CREDIT AGREEMENT
dated as of December 16, 2002,
Among
DENNY'S, INC.,
XXXXX'X REALTY, INC.,
as Borrowers,
XXXXX'X CORPORATION,
XXXXX'X HOLDINGS, INC.,
DFO, INC.,
as Guarantors,
THE LENDERS NAMED HEREIN,
JPMORGAN CHASE BANK,
as Administrative Agent
and
FOOTHILL CAPITAL CORPORATION,
as Syndication Agent
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X.X. XXXXXX SECURITIES INC., as Sole Advisor,
Sole Lead Arranger and Sole Bookrunner
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms..................................................1
SECTION 1.02. Classification of Loans and Borrowings........................19
SECTION 1.03. Terms Generally...............................................19
SECTION 1.04. Accounting Terms; GAAP........................................19
ARTICLE II
The Credits
SECTION 2.01. Commitments...................................................20
SECTION 2.02. Loans.........................................................20
SECTION 2.03. Requests for Borrowings.......................................20
SECTION 2.04. Swingline Loans.
SECTION 2.05. [Intentionally Omitted.]......................................22
SECTION 2.06. Letters of Credit.............................................22
SECTION 2.07. Funding of Borrowings.........................................25
SECTION 2.08. Interest Elections............................................25
SECTION 2.09. Termination and Reduction of Commitments......................26
SECTION 2.10. Repayment of Loans; Evidence of Debt..........................27
SECTION 2.11. Prepayment....................................................28
SECTION 2.12. Fees..........................................................28
SECTION 2.13. Interest......................................................29
SECTION 2.14. Alternate Rate of Interest....................................30
SECTION 2.15. Increased Costs...............................................30
SECTION 2.16. Break Funding Payments........................................31
SECTION 2.17. Taxes.........................................................31
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Setoffs....32
SECTION 2.19. Mitigation Obligations; Replacement of Lenders................33
SECTION 2.20. Covenant of Collateral Agent...................................34
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers..........................................34
SECTION 3.02. Authorization.................................................34
SECTION 3.03. Enforceability................................................35
SECTION 3.04. Governmental Approvals........................................35
SECTION 3.05. Financial Statements..........................................35
SECTION 3.06. No Material Adverse Change....................................35
SECTION 3.07. Title to Properties; Possession Under Leases..................35
SECTION 3.08. Subsidiaries..................................................36
SECTION 3.09. Litigation; Compliance with Laws..............................36
SECTION 3.10. Agreements....................................................36
SECTION 3.11. Federal Reserve Regulations...................................36
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act....36
SECTION 3.13. Use of Proceeds...............................................36
SECTION 3.14. Tax Returns...................................................37
SECTION 3.15. No Material Misstatements.....................................37
SECTION 3.16. Employee Benefit Plans........................................37
SECTION 3.17. Environmental Matters.........................................37
SECTION 3.18. Insurance.....................................................38
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SECTION 3.19. Security Documents............................................38
SECTION 3.20. Labor Matters.................................................38
SECTION 3.21. Solvency......................................................39
SECTION 3.22. Intellectual Property.........................................39
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events.............................................39
SECTION 4.02. First Credit Event............................................40
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties..........................43
SECTION 5.02. Insurance.....................................................43
SECTION 5.03. Obligations and Taxes.........................................43
SECTION 5.04. Financial Statements, Reports, etc............................44
SECTION 5.05. Litigation and Other Notices..................................45
SECTION 5.06. Employee Benefits.............................................45
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.....45
SECTION 5.08. Use of Proceeds...............................................46
SECTION 5.09. Compliance with Environmental Laws............................46
SECTION 5.10. Preparation of Environmental Reports..........................46
SECTION 5.11. Additional Subsidiaries.......................................46
SECTION 5.12. Further Assurances............................................46
SECTION 5.13. Cash Management Arrangements..................................47
SECTION 5.14. Mortgages Not Required at the Closing Date....................47
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness..................................................47
SECTION 6.02. Liens.........................................................49
SECTION 6.03. Sale and Lease-Back Transactions..............................49
SECTION 6.04. Investments, Loans and Advances...............................50
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.....50
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends................................52
SECTION 6.07. Transactions with Affiliates..................................52
SECTION 6.08. Other Indebtedness and Agreements.............................53
SECTION 6.09. Operating Leases..............................................53
SECTION 6.10. Capital Expenditures; Acquisitions............................54
SECTION 6.11. Consolidated Total Debt Ratio.................................54
SECTION 6.12. Consolidated Senior Secured Debt Ratio........................54
SECTION 6.13. Minimum Consolidated EBITDA...................................55
SECTION 6.14. Consolidated Fixed Charge Coverage Ratio......................55
SECTION 6.15. Business of Parent, the Borrowers and the Subsidiaries........55
SECTION 6.16. Fiscal Year...................................................56
SECTION 6.17. Hedging Agreements............................................56
ARTICLE VII
Events of Default
3
ARTICLE VIII
The Administrative Agent and the Collateral Agent; Syndication Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices.......................................................60
SECTION 9.02. Waivers; Amendments...........................................60
SECTION 9.03. Expenses; Indemnity; Damage Waiver............................61
SECTION 9.04. Successors and Assigns........................................62
SECTION 9.05. Survival......................................................64
SECTION 9.06. Counterparts; Integration; Effectiveness......................64
SECTION 9.07. Severability..................................................64
SECTION 9.08. Right of Setoff...............................................64
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process....65
SECTION 9.10. WAIVER OF JURY TRIAL..........................................65
SECTION 9.12. Confidentiality...............................................65
SECTION 9.13. Interest Rate Limitation......................................66
SECTION 9.14. Irrevocable Proxy.............................................66
SECTION 9.15. Obligations Joint and Several.................................67
Exhibits and Schedules
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C-1 Form of Notice of Borrowing
Exhibit C-2 Form of Notice of Swingline Borrowing
Exhibit D Form of Note
Exhibit E Form of Guarantee and Collateral Agreement
Exhibit F Form of Mortgage
Exhibit G Form of Deed of Trust
Exhibit H Form of Opinion of Xxxxxx & Bird, LLP
Exhibit I Form of Local Counsel Opinion
Exhibit J Form of Compliance Certificate
Schedule 1.01(a) Mortgaged Properties
Schedule 1.01(b) Properties Held for Sale
Schedule 2.01 Commitments
Schedule 2.06(a) Existing Letters of Credit
Schedule 3.07(c) Condemnation Proceedings
Schedule 3.07(e) Scheduled Financing Statements
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 3.19(d) Mortgage Filing Offices
Schedule 6.01 Indebtedness
Schedule 6.02 Liens
Schedule 6.04 Existing Investments
Schedule 6.06 Agreements Restricting Dividends
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CREDIT AGREEMENT dated as of December 16,
2002 (this "Agreement"), among DENNY'S, INC., a
California corporation, XXXXX'X REALTY, INC., a
Delaware corporation, (each of the foregoing,
individually, a "Borrower" and, jointly and
severally, and collectively, the "Borrowers"),
XXXXX'X CORPORATION, a Delaware corporation
("Parent"), XXXXX'X HOLDINGS, INC., a New York
corporation ("Denny's Holdings"), DFO, INC., a
Delaware corporation, the Lenders (as defined in
Article I), JPMORGAN CHASE BANK, a New York banking
corporation ("JPMCB"), as issuing bank, as
administrative agent (in such capacity, the
"Administrative Agent") and as collateral agent
(in such capacity, the "Collateral Agent") for the
Lenders and FOOTHILL CAPITAL CORPORATION, a
California corporation ("Foothill"), as syndication
agent (in such capacity, the "Syndication Agent")
for the Lenders.
The Borrowers have requested the Lenders to extend credit in the form
of Loans (such term and each other capitalized term used but not otherwise
defined herein having the meaning given it in Article I) at any time and from
time to time prior to the Maturity Date, in an aggregate principal amount at any
time outstanding not in excess of the aggregate Commitments at such time minus
the aggregate LC Exposure at such time. The Borrowers have requested the Issuing
Bank to issue letters of credit at any time and from time to time before the
fifth Business Day prior to the Maturity Date, in an aggregate face amount at
any time outstanding not in excess of $60,000,000 to support payment obligations
incurred in the ordinary course of business by the Borrowers and their
respective subsidiaries. The proceeds of the Loans are to be used solely (a) on
the Closing Date, to repay or refinance loans under the Credit Agreement dated
as of January 7, 1998, as amended or otherwise modified through the date hereof
(the "Existing Credit Agreement"), among Denny's, Parent, certain other existing
and former subsidiaries of Parent, the lenders party thereto and JPMCB, as
administrative agent and collateral agent, (b) on the Closing Date, to pay fees
and expenses incurred in connection with the Refinancing and this Agreement and
(c) after the Closing Date, for working capital and other general corporate
purposes.
The Lenders are willing to extend such credit to the Borrowers and the
Issuing Bank is willing to issue letters of credit for the account of the
Borrowers on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of
Article II.
"Adjusted LIBO Rate" shall mean, 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%) equal to the product of (a) the LIBO Rate
in effect for such Interest Period and (b) Statutory Reserves.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A.
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"Affiliate" shall mean, when used 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.
"Aggregate Credit Exposure" shall mean the aggregate amount of the
Lenders' Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. If for any reason the Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective Rate
for any reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms of the definition
thereof, the Alternate Base Rate shall be determined without regard to clause
(b) of the preceding sentence until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.
"Applicable Percentage" shall mean, with respect to any Lender, the
percentage of the Total Commitment represented by such Lender's Commitment. In
the event the Commitments shall have expired or been terminated, the Applicable
Percentages shall be determined on the basis of the Commitments most recently in
effect, giving effect to any assignments.
"Applicable Rate" shall mean (a) with respect to any ABR Loan, 4.00%
per annum, and (b) with respect to any Eurodollar Loan, 5.00% per annum.
"Applicable UCC" shall have the meaning assigned to such term in
Section 3.07(e).
"Approved Fund" shall mean any person (other than a natural person)
that is engaged in making, purchasing, holding or investing in bank loans and
similar extensions of credit in the ordinary course of its business and that is
administered or managed by a Lender, an Affiliate of a Lender or an entity or an
Affiliate of an entity that administers or manages a Lender.
"Asset Sale" shall mean any sale, lease, transfer, assignment or other
disposition (by merger or otherwise) of assets (including trademarks and other
intangibles), business units, individual business assets or property of Parent,
any Borrower or any Subsidiary, including the sale, transfer or disposition of
any capital stock or real property, to any person other than Parent, any
Borrower or any Subsidiary; provided, however, that neither of the following
shall be deemed to be an Asset Sale: (a) the sale of inventory in the ordinary
course of business or (b) the sale in the ordinary course of business of
damaged, worn-out or obsolete assets that are no longer necessary for the proper
conduct of the applicable Borrower's or Subsidiary's business in compliance with
Section 6.05(b).
