Business Development Services Agreement Dated 5/8/96

EXHIBIT 10.71


BUSINESS DEVELOPMENT SERVICES AGREEMENT


THIS BUSINESS DEVELOPMENT SERVICES AGREEMENT is made and entered into as of the 8th day of May 1996-(the "Effective Date"), by and between Koo Koo Roo, Inc., a Delaware corporation (the "Company"), and Restaurant Marketing Corporation ("RMC").


RECITALS


A. Company desires to be assured of the association and services of RMC for the Company.


B. RMC is willing and desires to be retained by the Company and the Company is willing to retain RMC, upon the terms, covenants and conditions hereinafter set forth.


AGREEMENT


NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions hereinafter set forth, the parties hereto do hereby agree as follows:


1. Retainer. The Company hereby retains RMC, subject to the direction of the Chairman of the Board, the President and the Company's Board of Directors.


1.1 RMC shall be available to provide business development services to the Company regarding Koo Koo Roo restaurants and Color Me Mine stores.


2. Term. This Business Development Services Agreement shall continue for a period of three (3) years commencing on the date hereof, unless terminated pursuant to Section 6 below; provided, however, that RMC's obligations in Section 5 below shall continue in effect for twelve months after such termination.


3. COMPENSATION; REGISTRATION.


3.1 In consideration for entering into this Business Development Services Agreement, and for services rendered by RMC under this Business Development Services Agreement, the Company shall pay RMC as follows (all of which are collectively referred to herein as "Compensation"):


(a) Company shall grant to RMC options, pursuant to the terms of the Non- Qualified Stock Option Agreement attached hereto as Exhibit "A" and incorporated herein by this reference, to purchase one million (1,000,000) shares of the Company's common stock, at eight dollars ($8.00) per share (the "Stock Options");


(b) The Stock Options shall vest and become exercisable as follows: (i) three hundred thirty three thousand three hundred thirty four (333,334) Stock Options shall vest on May 8,


1997; (ii) three hundred thirty three thousand three hundred thirty three (333,333) Stock Options shall vest on May 8, 1998; and (iii) three hundred thirty three thousand three hundred thirty three (333,333) Stock Options shall vest on May 8, 1999; provided, however, that if this Business Development Services Agreement is terminated pursuant to Section 6.1(b) hereof, a pro rata amount of the Stock Options which would have vested on the next May 8th vesting date shall vest and become exercisable as of the termination date.


(c) RMC shall be permitted to exercise the Stock Options and any other options to purchase the COMPANY'S common stock held or owned by RMC by any means set forth in Section 4. 1 of the Non-Qualified Stock Option Agreement.


3.2 REGISTRATION. (a) If the Company decides to file a registration statement to register for public offering any of its securities, the Company shall, at Company's sole expense, subject to underwriters approval and pre- existing registration rights agreements with third parties, include in any such registration statement all of the Company common stock owned by RMC, or which could be owned by RMC upon exercise of vested Stock Options. The Company agrees that in connection with any registration statement it shall prepare and file whatever pre-effective and post-effective amendments that the Securities and Exchange Commission shall require.


(b) Immediately after April 21, 1997, Company shall, at Company's sole expense, prepare and file such registration statements and all necessary documents, including pre-effective and post-effective amendments (the "Registration Statements") as may be necessary in order to comply with the Securities Act of 1933, as amended, and appropriate state securities laws, so as to permit the public offering and sale, at any time and from time to time, except for-customary blackout periods including blackout periods during material non-public acquisition negotiations, SEC required quiet periods, and underwriter requested lock-up periods during or after arms-length underwritten public offerings, of any or all Company common stock owned by RMC, or which could be owned by RMC upon exercise of vested Stock Options. The Company shall use its best efforts to make the Registration Statements effective as promptly as practicable. RMC's rights as set forth in this Section 3.2(b) are in addition to the registration rights under Section 3.2(a) of this Business Development Services Agreement, subject to necessary amendments and blackout periods as noted above.


4. SCOPE OF DUTIES. RMC shall devote such time as it deems necessary under this Business Development Services Agreement and shall not be prohibited in any way from conducting other business, except that RMC shall not directly compete with Koo Koo Roo restaurants or -Color Me Mine stores during the term of this Business Development Services Agreement.


5. CONFIDENTIALITY OF TRADE SECRETS AND OTHER MATERIALS.


5.1 TRADE SECRETS. Other than in the performance of its duties hereunder, or contained in lists of customers or documents provided by RMC, RMC agrees not to disclose,


2


either during the term of this Business Development Services Agreement or at any time thereafter, to any person, firm or corporation any information concerning the business affairs, the trade secrets or the customer lists or similar information of the Company. Any technique, method, process or technology used by the Company shall be considered a "trade secret" for the purposes of this Business Development Services Agreement.


5.2 OWNERSHIP OF TRADE SECRETS. RMC hereby agrees that all know-how, documents, reports, plans, proposals, marketing and sales plans, client lists, client files and materials made by the Company, other than lists of customers or documents provided by RMC, are the property of the Company and shall not be used by it in any way adverse to the Company's interests. RMC shall not deliver, reproduce or in any way allow such documents or things to be delivered or used by any third party, without specific di ...