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Exhibit 99.01
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
November 22, 1996
among
CHECKERS DRIVE-IN RESTAURANTS, INC.
The Lenders Listed Herein
and
CKE RESTAURANTS, INC.,
as Agent
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TABLE OF CONTENTS
AMENDED AND RESTATED CREDIT AGREEMENT
Page
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ARTICLE I
DEFINITIONS...............1
SECTION 1.01. Definitions..................................................1
SECTION 1.02. Accounting Terms and Determinations.........................12
SECTION 1.03. References..................................................13
SECTION 1.04. Use of Defined Terms........................................13
SECTION 1.05. Terminology.................................................13
ARTICLE II
THE CREDIT................13
SECTION 2.01. Syndicated Term Loans.......................................13
SECTION 2.02. Commitment to Lend Revolving Participated Loans.............14
SECTION 2.03. Notes; Miscellaneous Matters................................14
SECTION 2.04. Maturity of Loans...........................................16
SECTION 2.05. Interest Rates..............................................16
SECTION 2.06. Intentionally Deleted.......................................16
SECTION 2.07. Optional Prepayments of Syndicated Term Loan Notes..........16
SECTION 2.08. Principal Payments of Notes.................................16
SECTION 2.09. Intentionally Deleted.......................................18
SECTION 2.10. Intentionally Deleted.......................................18
SECTION 2.11. General Provisions as to Payments...........................18
SECTION 2.12. Computation of Interest and Fees............................18
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SECTION 2.13. Collateral..................................................18
SECTION 2.14. Waiver and Release..........................................19
ARTICLE III
CONDITIONS TO CLOSING...............20
SECTION 3.01. Conditions to Closing.......................................20
SECTION 3.02. Conditions to All Borrowings................................22
ARTICLE IV
REPRESENTATIONS AND WARRANTIES......22
SECTION 4.01. Corporate Existence and Power...............................22
SECTION 4.02. Corporate and Governmental Authorization; No Contravention..23
SECTION 4.03. Binding Effect..............................................23
SECTION 4.04. Financial Information.......................................23
SECTION 4.05. No Litigation...............................................23
SECTION 4.06. Compliance with ERISA.......................................23
SECTION 4.07. Compliance with Laws; Payment of Taxes......................24
SECTION 4.08. Consolidated Subsidiaries...................................24
SECTION 4.09. Investment Company Act......................................24
SECTION 4.10. Public Utility Holding Company Act..........................24
SECTION 4.11. Ownership of Property; Liens................................24
SECTION 4.12. No Default..................................................24
SECTION 4.13. Full Disclosure.............................................25
SECTION 4.14. Environmental Matters.......................................25
SECTION 4.15. Capital Stock...............................................25
SECTION 4.16. Margin Stock................................................26
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SECTION 4.17. Insolvency..................................................26
ARTICLE V
COVENANTS...........................26
SECTION 5.01. Information.................................................26
SECTION 5.02. Inspection of Property, Books and Records...................29
SECTION 5.03. Minimum Consolidated EBITDA.................................29
SECTION 5.04. Capital Expenditures........................................30
SECTION 5.05. Intentionally Deleted.......................................30
SECTION 5.06. Intentionally Deleted.......................................30
SECTION 5.07. Restricted Payments.........................................30
SECTION 5.08. Limitation on Indebtedness..................................30
SECTION 5.09. Loans or Advances...........................................31
SECTION 5.10. Investments.................................................31
SECTION 5.11. Negative Pledge.............................................31
SECTION 5.12. Maintenance of Existence....................................32
SECTION 5.13. Dissolution.................................................32
SECTION 5.14. Consolidations, Mergers and Sales of Assets.................32
SECTION 5.15. Use of Proceeds.............................................33
SECTION 5.16. Compliance with Laws; Payment of Taxes; SEC Filings.........33
SECTION 5.17. Insurance...................................................33
SECTION 5.18. Change in Fiscal Year.......................................33
SECTION 5.19. Maintenance of Property.....................................33
SECTION 5.20. Environmental Notices.......................................33
SECTION 5.21. Environmental Matters.......................................33
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SECTION 5.22. Environmental Release....................................................34
SECTION 5.23. Transactions with Affiliates.............................................34
SECTION 5.24. Certain Action in respect of Permitted Subordinated Indebtedness.........34
ARTICLE VI
DEFAULTS..............................34
SECTION 6.01. Events of Default........................................................34
ARTICLE VII
THE AGENT.............................37
SECTION 7.01. Appointment; Powers and Immunities.......................................37
SECTION 7.02. Reliance by Agent........................................................37
SECTION 7.03. Defaults.................................................................38
SECTION 7.04. Rights of Agent as a Lender..............................................38
SECTION 7.05. Indemnification..........................................................38
SECTION 7.06. Payee of Note Treated as Owner...........................................38
SECTION 7.07. Nonreliance on Agent and Other Lenders...................................39
SECTION 7.08. Failure to Act...........................................................39
SECTION 7.09. Resignation or Removal of Agent..........................................39
ARTICLE VIII
[INTENTIONALLY DELETED]...............40
ARTICLE IX
MISCELLANEOUS.........................40
SECTION 9.01. Notices..................................................................40
SECTION 9.02. No Waivers...............................................................40
SECTION 9.03. Expenses; Documentary Taxes..............................................40
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SECTION 9.04. Indemnification...........................................40
SECTION 9.05. Sharing of Setoffs........................................41
SECTION 9.06. Amendments and Waivers....................................42
SECTION 9.07. No Margin Stock Collateral................................42
SECTION 9.08. Successors and Assigns....................................42
SECTION 9.09. Confidentiality...........................................44
SECTION 9.10. Intentionally Deleted.....................................44
SECTION 9.11. Obligations Several.......................................44
SECTION 9.12. California Law............................................44
SECTION 9.13. Severability..............................................45
SECTION 9.14. Interest..................................................45
SECTION 9.15. Interpretation............................................45
SECTION 9.16. Waiver of Jury Trial; Consent to Jurisdiction.............45
SECTION 9.17. Counterparts..............................................45
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EXHIBITS
EXHIBIT 2.01(a) Syndicated Term Loan Note
EXHIBIT 2.01(b) Form of Warrant
EXHIBIT 2.02 Notice of Borrowing
EXHIBIT 2.03(a) Revolving Participated Loan Note
EXHIBIT 3.01(d) Form of Registration Rights Agreement
EXHIBIT 3.01(e) Form of Second Amended and Restated Security Agreement
EXHIBIT 3.01(f) Form of Amended and Restated Guaranty
EXHIBIT 3.01(g) Form of Amended and Restated Guarantor Security Agreement
EXHIBIT 3.01(h) Form of Closing Certificate
EXHIBIT 3.01(i) Form of Opinion of Counsel for the Borrower
EXHIBIT 3.01(k) Form of Insurance Certificate
EXHIBIT 5.01(a)(iii) Form of Compliance Certificate
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SCHEDULES
Schedule A Amended Credit Agreement as of July 29, 1996
Schedule 4.04 Material Adverse Effects
Schedule 4.08 Subsidiaries
Schedule 5.08 Indebtedness
Schedule 5.09 Loans
Schedule 5.11 Liens
Schedule 5.24 Permitted Subordinated Indebtedness
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AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") dated as of
November 22, 1996, among CHECKERS DRIVE-IN RESTAURANTS, INC., the LENDERS listed
on the signature pages hereof and CKE RESTAURANTS, INC., as Agent.
WHEREAS, on October 28, 1993 the Borrower, Wachovia Bank of Georgia,
N.A., as Agent (the "Initial Agent") and the Initial Banks (as hereinafter
defined) entered into a Credit Agreement (the "Original Credit Agreement")
pursuant to which the Initial Agent and the Initial Banks made certain loans to
the Borrower;
WHEREAS, pursuant to the agreements listed on Schedule A attached
hereto, the Borrower, the Initial Agent and the Initial Banks from time to time
amended and modified the Original Credit Agreement (the Original Credit
Agreement as so amended and modified, the "Amended Credit Agreement");
WHEREAS, on July 29, 1996 pursuant to certain agreements, the Prior
Agent (as hereinafter defined) and the Prior Lenders (as hereinafter defined)
acquired all right, title and interest of the Initial Agent and the Initial
Banks in, to and under the Amended Credit Agreement and the Loan Documents (as
defined in the Amended Credit Agreement);
WHEREAS, on November 12, 1996 pursuant to certain agreements, the Prior
Agent and the Prior Lenders assigned to the Agent and the Lenders, and the Agent
and the Lenders acquired, an assignment interest in, to and under the Amended
Credit Agreement and the Loan Documents;
WHEREAS, the Borrower has requested and, subject to the conditions set
forth herein, the Agent and the Lenders have agreed to restructure the
Borrower's obligations under the Amended Credit Agreement, as amended to date;
and
WHEREAS, this Agreement amends, restates and supersedes in its entirety
the Amended Credit Agreement, as amended to date, and no term or provision of
the Amended Credit Agreement shall bind the parties to this Agreement unless
specifically set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this Section 1.01
shall, for all purposes of this Agreement and any amendment hereto (except as
herein otherwise expressly provided or unless the context otherwise requires),
have the meanings set forth herein:
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"Affiliate" means (i) any Person that directly, or indirectly through
one or more intermediaries, controls the Borrower (a "Controlling Person"), (ii)
any Person (other than the Borrower or a Subsidiary) which is controlled by or
is under common control with a Controlling Person, or (iii) any Person (other
than a Subsidiary) of which the Borrower owns, directly or indirectly, 20% or
more of the common stock or equivalent equity interests, excluding existing
joint ventures. As used herein, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agent" means CKE Restaurants, Inc., a Delaware corporation, in its
capacity as agent for the Lenders hereunder, and its successors and permitted
assigns in such capacity.
"Agreement" means this Amended and Restated Credit Agreement, together
with all amendments and supplements hereto and all exhibits and schedules
hereto.
"Amended Credit Agreement" has the meaning set forth in the recitals
hereto.
"Amended and Restated Security Agreement" means that certain Second
Amended and Restated Security Agreement substantially in the form attached
hereto as Exhibit 3.01(e), delivered by the Borrower dated as of even date
herewith.
"Assignee" has the meaning set forth in Section 9.08(c).
"Assignment Agreement" means an Assignment Agreement executed in
accordance with Section 9.08(c).
"Borrower" means Checkers Drive-In Restaurants, Inc., a Delaware
corporation, and its successors and its permitted assigns.
"Borrowing" means (i) the restructuring of the Prior Syndicated Debt as
of the Closing Date pursuant to Section 2.01(a), and (ii) any borrowing
thereafter consisting of Revolving Participated Loans made to the Borrower by
CKE (which Revolving Participated Loans are participated to the Lenders
hereunder) pursuant to Article II.
"Capital Expenditures" means for any period the sum of all capital
expenditures incurred during such period by the Borrower and its Consolidated
Subsidiaries, as determined in accordance with GAAP.
"Capital Stock" means any nonredeemable capital stock of the Borrower
or any Consolidated Subsidiary (to the extent issued to a Person other than the
Borrower), whether common or preferred.
"CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. Section 9601 et. seq. and its implementing
regulations and amendments.
"CERCLIS" means the Comprehensive Environmental Response Compensation
and Liability Inventory System established pursuant to CERCLA.
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"Change of Control" means the occurrence of any of the following
events: (a) the acquisition after the Closing Date, in one or more transactions,
of "beneficial ownership" (within the meaning of Section 13(d) under the
Exchange Act and the rules and regulations promulgated thereunder) by (i) any
Person or entity, or (ii) any group of Persons or entities who constitute a
group (within the meaning of Section 13 of the Exchange Act), in either case, of
any securities of the Borrower such that, as a result of such acquisition, such
Person, entity or group either (A) "beneficially owns" (within the meaning of
Rule 13 under the Exchange Act), directly or indirectly 35% or more of the
Borrower's then outstanding voting securities entitled to vote on the election
of directors of the Borrower ("Voting Securities") (it being understood that
this clause (A) shall not apply if the Lenders or their Affiliates acquire
beneficial ownership of 35% or more of Borrowers than outstanding Voting
Securities) or (B) otherwise has the ability to elect, directly or indirectly, a
majority of the members of the Borrower's Board of Directors; (b) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Borrower (together with any new
directors selected by such Board of Directors or whose nomination for election
by the stockholders of the Borrower was approved by a vote of 66 2/3% of the
directors of the Borrower then still in office who are either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
members of the Board of Directors of the Borrower then in office; (c) the sale,
lease, transfer or other disposition of all or substantially all of the assets
of the Borrower as entirety or substantially as an entirety in one transaction
or a series of related transactions; (d) the liquidation or dissolution of the
Borrower; or (e) any transaction permitted under Section 5.14 which results in
any of the foregoing.
"Checkers Restaurant" shall mean any and all restaurants operated as a
Checkers restaurant, whether owned or operated by the Borrower or any other
Person.
"CKE" shall mean CKE Restaurants, Inc., a Delaware corporation, and its
successors and assigns.
"Closing Certificate" has the meaning set forth in Section 3.01(h).
"Closing Date" means the date on which all matters set forth in Section
3.01 are satisfied.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code.
"Collateral" has the meaning set forth in Section 2.13.
"Commitment" means, with respect to the Revolving Participated Loans to
be made by CKE pursuant to Section 2.02 of this Agreement, the amount of
$2,500,000.
"Compliance Certificate" has the meaning set forth in Section
5.01(a)(iii).
"Consolidated Cash Flow" means, for any period, Consolidated EBITDA for
such period, minus (i) consolidated interest expense of the Borrower and its
Consolidated Subsidiaries, to the extent such interest is paid in cash, for such
period, minus (ii) the cash portion of the provision for income taxes of the
Borrower and its Consolidated Subsidiaries for such period.
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"Consolidated EBITDA" means, for any period, Consolidated Net Income
for such period, plus (i) consolidated interest expense of the Borrower and its
Consolidated Subsidiaries for such period, plus (ii) provision for income taxes
of the Borrower and its Consolidated Subsidiaries for such period, plus (iii)
depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash charges (excluding any such non-cash
charge to the extent that it represents an accrual of or reserve for cash
charges in any future period or amortization of a prepaid cash expense that was
paid in a prior period) of the Borrower and its Consolidated Subsidiaries to the
extent that such depreciation, amortization and other non-cash charges were
deducted in computing Consolidated Net Income for such period, minus (iv)
non-cash items increasing consolidated revenues of the Borrower and its
Consolidated Subsidiaries in determining Consolidated Net Income for such
period, in each case on a consolidated basis and determined in accordance with
GAAP.
