EXHIBIT 10.52
FIFTH AMENDED AND RESTATED
CREDIT AGREEMENT
among
CKE RESTAURANTS, INC.,
THE LENDERS NAMED HEREIN
and
BNP PARIBAS,
As Agent
DATED AS OF NOVEMBER 12, 2003
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS................................................................. 1
Section 1.1 Definitions........................................................ 1
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES....................................... 23
Section 2.1 Term Loans......................................................... 23
Section 2.2 Revolving Loans.................................................... 24
Section 2.3 Notice of Borrowing................................................ 25
Section 2.4 Disbursement of Funds.............................................. 25
Section 2.5 Notes.............................................................. 26
Section 2.6 Interest........................................................... 26
Section 2.7 Interest Periods................................................... 28
Section 2.8 Minimum Amount of Eurodollar Loans................................. 28
Section 2.9 Conversion or Continuation......................................... 28
Section 2.10 Voluntary Reduction of Commitments................................. 29
Section 2.11 Voluntary Prepayments.............................................. 29
Section 2.12 Mandatory Prepayments.............................................. 29
Section 2.13 Application of Prepayments......................................... 31
Section 2.14 Method and Place of Payment........................................ 31
Section 2.15 Fees............................................................... 32
Section 2.16 Interest Rate Unascertainable, Increased Costs, Illegality......... 32
Section 2.17 Funding Losses..................................................... 34
Section 2.18 Increased Capital.................................................. 34
Section 2.19 Taxes.............................................................. 35
Section 2.20 Use of Proceeds.................................................... 36
Section 2.21 Collateral Security................................................ 36
Section 2.22 Replacement of Certain Lenders..................................... 38
SECTION 3. LETTERS OF CREDIT........................................................... 39
Section 3.1 Issuance of Letters of Credit, etc................................. 39
Section 3.2 Letter of Credit Fees.............................................. 40
Section 3.3 Obligation of Borrower Absolute, etc............................... 41
SECTION 4. CONDITIONS PRECEDENT........................................................ 43
Section 4.1 Conditions Precedent to the Effectiveness of this Agreement........ 43
Section 4.2 Conditions Precedent to All Loans.................................. 48
SECTION 5. REPRESENTATIONS AND WARRANTIES.............................................. 49
Section 5.1 Corporate Status................................................... 49
Section 5.2 Corporate Power and Authority...................................... 50
Section 5.3 No Violation....................................................... 50
Section 5.4 Litigation......................................................... 50
Section 5.5 Financial Statements; Financial Condition; etc..................... 50
Section 5.6 Solvency........................................................... 50
Section 5.7 Projections........................................................ 50
Section 5.8 Material Adverse Change............................................ 51
Section 5.9 Use of Proceeds; Margin Regulations................................ 51
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Section 5.10 Governmental and Other Approvals................................... 51
Section 5.11 Security Interests and Liens....................................... 51
Section 5.12 Tax Returns and Payments........................................... 51
Section 5.13 ERISA.............................................................. 51
Section 5.14 Investment Company Act; Public Utility Holding Company Act......... 52
Section 5.15 Dissolved Subsidiaries; Previously Material Subsidiaries, etc...... 52
Section 5.16 Representations and Warranties in Subordinated Debt Documents...... 52
Section 5.17 True and Complete Disclosure....................................... 53
Section 5.18 Corporate Structure; Capitalization................................ 53
Section 5.19 Environmental Matters.............................................. 53
Section 5.20 Intellectual Property.............................................. 54
Section 5.21 Ownership of Property; Restaurants................................. 54
Section 5.22 No Default......................................................... 55
Section 5.23 Licenses, etc...................................................... 55
Section 5.24 Compliance with Law................................................ 55
Section 5.25 No Burdensome Restrictions......................................... 55
Section 5.26 Brokers' Fees...................................................... 55
Section 5.27 Labor Matters...................................................... 55
Section 5.28 Indebtedness of the Borrower and Its Subsidiaries.................. 55
Section 5.29 Other Agreements................................................... 55
Section 5.30 Immaterial Subsidiaries............................................ 56
Section 5.31 Franchise Agreements and Franchisees............................... 56
SECTION 6. AFFIRMATIVE COVENANTS....................................................... 56
Section 6.1 Information Covenants.............................................. 56
Section 6.2 Books, Records and Inspections..................................... 60
Section 6.3 Maintenance of Insurance........................................... 60
Section 6.4 Taxes.............................................................. 60
Section 6.5 Corporate Franchises............................................... 61
Section 6.6 Compliance with Law................................................ 61
Section 6.7 Performance of Obligations......................................... 61
Section 6.8 Maintenance of Properties.......................................... 61
Section 6.9 Compliance with Terms of Leaseholds................................ 61
Section 6.10 Compliance with Environmental Laws................................. 61
Section 6.11 Subsidiary Guarantors.............................................. 62
Section 6.12 Immaterial Subsidiaries............................................ 62
Section 6.13 Additional Mortgages............................................... 62
Section 6.14 Collateral Account................................................. 62
SECTION 7. NEGATIVE COVENANTS.......................................................... 63
Section 7.1 Financial Covenants................................................ 63
Section 7.2 Indebtedness....................................................... 66
Section 7.3 Liens.............................................................. 68
Section 7.4 Restriction on Fundamental Changes................................. 70
Section 7.5 Sale of Assets..................................................... 70
Section 7.6 Contingent Obligations............................................. 72
Section 7.7 Dividends.......................................................... 72
Section 7.8 Advances, Investments and Loans.................................... 72
Section 7.9 Transactions with Affiliates....................................... 75
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Section 7.10 Limitation on Voluntary Payments and Modifications of
Certain Documents.................................................. 75
Section 7.11 Changes in Business................................................ 77
Section 7.12 Certain Restrictions............................................... 77
Section 7.13 Lease Obligations.................................................. 77
Section 7.14 Hedging Agreements................................................. 78
Section 7.15 Plans.............................................................. 78
Section 7.16 Fiscal Year; Fiscal Quarter........................................ 79
Section 7.17 Partnerships....................................................... 79
Section 7.18 Excluded Resales................................................... 79
Section 7.19 Designated Senior Indebtedness..................................... 79
Section 7.20 Instruments........................................................ 79
Section 7.21 Real Estate Collateral Value....................................... 79
SECTION 8. EVENTS OF DEFAULT........................................................... 79
Section 8.1 Events of Default.................................................. 79
Section 8.2 Rights and Remedies................................................ 82
SECTION 9. THE AGENT................................................................... 83
Section 9.1 Appointment........................................................ 83
Section 9.2 Delegation of Duties............................................... 83
Section 9.3 Exculpatory Provisions............................................. 83
Section 9.4 Reliance by Agent.................................................. 83
Section 9.5 Notice of Default.................................................. 84
Section 9.6 Non-Reliance on Agent and Other Lenders............................ 84
Section 9.7 Indemnification.................................................... 84
Section 9.8 Agent in its Individual Capacity................................... 85
Section 9.9 Successor Agent.................................................... 85
SECTION 10. MISCELLANEOUS............................................................... 85
Section 10.1 Payment of Expenses, Indemnity, etc................................ 85
Section 10.2 Right of Setoff.................................................... 86
Section 10.3 Notices............................................................ 87
Section 10.4 Successors and Assigns; Participation; Assignments................. 87
Section 10.5 Amendments and Waivers............................................. 89
Section 10.6 No Waiver; Remedies Cumulative..................................... 91
Section 10.7 Sharing of Payments................................................ 91
Section 10.8 Application of Collateral Proceeds................................. 92
Section 10.9 Governing Law; Submission to Jurisdiction.......................... 92
Section 10.10 Counterparts....................................................... 93
Section 10.11 Financial Advisor.................................................. 93
Section 10.12 Amendment and Restatement.......................................... 93
Section 10.13 Headings Descriptive............................................... 94
Section 10.14 Marshalling; Recapture............................................. 94
Section 10.15 Severability....................................................... 94
Section 10.16 Independence of Covenants.......................................... 94
Section 10.17 Survival........................................................... 94
Section 10.18 Domicile of Loans.................................................. 94
Section 10.19 Limitation of Liability............................................ 94
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Section 10.20 Calculations; Computations......................................... 94
Section 10.21 Waiver Of Trial By Jury............................................ 95
Section 10.22 References......................................................... 95
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Exhibits, Schedules and Annexes
Exhibit A - Form of Term Note
Exhibit B - Form of Revolving Note
Exhibit C - Form of Borrower Pledge Agreement
Exhibit D - Form of Borrower Security Agreement
Exhibit E - Form of Guaranty
Exhibit F - Form of Subsidiary Pledge Agreement
Exhibit G - Form of Subsidiary Security Agreement
Exhibit H - Form of Opinion of Stradling, Yocca, ▇▇▇▇▇▇▇ and ▇▇▇▇▇
Exhibit I - Form of Assignment Agreement
Exhibit J - Form of Notice of Borrowing
Schedule 1.1 - Commitments
Schedule 4.1(b) - Local Counsel
Schedule 5.10 - Governmental Approvals
Schedule 5.11 - Prior Liens
Schedule 5.13 - ERISA
Schedule 5.15 - Dissolved Entities
Schedule 5.18 - Capital Structure
Schedule 5.19 - Phase I Environmental Reports
Schedule 5.21 - Real Property
Schedule 5.27 - Labor Matters
Schedule 5.29 - Joint Ventures; Non-Competition Agreements
Schedule 5.30 - Immaterial Subsidiaries
Schedule 5.31 - Franchisees/Licensees
Schedule 7.2 - Existing Indebtedness
Schedule 7.3 - Existing Liens
Schedule 7.6 - Existing Contingent Obligations
Schedule 7.8 - Existing Investments
Schedule 7.17 - Existing Partnerships
Annex I - Lending Offices
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 12,
2003, among CKE Restaurants, Inc., a Delaware corporation (the "BORROWER"), the
Lenders (as hereinafter defined) and BNP Paribas, a bank organized under the
laws of France acting through its Chicago branch (as successor in interest to
Paribas) ("BNP PARIBAS"), as acting in its capacity as agent for the Lenders.
SECTION 1. DEFINITIONS.
Section 1.1 Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural number the singular.
"ACQUIRING SUBSIDIARY" shall have the meaning provided in Section
2.21(b).
"ACQUISITION" shall mean any transaction, or any series of related
transactions, consummated after the Closing Date, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or assets of any Person or
division thereof (other than assets acquired by the Borrower or any of its
Subsidiaries in the ordinary course of its business), whether through purchase
of assets, merger or otherwise or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of related
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors or a
majority (by percentage or voting power) of the outstanding partnership
interests of a partnership or of the outstanding equity interests of a limited
liability company or other corporate entity.
"ADJUSTED LEVERAGE RATIO" shall mean with respect to the Borrower on a
consolidated basis with its Subsidiaries, at any date, the ratio of (a)(i)
Consolidated Total Debt plus (ii) the product of (A) eight multiplied by (B) an
amount equal to Consolidated Rentals for the period of four (4) consecutive
fiscal quarters of the Borrower (taken as one accounting period) most recently
ended on or prior to such date to (b) Consolidated EBITDAR for the period of
four (4) consecutive fiscal quarters most recently ended on or prior to such
date.
"AFFECTED LENDER" shall have the meaning provided in Section 2.22.
"AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control another Person if
such Person possesses, directly or indirectly, the power to (i) vote 10% or more
of the Voting Stock of such other Person or (ii) direct or cause the direction
of the management and policies of such other Person, whether through the
ownership of voting securities, by contract or otherwise. No Lender shall be
deemed to be an Affiliate of the Borrower as a result of its being a party to
this Agreement.
"AGENT" shall mean BNP Paribas (and its successors) acting in its
capacity as agent for the Lenders and any successor agent appointed in
accordance with Section 9.9.
"AGENT'S OFFICE" shall mean the office of the Agent located at Chicago,
Illinois, or such other office as the Agent may hereafter designate in writing
as such to the other parties hereto.
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"AGREEMENT" shall mean this Fifth Amended and Restated Credit
Agreement, as the same may from time to time hereafter be modified, restated,
supplemented or amended.
"APPLICABLE MARGIN" shall mean, with respect to the Commitment Fee and
each Eurodollar Loan or Base Rate Loan that is a Revolving Loan, the rate of
interest per annum shown below for the range of Leverage Ratio specified below:
Leverage Ratio Eurodollar Loans Base Rate Loans Commitment Fee
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less than or equal to 3.5 to 1.0 3.50% 2.25% 0.50%
greater than 3.5 3.75% 2.50% 0.50%
The Leverage Ratio shall be calculated as of the end of each fiscal quarter of
the Borrower, commencing with the fiscal quarter ending November 3, 2003 and
shall be reported to the Agent pursuant to a Compliance Certificate delivered by
the Borrower in accordance with Section 6.1(e). Not later than two (2) Business
Days after receipt by the Agent of each Compliance Certificate delivered by the
Borrower in accordance with Section 6.1(e) for each fiscal quarter or fiscal
year of the Borrower, as applicable, the Agent shall determine the Leverage
Ratio for the applicable period and shall promptly notify the Borrower and the
Lenders of such determination and of any change in each Applicable Margin
resulting therefrom. Each Applicable Margin shall be adjusted (upwards or
downwards, as appropriate), if necessary, based on the Leverage Ratio as of the
end of the fiscal quarter immediately preceding the date of determination;
PROVIDED, HOWEVER, that for the period commencing on the Closing Date and ending
on the date of the delivery of a Compliance Certificate in accordance with
Section 6.1(e) for the second fiscal quarter of the Borrower ending after the
Closing Date, the Leverage Ratio shall be deemed to be greater than 3.5 to 1.
The adjustment, if any, to the Applicable Margin shall be effective commencing
on the third (3rd) Business Day after the receipt by the Agent of such quarterly
or annual financial statements delivered in accordance with Sections 6.1(a) and
6.1(b) and such related Compliance Certificate of the Borrower delivered in
accordance with Section 6.1(e) and shall be effective from and including the
third (3rd) Business Day after the date the Agent receives such Compliance
Certificate to but excluding the third (3rd) Business Day after the date on
which the next Compliance Certificate is required to be delivered pursuant to
Section 6.1(e); provided, however, that, in the event that the Borrower shall
fail at any time to furnish to the Lenders such financial statements and any
such Compliance Certificate required to be delivered pursuant to Sections
6.1(a), 6.1(b) and 6.1(e), for purposes of determining the Applicable Margin,
the Leverage Ratio shall be deemed to be greater than 3.5 to 1 at all times
until the third (3rd) Business Day after such time as all such financial
statements and each such Compliance Certificate are so received by the Agent and
the Lenders. Each determination of the Leverage Ratio and each Applicable Margin
by the Agent in accordance with this definition shall be conclusive and binding
on the Borrower and the Lenders absent manifest error.
"ASSET DISPOSITION" shall mean any conveyance, sale, lease, license,
transfer or other disposition by the Borrower or any of its Subsidiaries
subsequent to the Closing Date of any asset (including by way of (i) a sale and
leaseback transaction, (ii) the sale or other transfer of any of the capital
stock or other equity interest of any Subsidiary of the Borrower and (iii) any
total or partial loss, destruction or condemnation of any asset), but excluding
(A) sales of inventory in the ordinary
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
course of business, (B) licenses of intellectual property to franchisees in the
ordinary course of business, (C) leases and subleases of real and personal
property of the Borrower or any of its Subsidiaries to any of their respective
franchisees in the ordinary course of business and consistent with past
practices, and (D) sales, transfers or other dispositions of any property or
assets by the Borrower or any of its wholly-owned Subsidiaries to the Borrower
or any of its wholly-owned Domestic Subsidiaries, PROVIDED, that (i) all
documents or opinions required to be delivered to the Agent pursuant to Section
2.21 have been delivered to the Agent and the Borrower has provided the Agent
with written notice of such sale, transfer or other disposition at least ten
(10) days prior to the date of any such sale, transfer or other disposition and
(ii) the Agent and Lenders shall not be deemed to have released their security
interest in any such property or assets.
"ASSIGNEE" shall have the meaning provided in Section 10.4(c).
"ASSIGNMENT AGREEMENT" shall have the meaning provided in Section
10.4(d).
"AUTHORIZED OFFICER" of any Person shall mean any of the President, the
Chief Executive Officer, the Chief Operating Officer, the Chief Financial
Officer, any Senior Vice President, any Executive Vice President, any Vice
President, the Controller, the Treasurer or Assistant Treasurer of such Person,
acting singly.
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"BASE RATE" shall mean, at any particular date, the higher of (i) the
rate of interest publicly announced by BNP Paribas in its office in New York,
New York from time to time as its "base rate" changing as and when such base
rate changes and (ii) the Federal Funds Rate plus 0.50%. The base rate is not
intended to be the lowest rate of interest charged by BNP Paribas in connection
with extensions of credit to debtors.
"BASE RATE LOANS" shall mean Loans made and/or being maintained at a
rate of interest based upon the Base Rate.
"BLOCKED ACCOUNT AGREEMENT" shall mean an agreement that grants the
Agent "control" within the meaning of the UCC of the Collateral Account,
provides that the Agent may make withdrawals from, and otherwise direct the
disposition of the funds deposited or credited to, the Collateral Account and is
otherwise satisfactory in form and substance to the Agent.
"BORROWER" shall have the meaning provided in the first paragraph of
this Agreement.
"BORROWER PLEDGE AGREEMENT" shall mean a pledge agreement substantially
in the form of the Third Amended and Restated Borrower Pledge Agreement set
forth as Exhibit C hereto, as the same may be amended, restated, modified or
supplemented from time to time.
"BORROWER SECURITY AGREEMENT" shall mean a security agreement
substantially in the form of the Third Amended and Restated Borrower Security
Agreement set forth as Exhibit D hereto duly executed and delivered to the Agent
by the Borrower, as the same may be amended, restated, modified or supplemented
from time to time.
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"BORROWING" shall mean the incurrence of one Type of Loan of one
Facility from all the Lenders on a given date (or resulting from conversions or
continuations on a given date) having, in the case of Eurodollar Loans, the same
Interest Period.
"BUSINESS DAY" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in Chicago, Los Angeles or New York City a legal holiday or a day on which
banking institutions are authorized or required by law or other government
actions to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks for U.S. dollar deposits in the relevant London
interbank Eurodollar market.
"CAPITAL EXPENDITURES" shall mean, for any period, all expenditures
(whether paid in cash or accrued as a liability, including the portion of
Capitalized Leases of the Borrower and its Subsidiaries originally incurred
during such period that is capitalized on the consolidated balance sheet of the
Borrower and its Subsidiaries) by the Borrower and its Subsidiaries during such
period that, in conformity with GAAP, are included in "capital expenditures",
"additions to property, plant or equipment" or comparable items in the
consolidated financial statements of the Borrower and its Subsidiaries
(excluding any expenditures for assets that would be included in "capital
expenditures," "additions to property, plant or equipment" or in comparable
items in the consolidated financial statements of the Borrower and its
Subsidiaries in conformity with GAAP which assets are acquired in a Permitted
Acquisition).
"CAPITAL STOCK" shall mean any and all shares of, or interests or
participations in, corporate stock (or other instruments or securities
evidencing ownership).
"CAPITALIZED LEASE" shall mean with respect to any Person, (i) any
lease of property, real or personal, the obligations under which are capitalized
on the consolidated balance sheet of such Person, and (ii) any other such lease
of such Person to the extent that the then present value of the minimum rental
commitment thereunder should, in accordance with GAAP, be capitalized on a
balance sheet of the lessee.
"CAPITALIZED LEASE OBLIGATIONS" with respect to any Person, shall mean
at any time of determination all obligations of such Person under or in respect
of Capitalized Leases of such Person.
"CASH COLLATERALIZE" shall mean the pledge and deposit with or delivery
to the Agent, for the benefit of the Agent, the Issuing Bank and the Lenders,
cash or deposit account balances pursuant to documentation in form and substance
reasonably satisfactory to the Agent and the Issuing Bank; such documentation
shall irrevocably authorize the Agent to apply such cash collateral to
reimbursement of the Issuing Bank for draws under Letters of Credit as and when
occurring, and in all cases to payment of other Obligations as and when due.
Cash collateral shall be maintained in blocked deposit accounts at the Agent or
a Lender.
"CASH EQUIVALENTS" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than 360 days from the date of acquisition, (ii) time deposits and certificates
of deposit of any Lender or any domestic commercial bank of recognized standing
having capital and surplus in excess of $200,000,000 with maturities of not more
than 180 days from the date of acquisition,
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
(iii) fully secured repurchase obligations with a term of not more than 7 days
for underlying securities of the types described in clause (i) entered into with
any bank meeting the qualifications specified in clause (ii) above, and (iv)
commercial paper issued by the parent corporation of any Lender or any domestic
commercial bank of recognized standing having capital and surplus in excess of
$500,000,000 and commercial paper rated at least A-1 or the equivalent thereof
by Standard & Poor's Ratings Group or at least P-1 or the equivalent thereof by
▇▇▇▇▇'▇ Investor Services, Inc. and in each case maturing within 180 days after
the date of acquisition.
"CLOSING DATE" shall mean November 12, 2003.
"CLOSING EBITDA" shall mean, with respect to the Borrower and its
Subsidiaries for the 13 Retail Periods ended immediately prior to the Closing
Date and all determined on a consolidated basis and in accordance with GAAP, the
sum of (i) Consolidated Net Income for such period, plus (ii) to the extent
deducted in the calculation of Consolidated Net Income for such period,
Consolidated Interest Expense for such period, plus (iii) to the extent deducted
in the calculation of Consolidated Net Income for such period, federal and state
income taxes for such period, plus (iv) to the extent deducted in the
calculation of Consolidated Net Income for such period, depreciation and
amortization expense for such period, plus (v) to the extent deducted in the
calculation of Consolidated Net Income for such period, all extraordinary losses
for such period, minus (vi) to the extent included in the calculation of
Consolidated Net Income for such period, all extraordinary gains for such
period.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute.
"COLLATERAL" shall mean all property and interests in property now
owned or hereafter acquired in or upon which a Lien has been or is purported or
intended to have been granted to the Agent or any Lender or any Interest Rate
Hedge Provider under any of the Security Documents.
"COLLATERAL ACCOUNT" shall have the meaning set forth in the Borrower
Security Agreement."
"COMMITMENT FEE" shall have the meaning provided in Section 2.15(b).
"COMMITMENTS" shall mean, collectively, the Term Loan Commitments and
the Revolving Loan Commitments and "COMMITMENT" shall mean either of such
Commitments.
"COMPLIANCE CERTIFICATE" shall have the meaning provided in Section
6.1(e).
"CONSENTS" shall have the meaning provided in Section 4.1(r).
"CONSOLIDATED CASH INTEREST EXPENSE" shall mean, for any period,
Consolidated Interest Expense for such period minus the amount of such
Consolidated Interest Expense for such period not paid or payable in cash.
"CONSOLIDATED EBITDA" shall mean, for any Person during any period, the
sum of (i) Consolidated Net Income for such period, plus (ii) to the extent
deducted in the calculation of Consolidated Net Income for such period,
Consolidated Interest Expense for such period, plus (iii) to the extent deducted
in the calculation of Consolidated Net Income for such period, federal and state
income taxes for such period, plus (iv) to the extent deducted in the
calculation of Consolidated Net Income for such period, depreciation and
amortization expense for such period, plus (v) to the extent
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
deducted in the calculation of Consolidated Net Income for such period, all
extraordinary losses for such period, PROVIDED, HOWEVER, that up to $3,000,000
of any extraordinary loss incurred in connection with the disposition of Timber
Lodge shall be excluded from the calculation of Consolidated EBDITA, minus (vi)
to the extent included in the calculation of Consolidated Net Income for such
period, all extraordinary gains for such period, all determined on a
consolidated basis for such Person and its Subsidiaries in accordance with GAAP.
"CONSOLIDATED EBITDAR" shall mean, during any period (i) Consolidated
EBITDA for the Borrower and its Subsidiaries for such period plus (ii) to the
extent deducted in the calculation of Consolidated Net Income of the Borrower
and its Subsidiaries for such period, Consolidated Rentals for such period.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any Person and for any
period, the total interest expense (including, without limitation, interest
expense attributable to Capitalized Leases in accordance with GAAP, but
excluding any non-cash interest expense attributable to the amortization or
write-off of deferred financing costs) of such Person and its Subsidiaries for
such period determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" shall mean for any Person and for any period
the net income (or loss) of such Person and its Subsidiaries on a consolidated
basis for such period (taken as a single accounting period) as determined in
accordance with GAAP minus to the extent included in the calculation of
Consolidated Net Income for such period, gains for such period (net of any
applicable state or federal expense) resulting from any sale by the Borrower or
any of its Subsidiaries of a Restaurant of the Borrower or such Subsidiary plus
to the extent included in the calculation of Consolidated Net Income for such
period, losses for such period (net of any applicable state or federal tax
benefit) resulting from any sale by the Borrower or any of its Subsidiaries of a
Restaurant of the Borrower or such Subsidiary, plus any reserves (net of any
applicable state or federal tax benefit) established in accordance with GAAP for
closures of Restaurants or non-cash reductions in the carrying value of
Restaurant-related assets (including goodwill and other intangible assets).
"CONSOLIDATED RENTALS" shall mean, for the Borrower and its
Subsidiaries for any period, the aggregate rent expense for the Borrower and its
Subsidiaries for such period, minus rental income received from franchisees and
third parties pursuant to (i) subleases to such franchisees or third parties, as
the case may be, and (ii) leases that have been assigned to such franchisees or
third parties, as the case may be, in which the Borrower or its Subsidiary, as
applicable, remains liable for the payment of rent under such lease to the
extent that rent payments are actually made, all as determined on a consolidated
basis in accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean, at any time, the excess
of (i) the total assets of the Borrower and its Subsidiaries determined on a
consolidated basis in accordance with GAAP, minus goodwill and any other items
that are classified as intangibles in accordance with GAAP, minus (ii) all
liabilities of the Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP; PROVIDED, HOWEVER, that solely for the purpose of
determining Consolidated Tangible Net Worth hereunder, any loans and advances to
directors and officers of the Borrower and its Subsidiaries permitted by this
Agreement shall be accounted for as assets and included in the calculation of
total assets in clause (i) hereof.
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"CONSOLIDATED TOTAL DEBT" shall mean, at any time, all Indebtedness of
the Borrower and its Subsidiaries (other than undrawn amounts under letters of
credit issued for the account of the Borrower or any of its Subsidiaries) as
determined on a consolidated basis.
"CONTINGENT OBLIGATION" as to any Person shall mean any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("PRIMARY OBLIGATIONS") of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the owner
of such primary obligation against loss in respect thereof; PROVIDED, HOWEVER,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"CONTROLLING STOCKHOLDERS" shall mean (i) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇, (ii)
Fidelity National Financial, Inc., a Delaware corporation and (iii) any other
Person that, directly or indirectly, controls, is controlled by or is under
common control with any of the foregoing. For purposes of this definition, the
term "control" (including the terms "controlled by" and "under common control
with") of a Person means the possession, directly or indirect, of (A) the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise or (B)
the power to vote 51% or more of the Voting Stock of such Person. No Lender
shall be deemed to be a Controlling Stockholder as a result of its being a party
to this Agreement.
"CONVERSION" shall have the meaning provided in Section 2.21(b).
"CONVERTIBLE SUBORDINATED NOTE INDENTURE" shall mean that certain
Indenture between the Borrower and Chase Manhattan Bank and Trust Company, N.A.,
as trustee, dated as of March 13, 1998, as the same may be amended, restated,
supplemented or otherwise modified in accordance with the terms of this
Agreement.
"CONVERTIBLE SUBORDINATED NOTES" shall mean the Convertible
Subordinated Notes issued by the Borrower pursuant to the Convertible
Subordinated Note Indenture, in the original aggregate principal amount of
$197,225,000, as the same may be amended, restated, supplemented or otherwise
modified in accordance with the terms of this Agreement; PROVIDED that such
Convertible Subordinated Notes shall at all times be subordinated in respect of
the Obligations on subordination terms contained in the Convertible Subordinated
Note Indenture.
"CREDIT EXPOSURE" shall have the meaning provided in Section 10.4(b).
7
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"DEFAULT" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"DEFAULT RATE" shall have the meaning provided in Section 2.6(c).
"DIVIDENDS" shall have the meaning provided in Section 7.7.
"DOMESTIC LENDING OFFICE" shall mean, as to any Lender, the office of
such Lender designated as such on Annex I, or such other office designated by
such Lender from time to time by written notice to the Agent and the Borrower.
"DOMESTIC SUBSIDIARY" shall mean any wholly-owned Subsidiary of the
Borrower that is organized under the laws of a state of the United States of
America, and which is a party to the Subsidiary Security Agreement, the Guaranty
and, if required pursuant to Section 2.21, a Subsidiary Pledge Agreement.
"EBITDA CAPEX AMOUNT" shall mean, for any fiscal year of the Borrower,
an amount, if positive, equal to (i) .80 multiplied by (ii) the difference, if
any, between Consolidated EBITDA for such fiscal year and $110,000,000.
"EMPLOYEE STOCK LOAN" shall mean a loan made by the Borrower or any of
its Subsidiaries to an employee or director of the Borrower or any of its
Subsidiaries, the purpose of which is to finance the acquisition by such
employee or director of the capital stock of the Borrower.
"ENVIRONMENTAL AFFILIATE" shall mean, with respect to any Person, any
other Person whose liability for any Environmental Claim such Person has or may
have retained, assumed or otherwise become liable for (contingently or
otherwise), either contractually or by operation of law.
"ENVIRONMENTAL APPROVALS" shall mean any permit, license, approval,
ruling, variance, exemption or other authorization required under applicable
Environmental Laws.
"ENVIRONMENTAL CLAIM" shall mean, with respect to any Person, any
notice, claim, demand or similar communication (written or oral) by any other
Person alleging potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, fines or penalties arising out of, based on or resulting from
(i) the presence, or release into the environment, of any Material of
Environmental Concern at any location, whether or not owned by such Person or
(ii) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
"ENVIRONMENTAL LAWS" shall mean all federal, state, local and foreign
laws and regulations relating to pollution or protection of human health, safety
or the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), including without limitation,
laws and regulations relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
"EQUITY INTERESTS" shall mean Capital Stock and warrants, options or
other rights to acquire Capital Stock.
8
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time. Section references to ERISA are to ERISA, as in
effect at the Closing Date and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA CONTROLLED GROUP" means a group consisting of any ERISA Person
and all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control with such Person
that, together with such Person, are treated as a single employer under
regulations of the PBGC.
"ERISA PERSON" shall have the meaning set forth in Section 3(9) of
ERISA for the term "person."
"ERISA PLAN" means (i) any Plan that (x) is not a Multiemployer Plan
and (y) has Unfunded Benefit Liabilities in excess of $2,000,000 and (ii) any
Plan that is a Multiemployer Plan.
"EUROCURRENCY RESERVE REQUIREMENTS" shall mean, with respect to each
day during an Interest Period for Eurodollar Loans, that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Federal
Reserve Board or other governmental authority or agency having jurisdiction with
respect thereto for determining the maximum reserves (including, without
limitation, basic, supplemental, marginal and emergency reserves) for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D) maintained by a member bank of the Federal Reserve System.
"EURODOLLAR BASE RATE" shall mean, with respect to each day during an
Interest Period for Eurodollar Loans, the rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of one-sixteenth of one percent)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in United States Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period. If for any reason such rate is
not available, the term "Eurodollar Base Rate" shall mean, for any Eurodollar
Loan for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of one-sixteenth of one percent)
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in United States Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; PROVIDED, HOWEVER, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest
whole multiple of one-sixteenth of one percent). If, for any reason, neither of
such rates is available, then "Eurodollar Base Rate" shall mean the rate per
annum at which deposits in United States Dollars, as determined by the Agent,
are being offered by the principal office of each of the Reference Banks in
London, England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such Interest Period in
an amount substantially equal to such Reference Bank's Eurodollar Loan
comprising part of such Borrowing to be outstanding during such Interest Period
and for a period equal to such Interest Period and the Eurodollar Base Rate for
any Interest Period for each Eurodollar Loan comprising part of the same
Borrowing shall be determined by the Agent on the basis of applicable rates
furnished to and received by the Agent from the Reference Banks two Business
Days before the first day of such Interest Period, subject, however, to the
provisions of Section 2.7.
9
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"EURODOLLAR LENDING OFFICE" shall mean, as to any Lender, the office of
such Lender designated as such on Annex I, or such other office designated by
such Lender from time to time by written notice to the Agent and the Borrower.
"EURODOLLAR LOANS" shall mean Loans made and/or being maintained at a
rate of interest based upon the Eurodollar Rate.
"EURODOLLAR RATE" shall mean with respect to each day during an
Interest Period for Eurodollar Loans, a rate per annum determined for such day
in accordance with the following formula (rounded upwards to the nearest whole
multiple of 1/100th of one percent):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EVENT OF DEFAULT" shall have the meaning provided in Section 8.1.
"EXCESS AVAILABILITY" shall mean, as of any time the same is to be
determined, the amount (if any) by which (a) the Total Revolving Loan Commitment
as then determined exceeds (b) the aggregate principal amount of the Revolving
Loans and L/C Obligations then outstanding.
"EXCLUDED RESALES" shall mean any sale by the Borrower or any of its
Subsidiaries of a Restaurant of the Borrower or such Subsidiary so long as (i)
such Restaurant was acquired by the Borrower or such Subsidiary from a
franchisee with the intent of reselling such Restaurant and (ii) such sale
occurs within twelve (12) months of the acquisition of such Restaurant by the
Borrower or such Subsidiary.
"EXISTING DEBT" shall have the meaning provided in Section 4.1(o).
