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EXHIBIT 10.5
MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (the "Agreement") is made and entered
into as of this _____ day of ____________, 1997, by and between CKE RESTAURANTS,
INC., a Delaware corporation ("Manager"), and STAR BUFFET, INC., a Delaware
corporation ("STAR").
RECITALS:
A. Each of the companies listed on Exhibit A attached hereto
(individually, an "Operating Company" and collectively the "Operating
Companies") is a wholly-owned, direct or indirect subsidiary of STAR. Manager
and its subsidiaries employ a staff of administrative and professional personnel
that provide for certain administrative support services for certain
administrative functions, including, without limitation, management, financial,
real estate, purchasing, information technology, employee benefits, human
resources and record keeping services (collectively, the "Services"), and
Manager incurs expenses incident thereto for the benefit of the Operating
Companies and the businesses conducted by them; and
B. STAR desires to engage Manager to perform such Services for the
benefit of STAR and the Operating Companies, and Manager desires to perform such
Services, on the terms and provisions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein, and for good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Engagement. STAR hereby engages Manager to provide those Services
requested from time to time by STAR or any Operating Company, and Manager shall
endeavor to render to STAR or such Operating Company those Services requested
that Manager determines to be of a nature and extent generally performed by
Manager and which can be performed by Manager within its authority from its
Board of Directors.
2. Standard of Conduct; Limitation of Liability/Damages. Manager
covenants that the Services shall be furnished to STAR and each Operating
Company in a professional and diligent manner and in accordance with reasonable
requests made by STAR or the Operating Company.
Notwithstanding the foregoing, Manager shall not be liable for any
direct, indirect or consequential damages suffered or incurred by STAR or the
Operating Company or to any third party, including, without limitation, lost
profits arising from or relating to any breach by Manager of its obligations
hereunder absent a finding in a final judgment of a court of competent
jurisdiction that such damages proximately resulted from the bad faith, gross
negligence or willful misconduct of Manager or its agents. In addition, Manager
shall not be liable to STAR or any Operating Company or to any third party on
account of any action or omission by Manager relating to its performance of the
Services based upon incorrect information supplied by STAR or any Operating
Company reasonably relied upon by Manager. Nothing herein contained shall
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authorize or empower Manager to supervise or manage STAR's personnel or any
Operating Company's personnel or to become involved in STAR's or any Operating
Company's day-to-day business decisions in the ordinary course of business.
3. Term. The initial term of this Agreement shall commence on September
15, 1997 and shall continue until midnight on September 15, 2002 (the "Initial
Term"). Upon the expiration of the Initial Term and of each succeeding term
hereunder, this Agreement shall automatically be renewed for an additional term
of one (1) year each unless terminated as herein provided, or unless either
party shall provide not less than ninety (90) days written notice prior to the
expiration of the Initial Term or any renewal term that such party does not
intend to renew this Agreement. Notwithstanding the foregoing, either party may
terminate this Agreement at any time (i) if the other party breaches the terms
and conditions and does not cure any such breach within thirty (30) days after
written notice, or (ii) upon ninety (90) days prior written notice to the other
party. The termination of this Agreement by or with respect to one or more
Operating Companies shall not terminate this Agreement with respect to any other
Operating Company.
4. Fees for Services.
(a) In consideration for the Services provided hereunder, STAR
agrees to pay to Manager an annual general management fee of $350,000 payable in
equal installments ten days following the close of each regular accounting
period (each, an "Accounting Period") during the term of this Agreement. Any
changes to STAR's current information system or an increase/decrease of 10 units
will represent a "significant" change in STAR's operation and upon such
significant change, the general management fee will be increased/decreased
$25,000. Such management fee may be increased cumulatively not more than 10% per
fiscal year at the sole discretion of Manager, effective upon written notice to
STAR.
(b) In addition to the payment of management fees as specified in
paragraph 4(a) above, STAR shall reimburse Manager for all non-ordinary,
out-of-product expenses incurred by or on behalf of Manager or its affiliates in
connection with the Services rendered hereunder, including, without limitation,
costs of replacement equipment, travel expenses, year-end employee/accounting
reporting matters (for example, Form 1099's, W-2's, etc.), and legal and
accounting and other professional fees and expenses. All such expenses which
exceed $50,000 must be approved by STAR prior to incurring such expense.
(c) Manager shall calculate all management fees and expense
reimbursements due to Manager for each Accounting Period hereunder, all of which
shall be paid by STAR within [30] days after receipt of Manager's invoice.
5. Representations, Warranties and Covenants of Manager. Manager hereby
represents, warrants and covenants to STAR as follows:
(a) Manager is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation and has all
requisite power and authority to own and operate its business as presently
conducted.
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(b) Manager has full power and authority to execute, deliver and
perform this Agreement. he execution, delivery and performance of this Agreement
have been duly authorized by Manager and no other action or proceeding in the
part of Manager is necessary to authorize this Agreement or the performance
thereof. This Agreement has been duly and validly executed and delivered by
Manager and constitutes a legal, valid and binding obligation of Manager,
enforceable in accordance with its terms.
