exv10w1






Exhibit 10.1




Execution Copy




 










THIRD AMENDED AND RESTATED CREDIT AGREEMENT




dated as of




August 14, 2009




among




AFC ENTERPRISES, INC.,

as Borrower




THE LENDERS PARTY HERETO




JPMORGAN CHASE BANK, N.A.

as Administrative Agent




J.P. MORGAN SECURITIES INC.,

as Sole Bookrunner and Lead Arranger




and




BANK OF AMERICA, N.A.,

as Documentation Agent




 















 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I Definitions

	 
	 	 	 	 
	SECTION 1.01 Defined Terms

	 	 	2	 
	SECTION 1.02 Classification of Loans and Borrowings

	 	 	23	 
	SECTION 1.03 Terms Generally

	 	 	24	 
	SECTION 1.04 Accounting Terms; GAAP

	 	 	24	 
	 
	 	 	 	 
	ARTICLE II The Credits

	 
	 	 	 	 
	SECTION 2.01 Commitments

	 	 	24	 
	SECTION 2.02 Loans and Borrowings

	 	 	24	 
	SECTION 2.03 Requests for Borrowings

	 	 	25	 
	SECTION 2.04 Swingline Loans

	 	 	26	 
	SECTION 2.05 Letters of Credit

	 	 	27	 
	SECTION 2.06 Funding of Borrowings

	 	 	30	 
	SECTION 2.07 Interest Elections

	 	 	31	 
	SECTION 2.08 Termination and Reduction of Commitments

	 	 	32	 
	SECTION 2.09 Repayment of Loans; Evidence of Debt

	 	 	32	 
	SECTION 2.10 Prepayment of Loans

	 	 	33	 
	SECTION 2.11 Amortization of Term Loans

	 	 	35	 
	SECTION 2.12 Fees

	 	 	36	 
	SECTION 2.13 Interest

	 	 	37	 
	SECTION 2.14 Alternate Rate of Interest

	 	 	38	 
	SECTION 2.15 Increased Costs

	 	 	38	 
	SECTION 2.16 Break Funding Payments

	 	 	39	 
	SECTION 2.17 Taxes

	 	 	40	 
	SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs

	 	 	41	 
	SECTION 2.19 Mitigation Obligations; Replacement of Lenders

	 	 	42	 
	 
	 	 	 	 
	ARTICLE III Representations and Warranties

	 
	 	 	 	 
	SECTION 3.01 Organization; Powers

	 	 	44	 
	SECTION 3.02 Authorization; Enforceability

	 	 	44	 
	SECTION 3.03 Governmental Approvals; No Conflicts

	 	 	44	 
	SECTION 3.04 Financial Condition; No Material Adverse Change

	 	 	44	 
	SECTION 3.05 Properties

	 	 	44	 






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	 	 	Page
	SECTION 3.06 Litigation and Environmental Matters

	 	 	46	 
	SECTION 3.07 Compliance with Laws and Agreements

	 	 	46	 
	SECTION 3.08 Investment and Holding Company Status

	 	 	46	 
	SECTION 3.09 Taxes

	 	 	46	 
	SECTION 3.10 ERISA

	 	 	46	 
	SECTION 3.11 Disclosure

	 	 	46	 
	SECTION 3.12 Licenses, etc

	 	 	47	 
	SECTION 3.13 Labor Matters

	 	 	47	 
	SECTION 3.14 Use of Proceeds; Margin Regulations

	 	 	47	 
	SECTION 3.15 Subsidiaries

	 	 	47	 
	SECTION 3.16 Security Interests

	 	 	47	 
	SECTION 3.17 Insurance

	 	 	47	 
	SECTION 3.18 Solvency

	 	 	47	 
	 
	 	 	 	 
	ARTICLE IV Conditions

	 
	 	 	 	 
	SECTION 4.01 Conditions Precedent to Existing Credit Agreement

	 	 	48	 
	SECTION 4.02 Each Credit Event

	 	 	50	 
	SECTION 4.03 Conditions Precedent to this Agreement

	 	 	50	 
	 
	 	 	 	 
	ARTICLE V Affirmative Covenants

	 
	 	 	 	 
	SECTION 5.01 Financial Statements; Ratings Change and Other Information

	 	 	50	 
	SECTION 5.02 Notices of Material Events

	 	 	52	 
	SECTION 5.03 Existence; Conduct of Business

	 	 	52	 
	SECTION 5.04 Payment of Obligations

	 	 	53	 
	SECTION 5.05 Maintenance of Properties

	 	 	53	 
	SECTION 5.06 Books and Records; Inspection Rights

	 	 	53	 
	SECTION 5.07 Compliance with Laws

	 	 	53	 
	SECTION 5.08 Use of Proceeds and Letters of Credit

	 	 	53	 
	SECTION 5.09 Insurance

	 	 	53	 
	SECTION 5.10 Information Regarding Collateral

	 	 	54	 
	SECTION 5.11 Additional Subsidiaries and Real Property Assets

	 	 	54	 
	SECTION 5.12 Compliance with Contractual Obligations

	 	 	56	 
	SECTION 5.13 Further Assurances

	 	 	56	 
	SECTION 5.14 Casualty and Condemnation

	 	 	56	 
	SECTION 5.15 End of Fiscal Years; Fiscal Quarters

	 	 	56	 
	SECTION 5.16 Collateral Audit

	 	 	56	 






ii









 






	 	 	 	 	 
	 	 	Page
	SECTION 5.17 Amendments to Mortgages and Additional Mortgages

	 	 	57	 
	 
	 	 	 	 
	ARTICLE VI Negative Covenants

	 
	 	 	 	 
	SECTION 6.01 Indebtedness

	 	 	57	 
	SECTION 6.02 Liens

	 	 	59	 
	SECTION 6.03 Fundamental Changes and Asset Sales

	 	 	59	 
	SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions

	 	 	60	 
	SECTION 6.05 Swap Agreements

	 	 	61	 
	SECTION 6.06 Restricted Payments

	 	 	61	 
	SECTION 6.07 Transactions with Affiliates

	 	 	62	 
	SECTION 6.08 Restrictive Agreements

	 	 	62	 
	SECTION 6.09 Sale and Leaseback Transactions

	 	 	62	 
	SECTION 6.10 Capital Expenditure

	 	 	63	 
	SECTION 6.11 Amendment of Material Documents

	 	 	63	 
	SECTION 6.12 Minimum Fixed Charge Coverage Ratio

	 	 	63	 
	SECTION 6.13 Interest Expense Coverage Ratio

	 	 	63	 
	SECTION 6.14 Total Leverage Ratio

	 	 	63	 
	SECTION 6.15 Certain Calculations

	 	 	64	 
	SECTION 6.16 Disposal of Subsidiary Stock

	 	 	65	 
	 
	 	 	 	 
	ARTICLE VII Events of Default

	 
	 	 	 	 
	ARTICLE VIII The Administrative Agent

	 
	 	 	 	 
	ARTICLE IX Miscellaneous

	 
	 	 	 	 
	SECTION 9.01 Notices

	 	 	70	 
	SECTION 9.02 Waivers; Amendments

	 	 	71	 
	SECTION 9.03 Expenses; Indemnity; Damage Waiver

	 	 	72	 
	SECTION 9.04 Successors and Assigns

	 	 	73	 
	SECTION 9.05 Survival

	 	 	76	 
	SECTION 9.06 Counterparts; Integration; Effectiveness

	 	 	76	 
	SECTION 9.07 Severability

	 	 	77	 
	SECTION 9.08 Right of Setoff

	 	 	77	 
	SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process

	 	 	77	 
	SECTION 9.10 WAIVER OF JURY TRIAL

	 	 	77	 
	SECTION 9.11 Headings

	 	 	78	 
	SECTION 9.12 Confidentiality

	 	 	78	 






iii









 






	 	 	 	 	 
	 	 	Page
	SECTION 9.13 Interest Rate Limitation

	 	 	78	 
	SECTION 9.14 USA PATRIOT Act

	 	 	78	 
	SECTION 9.15 Reaffirmation and Grant of Security Interests

	 	 	79	 
	SECTION 9.16 Amendment and Restatement

	 	 	79	 






SCHEDULES:




Schedule 1.1A — Mortgaged Properties

Schedule 1.1B — Certain Specified Asset Sales

Schedule 1.1C — Existing Letters of Credit

Schedule 1.1 D — EBITDA Adjustments

Schedule 2.01 — Commitments

Schedule 3.15 — Subsidiaries

Schedule 3.17 — Insurance

Schedule 4.01(n) — Material Litigation

Schedule 5.15 — Borrower’s Fiscal Calendar

Schedule 6.01 — Existing Indebtedness

Schedule 6.02 — Existing Liens




EXHIBITS:




Exhibit A — Form of Assignment and Assumption

Exhibit B-1 — Form of Opinion of Bingham McCutchen LLP (New York)

Exhibit B-2 — Form of Opinion of Dorsey & Whitney LLP (Minnesota)

Exhibit B-3 — Form of Opinion of Cohen Pollock Merlin Axelrod & Small, P.C. (Georgia)

Exhibit C — Collateral Agreement

Exhibit D — Perfection Certificate

Exhibit E — Form of Agreement of Subordination, Non-Disturbance and Attornment

Exhibit F — Form of Permitted Subordinated Indebtedness Provisions

Exhibit G — Form of Mortgage

Exhibit H — Form of Joinder Agreement

Exhibit I — Form of Revolving Note

Exhibit J — Form of Tranche B Term Note




          THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of August 14, 2009, among AFC
ENTERPRISES, INC., a Minnesota corporation (the “Borrower”), the LENDERS party hereto, and
JPMORGAN CHASE BANK, N.A. (f/k/a JPMORGAN CHASE BANK, “JPMCB”), as Administrative Agent.




          The parties hereto agree as follows:




          WHEREAS, Borrower is a party to the Second Amended and Restated Credit Agreement, dated as of
May 11, 2005 (the “Second Amended and Restated Credit Agreement” and as amended,
supplemented or otherwise modified from time to time prior to the amendment and restatement
provided for herein, the “Existing Credit Agreement”), among Borrower, the lending and
other financial




iv









 




institutions listed from time to time thereto, the Sole Bookrunner and Lead
Arranger referred to therein, the Documentation Agent referred to therein and the Administrative
Agent;




          WHEREAS, Borrower has requested that the Existing Credit Agreement be amended and restated as
provided herein for the purposes, among others, of (i) extending the Revolving Loan Maturity Date;
(ii) extending the Tranche B Term Loan Maturity Date; (iii) decreasing the aggregate amount of
outstanding Tranche B Term Loans as provided in the Third Amendment through a partial prepayment of
principal at par; (iv) reducing the Revolving Loan Commitment from $60,000,000 to $48,000,000; and
(v) making other modifications to the Existing Credit Agreement, as more fully set forth herein;
and




          WHEREAS, it is the intent of the parties hereto that this Agreement not constitute a novation
of the obligations and liabilities existing under the Existing Credit Agreement and which remain
outstanding, or evidence repayment of any of such obligations and liabilities, and that this
Agreement amend and restate in its entirety the Existing Credit Agreement and the obligations
outstanding thereunder.




          NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the
parties hereto hereby agree that on the Third Amendment Effective Date the Existing Credit
Agreement shall be, and hereby is, amended and restated to read in its entirety as follows:




ARTICLE I




Definitions




     SECTION 1.01 Defined Terms as used in this Agreement, the following terms have the meanings
specified below:



          “ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to
the Alternate Base Rate.




          “Acquisition Properties” means as defined in subsection 5.11(b).




          “Additional Mortgagee Policies” means as defined in subsection 5.11(c).




          “Additional Mortgages” means as defined in subsection 5.11(b).




          “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1.00%) equal
to the greater of (x) 2.50% and (y) the product of (a) the LIBO Rate for such Interest Period and
(b) the Statutory Reserve Rate.




          “Adjusted Taxes” means, with respect to any period from the Closing Date, Taxes other
than such Taxes payable in connection with the disposition of its interests and assets with respect
to its Church’s Chicken and Texas Chicken business pursuant to that certain Asset Purchase
Agreement
between the Borrower and Cajun Holding Company, a Delaware corporation, dated as of October
30, 2004, as may be amended, and income from discontinued operations.




          “Administrative Agent” means JPMCB, in its capacity as administrative agent for the
Lenders hereunder.






2









 








          “Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.




          “Affiliate” means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.




          “Agreement” means this Third Amended and Restated Credit Agreement, as the same may be
amended, amended and restated, supplemented or otherwise modified from time to time.




          “Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1.00%, (c) the Adjusted LIBO Rate for a three-month Interest Period on such day plus
1.00% and (d) 3.50%. Any change in the Alternate Base Rate due to a change in the Prime Rate, the
Base CD Rate or the Federal Funds Effective Rate shall be effective from and including the
effective date of such change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate, respectively.




          “Applicable Percentage” means (i) with respect to all payments, computations and other
matters relating to the Tranche B Term Loan of any Lender, the percentage obtained by dividing (a)
the Tranche B Term Loan Exposure of that Lender by (b) the aggregate Tranche B Term Loan Exposure
of all Lenders; and (ii) with respect to all payments, computations and other matters relating to
the Revolving Commitment or Revolving Loans of any Lender or any Letters of Credit issued or
participations purchased therein by any Lender or any participations in any Swing Line Loans
purchased by any Lender, the percentage obtained by dividing (a) the Revolving Credit Exposure of
that Lender by (b) the aggregate Revolving Credit Exposure of all Lenders. For all other purposes
with respect to each Lender, “Applicable Percentage” means the percentage obtained by dividing
(A) an amount equal to the sum of the Tranche B Term Loan Exposure and the Revolving Credit
Exposure of that Lender, by (B) an amount equal to the sum of the aggregate Tranche B Term Loan
Exposure and the aggregate Revolving Credit Exposure of all Lenders. If the Commitments have
terminated or expired, the Applicable Percentages shall be determined based upon the Commitments
most recently in effect, giving effect to any assignments.




          “Applicable Rate” means, for any day, (i) with respect to any ABR Loan or Eurodollar
Loan that is a Revolving Loan, the applicable rate per annum set forth below under the caption “ABR
Spread” or “Eurodollar Spread”, as the case may be:




	 	 	 	 	 	 	 
	Loans	 	ABR Spread	 	Eurodollar Spread	 	Commitment Fee
	Tranche B Term Loans

	 	3.50%
	 	4.50%
	 	N/A
	Revolving Loans
	 	3.50%
	 	4.50%
	 	0.625%





The Applicable Rate shall increase by (i) 0.50% if either of Moody’s or S&P downgrades the
Borrower’s corporate rating to B2 or B, respectively, and (ii) an additional 0.50% if either of
Moody’s or S&P
downgrades the Borrower’s corporate rating to B3 or lower or B- or lower, respectively. For the
avoidance of doubt and in furtherance of the foregoing, the Applicable Rate shall increase by 1.00%
if either Moody’s or S&P downgrades Borrower’s corporate rating from B1/B+ to B3/B- or lower.




          “Approved Fund” has the meaning assigned to such term in Section 9.04.






3









 








          “Assessment Rate” means, for any day, the annual assessment rate in effect on such day
that is payable by a member of the Bank Insurance Fund classified as “well-capitalized” and within
supervisory subgroup “B” (or a comparable successor risk classification) within the meaning of 12
C.F.R. Part 327 (or any successor provision) to the Federal Deposit Insurance Corporation for
insurance by such Corporation of time deposits made in dollars at the offices of such member in the
United States; provided that if, as a result of any change in any law, rule or regulation,
it is no longer possible to determine the Assessment Rate as aforesaid, then the Assessment Rate
shall be such annual rate as shall be determined by the Administrative Agent to be representative
of the cost of such insurance to the Lenders.




          “Asset Sale” means a sale, lease or sub-lease (other than in the ordinary course of
business), sale and leaseback, assignment, conveyance, transfer or other disposition to, or any
exchange of property with, any Person (other than the Borrower or any Subsidiary Loan Party), in
one transaction or a series of transactions, of all or any part of the Borrower’s or any of its
Subsidiaries’ businesses, assets or properties of any kind, whether real, personal, or mixed and
whether tangible or intangible, whether now owned or hereafter acquired, including, without
limitation, the Capital Stock of any of the Borrower’s Subsidiaries, other than (i) inventory (or
other assets) sold or leased in the ordinary course of business (excluding any such sales by
operations or divisions discontinued or to be discontinued), and (ii) sales of other assets for
aggregate consideration of less than $3,000,000 in the aggregate during any fiscal year of the
Borrower.




          “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section 9.04),
and accepted by the Administrative Agent, in the form of Exhibit A or any other form
approved by the Administrative Agent.




          “Availability Period” means the period from and including the Closing Date to but
excluding the earlier of the Revolving Loan Maturity Date and the date of termination of the
Revolving Loan Commitments.




          “Base CD Rate” means the sum of (a) the Three-Month Secondary CD Rate multiplied by
the Statutory Reserve Rate plus (b) the Assessment Rate.




          “Board” means the Board of Governors of the Federal Reserve System of the United
States of America.




          “Borrower” means AFC Enterprises, Inc., a Minnesota corporation.




          “Borrower Common Stock” means the common stock issued by the Borrower.




          “Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in
effect, (b) a Tranche B Term Loan and as to which a single Interest Period is in effect or (c) a
Swingline Loan.




          “Borrowing Request” means a request by the Borrower for a Borrowing in accordance with
Section 2.03.




          “Breakage Cost Cash Collateral Account” as defined in Section 8.02.




          “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City or the City of Atlanta, Georgia are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan, the term
“Business Day”




4









 




shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market.




          “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.




          “Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation), including, without limitation,
partnership interests and membership interests, and any and all warrants, rights or options to
purchase or other arrangements or rights to acquire any of the foregoing.




          “Cash” means money, currency or a credit balance in a Deposit Account.




          “Cash Equivalents” means, as at any date of determination, (i) marketable securities
(a) issued or directly and unconditionally guaranteed as to interest and principal by the United
States Government or (b) issued by any agency of the United States the obligations of which are
backed by the full faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public instrumentality thereof, in
each case maturing within one year after such date (except in the case of taxable auction rate
municipal bonds and auction rate preferred securities which may have longer maturities) and having,
at the time of the acquisition thereof, the highest rating obtainable from either S&P or Moody’s;
(iii) commercial paper maturing no more than one year from the date of creation thereof and having,
at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody’s; (iv) certificates of deposit or bankers’ acceptances maturing within one year after such
date and issued or accepted by any Lender or by any commercial bank organized under the laws of the
United States of America or any state thereof or the District of Columbia or any foreign country
that (a) is at least “adequately capitalized” (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than
$100,000,000 (a “Cash Equivalent Bank”); (v) Eurodollar time deposits having a maturity of
less than one year purchased directly from any Lender or Cash Equivalent Bank; and (vi) shares of
any money market mutual fund that (a) has at least 95% of its assets invested continuously in the
types of investments referred to in clauses (i) through (v) above, (b) has net assets of not less
than $500,000,000, and (c) has the highest rating obtainable from either S&P or Moody’s.




          “Change in Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof) of Equity Interests representing more than 35% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of the Borrower or (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the Borrower by
Persons who were neither (i) nominated by the board of directors of the Borrower nor (ii) appointed
by directors so nominated.




          “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending
office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any
request, guideline or directive (whether




5









 




or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.




          “Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are Revolving Loans, Term Loans or Swingline Loans.




          “CLO” has the meaning assigned to such term in Section 9.04.




          “Closing Date” means the date on which the conditions specified in Section 4.01 are
satisfied (or waived in accordance with Section 9.02).




          “Code” means the Internal Revenue Code of 1986, as amended from time to time.




          “Collateral” means, collectively, all of the real, personal and mixed property
(including Capital Stock) in which Liens are purported to be granted pursuant to the Security
Documents as security for the Obligations.




          “Collateral Agent” has the meaning set forth in the Collateral Agreement.




          “Collateral Agreement” means the Amended and Restated Guarantee and Collateral
Agreement among the Loan Parties and the Administrative Agent as the same may be amended, amended
and restated, supplemented or otherwise modified from time to time, substantially in the form of
Exhibit C.




          “Collateral and Guarantee Requirement” means the requirement that:





     (a) the Administrative Agent shall have received (i) from each of the Borrower and the
Subsidiary Loan Parties a counterpart of each of the Security Documents duly executed and
delivered on behalf of the Loan Parties party thereto and (ii) in the case of any Person
that becomes a Subsidiary Loan Party after the Closing Date, a supplement to each Security
Document, in the form specified therein, duly executed and delivered on behalf of such
Subsidiary Loan Party;




     (b) all outstanding Equity Interests of each Subsidiary Loan Party and other
Subsidiaries not subject to an applicable restrictive agreement permitted pursuant to
Section 6.08 shall have been pledged pursuant to the Collateral Agreement and the
Administrative Agent shall have received certificates or other instruments representing all
such Equity Interests (if certificated), together with stock powers or other instruments of
transfer with respect thereto endorsed in blank;




     (c) all Indebtedness of the Borrower and each Subsidiary that is owing to any Loan
Party shall be evidenced by a promissory note or other instrument and shall have been
pledged pursuant to the Collateral Agreement and the Administrative Agent shall have
received all such promissory notes and other instruments, together with instruments of
transfer with respect thereto endorsed in blank;




     (d) all documents and instruments, including Uniform Commercial Code financing
statements, required by law or reasonably requested by the Administrative Agent to be
filed, registered or recorded to create the first priority Liens intended to be created by
the Collateral Agreement and perfect such Liens to the extent required by, and with the
priority required by, the Collateral Agreement, shall have been filed, registered or
recorded or delivered to the Administrative Agent for filing, registration or recording, all
subject to the Permitted Encumbrances;



6









 






     (e) the Administrative Agent shall have received on the Closing Date or within 90 days
thereafter: (i) counterparts of a Mortgage with respect to each Mortgaged Property described
on Schedule 1.1A (an “Initial Mortgage”), duly executed and delivered by the
record owner of such Mortgaged Property, (ii) a policy or policies of ALTA title insurance
each in an amount not less than the book value of such Mortgaged Property issued by a
nationally recognized title insurance company insuring the Lien of each such Initial
Mortgage as a valid first Lien on the Mortgaged Property described therein, free of any
other Liens except as expressly permitted by Section 6.02, together with such endorsements,
coinsurance and reinsurance as the Administrative Agent or the Required Lenders may
reasonably request, and (iii) such surveys, abstracts, appraisals and other documents as
the Administrative Agent or the Required Lenders may reasonably request with respect to any
such Mortgage or Mortgaged Property; and (iv) evidence of flood insurance with respect to
each Flood Hazard Property that is located in a community that participates in the National
Flood Insurance Program, in each case in compliance with any applicable regulations of the
Board of Governors of the Federal Reserve System, in form and substance reasonably
satisfactory to Collateral Agent; and




     (f) each Loan Party shall have obtained all consents and approvals required (without
giving effect to Sections 9-406 through 9-409 of the Uniform Commercial Code as in effect on
the date hereof in the State of Delaware) to be obtained by it in connection with the
execution and delivery of all Security Documents to which it is a party, the performance of
its obligations thereunder and the granting by it of the Liens thereunder.