"Assigned Claims" shall have the meaning assigned to such term in
Section 9.14(b)(i).
"Assigning Lender" shall have the meaning assigned to such term in
Section 9.14(a).
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit B or such other form as shall be approved by the
Administrative Agent.
"Availability Period" means the period from and including the Closing
Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
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"Borrowing" shall mean (a) a group of Revolving Loans of a single Type
made by the Lenders on a single date to one or more Borrowers and as to which a
single Interest Period is in effect or (b) a Swingline Loan.
"Borrowing Request" shall mean a request by one or more Borrowers in
accordance with the terms of Section 2.03 and substantially in the form of
Exhibit C-1.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which commercial banks in New York City are authorized or required by law
to close; provided, however, that when used in connection with a Eurodollar
Loan, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
"Capex Financing" shall mean, with respect to any Consolidated Capital
Expenditure, the incurrence by any Borrower or any Subsidiary of any
Indebtedness secured (whether such security is limited to principal or
otherwise) by a mortgage or other Lien, including any Lien under a Capital Lease
Obligation, solely on the asset that is the subject of such Consolidated Capital
Expenditure, to the extent that the Net Cash Proceeds of such Indebtedness do
not exceed the amount of such Consolidated Capital Expenditure.
"Capital Lease Obligations" of any person shall mean 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.
"Change in Control" shall mean (a) any person or group (within the
meaning of Rule 13d-5 of the Securities Exchange Act of 1934 as in effect on the
date hereof) shall own, directly or indirectly, beneficially or of record,
shares representing more than 25% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of Parent, (b) any
person (other than Parent or any wholly owned Subsidiary) shall own, directly or
indirectly, beneficially or of record any shares of capital stock of (i) any
Borrower or (ii) any Subsidiary that owns, directly or indirectly, beneficially
or of record, any shares of capital stock of any Borrower; (c) a majority of the
seats (other than vacant seats) on the board of directors of Parent shall at any
time be occupied by persons who were neither (i) nominated by the board of
directors of Parent, nor (ii) appointed by directors so nominated; (d) any
change in control (or similar event, however denominated) with respect to Parent
or with respect to Denny's Holdings shall occur under and as defined in any
indenture or agreement in respect of Indebtedness to which Parent is a party or
under the New Senior Notes Documents; or (e) any person or group shall otherwise
directly or indirectly Control Parent.
"Change in Law" shall mean (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 or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"Charges" shall have the meaning assigned to such term in Section 9.13.
"Closing Date" shall mean the date of the first Credit Event.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean all the "Collateral" as defined in the
Guarantee and Collateral Agreement and shall also include the Mortgaged
Properties.
"Collateral and Guarantee Requirement" shall mean the requirement that:
4
(a) the Administrative Agent shall have received from each
Loan Party either (i) a counterpart of the Guarantee and Collateral
Agreement duly executed and delivered on behalf of such Loan Party or
(ii) in the case of any person that becomes a Loan Party after the
Closing Date, a supplement to the Guarantee and Collateral Agreement,
in the form specified therein, duly executed and delivered on behalf of
such Loan Party;
(b) all outstanding Equity Interests of each Borrower and each
Subsidiary owned by or on behalf of any Loan Party shall have been
pledged pursuant to the Guarantee and Collateral Agreement (except that
the Loan Parties shall not be required to pledge more than 65% of the
outstanding voting Equity Interests of any Foreign Subsidiary that is
not a Loan Party) and the Administrative Agent shall have received
certificates or other instruments representing all such Equity
Interests, together with stock powers or other instruments of transfer
with respect thereto endorsed in blank;
(c) all Indebtedness of Parent, Denny's Holdings, the
Borrowers and each Subsidiary that is owing to any Loan Party shall be
evidenced by a promissory note and shall have been pledged pursuant to
the Guarantee and Collateral Agreement and the Administrative Agent
shall have received all such promissory notes, 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 Liens intended to be created by the Guarantee
and Collateral Agreement and perfect such Liens to the extent required
by, and with the priority required by, the Guarantee and Collateral
Agreement, shall have been filed, registered or recorded or delivered
to the Administrative Agent for filing, registration or recording;
(e) the Administrative Agent shall have received (i) on or
prior to the Closing Date, counterparts of Mortgages with respect to
substantially all the Mortgaged Properties on such date (and, in any
event, with respect to Mortgaged Properties representing at least 90%
of the aggregate value of all such Mortgaged Properties) duly executed
and completed, in recordable form and delivered by the record owner of
such Mortgaged Property; (ii) not later than 60 days after the Closing
Date, counterparts of Mortgages with respect to any Mortgaged
Properties for which Mortgages were not delivered to the Administrative
Agent on or prior to the Closing Date duly executed and completed, in
recordable form and delivered by the record owner of such Mortgaged
Property; (iii) counterparts of Mortgages with respect to any Mortgaged
Properties that are owned by any person that becomes a Loan Party after
the Closing Date or that are acquired by a Loan Party after the Closing
Date; and (iv) on or prior to receipt of each such counterpart, written
instructions from First American Title Insurance Company to the effect
that such Mortgage is in proper form for filing in the jurisdictions in
which such Mortgage is required to be recorded;
(f) the Lenders shall have received an appraisal (to the
extent deemed necessary or appropriate by, and satisfactory in form and
substance to, the Administrative Agent), from an appraiser satisfactory
to such Agent, of each Mortgaged Property, and full appraisal reports
with respect to Mortgaged Properties specified by the Administrative
Agent, with the number of Mortgaged Properties that are permitted to be
specified not to exceed 70 Mortgaged Properties; and
(g) each Loan Party shall have obtained all consents and
approvals required 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" shall mean, with respect to each Lender, the commitment of
such Lender to make Loans hereunder and participate in Letters of Credit and (if
required under Section 2.04(c)) Swingline Loans, all as set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed
its Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to
5
Section 2.09 or pursuant to Section 2.19 and (b) reduced or increased from time
to time pursuant to assignments by or to such Lender pursuant to Section 9.04.
"Commitment Reduction Event" shall mean:
(a) any Asset Sale;
(b) 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 Parent, any Borrower or any Subsidiary, in each case under this clause
(b) the Net Cash Proceeds of which exceed $3,000,000; or
(c) the issuance by Parent, any Borrower or any Subsidiary of any
Equity Interests, or the receipt by Parent, any Borrower or any Subsidiary of
any capital contribution, other than (i) any such issuance of Equity Interests
to, or receipt of any such capital contribution from, Parent, any Borrower or a
Subsidiary and (ii) any such issuance from time to time by Parent of Equity
Interests in Parent pursuant to any stock option, equity incentive or similar
benefit plan established for employees of Subsidiaries; or
(d) the incurrence by Parent, any Borrower or any Subsidiary of any
Indebtedness, other than Indebtedness for money borrowed permitted pursuant to
Section 6.01.
"Concentration Account" shall have the meaning assigned to such term in
the Guarantee and Collateral Agreement.
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Borrowers dated October, 2002.
"Consolidated Capital Expenditures" shall mean, for any period, without
duplication, the sum of the aggregate of all expenditures (whether paid in cash
or other consideration or accrued as a liability) by Parent, the Borrowers and
the Subsidiaries during such period that, in conformity with GAAP, would be
included in "additions to property, plant or equipment" or comparable items
reflected in the consolidated statement of cash flows of Parent, the Borrowers
and the Subsidiaries for such period, including (a) Capital Lease Obligations
and (b) expenditures for equipment that is purchased simultaneously with the
trade-in of existing equipment owned by any Borrower or any Subsidiary to the
extent of the gross amount of the purchase price less the book value of the
equipment being traded in at such time, but excluding (c) interest capitalized
during construction and (d) expenditures made in connection with the replacement
or restoration of assets, to the extent reimbursed or financed from insurance
proceeds paid on account of the loss of or the damage to the assets being
replaced or restored, or from awards of compensation arising from the taking by
condemnation or eminent domain of such assets being replaced, and net of cash
amounts received by the Borrowers and the Subsidiaries from other persons during
that period in reimbursement of Consolidated Capital Expenditures made by the
Borrowers and the Subsidiaries.
"Consolidated Cash Interest Expense" shall mean, for any period,
Consolidated Interest Expense minus (a) interest not paid in cash (including
amortization of (i) discount and deferred debt expenses and (ii) fees with
respect to Interest Rate Protection Agreements) payable in connection with the
incurrence of Indebtedness to the extent included in interest expense in
accordance with GAAP (including fees and expenses in connection with the
Transactions), plus (b) the amortization of the non-cash write-up of
indebtedness relating to the fresh-start accounting treatment (in accordance
with GAAP) of Parent's consolidated financial statements resulting from the
Chapter 11 bankruptcy cases of Parent, Flagstar Corporation and Flagstar
Holdings, Inc. and Parent's emergence therefrom.
"Consolidated EBITDA" shall mean with respect to Parent, the Borrowers
and the Subsidiaries for any period, all as determined in accordance with GAAP
on a consolidated basis after eliminating intercompany items, the net income (or
net loss) for such period, plus (a) to the extent deducted in computing such net
income (or net loss) the sum of (i) depreciation expense, (ii) amortization
expense, (iii) other non- cash charges, (iv) net total Federal, state and local
income tax expense, (v) Consolidated Interest Expense,
6
(vi) extraordinary losses, (vii) any non-recurring charge or restructuring
charge that in accordance with GAAP is excluded from operating income, (viii)
the cumulative effect of any change in accounting principles and (ix) any net
loss attributable to an Asset Sale minus (b) extraordinary gains minus (c) the
amount of cash expended in such period in respect of any amount that, under
clause (vii) above, was taken into account in determining Consolidated EBITDA
for such or any prior period minus (d) any net gain attributable to an Asset
Sale, minus (e) any non-cash amortization credits to net income; provided,
however, that after the occurrence of any acquisition of any person by Parent,
any Borrower or any Subsidiary, Consolidated EBITDA for each period that
includes the date of occurrence of such acquisition will, solely for purposes of
determining compliance with Sections 6.11 and 6.12, be determined on a pro forma
basis, based on the actual historical results of operations of such person, as
if such acquisition had occurred on the first day of such period.
"Consolidated Fixed Charge Coverage Ratio" shall mean, for any period,
the ratio of (a) the sum of (i) Consolidated EBITDA for such period and (ii)
Consolidated Lease Expense for such period to (b) the sum of (i) Consolidated
Cash Interest Expense for such period and (ii) Consolidated Lease Expense for
such period.