"EXISTING PROPERTY SALE AND LEASEBACK TRANSACTION" shall have the
meaning provided in Section 7.13(a)(i).
"FACILITY" shall mean either or both of the Term Loans and the
Revolving Loans.
"FEDERAL FUNDS RATE" shall mean, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three (3)
Federal funds brokers of recognized standing selected by the Agent in its sole
discretion.
"FEDERAL RESERVE BOARD" shall mean the Board of Governors of the
Federal Reserve System as constituted from time to time.
"FEE LETTER" shall mean that certain fee letter entered into between
the Borrower and the Agent dated September 12, 2003, as amended, restated or
otherwise modified from time to time.
"FEES" shall have the meaning set forth in Section 2.15(c).
10
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"FINAL MATURITY DATE" shall mean the later of the Revolving Loan
Maturity Date and the Term Loan Maturity Date.
"FINANCIAL ADVISOR" has the meaning set forth in Section 10.11.
"FIXED CHARGES" shall mean, without duplication, with respect to the
Borrower and its Subsidiaries for any period, (i) all Consolidated Cash Interest
Expense (excluding in respect of Capitalized Leases of the Borrower and its
Subsidiaries) for such period, plus (ii) scheduled payments due in such period
for principal of the Term Loans (including only such payments made due to
scheduled reductions in the Commitments during such period), plus (iii) all
scheduled amortization during such period (including principal and interest) of
Capitalized Leases under which the Borrower or any of its Subsidiaries is the
lessee, all determined on a consolidated basis for the Borrower and its
Subsidiaries for such period, plus (iv) the net usage of the Borrower's store
closure reserve for such period, determined in accordance with GAAP.
"FRANCHISE AGREEMENTS" shall mean any and all agreements that create a
franchise or license to which the Borrower or any of its Subsidiaries is a party
(as franchisee, licensee, franchisor or licensor) relating to the operation or
development of any Restaurant or Restaurants, including such franchise and/or
license agreements to which any of Borrower or any of its Subsidiaries is a
party as of the Closing Date and such franchise and/or license agreements
entered into from time to time after the Closing Date by the Borrower or any of
its Subsidiaries and shall include all other rights under such agreements
regardless of their nature.
"FRANCHISEE CONSTRUCTION DEBT" shall have the meaning provided in
Section 7.2(j).
"GAAP" shall mean (i) for purposes of determining compliance with the
covenants set forth in Section 7 hereof, United States generally accepted
accounting principles as in effect on the Closing Date and consistent with those
utilized in the preparation of the financial statements referred to in Section
5.5 and (ii) for all other purposes, United States generally accepted accounting
principles as in effect as of the date of determination.
"GREEN BURRITO" shall mean GB Franchise Corporation, a California
corporation.
"GUARANTOR" shall mean each Subsidiary of the Borrower that shall be
required by the terms of this Agreement to enter into a Guaranty from time to
time.
"GUARANTY" shall mean a guaranty substantially in the form of the Third
Amended and Restated Guaranty set forth as Exhibit E hereto duly executed and
delivered to the Agent for itself, the Lenders and any Interest Rate Hedge
Providers by each Subsidiary of the Borrower (other than Immaterial Subsidiaries
which are not Subordinated Guarantors), as the same may be amended, restated,
modified or supplemented from time to time.
"HARDEE'S" shall mean ▇▇▇▇▇▇'▇ Food Systems, Inc., a North Carolina
corporation or any successor entity permitted pursuant to the terms of this
Agreement.
"▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ACT" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvement Act of 1976, as amended.
"HEDGING AGREEMENTS" shall mean any interest rate protection agreements
(including, without limitation, any interest rate swaps, caps, floors, collars,
options, futures and similar
11
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
agreements) and swaps (including, without limitation, any caps, floors, collars,
options, futures and similar agreements) relating to currencies, commodities or
securities, and similar agreements.
"IMMATERIAL INVESTMENTS" shall mean, at any time, (a) any Investment
owned by the Borrower or any Subsidiary consisting of Capital Stock of any
Person that is not a Subsidiary of the Borrower and which, when added to all
other Investments held by the Borrower and/or its Subsidiaries consisting of
Capital Stock of such Person does not exceed $1,000,000 at any one time
outstanding and (b) any Investment owned by the Borrower or any Subsidiary
consisting of an Instrument payable by any Person that is not a Subsidiary of
the Borrower and which, when added to all other Investments held by the Borrower
and/or its Subsidiaries consisting of Instruments payable by such Person does
not exceed $2,000,000 at any one time outstanding.
"IMMATERIAL SUBSIDIARIES" shall mean any Subsidiary of the Borrower
with assets of less than $1,500,000 (as determined in accordance with GAAP),
which is designated by the Borrower as an Immaterial Subsidiary on Schedule 5.30
or pursuant to Section 6.12; provided that the aggregate amount of assets of all
Subsidiaries designated as Immaterial Subsidiaries shall not at any time exceed
$10,000,000 (as determined in accordance with GAAP).
"INDEBTEDNESS" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than trade payables on terms of 90 days or
less incurred in the ordinary course of business of such Person), (ii) all
indebtedness of such Person evidenced by a note, bond, debenture, acceptance or
similar instrument, (iii) the principal component of all Capitalized Lease
Obligations of such Person, (iv) the face amount of all letters of credit issued
for the account of such Person and, without duplication, all unreimbursed
amounts drawn thereunder, and all obligations of such Person, contingent or
otherwise, under acceptances or similar facilities, (v) all indebtedness of any
other Person secured by any Lien on any property owned by such Person, whether
or not such indebtedness has been assumed in an amount equal to the lesser of
the fair market value at such date of such property subject to such Lien
securing such Indebtedness and the amount of the Indebtedness secured by such
Lien, (vi) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), (vii) all Contingent Obligations of such Person, (viii) all
payment obligations, whether absolute or contingent, matured or unmatured,
present or future, due or to become due, now existing or hereafter arising, of
such Person under any Hedging Agreements, (ix) all Redeemable Stock and (x) all
indebtedness and other obligations of the types specified in clauses (i) through
(ix) above of any joint venture or partnership for which such Person is liable.
"INDEMNITEE" shall have the meaning provided in Section 10.1(c).
"INS" shall mean the United States Immigration and Naturalization
Service or any governmental body succeeding to its functions.
"INSTRUMENT" shall have the meaning ascribed thereto in the UCC.
"INTELLECTUAL PROPERTY" has the meaning set forth in Section 5.20.
"INTEREST PERIOD" shall have the meaning provided in Section 2.7.
12
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"INTEREST RATE AGREEMENTS" shall mean any and all interest rate
protection agreements, including, without limitation, any interest rate swaps,
caps, collars, floors and similar agreements.
"INTEREST RATE HEDGE PROVIDERS" shall mean any Lender or Affiliate of
any Lender that provides an Interest Rate Agreement to the Borrower as permitted
pursuant to Section 7.14(a) and that executes and delivers an agency agreement,
in form and substance satisfactory to the Agent.
"INVESTMENT" of a Person shall mean any loan, advance, extension of
credit or commitment to make any such loan, advance or extension of credit
(other than accounts receivable arising in the ordinary course of business),
deposit account or contribution of capital by such Person to any other Person or
any investment in, or purchase or other acquisition (whether by purchase,
merger, consolidation or otherwise) of, the stock, partnership interests, notes,
bonds, debentures or other securities, including options and warrants, of, or
other ownership interests in, any other Person made by such Person (whether for
cash, property, services, securities or otherwise).
"ISSUE" shall mean, with respect to any Letter of Credit, to issue or
to extend the expiry of, or to renew or increase the amount of, such Letter of
Credit; and the terms "Issued," "Issuing" and "Issuance" have corresponding
meanings.
"ISSUING BANK" shall mean BNP Paribas or, with the consent of BNP
Paribas, any other Revolving Lender (and their respective successors) that
agrees to be an Issuing Bank hereunder, in its capacity as issuer of one or more
Letters of Credit hereunder.
"LA SALSA" shall mean, collectively, La Salsa, Inc., a California
corporation, La Salsa Franchise, Inc., a California corporation, and La Salsa of
Nevada, Inc., a Nevada corporation.
"L/C AMENDMENT APPLICATION" shall mean an application form for
amendment of outstanding Letters of Credit as shall at any time be in use at the
Issuing Bank, as the Issuing Bank shall request.
"L/C APPLICATION" shall mean an application form for issuance of
Standby Letters of Credit or Trade Letters of Credit, as appropriate, as shall
at any time be in use at the Issuing Bank, as the Issuing Bank shall request.
"L/C COMMITMENT" shall mean the commitment of the Issuing Bank to
Issue, and the commitment of the Revolving Lenders severally to participate in,
Letters of Credit from time to time Issued or outstanding under Section 3, in an
aggregate amount not to exceed on any date the amount of $80,000,000, PROVIDED,
that the L/C Commitment is part of the Total Revolving Loan Commitment, rather
than a separate, independent commitment.
"L/C OBLIGATIONS" shall mean at any time the sum of (a) the aggregate
undrawn amount of all Letters of Credit then outstanding, plus (b) the amount of
all unreimbursed drawings under all Letters of Credit.
"L/C RELATED DOCUMENTS" shall mean the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document relating to
any Letter of Credit, including any of the Issuing Bank's standard form
documents for standby or commercial letter of credit issuances, as appropriate.
13
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"LENDER AFFILIATE" shall mean, with respect to any Lender that is a
fund that invests in bank loans, any other fund that invests in bank loans and
similar extensions of credit in the ordinary course of its business and is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such Lender or advisor.
"LENDERS" shall mean the persons listed on Schedule 1.1 hereto and the
persons which from time to time become a party hereto in accordance with Section
10.4(d).
"LETTERS OF CREDIT" shall mean any letters of credit Issued by the
Issuing Bank pursuant to Section 3.
"LEVERAGE RATIO" shall mean, with respect to the Borrower on a
consolidated basis with its Subsidiaries, at any date, the ratio of (a)
Consolidated Total Debt of the Borrower and its Subsidiaries to (b) Consolidated
EBITDA of the Borrower and its Subsidiaries for the period of four (4)
consecutive fiscal quarters most recently ended on or prior to such date, all
determined on a consolidated basis for the Borrower and its Subsidiaries for
such period.
"LIEN" shall mean any mortgage, deed of trust, pledge, charge, security
interest, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), or preference, priority or other security agreement of any
kind or nature whatsoever, whether or not filed, recorded or otherwise perfected
under applicable law, including, without limitation, any conditional sale or
other title retention agreement, any financing lease having substantially the
same effect as any of the foregoing and the filing of any financing statement or
similar instrument under the Uniform Commercial Code or comparable law of any
jurisdiction, domestic or foreign.
"LIQUIDATING DISTRIBUTION" shall mean any extraordinary, liquidating or
other distribution in return of capital with respect to any Equity Interest of
any Person (other than a Subsidiary of any Domestic Subsidiary) owned by a Loan
Party which Equity Interest is pledged pursuant to any of the Security
Documents.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Guaranty,
each Letter of Credit, each L/C Related Document, the Fee Letter, the Security
Documents, each Interest Rate Agreement permitted to be entered into pursuant to
Section 7.14(a) and all other documents, instruments and agreements executed
and/or delivered in connection herewith or therewith or required or contemplated
hereunder or thereunder, as the same may be amended, restated, modified or
supplemented and in effect from time to time.
"LOAN PARTY" shall mean and include the Borrower and each Guarantor.
"LOANS" shall mean and include the Term Loans and the Revolving Loans.
"MARGIN STOCK" shall have the meaning provided such term in Regulation
U of the Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect upon (i)
the business, operations, properties, assets, performance, prospects or
condition (financial or otherwise) of the Borrower and its Subsidiaries, taken
as a whole, or (ii) the ability of any Loan Party to perform, or of the Agent or
any of the Lenders to enforce, any of such Loan Party's material Obligations
under any
14
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Loan Document to which it is or is to be a party, or (iii) the validity,
perfection or priority of any Lien in favor of the Agent for the benefit of the
Lenders on any material portion of the Collateral.
"MATERIAL LEASES" shall have the meaning provided in Section 6.9.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall mean and include chemicals,
pollutants, contaminants, wastes, toxic substances, petroleum and petroleum
products, asbestos and radioactive materials.
"MORTGAGES" shall mean collectively, each mortgage, deed of trust,
leasehold mortgage, leasehold deed of trust or other similar instrument executed
and delivered by the Borrower or any of its Subsidiaries to the Agent for the
benefit of the Lenders from time to time (including, without limitation, all
Mortgages delivered prior to the Closing Date) and granting or purporting to
▇▇▇▇▇ ▇ ▇▇▇▇ on the real property of the Borrower or such Subsidiary identified
therein, as the same may be amended, restated, supplemented or otherwise
modified.
"MULTIEMPLOYER PLAN" shall mean a Plan which is a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA.
"NET DEBT PROCEEDS" means all cash proceeds received by the Borrower or
any of its Subsidiaries from the incurrence of, or the issuance of any
instruments relating to, any Indebtedness (other than (i) Indebtedness borrowed
by the Borrower under this Agreement, (ii) Indebtedness permitted to be incurred
pursuant to Section 7.2(g), (iii) Indebtedness permitted to be incurred pursuant
to Section 7.2(i) (including the New Convertible Subordinated Notes) and (iv)
Indebtedness permitted to be incurred pursuant to Section 7.2(m) with respect to
Sale and Leaseback Transactions) net of reasonable and customary underwriting
fees and discounts, brokerage commissions and other similar reasonable and
customary costs and expenses directly attributable to such issuance or
incurrence.
"NET EQUITY PROCEEDS" shall mean all cash proceeds received by the
Borrower or any of its Subsidiaries from any capital contribution or the
issuance of any Equity Interests or other equity securities of the Borrower or
any of its Subsidiaries (other than the issuance of common stock (A) of the
Borrower issued to employees, consultants or directors of the Borrower or any of
its Subsidiaries pursuant to an employee stock option or purchase plan approved
by the Board of Directors of the Borrower or (B) of any Subsidiary of the
Borrower to the Borrower or any wholly-owned Subsidiary of the Borrower), net of
any reasonable and customary brokerage commissions, underwriting fees and
discounts and any other similar reasonable and customary costs or expenses
directly attributable to such issuance.
"NET SALE PROCEEDS" shall mean, with respect to (a) any Asset
Disposition, all proceeds in the form of cash or cash equivalents received by
the Borrower or any of its Subsidiaries from or in respect of such Asset
Disposition (including any cash proceeds received as income or other proceeds of
any noncash proceeds of such Asset Disposition and including any insurance
payment or condemnation award in respect of any assets of the Borrower or any of
its Subsidiaries) and (b) any Liquidating Distribution, all proceeds in the form
of cash or cash equivalents received by the Borrower or any of its Subsidiaries
from or in respect of any Liquidating Distribution, in the case of the foregoing
clauses (a) and (b), net of (i) reasonable and customary expenses incurred or
reasonably expected to be incurred in connection with such Asset Disposition or
Liquidating Distribution, (ii) any income, franchise, transfer or other tax
payable by the Borrower or such
15
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Subsidiary in connection with such Asset Disposition or Liquidating Distribution
and (iii) any Indebtedness secured by a Lien on such property or assets and
required to be repaid as a result of such Asset Disposition, in each case with
respect to the foregoing clause (i) to the extent, but only to the extent, that
the amounts so deducted are, at the time of receipt of such cash or cash
equivalents, actually paid to a Person that is not an Affiliate and are properly
attributable to such transaction or to the asset that is the subject thereof;
PROVIDED, HOWEVER, that Net Sale Proceeds shall not include any such proceeds
from Excluded Resales.
"NEW CONVERTIBLE SUBORDINATED NOTE INDENTURE" shall mean that certain
Indenture between the Borrower and ▇.▇. ▇▇▇▇▇▇ Trust Company, National
Association, as Trustee, dated as of September 29, 2003, as the same may be
amended, restated, supplemented or otherwise modified in accordance with the
terms of this Agreement.
"NEW CONVERTIBLE SUBORDINATED NOTES" shall mean the convertible
subordinated notes issued by the Borrower pursuant to the New Convertible
Subordinated Note Indenture, in the maximum aggregate principal amount not to
exceed $105,000,000, as the same may be amended, restated, supplemented or
otherwise modified in accordance with the terms of this Agreement; PROVIDED that
such New Convertible Subordinated Notes shall at all times be subordinated in
respect of the Obligations on subordination terms contained in the New
Convertible Subordinated Note Indenture.
"NEW PROPERTY SALE AND LEASEBACK TRANSACTION" shall have the meaning
provided in Section 7.13(a)(i).
"NEW RETAIL UNIT" shall mean a retail unit of the Borrower or any of
its Subsidiaries purchased from a franchisee or constructed by the Borrower or
such Subsidiary after the Closing Date.
"NEW SUBORDINATED NOTE INDENTURE" shall mean that certain Indenture
among the Borrower, certain Subsidiaries of the Borrower, and Chase Manhattan
Bank and Trust Company, National Association, as trustee, dated as of March 4,
1999, as the same may be amended, restated, supplemented or otherwise modified
in accordance with the terms of this Agreement.
"NEW SUBORDINATED NOTES" shall mean the Senior Subordinated Notes
issued by the Borrower pursuant to the New Subordinated Note Indenture, in a
maximum principal amount not to exceed $200,000,000 in the aggregate at the rate
of 9-1/8% and due 2009 (the "ORIGINAL NOTES"), as the same may be amended,
restated, supplemented or otherwise modified in accordance with the terms of
this Agreement; PROVIDED, that such New Subordinated Notes shall at all times be
subordinated in respect of the Obligations on subordination terms contained in
the New Subordinated Note Indenture; PROVIDED, FURTHER, that the term "New
Subordinated Notes" shall include any notes or instruments exchanged for then
outstanding New Subordinated Notes pursuant to the New Subordinated Note
Indenture.
"NEW UNIT CAPITAL EXPENDITURES" shall mean Capital Expenditures
incurred in any period of four consecutive fiscal quarters for the construction
or purchase of a New Retail Unit constructed or purchased during such period or
the remodeling of a New Retail Unit constructed or purchased during such period.
"NOTE" shall mean a Revolving Note or a Term Note.
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"NOTES" shall mean and include each Revolving Note and each Term Note.
"NOTICE OF BORROWING" shall have the meaning provided in Section
2.3(a).
"NOTICE OF CONVERSION OR CONTINUATION" shall have the meaning provided
in Section 2.9(b).
"OBLIGATIONS" shall mean all obligations, liabilities and indebtedness
of every kind, nature and description of the Borrower and the other Loan Parties
from time to time owing to the Agent or any Lender or any Indemnitee under or in
connection with this Agreement or any other Loan Document, whether direct or
indirect, primary or secondary, joint or several, absolute or contingent, due or
to become due, now existing or hereafter arising and however acquired and shall
include, without limitation, all principal and interest on the Loans and, to the
extent chargeable under any Loan Document, all charges, expenses, fees and
attorney's fees.
"ORIGINAL CREDIT AGREEMENT" shall mean that certain Fourth Amended and
Restated Credit Agreement dated as of January 31, 2002, among the Borrower, the
lenders party thereto and BNP Paribas, as Agent, as amended prior to the date
hereof.
"OTHER TAXES" shall have the meaning provided in Section 2.19(c).
"PARTICIPANT" shall have the meaning provided in Section 10.4(b).
"PAYMENT DATE" shall mean the fifteenth day of each March, June,
September and December of each year.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
under ERISA, or any successor thereto.
"PERMITTED ACQUISITION" shall mean any Acquisition by the Borrower or
any of its Subsidiaries of a Carl's Jr., a Hardee's, a Green Burrito or a La
Salsa Restaurant from a franchisee that has been approved by the board of
directors (or other governing body, if applicable) of the Person which is the
subject of such Acquisition.
"PERMITTED SUBORDINATED DEBT" shall mean Indebtedness of the Borrower
or any Subsidiary of the Borrower incurred after the Closing Date, (A) with
respect to which no principal payments are due prior to the date which is one
year and one day after the Final Maturity Date and (B) which is subordinated as
to exercise of remedies and in right of payment to the Borrower's Obligations
and such Subsidiary's Obligations, respectively, under the Loan Documents on,
and is otherwise subject to, terms and conditions (including, without
limitation, terms in respect of maturities, covenants, defaults and remedies and
interest rates) approved in writing by the Agent and in any event shall not
include Indebtedness issued pursuant to the Subordinated Notes.
"PERSON" shall mean and include any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or
other enterprise or any government or political subdivision or agency,
department or instrumentality thereof.
"PLAN" means any employee benefit plan covered by Title IV of ERISA,
the funding requirements of which:
17
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
(i) were the responsibility of the Borrower or a
member of its ERISA Controlled Group at any time within the six years
immediately preceding the Closing Date,
(ii) are currently the responsibility of the
Borrower or a member of its ERISA Controlled Group, or
(iii) hereafter become the responsibility of the
Borrower or a member of its ERISA Controlled Group,
including any such plans as may have been, or may hereafter be, terminated for
whatever reason.
"PREPAYMENT" shall have the meaning provided in Section 7.10(a)(i).
"PRO RATA SHARE" as to any Lender shall mean:
(a) with respect to all payments, computations and
determinations relating to the Term Loan Commitment or the Term Loan of any
Lender, the percentage obtained by dividing (i) the outstanding principal
balance of such Lender's Term Loan by (ii) the aggregate outstanding principal
balance of the Term Loans;
(b) with respect to all payments, computations and
determinations relating to the Revolving Loan Commitment or the Revolving Loans
of any Lender, or such Lender's interest in Letters of Credit (including,
without limitation, determinations of the Commitment Fee under Section 2.15(b)
and letter of credit fees under Section 3.2), the percentage obtained by
dividing (i) such Lender's Revolving Loan Commitment (or the aggregate
outstanding principal balance of such Lender's Revolving Loans and all L/C
Obligations in which such Lender has an interest, if the Revolving Loan
Commitments have been terminated pursuant to the terms of this Agreement) by
(ii) the Total Revolving Loan Commitment (or the aggregate outstanding principal
balance of the Revolving Loans and all L/C Obligations, if the Revolving Loan
Commitments have been terminated pursuant to the terms of this Agreement); and
(c) for all other purposes with respect to each Lender,
the percentage obtained by dividing (i) the sum of (A) the outstanding principal
balance of such Lender's Term Loan and (B) such Lender's Revolving Loan
Commitment (or the aggregate outstanding principal balance of such Lender's
Revolving Loans and all L/C Obligations in which such Lender has an interest, if
the Revolving Loan Commitments have been terminated pursuant to the terms of
this Agreement) by (ii) the sum of (A) the aggregate outstanding principal
balance of the Term Loans and (B) the Total Revolving Loan Commitment (or the
aggregate outstanding principal balance of the Revolving Loans and all L/C
Obligations, if the Revolving Loan Commitments have been terminated pursuant to
the terms of this Agreement).
"PURCHASING LENDERS" shall have the meaning provided in Section
10.4(d).
"RATE HEDGING OBLIGATIONS" shall mean any and all obligations of any
Loan Party to any Interest Rate Hedge Provider under Interest Rate Agreements
permitted pursuant to Section 7.14(a).
"REAL ESTATE COLLATERAL" shall mean Collateral subject to or purported
to be subject to the Lien of the Mortgages.
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"REAL ESTATE COLLATERAL VALUE" shall mean, at any time, the sum of (i)
the fair market values of all Real Estate Collateral then subject to the Lien of
the Mortgages, plus (ii) all amounts then on deposit or credited to the
Collateral Account, PROVIDED, that the Collateral Account is subject to a
Blocked Account Agreement. The fair market values of the Real Estate Collateral
for the purpose of calculating Real Estate Collateral Value shall be (i) for
Real Estate Collateral subject to the Lien of the Mortgages on or prior to July
8, 2002, as determined by appraisals delivered to the Agent on or prior to July
8, 2002 and (ii) for Real Estate Collateral that becomes subject to the Lien of
the Mortgages after July 8, 2002, as determined by appraisals delivered to the
Agent on or prior to July 8, 2002 or, if no such appraisals have been delivered
to the Agent on or prior to such date, then by an appraisal or appraisals
satisfactory to the Agent, prepared by a firm satisfactory to the Agent and
delivered to the Agent prior to such Real Estate Collateral being included in
the calculation of Real Estate Collateral Value.
"REDEEMABLE STOCK" shall mean any Equity Interest which, by its terms,
or upon the happening of any event matures, is mandatorily redeemable or
repurchaseable (other than for Capital Stock not constituting Redeemable Stock),
in whole or in part, prior to one year and one day after the Final Maturity
Date, or is, by its terms or upon the happening of any event, required to be
redeemed or repurchased, redeemable or repurchaseable at the option of the
holder thereof, in whole or in part, at any time prior to one year and one day
after the Final Maturity Date.
"REDEMPTION TRANSACTIONS" shall mean, collectively, the issuance of the
New Convertible Subordinated Notes, the redemption of the Convertible
Subordinated Notes with the proceeds from the issuance of the New Convertible
Subordinated Notes, net of customary underwriting fees and discounts, brokerage
commissions and other similar reasonable and customary costs and expenses
directly attributable to the issuance of the New Convertible Subordinated Notes
and to the extent such proceeds are insufficient to redeem all of the
Convertible Subordinated Notes outstanding on the date of the issuance of the
New Convertible Subordinated Notes, the redemption of the balance of the
Convertible Subordinated Notes with the proceeds of the Loans as soon as
practicable, but in no event later than March 15, 2004.
"REFERENCE BANKS" shall mean BNP Paribas, First Bank and Trust, Fleet
National Bank, U.S. Bank National Association, ▇▇▇▇▇ Fargo Bank, National
Association and Union Bank of California, N.A. and their respective successors.
"REGISTER" shall have the meaning provided in Section 10.4(h).
"REGULATION D" shall mean Regulation D of the Federal Reserve Board as
from time to time in effect and any successor to all or any portion thereof.
"REPLACEMENT LENDER" shall have the meaning provided in Section 2.22.
"REPORTABLE EVENT" has the meaning set forth in Section 4043(b) of
ERISA (other than a Reportable Event as to which the provision of 30 days notice
to the PBGC is waived under applicable regulations), or is the occurrence of any
of the events described in Section 4068(f) or 4063(a) of ERISA.
"REQUIRED LENDERS" shall mean all Lenders whose Pro Rata Shares, in the
aggregate, are greater than 50%.
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"RESTAURANT" shall mean a Timber Lodge restaurant or any quick service
restaurant.
"RETAIL PERIOD" shall mean any of the thirteen consecutive four week or
five week periods used by the Borrower for accounting purposes which begin on or
about the Tuesday after the last Monday in January of each year and ending on
the last Monday in January of the next year.
"REVOLVING LENDERS" shall mean, collectively, the Lenders holding the
Revolving Commitments or any outstanding Revolving Loan, L/C Obligation or
participation therein and "REVOLVING LENDER" means any one of them.
"REVOLVING LOAN COMMITMENT" shall mean at any time, for any Lender, the
amount set forth opposite such Lender's name on Schedule 1.1 hereto under the
heading "Revolving Loan Commitment," as such amount may be reduced from time to
time pursuant to the terms of this Agreement.
"REVOLVING LOAN MATURITY DATE" shall mean November 15, 2006.
"REVOLVING LOANS" shall have the meaning provided in Section 2.2(a).
"REVOLVING NOTE" shall have the meaning provided in Section 2.5(a).
"SALE AND LEASEBACK TRANSACTIONS" shall mean Existing Property Sale and
Leaseback Transactions and New Property Sale and Leaseback Transactions, in each
case, permitted to be entered into by the Borrower or any of its Subsidiaries
pursuant to Section 7.13(a).
"SECURED PARTIES" shall have the meaning provided in the Borrower
Security Agreement and the Subsidiary Security Agreement.
"SECURITY DOCUMENTS" shall mean and include the Borrower Security
Agreement, the Subsidiary Security Agreement, the Guaranty, the Borrower Pledge
Agreement, the Subsidiary Pledge Agreements, the Mortgages and all other
security agreements, pledge agreements, mortgages, leasehold mortgages,
assignments and similar agreements executed in connection with the Loan
Documents.
"SOLVENT" as to any Person shall mean that (i) the sum of the assets of
such Person, both at a fair valuation and at present fair salable value, will
exceed its liabilities, including contingent liabilities, (ii) such Person will
have sufficient capital with which to conduct its business as presently
conducted and as proposed to be conducted and (iii) such Person has not incurred
debts, and does not intend to incur debts, beyond its ability to pay such debts
as they mature. For purposes of this definition, "debt" means any liability on a
claim, and "claim" means (x) a right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, or (y)
a right to an equitable remedy for breach of performance if such breach gives
rise to a payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured. With respect to any such contingent liabilities, such
liabilities shall be computed at the amount which, in light of all the facts and
circumstances existing at the time, represents the amount which can reasonably
be expected to become an actual or matured liability.
20
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"STANDBY LETTER OF CREDIT" shall mean any standby letter of credit
issued by the Issuing Bank pursuant to Section 3 and which is not a Trade Letter
of Credit.
"SUBORDINATED DEBT DOCUMENTS" shall mean the Subordinated Notes and the
Subordinated Note Indentures.
"SUBORDINATED GUARANTOR" shall mean each Subsidiary of the Borrower
that guarantees any Indebtedness or other obligations of the Borrower or any
Subsidiary of the Borrower under or with respect to any of the New Subordinated
Notes.
"SUBORDINATED NOTE INDENTURES" shall mean the Convertible Subordinated
Note Indenture, the New Subordinated Note Indenture and the New Convertible
Subordinated Note Indenture.
"SUBORDINATED NOTES" shall mean the Convertible Subordinated Notes, the
New Subordinated Notes and the New Convertible Subordinated Notes.
"SUBSIDIARY" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned or controlled by such Person
directly or indirectly through one or more Subsidiaries and (ii) any
partnership, limited liability company, association, joint venture or other
entity in which such Person, directly or indirectly through one or more
Subsidiaries, is either a general partner or has a more than 50% equity interest
at the time. Unless otherwise expressly provided, all references to a
"Subsidiary" shall mean a Subsidiary of the Borrower.
"SUBSIDIARY PLEDGE AGREEMENT" shall mean each pledge agreement
substantially in the form of the Third Amended and Restated Subsidiary Pledge
Agreement set forth as Exhibit F hereto duly executed and delivered to the Agent
by each Subsidiary of the Borrower which owns any equity interest of any Person,
as the same may be amended, restated, modified or supplemented from time to
time.
"SUBSIDIARY SECURITY AGREEMENT" shall mean a security agreement
substantially in the form of the Third Amended and Restated Subsidiary Security
Agreement set forth as Exhibit G hereto duly executed and delivered to the Agent
by each Subsidiary of the Borrower (other than Immaterial Subsidiaries), as the
same may be amended, restated, modified or supplemented from time to time.
"SURVIVING DEBT" shall have the meaning provided in Section 4.1(o).
"TAXES" has the meaning set forth in Section 2.19(a).
"TERM LOAN" shall have the meaning provided in Section 2.1.
"TERM LOAN COMMITMENT" shall mean at any time, for any Lender, the
amount set forth opposite such Lender's name on Schedule 1.1 hereto under the
heading "Term Loan Commitment," as such amount may be reduced from time to time
pursuant to the terms of this Agreement.
"TERM LOAN LENDERS" means, collectively, the Lenders holding the Term
Loan Commitments or any outstanding Term Loans and "TERM LOAN LENDER" means any
one of them.
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"TERM LOAN MATURITY DATE" shall mean April 1, 2008.
"TERM LOAN PAYDOWN" shall have the meaning set forth in Section 2.1.
"TERM NOTE" shall have the meaning provided in Section 2.5(a).
"TERMINATION EVENT" shall mean (i) a Reportable Event, or (ii) the
initiation of any action by the Borrower, any member of the Borrower's ERISA
Controlled Group or any ERISA Plan fiduciary to terminate an ERISA Plan or the
treatment of an amendment to an ERISA Plan as a termination under ERISA, or
(iii) the institution of proceedings by the PBGC under Section 4042 of ERISA to
terminate an ERISA Plan or to appoint a trustee to administer any ERISA Plan.
"TIMBER LODGE" shall mean Timber Lodge Steakhouse, Inc., a Minnesota
corporation.
"TOTAL COMMITMENT" shall mean, at any time, the sum of the Commitments
of all of the Lenders at such time.
"TOTAL REVOLVING LOAN COMMITMENT" shall have the meaning set forth in
Section 2.2(a).
"TOTAL TERM LOAN COMMITMENT" shall have the meaning set forth in
Section 2.1(a).
"TRADE LETTER OF CREDIT" shall mean any Letter of Credit that is issued
pursuant to Section 3 for the benefit of a supplier of inventory to the Borrower
or any of its Subsidiaries to effect payment for such inventory.
"TRANSACTION DOCUMENTS" shall mean the Loan Documents.
"TRANSACTIONS" shall mean each of the transactions contemplated by the
Transaction Documents.
"TRANSFEREE" shall have the meaning provided in Section 10.4(e).
"TYPE" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the applicable jurisdiction.
"UNFUNDED BENEFIT LIABILITIES" shall mean with respect to any Plan at
any time, the amount (if any) by which (i) the present value of all benefit
liabilities under such Plan as defined in Section 4001(a)(16) of ERISA, 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 (on the basis
of assumptions prescribed by the PBGC for the purpose of Section 4044 of ERISA).
"UNUSED PORTION" shall mean at any time with respect to the Revolving
Loans, the amount by which the Total Revolving Loan Commitment in effect at such
time exceeds the sum of (i) the aggregate principal amount of the Revolving
Loans outstanding at such time and (ii) the aggregate amount of L/C Obligations
outstanding at such time.