          “Commitment” means, with respect to each Lender, the commitment of such Lender to make
the Term Loans, to make Revolving Loans and to acquire participations in Letters of Credit and
Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such
Lender’s Revolving Credit Exposure hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s
Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Commitment, as applicable.




          “Commitment Fee” shall mean the fee indicated in the definition of Applicable Rate.




          “Consolidated Capital Expenditures” means, for any period, the sum of (i) the
aggregate of all expenditures (whether paid in cash or other consideration or accrued as a
liability and including that portion of Capital Lease Obligations which is capitalized on the
consolidated balance sheet of Borrower and its Subsidiaries) by Borrower and its Subsidiaries
during that period that, in conformity with GAAP, are included in “additions to property, plant or
equipment” or comparable items reflected in the consolidated statement of cash flows of Borrower
and its Subsidiaries plus (ii) to the extent not covered by clause (i) of this definition, the
aggregate of all expenditures by Borrower and its Subsidiaries during that period to acquire (by
purchase or otherwise) (a) the business, property or fixed assets of any Person, or (b) stock or
other evidence of beneficial ownership of any Person to the extent the purchase price of such stock
or other evidence of beneficial ownership of such Person is appropriately allocated to property,
plant, or equipment in accordance with GAAP; provided, however, Consolidated
Capital Expenditures
shall not include expenditures made from the proceeds of any insurance or condemnation
payments (or payments made in lieu of condemnation) received by Borrower and its Subsidiaries and
used to repair or replace the damaged property with respect to which such proceeds were received.





7









 








          “Consolidated Cash Interest Expense” means, for any period, Consolidated Interest
Expense for such period excluding, however, any interest expense not payable in Cash (including
amortization of discount and amortization of debt issuance costs).




          “Consolidated Current Assets” means, as at any date of determination, the total assets
of Borrower and its Subsidiaries on a consolidated basis which may properly be classified as
current assets in conformity with GAAP excluding Cash and Cash Equivalents.




          “Consolidated Current Liabilities” means, as at any date of determination, the total
liabilities of Borrower and its Subsidiaries on a consolidated basis which may properly be
classified as current liabilities in conformity with GAAP excluding, however, the current portion
of long-term Indebtedness.




          “Consolidated EBITDA” means, for any period, Consolidated Net Income for such period
plus (a) without duplication and to the extent deducted from revenues in determining such
Consolidated Net Income for such period, the sum of (i) the aggregate amount of consolidated
interest expense for such period, (ii) the aggregate amount of all provisions for all Adjusted
Taxes (whether or not paid, estimated or accrued) based upon or determined by reference to the
income and profits for such period, (iii) all amounts attributable to depreciation, amortization
(including but not limited to amortization of goodwill and other intangible assets, amortization
and write-offs of financing costs and premiums paid in connection with any early extinguishment of
Indebtedness) and any non-cash impairment charges related to goodwill, other intangible or
long-lived assets for such period, (iv) all extraordinary, unusual or non-recurring charges
(including without limitation, restructuring charges), (v) charges, reserves and provisions made
with respect to litigation, in each case to the extent cash reserves have been established with
respect to such charges, reserves and provisions, (vi) charges made with respect to litigation
disclosed in Schedule 4.01(n) to the extent reserves have been established with respect
thereto, or to the extent not reserved for in an amount acceptable to the Administrative Agent in
its sole discretion, (vii) those items described on Schedule 1.1D and (viii) all other
non-cash charges, minus (b) without duplication and to the extent added to revenues in determining
such Consolidated Net Income for such period, the sum of (i) all extraordinary gains during such
period, including without limitation any gain made from the disposition of the San Antonio
Properties, and (ii) after-tax income derived from discontinued operations or from the subject of
Asset Sales, all as determined on a consolidated basis in accordance with GAAP.




          “Consolidated EBITDAR” means, for any period, Consolidated EBITDA plus Consolidated
Rental Expense.




          “Consolidated Excess Cash Flow” means, for any period, an amount (if positive) equal
to (i) the sum, without duplication, of the amounts for such period of (a) Consolidated EBITDA and
(b) the Consolidated Working Capital Adjustment minus (ii) the sum, without duplication, of the
amounts for such period of (a) voluntary, mandatory and scheduled repayments of Consolidated Total
Indebtedness (excluding repayments of Revolving Loans except to the extent the Revolving Loan
Commitments are permanently reduced in connection with such repayments and mandatory prepayments of
the Loans and excluding voluntary repayments made after the Borrower’s fiscal year ending in 2006),
(b) Consolidated Capital Expenditures (net of any proceeds of any related financings with respect
to such expenditures or equity contributions applied to finance such expenditures), (c)
Consolidated Cash Interest Expense, (d) provisions for current Adjusted Taxes based upon or
determined by reference to income of Borrower and
its Subsidiaries and payable in cash with respect to such period, (e) to the extent not
included in Consolidated Capital Expenditures, payments made in connection with Permitted
Acquisitions (net of any proceeds of any related financing with respect to such expenditures or
equity contributions applied to finance such expenditures), and (f) to the extent not otherwise
deducted in calculating Consolidated Net




8









 




Income or included in Consolidated Capital Expenditures,
payments made under Permitted Earnout Agreements.




          “Consolidated Fixed Charges” means for any period, the sum of (a) the aggregate amount
of scheduled principal payments made during such period on Indebtedness, including Capital Lease
Obligations, of the Borrower and its Subsidiaries, (b) Consolidated Cash Interest Expense, and (c)
Consolidated Rental Expense of Borrower and its Subsidiaries.




          “Consolidated Interest Expense” means, for any period, the interest expense, both
expended and capitalized (including the interest component in respect of Capital Lease
Obligations), accrued or paid by the Borrower and its Subsidiaries during such period (excluding
any amortization or write-off of financing costs otherwise included therein and excluding any fees
paid pursuant to Section 2.12 hereof and the write-off of unamortized deferred financing costs
taken by Borrower in connection with the refinancings of Borrower and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Borrower and its Subsidiaries),
net of interest income of Borrower and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.




          “Consolidated Maintenance Capital Expenditures” means, for any period, the aggregate
amount of all Consolidated Capital Expenditures actually paid by Borrower and its Subsidiaries
during that period for repair or maintenance of property, plant or equipment.




          “Consolidated Net Income” means, for any period, (i) the net income (or loss) of the
Borrower and its Subsidiaries on a consolidated basis for such period taken as a single accounting
period determined in conformity with GAAP, minus (ii) (a) the income (or loss) of any
Person (other than a Subsidiary of the Borrower) in which any other Person (other than the Borrower
or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends
or other distributions actually paid to the Borrower or any of its Subsidiaries by such Person
during such period, (b) the income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the Borrower or any of its
Subsidiaries or that Person’s assets are acquired by the Borrower or any of its Subsidiaries,
(c) the income of any Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at the time permitted
by operation of the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary, (d) any after-tax gains or
losses attributable to Asset Sales or returned surplus assets of any Plan, and (e) (to the extent
not included in clauses (a) through (d) above) any net extraordinary gains or net extraordinary
losses.




          “Consolidated Rental Expense” for any period, the aggregate amount of fixed and
contingent rentals payable by Borrower and its Subsidiaries for such period with respect to
operating (non-capital) leases of real and personal property determined on a consolidated basis in
accordance with GAAP.




          “Consolidated Total Indebtedness” means, as of any date of determination, the
aggregate principal amount of Indebtedness of the Borrower and the Subsidiaries outstanding as of
such date.




          “Consolidated Working Capital” means, as at any date of determination, the amount
(which may be a negative number) obtained by subtracting Consolidated Current Liabilities from
Consolidated Current Assets.




          “Consolidated Working Capital Adjustment” means, for any fiscal year, the amount
(which may be a negative number) obtained by subtracting (i) Consolidated Working Capital as of the
end of such fiscal year from (ii) Consolidated Working Capital as of the beginning of such fiscal
year.





9









 








          “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.




          “Conversion Strategy” means sales by Borrower and Subsidiary Loan Parties to
franchisees thereof of restaurants and other outlets and units with respect to direct marketing
areas.




          “Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.




          “Deposit Account” means a demand, time, savings, and passbook or like account with a
bank, savings and loan association, credit union or like organization, other than an account
evidenced by a negotiable certificate of deposit.




          “Documentation Agent” means Bank of America, N.A. in its capacity as documentation
agent for the Lenders hereunder




          “dollars” or “$” refers to lawful money of the United States of America.




          “Employee Tax Loan Notes” mean the promissory notes evidencing the loans made to
employees of Borrower to cover their tax liabilities in connection with grants made to such
employees under Borrower’s 1996 Stock Bonus Plans.




          “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any Hazardous Material or to
health and safety matters.




          “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.




          “Equity Interests “ means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.




          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.




          “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code
or,
solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.





10









 








          “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is,
or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.




          “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.




          “Event of Default” has the meaning assigned to such term in Article VII.




          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of
the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by reference to) its
net income by the United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the case of any Lender,
in which its applicable lending office is located, (b) any branch profits taxes imposed by the
United States of America or any similar tax imposed by any other jurisdiction in which the Borrower
is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a
new lending office) or is attributable to such Foreign Lender’s failure to comply with Section
2.17(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new lending office (or assignment), to receive additional amounts from
the Borrower with respect to such withholding tax pursuant to Section 2.17(a).




          “Existing Credit Agreement” means the Second Amended and Restated Credit Agreement (as
amended), dated as of May 11, 2005 by and among AFC Enterprises, Inc., JPMorgan Chase Bank, as
Administrative Agent, and the Existing Lenders.




          “Existing Lenders” means Lenders who have extended certain credit facilities to the
Borrower pursuant to that certain Existing Credit Agreement.




          “Existing Letters of Credit” means those existing letters of credit issued by the
Issuing Bank and listed on Schedule 1.1C.




          “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1.00%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published




11









 




for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1.00%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of recognized standing
selected by it.




          “Financial Covenants” means the covenants set forth at Sections 6.10, 6.12, 6.13 and
6.14 hereof.




          “Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or controller of the Borrower.




          “First Amendment” means the First Amendment to Credit Agreement dated as of April 14,
2006.




          “First Amendment Effective Date” means the date on or prior to April 14, 2006 upon
which all the conditions precedent set forth in Section 2 of the First Amendment are satisfied.




          “Flood Hazard Property” means any Real Property Asset subject to a mortgage in favor
of Collateral Agent, for the benefit of Lenders, and located in an area designated by the Federal
Emergency Management Agency as having special flood or mud slide hazards.




          “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than that in which the Borrower is located. For purposes of this definition, the United
States of America, each State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.




          “Foreign Subsidiary” means any Subsidiary that is organized under the laws of a
jurisdiction other than the United States of America or any State thereof or the District of
Columbia.




          “GAAP” means generally accepted accounting principles in the United States of America.




          “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.




          “Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or obligation;
provided, that the term
Guarantee shall not include endorsements for collection or deposit or contingent liabilities
or obligations with respect to assigned or subleased operating leases in the ordinary course of
business.





12









 








          “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.




          “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money or with respect to loans or monetary advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (d) all obligations of such Person in respect of the deferred
purchase price of property or services (excluding (i) accounts payable and due within 12 months
incurred in the ordinary course of business, (ii) obligations incurred under ERISA and (iii)
obligations incurred under Permitted Earnout Agreements, other than in the case of (ii) and (iii)
to the extent recorded as Indebtedness on the consolidated balance sheet of the Borrower), (e) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by
such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all
obligations, contingent or otherwise, of such Person as an account party in respect of letters of
credit and letters of guaranty and (i) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor. The contingent liability of a Person arising from guaranties
of operating leases which are assigned or sublet in the ordinary course of business shall not
constitute Indebtedness.




          “Indemnified Taxes” means Taxes other than Excluded Taxes.




          “Index Debt” means senior, secured, long-term indebtedness for borrowed money of the
Borrower that is not guaranteed by any other Person or subject to any other credit enhancement.




          “Information Memorandum” means the Confidential Information Memorandum dated April
2005 relating to the Borrower and the Credit Agreement.




          “Interest Election Request” means a request by the Borrower to convert or continue a
Borrowing in accordance with Section 2.07.




          “Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline
Loan), the last day of each March, June, September and December, (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period, and (c) with respect to any Swingline
Loan, the day that such Loan is required to be repaid.




          “Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is three or six months (or, with the consent of each Lender, nine or twelve
months)
thereafter, in each case as the Borrower may elect; provided, that (i) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such




13









 




Interest Period shall end on the immediately preceding Business
Day and (ii) any Interest Period that commences on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month of such Interest
Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and, in the case of a Revolving Loan Borrowing, thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.




          “Investment” means any capital stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing) of, make or permit
to exist any loans or advances (excluding (A) accounts receivables of the Borrower and its
Subsidiaries that (i) are payable within 180 days, (ii) are incurred in ordinary course of business
and (iii) are incurred on commercially reasonably terms, to the extent such accounts receivables
may constitute a loan or advance and (B) advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course of business) to,
Guarantee any obligations of, or make or permit to exist any investment or any other interest in,
any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit.




          “Issuing Bank” means JPMCB, in its capacity as the issuer of Letters of Credit
hereunder and with respect to Existing Letters of Credit, and its successors in such capacity as
provided in Section 2.05(i). The Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing
Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.




          “Joinder Agreement” means an agreement substantially in the form of Exhibit H.




          “Joint Venture” means a joint venture, partnership or other similar arrangement,
whether in corporate, partnership or other legal form; provided that in no event shall any
Subsidiary of any Person be considered to be a Joint Venture to which such Person is a party.




          “LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of
Credit.




          “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of
any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.




          “Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption or a Joinder Agreement,
other than any such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline
Lender.




          “Letter of Credit” means any letter of credit issued pursuant to this Agreement,
including any Existing Letters of Credit.




          “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period,
the rate appearing on Page 3750 of the Dow Jones Market Service (or on any successor or substitute
page of such Service, or any successor to or substitute for such Service, providing rate quotations
comparable
to those currently provided on such page of such Service, as determined by the Administrative
Agent from time to time for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the




14









 




commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not available at such
time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest Period.




          “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.




          “Loan Documents” means this Agreement, the Collateral Agreement and the other Security
Documents.




          “Loan Parties” means the Borrower and the Subsidiary Loan Parties.




          “Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.




          “Margin Stock” shall have the meaning provided such term in Regulation U.




          “Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, property, prospects or condition, financial or otherwise, of the Borrower and its
Subsidiaries taken as a whole, (b) the validity or enforceability of any of the Loan Documents, (c)
(i) the ability of the Borrower or the Subsidiary Loan Parties to perform any of their respective
obligations under the Loan Documents or (ii) the ability of the Administrative Agent or the Lenders
to enforce the Obligations or (d) the rights of or benefits available to the Lenders under the Loan
Documents.




          “Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the
Borrower and its Subsidiaries in an aggregate principal amount exceeding $5,000,000. For purposes
of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or
any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to
pay if such Swap Agreement were terminated at such time.




          “Material Real Property Lease” has the meaning set forth in Section 3.05(b).




          “Material Subsidiary” shall mean a Subsidiary or Subsidiaries that, as of the end of
the most recent ended fiscal quarter, account individually or in the aggregate for 5.00% or more of
the Borrower’s consolidated (i) total assets, (ii) shareholders’ equity, (iii) operating income
(calculated for the four most recent fiscal quarters) or (iv) total revenue, determined in each
case in accordance with GAAP.




          “Moody’s” means Moody’s Investors Service, Inc.




15









 





          “Mortgage” means a mortgage, deed of trust, assignment of leases and rents, leasehold
mortgage or other security document granting a Lien on any Mortgaged Property to secure the
Obligations. Each Mortgage shall be substantially in the form of Exhibit G.




          “Mortgaged Property” means, initially, each parcel of real property and the
improvements thereto owned by a Loan Party and identified on Schedule 1.1A, and includes
each other parcel of real property and improvements thereto with respect to which a Mortgage is
granted pursuant to Section 5.11.




          “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.




          “Net Proceeds” means, with respect to any event (a) the cash proceeds received in
respect of such event including (i) any cash received in respect of any non-cash proceeds, (ii) in
the case of a casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid by the Loan Parties to third parties (other than Affiliates) in
connection with such event, including without limitation, underwriting discounts and commissions
and other reasonable transaction costs associated therewith, (ii) in the case of a sale, transfer
of other disposition of an asset (including pursuant to a sale and leaseback transaction or a
casualty or condemnation or similar proceeding), the amount of all payments required to be made by
the Loan Parties as a result of such event to repay Indebtedness (other than Loans) secured by such
asset or otherwise subject to mandatory prepayment as a result of such event and taxes reasonably
estimated to be actually payable as a result of such asset disposition within two years of the date
of such disposition, (iii) reasonable reserves taken by Borrower in accordance with GAAP against
any liabilities (actual or contingent) retained by Borrower as determined (in the case of any such
reserves in excess of $1,000,000) by the Board of Directors of Borrower in its reasonable good
faith judgment and evidenced by a resolution of the Board of Directors, and (iv) reasonable
employee termination costs payable in connection with Asset Sales; provided, that any
reduction in such reserve will be treated for all purposes of this Agreement as a new Asset Sale at
the time of such reduction with Net Proceeds equal to the amount of such reduction.




          “Non-Consenting Lender” has the meaning assigned to such term in Section 2.19(c).




          “Obligations” has the meaning assigned to such term in the Collateral Agreement.




          “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.




          “Participant” has the meaning set forth in Section 9.04.




          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.




          “Perfection Certificate” means a certificate provided by the Administrative Agent to
the Borrower or any other form approved by the Administrative Agent substantially in the form of
Exhibit D.




          “Permitted Acquisition” means any acquisition by the Borrower or its Subsidiary Loan
Parties of the assets of, or all of the Equity Interests in, a Person or division or line of
business of a Person that is engaged in a line or lines of business reasonably related (ancillary
or complementary) to the line of business or lines of business of the Borrower or any Subsidiary
if, immediately after giving effect thereto, (a) no Default or Event of Default has occurred and is
continuing or would result therefrom, (b) in the




16









 




case of an acquisition of Equity Interests in a Person, 100% of the Equity Interests in such
Person, and any other Subsidiary resulting from such acquisition, shall be owned directly or
indirectly by the Borrower or a Subsidiary Loan Party and all actions required to be taken, if any,
with respect to each Subsidiary resulting from such acquisition under Sections 5.11 and 5.13 have
been or are concurrently taken, (c) the Borrower and the Subsidiaries are in compliance, on a pro
forma basis after giving effect to such acquisition, with the Financial Covenants recomputed as at
the last day of the most recently ended fiscal quarter of the Borrower for which financial
statements are available as if such acquisition had occurred on the first day of each relevant
period for testing such compliance, (d) the business acquired shall be related to the food service
industry or suitable for or related to franchising and (e) the Borrower has delivered to the
Administrative Agent an officers’ certificate to the effect set forth in clauses (a), (c) and (d)
above, together with all relevant financial information for the business or entity being acquired.




          “Permitted Earnout Agreements” shall mean any agreement by Borrower or one of its
Subsidiaries to pay (i) the seller or sellers of any Person or assets acquired in accordance with
the provisions of this Agreement at any time following the consummation of such acquisition by
reference to the financial performance of the assets acquired or (ii) the purchaser or purchasers
in connection with any Asset Sales the amounts of any deferred maintenance obligations or monies
from repair escrow agreements; provided that the aggregate amount of all such payments
which may be owed under such agreements contemplated by clauses (i) and (ii) at any time of
determination shall not exceed $15,000,000.




