Contract
Exhibit
10.2
EXECUTION
COPY
SECOND
LIEN AMENDMENT NO. 1 (this “Amendment”)
dated
as of July 14, 2006, to the Credit Agreement dated as of September 21, 2004
(as
amended, supplemented or otherwise modified from time to time, the “Second
Lien Credit Agreement”),
among
DENNY’S, INC., a California corporation, DENNY’S REALTY, LLC (f/k/a Denny’s
Realty, Inc.), a Delaware limited liability company (each of the foregoing,
individually, a “Borrower”
and,
jointly and severally, and collectively, the “Borrowers”),
XXXXX’X CORPORATION, a Delaware corporation (“Parent”),
DENNY’S HOLDINGS, INC., a New York corporation (“Denny’s
Holdings”),
DFO,
LLC (f/k/a DFO, Inc.), a Delaware limited liability company (“DFO”),
the
Lenders (as defined in the Second Lien Credit Agreement), BANK OF AMERICA,
N.A.,
as administrative agent (in such capacity, the “Administrative
Agent”)
and as
collateral agent (in such capacity, the “Collateral
Agent”)
for
the Lenders, and UBS SECURITIES LLC, as syndication agent (in such capacity,
the
“Syndication
Agent”)
for
the Lenders.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Second Lien Credit Agreement, as amended
hereby.
WHEREAS,
pursuant to the Second Lien Credit Agreement, the Lenders have extended credit
to the Borrowers;
WHEREAS
the Borrowers, Parent, Denny’s Holdings and DFO have requested that certain
provisions of the Second Lien Credit Agreement be amended as set forth herein;
and
WHEREAS
the Required Lenders are willing to amend such provisions of the Second Lien
Credit Agreement on the terms and subject to the conditions set forth
herein;
NOW,
THEREFORE, in consideration of the mutual agreements herein contained and
other
good and valuable consideration, the sufficiency and receipt of which are
hereby
acknowledged, and subject to the conditions set forth herein, the parties
hereto
hereby agree as follows:
SECTION
1. As used in this Amendment:
“First
Lien Amendment No. 1”
means
the First Lien Amendment
No. 1 dated as of July 14, 2006, among the Borrowers, Parent,
Denny’s Holdings, DFO, the Lenders party thereto, the Administrative
Agent and the other Agents party thereto.
SECTION
2. Amendments
to Section 1.01.
(a)
Section 1.01 of the Second Lien Credit Agreement is hereby amended by adding
the
following definitions in the appropriate alphabetical order:
“Second
Lien Amendment No. 1”
means
the Second Lien Amendment No. 1 dated as of July 14, 2006, among the Borrowers,
Parent, Denny’s Holdings, DFO, the Lenders party thereto, the Administrative
Agent and the other Agents party thereto.
“Restaurant
Businesses”
shall
have the meaning assigned to such term in Section 6.05(e).
“Specified
Properties”
shall
mean the properties listed on Schedule 1 to Second Lien Amendment No.
1.
(b)
The
definition of the term “Act” in Section 1.01 of the Second Lien Credit Agreement
is hereby amended by replacing the text “9.17” with the text “9.18”
(c)
The
definition of the term “Consolidated Total Debt” in Section 1.01 of the Second
Lien Credit Agreement is hereby amended as follows:
(i)
by
replacing, in clause (c) of such definition, the text “aggregate
amount not to exceed $45,000,000” with the text “aggregate amount
not to exceed $55,000,000”
(ii)
by
replacing, in clause (c) of such definition, the text “of
which up
to (i)
$45,000,000” with the text “of which up to (i) $55,000,000”
(d)
The
definition of the term “Reduction Event” in Section 1.01 of the Second Lien
Credit Agreement is hereby amended by inserting, immediately after the text
“Sale” in clause (a) of such definition, the text “, provided
that,
other than for purposes of clause (a) of the definition of “Excess Cash Flow”,
no sale of any of the Specified Properties shall constitute a Reduction
Event”
SECTION
3. Amendments
to Section 6.05.
