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EXHIBIT 10.32
AMENDMENT NO. 1 TO
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
This Amendment No. 1 (this "Amendment"), dated as of April 26, 2000, is
by and among CKE Restaurants, Inc. (the "Borrower"), the Lenders party hereto
(the "Lenders") and Paribas, acting in its capacity as agent for the Lenders
(the "Agent"), and amends that certain Third Amended and Restated Credit
Agreement, dated as of November 24, 1999, among the Borrower, the Lenders party
thereto and the Agent (the "Credit Agreement"). Capitalized terms used but not
defined in this Amendment shall have the respective meanings specified in the
Credit Agreement.
The Borrower, the Lenders and the Agent, pursuant to Section 10.5 of
the Credit Agreement, hereby agree to amend the Credit Agreement as follows upon
the terms and conditions set forth herein:
1. Section 1.1 of the Credit Agreement is hereby amended by amending and
restating, in its entirety, the table contained in the definition of "Applicable
Margin" to read as follows:
Leverage Ratio Eurodollar Loans Base Rate Loans Commitment Fee
-------------- ---------------- --------------- --------------
less than 1.5 to 1.0 1.250% 0.00% 0.375%
1.5 to 1.0 or greater, but less
than 2.0 to 1.0 1.500% 0.250% 0.375%
2.0 to 1.0 or greater, but less
than 2.5 to 1.0 1.875% 0.625% 0.375%
2.5 to 1.0 or greater, but less
than 3.0 to 1.0 2.125% 0.875% 0.500%
3.0 to 1.0 or greater, but less
than 3.5 to 1.0 2.250% 1.000% 0.500%
3.5 to 1.0 or greater 3.250% 1.750% 0.500%
2. Section 1.1 of the Credit Agreement is hereby amended by deleting "3.0"
appearing in the fourth sentence of subsection (a) of the definition of
"Applicable Margin" and inserting "3.5" in place thereof.
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3. Section 1.1 of the Credit Agreement is hereby amended by inserting at the end
of the definition of "Applicable Margin" the following subsection (c):
(c) Notwithstanding the foregoing, if the Borrower and its
Subsidiaries have not received an aggregate amount of Net Sale Proceeds
of at least $125 million during the period from April 15, 2000 to
October 27, 2000, then the Applicable Margin with respect to each
Eurodollar Loan or Base Rate Loan shall be increased by 0.500% until
such time as the aggregate amount of Net Sale Proceeds received after
April 15, 2000 shall be at least $125 million.
4. Section 1.1 of the Credit Agreement is hereby amended by amending and
restating, in its entirety, the definition of "Consolidated EBITDA" to read as
follows:
"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, 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, all determined on a consolidated
basis for such Person and its Subsidiaries in accordance with GAAP,
plus (vii) without duplication, to the extent deducted (or minus to the
extent added) in the calculation of Consolidated Net Income for the
period from November 2, 1999 through January 31, 2000, the
non-recurring items from such period as presented in the EBITDA
Reconciliation Summary set forth on Exhibit K hereto.
5. Section 1.1 of the Credit Agreement is hereby amended by amending and
restating, in its entirety, the definition of "Consolidated Tangible Net Worth"
to read as follows:
"Consolidated Tangible Net Worth" shall mean, at any time, the
excess of (i) the total assets of the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP, minus
goodwill and any other items that are classified as intangibles in
accordance with GAAP, plus the net loss (expressed as a positive
number), in the aggregate (not to exceed $100 million), from all Asset
Dispositions of any Restaurant or Restaurants made after April 15,
2000, minus (ii) all liabilities of the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.
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6. Section 1.1 of the Credit Agreement is hereby amended by amending and
restating, in its entirety, the definition of "Paydown Condition" to read as
follows:
"Paydown Condition" shall mean the point in time at which the
Borrower shall have prepaid the outstanding Loans (and such Loans and
all Commitments in connection therewith shall have been permanently
reduced) in the aggregate amount of $175,000,000 with the Net Sale
Proceeds of Asset Dispositions of Restaurants occurring on or after
November 2, 1999 in accordance with the provisions of Section
2.12(a)(ii)(B).