          “Permitted Encumbrances” means:




     (a) Liens imposed by law for taxes, assessments or governmental charges or claims that
are not yet due or are being contested in compliance with Section 5.04;




     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlord’s and
other like Liens imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in compliance
with Section 5.04;




     (c) pledges and deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance and other social security laws or regulations;




     (d) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety, indemnity and appeal bonds, performance and return-of-money and
fiduciary bonds and other obligations of a like nature, in each case in the ordinary course
of business;




     (e) judgment liens in respect of judgments that do not constitute an Event of Default
under clause (l) of Article VII;




     (f) easements, zoning restrictions, rights-of-way, licenses, covenants, conditions,
minor defects, encroachments or irregularities in title and similar encumbrances on real
property that do not secure any monetary obligations and do not materially interfere with
the ordinary conduct of business of the Borrower or any Subsidiary at the Real Property
Assets or Real Property Leases subject to such Liens;




     (g) leases or subleases to the extent permitted hereunder granted to others not
interfering in any material respect with the ordinary conduct of the business of Borrower or
any of its Subsidiaries;



17









 






     (h) any (i) interest or title of a lessor or sublessor under any lease, (ii)
restriction or encumbrance that the interest or title of such lessor or sublessor may be
subject to, or (iii) subordination of the interest of the lessee or sublessee under such
lease to any restriction or encumbrance referred to in the preceding clause (ii);




     (i) Liens on goods held by suppliers arising in the ordinary course of business for
sums not yet delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made therefor
and as long as such Lien remains unperfected;




     (j) Liens in favor of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with the importation of goods;




     (k) rights of franchisees under franchise agreements in keeping with the Borrower’s
historical practices;




     (l) with respect to any Real Property Lease in which the Borrower owns a leasehold
estate, any defect or encumbrance caused by or arising out of the failure to record the
lease or a memorandum thereof in the applicable real property records in the county where
such Real Property Lease is located other than any defect or encumbrance created or suffered
by the Borrower; and




     (m) the effect of any moratorium, eminent domain or condemnation proceedings;


provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.




          “Permitted Investments” means:





     (n) investments in Cash or Cash Equivalents;




     (o) investments consisting of notes received from employees of Borrower and its
Subsidiaries in connection with, and in an amount not to exceed the purchase price of, their
purchase of Borrower Common Stock, provided such notes are secured by the Borrower Common
Stock being purchased with the proceeds thereof;




     (p) investments held or to be held by a grantor trust established by Borrower for the
purpose of providing a deferred compensation plan for certain members of management;
provided that the aggregate amount of all such investments made shall not at any time exceed
$10,000,000;




     (q) investments in Subsidiary Loan Parties;




     (r) investments consisting of notes received in connection with Specified Asset Sales
or Asset Sales to the extent permitted under Section 6.03; and




     (s) investments by way of loans evidenced by the Employee Tax Loan Notes in an
aggregate principal amount not to exceed $5,000,000 at any one time outstanding.



          “Permitted Joint Venture Investment” means one or more Investments by the Borrower or
a Subsidiary Loan Party in Joint Ventures; provided that, (i) each such Joint Venture interest
shall be at least 10% of the total Joint Venture interests of each such Joint Venture and (ii) the
businesses of each




18









 




such Joint Venture shall consist of the development and operation of a business which may be
conducted by the Borrower hereunder.




          “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.




          “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.”




          “Prepayment Event” means:





     (t) any sale, transfer or other disposition (including without limitation pursuant to a
sale and leaseback transaction or the issuance of Capital Stock of the Subsidiaries (other
than in connection with a Permitted Acquisition)) or other than the sale and transfer of
obsolete or surplus assets; or




     (u) any casualty or other insured damage to, or any taking under power of eminent
domain or by condemnation or similar proceeding of, any property or asset of the Borrower or
any Subsidiary, other than casualties, insured damage or takings resulting in aggregate Net
Proceeds not exceeding $250,000 per occurrence or $1,000,000 in the aggregate during any
fiscal year of the Borrower; or




     (v) the incurrence by the Borrower or any Subsidiary of any Indebtedness, other than
Indebtedness permitted by Section 6.01; or




     (w) any return to the Borrower or any of its Subsidiaries of any surplus assets of any
pension plan of the Borrower or any of its Subsidiaries.



          “Prime Rate” means the rate of interest per annum publicly announced from time to time
by JPMCB as its prime rate in effect at its principal office in New York City; each change in the
Prime Rate shall be effective from and including the date such change is publicly announced as
being effective.




          “Real Property Lease” has the meaning set forth in Section 3.05(b).




          “Real Property Assets” means fee owned estate interests of Borrower or any of its
Subsidiaries in land, buildings, improvements, and fixtures attached thereto, other than mall
located, kiosk and “in-line unit” type property.




          “Register” has the meaning set forth in Section 9.04.




          “Regulation D,” “Regulation U” and “Regulation X” shall mean,
respectively, Regulation D, Regulation U and Regulation X of the Federal Reserve Board.




          “Regulatory Shares” means, with respect to any Person, shares of such Person required
to be issued as qualifying shares to directors or persons similarly situated or shares issued to
Persons other than Borrower or a wholly owned Subsidiary of Borrower in response to regulatory
requirements of foreign jurisdictions pursuant to a resolution of the Board of Directors of such
Person, so long as such shares do not exceed one percent of the total outstanding shares of equity
such Person and any owners of




19









 




such shares irrevocably covenant with Borrower to remit to Borrower or waive any dividends or
distributions paid or payable in respect of such shares.




          “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.




          “Replacement Lender” has the meaning assigned to such term in Section 2.19(c).




          “Required Lenders” means, at any time, Lenders having Revolving Credit Exposure, Term
Loans and unused Commitments representing more than 50% of the sum of the total Revolving Credit
Exposures, outstanding Term Loans and unused Commitments at such time.




          “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the Borrower or any
Subsidiary, or any payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Equity Interests in the Borrower or any option, warrant or
other right to acquire any such Equity Interests in the Borrower.




          “Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure and Swingline
Exposure at such time.




          “Revolving Loan” means a Loan made pursuant to Section 2.01 and Section 2.20, if any.




          “Revolving Loan Commitment” means, with respect to each Lender, the commitment, if
any, of such Lender to make a Revolving Loan hereunder during the Availability Period in the
principal amount as set forth on Schedule 2.01 or on an Assignment and Assumption or a
Joinder Agreement. The aggregate amount of such Commitments of the Revolving Loan Lenders is
$48,000,000.




          “Revolving Loan Maturity Date” means May 11, 2012.




          “S&P” means Standard & Poor’s Ratings Group.




          “San Antonio Properties” means 302, 314, 352 and 355 Spencer Lane, San Antonio, Bexar
County, Texas.




          “Second Amendment” means the Second Amendment to Credit Agreement dated as of April
25, 2007.




          “Second Amendment Effective Date” means the date on or prior to April 25, 2007 upon
which all the conditions precedent set forth in Section 2 of the Second Amendment are satisfied.




          “Security Documents” means the Collateral Agreement, the Mortgages, and each other
security agreement or other instrument or document executed and delivered pursuant to Section 5.11
or 5.13 to secure any of the Obligations.




          “Shareholder Transaction” means the declaration or payment of cash dividends, the
purchase of Borrower Common Stock, or any transaction or series of transactions that have a
substantially




20









 




similar effect undertaken by the Borrower in an aggregate amount not to exceed $375,000,000,
which could include a return of capital.




          “Specified Asset Sales” means Asset Sales with respect to (i) sales or leases or
transfers of franchise related properties to franchisees pursuant to the Borrower’s “turnkey”
development programs, (ii) sales, leases or transfers of franchises and related assets and
properties repossessed or reacquired by the Borrower from franchisees and subsequently resold to
new franchisees all in the ordinary course of business, (iii) sales or dispositions of franchise
related properties and assets that are no longer in operation and are surplus to the Borrower’s
needs in the ordinary course of business in an amount not in excess of $5,000,000 in any twelve
month period; provided that such limitation shall not apply to sales and dispositions of the assets
listed on Schedule 1.1B hereto, (iv) exchanges of properties or assets for other properties
or assets (other than cash or cash equivalents) that (1) are useful in the business of the
Borrower and its Subsidiaries as then being conducted and (2) have a fair market value at least
equal to the fair market value of the assets or properties being exchanged (as evidenced by a
resolution of the directors of the Borrower in the case of transactions having a fair market value
in excess of $1,000,000) in the ordinary course of business and (v) sales of franchise related
properties in connection with a market relocation program or the Borrower’s Conversion Strategy.




          “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Administrative Agent is subject
(a) with respect to the Base CD Rate, for new negotiable nonpersonal time deposits in dollars of
over $100,000 with maturities approximately equal to three months and (b) with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities”
in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to
such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.




          “Subject Transaction” means as defined in Section 6.15.




          “Subordinated Debt” means the subordinated debt evidenced by subordinated Indebtedness
issued or incurred by the Borrower subordinated in right of payment to the payment in full of the
Obligations of the Borrower to the Loan Parties under the Loan Documents and other senior
obligations of the Borrower; provided that (i) the negative covenants in such subordinated
Indebtedness are less burdensome than the negative covenants in this Agreement as in effect at the
time such subordinated Indebtedness is incurred, (ii) the affirmative covenants in such
subordinated Indebtedness are no more burdensome than the affirmative covenants in this Agreement
as in effect at the time such subordinated Indebtedness is incurred, (iii) the events of default in
such subordinated Indebtedness relating to insolvency and nonpayment of amounts owed thereunder are
no more restrictive than the corresponding defaults in this Agreement as in effect at the time such
subordinated Indebtedness is incurred, (iv) such subordinated Indebtedness does not cross-default
to other Indebtedness (but may cross-accelerate to other material Indebtedness of Borrower or any
Subsidiary that has guaranteed such subordinated Indebtedness), (v) the subordination provisions in
such subordinated Indebtedness are either (A) reasonably satisfactory to the Administrative Agent
or (B) substantially the same as the subordination provision set forth on Exhibit F hereto,
(vi) such subordinated Indebtedness does not provide for any scheduled payment or mandatory
prepayment of principal earlier than one (1) year after the final maturity of Loans under this
agreement other than redemptions made at the option of the holders of such subordinated
Indebtedness upon a change in control of the Borrower in circumstances that would also




21









 




constitute a Change of Control under this Agreement (provided that any such redemption
cannot be made fewer than 30 days after such change in control and that any such redemption is
fully and absolutely subordinated to the indefeasible payment in full of all principal, interest
and other amounts under the Loan Documents) and (vii) no Default or Event of Default shall have
occurred and be continuing at the date of incurrence.




          “Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as
of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by
the parent and one or more subsidiaries of the parent.




          “Subsidiary Loan Party” means any wholly-owned Subsidiary (direct or indirect) that is
not a Foreign Subsidiary, any Subsidiary that is designated a Subsidiary Loan Party by the Borrower
or any Subsidiary that is otherwise classified as a Subsidiary Loan Party hereunder.




          “Swap Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a
Swap Agreement.




          “Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall
be its Applicable Percentage of the total Swingline Exposure at such time.




          “Swingline Lender” means JPMCB, in its capacity as lender of Swingline Loans
hereunder.




          “Swingline Loan” means a Loan made pursuant to Section 2.04.




          “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.




          “Term Loans” means the Tranche B Term Loan.




          “Terminated Lender” has the meaning assigned to such term in Section 2.19(c).




          “Third Amendment” means the Third Amendment and Restatement Agreement dated as of
August 14, 2009.




          “Third Amendment Effective Date” means the date on or prior to August 14, 2009 upon
which all the conditions precedent set forth in Section 2 of the Third Amendment are satisfied.




22









 





          “Three-Month Secondary CD Rate” means, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such day (or, if such day is not
a Business Day, the next preceding Business Day) by the Board through the public information
telephone line of the Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for three-month certificates of
deposit of major money center banks in New York City received at approximately 10:00 a.m., New York
City time, on such day (or, if such day is not a Business Day, on the next preceding Business Day)
by the Administrative Agent from three negotiable certificate of deposit dealers of recognized
standing selected by it.




          “Title Company” means any of Chicago Title Insurance Company, Stewart Title and
Guaranty Company, Commonwealth Title Insurance Company and First American Title Insurance Company
or such other reputable title insurance company reasonably satisfactory to the Administrative
Agent.




          “Total Leverage Ratio” means, on any date of determination, the ratio of
(a) Consolidated Total Indebtedness as of such date less the amounts on deposit in the Breakage
Cost Cash Collateral Account as of such date, to (b) Consolidated EBITDA for the period of four
immediately preceding fiscal quarters of the Borrower ended on such date.




          “Tranche B Term Loan” means a Loan made pursuant to clause (b) of Section 2.01.




          “Tranche B Term Loan Commitment” means, (a) in the case of each Lender that is a
Lender on the date hereof, the commitment of such Lender to make a Tranche B Term Loan hereunder in
the principal amount as set forth on Schedule 2.01 and (b) in the case of any Lender that
becomes a Lender after the date hereof, the amount specified as such Lender’s “Tranche B Term Loan
Commitment” in the Assignment and Assumption pursuant to which such Lender assumed a portion of the
Tranche B Term Loan. As of the Third Amendment Effective Date, all available Tranche B Term Loan
Commitments have previously been drawn, and the aggregate amount of the Tranche B Term Loan
Commitments is $0.




          “Tranche B Term Loan Exposure” means, with respect to any Lender, as of any date of
determination, the outstanding principal amount of the Tranche B Term Loans of such Lender.




          “Tranche B Term Loan Maturity Date” means May 11, 2013.




          “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Adjusted LIBO Rate or the Alternate Base Rate.




          “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.




     SECTION 1.02 Classification of Loans and Borrowings. For purposes of this Agreement, Loans
may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a
“Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan”). Borrowings also may
be classified and referred to by Class (e.g., a “Revolving Loan Borrowing”) or by Type (e.g., a
“Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).



23









 





     SECTION 1.03 Terms Generally. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.



     SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms
of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the operation of such
provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request
an amendment to any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then such provision shall
be interpreted on the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such provision amended in
accordance herewith.



ARTICLE II




The Credits




     SECTION 2.01 Commitments. Subject to the terms and conditions set forth herein, each Lender
agrees (a) if such Lender has made a Tranche B Term Loan Commitment, to make the Tranche B Term
Loan to the Borrower in one drawing on the Closing Date and (b) if such Lender has made a Revolving
Loan Commitment, to make Revolving Loans to the Borrower from time to time during the Availability
Period in an aggregate principal amount with respect to the Revolving Loans that will not result in
such Lender’s Revolving Credit Exposure exceeding such Lender’s Revolving Loan Commitment. Within
the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may
borrow, prepay and reborrow Revolving Loans. Amounts repaid in respect of Tranche B Term Loans may
not be reborrowed.



     SECTION 2.02 Loans and Borrowings. Each Loan (other than a Swingline Loan) shall be made as
part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in
accordance with their respective Commitments of the applicable Class. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as required.



          (a) Subject to Sections 2.07 and 2.14, each Borrowing shall be comprised entirely of ABR Loans
or Eurodollar Loans as the Borrower may request in accordance herewith; provided that all
Borrowings made on the Closing Date must be made as ABR Borrowings. Each Lender at its option may




24









 




make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender
to make such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement. Each
Swingline Loan shall bear interest at a rate equal to the Swingline Lender’s quoted cost of funds
plus the Eurodollar Spread for Tranche B Term Loans, but in no event will such rate exceed
a rate equal to the Alternate Base Rate plus ABR Spread for Revolving Loans, provided that
for all other purposes each Swingline Loan shall be deemed to be an ABR Loan.




          (b) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing
shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000. At the time that each ABR Revolving Borrowing is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is equal to the
entire unused balance of the total Revolving Loan Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.06(e). Each Swingline Loan shall
be in an amount that is an integral multiple of $100,000 and not less than $1,000,000. Borrowings
of more than one Type and Class may be outstanding at the same time; provided that there
shall not at any time be more than a total of 10 Eurodollar Borrowings outstanding.




          (c) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Revolving Loan Maturity Date, the Tranche B Term Loan Maturity
Date, as applicable, (taking into consideration that the Tranche B Term Loan Maturity Date occurs
subsequent to the Revolving Loan Maturity Date).




     SECTION 2.03 Requests for Borrowings. To request a Revolving Loan Borrowing or a Term Loan
Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in
the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City time, three Business
Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later
than 12:00 noon, New York City time, one Business Day before the date of the proposed Borrowing;
provided that any such notice of an ABR Revolving Borrowing to finance the reimbursement of
an LC Disbursement as contemplated by Section 2.05(e) may be given not later than 12:00 noon, New
York City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request
shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the
following information in compliance with Section 2.02:




     (i) whether the requested Borrowing is to be a Revolving Loan Borrowing, or a
Tranche B Term Loan Borrowing;




     (ii) the aggregate amount of the requested Borrowing;




     (iii) the date of such Borrowing, which shall be a Business Day;




     (iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;




     (v) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of the
term “Interest Period”; and



25









 






     (vi) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.07.


If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the Borrower shall be deemed to have selected an Interest Period of three month’s
duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.




     SECTION 2.04 Swingline Loans(a) Subject to the terms and conditions set forth herein, the
Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the
Availability Period, in an aggregate principal amount at any time outstanding that will not result
in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $10,000,000 and
(ii) the total Revolving Credit Exposures exceeding the total Revolving Loan Commitments;
provided that the Swingline Lender shall not be required to make a Swingline Loan to
refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.



          (b) To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such
request by telephone (confirmed by telecopy), not later than 12:00 noon, New York City time, on the
day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such notice received from the
Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means
of a credit to the general deposit account of the Borrower as designated in the Borrowing Request
(or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in Section 2.05(e), by remittance to the Issuing Bank) by 3:00 p.m., New York City time,
on the requested date of such Swingline Loan.




          (c) The Swingline Lender may by written notice given to the Administrative Agent not later
than 10:00 a.m., New York City time, on any Business Day require the Revolving Loan Lenders to
acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding.
Such notice shall specify the aggregate amount of Swingline Loans in which the Revolving Loan
Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give
notice thereof to each Revolving Loan Lender, specifying in such notice such Revolving Loan
Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Revolving Loan Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the
Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage
of such Swingline Loan or Loans. Each Revolving Loan Lender acknowledges and agrees that its
obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each
Revolving Loan Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.06 with respect to Loans
made by such Revolving Loan Lender (and Section 2.06 shall apply, mutatis mutandis,
to the payment obligations of the Revolving Loan Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the Revolving Loan Lenders.
The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan
acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan
shall be made to the Administrative Agent and not to the Swingline Lender. Any




26









 




amounts received by the Swingline Lender from the Borrower (or other party on behalf of the
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a
sale of participations therein shall be promptly remitted to the Administrative Agent; any such
amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent
to the Revolving Loan Lenders that shall have made their payments pursuant to this paragraph and to
the Swingline Lender, as their interests may appear; provided that any such payment so remitted
shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to
the extent such payment is required to be refunded to the Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any
default in the payment thereof.




     SECTION 2.05 Letters of Credit (a) General. Subject to the terms and conditions set
forth herein, the Borrower may request the issuance of Letters of Credit for its own account, in a
form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from
time to time during the Availability Period. In the event of any inconsistency between the terms
and conditions of this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by the Borrower with,
the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall
control.



          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter
of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication,
if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal
or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal
or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the
name and address of the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the
Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in
connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of
Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $25,000,000 and
(ii) the total Revolving Credit Exposures shall not exceed the total Revolving Loan Commitments.




          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Revolving Loan Maturity Date;
provided that the immediately preceding clause (i) shall not prevent the Issuing Bank from
agreeing that a Letter of Credit will automatically be extended for one or more successive periods
not to exceed one year, each upon prior written request of Borrower which will be provided at least
40 days prior to the expiration of such Letter of Credit, so long as Issuing Bank notifies Borrower
or such beneficiary, as the case may be, in writing not less than 20 days prior to the expiration
date that it has agreed to extend for any such additional period; and provided
further, that no such extension will be made if a Default has occurred and is continuing
(and has not been waived) at the time Issuing Bank must elect whether or not to allow such
extension.




          (d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Revolving Loan Lender, and each
Revolving Loan




27









 




Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Revolving Loan Lender’s Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving
Loan Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Revolving Loan Lender’s Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded
to the Borrower for any reason. Each Revolving Loan Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a
Default or reduction or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.




          (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative
Agent an amount equal to such LC Disbursement not later than 12:00 noon, New York City time, on the
date that such LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been
received by the Borrower prior to such time on such date, then not later than 12:00 noon, New York
City time, on the Business Day immediately following the day that the Borrower receives such
notice, if such notice is not received prior to such time on the day of receipt; provided
that, if such LC Disbursement is not less than $1,000,000 the Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such
payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and,
to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to make
such payment when due, the Administrative Agent shall notify each Revolving Loan Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such
Revolving Loan Lender’s Applicable Percentage thereof. Promptly following receipt of such notice,
each Revolving Loan Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in Section 2.06 with respect to
Loans made by such Revolving Loan Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Loan Lenders), and the Administrative
Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Revolving Loan
Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower
pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Revolving Loan Lenders have made payments pursuant to this paragraph to
reimburse the Issuing Bank, then to such Revolving Loan Lenders and the Issuing Bank as their
interests may appear. Any payment made by a Revolving Loan Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans
or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.




          (f) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as
provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the
Issuing Bank under a Letter of Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for the




28









 




provisions of this Section, constitute a legal or equitable discharge of, or provide a right
of setoff against, the Borrower’s obligations hereunder. Neither the Administrative Agent, the
Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise
care when determining whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court
of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such
determination. In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.




          (g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made
or will make an LC Disbursement thereunder; provided that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank
and the Lenders with respect to any such LC Disbursement.




          (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement
is made, the unpaid amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that,
if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section, then Section 2.13(c) shall apply. Interest accrued pursuant to this paragraph shall be
for the account of the Issuing Bank, except that interest accrued on and after the date of payment
by any Revolving Loan Lender pursuant to paragraph (e) of this Section to reimburse the Issuing
Bank shall be for the account of such Lender to the extent of such payment.