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
"VOTING STOCK" shall mean capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though the right
so to vote has been suspended by the happening of such a contingency.
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES.
Section 2.1 Term Loans. Subject to and upon the terms and
conditions herein set forth, each Term Loan Lender severally and not jointly
agrees to make a single loan to the Borrower on the Closing Date of a sum not
exceeding the Term Loan Commitment of such Term Loan Lender (each such loan, a
"TERM LOAN"). The aggregate principal amount of the Term Loan Commitments (the
"TOTAL TERM LOAN COMMITMENT") shall not exceed $25,000,000. All unutilized Term
Loan Commitments shall expire simultaneously with the making of the Term Loans
on the Closing Date. The Term Loan of each Term Loan Lender made on the Closing
Date shall be initially made as a Base Rate Loan or a Eurodollar Loan (subject
to the other terms of this Agreement, including without limitation, Section 2.3
and Section 2.17) and may thereafter be maintained at the option of the Borrower
as a Base Rate Loan or a Eurodollar Loan, in accordance with the provisions
hereof. Once repaid, Term Loans may not be reborrowed. The Borrower shall repay
the principal amounts with respect to the Term Loans on the dates and in the
amounts set forth below (each, a "TERM LOAN PAYDOWN"):
23
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
DATE PAYDOWN AMOUNT
---- --------------
January 1, 2004 $ 937,500
April 1, 2004 $ 937,500
July 1, 2004 $ 937,500
October 1, 2004 $ 937,500
January 1, 2005 $ 1,250,000
April 1, 2005 $ 1,250,000
July 1, 2005 $ 1,250,000
October 1, 2005 $ 1,250,000
January 1, 2006 $ 1,250,000
April 1, 2006 $ 1,250,000
July 1, 2006 $ 1,250,000
October 1, 2006 $ 1,250,000
January 1, 2007 $ 1,250,000
April 1, 2007 $ 1,250,000
July 1, 2007 $ 1,250,000
October 1, 2007 $ 1,250,000
January 1, 2008 $ 3,125,000
April 1, 2008 $ 3,125,000
The Term Loans shall mature on the Term Loan Maturity Date and shall be repaid
in full, without premium or penalty, by the Borrower, on the Term Loan Maturity
Date; PROVIDED HOWEVER, that the last such installment due on the Term Loan
Maturity Date shall be in the amount necessary to repay in full the aggregate
unpaid principal balance of the Term Loans.
Section 2.2 Revolving Loans.
(a) Subject to and upon the terms and conditions
herein set forth, each Lender severally and not jointly agrees, at any time and
from time to time on and after the Closing Date and prior to the Revolving Loan
Maturity Date, to make revolving loans (collectively, "REVOLVING LOANS") to the
Borrower, which Revolving Loans shall not exceed in aggregate principal amount
at any time outstanding (i) the Revolving Loan Commitment of such Lender at such
time minus (ii) such Lender's Pro Rata Share of the L/C Obligations at such
time; PROVIDED that at no time shall the aggregate outstanding principal amount
of the Revolving Loans of all of the Lenders plus the L/C Obligations of all of
the Lenders exceed the Total Revolving Loan Commitment. The sum of the Revolving
Loan Commitments of all of the Lenders (the "TOTAL REVOLVING LOAN COMMITMENT")
as of the date hereof is $150,000,000. The Revolving Loans of each Lender made
on the Closing Date shall be initially made as a Base Rate Loan or a Eurodollar
Loan (subject to the
24
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
other terms of this Agreement, including without limitation, Section 2.3 and
Section 2.17) and may thereafter be maintained at the option of the Borrower as
a Base Rate Loan or a Eurodollar Loan, in accordance with the provisions hereof.
(b) Revolving Loans may be voluntarily prepaid
pursuant to Section 2.11, and, subject to the other provisions of this
Agreement, any amounts so prepaid may be reborrowed. Each Lender's Revolving
Loan Commitment shall expire, and each Revolving Loan shall mature on, the
Revolving Loan Maturity Date, without further action on the part of the Lenders
or the Agent.
(c) Each Borrowing of Revolving Loans shall be
in the aggregate minimum amount of $500,000 or any integral multiple of $500,000
in excess thereof.
Section 2.3 Notice of Borrowing.
(a) Whenever the Borrower desires to borrow
Revolving Loans hereunder, it shall give the Agent at the Agent's Office prior
to 12:00 Noon, Chicago time, on the Business Day of such borrowing by telex,
facsimile or telephonic notice (promptly confirmed in writing) of each Base Rate
Loan, and at least three Business Days' prior telex, facsimile or telephonic
notice (promptly confirmed in writing) of each Eurodollar Loan to be made
hereunder. Each such notice shall be in the form of Exhibit J hereto (a "NOTICE
OF BORROWING") shall be irrevocable and shall specify (i) the aggregate
principal amount of the requested Revolving Loans, (ii) the date of Borrowing
(which shall be a Business Day), and (iii) whether such Revolving Loans shall
consist of Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the
initial Interest Period to be applicable thereto (PROVIDED, that no Eurodollar
Loan may be requested or made when any Default or Event of Default has occurred
and is continuing).
(b) Promptly after receipt of a Notice of
Borrowing, the Agent shall provide each Lender with a copy thereof and inform
each Lender as to its Pro Rata Share of the Revolving Loans requested
thereunder.
Section 2.4 Disbursement of Funds.
(a) No later than 2:00 P.M., Chicago time, on
the date specified in each Notice of Borrowing, each Lender will make available
its Pro Rata Share of the Revolving Loans requested to be made on such date, in
U.S. dollars and immediately available funds, at the Agent's Office. After the
Agent's receipt of the proceeds of such Revolving Loans, the Agent will make
available to the Borrower by depositing in the Borrower's account at the Agent's
Office the aggregate of the amounts so made available in the type of funds
actually received.
(b) Unless the Agent shall have been notified by
any Lender prior to the date of a Borrowing that such Lender does not intend to
make available to the Agent its portion of the Revolving Loans to be made on
such date, the Agent may assume that such Lender has made such amount available
to the Agent on such date and the Agent in its sole discretion may, in reliance
upon such assumption, make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Agent by such
Lender and the Agent has made such amount available to the Borrower, the Agent
shall be entitled to recover such corresponding amount on demand from such
Lender. If such Lender does not pay such corresponding amount forthwith upon the
Agent's demand therefor, the Agent shall promptly notify the Borrower and the
Borrower shall immediately repay such corresponding amount to the Agent. The
Agent shall also be entitled to
25
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
recover from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent, at a rate per annum equal to the
then applicable rate of interest, calculated in accordance with Section 2.6, for
the respective Revolving Loans. Nothing herein shall be deemed to relieve any
Lender from its obligation to fulfill its commitments hereunder or to prejudice
any rights which the Borrower may have against any Lender as a result of any
default by such Lender hereunder. Notwithstanding anything contained herein or
in any other Loan Document to the contrary, the Agent may apply all funds and
proceeds of Collateral available for the payment of any Obligations first to
repay any amount owing by any Lender to the Agent as a result of such Lender's
failure to fund its Revolving Loans hereunder.
Section 2.5 Notes.
(a) The Borrower's obligation to pay the
principal of, and interest on, each Lender's Loans shall be evidenced by (i) in
the case of such Lender's Term Loans, a promissory note (as the same may be
amended, restated, supplemented or otherwise modified from time to time, a "TERM
NOTE") duly executed and delivered by the Borrower substantially in the form of
Exhibit A hereto in a principal amount equal to such Lender's Term Loan with
blanks appropriately completed in conformity herewith and (ii) in the case of
such Lender's Revolving Loans, a promissory note (as the same may be amended,
restated, supplemented or otherwise modified from time to time, a "REVOLVING
NOTE") duly executed and delivered by the Borrower substantially in the form of
Exhibit B hereto in a principal amount equal to such Lender's Revolving Loan
Commitment, with blanks appropriately completed in conformity herewith. Each
Note issued to a Lender shall (x) be payable to the order of such Lender, (y) be
dated the date such Note was issued, and (z) mature on the Term Loan Maturity
Date or the Revolving Loan Maturity Date, as the case may be.
(b) Each Lender is hereby authorized, at its
option, either (i) to endorse on the schedule attached to its Revolving Note (or
on a continuation of such schedule attached to such Revolving Note and made a
part thereof) an appropriate notation evidencing the date and amount of each
Revolving Loan evidenced thereby and the date and amount of each principal and
interest payment in respect thereof, or (ii) to record such Revolving Loans and
such payments in its books and records. Such schedule or such books and records,
as the case may be, shall constitute prima facie evidence of the accuracy of the
information contained therein.
Section 2.6 Interest.
(a) (i) The Borrower agrees to pay interest
in respect of the unpaid principal amount of each Revolving Loan that is a Base
Rate Loan from the date of the making of such Revolving Loan until such
Revolving Loan shall be paid in full at a rate per annum which shall be equal to
the sum of (x) the Applicable Margin plus (y) the Base Rate in effect from time
to time, such rate to change as and when the Base Rate changes, such interest to
be computed on the basis of a 365 or 366 day year, as the case may be, and paid
for the actual number of days elapsed, subject to the provisions of clause (c)
of this Section 2.6.
(ii) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Term Loan that is a Base Rate
Loan from the date of the making of such Loan until such Loan shall be paid in
full at a rate per annum which shall be equal to the sum of (x) 2.5% plus (y)
the Base Rate in effect from time to time, such rate to change as and when the
Base Rate changes,
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
such interest to be computed on the basis of a 365 or 366-day year, as the case
may be, and paid for the actual number of days elapsed, subject to the
provisions of clause (c) of this Section 2.6.
(b) (i) The Borrower agrees to pay interest
in respect of the unpaid principal amount of each Revolving Loan that is a
Eurodollar Loan from the date of the making of such Revolving Loan until such
Revolving Loan shall be paid in full at a rate per annum which shall be equal to
the sum of (x) the Applicable Margin plus (y) the relevant Eurodollar Rate, such
interest to be computed on the basis of a 360-day year and paid for the actual
number of days elapsed, subject to the provisions of clause (c) of this Section
2.6.
(ii) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Term Loan that is a Eurodollar
Loan from the date of the making of such Term Loan until such Term Loan shall be
paid in full at a rate per annum which shall be equal to the sum of (x) 3.75%
plus (y) the relevant Eurodollar Rate, such interest to be computed on the basis
of a 360-day year and paid for the actual number of days elapsed, subject to the
provisions of clause (c) of this Section 2.6.
(c) In the event that, and for so long as, any
Event of Default shall have occurred and be continuing, the outstanding
principal amount of all Loans and, to the extent permitted by law, overdue
interest in respect of all Loans, shall bear interest at a rate per annum (the
"DEFAULT RATE") equal to (i) for Revolving Loans, the sum of (x) two percent
(2%) plus (y) the Applicable Margin applicable to Revolving Loans that are Base
Rate Loans plus (z) the Base Rate in effect from time to time, and shall be
payable on demand, and (ii) for Term Loans, the sum of (x) two percent (2%) plus
(y) 2.5% plus (z) the Base Rate in effect from time to time, and shall be
payable on demand.
(d) Interest on each Loan shall accrue from and
including the date of the Borrowing thereof to but excluding the date of any
repayment thereof (PROVIDED that any Loan borrowed and repaid on the same day
shall accrue one day's interest) and shall be payable (i) in respect of each
Base Rate Loan, quarterly in arrears on each Payment Date, (ii) in respect of
each Eurodollar Loan, on the last day of each Interest Period applicable to such
Loan and, in the case of an Interest Period of six months, on the date occurring
three months from the first day of such Interest Period and on the last day of
such Interest Period, and (iii) in the case of all Loans, on any prepayment or
conversion (on the amount prepaid or converted), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand. Each
determination by the Agent of an interest rate hereunder shall, except for
manifest error, be final, conclusive and binding for all purposes.
(e) In the event that the Eurodollar Base Rate
is to be determined by reference to the Reference Banks, each Reference Bank
agrees to furnish to the Agent timely information for the purpose of determining
each Eurodollar Base Rate. If any one or more of the Reference Banks shall not
furnish such timely information to the Agent for the purpose of determining any
such interest rate, the Agent shall determine such interest rate on the basis of
timely information furnished by the remaining Reference Banks. The Agent shall
give prompt notice to the Borrower and the Lenders of the applicable interest
rate determined by the Agent for purposes of Section 2.6(b), and the rate, if
any, furnished by each Reference Bank for the purpose of determining the
interest rate under Section 2.6(b).
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Section 2.7 Interest Periods.
(a) The Borrower shall, in each Notice of
Borrowing or Notice of Conversion or Continuation in respect of the making of,
conversion into or continuation of a Eurodollar Loan, select the interest period
(each an "INTEREST PERIOD") applicable to such Eurodollar Loan, which Interest
Period shall, at the option of the Borrower, be either a one-month, two-month,
three-month or six-month period, PROVIDED that:
(i) the initial Interest Period for any
Eurodollar Loan shall commence on the date of the making of such Loan
(including the date of any conversion from a Base Rate Loan) and each
Interest Period occurring thereafter in respect of such Loan shall
commence on the date on which the next preceding Interest Period
expires;
(ii) if any Interest Period would
otherwise expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day, PROVIDED,
HOWEVER, that if any Interest Period would otherwise expire on a day
which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(iii) if any Interest Period begins on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall
end on the last Business Day of such calendar month;
(iv) no Interest Period in respect of
any Revolving Loan or any Term Loan shall extend beyond the Revolving
Loan Maturity Date or the Term Loan Maturity Date, as the case may be;
and
(v) no Interest Period in respect of a
Term Loan shall extend beyond any date upon which a repayment of the
Term Loans is required to be made pursuant to Section 2.1 unless the
aggregate principal amount of Term Loans which are Base Rate Loans or
which have Interest Periods which will expire on or before such date is
equal to or in excess of the amount of the Term Loan repayment required
to be made on such date.
(b) If upon the expiration of any Interest
Period, the Borrower has failed to elect a new Interest Period to be applicable
to the respective Eurodollar Loan as provided above, the Borrower shall be
deemed to have elected to convert such Eurodollar Loans into Base Rate Loans
effective as of the expiration date of such current Interest Period.
Section 2.8 Minimum Amount of Eurodollar Loans. All
borrowings, conversions, continuations, payments, prepayments and selection of
Interest Periods hereunder shall be made or selected so that, after giving
effect thereto, (i) the aggregate principal amount of any Borrowing comprised of
Eurodollar Loans shall not be less than $3,000,000 or an integral multiple of
$500,000 in excess thereof, and (ii) there shall be no more than twelve (12)
Borrowings comprised of Eurodollar Loans outstanding at any time.
Section 2.9 Conversion or Continuation.
(a) Subject to the other provisions hereof, the
Borrower shall have the option (i) to convert at any time all or any part of
outstanding Base Rate Loans which comprise part
28
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
of the same Borrowing to Eurodollar Loans, (ii) to convert all or any part of
outstanding Eurodollar Loans which comprise part of the same Borrowing to Base
Rate Loans, on the expiration date of the Interest Period applicable thereto, or
(iii) to continue all or any part of outstanding Eurodollar Loans which comprise
part of the same Borrowing as Eurodollar Loans for an additional Interest
Period, on the expiration of the Interest Period applicable thereto; PROVIDED,
that no Loan may be continued as, or converted into, a Eurodollar Loan when any
Default or Event of Default has occurred and is continuing.
(b) In order to elect to convert or continue a
Loan under this Section 2.9, the Borrower shall deliver an irrevocable notice
thereof (a "NOTICE OF CONVERSION OR CONTINUATION") to the Agent no later than
12:00 Noon, Chicago time, (i) on the Business Day of the proposed conversion
date in the case of a conversion to a Base Rate Loan and (ii) at least three
Business Days in advance of the proposed conversion or continuation date in the
case of a conversion to, or a continuation of, a Eurodollar Loan. A Notice of
Conversion or Continuation shall specify (w) the requested conversion or
continuation date (which shall be a Business Day), (x) the amount, Facility and
Type of the Loan to be converted or continued, (y) whether a conversion or
continuation is requested, and (z) in the case of a conversion to, or a
continuation of, a Eurodollar Loan, the requested Interest Period. Promptly
after receipt of a Notice of Conversion or Continuation under this Section
2.9(b), the Agent shall provide each Lender with a copy thereof.
Section 2.10 Voluntary Reduction of Commitments. Upon at least
three Business Day's prior irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Agent (which notice the Agent shall
promptly transmit to each of the Lenders), the Borrower shall have the right,
without premium or penalty, to permanently reduce each Lender's Pro Rata Share
of all or part of the Total Revolving Loan Commitment, PROVIDED that any such
partial reduction shall be in the minimum aggregate amount of $1,000,000 or any
integral multiple of $500,000 in excess thereof.
Section 2.11 Voluntary Prepayments. The Borrower shall have
the right to prepay the Loans in whole or in part from time to time on the
following terms and conditions: (i) the Borrower shall give the Agent written
notice (or telephonic notice promptly confirmed in writing), which notice shall
be irrevocable, of its intent to prepay the Loans, at least three Business Days
prior to a prepayment of Eurodollar Loans and on the Business Day of a
prepayment of Base Rate Loans, which notice shall specify the amount of such
prepayment and what Types of Loans and which Facilities are to be prepaid and,
in the case of Eurodollar Loans, the specific Borrowing(s) pursuant to which
made, and which notice the Agent shall promptly transmit to each of the Lenders,
(ii) each prepayment shall be in an aggregate principal amount of $1,000,000 or
any integral multiple of $500,000 in excess thereof and (iii) partial
prepayments of the Term Loans shall be applied to the remaining scheduled
installments of principal thereof on a pro rata basis; PROVIDED that if any
prepayment of Eurodollar Loans is made pursuant to this Section 2.11 on a day
which is not the last day of the Interest Period applicable thereto, the
Borrower shall pay to each Lender all amounts due in connection with such
prepayment pursuant to Section 2.17.
Section 2.12 Mandatory Prepayments.
(a) Upon the consummation of any Asset
Disposition or upon the receipt by any Loan Party of any Liquidating
Distribution after the Closing Date, in each case within 270 days after the
Borrower or any of its Subsidiaries receives any Net Sale Proceeds, the Borrower
shall prepay the outstanding Loans in an amount equal to 100% of the amount of
such Net Sale Proceeds,
29
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
in accordance with the provisions of Section 2.13; PROVIDED, HOWEVER, that such
Net Sale Proceeds which the Borrower or such Subsidiary shall, within 270 days
after receipt thereof, use to reinvest in the business of the Borrower of its
Subsidiaries, shall not be included in determining the aggregate Net Sale
Proceeds for such period; PROVIDED, FURTHER that, if an Event of Default shall
have occurred and be continuing on the date such Net Sale Proceeds are received
by the Borrower or any of its Subsidiaries or at any time during such 270 day
period, then the Borrower shall prepay the outstanding Loans in an amount equal
to 100% of such Net Sale Proceeds (or, if any portion of such proceeds shall
have been reinvested prior to the occurrence of such Event of Default, 100% of
such remaining amount of Net Sale Proceeds not so reinvested), in accordance
with the provisions of Section 2.13, on the later of the date such Net Sale
Proceeds are received by the Borrower or any of its Subsidiaries or the date of
the occurrence of such Event of Default.
(b) On each date on which the Borrower or any of
its Subsidiaries receives any Net Equity Proceeds, the Borrower shall prepay the
outstanding Loans in an amount equal to (i) 50% of such Net Equity Proceeds if
both (A) the Leverage Ratio as of the end of the fiscal quarter immediately
preceding such date as to which financial statements are required to have been
delivered pursuant to Sections 6.1(a) and 6.1(b), as applicable, on a pro forma
basis after giving effect to any prepayment made by the Borrower pursuant to
clause (ii)(A) of this Section 2.12(b), is less than 2.0 to 1.0 and (B) no
Default or Event of Default has occurred or is continuing as a result of the
Borrower's failure to deliver any financial statement or Compliance Certificate
as and when required pursuant to Section 6.1(a), 6.1(b) or 6.1(e), as applicable
and (ii) 75% of such Net Equity Proceeds if either (A) the Leverage Ratio as of
the end of the fiscal quarter immediately preceding such date as to which
financial statements are required to have been delivered pursuant to Section
6.1(a) or 6.1(b), as applicable, is greater than or equal to 2.0 to 1.0 (but
only until the Leverage Ratio is less than 2.0 to 1.0, at which time clause (i)
of this Section 2.12(b) shall apply (unless clause (ii)(B) of this Section
2.12(b) shall then be applicable)) or (B) any Default or Event of Default has
occurred and is continuing as a result of the Borrower's failure to deliver any
financial statement or Compliance Certificate as and when required pursuant to
Sections 6.1(a), 6.1(b) or 6.1(e), as applicable, in each case in accordance
with the provisions of Section 2.13.
(c) On each date on which the Borrower or any of
its Subsidiaries receives any Net Debt Proceeds or becomes or remains liable
with respect to Indebtedness with respect to Capitalized Leases in excess of
$100,000,000 in the aggregate at any one time outstanding for the Borrower and
its Subsidiaries, the Borrower shall prepay the outstanding Loans in an amount
equal to 100% of such Net Debt Proceeds or 100% of the amount by which the
aggregate amount of Indebtedness of the Borrower and its Subsidiaries with
respect to Capitalized Leases exceeds $100,000,000 on such date, respectively,
in accordance with the provisions of Section 2.13.
(d) On each day on which the Total Revolving
Loan Commitment is reduced pursuant to Section 2.10 the Borrower shall prepay
the Revolving Loans to the extent, if any, that the outstanding principal amount
of the Revolving Loans exceeds such reduced Total Revolving Loan Commitment.
(e) If at any time and for any reason the
aggregate principal amount of Revolving Loans plus the L/C Obligations then
outstanding are greater than the Total Revolving Loan Commitment, the Borrower
shall immediately prepay the Revolving Loans in an amount equal to such excess.
In addition, to the extent at any time and for any reason, the Total Revolving
Loan Commitment minus the aggregate principal amount of Revolving Loans then
outstanding, is less than the amount of L/C Obligations outstanding at such
time, the Borrower shall Cash Collateralize the
30
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
L/C Obligations in an amount equal to the amount by which such L/C Obligations
exceed the amount equal to the difference between the Total Revolving Loan
Commitment and such aggregate principal amount of Revolving Loans.
(f) The Borrower shall make each Term Loan
Paydown in accordance with Section 2.1.
(g) Nothing in this Section 2.12 shall be
construed to constitute the Lenders' consent to any transactions referred to in
Sections 2.12(a), 2.12(b) or 2.12(c) above which transaction is not expressly
permitted by the terms of this Agreement.
Section 2.13 Application of Prepayments.
(a) All prepayments of the Loans required by
clauses (a) through (c) of Section 2.12 shall be applied first, to prepay the
Term Loans until such Term Loans shall have been repaid in full, together with
accrued and unpaid interest thereon, second, to prepay the Revolving Loans until
such Revolving Loans shall have been repaid in full, together with accrued and
unpaid interest thereon, third, to Cash Collateralize the then outstanding
Letters of Credit and, fourth, to all other outstanding Obligations. If (i) at
the time of any prepayment of the principal amount of the Revolving Loans
pursuant to the preceding sentence (other than any prepayment required by
Section 2.12(a)) either (A) the Leverage Ratio as of the end of the fiscal
quarter immediately preceding such date as to which financial statements are
required to have been delivered pursuant to Section 6.1(a) or 6.1(b), as
applicable, is greater than or equal to 2.0 or (B) any Default has occurred and
is continuing as a result of the Borrower's failure to deliver any financial
statement or Compliance Certificate as and when required pursuant to Section
6.1(a), 6.1(b) or 6.1(e), as applicable, then simultaneously with any prepayment
of the principal amount of the Revolving Loans pursuant to the preceding
sentence, each Lender's Revolving Loan Commitment shall be permanently reduced
by such Lender's Pro Rata Share of such prepayment and, (ii) at the time of any
prepayment of the principal amount of the Revolving Loans pursuant to the
preceding sentence (other than any prepayment required by Section 2.12(a)), both
(A) the Leverage Ratio as of the end of the fiscal quarter immediately preceding
such date as to which financial statements are required to have been delivered
pursuant to Sections 6.1(a) and 6.1(b), as applicable, is less than 2.0 and (B)
no Default has occurred or is continuing as a result of the Borrower's failure
to deliver any financial statement or Compliance Certificate as and when
required pursuant to Section 6.1(a), 6.1(b) or 6.1(e), as applicable, then, any
Revolving Loans repaid pursuant to the preceding sentence may be reborrowed,
subject to the other terms of this Agreement.
(b) Simultaneously with any prepayment of the
principal amount of Revolving Loans pursuant to Section 2.12(a), each Lender's
Revolving Loan Commitment shall be permanently reduced by such Lender's Pro Rata
Share of such prepayment.
(c) All prepayments of the then remaining Term
Loans required by clauses (a) through (c) of Section 2.12 shall be applied on a
pro rata basis to the scheduled installments of principal thereof.
Section 2.14 Method and Place of Payment.
(a) Except as otherwise specifically provided
herein, all payments and prepayments under this Agreement and the Notes shall be
made to the Agent for the account of the
31
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Lenders entitled thereto not later than 2:00 P.M., Chicago time, on the date
when due and shall be made in lawful money of the United States of America in
immediately available funds at the Agent's Office, and any funds received by the
Agent after such time shall, for all purposes hereof (including the following
sentence), be deemed to have been paid on the next succeeding Business Day.
Except as otherwise specifically provided herein, the Agent shall thereafter
cause to be distributed on the date of receipt thereof to each Lender in like
funds its Pro Rata Share of payments so received.
(b) Whenever any payment to be made hereunder or
under any Note shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable at the
applicable rate during such extension.
(c) All payments made by the Borrower hereunder
and under the other Loan Documents shall be made irrespective of, and without
any reduction for, any setoff or counterclaims.
Section 2.15 Fees.
(a) The Borrower agrees to pay the fees in the
amounts and on the dates specified in the Fee Letter.
(b) The Borrower agrees to pay to the Agent for
the account of each Lender a commitment fee (the "COMMITMENT FEE") for each day
computed at the per annum rate equal to the Applicable Margin (determined for
the Commitment Fee in accordance with the definition of Applicable Margin)
multiplied by each such Lender's Pro Rata Share of the average daily Unused
Portion, from and including the Closing Date to the Revolving Loan Maturity
Date.
(c) The Commitment Fee shall accrue from and
including the Closing Date to but excluding the Revolving Loan Maturity Date.
Accrued fees under this Section 2.15 shall be payable on the Closing Date and
payable quarterly in arrears on each Payment Date, commencing December 15, 2003,
and on the Revolving Loan Maturity Date or such earlier date, if any, on which
the Revolving Loan Commitments shall terminate in accordance with the terms
hereof. The Commitment Fee and all other fees due under the Loan Documents
(collectively the "FEES") shall be calculated on the basis of a 360-day year for
the actual number of days elapsed.
Section 2.16 Interest Rate Unascertainable, Increased Costs,
Illegality.
(a) In the event that the Agent, in the case of
clause (i) below, or any Lender, in the case of clauses (ii) and (iii) below,
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto):
(i) on any date for determining the
Eurodollar Rate for any Interest Period, that by reason of any changes
arising after the Closing Date affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
the Eurodollar Rate; or
(ii) at any time, that the relevant
Eurodollar Rate applicable to any of its Loans shall not represent the
effective pricing to such Lender for funding or maintaining a
Eurodollar Loan, or such Lender shall incur increased costs or
reductions in the
32
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
amounts received or receivable hereunder in respect of any Eurodollar
Loan, in any such case because of (x) any change since the Closing Date
in any applicable law or governmental rule, regulation, guideline or
order or any interpretation thereof and including the introduction of
any new law or governmental rule, regulation, guideline or order (such
as for example but not limited to a change in official reserve
requirements, but, in all events, excluding reserves required under
Regulation D of the Federal Reserve Board to the extent included in the
computation of the Eurodollar Rate), whether or not having the force of
law and whether or not failure to comply therewith would be unlawful,
and/or (y) other circumstances affecting such Lender or the interbank
Eurodollar market or the position of such Lender in such market; or
(iii) at any time, that the making or
continuance by it of any Eurodollar Loan has become unlawful by
compliance by such Lender in good faith with any law or governmental
rule, regulation, guideline or order (whether or not having the force
of law and whether or not failure to comply therewith would be
unlawful) or has become impracticable as a result of a contingency
occurring after the Closing Date which materially and adversely affects
the interbank Eurodollar market;
then, and in any such event, the Agent or such Lender shall, promptly after
making such determination, give notice (by telephone promptly confirmed in
writing) to the Borrower and (if applicable) the Agent of such determination
(which notice the Agent shall promptly transmit to each of the other Lenders).
Thereafter (x) in the case of clause (i) above, the Borrower's right to request
Eurodollar Loans shall be suspended, and any Notice of Borrowing or Notice of
Conversion or Continuation given by the Borrower with respect to any Borrowing
of Eurodollar Loans which has not yet been made shall be deemed cancelled and
rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower
shall pay to such Lender, upon such Lender's delivery of a written demand
therefor to the Borrower with a copy to the Agent, such additional amounts (in
the form of an increased rate of interest, or a different method of calculating
interest, or otherwise, as such Lender in its sole discretion shall determine)
as shall be required to compensate such Lender for such increased costs or
reduction in amounts received or receivable hereunder and (z) in the case of
clause (iii) above, the Borrower shall take one of the actions specified in
clause (b) below as promptly as possible and, in any event, within the time
period required by law. The written demand provided for in clause (y) shall
demonstrate in reasonable detail the calculation of the amounts demanded and
shall, absent manifest error, be final and conclusive and binding upon all of
the parties hereto.
(b) In the case of any Eurodollar Loan or
requested Eurodollar Loan affected by the circumstances described in clause
(a)(ii) above, the Borrower may, and in the case of any Eurodollar Loan affected
by the circumstances described in clause (a)(iii) above the Borrower shall,
either (i) if any such Eurodollar Loan has not yet been made but is then the
subject of a Notice of Borrowing or a Notice of Conversion or Continuation, be
deemed to have cancelled and rescinded such notice, or (ii) if any such
Eurodollar Loan is then outstanding, require the affected Lender to convert each
such Eurodollar Loan into a Base Rate Loan at the end of the applicable Interest
Period or such earlier time as may be required by law, in each case by giving
the Agent notice (by telephone promptly confirmed in writing) thereof on the
Business Day that the Borrower was notified by the Lender pursuant to clause (a)
above; PROVIDED, HOWEVER, that all Lenders whose Eurodollar Loans are affected
by the circumstances described in clause (a) above shall be treated in the same
manner under this clause (b).
33
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
(c) In the event that the Agent determines at
any time following its giving of notice based on the conditions described in
clause (a)(i) above that none of such conditions exist, the Agent shall promptly
give notice thereof to the Borrower and the Lenders, whereupon the Borrower's
right to request Eurodollar Loans from the Lenders and the Lenders' obligation
to make Eurodollar Loans shall be restored.
(d) In the event that a Lender determines at any
time following its giving of a notice based on the conditions described in
clause (a)(iii) above that none of such conditions exist, such Lender shall
promptly give notice thereof to the Borrower and the Agent, whereupon the
Borrower's right to request Eurodollar Loans from such Lender and such Lender's
obligation to make Eurodollar Loans shall be restored.
Section 2.17 Funding Losses. The Borrower shall compensate
each Lender, upon such Lender's delivery of a written demand therefor to the
Borrower, with a copy to the Agent (which demand shall set forth the basis for
requesting such amounts and shall, absent manifest error, be final and
conclusive and binding upon all of the parties hereto), for all reasonable
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by such Lender in connection with the liquidation
or reemployment of deposits or funds required by it to make or carry its
Eurodollar Loans), that such Lender sustains: (i) if for any reason (other than
a default by such Lender) a Borrowing of, or conversion from or into, or a
continuation of, Eurodollar Loans does not occur on a date specified therefor in
a Notice of Borrowing or Notice of Conversion or Continuation (whether or not
rescinded, cancelled or withdrawn or deemed rescinded, cancelled or withdrawn,
pursuant to Section 2.16(a) or 2.16(b) or otherwise), (ii) if any prepayment or
repayment (including, without limitation, payment after acceleration) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of the Interest Period applicable thereto, (iii) if any prepayment of any of
its Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower, or (iv) as a consequence of any default by the Borrower
in repaying its Eurodollar Loans or any other amounts owing hereunder in respect
of its Eurodollar Loans when required by the terms of this Agreement.
Calculation of all amounts payable to a Lender under this Section 2.17 shall be
made on the assumption that such Lender has funded its relevant Eurodollar Loan
through the purchase of a Eurodollar deposit bearing interest at the Eurodollar
Rate in an amount equal to the amount of such Eurodollar Loan with a maturity
equivalent to the Interest Period applicable to such Eurodollar Loan, and
through the transfer of such Eurodollar deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States of America,
PROVIDED that each Lender may fund its Eurodollar Loans in any manner that it in
its sole discretion chooses and the foregoing assumption shall only be made in
order to calculate amounts payable under this Section 2.17.
Section 2.18 Increased Capital. If any Lender shall have
determined that compliance with any applicable law, rule, regulation, guideline,
request or directive (whether or not having the force of law) of any
governmental authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital or assets of such Lender or
any Person controlling such Lender as a consequence of its commitments or
obligations hereunder, then from time to time, upon such Lender's delivering a
written demand therefor to the Agent and the Borrower (with a copy to the
Agent), the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender or Person for such reduction.
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Section 2.19 Taxes.
