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Exhibit 10-82
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AMENDMENT NO. FIVE, WAIVER AND CONSENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
This Amendment No. Five, Waiver and Consent to Amended and Restated Credit
Agreement (the "Amendment") dated as of March 15, 1994, is between Bank of
America National Trust and Savings Association (the "Bank") and Carl Karcher
Enterprises, Inc. (the "Borrower").
RECITALS
A. The Bank and the Borrower entered into a certain Amended and Restated
Credit Agreement dated as of November 20, 1992, as amended by Amendment No. One
dated as of April 28, 1993, by Amendment No. Two and Waiver dated as of
September 27, 1993, by Amendment No. Three and Waiver dated as of December 15,
1993, and by Amendment No. Four dated as of January 19, 1994.
B. The Borrower is in default of certain covenants of the Agreement and has
requested that Bank to waive such defaults.
C. Borrower has submitted to Bank a copy of the Form S-4 Registration
Statement of CKE Restaurants, Inc., a Delaware corporation ("Holding Company")
filed with the Securities and Exchange Commission on March 7, 1994
("Registration Statement").
D. Attached as Appendix A to the Registration Agreement is a proposed Plan
of Reorganization and Agreement of Merger ("Merger Agreement"), between
Borrower, Holding Company and CKE Food Services, Inc. a wholly-owned subsidiary
of Holding Company ("CKE Subsidiary"), pursuant to which Borrower will merge
with CKE Subsidiary and, as a result thereof, Borrower will become the
surviving company and a subsidiary of Holding Company (the "Merger").
E. Borrower has requested that the Bank consent to the Merger and waive
compliance by Borrower with certain covenants in the Agreement that would
otherwise prohibit the Merger.
F. The Borrower has requested the Bank to amend the Agreement in certain
respects.
G. The Bank has agreed to waive the defaults, consent to the Merger, waive
certain covenants and amend the Agreement but on the terms and conditions
herein contained.
AGREEMENT
1. Definitions. Capitalized terms used but not defined in this Amendment
shall have the meaning given to them in the Agreement.
2. Amendments. The Agreement is hereby amended as follows:
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2.1 Paragraph 1.2 of the Agreement is amended by substituting the date
"June 30, 1995" for the date "June 30, 1994" appearing therein.
2.2 Subparagraph (a) of Paragraph 1.3 of the Agreement is amended in full
to read:
"(a) Unless the Borrower elects an optional interest rate as described
below, the interest rate is the Bank's Reference Rate."
2.3 The first sentence of Paragraph 1.6 is amended in full to read:
"The Borrower may elect to have all or portions of the principal
balance of the line of credit bear interest at the Offshore Rate plus 1.50
percentage points."
2.4 The lead in to Paragraph 1.7 of the Agreement is hereby amended in
full to read:
"1.7 Letters of Credit. This line of credit may be used for financing
standby letters of credit with a maximum maturity not to extend beyond the
Expiration Date. The amount of letters of credit outstanding at any one
time (including amounts drawn on letters of credit and not yet reimbursed)
may not exceed Thirteen Million Dollars ($13,000,000)."
2.5 Upon the Effective Date (as defined in the Merger Agreement) of the
Merger, Paragraph 6.2(a) of the Agreement is amended in full to read:
"(a) Within one hundred (100) days of Holding Company's fiscal year
end, Holding Company's annual consolidated financial statements. These
financial statements must be audited (with an unqualified opinion) by a
Certified Public Accountant ("CPA") acceptable to the Bank. These
statements shall be prepared on a consolidating and consolidated basis for
Holding Company and its subsidiaries, and also on an unconsolidated basis
for the Borrower. Holding Company's consolidating statement and the
unconsolidated statement of the Borrower may be company prepared."
2.6 Upon the Effective Date (as defined in the Merger Agreement) of the
Merger, Paragraph 6.2(b) of the Agreement is amended in full to read:
"(b) Within fifty (50) days of each fiscal quarter end, quarterly
financial statements of Holding Company prepared on a consolidating and
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consolidated basis, These financial statements may be prepared by
Holding Company."
