EXHIBIT 10.21

 

 

 

 

STOCK PURCHASE AGREEMENT

 

by and between

 

THE PURCHASERS SET FORTH ON EXHIBIT A,

 

SANTA BARBARA RESTAURANT GROUP, INC.,

 

AND

 

CKE RESTAURANTS, INC.

 

for the purchase of

 

189,900 shares of Common Stock of CKE Restaurants, Inc.

 

 

 

 

DATED AUGUST ______, 2001

 

THIS STOCK PURCHASE AGREEMENT (the “Agreement”) is entered into as of
August ___, 2001 (the “Effective Date”), by and between the Purchasers set forth
on Exhibit A hereto (each, a “Purchaser”), Santa Barbara Restaurant Group, Inc.,
a Delaware corporation (“SBRG”), and CKE Restaurants, Inc., a Delaware
corporation (“CKE”).

 

RECITALS

 

A.            SBRG beneficially owns 189,900 shares of common stock, par value
$0.01, of CKE (the “Shares”).

 

B.            Each of the Purchasers is a participant in CKE’s Employee, or
Non-Employee Director, Stock Purchase Loan Plan (as applicable, the “Plan”),
pursuant to which CKE provided loans to certain officers and directors of CKE
for the purpose of purchasing shares of CKE common stock.

 

C.            CKE desires to provide loans to each Purchaser in the amounts set
forth opposite such Purchaser’s name on Exhibit A, for the purpose of purchasing
the number of Shares set forth opposite such Purchaser’s name on Exhibit A.

 

D.            SBRG desires to sell to the Purchasers, and each of the Purchasers
desires to purchase from SBRG, the number of Shares set forth opposite such
Purchaser’s name on Exhibit A, pursuant to the terms and conditions hereunder.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

 

AGREEMENT

 

1.             PURCHASE AND SALE.  SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT AND THE PLAN, PURCHASER HEREBY PURCHASES FROM SBRG, AND SBRG HEREBY
SELLS TO PURCHASER, THE NUMBER OF SHARES SET FORTH OPPOSITE PURCHASER’S NAME ON
EXHIBIT A HERETO AT A PURCHASE PRICE OF FIVE DOLLARS AND SEVENTY-TWO CENTS
($5.72) PER SHARE.  CONCURRENTLY HEREWITH, CKE IS DELIVERING TO SBRG AN
AGGREGATE OF $1,086,228.00 FOR THE PURCHASE OF ALL OF THE SHARES ON BEHALF OF
THE PURCHASERS, AND SBRG IS DELIVERING TO CKE ON BEHALF OF THE PURCHASERS
CERTIFICATES EVIDENCING THE SHARES, DULY ENDORSED FOR TRANSFER, RECEIPTS FOR
WHICH ARE HEREBY ACKNOWLEDGED.

 

2.             ELECTION TO PARTICIPATE.  PURCHASER HEREBY AGREES TO BORROW FROM
CKE THE AMOUNT SET FORTH OPPOSITE SUCH PURCHASER’S NAME ON EXHIBIT A HERETO, AND
TO ENTER INTO A PROMISSORY NOTE FOR SUCH AMOUNT IN THE FORM ATTACHED HERETO AS
EXHIBIT B, PURSUANT TO THE TERMS OF THE PLAN.

 

3.             REPRESENTATIONS AND WARRANTIES OF SBRG.  SBRG MAKES THE FOLLOWING
REPRESENTATIONS AND WARRANTIES:

 

3.1           AUTHORIZATION.  SBRG HAS FULL POWER AND AUTHORITY TO ENTER INTO
THIS AGREEMENT, AND THIS AGREEMENT HAS BEEN DULY AUTHORIZED BY ALL REQUISITE
CORPORATE ACTION OF SBRG AND WILL NOT RESULT IN A BREACH, ACCELERATION OR
VIOLATION OF ANY AGREEMENT TO WHICH SBRG IS A PARTY OR IS OTHERWISE BOUND.  THIS
AGREEMENT WILL CONSTITUTE THE VALID AND LEGALLY BINDING OBLIGATION OF SBRG,
ENFORCEABLE AGAINST SBRG IN ACCORDANCE WITH ITS TERMS EXCEPT (I) AS LIMITED BY
APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM, AND OTHER LAWS OF
GENERAL APPLICATION AFFECTING ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY AND
(II) AS LIMITED BY LAWS RELATING TO THE AVAILABILITY OF SPECIFIC PERFORMANCE,
INJUNCTIVE RELIEF, OR OTHER EQUITABLE REMEDIES.  SBRG HAS RECEIVED ALL CONSENTS,
APPROVALS, ORDERS WAIVERS AND AUTHORIZATIONS, AND HAS PROVIDED ALL NOTICES,
WHICH ARE NECESSARY IN CONNECTION WITH THE VALID EXECUTION AND DELIVERY OF THIS
AGREEMENT AND THE SALE OF THE SHARES.