          (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time
with the written consent of the Borrower, the Administrative Agent, the replaced Issuing Bank and
the successor Issuing Bank, each of which consents shall not be unreasonably withheld. The
Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank. At the
time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued
for the account of the replaced Issuing Bank pursuant to Section 2.12(b). From and after the
effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to
such successor or to any previous Issuing Bank, or to




29









 




such successor and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and
shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit.




          (j) Cash Collateralization. If any Event of Default shall occur and be continuing, on
the Business Day that the Borrower receives notice from the Administrative Agent or the Required
Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure
representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent,
in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal
to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower described in clause (i) or (j)
of Article VII. Such deposit shall be held by the Administrative Agent as collateral for the
payment and performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the Administrative Agent or at
the request of the Borrower, and at the Borrower’s risk and expense, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in such account.
Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank
for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall
be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure
at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of
Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to
provide an amount of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower
within three Business Days after all Events of Default have been cured or waived.




          (k) Existing Letters of Credit. On and after the Closing Date, the Existing Letters
of Credit shall be deemed to have been issued by the Issuing Bank pursuant to the terms of this
Agreement and shall constitute Letters of Credit for all purposes hereunder and under the other
Loan Documents. The Borrower agrees that it shall reimburse the Issuing Bank upon any draw under
the Existing Letters of Credit in accordance with Section 2.05(e) and the other provisions of this
Agreement.




     SECTION 2.06 Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00
noon, New York City time, to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as
provided in Section 2.04. The Administrative Agent will make such Loans available to the Borrower
by promptly crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in New York City and designated by the Borrower in the
applicable Borrowing Request; provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be remitted by the
Administrative Agent to the Issuing Bank.



          (b) Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this Section and may, in
reliance




30









 




upon such assumption, make available to the Borrower a corresponding amount. In such event,
if a Lender has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to but excluding the
date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest
rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Loan included in such Borrowing.




     SECTION 2.07 Interest Elections (a) Each Revolving Loan Borrowing and Term Loan Borrowing
initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Revolving Loan Borrowing or the Term Loan
Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar
Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected Borrowing, in which case
each such portion shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.
This Section shall not apply to Swingline Loans, which may not be converted or continued.



          (b) To make an election pursuant to this Section, the Borrower shall notify the Administrative
Agent of such election by telephone by the time that a Borrowing Request would be required under
Section 2.03 if the Borrower were requesting a Revolving Loan Borrowing of the Type resulting from
such election to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy
to the Administrative Agent of a written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower.




          (c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:





     (i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);




     (ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;




     (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and




     (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.


If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an
Interest Period, then the Borrower shall be deemed to have selected an Interest Period of three
month’s duration.




31









 








          (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall
advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.




          (e) If the Borrower fails to deliver a timely Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the request of the Required
Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless
repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.




     SECTION 2.08 Termination and Reduction of Commitments. (a) The Borrower may at any time
terminate, or from time to time reduce, the Revolving Loan Commitments; provided that (i)
each reduction of the Revolving Loan Commitments shall be in an amount that is an integral multiple
of $1,000,000 and not less than $5,000,000 (or lesser amount if the outstanding Revolving Loan
Commitments are less) and (ii) the Borrower shall not terminate or reduce the Revolving Loan
Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.10, the Revolving Credit Exposures would exceed the total Revolving Loan Commitments.



          (b) The Borrower shall notify the Administrative Agent of any election to terminate or reduce
the Revolving Loan Commitments under paragraph (a) of this Section at least three Business Days
prior to the effective date of such termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall
advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this
Section shall be irrevocable; provided that a notice of termination of the Revolving Loan
Commitments delivered by the Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower
(by notice to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Revolving Loans Commitments shall
be permanent. Each reduction of the Revolving Loan Commitments shall be made ratably among the
Lenders in accordance with their respective Revolving Loan Commitments.




     SECTION 2.09 Repayment of Loans; Evidence of Debt (a) The Borrower hereby unconditionally
promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Revolving Loan on the Revolving Loan Maturity Date, (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal amount of such
Lender’s Tranche B Term Loan on the Tranche B Term Loan Maturity Date and (iii) to the Swingline
Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Revolving Loan
Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of
a calendar month and is at least three Business Days after such Swingline Loan is made;
provided that on each date that a Revolving Loan Borrowing is made, the Borrower shall
repay all Swingline Loans then outstanding.



          (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.




          (c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative




32









 




Agent hereunder for the account of the Lenders and each Lender’s share thereof.




          (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of any Lender or the Administrative
Agent to maintain such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this Agreement.




          (e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after assignment pursuant
to Section 9.04) be represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).




     SECTION 2.10 Prepayment of Loans (a) The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part, subject to (i) prior notice in accordance
with paragraph (b) of this Section, (ii) paragraph (g) of this Section and (iii) Section 2.16.



          (b) The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a
Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 12:00 noon., New
York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment
of an ABR Borrowing, not later than 12:00 noon., New York City time, one Business Day before the
date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 12:00
noon, New York City time, on the date of prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Revolving Loan Commitments as contemplated by
Section 2.08, then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any such notice relating to
a Revolving Loan Borrowing or a Term Loan Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Revolving Loan Borrowing or any
Term Loan Borrowing shall be in an amount that would be permitted in the case of an advance of a
Revolving Loan Borrowing or a Term Loan Borrowing of the same Type as provided in Section 2.02,
except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment
of a Revolving Loan Borrowing or a Term Loan Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.13.




          (c) In the event and on each occasion that any Net Proceeds are received by or on behalf of
the Borrower or any Subsidiary in respect of any Prepayment Event, the Borrower shall, within one
Business Day after such Net Proceeds are received, prepay Term Loan Borrowings in accordance with
paragraph (e) below in an aggregate amount equal to such Net Proceeds; provided that, if
the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer to the
effect that the Borrower and the Subsidiaries intend to apply the Net Proceeds from, (y) in the
case of any event described in clause (a) or (b) of the definition of the term Prepayment Event,
within 9 months after receipt of such Net Proceeds, and (z) in the case of any issuance of Capital
Stock by the Subsidiaries to finance a Permitted Acquisition, within 360 days after receipt of such
Net Proceeds, to (i) acquire real property, equipment or other tangible assets to be used in the
business of the Borrower and the Subsidiaries (or in the case of an event described in clause (b)
of the definition of the term Prepayment Event, to promptly and diligently




33









 




apply such Net Proceeds to pay or reimburse the cost of repairing or restoring or replacing
the assets in respect of which such Net Proceeds were received) or (ii) make Permitted
Acquisitions, (other than Net Proceeds received from business interruption insurance for working
capital and general corporate purposes), and certifying that no Default has occurred and is
continuing, then no prepayment shall be required pursuant to this paragraph in respect of the Net
Proceeds in respect of such event (or the portion of such Net Proceeds specified in such
certificate, if applicable) except to the extent of any such Net Proceeds therefrom that have not
been so applied by the end of such 9 month or 360 day period, as applicable, at which time a
prepayment shall be required in an amount equal to such Net Proceeds that have not been so applied.
In addition, in the event and on each occasion that the Borrower or any Subsidiary shall sell,
lease or otherwise dispose of any asset (whether or not such transaction shall constitute a
Prepayment Event), if the Borrower would be required to prepay or redeem, or to offer to prepay or
redeem, any Subordinated Debt as a result of such transaction unless the proceeds of such
transaction are applied within a specified period to prepay Term Loan Borrowings (or otherwise
reinvested as permitted in accordance with the terms of such Subordinated Debt), then the Borrower
shall (unless such proceeds are otherwise reinvested within the specified period in a manner that
relieves the Borrower of any such requirement in respect of the Subordinated Debt) prepay Term Loan
Borrowings in accordance with paragraph (e) below within such specified period to the extent
necessary to relieve the Borrower of any such requirement. In the event the Borrower receives any
such Net Proceeds (not immediately reinvested in accordance with this Section 2.10(c)) in excess of
$10,000,000 in the aggregate in any fiscal year, the Borrower shall within three Business Days of
receipt thereof, deposit such excess Net Proceeds in the Breakage Cost Cash Collateral Account,
pending the application of such Net Proceeds in accordance with this Section 2.10(c).
Notwithstanding anything to the contrary set forth herein, at the Borrower’s option, the Net
Proceeds from Specified Asset Sales may be used to prepay Revolving Loans, provided such amount may
only be re-borrowed as Revolving Loans to make reinvestments or prepayments in accordance with this
Section 2.10(c). Furthermore, notwithstanding anything to the contrary set forth above, the
Borrower shall be not be required to apply any of the proceeds of the disposition of the San
Antonio Properties as prepayments against the Loans.




          (d) Following the end of each fiscal year of the Borrower, the Borrower shall prepay Term Loan
Borrowings in an aggregate amount equal to: (i) 50% of the sum of (A) Consolidated Excess Cash Flow
less (B) the amount of any voluntary prepayments, less (C) the amount by which Revolving Loan
Commitments are permanently reduced in connection with repayments and mandatory prepayments of the
Revolving Loans, for such fiscal year in accordance with paragraph (e) below if the Total Leverage
Ratio is greater than 2.00 to 1.00 on the last day of such fiscal year or (ii) 25% of the sum of
(A) Consolidated Excess Cash Flow less (B) the amount of any voluntary prepayments, less (C) the
amount by which Revolving Loan Commitments are permanently reduced in connection with repayments
and mandatory prepayments of the Revolving Loans, for such fiscal year in accordance with
paragraph (e) below if the Total Leverage Ratio is less than or equal to 2.00 to 1.00 on the last
day of such fiscal year. Each prepayment pursuant to this paragraph shall be made on or before
March 31 of each year.




          (e) Prior to any optional prepayment of Borrowings hereunder, the Borrower shall select the
Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such
prepayment pursuant to paragraph (b) of this Section. In the event of any mandatory prepayment of
Term Loan Borrowings the aggregate amount of such prepayment shall be allocated among the Tranche B
Term Loan Lenders pro rata based on the aggregate principal amount of outstanding Borrowings;
provided that any Tranche B Term Loan Lender may elect, by notice to the Administrative
Agent by telephone (confirmed by telecopy) at least one Business Day prior to the prepayment date,
to decline all or any portion of any prepayment of its Tranche B Term Loans pursuant to this
Section (other than an optional prepayment pursuant to paragraph (a) of this Section, which may not
be declined), in which case Borrower may elect to retain up to 100% of the aggregate amount of the
prepayment that would have been applied to prepay Tranche B Term Loans but was so declined.




34









 








          (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.




          (g) Notwithstanding anything to the contrary in this Agreement, in the event that all or any
portion of the Tranche B Term Loans are repaid in whole or in part by Borrower through a
refinancing or a repricing through any amendment of the Tranche B Term Loans at an interest rate
that is lower than the Applicable Rate, Borrower shall pay to each Lender holding a Tranche B Term
Loan a prepayment premium on the amount so repaid as follows: (i) 101% if such repayment occurs
prior to May 11, 2010 and (ii) 100.5% if such repayment occurs on or after May 11, 2010 and prior
to May 11, 2011.




     SECTION 2.11 Amortization of Term Loans. As of the Third Amendment Effective Date, the
aggregate principal amount of the outstanding Tranche B Term Loans is $[                    ].



          (a) Subject to adjustment pursuant to paragraph (d) of this Section, the Borrower shall repay
the Tranche B Term Loan on each date set forth below in the principal amount equal to the aggregate
amount of the Tranche B Term Loans set forth opposite such date:



	 	 	 	 	 
	Date	 	Installment
	September 30,2005

	 	$	475,000	 
	December 31, 2005

	 	$	475,000	 
	March 31, 2006

	 	$	475,000	 
	June 30, 2006

	 	$	475,000	 
	September 30, 2006

	 	$	475,000	 
	December 31, 2006

	 	$	475,000	 
	March 31, 2007

	 	$	475,000	 
	June 30, 2007

	 	$	475,000	 
	September 30, 2007

	 	$	475,000	 
	December 31, 2007

	 	$	475,000	 
	March 31, 2008

	 	$	475,000	 
	June 30, 2008

	 	$	475,000	 
	September 30, 2008

	 	$	475,000	 
	December 31, 2008

	 	$	475,000	 
	March 31, 2009

	 	$	475,000	 
	June 30, 2009

	 	$	475,000	 
	September 30, 2009

	 	$	[                    ]	 
	December 31, 2009

	 	$	[                    ]	 
	March 31, 2010

	 	$	[                    ]	 






35









 






	 	 	 	 	 
	Date	 	Installment
	June 30, 2010

	 	$	[                    ]	 
	September 30, 2010

	 	$	[                    ]	 
	December 31, 2010

	 	$	[                    ]	 
	March 31, 2011

	 	$	[                    ]	 
	June 30, 2011

	 	$	[                    ]	 
	September 30, 2011

	 	$	[                    ]	 
	December 31, 2011

	 	$	[                    ]	 
	March 31, 2012

	 	$	[                    ]	 
	June 30, 2012

	 	$	[                    ]	 
	September 30, 2012

	 	$	[                    ]	 
	December 31, 2012

	 	$	[                    ]	 
	March 31, 2013

	 	$	[                    ]	 
	Tranche B Term Loan Maturity Date

	 	$	[                    ]	 






          (b) To the extent not previously paid, all Tranche B Term Loans shall be due and payable on
the Tranche B Term Loan Maturity Date.




          (c) Any prepayment of the Tranche B Term Loans shall be applied to reduce the subsequent
scheduled repayments of the Tranche B Term Loans to be made pursuant to this Section ratably. If
the aggregate amount of the Lenders’ Tranche B Term Loan Commitments exceeds the aggregate
principal amount of the Tranche B Term Loans that are made on the Closing Date, then the scheduled
repayments of the Tranche B Term Loans to be made pursuant to this Section shall be reduced ratably
by an aggregate amount equal to such excess.




          (d) Prior to any repayment of the Tranche B Term Loans hereunder, the Borrower shall notify
the Administrative Agent by telephone (confirmed by telecopy) not later than 12:00 noon, New York
City time, three Business Days before the scheduled date of such repayment. Each repayment of a
Borrowing shall be applied ratably to the Loans included in the repaid Borrowing. Repayments of
the Tranche B Term Loans shall be accompanied by accrued interest on the amount repaid.




     SECTION 2.12 Fees. (a) Borrower agrees to pay to Administrative Agent, for distribution to
each Lender in proportion to that Lender’s Applicable Percentage of the Revolving Loan Commitments
(other than Swingline Loan Commitments), facility fees for the period from and including the
Closing Date to and excluding the Revolving Loan Maturity Date, equal to the average of the daily
excess of the Revolving Loan Commitments, as then in effect, over the sum of the aggregate
principal amount of Revolving Credit Exposure multiplied by the applicable Commitment Fee.
Such facility fees shall accrue and be payable in arrears on the third business day following the
last day of March, June, September and December of each year and on the date on which the
Commitments terminate, commencing on the first such date to occur after the date hereof;
provided that any facility fees accruing after the date on which the Commitments terminate
shall be payable on demand. All facility fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first day but excluding
the last day).



          (b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender
a participation fee with respect to its participations in Letters of Credit, which shall accrue at
the same Applicable Rate used to determine the interest rate applicable to Eurodollar Revolving
Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and including the Closing
Date to but excluding the later of the date on which such Lender’s Commitment terminates and the
date on which such Lender




36









 




ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate of 0.125% per annum on the average daily amount of the LC Exposure (excluding
any portion thereof attributable to unreimbursed LC Disbursements) during the period from and
including the Closing Date to but excluding the later of the date of termination of the Commitments
and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard
fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall be payable on the
third Business Day following such last day, commencing on the first such date to occur after the
Closing Date; provided that all such fees shall be payable on the date on which the
Commitments terminate and any such fees accruing after the date on which the Commitments terminate
shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).




          (c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon between the Borrower and the Administrative
Agent.




          (d) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for
distribution, in the case of facility fees and participation fees, to the Lenders. Fees paid shall
not be refundable under any circumstances.




     SECTION 2.13 Interest. (a) The Loans comprising each ABR Borrowing shall bear interest at
the Alternate Base Rate plus the Applicable Rate. Notwithstanding anything set forth in this
Agreement, Swingline Loans shall bear interest at the Swingline Lender quoted cost of funds
plus the Applicable Rate (Eurodollar Spread) for Tranche B Term Loans; provided, however,
that Swingline Loans shall bear interest at a rate no higher than at the Alternate Base Rate
plus the Applicable Rate (ABR Spread) for Revolving Loans.



          (b) The Loans comprising each Eurodollar Borrowing shall bear interest in the case of a
Eurodollar Loan, at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.




          (c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2.00% plus
the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount, 2.00% plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section.




          (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and, in the case of Revolving Loans, upon termination of the Revolving Loan
Commitments; provided that (i) interest accrued pursuant to subsection (c) of this Section
2.13 shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan
(other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period),
accrued interest on the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to
the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on
the effective date of such conversion.





37











 





          (e) All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO
Rate shall be determined by the Administrative Agent, and such determination shall be conclusive
absent manifest error.



     SECTION 2.14 Alternate Rate of Interest. If prior to the commencement of any Interest Period
for a Eurodollar Borrowing:



          (a) the Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO
Rate or the LIBO Rate, as applicable, for such Interest Period; or



          (b) the Administrative Agent is advised by the any of the Lenders that the making of
Eurodollar Loan (i) has become unlawful as a result of compliance by such Lender in good faith with
any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such
treaty, governmental rule, regulation, guideline or order not having the force of law even though
the failure to comply therewith would not be unlawful) or (ii) has become impracticable, or would
cause such Lender material hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the interbank Eurodollar market or the position of
such Lender in that market, then, and in any such event, such Lender shall be an “Affected Lender”
and it shall on that day give notice (by facsimile or by telephone confirmed in writing) to
Borrower and Administrative Agent of such determination (which notice Administrative Agent shall
promptly transmit to each other Lender).



     Thereafter (a) the obligation of the Affected Lender to make Loans as, or to convert Loans to,
Eurodollar Loans shall be suspended until such notice shall be withdrawn by the Affected Lender,
(b) to the extent such determination by the Affected Lender relates to a Eurodollar Loan then being
requested by Borrower pursuant to a Borrowing Request or a notice of conversion/continuation, the
Affected Lender shall make such Loan as (or convert such Loan to, as the case may be) a ABR Loan,
(c) the Affected Lender’s obligation to maintain its outstanding Eurodollar Loans (the “Affected
Loans”) shall be terminated at the earlier to occur of the expiration of the Interest Period then
in effect with respect to the Affected Loans or when required by law, and (d) the Affected Loans
shall automatically convert into ABR Loans on the date of such termination.



     Notwithstanding the foregoing, to the extent a determination by an Affected Lender as
described above relates to a Eurodollar Loan then being requested by Borrower pursuant to a
Borrowing Request or a notice of conversion/continuation, Borrower shall have the option to rescind
such Borrowing Request or notice of conversion/continuation as to all Lenders by giving notice (by
facsimile or by telephone confirmed in writing) to Administrative Agent of such rescission on the
date on which the Affected Lender gives and Borrower receives notice of its determination as
described above (which notice of rescission Administrative Agent shall promptly transmit to each
other Lender). Except as provided in the immediately preceding sentence, nothing in this
subsection (b) shall affect the obligation of any Lender other than an Affected Lender to make or
maintain Loans as, or to convert Loans to, Eurodollar Loans in accordance with the terms of this
Agreement.



     SECTION 2.15 Increased Costs. (a)  If any Change in Law shall:




     (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit



38









 







extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate) or the Issuing Bank; or




     (ii) impose on any Lender or the Issuing Bank or the London interbank market
any other condition affecting this Agreement or Eurodollar Loans made by such Lender
or any Letter of Credit or participation therein;


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan or to increase the cost to such Lender or the Issuing Bank of
participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum
received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest
or otherwise), then the Borrower will pay to such Lender or the Issuing Bank, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case
may be, for such additional costs incurred or reduction suffered.




          (b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such Lender’s or the
Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if
any, as a consequence of this Agreement or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below
that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company
could have achieved but for such Change in Law (taking into consideration such Lender’s or the
Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company
with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.



          (c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be,
as specified in subsections (a) or (b) of this Section 2.15 and setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Lender or Issuing Bank, as the case
may be, shall be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on
any such certificate within 10 days after receipt thereof.



          (d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right
to demand such compensation; provided that the Borrower shall not be required to compensate
a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender or the Issuing Bank, as the case may
be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 270-day period referred to above shall be extended to include
the period of retroactive effect thereof.



     SECTION 2.16 Break Funding Payments. In the event of (a) the payment of any principal of any
Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a
result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last
day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.10(b) and is revoked in
accordance therewith) or (d) the
assignment of any



39









 







Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed
to include an amount determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such event not occurred,
at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the
date of such event to the last day of the then current Interest Period therefor (or, in the case of
a failure to borrow, convert or continue, for the period that would have been the Interest Period
for such Loan), over (ii) the amount of interest which would accrue on such principal amount for
such period at the interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other banks in the
Eurodollar market. A certificate of any Lender setting forth any amount or amounts that such
Lender is entitled to receive pursuant to this Section and setting forth in reasonable detail the
basis for calculating the amounts owed shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.



     SECTION 2.17 Taxes. (a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable to additional sums
payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be)
receives an amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable law.



          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.



          (c) The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank,
within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent
on its own behalf or on behalf of a Lender or the Issuing Bank, setting forth in reasonable detail
the basis for calculating the additional amounts owed, shall be conclusive absent manifest error.



          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.



          (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with



40









 







a copy to the Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or reasonably requested
by the Borrower as will permit such payments to be made without withholding or at a reduced rate.
For any period with respect to which a Foreign Lender has failed to provide Borrower with the
appropriate form, certificate or other document requested by Borrower, such Foreign Lender shall
not be entitled to indemnification with respect to Taxes by reason of such failure unless such form
is provided within a reasonable time after the end of such period.



