Exhibit 10.4
 
MANAGEMENT SERVICES AGREEMENT
 
This MANAGEMENT SERVICES AGREEMENT, is dated as of July 12, 2010 (this
“Agreement”), among CKE Restaurants, Inc., a Delaware corporation (“CKE”),
Columbia Lake Acquisition Holdings, Inc., a Delaware corporation (“Holdings”,
and together with CKE, the “Companies”), and Apollo Management VII, L.P., a
Delaware limited partnership (together with its affiliates, “Apollo” or the
“Manager”).
 
WHEREAS, Holdings has on the date hereof consummated the acquisition of CKE (the
“Acquisition”) pursuant to that certain Agreement and Plan of Merger, dated as
of April 18, 2010 (the “Merger Agreement”) among CKE, Holdings and Columbia Lake
Acquisition Corp., a Delaware corporation;
 
WHEREAS, the Companies have obtained and desire to continue to obtain from the
Manager, and the Manager has provided and desires to continue to provide to the
Companies, certain investment banking, management, consulting and financial
planning services on an ongoing basis and certain financial advisory and
investment banking services in connection with major financial transactions that
may be undertaken by the Companies or their subsidiaries from time to time in
the future; and
 
WHEREAS, this Agreement has been approved by the each of the Companies’ board of
directors.
 
NOW, THEREFORE, in consideration of their mutual promises made herein, and for
other good and valuable consideration, receipt of which is hereby acknowledged
by each party, the parties, intending to be legally bound, hereby agree as
follows:
 
1. Retention of Services.
 
1.1 General Services.  Subject to the terms and conditions hereof, the Manager
hereby agrees, at the Companies’ request, to provide investment banking,
management, consulting and financial planning services to the Companies on an
ongoing basis in connection with the operation and growth of the Companies and
their subsidiaries in the ordinary course of their businesses during the term of
this Agreement (the “General Services”).  The scope of the General Services to
be provided by the Manager shall be such as reasonably requested by the
Companies and agreed to by the Manager from time to time.
 
1.2 Major Transaction Services.  Subject to the terms and conditions hereof, the
Manager hereby agrees, at the Companies’ request, to provide financial advisory
and investment banking services to the Companies in connection with major
financial transactions that may be undertaken by the Companies or their
subsidiaries from time to time in the future (the “Major Transaction
Services”).  The scope of the Major Transaction Services shall be such as
reasonably requested by the Companies and agreed to by the Manager from time to
time.
 
2. Compensation.
 
2.1 General Services Fee.  In consideration of the General Services, the
Companies shall pay the Manager an annual fee payable in cash (the “Annual Fee”)
equal to $2,500,000; provided, however, that the Manager, in its sole discretion
and at any time upon written notice to the Companies, may increase such fee up
to an amount equal to two percent (2%) of the annual EBITDA of the Borrower and
the Subsidiaries on a consolidated basis.  The Annual Fee shall be payable by
the Companies in equal monthly installments in advance, on the first business
day of each month commencing on the first such day following the date
hereof.  For purposes of this Section 2.1, “EBITDA”, “Borrower” and
“Subsidiaries” shall have the meaning ascribed to such terms in that certain
Credit Agreement, dated as of the date hereof, by and among Holdings, Columbia
Lake Acquisition Corp., Morgan Stanley Senior Funding, Inc. and the other
parties listed therein.
 
2.2 Major Transaction Services Fee.  In consideration of any Major Transaction
Services provided by the Manager from time to time, the Companies shall pay the
Manager normal and customary fees for services of like kind as agreed by the
Manager and the Companies, taking into consideration all relevant factors,
including but not limited to, the complexity of the subject transaction, the
time devoted to providing such services and the value of the Manager’s financial
advisory and/or investment banking expertise and relationships within the
business and financial community.
 
2.3 Transaction Fee.  In connection with the services provided to the Companies
in connection with the Acquisition and the transactions contemplated by, and
pursuant to the terms of, the Merger Agreement, the Companies agree to pay to
the Manager a transaction fee in the aggregate amount of $10,000,000 (the
“Transaction Fee”), plus reimbursement to the Manager of out of pocket expenses
incurred by the Manager in connection with the services provided in connection
with the Acquisition and the transactions contemplated by, and pursuant to the
terms of, the Merger Agreement.  The transaction fee and all out of pocket
expenses to be paid pursuant to this Section 2.3 shall be earned upon the
Closing (as such term is defined in the Merger Agreement) and shall be payable
in cash on the date of the Closing.
 
2.4 Expenses.  In addition to the fees to be paid to the Manager under Sections
2.1 and 2.2 hereof, the Companies shall pay to, or on behalf of, the Manager,
promptly as billed, an amount equal to all out-of-pocket expenses incurred by
the Manager in connection with the services requested by the Companies to be
provided by the Manager pursuant to the terms of this Agreement.  Such expenses
shall include, among other things, fees and disbursements of counsel, travel
expenses, word processing charges, messenger and duplicating services, telephone
and facsimile expenses and other customary expenditures.
 
3. Term.
 
3.1 Termination.  This Agreement shall terminate on the tenth anniversary of
this Agreement; provided, that in connection with or at anytime following a
Qualified IPO (as such term is defined in that certain Limited Partnership
Agreement of Apollo CKE Holdings, L.P., dated as of the date hereof, and as may
be amended from time to time), the Companies shall, acting at the direction of a
majority of the disinterested directors thereof, have the option of terminating
this Agreement upon payment to the Manager of the net present value of any
Annual Fees, calculated at a 10% discount rate, that would otherwise be payable
to the Manager absent such termination for the remainder of the term.
 