 

(A)           THE SHARES ARE VALIDLY ISSUED AND ARE FULLY PAID AND
NONASSESSABLE.

 

(B)           SBRG HOLDS OF RECORD AND BENEFICIALLY OWNS THE SHARES FREE AND
CLEAR OF ALL LIENS, CHARGES, CLAIMS, ENCUMBRANCES, WARRANTS, SECURITY INTERESTS,
EQUITIES, RESTRICTIONS ON TRANSFER, RIGHT OF FIRST REFUSAL, PREEMPTIVE RIGHTS OR
OTHER DEFECTS IN TITLE OF ANY KIND OR DESCRIPTION (COLLECTIVELY,
“ENCUMBRANCES”), AND IS OFFERING, SELLING AND TRANSFERRING THE SHARES FREE AND
CLEAR OF ENCUMBRANCES, OTHER THAN SUCH RESTRICTIONS IMPOSED BY THIS AGREEMENT
AND UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS.  THERE IS NO ACTION,
SUIT, CLAIM, INVESTIGATION OR PROCEEDING, WHETHER AT LAW OR IN EQUITY, AGAINST
SBRG OR CLAIM OR COUNTER-CLAIM INITIATED BY SBRG, THAT IS PENDING, OR TO SBRG’S
KNOWLEDGE, THREATENED (COLLECTIVELY, “PROCEEDINGS”), THAT COULD REASONABLY BE
EXPECTED TO AFFECT ADVERSELY SBRG’S OWNERSHIP AND SALE OF THE SHARES FREE AND
CLEAR OF ENCUMBRANCES, OR TO OTHERWISE PERFORM ANY OF ITS OBLIGATIONS HEREUNDER.

 

(C)           SBRG IS NOT A PARTY TO ANY OPTION, WARRANT, PURCHASE RIGHT, OR
OTHER CONTRACT OR COMMITMENT THAT COULD REQUIRE IT TO SELL, TRANSFER, OR
OTHERWISE DISPOSE OF ANY CAPITAL STOCK OF CKE (OTHER THAN THIS AGREEMENT).  SBRG
IS NOT A PARTY TO ANY VOTING TRUST, PROXY, OR OTHER AGREEMENT OR UNDERSTANDING
WITH RESPECT TO THE VOTING OF ANY CAPITAL STOCK OF CKE, INCLUDING, WITHOUT
LIMITATION, THE SHARES.

 

4.             PURCHASER INVESTMENT REPRESENTATIONS.  EACH PURCHASER MAKES THE
FOLLOWING REPRESENTATIONS AND WARRANTIES:

 

4.1           PURCHASER UNDERSTANDS THAT THE SHARES ARE NOT REGISTERED UNDER THE
SECURITIES ACT AND ARE NOT QUALIFIED OR REGISTERED UNDER BLUE SKY LAWS PURSUANT
TO EXEMPTIONS FROM REGISTRATION OR QUALIFICATION CONTAINED IN THE SECURITIES ACT
AND IN THE BLUE SKY LAWS.  PURCHASER UNDERSTANDS THAT THE SHARES MUST BE HELD
INDEFINITELY UNLESS SUBSEQUENTLY REGISTERED OR QUALIFIED UNDER THE SECURITIES
ACT AND UNDER THE BLUE SKY LAWS UNLESS EXEMPTIONS FROM THE REGISTRATION OR
QUALIFICATION REQUIREMENTS UNDER THE SECURITIES ACT AND UNDER THE BLUE SKY LAWS
ARE AVAILABLE IN CONNECTION WITH ANY PROPOSED TRANSFER OF THE SHARES BY
PURCHASER.