          (f) If the Administrative Agent or a Lender determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower
or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.17, it
shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.17 with respect to the Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or
such Lender and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or such Lender is
required to repay such refund to such Governmental Authority. This Section shall not be construed
to require the Administrative Agent or any Lender to make available its tax returns (or any other
information relating to its taxes which it deems confidential) to the Borrower or any other Person.



     SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs. (a) The Borrower
shall make each payment required to be made by it hereunder (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on any date may, in
the discretion of the Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at 270 Park Avenue, New York, New York, except payments to be
made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly on behalf of the
Persons entitled thereto. Payment to the Administrative Agent other than as described above shall
constitute payment to the Lender. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the
date for payment shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of such extension. All
payments hereunder shall be made in dollars.



          (b) If at any time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then
due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed
LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with
the amounts of principal and unreimbursed LC Disbursements then due to such parties.



          (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Revolving Loans, Term Loans
or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment
of a



41









 







greater proportion of the aggregate amount of its Revolving Loans, Term Loans and
participations in LC Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Revolving Loans, Term Loans and
participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Revolving Loans, Term
Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price restored to the extent of
such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed
to apply to any payment made by the Borrower pursuant to and in accordance with the express terms
of this Agreement or any payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Loans or participations in LC Disbursements to any assignee
or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the
provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender acquiring a participation
pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were a direct creditor
of the Borrower in the amount of such participation.



          (d) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or the
Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be,
the amount due. In such event, if the Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to it to but excluding
the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation.



          (e) If any Lender shall fail to make any payment required to be made by it pursuant to Section
2.04(c), 2.05(d) or (e), 2.06(b) or 2.18(d), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such
Sections until all such unsatisfied obligations are fully paid.



     SECTION 2.19 Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests
compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then
such Lender shall use reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Sections 2.14, 2.15 or 2.17, as the case
may be, in the future and (ii) would not subject such Lender, in such Lender’s reasonable judgment,
to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.



          (b) (x) If any Lender requests compensation under Section 2.15, (y) if the Borrower is



42









 







required to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17 or (z) if any Lender defaults in its obligation to
fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse
(in accordance with and subject to the restrictions contained in Section 9.04), all its interests,
rights and obligations under this Agreement to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment); provided that
(i) the Borrower shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.15 or payments required to be
made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.



          (c) Anything contained herein to the contrary notwithstanding, in the event that in connection
with any proposed amendment, modification, termination, waiver or consent with respect to any of
the provisions hereof as contemplated by Section 9.02, the consent of one or more Lenders (each a
“Non-Consenting Lender”) whose consent is required shall not have been obtained; then, with
respect to such Non-Consenting Lender (the “Terminated Lender”), the Borrower may, by
giving written notice to Administrative Agent and any Terminated Lender of its election to do so,
elect to cause such Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to
assign its outstanding Loans and its Revolving Commitments, if any, in full to one or more
assignees (each a “Replacement Lender”) in accordance with the provisions of Section 9.04
and the Borrower shall pay any fees payable thereunder in connection with such assignment;
provided, (1) on the date of such assignment, the Replacement Lender shall pay to
Terminated Lender an amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Terminated Lender, (B) an amount equal to all
unreimbursed drawings that have been funded by such Terminated Lender, together with all then
unpaid interest with respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid fees owing to such Terminated Lender pursuant to Section 2.12, (2) on the date
of such assignment, Borrower shall pay any amounts payable to such Terminated Lender pursuant to
Section 2.16, 2.15 or 2.17; or otherwise as if it were a prepayment and (3) each Replacement Lender
shall consent, at the time of such assignment, to each matter in respect of which such Terminated
Lender was a Non-Consenting Lender; provided, the Borrower may not make such election with
respect to any Terminated Lender that is also an Issuing Bank unless, prior to the effectiveness of
such election, the Borrower shall have caused each outstanding Letter of Credit issued thereby to
be cancelled. Upon the prepayment of all amounts owing to any Terminated Lender and the
termination of such Terminated Lender’s Revolving Commitments, if any, such Terminated Lender shall
no longer constitute a “Lender” for purposes hereof; provided, any rights of such
Terminated Lender to indemnification hereunder shall survive as to such Terminated Lender.



ARTICLE III




Representations and Warranties




          The Borrower represents and warrants to the Lenders on the Closing Date, on the date of each
Borrowing and on the date of issuance of each Letter of Credit, that:



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     SECTION 3.01 Organization; Powers. Each of the Borrower and its Subsidiaries is duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.



     SECTION 3.02 Authorization; Enforceability. The Agreement and the transactions contemplated
hereby are within the Borrower’s corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. Each of this Agreement and the Security Documents
has been duly executed and delivered by the Borrower and constitutes a legal, valid and binding
obligation of the Borrower, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law.



     SECTION 3.03 Governmental Approvals; No Conflicts. The Agreement and the transactions
contemplated hereby (a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority which has not been or will not be timely obtained,
registered or filed, as the case may be, except (x) as such have been obtained or made and are in
full force and effect or (y) filings necessary to perfect Liens created under the Loan Documents,
(b) will not violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of its Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any indenture, agreement
or other instrument binding upon the Borrower or any of its Subsidiaries or its assets, or give
rise to a right thereunder to require any payment to be made by the Borrower or any of its
Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Subsidiaries other than as anticipated and created under the Loan Documents.



     SECTION 3.04 Financial Condition; No Material Adverse Change. (a) The Borrower has
heretofore furnished to the Lenders its consolidated balance sheet and statements of income,
stockholders equity and cash flows as of and for the fiscal year ended December 28, 2003, reported
on by KMPG LLP, independent public accountants, certified by its chief financial officer. Such
financial statements present fairly, in all material respects, the financial position and results
of operations and cash flows of the Borrower and its Subsidiaries on a consolidated basis as of
such dates and for such periods in accordance with GAAP.



          (b) Since December 26, 2004, there has been no adverse change in the business, assets,
operations, prospects or condition, financial or otherwise, of the Borrower and its Subsidiaries,
taken as a whole which would have or could reasonably be expected to have a Material Adverse
Effect.



     SECTION 3.05 Properties. (a) Each of the Borrower and its Subsidiaries has good, marketable
fee title to, or valid leasehold interests in, all its real and personal property material to its
business, except for Permitted Encumbrances and minor defects in title that do not materially
interfere with its ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.



          (b) With respect to substantially all of the operating leases pursuant to which the Borrower
or one of its Subsidiaries has a leasehold interest (each a “Real Property Lease”), each of
the following is true except to the extent that, if not true, the consequences of same would not
reasonably be expected to result in a Material Adverse Effect:




     (i) such Real Property Leases are in full force and effect;



44









 






     (ii) to the best knowledge of Borrower, all rent, additional rent and/or other
charges reserved in or payable by Borrower or its applicable Subsidiary, as tenant,
under the Real Property Leases, have been paid to the extent that they have been
determined and are payable to the date hereof and are not being contested in good
faith by Borrower, any such amounts being contested have been paid or rescinded for
by Borrower or its applicable Subsidiary, and no such contest may reasonably be
expected to result in the exercise by the applicable landlord of a remedy of
termination of such Real Property Lease;




     (iii) to the actual knowledge of Borrower, no Person has questioned Borrower’s
or its applicable Subsidiary’s quiet and peaceful possession of the premises which
are the subject of such Real Property Lease;




     (iv) no default by Borrower or its applicable Subsidiary, as tenant, under any
of the material terms of any Real Property Lease has occurred and remains uncured;
nor, to the best knowledge of Borrower, is there any existing condition which, with
the passage of time or the giving of notice, or both, would result in a default by
Borrower or its applicable Subsidiary under the terms of any Real Property Lease;




     (v) Borrower covenants and agrees that it shall, or shall cause its applicable
Subsidiary to, other than in the ordinary course of business and if such action
would not reasonably be expected to result in a Material Adverse Effect,: (A)
promptly and faithfully observe, perform and comply with all the material terms,
covenants and provisions of each Real Property Lease on its part to be observed,
performed and complied with, within the applicable grace periods, if any; (B)
refrain from doing anything, as a result of which, there could be a material default
under or a breach of any of the terms of any Real Property Lease; (C) not do, permit
or suffer any event or omission as a result of which there would occur a default or
breach under any Real Property Lease after the passing of the applicable grace
periods, if any; (D) not cancel, terminate, surrender, modify, amend or in any way
alter or permit the alteration of any of the provisions of any Real Property Lease
or grant any material consents or waivers thereunder; and not exercise any right it
may have under any Real Property Lease to cancel or surrender the same without the
prior written consent of the Administrative Agent, such consent not to be
unreasonably withheld, conditioned or delayed; and (E) give the Administrative Agent
any notice of any default under any “Material Real Property Leases” received or sent
by Borrower or its applicable Subsidiary, within three (3) Business Days and
promptly deliver to the Administrative Agent a copy of all responses to default
notices, similar instruments received or delivered by Borrower or its applicable
Subsidiary, in connection with any Material Real Property Leases. As used herein,
“Material Real Property Lease” means the office lease for Borrower’s
headquarters at 5555 Glenridge Connector, Atlanta, Georgia and any other lease the
Borrower or its Subsidiaries may enter into with an aggregate value of rental
payments exceeding $100,000 in any 12 month period.



          (c) Each of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its business, and the
use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.



          (d) The properties listed on Schedule 1.1A are all of Borrower’s material existing fee
owned real property assets as of the Closing Date.



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     SECTION 3.06 Litigation and Environmental Matters. (a)  There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries
(i) as to which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the aggregate, to result in
a Material Adverse Effect or (ii) that involve this Agreement or the Loan Documents.



          (b) Except for with respect to any matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental Liability.



     SECTION 3.07 Compliance with Laws and Agreements. Each of the Borrower and its Subsidiaries
is in compliance with all laws, regulations and orders of any Governmental Authority applicable to
it or its property and all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect. No material default has occurred and is
continuing with respect to any of the aforementioned in this Section 3.07.



     SECTION 3.08 Investment and Holding Company Status. Neither the Borrower nor any of its
Subsidiaries is (a) an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a “holding company” as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.



     SECTION 3.09 Taxes. Each of the Borrower and its Subsidiaries has timely filed or caused to
be filed all Tax returns and reports required to have been filed and has paid or caused to be paid
all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set
aside on its books adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.



     SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when
taken together with all other such ERISA Events for which liability is reasonably expected to
occur, could reasonably be expected to result in a Material Adverse Effect. The present value of
all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed the fair market value of the assets of such
Plan.



     SECTION 3.11 Disclosure. The Borrower has disclosed to the Lenders all agreements,
instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject,
and all other matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither the Information Memorandum nor any of the
other reports, financial statements, certificates or other information furnished by or on behalf of
the Borrower to the Administrative Agent or any Lender in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact necessary to make
the statements therein, in the
light of the circumstances under which they were made, not misleading in any material respect;
provided



46









 







that, with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based upon assumptions believed to be
reasonable at the time.



     SECTION 3.12 Licenses, etc. The Borrower and each of its Subsidiaries have obtained and hold
in full force and effect, all franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights, consents and approvals
which are necessary for the operation of their respective businesses as presently conducted, except
where the failure to obtain and hold the same, individually or in the aggregate, may not reasonably
be expected to have a Material Adverse Effect.



     SECTION 3.13 Labor Matters. As of the Closing Date, there are no strikes, lockouts, slowdowns
or any other material labor disputes against the Borrower or any Subsidiary pending or threatened.
All payments due from the Borrower or any Subsidiary, or for which any claim may be made against
the Borrower or any Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of the Borrower or such
Subsidiary. The consummation of the Agreement will not give rise to any right of termination or
right of renegotiation on the part of any union under any collective bargaining agreement to which
the Borrower or any Subsidiary is bound.



     SECTION 3.14 Use of Proceeds; Margin Regulations. All proceeds of each Loan, and each Letter
of Credit, will be used by the Borrower only in accordance with the provisions of Section 5.08. No
part of the proceeds of any Loan will be used by the Borrower to purchase or carry any Margin Stock
or to extend credit to others for the purpose of purchasing or carrying any Margin Stock. Neither
the making of any Loan nor the use of the proceeds thereof will violate or be inconsistent with the
provisions of Regulations U or X.



     SECTION 3.15 Subsidiaries. Schedule 3.15 sets forth the name of, and the ownership
interest of the Borrower in, each Subsidiary of the Borrower and identifies each Subsidiary that is
a Subsidiary Loan Party, in each case as of the Closing Date.



     SECTION 3.16 Security Interests. The representations and warranties in the Security Documents
are true and correct in all material respects.



     SECTION 3.17 Insurance. Schedule 3.17 sets forth a description of all insurance
maintained by or on behalf of the Borrower and its Subsidiaries as of the Closing Date. Except as
noted on Schedule 3.17, as of the Closing, all premiums in respect of such insurance have
been paid. The Borrower believes that the insurance maintained by or on behalf of the Borrower and
its Subsidiaries is adequate.



     SECTION 3.18 Solvency. Immediately after the consummation of the Agreement and the
transactions contemplated hereby, (a) the fair value of the assets of all of the Loan Parties, at a
fair valuation, will exceed their collective debts and liabilities, subordinated, contingent or
otherwise; (b) Borrower and its Subsidiaries are able to pay their collective debts and
liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute
and matured; and (c) Borrower and its Subsidiaries, taken as a whole, do not have unreasonably
small capital with which to conduct their respective businesses in which they are engaged, as such
business is now conducted and is proposed to be conducted following the Closing Date.



47









 





ARTICLE IV




Conditions




     SECTION 4.01 Conditions Precedent to Existing Credit Agreement. The Existing Credit Agreement
became effective at or prior to 5:00 p.m., New York City time, on May 11, 2005 upon the
satisfaction or waiver in accordance with Section 9.02 of the following conditions:




     (a) The Administrative Agent (or its counsel) shall have received from each party
hereto either (i) a counterpart of this Agreement signed on behalf of such party, or (ii) a
written consent via a consent supplement to this Agreement by certain Required Lenders, as
such term is defined under the Existing Credit Agreement (signature pages delivered pursuant
to clauses (i) and (ii) above may be provided by telecopy or electronic
transmission).




     (b) The Administrative Agent shall have received a favorable written opinion (addressed
to the Administrative Agent and the Lenders and dated the Closing Date) of (i) Bingham
McCutchen LLP, substantially in the form of Exhibit B-1, (ii) Dorsey & Whitney LLP,
substantially in the form of Exhibit B-2 and (iii) Cohen Pollock Merlin Axelrod & Small,
P.C., substantially in the form of Exhibit B-3, in each case counsel for the Borrower, and,
in the case of each such opinion required by this paragraph, covering such other matters
relating to the Loan Parties, the Loan Documents as the Required Lenders shall reasonably
request. The Borrower hereby requests such counsel to deliver such opinion.




     (c) The Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the organization,
existence and good standing of the Borrower, the authorization of the Agreement and any
other legal matters relating to the Borrower, this Agreement, all in form and substance
satisfactory to the Administrative Agent and its counsel.




     (d) The Administrative Agent shall have received a certificate, dated the Closing Date
and signed by the President, a Vice President or a Financial Officer of the Borrower,
confirming compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.02 and such other matters as may be reasonably required by the Administrative
Agent.




     (e) The Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Closing Date, including, to the extent invoiced, reimbursement or
payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder.




     (f) All requisite Governmental Authorities and third parties shall have approved or
consented to the Agreement and the other transactions contemplated hereby to the extent
required (without giving effect to Sections 9-406 through 9-409 of the Uniform Commercial
Code as in effect on the date hereof in the State of Delaware) or in the opinion of the
Administrative Agent may be advisable, all applicable appeal periods shall have expired and
there shall be no governmental or judicial action, actual or threatened, that is reasonably
likely to restrain, prevent or impose burdensome conditions on the Agreement or the other
transactions contemplated hereby.




     (g) The Lenders shall have received audited consolidated financial statements of the
Borrower for the two most recent fiscal years ended prior to the Closing Date.




     (h) On a pro forma basis after giving effect to the Agreement and the other
transactions
related thereto, (a) the ratio of (i) Consolidated Total Indebtedness as of the Closing
Date to (ii) Consolidated EBITDA of the Borrower for the four fiscal quarters ending on
April 17, 2005, shall not exceed 3.75 to 1.0; provided that the Consolidated EBITDA
of the Borrower for the



48









 







relevant period shall be determined on a pro forma basis, in a
manner satisfactory to the Administrative Agent.




     (i) The Lenders shall have received evidence that the Borrower has obtained a senior
secured credit rating from Moody’s and from S&P.




     (j) The Collateral and Guarantee Requirement shall have been satisfied (other than with
respect to paragraph (e) of such defined term) and the Administrative Agent shall have
received a completed Perfection Certificate dated the Closing Date and signed by an
executive officer or Financial Officer of the Borrower, together with all attachments
contemplated thereby, including the results of a search of the Uniform Commercial Code (or
equivalent) filings made with respect to the Loan Parties in the jurisdictions contemplated
by the Perfection Certificate and copies of the financing statements (or similar documents)
disclosed by such search and evidence reasonably satisfactory to the Administrative Agent
that the Liens indicated by such financing statements (or similar documents) are permitted
by Section 6.02 or have been released or delivered to Administrative Agent for filing.
Notwithstanding anything to the contrary set forth in this paragraph (j), the Administrative
Agent shall be satisfied in its sole discretion that the Borrower shall be taking all action
reasonably necessary to comply with paragraph (e) of the Collateral and Guarantee
Requirement within the period set forth therein.




     (k) On the Closing Date the Borrower and its Subsidiaries shall have (i) repaid in full
all amounts outstanding under the Credit Agreement (as amended), dated as of December 16,
2004 by and among AFC Enterprises, Inc., JPMorgan Chase Bank, as Administrative Agent, and
the lenders party thereto (the “2004 Credit Agreement”) (ii) terminated any commitments to
lend or make other extensions of credit under the 2004 Credit Agreement, (iii) delivered to
the Administrative Agent all documents or instruments necessary to release all Liens
securing all amounts owed under the 2004 Credit Agreement or other obligations of the
Borrower and its Subsidiaries thereunder being repaid on the Closing Date, and (iv) made
arrangements satisfactory to the Administrative Agent with respect to the continuance of the
Existing Letters of Credit on Schedule 1.1C outstanding thereunder or the issuance
of Letters of Credit to support the obligations of the Borrower and its Subsidiaries with
respect thereto.




     (l) The Administrative Agent shall have received evidence that the insurance required
by Section 5.09 and the Security Documents is in full force and effect and that the
Collateral Agent, for the benefit of the Lenders, has been named as additional insured and
loss payee thereunder.




     (m) The consummation of the Agreement and the other transactions contemplated hereby
shall not (a) violate any applicable law, statute, rule or regulation or (b) conflict with,
or result in a default or event of default under, any agreement of the Borrower or any of
its Subsidiaries after giving effect to the Agreement and the other transactions hereby,
except such as would not reasonably be expected to have a Material Adverse Effect.




     (n) Except to the extent disclosed on Schedule 4.01(n), there shall be no
litigation or administrative proceeding that would reasonably be expected to have a Material
Adverse Effect on (a) the business, assets, operations, prospects properties or conditions
(financial, prospective or otherwise) of the Borrower after giving effect to the Agreement
and the other transactions contemplated hereby, or (b) the ability of the parties to
consummate the Agreement or other transactions contemplated hereby.


The Administrative Agent shall notify the Borrower and the Lenders of the Closing Date, and such
notice shall be conclusive and binding.




49









 








     SECTION 4.02 Each Credit Event. The obligation of each Lender to make a Loan on the occasion
of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is
subject to the satisfaction of the following conditions:




     (a) The representations and warranties of the Borrower set forth in the Loan Documents
shall be true and correct in all material respects on and as of the date of such Borrowing
or the date of issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, 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;




     (b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no
Default or Event of Default shall have occurred and be continuing.




     (c) The parties understand and acknowledge that with respect to any of the covenants
set forth in Sections 6.10, 6.12, 6.13 and 6.14, Borrower may continue to make Borrowings
hereunder until the delivery of financial information pursuant to Section 5.01(a), as
applicable, unless, the Borrower has actual knowledge that there has been a Default or Event
of Default with respect to any of such covenants (it being understood that Section 4.02(b)
shall apply with respect to any Default or Event of Default).


Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be
deemed to constitute a representation and warranty by the Borrower on the date thereof as to the
matters specified in paragraphs (a) and (b) of this Section.




     SECTION 4.03 Conditions Precedent to this Agreement. This Agreement shall become effective
automatically upon the satisfaction of the conditions precedent set forth in the Third Amendment on
the Third Amendment Effective Date without the necessity of further action on the part of any
Person, whereupon this Agreement will replace the Existing Credit Agreement as amended through the
Third Amendment.



ARTICLE V




Affirmative Covenants




          Until the Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit
shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:




     SECTION 5.01 Financial Statements; Ratings Change and Other Information. The Borrower will
furnish to the Administrative Agent and each Lender:



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     (a) within 90 days after the end of each fiscal year of the Borrower, its audited
consolidated balance sheet and related statements of operations, stockholders’ equity and
cash flows as of the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by KPMG LLP or other
independent public accountants of recognized national standing (without a “going concern” or
like qualification or exception and without any qualification or exception as to the scope
of such audit) to the effect that such consolidated financial statements present 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.




     (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.