3.2 Survival of Certain Obligations.  Notwithstanding any other provision
hereof, the obligations of the Companies to pay amounts due with respect to
periods prior to the termination hereof pursuant to Section 2 hereof and the
provisions of Sections 4 and 5 hereof shall survive any termination of this
Agreement.
 
4. Decisions and Authority of the Manager.
 
4.1 Limitation on the Manager’s Liability.  The Companies reserve the right to
make all decisions with regard to any matter upon which the Manager has rendered
advice and consultation, and there shall be no liability of the Manager for any
such advice accepted by the Companies pursuant to the provisions of this
Agreement.
 
4.2 Independent Contractor.  The Manager shall act solely as an independent
contractor and shall have complete charge of its respective personnel engaged in
the performance of the services under this Agreement.  As an independent
contractor, the Manager shall have authority only to act as an advisor to the
Companies and shall have no authority to enter into any agreement or to make any
representation, commitment or warranty binding upon the Companies or to obtain
or incur any right, obligation or liability on behalf of the Companies.  Nothing
contained in this Agreement shall result in the Manager or any of its partners
or members or any of their affiliates, investment managers, investment advisors
or partners being a partner of or joint venturer with the Companies.
 
5. Indemnification.
 
5.1 Indemnification/Reimbursement of Expenses.  The Companies shall
(i) indemnify the Manager and each of its partners and members and their
respective affiliates, investment managers, investment advisors and their
respective affiliates, and the partners, directors, officers, employees, agents
and controlling persons of the Manager and its partners and its affiliates
(collectively, the “Indemnified Parties”), to the fullest extent permitted by
law, from and against any and all losses, claims, damages and liabilities, joint
or several, to which any Indemnified Party may become subject, directly or
indirectly caused by, related to or arising out of the services or any other
advice or services contemplated by this Agreement or the engagement of the
Manager pursuant to, or the performance by the Manager of the services
contemplated by, this Agreement, and (ii) promptly reimburse each Indemnified
Party for all costs and expenses (including reasonable and documented attorneys'
fees and expenses), as incurred, in connection with the investigation of,
preparation for or defense of any pending or threatened claim or any action or
proceeding arising therefrom, whether or not such Indemnified Party is a party
and whether or not such claim, action or proceeding is initiated or brought by
or on behalf of the Companies and whether or not resulting in any liability.
 
5.2 Limited Liability.  The Companies shall not be liable under the
indemnification contained in Section 5.1 hereof with respect to the Manager and
its Indemnified Parties to the extent that such loss, claim, damage, liability,
cost or expense is found in a final non-appealable judgment by a court of
competent jurisdiction to have resulted directly from the Manager’s willful
misconduct or gross negligence.  The Companies further agree that no Indemnified
Party shall have any liability (whether direct or indirect, in contract, tort or
otherwise) to the Companies, holders of their securities or their creditors
related to or arising out of the engagement of the Manager pursuant to, or the
performance by the Manager of the services contemplated by, this Agreement.
 
6. Miscellaneous.
 
6.1 Assignment.  None of the parties hereto shall assign this Agreement or the
rights and obligations hereunder, in whole or in part, without the prior written
consent of Apollo; provided, however, that, without obtaining such consent,
Apollo may assign this Agreement or its rights and obligations hereunder to
(i) any of its partners or members or their affiliates or any person who
controls Apollo; or (ii) any investment fund, investment account or investment
entity whose investment manager, investment advisor or partner, or any principal
or beneficial owner of any of the foregoing, is any person identified in clause
(i) above.  Subject to the foregoing, this Agreement will be binding upon and
inure solely to the benefit of the parties hereto and their respective
successors and assigns, and no other person shall acquire or have any right
hereunder or by virtue hereof.
 
6.2 Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware as applied to contracts made
and performed within the State of Delaware without regard to principles of
conflict of laws.
 
6.3 Joint and Several Obligations.  The obligations of the Companies under this
Agreement are the joint and several obligations of Holdings and CKE.
 
6.4 Severability.  If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction.  It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any such terms,
provisions, covenants and restrictions which may be hereafter declared invalid,
illegal, void or unenforceable.
 
6.5 Entire Agreement.  This Agreement contains the entire agreement between the
parties with respect to the subject matter of this Agreement and supersedes all
written or verbal representations, warranties, commitments and other
understandings with respect to the subject matter of this Agreement prior to the
date of this Agreement.
 
6.6 Further Assurances.  Each party hereto agrees to use all reasonable efforts
to obtain all consents and approvals and to do all other things necessary to
consummate the transactions contemplated by this Agreement.  The parties agree
to take such further action and to deliver or cause to be delivered any
additional agreements or instruments as any of them may reasonably request for
the purpose of carrying out this Agreement and the agreements and transactions
contemplated hereby.
 
6.7 Attorneys’ Fees.  In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by a court of competent
jurisdiction, shall be entitled to recover reasonable and documented attorneys’
fees in addition to any other available remedy.
 
6.8 Headings.  The headings in this Agreement are for convenience and reference
only and shall not limit or otherwise affect the meaning hereof.
 
6.9 Amendment and Waiver.  This Agreement may be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may be given, provided that the same are in writing and signed by each of the
parties hereto.
 
6.10 Counterparts.  This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
 
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first written above.
 
 
 

COLUMBIA LAKE ACQUISITION HOLDINGS, INC.
 

By:
/s/ Peter Copses      

 
Name:  Peter Copses

 
Title:    President

 
 

 
CKE RESTAURANTS, INC.
 
 
By:
/s/ Theodore Abajian   

 
Name:  Theodore Abajian

 
Title:    Executive Vice President

 
 
 
APOLLO MANAGEMENT VII, L.P.
 
 
By:
 AIF VII Management, LLC, its General Partner

 
 

 
 
By:
/s/ Peter Copses      

 
Name: Peter Copses

 
Title:   Vice President