EXHIBIT 10.58
SIXTH AMENDED AND RESTATED
CREDIT AGREEMENT
among
CKE RESTAURANTS, INC.,
THE LENDERS NAMED HEREIN
and
BNP PARIBAS,
As Agent
DATED AS OF JUNE 2, 2004
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
SECTION 1. DEFINITIONS............................................................ 1
Section 1.1 Definitions............................................................ 1
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES.................................. 33
Section 2.1 Term Loans............................................................. 33
Section 2.2 Revolving Loans........................................................ 35
Section 2.3 Notice of Borrowing.................................................... 36
Section 2.4 Disbursement of Funds.................................................. 36
Section 2.5 Notes.................................................................. 37
Section 2.6 Interest............................................................... 38
Section 2.7 Interest Periods....................................................... 39
Section 2.8 Minimum Amount of Eurodollar Loans..................................... 41
Section 2.9 Conversion or Continuation............................................. 41
Section 2.10 Voluntary Reduction of Commitments.................................. 42
Section 2.11 Voluntary Prepayments............................................... 42
Section 2.12 Mandatory Prepayments............................................... 42
Section 2.13 Application of Prepayments.......................................... 44
Section 2.14 Method and Place of Payment......................................... 45
Section 2.15 Fees................................................................ 46
Section 2.16 Interest Rate Unascertainable, Increased Costs, Illegality.......... 47
Section 2.17 Funding Losses...................................................... 49
Section 2.18 Increased Capital................................................... 50
Section 2.19 Taxes............................................................... 50
Section 2.20 Use of Proceeds..................................................... 52
Section 2.21 Collateral Security................................................. 52
Section 2.22 Replacement of Certain Lenders...................................... 55
SECTION 3. SECTION LETTERS OF CREDIT.............................................. 56
Section 3.1 Issuance of Letters of Credit, etc..................................... 56
Section 3.2 Letter of Credit Fees.................................................. 58
Section 3.3 Obligation of Borrower Absolute, etc................................... 59
SECTION 4. SECTION CONDITIONS PRECEDENT........................................... 62
Section 4.1 Conditions Precedent to the Effectiveness of this Agreement............ 62
Section 4.2 Conditions Precedent to All Loans...................................... 71
SECTION 5. SECTION REPRESENTATIONS AND WARRANTIES................................. 72
Section 5.1 Corporate Status....................................................... 72
Section 5.2 Corporate Power and Authority.......................................... 72
Section 5.3 No Violation........................................................... 72
Section 5.4 Litigation............................................................. 73
Section 5.5 Financial Statements; Financial Condition; etc......................... 73
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
Section 5.6 Solvency............................................................... 73
Section 5.7 Projections............................................................ 73
Section 5.8 Material Adverse Change................................................ 74
Section 5.9 Use of Proceeds; Margin Regulations.................................... 74
Section 5.10 Governmental and Other Approvals.................................... 74
Section 5.11 Security Interests and Liens........................................ 74
Section 5.12 Tax Returns and Payments............................................ 75
Section 5.13 ERISA............................................................... 75
Section 5.14 Investment Company Act; Public Utility Holding
Company Act......................................................... 76
Section 5.15 Dissolved Subsidiaries; Previously Material Subsidiaries, etc....... 76
Section 5.16 Representations and Warranties in Subordinated Debt
Documents........................................................... 76
Section 5.17 True and Complete Disclosure........................................ 76
Section 5.18 Corporate Structure; Capitalization................................. 77
Section 5.19 Environmental Matters............................................... 77
Section 5.20 Intellectual Property............................................... 79
Section 5.21 Ownership of Property; Restaurants.................................. 79
Section 5.22 No Default.......................................................... 79
Section 5.23 Licenses, etc....................................................... 79
Section 5.24 Compliance with Law................................................. 80
Section 5.25 No Burdensome Restrictions.......................................... 80
Section 5.26 Brokers' Fees....................................................... 80
Section 5.27 Labor Matters....................................................... 80
Section 5.28 Indebtedness of the Borrower and Its Subsidiaries................... 80
Section 5.29 Other Agreements.................................................... 80
Section 5.30 Immaterial Subsidiaries............................................. 80
Section 5.31 Franchise Agreements and Franchisees................................ 81
SECTION 6. SECTION AFFIRMATIVE COVENANTS.......................................... 81
Section 6.1 Information Covenants.................................................. 81
Section 6.2 Books, Records and Inspections......................................... 86
Section 6.3 Maintenance of Insurance............................................... 86
Section 6.4 Taxes.................................................................. 87
Section 6.5 Corporate Franchises................................................... 87
Section 6.6 Compliance with Law.................................................... 87
Section 6.7 Performance of Obligations............................................. 88
Section 6.8 Maintenance of Properties.............................................. 88
Section 6.9 Compliance with Terms of Leaseholds.................................... 88
Section 6.10 Compliance with Environmental Laws.................................. 88
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
Section 6.11 Subsidiary Guarantors............................................... 89
Section 6.12 Immaterial Subsidiaries............................................. 89
Section 6.13 Additional Mortgages................................................ 89