"Consolidated Interest Expense" shall mean, for any period, all
interest expense (including the interest component in respect of Capital Lease
Obligations), net of interest income, accrued or paid by Parent, the Borrowers
and the Subsidiaries during such period in respect of Indebtedness of Parent,
the Borrowers and the Subsidiaries, including (a) any amortization of initial
debt discount or any fees (including fees with respect to Interest Rate
Protection Agreements) payable in connection with the incurrence of Indebtedness
to the extent included in interest expense in accordance with GAAP (including
fees and expenses in connection with the Transactions), (b) any commitment fees,
agent's and other regularly scheduled fees and charges in respect of such
Indebtedness, (c) commissions and other fees and charges payable in connection
with letters of credit, (d) the net payment, if any, payable in connection with
all Interest Rate Protection Agreements and (e) interest capitalized during
construction, all determined on a consolidated basis in accordance with GAAP
after eliminating all intercompany items.
"Consolidated Lease Expense" shall mean, for any period, all payment
obligations of Parent, the Borrowers and the Subsidiaries during such period
under Operating Leases, as determined on a consolidated basis for Parent, the
Borrowers and the Subsidiaries in accordance with GAAP.
"Consolidated Senior Secured Debt" shall mean, at any date and without
duplication, Consolidated Total Debt at such date minus (a) the aggregate
principal amount of Old Senior Notes outstanding on such date, (b) the aggregate
principal amount of New Senior Notes outstanding on such date and (c) to the
extent included in computing such Consolidated Total Debt, the aggregate amount
of other unsecured Indebtedness of Parent at such date on a consolidated basis
in accordance with GAAP.
"Consolidated Senior Secured Debt Ratio" shall mean, for any period,
the ratio of (a) Consolidated Senior Secured Debt on the last day of such period
to (b) Consolidated EBITDA for such period.
"Consolidated Total Debt" shall mean, at any date and without
duplication, the aggregate amount of all Indebtedness (including obligations of
the type described in clause (f) of the definition of the term "Indebtedness")
of Parent, the Borrowers and the Subsidiaries at such date on a consolidated
basis in accordance with GAAP (other than Indebtedness of the type described in
clause (g) of the definition of the term "Indebtedness" or Indebtedness of the
type referred to in clause (h) or (i) or the final sentence of such definition
to the extent that the Indebtedness of the other person referred to in such
clause (h) or (i) or such final sentence is Indebtedness of the type referred to
in clause (a) or (b) above).
"Consolidated Total Debt Ratio" shall mean, for any period, the ratio
of (a) Consolidated Total Debt on the last day of such period to (b)
Consolidated EBITDA for such period.
7
"Control" shall mean 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 ownership of voting securities, by contract or
otherwise, and the terms "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Credit Event" shall have the meaning assigned to such term in Section
4.01.
"Credit Exposure" shall mean, with respect to any Lender at any time,
the aggregate principal amount at such time of all outstanding Loans of such
Lender, plus the aggregate amount at such time of such Lender's LC Exposure plus
the aggregate amount at such time of such Lender's Swingline Exposure.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Denny's" shall mean Denny's, Inc., a California corporation and an
indirect, wholly owned subsidiary of Parent.
"Denny's Holdings" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Denny's Realty" shall mean Denny's Realty, Inc., a Delaware
corporation and an indirect, wholly owned subsidiary of Denny's.
"dollars" or "$" shall mean lawful money of the United States of
America.
"Domestic Subsidiaries" shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
"environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"Environmental Claim" shall mean any written accusation, allegation,
notice of violation, claim, demand, order, directive, cost recovery action or
other cause of action by, or on behalf of, any Governmental Authority or any
other person not a party to this Agreement for damages, injunctive or equitable
relief, personal injury (including sickness, disease or death), Remedial Action
costs, tangible or intangible property damage, natural resource damages,
nuisance, pollution, any adverse effect on the environment caused by any
Hazardous Material, or for fines, penalties or restrictions, resulting from or
based upon (a) the existence, or the continuation of the existence, of a Release
(including sudden or non-sudden, accidental or non-accidental Releases), (b)
exposure to any Hazardous Material, (c) the presence, use, handling,
transportation, storage, treatment or disposal of any Hazardous Material or (d)
the violation or alleged violation of any Environmental Law or Environmental
Permit.
"Environmental Law" shall mean any and all applicable present and
future treaties, 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.
"Environmental Permit" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"Equity Interests" shall mean 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.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
8
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with Parent or any 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.
"ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan (other than events the reporting of which has been waived by the PBGC); (b)
the adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c)
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; (d) 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; (e) the incurrence of any liability under Title IV of ERISA
with respect to the termination of any Plan or the withdrawal or partial
withdrawal of Parent or any Borrower or any of its ERISA Affiliates from any
Plan or Multiemployer Plan; (f) the receipt by any Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (g) the receipt by any 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; (h) the occurrence of a "prohibited
transaction" with respect to which Parent, any Borrower or any of their
respective subsidiaries is a "disqualified person" (within the meaning of
Section 4975 of the Code) or with respect to which Parent, any Borrower or any
such Subsidiary could otherwise be liable; and (i) any other event or condition
with respect to a Plan or Multiemployer Plan that could reasonably be expected
to result in liability of Parent or any Borrower.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Excess Amount" shall have the meaning assigned to such term in Section
9.14(a).
"Excess Cash Flow" shall mean, for any fiscal year, the sum (without
duplication) of:
(a) the consolidated net income (or loss) of the Borrowers and
their consolidated subsidiaries for such fiscal year, adjusted to
exclude any gains or losses attributable to Commitment Reduction
Events; plus
(b) depreciation, amortization and other non-cash charges or
losses deducted in determining such consolidated net income (or loss)
for such fiscal year; plus
(c) the amount, if any, by which Net Working Capital
decreased during such fiscal year minus
(d) the sum of (i) any non-cash gains included in determining
such consolidated net income (or loss) for such fiscal year plus (ii)
the amount, if any, by which Net Working Capital increased during such
fiscal year minus
(e) Consolidated Capital Expenditures for such fiscal year
(except to the extent attributable to the incurrence of Capital Lease
Obligations or otherwise financed by incurring Long-Term Indebtedness);
minus
9
(f) the aggregate principal amount of Long-Term Indebtedness
repaid or prepaid by the Borrower and its consolidated subsidiaries
during such fiscal year, excluding (i) Indebtedness in respect of
Revolving Loans and Letters of Credit and (ii) repayments or
prepayments of Long-Term Indebtedness financed by incurring other
Long-Term Indebtedness.
"Excluded Properties" shall mean Properties Held for Sale, provided,
however, that after the first anniversary of the Closing Date, Properties Held
for Sale that have not been sold or that are not then subject to a bona fide
contract of sale shall not be Excluded Properties.
"Excluded Taxes" shall mean, 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 Borrowers hereunder, (a) income or
franchise taxes imposed on (or measured by) 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 a Borrower is located and (c) in the case of
a Foreign Lender (other than an assignee pursuant to a request by the Borrowers
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 Borrowers with respect to such withholding tax pursuant to
Section 2.17(a).
"Existing Credit Agreement" shall have the meaning assigned to such
term in the preamble to this Agreement.
"Existing Letter of Credit" shall mean each letter of credit previously
issued for the account of, or guaranteed by, any Borrower or a Subsidiary that
(a) is outstanding on the Closing Date and (b) is listed on Schedule 2.06(a).
"Facility Claims" shall have the meaning assigned to such term in
Section 9.14(a).
"Fair Market Value" shall mean, with respect to any asset, the value of
the consideration obtainable in a sale of such asset in the open market at a
specific date assuming a sale by a willing seller to a willing purchaser dealing
at arm's length and arranged in an orderly manner over a reasonable period of
time having regard to the nature and characteristics of such asset, which value
shall, for any asset with a Fair Market Value in excess of $5,000,000, be either
(a) the value of such asset as determined in good faith by the Board of
Directors of Parent or (b) if such asset shall have been the subject of an
appraisal done reasonably contemporaneously by any independent third-party
appraiser engaged by any Lender or Loan Party and the basic assumptions
underlying such appraisal are reasonable, the value of such asset as stated in
such appraisal.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) 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 for any day that is a Business Day, the average of the quotations for
the day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Officer" of any corporation shall mean the chief financial
officer, principal accounting officer, Treasurer, Assistant Treasurer, or
Controller of such corporation.
"First-Tier Subsidiaries" shall mean each of Denny's Holdings and each
other Subsidiary Loan Party that is not a subsidiary of another subsidiary of
Parent.
10
"Foreign Lender" shall mean any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrowers are 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" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"GAAP" shall mean generally accepted accounting principles in the
United States of America applied on a consistent basis.
"Governmental Authority" shall mean 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") shall mean 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 other obligation; provided, however, that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary course
of business.
"Guarantee and Collateral Agreement" shall mean the Guarantee and
Collateral Agreement among Parent, Denny's Holdings, the Borrowers, the
Subsidiary Loan Parties and the Administrative Agent, substantially in the form
of Exhibit D.
"Hazardous Materials" shall mean all explosive or radioactive
substances or wastes, hazardous or toxic substances or wastes, pollutants or
contaminants, including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls ("PCBs"),
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" shall mean any currency swap agreement, currency
future or option contract or other similar agreement or arrangement designed to
protect any Loan Party against fluctuations in foreign interest rates and any
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate future or option contract, foreign currency exchange
agreement, commodity price protection agreement or other interest or currency
exchange rate or commodity price hedging arrangement.
"Indebtedness" of any person shall mean, without duplication, (a) all
indebtedness of such person for borrowed money; (b) all indebtedness of such
person for the deferred purchase price of property or services (other than
property, including inventory, and services purchased, and expense accruals and
deferred compensation items arising, in the ordinary course of business); (c)
all obligations of such person evidenced by notes, bonds, debentures or other
similar instruments (other than performance, surety and appeal bonds arising in
the ordinary course of business); (d) all indebtedness of such person created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property); (e) all Capital Lease Obligations of
such person; (f) all reimbursement, payment or similar obligations of such
person, contingent or otherwise, under acceptance, letter of credit or similar
facilities; (g) all obligations of such person in respect of (i) currency swap
agreements, currency future or option contracts and other similar agreements
designed to hedge against
11
fluctuations in foreign interest rates and (ii) interest rate swap, cap or
collar agreements, interest rate future or option contracts and other similar
agreements designed to hedge against fluctuations in interest rates; (h) all
Guarantees by such person of Indebtedness of others; (i) all Indebtedness
referred to in clauses (a) through (h) above secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien upon or in property (including accounts and contract
rights) owned by such person, even though such person has not assumed or become
liable for the payment of such Indebtedness; (j) all obligations, contingent or
otherwise, of such person as an account party in respect of letters of credit
and letters of guaranty; (k) all obligations, contingent or otherwise, of such
person in respect of bankers' acceptances; and (l) the non-cash write-up of
indebtedness relating to the fresh-start accounting treatment (in accordance
with GAAP) of Parent's consolidated financial statements resulting from the
Chapter 11 bankruptcy cases of Parent, Flagstar Corporation and Flagstar
Holdings, Inc. and Parent's emergence therefrom. The Indebtedness of any person
shall include the Indebtedness of any partnership in which such person is a
general partner.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Indemnitee" shall have the meaning assigned to such term in Section
9.03(b).
