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EXHIBIT 10.15
STOCK REPURCHASE AGREEMENT
STOCK REPURCHASE AGREEMENT (the "Agreement") is entered into as of
September 10, 1998 by and among CKE RESTAURANTS, INC., a Delaware corporation
(the "Seller"), and STAR BUFFET, INC., a Delaware corporation (the "Buyer" or
the "Company").
R E C I T A L S:
A. The Seller owns 2,000,000 shares (the "Shares") of the common stock,
par value $.001 per share (the "Common Stock") of the Company, representing
approximately 36.7% of the issued and outstanding shares of Common Stock of the
Company; and
B. The Seller desires to sell and transfer to the Company, and the
Company desires to repurchase from the Seller, the Shares, for the consideration
and on the terms provided herein; and
C. The Board of Directors of the Company, in consultation with its
independent legal and financial advisors, has unanimously (with certain
directors abstaining) approved the transactions contemplated by this Agreement
and determined that the repurchase of the Shares at the negotiated Repurchase
Price is fair to and in the best interests of the Company and its stockholders.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
REPURCHASE OF SHARES
Section 1.1. Repurchase of Shares. The Company repurchases from the
Seller, and Seller hereby sells, assigns, transfers, conveys and delivers to the
Company, all of the Seller's right, title and interest in and to the Shares. As
consideration for the repurchase of the Shares, the Company shall pay to the
Seller a repurchase price of Six and 25/100 Dollars ($6.25) per Share, or an
aggregate repurchase price of Twelve Million Five Hundred Thousand Dollars
($12,500,000) (the "Repurchase Price"). The Repurchase Price shall be paid to
Seller, against delivery of the certificates representing the Shares, duly
endorsed for transfer or accompanied by appropriate stock powers, as follows:
(a) Five Million Dollars ($5,000,000) shall be paid in cash, by wire transfer of
immediately available funds, concurrently with the execution and delivery
hereof, and (b) Seven Million Five Hundred Thousand Dollars ($7,500,000) shall
be paid pursuant to the Company's Secured Promissory Note in the form attached
hereto as Exhibit A (the "Note"), which shall be secured by a pledge of the
Shares pursuant to a Pledge Agreement in the form attached hereto as Exhibit B
(the "Pledge Agreement") to be executed and delivered by the Company and Seller.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Seller as follows:
Section 2.1. Organization and Authority; No Conflicts.
(a) Organization and Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has all requisite corporate power and authority to carry on its
business as it is now being conducted, and has taken all corporate action
necessary in order to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly executed and delivered by the Company
and is a legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(b) No Conflicts. The execution, delivery and performance of this
Agreement by the Company does not, and the consummation by the Company of the
transactions contemplated hereby will not, constitute or result in (i) a breach
or violation of, or a default under, the certificate of incorporation or by-laws
of the Company, (ii) a breach of, or a default under, the acceleration of any
obligations or the creation of a lien, pledge, security interest or other
encumbrance on the assets of the Company (with or without notice, lapse of time
or both) pursuant to, any material contracts binding upon the Company, or (iii)
to the knowledge of the Company, a violation of any applicable Law or any
governmental or non-governmental permit or license to which the Company is
subject.
Section 2.2. SEC Documents; Financial Statements. The Company has
provided or made available to the Seller true and correct copies of all reports,
schedules, forms, statements, exhibits and other documents filed with the
Securities and Exchange Commission (the "Commission") by the Company under or
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")
since January 1, 1997 (the "Company SEC Documents"), all of which were timely
filed with the Commission. As of their respective dates, or as subsequently
amended prior to the date of this Agreement, the Company SEC Documents complied
in all material respects with the requirements of the Exchange Act applicable to
such Company SEC Documents, and none of the Company SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the Company SEC Documents comply
in all material respects with applicable accounting requirements and the
published rules and regulations of the Commission with respect thereto, have
been prepared in accordance with generally accepted accounting principles
(except as may be indicated in the notes thereto) and fairly present the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
Section 2.3. Consents and Approvals. No notices, reports or other
filings are required to be made by the Company with, nor are any consents,
registrations or approvals required to be obtained by the Company from, any
individual, corporation, partnership, firm, joint venture, limited liability
company, association, joint-stock company, trust, unincorporated organization or
governmental entity ("Person"), in connection with the execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby.
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Section 2.4. Disclosure. No representation or warranty of the Company
contained in this Agreement contains any untrue statement of material fact or
omits to state any material fact necessary to make the statements herein, taken
as a whole and in light of the circumstances under which they were made, not
misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Company as follows:
Section 3.1. Organization and Authority; No Conflicts.