(a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without reduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any governmental
authority excluding, in the case of the Agent and each Lender, net income and
franchise taxes imposed on the Agent or such Lender by the jurisdiction under
the laws of which the Agent or such Lender is organized or any political
subdivision or taxing authority thereof or therein, or by any jurisdiction in
which such Lender's Domestic Lending Office or Eurodollar Lending Office, as the
case may be, is located or any political subdivision or taxing authority thereof
or therein (all such non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called "TAXES"). If any Taxes are required to be
withheld from any amounts payable to the Agent or any Lender hereunder or under
the Notes, the amounts so payable to the Agent or such Lender shall be increased
to the extent necessary to yield to the Agent or such Lender (after payment of
all Taxes) interest or any such other amounts payable hereunder at the rates or
in the amounts specified in this Agreement and the Notes. Whenever any Taxes are
payable by the Borrower, as promptly as possible thereafter, the Borrower shall
send to the Agent for its own account or for the account of such Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Taxes when
due to the appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Agent or any Lender as a result of any
such failure. The agreements in this Section 2.19 shall survive the termination
of this Agreement and the payment of the Notes and all other Obligations.
(b) Each Lender that is not incorporated under
the laws of the United States of America or a state thereof (including each
Purchasing Lender that becomes a party to this Agreement pursuant to Section
10.4) agrees that, prior to the first date on which any payment is due to it
hereunder, it will deliver to the Borrower and the Agent (i) two duly completed
copies of United States Internal Revenue Service Form W-8BEN or W-8ECI or
successor applicable form, as the case may be, certifying in each case that such
Lender is entitled to receive payments under this Agreement and the Notes
payable to it, without deduction or withholding of any United States federal
income taxes, and (ii) an Internal Revenue Service Form W-8 (or W-8BEN) or W-9
or successor applicable form, as the case may be, to establish an exemption from
United States backup withholding tax. Each Lender which delivers to the Borrower
and the Agent a Form W-8BEN or W-8ECI and Form W-8 (or W-8BEN) or W-9 pursuant
to the preceding sentence further undertakes to deliver to the Borrower and the
Agent two further copies of the said letter and Form W-8BEN or W-8ECI and Form
W-8 (or W-8BEN) or W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such letter or
form expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent letter and form previously delivered by it to the
Borrower, and such extensions or renewals thereof as may reasonably be requested
by the Borrower, certifying in the case of a Form W-8BEN or W-8ECI that such
Lender is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless in any such case
an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such letter or form
with respect to it and such Lender advises the Borrower that it is not capable
of receiving payments without any deduction or
35
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
withholding of United States federal income tax, and in the case of a Form W-8
(or W-8BEN) or W-9, establishing an exemption from United States backup
withholding tax.
(c) In addition, the Borrower agrees to pay any
and all present or future stamp, court or documentary taxes and any other excise
or property taxes or charges or similar levies which arise from any payment made
under any Loan Document or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to, any Loan Document
(hereinafter referred to as "Other Taxes").
(d) The Borrower agrees to indemnify the Agent
and each Lender for (i) the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section) paid by the Agent and such Lender, (ii) amounts payable
under Section 2.19 (c) and (iii) any liability (including additions to tax,
penalties, interest and expenses) arising therefrom or with respect thereto, in
each case whether or not such Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant governmental authority. Payment under this
subsection (d) shall be made within 30 days after the date the Lender or the
Agent makes a demand therefor.
Section 2.20 Use of Proceeds. The proceeds of the Loans shall
be used (i) to the extent the proceeds from the issuance of the New Convertible
Subordinated Notes on or prior to the Closing Date, net of customary
underwriting fees and discounts, brokerage commissions and other similar
reasonable and customary costs and expenses directly attributable to the
issuance of the New Convertible Subordinated Notes are insufficient to redeem
all of the Convertible Subordinated Notes outstanding on the date of the
issuance of the New Convertible Subordinated Notes, to redeem the balance of
such Convertible Subordinated Notes as soon as practicable, but in no event
later than March 15, 2004 and (ii) for the Borrower's working capital and
general corporate purposes which shall include, but not be limited to,
Restaurant renovations and Permitted Acquisitions.
Section 2.21 Collateral Security.
(a) As security for the payment of the
Obligations, the Borrower shall cause to be granted to the Agent, for the
ratable benefit of the Lenders, a first priority perfected Lien on and security
interest in all of the following, whether now or hereafter existing or acquired
subject only to the Liens permitted to be incurred pursuant to Section 7.3
hereof: (i) all of the shares of capital stock (or other equity interests of
each Subsidiary if such Subsidiary is not a corporation) of each Subsidiary of
the Borrower now or hereafter directly or indirectly owned by the Borrower and
all proceeds thereof, all as more specifically described in the Borrower Pledge
Agreement and the Subsidiary Pledge Agreements; (ii) certain of the assets of
the Borrower and all proceeds thereof, all as more specifically described in the
Borrower Security Agreement and the Mortgages; and (iii) certain of the assets
of each Subsidiary now or hereafter directly or indirectly owned by the Borrower
and all proceeds thereof, all as more specifically described in the Subsidiary
Security Agreement and the Mortgages. To the extent the Agent for the benefit of
the Lenders does not have a first priority perfected security interest in any
assets of the Borrower or any other Loan Party required to be pledged as
described above which is of the type described in the Borrower Security
Agreement, the Borrower Pledge Agreement, the Subsidiary Pledge Agreement or the
Subsidiary Security Agreement or which consists of real property of the type
described in subsection (c) below, the Borrower will grant, and cause each other
Loan Party to grant, to the Agent for itself and the benefit of the Lenders a
first priority perfected security interest in such assets subject only to the
Liens permitted pursuant to Section 7.3 hereof. In connection with any sales of
assets permitted
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
hereunder, the Agent will release and terminate the liens and security interests
granted under the Security Documents with respect to such assets and no further
consent of the Lenders will be required with respect to any such release.
(b) Concurrently with the consummation of any
Permitted Acquisition or any other acquisition of any asset (whether by
purchase, merger, contribution, license or otherwise) which is of the type
described in the Borrower Security Agreement, the Subsidiary Security Agreement,
the Borrower Pledge Agreement or the Subsidiary Pledge Agreement by the Borrower
or any Subsidiary of the Borrower (other than a Subsidiary which, after giving
effect to any such acquisition, is an Immaterial Subsidiary, except as otherwise
provided in Section 6.11 or any Security Document) (an "ACQUIRING SUBSIDIARY")
or the formation of any new Subsidiary (other than a Subsidiary which, after
giving effect to any such acquisition, is an Immaterial Subsidiary, except as
otherwise provided in Section 6.11 or any Security Document) of the Borrower or
upon an Immaterial Subsidiary ceasing to qualify or be designated as an
Immaterial Subsidiary (conversion from the status of an Immaterial Subsidiary to
a Subsidiary which is not an Immaterial Subsidiary is hereinafter referred to as
a "CONVERSION"), the Borrower shall:
(i) in the case of a Permitted
Acquisition of stock or other equity interest or any other acquisition
of stock or other equity interest (whether by purchase, merger,
contribution, license or otherwise) by the Borrower or any such
Acquiring Subsidiary of the Borrower or the formation of such a new
Subsidiary or a Conversion: (A) deliver or cause to be delivered to the
Agent all of the certificates representing the capital stock (or other
equity interest if such equity interests are represented by a
certificate or certificates) of such new Subsidiary which is being
acquired or formed or converted (or Investment if such Investment is
not an Immaterial Investment), beneficially owned by the Borrower or
such Acquiring Subsidiary, as additional collateral for the
Obligations, to be held by the Agent in accordance with the terms of
the Borrower Pledge Agreement or a Subsidiary Pledge Agreement, as the
case may be; and (B) cause such Acquiring Subsidiary (which is not
already a party thereto) or new Subsidiary which is being acquired or
formed or converted to deliver to the Agent (1) duly executed
counterpart signature pages to each of the Guaranty, and the Subsidiary
Security Agreement, in the forms attached respectively thereto as Annex
I, together with the authorization to the Agent and the Lenders to
attach such signature pages to the Guaranty and the Subsidiary Security
Agreement, respectively, the effect of which shall be that as of the
date set forth on such signature pages such Acquiring Subsidiary or
such new or converted Subsidiary, as the case may be, shall become a
party to each such agreement and be bound by the terms thereof and any
revisions to the schedules to the Subsidiary Security Agreement
necessary in connection therewith, (2) if such new or converted
Subsidiary owns any capital stock or other equity interest or if such
Acquiring Subsidiary is not already a party to a Subsidiary Pledge
Agreement, a Subsidiary Pledge Agreement duly executed by such new or
converted Subsidiary or such Acquiring Subsidiary, as the case may be,
or if such new or converted Subsidiary owns any copyrights, trademarks,
patents or other intellectual property, such additional Security
Documents as requested by the Agent, (3) such Uniform Commercial Code
financing statements as shall be required to perfect the security
interest of the Agent and the Lenders in the Collateral being pledged
by such new Subsidiary pursuant to the Subsidiary Security Agreement,
and (4) ten (10) days prior written notice of any such Permitted
Acquisition, other acquisition, formation or Conversion.
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
(ii) in the case of a Permitted
Acquisition of assets or any other acquisition of assets (including
equity interests of a Person other than a corporation) (whether by
purchase, merger, contribution, license or otherwise) by the Borrower
or any such Acquiring Subsidiary which is of the type described in the
Borrower Security Agreement or the Subsidiary Security Agreement or the
formation of such a new Subsidiary or a Conversion into a Person which
in either case is not a corporation, deliver or cause to be delivered
by the Borrower or such Acquiring Subsidiary acquiring such assets or
forming such new Subsidiary, (A) such Uniform Commercial Code financing
statements as shall be required to perfect the security interest of the
Agent and the Lenders in the assets being so acquired, (B) if such
assets include copyrights, trademarks, patents or other intellectual
property, such additional Security Documents as requested by the Agent,
(C) any additional instruments or documents evidencing the security
interest of the Agent reasonably required by the Agent and (D) ten (10)
days prior written notice of any such Permitted Acquisition, other
acquisition, formation or Conversion; and
(iii) in any case (A) provide such other
documentation, including, without limitation, one or more opinions of
counsel reasonably satisfactory to the Agent, articles of
incorporation, by-laws and resolutions (or equivalent organizational
and authorization documents), which in the reasonable opinion of the
Agent is necessary or advisable in connection with such Permitted
Acquisition or formation of such new Subsidiary or other acquisition
(whether by purchase, merger, contribution or otherwise) or Conversion,
(B) cause any newly formed or acquired Immaterial Subsidiary which is
or is to become a Subordinated Guarantor, to execute and deliver a
counterpart to the Guaranty, and (C) if, as a result of the
consummation of any transaction or transactions, there is a significant
change in the information provided by the Borrower on Schedule 5.18,
promptly provide the Agent with a new schedule which reflects the then
current corporate structure of the Borrower and its Subsidiaries
certified by an Authorized Officer of the Borrower.
(c) Concurrently with the acquisition of any
interest (including a leasehold interest) in any real property by the Borrower
or any Subsidiary of the Borrower in any state that does not at the time of
acquisition assess a mortgage recording tax, the Borrower shall deliver or cause
to be delivered to the Agent, Mortgages with respect to such real property
interest, together with title insurance policies, surveys, appraisals, opinions
of counsels and such other documentation as the Agent may reasonably request.
Section 2.22 Replacement of Certain Lenders. If a Lender
("AFFECTED LENDER") shall have requested compensation from the Borrower under
Sections 2.16, 2.18 or 2.19 to recover Taxes or other additional costs incurred
by such Lender which are not being incurred generally by the other Lenders, or
delivered a notice pursuant to Section 2.16(a)(iii) claiming that such Lender is
unable to extend Eurodollar Loans to the Borrower for reasons not generally
applicable to the other Lenders, then, in any such case, so long as no Default
or Event of Default exists, the Borrower may make written demand on such
Affected Lender (with a copy to the Agent) for the Affected Lender to assign,
and such Affected Lender shall assign pursuant to one or more duly executed
assignment and acceptance agreements in substantially the form of Exhibit I
thirty (30) Business Days after the date of such demand, to one or more
financial institutions that comply with the provisions of Sections 10.4(c) and
10.4(d) (and that are reasonably acceptable to the Agent) which the Borrower
shall have engaged for such purpose ("REPLACEMENT LENDER"), all of such Affected
Lender's rights and obligations under this Agreement and the other Loan
Documents (including its Revolving Loan Commitment, all Loans owing to it, all
of its participation interests in outstanding Letters of Credit,
38
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
and its obligation to participate in additional Letters of Credit hereunder) in
accordance with Sections 10.4(c) and 10.4(d). Further, with respect to any such
assignment, the Affected Lender shall have concurrently received, in cash, all
amounts due and owing to such Affected Lender hereunder or under any other Loan
Document, including the aggregate outstanding principal amount of the Loans owed
to such Lender, together with accrued interest thereon through the date of such
assignment from the Replacement Lender, amounts payable under Sections 2.16,
2.18 and 2.19 with respect to such Affected Lender and compensation payable
under Section 2.15; PROVIDED, that upon such Affected Lender's replacement, such
Affected Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.16, 2.17, 2.18, 2.19 and 10.1 accruing
with respect to such Affected Lender prior to the date such Affected Lender is
replaced, as well as to any fees accrued for its account hereunder prior to
being replaced and not yet paid, and shall continue to be obligated under
Section 9.7.
SECTION 3. LETTERS OF CREDIT.
Section 3.1 Issuance of Letters of Credit, etc.
(a) Subject to the terms and conditions hereof,
at any time and from time to time from the Closing Date through the day prior to
the Revolving Loan Maturity Date, the Issuing Bank shall issue such Letters of
Credit for the account of the Borrower or any Subsidiary of the Borrower which
is a party to the Guaranty as Borrower may request by an L/C Application;
PROVIDED that, giving effect to such Letter of Credit, (x) the sum of the L/C
Obligations then outstanding plus the then outstanding aggregate principal
amount of the Revolving Loans shall not exceed the Total Revolving Loan
Commitment and (y) the aggregate L/C Obligations then outstanding shall not
exceed the L/C Commitment. Unless all the Revolving Lenders and the Issuing Bank
otherwise consent in writing, the Borrower and its Subsidiaries shall not
request any Letter of Credit (i) whose term exceeds 12 months or (ii) which
expires after the Revolving Loan Maturity Date unless such Letter of Credit is
Cash Collateralized at least two (2) Business Days prior to the Revolving Loan
Maturity Date. No Letter of Credit shall be issued except in the ordinary course
of business of the Borrower or any of its Subsidiaries or in connection with
Permitted Acquisitions with respect to which the conditions set forth in Section
7.8(f) have been satisfied, each Letter of Credit shall be used solely (a) to
support obligations of the Borrower and its Subsidiaries not prohibited
hereunder, other than Indebtedness for borrowed money, and (b) for the purposes
described in the definition of "Trade Letter of Credit".
(b) The Borrower shall submit the L/C
Application for the Issuance of any Letter of Credit to the Issuing Bank at
least five Business Days prior to the date when required. Upon Issuance of a
Letter of Credit, the Issuing Bank shall promptly notify the Revolving Lenders
of the amount and terms thereof.
(c) Upon the Issuance of a Letter of Credit,
each Revolving Lender that has made a Revolving Loan Commitment shall be deemed
to have purchased a pro rata participation, from the Issuing Bank in an amount
equal to that Lender's Pro Rata Share, in the Letter of Credit. Without limiting
the scope and nature of each Revolving Lender's participation in any Letter of
Credit, to the extent that the Issuing Bank has not been reimbursed by the
Borrower for any payment to a beneficiary of a Letter of Credit in respect of a
drawing under such Letter of Credit made by the Issuing Bank under any Letter of
Credit, each Revolving Lender shall, pro rata according to its Pro Rata Share,
reimburse the Issuing Bank promptly upon demand for the amount of such payment.
The obligation of each Revolving Lender to so reimburse the Issuing Bank shall
be absolute and
39
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
unconditional and shall not be affected by the occurrence of a Default, Event of
Default or any other occurrence or event. Any such reimbursement shall not
relieve or otherwise impair the obligation of the Borrower to reimburse the
Issuing Bank for the amount of any payment made by the Issuing Bank under any
Letter of Credit together with interest as hereinafter provided.
(d) Upon the making of any payment with respect
to any Letter of Credit by the Issuing Bank, the Borrower shall be deemed to
have submitted a Notice of Borrowing for a Revolving Loan consisting of a Base
Rate Loan in the amount of such payment, and the Agent shall without notice to
or the consent of Borrower cause Revolving Loans to be made by the Revolving
Lenders in an aggregate amount equal to the amount paid by the Issuing Bank on
that Letter of Credit, but not exceeding the Total Revolving Loan Commitment
minus the then outstanding principal amount of Revolving Loans and minus all
other then outstanding L/C Obligations, and for this purpose, the conditions
precedent set forth in Section 4 hereof shall not apply. The proceeds of such
Revolving Loans shall be paid to the Issuing Bank to reimburse it for the
payment made by it under the Letter of Credit. Promptly following any Revolving
Loans made under this Section 3.1(d), the Agent shall notify the Borrower
thereof.
(e) To the extent that any Revolving Loans made
pursuant to Section 3.1(d) are insufficient to reimburse the Issuing Bank in
full, the Borrower agrees to pay to the Issuing Bank with respect to each Letter
of Credit, within one Business Day after demand therefor, a principal amount
equal to any payment made by the Issuing Bank under that Letter of Credit,
together with interest on such amount from the date of any payment made by the
Issuing Bank through the date of payment by the Borrower at the Default Rate for
Revolving Loans. The principal amount of any such payment made by the Borrower
to the Issuing Bank shall be used to reimburse the Issuing Bank for the payment
made by it under the Letter of Credit. Each Revolving Lender that has reimbursed
the Issuing Bank pursuant to Section 3.1(d) for its Pro Rata Share of any
payment made by the Issuing Bank under a Letter of Credit shall thereupon
acquire a pro rata participation, to the extent of such reimbursement, in the
claim of the Issuing Bank against the Borrower under this Section 3.1(e).
(f) The Issuance of any supplement,
modification, amendment, renewal or extension to or of any Letter of Credit
shall be treated in all respects the same as the Issuance of a new Letter of
Credit.
Section 3.2 Letter of Credit Fees. The Borrower shall pay (i)
a letter of credit fee to the Agent equal to (x) a per annum rate equal to the
then effective Applicable Margin for Eurodollar Loans minus 0.50% times (y) the
stated amount of each Standby Letter of Credit for the term of each such Letter
of Credit for the account of the Lenders who have made Revolving Loan
Commitments, according to their respective Pro Rata Shares, in each case payable
quarterly in arrears on each Payment Date, commencing on December 15, 2003, and
(ii) a letter of credit fee to the Agent equal to (x) a per annum rate equal to
the then effective Applicable Margin for Eurodollar Loans minus 0.50% times (y)
the stated amount of each Trade Letter of Credit as of the date of Issuance
thereof, payable for the account of the Lenders who have made Revolving Loan
Commitments, according to their respective Pro Rata Shares, in each case payable
quarterly in arrears on each Payment Date, commencing on December 15, 2003. Upon
(A) the issuance of each Letter of Credit, the Borrower shall also pay to the
Agent for the account of the Issuing Bank an amount equal to the greater of (i)
$500 or (ii) 0.125% of the stated amount of such Letter of Credit as an issuance
fee; (B) the amendment of each Letter of Credit, the Borrower shall pay to the
Agent for the account of the Issuing Bank the amendment fees, in each case, as
the Issuing Bank normally
40
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
charges in connection with a Letter of Credit and activity pursuant thereto, in
either case which fees shall be solely for the account of the Issuing Bank; and
(C) the incurrence of any reasonable out-of-pocket costs and expenses in
connection with the maintenance of any Letter of Credit, the Borrower shall pay
to the Agent for the account of the Issuing Bank the amount of such
out-of-pocket costs and expenses so incurred.
Section 3.3 Obligation of Borrower Absolute, etc.
(a) The obligation of the Borrower to pay to the
Issuing Bank the amount of any payment made by the Issuing Bank under any Letter
of Credit shall be absolute, unconditional and irrevocable. Without limiting the
foregoing, such obligation of the Borrower shall not be affected by any of the
following circumstances:
(1) any lack of validity or
enforceability of the Letter of Credit, this Agreement or any other
agreement or instrument relating thereto;
(2) any amendment or waiver of or any
consent to departure from the Letter of Credit, this Agreement or any
other agreement or instrument relating thereto;
(3) the existence of any claim, setoff,
defense or other rights which the Borrower or any Subsidiary of the
Borrower may have at any time against the Issuing Bank, any Lender, the
Agent, any beneficiary of the Letter of Credit (or any Persons for whom
any such beneficiary may be acting) or any other Person, whether in
connection with the Letter of Credit, this Agreement or any other
agreement or instrument relating thereto, or any unrelated
transactions;
(4) any demand, statement or any other
document presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever so long as
any such document appeared to comply with the terms of the Letter of
Credit;
(5) payment by the Issuing Bank in good
faith under the Letter of Credit against presentation of a draft or any
accompanying document which does not strictly comply with the terms of
the Letter of Credit;
(6) the existence, character, quality,
quantity, condition, packing, value or delivery of any property
purported to be represented by documents presented in connection with
any Letter of Credit or for any difference between any such property
and the character, quality, quantity, condition or value of such
property as described in such documents;
(7) the time, place, manner, order or
contents of shipments or deliveries of property as described in
documents presented in connection with any Letter of Credit or the
existence, nature and extent of any insurance relative thereto;
(8) the solvency or financial
responsibility of any party issuing any documents in connection with a
Letter of Credit;
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
(9) any failure or delay in notice of
shipments or arrival of any property; and
(10) any other circumstances whatsoever.
(b) As among the Borrower, the Lenders, the
Issuing Bank and the Agent, the Borrower assumes all risks of the acts and
omissions of, or misuse of such Letter of Credit by, the beneficiary of any
Letter of Credit. In furtherance and not in limitation of the foregoing, subject
to the provisions of the Letter of Credit applications and Letter of Credit
reimbursement agreements executed by the Borrower at the time it requests any
Letter of Credit, the Agent, the Issuing Bank and the Lenders shall not be
responsible:
(i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and
issuance of the Letters of Credit, even if it should in fact prove to
be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged;
(ii) for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason;
(iii) for the failure of the beneficiary
of a Letter of Credit to comply duly with conditions required in order
to draw upon such Letter of Credit;
(iv) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex, or other similar form of
teletransmission or otherwise;
(v) for errors in interpretation of
technical trade terms;
(vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit or of the proceeds thereof;
(vii) for the misapplication by the
beneficiary of a Letter of Credit of the proceeds of any drawing under
such Letter of Credit; and
(viii) for any consequences arising from
causes beyond the control of the Agent, the Issuing Bank and the
Lenders including, without limitation, any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto
government or governmental authority.
None of the above shall affect, impair, or prevent the vesting of any of the
Issuing Bank's rights or powers hereunder.
(c) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Bank under or in connection with Letters of Credit issued
by it or any related certificates shall not, in the absence of
42
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
gross negligence or willful misconduct, put the Issuing Bank under any resulting
liability to the Borrower or relieve the Borrower of any of its obligations
hereunder to any such Person.
(d) The Issuing Bank shall be entitled to the
protection accorded to the Agent pursuant to Section 9, mutatis mutandis.
SECTION 4. CONDITIONS PRECEDENT.
Section 4.1 Conditions Precedent to the Effectiveness of this
Agreement. This Agreement shall become effective as of the Closing Date upon the
satisfaction on or before the Closing Date of the following conditions
precedent:
(a) Loan Documents.
(i) Credit Agreement. The Borrower and
the Lenders shall have executed and delivered this Agreement to the
Agent.
(ii) Notes. The Borrower shall have
executed and delivered to each of the Lenders the appropriate Notes in
the amount, maturity and as otherwise provided herein.
(iii) Borrower Security Agreement. The
Borrower shall have executed and delivered to the Agent the Borrower
Security Agreement.
(iv) Subsidiary Security Agreement. Each
Subsidiary of the Borrower (other than any such Subsidiary which is an
Immaterial Subsidiary) shall have duly executed and delivered to the
Agent the Subsidiary Security Agreement.
(v) Borrower Pledge Agreement. The
Borrower shall have executed and delivered to the Agent the Borrower
Pledge Agreement.
(vi) Subsidiary Pledge Agreements. Each
Subsidiary of the Borrower that owns any Equity Interest in any Person
as of the Closing Date (other than in an Immaterial Subsidiary) shall
have duly executed and delivered to the Agent a Subsidiary Pledge
Agreement.
(vii) Guaranty. Each Subsidiary of the
Borrower (other than any Immaterial Subsidiary that is not a
Subordinated Guarantor) shall have executed and delivered to the Agent
the Guaranty.
(viii) [Intentionally Omitted.].
(ix) Borrower Trademark Security
Agreement. The Borrower shall have executed and delivered to the Agent
an amended and restated Borrower Trademark Security Agreement, amending
and restating that certain Borrower Trademark Security Agreement, dated
as of July 15, 1997, by the Borrower in favor of the Agent.
(x) Subsidiary Trademark, Patent and
Copyright Security Agreements. Each Subsidiary of the Borrower party to
the Amended and Restated Subsidiary Trademark Security Agreement,
Amended and Restated Subsidiary Patent
43
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Security Agreement or Amended and Restated Subsidiary Copyright
Security Agreement (as applicable), each dated as of January 31, 2002
in favor of the Agent, shall have executed and delivered to the Agent a
second amended and restated version of each such agreement, and each
Subsidiary of the Borrower not party to any of such agreements that
owns any Intellectual Property shall have executed and delivered to the
Agent a security agreement substantially in the form of each such
previously delivered agreement (as applicable).
(b) Opinions of Counsel. The Agent shall have
received (A) a legal opinion, dated the Closing Date, from ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Loan Parties, substantially in the form set
forth as Exhibit H hereto, (B) legal opinions, dated the Closing Date, from each
of the local counsel to the Loan Parties identified on Schedule 4.1(b), in form
and substance satisfactory to the Agent and (C) such other legal opinions, each
dated the Closing Date, from local counsel to the Loan Parties as requested by
the Agent with respect to such matters as requested by the Agent and in form and
substance satisfactory to the Agent.
(c) Corporate Documents. The Agent shall have
received the certificate of incorporation, certificate of limited partnership,
certificate of formation or other similar organizational document of each of the
Loan Parties as amended, modified or supplemented to the Closing Date, (other
than in the case of a general partnership) certified to be true, correct and
complete by the appropriate Secretary of State as of a date not more than ten
Business Days prior to the Closing Date, together with a good standing
certificate from such Secretary of State and a good standing certificate from
the Secretaries of State (or the equivalent thereof) of each other State in
which each of them is required to be qualified to transact business, each to be
dated a date not more than ten Business Days prior to the Closing Date and a
bring-down good standing certificate or telephonic confirmation from the
appropriate Secretary of State in each jurisdiction of organization of each Loan
Party dated the Closing Date.
(d) Certified Resolutions, etc. The Agent shall
have received a certificate of the Secretary or Assistant Secretary of each of
the Loan Parties or of a general partner in the case of each Loan Party which is
a general partnership and dated the Closing Date certifying (i) the names and
true signatures of the incumbent officers of such Person authorized to sign the
applicable Loan Documents, (ii) the By-Laws, partnership agreement, limited
liability company agreement or other similar organizational document of such
Person as in effect on the Closing Date, (iii) the resolutions of such Person's
Board of Directors (or other governing body, as applicable) approving and
authorizing the execution, delivery and performance of all Transaction Documents
executed by such Person, and (iv) that there have been no changes in the
certificate of incorporation, certificate of limited partnership, certificate of
formation or other similar organizational document of such Person since the date
of the most recent certification thereof by the appropriate Secretary of State
or, in the case of a partnership or other similar entity, the partnership
agreement or other similar organizational document.
(e) Existing Indebtedness. The Agent shall have
received copies of all documents relating to existing Indebtedness for borrowed
money or evidenced by a note, bond, debenture, acceptance or similar instrument
of the Borrower and its Subsidiaries that shall be outstanding in each case in a
principal amount in excess of $2,000,000 on and after the Closing Date,
including, without limitation, terms of amortization, interest, premiums, fees,
expenses, maturity, amendments, covenants, events of default and remedies,
certified as of the Closing Date as such by the President or Vice President of
the Borrower.
44
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
(f) Process Agent. Each Loan Party shall have
appointed an agent satisfactory to the Agent for service of process in
connection with any action or proceeding arising under or relating to the Loan
Documents, and such agent shall have accepted such appointment in writing.
(g) Officer's Certificate. The Agent and the
Lenders shall have received a certificate of the President or Vice President of
the Borrower, dated the Closing Date, certifying that (i) the Subordinated Debt
Documents are in full force and effect and no material term or condition thereof
has been amended from the form thereof delivered to the Agent, or waived, except
as disclosed to the Agent or its counsel prior to the execution of this
Agreement, (ii) each of the Loan Parties and, to the best of his or her
knowledge, the other parties to the Subordinated Debt Documents, have performed
or complied in all material respects with all agreements and conditions
contained in such Subordinated Debt Documents, (iii) subject to the foregoing,
neither any Loan Party nor, to the best of his or her knowledge, any such other
party is in default in the performance or compliance with any of the material
terms or provisions thereof, except to the extent that performance thereof or
compliance therewith or default has been waived with the prior written consent
of the Lenders, (iv) all of the representations and warranties of the Borrower
and each other Loan Party contained in the Subordinated Debt Documents and the
Loan Documents are true and correct, (v) no Default or Event of Default has
occurred and is continuing and no default or event of default has occurred and
is continuing under the Subordinated Debt Documents and (vi) since January 31,
2002, no event or change has occurred that has caused or evidences a Material
Adverse Effect.
(h) Closing Compliance Certificate. The Agent
shall have received a certificate signed by the chief financial officer of the
Borrower (i) containing conclusions that the Borrower and its Subsidiaries are
Solvent before and after giving effect to the Transactions and the Redemption
Transactions and that Closing EBITDA equals at least $100,000,000 and (ii)
setting forth the calculations required to establish the Leverage Ratio
calculated as of the end of the Retail Period of the Borrower ending October 6,
2003.
(i) Insurance. The Agent shall have received a
certificate of insurance demonstrating insurance coverage in respect of each of
the Loan Parties of types, in amounts, with insurers and with other terms
reasonably satisfactory to the Agent and which name the Agent as an additional
insured or loss payee, as applicable.
(j) Lien Search Reports. The Agent shall have
received satisfactory reports of UCC, tax lien, judgment and litigation searches
with respect to the Borrower and each of the other Loan Parties in each of the
locations requested by the Agent.
(k) UCC-1 Financing Statements. The Agent shall
have received originals of each UCC-1 financing statement (i) duly authorized by
the Borrower naming the Borrower as debtor and the Agent as secured party and
filed in the jurisdictions set forth in Schedule I to the Borrower Security
Agreement and (ii) duly authorized by each other Loan Party naming such Loan
Party as debtor and the Agent as secured party and filed in the appropriate
jurisdictions set forth in Schedule I to the Subsidiary Security Agreement.
(l) Pledged Collateral. The Agent shall have
received (i) the original stock, membership interest or partnership interest
certificates evidencing the Pledged Stock (as defined in the Borrower Pledge
Agreement and each Subsidiary Pledge Agreement) pursuant to the
45
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Borrower Pledge Agreement and each Subsidiary Pledge Agreement (other than
certificates representing any shares of Pledged Stock of any Immaterial
Subsidiary and any shares of Pledged Stock which evidence an Immaterial
Investment), together with undated stock powers or similar instruments of
assignment duly executed in blank in connection therewith and (ii) each original
Instrument pursuant to the Borrower Pledge Agreement and each Subsidiary Pledge
Agreement (other than any Instrument evidencing an Immaterial Investment).
(m) Corporate and Capital Structure. The
corporate and capital structure of the Loan Parties shall be satisfactory to the
Lenders, and the Agent shall have received a corporate structure chart with
respect to the Borrower and all of its Subsidiaries (certified by an Authorized
Officer of the Borrower).
(n) Funded Debt and Capitalization. The Total
Revolving Loan Commitment minus the aggregate principal amount of the Revolving
Loans outstanding on the Closing Date minus the amount of any L/C Obligations
then outstanding including any Letters of Credit to be issued on the Closing
Date shall equal at least $25,000,000. The Leverage Ratio for the four fiscal
quarters ended immediately prior to the Closing Date shall not exceed 4.1 to 1.
The assets and liabilities of the Borrower and its consolidated Subsidiaries
shall be materially consistent with the projections dated September 26, 2003 and
previously delivered by the Borrower to the Agent.
(o) Existing Indebtedness. The Agent shall have
received evidence satisfactory to the Agent and the Lenders that, after giving
effect to the consummation of the Transactions, (i) the Borrower and its
Subsidiaries shall not be liable for or have outstanding any Indebtedness which
is of the type of Indebtedness which would appear as a liability on (or would be
required to appear as a liability on) the consolidated balance sheet of the
Borrower (and not of the type required solely to be included in the footnotes
thereto) and which Indebtedness shall include, without limitation, Indebtedness
for borrowed money and Capitalized Lease Obligations, other than (A) the Loans
outstanding hereunder as contemplated by Section 4.1(n) and (B) Indebtedness
permitted under Section 7.2 (but excluding Indebtedness described in Section
7.2(a)) (collectively, the "SURVIVING DEBT"), and (ii) the Borrower and each of
its Subsidiaries shall have paid in full all other Indebtedness of the Borrower
and each of its Subsidiaries existing prior to the making of the initial Loans
hereunder (all of the foregoing Indebtedness described in the foregoing clause
(i) and (ii) referred to collectively as "EXISTING DEBT"). The Agent shall be
satisfied that the execution and delivery of, and the performance by each of the
Borrower and its Subsidiaries of its respective obligations under, each
Transaction Document to which it is a party and consummation of the Transactions
does not violate, conflict with or cause a default under any document or
instrument evidencing Existing Debt. The Agent shall have received (i) payoff
and lien termination and release agreements, in form and substance satisfactory
to the Agent, from each creditor of the Borrower and its Subsidiaries with
respect to Existing Debt other than Surviving Debt, and (ii) such UCC Amendments
(or its equivalent), intellectual property lien releases in recordable form in
all applicable jurisdictions, and other lien and mortgage release and
termination agreements, evidence of release of federal and state tax liens, all
in form and substance satisfactory to the Agent, as the Agent shall request,
duly executed by the appropriate Person in favor of which such Liens were
granted.
