EX-10.86 FOURTH AMENDMENT TO CREDIT FACILITY

EX-10.86 15 g87807exv10w86.txt EX-10.86 FOURTH AMENDMENT TO CREDIT FACILITY EXHIBIT 10.86 AFC ENTERPRISES, INC. FOURTH AMENDMENT TO CREDIT AGREEMENT This FOURTH AMENDMENT, dated as of August 22, 2003 (this "AMENDMENT"), to the Credit Agreement, dated as of May 23, 2002, (the "CREDIT AGREEMENT") among AFC ENTERPRISES, INC., a Minnesota corporation (the "BORROWER"), the LENDERS party thereto, JPMORGAN CHASE BANK ("JPMCB"), as Administrative Agent, J.P.MORGAN SECURITIES INC., as Joint Bookrunner and Co-Lead Arranger, CREDIT SUISSE FIRST BOSTON as Joint Bookrunner and Co-Lead Arranger, CREDIT LYONNAIS NEW YORK BRANCH as Co-Documentation Agent, FLEET NATIONAL BANK, INC., as Co-Documentation Agent and SUNTRUST BANK as Co-Documentation Agent, as amended by the First Amendment to the Credit Agreement, dated March 31, 2003, and the Second Amendment to the Credit Agreement, dated May 30, 2003, and the Third Amendment to the Credit Agreement, dated July 14, 2003, each of the First Amendment, the Second Amendment and the Third Amendment being among the Borrower, JPMorgan Chase Bank and the Lenders party thereto, each in their stated capacities. Capitalized terms used herein not otherwise defined herein or otherwise amended hereby shall have the meanings ascribed thereto in the Credit Agreement. RECITALS: WHEREAS, Borrower and the Lenders have agreed to amend the Credit Agreement to revise the provision relating to delivery of financial reports and other matters, in each case subject to the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows: SECTION 1. AMENDMENTS TO CREDIT AGREEMENT 1.1 AMENDMENTS TO SECTION 1: DEFINITIONS A. Section 1.01 of the Credit Agreement is hereby amended by adding the following definitions: "Fourth Amendment" means the amendment to the Credit Agreement dated as of August 22, 2003. 1 "Fourth Amendment Effective Date" means the date on or prior to August 22, 2003 upon which all the conditions precedent set forth in Section 2 of the Fourth Amendment are satisfied. B. The definition of "Outside Reporting Date" is deleted and replaced in its entirety by the following: "Outside Reporting Date" means (i) with respect to the delivery of the financial information and statements for fiscal year 2002, October 31, 2003, (ii) with respect to the delivery of the financial information and statements for the first fiscal quarter 2003, second fiscal quarter 2003 and third fiscal quarter 2003, December 1, 2003. 1.2 AMENDMENTS TO SECTION 2: THE CREDITS A. Section 2.10(f) is hereby amended by inserting the following sentence at the end thereof: "Notwithstanding anything to the contrary set forth herein, on the Fourth Amendment Effective Date the Borrower shall deposit $32,000,000 (the "Escrow Amount") into the Breakage Cost Collateral Account. The Escrow Amount shall be held in the Breakage Cost Collateral Account and shall be released to the Borrower upon delivery of all financial information and statements specified in the definition of Outside Reporting Date by the dates provided for therein, so long as (i) such financial information and statements do not, to the satisfaction of the Administrative Agent, disclose or provide evidence of any Default and (ii) no other Default shall exist and be continuing. In the event that the Borrower does not satisfy each of the above mentioned escrow conditions by the dates required, the Borrower must pay 100% of the net cash proceeds of the SCC Disposition (the "Prepayment Amount") to the prepayment of Loans in the order specified in paragraph (e) of this Section. The Administrative Agent shall apply from the Escrow Account an amount which, when added to the net cash proceeds of the SCC Disposition already applied to the prepayment of Loans pursuant to the Third Amendment (the "Applied Proceeds"), will equal the Prepayment Amount. To the extent that the Escrow Amount when added to the Applied Proceeds is (y) in excess of the Prepayment Amount, the Administrative Agent shall promptly release the balance thereof to the Borrower and (z) less than the Prepayment Amount, the Borrower shall promptly make an additional prepayment of Loans to the Administrative Agent in an amount equal to such deficiency so that in either event, 100% of the Prepayment Amount is applied to the prepayment of Loans." B. Section 2.13 is hereby amended by adding the following subsection after subsection 2.13(e): "(f) Notwithstanding the provisions of Section 2.13(a) and Section 2.13(b) set forth above or anything provided for in the definition of "Applicable Rate", from the Fourth Amendment Effective Date until the later of the provision of the financial information and statements required pursuant to Section 5.01(b), with respect to each of the second fiscal quarter 2003, third fiscal quarter 2003 and fourth fiscal quarter 2003, and the occurrence of an improvement in the Borrower's credit ratings issued by S&P and Moody's to at least BB- and 2 Ba3, the Applicable Rate shall be (i) with respect to Revolving Loans and Tranche A Term Loans, 1.75% for ABR Loans and 2.75% for Eurodollar Loans and (ii) with respect to Tranche B Term Loans, 2.25% for ABR Loans and 3.00% for Eurodollar Loans; thereafter, the Applicable Rate shall be calculated as provided for in this definition." 