(a) Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has all requisite corporate power and authority to carry on its
business as it is now being conducted, and has taken all corporate action
necessary in order to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly executed and delivered by the Seller and
is a legal, valid and binding obligation of the Seller, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditor's rights and to general equity principles.
(b) No Conflicts. The execution, delivery and performance of this
Agreement by the Seller does not, and the consummation by the Seller of the
transactions contemplated hereby will not, constitute or result in (i) a breach
or violation of, or a default under, the certificate of incorporation or by-laws
of the Seller, (ii) a breach of, or a default under, the acceleration of any
obligations or the creation of a lien, pledge, security interest or other
encumbrance on the assets of the Seller (with or without notice, lapse of time
or both) pursuant to, any material contracts binding upon the Seller, (iii) to
the knowledge of the Seller, a violation of any applicable Law or governmental
or non-governmental permit or license to which the Seller is subject, except, in
the case of clause (ii) or (iii) above, for any breach, violation, default,
acceleration, creation or change that, individually or in the aggregate, is not
reasonably likely to materially delay or materially impair the ability of the
Seller to consummate the transactions contemplated by this Agreement, and except
for the requirement to obtain a release from Banque Paribas, as Agent, of its
lien on the Shares granted by the Seller pursuant to the Amended and Restated
Credit Agreement, dated as of April 1, 1998, by and among the Seller, Banque
Paribas, as agent, and the Lenders party thereto.
Section 3.2. Ownership of Shares. Upon transfer and delivery of the
Shares by the Seller hereunder to the Company as provided herein, the Company
shall acquire good and marketable title to the Shares, free and clear of all
liens, claims and encumbrances.
Section 3.3. Disclosure. No representation or warranty of the Seller
contained in this Agreement contains any untrue statement of material fact or
omits to state any material fact necessary to make the statements herein, taken
as whole and in light of the circumstances under which they were made, not
misleading.
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ARTICLE IV
COVENANTS AND AGREEMENTS OF THE PARTIES
Section 4.1. Amendment of Certain Stock Option Agreements. The Company
shall enter into such amendments to the Stock Option Agreements between the
Company and Messrs. Xxxxxxx X. Xxxxx XX and C. Xxxxxx Xxxxxxxx to provide that
their options to purchase shares of the Company's Common Stock shall continue in
full force and effect notwithstanding their resignations from the Board of
Directors of the Company.
Section 4.2. Financing. The Company shall use best efforts to secure
such financing as may be necessary for the Company to timely satisfy and
discharge its payment obligations under the Note.
Section 4.3. Further Assurances. At any time after the Closing Date, the
Company and the Seller shall promptly execute, acknowledge and deliver any other
assurances or documents reasonably requested by the Seller or the Company, as
the case may be, and necessary for the Seller or the Company, as the case may
be, to satisfy its obligations hereunder or obtain the benefits contemplated
hereby.
Section 4.4. Release and Waiver. Effective upon the consummation of the
transactions contemplated hereby, each of the parties hereto, for itself and its
Subsidiaries, and for each of their respective principals, partners,
fiduciaries, affiliates, managers, directors, stockholders, officers, agents and
employees and for the predecessors, successors and assigns of each of them (the
"Releasing Persons"), does hereby forever and unconditionally release, acquit
and discharge each of the other party hereto and such other party's Subsidiaries
and each of their respective principals, partners, fiduciaries, affiliates,
managers, directors, stockholders, officers, agents and employees, and the
predecessors, successors and assigns of each of them (collectively the "Released
Persons"), from and with respect to any and all claims, demands, judgments,
losses, contracts, obligations, actions, causes of action, suits or liabilities
of whatever kind or nature, whether known or unknown, whether suspected or
unsuspected, whether in law or in equity, which the Releasing Persons had or
have or may claim to have against any Released Person based upon or for any
matter, thing, event, circumstances, relationship, contract, act or omission
which occurred on or prior to the Closing Date, including, without limitation,
those which (i) arise directly or indirectly out of the ownership by the Seller
of the Shares, including without limitation claims which the Seller has or
believes it may have as a stockholder relating to fiduciary duties of directors
or officers, disclosure or similar matters, or (ii) arise directly or indirectly
out of the Business Services Agreement or the performance by the Seller or the
Company of their respective obligations thereunder (collectively, the "Claims");
provided, however, that nothing contained herein shall release any Claim with
respect to or arising out of this Agreement, Note, the Pledge Agreement, the
Contribution Agreement by and among the Company and the Seller, among others, or
the Business Services Agreement between the Company and the Seller.
It is the intent of the parties that the above release constitute a
general release of the Claims.
