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EXHIBIT 10.38
EATERIES, INC.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of
February 17, 1999, by and among Eateries, Inc., an Oklahoma corporation (the
"Company"), as buyer, and Astoria Capital Partners, L.P., a California limited
partnership ("Astoria"), Montavilla Partners, L.P., a California limited
partnership ("Montavilla"), and MicroCap Partners L.P., a North Carolina
limited partnership ("MicroCap"), as sellers. Astoria, Montavilla, and MicroCap
are collectively referred to herein as "Sellers," and each is sometimes
individually referred to as a Seller.
RECITALS:
A. Each Seller owns the number of shares of Common Stock (par value
$.002 per share) of the Company ("Common Stock"), set forth opposite its name
on the signature page hereto. The aggregate shares of such Common Stock so held
by the Sellers are referred to herein as the "Shares."
B. The Company wishes to purchase all of the Shares and each Seller
wishes to sell the Shares it owns, on the terms and subject to the conditions
set forth in this Agreement.
In consideration of the mutual covenants and conditions herein
contained, the parties hereto agree as follows:
AGREEMENT
1. PURCHASE AND SALE OF SHARES.
a. Purchase of Shares. The Company hereby agrees to
purchase from each Seller and each Seller hereby agrees to sell to the Company,
the number of shares of Common Stock set forth opposite its name on the
signature page hereto for a purchase price per share of $5.125.
b. Closing. The purchase and sale of the Shares (the
"Closing") shall take place as soon as practicable after the time the last of
the parties hereto to execute and deliver this Agreement to the other party has
effected such execution and delivery. At the time of Closing or as soon as
practicable thereafter, each Seller shall either deliver to the Company a
certificate or certificates representing the Shares to be sold by such Seller
or cause that number of Shares to be transferred by book entry through the
facilities of the Depository Trust Company to an account designated in writing
by the Company and the Company shall deliver to each such Seller the aggregate
purchase price for the Shares sold by such Seller by wire transfer or by a
check payable to such Seller. The obligations of each party hereunder to effect
such delivery and payment shall be unconditional as of the time of the Closing.
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2. REPRESENTATIONS AND WARRANTIES OF SELLERS. Each Seller hereby
represents and warrants to the Company with respect to the sale of the Shares
as follows:
a. Experience. Such Seller is experienced in purchasing
and selling investments in small capitalization companies such as the Company,
and it has fully evaluated the advisability of selling the Shares.
b. Organization and Authority of the Sellers. Such
Seller:
(1) is a partnership duly organized, validly
existing, authorized to exercise all its corporate powers, rights and
privileges and in good standing in the state or jurisdiction of its
incorporation; and
(2) has the partnership power and authority to
carry on its business as presently conducted and as proposed to be conducted.
c. Authority. Such Seller has all rights, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby, and this Agreement, once executed by the Company and such
Seller, will constitute legally binding valid obligations of such Seller,
enforceable in accordance with its terms, such enforceability being subject
only to laws of general application relating to bankruptcy, insolvency and the
relief of debtors and rules of law governing specific performance, injunctive
relief or other equitable remedies.
d. Ownership. Such Seller has, and at the Closing shall
have, good and marketable title to the Shares to be sold by it and full,
complete and unrestricted legal right, power and authority to transfer, assign
and deliver title to such Shares free and clear of all liens, mortgages,
charges, liabilities, claims, security interests or encumbrances of every type
whatsoever. The sale, conveyance, transfer and delivery of such Shares by such
Seller to the Company pursuant to this Agreement will transfer full legal and
equitable right, title and interest in such Shares to the Company, free and
clear of all liens, mortgages, charges, claims, liabilities, security interests
and encumbrances of any nature whatsoever.
e. No Conflict. The execution and delivery of the
Agreement do not, and the consummation of the transactions contemplated hereby
and the performance of the obligations hereunder will not, conflict with, or
result in any violation of, or default (with or without notice or lapse in
time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or to a loss of a material benefit, under, any
provision of the Agreement of Limited Partnership of such Seller.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Seller as follows:
a. Corporate Organization and Authority of the Company.
The Company and each of its subsidiaries:
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(1) is a corporation duly organized, validly
existing, authorized to exercise all its corporate powers, rights and
privileges and in good standing in the state or jurisdiction of its
incorporation;
(2) has the corporate power and authority to own
and operate its properties and to carry on its business as presently conducted
and as proposed to be conducted; and
(3) is qualified to do business as a foreign
corporation in each jurisdiction in which the ownership of its property or the
nature of its business requires such qualification, except where failure to so
qualify would not have a material adverse effect on the business, properties or
financial condition of the Company and its subsidiaries, taken as a whole. The
Company has made available to Sellers true and correct copies of its
Certificate of Incorporation and Bylaws as amended.
b. Corporate Power. The Company has taken or will have
taken, prior to the Closing, such action as may be required to enable it to
purchase the Shares as contemplated by this Agreement in compliance with
applicable restrictions on purchases imposed by applicable corporate law.