     (c) concurrently with any delivery of financial statements under clause (a) or
(b) above, a certificate of a Financial Officer of the Borrower (i) certifying as to whether
a Default has occurred and, if a Default has occurred, specifying the details thereof and
any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with Sections 6.10, 6.12, 6.13 and 6.14 and
(iii) stating whether any change in GAAP or in the application thereof has occurred since
the date of the audited financial statements referred to in Section 3.04 and, if any such
change has occurred, specifying the effect of such change on the financial statements
accompanying such certificate;




     (d) concurrently with any delivery of financial statements under clause (a) above, a
certificate of the accounting firm that reported on such financial statements stating
whether they obtained knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the extent required by
accounting rules or guidelines);




     (e) promptly after the same become publicly available, copies of all periodic and other
reports (including any accountants’ reports, comment letters and material press releases or
press releases relating to financial matters), proxy statements and other materials filed by
the Borrower or any Subsidiary with the Securities and Exchange Commission or with any
Governmental Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, or distributed by the Borrower to its shareholders
generally, as the case may be; provided that with respect to filings with the
Securities and Exchange Commission, only a notice of such filing shall be provided;




     (f) promptly after Moody’s or S&P shall have announced a change in the rating
established or deemed to have been established for the Index Debt, written notice of such
rating change;




     (g) within 75 days of the commencement of each fiscal year of the Borrower, a detailed
consolidated budget for such fiscal year (including a projected consolidated balance sheet
and related statements of projected operations and cash flow as of the end of and for such
fiscal year



51









 







and setting forth the assumptions used for purposes of preparing such budget) and,
promptly when available, any significant revisions of such budget.




     (h) within 90 days after the end of each fiscal year of the Borrower, a summary of the
insurance coverage in full force and effect; and




     (i) promptly following any request therefor, such other information regarding the
operations, business affairs and financial condition of the Borrower or any Subsidiary, or
compliance with the terms of this Agreement, as the Administrative Agent or any Lender,
acting through the Administrative Agent, may reasonably request.




     (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.


Notwithstanding anything to the contrary set forth herein, to the extent the delivery deadlines for
Sections 5.01(a), (b), (g) and (h) fall on a non-Business Day, the Borrower may deliver such items
on the Business Day next succeeding such day.




     SECTION 5.02 Notices of Material Events. The Borrower will furnish to the Administrative
Agent and each Lender prompt written notice of the following:




     (a) the occurrence of any Default;




     (b) the filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate
thereof that, if adversely determined, could reasonably be expected to result in a Material
Adverse Effect;




     (c) the occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability of the
Borrower and its Subsidiaries in an aggregate amount exceeding $1,000,000; and




     (d) the occurrence of any environmental event that, alone or together with any other
environmental events that have occurred, could reasonably be expected to result in liability
of the Borrower and its Subsidiaries in an aggregate amount exceeding $1,000,000;




     (e) any other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect.


Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect thereto.




     SECTION 5.03 Existence; Conduct of Business. The Borrower will, and will cause each of its
Subsidiaries to do or cause to be done all things necessary to preserve, renew and keep in full
force
and



52









 







effect its legal existence and the rights, privileges and franchises material to the
conduct of its business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation, disposition or dissolution permitted under Section 6.03.



     SECTION 5.04 Payment of Obligations. The Borrower will, and will cause each of its
Subsidiaries to pay its obligations, including Tax liabilities and Material Indebtedness, that, if
not paid, could result in a Material Adverse Effect before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in good faith, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably
be expected to result in a Material Adverse Effect.



     SECTION 5.05 Maintenance of Properties. The Borrower will, and will cause each of its
Subsidiaries to keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear, casualty and condemnation (subject to
restoration obligations) excepted.



     SECTION 5.06 Books and Records; Inspection Rights. The Borrower will, and will cause each of
its Subsidiaries to, keep proper books of record and account in accordance with sound business
practices sufficient to permit the preparation of financial statements auditable in accordance with
GAAP, in relation to its business and activities. The Borrower will, and will cause each of its
Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender,
upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts
from its books and records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as reasonably requested.
Borrower shall have the right to have its representatives present during any such examinations and
conferences.



     SECTION 5.07 Compliance with Laws. The Borrower will, and will cause each of its Subsidiaries
to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to
it or its property, except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.



     SECTION 5.08 Use of Proceeds and Letters of Credit. The proceeds of the Tranche B Term Loan
and the Revolving Loan will be used only (i) for general corporate purposes (including, without
limitation, payment of fees, expenses, and other transaction costs contemplated hereunder) and (ii)
to fund a portion of the Shareholder Transaction in an aggregate amount not to exceed $119,000,000.
No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose
that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.



     SECTION 5.09 Insurance. The Borrower will, and will cause each of its Subsidiaries to,
maintain, with financially sound and reputable insurance companies (a) insurance in such amounts
(with no greater risk retention) and against such risks as are customarily maintained by companies
of established repute engaged in the same or similar businesses operating in the same or similar
locations including, without limitation, appropriate environmental liability insurance reasonably
satisfactory to the Administrative Agent in any case no less favorable than that which the Borrower
has in place on the Closing Date, to a date not less than six months following the Tranche B Term
Loan Maturity Date and (b) all insurance required to be maintained pursuant to the Security
Documents. Without limiting the generality of the foregoing, Borrower will maintain or cause to be
maintained flood insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each case in compliance
with any applicable regulations of the Board of Governors of the Federal Reserve System. The
Borrower will furnish to the Lenders, upon request of the



53









 







Administrative Agent, information in reasonable detail as to the insurance so maintained.



     SECTION 5.10 Information Regarding Collateral. (a) The Borrower will furnish to the
Administrative Agent prompt written notice of any changes as required by the Collateral Agreement
(i) in any Loan Party’s corporate name or in any trade name used to identify it in the conduct of
its business or in the ownership of its properties, (ii) in the location of any Loan Party’s chief
executive office, its principal place of business, any office in which it maintains books or
records relating to Collateral owned by it or any office or facility at which Collateral owned by
it is located (including the establishment of any such new office or facility), (iii) in any Loan
Party’s identity, jurisdiction of incorporation or organization, or corporate or organizational
structure or (iv) in any Loan Party’s Organization Identification Number. The Borrower agrees not
to effect or permit any change referred to in the preceding sentence unless all filings have been
made under the Uniform Commercial Code or otherwise that are required in order for the
Administrative Agent to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral. The Borrower also agrees promptly to notify the
Administrative Agent if any material portion of the Collateral is damaged or destroyed.



          (b) Each year, at the time of delivery of annual financial statements with respect to the
preceding fiscal year pursuant to clause (a) of Section 5.01, the Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer of the Borrower setting forth the
information required pursuant to the Perfection Certificate or confirming that there has been no
change in such information since the date of the Perfection Certificate delivered on the Closing
Date or the date of the most recent certificate delivered pursuant to this Section.



     SECTION 5.11 Additional Subsidiaries and Real Property Assets. (a) If any additional
Subsidiary is formed or acquired after the Closing Date, the Borrower will notify the
Administrative Agent thereof and, within ten Business Days (or such longer period as the
Administrative Agent may permit in light of the circumstances) after such Subsidiary is formed or
acquired, cause the Collateral and Guarantee Requirement to be satisfied with respect to such
Subsidiary (if it is a Subsidiary Loan Party) and to any Equity Interest in or Indebtedness of such
Subsidiary owned by or on behalf of any Loan Party to the extent required by the Collateral and
Guarantee Requirement. The Borrower shall, and shall cause its Subsidiaries to, use reasonable
efforts to have domestic Subsidiaries that are not Subsidiary Loan Parties comply with the
Collateral and Guarantee Requirement, including, without limitation, having third party
stockholders of any such Subsidiary provide any necessary consents to such compliance.



          (b) With respect to any Real Property Asset that (I) is acquired after the Closing Date and
has a book value upon acquisition in excess of $250,000, or (II) is acquired after the Closing Date
with other properties and the aggregate book value of such properties acquired exceeds $5,000,000
then for any Real Property Asset with respect to such acquisition that individually has a book
value upon such acquisition in excess of $100,000, (each an “Acquisition Property” and
collectively, the “Acquisition Properties”) Borrower shall, and shall cause its
Subsidiaries to, (i) not less than ten (10) Business Days after the acquisition thereof, notify
Administrative Agent in writing of such acquisition; (ii) not later than five (5) days after a
Mortgage is delivered to Borrower, execute and deliver the Mortgage to Administrative Agent (each
an “Additional Mortgage” and collectively the “Additional Mortgages”) duly executed
by the Borrower or applicable Subsidiary together with evidence that such Additional Mortgage has
been recorded in all places to the extent necessary or desirable, in the reasonable judgment of
Administrative Agent, so as to effectively create a valid and enforceable first priority lien,
subject to Permitted Encumbrances, on such Acquisition Property in favor of Administrative Agent
(or such other trustee as may be required or desired under local law) for the benefit of Lenders;
(iii) not later than the date on which such Mortgage is delivered, have delivered to Administrative
Agent a title report in respect of any such Acquisition Property; (iv) if such Acquisition Property
is to be held by Borrower or one of its Subsidiaries as a leasehold interest, exercise commercially
reasonable efforts to obtain and deliver to



54









 







Administrative Agent (x) the consent of the lessor thereof to the encumbering by Borrower or
the applicable Subsidiary of its leasehold interest as a condition to Borrower’s obligation to
deliver an Additional Mortgage and (y) upon the request of Administrative Agent, deliver to
Administrative Agent an estoppel letter from the landlord, in form and substance reasonably
satisfactory to Administrative Agent, environmental audits prepared by nationally recognized
professional consultants or other consultants mutually acceptable to Borrower and Administrative
Agent, in form, scope and substance satisfactory to Administrative Agent in its reasonable
discretion. Notwithstanding anything to the contrary set forth in this Agreement, if a Default has
occurred and is continuing, Borrower and its Subsidiaries shall be obligated to comply with this
Section 5.11 with respect to all Real Property Assets within 60 days of receipt of notice of such
Default from the Administrative Agent. The Borrower will, no less than once during each six month
period, provide the Administrative Agent with a list of real property acquired by Borrower and its
Subsidiaries since the date of the last list provided pursuant to this Section 5.11.



          (c) If Borrower or any Subsidiary is required to deliver an Additional Mortgage with respect
to any Acquisition Property, Borrower shall deliver or shall cause such Subsidiary to deliver to
Administrative Agent, and promptly thereafter evidence that such Additional Mortgage has been
recorded in all places to the extent necessary or desirable, in the reasonable judgment of
Administrative Agent, so as to effectively create a valid and enforceable first priority lien,
subject to Permitted Encumbrances, on such Acquisition Property in favor of Administrative Agent
(or such other trustee as may be required or desired under local law) for the benefit of Lenders;
an ALTA mortgage title insurance policy if available in the jurisdiction in which the Acquisition
Property is located (each an “Additional Mortgagee Policy” and collectively, the
“Additional Mortgagee Policies”) issued by the Title Company, in an amount reasonably
satisfactory to Administrative Agent (but not in excess of Administrative Agent’s reasonable
determination of the fair market value of the Acquisition Property), assuring Administrative Agent
that the Additional Mortgage in connection with the acquisition thereof creates a valid and
enforceable first priority mortgage lien on such Acquisition Property, free and clear of all
defects and encumbrances except Permitted Encumbrances, and subject to a standard survey exception,
and which Additional Mortgagee Policy shall provide for affirmative insurance and such reinsurance
as Administrative Agent may reasonably request, all of the foregoing in form and substance
reasonably satisfactory to Administrative Agent. If any Real Property Asset of Borrower or any of
its Subsidiaries is to be leased or subleased by the Borrower or applicable Subsidiary to a
non-Affiliate of Borrower, Administrative Agent agrees to deliver, on behalf of itself and all
Lenders an agreement of subordination, non-disturbance and attornment substantially in the form
attached hereto as Exhibit E (subject to such necessary modifications to comply with the
laws of the applicable jurisdiction in which it will be filed), subordinating the leasehold
interest of such third party to the Additional Mortgage and the Lien created thereby, which
agreement shall be executed by Borrower or the applicable Subsidiary as lessor (or sublessor, as
the case may be) and the lessee (or sublessee, as the case may be).



          (d) If no Default has occurred and is continuing and Borrower or any Subsidiary Loan Party
sells any Mortgaged Property or Acquisition Property to a franchisee or non-Affiliate of Borrower
in connection with the sale of the land and/or improvements (building, furniture, fixtures and
equipment) thereon to such franchisee or non-Affiliate of Borrower, then Administrative Agent shall
deliver a release of the Mortgage or Additional Mortgage to Borrower’s counsel or to the relevant
Title Company, to be held in trust pending the closing of any such sale.



          Notwithstanding anything to the contrary herein, the Administrative Agent may in its sole
discretion exclude particular Real Property Assets from the Collateral if it determines that the
cost or impracticality of including such assets would be excessive or disproportionate in relation
to (i) the benefits to the Lenders and (ii) the value of such Real Property Asset.



55









 





     SECTION 5.12 Compliance with Contractual Obligations. The Borrower will, and will cause each
of its Subsidiaries to, comply in all material respects with its obligations under each agreement
to which it is a party and enforce its rights thereunder in a commercially reasonable manner, to
the extent a failure to do so could reasonably be expected to result in a Material Adverse Effect.



     SECTION 5.13 Further Assurances. (a)  The Borrower will, and will cause each Subsidiary Loan
Party to, execute any and all further documents, financing statements, agreements and instruments,
and take all such further actions (including the filing and recording of financing statements,
fixture filings, mortgages, deeds of trust and other documents), which may be required under any
applicable law, or which the Administrative Agent or the Required Lenders may reasonably request,
to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of
the Loan Parties. The Borrower also agrees to provide to the Administrative Agent, from time to
time upon request, evidence reasonably satisfactory to the Administrative Agent as to the
perfection and priority of the Liens created or intended to be created by the Security Documents.



          (b) If any material assets other than Real Property Assets addressed in Section 5.11 are
acquired by the Borrower or any Subsidiary Loan Party after the Closing Date (other than assets
constituting Collateral under the Collateral Agreement that become subject to the Lien of the
Collateral Agreement upon acquisition thereof), the Borrower will notify the Administrative Agent
and the Lenders thereof, and, if requested by the Administrative Agent or the Required Lenders, the
Borrower will cause such assets to be subjected to a Lien securing the Obligations and will take,
and cause the Subsidiary Loan Parties to take, such actions as shall be necessary or reasonably
requested by the Administrative Agent to grant and perfect such Liens, including actions described
in paragraph (a) of this Section, all at the expense of the Loan Parties.



     SECTION 5.14 Casualty and Condemnation. The Borrower (a) will furnish to the Administrative
Agent and the Lenders prompt written notice of any casualty or other insured damage to any material
portion of any Collateral or the commencement of any action or proceeding for the taking of any
Collateral or any part thereof or interest therein under power of eminent domain or by condemnation
or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the
form of insurance proceeds, condemnation awards or otherwise) are collected and applied in
accordance with the applicable provisions of the Security Documents; provided,
however, so long as no Event of Default shall have occurred or be continuing, Borrower or
its Subsidiaries may retain and apply such Net Proceeds in accordance with the provision of Section
2.10(c).



     SECTION 5.15 End of Fiscal Years; Fiscal Quarters. The Borrower will, for financial reporting
purposes, cause each of its fiscal years and quarters to end on the dates shown on the period
calendar attached hereto as Schedule 5.15.



     SECTION 5.16 Collateral Audit. The Administrative Agent shall receive a completed post-closing
UCC diligence certificate signed by an executive officer or Financial Officer of the Borrower,
together with all attachments contemplated thereby, including the results of a search of the
Uniform Commercial Code (or equivalent) filings made with respect to the Loan Parties in the
jurisdictions contemplated by the post-closing UCC diligence certificate and copies of the
financing statements (or similar documents) disclosed by such search and evidence reasonably
satisfactory to the Administrative Agent that the Liens indicated by such financing statements (or
similar documents) are permitted by Section 6.02 or have been released or delivered to
Administrative Agent for filing, in each case as promptly as possible and, in any event, no later
than 30 days after the Third Amendment Effective Date (unless extended by the Administrative Agent
to 60 days after the Third Amendment Effective Date in its sole discretion). If the Administrative
Agent determines that any Collateral is not subject to a perfected security interest in favor of
the Administrative Agent, then the Loan Parties shall promptly take
all actions



56









 







deemed necessary or reasonably advisable by the Administrative Agent to ensure
that the Administrative Agent obtains a security interest in such Collateral as soon as
practicable.



     SECTION 5.17 Amendments to Mortgages and Additional Mortgages. The Borrower will take all
actions reasonably necessary to assist and cooperate with the Administrative Agent in the
preparation of any necessary amendments to the Mortgages and Additional Mortgages and no later than
30 days after the Third Amendment Effective Date (unless extended by the Administrative Agent to 60
days after the Third Amendment Effective Date in its sole discretion) the Borrower shall, and will
cause each Subsidiary to, execute and deliver to the Administrative Agent any necessary amendments
to the Mortgages and Additional Mortgages together with evidence that such amendments have been
recorded in all places to the extent necessary or desirable, in the reasonable judgment of the
Administrative Agent, so as to maintain a valid and enforceable first priority lien, subject to
Permitted Encumbrances, on such Mortgaged Property and Acquisition Property in favor of the
Administrative Agent (or such other trustee as may be required or desired under local law) for the
benefit of the Lenders.



ARTICLE VI




Negative Covenants




          Until the Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired
or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:



     SECTION 6.01 Indebtedness. The Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Indebtedness, except:




     (a) Indebtedness with respect to the Loans and Obligations;




     (b) Indebtedness existing on the date hereof and set forth in Schedule 6.01,
and any extensions, renewals or replacements of any such Indebtedness as long as the
principal amount thereof is not increased and the Indebtedness remains unsecured to the
extent originally unsecured;




     (c) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the
Borrower or any other Subsidiary, provided that (i) the proceeds from such
Indebtedness shall not be issued by a Subsidiary that is subject to a restrictive agreement
permitted under Section 6.08; (ii) all such intercompany Indebtedness shall be evidenced by
intercompany notes; (iii) the obligations of each obligor on such Indebtedness shall be
subordinated in right of payment to the payment and performance of such obligor’s
obligations, if any, (whether as a borrower, guarantor or pledgor of Collateral under the
Loan Documents to which such obligor is a party) pursuant to the terms of the intercompany
notes; (iv) such intercompany Indebtedness shall be reduced pro tanto by the amount of any
payments made by such obligor in respect of its Obligations under any guarantee of the
Obligations; and (v) the intercompany notes evidencing such indebtedness shall be pledged to
Lenders;




     (d) (i) Guarantees by the Borrower of any Indebtedness of its Subsidiaries permitted
under this Section 6.01 or (ii) Guarantees by Borrower or any of its Subsidiary Loan Parties
of loans to franchisees which together with Investments consist of direct loans to
franchisees as permitted in Sections 6.03 or 6.04, non-cash consideration received by the
Borrower or any of its Subsidiaries to the extent permitted under Section 6.03(vi), assumed
Indebtedness permitted



57









 







under Section 6.01(f) and other Investments permitted under Section 6.04(c) not to
exceed an aggregate amount of $35,000,000 at any time outstanding; provided, that
such Guarantees (i) are unsecured, (ii) shall constitute debt for the purpose of compliance
with Section 6.04 herein, (iii) would not create a Default and (iv) have terms and
conditions that are substantially similar to or consistent with those customarily offered by
the Borrower to such franchisees and provided further that the aggregate amount of
obligations Guaranteed shall not exceed in any event $20,000,000.




     (e) Borrower and its Subsidiaries may become and remain liable with respect to
Indebtedness incurred in connection with the re-imaging or construction of properties for
its “turnkey” and re-imaging programs, including loans to franchisees for re-imaging
purposes, in an aggregate principal amount not to exceed $15,000,000 outstanding at any
time;




     (f) Indebtedness of any Person that becomes a Subsidiary after the date hereof or
assumption of any Indebtedness subject to prepayment premiums in connection with a Permitted
Acquisition, provided that (i) such Indebtedness exists at the time such Person
becomes a Subsidiary or at such time the Permitted Acquisition is consummated and is not
created in contemplation of or in connection with either such Person becoming a Subsidiary
or the consummation of such Permitted Acquisition, (ii) the aggregate principal amount of
Indebtedness permitted by this clause (f) shall not exceed $15,000,000 and (iii) any
Indebtedness incurred pursuant to this clause (f) shall reduce the Indebtedness permitted
pursuant to Section 6.01(d)(ii) on a dollar for dollar basis;




     (g) Indebtedness of the Borrower or any Subsidiary as an account party in respect of
trade letters of credit;




     (h) Indebtedness of the Borrower that constitutes Subordinated Debt or subordinated
guarantees of Subordinated Debt subordinated to the same extent as the underlying
indebtedness; provided that with respect to future Subordinated Debt, at the time
of the incurrence of such Indebtedness and after giving effect thereto (i) no Default shall
occur or be continuing, (ii) such Indebtedness shall mature after the Tranche B Term Loan
Maturity Date and (iii) the amortization of such Indebtedness shall be reasonably acceptable
to the Administrative Agent.