(p) Environmental Matters. The Agent shall have
received, if the Agent deems it necessary, a written report of an investigation,
conducted to the Agent's satisfaction, from an environmental consultant
acceptable to the Agent, as to any environmental, health or safety violations,
hazards or liabilities which it deems material. The Agent shall (i) be satisfied
that neither the Borrower nor any of its Subsidiaries nor any other Loan Party
is subject to any present or
46
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
contingent liability deemed material by the Agent in its reasonable judgment in
connection with any past or present treatment, storage, recycling, disposal or
release or threatened release, at any property location regardless of whether
owned or operated by the Borrower or any of its Subsidiaries or any other Loan
Party, of any Materials of Environmental Concern or in connection with any
Environmental Law or other health or safety laws or regulations, and that their
operations taken as a whole comply in all material respects (in the Agent's
reasonable judgment) with all Environmental Laws or other health or safety laws
or regulations, (ii) be satisfied that neither the Borrower nor any of its
Subsidiaries, nor any other Loan Party nor any property owned or operated by any
such Person is the subject of any federal or state investigation evaluating
whether any remedial action, involving a material expenditure (in the opinion of
the Agent) is needed to respond to any release or other presence of Materials of
Environmental Concern and (iii) have received a list of all of the properties
operated, owned or leased by the Borrower and each of its Subsidiaries as to
which Phase I environmental audit reports have been completed within ten (10)
years prior to the Closing Date and have received copies of those Phase I audit
reports which identify, or which recommend a subsequent Phase II investigation
as to, any material environmental health or safety violations, hazards or
potential liabilities relating to the properties and business of the Borrower
and each of its Subsidiaries, the other Loan Parties (if applicable) and each of
their Environmental Affiliates of which the Borrower or any of its Subsidiaries
have knowledge.
(q) Fees and Expenses. The Agent shall have
received, for its account and for the account of each Lender, as applicable, all
Fees and other fees and expenses due and payable hereunder and under the other
Loan Documents on or before the date hereof, including, without limitation, the
reasonable fees and expenses accrued through the date hereof, of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois) and any other counsel retained by the Agent.
(r) Consents, Licenses, Approvals; Compliance
with Laws. All consents, licenses, orders, permits, authorizations, validations,
certificates, filings and approvals (collectively, "CONSENTS"), if any, required
in connection with the execution, delivery and performance by the Borrower or
any of its Subsidiaries, and the validity and enforceability of the Transaction
Documents, or in connection with any of the Transactions, including, without
limitation, all shareholder Consents and all Consents required by any federal,
state, local regulatory or governmental authority including, without limitation,
all Consents required pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, shall have been
obtained or made and shall be in full force and effect and copies thereof shall
in each case have been delivered to the Agent. No law or Regulation shall be
applicable that could reasonably be expected to restrain, prevent or otherwise
impose adverse conditions on the validity and enforceability of the Transaction
Documents, or the Transactions. The Borrower shall have delivered to the Agent
such evidence as the Agent shall have requested, evidencing compliance by the
Borrower, its Subsidiaries and the other Loan Parties with all applicable laws,
rules and regulations before and after giving effect to the Transactions
(including, without limitation, all applicable corporate and securities laws and
all ERISA, environmental and health and safety laws, rules and regulations).
(s) Management Contracts. The Borrower shall
have delivered to the Agent and each Lender copies of each written agreement
that it or any of its Subsidiaries has with its officers or other members of
management as requested by the Agent certified by an officer of the Borrower,
and each such contract shall be satisfactory in form and substance to the Agent.
(t) Franchise Agreements. The Borrower shall
deliver to the Agent copies of representative forms of Franchise Agreements,
which represent the various forms of all
47
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Franchise Agreements to which the Borrower or any of its Subsidiaries as of the
Closing Date is the franchisor or licensor in each case certified by the general
counsel of the Borrower.
(u) No Material Adverse Change; No Default. No
event, act or condition shall have occurred after January 31, 2003, that has had
a Material Adverse Effect, or that would make the facts and other information
represented by the Borrower or the other Loan Parties to the Agent prior to the
Closing Date materially misleading. No Default or Event of Default shall have
occurred and be continuing or shall result from the consummation of the
Transactions on the Closing Date.
(v) Management/Ownership. The composition of the
management of the Borrower and its strategic plans shall be satisfactory to the
Agent.
(w) No Litigation. There shall not be any
action, suit, investigation, arbitration, litigation or proceeding pending or
threatened against the Borrower or any of its Subsidiaries, before any court,
arbitrator or governmental or administrative body, agency or official that could
reasonably be expected to have a material adverse effect on the Transactions and
the Redemption Transactions, the Borrower or the other Loan Parties.
(x) [Intentionally Omitted].
(y) Mortgage Amendments. The Borrower shall have
executed and delivered to the Agent, and cause its Subsidiaries to execute and
deliver to the Agent, such amendments to the Mortgages as the Agent shall
reasonably request.
(z) Financial Statements. The Agent shall have
received and be satisfied with (i) audited financial statements of the Borrower
and its Subsidiaries for each of the last three fiscal years, including balance
sheets, income and cash flow statements, audited by independent public
accountants of recognized national standing and prepared in conformity with
GAAP, together with such accountants' report thereon, (ii) unaudited interim
financial statements of the Borrower and its subsidiaries for the fiscal periods
most recently ended prior to the Closing Date (including without limitation
Retail Period financial statements for any such period), (iii) a pro forma
balance sheet of the Borrower and the other Loan Parties as of the Closing Date
after giving effect to the Transactions and the Redemption Transactions, and
(iv) projected financial statements (including balance sheets, income and cash
flow statements) of the Borrower and the other Loan Parties for the seven-year
period after the Closing Date, all of the foregoing to be substantially
consistent with any financial statements for the same periods delivered to the
Agent prior to September 26, 2003 and, in the case of any such financial
statements for subsequent periods, substantially consistent with any projected
financial statements for such periods delivered to the Agent prior to September
26, 2003.
(aa) Additional Matters. The Agent shall have
received such other certificates, opinions, documents and instruments relating
to the Transactions as may have been reasonably requested by the Agent or any
Lender, and all corporate and other proceedings and all other documents
(including, without limitation, all documents referred to herein and not
appearing as exhibits hereto) and all legal matters in connection with the
Transactions shall be satisfactory in form and substance to the Lenders.
Section 4.2 Conditions Precedent to All Loans. The obligation
of each Lender to make any Loan at any time on or after the date hereof and of
the Issuing Bank to issue any Letter of
48
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Credit is subject to the satisfaction on the date such Loan is made or such
Letter of Credit is Issued of the following conditions precedent:
(a) Representations and Warranties. The
representations and warranties contained herein and in the other Loan Documents
(other than representations and warranties which expressly speak only as of a
different date) shall be true and correct in all material respects on such date
both before and after giving effect to the making of such Loans or the Issuance
of such Letter of Credit.
(b) No Default or Event of Default. No Default
or Event of Default shall have occurred and be continuing on such date either
before or after giving effect to the making of such Loans or the Issuance of
such Letter of Credit.
(c) No Injunction. No law or regulation shall
have been adopted, no order, judgment or decree of any governmental authority
shall have been issued, and no litigation shall be pending or threatened, which
in the reasonable judgment of the Lenders would enjoin, prohibit or restrain, or
impose or result in the imposition of any material adverse condition upon, the
making or repayment of the Loans, the Issuance of such Letter of Credit or the
reimbursement of any amounts with respect thereto or the consummation of the
Transactions.
(d) No Material Adverse Change. No event, act or
condition shall have occurred after January 31, 2003 which, in the judgment of
the Required Lenders, has had or could have a Material Adverse Effect.
(e) Notice of Borrowing or Issuance. The Agent
or the Issuing Bank shall have received a fully executed Notice of Borrowing or
L/C Application, as appropriate, in respect of the Loans to be made or Letters
of Credit to be Issued, respectively, on such date.
The acceptance of the proceeds of each Loan and of the Issuance of each
Letter of Credit shall constitute a representation and warranty by the Borrower
to the Agent and each of the Lenders that all of the conditions required to be
satisfied under this Section 4 in connection with the making of such Loan or the
Issuance of such Letter of Credit have been satisfied.
All of the Notes, certificates, agreements, legal opinions and other
documents and papers referred to in this Section 4, unless otherwise specified,
shall be delivered to the Agent for the account of each of the Lenders and,
except for the Notes, in sufficient counterparts for each of the Lenders, and
shall be satisfactory in form and substance to the Agent and each Lender in its
sole discretion.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to make
the Loans and to induce the Issuing Bank to issue Letters of Credit, the
Borrower makes the following representations and warranties, which shall survive
the execution and delivery of this Agreement and the Notes and the making of the
Loans and the Issuance of the Letters of Credit:
Section 5.1 Corporate Status. Each Loan Party (i) is duly
organized and validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has the corporate or other requisite
power and authority to own its property and assets and to transact the
49
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
business in which it is engaged or presently proposes to engage and (iii) has
duly qualified and is authorized to do business and is in good standing as a
foreign entity in every jurisdiction in which it owns or leases real property or
in which the nature of its business requires it to be so qualified, except in
the case of clause (iii), where the failure to so qualify, individually or in
the aggregate, could not have a Material Adverse Effect.
Section 5.2 Corporate Power and Authority. Each Loan Party has
the corporate or other requisite power and authority to execute, deliver and
carry out the terms and provisions of each of the Transaction Documents to which
it is a party and has taken all necessary corporate or other requisite action to
authorize the execution, delivery and performance by it of such Transaction
Documents. Each Loan Party has duly executed and delivered each such Transaction
Document, and each such Transaction Document constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms.
Section 5.3 No Violation. Neither the execution, delivery or
performance by any Loan Party of the Transaction Documents to which it is a
party, nor compliance by it with the terms and provisions thereof nor the
consummation of the Transactions, (i) will contravene any applicable provision
of any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality or (ii) will conflict or be inconsistent
with or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Security Documents) upon any of the property or assets of any Loan Party
pursuant to the terms of, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which such Loan Party is a party or by which it
or any of its property or assets is bound or to which it may be subject, or
(iii) will violate any provision of its certificate of incorporation, by-laws,
partnership agreement or limited liability company agreement (or other relevant
organizational documents) of any Loan Party.
Section 5.4 Litigation. There are no actions, suits,
governmental investigations, arbitrations or proceedings pending or threatened
(i) with respect to any of the Transactions or the Transaction Documents or (ii)
that could, individually or in the aggregate, result in a Material Adverse
Effect.
Section 5.5 Financial Statements; Financial Condition; etc.
Each of the financial statements and financial certificates delivered pursuant
to Section 4.1(z) were prepared in accordance with GAAP consistently applied and
fairly present the financial condition and the results of operations of the
entities covered thereby on the dates and for the periods covered thereby,
except as disclosed in the notes thereto and, with respect to interim financial
statements, subject to normally recurring year-end adjustments. No Loan Party
has any material liability (contingent or otherwise) not reflected in such
financial statements or in the notes thereto.
Section 5.6 Solvency. On the Closing Date and at all times
after the Closing Date, after giving effect to the Transactions, each Loan Party
is and will be Solvent.
Section 5.7 Projections. The projections delivered to the
Lenders dated September 26, 2003, were prepared on the basis of the assumptions
accompanying them, and such projections and assumptions, as of the date of
preparation thereof and as of the Closing Date, are reasonable and represent the
Borrower's good faith estimate of its future financial performance, it being
understood that nothing contained in this Section 5.7 shall constitute a
representation or warranty that such future financial performance or results of
operations will in fact be achieved.
50
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Section 5.8 Material Adverse Change. Since January 31, 2003,
there has occurred no event, act, condition or liability which has had, or could
have, a Material Adverse Effect.
Section 5.9 Use of Proceeds; Margin Regulations. All proceeds
of each Loan, and each Letter of Credit, will be used by the Borrower only in
accordance with the provisions of Section 2.20. No part of the proceeds of any
Loan, or any Letter of Credit, will be used by the Borrower to purchase or carry
any Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan, nor the Issuance of
any Letter of Credit, nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulations T, U or X of the Federal Reserve
Board. Following the application of the proceeds of each Loan, less than 25% of
the value (as determined by any reasonable method) of the assets of the Borrower
and its Subsidiaries (on a consolidated and an unconsolidated basis) have been
and will continue to be, represented by Margin Stock.
Section 5.10 Governmental and Other Approvals. No order,
consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any governmental or public body
or authority, or any subdivision thereof, or any other Person, is required to
authorize, or is required in connection with (i) the execution, delivery and
performance of any Transaction Document or the consummation of any of the
Transactions or (ii) the legality, validity, binding effect or enforceability of
any Transaction Document or the exercise by the Agent or any Lender of any of
its rights under any Loan Document, except those listed on Schedule 5.10 that
have already been duly made or obtained and remain in full force and effect and
except for the filing of financing statements pursuant to the Security
Documents. All applicable waiting periods including, without limitation, those
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act in connection with each Permitted Acquisition
and the other transactions contemplated thereby have expired without any action
having been taken by any competent authority restraining, preventing or imposing
materially adverse conditions upon the rights of the Loan Parties or their
Subsidiaries freely to transfer or otherwise dispose of, or to create any Lien
on, any properties now owned or hereafter acquired by any of them.
Section 5.11 Security Interests and Liens. The Security
Documents create, as security for the Obligations, valid and enforceable
security interests in and Liens on all of the Collateral, in favor of the Agent
for the ratable benefit of the Lenders, and subject to no other Liens (other
than Liens expressly permitted by Section 7.3 hereof). Upon the satisfaction of
the conditions precedent described in Sections 4.1(k) and 4.1(l), such security
interests in and Liens on the Collateral shall be superior to and prior to the
rights of all third parties (except as disclosed on Schedule 5.11), and no
further recordings or filings are or will be required in connection with the
creation, perfection or enforcement of such security interests and Liens, other
than the filing of continuation statements in accordance with applicable law.
Section 5.12 Tax Returns and Payments. Each Loan Party has
filed all tax returns required to be filed by it and has paid all taxes and
assessments payable by it which have become due, other than (i) those not yet
delinquent or those that are reserved against in accordance with GAAP which are
being diligently contested in good faith by appropriate proceedings or (ii)
where the failure to so pay has not resulted and could not reasonably be
expected to result in liability in excess of $1,000,000 in the aggregate for all
of the Loan Parties.
Section 5.13 ERISA. Neither the Borrower nor any of its
Subsidiaries have any Plans other than those listed on Schedule 5.13. No
accumulated funding deficiency (as defined in Section 412 of the Code or Section
302 of ERISA) or Reportable Event has occurred with respect to
51
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
any Plan. There are no Unfunded Benefit Liabilities under any Plan except as
notified to the Agent pursuant to Section 6.1(h)(i)(E). The Borrower and each
member of its ERISA Controlled Group have complied with the requirements of
Section 515 of ERISA with respect to each Multiemployer Plan and is not in
"default" (as defined in Section 4219(c)(5) of ERISA) with respect to payments
to a Multiemployer Plan. The aggregate potential total withdrawal liability, and
the aggregate potential annual withdrawal liability payments of the Borrower and
the members of its ERISA Controlled Group as determined in accordance with Title
IV of ERISA as if the Borrower and the members of its ERISA Controlled Group had
completely withdrawn from all Multiemployer Plans is not greater than
$2,000,000. To the best knowledge of the Borrower and each member of its ERISA
Controlled Group, no Multiemployer Plan is or is likely to be in reorganization
(as defined in Section 4241 of ERISA or Section 418 of the Code) or is insolvent
(as defined in Section 4245 of ERISA). No material liability to the PBGC (other
than required premium payments), the Internal Revenue Service, any Plan or any
trust established under Title IV of ERISA has been, or is expected by the
Borrower or any member of its ERISA Controlled Group to be, incurred by the
Borrower or any member of its ERISA Controlled Group. Neither the Borrower nor
any member of its ERISA Controlled Group has any contingent liability with
respect to any post-retirement benefit under any "welfare plan" (as defined in
Section 3(1) of ERISA), other than liability for continuation coverage under
Part 6 of Title I of ERISA and other than contingent liabilities under Hardee's
Retiree Medical Insurance Plan, and the aggregate present value of all
post-retirement benefit liabilities of the Borrower and its Subsidiaries under
Hardee's Retiree Medical Insurance Plan as of the Closing Date does not exceed
$4,800,000. No lien under Section 412(n) of the Code or 302(f) of ERISA or
requirement to provide security under Section 401(a)(29) of the Code or Section
307 of ERISA has been or is reasonably expected by the Borrower or any member of
its ERISA Controlled Group to be imposed on the assets of the Borrower or any
member of its ERISA Controlled Group.
Section 5.14 Investment Company Act; Public Utility Holding
Company Act. No Loan Party is (x) an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended, (y) a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of either a "holding company"
or a "subsidiary company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or (z) subject to any other federal or state
law or regulation which purports to restrict or regulate its ability to borrow
money.
Section 5.15 Dissolved Subsidiaries; Previously Material
Subsidiaries, etc. Schedule 5.15 sets forth a list of previous Subsidiaries that
have been dissolved since January 31, 2002 (the "DISSOLVED ENTITIES"). All of
the assets and property (including, without limitation, all real property for
which title was previously vested in Leased Restaurant Partners) of each
Dissolved Entity have been transferred to the Borrower or a Subsidiary of the
Borrower party to the Subsidiary Security Agreement and Guaranty. In addition,
substantially all of the assets and property of each of Carl's Jr. Media Fund,
Inc., a California corporation, Carl's Jr. National Production Fund, Inc., a
California corporation, and Hardee's Employees Hurricane Fund, Inc., a
California corporation has been transferred to the Borrower or a Subsidiary of
the Borrower party to the Subsidiary Security Agreement and Guaranty. None of
Carl's Jr. Media Fund, Inc., a California corporation, Carl's Jr. National
Production Fund, Inc., a California corporation, and Hardee's Employees
Hurricane Fund, Inc., a California corporation has any obligation as a
"Subsidiary Guarantor" under and as defined in the New Subordinated Note
Indenture.
Section 5.16 Representations and Warranties in Subordinated
Debt Documents. All representations and warranties made by any Loan Party in the
Subordinated Debt Documents,
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and, to the best of the Borrower's knowledge, all representations made by each
other Person in such Subordinated Debt Documents, are true and correct in all
material respects. None of such representations and warranties is inconsistent
in any material respect with the representations and warranties of any Loan
Party made herein or in any other Loan Document.
Section 5.17 True and Complete Disclosure. All factual
information (taken as a whole) furnished by or on behalf of any Loan Party in
writing to the Agent or any Lender on or prior to the Closing Date, for purposes
of or in connection with this Agreement or any of the Transactions is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of any Loan Party in writing to the Agent or any Lender will be, true and
accurate in all material respects on the date as of which such information is
dated or furnished and not incomplete by omitting to state any material fact
necessary to make such information (taken as a whole) not misleading at such
time. As of the Closing Date, there are no facts, events or conditions known to
any Loan Party which, individually or in the aggregate, have or could be
expected to have a Material Adverse Effect.
Section 5.18 Corporate Structure; Capitalization. Schedule
5.18 hereto sets forth as of the Closing Date, the jurisdiction of incorporation
or organization of the Borrower, each of its Subsidiaries, each other Loan Party
and each Subsidiary of such Loan Party, the number of authorized and issued
shares of capital stock or other outstanding equity interests of the Borrower
and each of its Subsidiaries and of each other Loan Party and each Subsidiary of
such Loan Party, the par value thereof and (other than with respect to the
Borrower) the registered owner(s) thereof. All of such stock has been duly and
validly issued and is fully paid and non-assessable and (except for the stock of
the Borrower) is, together with all such other equity interests, owned by such
Loan Party free and clear of all Liens. Except for the Convertible Subordinated
Notes or as disclosed in Schedule 5.18, neither any Loan Party nor any such
Subsidiary has outstanding any securities convertible into or exchangeable for
its capital stock or other outstanding equity interest nor does any Loan Party
or any such Subsidiary have outstanding any rights to subscribe for or to
purchase, or any options for the purchase of, warrants or any agreements
providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock or other
outstanding equity interest.
Section 5.19 Environmental Matters.
(a) (i) Each of the Loan Parties and their
Environmental Affiliates are in compliance with all applicable Environmental
Laws except where noncompliance, individually or in the aggregate, could not
have a Material Adverse Effect, (ii) each of the Loan Parties and their
Environmental Affiliates have all Environmental Approvals required to operate
their businesses as presently conducted or as reasonably anticipated to be
conducted except where the failure to obtain any such Environmental Approval,
individually or in the aggregate, could not have a Material Adverse Effect,
(iii) none of the Loan Parties nor any of their Environmental Affiliates has
received any communication (written or oral), whether from a governmental
authority, citizens group, employee or otherwise, that alleges that such Loan
Party or Environmental Affiliate is not in full compliance with all
Environmental Laws and where such noncompliance, individually or in the
aggregate, could have a Material Adverse Effect, and (iv) to the Borrower's best
knowledge after due inquiry, there are no circumstances that may prevent or
interfere with such full compliance in the future except where such
noncompliance, individually or in the aggregate, could not have a Material
Adverse Effect.
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(b) There is no Environmental Claim pending or
threatened against any Loan Party or its Environmental Affiliate, which,
individually or in the aggregate, could have a Material Adverse Effect.
(c) There are no past or present actions,
activities, circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge or disposal of any Material of
Environmental Concern, that could form the basis of any Environmental Claims
against any of the Loan Parties or any of their Environmental Affiliates, which
Environmental Claims, individually or in the aggregate, could have a Material
Adverse Effect.
(d) Schedule 5.19 sets forth a list of all of
the properties operated, owned or leased by the Borrower and each of its
Subsidiaries as to which Phase I environmental audit reports have been completed
as of the Closing Date and the Borrower has delivered copies of those Phase I
audit reports which identify, or which recommend a subsequent Phase II
investigation as to, any material environmental, health or safety violations,
hazards or potential liabilities relating to the properties and business of the
Borrower, each of its Subsidiaries, the other Loan Parties (if applicable) and
each of their Environmental Affiliates of which the Borrower or any of its
Subsidiaries have knowledge.
(e) The Borrower has caused to be completed
Phase I audit reports with respect to each property owned, operated or leased by
the Borrower or any of its Subsidiaries, upon which a business or operation
other than a Restaurant has been conducted at any time during the six (6) years
immediately preceding the Closing Date and with respect to which a Phase I audit
report had not been completed in the eleven (11) year period immediately
preceding the Closing Date. The Borrower has delivered all such Phase I audit
reports to the Agent which were obtained pursuant to the preceding sentence
which identified, or which recommended a subsequent Phase II investigation as
to, any material environmental, health or safety violations, hazards or
potential liabilities relating to the properties and business of any Loan Party
or any of their Environmental Affiliates.
Section 5.20 Intellectual Property. Each of the Loan Parties
owns or has the valid right to use all patents, trademarks, service marks,
domain names, trade names, copyrights, trade secrets and other intangible rights
(the "INTELLECTUAL PROPERTY"), which are used in or necessary for the operation
of its business, free and clear of all Liens. Schedule V to the Borrower
Security Agreement and Schedule V to the Subsidiary Security Agreement together
set forth a complete and accurate list thereof with respect to each Loan Party
as of the Closing Date, of all applications and registrations for Intellectual
Property owned by such Loan Party and all license agreements to or from third
parties to which such Loan Party is a party or is otherwise bound. Each Loan
Party is the record owner of all registrations and applications which it owns
and all such registrations for Intellectual Property are valid and enforceable.
To the best of each Loan Party's knowledge, no service, product, process,
component or other material presently offered, sold or employed by any Loan
Party infringes upon or dilutes any Intellectual Property of any other Person,
and no such claims have been made by any other Person against any Loan Party.
There is no pending or, to the best of each Loan Party's knowledge, threatened
claim or litigation against or affecting any Loan Party contesting its rights to
own or use any Intellectual Property or the validity or enforceability thereof.
Section 5.21 Ownership of Property; Restaurants. Schedule 5.21
sets forth all the real property owned or leased by the Loan Parties as of the
Closing Date and identifies the street address, the current owner (and current
record owner, if different) and whether such property is
54
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
leased or owned. The Loan Parties have good and marketable fee simple title to
or valid leasehold interests in all of such real property and good title to all
of their personal property subject to no Lien of any kind except Liens permitted
hereby. Schedule 5.21 also sets forth a list of each Restaurant and the street
address thereof which is owned or operated as of the Closing Date by any Loan
Party or any of its Subsidiaries. The Loan Parties enjoy peaceful and
undisturbed possession under all of their respective leases.
Section 5.22 No Default. No Loan Party is in default under or
with respect to any Transaction Document or any other agreement, instrument or
undertaking to which it is a party or by which it or any of its property is
bound in any respect which could result in a Material Adverse Effect. No Default
or Event of Default exists.
Section 5.23 Licenses, etc. The Loan Parties have obtained and
hold in full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
their respective businesses as presently conducted.
Section 5.24 Compliance with Law. Each Loan Party is in
compliance with all applicable laws, rules, regulations, orders, judgments,
writs and decrees except where such non-compliance, individually or in the
aggregate, could not have a Material Adverse Effect.
Section 5.25 No Burdensome Restrictions. No Loan Party is a
party to any agreement or instrument or subject to any other obligation or any
charter or corporate restriction or any provision of any applicable law, rule or
regulation which, individually or in the aggregate, could have a Material
Adverse Effect.
Section 5.26 Brokers' Fees. None of the Loan Parties has any
obligation to any Person in respect of any finder's, brokers, investment banking
or other similar fee in connection with any of the Transactions.
Section 5.27 Labor Matters. Except as set forth on Schedule
5.27, there are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower, any of its Subsidiaries or any of the
other Loan Parties, and none of such Persons has suffered any strikes, walkouts,
work stoppages or other material labor difficulty within the last five years. No
proceedings are pending against the Borrower or any of its Subsidiaries before
the INS which could reasonably be expected to have a Material Adverse Effect.
Section 5.28 Indebtedness of the Borrower and Its
Subsidiaries. Set forth on Schedule 7.2 hereto is a complete and accurate list
of all Indebtedness of the Borrower and each of its Subsidiaries existing as of
the Closing Date, showing the principal amount outstanding thereunder as of the
Closing Date. As of the Closing Date, the Borrower has redeemed or repurchased
Convertible Subordinated Notes for an aggregate purchase price of
$101,274,666.67 with the proceeds from the issuance of the New Convertible
Subordinated Notes, and the par value of all Convertible Subordinated Notes so
redeemed or repurchased is $100,000,000 as of the Closing Date.
Section 5.29 Other Agreements. Schedule 5.29 sets forth a
complete and accurate list as of the Closing Date of (i) all joint venture and
partnership agreements to which the Borrower or any of its Subsidiaries is a
party, and (ii) all covenants not to compete restricting the Borrower or
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
any of its Subsidiaries to which the Borrower or any of its Subsidiaries is a
party or by which the Borrower or any of its Subsidiaries is bound.
Section 5.30 Immaterial Subsidiaries. The Subsidiaries of the
Borrower designated as Immaterial Subsidiaries on the Closing Date are set forth
on Schedule 5.30. The assets of each Subsidiary of the Borrower designated as an
Immaterial Subsidiary by the Borrower do not exceed $1,500,000 and the assets of
all of the Subsidiaries of the Borrower designated as Immaterial Subsidiaries by
the Borrower do not in the aggregate exceed $10,000,000, in each case as
determined in accordance with GAAP.
Section 5.31 Franchise Agreements and Franchisees. None of the
Franchise Agreements to which the Borrower or any of its Subsidiaries is a party
as a franchisor or a licensor prohibit or restrict in any manner the assignment
of such Franchise Agreement to the Agent for the benefit of the Secured Parties
or require any consent of any Person in connection with any such assignment.
Schedule 5.31 sets forth a complete and accurate list of each Person who is a
franchisee or licensee of the Borrower or any of its Subsidiaries as of the
Closing Date.
SECTION 6. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that until all of the Commitments of
each of the Lenders have terminated, each of the Letters of Credit has expired
or been terminated, and the Obligations are paid in full:
Section 6.1 Information Covenants. The Borrower will furnish
to the Agent, with sufficient copies for each Lender:
(a) Quarterly Financial Statements. Within 45
days after the close of each of the first three (3) quarterly accounting periods
in each fiscal year of the Borrower, the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such quarterly period and the
related consolidated statements of income and cash flow for such quarterly
period and for the elapsed portion of the fiscal year ended with the last day of
such quarterly period, and in each case setting forth comparative figures for
the related periods in the prior fiscal year.
(b) Annual Financial Statements. Within 90 days
after the close of each fiscal year of the Borrower, the consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and
the related consolidated statements of income and cash flow for such fiscal
year, setting forth comparative figures for the preceding fiscal year and, with
respect to such consolidated financial statements, certified without
qualification by KPMG LLP or other independent certified public accountants of
recognized national standing reasonably acceptable to the Agent and the Required
Lenders and indicating that its audit of the consolidated financial statements
of the Borrower was conducted in accordance with generally accepted auditing
standards.
(c) Management Letters. Promptly after the
Borrower's receipt thereof, a copy of any "management letter" or other material
report received by the Borrower from its certified public accountants.
(d) Budgets. Within 60 days after the first day
of each fiscal year of the Borrower (including the fiscal year 2005 commencing
on January 27, 2004), a budget and financial forecast of results of operations
and sources and uses of cash (in form reasonably satisfactory to the
56
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Agent) prepared by the Borrower for such fiscal year, accompanied by a written
statement of the assumptions used in connection therewith, together with a
certificate of the chief financial officer of the Borrower to the effect that
such budget and financial forecast and, to the best of such officer's knowledge,
assumptions, are reasonable and were prepared in good faith. The financial
statements required to be delivered pursuant to clauses (a) and (b) above shall
be accompanied by a comparison of the actual financial results set forth in such
financial statements to those contained in the forecasts delivered pursuant to
this clause (d) together with an explanation of any material variations from the
results anticipated in such forecasts.
(e) Officer's Certificates. At the time of the
delivery of the financial statements under clauses (a) and (b) above, a
certificate of the chief financial officer of the Borrower which certifies (x)
that such financial statements fairly present the financial condition and the
results of operations of the Borrower and its Subsidiaries on the dates and for
the periods indicated, subject, in the case of interim financial statements, to
normally recurring year-end adjustments, and that such financial statements were
prepared in accordance with GAAP and (y) that such officer has reviewed the
terms of the Loan Documents and has made, or caused to be made under his or her
supervision, a review in reasonable detail of the business and condition of the
Borrower and its Subsidiaries during the accounting period covered by such
financial statements, and that as a result of such review such officer has
concluded that no Default or Event of Default has occurred during the period
commencing at the beginning of the accounting period covered by the financial
statements accompanied by such certificate and ending on the date of such
certificate or, if any Default or Event of Default has occurred, specifying the
nature and extent thereof and, if continuing, the action the Borrower proposes
to take in respect thereof (the "COMPLIANCE CERTIFICATE"). Such certificate
shall set forth the calculations required to establish whether the Borrower was
in compliance with the provisions of Sections 6.11, 6.12, 7.1, 7.2, 7.3, 7.7,
7.8 and 7.18 during and as at the end of the accounting period covered by the
financial statements accompanied by such certificate.
(f) Notice of Default. Promptly and in any event
within one Business Day after any Loan Party obtains knowledge thereof, notice
(i) of the occurrence of any Default or Event of Default together with a
certificate of an Authorized Officer of the Borrower specifying the nature and
period of existence thereof and the Borrower's proposed response thereto, (ii)
that any holder of Indebtedness of the Borrower or any Subsidiary of the
Borrower having an outstanding principal balance exceeding $5,000,000 has given
any written notice to the Borrower or any Subsidiary of the Borrower or taken
any other action with respect to a claimed default or event or condition of the
type referred to in Section 8.1(d) specifying (A) the nature and period of
existence of any such claimed default, condition or event, (B) the notice given
or action taken by such Person in connection therewith, and (C) the Borrower's
proposed response thereto and (iii) of the occurrence of any default or event of
default under any Subordinated Debt Document specifying (A) the nature and
period of existence of any such default, condition or event, (B) any notice
given or action taken by any holder or trustee thereunder in connection
therewith, and (C) the Borrower's proposed response thereto.
(g) Notice of Litigation. Promptly after (i) the
occurrence thereof, notice of the institution of, or any material development
in, any action, suit, litigation, proceeding, investigation or arbitration,
before any court or arbitrator or any governmental or administrative body,
agency or official, against the Borrower, any of its Subsidiaries or any
material property of any thereof which, individually or in the aggregate, could
have a Material Adverse Effect, or (ii) actual knowledge thereof, notice of the
threat of any such action, suit, proceeding, investigation or arbitration.
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(h) ERISA.