(c) The execution, delivery and performance of this Agreement by
Manager will not (with or without the giving of notice or the lapse of time or
both) (i) violate or require any consent or approval under any applicable
provision of any order, injunction, rule, regulation or law; (ii) require any
consent under, conflict with, constitute a default under, or otherwise violate
the terms of any agreements, instruments or other obligations to which Manager
is a party or by which it or any of its property may be bound or affected; or
(iii) require any consent or approval by, notice to or registration with any
governmental authority. In the event at any time during the term of this
Agreement any consents, approvals, notices or registrations are required in
connection with the performance of this Agreement, Manager shall take all
necessary and appropriate steps to obtain or file such consents, approvals,
notices or registrations.
6. Representations, Warranties and Covenants of STAR. STAR hereby
represents, warrants and covenants to Manager as follows:
(a) STAR and each Operating Company is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation and has all requisite power and authority to own and operate the
business which it intends to operate.
(b) STAR has full power and authority to execute, deliver and
perform this Agreement. The execution, delivery and performance of this
Agreement have been duly authorized by STAR and no other action or proceeding on
the part of STAR is necessary to authorize this Agreement or the performance
thereof. This Agreement has been duly and validly executed and delivered by STAR
and constitutes a legal, valid and binding obligation of STAR, enforceable in
accordance with its terms.
(c) The execution, delivery and performance of this Agreement by
STAR will not (with or without the giving of notice or the lapse of time or
both) (i) violate or require any consent or approval under any applicable
provision of any order, injunction, rule, regulation or law; (ii) require any
consent under, conflict with, constitute default under, or otherwise violate the
terms of any agreements, instruments or other obligations to which STAR is a
party or by which it or any of its property may be bound or affected; or (iii)
require any consent or approval by, notice to or registration with any
governmental author it. In the event at any time during the term of this
Agreement any consents, approvals, notices or registrations are required in
connection with the performance of this Agreement, STAR shall take all necessary
and appropriate steps to obtain or file such consents, approvals, notices or
registrations.
7. No Right to Participate in Management; Independent Contractors. This
Agreement shall not be construed to grant Manager any right to control or
participate in the management or financial decisions of STAR or the Operating
Companies in the ordinary course of
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business. In the rendition of the Services, Manager shall provide the Services
based upon compliance with policies and procedures established by the Board of
Directors and officers of STAR or the Operating Companies. STAR and Manager
agree that, with respect to the subject matter of this Agreement, neither party
is an agent, employee or representative of the other and that nothing contained
herein shall be construed to create an agency, employment or representative
relationship or a relationship of partners or joint venturers.
8. Indemnification. Subject to the other terms and conditions hereof,
STAR agrees to indemnify and hold harmless Manager, and Manager agrees to
indemnify and hold harmless STAR (as the context requires, the "Indemnifying
Party" and the "Indemnified Party") of and from any and all claims, demands,
causes of action, liabilities, judgments, losses, deficiencies and expenses,
including court costs and reasonable attorneys' fees) incurred by the
Indemnified Party and arising out of or in any manner, directly or indirectly,
relating to the performance by the Indemnified Party of its obligations
hereunder (other than and excluding the respective indemnification obligations
under this Section) or relating to any act or omission of the Indemnifying
Party's employees or agents. Anything herein to the contrary notwithstanding, no
party shall be obligated to indemnify any other party hereto with respect to any
expenses, loss or damages incurred by the Indemnified Party to the extent that
the Indemnified Party has insurance coverage with respect to such expenses, loss
or damages.
9. General Terms.
(a) This Agreement shall not be assignable by any party, in whole
or in part, without the prior written consent of any other affected party.
(b) This Agreement sets forth the entire understanding and
agreement of the parties with respect to the subject matter hereof. except as
otherwise expressly provided herein, this Agreement may not be changed, modified
or amended except in a writing signed by the affected parties. All previous
negotiations and understandings among the parties are merged into this
Agreement, and there are no warranties, agreements or understandings, express or
implied, except such as are expressly set forth herein.
(c) Any notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
hand-delivered, delivered by facsimile or overnight courier, or if mailed by
certified or registered mail, postage prepaid and return receipt requested,
addressed as set forth hereinafter (or at such other address for a party as
shall be specified by like notice; provided that notice of a change of address
shall be effective only upon receipt thereof):
To Manager: CKE RESTAURANTS, INC.
0000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
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To STAR or any
Operating Company: STAR BUFFET, INC.
000 Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Attention: Xxx Xxxxxxx
(d) This Agreement shall be binding upon and inure to the benefit
of the parties hereto, their respective successors and permitted assigns,
wherever the context admits or requires.
(e) This Agreement may be executed in two or more counterparts
each of which shall be deemed an original, but all of which, together, shall
constitute one and the same instrument.
(f) Any waiver of any provision of this Agreement by either party
may be made only by written notice to the other. No waiver of any breach or
default hereunder shall be deemed to constitute a waiver of any other breach or
default not of the same breach or default on a future occasion.
(g) This Agreement shall be interpreted, construed and enforced
in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date above written.
CKE RESTAURANTS, INC.
By:
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Name:
--------------------------
Title:
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STAR BUFFET, INC.
By:
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Name:
--------------------------
Title:
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EXHIBIT A
OPERATING COMPANIES
Summit Family Restaurants, Inc.
HTB Restaurants, Inc.