"Consolidated Net Income" means, for any period, the aggregate of the
Net Income of the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis in accordance with GAAP, but excluding therefrom (i)
extraordinary items, (ii) any gains or losses from the sale of any assets of the
Borrower or its Subsidiaries, (iii) the net income of any Subsidiary to the
extent that the declaration or payment of dividends or similar distributions by
that Subsidiary of that net income is not permitted, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary or its stockholders, or is not permitted without prior governmental
approval (that has not been obtained), and (iv) the income or loss from any
entity in which the Borrower's or its Subsidiary's, as applicable, investment is
classified pursuant to GAAP as a minority interest.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which, in accordance with GAAP, would be consolidated
with those of the Borrower in its consolidated financial statements as of such
date.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Default" has the meaning set forth in Section 6.01.
"Default Rate" means a rate per annum equal to the sum of the then
applicable interest rate on the Loans plus two percent (2%).
"Dollars" or "$" means dollars in lawful currency of the United States
of America.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in The State of California are authorized by
law to close.
"Environmental Authority" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
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"Environmental Authorizations" means all licenses, permits, orders,
approvals, notices, registrations or other legal prerequisites for conducting
the business of the Borrower or any Wholly Owned Subsidiary required by any
Environmental Requirement.
"Environmental Judgments and Orders" means all judgments, decrees or
orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with an
Environmental Authority or other entity arising from or in any way associated
with any Environmental Requirement.
"Environmental Liabilities" means any liabilities, whether accrued,
contingent or otherwise, arising from and in any way associated with any
Environmental Requirements.
"Environmental Notices" means notice from any Environmental Authority,
of possible or alleged noncompliance with or liability under any Environmental
Requirement, including without limitation any complaints, citations, demands or
requests from any Environmental Authority or from any other person or entity for
correction of any, violation of any Environmental Requirement or any
investigations concerning any violation of any Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or under
any applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement relating to
health, safety or the environment and applicable to the Borrower, any Wholly
Owned Subsidiary or the Properties, including but not limited to any such
requirement under CERCLA or similar state legislation and all federal, state and
local laws, ordinances, regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law. Any reference to any provision
of ERISA shall also be deemed to be a reference to any successor provision or
provisions thereof.
"Event of Default" has the meaning set forth in Section 6.01.
"Fiscal Quarter" means any fiscal quarter of the Borrower, it being
understood that each of the first three fiscal quarters of each Fiscal Year
consists of three Reporting Periods and the final fiscal quarter consists of
four Reporting Periods.
"Fiscal Year" means any fiscal year of the Borrower consisting of the
52 or 53 week period generally ending on the Monday closest to December 31.
"GAAP" means generally accepted accounting principles applied on a
basis consistent with those which, in accordance with Section 1.02, are to be
used in making the calculations for purposes of determining compliance with the
terms of this Agreement.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and,
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without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to secure, purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation (whether arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or services, to
provide collateral security, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantors" means, individually and collectively, (i) InnerCityFoods
Leasing Company, a Delaware corporation, (ii) InnerCityFoods Restaurant Company,
Inc., a Delaware corporation, (iii) InnerCityFoods Joint Venture Company, a
Delaware corporation, and (iv) any other Person delivering a Guaranty to the
Agent, together with each of their respective successors and permitted assigns.
"Guaranty" means, individually and collectively, (i) those certain
Amended and Restated Guaranty Agreements, substantially in the form of Exhibit
3.01(f) hereto, executed and delivered by the Guarantors, jointly and severally,
to the Agent, for the ratable benefit of each of the Lenders, together with all
amendments and modifications thereto and (ii) any other guaranty agreement
delivered to the Agent for the purpose of providing a Guarantee of any of the
Borrower's or the Guarantors' obligations under any of the Loan Documents,
together with all amendments and modifications thereto.
"Guarantor Security Agreements" means those certain Amended and
Restated Security Agreements, substantially in the form of Exhibit 3.01(g)
hereto, executed and delivered by the Guarantors to the Agent, for the ratable
benefit of each of the Lenders, together with all respective amendments and any
modifications thereto.
"Hazardous Materials" includes, without limitation, (a) solid or
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. Section 6901 et seq. and its implementing regulations and
amendments, or in any applicable state or local law or regulation, (b)
"hazardous substance", "pollutant", or "contaminant" as defined in CERCLA, or in
any applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including, crude oil or any fraction thereof or
(d) insecticides, fungicides, or rodenticides, as defined in the Federal
Insecticide, Fungicide, and Rodenticide Act of 1975, or in any applicable state
or local law or regulation, as each such Act, statute or regulation may be
amended from time to time.
"Indebtedness" shall have the meaning set forth in Section 5.08.
"Initial Agent" means Wachovia Bank of Georgia, N.A., a national
banking association organized under the laws of the United States of America, in
its capacity as agent for the Initial Banks under the Amended Credit Agreement.
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"Initial Banks" mean collectively Wachovia Bank of Georgia, N.A.,
▇▇▇▇▇▇▇ Bank of Pinellas County, The Boatmen's National Bank of St. Louis, PNC
Bank, Kentucky, Inc., NBD Bank and First Alabama Bank.
"Interest Period" means the period commencing on the last day of each
Reporting Period and ending on the same date of the following Reporting Period;
provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to paragraph (b) below) which would otherwise end
on a day which is not a Domestic Business Day shall be extended to the
next succeeding Domestic Business Day;
(b) the first Interest Period shall commence on November 26,
1996 and shall end on December 30, 1996; and
(c) any Interest Period which begins before the Termination
Date and would otherwise end after the Termination Date shall end on
the Termination Date.
"Investment" means any investment in any Person, whether by means of
purchase or acquisition of obligations or securities of such Person, capital
contribution to such Person, loan or advance to such Person, making of a time
deposit with such Person, Guarantee or assumption of any obligation of such
Person or otherwise.
"Lender" means each Person listed on the signature pages hereof (other
than the Borrower and Guarantors) and its successors and assigns.
"Lending Office" means, as to each Lender, its office located at its
address set forth on the signature pages hereof or identified on the signature
pages hereof as its Lending Office or such other office as such Lender may
hereafter designate as its Lending Office by notice to the Borrower and the
Agent.
"Lien" means, with respect to any asset, any mortgage, deed to secure
debt, deed of trust, lien, pledge, charge, security interest, security title, or
encumbrance or servitude of any kind in respect of such asset to secure or
assure payment of a Indebtedness or a Guarantee, whether by consensual agreement
or by operation of statute or other law, or by any agreement, contingent or
otherwise, to provide any of the foregoing. For the purposes of this Agreement,
a Person shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease (as determined under GAAP) or other
title retention agreement relating to such asset. Provided, however, an
operating lease (as determined under GAAP) shall not constitute a Lien.
"Loan" means a Syndicated Term Loan or a Revolving Participated Loan
and "Loans" means Syndicated Term Loans or Revolving Participated Loans or both.
"Loan Documents" means this Agreement, the Notes, the Warrants, the
Guaranty, the Security Agreements, the Post-Closing Collateral Documents, the
Registration Rights Agreement, the Mortgage Documents and any other document
evidencing, relating to or securing the obligations of the Borrower hereunder,
and any other document or instrument delivered from time to time in connection
with this Agreement, the Notes, the Warrants or the obligations of the
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Borrower hereunder, as such documents and instruments may be amended, modified
or supplemented from time to time.
"Margin Stock" means "margin stock" as defined in Regulations G, T, U
or X.
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence arising after the Closing Date, or if arising on or
before the Closing Date, not disclosed to the Lenders in writing (such written
disclosures to include, without limitation, the Borrower's most recent Annual
Report on Form 10-K and most recent Quarterly Report on Form 10-Q previously
delivered to the Lenders) on or before the Closing Date, of whatever nature
(including any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding that is not a judgment giving rise to a
Default under Section 6.01(j)), whether singly or in conjunction with any other
event or events, act or acts, condition or conditions, occurrence or
occurrences, whether or not related, a material adverse change in, or a material
adverse effect upon, any of (a) the financial condition, operations, business,
properties or prospects of the Borrower and its Consolidated Subsidiaries taken
as a whole, (b) the rights and remedies of the Agent and the Lenders under the
Loan Documents, or (c) the legality, validity or enforceability of any Loan
Document. In making any determination of a Material Adverse Effect, all relevant
circumstances known to the Lenders shall be considered, including, without
limitation, insurance proceeds receivable, opinions of counsel, the merits of
any relevant claim, subrogation rights, and contribution rights available to the
Borrower.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"NTDT Note" means the promissory note of the Borrower held by Nashville
Twin Drive-Thru Partners, L.P. ("NTDT"), the outstanding principal amount of
which was $1,126,162 as of September 9, 1996.
"Net Income" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
"Net Proceeds" means the cash proceeds received by the Borrower in
respect to the issuance of Capital Stock in connection with the exercise of
subscription rights distributed (including any such rights exercised by the
Lenders as required hereunder) pursuant to the Rights Offering, after deducting
therefrom reasonable and customary costs and expenses incurred by the Borrower
directly in connection with such issuance.
"Notes" means (i) the Syndicated Term Loan Notes, and (ii) the
Revolving Participated Loan Note, together with all amendments, consolidations,
modifications, renewals, and supplements to, and replacements of, items (i) and
(ii) above.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Original Credit Agreement" has the meaning set forth in the recitals
hereto.
"Participant" has the meaning set forth in Section 9.08(b).
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"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Subordinated Indebtedness" means the Indebtedness identified
on Schedule 5.24 hereto.
"Person" means an individual, a corporation, a partnership, an
unincorporated association, a trust or any other entity or organization,
including, but not limited to, a government or political subdivision or an
agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five (5) plan years made
contributions.
"Post-Closing Collateral" has the meaning set forth in Section 2.13(a).
"Post-Closing Collateral Documents" has the meaning set forth in
Section 2.13(a).
"Prior Agent" means The Galileo Fund, L.P., a Massachusetts limited
partnership, in its capacity a agent for the Prior Lenders under the Amended
Credit Agreement.
"Prior Lenders" means collectively The Galileo Fund, L.P., Canpartners
Investments IV, LLC, Foothill Capital Corporation and Pearl Street, L.P.
"Prior Revolving Participated Loan Note" means the Revolving
Participated Loan dated October 2, 1995 of the Borrower in favor of Wachovia
Bank of Georgia, N.A. in the original principal amount of $2,000,000.
"Prior Syndicated Debt" means the loans, interest, and other
obligations of the Borrower to the Lenders outstanding on the Closing Date under
the "Loans" as defined in the Amended Credit Agreement.
"Prior Syndicated Term Loan Notes" means, collectively (i) the Amended
and Restated Syndicated Term Loan Note dated as of April 12, 1995 of the
Borrower in favor of Wachovia Bank of Georgia, N.A. in the original principal
amount of $12,031,250, (ii) the Amended and Restated Syndicated Term Loan Note
dated as of April 12, 1995 of the Borrower in favor of ▇▇▇▇▇▇▇ Bank of Pinellas
County in the original principal amount of $7,218,750, (iii) the Amended and
Restated Syndicated Term Loan Note dated as of April 12, 1995 of the Borrower in
favor of The Boatmen's National Bank of St. Louis in the original principal
amount of $4,812,500, (iv) the Amended and Restated Syndicated Term Loan Note
dated as of April 12, 1995 of the Borrower in favor of NBD Bank in the original
principal amount of $4,812,500, (v) the Amended and Restated Syndicated Term
Loan Note dated as of April 12, 1995 of the Borrower in favor of PNC Bank,
Kentucky, Inc. in the original principal amount of $4,812,500 and (vi) the
Amended and Restated
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Syndicated Term Loan Note dated as of April 12, 1995 of the Borrower in favor of
First Alabama Bank in the original principal amount of $4,812,500.
"Prior Warrant Agreements" means, individually and collectively, the
Warrant Agreements dated as of April 15, 1995 executed and delivered by the
Borrower to the Initial Banks, and having been subsequently assigned to the
Prior Lenders and re-assigned to the Lenders.
"Pro Rata Share" means, with respect to each Lender identified below,
the percentage interest set forth opposite the name of such Lender:
Lender Percentage Interest
------ -------------------
CKE Restaurants, Inc. 36.75214
KCC Delaware 14.24501
Fidelity National Financial, Inc. 10.54131
The Travelers Indemnity Company 8.54701
The Galileo Fund, L.P. 5.69801
Foothill Capital Corporation 5.69801
Canpartners Investments IV, LLC 5.69801
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇ 5.69800
▇▇▇▇ ▇▇▇▇▇▇▇▇ 3.56125
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 2.84900
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 0.71225
---------
Total 100.00000%
"Properties" means all real property owned, leased or otherwise used or
occupied by the Borrower or any Consolidated Subsidiary, wherever located.
"▇▇▇▇-Folks Notes" means the promissory notes of the Borrower held by
▇▇▇▇-Folks, Inc. ("▇▇▇▇-Folks"), the aggregate outstanding principal amount of
which was $1,788,000 as of September 9, 1996.
"RDG Note" means the promissory note of the Borrower held by Restaurant
Development Group, Inc. ("RDG"), the outstanding principal amount of which was
approximately $1,693,000 as of September 9, 1996.
"Registration Rights Agreement" means the Registration Rights
Agreement, in the form of Exhibit 3.01(d) hereto, executed and delivered by the
Borrower to Lenders.
"Regulation G" means Regulation G of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
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"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Released Parties" has the meaning set forth in Section 2.14 hereof.
"Reporting Period" means, with respect to any Fiscal Year, each
consecutive 4 week period beginning on the first day of such Fiscal Year.
"Required Lenders" means at any time Lenders having at least 66 2/3% of
the aggregate outstanding principal amount of the Syndicated Term Loan Notes.
"Restricted Payment" means (i) any dividend or other distribution on
any shares of the Borrower's capital stock (except dividends payable solely in
shares of its capital stock) or (ii) any cash payment on account of the
purchase, redemption, retirement or acquisition (excluding therefrom any nominal
amount of cash paid in lieu of fractional shares of Capital Stock issued in the
ordinary course of business) of (a) any shares of the Borrower's capital stock
(except shares acquired upon the conversion thereof into other shares of its
capital stock) or (b) any option, warrant or other right to acquire shares of
the Borrower's capital stock.
"Retail Building" means any removable restaurant building owned by the
Borrower and operated under the "Checkers" trade name and all related equipment
and moveable site improvements.
"Revolving Lenders" means CKE and KCC Delaware.