1.3 AMENDMENTS TO SECTION 5: AFFIRMATIVE COVENANTS Section 5.01(b) is hereby amended by inserting the following sentence at the end thereof: "(provided, however, that with respect to first fiscal quarter 2003 and second fiscal quarter 2003, such financial information and statements shall be furnished on or before the Outside Reporting Date)" 1.4 AMENDMENTS TO SECTION 6: NEGATIVE COVENANTS Section 6.06(a) is hereby amended by deleting clause (y) in its entirety and replacing it with the following: "(y) since the Third Amendment Effective Date there shall have been no adverse change that remains in effect in the Borrower's credit ratings issued by S&P and Moody's" SECTION 2. CONDITIONS PRECEDENT TO EFFECTIVENESS 2.1 The effectiveness of the amendments set forth at Section 1 hereof are subject to the satisfaction, or waiver, of the following conditions on or before the date hereof: A. The Borrower, the Required Lenders and the Subsidiary Loan Parties shall have indicated their consent to this Amendment by the execution and delivery of the applicable signature pages to the Administrative Agent. B. As of the Fourth Amendment Effective Date, after giving effect to this Amendment, the representations and warranties contained herein and in the other Loan Documents shall be true, correct and complete in all material respects on and as of the Fourth Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true, correct and complete in all material respects on and as of such earlier date. C. As of the Fourth Amendment Effective Date, after giving effect to this Amendment, no event shall have occurred and be continuing that would constitute an Event of Default or a Default. D. The Administrative Agent shall have received a certificate signed by a Financial Officer of the Borrower and dated the Fourth Amendment Effective Date certifying that, (y) to the best knowledge of the Borrower, it is in compliance with Sections 6.10, 6.12, 6.13, 6.14 and 6.15 of the Credit Agreement and that at no time has it been in default of any such 3 Section based upon the financial information available to said Financial Officer on the Fourth Amendment Effective Date and (z) no event shall have occurred and be continuing that would constitute an Event of Default or a Default (other than as contemplated by the foregoing clause (y) with respect to Sections 6.10, 6.12, 6.13, 6.14 and 6.15 of the Credit Agreement). E. The Administrative Agent shall have received a favorable written opinion of (i) Cohen Pollock Merlin Axelrod & Small, P.C. (Delaware and Georgia), counsel for the Loan Parties, (ii) Dorsey & Whitney LLP (Minnesota), (iii) Dorsey & Whitney LLP (Washington), (iv) Bingham McCutchen (New York) and (v) Carrington Coleman Sloman & Blumenthal L.L.P. (Texas); each in form and substance satisfactory to the Administrative Agent. F. As of the Fourth Amendment Effective Date, the Borrower shall have paid all fees and other amounts due and payable, including, to the extent invoiced, reimbursement or other payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower under any Loan Document. G. Administrative Agent shall have received, for distribution to all Lenders executing this Amendment by 12:00 noon Eastern time on Thursday, August 21, 2003 an amendment fee equal to 0.20% of such Lenders' outstanding Loans and Commitments immediately prior to the Fourth Amendment Effective Date. H. On the Fourth Amendment Effective Date, the Borrower shall have deposited the Escrow Amount into the Breakage Cost Collateral Account in accordance with Section 2.10(f) of the Credit Agreement. SECTION 3. REPRESENTATIONS AND WARRANTIES In order to induce Required Lenders to enter into this Amendment, each applicable Loan Party represents and warrants to each Lender, as of the date hereof and upon giving effect to this Amendment, that the representations and warranties contained in each of the Loan Documents are true, correct and complete in all material respects on and as of the date hereof to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true, correct and complete in all material respects on and as of such earlier date. SECTION 4. ACKNOWLEDGMENT AND CONSENT 4.1 Each of Subsidiary Loan Parties of Borrower has (i) guarantied the Obligations and (ii) created Liens in favor of Lenders on certain Collateral to secure such obligations. 