EXHIBIT H
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(KEY TERM AND CONDITIONS OF
STANDARD FRANCHISEE LOANS)
Lender: Banco Popular.
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Borrower: Qualified AFC Franchisees approved by the Bank.
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Loan Amount: Up to $10,000,000.00 to any one borrower, with a minimum loan
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amount of $50,000.00.
Purpose: To purchase Completed Store(s).
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Term: (A) If Completed Store is a leasehold, up to ten (10) years.
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(B) If Completed Store is acquired in fee, up to twenty (20)
years.
Interest Rate: (A) If Completed Store is a leasehold:
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For first year of loan, interest would be based on the
Prime Rate. Thereafter, interest would be based on (1)
Prime Rate + 1.25% or (2) Applicable Treasury Rate + 250
basis points fixed at closing.
(B) If Completed Store is acquired in fee:
For first year of loan, interest would be based on the
Prime Rate. Thereafter, interest would be based on (1)
Prime Rate + 1.75% or (2) Applicable Treasury Rate + 300
basis points fixed at closing.
Fixed interest rate will be available for no more than a
seven (7) year period.
Payment of Principal
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and Interest: Payment of interest only during the first 6 months of the
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Loan. Thereafter, principal and interest would be paid
based on (1) an up to 10-year amortization schedule with
respect to loans secured by a leasehold interest, and (2)
and up to 20-year amortization schedule with respect to
loans secured by a fee interest.
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Collateral: First fee or leasehold mortgage on the Completed Store,
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together with a first priority security interest in all
furniture,fixtures and equipment.
Guarantee: Shareholders/partners/members/principles of borrower to
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provide guarantee of payment and performance.
Equity Contribution: 20% of purchase price.
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Fees: Commitment fee of 50 basis points. Borrower would pay
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Bank's legal fees and cost of title, appraisal
environmental updates and recording charges.
Additional Documentation: (1) AFC franchise agreement.
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(2) Remarketing Agreement satisfactory to AFC,
borrower and Bank.
(3) Lease of Completed Store (if any) with landlord
consent to mortgage/assignment.
(4) Year-end financial statements.
(5) Pro-forma income and cash flow statements.
(6) Personal financial statements and tax returns of
Qualified AFC Franchisee and its
members/partners/ shareholders/principals.
(7) Any other due diligence requirements as
determined by Bank.
Loan Covenants: (1) Maintain cash flow coverage ratio of 1.20:1.
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(A) Cash flow coverage to be defined as cash flow
before debt service divided by debt service; (B)
cash flow before debt service to be defined as
annual store operating income plus depreciation,
amortization and interest expense; and (C) debt
service to be defined as total required annual
principle and interest expense.
(2) Compliance with terms of AFC franchise agreement and
Completed Store lease (if any).
(3) Other customary terms and conditions applicable to
loans of this type, which will be set forth in the
Facility One loan documents.
Miscellaneous: New York law to govern loan documents other than
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mortgage, which shall be governed by law of state
in which Completed Store is located.
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