"Revolving Participated Loan" means a Loan made by CKE pursuant to
Section 2.02.
"Revolving Participated Loan Note" means the amended and restated
promissory note of the Borrower, substantially in the form of Exhibit 2.03(b),
evidencing the obligation of the Borrower to repay the Revolving Participated
Loans, together with all amendments, consolidations, modifications, renewals and
supplements thereto.
"Rights Guaranty" means the commitment of CKE, KCC Delaware and
Fidelity National Financial, Inc. pursuant to Section 2.03(d).
"Rights Offering" means the distribution by the Borrower to each holder
of Common Stock of the Borrower (it being understood that, for purposes of the
Rights Offering, the Warrants will be deemed to have been exercised and the
shares of Common Stock of the Borrower issuable on exercise of the Warrants
shall be deemed to be issued and outstanding and held of record by the Lenders
on the record date established for such distribution) of rights to purchase
shares of Common Stock of the Borrower, at any price as may be determined by the
Borrower up to the average closing price for such common stock for the ten
trading days prior to the effective date of
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the registration statement covering such shares, the Net Proceeds of which shall
be not less than $10,000,000.
"Security Agreements" means the Guarantor Security Agreements and the
Amended and Restated Security Agreement.
"Subsidiary" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower, and any partnership in which
the Borrower or any Consolidated Subsidiary is a general partner.
"Syndicated Term Loans" means the Loans made by the Lenders pursuant to
Section 2.01(a).
"Syndicated Term Loan Notes" means the amended and restated promissory
notes of the Borrower, substantially in the form of Exhibit 2.03(a), evidencing
the obligation of the Borrower to repay the Syndicated Term Loans, together with
all amendments, consolidations, modifications, renewals, and supplements
thereto.
"Termination Date" means (i) with respect to the Revolving Participated
Loan Commitment and the Revolving Participated Loans, unless extended by the
Borrower pursuant to Section 2.03(e), upon the earlier to occur of (I) March 22,
1997 or (II) consummation of the issuance of shares of Capital Stock as a result
of the full subscription of rights in the Rights Offering, and (ii) with respect
to the Syndicated Term Loans, July 31, 1999.
"Transferee" has the meaning set forth in Section 9.08(d).
"Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under such Plan exceeds (ii) the fair market value of
all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the Controlled Group to the PBGC
or the Plan under Title IV of ERISA.
"Warrants" mean the warrants to purchase shares of Borrower's Common
Stock in the form attached hereto as Exhibit 2.01(b) to be issued to the Lenders
on the Closing Date pursuant to Section 2.01(a).
"Wholly Owned Subsidiary" means any Subsidiary all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP, applied on a basis consistent (except for changes with
which the Borrower's independent public accountants concur or that are otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Lenders except for any change in
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which the Borrower's independent public accountants concur or is required by
GAAP, in determining compliance with any of the provisions of this Agreement or
any of the other Loan Documents: (i) the Borrower shall have objected to
determining such compliance on such basis at the time of delivery of such
financial statements, or (ii) the Required Lenders shall so object in writing
within 30 days after the delivery of such financial statements, in either of
which events such calculations shall be made on a basis consistent with those
used in the preparation of the latest financial statements as to which such
objection shall not have been made (which, if objection is made in respect of
the first financial statements delivered under Section 5.01 hereof, shall mean
the financial statements referred to in Section 4.04).
SECTION 1.03. References. Unless otherwise indicated, references in
this Agreement to "Articles", "Exhibits", "Schedules", "Sections " and other
Subdivisions are references to articles, exhibits, schedules, sections and other
subdivisions hereof.
SECTION 1.04. Use of Defined Terms. All terms defined in this Agreement
shall have the same defined meanings when used in any of the other Loan
Documents, unless otherwise defined therein or unless the context shall require
otherwise.
SECTION 1.05. Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural, and the plural
shall include the singular. Titles of Articles and Sections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.
ARTICLE II
THE CREDITS
SECTION 2.01. Syndicated Term Loans.
(a) Each Lender severally agrees, subject to the terms and
conditions set forth herein and based on the representations and warranties set
forth herein, to restructure the Borrower's obligations hereunder as provided
herein. All Syndicated Term Loans shall earn interest at the rate of 13.00% per
annum. In consideration for the restructuring of the Borrower's obligations
hereunder, the Commitment and the Rights Guaranty, on the Closing Date, the
Borrower shall grant to the Lenders, in proportion to each Lender's Pro Rata
Share of the Prior Syndicated Debt, warrants for the purchase of an aggregate of
20,000,000 shares of the Borrower's Common Stock at an exercise price of $.75
each, which warrants may be exercised in accordance with and subject to the
terms and conditions of the Warrants. Effective as of the Closing Date, the
Prior Warrant Agreements shall be terminated and of no further force or effect.
(b) On the Closing Date, subject to satisfaction of the terms
and conditions set forth in Article III herein, each Lender severally agrees to
deliver to the Borrower the Prior Syndicated Term Loan Notes and the Agent
agrees to deliver to the Borrower the Prior Revolving Participated Loan Note, in
exchange for (i) a Syndicated Term Loan Note in the principal amount of such
Lender's Pro Rata Share of the Prior Syndicated Debt, (ii) a participation
interest in the Revolving Participated Loan in an amount equal to such Lender's
Pro Rata Share of the Revolving
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Participated Loan Note, and (iii) warrant certificates representing a number of
Warrants equal to such Lender's Pro Rata Share of the Warrants issuable pursuant
to Section 2.01(a).
SECTION 2.02. Commitment to Lend Revolving Participated Loans. CKE
shall from time to time on or after December 3, 1996 and through and including
the Termination Date applicable to Revolving Participated Loans, upon the
written request of the Borrower in the form of notice attached hereto as Exhibit
2.02 (the "Notice of Borrowing"), and on the terms and conditions set forth
herein, make Revolving Participated Loans to the Borrower in an aggregate
principal amount at any time not to exceed an amount equal to $2,500,000 through
and including the Termination Date, which Revolving Participated Loans shall be
evidenced by the Revolving Participated Loan Note (in the original stated
principal amount of $2,500,000) dated as of the Closing Date. Each Revolving
Participated Loan Borrowing under this Section 2.02 shall be in an aggregate
principal amount of $500,000 or any larger multiple of $250,000. Within the
foregoing limits, the Borrower may borrow under this Section 2.02, repay and
reborrow under this Section 2.02 at any time before the Termination Date
applicable to Revolving Participated Loans. All Revolving Participated Loans
shall earn interest at the rate of 13.00% per annum. CKE shall notify each
Revolving Lender of each Revolving Participated Loan Borrowing, and each
Revolving Lender other than CKE shall, on the date of each Revolving
Participated Loan Borrowings, purchase a participating interest in Revolving
Participated Loans in an amount equal to the same proportion of such Revolving
Participated Loans as such other Revolving Lender's Pro Rata Share bears to the
aggregate Pro Rata Shares of the Revolving Lenders. On the date of each such
Revolving Participated Loan Borrowing, each Revolving Lender will immediately
transfer to CKE, in immediately available funds, the amount of its
participation. Whenever, at any time after CKE has received from any such
Revolving Lender its participating interest in a Revolving Participated Loan,
the Agent receives any payment on account thereof, the Agent will distribute to
such Revolving Lender its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Revolving Lender's participating interest was outstanding and funded;
provided, however, that in the event that such payment received by the Agent is
required to be returned, such Revolving Lender will return to the Agent any
portion thereof previously distributed by the Agent to it. Each Revolving
Lender's obligation to purchase such participating interests shall be absolute
and unconditional and shall not be affected by any circumstance, including,
without limitation: (i) any set-off, counterclaim, recoupment, defense or other
right which such Revolving Lender or any other Person may have against CKE
requesting such purchase or any other Persons for any reason whatsoever; (ii)
the occurrence or continuance of a Default or an Event of Default or the
termination of the Commitments; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower, or any other Person; (iv) any breach
of this Agreement by the Borrower or any other Revolving Lender; or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.
SECTION 2.03. Notes; Miscellaneous Matters.
(a) The Syndicated Term Loans of each Lender shall be
evidenced by the Syndicated Term Loan Notes payable to the order of such Lender
for the account of its Lending Office in an amount equal to the original
principal amount of such Lender's Pro Rata Share of the Prior Syndicated Debt.
The Revolving Participated Loan shall be evidenced by the Revolving Participated
Loan Note payable to the order of CKE in the original principal amount of
$2,500,000.
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(b) The Borrower hereby represents, warrants, ratifies and
confirms that the Prior Syndicated Debt in the aggregate outstanding principal
amount of $35,818,098.88 as of the Closing Date (which consists of an aggregate
principal amount of $34,718,098.88 of "Syndicated Term Loans" as defined under
the Amended Credit Agreement, an aggregate principal amount of $1,000,000 of
"Revolving Participated Loans" as defined under the Amended Credit Agreement,
and an aggregate principal amount of $100,000 with respect to the "Extension
Fee" as defined under the Amended Credit Agreement (more specifically, the
Eleventh Amendment Agreement dated July 29, 1996 identified on Schedule A
attached hereto)) as evidenced by the Syndicated Term Loan Notes remains in full
force and effect without novation and is payable in accordance with its terms,
without defense, offset, recoupment or counterclaim. The Borrower also
represents and warrants that the fair market value of the Collateral exceeds the
aggregate principal amount of the Loans. CKE shall record with respect to the
Revolving Participated Loan Note on the schedule forming a part thereof
appropriate notations to evidence the date, amount and maturity of each
Revolving Participated Loan made by it, the date and amount of each payment of
principal made by the Borrower with respect thereof and, such schedule shall
constitute rebuttable presumptive evidence of the principal amount owing and
unpaid on the Revolving Participated Loan Note; provided that the failure of CKE
to make any such recordation or endorsement shall not affect the obligation of
the Borrower hereunder or under the Revolving Participated Loan Note or the
ability of CKE to assign such Revolving Participated Loan Note. CKE is hereby
irrevocably authorized by the Borrower so to endorse the Revolving Participated
Loan Note and to attach to and make a part of the Revolving Participated Loan
Note a continuation of any such schedule as and when required.
(c) Intentionally Deleted.
(d) The Borrower shall prepare and file with the Securities
and Exchange Commission, and use its best efforts to be declared effective under
the Securities Act of 1933, as amended, a registration statement relating to the
shares of Common Stock of the Borrower to be issued in a Rights Offering, and to
distribute rights to purchase Common Stock pursuant thereto to Borrower's
stockholders and the holders of the Warrants as of a record date which is,
within 60 days after the Closing Date. Each of CKE, Fidelity National Financial,
Inc. and KCC Delaware hereby agrees, severally and not jointly, to purchase from
the Company an aggregate number of shares of Borrower Common Stock equal to the
excess, if any, of the maximum number of shares of Borrower Common Stock
issuable upon the exercise in full of all subscription rights distributed in
such Rights Offering remaining after subtracting from the maximum number of
shares of Borrower Common Stock issuable upon the exercise of all subscription
rights so distributed and exercised by Persons other than the Lenders and their
Affiliates. The obligations of the foregoing Lenders to purchase shares shall be
allocated among them in accordance with their relative Pro Rata Shares.
(e) The Borrower shall have the right, on notice to the Agent,
to extend the Termination Date applicable to the Revolving Participated Loan for
three (3) successive one (1)-month periods; provided, that for each such
extension the Borrower shall issue to the Revolving Lenders, pro rata in
accordance with each Revolving Lender's interests in the Revolving Participated
Loan, additional warrants to purchase 333,333 shares of Common Stock of the
Borrower upon the first day of each such one-month extension period at an
exercise price equal to 90% of the average closing price of Borrower's Common
Stock, as reported on the NASDAQ National Market, over the 30 day period ending
on the last day of the applicable Termination Date
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(before giving effect to such extension). The terms of the warrants shall be
identical to the Warrants.
(f) Upon the closing, the Borrower shall take all corporate
actions necessary to elect to the Board of Directors of the Borrower three (3)
designees of the Lenders, and such Board of Directors shall consist of seven (7)
Persons, of whom three (3) Persons shall have been designated by the Lenders. At
each election of directors from and after the Closing Date, the Borrower shall
nominate for election to its Board of Directors and recommend to its
stockholders the election of three (3) designees of the Lenders to the Board of
Directors. No change in the actual number of directors of the Borrower shall be
made without the prior written consent of the Required Lenders.
SECTION 2.04. Maturity of Loans. Except for mandatory prepayments of
the Loans required by this Agreement, the Syndicated Term Loans and the
Revolving Participated Loans shall mature, and the principal amount thereof, if
any, together with all accrued but unpaid interest thereon, if any, shall be due
and payable on the applicable Termination Date without notice to or demand upon
the Borrower.
SECTION 2.05. Interest Rates.
(a) Each Loan shall bear interest on the outstanding principal
amount thereof, for each day from the date such Loan is made until it becomes
due, at a rate per annum equal to 13.00%. Such interest shall be payable for
each Interest Period on the last day thereof. Any overdue principal of and, to
the extent permitted by applicable law, overdue interest on any Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the Default Rate.
(b) After the occurrence and during the continuance of a
Default, the principal amount of the Loans (and, to the extent permitted by
applicable law, all accrued interest thereon) shall, at the election of the
Required Lenders, bear interest at the Default Rate.
SECTION 2.06. Intentionally Deleted.
SECTION 2.07. Optional Prepayments of Syndicated Term Loan Notes. The
Borrower may, upon at least one Domestic Business Day's notice to the Lenders,
prepay the Syndicated Term Loan Notes by an aggregate amount of at least
$500,000 or any larger multiple of $500,000, without premium or penalty.
SECTION 2.08. Principal Payments of Notes.
(a) Scheduled Principal Payments. On the last day of each
of the following Reporting Periods, the Borrower shall pay the principal amount
of the Syndicated Term Loans equal to the greater of the following amounts:
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Amount Equal to
the Greater of
---------------------------
Reporting Periods x or y
----------------- ------- -----------
From the Closing Date
through Reporting Period
4 in Fiscal Year 1997 (n/a) (n/a)
For Reporting Periods
5 through 11 in Fiscal Year 1997 $200,000 (n/a)
For Reporting Period 12 in
Fiscal 1997 through
Reporting Period 3 in
Fiscal Year 1998 $275,000 50% of Consolidated
Cash Flow for the
previous
Reporting Period
For Reporting Period 4
in Fiscal Year 1998 and for all
Reporting Periods thereafter $350,000 60% of Consolidated
Cash Flow for the
previous Reporting
Period
As used in this Section 2.08(a), Consolidated Cash Flow shall exclude the
portion of Consolidated Cash Flow attributable to any Person other than a Wholly
Owned Subsidiary that is not received by the Borrower or any Guarantor.