(i) As soon as possible and in any event within
10 days after the Borrower or any member of its ERISA Controlled Group knows,
or has reason to know, that:
(A) any Termination Event with respect
to a Plan has occurred or will occur, or
(B) any condition exists with respect
to a Plan which presents a material risk of termination of the Plan or
imposition of an excise tax or other liability on the Borrower or any
member of its ERISA Controlled Group, or
(C) the Borrower or any member of its
ERISA Controlled Group has applied for a waiver of the minimum funding
standard under Section 412 of the Code or Section 302 of ERISA, or
(D) the Borrower or any member of its
ERISA Controlled Group has engaged in a "prohibited transaction," as
defined in Section 4975 of the Code or as described in Section 406 of
ERISA, that is not exempt under Section 4975 of the Code and Section
408 of ERISA, or
(E) the aggregate present value of the
Unfunded Benefit Liabilities under all Plans has in any year increased
by $500,000 or to an amount in excess of $2,000,000, or
(F) any condition exists with respect
to a Multiemployer Plan which presents a material risk of a partial or
complete withdrawal (as described in Section 4203 or 4205 of ERISA) by
the Borrower or any member of its ERISA Controlled Group from a
Multiemployer Plan, or
(G) the Borrower or any member of its
ERISA Controlled Group is in "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan,
or
(H) a Multiemployer Plan is in
"reorganization" (as defined in Section 418 of the Code or Section 4241
of ERISA) or is "insolvent" (as defined in Section 4245 of ERISA), or
(I) the potential withdrawal liability
(as determined in accordance with Title IV of ERISA) of the Borrower
and the members of its ERISA Controlled Group with respect to all
Multiemployer Plans has in any year increased by $500,000 or to an
amount in excess of $2,000,000, or
(J) there is an action brought against
the Borrower or any member of its ERISA Controlled Group under Section
502 of ERISA with respect to its failure to comply with Section 515 of
ERISA,
a certificate of the president or chief financial officer of the Borrower
setting forth the details of each of the events described in clauses (A) through
(J) above as applicable and the action which the
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Borrower or the applicable member of its ERISA Controlled Group proposes to take
with respect thereto, together with a copy of any notice or filing from the PBGC
or which may be required by the PBGC or other agency of the United States
government with respect to each of the events described in clauses (A) through
(J) above, as applicable.
(ii) As soon as possible and in any event within
two Business Days after the receipt by the Borrower or any member of
its ERISA Controlled Group of a demand letter from the PBGC notifying
the Borrower or such member of its ERISA Controlled Group of its final
decision finding liability and the date by which such liability must be
paid, a copy of such letter, together with a certificate of the
president or chief financial officer of the Borrower setting forth the
action which the Borrower or such member of its ERISA Controlled Group
proposes to take with respect thereto.
(i) SEC Filings. Promptly upon transmission
thereof, copies of all regular and periodic financial information, proxy
materials and other information, regular, periodic and special reports and
registration statements, if any, which any Loan Party shall file with the
Securities and Exchange Commission or any governmental agencies substituted
therefore or which any Loan Party shall send to its stockholders.
(j) Environmental. Promptly and in any event
within two Business Days after the existence of any of the following conditions,
a certificate of an Authorized Officer of the Borrower specifying in detail the
nature of such condition and the applicable Loan Party's or Environmental
Affiliate's proposed response thereto: (i) the receipt by any Loan Party or any
of its Environmental Affiliates of any communication (written or oral), whether
from a governmental authority, citizens group, employee or otherwise, that
alleges that such Loan Party or Environmental Affiliate is not in compliance
with applicable Environmental Laws where such noncompliance, individually or in
the aggregate, could have a Material Adverse Effect, (ii) any Loan Party or any
of its Environmental Affiliates shall obtain actual knowledge that there exists
any Environmental Claim pending or threatened against such Loan Party or such
Environmental Affiliate, which, individually or in the aggregate, could have a
Material Adverse Effect, or (iii) any release, emission, discharge or disposal
of any Material of Environmental Concern that could form the basis of any
Environmental Claim against any Loan Party or any of their Environmental
Affiliates, which Environmental Claim, individually or in the aggregate could
have a Material Adverse Effect.
(k) Creditor Reports. Promptly after the
furnishing thereof, copies of any statement or report furnished to any other
holder of the securities of any Loan Party or of any of its Subsidiaries
pursuant to the terms of any indenture, loan or credit or similar agreement and
not otherwise required to be furnished to the Lenders pursuant to any other
clause of this Section 6.1.
(l) Officer's Certificates and Financial
Statements relating to Retail Periods. Within 45 days after the close of each
Retail Period of the Borrower, a certificate of the chief financial officer of
the Borrower setting forth the calculations required to establish whether the
Borrower was in compliance with the provisions of Section 7.1(c) during and as
at the end of such Retail Period (including, without limitation, calculations of
Consolidated EBITDA, consolidated depreciation and consolidated amortization of
the Borrower and its Subsidiaries for such Retail Period), which certificate
shall be accompanied by (i) consolidated and consolidating (by business units)
statements of income for the Borrower and its Subsidiaries for such Retail
Period and for the elapsed portion of the fiscal year ended with the last day of
such Retail Period, (ii) consolidated balance sheets of the Borrower and its
Subsidiaries as at the end of such Retail Period and the related
59
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consolidated statements of cash flow for such Retail Period and for the elapsed
portion of the fiscal year ended with the last day of such Retail Period, (iii)
comparative figures for the related periods in the prior fiscal year for the
statement of income required to be delivered pursuant to this subsection (l) for
such Retail Period and (iv) comparative figures for the corresponding financial
results contained in the budget required to be delivered pursuant to Section
6.1(d) and prior year for the statement of income. In addition, the Borrower
agrees to furnish the foregoing information within the time period specified
above with respect to its Retail Periods ended September 8, 2003, October 6,
2003 and November 3, 2003.
(m) Other Information. From time to time, such
other information or documents (financial or otherwise) as any Lender may
reasonably request.
Section 6.2 Books, Records and Inspections. The Borrower
shall, and shall cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries in conformity with GAAP and
all requirements of law shall be made of all dealings and transactions in
relation to its business and activities. The Borrower shall, and shall cause
each of its Subsidiaries to, permit the officers and designated representatives
of any Lender or the Financial Advisor to visit and inspect any of the
properties of the Borrower or any of its Subsidiaries, and to examine the books
of record and account of the Borrower or any of its Subsidiaries and discuss the
affairs, finances and accounts of the Borrower or any of its Subsidiaries, with,
and be advised as to the same by, its and their officers and independent
accountants, all upon reasonable notice and at such reasonable times as such
Lender or, in the case of the Financial Advisor, the Agent may desire; PROVIDED
that no such prior notice shall be required if an Event of Default has occurred
and is continuing.
Section 6.3 Maintenance of Insurance. The Borrower shall, and
shall cause each of its Subsidiaries to, (a) maintain with financially sound and
reputable insurance companies insurance on itself and its properties (including
all real properties leased or owned by them)in at least such amounts and against
at least such risks as are customarily insured against in the same general area
by companies engaged in the same or a similar business similarly situated, which
insurance shall in any event not provide for materially less coverage than the
insurance in effect on the Closing Date and shall name the Agent for the benefit
of the Lenders as an additional insured or loss payee, as applicable, and (b)
furnish to each Lender from time to time, upon written request, the policies
under which such insurance is issued, certificates of insurance and such other
information relating to such insurance as such Lender may request.
Section 6.4 Taxes.
(a) The Borrower, and shall cause each of its
Subsidiaries to, timely file with the appropriate governmental authorities all
required tax returns, tax reports, and information statements relating to Taxes,
and all such tax returns, tax reports and information statements shall be true,
correct and complete in all material respects when filed. The Borrower shall pay
or cause to be paid, and shall cause each of its Subsidiaries to pay or cause to
be paid, when due, all taxes, charges and assessments and all other lawful
claims required to be paid by the Borrower or such Subsidiaries, except as
contested in good faith and by appropriate proceedings diligently conducted, if
adequate reserves have been established with respect thereto in accordance with
GAAP.
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(b) The Borrower shall not, and shall not permit
any of its Subsidiaries to, file or consent to the filing of any consolidated
tax return with any Person (other than the Borrower and its Subsidiaries).
Section 6.5 Corporate Franchises. Except as permitted by
Section 7.4 below, the Borrower shall, and shall cause each of its Subsidiaries
to, do or cause to be done, all things necessary to preserve and keep in full
force and effect its existence and its patents, trademarks, servicemarks,
tradenames, copyrights, franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals except where the failure to so preserve any
of the foregoing (other than existence) could not, individually or in the
aggregate, result in a Material Adverse Effect.
Section 6.6 Compliance with Law. The Borrower shall, and shall
cause each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, statutes, regulations, decrees and orders of, and all
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of their business and the ownership of their
property, including, without limitation, ERISA and all Environmental Laws.
Section 6.7 Performance of Obligations. The Borrower shall,
and shall cause each of its Subsidiaries to, perform all of its obligations
under the terms of each mortgage, indenture, security agreement, debt
instrument, lease, undertaking and contract by which it or any of its properties
is bound or to which it is a party, except where the failure to perform such
obligations individually or in the aggregate could not reasonably be expected to
have a Material Adverse Effect.
Section 6.8 Maintenance of Properties. The Borrower shall, and
shall cause each of its Subsidiaries to, ensure that its respective properties
useful in its respective business are kept in good repair, working order and
condition, normal wear and tear excepted.
Section 6.9 Compliance with Terms of Leaseholds. The Borrower
shall and shall cause each of its Subsidiaries to (a) make all payments and
otherwise perform all obligations in respect of all leases of the Borrower and
each of its Subsidiaries of real property, (b) keep all such leases that are
useful or material in the conduct of the business of the Borrower and its
Subsidiaries (such useful or material leases are hereinafter referred to as the
"MATERIAL LEASES") in full force and effect, (c) not allow such Material Leases
to lapse or be terminated or any rights to renew such leases to be forfeited or
cancelled, and (d) notify the Agent of any default by any party with respect to
such Material Leases and cooperate with the Agent in all respects to cure any
such default.
Section 6.10 Compliance with Environmental Laws. The Borrower
shall, and shall cause each of its Subsidiaries and all lessees and other
Persons occupying its properties to (a) comply in all material respects, with
all Environmental Laws and Environmental Approvals applicable to its respective
operations and properties; (b) obtain and renew all Environmental Approvals
necessary for its respective operations and properties; and (c) conduct any
investigation, study, sampling and testing, and undertake any cleanup, removal,
remedial or other action necessary to remove and clean up all Materials of
Environmental Concern from any of its respective properties, in accordance with
the requirements of all Environmental Laws; PROVIDED, HOWEVER, that neither the
Borrower nor any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances, unless the
Borrower or any of its Subsidiaries is subject to an order issued by any
governmental authority requiring the
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Borrower or such Subsidiary to undertake any such cleanup, removal, remedial or
other action, in which case this proviso shall not apply.
Section 6.11 Subsidiary Guarantors. The Borrower shall cause
each of its Subsidiaries now or hereafter existing, formed or acquired (other
than any Immaterial Subsidiaries) to at all times be and remain a party to the
Guaranty, the Subsidiary Security Agreement and, if any such Subsidiary owns any
Equity Interests in any Person (other than in Boston West, L.L.C. and other than
in an Immaterial Subsidiary), a Subsidiary Pledge Agreement. The Borrower shall
cause each of its Immaterial Subsidiaries which is a Subordinated Guarantor to
at all times be and remain a party to the Guaranty so long as each such
Immaterial Subsidiary is a Subordinated Guarantor. The Borrower shall cause to
be delivered to the Agent a legal opinion in form and substance reasonably
satisfactory to the Agent with respect to any Subsidiary entering into the
Guaranty after the Closing Date.
Section 6.12 Immaterial Subsidiaries. If (i) the assets of any
Subsidiary of the Borrower then designated as an Immaterial Subsidiary shall at
any time exceed $1,500,000, then the Borrower shall immediately provide notice
to the Agent thereof, and such Subsidiary shall immediately be deemed
automatically to no longer be an Immaterial Subsidiary or (ii) the aggregate
amount of assets of all Subsidiaries of the Borrower so designated as Immaterial
Subsidiaries shall at any time exceed $10,000,000, then the Borrower shall
immediately provide notice to the Agent thereof and notice of which of such
previously designated Immaterial Subsidiaries shall no longer be deemed to be
Immaterial Subsidiaries so that the aggregate amount of assets of all such
Subsidiaries so designated as Immaterial Subsidiaries does not exceed
$10,000,000; PROVIDED that the Borrower may from time to time designate
additional Subsidiaries of the Borrower as Immaterial Subsidiaries so long as
the assets of any such Subsidiary do not exceed $1,500,000 and so long as the
aggregate amount of assets of all such Subsidiaries so designated as Immaterial
Subsidiaries does not exceed $10,000,000 (in each case as determined in
accordance with GAAP). At such time as any Subsidiary that was an Immaterial
Subsidiary is no longer an Immaterial Subsidiary, the Borrower shall thereafter
comply with the terms of this Agreement with respect to such Subsidiary relating
to or affecting Subsidiaries that are not Immaterial Subsidiaries (in addition
to those terms relating to or affecting the Borrower's Subsidiaries generally),
including, without limitation, the requirements of Section 6.11 and Section
2.21.
Section 6.13 Additional Mortgages. As security for the payment
of the Obligations, the Borrower shall and shall cause each of its Subsidiaries
to, concurrently with the acquisition thereof, grant to the Agent a first
priority Lien (free and clear of all Liens other than Liens permitted to be
incurred pursuant to Section 7.3) on and security interest in, all real property
(including any leasehold interest) acquired by the Borrower or any such
Subsidiary after the Closing Date in any jurisdiction that does not as of the
date of acquisition assess a mortgage recording tax, together with title
insurance policies, surveys, appraisals, opinions of counsels and such other
documentation as the Agent may reasonably request.
Section 6.14 Collateral Account. The Collateral Account shall,
at all times during which any funds are deposited therein or credited thereto,
be subject to a Blocked Account Agreement.
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SECTION 7. NEGATIVE COVENANTS.
The Borrower covenants and agrees that until all of the Commitments of
each Lender have terminated, each of the Letters of Credit has expired or been
terminated, and the Obligations are paid in full:
Section 7.1 Financial Covenants.
(a) Leverage Ratio. The Borrower shall not
permit the Leverage Ratio at any time during each of the fiscal quarters of the
Borrower ending on the date set forth below to exceed the ratio set forth
opposite such date:
Quarter Ending Ratio
-------------- -----
November 3, 2003 4.10
January 26, 2004 4.00
May 17, 2004 3.90
August 9, 2004 3.90
November 1, 2004 3.80
January 31, 2005 3.60
May 23, 2005 3.40
August 15, 2005 3.30
November 7, 2005 3.20
January 30, 2006 3.10
May 22, 2006 3.00
August 14, 2006 2.90
November 6, 2006 2.80
January 29, 2007 and thereafter 2.75
(b) Fixed Charge Coverage Ratio. The Borrower
shall not permit the ratio of (i) (A) Consolidated EBITDA of the Borrower, minus
(B) Capital Expenditures, minus (C) all federal and state income taxes paid in
cash by the Borrower or any of its Subsidiaries, plus (D) New Unit Capital
Expenditures, to (ii) Fixed Charges of the Borrower for the period of four
consecutive fiscal quarters of the Borrower (taken as one accounting period) as
determined on the last day of each of the fiscal quarters of the Borrower ending
on the dates set forth below to be less than the ratio set forth opposite such
dates:
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Quarter Ending Ratio
-------------- -----
January 26, 2004 1.10
May 17, 2004 and each fiscal quarter 1.25
thereafter
(c) Minimum Consolidated EBITDA. The Borrower
shall not permit Consolidated EBITDA of the Borrower for the period of thirteen
consecutive Retail Periods of the Borrower (taken as one accounting period) as
determined on the last day of each Retail Period of the Borrower ending during
each period set forth below, to be less than the amount set forth opposite such
period:
Retail Periods Ending Amount
--------------------- ------
November 3, 2003 through $ 100,000,000
December 29, 2003
January 26, 2004 through $ 102,500,000
April 19, 2004
May 17, 2004 through July 12, $ 105,000,000
2004
August 9, 2004 through $ 108,000,000
October 4, 2004
November 1, 2004 through $ 110,000,000
December 27, 2004
January 31, 2005 through $ 115,000,000
April 25, 2005
May 23, 2005 through July 18, $ 120,000,000
2005
August 15, 2005 through $ 122,000,000
October 10, 2005
November 7, 2005 and thereafter $ 125,000,000
(d) Adjusted Leverage Ratio. The Borrower shall
not permit the Adjusted Leverage Ratio to exceed at any time during each fiscal
quarter of the Borrower ending on the date set forth below, the ratio set forth
opposite such date:
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Quarter Ending Ratio
-------------- -----
November 3, 2003 5.75
January 26, 2004 5.75
May 17, 2004 5.60
August 9, 2004 5.50
November 1, 2004 5.45
January 31, 2005 5.35
May 23, 2005 5.30
August 15, 2005 5.25
November 7, 2005 5.20
January 30, 2006 5.15
May 22, 2006 5.10
August 14, 2006 5.00
November 6, 2006 4.95
January 29, 2007 and thereafter 4.75
(e) Capital Expenditures.
(i) The Borrower shall not make or
incur, and shall not permit any of its Subsidiaries to make or incur, any
Capital Expenditures, except, subject to subsections (ii) and (iii) below,
Capital Expenditures of the Borrower and its Subsidiaries in an aggregate
amount, (A) for fiscal year 2004 of the Borrower not in excess of $55,000,000
and (B) for each fiscal year of the Borrower thereafter, not in excess of the
sum of (I) $45,000,000, plus (II) the EBITDA CapEx Amount for such fiscal year,
plus (III) the amount of Net Sale Proceeds for Asset Dispositions occurring
during such fiscal year not required to be applied to reduce the Loans pursuant
to Section 2.12. If the aggregate amount of Capital Expenditures made or
incurred during any fiscal year of the Borrower is less than the amount (as
reduced, if applicable) permitted to be made or incurred pursuant to the
immediately preceding sentence, then the maximum amount for the following fiscal
year of the Borrower and its Subsidiaries (but not any subsequent fiscal year of
the Borrower) shall be increased by the amount of such difference.
(ii) Notwithstanding any other provision
of this Section 7.1(e), for fiscal year 2005 of the Borrower and each fiscal
year of the Borrower thereafter, the ability of
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the Borrower and its Subsidiaries to make or incur Capital Expenditures as
otherwise permitted by this Section 7.1(e) shall be subject to quarterly
sublimits as follows: the Borrower shall not make or incur, and shall not permit
any of its Subsidiaries to make or incur, any Capital Expenditures (A) for the
first fiscal quarter of such fiscal year, in an amount that exceeds one-third
(1/3) of the maximum amount of Capital Expenditures permitted for the
immediately preceding fiscal year (including any increases pursuant to the last
sentence of subsection (i) above), (B) for the first two fiscal quarters of such
fiscal year, in an amount that exceeds two-thirds (2/3) of the maximum amount of
Capital Expenditures permitted for the immediately preceding fiscal year
(including any increases pursuant to the last sentence of subsection (i) above)
and (C) for the first three fiscal quarters of such fiscal year, in an amount
that exceeds the maximum amount of all Capital Expenditures permitted for the
immediately preceding fiscal year (including any increases pursuant to the last
sentence of subsection (i) above).
(iii) Notwithstanding any other provision
of this Section 7.1(e), if at any time the Unused Portion of the Revolving Loans
shall be less than $15,000,000, and until such time as such Unused Portion has
been restored to at least $15,000,000, the Borrower shall not make or incur and
shall not permit any of its Subsidiaries to make or incur any Capital
Expenditures (other than Capital Expenditures otherwise permitted by this
Section 7.1(e) and made or incurred pursuant to contractual commitments to make
or incur such Capital Expenditures entered into by the Borrower or any of its
Subsidiaries at a time when such Unused Portion was at least $15,000,000).
(f) Consolidated Tangible Net Worth. The
Borrower shall not permit its Consolidated Tangible Net Worth at any time to be
less than the sum of (i) $70,000,000; (ii) 50% of cumulative Consolidated Net
Income of the Borrower and its Subsidiaries for all fiscal quarters of the
Borrower ended on or after November 3, 2003 in which Consolidated Net Income is
positive (and without any deduction for any fiscal quarter in which Consolidated
Net Income is negative), plus (iii) 100% of the Net Equity Proceeds of any
equity offering by the Borrower.
(g) Excess Availability. The Borrower shall at
all times prior to the redemption in full of all of the Convertible Subordinated
Notes maintain Excess Availability of $15,000,000.
Section 7.2 Indebtedness. The Borrower shall not, and shall
not permit any of its Subsidiaries to, create, incur, assume, suffer to exist or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness other than the following PROVIDED that none of the creation,
incurrence, assumption or existence of any of the following result in or cause a
violation or breach of, or default under, any Subordinated Debt Document:
(a) Indebtedness hereunder and under the other
Loan Documents;
(b) Indebtedness outstanding on the Closing Date
and set forth on Schedule 7.2 hereto (without duplication of any other
Indebtedness permitted by the other provisions of this Section 7.2);
(c) Indebtedness permitted under Sections
7.6(a), 7.6(b) and 7.6(d);
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(d) Indebtedness of the Borrower of the type
described in clause (viii) of the definition of Indebtedness to the extent
permitted under Section 7.14;
(e) Indebtedness with respect to (i) purchase
money Indebtedness incurred solely to finance Capital Expenditures permitted
under Section 7.1(e) and any extensions, renewals, refundings or refinancings
thereof, not in excess of $5,000,000 in the aggregate at any one time
outstanding for all such purchase money Indebtedness and all extensions,
renewals, refundings and refinancings thereof and (ii) Capitalized Leases
permitted under Section 7.13 and any extensions, renewals, refundings or
refinancings thereof so long as the terms of any such Indebtedness with respect
to Capitalized Leases is permitted under Section 7.13; PROVIDED, that (A) any
such Indebtedness incurred pursuant to this clause (e) and any such extensions,
renewals, refundings or refinancings thereof shall not exceed 85% of the lesser
of the purchase price or the fair market value of the asset so financed, (B) at
the time of such incurrence, no Default or Event of Default has occurred and is
continuing or would result from such incurrence, and (C) such Indebtedness has a
scheduled maturity and is not due on demand;
(f) any extensions, renewals, refundings and
refinancings of the Indebtedness described in clause (b) above, so long as the
terms of any such extension, renewal, refunding or refinancing Indebtedness, and
of any agreement entered into and of any instrument issued in connection
therewith, are otherwise permitted by the Loan Documents; PROVIDED, FURTHER,
that the principal amount of such Indebtedness shall not be increased above the
principal amount thereof outstanding immediately prior to such extension,
renewal, refunding or refinancing, and the direct and contingent obligors
therefor shall not be changed, as a result of or in connection with such
extension, renewal, refunding or refinancing;
(g) Indebtedness of any Domestic Subsidiary of
the Borrower owed to the Borrower or to any Domestic Subsidiary of the Borrower;
(h) Permitted Subordinated Debt in an aggregate
principal amount not to exceed $5,000,000 at any one time outstanding incurred
in connection with a Permitted Acquisition with respect to which all of the
conditions set forth in Section 7.8(f) have been satisfied and incurred to pay
all or part of the purchase price thereof which Permitted Subordinated Debt, if
secured, is secured only by Liens permitted pursuant to Section 7.3(i);
(i) Indebtedness of the Borrower incurred
pursuant to (i) the Convertible Subordinated Notes in an aggregate original
principal amount not to exceed $22,319,000, (ii) the New Subordinated Notes in
an aggregate original principal amount not to exceed $200,000,000 and (iii) the
New Convertible Subordinated Notes in an aggregate principal amount not to
exceed $105,000,000; in each case less all repayments, redemptions, prepayments,
purchases, defeasances or acquisitions for value with respect thereto after the
Closing Date, PROVIDED, HOWEVER, that the New Convertible Subordinated Notes
shall be permitted only to the extent all of the proceeds, net of customary
underwriting fees and discounts, brokerage commissions and other similar
reasonable and customary costs and expenses directly attributable to the
issuance of the New Convertible Subordinated Notes, are applied to redeem
Convertible Subordinated Notes as permitted to be redeemed pursuant to Section
7.10(d)(vi) within 90 days of the receipt of such proceeds and pending such
redemptions the Borrower shall maintain such proceeds in a segregated account
restricted for such purpose;
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(j) unsecured Indebtedness of the Borrower or
any of its Subsidiaries consisting of guarantees of Indebtedness of a franchisee
incurred to finance a remodeling, construction or purchase of a retail unit of
such franchisee or capital expenditures of such franchisee ("FRANCHISEE
CONSTRUCTION DEBT"); PROVIDED, that (i) the amount of the obligations of the
Borrower and its Subsidiaries under or with respect to such guarantees shall not
exceed $40,000,000 in the aggregate outstanding at any time; (ii) the amount of
the obligations of the Borrower and its Subsidiaries under or with respect to
guarantees of more than 20% of the principal amount of the Franchisee
Construction Debt of a franchisee shall not exceed $5,000,000 in the aggregate
outstanding at any time; and (iii) except for the guarantees described in the
foregoing clause (ii), the amount of the obligations of the Borrower and its
Subsidiaries under or with respect to guarantees of Franchisee Construction Debt
of any franchisee shall not exceed 20% of the Franchisee Construction Debt of
such franchisee;
(k) unsecured Indebtedness of the Borrower or
any of its Subsidiaries owing to former franchisees and representing the
deferred purchase price (or a deferred portion of such purchase price) payable
by the Borrower or such Subsidiary to such former franchisee in connection with
the purchase by the Borrower or such Subsidiary of one or more retail outlets
from such former franchisee in an aggregate principal amount for all such
Indebtedness not to exceed $5,000,000 at any one time outstanding;
(l) Indebtedness of any entity acquired pursuant
to a Permitted Acquisition with respect to which all of the conditions set forth
in Section 7.8(f) have been satisfied, which Indebtedness (i) is existing prior
to such Permitted Acquisition, (ii) is assumed by the Borrower or any Subsidiary
of the Borrower in connection with any such Permitted Acquisition and (iii) is
not incurred in contemplation of such Permitted Acquisition; PROVIDED, that the
aggregate principal amount of all such Indebtedness shall not exceed $5,000,000
at any time outstanding; and
(m) Indebtedness with respect to Sale and
Leaseback Transactions permitted under Section 7.13(a).
Section 7.3 Liens. The Borrower shall not, and shall not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist,
directly or indirectly, any Lien on any of its property now owned or hereafter
acquired, other than the following PROVIDED, that none of the creation,
incurrence, assumption or existence of any of the following result in the
creation or imposition of a Lien under any Subordinated Debt Document:
(a) Liens existing on the Closing Date and set
forth on Schedule 7.3 hereto;
(b) Liens for taxes not yet due or which are
being contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate reserves are being maintained in accordance
with GAAP;
(c) Statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other Liens imposed by Law
(other than any Lien imposed by ERISA or pursuant to any Environmental Law)
created in the ordinary course of business for amounts not yet due or which are
being contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate bonds have been posted;
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(d) Liens (other than any Lien imposed by ERISA
or pursuant to any Environmental Law) incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(e) Easements, licenses, rights-of-way,
covenants, conditions and restrictions, zoning and similar restrictions and
other similar charges or encumbrances not interfering with the ordinary conduct
of the business of the Borrower or any of its Subsidiaries and which do not
detract materially from the value of the property to which they attach or impair
materially the use thereof by the Borrower or any of its Subsidiaries or
materially adversely affect the security interests of the Agent or the Lenders
therein;
(f) Liens granted to the Agent for the benefit
of the Lenders pursuant to the Security Documents securing the Obligations;
(g) Liens created pursuant to Capitalized Leases
and to secure other purchase-money Indebtedness permitted pursuant to Section
7.2(e), PROVIDED, that such Liens are only in respect of the property or assets
subject to, and secure only, the respective Capitalized Lease or other
purchase-money Indebtedness;
(h) Liens arising out of the replacement,
extension or renewal of any Lien permitted by clause (a) above upon or in the
same property theretofore subject thereto in connection with the refunding,
refinancing, extension or renewal (without increase in the amount or change in
any direct or contingent obligor) of the Indebtedness secured thereby permitted
pursuant to Section 7.2(f);
(i) Liens securing Permitted Subordinated Debt
permitted pursuant to Section 7.2(h) PROVIDED, that (i) such Liens are only in
respect of the assets acquired in the applicable Permitted Acquisition, (ii) the
Obligations are secured by valid first priority perfected Liens on such assets
and the Liens permitted pursuant to this Section 7.3(i) are second in priority
to the Liens on such assets securing the Obligations and (iii) the rights and
remedies of any holder of such Liens are subordinated to the rights and remedies
of the Agent and the Lenders on terms approved in writing by the Agent;
(j) Liens securing Indebtedness (other than
Permitted Subordinated Debt) of the Borrower and its Subsidiaries in an
aggregate principal amount not to exceed $25,000,000;
(k) Liens of a lessor covering only specific
property leased by the Borrower or any of its Subsidiaries subject to operating
leases entered into by the Borrower or any of its Subsidiaries as a lessee in
the ordinary course of business;
(l) Liens of a lessor covering only specific
property leased by the Borrower or any of its Subsidiaries subject to a Sale and
Leaseback Transaction permitted by Section 7.13(a) entered into by the Borrower
or any of its Subsidiaries as a lessee; and
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(m) Liens set forth as exceptions to the title
policies accepted by the Agent in connection with the Real Estate Collateral.
Section 7.4 Restriction on Fundamental Changes.
(a) The Borrower shall not, and shall not permit
any of its Subsidiaries to, enter into any merger or consolidation, or
liquidate, wind-up or dissolve (or suffer any liquidation or dissolution),
discontinue its business or convey, lease, sell, transfer or otherwise dispose
of, in one transaction or series of transactions, all or any substantial part of
its business or property, whether now or hereafter acquired, except (i) as
otherwise permitted under Section 7.5, (ii) any wholly-owned Subsidiary of the
Borrower may merge into or convey, sell, lease or transfer all or substantially
all of its assets to, the Borrower or any other Domestic Subsidiary of the
Borrower, PROVIDED, that in any such merger involving the Borrower, the Borrower
shall be the surviving corporation and any such Subsidiary merging into the
Borrower or any such Domestic Subsidiary shall be Solvent, (iii) any Solvent
Person acquired by the Borrower or a Subsidiary of the Borrower in a Permitted
Acquisition permitted hereunder may merge with the Borrower or any wholly-owned
Subsidiary of the Borrower, PROVIDED, that in any such merger, the Borrower or
such wholly-owned Subsidiary shall be the surviving corporation, PROVIDED,
FURTHER, that in each case, (A) any such wholly-owned Subsidiary of the Borrower
which is the surviving corporation of any such merger or to which any business
or property is so transferred shall be a party to the Guaranty and the
Subsidiary Security Agreement and if required by Section 2.21, a Subsidiary
Pledge Agreement, (B) the Borrower shall give the Agent at least ten (10) days
prior written notice of any such sale, merger or other transfer, (C) the Agent
and Lenders shall not be deemed to have released their security interest in any
assets so transferred or in any Subsidiary or the assets of any Subsidiary so
merged and (D) no Default or Event of Default shall have occurred or be
continuing or would occur after giving effect thereto or as a result thereof.
(b) Borrower shall not and shall not permit any
of its Subsidiaries to, amend its certificate of incorporation or by-laws (or
other relevant organizational and governing documents) in any manner adverse to
the interests of the Agent or the Lenders.
Section 7.5 Sale of Assets. The Borrower shall not, and shall
not permit any of its Subsidiaries to, make, consummate or effect any Asset
Disposition (or agree to do so at any future time) with respect to all or any
part of its property or assets, except:
(a) the sale of any asset by the Borrower or any
of its Subsidiaries (excluding (i) a bulk sale of inventory and a sale of
receivables (other than delinquent accounts for collection purposes only) and
(ii) a sale of any capital stock of ▇▇▇▇ ▇▇▇▇▇▇▇ Enterprises, Inc. or Hardee's)
so long as:
(I) the purchase price paid to the Borrower or
such Subsidiary for such asset shall be no less than the fair market
value of such asset at the time of such sale,
(II) the purchase price for such asset shall be
paid to the Borrower or such Subsidiary solely in cash, Cash
Equivalents or non-cash consideration in the form of promissory notes,
PROVIDED, that in the case of non-cash consideration received in the
form of promissory notes, (A) such consideration shall not exceed 25%
of the aggregate purchase price for such asset, (B) such promissory
notes shall mature no later than 3 years after the date of issuance,
(C) such promissory notes shall be pledged to the Agent, for the
benefit of the Lenders, pursuant to a pledge agreement in form and
substance satisfactory to the Agent,
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(D) all payments of principal, interest and other amounts payable under
such promissory notes and that are received by the Borrower or such
Subsidiary shall be applied to prepay the outstanding Loans in
accordance with Section 2.12(a) hereof and (E) the aggregate principal
amount of all promissory notes received as consideration for all asset
sales permitted under this Section 7.5(a) shall not exceed $50,000,000
at any one time outstanding,
(III) the aggregate fair market value of such
asset and all other assets sold by the Borrower and its Subsidiaries
during the same fiscal year of the Borrower pursuant to this clause (a)
shall not exceed 10% of the total assets of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP
(PROVIDED, that Excluded Resales shall not be included in the
calculation of such percentage),
(IV) the Borrower shall prepay the outstanding
Loans pursuant to, and in accordance with, Section 2.12 in an aggregate
principal amount equal to the Net Sale Proceeds received by the
Borrower or such Subsidiary from the sale, transfer or other
disposition of such asset,
(V) no Default or Event of Default has occurred
and is continuing or would result from such asset sale, and
(VI) with respect to any Asset Disposition
involving Real Estate Collateral, if, after giving effect to such sale,
the minimum Real Estate Collateral Value required under Section 7.21
would not be satisfied, the Borrower or such Subsidiary shall,
concurrently with such sale, in substitution for the Real Estate
Collateral sold, either:
(i) pledge to the Agent for the benefit
of the Lenders and the Interest Rate Hedge Providers additional real
property of the Borrower or such Subsidiary with a fair market value,
as determined by appraisals delivered to the Agent on or prior to July
8, 2002 or, if no such appraisals have been delivered to the Agent on
or prior to such date, then by an appraisal satisfactory to the Agent
and prepared by a firm satisfactory to the Agent, at least equal to the
amount necessary to satisfy the minimum Real Estate Collateral Value
required by Section 7.21 after giving effect to such sale, and deliver
to the Agent such agreements, documents and instruments as the Agent
shall request to create, perfect, establish the first priority nature
of or otherwise protect any Lien purported to be created in favor of
the Agent in the real property so substituted; or
(ii) deposit cash into the Collateral
Account, which shall be subject to a Blocked Account Agreement, in an
amount at least equal to the amount necessary to satisfy the minimum
Real Estate Collateral Value required by Section 7.21 after giving
effect to such sale, deliver to the Agent such other agreements,
documents and instruments as the Agent shall request to create,
perfect, establish the first priority nature of or otherwise protect
any Lien purported to be created in favor of the Agent in the money
deposited in the Collateral Account and in the Collateral Account.