     (i) Indebtedness consisting of contingent obligations in respect of Letters of Credit;




     (j) Indebtedness consisting of contingent obligations under interest rate cap, collar
or similar hedging agreements designed to protect Borrower or its Subsidiaries against
fluctuations in interest rates with respect to the Loans and with respect to commodity and
currency hedging arrangements entered into in the ordinary course of business;




     (k) Permitted Earnout Agreements;




     (l) Permitted Investments to the extent also constituting Indebtedness;




     (m) Indebtedness otherwise permitted under Sections 6.04 and 6.05;




     (n) Indebtedness for guaranties of operating leases in the ordinary course of business;
the aggregate net rental expense with respect to such leases not to exceed $5,000,000;




     (o) unsecured Indebtedness regarding any note or similar debt instrument issued to Al
Copeland and certain of his family members with regard to the Popeye’s spice royalty
purchase in
an aggregate principal amount not to exceed $30,000,000; and



58









 






     (p) other Indebtedness (including without limitation pursuant to Capital Lease
Obligations) not falling within another exception listed above, in an aggregate principal
amount not to exceed $20,000,000 at any time outstanding; provided that such
Indebtedness may be secured by Liens on any assets purchased, constructed or financed with
such Indebtedness and the proceeds of such Indebtedness shall be used to provide not less
than 70% of the original purchase price of such asset or the amount expended to construct or
improve such asset as the case may be.



     SECTION 6.02 Liens. The Borrower will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired
by it, or assign or sell any income or revenues (including accounts receivable) or rights in
respect of any thereof, except:




     (a) Permitted Encumbrances and Liens securing the Obligations;




     (b) any Lien (other than Permitted Encumbrances) on any property or asset of the
Borrower or any Subsidiary either existing on the date hereof and set forth in
Schedule 6.02 or on any property acquired in connection with a Permitted Acquisition
and which secures Indebtedness permitted under Section 6.01(f) above; provided that
(i) such Lien shall not apply to any other property or asset of the Borrower or any
Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the
date hereof or as of the date acquired in connection with a Permitted Acquisition in which
Indebtedness is assumed as permitted in Section 6.01(f) above;




     (c) Liens securing Indebtedness permitted by Sections 6.01(e) and (n);




     (d) any Lien existing on any property or asset prior to the acquisition thereof by the
Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a
Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien
shall not apply to any other property or assets of the Borrower or any Subsidiary and (iii)
such Lien shall secure only those obligations which it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case may be; and




     (e) any Lien arising from put or call options in connection with Permitted Joint
Venture Investments.



     SECTION 6.03 Fundamental Changes and Asset Sales. (a) The Borrower will not, and will not
permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other
Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in
one transaction or in a series of transactions) all or substantially all of its assets, or all or
substantially all of the stock of any of the Subsidiary Loan Parties (in each case, whether now
owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Event of Default or Default shall have occurred and be
continuing (i) any Subsidiary may merge into the Borrower in a transaction in which the Borrower is
the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary in a transaction in
which the surviving entity is a Subsidiary; provided that to the extent either such Subsidiary is a
Subsidiary Loan Party, the surviving entity shall be a Subsidiary Loan Party, (iii) any Subsidiary
may sell, transfer, lease or otherwise dispose of its assets to the Borrower or to another
Subsidiary, (iv) any Subsidiary may liquidate or dissolve if the Borrower determines in good faith
that such liquidation or dissolution is in the best interests of the Borrower and is not materially



59









 







disadvantageous to the Lenders; provided that any such merger involving a Person that
is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless
also permitted by Section 6.04, (v) Borrower and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales; provided that the consideration received
for such assets shall be in amount at least equal to the fair market value thereof, (vi) Borrower
or its Subsidiaries may make Specified Asset Sales provided that, such Specified Asset Sales can be
made for Cash or non-Cash consideration until the amount of non-Cash consideration exceeds
$10,000,000 in the aggregate; thereafter, such Specified Asset Sales shall be made for at least 66
2/3% in Cash (provided that the limitation with respect to Cash consideration set forth in this
Section 6.03(vi) shall not apply to the asset sales described under clause (iv) of the definition
of Specified Asset Sales), (vii) Borrower or its Subsidiaries may take any action permitted by
Section 6.04 below to the extent constituting an Asset Sale, (viii) subject to Section 6.16,
Borrower and its Subsidiaries may make Asset Sales (other than Specified Asset Sales) having an
aggregate fair market value not in excess of $20,000,000 in any fiscal year; provided that (A) the
consideration received for each such Asset Sale shall be in an amount at least equal to the fair
market value thereof; (B) the consideration for each such Asset Sale is at least 66 2/3% in Cash
and (C) the proceeds of such Asset Sales shall be applied as required by Section 2.10(c), and (ix)
Borrower may reorganize for the purpose of changing its jurisdiction of incorporation to the State
of Delaware or the State of Georgia.



          (b) The Borrower will not, and will not permit any of its Subsidiaries to, engage to any
material extent in any business other than businesses of the type conducted by the Borrower and its
Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto
and that will not materially change its or its Subsidiary’s material lines of business taken as a
whole as of the Closing Date. For the avoidance of doubt, the type of business conducted by the
Borrower and its Subsidiaries as of the Closing Date is the franchising of food-service related
businesses and the provision of directly related services and products and the distribution,
wholesale and retailing of food and food related products.



          (c) Notwithstanding anything to the contrary herein, the Borrower may dissolve the following
Subsidiaries: (i) AFC of Louisiana, LLC and (ii) Looziana Culinary Concepts, LLC, provided
that such dissolution shall occur within sixty (60) days following the Closing Date. If such
dissolution has not occurred within sixty (60) days following the Closing Date, the Borrower shall
and shall cause AFC of Louisiana, LLC and Looziana Culinary Concepts, LLC to satisfy the Collateral
and Guarantee Requirement with respect to such Subsidiary Loan Parties pursuant to Sections 5.11
and 5.13 of this Agreement.



     SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions. The Borrower will
not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant
to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any
Investment, except:




     (a) Permitted Investments;




     (b) (i) Permitted Joint Venture Investments and (ii) Investments by Subsidiaries in
capital expenditures, all of which in the aggregate shall not exceed initially $25,000,000.




     (c) Investments consisting of extensions of credit to franchisees as permitted by
Section 6.01 or which otherwise provide credit support to franchisees in respect of the
deferral of royalty payments, rental payments, taxes, equipment sales, financing of
restaurant properties, franchise agreements and development or territory agreements of such
franchisees which together with Indebtedness permitted under Section 6.01(d) shall not
exceed $20,000,000 in the aggregate;



60









 






     (d) Guarantees constituting Indebtedness permitted by Section 6.01;




     (e) ordinary course Permitted Acquisitions consisting of acquisitions of the assets of
or all of the Equity Interests in a Person or division or line of business of a Person that
is engaged in the operation of Borrower’s franchised restaurant(s) or the acquisition of
franchise related properties in connection with a market relocation program or the
Borrower’s Conversion Strategy; provided that such Permitted Acquisitions may not exceed
$15,000,000 per fiscal year of the Borrower and a maximum of $25,000,000 for the period
beginning on the Third Amendment Effective Date and ending on the later of the Revolving
Loan Maturity Date and the Tranche B Term Loan Maturity Date (the “Maximum Permitted
Acquisition Amounts”); provided, further, that the Net Proceeds from the sale of any
assets set forth in the description of ordinary course Permitted Acquisitions above will
restore, on a dollar for dollar basis, any used Maximum Permitted Acquisition Amounts;




     (f) any matter permitted in Section 6.03 to the extent it is an Investment; and




     (g) other Investments not addressed above in an aggregate amount not to exceed
$10,000,000, provided that such Investment permitted by the this clause (g) shall
reduce the Investments permitted pursuant to Section 6.04(b) on a dollar for dollar basis.



     SECTION 6.05 Swap Agreements. The Borrower will not, and will not permit any of its
Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements entered into in the
ordinary course of business to hedge or mitigate risks with respect to commodities or currencies to
which the Borrower or any Subsidiary has actual exposure (other than those in respect of Equity
Interests of the Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into in
order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate, from floating to fixed rate or otherwise) with respect to
any interest-bearing liability or investment of the Borrower or any Subsidiary; provided, that in
the event that the Total Leverage Ratio exceeds 2.00 to 1.0 at any date of determination, then if
on such date less than 30% of the funded Indebtedness of Borrower as reflected on the consolidated
balance sheet of the Borrower for the most recent ended fiscal quarter accrues interest at a fixed
rate of interest, the Borrower shall promptly enter into Swap Agreements, in form and substance
reasonably satisfactory to the Administrative Agent, to the extent necessary so that the Borrower
and its Subsidiaries have consolidated floating rate interest exposure in respect of not more than
70% of its consolidated funded Indebtedness. Notwithstanding anything to the contrary set forth in
this Agreement the Required Lenders hereby waive any Default or Event of Default caused by any
failure of Borrower to comply with the provisions set forth above in this Section 6.05 during the 8
months immediately prior to the Third Amendment Effective Date and any other Defaults or Events of
Default directly associated therewith; provided that Borrower shall comply with such provisions set
forth above within 30 days following the Third Amendment Effective Date.



     SECTION 6.06 Restricted Payments. (a) The Borrower will not, and will not permit any of its
Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, except, so long as no Default or Event of Default shall have occurred and be continuing,
the Borrower may (i) consummate the Shareholder Transaction in an aggregate amount not to exceed
$375,000,000 (the “Shareholder Transaction Amount”), and (ii) make payments to purchase
Borrower Common Stock or options, warrants or rights to purchase or acquire Borrower Common Stock
(or any transaction that has a substantially similar effect) with Consolidated Excess Cash Flow to
the extent not required to be paid pursuant to Section 2.10(d); provided, however,
that at the time of making such purchase, and after giving pro forma effect thereto, the Total
Leverage Ratio of Borrower shall be less than 1:75 to 1.00. The Borrower shall provide the
Administrative Agent a certificate, in form and substance reasonably satisfactory to the
Administrative Agent, with respect to clauses (i) and (ii), above
in reasonable detail.



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          (b) The Borrower will not, nor will it permit any Subsidiary to, make or agree to pay or make,
directly or indirectly, any payment or other distribution (whether in cash, securities or other
property) of or in respect of principal of or interest on any subordinated Indebtedness, or any
payment or other distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Indebtedness, except (i) payment or prepayment of Indebtedness
created or permitted under the Loan Documents and (ii) the scheduled interest payments on
Subordinated Debt permitted pursuant to this Agreement in accordance with the terms thereof and
only to the extent required thereby; provided that at the time of any payment of such restricted
payment pursuant to this clause (ii) and immediately after giving effect thereto, (A) no Event of
Default shall have occurred and be continuing under Section 7(a), or (B) no Event of Default shall
have occurred under Section 7(e) and Section 7(f), provided further that before prohibiting payment
for such Event of Default under Section 7(e) and Section 7(f), Administrative Agent shall have
given the notice required under the Subordinated Debt indenture of its election to block such
payments, subject to the subordination provisions of the permitted Subordinated Debt.



     SECTION 6.07 Transactions with Affiliates. The Borrower will not, and will not permit any of
its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase,
lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices
and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among
the Borrower and its wholly owned Subsidiaries or between wholly owned Subsidiaries not involving
any other non-Affiliate and between Borrower and other non-wholly owned Subsidiaries on a
commercially reasonable basis, (c) any Restricted Payment permitted by Section 6.06, (d) reasonable
and customary compensation or employee benefit arrangements with any officer or member of the Board
of Directors of Borrower or any of its Subsidiaries entered into in the ordinary course of business
and consistent with past practices, (e) the Employee Tax Loan Notes, and (f) employee stock
purchase plans.



     SECTION 6.08 Restrictive Agreements. The Borrower will not, will not permit Subsidiary Loan
Parties to and will use reasonable commercial efforts to prohibit any of its Subsidiaries that are
not Subsidiary Loan Parties to, directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of
its property or assets, or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its Capital Stock or to make or repay loans or advances
to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other
Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions
imposed by law or by this Agreement, (ii) the foregoing shall not apply to customary restrictions
and conditions contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such
sale is permitted hereunder, (iii) clause (a) of the foregoing shall not apply to restrictions or
conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if
such restrictions or conditions apply only to the property or assets securing such Indebtedness and
are no more restrictive in any material respect than these provisions and (iv) clause (a) of the
foregoing shall not apply to customary provisions in contracts and leases entered into in the
ordinary course restricting the assignment thereof.



     SECTION 6.09 Sale and Leaseback Transactions. The Borrower will not, and will not permit any
of its Subsidiaries to, enter into any arrangement (other than with or between Borrower and any of
its Subsidiaries), directly or indirectly, whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use for substantially
the same purpose or purposes as the



62









 







property sold or transferred, except for sale leasebacks to the
extent such sale leasebacks and other Indebtedness permitted under Section 6.01(p) do not exceed
$30,000,000 and in no event shall such sale leasebacks exceed $15,000,000 in the aggregate, it
being understood that any such sale leaseback shall constitute a Prepayment Event.



     SECTION 6.10 Capital Expenditure. The Borrower will not permit the aggregate amount of
Consolidated Capital Expenditures made by the Borrower and the Subsidiaries in any fiscal year to
exceed the corresponding amount set forth in the chart below opposite such fiscal year.



	 	 	 	 	 
	 	 	Consolidated
	 	 	Capital
	Fiscal Year	 	Expenditures
	2005 to 2008
	 	$	25,000,000	 
	2009 and thereafter
	 	$	10,000,000	 






     SECTION 6.11 Amendment of Material Documents. The Borrower will not, nor will it permit any
Subsidiary Loan Party to, amend, modify or waive any of its rights under (a) its certificate of
incorporation, by-laws or other organizational documents if such amendment, modification or waiver
would materially and adversely affect the interests of the Lenders or (b) any indenture, credit
agreement or other document entered into to evidence or govern the terms of any Indebtedness
permitted pursuant to Section 6.01(h) if the effect of such amendment, modification or waiver is to
increase the interest rate on the Indebtedness, change (to earlier dates) any dates upon which
payments of principal or interest are due thereon, change any event of default or condition to an
event of default (other than to delay, waive or eliminate any such event of default), change the
redemption, prepayment or defeasance provisions thereof, change the subordination provisions
thereof (or of any guaranty thereof), or if the effect of such amendment or change, together with
all other amendments or changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of the Indebtedness (or a trustee or
other representative on their behalf) which would be adverse to Borrower or Lenders.



     SECTION 6.12 Minimum Fixed Charge Coverage Ratio. As of the last day of any fiscal quarter the
Borrower will not permit the ratio of (i) Consolidated EBITDAR less provisions for current taxes
based upon or determined by reference to income of Borrower and its Subsidiaries and payable in
cash with respect to such period less Consolidated Maintenance Capital Expenditure to (ii)
Consolidated Fixed Charges, in each case for any period of four consecutive fiscal quarters ending
on or after the Closing Date to be less than 1.30:1.00 for any such periods ending on or prior to
June 30, 2006, 1.40:1.00 for any such periods ending in subsequent to June 30, 2006, but prior to
the fiscal quarter ending June 30, 2008 and 1.50:1.00 thereafter.



     SECTION 6.13 Interest Expense Coverage Ratio. As of the last day of any fiscal quarter, the
Borrower will not permit the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Expense,
in each case for the previous four consecutive fiscal quarters then ended to be less than 3.25 to
1.0.



     SECTION 6.14 Total Leverage Ratio. As of the last day of any fiscal quarter, the Borrower will
not permit the Total Leverage Ratio as of such day (to be calculated for the purposes of this
Section 6.14 only using Consolidated Total Indebtedness less the balance sheet amount of Cash and
Cash Equivalents on such date of determination in an amount in excess of $3,000,000,
provided that such Cash and Cash Equivalents shall exclude funds drawn from the Revolving
Loan on such date) to exceed the ratio set forth below opposite the period during which such fiscal
quarter ends:



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	 	 	Total Leverage
	Fiscal Quarter	 	Ratio
	Second Fiscal Quarter 2005
	 	 	4.25:1.0	 
	Third Fiscal Quarter 2005
	 	 	4.25:1.0	 
	Fourth Fiscal Quarter 2005
	 	 	4.25:1.0	 
	First Fiscal Quarter 2006
	 	 	4.00:1.0	 
	Second Fiscal Quarter 2006
	 	 	4.00:1.0	 
	Third Fiscal Quarter 2006
	 	 	4.00:1.0	 
	Fourth Fiscal Quarter 2006
	 	 	4.00:1.0	 
	First Fiscal Quarter 2007
	 	 	3.75:1.0	 
	Second Fiscal Quarter 2007
	 	 	3.75:1.0	 
	Third Fiscal Quarter 2007
	 	 	3.50:1.0	 
	Fourth Fiscal Quarter 2007
	 	 	3.50:1.0	 
	First Fiscal Quarter 2008
	 	 	3.50:1.0	 
	Second Fiscal Quarter 2008
	 	 	3.50:1.0	 
	Third Fiscal Quarter 2008
	 	 	3.25:1.0	 
	Fourth Fiscal Quarter 2008
	 	 	3.25:1.0	 
	First Fiscal Quarter 2009
	 	 	3.00:1.0	 
	Second Fiscal Quarter 2009
	 	 	3.00:1.0	 
	Third Fiscal Quarter 2009
	 	 	3.00:1.0	 
	Fourth Fiscal Quarter 2009
	 	 	3.00:1.0	 
	First Fiscal Quarter 2010
	 	 	3.00:1.0	 
	Second Fiscal Quarter 2010
	 	 	3.00:1.0	 
	Third Fiscal Quarter 2010
	 	 	3.00:1.0	 
	Fourth Fiscal Quarter 2010
	 	 	3.00:1.0	 
	First Fiscal Quarter 2011
	 	 	3.00:1.0	 
	Second Fiscal Quarter 2011
	 	 	3.00:1.0	 
	Third Fiscal Quarter 2011
	 	 	3.00:1.0	 
	Fourth Fiscal Quarter 2011
	 	 	3.00:1.0	 
	First Fiscal Quarter 2012
	 	 	3.00:1.0	 
	Second Fiscal Quarter 2012 and
thereafter
	 	 	2.75:1.0	 






     SECTION 6.15 Certain Calculations. With respect to any period during which a Permitted
Acquisition or an Asset Sale has occurred (each, a “Subject Transaction”), for purposes of
determining compliance with Total Leverage Ratio, Consolidated EBITDA shall be calculated with
respect to such period on a pro forma basis (including pro forma adjustments arising out of events
which are directly attributable to a specific transaction, are factually supportable and are
expected to have a continuing impact, in each case determined on a basis consistent with Article 11
of Regulation S-X promulgated under the Securities Act and as interpreted by the staff of the
Securities and Exchange Commission, which would include cost savings resulting from head count
reduction, closure of facilities and similar restructuring charges, which pro forma adjustments
shall be certified by the chief financial officer of Borrower) using the historical audited
financial statements of any business so acquired or to be acquired or sold or to be sold and the
consolidated financial statements of the Borrower and its Subsidiaries which shall be reformulated
as if such Subject Transaction, and any Indebtedness incurred or repaid in connection therewith,
had been consummated or incurred or repaid at the beginning of such period (and assuming that such
Indebtedness bears interest during any portion of the applicable measurement period prior to the
relevant acquisition at the weighted average of the interest rates applicable to outstanding Loans
incurred during such period).



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     SECTION 6.16 Disposal of Subsidiary Stock. Except for any sale of any Regulatory Shares or
all of the Capital Stock of a Subsidiary owned by the Borrower or its Subsidiaries, in each case in
compliance with the provisions of Section 6.03 hereof, Borrower shall not directly or indirectly
sell, assign, pledge or otherwise encumber or dispose of any shares of Capital Stock or other
equity securities of any of its Subsidiaries, except to qualify directors if required by applicable
law; or permit any of its Subsidiaries directly or indirectly to sell, assign, pledge or otherwise
encumber or dispose of any shares of Capital Stock or other equity securities of any of its
Subsidiaries (including such Subsidiary), except to Borrower, a Subsidiary Loan Party, or to
qualify directors if required by applicable law.



ARTICLE VII




Events of Default





     If any of the following events (“Events of Default”) shall occur:




     (a) the Borrower shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment thereof or
otherwise;




     (b) the Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in clause (a) of this Article) payable under this
Agreement, when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of three Business Days;




     (c) [Reserved];




     (d) any representation or warranty made or deemed made by or on behalf of the Borrower
or any Subsidiary in or in connection with this Agreement or any amendment or modification
hereof or waiver hereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with this Agreement or any amendment or
modification hereof or waiver hereunder, shall prove to have been materially incorrect when
made or deemed made;




     (e) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.02, 5.03 (with respect to the Borrower’s existence), 5.08 or in
Article VI or in paragraph (e) of the Collateral and Guarantee Requirement;




     (f) the Borrower or any Subsidiary Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than those specified in
clause (a), (b), (d) or (e) of this Article) or in any of the Security Documents (other than
with respect to Collateral with an aggregate fair market value of which does not exceed
$1,000,000), and such failure shall continue unremedied for a period of thirty days after
notice thereof from the Administrative Agent to the Borrower (which notice will be given at
the request of any Lender);




     (g) the Borrower or any Subsidiary shall fail to make any payment (whether of principal
or interest and regardless of amount) in respect of any Material Indebtedness, when and as
the same shall become due and payable and such failure continues beyond applicable cure
periods;




     (h) any event or condition occurs that results in any Material Indebtedness becoming
due prior to its scheduled maturity or that enables or permits (with or without the giving
of notice, the



65









 







lapse of time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or
to require the prepayment, repurchase, redemption or defeasance thereof, prior to its
scheduled maturity; provided that this clause (h) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;




     (i) an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or
any Subsidiary or its debts, or of a substantial part of its assets, under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Borrower or any Material Subsidiary or for a substantial part of
its assets, and, in any such case, such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the foregoing shall be
entered;




     (j) the Borrower or any Material Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other relief under
any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (i) of this Article,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any Material Subsidiary or
for a substantial part of its assets, (iv) file an answer admitting the material allegations
of a petition filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of the
foregoing;




     (k) the Borrower or any Material Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;




     (l) any money judgments, writ or warrant of attachment or similar process which is
beyond all rights of appeal involving (i) in any individual case an amount in excess of
$2,500,000 or (ii) in the aggregate at any time an amount in excess of $5,000,000 (in either
case not adequately covered by insurance as to which a solvent and unaffiliated insurance
company has acknowledged coverage) shall be rendered against the Borrower, any Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon any assets of the
Borrower or any Subsidiary to enforce any such judgment;




     (m) an ERISA Event shall have occurred that, in the opinion of the Required Lenders,
when taken together with all other ERISA Events that have occurred, could reasonably be
expected to result in a Material Adverse Effect;




     (n) a Change in Control shall occur;




     (o) any Lien purported to be created under any Security Document shall cease to be, or
shall be asserted by any Loan Party not to be, a valid and perfected Lien on any Collateral
having an aggregate fair market value of $1,000,000 or more, with the priority required by
the applicable Security Document, except (i) as a result of the sale or other disposition of
the applicable Collateral in a transaction permitted under the Loan Documents or (ii) as a
result of the Administrative Agent’s failure to maintain possession of any stock
certificates, promissory notes
or other instruments delivered to it under any Security Document;



66









 






     (p) at any time after the execution and delivery thereof, (i) the Collateral Agreement
for any reason, other than the satisfaction in full of all Obligations and termination of
the Commitments, shall cease to be in full force and effect (other than in accordance with
its terms) or shall be declared to be null and void or any Subsidiary Loan Party shall
repudiate its obligations thereunder, (ii) this Agreement or any Security Document ceases to
be in full force and effect (other than by reason of a release of Collateral in accordance
with the terms hereof or thereof or the satisfaction in full of the Obligations in
accordance with the terms hereof) or shall be declared null and void (other than with
respect to Collateral with an aggregate fair market value of which does not exceed
$1,000,000) or (iii) any Loan Party shall contest the validity or enforceability of any Loan
Document in writing or deny in writing that it has any further liability, including with
respect to future advances by Lenders, under any Loan Document to which it is a party;


then, and in every such event (other than an event with respect to the Borrower described in clause
(i) or (j) of this Article), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times:  (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately,
and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to
the Borrower described in clause (i) or (j) of this Article, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.