(b) Mandatory Principal Payments upon Sales of Assets. Except
to the extent otherwise provided in this Section 2.08(a), all proceeds (whenever
received, whether at closing or as a result of payments under any promissory
note, net however of prorated property taxes and reasonable transactional costs
incurred with respect to such closing) payable to and received by Borrower or
any Guarantor from the sale of assets (except for sales of inventory in the
ordinary course of business) owned by the Borrower and/or its Consolidated
Subsidiaries permitted by Section 5.14 hereof shall be paid to the Lenders and
shall be applied against the outstanding principal payments required to be paid
under Section 2.08a in order of maturity. Notwithstanding foregoing, provided no
Default exists, the Borrower may retain fifty percent (50%) the of such net
proceeds of asset sales and may use the portion so retained for general
corporate purposes (other than dividends, distributions or loans). Nothing
herein shall be construed to permit the Borrower to sell any of its assets other
than as expressly authorized by this Agreement.
(c) Prepayment at Election of Lenders Upon Change of Control.
Upon the occurrence of a Change of Control (which Change of Control the parties
agree shall not occur from the election of representatives of the Lenders to the
Borrower's Board of Directors on the Closing Date pursuant to this Agreement or
any additional stock purchased by Lenders or their Affiliates), each Lender
shall have the right to require the Borrower to prepay the Notes at a prepayment
price
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equal to 103% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of prepayment. Within five Domestic Business Days following
any Change of Control, the Borrower will mail a notice thereof to each Lender,
with a copy to the Agent (a "Change of Control Notice"). Any Lender, by written
notice to the Borrower within 30 days following receipt of such Change of
Control Notice, may elect prepayment of its Notes and the Borrower shall prepay
such Notes at the price specified above no later than 30 days thereafter.
(d) Prepayment Upon Rights Offering. Upon the consummation of
the issuance and sale of Capital Stock in connection with a Rights Offering, the
Borrower shall prepay the entire principal amount of the Revolving Participated
Loans, plus accrued and unpaid interest, if any, thereon to the date of
prepayment.
SECTION 2.09. Intentionally Deleted.
SECTION 2.10. Intentionally Deleted.
SECTION 2.11. General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of, and
interest on, the Syndicated Term Loans and of fees hereunder not later than
11:00 A.M. (Eastern Standard Time) on the date when due, in Federal or other
funds immediately available, to the Agent at its address referred to in Section
9.01. The Borrower shall make each payment of principal of, and interest on, the
Revolving Syndicated Term Loan not later than 11:00 A.M. (Eastern Standard Time)
on the date when due, in Federal or other funds immediately available, to the
Agent.
(b) Whenever any payment of principal of, or interest on, the
Loans or of fees hereunder shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day.
SECTION 2.12. Computation of Interest and Fees. Interest on Loans shall
be computed on the basis of a year of 360 days and a month of 30 days. All fees
payable hereunder shall be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed (including the first day but excluding the
last day).
SECTION 2.13. Collateral.
(a) In addition to the collateral security granted by the
Borrower and the Guarantors under the Security Agreements the Borrower shall
(and shall cause each of the Guarantors to), at the sole cost and expense of the
Borrower (subject to the limitations described in subsection 2.13(c) below),
grant to the Agent and do all things requested to maintain, for the ratable
benefit of the Lenders to secure all obligations of the Borrower hereunder
(including, without limitation, the Syndicated Term Loan Notes and the Revolving
Participated Loan Note), a continuing, blanket and general lien upon and
security interest and title in and to all real property, equipment, inventory,
general intangibles, personal property and assets of the Borrower and the
Guarantors, or other assets as the Required Lenders shall designate in their
reasonable discretion (the "Post-Closing Collateral") and shall deliver (or
cause to be delivered) to the Agent such duly executed security agreements,
security deeds, mortgages, deeds of trust, estoppels, subordination agreements,
pledge agreements, stock powers, Uniform Commercial Code financing statements,
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title certificates, affidavits, and other documents, as are reasonably necessary
or desirable in the judgment of the Required Lenders to perfect first priority
liens (as such first priority may be available) against the Post-Closing
Collateral (collectively, the "Post-Closing Collateral Documents").
(b) The Borrower shall (and shall cause each of the Guarantors
to), after an Event of Default, at the sole cost and expense of the Borrower,
deliver (or cause to be delivered) to the Agent such appraisals, surveys, title
searches, title policies, environmental audits and other documents, all of which
shall be satisfactory to the Required Lenders in all respects, as are deemed
reasonably necessary or desirable by the Required Lenders in connection with the
Collateral.
(c) The Borrower agrees to pay up to $200,000 of costs and
expenses incurred by the Agent and the Lenders in connection with the actions
contemplated by this Section 2.13, including, without limitation, all filing
fees, lien search fees, intangible taxes (whether incurred before or after
payment in full of the Loans), documentary stamp taxes (whether incurred before
or after payment in full of the Loans), surveys, environmental surveys, and
title reports. All such documentation shall be reasonable and customary and in
form and substance satisfactory to the Agent and the Lenders in their
discretion. The Borrower hereby irrevocably appoints the Agent as the Borrower's
attorney-in-fact to (i) deliver and record in the appropriate filing office any
instrument contemplated or required hereby (including, without limitation, the
relevant security deeds, mortgages, deeds of trust, and Uniform Commercial Code
financing statements) and to pay the related recording expenses and (ii) from
time to time in the Agent's discretion, to take any other action which the Agent
may deem reasonably necessary or advisable to accomplish the purposes of this
Section 2.13 with respect to the Collateral.
SECTION 2.14. Waiver and Release. THROUGH THE DATE OF THIS AGREEMENT,
THE BORROWER AND EACH GUARANTOR HEREBY KNOWINGLY AND VOLUNTARILY, FOREVER
RELEASES, ACQUITS AND DISCHARGES THE AGENT AND THE LENDERS (BUT NOT ANY OF THE
PRIOR LENDERS), THEIR DIRECTORS, OFFICERS, PARTNERS, TRUSTEES, BENEFICIARIES,
EMPLOYEES, AGENTS, CONTROLLING PERSONS AND SHAREHOLDERS (COLLECTIVELY, THE
"RELEASED PARTIES") (A) FROM AND OF ANY AND ALL CLAIMS ARISING FROM ACTS OR
OMISSIONS OF ANY OF THE RELEASED PARTIES OR THE PRIOR LENDERS, THEIR DIRECTORS,
OFFICERS, PARTNERS, TRUSTEES, BENEFICIARIES, EMPLOYEES, AGENTS, CONTROLLING
PERSONS AND SHAREHOLDERS (COLLECTIVELY, THE "PRIOR LENDER PARTIES") THAT MAY
HAVE OCCURRED PRIOR TO THE CLOSING DATE THAT ANY OF THE RELEASED PARTIES OR ANY
OF THE PRIOR LENDER PARTIES (1) IS IN ANY WAY RESPONSIBLE FOR THE PAST, CURRENT
OR FUTURE CONDITION OR DETERIORATION OF THE BUSINESS OPERATIONS AND/OR FINANCIAL
CONDITION OF THE BORROWER, OR (2) BREACHED ANY AGREEMENT TO LOAN MONEY OR MAKE
OTHER FINANCIAL ACCOMMODATIONS AVAILABLE TO THE BORROWER OR TO FUND ANY
OPERATIONS OF THE BORROWER AT ANY TIME, AND (B) FROM AND OF ANY AND ALL OTHER
CLAIMS, DAMAGES, LOSSES, ACTIONS, COUNTERCLAIMS, SUITS, JUDGMENTS, OBLIGATIONS,
LIABILITIES, DEFENSES, AFFIRMATIVE DEFENSES, SETOFFS, AND DEMANDS OF ANY KIND OR
NATURE WHATSOEVER, IN LAW OR IN EQUITY, WHETHER PRESENTLY KNOWN OR UNKNOWN,
WHICH THE BORROWER OR ANY GUARANTOR MAY HAVE HAD, NOW HAVE, OR WHICH IT CAN,
SHALL OR MAY HAVE FOR, UPON, OR BY REASON OF
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ANY MATTER, COURSE OR THING WHATSOEVER RELATING TO, ARISING OUT OF, BASED UPON,
OR IN ANY MANNER CONNECTED WITH, ANY TRANSACTION, EVENT, CIRCUMSTANCE, ACTION,
FAILURE TO ACT, OR OCCURRENCE OF ANY SORT OR TYPE, WHETHER KNOWN OR UNKNOWN,
WHICH OCCURRED, EXISTED, WAS TAKEN, PERMITTED, BEGUN, OR OTHERWISE RELATED OR
CONNECTED TO OR WITH ANY OR ALL OF THE LOANS, THIS AGREEMENT, THE AMENDED CREDIT
AGREEMENT, ANY OR ALL OF THE LOAN DOCUMENTS, AND/OR ANY DIRECT OR INDIRECT
ACTION OR OMISSION OF ANY OF THE RELEASED PARTIES OR THE PRIOR LENDER PARTIES
ARISING FROM ACTS OR OMISSIONS OF THE RELEASED PARTIES OR THE PRIOR LENDER
PARTIES THAT MAY HAVE OCCURRED PRIOR TO THE CLOSING DATE. THE BORROWER FURTHER
AGREES THAT FROM AND AFTER THE DATE HEREOF, IT WILL NOT ASSERT TO ANY PERSON OR
ENTITY THAT ANY DETERIORATION OF THE BUSINESS OPERATIONS OR FINANCIAL CONDITION
OF THE BORROWER WAS CAUSED BY ANY BREACH OR WRONGFUL ACT OF ANY OF THE RELEASED
PARTIES OR THE PRIOR LENDER PARTIES OCCURRING PRIOR TO THE DATE HEREOF.
It is the intention of the parties that the foregoing shall be
effective as a full and final accord and satisfactory release of each and every
matter specifically or generally referred to above. In furtherance of this
intention, the parties acknowledge that each is familiar with Section 1542 of
the California Civil Code, which provides 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.
The parties hereto waive and relinquish any right and benefits which they each
may have under said Section 1542. The parties acknowledge that they may
hereafter discover facts in addition to or different from those which they now
know or believe to be true with respect to the Action or the subject matter of
this Agreement, but it is their intention to fully, finally and forever settle
and release any and all matters, disputes and differences, known or unknown,
suspected or unsuspected, which do now exist, may exist or heretofore have
existed between them.
ARTICLE III
CONDITIONS TO CLOSING
SECTION 3.01. Conditions to Closing. The obligation of each Lender to
make a Syndicated Term Loan or of CKE to make a Revolving Participated Loan on
the occasion of the first Borrowing, and to restructure the obligations
hereunder, is subject to the satisfaction of the conditions set forth below and
receipt by the Agent of the documents, instruments, agreements and certificates
set forth below (in sufficient number of counterparts (except as to the Notes
and the Warrants) for delivery of a counterpart to each Lender and retention of
one counterpart by the Agent):
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(a) from each of the parties hereto of either (i) a duly
executed counterpart of this Agreement signed by such party or (ii) a facsimile
transmission stating that such party has duly executed a counterpart of this
Agreement and sent such counterpart to the Agent;
(b) duly executed originals of the Syndicated Term Loan
Notes and the Participated Loan;
(c) duly executed originals of the Warrants;
(d) duly executed Registration Rights Agreement;
(e) duly executed Amended and Restated Security
Agreement;
(f) duly executed Guaranty by each of the Guarantors;
(g) duly executed Guarantor Security Agreements;
(h) a certificate (the "Closing Certificate")
substantially in the form of Exhibit 3.01(h)), dated as of the Closing Date,
signed by a principal financial officer of the Borrower, to the effect that (i)
no Default has occurred and is continuing, and (ii) the representations and
warranties of the Borrower contained in Article IV are true on and as of the
Closing Date;
(i) an opinion letter (together with any opinions of
local counsel relied on therein) of ▇▇▇▇▇▇▇▇, Loop & ▇▇▇▇▇▇▇▇, counsel for the
Borrower, dated as of the Closing Date, substantially in the form of Exhibit
3.01(i) and covering such additional matters relating to the transactions
contemplated hereby as the Agent or any Lender may reasonably request;
(j) all documents which the Agent or any Lender may
reasonably request relating to the existence of the Borrower and the Guarantors,
the corporate authority for and the validity of this Agreement, the Notes, the
Warrant Agreements and the other Loan Documents and any other matters relevant
hereto, or thereto, all in form and substance reasonably satisfactory to the
Agent, including, without limitation, a certificate of incumbency of each of the
Borrower and the Guarantors, signed by the Secretary or an Assistant Secretary
of the Borrower and the Guarantors, certifying as to the names, true signatures
and incumbency of the officer or officers, respectively, of the Borrower and the
Guarantors authorized to execute and deliver the Loan Documents, and certified
copies of the following items, for the Borrower and each of the Guarantors,
respectively: (i) Certificate/Articles of Incorporation, (ii) Bylaws, (iii) a
certificate of the Secretary of State of the state of incorporation of each as
to the good standing of each as a corporation in that state, and (iv) the action
taken by the Board of Directors authorizing the execution, delivery and
performance of this Agreement, the Notes, the Warrants and the other Loan
Documents to which the Borrower or any of the Guarantors is a party;
(k) a list in the form of Exhibit 3.01(k) hereto
certified by the principal financial officer of the Borrower, of all insurance
required by Section 5.17 showing the insurer, the face amount and the nature of
coverage, and the Agent as a loss payee (or beneficiary, as the case may be)
under each policy then in force;
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(l) all mortgages and security interests securing the
Borrower's obligations hereunder (and the Guarantors' obligations under the
Guaranties) shall be duly perfected and validly recorded; and
(m) there shall not have occurred any material adverse change
in the condition (financial or otherwise), operation, properties, assets,
liabilities, earnings or prospects of the Borrower or the Guarantors since
September 9, 1996.