7. Section 2.6 of the Credit Agreement is hereby amended by replacing the last
sentence of subsection (a) thereof with the following:
The Borrower agrees to pay interest in respect of the unpaid principal
amount of each Term Loan that is a Base Rate Loan from the date of the
making of such Loan until such Loan shall be paid in full at a rate per
annum which shall be equal to (i) so long as the Leverage Ratio is less
than 3.5 to 1.0, the sum of (A) 1.25% plus (B) 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, or (ii) so long as the Leverage Ratio is 3.5 to 1.0 or
greater, the sum of (A) 1.75% plus (B) the relevant Base Rate, such
interest to be computed on the basis of a 365 or 366-day year and paid
for the actual number of days elapsed, in each case subject to the
provisions of clause (c) of this Section 2.6. For purposes of this
subsection 2.6(a), the Leverage Ratio shall be calculated in the same
manner (and adjustments to the interest rate of Term Loans that are
Base Rate Loans shall be made in the same manner as are adjustments to
Applicable Margin) as specified in subsection (a) of the definition of
"Applicable Margin."
8. Section 2.6 of the Credit Agreement is hereby amended by replacing the last
sentence of subsection (b) thereof with the following:
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 Loan until such Loan shall be paid in full at a rate per
annum which shall be equal to (i) so long as the Leverage Ratio is less
than 3.5 to 1.0, the sum of (A) 2.50% plus (B) the relevant Eurodollar
Rate, or (ii) so long as the Leverage Ratio is 3.5 to 1.0 or greater,
the sum of (A) 3.25% plus (B) the relevant Eurodollar Rate, such
interest in each case to be computed on the basis of a 360-day year and
paid for the actual number of days elapsed, in each case subject to the
provisions of clause (c) of this Section 2.6. For purposes of this
subsection 2.6(b), the Leverage Ratio shall be calculated in the same
manner (and adjustments to the interest rate of Term Loans that are
Eurodollar Loans shall be made in the same manner as are adjustments to
Applicable Margin) as specified in subsection (a) of the definition of
"Applicable Margin."
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9. Section 2.12 of the Credit Agreement is hereby amended by amending and
restating, in its entirety, paragraph (B) of clause (ii) of subsection (a)
thereof to read as follows:
(B) Upon the consummation of any Asset Disposition of any
Restaurant or Restaurants occurring on or after November 2, 1999 and,
with respect to subparagraphs (I) and (II) hereof, prior to the
occurrence of the Paydown Condition, within ten (10) days after the
Borrower or any of its Subsidiaries receives any Net Sale Proceeds with
respect to any such Asset Disposition, the Borrower shall prepay the
outstanding Loans (I) in an amount equal to 100% of the first
$100,000,000 of such Net Sale Proceeds of Restaurants, (II) in an
amount equal to 75% of the next $100,000,000 of such Net Sale Proceeds
of Restaurants, and (III) notwithstanding any other provision of this
paragraph 2.12(a)(ii)(B), in an amount equal to 100% of the net
proceeds, without duplication, from sales of Carl's Jr. and Taco Bueno
Restaurants, each in accordance with the provisions of Section 2.12.