"Information" shall mean all information received from the Borrowers
relating to the Borrowers or their 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 Borrowers; provided that, in
the case of information received from the Borrowers after the date hereof, such
information is clearly identified as confidential at the time of delivery.
"Initial Lenders" shall mean JPMCB, Farallon Capital Management, LLC,
on behalf of its affiliated managed funds, Foothill Capital Corporation and The
Foothill Group, Inc.
"Interest Election Request" shall mean a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.08.
"Interest Payment Date" shall mean (a) with respect to any ABR Loan,
the last day of each March, June, September and December and (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.
"Interest Period" shall mean, 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 one, two, three or
six months thereafter, 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 Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period pertaining to a Eurodollar Borrowing 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 thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.
"Issuing Bank" shall mean JPMCB, any Affiliate of JPMCB or one or more
other issuing banks satisfactory to the Administrative Agent.
"JPMCB" shall have the meaning assigned to such term in the preamble to
this Agreement.
"LC Commitment" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.06.
12
"LC Disbursement" shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.
"LC Exposure" shall mean at any time the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate principal amount of all LC Disbursements that have not yet been
reimbursed at such time. The LC Exposure of any Lender at any time shall mean
its Applicable Percentage of the aggregate LC Exposure at such time.
"Lenders" shall mean (a) the financial institutions listed on Schedule
2.01 and (b) any financial institution that has become a party hereto pursuant
to an Assignment and Acceptance (in each case, other than any such financial
institution that has ceased to be a party hereto pursuant to an Assignment and
Acceptance).
"Letter of Credit" shall mean any letter of credit (including each
Existing Letter of Credit) issued pursuant to Section 2.06.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx 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 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" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on 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" shall mean this Agreement, the Letters of Credit, the
Guarantee and Collateral Agreement and the other Security Documents.
"Loan Parties" shall mean the Borrowers, Parent, Denny's Holdings and
the Subsidiary Loan Parties.
"Loans" shall mean the Revolving Loans and the Swingline Loans.
"Lockbox Agreement" shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.
"Long-Term Indebtedness" shall mean any Indebtedness that, in
accordance with GAAP, constitutes (or, when incurred, constituted) a long-term
liability.
"Margin Stock" shall have the meaning assigned to such term in
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse effect on
or change in the business, assets, operations, properties, condition (financial
or otherwise), liabilities (including potential environmental and employee
health and safety liabilities and other contingent liabilities), prospects or
material agreements of Parent, the Borrowers and the Subsidiaries, taken as a
whole, (b) material impairment of the ability of any Borrower or any other Loan
Party to perform any of its obligations under any Loan Document to which it
13
is or will be a party or (c) material impairment of the rights of or benefits
available to the Lenders under any Loan Document.
"Maturity Date" shall mean December 20, 2004.
"Maximum Rate" shall have the meaning assigned to such term in Section
9.13.
"Mortgage" shall mean 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
satisfactory in form and substance to the Collateral Agent.
"Mortgaged Property" shall mean, initially, each parcel of real
property and the improvements thereto owned by a Loan Party, and includes each
other parcel of real property and improvements thereto with respect to which a
Mortgage is granted pursuant to Section 5.11 or 5.12, but excludes the Excluded
Properties.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean, with respect to any event, the
aggregate amount of cash received from time to time by or on behalf of such
person in connection with such transaction after deducting therefrom only (a)
reasonable and customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions paid by Parent,
the Borrowers and the Subsidiaries to third parties (other than Affiliates) in
connection therewith, (b) the amount of taxes and other governmental fees and
charges, if any, payable in connection with or as a result of such transaction,
(c) the amount of any Indebtedness secured by a Lien on the asset that is the
subject of an Asset Sale or other disposition (including pursuant to a sale and
leaseback transaction or a casualty or a condemnation or similar proceeding)
that, by the terms of such transaction, is required to be repaid upon such
disposition, in each case to the extent, but only to the extent, that the
amounts so deducted are, at the time of receipt of such cash, properly
attributable to such transaction or to the asset that is the subject of such
Asset Sale or other disposition and are actually paid by such person to a person
that is not an Affiliate and (d) in the case of Asset Sales only, an amount of
such proceeds equal to the amount of liabilities associated with such asset
(including accrued tax liabilities) incurred or retained by the person disposing
of such asset as part of such transaction to the extent, and for the period,
such liabilities are reserved against in accordance with GAAP or actually paid
by such person to a person that is not an Affiliate, provided that such proceeds
shall be deemed received by such person as and when such reserves are no longer
maintained and such liabilities are not actually so paid by such person.
"Net Working Capital" shall mean at any date, (a) the consolidated
current assets of the Borrowers and their consolidated subsidiaries as of such
date (excluding cash and Permitted Investments) minus (b) the consolidated
current liabilities of the Borrowers and their consolidated subsidiaries as of
such date (excluding current liabilities in respect of Indebtedness). Net
Working Capital at any date may be a positive or negative number. Net Working
Capital increases when it becomes more positive or less negative and decreases
when it becomes less positive or more negative.
"New Senior Notes" shall mean the 12 3/4% Senior Notes Due 2007 of
Parent and Denny's Holdings, as joint obligors.
"New Senior Notes Documents" shall mean the New Senior Notes, the New
Senior Notes Indenture and all material agreements, documents and instruments
related thereto, in each case as amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof and thereof.
"New Senior Notes Indenture" shall mean the Indenture dated as of April
15, 2002, among Parent, Denny's Holdings and U.S. Bank National Association,
with respect to the New Senior Notes, as amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof and thereof.
14
"Non-Assigning Lender" shall have the meaning assigned to such term in
Section 9.14(b)(i).
"Old Senior Notes" shall mean Parent's 11-1/4% Senior Notes due 2008.
"Old Senior Notes Documents" shall mean the Old Senior Notes, the Old
Senior Notes Indenture and all material agreements, documents and instruments
related thereto, in each case as amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof and thereof.
"Old Senior Notes Indenture" shall mean the Indenture dated as of
January 7, 1998, between Parent and U.S. Bank Trust, National Association, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof and thereof.
"Obligations" shall mean all obligations defined as "Obligations" in
the Guarantee and Collateral Agreement.
"Operating Leases" shall mean, as applied to any person, any lease
(including leases that may be terminated by the lessee at any time) by such
person of any property (whether real, personal or mixed) that is not required to
be classified and accounted for as a capital lease on such person's balance
sheet in accordance with GAAP, other than any such lease under which such person
is the lessor.
"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" shall have the meaning assigned to such term in Section
9.04(c)(i).
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" shall mean the Perfection Certificate
substantially in the form of Annex II to the Guarantee and Collateral Agreement.
"Permitted Amendments" means (a) any amendment or supplement to the Old
Senior Notes Documents or the New Senior Notes Documents that does not require a
waiver or consent of the holders of the Indebtedness evidenced thereby, other
than an amendment or supplement that (i) adds, directly or indirectly, any new
provision commonly characterized as an affirmative, negative or financial
covenant or any new event of default, collateral requirements or repayment
requirement (including any put requirement) that relates to any date prior to 91
days after the Maturity Date, (ii) modifies in any manner adverse to the issuer
or guarantors thereof any existing provision commonly characterized as an
affirmative, negative or financial covenant or any existing event of default,
collateral requirement or repayment requirement (including any shortening of any
amortization requirement) that relates to any date prior to 91 days after the
Maturity Date or (iii) increases the interest rate thereon or modifies in any
manner adverse to the issuer or guarantors thereof the time or manner of payment
of such interest (including any option or right to pay such interest in kind) or
(b) any amendment or supplement (i) to the Old Senior Notes Documents or the New
Senior Notes Documents that is prohibited under clause (a) above (other than any
amendment or supplement prohibited by subclauses (i), (ii) or (iii) of clause
(a) above) or (ii) to any other indenture, instrument or agreement pursuant to
which any Indebtedness or preferred stock is outstanding that, in each case, is
not materially adverse to the interests of the Lenders.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof), in each case maturing within one
year from the date of acquisition thereof;
15
(b) without limiting the provisions of paragraph (d) below,
investments in commercial paper maturing within 180 days from the date
of acquisition thereof and having, at such date of acquisition, a
rating of at least "A-1" or the equivalent thereof from Standard &
Poor's Ratings Service or of at least "P-1" or the equivalent thereof
from Xxxxx'x Investors Service, Inc. or investments in other corporate
debt securities maturing within one year from the date of the
acquisition thereof and having, at such date of acquisition, a rating
of at least "A" or the equivalent thereof from Standard & Poor's Rating
Service or of at least "A2" or the equivalent thereof from Xxxxx'x
Investors Service, Inc.;
(c) investments in certificates of deposit, bankers'
acceptances and time deposits (including Eurodollar time deposits)
maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with (i) any domestic office of the
Administrative Agent or the bank with whom the Borrowers and the
Subsidiaries maintain their cash management system, provided, that if
such bank is not a Lender hereunder, such bank shall have entered into
an agreement with the Administrative Agent pursuant to which such bank
shall have waived all rights of setoff and confirmed that such bank
does not have, nor shall it claim, a security interest therein or (ii)
any domestic office of any other commercial bank of recognized standing
organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits
of not less than $250,000,000 and is the principal banking subsidiary
of a bank holding company having a long-term unsecured debt rating of
at least "A" or the equivalent thereof from Standard & Poor's Ratings
Service or at least "A2" or the equivalent thereof from Xxxxx'x
Investors Service, Inc.;
(d) investments in commercial paper maturing within 180 days
from the date of acquisition thereof and issued by (i) the holding
company of the Administrative Agent or (ii) the holding company of any
other commercial bank of recognized standing organized under the laws
of the United States of America or any State thereof that has (A) a
combined capital and surplus in excess of $250,000,000 and (B)
commercial paper rated at least "A-1" or the equivalent thereof from
Standard & Poor's Ratings Service or of at least "P-1" or the
equivalent thereof from Xxxxx'x Investors Service, Inc.;
(e) investments in repurchase obligations with a term of not
more than seven days for underlying securities of the types described
in clause (a) above entered into with any office of a bank or trust
company meeting the qualifications specified in clause (c) above; and
(f) investments in money market funds substantially all the
assets of which are comprised of securities of the types described in
clauses (a) through (e) above.