SECTION 3.02. Conditions to All Borrowings. The obligation of CKE to
make a Revolving Participated Loan on the occasion of each Borrowing is subject
to the satisfaction of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing;
(b) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of the
Borrower contained in Article IV of this Agreement shall be true on and as of
the date of such Borrowing; and
(d) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Revolving Participated Loans will
not exceed the amount of the Commitment.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the truth and accuracy of the
facts specified in paragraphs (b), (c) and (d) of this Section; provided that
such Borrowing shall not be deemed to be such a representation and warranty to
the effect set forth in Section 4.04(b) as to any event, act or condition having
a Material Adverse Effect which has theretofore been disclosed in writing by the
Borrower to the Lenders if the aggregate outstanding principal amount of the
Loans immediately after such Borrowing will not exceed the aggregate outstanding
principal amount thereof immediately before such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, is duly qualified to transact business
in every jurisdiction where, by the nature of its business, such qualification
is necessary, except where the failure to qualify could not reasonably be
expected to have or cause a Material Adverse Effect, and has all corporate
powers and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except where the failure to
have any license, authorization, consent or approval could not reasonably be
expected to have or cause a Material Adverse Effect.
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SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement, the Notes, the Warrant Agreements and the other Loan Documents
delivered as of the Closing Date (i) are within the Borrower's corporate powers,
(ii) have been duly authorized by all necessary corporate action, (iii) require
no action by or in respect of or filing with, any governmental body, agency or
official, (iv) do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the certificate of incorporation or
by-laws of the Borrower or of any agreement, judgment, injunction, order, decree
or other material instrument binding upon the Borrower or any Guarantor, and (v)
do not result in the creation or imposition of any Lien on any asset of the
Borrower or any Guarantor other than Liens created or imposed pursuant to the
Loan Documents.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower enforceable in accordance with its terms, the
Notes, the Warrant Agreements and the other Loan Documents, when executed and
delivered in accordance with this Agreement, will constitute valid and binding
obligations of the Borrower enforceable in accordance with their respective
terms, provided that the enforceability hereof and thereof is subject in each
case to general principles of equity and to bankruptcy, insolvency and similar
laws affecting the enforcement of creditors' rights generally, and to standards
of good faith and commercial reasonableness.
SECTION 4.04. Financial Information. (a) The consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of January 1, 1996, and the
related consolidated statements of income, shareholders' equity and cash flows
for the Fiscal Year then ended, reported on by KPMG Peat Marwick, and the
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries of
September 9, 1996, and the related consolidated statements of operations and
cash flows for the Fiscal Quarter then ended, copies of which have been
delivered to each of the Lenders, fairly present, in conformity with GAAP, the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such dates and their consolidated results of operations and
cash flows for such periods stated.
(b) Since September 9, 1996 and excepted as disclosed in
Schedule 4.04 attached hereto, there has been no event, act, condition or
occurrence having a Material Adverse Effect.
SECTION 4.05. No Litigation. Except as disclosed as Schedule 4.05,
there is no action, suit or proceeding pending, or to the knowledge of the
Borrower threatened, against or affecting the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official which could reasonably be expected to have or cause a Material Adverse
Effect.
SECTION 4.06. Compliance with ERISA.
(a) The Borrower and each member of the Controlled Group have
fulfilled their obligations in all material respects under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respects with the presently applicable provisions of ERISA and
the Code, and have not incurred any liability to the PBGC or a Plan under Title
IV of ERISA.
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(b) Neither the Borrower nor any member of the Controlled
Group is or ever been obligated to contribute to any Multiemployer Plan.
SECTION 4.07. Compliance with Laws; Payment of Taxes. The Borrower and
its Consolidated Subsidiaries are in compliance with all applicable laws,
regulations and similar requirements of governmental authorities, except where
such compliance is being contested in good faith through appropriate proceedings
and except where the failure to comply could not reasonably be expected to have
or cause a Material Adverse Effect. There have been filed on behalf of the
Borrower and its Consolidated Subsidiaries all Federal and state income, excise,
property and other tax returns which are required to be filed by them and all
taxes due pursuant to such returns or pursuant to any assessment received by or
on behalf of the Borrower or any Consolidated Subsidiary have been paid. There
have been filed on behalf of the Borrower and its Consolidated Subsidiaries all
local income, excise, property and other tax returns that are required to be
filed by them and all taxes due pursuant to the returns or any assessment
received by Borrower or any Consolidated Subsidiary have been paid, except to
the extent that unfiled tax returns and unpaid taxes could not reasonably be
expected to have or cause a Material Adverse Effect. The charges, accruals and
reserves on the books of the Borrower and its Consolidated Subsidiaries in
respect of taxes or other governmental charges are, in the opinion of the
Borrower, adequate, except for any changes in taxes which are imposed
retroactively.
SECTION 4.08. Consolidated Subsidiaries. Each of the Borrower's
Consolidated Subsidiaries is a corporation or other business entity duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except where the failure to have any license,
authorization, consent, or approval could not reasonably be expected to have or
cause a Material Adverse Effect. The Borrower has no Subsidiaries except for
those Subsidiaries listed on Schedule 4.08, which accurately sets forth each
such Subsidiary's complete name and jurisdiction of incorporation.
SECTION 4.09. Investment Company Act. Neither the Borrower nor any of
its Consolidated Subsidiaries is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
SECTION 4.10. Public Utility Holding Company Act. Neither the Borrower
nor any of its Consolidated Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Ownership of Property; Liens. Each of the Borrower and
its Consolidated Subsidiaries has title to its properties sufficient for the
conduct of its business, and none of such property is subject to any Lien except
as permitted in Section 5.11.
SECTION 4.12. No Default. Except as disclosed in the Forms 10K, 10Q and
8K of Borrower filed with the Securities and Exchange Commission, neither the
Borrower nor any of its Consolidated Subsidiaries is in default under or with
respect to any agreement, instrument or undertaking to which it is a party or by
which it or any of its property is bound which could have
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or cause a Material Adverse Effect and no Default or Event of Default has
occurred and is continuing.
SECTION 4.13. Full Disclosure. All written information heretofore
furnished by the Borrower to the Agent or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower to the Agent or any
Lender will be, true, accurate and complete in every material respect or based
on reasonable estimates on the date as of which such information is stated or
certified. The Borrower has disclosed to the Lenders in writing any and all
facts which could have or cause a Material Adverse Effect.
SECTION 4.14. Environmental Matters.
(a) Neither the Borrower nor any Consolidated Subsidiary is
subject to any Environmental Liability which could have or cause a Material
Adverse Effect as the Environmental Liability becomes due and neither the
Borrower nor any Consolidated Subsidiary has been designated as a potentially
responsible party under CERCLA or under any state statute similar to CERCLA.
None of the Properties has been identified on any current or proposed (i)
National Priorities List under 40 C.F.R. Section 300, (ii) CERCLIS list or (iii)
any list arising from a state statute similar to CERCLA.
(b) No Hazardous Materials are being used, produced,
manufactured, processed, treated, recycled, generated, stored, disposed of,
managed or otherwise handled at, or shipped or transported to or from the
Properties except in material compliance with Environmental Requirements. No
Hazardous Materials are present at, on, in or under the Properties, or, to the
best of the knowledge of the Borrower, at or from any adjacent site or facility
(except for Hazardous Materials, such as cleaning solvents, pesticides and other
materials used, produced, manufactured, processed, treated, recycled, generated,
stored, disposed of, managed, or otherwise handled in minimal amounts in the
ordinary course of business in compliance with all applicable Environmental
Requirements) in such quantities that the cost to monitor, investigate, and/or
remediate the Hazardous Materials in compliance with Environmental Requirements
could not reasonably be expected to have or cause a Material Adverse Effect.
(c) The Borrower, and each of its Consolidated Subsidiaries,
is in compliance with all Environmental Requirements in connection with the
operation of the Properties and the Borrower's, and each of its Consolidated
Subsidiary's respective businesses, except where the potential Environmental
Liability could not reasonably be expected to have or cause a Material Adverse
Effect.
SECTION 4.15. Capital Stock. All Capital Stock, debentures, bonds,
notes and all other securities of the Borrower and its Consolidated Subsidiaries
presently issued and outstanding are validly and properly issued in accordance
with all applicable laws, including but not limited to, the "Blue Sky" laws of
all applicable states and the federal securities laws. The issued shares of
Capital Stock of the Borrower's Wholly Owned Subsidiaries are owned by the
Borrower free and clear of any Lien or adverse claim. At least a majority of the
issued shares of capital stock of each of the Borrower's Subsidiaries other than
Wholly Owned Subsidiaries is owned by the Borrower free and clear of any Lien or
adverse claim.
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SECTION 4.16. Margin Stock. Neither the Borrower nor any of its
Consolidated Subsidiaries is engaged principally, or as one of its important
activities, in the business of purchasing or carrying any Margin Stock, and no
part of the proceeds of any Loan will be used to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or carrying
any Margin Stock, or be used for any purpose which violates, or which is
inconsistent with, the provisions of Regulation X.
SECTION 4.17. Insolvency. After giving effect to the execution and
delivery of this Agreement, the Notes and the other Loan Documents, the Borrower
will not be "insolvent," within the meaning of such term as defined in Section
101 of Title 11 of the United States Code or Section 2 of the Uniform Fraudulent
Transfer Act, or any other applicable state law pertaining to fraudulent
transfers, as amended from time to time, or be unable to pay its debts generally
as such debts become due, or have an unreasonably small capital to engage in any
business or transaction, whether current or contemplated.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any amount payable
hereunder or under any Note remains unpaid:
SECTION 5.01. Information.
(a) The Borrower will deliver to each of the Lenders:
(i) as soon as available and in any event within
120 days after the end of each Fiscal Year, a
consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of the end of
such Fiscal Year and the related consolidated
statements of operations, stockholders' equity
and cash flows for such Fiscal Year, setting
forth in each case in comparative form the
figures for the previous fiscal year, all
certified by KPMG Peat Marwick or other
independent public accountants of nationally
recognized standing, with such certification to
be free of exceptions and qualifications not
acceptable to the Required Lenders;
(ii) as soon as available and in any event within 45
days after the end of each of the first 3 Fiscal
Quarters of each Fiscal Year, a consolidated
balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such
Fiscal Quarter and the related statements of
operations and statements of cash flows for such
Fiscal Quarter and for the portion of the Fiscal
Year ended at the end of such Fiscal Quarter,
setting forth in each case in comparative form
the figures for the corresponding Fiscal Quarter
and the corresponding portion of the previous
Fiscal Year, all certified (subject to normal
year-end adjustments) as to fairness of
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presentation, GAAP and consistency by the
chief financial officer or the chief
accounting officer of the Borrower, except
to the extent that interim financial
statements on Form 10-Q do not require
footnotes and other disclosures that would
otherwise be required by GAAP;
(iii) simultaneously with the delivery of each set
of financial statements referred to in
paragraphs (i) and (ii) above and at the end
of each Reporting Period, a certificate,
substantially in the form of Exhibit
5.01(a)(iii) (a "Compliance Certificate"),
of the chief financial officer or the chief
accounting officer of the Borrower (i)
setting forth in reasonable detail the
calculations required to establish whether
the Borrower was in compliance with the
requirements of Sections 5.03 through 5.11,
inclusive, and 5.14 on the date of such
financial statements and (ii) stating
whether any Default exists on the date of
such certificate and, if any Default then
exists, setting forth the details thereof
and the action which the Borrower is taking
or proposes to take with respect thereto;
(iv) simultaneously with the delivery of each set
of annual financial statements referred to
in paragraph (a)(i) above, a statement of
the firm of independent public accountants
which reported on such statements to the
effect that nothing has come to their
attention to cause them to believe that any
Default existed on the date of such
financial statements, or, if any Default
then exists, setting forth the details
thereof, and a copy of the audit report
and/or management letter provided by such
accountants to the Borrower;
(v) within 5 Domestic Business Days after the
Borrower has knowledge of the occurrence of
any Default, a certificate of the chief
financial officer or the chief accounting
officer of the Borrower setting forth the
details thereof and the action which the
Borrower is taking or proposes to take with
respect thereto;
(vi) promptly upon the mailing thereof to the
stockholders of the Borrower generally,
copies of all financial statements, reports
and proxy statements so mailed; and
(vii) promptly upon the filing thereof, copies of
all registration statements (other than the
exhibits thereto and any registration
statements on Form S-8 or its equivalent)
and annual, quarterly or monthly reports
which the Borrower shall have filed with the
Securities and Exchange Commission.
(b) Upon the request of the Agent or any Lender, the Borrower
will deliver to of the Lenders:
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(i) if and when any member of the Controlled
Group (A) gives or is required to give
notice to the PBGC of any "reportable event"
(as defined in Section 4043 of ERISA) with
respect to any Plan which might constitute
grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is
required to give notice of any such
reportable event, a copy of the notice of
such reportable event given or required to
be given to the PBGC; (B) receives notice of
complete or partial withdrawal liability
under Title IV of ERISA, a copy of such
notice; or (C) receives notice from the PBGC
under Title IV of ERISA of an intent to
terminate or appoint a trustee to administer
any Plan, a copy of such notice; and
(ii) as soon as available and in any event within
25 days after the end of each of the first
12 Reporting Periods of each Fiscal Year, a
consolidated statement of income and balance
sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such Reporting
Period and for the portion of the Fiscal
Year ended at the end of such Reporting
Period, setting forth in each case in
comparative form the figures for the
corresponding Reporting Period and the
corresponding portion of the previous Fiscal
Year, all certified (subject to normal
year-end adjustments) as to fairness of
presentation, GAAP and consistency by the
chief financial officer or the chief
accounting officer of the Borrower, except
to the extent that interim financial
statements do not require footnotes and that
such financial statements are subject to
normal year-end adjustments;
(iii) promptly upon receipt or obtaining knowledge
thereof, any and all bona fide offers or
expressions of interest (whether verbal or
written, solicited or unsolicited) to merge
with or to acquire all or any part of the
assets or capital stock of the Borrower;
(iv) within 25 days after the end of each
Reporting Period, a variance report which
reconciles the performance of the Borrower
for the immediately preceding Reporting
Period to the projected budget of the
Borrower for such period;
(v) within 25 days after the end of each
Reporting Period, an accounts payable
schedule for the Borrower;
(vi) within 25 days after the end of each fiscal
quarter of the Borrower, a written schedule
of all fee simple and leased properties of
the Borrower as of such date;
(vii) within 25 days after the end of each
Reporting Period, a written schedule of the
revenues, profit contributions and other
operating
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and financial information with respect to
each Checkers Restaurant, on an individual
and regional basis;
(viii) within 5 days after the end of each calendar
week, written weekly sales reports with
respect to each Checkers Restaurant, on an
individual and regional basis;
(ix) within 25 days after the end of each
Reporting Period, a written summary of the
Borrower's advertising and promotional
activities, including a summary of amounts
expended in connection therewith and a
cost/benefit analysis of such expenditures;
and
(x) from time to time such additional
information regarding the financial position
or business of the Borrower and its
Subsidiaries as may be reasonably requested.