Section 6.14 Collateral Account.................................................. 90
SECTION 7. SECTION NEGATIVE COVENANTS............................................. 90
Section 7.1 Financial Covenants.................................................... 90
Section 7.2 Indebtedness........................................................... 94
Section 7.3 Liens.................................................................. 96
Section 7.4 Restriction on Fundamental Changes..................................... 98
Section 7.5 Sale of Assets......................................................... 99
Section 7.6 Contingent Obligations................................................. 102
Section 7.7 Dividends.............................................................. 102
Section 7.8 Advances, Investments and Loans........................................ 103
Section 7.9 Transactions with Affiliates........................................... 108
Section 7.10 Limitation on Voluntary Payments and Modifications of
Certain Documents................................................... 108
Section 7.11 Changes in Business................................................. 110
Section 7.12 Certain Restrictions................................................ 110
Section 7.13 Lease Obligations................................................... 111
Section 7.14 Hedging Agreements.................................................. 113
Section 7.15 Plans............................................................... 113
Section 7.16 Fiscal Year; Fiscal Quarter......................................... 113
Section 7.17 Partnerships........................................................ 113
Section 7.18 Excluded Resales.................................................... 113
Section 7.19 Designated Senior Indebtedness...................................... 113
Section 7.20 Instruments......................................................... 114
Section 7.21 Real Estate Collateral Value........................................ 114
SECTION 8. SECTION EVENTS OF DEFAULT.............................................. 114
Section 8.1 Events of Default...................................................... 114
Section 8.2 Rights and Remedies.................................................... 118
SECTION 9. SECTION THE AGENT...................................................... 119
Section 9.1 Appointment............................................................ 119
Section 9.2 Delegation of Duties................................................... 120
Section 9.3 Exculpatory Provisions................................................. 120
Section 9.4 Reliance by Agent...................................................... 120
Section 9.5 Notice of Default...................................................... 121
Section 9.6 Non-Reliance on Agent and Other Lenders................................ 121
Section 9.7 Indemnification........................................................ 122
Section 9.8 Agent in its Individual Capacity....................................... 122
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
Section 9.9 Successor Agent........................................................ 122
SECTION 10. MISCELLANEOUS.......................................................... 123
Section 10.1 Payment of Expenses, Indemnity, etc................................. 123
Section 10.2 Right of Setoff..................................................... 125
Section 10.3 Notices............................................................. 125
Section 10.4 Successors and Assigns; Participation; Assignments.................. 125
Section 10.5 Amendments and Waivers.............................................. 129
Section 10.6 No Waiver; Remedies Cumulative...................................... 132
Section 10.7 Sharing of Payments................................................. 132
Section 10.8 Application of Collateral Proceeds.................................. 132
Section 10.9 Governing Law; Submission to Jurisdiction........................... 133
Section 10.10 Counterparts........................................................ 134
Section 10.11 Financial Advisor................................................... 134
Section 10.12 Amendment and Restatement........................................... 134
Section 10.13 Headings Descriptive................................................ 135
Section 10.14 Marshalling; Recapture.............................................. 135
Section 10.15 Severability........................................................ 136
Section 10.16 Independence of Covenants........................................... 136
Section 10.17 Survival............................................................ 136
Section 10.18 Domicile of Loans................................................... 136
Section 10.19 Limitation of Liability............................................. 136
Section 10.20 Calculations; Computations.......................................... 137
Section 10.21 WAIVER OF TRIAL BY JURY............................................. 137
Section 10.22 References.......................................................... 137
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CKE SIXTH 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 5.28 - Existing Indebtedness
Schedule 5.29 - Joint Ventures; Non-Competition Agreements
Schedule 5.30 - Immaterial Subsidiaries
Schedule 5.31 - Franchisees/Licensees
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 SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
SIXTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June
2, 2004, 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 ("BNP PARIBAS"), 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.
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
"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.
"AGREEMENT" shall mean this Sixth 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 Term 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
-------------- ---------------- --------------- --------------
less than or equal to 2.75 to 1.0 2.75% 1.50% 0.50%
greater than 2.75 3.00% 1.75% 0.50%
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
The Leverage Ratio shall be calculated as of the end of each fiscal quarter of
the Borrower, commencing with the fiscal quarter ending May 17, 2004 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 fiscal quarter of the Borrower ending November 1, 2004,
the Leverage Ratio shall be deemed to be greater than 2.75 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 2.75 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 SIXTH 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 the Amended and Restated
Collateral Account Control Agreement, dated as of June 2, 2004, by and among the
Borrower, the Agent and BNP Paribas in its capacity as both a "securities
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
intermediary", as defined in Section 8-102 of the UCC, and a "bank", as defined
in Section 9-102 of the UCC, as the same may from time to time hereafter be
modified, restated, supplemented or amended.