2.7 Upon the Effective Date (as defined in the Merger Agreement) of the
Merger, Paragraph 6.2(d) of the Agreement is amended by substituting
"Holding Company's" for "Borrower's" in each place it appears therein.
2.8 Paragraph 6.3 of the Agreement is amended in full to read:
"6.3 Current Ratio. To maintain a ratio of current assets to current
liabilities of at least .90:1.0 from the date hereof through January 29,
1995, and .95:1.0 from January 30, 1995, and thereafter."
2.9 The table shown at the bottom of Paragraph 6.4 of the Agreement is
amended to read:
Minimum Annual Increase
in Retained Earnings Over
Prior Fiscal Year End
Date Retained Earnings
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January 30, 1995 $4,500,000
2.10 The table shown in Paragraph 6.5 of the Agreement is amended to read:
Period End Ratio
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May 23, 1994 1.75:1.0
August 15, 1994 1.75:1.0
November 7, 1994 1.75:1.0
January 30, 1995
and thereafter 1.50:1.0
2.11 The table shown in Paragraph 6.6 of the Agreement is amended to read:
Period End Ratio
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For the quarter
ending May 23, 1994 .60:1.0
For the quarter
ending August 15, 1994 .80:1.0
For the quarter ending
November 17, 1994 1.00:1.0
At the end of each
fiscal quarter
thereafter, calculated
on a Four Quarter
Rolling Basis 1.00:1.0
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2.2 Subparagraph (h) of Paragraph 6.10 of the Agreement is deleted in its
entirety.
2.13 Paragraph 6.12 of the Agreement is deleted in its entirety.
2.14 Paragraph 6.25 of the Agreement is amended in full to read:
"6.25 Owned Restaurants. Maintain a ratio of total company owned
restaurants of not less than forty-five percent (45%) of total restaurants
on a system wide basis."
2.15 Paragraph 6.27 of the Agreement is amended in its entirety to read as
follows:
"6.27 Tangible Net Worth. Maintain tangible net worth equal to at
least the sum of:
(a) Eighty Four Million Four Hundred Thousand Dollars ($84,000,000);
plus
(b) the sum of fifty percent (50%) of net income after income taxes
(without subtracting losses) earned in each quarterly accounting
period commencing with the first quarter of fiscal year 1995."
"Tangible Net Worth" means the gross book value of the Borrower's assets
(excluding goodwill, patents, trademarks, trade names, organization
expense, treasury stock, unamortized debt discount and expense, deferred
research and development costs, deferred marketing expenses, and other
like intangibles and monies due from affiliates, officers, directors or
shareholders of Borrower plus any investments in affiliates less total
liabilities, including but not limited to accrued and deferred income
taxes, and any results against assets."
2.16 The Agreement is hereby amended to add a new Paragraph 6.30 to read
as follows:
"6.30 Loans. Not to make any loans, advances or other extensions of
credit to any of Borrower's executives, officers, directors, shareholders
or affiliates (or any relatives of the foregoing) in excess of Five
Million Dollars ($5,000,000) outstanding at any time, excluding affiliates
notes receivable shown in the balance sheet at fiscal year end 1994."
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2.17 Paragraph 8.3 of the Agreement is amended in full to read:
"8.3 Bankruptcy. The Borrower or any grantor files a bankruptcy
petition, a bankruptcy petition is filed against the Borrower or any
guarantor or the Borrower or any guarantor makes a general assignment for
the benefit of creditors. The default will be deemed cured if any
bankruptcy petition filed against the Borrower or any guarantor is dismissed
within a period of forty-five (45) days after the filing; provided, however,
that the Bank will not be obligated to extend any additional credit to the
Borrower during that period."
2.18 Paragraph 8.4 of the Agreement is amended by adding the words "or any
guarantor's" immediately following the work "Borrower's".
2.19 Paragraph 8.6 of the Agreement is amended by adding the words "or any
guarantor" immediately following the word "Borrower" in each place where
such word appears.
2.20 Paragraph 8.7 of the Agreement is amended by adding the words "or any
guarantor's" immediately following the word "Borrower's".