SECTION 5.02. Inspection of Property, Books and Records. The Borrower
will (i) keep, and cause each Consolidated Subsidiary to keep, proper books of
record and account in which full, true and correct entries in conformity with
GAAP shall be made of all dealings and transactions in relation to its business
and activities; and (ii) permit, and cause each Wholly Owned Subsidiary to
permit, representatives of any Lender at the Borrower's expense to visit and
inspect any of their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants. The Borrower agrees to cooperate and assist in
such visits and inspections, in each case at such reasonable times and as often
as may reasonably be desired.
SECTION 5.03. Minimum Consolidated EBITDA. For each three consecutive
Reporting Period cycle ending with the Reporting Period listed below,
Consolidated EBITDA shall not be less than the amounts listed below:
Reporting Period Amount ($)
---------------- ----------
Fiscal Year 1996: N/A
Fiscal Year 1997: Reporting Period 1 625,000
Reporting Period 2 1,000,000
Reporting Period 3 1,250,000
Reporting Period 4 1,250,000
Reporting Periods 5-6 1,250,000
Reporting Periods 7-9 1,300,000
Reporting Periods 10-13 2,000,000
Fiscal Year 1998: Reporting Periods 1-13 2,750,000
Fiscal Year 1999: Reporting Periods 1 through 2,750,000
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the Reporting Period in which
the Termination Date occurs.
SECTION 5.04. Capital Expenditures. Capital Expenditures shall not
exceed (a) $1,500,000 for the period from September 16, 1996 through the end of
Fiscal Year 1996, and (b) $4,000,000 for any Fiscal Year thereafter (unless
otherwise approved by the Borrower's Board of Directors).
SECTION 5.05. Intentionally Deleted.
SECTION 5.06. Intentionally Deleted.
SECTION 5.07. Restricted Payments. The Borrower will not declare or
make any Restricted Payments other than Restricted Payments made for the purpose
of purchasing any redeemable warrants issued in a rights offering.
SECTION 5.08. Limitation on Indebtedness. Neither the Borrower nor any
of its Subsidiaries will create, incur, assume, or become, be or remain liable
in any manner in respect of, or allow to exist, any Indebtedness (which term
shall include: all indebtedness, obligations and liabilities which in accordance
with generally accepted accounting principles would be reflected on the balance
sheet of the Borrower as a liability; all indebtedness, obligations and
liabilities, whether or not assumed by Borrower or any Subsidiary, secured by
any mortgage, pledge or lien existing on property owned by the Borrower or any
Subsidiary; and all amounts representing rental payments which, in accordance
with generally accepted accounting principles, would be classified as a
liability on its balance sheet), except for:
(a) the Notes and any other obligations owed to the Lenders
under this or otherwise;
(b) Indebtedness of the Borrower existing as of the date of
this Agreement which is specifically disclosed in Schedule 5.08 attached hereto;
(c) Indebtedness representing trade debt, wages, employee
benefits, advance payments on sales contracts and other indebtedness incurred in
the ordinary course of business;
(d) Indebtedness existing as of the date of this Agreement
secured by liens by subsection (a) of Section 5.11;
(e) Liabilities for taxes, assessments, governmental charges,
liens or claims described in Section 5.16 hereof to the extent that payment
thereof is not required by such Section 5.16; and
(f) Indebtedness in respect of final judgments for the payment
of money not in excess of $10,000 in the aggregate at any time outstanding
(excluding sums covered by insurance) remaining unsatisfied and in effect for
any period of less than thirty (30) days or in respect of which a stay of
execution shall have been obtained pending an appeal or proceeding for review.
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SECTION 5.09. Loans or Advances. Neither the Borrower nor any Guarantor
shall make loans or advances to any Person except (without duplication): (a)
loans or advances to employees not exceeding $50,000 in the aggregate principal
amount outstanding at any time, in each case made in the ordinary course of
business and consistent with practices existing on the Closing Date; (b)
deposits required by government agencies or public utilities; (c) loans,
advances or monetary capital contributions from the Borrower or a Guarantor to
any Guarantor, or from any Guarantor to the Borrower; (d) loans in existence on
the Closing Date not exceeding a total aggregate principal amount of $53,957,868
outstanding as described on Schedule 5.09 attached hereto, which are evidenced
by legally enforceable promissory notes and subject to the Lenders' perfected
Liens and shall be delivered to the Agent; and (e) loans or advances consented
to by the Required Lenders in connection with asset sales under Section 5.14 or
loans or advances in connection with asset sales which do not require the
consent of the Required Lenders; provided that after giving effect to the making
of any loans, advances or deposits permitted by this Section, the Borrower will
be in full compliance with all the provisions of this Agreement.
SECTION 5.10. Investments. Neither the Borrower nor any Guarantor shall
make Investments in any Person except as permitted by Section 5.09 and except
Investments (i) in direct obligations of the United States Government maturing
within one year, (ii) in certificates of deposit issued by a commercial bank
whose long-term certificates of deposit are rated at least AA or the equivalent
thereof by Standard & Poor's Corporation and Aa or the equivalent thereof by
▇▇▇▇▇'▇ Investors Service, Inc., (iii) in commercial paper rated A1 or the
equivalent thereof by Standard & Poor's Corporation or P1 or the equivalent
thereof by ▇▇▇▇▇'▇ Investors Service, Inc. and in either case maturing within 6
months after the date of acquisition, (iv) in tender bonds the payment of the
principal of and interest on which is fully supported by a letter of credit
issued by a United States bank whose long-term certificates of deposit are rated
at least AA or the equivalent thereof by Standard & Poor's Corporation and Aa or
the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc, and (v) not in excess
of $150,000 individually.
SECTION 5.11. Negative Pledge. Neither the Borrower nor any Wholly
Owned Subsidiary will create, assume or suffer to exist any Lien on any asset
now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement and
identified on 5.11;
(b) any Lien existing on any asset of any corporation at the
time such corporation becomes a Consolidated Subsidiary and not created in
contemplation of such event;
(c) any Lien on any asset securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the cost of acquiring or
constructing such asset;
(d) any Lien on any asset of any corporation existing at the
time such corporation is merged with or into the Borrower or a Consolidated
Subsidiary and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Consolidated Subsidiary and not created in
contemplation of such acquisition;
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(f) Liens securing Indebtedness owing by any Subsidiary to
the Borrower;
(g) any Lien arising out of the refinancing, extension,
renewal or refunding of any Indebtedness secured by any Lien permitted by any of
the foregoing paragraphs of this Section , provided that (i) such Indebtedness
is not secured by any additional assets, and (ii) the amount of such
Indebtedness secured by any such Lien is not increased or, if increased, the
excess of the amount of the Indebtedness secured by any such lien over the
amount of the Indebtedness so refinanced extended, renewed, or refunded shall
be tendered to the Agent as a prepayment of the Syndicated Term Loans;
(h) Liens incidental to the conduct of its business or the
ownership of its assets which (i) do not secure Indebtedness and (ii) do not in
the aggregate materially detract from the value of its assets or materially
impair the use thereof in the operation of its business;
(i) any Lien on Margin Stock;
(j) Liens in favor of the Lenders created under the Loan
Documents; and
(k) Liens incurred by Borrower in the ordinary course of
business for items not past due and payable, including mechanics' and
materialmen's liens and deposits and charges for workers' compensation and liens
for taxes and assessments not past due and payable.
SECTION 5.12. Maintenance of Existence. The Borrower shall, and shall
cause each Subsidiary to, maintain its corporate existence and carry on its
business in substantially the same manner and in substantially the same fields
as such business is now carried on and maintained.
SECTION 5.13. Dissolution. Neither the Borrower nor any of its Wholly
Owned Subsidiaries shall suffer or permit dissolution or liquidation either in
whole or in part or redeem or retire any shares of its own stock or that of any
Wholly Owned Subsidiary, except through corporate reorganization to the extent
permitted by Section 5.14.
SECTION 5.14. Consolidations, Mergers and Sales of Assets. The Borrower
will not, nor will it permit any Wholly Owned Subsidiary to, consolidate or
merge with or into, or sell, lease or otherwise transfer all or any substantial
part of its assets to, any other Person, or discontinue or eliminate any
business line or segment; provided, however, that if no Default has occurred and
is continuing (i) the Borrower may merge with another Person if (A) such Person
was organized under the laws of the United States of America or one of its
states, (B) the Borrower is the corporation surviving such merger, and (C)
immediately after giving effect to such merger, no Default shall have occurred
and be continuing, (ii) Subsidiaries of the Borrower may merge with one another
or, if the Borrower is the surviving corporation, the Borrower, and (iii) the
foregoing limitation on the sale, lease or other transfer of assets and on the
discontinuation or elimination of a business line or segment shall not prohibit
the Borrower from selling or permitting the sale of assets owned by the Borrower
and its Subsidiaries for not less than 85% (or a lesser percentage as may be
consented to by the Required Lenders in writing) of their book value provided
that any such sale or sales, in any single transaction or series of related
transactions, in excess of $250,000 shall be consented to in writing in advance
by the Required Lenders (other than sales of used buildings to franchisees to be
operated by such franchisees as Checkers Restaurants).
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SECTION 5.15. Use of Proceeds. No portion of the proceeds of the Loans
will be used by the Borrower or any Subsidiary (i) in connection with, whether
directly or indirectly, any tender offer for, or other acquisition of, stock of
any corporation with a view towards obtaining control of such other corporation,
(ii) directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any Margin Stock, or (iii) for any purpose
in violation of any applicable law or regulation.
SECTION 5.16. Compliance with Laws; Payment of Taxes; SEC Filings. The
Borrower will, and will cause each of its Wholly Owned Subsidiaries and each
member of the Controlled Group to, comply with applicable laws (including but
not limited to ERISA), regulations and similar requirements of governmental
authorities (including but not limited to PBGC) in all material respects, except
where the necessity of such compliance is being contested in good faith through
appropriate proceedings. The Borrower will, and will cause each of its Wholly
Owned Subsidiaries to, pay promptly before past due all taxes, assessments,
governmental charges, claims for labor, supplies, rent and other obligations
which, if unpaid, might become or remain a lien against the property of the
Borrower or any Wholly Owned Subsidiary, except liabilities being contested in
good faith and against which, if requested by the Agent, the Borrower will set
up reserves in accordance with GAAP. The Borrower will timely file all reports
with the Securities and Exchange Commission (including Forms 10K, 10Q and 8K)
required to be filed under, and will otherwise comply in all respects with,
applicable securities laws.
SECTION 5.17. Insurance. The Borrower will maintain, and will cause
each of its Wholly Owned Subsidiaries to maintain (either in the name of the
Borrower or in such Subsidiary's own name), with financially sound and reputable
insurance companies, insurance on all its property in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies of established repute engaged in the same or similar business,
and as required by the other Loan Documents.
SECTION 5.18. Change in Fiscal Year. The Borrower will not change its
Fiscal Year without the consent of the Required Lenders.
SECTION 5.19. Maintenance of Property. The Borrower shall, and shall
cause each Wholly Owned Subsidiary to, maintain all of its properties and assets
in good condition, repair and working order, except for ordinary wear and tear
and loss by casualty.
SECTION 5.20. Environmental Notices. The Borrower shall furnish to the
Lenders and the Agent prompt written notice of all Environmental Liabilities,
pending, threatened or anticipated Environmental Proceedings, Environmental
Notices, Environmental Judgments and Orders, and Environmental Releases at, on,
in, under or in any way affecting the Properties or any adjacent property, and
all facts, events, or conditions that could lead to any of the foregoing.
SECTION 5.21. Environmental Matters. The Borrower and its Wholly Owned
Subsidiaries will not, and will not permit any Third Party to, use, produce,
manufacture, process, treat, recycle, generate, store, dispose of, manage at, or
otherwise handle, or ship or transport to or from the Properties any Hazardous
Materials except for Hazardous Materials such as cleaning solvents, pesticides
and other similar materials used, produced, manufactured, processed, treated,
recycled, generated, stored, disposed, managed, or otherwise handled in minimal
amounts in the ordinary course of business in compliance with all applicable
Environmental Requirements.
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SECTION 5.22. Environmental Release. The Borrower agrees that upon the
occurrence of an Environmental Release at or on any of the Properties it will
act immediately to investigate the extent of, and to take appropriate remedial
action to eliminate, such Environmental Release, whether or not ordered or
otherwise directed to do so by any Environmental Authority.
SECTION 5.23. Transactions with Affiliates. Excluding any transactions
otherwise permitted by this Agreement, neither the Borrower nor any of its
Wholly Owned Subsidiaries shall enter into, or be a party to (and the Borrower
shall use its best efforts to cause any other Subsidiary to not enter into or be
a party to), any transaction with any Affiliate of the Borrower or such
Subsidiary (which Affiliate is not the Borrower or a Subsidiary), except (i)
such transactions between and/or among the Borrower and its Wholly Owned
Subsidiaries which are permitted by law, consistent with its past practices, in
the ordinary course of business and pursuant to reasonable terms which are no
less favorable to Borrower or such Wholly Owned Subsidiary than would be
obtained in a comparable arm's length transaction with a Person which is not an
Affiliate or (ii) such transactions as are otherwise fully disclosed to the
Agent and the Lenders and consented to in writing in advance by the Required
Lenders.
