consultant or such Indemnitee is not entitled to be
indemnified by the Company as authorized by this Agreement.
(c) The foregoing right to indemnity shall be in addition to any
rights that any Indemnitee may have at common law or otherwise and shall
remain in full force and effect following the completion or any termination
of the engagement. The Company hereby consents to personal jurisdiction and
to service and venue in any court in which any claim which is subject to
this Agreement is brought against any Indemnitee.
7. Independent Contractor. Consultant is an independent contractor and
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nothing in this Agreement shall be construed or inferred to imply that
Consultant or any affiliate of Consultant is a partner or joint venturer with,
or an agent or employee of, the Company. All employees, agents or
representatives employed by or used by Consultant in its performance of this
Agreement shall be the employees, agents and representatives of Consultant and
not the Company, except as expressly agreed to in writing by the Company.
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8. Notices. Any notice required or permitted hereunder shall be deemed to
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have been given or made only if in writing and either delivered or sent by hand
delivery, express delivery, or courier service, or prepaid registered or
certified mail, return receipt requested, addressed as follows:
If to the Company, to:
Red Xxxxx International, Inc.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
and Xxxx X. Xxxxx
with a copy to:
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
If to Consultant, to:
Quad-C, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
with a copy to:
McGuire, Woods, Battle & Xxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
The date of delivery, or the date of mailing, of any such notice shall be deemed
to be the date on which the same was given. Any of the parties may change its
address for the purpose of notice by giving like notice in accordance with the
provisions of this Section.
9. Entire Agreement. This Agreement contains the entire agreement between
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the parties hereto and supersedes any and all prior agreements, arrangements or
understandings relating to the subject matter hereof.
10. Binding Effect; Assignment. This Agreement shall be binding upon and
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inure to the benefit of the parties to this Agreement and their respective
successors and assigns and to each Indemnitee. Consultant may assign any of its
rights and obligations under this Agreement to any of its affiliates without the
consent of the Company. This Agreement is not intended to confer any right or
remedy hereunder upon any person other than the parties to this Agreement and
their respective successors and permitted assigns and each Indemnitee.
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11. Amendment; Waivers. No amendment, modification, supplement or discharge
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of this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by the party or Indemnitee against whom
enforcement of the amendment, modification, supplement, discharge or waiver is
sought (and in the case of the Company, approved by resolution of the Board of
Directors of the Company). Any such waiver shall constitute a waiver only with
respect to the specific matter described in such writing and shall in no way
impair the rights of the party or Indemnitee granting such waiver in any other
respect or at any other time. Neither the waiver by any of the parties hereto or
any Indemnitee of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any party hereto or any Indemnitee on one or more
occasions, to enforce any of the provisions of this Agreement or to exercise any
right, powers or privilege hereunder, shall be construed as a waiver of any
other breach or default of a similar nature, or as a waiver of any of such
provisions, rights, power or privileges hereunder. The rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies
that any party or Indemnitee may otherwise have at law or in equity or
otherwise.
12. Governing Law. This Agreement shall be governed and construed by, and
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enforced in accordance with, the laws of the State of Colorado, without giving
effect to its principles or rules of conflict of laws to the extent that such
principles or rules would require or permit the application of the laws of
another jurisdiction.
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IN WITNESS WHEREOF the parties have entered into this Agreement as of the
day and year first above written.
RED XXXXX INTERNATIONAL, INC.
By: /s/Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: President
QUAD-C MANAGEMENT, INC.
By:
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Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
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IN WITNESS WHEREOF the parties have entered into this Agreement as of the
day and year first above written.
RED XXXXX INTERNATIONAL, INC.
By:
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Name: Xxxxxxx X. Xxxxxx
Title: President
QUAD-C MANAGEMENT, INC.
By: /s/Xxxxxx X. Xxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
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