"Permitted Liens" shall mean (a) Liens imposed by law (other than
Environmental Liens and any Lien imposed under ERISA) for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP; (b) statutory and other Liens of landlords, Liens of
tenants arising from occupancy rights and statutory Liens of carriers,
warehousemen, mechanics, materialmen and other Liens (other than Environmental
Liens and any Lien imposed under ERISA) imposed by law created in the ordinary
course of business for amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with GAAP; (c)
Liens (other than any Lien imposed under ERISA) incurred or deposits made in the
ordinary course of business (including surety bonds and appeal bonds) in
connection with workers' compensation, unemployment insurance and other types of
social security benefits or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory obligations
and other similar obligations or arising as a result of progress payments under
government contracts; (d) easements (including reciprocal easement agreements
and utility agreements), rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other restrictions, charges or
encumbrances (whether or not recorded), which do not interfere materially with
the ordinary conduct of the business of any Borrower,
16
Parent, Denny's Holdings or any Subsidiary Loan Party, as the case may be, and
which do not materially detract from the value of the property to which they
attach or materially impair the use thereof to any Borrower, Parent, Denny's
Holdings or any Subsidiary Loan Party, as the case may be (any such items
described in this clause (d), "Permitted Real Estate Liens"); (e) purchase money
Liens upon or in any property acquired or held in the ordinary course of
business to secure the purchase price of such property or to secure Indebtedness
permitted by Section 6.01(c), provided that any such Liens shall be placed on
such property (and the Indebtedness secured by such Liens shall be created)
within 180 days following the acquisition of such property, such Liens do not
apply to any other property or assets of Parent, any Borrower or any Subsidiary
and the Indebtedness secured by such Liens does not exceed 100% of the lesser of
the cost or Fair Market Value of such property at the time of acquisition; and
(f) extensions, renewals or replacements of any Lien referred to in paragraphs
(a) through (e) above, provided that the principal amount of the obligation
secured thereby is not increased and that any such extension, renewal or
replacement is limited to the property originally encumbered thereby.
"Permitted Real Estate Liens" shall have the meaning assigned to such
term in clause (d) of the definition of "Permitted Liens".
"Permitted Senior Notes Exchanges" shall mean (a) the delivery (in one
or a series of exchanges) by Parent of notes evidencing obligations of Parent
and/or Denny's Holdings to holders of Old Senior Notes in exchange for Old
Senior Notes held by such holders; provided that (i) the aggregate amount of
interest that will accrue in any period in respect of such notes and Old Senior
Notes that will be outstanding immediately after giving effect to the Permitted
Senior Notes Exchange shall be less than the aggregate amount of interest that
would have accrued in such period in respect of the Old Senior Notes that were
outstanding immediately prior to giving effect to the Permitted Senior Notes
Exchange (in each case, such interest being the interest that will accrue or
would have accrued, as the case may be, pursuant to the terms of the applicable
notes), (ii) the aggregate principal amount of Indebtedness evidenced by such
notes and the Old Senior Notes immediately after giving effect to the Permitted
Senior Notes Exchange shall be less than the aggregate principal amount of
Indebtedness evidenced by the Old Senior Notes immediately prior to giving
effect to the Permitted Senior Notes Exchange, (iii) before and after giving
effect to the Permitted Senior Notes Exchange, no Default or Event of Default
shall have occurred and be continuing, (iv) all transactions related to the
Permitted Senior Notes Exchange shall be reasonably satisfactory to the
Administrative Agent (provided that, in the case of any proposed transaction
related to a Permitted Senior Notes Exchange the terms of which are
substantially identical to, and differ only in terms that could not be more
adverse to the Lenders than, the terms of a previous transaction reasonably
satisfactory to the Administrative Agent, Parent shall deliver a certificate to
the Administrative Agent certifying that the terms of such proposed transaction
are (i) substantially identical to the terms of such previous transaction, (ii)
differ only in terms that could not be more adverse to the Lenders than the
terms of such previous transaction and (iii) the date of such previous
transaction then such proposed transaction shall be deemed reasonably
satisfactory to the Administrative Agent), (v) upon the date of consummation of
the Permitted Senior Notes Exchange, the Administrative Agent shall have
received a certificate of a Financial Officer of Parent dated such date and
certifying that consummation of the Permitted Senior Notes Exchange will not
result in a default under, a breach of or a termination pursuant to the terms
of, any material agreement of Parent or any of the Subsidiaries and (vi) upon
the date of consummation of the Permitted Senior Notes Exchange, the
Administrative Agent, on behalf of itself, the Lenders and the Issuing Bank,
shall have received a favorable written opinion of counsel for Parent and the
Borrowers, dated as of such date and subject only to customary exceptions and
qualifications, (x) that consummation of the Permitted Senior Notes Exchange
will not violate any applicable law, statute, consent decree, rule or regulation
or result in a default under, a breach of or a termination pursuant to the terms
of, any material agreement of Parent or any of the Subsidiaries and (y) covering
such other matters relating to the Permitted Senior Notes Exchange as the
Administrative Agent may reasonably request and (b) subsequent to any exchange
contemplated by clause (a) above, any surrender of the notes referred to in
clause (a) above in exchange for an equal principal amount of senior unsecured
notes issued by Parent and Denny's Holdings, pursuant to a registration
statement under the Securities Act of 1933, and having terms substantially
identical to the terms of the notes issued under clause (a) above.
17
"person" shall mean any natural person, corporation, business trust,
joint venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof.
"Plan" shall mean 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 any 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.
"Prime Rate" shall mean 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.
"Properties Held for Sale" shall mean the 26 parcels of real property
and the improvements thereto owned by a Loan Party that contain restaurants that
are not operating or are held for sale, which properties are set forth on
Schedule 1.01(b).
"Refinancing" shall have the meaning assigned to such term in Section
4.02(k).
"Register" shall have the meaning given such term in Section 9.04(b).
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reinvestment Assets" shall mean any assets to be employed in the
business of any Borrower or Subsidiary Loan Party as conducted on the date
hereof.
"Related Parties" shall mean, with respect to any person, such person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such person or such person's Affiliates.
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, emanating or migrating of any Hazardous Material in, into, onto or
through the environment.
"Remedial Action" shall mean (a) "remedial action" as such term is
defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions
required by any Governmental Authority to: (i) clean up, remove, treat, xxxxx or
in any other way address any Hazardous Material in the environment; (ii) prevent
the Release or threat of Release, or minimize the further Release, of any
Hazardous Material so it does not migrate or endanger or threaten to endanger
public health, welfare or the environment; or (iii) perform studies and
investigations in connection with, or as a precondition to, (i) or (ii) above.
"Required Lenders" shall mean, at any time, Lenders having Loans, LC
Exposure and unused Commitments representing more than 50% of the sum of all
Loans outstanding, LC Exposure and unused Commitments at such time.
"Responsible Officer" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the obligations
of such corporation in respect of this Agreement.
"Restricted Indebtedness" shall mean Indebtedness of Parent, the
Borrowers or any other Subsidiary the payment, prepayment, redemption,
repurchase or defeasance of which is restricted under Section 6.08.
18
"Revolving Loans" shall mean the revolving loans made by the Lenders to
the Borrowers pursuant to Section 2.01. Each Revolving Loan shall be a
Eurodollar Loan or an ABR Loan.
"Scheduled Financing Statement" shall have the meaning assigned to such
term in Section 3.07(e).
"Secured Parties" shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.
"Security Documents" shall mean the Mortgages, the Guarantee and
Collateral Agreement and each of the security agreements, mortgages and other
instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.12.
"Specified Debt" shall have the meaning assigned to such term in
Section 9.14(a).
"Statutory Reserves" shall mean 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 and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch, Affiliate
or other fronting office making or holding a Loan) is subject with respect to
the Adjusted LIBO Rate, for Eurocurrency Liabilities (as defined 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
Liabilities 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. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"subsidiary" shall mean, with respect to any person (herein referred to
as the "parent"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or more than 50%
of the general partnership interests are, at the time any determination is being
made, owned, controlled or held by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" shall mean any subsidiary of Parent.
"Subsidiary Loan Party" shall mean each Subsidiary other than a
Foreign Subsidiary and other than Advantica Systems, Inc., IM Purchasing, Inc.,
Flagstar Holdings, Inc. and La Mirada Enterprises No. 1, Inc.
"Swingline Exposure" shall mean, 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 all Swingline
Loans outstanding at such time.
"Swingline Lender" shall mean either JPMCB or Foothill, each in its
capacity as lender of Swingline Loans hereunder, and "Swingline Lenders" shall
mean JPMCB and Foothill, in their capacities as lenders of Swingline Loans.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Syndication Agent" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Synthetic Purchase Agreement" shall mean any swap, derivative or other
agreement or combination of agreements pursuant to which Parent, any Borrower or
any other Subsidiary is or may become obligated to make (a) any payment not
expressly permitted hereunder (i) in connection with a purchase by any person
other than Parent, a Borrower and the other Subsidiaries of any Equity Interests
of Parent, a Borrower or any other Subsidiary or (ii) in respect of any
Indebtedness or (b) any payment not expressly permitted hereunder
19
the amount of which is determined by reference to (i) the price or value at any
time of any Equity Interests of Parent, a Borrower or any other Subsidiary or
(ii) Indebtedness; provided that any phantom stock or similar plan providing for
payments only to current or former directors, officers or employees of Holdings,
the Borrower and the other Subsidiaries (or to their heirs or estates) shall be
deemed not to be a Synthetic Purchase Agreement.
"Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Third-Party Assignment" shall have the meaning assigned to such term
in Section 9.14(b)(ii).
"Third-Party Assignment Amount" shall have the meaning assigned to such
term in Section 9.14(b)(ii).
"Third-Party Assignment Notice" shall have the meaning assigned to such
term in Section 9.14(b)(ii).
"Total Commitment" shall mean, at any time, the aggregate amount of the
Commitments, as in effect at such time and which on the Closing Date is
$125,000,000.
"Transactions" shall have the meaning assigned to such term in Section
3.02.
"Trigger Date" shall have the meaning assigned to such term in Section
9.14(b)(i).
"Type", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, the term "Rate" shall consist
of the Adjusted LIBO Rate and the Alternate Base Rate.
"wholly owned subsidiary" of any person shall mean a subsidiary of such
person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the equity or 100% of the ordinary
voting power or 100% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held by such person or one or
more wholly owned subsidiaries of such person or by such person and one or more
wholly owned subsidiaries of such person.
"Withdrawal Liability" shall mean 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 Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
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
20
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. Each term used in Section 3.07(e) or 5.12(c) that
is defined in the Applicable UCC shall have the meaning assigned to such term in
the Applicable UCC.
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 Borrowers notify the Administrative Agent that the Borrowers request
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
Borrowers 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 to make Loans to any Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in (a) such Lender's Credit Exposure exceeding such Lender's Commitment
or (b) the sum of the Aggregate Credit Exposure exceeding the Total Commitment.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02. Loans. (a) Each Loan (other than a Swingline Loan) shall
be made as part of a Borrowing consisting of Loans made by the Lenders ratably
in accordance with their respective Commitments. 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.