Section
6.05 of the Second Lien Credit Agreement is hereby amended as
follows:
(a)
by
deleting clause (e) of such Section in its entirety and replacing
it with the following text:
“(e)
Parent, any Borrower or any Subsidiary Loan Party may sell, transfer,
sell a franchise in or otherwise dispose of restaurants or property
(including real property, improvements, fixtures and equipment)
relating to current or former restaurants of such person (such
restaurants and property are collectively referred to as “Restaurant
Businesses”) for consideration determined by the board
of
directors of the person that owns such Restaurant Businesses
to be equal to the Fair Market Value of the Restaurant
Businesses sold, transferred or otherwise disposed of, provided
that the
aggregate Fair Market Value of all assets disposed
of pursuant to this clause (e) shall not exceed $15,000,000
in any fiscal year;”
(b)
by
deleting the text “and” at the end of clause (i) of such Section
and inserting the following new text immediately after the semicolon
at the end of clause (j) of such Section:
“and
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(k)
Parent, any Borrower or any Subsidiary Loan Party may sell the Specified
Properties; provided
that
100% of the Net Cash Proceeds of each sale of any of the Specified Properties
shall be used to prepay Term Loans as if such sale was a Reduction Event
described in clause (a) of the definition of the term “Reduction Event”, except
that any such prepayment shall occur on the fifth
Business Day of the month following the month in which such sale
occurs;
provided
further
that,
notwithstanding anything in this Agreement to the contrary, (i) none of
the Net
Cash Proceeds of any sale of any of the Specified Properties shall be used
to
acquire Reinvestment Assets and (ii) Parent shall deliver to the Administrative
Agent a certificate of a Financial Officer promptly following receipt of
any Net
Cash Proceeds (and
in
any event no later than the fifth Business Day of the month following the
month
in which such Net Cash Proceeds were received) of
a sale
of any of the Specified Properties setting forth a reasonably detailed
calculation of the amount of such Net Cash Proceeds;”
(c)
by
replacing, in the proviso at the end of such Section, the text “(b)
or
(c)” with the text “(b), (c) or (k)”
(d)
by
replacing, just before clause (B) of the proviso at the end of such
Section, the text “ and” with the text “,”
(e)
by
replacing the text “.” at the end of the proviso at the end of such
Section with the text “ and (C) $500,000 for all such sales, transfers,
exchanges or other dispositions permitted by clause (k) shall
not be
permitted unless such disposition is for at least 90% cash consideration.”
SECTION
4. Amendments
to Article IX.
Article
IX of the Second Lien Credit Agreement is hereby amended as
follows:
(a)
by
deleting the text “and” at the end of clause (b)(ii)(C) of Section
9.04 and replacing the text “.” at the end of clause (b)(ii)(D)
of Section
9.04 with the following new text:
“;
(E)
no
assignment shall be made to either Borrower or any of either
Borrower’s Affiliates or subsidiaries; and
(F)
no
assignment shall be made to a natural person.”
(b)
by
renumbering Section 9.17 as Section 9.18 and inserting the following
Section immediately after Section 9.16:
“SECTION
9.17. No
Advisory or Fiduciary Responsibility. In
connection with all aspects of each transaction contemplated hereby,
each Borrower and each other Loan Party acknowledges and
agrees, and acknowledges its Affiliates’ understanding, that: (i)
the
credit facilities provided for hereunder and any related arranging
or other services in connection therewith (including in connection
with any amendment, waiver or other modification hereof
or
of any other Loan Document) are an arm’s-length commercial
transaction between each Borrower, each other Loan Party
and
their respective Affiliates, on the one hand, and the Administrative
Agent and the Arrangers, on the other hand, and each
Borrower and each other Loan Party is capable of evaluating and
understanding and understands and accepts the terms, risks
and conditions
of the transactions contemplated
hereby and by the other
Loan Documents (including any amendment, waiver or other modification
hereof or thereof); (ii) in connection with the process leading
to such transaction, each of the Administrative Agent and the
Arrangers is and has been acting solely
as
a principal and is not
the
financial advisor, agent or fiduciary, for any Borrower, any other
Loan Party or any of their respective Affiliates,
stockholders, creditors
or employees or any other person; (iii) neither the Administrative
Agent nor any Arranger has assumed or will assume
an
advisory, agency or fiduciary responsibility in favor of any
Borrower or any other Loan Party with respect to any of the transactions
contemplated hereby or the process leading thereto, including
with respect to any amendment, waiver or other modification
hereof or of any other Loan Document (irrespective of
whether the Administrative Agent or any Arranger has advised or
is
currently advising any Borrower, any other Loan Party or any of
their
respective Affiliates on other matters) and neither the Administrative
Agent nor any Arranger has any obligation to any Borrower,
any other Loan Party or any of their respective Affiliates
with respect to the transactions contemplated hereby except
those obligations expressly set forth herein and in the other Loan
Documents; (iv) the Administrative Agent, the Arrangers and their
respective Affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Borrowers,
the other Loan Parties and their respective Affiliates, and
neither the Administrative Agent nor any Arranger has any obligation
to disclose any of such interests by virtue of any advisory,
agency or fiduciary relationship; and (v) the Administrative
Agent and the Arrangers have not provided and will
not
provide any legal accounting, regulatory or tax advice with respect
to any of the transactions contemplated hereby (including any
amendment, waiver or other modification hereof or of any other
Loan Document) and each of the Borrowers and the other
Loan Parties has consulted its own legal, accounting, regulatory
and tax advisors to the extent it has deemed appropriate. Each
of
the Borrowers and the other Loan Parties hereby waives
and releases to the fullest extent permitted by law, any claims
that it may have against the Administrative Agent and the Arrangers
with respect to any breach or alleged breach of agency or
fiduciary duty with respect to the transactions contemplated hereby.”
SECTION
5. Amendment
to Exhibit B.
Exhibit
B of the Second Lien Credit Agreement is hereby amended and restated in
its
entirety by Exhibit B attached hereto.
SECTION
6. Representations
and Warranties.