"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 Fourth 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 Fourth 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.
"BORROWING" shall mean the incurrence of one Type of Loan of one
Facility from all the Revolving Lenders or the Term Lenders, as the case may be,
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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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, (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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 June 2, 2004.
"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.
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
"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 CURRENT ASSETS" means, as at any date of determination,
the total assets of the Borrower and its Subsidiaries on a consolidated basis
which may properly be classified as current assets in conformity with GAAP,
excluding cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of the Borrower and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP, excluding the current portion of Indebtedness and Hedging
Agreements.
"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 deducted in the
calculation of Consolidated Net Income for such period, the prepayment premium
of $9,126,000 paid in connection with the redemption of the Senior Subordinated
Notes, plus (vi) to the extent deducted in the calculation of Consolidated Net
Income for such period, all extraordinary losses for such period, PROVIDED,
HOWEVER, that up to $4,000,000 of any loss incurred in connection with the
disposition of Timber Lodge shall be excluded from the calculation of
Consolidated EBITDA, minus (vii) 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.
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
"CONSOLIDATED EXCESS CASH FLOW" shall mean, for any period, an amount
(if positive) equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated EBITDA and (b) the Consolidated Working Capital
Adjustment minus (ii) the sum, without duplication, of the amounts for such
period of (a) Capital Expenditures (net of any proceeds of any related
financings with respect to such expenditures), (b) Consolidated Cash Interest
Expense, (c) to the extent deducted in the calculation of Consolidated Net
Income for such period, federal and state income taxes for such period and
payable in cash with respect to such period, (d) amortization of principal of
Capitalized Leases and (e) amortization of principal of the Term Loan as set
forth in Section 2.1.
"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
9
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
under such lease to the extent that rent payments are actually made, all as
determined on a consolidated basis in accordance with GAAP.
"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.
"CONSOLIDATED WORKING CAPITAL" shall mean, as at any date of
determination, the excess (or deficit) of Consolidated Current Assets over
Consolidated Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"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.
10
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
"CONTROLLING STOCKHOLDERS" shall mean ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇ and 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 ▇▇▇▇▇ Fargo Bank of Minnesota, National
Association (successor-in-interest to ▇.▇. ▇▇▇▇▇▇ 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 and any refinancings or replacements thereof in a
principal amount not exceeding the principal amount of the Indebtedness so
refinanced or replaced (plus premium and accrued interest payable thereon and
fees payable in such refinancing) and with an average life to maturity of not
less than the then average life to maturity of the Indebtedness so refinanced or
replaced; PROVIDED that (i) the Lenders shall receive 10 days prior written
notice thereof and (ii) such refinancings or replacements thereof may not change
or amend any term or provision thereof if the effect of such change or
amendment, together with all other changes or amendments, would be materially
adverse to the Borrower, the Agent or the Lenders, in the Agent's reasonable
determination.
"CONVERTIBLE SUBORDINATED NOTES" shall mean the convertible
subordinated notes issued by the Borrower pursuant to the 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 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).
11
CKE SIXTH 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).
"DEFERRED COMPENSATION PLAN" shall mean a deferred compensation plan
substantially in the form provided to the Agent prior to the date hereof, upon
its adoption by the Borrower, as the same may be amended, restated, modified or
supplemented from time to time, PROVIDED, that any such amendments,
restatements, modifications and supplements shall be reasonably satisfactory to
the Agent.
"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.
12
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
"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 INDEMNITY AGREEMENT" shall mean that certain Amended and
Restated Environmental Indemnity Agreement, dated as of June 2, 2004, among the
Borrower, each Guarantor and the Agent, as amended, restated or otherwise
modified from time to time.
"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.
"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."
13
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
"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
14
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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.
"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.
15
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
"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 April 5, 2004, as amended, restated or
otherwise modified from time to time.
"FEES" shall have the meaning set forth in Section 2.15(c).
"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
16
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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
Fourth 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 the Immaterial
Subsidiaries), 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 agreements) and swaps (including, without
limitation, any caps,
17
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 (i) Timber Lodge; PROVIDED that
Timber Lodge shall no longer be an Immaterial Subsidiary in the event that an
Asset Disposition of all or substantially all of the Capital Stock of, or all or
substantially all of the assets of, Timber Lodge has not been consummated prior
to November 30, 2004 or such later date as may be approved in writing by the
Agent in it sole discretion and (ii) 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
18
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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.
"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).
19
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
"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.