(b) Subject to Section 2.14, each Borrowing shall be comprised entirely
of ABR Loans or Eurodollar Loans as the applicable Borrower may request in
accordance herewith. Each Swingline Loan shall be an ABR Loan. Each Lender at
its option may 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 applicable
Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) 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
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $500,000; provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.06(e).
Borrowings of more than one Type may be outstanding at the same time; provided,
that there shall not at any time be more than a total of five Eurodollar
Borrowings outstanding. Each Swingline Loan shall be in an amount that is an
integral multiple of $100,000 and not less than $500,000.
(d) Notwithstanding any other provision of this Agreement, no Borrower
shall 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
Maturity Date.
21
SECTION 2.03. Requests for Borrowings. To request a Borrowing (other
than of a Swingline Loan), the applicable 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 Borrowing to finance the reimbursement of an LC Disbursement as contemplated
by Section 2.06(e) may be given not later than 10:00 a.m., 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 applicable Borrower. Each
such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:
(i) the identity of the Borrower in respect of such 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
(vi) to the extent applicable, the location and number of the
applicable 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 applicable Borrower
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section (and in any event not later than 5:00 p.m., New York City time, one
Business Day before the date of the proposed Borrowing other than an ABR
Borrowing to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.06(e)), the Administrative Agent shall notify in writing 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, each Swingline Lender agrees to make Swingline Loans to the
Borrowers 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,
(ii) the Aggregate Credit Exposure exceeding the Total Commitment or (iii) the
aggregate principal amount of outstanding Swingline Loans made by such Swingline
Lender as to which the Lenders have not acquired participations pursuant to
Section 2.04(c) exceeding such Swingline Lender's unused Commitment; provided
that a 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 Borrowers may borrow, prepay
and reborrow Swingline Loans.
(b) To request a Swingline Loan, the applicable 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 identity of the Borrower, the requested date (which shall be a Business
Day), the amount of the requested Swingline Loan, the Swingline Lender to be
used and, to the extent applicable, the location and number of the applicable
Borrower's account to which funds are to be disbursed, which shall comply with
the requirements of Section 2.07. The Administrative Agent will promptly (and in
any event not later than 1:30 p.m., New York City time, on the date of a
proposed Swingline Loan) notify in writing such Swingline Lender that any such
notice has been received from such Borrower and shall advise whether any of the
limits set forth in
22
Section 2.04(a) would be exceeded as a result of such requested Swingline Loan.
If such Swingline Lender has received notice of such request in accordance with
this Section 2.04(b) and the conditions to such Swingline Lender's agreement to
make Swingline Loans have been satisfied, such Swingline Lender shall make the
Swingline Loan available to such Borrower (i) if such Swingline Lender is the
Administrative Agent, by means of a credit to the account of such Borrower
specified in the second sentence of Section 2.07(a) with such Swingline Lender
(or, in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.06(e), by remittance to the Issuing Bank)
by 3:00 p.m., New York City time, on the requested date of such Swingline Loan
and (ii) if such Swingline Lender is not the Administrative Agent, by wire
transfer of immediately available funds to the account specified in the second
sentence of Section 2.07(a) of such Borrower with the Administrative Agent (or,
in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.06(e), by remittance to the Issuing Bank)
on the requested date of such Swingline Loan.
(c) A Swingline Lender may by written notice given to the
Administrative Agent not later than 12:00 noon, New York City time, on any
Business Day require the Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans made by such Swingline Lender
outstanding. Such notice shall specify the aggregate amount of Swingline Loans
in which Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Lender, specifying in such
notice such Lender's Applicable Percentage of such Swingline Loan or Loans. Each
Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Administrative Agent, for the account of the
applicable Swingline Lender, such Lender's Applicable Percentage of such
Swingline Loan or Loans. Each 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 Lender
shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.07 with
respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to such Swingline Lender the amounts so received by it
from the Lenders. The Administrative Agent shall notify the Borrowers 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 such Swingline Lender. Any amounts received by a
Swingline Lender from a Borrower (or other party on behalf of a Borrower) in
respect of a Swingline Loan after receipt by such 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 Lenders
that shall have made their payments pursuant to this paragraph and to the
Swingline Lenders, as their interests may appear. The purchase of participations
in a Swingline Loan pursuant to this paragraph shall not relieve the Borrowers
of any default in the payment thereof.
SECTION 2.05. [Intentionally Omitted.]
SECTION 2.06. Letters of Credit. (a) General. Upon the satisfaction (or
waiver in accordance with Section 9.02) of the conditions specified in Section
4.01 on the Closing Date, each Existing Letter of Credit will automatically,
without any action on the part of any person, be deemed to be a Letter of Credit
issued hereunder for the account of the applicable Borrower for all purposes of
this Agreement and the other Loan Documents. Subject to the terms and conditions
set forth herein, a 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 a Borrower to, or entered into by
such Borrower with, the Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control.
23
(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), a 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, such 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 $60,000,000 and (ii) the
Aggregate Credit Exposure shall not exceed the Total Commitment.
(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 Maturity Date.
(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 Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit (including each Existing Letter
of Credit) equal to such 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 Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
such Lender's Applicable Percentage of each LC Disbursement made by the Issuing
Bank and not reimbursed by the applicable Borrower on the date due as provided
in paragraph (e) of this Section, or of any reimbursement payment required to be
refunded to the applicable Borrower for any reason. Each 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 Borrowers 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 Borrowers 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 Borrowers prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrowers receive such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that such 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 $500,000, the applicable Borrower may,
subject to the conditions to borrowing set forth herein, request in accordance
with Section 2.03 or 2.04 that such payment be financed with an ABR Borrowing or
Swingline Loan in an equivalent amount and, to the extent so financed, the
Borrowers' obligation to make such payment shall be discharged and replaced by
the resulting ABR Borrowing or Swingline Loan. If the Borrowers fail to make
such payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Borrowers in respect
thereof and such Lender's Applicable Percentage thereof. Promptly following
receipt of such notice, each Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the
24
Borrowers, in the same manner as provided in Section 2.07 with respect to Loans
made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the
payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrowers
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders
and the Issuing Bank as their interests may appear. Any payment made by a Lender
pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement
(other than the funding of ABR Loans as contemplated above) shall not constitute
a Loan and shall not relieve the Borrowers of their obligation to reimburse such
LC Disbursement.
(f) Obligations Absolute. The obligation of the Borrowers 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 provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrowers' 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 a Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrowers to the extent permitted by applicable law) suffered by
such 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 wilful 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 Borrowers 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 Borrowers of their obligations 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 Borrowers 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 Borrowers reimburse such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided, that
if the Borrowers fail to reimburse such LC Disbursement when
25
due pursuant to paragraph (e) of this Section, then Section 2.13(d) 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 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 by written agreement among the Borrowers, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. 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 Borrowers 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 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 Borrowers receive 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 Borrowers 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 105% of 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 a
Borrower described in clause (g) or (h) of Article VII. Such deposit shall be
held by the Administrative Agent as collateral for the payment and performance
of the Obligations. 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 and
at the Borrowers' 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 Borrowers 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), shall be applied to satisfy other Obligations. If the Borrowers
are 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 Borrowers within three Business Days after
all Events of Default have been cured or waived.
SECTION 2.07. 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
applicable Borrower by promptly crediting the amounts so received, in like
funds, to (i) prior to the date on which the Lockbox Agreement is entered into,
an account of such Borrower maintained with the Administrative Agent in New York
City and designated by such Borrower in the applicable Borrowing Request and
(ii) thereafter, the Concentration Account; provided that ABR Loans made to
finance the reimbursement of an LC Disbursement as provided in Section 2.06(e)
shall be remitted by the Administrative Agent to the Issuing Bank.
26
(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 its sole discretion, in reliance upon such assumption, make
available to the applicable 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 Borrowers 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 such 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 such 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 2.08. Interest Elections. (a) Each 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 applicable Borrower may elect to convert such
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 applicable 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 Borrowings of Swingline
Loans, which may not be converted or continued.
(b) To make an election pursuant to this Section, the applicable
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 such
Borrower was requesting a 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
applicable 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 applicable Borrower shall be deemed to
have selected an Interest Period of one month's duration.
27
(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 applicable 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 Borrowers, 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 2.09. Termination and Reduction of Commitments. (a) The
Commitments and the LC Commitment shall automatically terminate on the Maturity
Date.
(b) In the event and on such occasion that any Net Cash Proceeds are
received by or on behalf of Parent, any Borrower or any Subsidiary in respect of
any Commitment Reduction Event, the Commitments shall be reduced on the third
Business Day following the occurrence of such Commitment Reduction Event by an
amount equal to 100% of the Net Cash Proceeds received with respect to such
Commitment Reduction Event, provided, that any Net Cash Proceeds from an Asset
Sale that is a Commitment Reduction Event shall not be applied to reduce the
Commitments in accordance with this Section 2.09(b) until the aggregate amount
of Net Cash Proceeds not yet applied in accordance with this Section 2.09(b)
exceeds $1,000,000, at which time all such Net Cash Proceeds shall be so
applied. Notwithstanding the foregoing, in the case of any event described in
clause (a) of the definition of the term "Commitment Reduction Event" that, when
combined with all other such events, results in aggregate Net Cash Proceeds of
not more than $20,000,000, if the Borrower applies the Net Cash Proceeds from
such event (or a portion thereof) within 270 days after receipt of such Net Cash
Proceeds to acquire Reinvestment Assets, then no reduction of the Commitments
shall be required pursuant to this Section 2.09(b) in respect of such amount
except to the extent of any such Net Cash Proceeds therefrom that have not been
so applied by the end of such 270-day period, at which time a reduction of the
Commitments shall be required in an amount equal to such Net Cash Proceeds that
have not been so applied. Parent shall deliver to the Administrative Agent a
certificate of a Financial Officer promptly (and in any event within two
Business Days) following receipt of any Net Cash Proceeds of an Asset Sale that
is a Commitment Reduction Event for which a reduction of the Commitments is
required pursuant to this Section 2.09(b) setting forth a reasonably detailed
calculation of the amount of such Net Cash Proceeds.
(c) Following the end of each fiscal year of the Borrowers commencing
with the fiscal year ending December 24, 2003, the Commitments shall be reduced
in an aggregate amount equal to (i) until such time as the Total Commitment is
less than or equal to $100,000,000, 100% of Excess Cash Flow for such fiscal
year and (ii) thereafter, 75% of Excess Cash Flow for such fiscal year.
Reductions in the Commitments pursuant to this paragraph shall become effective
on the date on which financial statements are delivered pursuant to Section 5.04
with respect to the fiscal year for which Excess Cash Flow is being calculated
(and in any event no later than 90 days after the end of such fiscal year).
