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EXHIBIT 10.16
AGREEMENT FOR MANAGEMENT ADVISORY,
STRATEGIC PLANNING AND
CONSULTING SERVICES
THIS AGREEMENT is made effective as of the 30th day of October, 1996
(the "Effective Date"), by and between Investcorp International, Inc., a
Delaware corporation ("III"), and CSK Auto, Inc., a Delaware corporation ("CSK
Auto").
WHEREAS, III, by and through its officers, employees, agents and
affiliates has developed in connection with the conduct of its business and
affairs various areas of expertise in the fields of management, finance,
marketing, and strategic planning; and
WHEREAS, CSK Auto desires to avail itself of the expertise of III in
those areas hereinabove enumerated and in which III is acknowledged to have
expertise, for a period of five (5) years from the effective date hereof, said
5-year period being referred to as the "Term";
NOW, THEREFORE, the parties do hereby agree as follows:
1. Appointment. CSK Auto hereby appoints III to render management
advisory, strategic planning and consulting services to CSK Auto on an
exclusive basis during the Term as herein contemplated.
2. III. During the Term, III shall render to CSK Auto, by and through
such of its officers, employees, agents and affiliates as III, in its sole
discretion, shall designate from time to time, management advisory, strategic
planning and consulting services. Said services shall consist of advice
concerning management, finance, marketing, strategic planning, and such other
services as shall be requested from time to time by the Board of Directors of
CSK Auto. CSK Auto acknowledges and agrees that the services to be provided by
III hereunder do not encompass services that would be required in connection
with an acquisition, restructuring or initial public offering by CSK Auto, or a
private sale of the stock or assets of CSK Auto. Should CSK Auto desire to
engage III to provide financial advisory services in connection with any such
type of transaction, such engagement shall be subject to the negotiation of
mutually acceptable fee arrangements for such additional services, albeit the
indemnification obligations of CSK Auto as set forth in paragraph 7 of this
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Agreement shall apply to any such additional services performed by III.
3. Fees. In consideration of III's performance of the above-described
services, CSK Auto shall pay to III, in cash, consulting services fees at the
rate of $1,000,000 per year for the duration of the Term (collectively, the
"Fee"). It is recognized that the services provided under this Agreement will
not be evenly distributed over time and that a significant portion of such
services will be performed early in the period of time covered by this
Agreement. It is also recognized that, subject to the terms of this Agreement,
CSK Auto is committed to pay the full amount payable hereunder, and the Fee,
once paid, is non-refundable. The full amount of the Fee for the entire Term
shall be paid on its Effective Date.
4. Reimbursements. Within 15 calendar days of delivery of III's
invoice, CSK Auto shall reimburse III for its actual out-of-pocket expenses
incurred in connection with the performance of services pursuant to this
Agreement.
5. Default. In the event that CSK Auto fails to pay any part of the
Fee as set forth in Paragraph 3 above when and as due, and CSK Auto does not
cure such failure prior to the 10th day of the month in which such payment is
due, then CSK Auto shall be in default under this Agreement and III shall be
entitled to receive payment in full of the unpaid portion of the Fee upon
making written demand upon CSK Auto for such payment. Upon delivery of such
written demand, III shall be excused from rendering any further services
pursuant to this Agreement. The aforesaid right and privilege of III to
withhold services is intended to be in addition to any and all other remedies
available because of CSK Auto's default, including III's right to payment of
all fees set forth herein. Further, in the event of a default by CSK Auto, CSK
Auto agrees to reimburse III for any and all costs and expenses incurred by
III, including, without limitation, reasonable counsel fees and expenses, in
connection with such default and any litigation or other proceedings instituted
for the collection of payments due hereunder.
6. Permissible Activities. Nothing herein shall in any way preclude
III from engaging in any business activities or from performing services for
its own account or for the account of others.
7. Indemnification. CSK Auto shall indemnify and hold harmless III and
its directors, officers, employees, agents and controlling persons (each being
an "Indemnified Party") from and against any and all losses, claims, damages
and liabilities, joint or several, to which such Indemnified
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Party may become subject under any applicable federal or state law, or
otherwise, relating to or arising out of the management, strategic planning and
consulting services contemplated by, this Agreement. CSK Auto shall reimburse
any Indemnified Party for all costs and expenses (including reasonable counsel
fees and expenses) incurred in connection with the investigation of,
preparation for or defense of any pending or threatened claim or any action or
proceeding arising therefrom, whether or not such Indemnified Party is a party.
CSK Auto shall not be liable under the foregoing indemnification provision to
the extent that any loss, claim, damage, liability or expense is found in a
final judgment by a court of competent jurisdiction to have resulted primarily
from the bad faith or gross negligence of III.
8. Amendments. No amendment or waiver of any provision of this
Agreement, or consent to any departure by either party from any such provision,
shall in any event be effective unless the same shall be in writing and signed
by the parties to this Agreement and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
9. Notices. Any and all notices hereunder shall, in the absence of
receipted hand delivery, be deemed duly given when mailed, if the same shall be
sent by registered or certified mail, return receipt requested, and the mailing
date shall be deemed the date from which all time periods pertaining to a date
of notice shall run. Notices shall be addressed to the parties at the
following addresses:
If to III, to:
Investcorp International, Inc.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxx
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
If to CSK Auto, to:
CSK Auto, Inc.
000 Xxxx Xxxxxxxx
Xxxxxxx, Xxxxxxx 00000
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10. Entire Agreement. This Agreement shall constitute the entire
agreement between the parties with respect to the subject matter hereof, and
shall supersede all previous oral and written (and all contemporaneous oral)
negotiations, commitments, agreements and understandings relating hereto.
11. Assignment. This Agreement shall be assignable by either party
hereto provided that the non-assigning party consents in writing to such
assignment.
12. Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of Delaware and shall inure to the benefit of, and be
binding upon, III and CSK Auto and their respective successors and assigns.
13. No Continuing Waiver. The waiver by any party of any breach of
this Agreement shall not operate or be construed to be a waiver of any
subsequent breach.
IN WITNESS WHEREOF, each of the parties has caused this Agreement for
Management Advisory, Strategic Planning and
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Consulting Services to be executed and delivered by its duly authorized officer
or agent as set forth below.
INVESTCORP INTERNATIONAL, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
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Name:
Title:
CSK AUTO, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: President
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