"JUNIOR RECAPITALIZATION AMOUNT" shall mean, at the time of
determination, and after giving effect to any of the following amounts paid, the
result of $27,000,000 plus, (i) any Net Sale Proceeds of an Asset Disposition
with respect to Timber Lodge, plus (ii) any Consolidated Excess Cash Flow
limited to the extent such Consolidated Excess Cash Flow is not required to be
applied as a mandatory prepayment pursuant to Section 2.12(h), minus, (iii) the
sum of (A) all amounts paid by the Borrower from and after the Closing Date to
and including such time, to redeem, retire, purchase, defease or otherwise
acquire, directly or indirectly, any shares of any class of the Capital Stock of
the Borrower in accordance with to Section 7.7(d), plus (B) all amounts paid by
the Borrower from and after the Closing Date to and including such time, to
prepay, redeem, defease, purchase or acquire for value the Convertible
Subordinated Notes or otherwise segregate funds with respect to the Convertible
Subordinated Notes in accordance with Section 7.10(d)(iv).
"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 $85,000,000, PROVIDED,
that the L/C
20
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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.
"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 manager or advisor as such Lender or
by an Affiliate of such Lender or advisor or manager.
"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
21
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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, the Environmental Indemnity Agreement, 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 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
22
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 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
23
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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
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 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 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.
"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
24
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 Fifth Amended and
Restated Credit Agreement dated as of November 12, 2003, 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.
"PATRIOT ACT" shall have the meaning provided in Section 10.23.
"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 Restaurant 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 Convertible Subordinated Notes or
the Senior Subordinated Notes.
"PERSON" shall mean and include any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or
other enterprise or
25
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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:
(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
26
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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).
"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.
"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
27
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 DATE" shall have the meaning provided in Section 4.1(x).
"REDEMPTION PRICE" shall have the meaning provided in Section 4.1(x).
"REFERENCE BANKS" shall mean each of 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;
PROVIDED, HOWEVER, that in the event any such Person shall cease to be a Lender
hereunder, such Person shall cease to be a Reference Bank.
"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%.
"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.
28
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
"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 May 1, 2007.
"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.
"SENIOR SUBORDINATED NOTE INDENTURE" shall mean that certain Indenture
among the Borrower, certain Subsidiaries of the Borrower, and ▇▇▇▇▇ Fargo Bank
of Minnesota, National Association (as successor-in-interest to 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.
"SENIOR SUBORDINATED NOTES" shall mean the Senior Subordinated Notes
issued by the Borrower pursuant to the Subordinated Note Indenture, in a maximum
principal amount not to exceed $200,000,000 in the aggregate at the rate of
9-1/8%
29
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
and due 2009, as the same may be amended, restated, supplemented or otherwise
modified in accordance with the terms of this Agreement; PROVIDED, that such
Subordinated Notes shall at all times be subordinated in respect of the
Obligations on subordination terms contained in the Subordinated Note Indenture;
PROVIDED, FURTHER, that the term "Subordinated Notes" shall include any notes or
instruments exchanged for then outstanding Subordinated Notes pursuant to the
Subordinated Note Indenture.
"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.
"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 Convertible Subordinated
Notes, the Convertible Subordinated Note Indenture, the Senior Subordinated
Notes and the Senior Subordinated Note Indenture.
"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
30
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 Fourth 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 Fourth 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 the 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 in the Register, 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.
"TERM LOAN MATURITY DATE" shall mean July 2, 2008; PROVIDED, HOWEVER
that in the event that on July 2, 2008 either (i) the Leverage Ratio is less
than or equal to 2.5 to 1 or (ii) the aggregate principal amount of the
Convertible Subordinated Notes then outstanding is less than $50,000,000, the
Term Loan Maturity Date shall mean May 1, 2010.
"TERM LOAN PAYDOWN" shall have the meaning set forth in Section 2.1.
31
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
"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.
32
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
"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.
"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 $230,000,000. 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"):
33
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
DATE PAYDOWN AMOUNT
--------------- --------------
July 1, 2004 $ 575,000
October 1, 2004 $ 575,000
January 1, 2005 $ 575,000
April 1, 2005 $ 575,000
July 1, 2005 $ 575,000
October 1, 2005 $ 575,000
January 1, 2006 $ 575,000
April 1, 2006 $ 575,000
July 1, 2006 $ 575,000
October 1, 2006 $ 575,000
January 1, 2007 $ 575,000
April 1, 2007 $ 575,000
July 1, 2007 $ 575,000
October 1, 2007 $ 575,000
January 1, 2008 $ 575,000
April 1, 2008 $ 575,000
July 1, 2008 $ 575,000
October 1, 2008 $ 575,000
January 1, 2009 $ 575,000
April 1, 2009 $ 575,000
July 1, 2009 $ 575,000
October 1, 2009 $54,481,250
January 1, 2010 $54,481,250
34
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
DATE PAYDOWN AMOUNT
--------------- --------------
April 1, 2010 $54,481,250
May 1, 2010 $54,481,250
Notwithstanding the foregoing, 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 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.