SECTION 5.24. Certain Action in respect of Permitted Subordinated
Indebtedness. The Borrower shall not amend, modify or otherwise change in any
respect having an adverse effect on the Borrower's financial condition or
results of operations or otherwise disadvantageous in any respect to the Agent
or the Lenders any of the terms or conditions of any Permitted Subordinated
Indebtedness (including, without limitation, any terms or conditions relating to
the payment of principal, interest or fees in connection therewith), or any
other document evidencing, securing or relating to any Permitted Subordinated
Indebtedness; provided, however, that notwithstanding the foregoing the Borrower
shall be permitted to convert the Permitted Subordinated Indebtedness evidenced
by the ▇▇▇▇-Folks Notes, the RDG Note and the NTDT Note into common stock of the
Borrower on the terms and conditions specified in Borrower's Quarterly Report on
Form 10-Q for the period ended September 9, 1996.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following events
(each, a "Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of
any Loan or shall fail to pay any interest on any Loan within 5 Domestic
Business Days after such interest shall become due, or shall fail to pay any fee
or other amount payable hereunder within 5 Domestic Business Days after such fee
or other amount becomes due; or
(b) the Borrower shall fail to observe or perform any covenant
contained in: (i) Section 5.01 (except Section 5.01(a)(v)) and such failure
shall continue for 15 Business Days after the earlier to occur of (x) written
notice thereof has been given to the Borrower by the Agent at the request of any
Lender or (y) the Borrower obtains knowledge of any such failure; or (ii)
Sections 5.01(a)(v), 5.02(ii), 5.03 to 5.15, inclusive, Sections 5.18, 5.23 or
5.24; or
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(c) the Borrower shall fail to observe or perform any covenant
or agreement contained or incorporated by reference in this Agreement (other
than those covered by paragraph (a) or (b) above) and such failure shall not
have been cured within 30 days after the earlier to occur of (i) written notice
thereof has been given to the Borrower by the Agent at the request of any Lender
or (ii) the Borrower otherwise becomes aware of any such failure; or
(d) any representation, warranty, certification or statement
made by the Borrower in Article IV of this Agreement or in any certificate,
financial statement or other document delivered pursuant to this Agreement shall
prove to have been incorrect or misleading in any material respect when made (or
deemed made); or
(e) the Borrower (other than Indebtedness described in Section
5.08(c) and Indebtedness described in Section 5.08(e) which is not delinquent
and for which adequate reserves have been established by the Borrower) or any
Wholly Owned Subsidiary shall fail to make any payment in respect of
Indebtedness outstanding in an aggregate amount in excess of $500,000 (other
than the Notes) when due or within any applicable grace period; or
(f) any event or condition shall occur which results in the
acceleration of the maturity of Indebtedness of the Borrower or any Wholly Owned
Subsidiary outstanding in an aggregate amount in excess of $500,000 (including,
without limitation, any required mandatory prepayment or "put" of such
Indebtedness to the Borrower or any Wholly Owned Subsidiary) or enables (or,
with the giving of notice or lapse of time or both, would enable) the holders of
such Indebtedness or any Person acting on such holders' behalf to accelerate the
maturity thereof (including, without limitation, any required mandatory
prepayment or "put" of such Indebtedness to the Borrower or any Wholly Owned
Subsidiary); or
(g) the Borrower or any Wholly Owned Subsidiary shall commence
a voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any corporate action to authorize
any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Wholly Owned Subsidiary (with the exception of
Checkers of Chicago, Inc.) seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Wholly Owned Subsidiary
under the federal bankruptcy laws as now or hereafter in effect; or
(i) the Borrower or any member of the Controlled Group shall
fail to pay when due any material amount which it shall have become liable to
pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans shall be filed under Title IV of
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ERISA by the Borrower, any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans to enforce Section 515 or
4219(c)(5) of ERISA and such proceeding shall not have been dismissed within 30
days thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must be
terminated; or the Borrower or any other member of the Controlled Group shall
enter into, contribute or be obligated to contribute to, terminate or incur any
withdrawal liability with respect to, a Multiemployer Plan;
(j) one or more final, nonappealable judgments or orders for
the payment of money in an aggregate amount in excess of $1,000,000 shall be
rendered against the Borrower or any Wholly Owned Subsidiary and such judgment
or order shall continue unsatisfied and unstayed for a period of 30 days; or
(k) a federal tax lien for a claimed amount in excess of
$100,000 shall be filed against the Borrower under Section 6323 of the Code or a
lien of the PBGC shall be filed against the Borrower under Section 4068 of ERISA
and in either case such lien shall remain undischarged for a period of 25 days
after the date of filing; or
(l) except as a result of the election of representatives of
Lenders to Borrower's Board of Directors on the Closing Date pursuant to this
Agreement or any additional stock purchases by Lenders, as of any date a
majority of the Board of Directors of the Borrower consists of individuals who
were not either (A) directors of the Borrower as of the corresponding date of
the previous year, (B) selected or nominated to become directors by the Board of
Directors of the Borrower of which a majority consisted of individuals described
in clause (A), or (C) selected or nominated to become directors by the Board of
Directors of the Borrower of which a majority consisted of individuals described
in clause (A) and individuals described in clause (B); or
(m) (i) any default by the Borrower or any of the Guarantors
under any of the Loan Documents shall exist after the satisfaction of any
applicable grace, notice or cure periods, if any, (ii) any Loan Documents
(including, without limitation, the Guaranty) shall cease to be enforceable, or
(iii) any Guarantor or the Borrower shall assert that any Loan Document
(including, without limitation, the Guaranty) shall cease to be enforceable
then, and in every such event (an "Event of Default"), the Agent shall if
requested by the Required Lenders, by notice to the Borrower declare the Notes
(together with accrued interest thereon) to be, and the Notes shall thereupon
become, immediately due and payable without presentment, demand, protest or
additional notice of any kind, all of which are hereby waived by the Borrower
together with interest at the Default Rate accruing on the principal amount
thereof from and after the date of such Event of Default; provided that if any
Event of Default specified in paragraph (g) or (h) above occurs with respect to
the Borrower, without any notice to the Borrower or any other act by the Agent
or the Lenders, the Notes (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower together with
interest thereon at the Default Rate accruing on the principal amount thereof
from and after the date of such Event of Default. Notwithstanding the foregoing,
the Agent shall have available to it all other remedies at law or
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equity, and shall, subject to the provisions of Article VII, exercise any one or
all of them at the request of the Required Lenders.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment; Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated to
the Agent by the terms hereof and thereof, together with such other powers as
are reasonably incidental thereto. The Agent: (a) shall have no duties or
responsibilities except as expressly set forth in this Agreement and the other
Loan Documents, and shall not by reason of this Agreement or any other Loan
Document be a trustee for any Lender; (b) shall not be responsible to the
Lenders for any recitals, statements, representations or warranties contained in
this Agreement or any other Loan Document, or in any certificate or other
document referred to or provided for in, or received by any Lender under, this
Agreement or any other Loan Document, or for the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or any other document referred to or provided for herein or therein or
for any failure by the Borrower to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Loan Document except to the
extent requested by the Required Lenders, and then only on terms and conditions
reasonably satisfactory to the Agent, and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document or any other document or instrument referred to or provided for herein
or therein or in connection herewith or therewith, except for its own gross
negligence or wilful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care. The
provisions of this Article VII are solely for the benefit of the Agent and the
Lenders, and the Borrower shall not have any rights as a third party beneficiary
of any of the provisions hereof. In performing its functions and duties under
this Agreement and under the other Loan Documents, the Agent shall act solely as
agent of the Lenders and does not assume and shall not be deemed to have assumed
any obligation towards or relationship of agency or trust with or for the
Borrower. The duties of the Agent shall be ministerial and administrative in
nature, and the Agent shall not have by reason of this Agreement or any other
Loan Document a fiduciary relationship in respect of any Lender.
SECTION 7.02. Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telefax, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants or
other experts selected by the Agent. As to any matters not expressly provided
for by this Agreement or any other Loan Document, the Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions signed by the Required Lenders, and
such instructions of the Required Lenders in any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders.
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SECTION 7.03. Defaults. The Agent shall not be deemed to have knowledge
of the occurrence of a Default or an Event of Default unless the Agent has
received notice from a Lender or the Borrower specifying such Default or Event
of Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice of the occurrence of a Default or an Event
of Default, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall (subject to Section 9.06) take such action hereunder with respect to such
Default or Event of Default as shall be directed by the Required Lenders,
provided that, unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
SECTION 7.04. Rights of Agent as a Lender. CKE and its successors and
assigns, in its capacity as a Lender hereunder, shall have the same rights,
powers and obligations hereunder as any other Lender and may exercise the same
as though it were not acting as the Agent, and the term "Lender" or "Lenders"
shall, unless the context otherwise indicates, include CKE in its individual
capacity. The Agent may (without having to account therefor to any Lender)
accept deposits from, lend money to and generally engage in any kind of banking,
trust or other business with the Borrower (and any of its Affiliates) as if it
were not acting as the Agent, and the Agent may accept fees and other
consideration from the Borrower (in addition to any agency fees and arrangement
fees heretofore or hereinafter agreed to between the Borrower and the Agent) for
services in connection with this Agreement or any other Loan Document or
otherwise without having to account for the same to the Lenders.
SECTION 7.05. Indemnification. Each Lender severally agrees to
indemnify the Agent, to the extent the Agent shall not have been reimbursed by
the Borrower, in an amount equal to its Pro Rata Share, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and is continuing,
the normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or any such other documents; provided, however that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or wilful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
SECTION 7.06. Payee of Note Treated as Owner. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof shall have been
filed with the Agent and the provisions of Section 9.08(c) have been satisfied.
Any requests, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of that
Note or of any Note or Notes issued in exchange therefor or replacement thereof.
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SECTION 7.07. Nonreliance on Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the
other Loan Documents. The Agent shall not be required to keep itself informed as
to the performance or observance by the Borrower of this Agreement or any of the
other Loan Documents or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower or any other
Person. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Agent hereunder or
under the other Loan Documents, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower or any
other Person (or any of their Affiliates) which may come into the possession of
the Agent.
SECTION 7.08. Failure to Act. Except for action expressly required of
the Agent hereunder or under the other Loan Documents, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder and thereunder
unless it shall receive further assurances to its satisfaction by the Lenders of
their indemnification obligations under Section 7.05 against any and all
liability and expense which may be incurred by the Agent by reason of taking,
continuing to take, or failing to take any such action.
SECTION 7.09. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Lenders and the Borrower, and
the Agent may be removed at any time with or without cause by the Required
Lenders. If a Lender which is serving as Agent assigns all of its rights and
interests hereunder pursuant to Section 9.08 hereof, such assignment shall
operate as, and shall be deemed notice to the other Lenders and to the Borrower
of, the Agent's resignation. Upon any such resignation or removal, the Required
Lenders or their respective assignees shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders or their respective assignees and shall have accepted such
appointment within 30 days after the retiring Agent's notice of resignation, the
Required Lenders' removal of the retiring Agent, or the retiring Agent's notice
of assignment, then the Retiring Agent may, on behalf of the Lenders, appoint a
successor Agent. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. Notwithstanding the foregoing, if each Lender shall assign all of its
respective rights and interests hereunder pursuant to Section 9.08 hereof to the
assignee or assignees, then such assignee or assignees, or their respective
designee, shall automatically be deemed to be, and shall have all of the powers,
rights and privileges of, the Agent as of the effective date of such assignment
unless and until the Required Lenders remove such assignee or assignees as Agent
and appoint a Successor Agent as provided above. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder.
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ARTICLE VIII
[INTENTIONALLY DELETED]
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telecopier or
similar writing) and shall be given to such party at its address or telecopier
number set forth on the signature pages hereof or such other address or
telecopier number as such party may hereafter specify for the purpose by notice
to each other party. Each such notice, request or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in this Section and the appropriate confirmation is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid or (iii)
if given by any other means, when delivered at the address specified in this
Section ; provided that notices to the Agent under Article II or Article VIII
shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any
Lender in exercising any right, power or privilege hereunder or under any Note
or other Loan Document 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. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Documentary Taxes. The Borrower shall pay (i)
all reasonable out-of-pocket expenses of the Agent, including reasonable fees
and disbursements of special counsel for the Lenders and the Agent and of
special counsel for the Prior Lenders and the Prior Agent, in connection with
the preparation of this Agreement and the other Loan Documents (including all of
such fees and disbursements of special counsel for the Prior Lenders and the
Prior Agent which were incurred up to the Closing Date in connection with prior
amendments, extensions, waivers and other actions relating to the Amended Credit
Agreement and the other Loan Documents (as defined in the Amended Credit
Agreement)), any waiver or consent hereunder or thereunder or any amendment
hereof or thereof or any Default or alleged Default hereunder or thereunder and
(ii) if a Default occurs, all out-of-pocket expenses incurred by the Agent and
the Lenders, including fees and disbursements of counsel, in connection with
such Default and collection and other enforcement proceedings resulting
therefrom, including out-of-pocket expenses incurred in enforcing this Agreement
and the other Loan Documents. The Borrower shall pay all of the expenses
described in clause (i) of this Section on or within 90 days following
consummation of the Rights Offering, or on May 31, 1996, if the Rights Offering
is not consummated on or prior to such date. The Borrower shall indemnify the
Agent and each Lender against any transfer taxes, documentary taxes, assessments
or charges made by any Authority by reason of the execution and delivery of this
Agreement or the other Loan Documents.
SECTION 9.04. Indemnification. The Borrower shall indemnify the Agent,
the Lenders and each affiliate thereof and their respective directors, officers,
partners, trustees, beneficiaries, controlling persons, shareholders, employees
and agents from, and hold each of them
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harmless against, any and all losses, liabilities, claims or damages to which
any of them may become subject, insofar as such losses, liabilities, claims or
damages arise out of or result from (i) any actual or proposed use by the
Borrower of the proceeds of any extension of credit by any Lender hereunder, or
(ii) breach by the Borrower of this Agreement (including, without limitation,
representations, warranties and covenants relating to environmental matters) or
any other Loan Document, or (iii) any acts or omissions of any of the Prior
Lenders that may have occurred prior to the Closing Date or any and all claims
that any of the Prior Lenders (A) is in any way responsible for the past,
current or future condition or deterioration of the business operations and/or
financial condition of the Borrower, or (B) breached any agreement to loan money
or make other financial accommodations available to the Borrower or to fund any
operations of the Borrower at any time, and from and of any and all other
claims, damages, losses, actions, counterclaims, suits, judgments, obligations,
liabilities, defenses, affirmative defenses, setoffs, and demands of any kind or
nature whatsoever, in law or in equity, whether presently known or unknown,
which the Borrower or any Guarantor may have had, now have, or which it can,
shall or may have for, upon, or by reason of any matter, course or thing
whatsoever relating to, arising out of, based upon, or in any manner connected
with, any transaction, event, circumstance, action, failure to act, or
occurrence of any sort or type, whether known or unknown, which occurred,
existed, was taken, permitted, begun, or otherwise related or connected to or
with any or all of the Loans, this Agreement, the Amended Credit Agreement, any
or all of the Loan Documents, and/or any direct or indirect action or omission
of any of the Lender Parties arising from acts or omissions of the Lender
Parties that may have occurred prior to the closing date, or (iv) from any
investigation, litigation (including, without limitation, any actions taken by
the Agent or any of the Lenders to enforce this Agreement or any of the other
Loan Documents) or other proceeding (including, without limitation, any
threatened investigation or proceeding) relating to the foregoing, and the
Borrower shall reimburse the Agent and each Lender, and each affiliate thereof
and their respective directors, officers, employees and agents, upon demand for
any expenses (including, without limitation, legal fees) incurred in connection
with any such investigation or proceeding; but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of the gross
negligence or wilful misconduct of the Person to be indemnified.