At any time when funds are on deposit in the Collateral
Account, so long as no Default or Event of Default has occurred and is
continuing, the Agent shall, at the Borrower's request, release to the Borrower
from the Collateral Account an amount equal to the lesser of (I) all amounts on
deposit in the Collateral Account and (II) the amount by which the Real Estate
Collateral Value exceeds $218,000,000; and
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
(b) so long as no Default or Event of Default
shall occur and be continuing, the grant of any option or other right to
purchase any asset in a transaction which would be permitted under the
provisions of the preceding clause (a).
Section 7.6 Contingent Obligations. The Borrower shall not,
and shall not permit any of its Subsidiaries to, create or become or be liable
with respect to any Contingent Obligation, except:
(a) pursuant to the Guaranty or the Security
Documents;
(b) Contingent Obligations which are in
existence on the Closing Date and which are set forth on Schedule 7.6;
(c) Contingent Obligations permitted pursuant to
Section 7.2(j); and
(d) guarantees by Subsidiaries of the Borrower
pursuant to the New Subordinated Note Indenture of obligations of the Borrower
under the New Subordinated Notes, PROVIDED, that such guarantees shall at all
times be subordinated in respect of the Obligations on subordination terms
contained in the New Subordinated Note Indenture.
Section 7.7 Dividends. The Borrower shall not, and shall not
permit any of its Subsidiaries to, declare or pay any dividends, or return any
capital to, its stockholders or authorize or make any other distribution,
payment or delivery of property or cash to its stockholders as such, or redeem,
retire, purchase, defease or otherwise acquire, directly or indirectly, any
shares of any class of its Capital Stock now or hereafter outstanding (or any
options, rights or warrants issued with respect to its Capital Stock), or set
aside any funds for any of the foregoing purposes (all the foregoing
"DIVIDENDS"), except that:
(a) Dividends may be made to the Borrower or any
of its wholly-owned Subsidiaries by any of its wholly-owned Subsidiaries; and
(b) So long as no Default or Event of Default
shall have occurred and be continuing or would result therefrom, the Borrower
may declare and deliver dividends and distributions payable only in common stock
of the Borrower; and
(c) So long as no Default or Event of Default
shall have occurred and be continuing, any Subsidiary of the Borrower that is
not a wholly-owned Subsidiary of the Borrower may declare and pay cash dividends
to the extent, and only to the extent, of any cumulative positive net income
(after deducting any negative net income) of such Subsidiary arising after the
date such Subsidiary became a Subsidiary of the Borrower so long as such
dividends are payable to all of its equity holders on a ratable basis.
Section 7.8 Advances, Investments and Loans. The Borrower
shall not, and shall not permit any of its Subsidiaries to, make or suffer to
exist, directly or indirectly any Investments (including, without limitation,
loans and advances to the Borrower or any of its Subsidiaries, and other
Investments in Subsidiaries of the Borrower), or commitments therefor, or to
create any Subsidiary or to become or remain a partner in any partnership or
joint venture, or make any Acquisition of any interest in any Person, except
that the following shall be permitted PROVIDED, that none of the making,
existence or creation of or becoming or remaining a partner in, any of the
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
following will not result in or cause a violation or breach of, or default
under, any Subordinated Debt Document:
(a) Investments set forth on Schedule 7.8;
(b) Investments by the Borrower and its
Subsidiaries in Subsidiaries of the Borrower outstanding on the Closing Date,
additional Investments (other than loans and advances) by the Borrower or any
Subsidiary of the Borrower in any Domestic Subsidiary of the Borrower which
Subsidiary is Solvent and is a party to the Guaranty, and additional Investments
by the Borrower or any wholly-owned Subsidiary of the Borrower consisting of
loans and advances to wholly-owned Domestic Subsidiaries of the Borrower to the
extent permitted by Section 7.2(g).
(c) loans and advances by the Borrower and its
Subsidiaries to their employees in the ordinary course of its business (other
than Employee Stock Loans) not exceeding $2,000,000 in the aggregate at any one
time outstanding;
(d) the Borrower and its Subsidiaries may
acquire and hold Cash Equivalents;
(e) Investments consisting of promissory notes
permitted to be received as consideration in connection with Asset Dispositions
permitted under Section 7.5(a);
(f) Permitted Acquisitions, PROVIDED, that, in
the case of each Permitted Acquisition, the conditions referred to in clauses
(i) through (viii) below are satisfied on or prior to the date of such Permitted
Acquisition (it being understood that, for purposes of clause (ii) below, the
phrase "the Borrower and its Subsidiaries" and the phrase "Consolidated" shall
be deemed to include the Person (and its Subsidiaries, if any, to be acquired)
or assets to be acquired as though such Person (and its Subsidiaries, if any, to
be acquired) or assets were a Subsidiary of the Borrower):
(i) the Person or assets to be acquired
satisfy the criteria set forth in either the definition of "Permitted
Acquisition" contained in Section 1;
(ii) the Borrower shall have delivered
to the Agent a certificate of the chief financial officer of the
Borrower, in form and substance satisfactory to the Agent,
demonstrating:
(1) compliance by the Borrower and
its Subsidiaries with the covenants set forth in Section 7.1, on a pro
forma basis after giving effect to such Acquisition, for a period of
four consecutive fiscal quarters after the date of such Acquisition,
and
(2) the Consolidated EBITDA of the
Person and any of its Subsidiaries, if any, to be acquired, for the
twelve-month period most recently ended shall be a positive number;
(iii) the representations and warranties
contained in each Loan Document are correct in all material respects on
and as of the date of such Acquisition, after giving effect to such
Acquisition, as though made on and as of such date, other than any such
representations and warranties that by their terms are specifically
made as of a date other than such date;
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
(iv) no event has occurred and is
continuing on the date of such Acquisition, or would result from such
Acquisition, that constitutes a Default or an Event of Default;
(v) the Total Revolving Loan Commitment
minus the aggregate principal amount of the Revolving Loans outstanding
on the date of such Permitted Acquisition, minus the amount of any L/C
Obligations outstanding on the date of such Permitted Acquisition shall
equal at least $25,000,000;
(vi) all Consents and waiting periods
described in clause (vii)(3)(D) below shall have been obtained or
expired; and
(vii) the Borrower or such Subsidiary of
the Borrower making such Acquisition shall furnish or cause to be
furnished to the Agent and the Lenders the following:
(1) Certified copies of the
resolutions of the Board of Directors (or other governing body) of the
Borrower and, if any Subsidiary of the Borrower will participate in the
applicable Acquisition, of such Subsidiary (in each case, to the extent
resolutions of the Board of Directors of the Borrower or such
Subsidiary are required or advisable pursuant to applicable law or the
Borrower's or such Subsidiary's charter documents) and of all documents
evidencing other necessary corporate action or other Consents, if any,
with respect to such Acquisition;
(2) Such other financial, business
and other information regarding the Person or assets to be acquired, as
the case may be, as the Agent or the Required Lenders through the Agent
shall have reasonably requested, including, without limitation, actual
and pro forma financial statements and projections relating to such
Person or assets;
(3) In the case of each Permitted
Acquisition, to the extent that such Acquisition consists of the
acquisition by the Borrower or any of its Subsidiaries of stock,
partnership or other Equity Interests of any Person (or assets in the
case of clause (A) below):
(A) All documents required to be
delivered pursuant to Section 2.21 and Section 6.11;
(B) A copy of the charter or
other organizational document of such Person and each amendment thereto, if any,
certified by the Secretary of State of its jurisdiction of organization, as of a
date reasonably near the date of such Borrowing, as being a true and correct
copy thereof;
(C) An officer's certificate
signed on behalf of such Person by an appropriate officer of such Person,
certifying as to (i) the absence of any amendment to the charter or other
organizational document of such Person since the date of the Secretary of
State's certificate referred to in clause (B) above, (ii) a true and correct
copy of the by-laws or similar organizational document of such Person, (iii) a
true and correct copy of the resolutions adopted by the Board of Directors or
equivalent governing body of such Person approving the documents or instruments
to be delivered under this Section 7.8(f) to which such
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Person is a party and the matters contemplated thereby, (iv) the incumbency and
specimen signatures of the officers of such Person executing the documents and
instruments to be delivered under this Section 7.8(f) to which such Person is a
party, and (v) the due organization and good standing of such Person as a Person
organized under the laws of its jurisdiction of organization;
(D) Evidence satisfactory to the
Agent and the Lenders that the Borrower, its Subsidiaries and the Person being
acquired has made and obtained all necessary governmental and other Consents
required in order to consummate such Acquisition and that all applicable waiting
periods with respect to such Acquisition including, without limitation, those
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act have expired without any action having been
taken by any competent authority restraining, preventing or imposing materially
adverse conditions upon the rights of the Loan Parties or their Subsidiaries
freely to transfer or otherwise dispose of, or to create any Lien on, any
properties now owned or hereafter acquired by any of them; and
(viii) the total consideration, contingent
or other-wise, for the Acquisition of the Person being acquired,
together with the consideration paid for each other Acquisition
consummated pursuant to this Section 7.8(f) during the same fiscal year
does not exceed, in the aggregate, $10,000,000 (including, without
limitation, securities, instruments, or promissory notes tendered or
executed in connection with such acquisition), PROVIDED, that the
consideration paid under this clause (viii) shall be included for
purposes of calculating compliance with Section 7.1(e) and all such
Acquisitions shall be permitted only to the extent they are permitted
under Section 7.1(e);
(g) Investments received as consideration in
connection with Asset Dispositions permitted under paragraph (a) of Section 7.5;
(h) Investments consisting of promissory notes
evidencing past due receivables owed to the Borrower or any Subsidiary of the
Borrower by an account debtor and not involving any monetary advance;
(i) Employee Stock Loans not exceeding
$10,000,000 in the aggregate at any one time outstanding; and
(j) loans to franchisees of Green Burrito in an
aggregate amount not to exceed $900,000 for all such loans made after the
Closing Date.
Section 7.9 Transactions with Affiliates. The Borrower shall
not, and shall not permit any of its Subsidiaries to, enter into any transaction
or series of related transactions, whether or not in the ordinary course of
business, with any Affiliate, other than on terms and conditions substantially
as favorable to the Borrower or such Subsidiary as would be obtainable at the
time in a comparable arm's-length transaction with a Person other than an
Affiliate; PROVIDED, HOWEVER, that Employee Stock Loans otherwise permitted by
the terms hereof shall not be considered to be transactions with Affiliates for
purposes of this Section 7.9.
Section 7.10 Limitation on Voluntary Payments and
Modifications of Certain Documents. The Borrower shall not, and shall not permit
any of its Subsidiaries to:
(a) make any sinking fund payment or voluntary
or optional payment or prepayment on or redemption, defeasance, purchase or
acquisition for value of (including, without
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
limitation, by way of depositing with the trustee with respect thereto money or
securities before due for the purpose of paying when due) or exchange of any
Indebtedness (excluding the Indebtedness hereunder and under the other Loan
Documents and Indebtedness permitted to be incurred pursuant to Section 7.2(i)),
PROVIDED that the Borrower may, and may permit any of its Subsidiaries to,
(i) prepay, redeem, defease, purchase
or acquire or exchange any (collectively, a "PREPAYMENT") Surviving
Debt (other than Indebtedness permitted to be incurred pursuant to
Section 7.2(i)) only if on the date of such Prepayment (x) no event or
condition has occurred and is continuing, or would result from such
Prepayment, that constitutes a Default or an Event of Default, and (y)
after giving effect to such Prepayment, the Total Revolving Loan
Commitment minus the aggregate principal amount of the Revolving Loans
outstanding on the date of such Prepayment minus the amount of any L/C
Obligations outstanding on the date of such Prepayment shall equal at
least $20,000,000; PROVIDED, HOWEVER, that notwithstanding the
foregoing, the Borrower shall not, and shall not permit any of its
Subsidiaries to, make any Prepayment of any Indebtedness referred to in
Section 7.2(h); and
(ii) make regularly scheduled or
required repayments of Indebtedness permitted pursuant to Section 7.2.
(b) amend, modify or waive, or permit the
amendment, modification or waiver of (i) the Surviving Debt (other than
Indebtedness permitted to be incurred pursuant to Section 7.2(h) or Section
7.2(i)) in any way that would be materially adverse to the Lenders or (ii) the
Permitted Subordinated Debt or the Subordinated Debt Documents; or
(c) make any payment in violation of any
subordination terms of any Indebtedness of the Borrower or any of its
Subsidiaries; or
(d) make or offer to make any sinking fund
payment, payment, prepayment, redemption, defeasance, purchase or acquisition
for value (including, without limitation, by way of depositing with the trustee
with respect thereto money or securities before due for the purpose of paying
when due) or otherwise segregate funds with respect to the Subordinated Notes
other than (i) regularly scheduled semi-annual interest payments required to be
made in cash, (ii) conversions of the Convertible Subordinated Notes or the New
Convertible Subordinated Notes into common stock of the Borrower, (iii)
redemptions of the Convertible Subordinated Notes with the proceeds of the
Loans, as soon as practicable and in any event no later than March 15, 2004,
PROVIDED, that any such Convertible Subordinated Notes that are redeemed by the
Borrower shall then be cancelled in accordance with the terms of the Convertible
Subordinated Note Indenture, and shall not be reissued and (iv) the redemption
or repurchase of Subordinated Notes, PROVIDED, that (A) the purchase price paid
by the Borrower for such Subordinated Notes shall not exceed in the aggregate,
for the period commencing November 3, 2003, and ending the last day of the last
fiscal quarter ending prior to such redemption or repurchase the sum of (1) the
aggregate Net Equity Proceeds of the Borrower for such period, plus (2) 50% of
Consolidated Net Income for such period (or if Consolidated Net Income for such
period is a deficit, less 100% of such deficit (which deficit for purposes of
subtracting such amount shall be deemed to be a positive number)), (B) the
Borrower shall have delivered to the Agent a certificate of the chief financial
officer of the Borrower, in form and substance satisfactory to the Agent,
demonstrating that, both before and after giving effect to such repurchase and
redemption, for a period of four consecutive fiscal quarters then ended, the
Leverage Ratio shall be less than 3.75 and Consolidated EBITDA of the Borrower
and its
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Subsidiaries for the 13 Retail Period most recently ended shall at least equal
$115,000,000, (C) both before and after giving effect to such redemption or
repurchase, no Default or Event of Default shall have occurred and be continuing
and (D) after giving effect to such redemption or repurchase, no Revolving Loans
shall be outstanding.
Section 7.11 Changes in Business. The Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into any business which is
substantially different from that conducted by the Borrower or such Loan Party,
as the case may be, on the Closing Date after giving effect to the Transactions.
Section 7.12 Certain Restrictions. The Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into or permit to exist any
agreement, instrument or other document which directly or indirectly restricts
the ability of the Borrower or any of its Subsidiaries to (a) enter into
amendments, modifications or waivers of the Loan Documents, (b) sell, transfer
or otherwise dispose of its assets, (c) create, incur, assume or suffer to exist
any Lien upon any of its property, (d) create, incur, assume, suffer to exist or
otherwise become liable with respect to any Indebtedness, (e) make loans or
advances to the Borrower, or (f) pay any Dividend or repay any Indebtedness owed
to the Borrower or any of its Subsidiaries; PROVIDED, that Capitalized Leases or
agreements governing purchase money Indebtedness which contain restrictions of
the types referred to in clauses (b) or (c) with respect to the property covered
thereby shall be permitted; PROVIDED, FURTHER, that the foregoing shall not
apply to restrictions in effect on the Closing Date contained in agreements
governing Surviving Debt (other than Indebtedness arising under the Subordinated
Notes) and, if such Indebtedness is renewed, extended or refinanced,
restrictions in the agreements governing the renewed, extended or refinanced
Indebtedness (as successive renewals, extensions and refinancings thereof) if
such restrictions are no more restrictive in any material respect than those
contained in the agreements governing the Indebtedness being renewed, extended
or refinanced and if such renewals, extensions and refinancings are permitted
pursuant to Section 7.2(f).
Section 7.13 Lease Obligations. The Borrower shall not, and
shall not permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any obligations as lessee:
(a) for the rental or hire of real or personal
property in connection with any sale and leaseback transaction, except:
(i) the Borrower and its Subsidiaries
may sell real property or equipment owned by the Borrower or any of its
Subsidiaries on the Closing Date and simultaneously with such sale
become liable with respect to any operating lease involving such
property (each, an "EXISTING PROPERTY SALE AND LEASEBACK TRANSACTION"),
and (ii) the Borrower and its Subsidiaries may sell real property which
the Borrower or any of its Subsidiaries acquires after the Closing Date
for the purpose of building a Restaurant which the Borrower or such
Subsidiary intends to own and operate, and simultaneously with such
sale become liable with respect to any operating lease involving such
property if such sale and leaseback occurs on or before the date which
is twelve (12) months after the date of acquisition by the Borrower or
one of its Subsidiaries of such real property (each, a "NEW PROPERTY
SALE AND LEASEBACK TRANSACTION") PROVIDED, that:
(1) an Affiliate of the
Borrower or any of its Subsidiaries is not a party to any such Sale and
Leaseback Transaction (except to the extent that the Borrower or any of
its Subsidiaries is the lessee);
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
(2) the Agent is provided with
fully executed documentation of each Sale and Leaseback Transaction on
or prior to the closing date of such transaction;
(3) no Default or Event of
Default exists on the closing date of any Sale and Leaseback
Transaction or would result therefrom and the Borrower shall deliver to
the Agent prior to the closing date of such transaction an officer's
certificate of the chief financial officer of the Borrower certifying
thereto;
(4) the term of each such
operating lease shall not be less than fifteen (15) years, PROVIDED,
that the Borrower and its Subsidiaries may enter into Sale and
Leaseback Transactions involving equipment in an amount not exceeding
$5,000,000 in the aggregate where the term of the operating lease is
less than fifteen (15) but greater than three (3) years;
(5) the aggregate amount of
all property sold after the Closing Date pursuant to a Sale and
Leaseback Transaction shall not exceed $25,000,000 in the aggregate;
and
(6) concurrently with any Sale
and Leaseback Transaction involving Real Estate Collateral, the
Borrower or such Subsidiary shall, (i) in substitution for the real
property sold, pledge additional fee owned real property of the
Borrower or such Subsidiary to the Agent for the benefit of the Lenders
with a fair market value at least equal to the then fair market value
of the real property sold, as determined by an appraisal performed at
the time of such sale which is satisfactory to the Agent and prepared
by a firm satisfactory to the Agent and (ii) deliver to the Agent
Mortgages and such title insurance policies, surveys and appraisals
with respect to such substitution property and the leasehold interest
created as the Agent may reasonably request, together such agreements,
documents and instruments as the Agent shall request to create,
perfect, establish the first priority nature of or otherwise protect
any Lien purported to be created in favor of the Agent in the
substitution property and the leasehold interest;
(b) for the rental or hire of other
real or personal property of any kind under leases or agreements to lease
including Capitalized Leases except for leases (including Capitalized Leases)
entered into for fair market value in the ordinary course of business of the
Borrower and its Subsidiaries.
Section 7.14 Hedging Agreements. The Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into or remain liable under
any Hedging Agreement, except (a) Interest Rate Agreements with one or more of
the Lenders or their respective Affiliates pursuant to which the Borrower and
its Subsidiaries have hedged their reasonably estimated interest rate exposure
and (b) Hedging Agreements relating to commodities pursuant to which the
Borrower and its Subsidiaries have hedged their reasonably estimated commodity
price exposure.
Section 7.15 Plans. The Borrower shall not, nor shall it
permit any member of its ERISA Controlled Group to, take any action which would
increase the aggregate present value of the Unfunded Benefit Liabilities under
all Plans to an amount in excess of $2,000,000.
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Section 7.16 Fiscal Year; Fiscal Quarter. The Borrower shall
not, and shall not permit any of its Subsidiaries to, change its fiscal year or
any of its fiscal quarters.
Section 7.17 Partnerships. The Borrower shall not, and shall
not permit any of its Subsidiaries to, become or remain a general partner in any
general or limited partnership, or permit any of its Subsidiaries to do so,
except for any Subsidiary which is a corporation and the sole assets of which
consist of its interest in such partnership and except with respect to the
partnerships described on Schedule 7.17.
Section 7.18 Excluded Resales. The Borrower shall not, and
shall not permit any of its Subsidiaries to, acquire, purchase, hold or own any
Restaurants which the Borrower or any such Subsidiaries acquire from a
franchisee with the intent of reselling to the extent the aggregate amount of
Restaurants owned or held by the Borrower and its Subsidiaries would exceed
$20,000,000 at any one time outstanding, such amount to be measured by the
purchase price paid by the Borrower or any such Subsidiaries for such
Restaurants.
Section 7.19 Designated Senior Indebtedness. The Borrower
shall not designate, create or permit to exist any (a) Designated Senior
Indebtedness (as defined in the Convertible Subordinated Note Indenture), (b)
Designated Senior Indebtedness (as defined in the New Subordinated Note
Indenture) or (c) Designated Senior Indebtedness (as defined in the New
Convertible Subordinated Note Indenture), in each case other than obligations
arising under the Loan Documents.
Section 7.20 Instruments. The Borrower shall not permit any of
its Subsidiaries to own or hold, directly or beneficially, any Instrument if
such Subsidiary is not a party to a legal, valid and binding Subsidiary Pledge
Agreement.
Section 7.21 Real Estate Collateral Value. The Borrower shall
not permit the Real Estate Collateral Value to be less than $218,000,000 at any
time.
SECTION 8. EVENTS OF DEFAULT
Section 8.1 Events of Default. Each of the following events,
acts, occurrences or conditions shall constitute an Event of Default (each an
"EVENT OF DEFAULT") under this Agreement, regardless of whether such event, act,
occurrence or condition is voluntary or involuntary or results from the
operation of law or pursuant to or as a result of compliance by any Person with
any judgment, decree, order, rule or regulation of any court or administrative
or governmental body:
(a) Failure to Make Payments. The Borrower shall
(i) default in the payment when due of any principal of the Loans or (ii)
default, and such default shall continue unremedied for two (2) or more Business
Days, in the payment when due of any interest on the Loans or in the payment
when due of any Fees or any other amounts owing hereunder.
(b) Breach of Representation or Warranty. Any
representation or warranty made by any Loan Party herein or in any other Loan
Document or in any certificate or statement delivered pursuant hereto or thereto
shall prove to be false or misleading in any material respect on the date as of
which made or deemed made.
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
(c) Breach of Covenants.
(i) The Borrower shall fail to perform
or observe any agreement, covenant or obligation arising under Section
6.1(f) or Section 7.
(ii) The Borrower shall fail to perform
or observe any agreement, covenant or obligation arising under this
Agreement (except those described in subsections (a), (b) and (c)(i)
above), and such failure shall continue for thirty (30) days.
(iii) Any Loan Party shall fail to
perform or observe any agreement, covenant or obligation arising under
any provision of the Loan Documents other than this Agreement, which
failure shall continue after the end of the applicable grace period, if
any, provided therein.
(d) Default Under Other Agreements. Any Loan
Party or any of its Subsidiaries shall default in the payment when due (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise)
of any amount owing in respect of any Indebtedness of such Loan Party or any of
its Subsidiaries (other than the Obligations) in the aggregate principal amount
of $5,000,000 or more; or any Loan Party or any of its Subsidiaries shall
default in the performance or observance of any obligation or condition with
respect to any such Indebtedness or any other event shall occur or condition
shall exist, if the effect of such default, event or condition is to accelerate
the maturity or cause a mandatory redemption of any such Indebtedness or to
permit the holder or holders thereof, or any trustee or agent for such holders,
to accelerate the maturity or require a redemption or other repurchase thereof
of any such Indebtedness, or any such Indebtedness shall become or be declared
to be due and payable prior to its stated maturity other than as a result of a
regularly scheduled payment; or any such Indebtedness shall be declared to be
due and payable, or shall be required to be prepaid, redeemed, purchased or
defeased, or an offer to prepay, redeem, purchase or defease such Indebtedness
shall be required to be made, in each case prior to its stated maturity other
than as a result of a regularly scheduled payment.
(e) Bankruptcy, etc. (i) Any Loan Party or any
of its Subsidiaries shall commence a voluntary case concerning itself under the
Bankruptcy Code; or (ii) an involuntary case is commenced against any Loan Party
or any of its Subsidiaries and the petition is not controverted within 10 days,
or is not dismissed within 60 days, after commencement of the case; or (iii) a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge
of, all or substantially all of the property of any Loan Party or any of its
Subsidiaries or any Loan Party or any of its Subsidiaries commences any other
proceedings under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to any Loan Party or
any of its Subsidiaries or there is commenced against any Loan Party or any of
its Subsidiaries any such proceeding which remains undismissed for a period of
60 days; or (iv) any order of relief or other order approving any such case or
proceeding is entered; or (v) any Loan Party or any of its Subsidiaries is
adjudicated insolvent or bankrupt; or (vi) any Loan Party or any of its
Subsidiaries suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or (vii) any Loan Party or any of its Subsidiaries makes a
general assignment for the benefit of creditors; or (viii) any Loan Party or any
of its Subsidiaries shall fail to pay, or shall state that it is unable to pay,
or shall be unable to pay, its debts generally as they become due; or (ix) any
Loan Party or any of its Subsidiaries shall call a meeting of its creditors with
a view to arranging a composition or adjustment of its debts; or (x) any Loan
Party or any of its Subsidiaries
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shall by any act or failure to act consent to, approve of or acquiesce in any of
the foregoing; or (xi) any corporate action is taken by any Loan Party or any of
its Subsidiaries for the purpose of effecting any of the foregoing.
(f) ERISA. (i) Any Termination Event shall
occur, or (ii) any Plan shall incur an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived, or (iii) the Borrower or a member of its ERISA Controlled Group shall
have engaged in a transaction which is prohibited under Section 4975 of the Code
or Section 406 of ERISA which could result in the imposition of liability in
excess of $2,000,000 on the Borrower or any member of its ERISA Controlled
Group, or (iv) the Borrower or any member of its ERISA Controlled Group shall
fail to pay when due an amount which it shall have become liable to pay to the
PBGC, any Plan or a trust established under Title IV of ERISA, or (v) a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that an ERISA Plan must be terminated or have a trustee
appointed to administer any ERISA Plan, or (vi) the Borrower or a member of its
ERISA Controlled Group suffers a partial or complete withdrawal from a
Multiemployer Plan or is in "default" (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a Multiemployer Plan, or (vii) a proceeding
shall be instituted against the Borrower or any member of its ERISA Controlled
Group to enforce Section 515 of ERISA and such proceeding shall remain
undismissed for 180 days, or (viii) any other event or condition shall occur or
exist with respect to any Plan which could subject the Borrower or any member of
its ERISA Controlled Group to any tax, penalty or other liability in excess of
$2,000,000 or (ix) the aggregate present value of all post-retirement benefit
liabilities of the Borrower and its Subsidiaries under any "welfare plan" (as
defined in Section 3(1) of ERISA), including, without limitation, Hardee's
Retiree Medical Insurance Plan, exceeds $20,000,000.
(g) Security Documents. Any of the Security
Documents shall for any reason cease to be in full force and effect, or shall
cease to give the Agent for the benefit of the Lenders the Liens, rights, powers
and privileges purported to be created thereby including, without limitation, a
perfected first priority security interest in, and Lien on, any material part of
the Collateral in accordance with the terms thereof or the Borrower or any of
the Borrower's Subsidiaries party to any Security Document seeks to repudiate
its respective obligations thereunder and the Liens created thereby are
rendered, or the Borrower or any such Subsidiary of the Borrower seeks to render
such Liens, invalid and unperfected.
(h) Guaranty. The Guaranty or any provision
thereof shall cease to be in full force and effect, or any Guarantor or any
Person acting by or on behalf of a Guarantor shall deny or disaffirm all or any
portion of such Guarantor's obligations under such Guaranty.
(i) Change of Control. (i) Any Person or two or
more Persons acting in concert other than the Controlling Stockholders shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Stock of the Borrower (or other securities
convertible into such Voting Stock) representing 20% or more of the combined
voting power of all Voting Stock of the Borrower; or (ii) during any period of
up to 24 consecutive months, commencing after the Closing Date, individuals who
at the beginning of such 24-month period were directors of the Borrower shall
cease for any reason to constitute a majority of the board of directors of the
Borrower; or (iii) any Person or two or more Persons acting in concert other
than the Controlling Stockholders shall have acquired by contract or otherwise,
or shall have entered into a contract or arrangement that, upon consummation,
will result in its or their acquisition of, the power to exercise control over
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Voting Stock of the Borrower (or other securities convertible into such
securities representing 20% or more of the combined voting power of all Voting
Stock of the Borrower); (iv) a Change in Control as defined in the New
Subordinated Note Indenture shall have occurred; (v) a Change of Control as
defined in the Convertible Subordinated Note Indenture shall have occurred or
(vi) a Change of Control as defined in the New Convertible Subordinated Note
Indenture shall have occurred.
(j) Judgments. One or more judgments or decrees
or awards in an aggregate amount of $5,000,000 or more shall be entered by a
court or courts of competent jurisdiction or in any arbitration proceeding
against any Loan Party or any of its Subsidiaries and (i) any such judgments or
decrees or awards shall not be stayed, discharged, paid, bonded or vacated
within 30 days or (ii) enforcement proceedings shall be commenced by any
creditor on any such judgment or decree or award.
(k) Environmental Matters. (i) Any Environmental
Claim shall have been asserted against any Loan Party or any Environmental
Affiliate thereof which, if determined adversely, could have a Material Adverse
Effect, (ii) any release, emission, discharge or disposal of any Material of
Environmental Concern shall have occurred, and such event could form the basis
of an Environmental Claim against any Loan Party or any Environmental Affiliate
thereof which, if determined adversely, could have a Material Adverse Effect, or
(iii) any Loan Party or its Environmental Affiliate shall have failed to obtain
any Environmental Approval necessary for the management, use, control,
ownership, or operation of its business, property or assets or any such
Environmental Approval shall be revoked, terminated, or otherwise cease to be in
full force and effect, in each case, if the existence of such condition could
have a Material Adverse Effect.
(l) Ownership of Certain Assets. The Borrower
and/or its Subsidiaries shall sell, convey or otherwise transfer or dispose of
any material intellectual property or license agreement owned by or licensed to
the Borrower or any of its Subsidiaries or any material license agreement to
which the Borrower or any of its Subsidiaries is a party other than (A) a sale,
conveyance or other transfer (other than a Lien) to a Domestic Subsidiary, (B)
licenses pursuant to Franchise Agreements pledged to the Agent pursuant to the
Security Documents and (C) any Asset Disposition permitted by the terms of any
of the Loan Documents.
Section 8.2 Rights and Remedies. Upon the occurrence of any
Event of Default described in Section 8.1(e), the Commitments shall
automatically and immediately terminate and the unpaid principal amount of and
any and all accrued interest on the Loans and any and all accrued Fees and other
Obligations shall automatically become immediately due and payable, with all
additional interest from time to time accrued thereon and without presentation,
demand, or protest or other requirements of any kind (including, without
limitation, valuation and appraisement, diligence, presentment, notice of intent
to demand or accelerate and notice of acceleration), all of which are hereby
expressly waived by Borrower, and the obligation of each Lender to make any Loan
hereunder shall thereupon terminate; and upon the occurrence and during the
continuance of any other Event of Default, the Agent shall at the request, or
may with the consent, of the Required Lenders, by written notice to Borrower,
(i) declare that the Commitments are terminated, whereupon the Commitments and
the obligation of each Lender to make any Loan hereunder shall immediately
terminate, (ii) require the Borrower to Cash Collateralize the L/C Obligations
in an amount equal to the maximum aggregate amount that is, or at any time
thereafter may become, available for drawing under any outstanding Letters of
Credit (whether or not any beneficiary shall have presented, or shall be
entitled at such time to present, the drafts or other documents required to draw
under such Letters of Credit), and (iii) declare the unpaid principal amount of
and any and all accrued and unpaid
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interest on the Loans and any and all accrued Fees and other Obligations to be,
and the same shall thereupon be, immediately due and payable with all additional
interest from time to time accrued thereon and without presentation, demand, or
protest or other requirements of any kind (including, without limitation,
valuation and appraisement, diligence, presentment, notice of intent to demand
or accelerate and notice of acceleration), all of which are hereby expressly
waived by Borrower.