Subject to completion of the foregoing, the Company will have at a Closing Date
all requisite legal and corporate power and authority to execute and deliver
the Agreement, to purchase the Shares hereunder and to carry out and perform
its obligations under the terms of the Agreement.
c. Authorization. All corporate action on the part of the
Company and its officers, directors and stockholders necessary for the
authorization, execution, delivery and, subject to completion of the actions to
be performed pursuant to the first sentence of Section 3.b., the performance by
the Company of all its obligations under this Agreement has been taken; and
this Agreement, once executed by the Company and Sellers, will constitute
legally binding valid obligations of the Company enforceable in accordance with
its terms, such enforceability being subject only to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other
equitable remedies.
d. No Conflict. The execution and delivery of the
Agreement do not, and the consummation of the transactions contemplated hereby
and, subject to completion of the actions to be performed pursuant to the first
sentence of Section 3.b., the performance of the obligations hereunder will
not, conflict with, or result in any violation of, or default (with or without
notice or lapse in time, or both), or give rise to a right of termination,
cancellation or acceleration of any obligation or to a loss of a material
benefit, under, any provision of the Certificate of Incorporation or Bylaws of
the Company.
e. Accuracy of Reports. The Company's most recently filed
Annual Report on Form 10-K, the Quarterly Reports on Form 10-Q for the quarters
ended after the end of the year to which such Form 10-K relates, each as filed
with the SEC, and all reports required to be filed by the Company thereafter up
to the date of this Agreement under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), copies of which have been made available to
Sellers, have been duly filed, were in substantial
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compliance with the requirements of their respective report forms, were
complete and correct in all material respects as of the dates at which the
information was furnished, and contained (as of such dates) no untrue statement
of a material fact nor omitted to state a material fact necessary in order to
make the statements made therein in light of the circumstances in which made
not misleading. Since the date of the latest of such reports, there has not
been any material adverse change in the condition (financial or otherwise) or
results of operations of the Company.
f. Governmental Consent, etc. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority on the part of the Company is required in connection with the valid
execution and delivery of this Agreement.
g. Full Disclosure. The representations and warranties of
the Company contained in this Agreement do not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements contained herein or therein in light of the circumstances under
which they were made not misleading.
h. Litigation. Except as disclosed in writing to Sellers,
there is no action, proceeding or investigation pending or, to the knowledge of
the Company, threatened, or any basis therefor known to the Company that
questions the validity of this Agreement or the right of the Company to enter
into such agreement, or to consummate the transactions contemplated hereby.
4. CONDITIONS TO CLOSING.
a. Conditions to Company's Obligations. The obligations
of the Company to consummate the purchase of Shares hereunder from any Seller
shall be subject to the conditions that (i) the representations and warranties
made by such Seller in this Agreement remain true and correct in all material
respects as of the Closing Date, as if made on and as of that date, (ii) such
Seller shall have performed in all material respects all of its obligations to
be performed at or prior to the Closing Date under this Agreement, and (iii) no
court or other government body or public authority shall have issued an order
that shall then be in effect restraining or prohibiting the completion of the
transactions contemplated by this Agreement.
b. Conditions to Sellers' Obligations. The obligations of
each Seller to consummate the sale of Shares hereunder shall be subject to the
conditions that (i) the representations and warranties made by the Company in
this Agreement remain true and correct in all material respects as of the
Closing Date, as if made on and as of that date, (ii) the Company shall have
performed in all material respects all of its obligations to be performed at or
prior to the Closing Date under this Agreement, and (iii) no court or other
government body or public authority shall have issued an order that shall then
be in effect restraining or prohibiting the completion of the transactions
contemplated by this Agreement.
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5. MISCELLANEOUS.
a. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts entered into and wholly to be performed within the State of
California by California residents.
b. Successors and Assigns. Except as otherwise provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
c. Entire Agreement. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof. Neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought.
d. Notices, etc. Any notice and other communications as
required or permitted under the Agreement shall be mailed, by registered or
certified mail, postage prepaid with return receipt requested, or otherwise
delivered by hand, addressed (a) if to a Seller, at such Seller's address set
forth on the signature page hereof, or at such other address as such Seller
shall have furnished to the Company in writing, or (c) if to the Company, at
its address set forth on the signature page hereof, or at such other address as
the Company shall have furnished in writing to Sellers.
e. Counterparts. This Agreement may be executed in two or
more counterparts, each of which may be executed by less than all of the
parties hereto, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
f. Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to
any party.
g. Headings. Headings and the table of contents in this
Agreement are for reference purposes only and shall not be deemed to have any
substantive effect.
h. Survival of Representations and Warranties. The
representations and warranties of the parties contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing; provided however, that such representations and warranties need
only be accurate as of the date of such execution and delivery and as of the
Closing.
i. Amendment of Agreement. Any provision of this
Agreement may be modified or amended by a written instrument signed by the
Company and by Sellers.
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j. Finder's Fees. The Company represents and warrants to
the Sellers, and each Seller represents and warrants to the Company, that no
person is entitled, directly or indirectly, to compensation by reason of any
contract or understanding with such party, as a finder or broker in connection
with the sale and purchase of the Shares hereunder. The Company, on the one
hand, and each Seller, on the other hand, will each indemnify the other against
all liabilities incurred by the indemnifying party with respect to claims
related to investment banking or finders fees in connection with the
transactions contemplated by this Agreement, arising out of arrangements
between the party asserting such claims and the indemnifying party, and all
costs and expenses (including reasonable fees of counsel) of investigating and
defending such claims.
The foregoing Stock Purchase Agreement is hereby executed as of the date first
above written.
THE "COMPANY":
EATERIES, INC., an Oklahoma corporation
By:
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Vice President
SELLERS SHARES TO BE SOLD
ASTORIA CAPITAL PARTNERS, a California 624,700
limited partnership
By: ASTORIA CAPITAL MANAGEMENT, a
California corporation, its General Partner
By:
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Its: President
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SELLERS SHARES TO BE SOLD
MONTAVILLA PARTNERS, L.P., a California
limited partnership 72,700
By: ASTORIA CAPITAL MANAGEMENT, a
California corporation, its General Partner
By:
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Its: President
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MICROCAP PARTNERS L.P., a North Carolina
limited partnership 358,800
By: ASTORIA CAPITAL MANAGEMENT, a
California corporation, as attorney-in-fact
By:
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Its: President
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