1
EXHIBIT 10.39
CONSULTING AGREEMENT
This Consulting Agreement is entered into as of March 27, 1997 by and
among Kenneth J. Abdalla, Waterton Management, LLC ("Waterton") and Jerry's
Famous Deli, Inc. (the "Company").
A. Mr. Abdalla is managing member of Waterton, which is engaged in
the investment management business, and which through its affiliates is an
investor in the Company.
B. The Company desires to retain Mr. Abdalla as a consultant, and
to confer on him in such capacity the advisory responsibilities set forth in
this Agreement.
C. In fulfilling the responsibilities set forth in this Agreement,
Mr. Abdalla will rely as necessary on the assistance of Waterton.
C. In order to attract and retain the services of Mr. Abdalla and
Waterton, the Company has agreed to provide to each of them the compensation set
forth in this Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Consulting Services. Effective the date hereof, and continuing
until December 31, 1998, the Company will retain Mr. Abdalla as a consultant.
In such capacity Mr. Abdalla will provide to the Company advice and
consultation with respect to sites to be leased or purchased, or other assets
or entities to be acquired by the Company. In providing such advice and
consultation, Mr. Abdalla may rely on such assistance from Waterton as he
deems necessary or appropriate. Mr. Abdalla will not be obligated to maintain
an office at the Company or to devote any minimum number of hours to the
fulfillment of the foregoing responsibilities. Rather, Mr. Abdalla will consult
with and advise the Company's management and board of directors with respect to
such issues as are reasonably related to the advisory functions stated above,
and the number of hours to be devoted thereto by Mr. Abdalla or by other
Waterton personnel shall be determined in the sole discretion of Mr. Abdalla.
2. Title. To facilitate the performance by Mr. Abdalla of the
services set forth above, the Company will name Mr. Abdalla as its Interim
President (although Mr. Abdalla will not be deemed an employee of the Company).
3. Consideration. In consideration of the services described in
paragraph 1 above, the Company shall (i) pay to Waterton a cash fee of $600,000
and (ii) shall issue to Mr. Abdalla 200,000 shares of the Common Stock, par
value $.01 per share, of the Company. The cash fee specified above shall be
paid within five business days following the date of this Agreement. The shares
of Common Stock to be issued to Mr. Abdalla will be registered upon issuance on
Form S-8 or other applicable form filed with the Securities and Exchange
2
Commission ("SEC"), and shall be freely tradeable and not restricted. The
registration and issuance of such shares shall be effected as promptly as
practicable following the date hereof, but in no event later than April 30, 1997
(unless the SEC advises the Company that Form S-8 is not available to effect
such registration, in which case such registration and issuance will be effected
on another applicable form not later than June 30, 1997). The foregoing
compensation, cash and shares, will be fully vested as of the date hereof, and
will not be subject to forfeiture.
4. Other Services Not Foreclosed. The parties acknowledge and agree
that there may be certain significant acquisitions by the Company during the
term hereof as to which Mr. Abdalla or Waterton, as applicable, may be entitled
to advisory fees in addition to those set forth herein. The Company shall not be
obligated to engage the services of Mr. Abdalla or Waterton with respect to such
acquisitions, nor shall Mr. Abdalla or Waterton be obligated to provide advice
or other services with respect thereto. However, in the event that Mr. Abdalla
or Waterton on the one hand, and the Company on the other hand, agree that Mr.
Abdalla or Waterton shall be engaged to provide advisory or other services with
respect to such acquisitions, the parties shall agree in good faith at that time
on the level of additional compensation to be paid in consideration of such
services.
The parties hereto have executed this Agreement as of March 27, 1997.
/s/ KENNETH J. ABDALLA
-------------------------------------------
Kenneth J. Abdalla
WATERTON MANAGEMENT, LLC
/s/ KENNETH J. ABDALLA
-------------------------------------------
By: Kenneth J. Abdalla
Title: Managing Member
JERRY'S FAMOUS DELI, INC.
/s/ ISAAC STARKMAN
-------------------------------------------
By: Isaac Starkman
Title: Chairman and Chief Executive Officer