SECTION 9. THE AGENT
Section 9.1 Appointment. Each Lender hereby irrevocably
designates and appoints BNP Paribas as the Agent of such Lender under this
Agreement and each other Loan Document, and each such Lender irrevocably
authorizes BNP Paribas as the Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to
the Agent by the terms of this Agreement and each other Loan Document, together
with such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the Agent
shall be read into this Agreement or otherwise exist against the Agent. The
provisions of this Section 9 are solely for the benefit of the Agent and the
Lenders and no Loan Party shall have any rights as a third party beneficiary or
otherwise under any of the provisions hereof. In performing its functions and
duties hereunder and under the other Loan Documents, the Agent shall act solely
as the agent of the Lenders and does not assume nor shall be deemed to have
assumed any obligation or relationship of trust or agency with or for any Loan
Party or any of their respective successors and assigns.
Section 9.2 Delegation of Duties. The Agent may execute any of
its duties under this Agreement or the other Loan Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 9.3 Exculpatory Provisions. The Agent shall not be (i)
liable for any action lawfully taken or omitted to be taken by it or any Person
described in Section 9.2 under or in connection with this Agreement or any other
Loan Document (except for its or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Loan Party
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
under or in connection with, this Agreement or any other Loan Document or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement, or any other Loan Document or for any failure of any Loan
Party to perform their obligations hereunder or thereunder. The Agent shall not
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party. This Section is intended solely to govern
the relationship between the Agent, on the one hand, and the Lenders, on the
other.
Section 9.4 Reliance by Agent. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document
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or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to any Loan
Party), independent accountants and other experts selected by the Agent. The
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless the Agent shall have received an executed Assignment Agreement
in respect thereof. The Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.
Section 9.5 Notice of Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
unless the Agent has received notice from a Lender or the Borrower referring to
this Agreement, describing 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, the Agent shall promptly give notice thereof to the Lenders. Subject
to the provisions of Section 10.5, the Agent shall take such action 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 the Agent shall deem advisable and in the best interests of the
Lenders.
Section 9.6 Non-Reliance on Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Loan
Party, shall be deemed to constitute any representation or warranty by the
Agent. Each Lender represents and warrants to the Agent that it has,
independently and without reliance upon the Agent or any other Lender and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Loan
Parties and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents 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 credit analysis, appraisals and decisions in taking or not taking action
under this Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, prospects, financial and
other condition and creditworthiness of the Loan Parties. Except for notices,
reports and other documents expressly required under the Loan Documents to be
furnished to the Lenders by the Agent, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, prospects, financial and other
condition or creditworthiness of the Loan Parties which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
Section 9.7 Indemnification. The Lenders agree to indemnify
the Agent and its officers, directors, employees, representatives and agents (to
the extent not reimbursed by the Loan Parties and without limiting the
obligation of the Loan Parties to do so), ratably according to their
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Pro Rata Shares, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (including, without limitation, the fees and
disbursements of counsel for the Agent or such Person in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Agent or such Person shall be designated a party thereto)
that may at any time (including, without limitation, at any time following the
payment of the Obligations) be imposed on, incurred by or asserted against the
Agent or such Person as a result of, or arising out of, or in any way related to
or by reason of, any of the Transactions or the execution, delivery or
performance of any Loan Document or any other Transaction Document (but
excluding any such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of the Agent or such Person as finally
determined by a court of competent jurisdiction); PROVIDED that to the extent
indemnification payments made by the Lenders pursuant to this Section 9.7 are
subsequently recovered from or for the account of the Borrower, the Agent shall
promptly refund such previously paid indemnification payments to the Lenders.
Section 9.8 Agent in its Individual Capacity. The Agent and
its affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Loan Parties as though the Agent were not the
Agent hereunder. With respect to Loans made or renewed by it and any Note issued
to it, the Agent shall have the same rights and powers under this Agreement as
any Lender and may exercise the same as though it were not the Agent, and the
terms "Lender" and "Lenders" shall include the Agent in its individual capacity.
Section 9.9 Successor Agent. The Agent may resign as Agent
upon 30 days' notice to the Borrower and the Lenders. If the Agent shall resign
as Agent under this Agreement, then the Required Lenders during such 30-day
period shall appoint from among the Lenders a successor agent, whereupon such
successor agent shall succeed to the rights, powers and duties of the Agent and
the term "Agent" shall mean such successor agent, effective upon its
appointment, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement or any holders of the Notes.
Notwithstanding anything herein to the contrary, so long as no Event of Default
has occurred and is continuing, each such successor agent shall be subject to
approval by the Borrower, which approval shall not be unreasonably withheld or
delayed. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 9 and Section 10.1 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under this
Agreement.
SECTION 10. MISCELLANEOUS
Section 10.1 Payment of Expenses, Indemnity, etc. The Borrower
shall:
(a) whether or not the transactions hereby
contemplated are consummated, pay all reasonable out-of-pocket costs and
expenses of the Agent in connection with the negotiation, preparation, execution
and delivery of the Loan Documents, the commitment letter related thereto and
the Fee Letter, the syndication of the Loans and the closing of the Transactions
and the documents and instruments referred to therein, in connection therewith,
the creation, perfection or protection of the Agent's Liens in the Collateral
(including, without limitation, fees and expenses for lien searches and filing
and recording fees and, including, without limitation, fees and expenses
incurred in connection with the transactions contemplated by Section 2.21), and
any amendment, waiver or consent relating to any of the Loan Documents
(including, without limitation,
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
as to each of the foregoing, the reasonable fees and disbursements of Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), special counsel to the Agent and any
other attorneys and legal assistants retained by the Agent and allocated costs
of internal counsel and legal assistants) and of the Agent and each Lender in
connection with the preservation of rights under, and enforcement of, the Loan
Documents and the documents and instruments referred to therein or in connection
with any restructuring or rescheduling of the Obligations (including, without
limitation, the reasonable fees and disbursements of counsel for the Agent and
for each of the Lenders);
(b) pay, and hold the Agent and each of the
Lenders harmless from and against, any and all present and future stamp, excise
and other similar taxes with respect to the foregoing matters and hold the Agent
and each Lender harmless from and against any and all liabilities with respect
to or resulting from any delay or omission (other than to the extent
attributable to such Lender) to pay such taxes; and
(c) indemnify the Agent, the Financial Advisor
and each Lender, and each of their Affiliates and their officers, directors,
employees, representatives, trustees, attorneys and agents (each an
"INDEMNITEE") from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for such Indemnitee) that may at any time (including, without limitation, at any
time following the payment of the Obligations) be imposed on, asserted against
or incurred by any Indemnitee as a result of, or arising out of, or in any way
related to or by reason of, or in connection with the preparation for a defense
of, any investigation, litigation or proceeding arising out of, related to or in
connection with (i) any of the Transactions or the execution, delivery or
performance of any Loan Document or any other Transaction Document (including,
without limitation, any actual or proposed use by the Borrower or any Subsidiary
of the Borrower of the proceeds of any Loan or Letter of Credit), (ii) any
violation by any Loan Party or its Environmental Affiliate of any applicable
Environmental Law, (iii) any Environmental Claim arising out of the management,
use, control, ownership or operation of property or assets by any of the Loan
Parties or any of their Environmental Affiliates, including, without limitation,
all on-site and off-site activities involving Materials of Environmental
Concern, (iv) the breach of any environmental representation or warranty set
forth in Section 5.19, (v) the grant to the Agent and the Lenders of any Lien in
any property or assets of any of the Loan Parties or any stock or other equity
interest in any of the Loan Parties, and (vi) the exercise by the Agent and the
Lenders of their rights and remedies (including, without limitation,
foreclosure) under any agreements creating any such Lien (but excluding, as to
any Indemnitee, any such losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements
incurred solely by reason of the gross negligence or willful misconduct of such
Indemnitee as finally determined by a court of competent jurisdiction). The
Borrower's obligations under this Section shall survive the termination of this
Agreement and the payment of the Obligations.
Section 10.2 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Event of Default, each Lender and each of such Lender's Affiliates is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to any Loan Party or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special, time or demand, provisional or
final) and any other indebtedness at any time held or owing by such Lender or
such Affiliate (including, without limitation, by branches and agencies of
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such Lender or such Affiliate wherever located) to or for the credit or the
account of any Loan Party against and on account of the Obligations of the Loan
Parties to such Lender or such Affiliate under this Agreement or under any of
the other Loan Documents, including, without limitation, all interests in
Obligations purchased by such Lender pursuant to Section 10.7, and all other
claims of any nature or description arising out of or connected with this
Agreement or any other Loan Document, irrespective of whether or not such Lender
or such Affiliate shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
Section 10.3 Notices. Except as otherwise expressly provided
herein, all notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy, telex, or
cable communication), and shall be deemed to have been duly given or made when
delivered by hand, or five days after being deposited in the United States mail,
postage prepaid, or, in the case of telex notice, when sent, answerback
received, or, in the case of telecopy notice, when sent, or, in the case of a
nationally recognized overnight courier service, one Business Day after delivery
to such courier service, addressed, in the case of each party hereto, at its
address specified opposite its signature below or on the appropriate Assignment
Agreement, or to such other address as may be designated by any party in a
written notice to the other parties hereto, PROVIDED that notices and
communications to the Agent shall not be effective until received by the Agent.
Section 10.4 Successors and Assigns; Participation;
Assignments.
(a) Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the Borrower, the Lenders, the
Agent, all future holders of the Notes and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of each
Lender. No Lender may participate, assign or sell any of its Credit Exposure (as
defined in clause (b) below) except as required by operation of law, in
connection with the merger, consolidation or dissolution of any Lender or as
provided in this Section 10.4.
(b) Participation. 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, any Commitment of
such Lender and or any other interest of such Lender hereunder (in respect of
any such Lender, its "CREDIT EXPOSURE"). Notwithstanding any such sale by a
Lender of participating interests to a Participant, such Lender's rights and
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 (except as
expressly provided below), 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. The Borrower agrees that if any Obligations
are due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence and during the continuance of an Event of Default,
each Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and any Note to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under this Agreement or any Note PROVIDED, that such right of
setoff shall be subject to the obligations of such Participant to share with the
Lenders, and the Lenders agree to share with such Participant, as provided in
Section 10.7. The Borrower also agrees that each Participant shall be entitled
to the benefits of Sections 2.16, 2.17, 2.18 and 2.19, PROVIDED, that no
Participant shall be entitled to receive any greater amount pursuant to such
sections than the transferor Lender would have been entitled to receive in
respect of the amount of the participating interest transferred by such
transferor Lender to
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such Participant had no such transfer occurred. Each Lender agrees that any
agreement between such Lender and any such Participant in respect of such
participating interest shall not restrict such Lender's right to agree to any
amendment, supplement, waiver or modification to this Agreement or any other
Loan Document, except where the result of any of the foregoing would be to
extend the final maturity of any Obligation or any regularly scheduled
installment thereof or reduce the rate or extend the time of payment of interest
thereon or reduce the principal amount thereof or release all or substantially
all of the Collateral (except as expressly provided in the Loan Documents).
(c) Assignments. Any Lender may, in accordance
with applicable law, at any time assign to any Lender or any affiliate thereof,
including, without limitation, a Lender Affiliate or, with the consent of the
Agent, which consent shall not be unreasonably withheld, to any other Person
(each an "ASSIGNEE") all or any part of its Credit Exposure; PROVIDED, that in
the case of any such assignment to a Person that is not another Lender or an
affiliate of the assigning Lender, each such assignment shall be (i) except in
the case of an assignment of the entire remaining amount of the Lender's Credit
Exposure, (A) for a Credit Exposure not less than $5,000,000 in the case of
Revolving Loans and (B) for Credit Exposure not less than $1,000,000 in the case
of Term Loans, PROVIDED, that concurrent assignments of such Lender's Term Loan
Credit Exposure to such Person and the affiliates of such Person, including,
without limitation, Lender Affiliates of such Person, may be for lesser amounts
so long as the aggregate amount of such assignments are not less than
$1,000,000, (ii) to an Assignee approved in writing by the Agent, which approval
shall not be unreasonably withheld and (iii) so long as no Default or Event of
Default shall have occurred and be continuing, to an Assignee approved by the
Borrower, which approval shall not be unreasonably withheld. Such consent of the
Agent shall be substantially in the form attached as Schedule II to Exhibit I
hereto. The Borrower, the Agent and the Lenders agree that to the extent of any
assignment the Assignee shall be deemed to have the same rights and benefits
under the Loan Documents and the same rights of setoff and obligation to share
pursuant to Section 10.7 as it would have had if it were a Lender hereunder;
PROVIDED that the Borrower and the Agent shall be entitled to continue to deal
solely and directly with the assignor Lender in connection with the interests so
assigned to the Assignee unless and until such Assignee becomes a Purchasing
Lender pursuant to clause (d) below.
(d) Assignments to Purchasing Lenders. Any
Lender may at any time and from time to time assign to one or more Persons
("PURCHASING LENDERS") all or any part of its Credit Exposure pursuant to a
supplement to this Agreement, substantially in the form of Exhibit I hereto (an
"ASSIGNMENT AGREEMENT"), executed by such Purchasing Lender, such transferor
Lender and the Agent. Upon (i) such execution of such Assignment Agreement, (ii)
delivery to the Agent of a notice of assignment substantially in the form of
Schedule I to Exhibit I hereto (a "NOTICE OF ASSIGNMENT") with a copy to the
Borrower, together with any consent required pursuant to Section 10.4(c) above
and a copy of the Assignment Agreement, (iii) payment by such Purchasing Lender
to such transferor Lender of an amount equal to the purchase price agreed
between such transferor Lender and such Purchasing Lender and (iv) payment of a
$3,500 fee to the Agent for processing of such assignment, and subject to
acceptance and recording of such Assignment Agreement pursuant to subsection (h)
below, such assignment shall become effective on the effective date specified in
such Assignment Agreement, which effective date shall be at least five (5)
Business Days after delivery of such Notice of Assignment to the Agent (or such
shorter period agreed to by the Agent), such transferor Lender shall be released
from its obligations hereunder to the extent of such assignment and such
Purchasing Lender 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, and no further consent
or action by the Borrower, the Lenders or the Agent shall be required. Such
Assignment Agreement shall be deemed to amend this
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Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender as a Lender and the resulting adjustment of
the Commitments, if any, arising from the purchase by such Purchasing Lender of
all or a portion of the Credit Exposure of such transferor Lender.
(e) Disclosure of Information. The Borrower
authorizes each Lender to disclose to any Participant, Assignee or Purchasing
Lender (each, a "TRANSFEREE") and any prospective Transferee any and all
financial and other information in such Lender's possession concerning the
Borrower which has been delivered to such 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 of the Borrower prior to
entering into this Agreement.
(f) Pledges by Lenders. Notwithstanding any
other provision set forth in this Agreement, any Lender may at any time assign
and pledge a security interest in all or any portion of its rights under this
Agreement to secure the obligations of such Lender, including, without
limitation, any assignment or pledge to secure obligations to any Federal
Reserve Bank as collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Bank; PROVIDED, that no such assignment
or pledge shall release the assigning Lender from its obligations hereunder or
substitute any such assignee or pledgee for such Lender as a party hereto.
(g) Transfer and Exchange of Notes. Promptly
after the consummation of any transfer to a Purchasing Lender pursuant hereto,
the transferor Lender, the Agent and the Borrower shall make appropriate
arrangements so that any Notes held by such transferor Lender shall be
surrendered to the Borrower for cancellation, one or more replacement Notes in
exchange therefor shall be issued to such transferor Lender, and one or more new
Notes shall be issued to such Purchasing Lender, in each case in notional
amounts reflecting such transfer. Each such new Revolving Note and new Term Note
shall be payable to the Purchasing Lender and shall be substantially in the form
of Exhibits A and B, respectively.
(h) Register. The Agent, acting solely for this
purpose as an agent of the Borrower, shall maintain at its address referred to
on its signature page hereto a copy of each Assignment Agreement delivered to it
and a register (the "REGISTER") for the recordation of the names and addresses
of the Lenders and the Commitments of, and the principal amount of the Loans and
the making of payments with respect to any Letter of Credit owing to, each
Lender pursuant to the terms hereof from time to time. The entries in the
Register shall be, to the extent permitted by law, prima facie evidence of the
existence and amounts of the obligations of the Borrower therein recorded, and
the Borrower, the Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as the owner
of the Loans recorded therein for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender at any reasonable time and from time
to time upon reasonable prior notice.
Section 10.5 Amendments and Waivers.
(a) Neither this Agreement, any Note, any other
Loan Document to which the Borrower or any other Loan Party is a party nor any
terms hereof or thereof may be amended, supplemented, modified or waived except
in accordance with the provisions of this Section. The Required Lenders and the
Borrower (or such other Loan Party, as the case may be) may, from time to time,
enter into written amendments, supplements, modifications or waivers for
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
the purpose of adding, deleting, changing or waiving any provisions to this
Agreement, the Notes, or the other Loan Documents to which the Borrower or such
other Loan Party is a party, PROVIDED, that no such amendment, supplement,
modification or waiver shall
(i) extend the Revolving Loan Maturity
Date or the Term Loan Maturity Date or extend the time for payment of
any installment, fee or required prepayment of any Obligations or
reduce the rate or extend the time of payment of interest on any
Obligations, or reduce the principal amount of any Obligations or
reduce any fee payable to the Lenders hereunder, or release or
subordinate all or substantially all of the Collateral (except as
expressly contemplated by the Loan Documents) or change the amount of
any Commitment of any Lender, or amend, modify or waive any provision
of this Section 10.5, or the definition of Required Lenders, or consent
to or permit the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement or any other Loan Document,
or modify any provision hereof providing for the pro rata sharing of
payments, in each case without the written consent of all the Lenders;
(ii) release ▇▇▇▇ ▇▇▇▇▇▇▇ Enterprises,
Inc., Hardee's or any Subsidiary of Hardee's (other than any such
Subsidiary which is an Immaterial Subsidiary), from the Guaranty and
the other applicable Security Documents (including the release of such
Loan Party's stock certificates from the Borrower Pledge Agreement or
the Subsidiary Pledge Agreement, as applicable), in each case without
the written consent of all of the Lenders; or
(iii) amend, modify or waive any
provision of Section 9 or any other provision of any Loan Document if
the effect thereof is to affect the rights or duties of the Agent,
without the written consent of the then Agent; PROVIDED, FURTHER, that
the release from the Guaranty and the other applicable Security
Documents (including the release of such Loan Party's stock
certificates from the Borrower Pledge Agreement or the Subsidiary
Pledge Agreement, as applicable) of any Subsidiary of the Borrower
(other than a Subsidiary of Hardee's) with assets of less than
$10,000,000 (as determined in accordance with GAAP) shall not require
the consent of any of the Lenders in any of the foregoing circumstances
if (x) such Subsidiary (a "SOLD GUARANTOR") is being released from the
Guaranty because all or a portion of the assets of such Sold Guarantor
are being sold or otherwise disposed of in an Asset Disposition or the
Equity Interests of such Sold Guarantor are being sold or otherwise
disposed of or an issuance of Equity Interests of such Sold Guarantor
is commenced, and immediately after giving effect to such sale, other
disposition or issuance of Equity Interests and as a result of such
sale, other disposition or issuance of Equity Interests, such Sold
Guarantor is no longer a Subsidiary of the Borrower and (y) any such
Asset Disposition or sale, other disposition or issuance of Equity
Interests is otherwise permitted and commenced in accordance with the
terms of this Agreement (and the Agent is hereby authorized by the
Lenders to execute and deliver to the Borrower all such documents
evidencing any such release).
(iv) amend, modify or waive Section 2.12
or 2.13 hereof in a manner that would alter the application of any
prepayment of the Obligations without the consent of each Lender
adversely affected thereby.
Any such amendment, supplement, modification or waiver shall apply to each of
the Lenders equally and shall be binding upon the Borrower, the Lenders, the
Agent and all future holders of the Notes.
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In the case of any waiver, the Borrower, the Lenders and the Agent shall be
restored to their former position and rights hereunder and under the outstanding
Notes, and any Default or Event of Default waived shall be deemed to be cured
and not continuing, but no such waiver shall extend to any subsequent or other
Default or Event of Default, or impair any right consequent thereon.
Notwithstanding the foregoing, (i) the Fee Letter may be amended or otherwise
modified in a writing executed by only the parties thereto and (ii) a Letter of
Credit may be amended in accordance with Section 3.1(f).
(b) Each of the Lenders agrees that in the event
that such Lender is requested to consent to any amendment, supplement,
modification or waiver of any term or condition of or with respect to this
Agreement or any other Loan Document, the effectiveness of which requires the
consent of all of the Lenders pursuant to the first proviso of Section 10.5(a)
hereof, and such Lender shall fail or refuse to give such consent, such Lender
(the "AFFECTED LENDER") shall be obliged, at the request of the Borrower and
with the consent of the Agent, to assign all of its rights and obligations
hereunder to (i) another Lender or (ii) another qualified financial institution
nominated by the Agent and reasonably acceptable to the Borrower (the
"REPLACEMENT LENDER"), and willing to participate in this Agreement through the
Final Maturity Date in the place of such Affected Lender; PROVIDED that the
Affected Lender receives payment in full, pursuant to an Assignment Agreement,
of an amount equal to such Lender's Pro Rata Share of all unpaid principal and
interest owing to the Lenders and all accrued but unpaid fees and other costs
and expenses payable with respect to its Pro Rata Share. The Agent shall give
written notice to the Borrower of any such assignment.
Section 10.6 No Waiver; Remedies Cumulative. No failure or
delay on the part of the Agent or any Lender or any holder of a Note in
exercising any right, power or privilege hereunder or under any other Loan
Document and no course of dealing between any Loan Party and the Agent or any
Lender or the holder of any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
under any other Loan Document preclude any other or further exercise thereof of
the exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies herein expressly provided are cumulative and not exclusive
of any rights or remedies which the Agent or any Lender or the holder of any
Note would otherwise have. No notice to or demand on any Loan Party in any case
shall entitle any Loan Party to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the Agent, the
Lenders or the holder of any Note to any other or further action in any
circumstances without notice or demand.
Section 10.7 Sharing of Payments. Each of the Lenders agrees
that if it should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker's
lien, by counterclaim or cross action, by the enforcement of any right under the
Loan Documents, or otherwise) which is applicable to the payment of any
Obligations, of a sum which with respect to the related sum or sums received by
other Lenders is in a greater proportion than the total of such Obligation then
owed and due to such Lender bears to the total of such Obligation then owed and
due to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in such Obligations owing to such
Lenders in such amount as shall result in a proportional participation by all of
the Lenders in such amount; PROVIDED that if all or any portion of such excess
amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
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Section 10.8 Application of Collateral Proceeds. The Agent
shall, unless otherwise specified at the direction of the Required Lenders which
direction shall be consistent with the last sentence of this Section 10.8, apply
all proceeds of Collateral in the following order:
(A) first, to pay Obligations
in respect of any fees, expense reimbursements or indemnities
then due to the Agent;
(B) second, to pay Obligations
in respect of any fees, expenses, reimbursements or
indemnities then due to the Lenders and the Issuer;
(C) third, to pay interest due
in respect of the Loans and L/C Obligations;
(D) fourth, to the ratable
payment of principal outstanding on the Loans, Obligations for
unreimbursed drawings under all Letters of Credit and net
termination amounts payable in respect of Rate Hedging
Obligations (with the order of application to the installments
of any particular Loan, Obligation for any unreimbursed
drawing under any Letter of Credit or net termination amount
payable in respect of Rate Hedging Obligation to be determined
by the Agent in its sole discretion);
(E) fifth, to provide required
cash collateral if any pursuant to Section 8.2; and
(F) sixth, to the ratable
payment of all other Obligations.
The order of priority set forth in this Section 10.8 and the related provisions
of this Agreement are set forth solely to determine the rights and priorities of
the Agent and the Lenders as among themselves. The order of priority set forth
in clauses (B) through (F) of this Section 10.8 may at any time and from time to
time be changed with the consent of 100% of the Lenders without necessity of
notice to or consent of or approval by the Borrower, or any other Person. The
order of priority set forth in clause (A) of this Section 10.8 may be changed
only with the prior written consent of the Agent.
Section 10.9 Governing Law; Submission to Jurisdiction.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF
ILLINOIS (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS
OF LAW TO THE EXTENT SUCH PRINCIPLES WOULD REQUIRE THE APPLICATION OF THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF ILLINOIS).
(b) Any legal action or proceeding with respect
to this Agreement or any other Loan Document and any action for enforcement of
any judgment in respect thereof may be brought in the courts of the State of
Illinois or of the United States of America for the Northern District of
Illinois, and, by execution and delivery of this Agreement, the Borrower hereby
accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
of the aforesaid courts and appellate courts. The Borrower irrevocably consents
to the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, the Borrower at its address set forth opposite its
signature below. The Borrower hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement or any other
Loan Document brought in the courts referred to above and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum. Nothing herein shall affect the right of the Agent, any
Lender or any holder of a Note to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against the Borrower
in any other jurisdiction.
Section 10.10 Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
Section 10.11 Financial Advisor. The Borrower and each Lender
agrees and acknowledges that the Agent may, in its sole discretion, from time to
time retain a financial advisor (the "FINANCIAL ADVISOR") for the purpose of
advising the Agent and the Lenders as to the financial condition of the Borrower
and its Subsidiaries and such other matters related to the facility provided and
contemplated hereunder as the Agent and the Lenders may desire. The Borrower
agrees to pay all reasonable fees, costs and out-of-pocket expenses of the
Financial Advisor in connection with the performance of its duties under this
Section 10.11 and to indemnify the Financial Advisor in accordance with Section
10.1(c) hereof.
Section 10.12 Amendment and Restatement. This Agreement amends
and restates in its entirety the Original Credit Agreement. Upon the
effectiveness of this Agreement, the terms and provisions of the Original Credit
Agreement shall, subject to this Section 10.12, be superseded hereby.
Notwithstanding the amendment and restatement of the Original Credit Agreement
by this Agreement, the Borrower shall continue to be liable to the Lenders party
to the Original Credit Agreement and the Agent with respect to agreements on the
part of the Borrower under the Original Credit Agreement to indemnify any of
such Lenders or the Agent in connection with events or conditions arising or
existing prior to the date hereof, including, but not limited to, those events
and conditions set forth in Section 10 thereof. This Agreement is given in
substitution for the Original Credit Agreement. Upon the effectiveness of this
Agreement, each reference to the Original Credit Agreement in any other
document, instrument or agreement executed and/or delivered in connection
therewith shall mean and be a reference to this Agreement. This Agreement
amends, restates and supersedes only the Original Credit Agreement. This
Agreement is not a novation. Nothing contained herein or in any of the other
Loan Documents, unless expressly herein or therein stated to the contrary, is
intended to amend, modify or otherwise affect any other instrument, document or
agreement executed and/or delivered in connection with the Original Credit
Agreement. The principal amounts of Loans outstanding under the Original Credit
Agreement immediately prior to giving effect to this Agreement to each Lender
that is a party thereto shall be deemed to be Loans made by that Lender
hereunder. Each Letter of Credit issued under the Original Credit Agreement and
outstanding immediately prior to giving effect to this Agreement shall be deemed
to be a Letter of Credit hereunder. To the extent necessary, the Agent shall
reallocate such outstanding Revolving Loans and the participation interests in
such outstanding Letters of Credit ratably among the
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Revolving Lenders after giving effect to this Agreement so that each Revolving
Lender's Pro Rata Share of such Letters of Credit is based on the Total
Revolving Loan Commitment hereunder.
Section 10.13 Headings Descriptive. The headings of the
several Sections and subsections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.
Section 10.14 Marshalling; Recapture. Neither the Agent nor
any Lender shall be under any obligation to ▇▇▇▇▇▇▇▇ any assets in favor of any
Loan Party or any other party or against or in payment of any or all of the
Obligations. To the extent any Lender receives any payment by or on behalf of
any Loan Party, which payment or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
such Loan Party or its estate, trustee, receiver, custodian or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the obligation or part thereof
which has been paid, reduced or satisfied by the amount so repaid shall be
reinstated by the amount so repaid and shall be included within the liabilities
of such Loan Party to such Lender as of the date such initial payment, reduction
or satisfaction occurred.
Section 10.15 Severability. In case any provision in or
obligation under this Agreement or the Notes or the other Loan Documents shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
Section 10.16 Independence of Covenants. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default or Event of Default if such
action is taken or condition exists.
Section 10.17 Survival. All indemnities set forth herein
including, without limitation, in Sections 2.16, 2.17, 2.18, 2.19, 9.7 and 10.1
shall survive the execution and delivery of this Agreement and the Notes and the
making and repayment of the Loans hereunder.
Section 10.18 Domicile of Loans. Each Lender may transfer and
carry its Loans at, to or for the account of any branch office, subsidiary or
affiliate of such Lender.
Section 10.19 Limitation of Liability. No claim may be made by
any Loan Party or any other Person against the Agent or any Lender or the
Affiliates, directors, officers, employees, attorneys or agent of any of them
for any special, indirect, consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement or any other
Transactions, or any act, omission or event occurring in connection therewith;
and each Loan Party hereby waives, releases and agrees not to ▇▇▇ upon any claim
for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
Section 10.20 Calculations; Computations. The financial
statements to be furnished to the Agent and the Lenders pursuant hereto shall be
made and prepared in accordance with GAAP consistently applied throughout the
periods involved and consistent with GAAP as used in the
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CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
preparation of the financial statements referred to in Section 5.5, and, except
as otherwise specifically provided herein, all computations determining
compliance with Section 7.1 hereof shall utilize GAAP.
Section 10.21 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED
BY APPLICABLE LAW, EACH OF THE BORROWER, THE AGENT AND THE LENDERS HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.
Section 10.22 References. Unless otherwise expressly specified
herein, all references to "Article," "Section,""Schedule," or "Exhibit" shall
mean articles and sections of, and schedules and exhibits to, this Agreement.
(Signature Pages Follow)
95
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
CKE RESTAURANTS, INC.
By: _______________________________
Print Name:
Title:
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
BNP PARIBAS,
as Agent and as a Lender
By: _______________________________
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇ III
Title: Managing Director
By: _______________________________
Print Name:
Title:
Address: ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇ III
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
BNP Paribas
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
FIRST BANK & TRUST
By: _______________________________
Print Name: Nic ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Nic ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
▇▇▇▇▇ FARGO BANK, N.A.
By: _______________________________
Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-4
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
FLEET NATIONAL BANK
By: _______________________________
Print Name:
Title:
Address:
Attn: ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-5
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
U.S. BANK NATIONAL ASSOCIATION
By: _______________________________
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇. ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-6
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
UNION BANK OF CALIFORNIA, N.A.
By: _______________________________
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-7
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
ALLIED IRISH BANKS, P.L.C.
By: _______________________________
Print Name:
Title:
Address: Bankcentre,
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-8
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
CITICORP NORTH AMERICA, INC.
By: _______________________________
Print Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-9
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
EAST WEST BANK
By: _______________________________
Print Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-10
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
TORONTO DOMINION (NEW YORK) INC.
By: _______________________________
Print Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇, ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-11
Schedule 1.1 to Credit Agreement
Lenders and Commitments
Name of Lender Revolving Loan Commitment
--------------- -------------------------
First Bank and Trust $20,000,000.00
Fleet National Bank $30,000,000.00
BNP Paribas $25,000,000.00
U.S. Bank National Association $15,000,000.00
▇▇▇▇▇ Fargo Bank, N.A. $25,000,000.00
Union Bank of California $15,000,000.00
Allied Irish Bank $10,000,000.00
Citicorp North America, Inc. $ 5,000,000.00
East West Bank $ 5,000,000.00
Name of Lender Term Loan Commitment
-------------- --------------------
BNP Paribas $23,000,000.00
Toronto Dominion (New York) Inc. $ 2,000,000.00
SCHEDULE 4.1(b)
Local Counsel
State Counsel
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Delaware & California ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇
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North Carolina ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Alabama ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
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Minnesota Larkin, Hoffman, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd.
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Nevada ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Sch 4.2(b)-1
ANNEX I
DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
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BNP Paribas BNP Paribas
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 209 ▇. ▇▇▇▇▇▇▇ Street
Suite 500 Suite 500
Chicago, IL 60604 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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First Bank & Trust First Bank & Trust
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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Fleet National Bank Fleet National Bank
Mail Code: ▇▇ ▇▇ ▇▇▇▇▇▇ Mail Code: ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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U.S. Bank National Association U.S. Bank National Association
▇▇▇ ▇. ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇-▇ ▇▇▇ ▇. ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇▇▇ Fargo Bank, ▇.▇. ▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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Union Bank of California, N.A. Union Bank of California, N.A.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
Telephone: (▇▇▇) ▇▇▇ ▇▇▇▇ Telephone: (▇▇▇) ▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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Annex I-2
CKE FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
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Citicorp North America, Inc. Citicorp North America, Inc.
▇ ▇▇▇▇▇ ▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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East West Bank East West Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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Toronto Dominion (New York), Inc. Toronto Dominion (New York), Inc.
909 Fannin ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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Allied Irish Banks, p.l.c. Allied Irish Banks, p.l.c.
Business Support Unit Business Support Unit
AIB Bankcentre AIB Bankcentre
Ballsbridge Ballsbridge
Dublin 4, Ireland ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇
Telephone: ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇ Telephone: ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇
Telecopier: ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇ Telecopier: ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇
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Annex I-3