 

4.2           PURCHASER AGREES THAT NONE OF THE SHARES, NOR ANY INTEREST IN SUCH
SHARES, WILL BE RESOLD OR OTHERWISE TRANSFERRED BY PURCHASER WITHOUT
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES ACT AND THE BLUE SKY LAWS
UNLESS EXEMPTIONS FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS ARE
AVAILABLE.

 

4.3           PURCHASER IS AWARE OF CKE’S BUSINESS AFFAIRS AND FINANCIAL
CONDITION AND HAS ACQUIRED SUFFICIENT INFORMATION ABOUT CKE TO REACH AN INFORMED
AND KNOWLEDGEABLE DECISION REGARDING THE MERITS AND RISKS OF INVESTING IN THE
SHARES.  PURCHASER HAS HAD AMPLE OPPORTUNITY TO REVIEW INFORMATION REGARDING CKE
AND TO ASK QUESTIONS OF CKE AND ITS REPRESENTATIVES AND TO SEEK INDEPENDENT
INVESTMENT, TAX, AND LEGAL ADVICE PRIOR TO INVESTING IN THE SHARES.

 

4.4           THE SHARES ARE BEING ACQUIRED FOR PRIVATE INVESTMENT FOR
PURCHASER’S OWN ACCOUNT AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH
ANY DISTRIBUTION OF SUCH SHARES.

 

4.5           The sale of the Shares to Purchaser was not accompanied by the
publication of any written or printed communication or any communication by
means of recorded telephone messages or spoken on radio, television, or similar
communications media.

 

4.6           PURCHASER IS AN “ACCREDITED INVESTOR” AS DEFINED UNDER
SECTION 501(A) OF THE SECURITIES ACT.

 

4.7           PURCHASER ACKNOWLEDGES THAT THE CERTIFICATES REPRESENTING THE
SHARES WILL BEAR THE LEGENDS SET FORTH HEREIN:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933; THEY HAVE BEEN ACQUIRED BY THE HOLDER FOR INVESTMENT
AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT OF 1933, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER.

 

4.8           PURCHASER UNDERSTANDS THAT THE SHARES CONSTITUTE “RESTRICTED
SECURITIES” FOR THE PURPOSES OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT.

 

4.9           PURCHASER UNDERSTANDS THAT SBRG WILL RELY UPON THE FOREGOING FOR
THE PURPOSES OF TRANSFERRING THE SHARES HEREUNDER.  PURCHASER HEREBY AGREES TO
INDEMNIFY SBRG AND ITS RESPECTIVE OFFICERS, DIRECTORS, AGENTS, AND COUNSEL AND
HOLD THEM HARMLESS FROM AND AGAINST ANY AND ALL DAMAGES SUFFERED AND LIABILITIES
INCURRED BY THEM (INCLUDING COSTS OF INVESTIGATION, DEFENSE, AND ATTORNEYS’
FEES) ARISING OUT OF ANY BREACH BY PURCHASER OF THE AGREEMENTS OR INACCURACY IN
THE REPRESENTATIONS AND WARRANTIES WHICH PURCHASER HAS MADE HEREIN.

 

5.             REPRESENTATIONS AND WARRANTIES OF CKE.  CKE MAKES THE FOLLOWING
REPRESENTATIONS AND WARRANTIES:

 

5.1           AUTHORIZATION. CKE HAS FULL POWER AND AUTHORITY TO ENTER INTO THIS
AGREEMENT AND MAKE THE LOANS TO PURCHASERS, AND SUCH ACTIONS HAVE BEEN DULY
AUTHORIZED BY ALL REQUISITE CORPORATE ACTION OF CKE AND WILL NOT RESULT IN A
BREACH, ACCELERATION OR VIOLATION OF ANY AGREEMENT TO WHICH CKE IS A PARTY OR IS
OTHERWISE BOUND.  THIS AGREEMENT, WHEN EXECUTED AND DELIVERED, WILL CONSTITUTE A
VALID AND LEGALLY BINDING OBLIGATION OF CKE, ENFORCEABLE AGAINST CKE IN
ACCORDANCE WITH ITS TERMS EXCEPT (I) AS LIMITED BY APPLICABLE BANKRUPTCY,
INSOLVENCY, REORGANIZATION, MORATORIUM, AND OTHER LAWS OF GENERAL APPLICATION
AFFECTING ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY AND (II) AS LIMITED BY LAWS
RELATING TO THE AVAILABILITY OF SPECIFIC PERFORMANCE, INJUNCTIVE RELIEF, OR
OTHER EQUITABLE REMEDIES.  CKE HAS RECEIVED ALL CONSENTS, APPROVALS, ORDERS
WAIVERS AND AUTHORIZATIONS, AND HAS PROVIDED ALL NOTICES, WHICH ARE NECESSARY IN
CONNECTION WITH THE VALID EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE
DELIVERY OF THE PURCHASE PRICE ON BEHALF OF THE PURCHASERS.