4.2 Each Subsidiary Loan Party hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement and this Amendment and consents to the amendment of the Credit Agreement effected pursuant to this Amendment. Each Subsidiary Loan Party hereby confirms that each Security Document to which it is a party or otherwise 4 bound and all Collateral encumbered thereby will continue to guarantee or secure, as the case may be, to the fullest extent possible in accordance with the Security Documents, the payment and performance of all Obligations under the Credit Agreement and the Obligations (as such term is defined in the Security Documents) under the Security Documents, as the case may be, including without limitation the payment and performance of all such Obligations under the Credit Agreement and the Obligations under the Security Documents in respect of the Obligations of Borrower now or hereafter existing under or in respect of the Credit Agreement, as amended hereby, and grants to the Collateral Agent a continuing lien on and security interest in and to all Collateral as collateral security for the prompt payment and performance in full when due of the Obligations under the Credit Agreement and the Obligations under the Security Documents (whether at stated maturity, by acceleration or otherwise). 4.3 Each Subsidiary Loan Party acknowledges and agrees that any of the Security Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment. Each Subsidiary Loan Party represents and warrants that all representations and warranties contained in the Credit Agreement, as amended hereby, and the Security Documents to which it is a party or otherwise bound are true, correct and complete in all material respects on and as of the Fourth Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date. 4.4 Each Subsidiary Loan Party acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Subsidiary Loan Party is not required by the terms of the Credit Agreement or any other Loan Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Subsidiary Loan Party to any future amendments to the Credit Agreement. SECTION 5. MISCELLANEOUS 5.1 This Amendment shall be binding upon the parties hereto and the Lenders and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Lenders. No Loan Party's rights or obligations hereunder or any interest therein may be assigned or delegated by any Loan Party without the prior written consent of all Lenders. 5.2 In case any provision in or obligation hereunder 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. 5.3 On and after the Fourth Amendment Effective Date, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import 5 referring to the Credit Agreement, and each reference in the other Loan Documents to the "Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended by this Amendment. 5.4 Except as specifically amended by this Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed. 5.5 The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of any Agent or Lender under, the Credit Agreement or any of the other Loan Documents. 5.6 Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect. 5.7 THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 5.8 This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. As set forth herein, this Amendment shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by Borrower and Administrative Agent of written or telephonic notification of such execution and authorization of delivery thereof. [The remainder of this page is intentionally left blank.] 6 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above. BORROWER: AFC ENTERPRISES, INC., By: /s/ Allan J. Tanenbaum --------------------------------------- Name: Title: Sr. Vice President Legal Affairs, General Counsel & Secretary SUBSIDIARY LOAN PARTIES: AFC PROPERTIES, INC. By: /s/ Allan J. Tanenbaum --------------------------------------- Name: Allan J. Tanenbaum Title: Secretary AFC OF LOUISIANA, LLC By: AFC Enterprises, Inc., Sole Member By: /s/ Allan J. Tanenbaum --------------------------------------- Name: Allan J. Tanenbaum Title: Secretary CHURCH'S TEXAS HOLDINGS, LLC By: AFC Enterprises, Inc., General Partner By: /s/ Allan J. Tanenbaum --------------------------------------- Name: Allan J. Tanenbaum Title: Vice President S-1 AFC HOLDINGS OF TEXAS, LLC By: AFC Enterprises, Inc. By: /s/ Allan J. Tanenbaum -------------------------------------- Name: Allan J. Tanenbaum Title: Vice President CINNABON INTERNATIONAL, INC. By: /s/ Allan J. Tanenbaum -------------------------------------- Name: Allan J. Tanenbaum Title: Senior Vice President/Secretary CT RESTAURANTS, L.P. By: Church's Texas Holdings, LLC By: AFC Enterprises, Inc. By: /s/ Allan J. Tanenbaum -------------------------------------- Name: Allan J. Tanenbaum Title: Vice President CINNABON INC. By: /s/ Allan J. Tanenbaum -------------------------------------- Name: Allan J. Tanenbaum Title: Senior Vice President/Secretary S-2 LENDERS: JPMORGAN CHASE BANK, INDIVIDUALLY AS A LENDER AND AS ADMINISTRATIVE AGENT, By: /s/ H. David Jones --------------------------------------- Name: H. David Jones Title: Vice President [Individual Lender Signature Pages Omitted] S-3