35
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
(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
36
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 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
37
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 Term Loan that is a Base Rate
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) 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 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) 1.50%
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.
(b) (i) 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) 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 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) 2.75%
plus (y) the relevant
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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) 2% plus (y) 1.75%) 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) 2% plus (y) the Applicable Margin
applicable to Term Loans that are Base Rate Loans 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).
Section 2.7 Interest Periods.
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
(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.
40
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
(vi) 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 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
41
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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, 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
42
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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
43
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 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.
(h) In the event that there shall be Consolidated
Excess Cash Flow for any fiscal year of the Borrower (commencing with fiscal
year 2005), the Borrower shall, no later than 90 days after the end of such
fiscal year, prepay the Loans in an aggregate amount equal to 50% of such
Consolidated Excess Cash Flow, minus the aggregate amount of any voluntary
prepayments made pursuant to Section 2.11 during such fiscal year.
Section 2.13 Application of Prepayments.
(a) All prepayments of the Loans required by clauses
(a) through (c) and (h) 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
44
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 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
45
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 June 15, 2004, 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.
46
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 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
47
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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).
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CKE SIXTH 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
49
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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.
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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 Assignee
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 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.
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
(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 prepay in full the outstanding principal amount of (A) the Senior
Subordinated Notes and (B) the Borrower's Loans (as defined in the Original
Credit Agreement) pursuant to the Original Credit Agreement 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 (other than
Timber Lodge so long as Timber Lodge is an Immaterial Subsidiary) 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 (other than Timber
Lodge so long as Timber Lodge is an Immaterial Subsidiary) and all
52
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 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
53
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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.
(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
54
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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,
and (B) 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
55
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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, 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
56
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 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 June 15, 2004, 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 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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
Loan Commitments, according to their respective Pro Rata Shares, in each case
payable quarterly in arrears on each Payment Date, commencing on June 15, 2004.
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 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:
(i) any lack of validity or enforceability
of the Letter of Credit, this Agreement or any other agreement or
instrument relating thereto;
(ii) 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;
(iii) 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;
(iv) any demand, statement or any other
document presented under the Letter of Credit proving to be forged,
59
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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;
(v) 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;
(vi) 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;
(vii) 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;
(viii) the solvency or financial
responsibility of any party issuing any documents in connection with a
Letter of Credit;
(ix) any failure or delay in notice of
shipments or arrival of any property; and
(x) 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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
Bank under or in connection with Letters of Credit issued by it or any related
certificates shall not, in the absence of 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)
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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) 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 November 12, 2003, by the Borrower in favor of the Agent.
(x) Subsidiary Trademark, Patent and
Copyright Security Agreements. Each Subsidiary of the Borrower (other
than Timber Lodge) party to the Second Amended and Restated Subsidiary
Trademark Security Agreement, Second Amended and Restated Subsidiary
Patent Security Agreement or Second Amended and Restated Subsidiary
Copyright Security Agreement (as applicable), each dated as of November
12, 2003 in favor of the Agent, shall have executed and delivered to
the Agent a third 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.
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
(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.
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(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 26,
2004, 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 that Closing
EBITDA equals at least $117,500,000, (ii) containing conclusions that the
Leverage Ratio, calculated as of the end of the Retail Period of the Borrower
ending April 19, 2004, does not exceed 3.60 and setting forth the calculations
required to establish such Leverage Ratio and (iii) containing conclusions that
the Adjusted Leverage Ratio, calculated as of the end of the Retail Period of
the Borrower ending April 19, 2004, does not exceed 5.0 and setting forth the
calculations required to establish such Adjusted Leverage Ratio.
(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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 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 assets and liabilities of the
Borrower and its consolidated Subsidiaries shall be materially consistent with
the projections dated April 27, 2004 and previously delivered by the Borrower to
the Agent.
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
(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, except to the extent that the consummation
of the Transactions may constitute a breach of Section 4.7 of the Senior
Subordinated Note Indenture for 30 days after the Closing Date. 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 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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP 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
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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 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 26, 2004, 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) Redemption of Senior Subordinated Notes. The
Borrower shall have (i) given notice to the holders of the Senior Subordinated
Notes of the redemption thereof to occur upon the 30th day following the Closing
Date (the "Redemption Date") in accordance with the terms of the Senior
Subordinated Note
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Indenture; and (ii) shall have deposited with the Trustee (as defined in the
Senior Subordinated Note Indenture) in escrow such amounts (the "Redemption
Price") as will be sufficient to pay the principal of, premium, Additional
Interest (as defined in the Senior Subordinated Note Indenture), if any, and
interest on all of the outstanding Senior Subordinated Notes on the Redemption
Date (such amount to be specified in the escrow agreement, dated as of and
delivered on the Closing Date, between the Borrower and the Trustee) and shall
have irrevocably instructed such Trustee to tender for and redeem the Senior
Subordinated Notes on the Redemption Date.