(d) Subject to adjustment pursuant to paragraph (e), the Commitments
shall be reduced on each date set forth below by the aggregate amount set forth
opposite such date:
Date Amount
September 30, 2003 $2,000,000
December 31, 2003 $2,000,000
March 31, 2004 $3,000,000
June 30, 2004 $3,000,000
September 30, 2004 $5,000,000
28
(e) Any reduction of the Commitments pursuant to Section 2.09(b) or
2.09(c) shall reduce scheduled reductions of Commitments to be made pursuant to
paragraph (d) ratably.
(f) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrowers may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Commitments; provided, however, that (i) each partial reduction of the
Commitments shall be in an integral multiple of $1,000,000 and in a minimum
amount of $5,000,000 and (ii) the Total Commitment shall not be reduced to an
amount that is less than the Aggregate Credit Exposure at the time.
(g) Each reduction in the Commitments hereunder shall be made ratably
among the Lenders in accordance with their respective Commitments.
SECTION 2.10. Repayment of Loans; Evidence of Debt. (a) The Borrowers
hereby unconditionally promise to pay (i) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
on the Maturity Date and (ii) to each Swingline Lender the then unpaid principal
amount of each Swingline Loan made by such Swingline Lender on the earlier of
the 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 two Business Days after
such Swingline Loan is made; provided, that on each date that a Revolving Loan
is made, the Borrowers shall repay all Swingline Loans that were outstanding on
the date such Borrowing was requested.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers 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 Borrowers to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
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 Borrowers 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 applicable Borrower shall prepare, execute
and deliver to such Lender a promissory note, substantially in the form of
Exhibit D, payable to the order of such Lender (or, if requested by such Lender,
to such Lender and its registered assigns). 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 2.11. Prepayment. (a) The Borrowers shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part (i) with
respect to Eurodollar Borrowings, upon at least three Business Days' prior
written or telecopy notice (or telephone notice promptly confirmed by written or
telecopy notice) to the Administrative Agent before 12:00 noon, New York City
time or (ii) with respect to ABR Borrowings, upon prior written or telecopy
notice (or telephone notice promptly confirmed by written or telecopy notice) on
or prior to the date of prepayment to the Administrative Agent before 12:00
noon, New York City time; provided, however, that each partial prepayment shall
be in an amount that is an integral multiple of $100,000 and not less than (A)
$5,000,000 in the case of Eurodollar Borrowings or (B) $500,000 in the case of
ABR Borrowings.
29
(b) In the event of any termination of all the Commitments, the
Borrowers shall prepay all outstanding Borrowings and replace or cash
collateralize all outstanding Letters of Credit on the date of such termination.
In the event of any partial reduction of the Commitments, then (i) at or prior
to the effective date of such reduction, the Administrative Agent shall notify
the Borrowers and the Lenders of the Aggregate Credit Exposure after giving
effect thereto and (ii) if the Aggregate Credit Exposure would exceed the Total
Commitment after giving effect to such reduction, then the Borrowers shall, on
the date of such reduction and in an amount sufficient to eliminate such excess,
first, prepay the then outstanding Swingline Loans (if any), second, Revolving
Loans (if any) and, third, to the extent of any remaining excess (after the
prepayment of Revolving Loans and Swingline Loans), replace outstanding Letters
of Credit or deposit an amount in cash in a cash collateral account established
with the Collateral Agent for the benefit of the Secured Parties on the same
terms as those set forth in Section 2.06(j).
(c) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrowers to prepay such Borrowing by the
amount stated therein on the date stated therein. All prepayments under this
Section 2.11 shall be subject to Section 2.16 but otherwise without premium or
penalty. All prepayments under this Section 2.11 shall be accompanied by accrued
interest on the principal amount being prepaid to the date of payment.
SECTION 2.12. Fees. (a) The Borrowers agree to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at a rate of 1.00% per annum on the daily unused amount of the
Commitment of such Lender during the period from and including the Closing Date.
Accrued commitment fees shall be payable in arrears on 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. All commitment 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). For purposes of computing commitment fees, a
Commitment of a Lender shall be deemed to be used to the extent of the
outstanding Revolving Loans and LC Exposure of such Lender (and the Swingline
Exposure of such Lender shall be disregarded for such purpose).
(b) The Borrowers agree to pay (i) to the Administrative Agent for the
account of each Lender a participation fee with respect to such Lender's
participations in Letters of Credit, which shall accrue at a rate per annum
equal to the same Applicable Rate as interest on Eurodollar 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 ceases to have
any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue
at the rate of 0.25% 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 five 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 Borrowers agree to pay to each Initial Lender, for the account
of such Initial Lender, fees payable in the amounts and at the times separately
agreed upon between the Borrowers and such Initial Lender.
30
(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, except that the fees
payable to an Initial Lender pursuant to Section 2.12(c) shall be paid directly
to such Initial Lender. Fees paid shall not be refundable under any
circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at the Alternate Base Rate
plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest,
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 Borrowers 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% 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% 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 upon termination of the Commitments;
provided that (i) interest accrued pursuant to paragraph (c) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR 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.
(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 or
Adjusted 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 for such Interest
Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or
maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing; provided that if the circumstances
giving rise to such notice affect only one Type of Borrowings, then the other
Type of Borrowings shall be permitted.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
>
31
(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 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 of maintaining its
obligation to make any such 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
Borrowers 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 Borrowers 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 paragraph (a) or (b) of
this Section shall be delivered to the Borrowers and shall be conclusive absent
manifest error. The Borrowers 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 Borrowers 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 Borrowers 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, or (d) the assignment of any Eurodollar Loan other
than on the last day of the Interest Period applicable thereto as a result of a
request by the Borrowers pursuant to Section 2.19, then, in any such event, the
Borrowers 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
32
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 shall
be delivered to the Borrowers and shall be conclusive absent manifest error. The
Borrowers 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 Borrowers hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if a
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) such Borrower shall make
such deductions and (iii) such Borrower shall pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers 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 Borrowers 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 Borrowers 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, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by a Borrower to a Governmental Authority, such 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 a
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrowers (with 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 Borrowers as will permit such payments to be
made without withholding or at a reduced rate.
(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 Borrowers or with respect to which the
Borrowers have paid additional amounts pursuant to this Section 2.17, it shall
pay over such refund to the Borrowers (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrowers 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 Borrowers, upon the
request of the Administrative Agent or such Lender, agree to repay the amount
paid over to any Borrower (plus any penalties, interest or other charges imposed
by the relevant Governmental
33
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
Borrowers or any other person.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Setoffs. (a) Each Loan Party shall make each payment required to be made by them
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) or under any other Loan Document 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 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, except payments to be made directly to the
Issuing Bank or either 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 to the persons entitled thereto. 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 or participations in LC Disbursements or
Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving 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 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 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 Borrowers 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 Borrowers or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply). The Borrowers consent to the foregoing and
agree, to the extent they may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrowers rights of set-off and counterclaim with respect
to such participation as fully as if such Lender were a direct creditor of the
Borrowers in the amount of such participation. This Section 2.18(c) is expressly
subject to the provision of Section 9.08 requiring the consent of all Lenders
prior to any Lender, the Administrative Agent or the Collateral Agent exercising
any right of set-off.
(d) Unless the Administrative Agent shall have received notice from the
Borrowers prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank
34
hereunder that the Borrowers will not make such payment, the Administrative
Agent may assume that the Borrowers have made such payment on such date in
accordance herewith and may, in its sole discretion, 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 Borrowers have 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), 2.06(d) or (e), 2.07(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 Borrowers are
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 Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrowers
hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if the
Borrowers are 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 if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrowers may, at their 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 Borrowers
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 Borrowers (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
Borrowers to require such assignment and delegation cease to apply.
SECTION 2.20. Covenant of Collateral Agent. (a) In connection with any
permitted Asset Sale and promptly following the reasonable written request of
Parent or a Borrower, the Collateral Agent will execute and deliver documents
prepared by Parent or a Borrower and appropriate under local law, to release the
lien of any mortgage, filing under the Uniform Commercial Code of the applicable
state or other security interest arising under any Loan Document, as to any
asset to be sold under a permitted Asset Sale.
(b) Promptly following the written reasonable request of Parent or a
Borrower from time to time, Collateral Agent will execute and deliver documents:
(i) to consent to, or subordinate the lien of any mortgage, filing under the
Uniform Commercial Code of the applicable state, or other security interest
arising under any Loan Document to, any Permitted Real Estate Lien that Parent
or such Borrower determines, in
35
the exercise of its reasonable business judgment, is in the interest of Parent
or such Borrower's business on any Mortgaged Property and (ii) required in
connection with the subdivision of any Mortgaged Property.
ARTICLE III
Representations and Warranties
Each of Parent, Denny's Holdings, and the Borrowers represents and
warrants to the Administrative Agent, the Collateral Agent, the Issuing Bank and
each of the Lenders that:
SECTION 3.01. Organization; Powers. Each of Parent, the Borrowers and
the Subsidiaries (a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
all requisite power and authority to own its property and assets and to carry on
its business as now conducted and as proposed to be conducted, (c) is qualified
to do business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect, and (d) has the
corporate power and authority to execute, deliver and perform its obligations
under each of the Loan Documents and each other agreement or instrument
contemplated hereby to which it is or will be a party and, in the case of the
Borrowers, to borrow hereunder.
SECTION 3.02. Authorization. The execution, delivery and performance by
each Loan Party of each of the Loan Documents, the borrowings hereunder and the
Refinancing (collectively, the "Transactions") (a) have been duly authorized by
all requisite corporate and, if required, stockholder action and (b) will not
(i) violate (A) any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents or
by-laws of Parent, any Borrower or any Subsidiary, (B) any order of any
Governmental Authority or (C) any provision of any indenture, agreement or other
instrument to which Parent, any Borrower or any Subsidiary is a party or by
which any of them or any of their property is or may be bound, (ii) be in
conflict with, result in a breach of or constitute (alone or with notice or
lapse of time or both) a default under, or give rise to any right to accelerate
or to require the prepayment, repurchase or redemption of any obligation under
any such indenture, agreement or other instrument or (iii) result in the
creation or imposition of any Lien upon or with respect to any property or
assets now owned or hereafter acquired by Parent, any Borrower or any Subsidiary
(other than any Lien created hereunder or under the Security Documents).
SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by Parent, Denny's Holdings and each Borrower and constitutes, and
each other Loan Document when executed and delivered by each Loan Party party
thereto will constitute, a legal, valid and binding obligation of such Loan
Party enforceable against such Loan Party in accordance with its terms.
SECTION 3.04. Governmental Approvals. No action, consent or approval
of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except for
(a) the filing of Uniform Commercial Code financing statements and filings with
the United States Patent and Trademark Office and the United States Copyright
Office, (b) recordation of the Mortgages and (c) such as have been made or
obtained and are in full force and effect.