 

6.             MISCELLANEOUS.

 

6.1           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT
REGARD TO ITS CONFLICT OF LAW PRINCIPLES.

 

6.2           Binding Effect.  This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

6.3           COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS,
EACH OF WHICH SHALL BE DEEMED AN ORIGINAL AND ALL OF WHICH TOGETHER SHALL
CONSTITUTE ONE AND THE SAME DOCUMENT.

 

6.4           TITLES AND SUBTITLES.  THE TITLES AND SUBTITLES USED IN THIS
AGREEMENT ARE USED FOR CONVENIENCE ONLY AND ARE NOT TO BE CONSIDERED IN
CONSTRUING OR INTERPRETING THIS AGREEMENT.

 

6.5           NOTICES.  UNLESS OTHERWISE PROVIDED, ALL NOTICES AND OTHER
COMMUNICATIONS REQUIRED OR PERMITTED UNDER THIS AGREEMENT SHALL BE IN WRITING
AND SHALL BE MAILED BY UNITED STATES FIRST-CLASS MAIL, POSTAGE PREPAID, SENT BY
FACSIMILE OR DELIVERED PERSONALLY BY HAND OR BY A COURIER ADDRESSED TO THE PARTY
TO BE NOTIFIED AT THE ADDRESS OR FACSIMILE NUMBER BELOW, OR AT SUCH OTHER
ADDRESS OR FACSIMILE NUMBER AS SUCH PARTY MAY DESIGNATE BY TEN (10) DAYS’
ADVANCE WRITTEN NOTICE TO THE OTHER PARTIES HERETO.

 

If to SBRG, to:

 

 

 

 

 

 

 

Attn:

 

 

 

 

with a copy to:

 

Stradling Yocca Carlson & Rauth

 

 

660 Newport Center Dr., Suite 1600

 

 

Newport Beach, California 92660

 

 

Attn:  C. Craig Carlson, Esq.

 

 

 

If to CKE, to:

 

401 W. Carl Karcher Way

 

 

Anaheim, California  92801

 

 

Attn:  Michael Murphy

 

6.6           FINDER’S FEES.  EACH PARTY REPRESENTS THAT IT NEITHER IS NOR WILL
BE OBLIGATED FOR ANY FINDER’S FEE OR COMMISSION IN CONNECTION WITH THIS
TRANSACTION.  EACH PARTY AGREES TO SEVERALLY INDEMNIFY AND TO HOLD HARMLESS THE
OTHER PARTY FROM ANY LIABILITY FOR ANY COMMISSION OR COMPENSATION IN THE NATURE
OF A FINDER’S FEE (AND THE COST AND EXPENSES OF DEFENDING AGAINST SUCH LIABILITY
OR ASSERTED LIABILITY) FOR WHICH SUCH INDEMNIFYING PARTY OR ANY OF ITS OFFICERS,
PARTNERS, EMPLOYEES, OR REPRESENTATIVES IS RESPONSIBLE.

 

6.7           EXPENSES.  EACH PARTY SHALL PAY ITS OWN COSTS AND EXPENSES WITH
RESPECT TO THE NEGOTIATION, EXECUTION, DELIVERY, AND PERFORMANCE OF THIS
AGREEMENT.

 

6.8           ATTORNEYS’ FEES.  IF ANY ACTION AT LAW OR IN EQUITY IS NECESSARY
TO ENFORCE OR INTERPRET THE TERMS OF THIS AGREEMENT, THE PREVAILING PARTY SHALL
BE ENTITLED TO REASONABLE ATTORNEYS’ FEES, COSTS, AND DISBURSEMENTS IN ADDITION
TO ANY OTHER RELIEF TO WHICH SUCH PARTY MAY BE ENTITLED.