(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 April 27, 2004 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 April 27, 2004.
(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.
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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 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 26, 2004 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.
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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. SECTION 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 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,
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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, except to the extent that the
consummation of the Transactions may constitute a breach of Section 4.7 of the
Senior Subordinated Note Indenture for 30 days after the Closing Date 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 April 27, 2004, 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.
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Section 5.8 Material Adverse Change. Since January 26, 2004,
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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 November 12, 2003 (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.
Section 5.16 Representations and Warranties in Subordinated
Debt Documents. All representations and warranties made by any Loan Party in the
Subordinated Debt Documents, 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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
(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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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.
(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.
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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 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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 5.28 hereto is a complete and accurate list
of all Indebtedness of the Borrower and each of its Subsidiaries existing as of
the Closing Date and not otherwise permitted under Section 7.2, showing the
principal amount outstanding thereunder 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 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
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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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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 2006 commencing on
February 1, 2005), a budget and financial forecast of results of operations and
sources and uses of cash (in form reasonably satisfactory to the 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
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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.
(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
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(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
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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 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
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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) [Intentionally Omitted].
(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
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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.
(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
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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
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circumstances, unless the Borrower or any of its Subsidiaries is subject to an
order issued by any governmental authority requiring the 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 an Immaterial Subsidiary), a
Subsidiary Pledge Agreement. 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
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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 the Blocked Account Agreement.
Section 6.15 Interest Rate Protection. Within 90 days of the
Closing Date, the Borrower shall enter into and maintain in effect one or more
Interest Rate Agreements with respect to the Loans, in an aggregate notional
principal amount of not less than $70,000,000, each such Interest Rate Agreement
to be in form and substance reasonably satisfactory to Agent and with a term not
to expire prior to the date that is three (3) years from the Closing Date.
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
-------------- -----
May 17, 2004 3.80
August 9, 2004 3.70
November 1, 2004 3.60
January 31, 2005 3.50
May 23, 2005 3.30
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Quarter Ending Ratio
-------------- -----
August 15, 2005 3.20
November 7, 2005 3.10
January 30, 2006 3.00
May 22, 2006 2.90
August 14, 2006 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 May 17, 2004 and each fiscal quarter thereafter to be less than 1.25.
(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 fiscal quarter of the Borrower ending on the
date set forth below, to be less than the amount set forth opposite such date:
Retail Periods Ending Amount
--------------------- ------
May 17, 2004 $105,000,000
August 9, 2004 $108,000,000
November 1, 2004 $110,000,000
January 31, 2005 $115,000,000
May 23, 2005 $120,000,000
August 15, 2005 $122,000,000
November 7, 2005 and thereafter $125,000,000
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(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:
Quarter Ending Ratio
-------------- -----
May 17, 2004 5.60
August 9, 2004 5.50
November 1, 2004 5.45
January 31, 2005 5.35
May 23, 2005 5.25
August 15, 2005 5.15
November 7, 2005 5.05
January 30, 2006 5.00
May 22, 2006 4.90
August 14, 2006 4.80
November 6, 2006 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 2005 of the Borrower, not in
excess of the sum of (I) $50,000,000, 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,
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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 2006 of the Borrower and each
fiscal year of the Borrower thereafter, the ability of 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
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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).
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 5.28 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);
(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 , in the case of Capitalized Leases, the lesser of the
purchase price or the fair market value of the asset so financed or, in the case
of purchase money Indebtedness, 90% of the
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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 (i)
pursuant to the Convertible Subordinated Notes in an aggregate principal amount
not to exceed $105,000,000 and (ii) the Senior Subordinated Notes in an
aggregate original principal amount not to exceed $200,000,000, PROVIDED,
HOWEVER, that the Senior Subordinated Notes shall be permitted only to the
extent the Redemption Price has been irrevocably deposited with the Trustee (as
defined in the Senior Subordinated Note Indenture) on the Closing Date and all
of the outstanding Senior Subordinated Notes are redeemed on the Redemption
Date;
(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
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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 (other than Timber Lodge so long as Timber Lodge
is an Immaterial Subsidiary) 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;
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(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;
(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
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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
(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
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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:
(1) 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,
(2) except with respect to an Asset Disposition in
respect of Timber Lodge, 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-
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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, (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,
(3) 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),
(4) except with respect to an Asset Disposition in
respect of Timber Lodge, 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,
(5) no Default or Event of Default has occurred and
is continuing or would result from such asset sale, and
(6) 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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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:
(A) 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
(B) deposit cash into the Collateral Account, which shall be
subject to the 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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(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 Senior Subordinated Note Indenture of obligations of the
Borrower under the Senior Subordinated Notes, PROVIDED, that such guarantees
shall at all times be subordinated in respect of the Obligations on
subordination terms contained in the Senior 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;
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
(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;
(d) The Borrower may redeem, retire or purchase any
shares of any class of the Capital Stock of the Borrower PROVIDED, that (i) the
purchase price paid by the Borrower for such Capital Stock shall not exceed, in
the aggregate after giving effect to such payment and all other payments made
pursuant to this Section 7.7(d) and Section 7.10(d)(iv) hereof, the Junior
Recapitalization Amount, (ii) both before and after giving effect to such
redemption, retirement or purchase no Default or Event of Default shall have
occurred and be continuing and (iii) after giving effect to such redemption,
retirement or purchase, no Revolving Loans shall be outstanding.