Notwithstanding anything contained in the preceding paragraph, if at any time within 60 days after
an acceleration of the Loans pursuant to such paragraph Borrower shall pay all arrears of interest
and all payments on account of principal which shall have become due otherwise than as a result of
such acceleration (with interest on principal and, to the extent permitted by law, on overdue
interest, at the rates specified in this Agreement) and all Events of Default (other than
non-payment of the principal of and accrued interest on the Loans, in each case which is due and
payable solely by virtue of acceleration) shall be remedied or waived, then Required Lenders, by
written notice to Borrower, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind Lenders to a
decision which may be made at the election of Required Lenders and are not intended to benefit
Borrower and do not grant Borrower the right to require Lenders to rescind or annul any
acceleration hereunder or preclude Lenders from exercising any of their rights and remedies under
the Loan Documents, even if the conditions set forth herein are met.




ARTICLE VIII




The Administrative Agent




          SECTION 8.01 General.



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          Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms hereof, together
with such actions and powers as are reasonably incidental thereto.



          Each Lender hereby further authorizes Collateral Agent to enter into each Security Document as
secured party on behalf of and for the benefit of Lenders and agrees to be bound by the terms of
each Security Document; provided that Collateral Agent shall not enter into or consent to
any amendment, modification, termination or waiver of any provision contained in any Security
Document without the prior consent of Required Lenders; provided further,
however, that, without further written consent or authorization from Lenders, Collateral
Agent may execute any documents or instruments necessary to effect the release of any asset
constituting Collateral from the Lien of the applicable Security Document in the event that such
asset is sold or otherwise disposed of in a transaction effected in accordance with Sections 6.03
or 6.04 (and shall, at the reasonable request of Borrower execute such documents and instruments).



          The bank serving as the Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.



          The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall
not be subject to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that the Administrative Agent is required to exercise in writing as
directed by the Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent or any of its
Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or
not taken by it with the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02) or in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless and until written
notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this Agreement,
(ii) the contents of any certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.



          The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any liability for relying
thereon. The



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Administrative Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be liable for any action
taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.



          The Administrative Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any
such sub-agent, and shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Administrative Agent.



          Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor. If no successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative
Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent
which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon
the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the benefit of such
retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of
any actions taken or omitted to be taken by any of them while it was acting as Administrative
Agent.



          Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder or thereunder. Each
Lender further acknowledges that each of J.P. Morgan Securities, Inc. shall have no obligations
under this Agreement.



          SECTION 8.02 Breakage Cost Cash Collateral Account



          (a) Within sixty (60) days following the Closing Date, the Borrower shall establish with the
Administrative Agent (i) an account (the “Breakage Cost Cash Collateral Account”) in the
name of the Administrative Agent (for the benefit of the Lenders), into which the Borrower may from
time to time deposit Dollars pursuant to, and in accordance with Sections 2.10(c) and 2.10(f)
hereof. The Breakage Cost Cash Collateral Account shall be under the sole dominion and control of
the Administrative Agent and shall be subject to a control agreement entered into between the
Borrower and the Administrative Agent. In the case of funds deposited in the Breakage Cost Cash
Collateral Account (i) in accordance with Section 2.10(c), unless a Default has occurred and is
continuing, the Administrative Agent will release such funds as set forth in Section 2.10(c) and
(ii) in accordance with Section 2.10(f), the Administrative Agent will apply such funds as set
forth in Section 2.10(f).



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          (b) The Administrative Agent is hereby authorized and directed to invest and reinvest the
funds from time to time deposited into the Breakage Cost Cash Collateral Account, so long as no
Event of Default has occurred and is continuing, on the instructions of the Borrower
(provided, that any such instructions given verbally shall be confirmed promptly in
writing) or, if the Borrower shall fail to give such instructions upon delivery of any such funds,
in the sole discretion of the Administrative Agent; provided, that in no event may the
Borrower give instructions to the Administrative Agent to, or may the Administrative Agent in its
discretion, invest or reinvest funds in the Breakage Cost Cash Collateral Account in anything
other than Cash Equivalents.



          (c) Any net income or gain on the investment of funds from time to time held in the Breakage
Cost Cash Collateral Account, shall be promptly reinvested by the Administrative Agent as a part of
the Breakage Cost Cash Collateral Account; and any net loss on any such investment shall be charged
against the Breakage Cost Cash Collateral Account.



          (d) The Administrative Agent, the Issuing Bank or any of the Lenders shall not be a trustee
for any of the Loan Parties, or shall have any obligations or responsibilities, or shall be liable
for anything done or not done, in connection with the Breakage Cost Cash Collateral Account, except
as expressly provided herein and except that the Administrative Agent shall have the obligations of
a secured party under the Uniform Commercial Code. None of the Administrative Agent, the Issuing
Bank or any of the Lenders shall have any obligation or responsibility or shall be liable in any
way for any investment decision made in accordance with this Section 8.02 or for any decrease in
the value of the investments held in the Breakage Cost Cash Collateral Account.



          (e) Grant of Security Interest. For value received and to induce the Issuing Bank to
issue Letters of Credit and the Lenders to enter into this Agreement, as security for the payment
of all of the Obligations, each of the Loan Parties hereby assigns to the Administrative Agent (for
the benefit of the Lenders) and grants to the Administrative Agent (for the benefit of the
Lenders), a first priority Lien upon all of such Loan Party’s rights in and to the Breakage Cost
Cash Collateral Account, all cash, documents, instruments and securities from time to time held
therein, and all rights pertaining to investments of funds in the Breakage Cost Cash Collateral
Account and all products and proceeds of any of the foregoing. All Cash, documents, instruments
and securities from time to time on deposit in the Breakage Cost Cash Collateral Account, and all
rights pertaining to investments of funds in the Breakage Cost Cash Collateral Account shall
immediately and without any need for any further action on the part of any of the Loan Parties, the
Administrative Agent or any of the Lenders, become subject to the Lien set forth in this Section,
be deemed Collateral for all purposes hereof and be subject to the provisions of this Credit
Agreement.



          (f) Remedies. At any time during the continuation of an Event of Default, the
Administrative Agent may sell any documents, instruments and securities held in the Breakage Cost
Cash Collateral Account and may immediately apply the proceeds thereof and any other cash held in
the Breakage Cost Cash Collateral Account in accordance with Section 2.10.



ARTICLE IX




Miscellaneous




     SECTION 9.01 Notices. (a) Except in the case of notices and other communications expressly
permitted to be given by telephone (and subject to paragraph (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered by hand or overnight



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courier service, mailed by certified or registered mail or sent by telecopy, as follows:




          (b) if to the Borrower, to it at 5555 Glenridge Connector, Suite 300, Atlanta, GA 30342,
Attention of Treasurer (Telecopy No. (404) 459-4539); and in the case of any notice of default or
an Event of Default, concurrently to each of AFC Enterprises, Inc., 5555 Glenridge Connector, Suite
300, Atlanta, GA 30342, Attention of General Counsel (Telecopy No. (404) 459-4649) and to Cohen
Pollock Merlin & Small, P.C., 3350 Riverwood Parkway, SE, Suite 1600, Atlanta, GA 30339-3359,
Attention of Steven A. Fetter, Esq. (Telecopy No. (770) 857-4825; email: sfetter@cpmas.com);



          (c) if to the Administrative Agent, to JPMCB, Loan and Agency Services, 1111 Fannin, 10th
Floor, Houston Texas 77002, Attention of Ms. Angelynn Johnson (Telecopy No. (713) 750-2892), with a
copy to JPMCB, 707 Travis Street, 4th Floor, Houston, Texas 77002, Attention of Debra
Harris (Telecopy No. (713) 216-6710);



          (d) if to the Issuing Bank, to JPMCB, Loan and Agency Services, 1111 Fannin, 10th Floor,
Houston Texas 77002, Attention of Ms. Angelynn Johnson (Telecopy No. (713) 750-2892), with a copy
to JPMCB, 707 Travis Street, 4th Floor, Houston, Texas 77002, Attention of Debra Harris
(Telecopy No. (713) 216-6710);



          (e) if to the Swingline Lender, to JPMCB, Loan and Agency Services, 1111 Fannin, 10th Floor,
Houston Texas 77002, Attention of Ms. Angelynn Johnson (Telecopy No. (713) 750-2892), with a copy
to JPMCB, 707 Travis Street, 4th Floor, Houston, Texas 77002, Attention of Debra Harris
(Telecopy No. (713) 216-6710); and



          (f) if to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.



          (g) Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative Agent; provided
that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in
its discretion, agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of such procedures may
be limited to particular notices or communications.



          (h) Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.



     SECTION 9.02 Waivers; Amendments. (a)  No failure or delay by the Administrative Agent, the
Issuing Bank or any Lender in exercising any right or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of the Administrative
Agent, the Issuing Bank and the Lenders hereunder are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the



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Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such
Default at the time.



          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower and the Required
Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment or Applicable Percentage
of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any
Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment,
or postpone the scheduled date of expiration of any Commitment, without the written consent of each
Lender affected thereby, (iv) change Section 2.10 or Section 2.18(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written consent of each Lender
affected thereby, (v) change any of the provisions of this Section or the percentage set forth in
the definition of “Required Lenders” or any other provision of any Loan Document specifying the
number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any
rights thereunder or make any determination or grant any consent thereunder, without the written
consent of each Lender (or each Lender of such Class, as the case may be), (vi) release any
Subsidiary Loan Party from its Guarantee under the Collateral Agreement (except as expressly
provided in the Collateral Agreement), or limit its liability in respect of such Guarantee, without
the written consent of each Lender, (vii) release all or substantially all of the Collateral from
the Liens of the Security Documents, without the written consent of each Lender, (viii) change any
provisions of any Loan Document in a manner that by its terms adversely affects the rights in
respect of payments due to Lenders holding Loans of any Class differently than those holding Loans
of any other Class, without the written consent of Lenders holding a majority in interest of the
outstanding Loans and unused Commitments of each adversely affected Class (in addition to any
consent required under any other clause of this Section), (ix) change the rights of the Tranche B
Term Loan Lenders to decline mandatory prepayments as provided in Section 2.10, without the written
consent of Tranche B Term Loan Lenders holding a majority of the outstanding Tranche B Term Loans;
provided further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder
without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline
Lender, as the case may be.



     SECTION 9.03 Expenses; Indemnity; Damage Waiver. (a)  The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the Administrative Agent,
in connection with the syndication of the credit facilities provided for herein, the preparation,
execution, delivery and administration of this Agreement or any amendments, modifications or
waivers of the provisions hereof (whether or not the transactions contemplated hereby or thereby
shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent,
the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for
the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all
such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect
of such Loans or Letters of Credit.



          (b) The Borrower shall indemnify the Administrative Agent, the Issuing Bank and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being called an



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“Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including the fees, charges and disbursements of
any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement
or instrument contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Agreement or any other transactions contemplated
hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any
refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any presence or release of Hazardous Materials on or from any property owned or
operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any
way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.




          (c) To the extent that the Borrower fails to pay any amount required to be paid by it to the
Administrative Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the
Swingline Lender, as the case may be, such Lender’s Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted against the
Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such.



          (d) To the extent permitted by applicable law, the Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Agreement, any Loan or Letter of Credit or the use of the proceeds thereof.



          (e) All amounts due under this Section shall be payable promptly after written demand
therefor.



     SECTION 9.04 Successors and Assigns. (a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit),
except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign
or otherwise transfer its rights or obligations hereunder except in accordance with this Section.
Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns permitted hereby (including
any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.




(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may
assign to one or more assignees all or a portion of its rights and obligations under this
Agreement (including all



73









 







or a portion of its Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld) of:



          (A) the Borrower, provided that no consent of the Borrower shall be required for an
assignment to a Lender, an Affiliate of a Lender, an Approved Fund (as defined below) or, if an
Event of Default has occurred and is continuing, any other assignee; and



          (B) the Administrative Agent, provided that no consent of the Administrative Agent
shall be required for an assignment to an assignee that is a Lender, an Affiliate of a Lender or an
Approved Fund immediately prior to giving effect to such assignment.




(ii) Assignments shall be subject to the following additional conditions:



          (C) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund, or an assignment of the entire remaining amount of the assigning Lender’s Commitment, the
amount of the Commitment of the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 for the Revolving Loan or the Revolving
Loan Commitments or $1,000,000 for the Term Loans unless each of the Borrower and the
Administrative Agent otherwise consent, provided that no such consent of the Borrower shall
be required if an Event of Default under Article VII has occurred and is continuing;



          (D) each partial assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement, provided that this Section
9.04(b)(ii)(B) shall not be construed to prohibit assignment of a proportionate part of all the
assigning Lender’s rights and obligations in respect of one Class of Commitments or Loans;



          (E) the parties to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of $3,500;



          (F) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire; and



          (G) in the case of an assignment by a Lender to a CLO (as defined below) managed by such
Lender or by an Affiliate of such Lender, unless such assignment (or an assignment to a CLO managed
by the same manager or an Affiliate of such manager) shall have been approved by the Company (the
Company hereby agreeing that such approval, if requested will not be unreasonably withheld or
delayed), the assigning Lender shall retain the sole right to approve any amendment, modification
or waiver of any provision of this Agreement, provided that the Assignment and Assumption
between such Lender and such CLO may provide that such Lender will not, without the consent of such
CLO, agree to any amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such CLO.



          For the purposes of this Section 9.04(b), the terms “Approved Fund” and “CLO” have the
following meanings:



          “Approved Fund” means (a) with respect to any Lender, a CLO managed by such Lender or
by an Affiliate of such Lender and (b) with respect to any Lender that is a fund which invests in
bank loans and similar extensions of credit, any other fund that invests in bank loans and similar
extensions of credit and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.



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          “CLO” means any entity (whether a corporation, partnership, trust or otherwise) that
is engaged in making, purchasing, holding or otherwise investing in bank loans and similar
extensions of credit in the ordinary course of its business and is administered or managed by a
Lender or an Affiliate of such Lender.




(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and Assumption the
assignee thereunder shall be a party hereto and, to the extent of the interest assigned by
such Assignment and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned
by such Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03).
Any assignment or transfer by a Lender of rights or obligations under this Agreement that
does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.




(iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption delivered to it and
a register for the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to
the terms hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.
The Register shall be available for inspection by the Borrower, the Issuing Bank and any
Lender, at any reasonable time and from time to time upon reasonable prior notice.




(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the processing and recordation fee referred
to in paragraph (b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.




     (c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent,
the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other
entities (a “Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (A) such Lender’s obligations under this Agreement shall
remain unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrower, the Administrative
Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such Lender
will not, without the consent of the Participant, agree to any amendment, modification or
waiver described



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in the first proviso to Section 9.02(b) that affects such Participant. Subject to
paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.18(c) as though it were a Lender.




     (ii) A Participant shall not be entitled to receive any greater payment under Section 2.15
or 2.17 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. A Participant that would be
a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17
unless the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as
though it were a Lender.




     (d) Any Lender may, without the consent of the Borrower or Administrative Agent, at any
time pledge or assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including, without limitation, any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply
to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.



     SECTION 9.05 Survival. All covenants, agreements, representations and warranties made by the
Borrower herein and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto
and shall survive the execution and delivery of this Agreement and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any such other party or
on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may
have had notice or knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement
is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the
Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.



     SECTION 9.06 Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall
become effective when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement.



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     SECTION 9.07 Severability. Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.



     SECTION 9.08 Right of Setoff. If an Event of Default shall have occurred and be continuing,
each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at any time owing by
such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all
the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this Section are in
addition to other rights and remedies (including other rights of setoff) which such Lender may
have.



     SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement
shall be construed in accordance with and governed by the law of the State of New York.



          (b) The Borrower hereby irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding
may be heard and determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against the Borrower or its properties in the courts of any
jurisdiction.



          (c) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.



          (d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.



     SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING



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WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.



     SECTION 9.11 Headings. Article and Section headings and the Table of Contents used herein are
for convenience of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.



     SECTION 9.12 Confidentiality. Each of the Administrative Agent, the Issuing Bank and the
Lenders agrees to maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and
agents, including accountants, legal counsel and other advisors who have a legitimate need to know
such information (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other
party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights hereunder, (f) subject
to an agreement containing provisions substantially the same as those of this Section, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights
or obligations under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g)
with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other
than the Borrower. For the purposes of this Section, “Information” means all information
received from the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of
information received from the Borrower after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own confidential
information.



     SECTION 9.13 Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at
any time the interest rate applicable to any Loan, together with all fees, charges and other
amounts which are treated as interest on such Loan under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance
with applicable law, the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent
lawful, the interest and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.



     SECTION 9.14 USA PATRIOT Act. Each Lender hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower and other information
that will allow such Lender to identify the Borrower in accordance with the Patriot Act.



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     SECTION 9.15 Reaffirmation and Grant of Security Interests. (a) Each Loan Party has (i)
guarantied the Obligations and (ii) created Liens in favor of Lenders on certain Collateral to
secure its obligations hereunder, under the Guarantee. Each Loan Party hereby acknowledges that it
has reviewed the terms and provisions of this Agreement and consents to the amendment and
restatement of the Existing Credit Agreement effected pursuant to this Agreement. Each Loan Party
hereby (i) confirms that each Loan Document to which it is a party or is 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 Loan Documents, the payment and performance of the
Obligations and all Guarantees, as the case may be, including without limitation the payment and
performance of all such Obligations and all Guarantees which are joint and several obligations of
each grantor now or hereafter existing, and (ii) grants to the Administrative Agent for the benefit
of the Lenders a continuing lien on and security interest in and to such Loan Party’s right, title
and interest in, to and under all Collateral as collateral security for the prompt payment and
performance in full when due of the Obligations and all Guarantee (whether at stated maturity, by
acceleration or otherwise).



          (b) Each Loan Party acknowledges and agrees that any of the Loan 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 the amendment and restatement of the Existing Credit Agreement. Each Loan Party
represents and warrants that all representations and warranties contained in the Loan Documents to
which it is a party or otherwise bound are true, correct and complete in all material respects on
and as of the Closing 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.




     SECTION 9.16 Amendment and Restatement. It is the intention of each of the parties hereto
that the Existing Credit Agreement be amended and restated so as to preserve the perfection and
priority of all security interests securing indebtedness and obligations under the Existing Credit
Agreement and that all Indebtedness and Obligations and Guarantee of Borrower and its Subsidiaries
hereunder and thereunder shall be secured by the Security Documents and that this Agreement does
not constitute a novation of the obligations and liabilities existing under the Existing Credit
Agreements. The parties hereto further acknowledge and agree that this Agreement constitutes an
amendment of the Existing Credit Agreement made under and in accordance with the terms of
subsection 9.02 of the Existing Credit Agreement. In addition, unless specifically amended hereby,
each of the Loan Documents, the Exhibits and Schedules to the Existing Credit Agreement shall
continue in full force and effect and that, from and after the Third Amendment Effective Date, all
references to the “Credit Agreement” contained therein shall be deemed to refer to this Agreement,
the definition of any term defined in any Loan Document by reference to the terms defined in the
Existing Credit Agreement shall be amended to be defined by reference to the defined term in this
Agreement, as the same may be amended, restated, modified or supplemented and in effect from time
to time. Furthermore, each reference, whether direct or indirect, in each Loan Document to
“Obligations” shall be deemed to include any indebtedness or obligations incurred, or loans made,
pursuant to the Third Amendment.



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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.




	 	 	 	 	 
	 	AFC ENTERPRISES, INC.,

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




80









 





	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.,

individually as a Lender and as Administrative Agent

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




81









 





	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,

as Documentation Agent and a Lender

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




82