Each of
Parent, Denny’s Holdings, DFO and the Borrowers represents and warrants to the
Administrative Agent, the Collateral Agent and each of the Lenders
that:
(a)
This
Amendment has been duly authorized, executed and delivered by it and constitutes
a legal, valid and binding obligation of Parent, Denny’s Holdings, DFO and each
Borrower, enforceable against each of them in accordance with its
terms.
(b)
The
representations and warranties of each Loan Party set forth in the Loan
Documents are true and correct in all material respects on and as of the
Effective Date (as defined below), except to the extent such representations
and
warranties expressly relate to an earlier date (in which case such
representations and warranties were true and correct in all material respects
as
of such earlier date).
(c)
Immediately before and after giving effect to this Amendment, no Default
shall
have occurred and be continuing.
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SECTION
7. Conditions.
This
Amendment shall become effective as of the date first above written (the
“Effective
Date”)
when
(a) the Administrative Agent shall have received counterparts of this Amendment
that, when taken together, bear the signatures of the Borrowers, Parent,
Denny’s
Holdings, DFO and the Required Lenders, (b) First Lien Amendment No.1 shall
have
become or shall simultaneously become effective in accordance with its
terms and
(c) all fees and, to the extent invoiced prior to the date hereof, expenses
required to be paid or reimbursed by the Borrowers under or in connection
with
this Amendment or the Second Lien Credit Agreement (including all reasonable
invoiced fees, charges and disbursements of Cravath, Swaine & Xxxxx LLP,
counsel to the Administrative Agent) shall have been paid or
reimbursed.
SECTION
8. Second
Lien Credit Agreement.
Except
as expressly set forth herein, this Amendment (a) shall not by implication
or otherwise limit, impair, constitute a waiver of or otherwise affect
the
rights and remedies of the Lenders, the Administrative Agent, the Borrowers,
Parent, Denny’s Holdings or DFO under the Second Lien Credit Agreement or any
other Loan Document and (b) shall not alter, modify, amend or in any way
affect any of the terms, conditions, obligations, covenants or agreements
contained in the Second Lien Credit Agreement or any other Loan Document,
all of
which are ratified and affirmed in all respects and shall continue in full
force
and effect. Nothing herein shall be deemed to entitle either Borrower,
Parent,
Denny’s Holdings or DFO to a consent to, or a waiver, amendment, modification
or
other change of, any of the terms, conditions, obligations, covenants or
agreements contained in the Second Lien Credit Agreement or any other Loan
Document in similar or different circumstances. From and after the date
hereof,
any reference in the Loan Documents to the Second Lien Credit Agreement
shall
mean the Second Lien Credit Agreement as modified hereby.
SECTION
9. Applicable
Law; Waiver of Jury Trial. (a)
THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF
THE STATE OF NEW YORK.
(b)
EACH PARTY HERETO HEREBY AGREES AS SET FORTH IN SECTION 9.10 OF THE SECOND
LIEN
CREDIT AGREEMENT AS IF SUCH SECTION WERE SET FORTH IN FULL
HEREIN.
SECTION
10. Counterparts;
Amendments.
This
Amendment may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute
a
single contract. Delivery of an executed counterpart of a signature page
of this
Amendment by telecopy shall be effective as delivery of a manually executed
counterpart of this Amendment. Except as otherwise permitted by Section
9.02 of
the Second Lien Credit Agreement, this Amendment may not be amended nor
may any
provision hereof be waived except pursuant to a writing signed by the Borrowers,
Parent, Denny’s Holdings, DFO and the Required Lenders.
SECTION
11. Headings.
The
Section headings used herein are for convenience of reference only, are
not part
of this Amendment and are not to affect the construction of, or to be taken
into
consideration in interpreting, this Amendment.
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DENNY’S,
INC.,
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By
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/s/
F. Xxxx Xxxxxxxxx
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Name: F.
Xxxx Xxxxxxxxx
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Title: SVP
& CFO
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DENNY’S
REALTY, LLC,
f/k/a Denny’s Realty, Inc.,
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By
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/s/
F. Xxxx Xxxxxxxxx
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Name: F.
Xxxx Xxxxxxxxx
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Title: SVP
& CFO
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XXXXX’X
CORPORATION,
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By
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/s/
F. Xxxx Xxxxxxxxx
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Name: F.
Xxxx Xxxxxxxxx
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Title: SVP
& CFO
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DENNY’S
HOLDINGS, INC.,
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By
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/s/
Xxxxxxxx Xxxxxxx
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Name: Xxxxxxxx
Xxxxxxx
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Title: Vice
President
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DFO,
LLC, f/k/a
DFO, Inc.,
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By
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/s/
F. Xxxx Xxxxxxxxx
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Name: F.
Xxxx Xxxxxxxxx
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Title: SVP
& CFO
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BANK
OF AMERICA, N.A., individually
and as Administrative Agent, as Collateral Agent and a Lender,
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By
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/s/
Xxxx Xxxxxxx
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Name: Xxxx
Xxxxxxx
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Title: Vice
President
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