(e) So long as no Default of Event of Default shall
have occurred and be continuing, the Borrower may enter into with its directors
and executive officers a transaction or transactions pursuant to the terms of
the Deferred Compensation Plan whereby an Eligible Stock Option (as defined in
the Deferred Compensation Plan) is exercised by any such directors or executive
officers which results in a Qualifying Gain (as defined in the Deferred
Compensation Plan).
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
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
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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
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(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;
(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;
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(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
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to be delivered under this Section 7.8(f) to which such 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 otherwise, 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;
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(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 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
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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 Convertible Subordinated
Notes other than:
(i) regularly scheduled semi-annual interest
payments required to be made in cash;
(ii) conversions of the Convertible
Subordinated Notes into common stock of the Borrower;
(iii) the redemption, repurchase or
acquisition for value of Convertible Subordinated Notes, PROVIDED, that
(A) the purchase price paid by the Borrower for such Convertible
Subordinated Notes shall not exceed, in the aggregate after giving
effect to such payment and all other payments made pursuant to Section
7.7(d) hereof and this Section 7.10(d)(iv) hereof, the Junior
Recapitalization Amount, (B) both before and after giving effect to
such redemption, retirement or purchase no Default or Event of Default
shall have occurred and be continuing and (C) after giving
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effect to such redemption, repurchase or acquisition for value, no
Revolving Loans shall be outstanding; and
(iv) the redemption, repurchase or
acquisition for value of the Senior Subordinated Notes (A) by
depositing the Redemption Price with the Trustee (as defined in the
Senior Subordinated Note Indenture) on the Closing Date and by a
redemption on the Redemption Date in accordance with the terms of the
Senior Subordinated Note Indenture or (B) pursuant to a repurchase by
the Borrower prior to the Redemption Date PROVIDED, that the purchase
price paid by the Borrower for any such repurchase of Senior
Subordinated Notes shall not exceed in the aggregate, the amount that
would otherwise be required to redeem such Senior Subordinated Notes,
pursuant to the preceding subclause (A).
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 Senior
Subordinated Notes and the Convertible 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
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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);
(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
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CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
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;
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(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.
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) or (b)
Designated Senior
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Indebtedness (as defined in the Senior 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. SECTION 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.
(c) Breach of Covenants.
(i) The Borrower shall fail to perform or
observe any agreement, covenant or obligation arising under Section
6.1(f), Section 6.15 or Section 7.
(ii) The Borrower shall fail to perform or
observe any agreement, covenant or obligation arising under this
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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 the Convertible Subordinated Notes or any other
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 (except to the
extent that the consummation of the Transactions may allow the holders of the
Senior Subordinated Notes to accelerate or require a redemption on the
Redemption Date), 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,
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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 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
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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 Stockholder 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 Stockholder 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
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 of Control as defined in the Convertible
Subordinated Note Indenture shall have occurred; or (v) a Change of Control as
defined in the Senior Subordinated Note Indenture shall have occurred.
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(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
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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 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. SECTION 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
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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 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
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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
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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 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
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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, 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);
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(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.
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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 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
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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 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).
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(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 (or such lesser amount agreed to by the Agent) and (B) for
Credit Exposure not less than $1,000,000 in the case of Term Loans (or such
lesser amount agreed to by the Agent), 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 (or such lesser amount agreed to by the Agent),
(ii) to an Assignee approved in writing by the Agent, which approval shall not
be unreasonably withheld and (iii) in the case of Revolving Loans, 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. 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.