10. Section 7.1 of the Credit Agreement is hereby amended by amending and
restating, in its entirety, the table contained in subsection (a) thereof to
read as follows:
Period Ratio
------ ------------
Second A&R Closing Date through November 1, 1999 3.60 to 1.00
November 2, 1999 through January 31, 2000 4.00 to 1.00
February 1, 2000 through May 22, 2000 5.00 to 1.00
May 23, 2000 through August 14, 2000 4.80 to 1.00
August 15, 2000 through November 6, 2000 4.60 to 1.00
November 7, 2000 through January 29, 2001 4.00 to 1.00
Each fiscal quarter of the Borrower thereafter 2.50 to 1.00
11. Section 7.1 of the Credit Agreement is hereby amended by amending and
restating, in its entirety, the table contained in subsection (b) thereof to
read as follows:
Period Ratio
------ ------------
Second A&R Closing Date through November 1, 1999 3.00 to 1.00
November 2, 1999 through January 31, 2000 3.00 to 1.00
February 1, 2000 through May 22, 2000 2.50 to 1.00
May 23, 2000 through August 14, 2000 2.50 to 1.00
August 15, 2000 through November 6, 2000 2.50 to 1.00
November 7, 2000 through January 29, 2001 2.50 to 1.00
Each fiscal quarter of the Borrower thereafter 5.00 to 1.00
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12. Section 7.1 of the Credit Agreement is hereby amended by amending and
restating, in its entirety, the table contained in subsection (d) thereof and
the proviso immediately following to read as follows:
Period Amount
------ ------------
Second A&R Closing Date through November 1, 1999 $200,000,000
November 2, 1999 through January 31, 2000 $175,000,000
February 1, 2000 through May 22, 2000 $155,000,000
May 23, 2000 through August 14, 2000 $160,000,000
August 15, 2000 through November 6, 2000 $165,000,000
November 7, 2000 through January 29, 2001 $180,000,000
Each fiscal quarter of the Borrower thereafter $260,000,000
provided, however, that the amount set forth opposite such period shall
be reduced by the EBITDA Adjustments as of the date of determination
attributable to those Restaurants sold (excluding those sold during the
period from November 2, 1999 through January 31, 2000) pursuant to
which the Net Sale Proceeds from such sales have been applied to
permanently reduce the Commitments of the Lenders on or before the 45th
calendar day following the end of the fiscal quarter in which such
Restaurants were sold.
13. Section 7.1 of the Credit Agreement is hereby amended by amending and
restating, in its entirety, the table contained in subsection (e) thereof to
read as follows:
Period Ratio
------ ------------
Second A&R Closing Date through November 1, 1999 5.00 to 1.00
November 2, 1999 through January 31, 2000 5.80 to 1.00
Feb. 1, 2000 through May 22, 2000 5.80 to 1.00
May 23, 2000 through August 14, 2000 5.80 to 1.00
August 15, 2000 through November 6, 2000 5.70 to 1.00
November 7, 2000 through January 29, 2001 5.20 to 1.00
Each fiscal year of the Borrower thereafter 3.75 to 1.00
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14. Section 7.1 of the Credit Agreement is hereby amended by amending and
restating, in its entirety, subsection (f) thereof to read as follows:
(f) Capital Expenditures. The Borrower shall not make or
incur, and shall not permit any of its Subsidiaries to make or incur,
any Capital Expenditures, except Capital Expenditures of the Borrower
and its Subsidiaries in an aggregate amount not in excess of
$120,000,000 in each fiscal year of the Borrower; and provided that if
the aggregate amount of Capital Expenditures made or incurred during
such fiscal year of the Borrower is less than the amount (as reduced,
if applicable) permitted to be made or incurred pursuant to this clause
(f), then the maximum amount for the following fiscal year of the
Borrower (but not any subsequent fiscal year of the Borrower) shall be
increased by the amount of such difference. The Borrower shall not
enter into and shall not permit any of its Subsidiaries to enter into
any commitments to build or develop new Restaurants; provided, that the
Borrower may, and may permit its Subsidiaries to, complete any new
Restaurant that was under development on or before April 26, 2000, and
for which the Borrower or any of its Subsidiaries had either commenced
construction or had entered into commitments to build such Restaurant,
so long as the aggregate Capital Expenditures incurred for new
Restaurants during the periods in each case commencing on January 31,
2000 shall not exceed in the aggregate (i) $13 million cumulatively
through May 22, 2000, (ii) $23 million cumulatively through August 14,
2000, (iii) $30 million cumulatively through November 6, 2000, and (iv)
$33 million cumulatively through January 29, 2001. Notwithstanding any
other provision of this subsection 7.1(f), if at any time the Unused
Portion of the Revolving Loans shall be less than $20 million, and
until such time as such Unused Portion has been restored to at least
$20 million, the Borrower shall not make or incur and shall not permit
any of its Subsidiaries to make or incur any Capital Expenditures
(other than Capital Expenditures otherwise permitted by this subsection
7.1(f) 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 $20
million).