2.21 Paragraph 8.8 of the Agreement is amended by adding the words "or any
guarantor's" immediately following the word "Borrower's".
2.22 paragraph 8.9 of the Agreement is amended by adding the words "or any
guarantor" immediately following the word "Borrower" in each place where
such word appears.
2.23 Paragraph 8.10 of the Agreement is amended by adding the words "or
any guarantor" immediately following the word "Borrower" in each place where
such word appears.
2.24 Paragraph 8.13 of the Agreement is deleted in its entirety and
replaced by a new Paragraph 8.13 to read as follows:
"8.13 Default Under Related Document. Any guaranty, subordination
agreement, security agreement or other document required by this Agreement
is violated or no longer in effect."
3. Defaults. The borrower hereby acknowledges that it breached the
following covenants of the Agreement for the fiscal period ending January 31,
1994:
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3.1 Paragraph 6.4 in that Retained Earnings were Two Million Two Hundred
Nine Dollars ($2,209,000) and not Five Million Dollars ($5,000,000) as
required.
3.2 Paragraph 6.6 in that the Fixed Charge Coverage Ratio was .86:1.0 and
not .94:1.0 as required.
3.3 Paragraph 6.27 in that net income was Five Million Five Hundred
Thousand One Dollars ($5,501,000) and not at least Eight Million Seven
Hundred Thousand Dollars ($8,700,00) as required.
4. Waiver. The Bank hereby waives compliance with the above covenants for
the fiscal period ending January 31, 1994.
5. Consent and Waiver. The Bank hereby consents to the Merger described in
Recital C above, and waives any violation of Paragraphs 6.15 and 6.24(c) that
would otherwise result after giving effect to the Merger.
6. Representations and Warranties. When the Borrower signs this Amendment,
the Borrower represents and warrants to the Bank that: (a) other than the
defaults listed above there is no event which is, or with notice of, or lapse
of time, or both would be, a default under the Agreement and (b) the
representations and warranties in the Agreement are true as of the date of the
Amendment as if made on the date of this Amendment, (c) this Amendment is
within the Borrower's powers, has been duly authorized, and does not conflict
with any of the Borrower's organizational papers, and (d) this Amendment does
not conflict with any law, agreement, or obligations by which the Borrower is
bound.
7. Conditions Precedent. This Amendment will be effective when the Bank
receives the following items, in form and content acceptable to the Bank:
7.1 This Amendment executed by the Borrower.
7.2 Evidence that the execution, delivery and performance by the Borrower
of this Amendment and any instrument or agreement required under this
Amendment have been duly authorized.
8. Conditions Subsequent. Within thirty (30) days of the Effective Date
(as defined in the Merger Agreement) of the Merger, Borrower shall cause to be
delivered to the Bank the following items in form and substance acceptable to
Bank.
8.1 A guaranty duly executed by Holding Company in the amount of Twenty
Million Dollars ($20,000,000).
8.2 Evidence that the execution, delivery and performance by Holding
Company of the guaranty has been
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duly authorized.
9. Effect of Amendment and Waivers. The above waivers shall be limited
precisely as written and relate solely to the sections of the Agreement and for
the time referred to above. Nothing in the above consents shall be deemed to
(a) constitute a waiver of compliance by the Borrower with respect to any other
term, provision or condition of the Agreement or any other instrument or
agreement referred to therein or (b) prejudice any right or remedy that the
Bank may now have or may have in the future under applicable law or instrument
or agreement referred to therein. Except as expressly set forth herein, the
terms, provisions, and conditions of the Agreement and the other documents
issued pursuant thereto shall remain in full force and effect and in all other
respects are hereby ratified and confirmed.
This Amendment is executed as of the date stated at the top of the first
page.
BANK OF AMERICA NATIONAL TRUST CARL KARCHER ENTERPRISES,
AND SAVINGS ASSOCIATION INC.
By /s/ Deborah L. Miller By /s/ Loren C. Pannier
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Title Vice President Title Sr.Vice President, CFO
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By ___________________________ By /s/ Richard C. Celio
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Title ________________________ Title Vice President,
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Corporate Counsel
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