EXHIBIT 10.87
AFC ENTERPRISES, INC.
FIFTH AMENDMENT
TO CREDIT AGREEMENT
This FIFTH AMENDMENT, dated as of October 30, 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,
X.X.XXXXXX 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, the Third
Amendment to the Credit Agreement, dated July 14, 2003, and the Fourth Amendment
to the Credit Agreement dated August 22, 2003, each of the First Amendment, the
Second Amendment, the Third Amendment and the Fourth 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:
"Fifth Amendment" means the amendment to the Credit Agreement
dated as of October 30, 2003.
"Fifth Amendment Effective Date" means the date on or prior to
October 30, 2003 upon which all the conditions precedent set forth in Section 2
of the Fifth Amendment are satisfied.
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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,
December 15, 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, February 28, 2004.
1.2 AMENDMENTS TO SECTION 2: THE CREDITS
A. Section 2.02 is hereby amended by adding the
following subsection after subsection 2.02(c):
"(d) Notwithstanding any other provision of this Agreement to
the contrary, the Borrower shall not be entitled to have Revolving Credit
Exposure of more than $65,000,000 outstanding until (i) the Borrower has
delivered all the financial information and statements required to be delivered
by Section 5 hereunder in accordance therewith and (ii) it is determined that
the Total Leverage Ratio, as of the date of delivery of the financial
information and statements for the earlier of (y) the third fiscal quarter 2003
or (z) any subsequent fiscal quarter, is not more than 2.0:1.0.
B. Section 2.10(f) is hereby amended by deleting such
section in its entirety and replacing it with the following:
"(f) If on any day on which Loans would otherwise be required
to be prepaid pursuant to this Section 2.10, (each a "Prepayment Date"), the
amount of such required prepayment exceeds the then outstanding aggregate
principal amount of ABR Loans which are of the Class required to be prepaid, and
no Default exists or is continuing, then on such Prepayment Date, at any time
following the establishment of the Breakage Cost Cash Collateral Account
pursuant to Section 8.02, at the election of Borrower, (i) Borrower shall
deposit Dollars into the Breakage Cost Cash Collateral Account in an amount
equal to such excess, and only the outstanding ABR Loans which are of the Class
required to be prepaid shall be required to be prepaid on such Prepayment Date
and (ii) on the last day of each Interest Period after such Prepayment Date in
effect with respect to a Eurodollar Loan which is of the Class required to be
prepaid, the Administrative Agent is irrevocably authorized and directed to
apply funds from the Breakage Cost Cash Collateral Account (and liquidate
investments held in the Breakage Cost Cash Collateral Account as necessary) to
prepay such Eurodollar Loans for which the Interest Period is then ending to the
extent funds are available in the Breakage Cost Cash Collateral Account.
Notwithstanding any prepayment of Loans made in connection with the Fifth
Amendment, the Borrower shall maintain in the Breakage Cost Collateral Account
an amount not more than $2,800,000 (the "Escrow Amount") from the proceeds of
the SCC Disposition. Following the provision of the Borrower's fiscal year 2002
financial information and statements required pursuant to Section 5.01(a)
hereof, the Escrow Amount shall be released from the Breakage Cost Collateral
Account upon the receipt of certification by the Borrower of the purchase price
adjustment in connection with the SCC Disposition. The Borrower shall use the
Escrow Amount only for (i) certified purchase price adjustment payments made in
connection
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with the SCC Disposition and (ii) mandatory prepayments of Loans and reductions
of Commitments to be applied pursuant to Section 2.10(e) hereof. "
1.3 AMENDMENTS TO SECTION 5: AFFIRMATIVE COVENANTS
A. Section 5.01(b) is hereby amended by deleting such
section in its entirety and replacing it with the following:
"(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, its consolidated balance
sheet and related statements of operations, stockholders' equity and cash flows
as of the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes; provided,
however, that with respect to Borrower's first fiscal quarter 2003, second
fiscal quarter 2003 and third fiscal quarter 2003, such financial information
and statements shall be furnished on or before the Outside Reporting Date)."
B. Section 5.01 is hereby amended by adding the
following subsection after subsection 5.01(i):
"(j) Notwithstanding any other provision of this Agreement,
until the Borrower has delivered all the financial information and statements
required to be delivered by Section 5 hereunder in accordance therewith, the
Borrower shall provide to the Lenders, not later than thirty (30) days after the
end of each of the Company's twenty-eight (28) day fiscal periods, a financial
report containing, without limitation, information regarding domestic
comparative store sales, system sales, total revenues, Indebtedness, Cash, Cash
Equivalents, and any other information the Administrative Agent may reasonably
request from time to time, in each case to at least the level of detail as
customarily provided to executive management and/or the board of directors of
the Borrower."
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 Fifth 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 Fifth
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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 Fifth 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 Fifth
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
Section based upon the financial information available to said Financial Officer
on the Fifth 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. As of the Fifth 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.
F. Administrative Agent shall have received,
for distribution to all Lenders executing this Amendment by 12:00 noon Eastern
time on Thursday, October 30, 2003 an amendment fee equal to 0.125% of such
Lenders' outstanding Loans and Commitments immediately prior to the Fifth
Amendment Effective Date.
G. As of the Fifth Amendment Effective Date,
the Borrower shall have instructed the Administrative Agent to release and pay
from the Escrow Amount $29,200,000 to be applied to the prepayment of Loans in
accordance with subsection 2.10(e).
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
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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 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 Fifth 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.
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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 Fifth Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import 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.]
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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/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President Legal
Affairs, General Counsel &
Secretary
SUBSIDIARY LOAN PARTIES: AFC PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Secretary
AFC OF LOUISIANA, LLC
By: AFC Enterprises, Inc., Sole Member
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Secretary
CHURCH'S TEXAS HOLDINGS, LLC
By: AFC Enterprises, Inc., General Partner
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
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AFC HOLDINGS OF TEXAS, LLC
By: AFC Enterprises, Inc.
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
CINNABON INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President/Secretary
CT RESTAURANTS, L.P.
By: Church's Texas Holdings, LLC
By: AFC Enterprises, Inc.
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
CINNABON INC.
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President/Secretary
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LENDERS: JPMORGAN CHASE BANK, INDIVIDUALLY AS A
LENDER AND AS ADMINISTRATIVE AGENT,
By: /s/ H. Xxxxx Xxxxx
---------------------------------------
Name: H. Xxxxx Xxxxx
Title: Vice President
[Individual Lender Signature Pages Omitted]
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