15. Section 7.7 of the Credit Agreement is hereby amended by amending and
restating, in its entirety, clause (ii) of subsection (b) thereof to read as
follows:
(ii) declare and pay cash dividends to its stockholders
during any fiscal year of the Borrower if after giving effect
thereto the aggregate amount of such dividends paid or made
during such fiscal year would be less than the amount of (A) 30%
of Consolidated Net Income of the Borrower for each fiscal year
of the Borrower (commencing with the fiscal year ending January
26,
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1998) up to and including the fiscal year immediately preceding
the year in which such dividend is paid or made, less (B) the
aggregate amount of any regularly scheduled payment paid
pursuant to Section 7.10(d) during such fiscal year (excluding,
however, the aggregate amount of payments made in connection
with Permitted Redemptions), less (C) the aggregate amount of
all such dividends paid and made by the Borrower after January
26, 1998 through and including the end of such immediately
preceding fiscal year, less (D) the aggregate outstanding
principal balance of all Employee Stock Loans then outstanding;
provided, however, for purposes of this clause (ii), the
Borrower shall not increase the rate of cash dividends paid in
respect of its shares above the rate authorized to be paid as of
the last dividend distribution date prior to April 26, 2000, or
in any event pay cash dividends in a total aggregate amount
greater than $4.5 million in any fiscal year; and
16. Section 7.10 of the Credit Agreement is hereby amended by replacing the ";
or" as it appears at the end of subsection (a) thereof with the following:
; 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); or
17. Section 7.10 of the Credit Agreement is hereby amended by amending and
restating, in its entirety, subsection (d) thereof to read as follows:
(d) make or offer to make any sinking fund payment, payment,
prepayment, redemption, defeasance, purchase or acquisition for value
(including, without limitation, by way of depositing with the trustee
with respect thereto money or securities before due for the purpose of
paying when due) or otherwise segregate funds with respect to the
Subordinated Notes (other than (i) regularly scheduled semi-annual
interest payments required to be made in cash and (ii) conversions of
the Convertible Subordinated Notes into common stock of the Borrower).
18. The Borrower represents and warrants to the Agent and the Lenders, as of the
date hereof, after giving effect to this Amendment:
(a) no Default or Event of Default has occurred and is
continuing; and
(b) all of the representations and warranties of the Borrower
and each other Loan Party contained in the Transaction Documents are
true and correct.
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19. The effectiveness of this Amendment is subject to the satisfaction of the
following conditions precedent:
(a) This Amendment shall have been duly executed and delivered
by the Borrower and the Required Lenders.
(b) The Agent shall have received a certificate of a duly
authorized officer of the Borrower certifying as to matters set forth
in Section 18 of this Amendment.
This Amendment shall immediately become effective as of January 31, 2000 upon
the receipt by the Agent of duly executed counterparts of each of the foregoing.
20. The amendments set forth herein are effective solely for the purposes set
forth herein and shall be limited precisely as written, and shall not be deemed
to (a) be a consent to any amendment, waiver or modification of any other term
or condition of any Transaction Document or of any other instrument or agreement
referred to therein, except as set forth herein, or (b) prejudice any right or
remedy that the Agent or any Lender may now have or may have in the future under
or in connection with the Credit Agreement or any other instrument or agreement
referred to therein. Each reference in the Credit Agreement to "this Agreement,"
"herein," "hereof" and words of like import and each reference in the other
Transaction Documents to the "Credit Agreement" shall mean the Credit Agreement
as amended hereby. This Amendment shall be construed in connection with and as
part of the Credit Agreement and all terms, conditions, representations,
warranties, covenants and agreements set forth in the Credit Agreement and each
other instrument or agreement referred to therein, except as herein amended, are
hereby ratified and confirmed and shall remain in full force and effect.
21. The Borrower agrees to pay all costs, fees and expenses in connection with
the preparation, execution and delivery of this Amendment (including the
reasonable fees and expenses of counsel to the Agent and the Lenders), including
an amendment fee of 0.25% on its existing Commitment to each Lender who approves
this Amendment.
22. Each Lender by its signature hereto hereby authorizes the Facility
Conversion. If all of the Lenders acknowledge the Facility Conversion by their
signatures hereto, the Facility Conversion Date will occur on and as of the date
hereof.
23. This Amendment may be executed in any number of counterparts, each such
counterpart constituting an original and all of which when taken together shall
constitute one and the same instrument.