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IN AGREEING TO THE ABOVE GENERAL RELEASE OF CLAIMS, EACH OF THE COMPANY
AND THE SELLER HEREBY WAIVES AND RELINQUISHES ANY AND ALL RIGHTS WHICH IT MAY
HAVE UNDER THE PROVISIONS OF SECTION 1542 OF THE CIVIL CODE OF THE STATE OF
CALIFORNIA, WHICH SECTION READS AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
ARTICLE V
INDEMNIFICATION
Section 5.1. Indemnification by the Company. The Company shall
indemnify, defend and hold harmless the Seller against and in respect of all
losses, damages, liabilities, costs and expenses (including reasonable
attorneys' fees and reasonable expenses incurred in investigating, preparing or
defending any claims covered hereby) (collectively, "Losses") sustained or
incurred arising out of, based upon or otherwise in respect of (i) any breaches
of or inaccuracy in the Company's representations, warranties, covenants and
agreements set forth in this Agreement, or (ii) any action, suit, proceeding or
claim by a stockholder of the Company (in such capacity) challenging or seeking
to prevent the transactions contemplated by this Agreement.
Section 5.2. Indemnification by the Seller. The Seller shall indemnify,
defend and hold harmless the Company against and in respect of all Losses
sustained or incurred arising out of, based upon or otherwise in respect of (i)
any breaches of or inaccuracy in the Seller's representations, warranties,
covenants and agreements set forth in this Agreement, or (ii) any action, suit,
proceeding or claim by a stockholder of the Seller (in such capacity)
challenging or seeking to prevent the transactions contemplated by this
Agreement.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Amendment and Waiver. Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the Company and the Seller, or in the
case of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
Section 6.2. Expenses. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated by this Agreement are
consummated, the parties shall bear their own respective expenses incurred in
connection with this Agreement and the transactions contemplated hereby.
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Section 6.3. Assignment. No party to this Agreement may assign any of
its rights or obligations under this Agreement without the prior written consent
of the other party hereto.
Section 6.4. Entire Agreement. This Agreement (including all Exhibits
and Schedules hereto) contains the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements
and understandings, oral or written, with respect to such matters.
Section 6.5. Fulfillment of Obligations. Any obligation of any party to
any other party under this Agreement, which obligation is performed, satisfied
or fulfilled by an Affiliate of such party, shall be deemed to have been
performed, satisfied or fulfilled by such party.
Section 6.6. Parties in Interest; No Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Nothing in this Agreement
(other than Section 5.1), express or implied, is intended to confer upon any
Person other than the Company, the Seller, or their successors or permitted
assigns, any rights or remedies under or by reason of this Agreement.
Section 6.7. Counterparts. This Agreement and any amendments hereto may
be executed in one or more counterparts, each of which shall be deemed to be an
original by the parties executing such counterpart, but all of which shall be
considered one and the same instrument.
Section 6.8. Section Headings. The section and paragraph headings and
table of contents contained in this Agreement are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
Section 6.9. Notices. All notices hereunder shall be deemed given if in
writing and delivered personally or sent by facsimile or by registered or
certified mail (return receipt requested) to the parties at the following
addresses (or at such other addresses as shall be specified by like notice):
(a) if to the Company, to: Star Buffet, Inc.
000 Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Fax (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx,
Chief Executive Officer
(b) if to the Seller, to: CKE Restaurants, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Fax (000) 000-0000
Attention: Xxxxxx X. Xxxxxx,
Executive Vice President and
General Counsel
Any notice given by mail shall be effective when received.
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Section 6.10. Governing Law; Submission to Jurisdiction; Selection of
Forum. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California, without reference to the choice of law
principles thereof. each party hereto agrees that it shall bring any action or
proceeding in respect of any claim arising out of or related to this Agreement
or the transactions contained in or contemplated by this Agreement, whether in
tort or contract or at law or in equity, exclusively in the United States
District Court for the Central District of California or the Supreme Court of
the State of California located in the County of Orange, California (the "Chosen
Courts") and (i) irrevocably submits to the exclusive jurisdiction of the Chosen
Courts, (ii) agrees that venue is proper in the Chosen Courts, and (iii) waives
any objection that the Chosen Courts are an inconvenient forum or do not have
jurisdiction over any party hereto.
Section 6.11. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or entity
or any circumstance, is invalid or unenforceable, (i) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (ii) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability.
IN WITNESS WHEREOF, this Agreement has been signed on behalf of each of
the parties hereto as of the date first written above.
STAR BUFFET, INC.
By: /s/ XXXXXX X. XXXXXXX
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Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
CKE RESTAURANTS, INC.
By: /s/ XXXXXX X. XXXXXX
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Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
and General Counsel
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