(d) Assignment Requirements. Any Lender may at any
time and from time to time assign to one or more Assignees 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
Assignee, such transferor Lender, the Agent and, if required pursuant to clause
(iii) of Section 10.4(c) above, the Borrower. Upon (i) such execution of such
Assignment Agreement, (ii) delivery to the Agent of any consent required
pursuant to Section 10.4(c) above and a copy of the Assignment Agreement and
(iii) 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 Assignment Agreement (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 Assignee shall for all purposes be a Lender party to this
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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 Agreement to
the extent, and only to the extent, necessary to reflect the addition of such
Assignee as a Lender and the resulting adjustment of the Commitments, if any,
arising from the purchase by such Assignee 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 or Assignee (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 an Assignee 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 Assignee, in each case in notional amounts reflecting such transfer. Each
such new Revolving Note and new Term Note shall be payable to the Assignee 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
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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 (with
respect to the Commitments of such Lender) at any reasonable time and from time
to time upon reasonable prior notice. Upon receipt of a duly executed Assignment
Agreement, and satisfaction of the conditions set forth in Section 10.4(c) and
10.4(d), the Agent shall accept such Assignment Agreement and record the
information contained therein in the Register. No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
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 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
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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).
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(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 the Lenders
adversely affected thereby whose Pro Rata Shares, in the aggregate, are
greater than 66 2/3%.
(v) waive a Default or Event of Default
without the consent of the Revolving Lenders whose Pro Rata Shares, in
the aggregate, are greater than 50% and the Required Lenders.
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. 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.
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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.
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;
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(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
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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 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
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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 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,
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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.
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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 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.
Section 10.23 USA PATRIOT Act. Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the "Patriot Act"), it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender to identify the Borrower in accordance
with the Patriot Act.
(Signature Pages Follow)
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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 SIXTH 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 SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
FIRST BANK & TRUST
By:_________________________________________
Print Name: Nic ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Nic ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
▇▇▇▇▇ FARGO BANK N.A.
By:_________________________________________
Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-4
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
FLEET NATIONAL BANK
By:_________________________________________
Print Name: ▇▇▇▇▇ ▇▇▇▇
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-5
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
U.S. BANK NATIONAL ASSOCIATION
By:_________________________________________
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇. ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Mail Code: PD-OR-P4CB
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-6
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
UNION BANK OF CALIFORNIA, N.A.
By:_________________________________________
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-7
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
ALLIED IRISH BANKS PLC
By:_________________________________________
Print Name:
Title:
Address: ▇▇▇▇ ▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-8
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
GENERAL ELECTRIC CAPITAL CORPORATION
By:_________________________________________
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
Address: Corporate Financial Services
▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-9
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
EAST WEST BANK
By:_________________________________________
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-10
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
FAR EAST NATIONAL BANK
By:_________________________________________
Print Name:
Title:
Address: Two California Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ Van Noord
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-11
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
Schedule 1.1 to Credit Agreement
Lenders and Commitments
Name of Lender Revolving Loan Commitment
------------------------------------ -------------------------
Fleet National Bank $28,000,000.00
▇▇▇▇▇ Fargo Bank N.A. $25,000,000.00
BNP Paribas $23,000,000.00
First Bank & Trust $20,000,000.00
U.S. Bank National Association $15,000,000.00
Union Bank of California, N.A. $15,000,000.00
Allied Irish Banks plc $10,000,000.00
Far East National Bank $ 5,000,000.00
General Electric Capital Corporation $ 5,000,000.00
East West Bank $ 4,000,000.00
Sch 1.1-1
SCHEDULE 4.1(b)
Local Counsel
State Counsel
----- -------
Delaware & California ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇
North Carolina ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Alabama ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
Nevada ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Sch 4.1(b)-1
ANNEX I
DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
----------------------- -------------------------
BNP Paribas BNP Paribas
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 209 ▇. ▇▇▇▇▇▇▇ Street
Suite 500 Suite 500
Chicago, IL 60604 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
First Bank & Trust First Bank & Trust
▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Fleet National Bank Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
U.S. Bank National Association U.S. Bank National Association
▇▇▇ ▇. ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇-▇▇▇▇ ▇▇▇ ▇. ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ Fargo Bank ▇.▇. ▇▇▇▇▇ Fargo Bank N.A.
▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Union Bank of California, N.A. Union Bank of California, N.A.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇ ▇▇▇▇ Telephone: (▇▇▇) ▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
General Electric Capital Corporation General Electric Capital Corporation
Corporate Financial Services Corporate Financial Services
▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 7, ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Annex I-1
CKE SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
----------------------- -------------------------
East West Bank East West Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Far East National Bank Far East National Bank
Two California Plaza Two California Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Allied Irish Banks plc Allied Irish Banks plc
Business Support Unit Business Support Unit
Iona House, Shelbourne Road Iona House, Shelbourne Road
Ballsbridge Ballsbridge
Dublin 4, Ireland ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇
Telephone: ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇ Telephone: ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇
Telecopier: ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇ Telecopier: ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇
Annex I-2