SECTION 9.05. Sharing of Setoffs. Each Lender agrees that if it shall,
by exercising any right of setoff or counterclaim or otherwise, receive payment
of a proportion of the aggregate amount of principal and interest owing with
respect to the Notes held by it which is greater than the proportion received by
any other Lender in respect of the aggregate amount of all principal and
interest owing with respect to the Notes held by such other Lender, the Lender
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Lenders owing to such other
Lenders, and such other adjustments shall be made, as may be required so that
all such payments of principal and interest with respect to the Notes held by
the Lenders owing to such other Lenders shall be shared by the Lenders pro rata;
provided that (i) nothing in this Section shall impair the right of any Lender
to exercise any right of setoff or counterclaim it may have and to apply the
amount subject to such exercise to the payment of indebtedness of the Borrower
other than its indebtedness under the Notes, and (ii) if all or any portion of
such payment received by the purchasing Lender is thereafter recovered from such
purchasing Lender, such purchase from each other Lender shall be rescinded and
such other Lender shall repay to the purchasing Lender the purchase price of
such participation to the extent of such recovery together with an amount equal
to such other Lender's ratable share (according to the proportion of (x) the
amount of such other Lender's required repayment to (y) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the
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purchasing Lender in respect of the total amount so recovered. The Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any holder of a participation in a Note, whether or not acquired pursuant
to the foregoing arrangements, may exercise rights of setoff or counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.
SECTION 9.06. Amendments and Waivers.
(a) Any provision of this Agreement, the Notes or any other
Loan Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Lenders
(and, if the rights or duties of the Agent are affected thereby, by the Agent);
provided that, no such amendment or waiver shall, unless signed by all Lenders,
(i) change the Pro Rata Share of any Lender or subject any Lender to any
additional obligation, (ii) change the principal of or rate of interest on any
Syndicated Term Loan or any fees or other amounts payable hereunder, (iii)
change the date fixed for any payment of principal or interest on any Syndicated
Term Loan or the amount of principal or interest due on any date fixed for the
payment thereof, (iv) change the percentage of Lenders which shall be required
for the Lenders or any of them to take any action under this Section or any
other provision of this Agreement, (v) release or substitute all or a
substantial portion of the collateral (if any) held as security for the
Borrower's obligations hereunder, or (vi) release any Guarantee given to support
payment of the Borrower's obligations hereunder.
(b) The Borrower will not solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the provisions of
this Agreement unless each Lender shall be informed thereof by the Borrower and
shall be afforded an opportunity of considering the same and shall be supplied
by the Borrower with sufficient information to enable it to make an informed
decision with respect thereto. Executed or true and correct copies of any waiver
or consent effected pursuant to the provisions of this Agreement shall be
delivered by the Borrower to each Lender forthwith following the date on which
the same shall have been executed and delivered by the requisite percentage of
Lenders. The Borrower will not, directly or indirectly, pay or cause to be paid
any remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any Lender (in its capacity as such) as consideration for or as an
inducement to the entering into by such Lender of any waiver or amendment of any
of the terms and provisions of this Agreement unless such remuneration is
concurrently paid, on the same terms, ratably to all such Lenders.
SECTION 9.07. No Margin Stock Collateral. Each of the Lenders
represents to the Agent and each of the other Lenders that it in good faith is
not, directly or indirectly (by negative pledge or otherwise), relying upon any
Margin Stock as collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 9.08. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement.
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(b) Any Lender (or successor or assignee of any Lender) may at
any time sell to one or more Persons (each a "Participant") participating
interests in any Loan owing to such Lender, any Note held by such Lender, or any
other interest of such Lender hereunder. In the event of any such sale by a
Lender of a participating interest to a Participant, such Lender's obligations
under this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Note for all purposes under this Agreement, and the Borrower and the
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement. In no event
shall a Lender that sells a participation be obligated to the Participant to
take or refrain from taking any action hereunder except that such Lender may
agree that it will not (except as provided below), without the consent of the
Participant, agree to (i) the change of any date fixed for the payment of
principal of or interest on the related loan or loans, (ii) the change of the
amount of any principal, interest or fees due on any date fixed for the payment
thereof with respect to the related loan or loans, (iii) the change of the
principal of the related loan or loans, (iv) any change in the rate at which
either interest is payable thereon or (if the Participant is entitled to any
part thereof) fee is payable hereunder from the rate at which the Participant is
entitled to receive interest or fee (as the case may be) in respect of such
participation, (v) the release or substitution of all or any substantial part of
the collateral (if any) held as security for the Borrower's obligations
hereunder, or (vi) the release of any Guarantee given to support payment of the
Borrower's obligations hereunder. Each Lender selling a participating interest
in any Syndicated Term Loan, Note, or other interest under this Agreement shall
provide the Borrower and the Agent with written notification stating that such
sale has occurred and identifying the Participant and the interest purchased by
such Participant.
(c) Any Lender or assignee of any Lender (in either case, a
"Transferor") may at any time assign to one or more banks or other financial
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement, the Notes and the other Loan
Documents (but in no event shall such assignment of any portion of the principal
balance of any Note (other than the Revolving Participated Loan Note) be less
than either (i) the entire principal amount of such Note, or (ii) $2,000,000),
and such Assignee shall assume all rights and obligations of the Transferor
hereunder pursuant to an agreement executed by such Assignee, such Transferor
and the Agent in form and substance satisfactory to the Agent (an "Assignment
Agreement"). Upon (a) execution of the Assignment Agreement by such Transferor,
such Assignee and the Agent, (b) payment by such Assignee to such Transferor of
an amount equal to the purchase price agreed between such Transferor and such
Assignee, and (c) payment of a processing and recordation fee of $2,000 to the
Agent, such Assignee shall for all purposes be a Lender party to this Agreement
and shall have all the rights and obligations of a Lender under this Agreement
to the same extent as if it were an original party hereto with a Pro Rata Share
as set forth in the Assignment Agreement, and the Transferor shall be released
from its obligations hereunder to a corresponding extent, and no further consent
or action by the Borrower, the Lenders or the Agent shall be required. Upon the
consummation of any transfer to an Assignee pursuant to this paragraph (c), the
Transferor, the Agent and the Borrower shall make appropriate arrangements so
that, if required, a new Note (or Notes) is (are) issued to such Assignee.
(d) Subject to the provisions of Section 9.09, the Borrower
authorizes each Lender to disclose to any Participant, Assignee or other
transferee (each a "Transferee") and any prospective Transferee who has agreed
in writing to be bound by Section 9.09 any and all financial information in such
Lender's possession concerning the Borrower which has been delivered to such
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Lender by the Borrower pursuant to this Agreement or which has been delivered to
such Lender by the Borrower in connection with such Lender's credit evaluation
prior to entering into this Agreement.
(e) Intentionally Deleted.
(f) Anything in this Section 9.08 to the contrary
notwithstanding, any Lender may assign and pledge all or any portion of the
Syndicated Term Loans and/or obligations owing to it to any Federal Reserve Bank
or the United States Treasury as collateral security pursuant to Regulation A of
the Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank, provided that any payment in respect of
such assigned Syndicated Term Loans and/or obligations made by the Borrower to
the assigning and/or pledging Lender in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Syndicated Term Loans and/or obligations to the extent of such payment.
No such assignment shall release the assigning and/or pledging Lender from its
obligations hereunder.
SECTION 9.09. Confidentiality. Each Lender agrees to keep any
information delivered or made available by the Borrower to it which is clearly
indicated to be confidential information, confidential from anyone other than
persons employed or retained by such Lender who are or are expected to become
engaged in evaluating, approving, structuring or administering the Borrower's
obligations hereunder provided, that, such individuals shall be subject to the
agreement contained in this Section 9.09; provided, however that nothing herein
shall prevent any Lender from disclosing such information (i) to any other
Lender, (ii) upon the order of any court or administrative agency after notice
to the Borrower, (iii) upon the request or demand of any regulatory agency or
authority having jurisdiction over such Lender after notice to the Borrower,
(iv) which has been publicly disclosed by Borrower, (v) to the extent reasonably
required in connection with any litigation to which the Agent, any Lender or
their respective Affiliates may be a party, (vi) to the extent reasonably
required in connection with the exercise of any remedy hereunder, (vii) to such
Lender's legal counsel and independent auditors and (viii) to any actual or
proposed Participant, Assignee or other Transferee of all or part of its rights
hereunder, provided that such proposed Participant, Assignee or other Transferee
agrees in writing to be bound by this Section .
SECTION 9.10. Intentionally Deleted.
SECTION 9.11. Obligations Several. The obligations of each Lender
hereunder are several, and no Lender shall be responsible for the obligations or
commitment of any other Lender hereunder. Nothing contained in this Agreement
and no action taken by the Lenders pursuant hereto shall be deemed to constitute
the Lenders to be a partnership, an association, a joint venture or any other
kind of entity. The amounts payable at any time hereunder to each Lender shall
be a separate and independent debt, and each Lender shall be entitled to protect
and enforce its rights arising out of this Agreement or any other Loan Document
and it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.
SECTION 9.12. California Law. This Agreement and each Note shall be
construed in accordance with and governed by the law of the State of California.
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SECTION 9.13. Severability. In case any one or more of the provisions
contained in this Agreement, the Notes or any of the other Loan Documents should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby and shall be enforced to the
greatest extent permitted by law.
SECTION 9.14. Interest. In no event shall the amount of interest due or
payable hereunder or under the Notes exceed the maximum rate of interest allowed
by applicable law, and in the event any such payment is inadvertently made to
any Lender by the Borrower or inadvertently received by any Lender, then such
excess sum shall be credited as a payment of principal, unless the Borrower
shall notify such Lender in writing that it elects to have such excess sum
returned forthwith. It is the express intent hereof that the Borrower not pay
and the Lenders not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
applicable law.
SECTION 9.15. Interpretation. No provision of this Agreement or any of
the other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
SECTION 9.16. Waiver of Jury Trial; Consent to Jurisdiction. The
Borrower and each of the Lenders and the Agent irrevocably (a) waives any and
all right to trial by jury in any legal proceeding arising out of this
Agreement, any of the other Loan Documents, or any of the transactions
contemplated hereby or thereby, (b) submits to the nonexclusive personal
jurisdiction in the State of California, the courts thereof and the United
States District Courts sitting therein, for the enforcement of this Agreement,
the Notes and the other Loan Documents, (c) waives any and all personal rights
under the law of any jurisdiction to object on any basis (including, without
limitation, inconvenience of forum) to jurisdiction or venue within the State of
California for the purpose of litigation to enforce this Agreement, the Notes or
the other Loan Documents, and (d) agrees that service of process may be made
upon it in the manner prescribed in Section 9.01 for the giving of notice to the
Borrower. Nothing herein contained, however, shall prevent the Agent from
bringing any action or exercising any rights against any security and against
the Borrower personally, and against any assets of the Borrower, within any
other state or jurisdiction.
SECTION 9.17. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
CHECKERS DRIVE-IN RESTAURANTS,
INC.
By:______________________________________________
Name:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
CKE RESTAURANTS, INC.,
as Agent and as a Lender
By:______________________________________________
Name:
Tile:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopier No.: (714)_______________
Telephone No.: (714)________________
KCC DELAWARE
By:______________________________________________
Name:
Title:
_____________________________________
_____________________________________
Attention:
Telecopier No.: ( )_______________
Telephone No.: ( )_______________
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FIDELITY NATIONAL FINANCIAL, INC.
By:______________________________________________
Name:
Title:
_____________________________________
_____________________________________
Attention:
Telecopier No.: ( )_______________
Telephone No.: ( )_______________
THE TRAVELERS INDEMNITY COMPANY
By:______________________________________________
Name:
Title:
_____________________________________
_____________________________________
Attention:
Telecopier No.: ( )_______________
Telephone No.: ( )_______________
__________________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇
_____________________________________
_____________________________________
Attention:
Telecopier No.: ( )_______________
Telephone No.: ( )_______________
__________________________________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇
_____________________________________
_____________________________________
Attention:
Telecopier No.: ( )_______________
Telephone No.: ( )_______________
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__________________________________________________
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
_____________________________________
_____________________________________
Attention:
Telecopier No.: ( )_______________
Telephone No.: ( )_______________
__________________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
_____________________________________
_____________________________________
Attention:
Telecopier No.: ( )_______________
Telephone No.: ( )_______________
THE GALILEO FUND, L.P.
By: DDJ Galileo, LLC, its
General Partner
By:_______________________________________________
Name:
Title:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
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FOOTHILL CAPITAL CORPORATION
By:_____________________________________________
Name:
Title:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
CANPARTNERS INVESTMENTS IV, LLC
By:_____________________________________________
Name:
Title:
c/o Canyon Partners
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
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SCHEDULE A
AMENDED CREDIT AGREEMENT AS OF JULY 29, 1996
1. Amended and Restated Credit Agreement dated as of April 12, 1995 among
Checkers Drive-In Restaurants, Inc., the Prior Agent and the Prior
Banks
2. Amendment Agreement dated as of July 26, 1995 among the Borrower, the
Guarantors, the Prior Agent and the Prior Banks
3. Second Amendment Agreement dated as of October 2, 1995 among the
Borrower, the Guarantors, the Prior Agent and the Prior Banks
4. Third Amendment Agreement dated as of January 2, 1996 among the
Borrower, the Guarantors, the Prior Agent and the Prior Banks
5. Fourth Amendment Agreement dated as of January 31, 1996 among the
Borrower, the Guarantors, the Prior Agent and the Prior Banks
6. Fifth Amendment Agreement dated as of February 29, 1996 among the
Borrower, the Guarantors, the Prior Agent and the Prior Banks
7. Sixth Amendment Agreement dated as of March 8, 1996 among the Borrower,
the Guarantors, the Prior Agent and the Prior Banks
8. Seventh Amendment Agreement dated as of March 11, 1996 among the
Borrower, the Guarantors, the Prior Agent and the Prior Banks
9. Eighth Amendment Agreement dated as of March 13, 1996 among the
Borrower, the Guarantors, the Prior Agent and the Prior Banks
10. Ninth Amendment Agreement dated as of March 15, 1996 among the
Borrower, the Guarantors, the Prior Agent and the Prior Banks
11. Tenth Amendment Agreement dated as of May 29, 1996 among the Borrower,
the Guarantors, the Prior Agent and the Prior Banks
12. Eleventh Amendment Agreement dated as of July 29, 1996 among the
Borrower, the Guarantors, the Prior Agent and the Prior Banks
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