24. Any provision contained in this Amendment that is held to be inoperative,
unenforceable or invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable or invalid without affecting the operation,
enforceability or validity of the remaining provisions of this Amendment in that
jurisdiction or the operation, enforceability or validity of such provision in
any other jurisdiction.
25. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first above written.
CKE RESTAURANTS, INC.
By: /s/ Carl Strunk
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Print Name: Carl Strunk
Title: Executive Vice President, Chief
Financial Officer
PARIBAS, as Agent and as a Lender
By: /s/ Clark King
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Print Name: Clark C. King III
Title: Managing Director
By: /s/ Michael Colias
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Print Name: Michael C. Colias
Title: Assistant Vice President
ARAB BANKING CORPORATION
By: /s/ Sheldon Tilney
--------------------------------------
Print Name: Sheldon Tilney
Title: Deputy General Manager
By:
--------------------------------------
Print Name:
------------------------------
Title:
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BANK AUSTRIA
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ Jack Bertges
--------------------------------------
Print Name: Jack R. Bertges
Title: Executive Vice President
By: /s/ James McCann
--------------------------------------
Print Name: James F. McCann
Title: Vice President
BANK LEUMI USA
By: /s/ Joung Hee Hong
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Print Name: Joung Hee Hong
Title: Vice President
BANK UNITED
By: /s/ Phil Green
--------------------------------------
Print Name: Phil Green
Title: Director
FLEET NATIONAL BANK
(f/k/a BANKBOSTON, N.A.)
By: /s/ J. Nicholas Cole
--------------------------------------
Print Name: J. Nicholas Cole
Title: Director
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BANQUE NATIONALE DE PARIS
By: /s/ David W. Low
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Print Name: David W. Low
Title: Vice President
By: /s/ Jeffrey Kajisa
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Print Name: Jeffrey S. Kajisa
Title: Vice President
CALIFORNIA BANK & TRUST
(f/k/a Sumitomo Bank of California)
By: /s/ Robert S. Kahn
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Print Name: Robert S. Kahn
Title: Vice President & Relationship
Manager
CENTURA BANK
By:
Print Name:
Title:
CHANG HWA COMMERCIAL BANK, LTD.,
NEW YORK BRANCH
By: /s/ Wan-Tu Yeh
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Print Name: Wan-Tu Yeh
Title: Vice President & General Manager
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CREDIT INDUSTRIEL ET COMMERCIAL
(f/k/a COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE)
By: /s/ Brian O'Leary
--------------------------------------
Print Name: Brian O'Leary
Title: Vice President
By: /s/ Sean Mounier
-------------------------------------
Print Name: Sean Mounier
Title: First Vice President
AMSOUTH BANK
successor in interest by merger to
FIRST AMERICAN NATIONAL BANK
By: /s/ Seth Butler
-------------------------------------
Print Name: Seth Butler
Title: Corporate Bank Officer
FIRST BANK & TRUST
By: /s/ K.P. Balkrishna
-------------------------------------
Print Name: K.P. "Bala" Balkrishna
Title: Executive Vice President
FIRST UNION NATIONAL BANK
By: /s/ Jeffrey R. Stottler
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Print Name: Jeffrey R. Stottler
Title: Vice President
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MANUFACTURERS BANK
By: /s/ Eric Shapiro
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Print Name: Eric Shapiro
Title: Vice President
NATIONAL BANK OF KUWAIT
By: /s/ Robert McNeill
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Print Name: Robert J. McNeill
Title: Executive Manager
By: /s/ Jeffrey J. Ganter
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Print Name: Jeffrey J. Ganter
Title: Senior Credit Officer
THE SANWA BANK, LIMITED
By: /s/ Toshiko Boyd
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Print Name: Toshiko Boyd
Title: Vice President
SUNTRUST BANK (f/k/a/ SUNTRUST BANK,
NASHVILLE, N.A.)
By: /s/ William D. Priester
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Print Name: William D. Priester
Title: Assistant Vice President
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UMB BANK, N.A.
By: /s/ David Proffitt
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Print Name: David A. Proffitt
Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Janet Jordan
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Print Name: Janet E. Jordan
Title: Vice President
WELLS FARGO BANK
By: /s/ Jessica O. Euzebio
Print Name: Jessica Euzebio
Title: Vice President
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