 

6.9           AMENDMENTS AND WAIVERS.  ANY TERM OF THIS AGREEMENT MAY BE AMENDED
AND THE OBSERVANCE OF ANY TERM OF THIS AGREEMENT MAY BE WAIVED (EITHER GENERALLY
OR IN A PARTICULAR INSTANCE AND EITHER RETROACTIVELY OR PROSPECTIVELY), ONLY
WITH THE WRITTEN CONSENT OF THE PARTIES HERETO.

 

6.10         Severability.  If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

 

6.11         DISPUTE RESOLUTION.  IF THERE ARISES A DISPUTE BETWEEN ANY PARTY TO
THIS AGREEMENT AND ANY OTHER PARTY TO THIS AGREEMENT REGARDING THIS AGREEMENT,
THOSE PARTIES AGREE TO NEGOTIATE IN GOOD FAITH TO RESOLVE THE DISPUTE BETWEEN
THEM REGARDING THIS AGREEMENT.  IF THE NEGOTIATIONS DO NOT RESOLVE THE DISPUTE
TO THE REASONABLE SATISFACTION OF BOTH PARTIES, THEN EACH PARTY SHALL NOMINATE
ONE PARTNER, MEMBER OR SENIOR OFFICER OF THE RANK OF VICE PRESIDENT OR HIGHER AS
ITS REPRESENTATIVE.  THESE REPRESENTATIVES SHALL, WITHIN THIRTY (30) DAYS OF A
WRITTEN REQUEST BY EITHER PARTY TO CALL SUCH A MEETING, MEET IN PERSON AND ALONE
(EXCEPT FOR ONE ASSISTANT FOR EACH PARTY) AND SHALL ATTEMPT IN GOOD FAITH TO
RESOLVE THE DISPUTE.  IF THE DISPUTES CANNOT BE RESOLVED BY SUCH SENIOR MANAGERS
IN SUCH MEETING, THE PARTIES AGREE THAT THEY SHALL, IF REQUESTED IN WRITING BY
EITHER PARTY, MEET WITHIN THIRTY (30) DAYS AFTER SUCH WRITTEN NOTIFICATION FOR
ONE DAY WITH AN IMPARTIAL MEDIATOR AND CONSIDER DISPUTE RESOLUTION ALTERNATIVES
OTHER THAN LITIGATION.  IF ANY ALTERNATIVE METHOD OF DISPUTE RESOLUTION IS NOT
AGREED UPON WITHIN THIRTY (30) DAYS AFTER THE ONE DAY MEDIATION, EITHER PARTY
MAY BEGIN LITIGATION PROCEEDINGS.  THIS PROCEDURE SHALL BE A PREREQUISITE BEFORE
TAKING ANY ADDITIONAL ACTION HEREUNDER.

 

IN WITNESS THEREOF, the parties hereto have executed this Stock Purchase
Agreement as of the Effective Date.

 

Santa Barbara Restaurant Group, Inc.,

 

CKE Restaurants, Inc.,

a Delaware corporation

 

a Delaware corporation

 

 

 

 

 

 

By:

 

 

By:

 

 

 

 

 

Name:

 

 

Name:

 

 

 

 

 

Title:

 

 

Title:

 

 

 

 

Purchaser

 

 

 

 

 

By:

 

 

 

 

 

 

 

Print Name:

 

 

 

 

Exhibit A

 

Name

 

Number of Shares

Amount

 

 

 

 

 

 

Bryon Allumbaugh

 

6,126

 

$

35,040

 

Peter Churm

 

6,126

 

35,040

 

Carl L. Karcher

 

6,126

 

35,040

 

Daniel D. Lane

 

6,126

 

35,040

 

Daniel E. Ponder, Jr.

 

6,126

 

35,040

 

Frank P. Willey

 

6,126

 

35,040

 

William P. Foley, II

 

67,383

 

385,434

 

Andrew F. Puzder

 

67,383

 

385,434

 

Carl N. Karcher

 

6,126

 

35,040

 

E. Michael Murphy

 

6,126

 

35,040

 

Dennis J. Lacey

 

6,126

 

35,040

 

 

Exhibit B

 

Form of Promissory Note

 

[See Attached]