SECTION 3.05. Financial Statements. Parent has heretofore furnished to
the Lenders its consolidated balance sheets and statements of income and changes
in financial condition (i) as of and for the fiscal year ended December 26,
2001, which in the case of such consolidated statements have been audited by and
accompanied by the opinion of Deloitte & Touche, LLP, independent public
accountants, and (ii) as of and for the fiscal quarter and the portion of the
fiscal year ended September 25, 2002, certified by its chief financial officer.
Such financial statements present fairly the financial condition and results of
operations and cash flows of Parent and the consolidated Subsidiaries as of such
dates and for such periods. Such balance sheets and the notes thereto disclose,
as and to the extent required by GAAP, all material liabilities,
36
direct or contingent, of Parent and the consolidated Subsidiaries as of the
dates thereof and, as of such dates, there were no other material liabilities,
direct or contingent, of Parent or the Subsidiaries, except as disclosed in the
Confidential Information Memorandum. The financial statements referred to in
this Section 3.05 were prepared in accordance with GAAP applied on a consistent
basis.
SECTION 3.06. No Material Adverse Change. There has been no material
adverse change in the business, assets, operations, properties, condition
(financial or otherwise) liabilities (including potential environmental and
employee health and safety liabilities and other contingent liabilities),
prospects or material agreements of Parent, the Borrowers and the Subsidiaries,
taken as a whole, since December 26, 2001.
SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of
Parent, the Borrowers and the Subsidiaries has good and marketable title to, or
valid leasehold interests in, all its material properties and assets (including
the Mortgaged Properties), except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties and assets for their intended purposes. All such
material properties and assets are free and clear of Liens, other than Liens
expressly permitted by Section 6.02.
(b) Each of Parent, the Borrowers and the Subsidiaries has complied
with all obligations under all material leases to which it is a party and all
such leases are in full force and effect. Each of Parent, the Borrowers and the
Subsidiaries enjoys peaceful and undisturbed possession under all such material
leases, subject to the rights of subtenants and assignees, as applicable.
(c) Except as set forth on Schedule 3.07(c), none of the Loan Parties
has received any notice of, or has any knowledge of, any pending or contemplated
condemnation proceeding affecting the Mortgaged Property or any sale or
disposition thereof in lieu of condemnation.
(d) None of Parent, the Borrowers or the Subsidiaries is obligated
under any right of first refusal, option or other contractual right to sell,
assign or otherwise dispose of any Mortgaged Property or any interest therein.
(e) Upon the filing of a properly authorized termination statement
under Article 9 of the Uniform Commercial Code of the applicable state (the
"Applicable UCC") in respect of each financing statement set forth on or
attached to Schedule 3.07(e) (each, a "Scheduled Financing Statement") in the
applicable filing office, such Scheduled Financing Statement will cease to be
effective. All obligations purported to be secured by the Scheduled Financing
Statements have been paid in full or otherwise extinguished (including as set
forth in the payoff letter to State Street Bank & Trust attached to Schedule
3.07(e)), and there is no obligation or commitment to make an advance, incur an
obligation or otherwise give value secured by the collateral covered by any
Scheduled Financing Statement.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing
Date a list of all Subsidiaries and the percentage ownership interest of Parent,
any Borrower or any Subsidiary therein. The Equity Interests so indicated on
Schedule 3.08 are fully paid and non-assessable and are owned by Parent, a
Borrower or a Subsidiary free and clear of all Liens.
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth
on Schedule 3.09, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of Parent or any Borrower, threatened against or affecting Parent, any
Borrower or any Subsidiary or any business, property or rights of any such
person (i) that involve any Loan Document or the Transactions or (ii) that have
had or are reasonably likely to have, either individually or in the aggregate, a
Material Adverse Effect.
(b) None of Parent, the Borrowers or any of the Subsidiaries or any of
their respective material properties or assets is in violation of, nor will the
continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation (including any zoning, building,
Environmental
37
Law, ordinance, code or approval or any building permits) or any restrictions of
record or agreements affecting the Mortgaged Property, or is in default with
respect to any judgment, writ, injunction, decree or order of any Governmental
Authority, where such violation or default could reasonably be expected to
result in a Material Adverse Effect.
(c) Certificates of occupancy and permits are in effect for the
Mortgaged Properties.
SECTION 3.10. Agreements. (a) None of Parent, the Borrowers or any
Subsidiary is a party to any agreement or instrument or subject to any
corporate restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(b) None of Parent, the Borrowers or any Subsidiary is in default in
any manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or instrument to which
it is a party or by which it or any of its properties or assets are or may be
bound, where such default could reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) None of Parent, the
Borrowers or any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation U or
Regulation X.
SECTION 3.12. Investment Company Act; Public Utility Holding Company
Act. None of Parent, the Borrowers or any Subsidiary 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 3.13. Use of Proceeds. The Borrowers will use the proceeds of
the Loans and will request the issuance of Letters of Credit only for the
purposes specified in the preamble to this Agreement.
SECTION 3.14. Tax Returns. Each of Parent, the Borrowers and the
Subsidiaries has filed or caused to be filed all Federal, state, local and
foreign tax returns or materials required to have been filed by it (except for
any non-material state, local or foreign returns) and has paid or caused to be
paid all taxes due and payable by it and all assessments received by it, except
taxes that are being contested in good faith by appropriate proceedings and for
which Parent, the Borrowers or such Subsidiary, as applicable, shall have set
aside on its books adequate reserves.
SECTION 3.15. No Material Misstatements. None of (a) the Confidential
Information Memorandum or (b) any other information, report, financial
statement, exhibit or schedule furnished by or on behalf of Parent or the
Borrowers to the Administrative Agent or any Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto, taken as a whole together with any other information (including the
Confidential Information Memorandum) so furnished, contained, contains or will
contain any material misstatement of fact or omitted, omits or will omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were, are or will be made, not misleading,
provided that to the extent that such information was subsequently replaced,
prior to the date hereof, by other information expressly correcting such earlier
information (and the Administrative Agent and Lenders were expressly informed by
or on behalf of Parent or the Borrowers that such other information was
correcting such earlier information), the foregoing representation does not
apply to such earlier information.
SECTION 3.16. Employee Benefit Plans. Each of Parent, the Borrowers
and their ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
38
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of Parent, the
Borrowers or any of their ERISA Affiliates. The present value of all benefit
liabilities under each Plan (based on those assumptions used to fund such Plan)
did not, as of the last annual valuation date applicable thereto, exceed by more
than $5,000,000 the fair market value of the assets of such Plan (assuming the
accrual of contributions for the current or immediately preceding Plan year not
yet due), and the present value of all benefit liabilities of all underfunded
Plans (based on those assumptions used to fund each such Plan) did not, as of
the last annual valuation dates applicable thereto, exceed by more than
$5,000,000 the fair market value of the assets (assuming the accrual of
contributions for the current or immediately preceding Plan year not yet due) of
all such underfunded Plans.
SECTION 3.17. Environmental Matters. Except as set forth in Schedule
3.17: (a) The properties owned or operated by Parent, the Borrowers and the
Subsidiaries (the "Properties") do not contain any Hazardous Materials in
amounts or concentrations which (i) constitute, or constituted a violation of,
(ii) require Remedial Action under, or (iii) could otherwise give rise to
liability under, Environmental Laws, which violations, Remedial Actions and
liabilities, in the aggregate, could reasonably be expected to result in a
Material Adverse Effect;
(b) The Properties and all operations of Parent, the Borrowers and the
Subsidiaries are in compliance, and in the last five years have been in
compliance, with all Environmental Laws, and all necessary Environmental Permits
have been obtained and are in effect, except to the extent that such
non-compliance or failure to obtain any necessary permits, in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect;
(c) There have been no Releases or threatened Releases at, from, under
or proximate to the Properties or otherwise in connection with the operations of
Parent, the Borrowers or the Subsidiaries, which Releases or threatened
Releases, in the aggregate, could reasonably be expected to result in a Material
Adverse Effect;
(d) None of Parent, the Borrowers or any of the Subsidiaries has
received any notice of an Environmental Claim in connection with the Properties
or the operations of Parent, the Borrowers or the Subsidiaries or with regard to
any person whose liabilities for environmental matters Parent, the Borrowers or
the Subsidiaries has retained or assumed, in whole or in part, contractually, by
operation of law or otherwise, which, in the aggregate, could reasonably be
expected to result in a Material Adverse Effect, nor do Parent, the Borrowers or
the Subsidiaries have reason to believe that any such notice will be received or
is being threatened; and
(e) Hazardous Materials have not been transported from the Properties,
nor have Hazardous Materials been generated, treated, stored or disposed of at,
on or under any of the Properties in a manner that could give rise to liability
under any Environmental Law, nor have Parent, the Borrowers or the Subsidiaries
retained or assumed any liability, contractually, by operation of law or
otherwise, with respect to the generation, treatment, storage or disposal of
Hazardous Materials, which transportation, generation, treatment, storage or
disposal, or retained or assumed liabilities, in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and
correct description of all insurance maintained by Parent or any Borrower or by
Parent or any Borrower for the Subsidiaries as of the date hereof and the
Closing Date. As of each such date, such insurance is in full force and effect
and all premiums have been duly paid. Parent, the Borrowers and the Subsidiaries
have insurance in such amounts and covering such risks and liabilities as are in
accordance with normal industry practice.
SECTION 3.19. Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Pledged Collateral (as defined in the Guarantee and Collateral
Agreement) and, when the Pledged Collateral is delivered to the Collateral
Agent, the Guarantee and Collateral Agreement shall constitute a fully perfected
first priority Lien on, and security interest in, all right, title and
39
interest of the pledgors thereunder in such Pledged Collateral, in each case
prior and superior in right to any other person.
(b) The Guarantee and Collateral Agreement is effective to create in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral (as defined in
the Guarantee and Collateral Agreement) and, when financing statements in
appropriate form are filed in the offices specified on Schedule 6 to the
Perfection Certificate, the Guarantee and Collateral Agreement shall constitute
a fully perfected Lien on, and security interest in, all right, title and
interest of the grantors thereunder in such Collateral (other than the
Intellectual Property, (as defined in the Guarantee and Collateral Agreement) in
which a lien, pursuant to applicable law, may only be perfected by a filing with
the United States Patent and Trademark Office or the United States Copyright
Office), as to which perfection is effected through the filing of such financing
statements, in each case prior and superior in right to any other person, other
than with respect to Liens expressly permitted by Section 6.02.
(c) When the Guarantee and Collateral Agreement is filed in the United
States Patent and Trademark Office and the United States Copyright Office, the
Guarantee and Collateral Agreement shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the grantors
thereunder in the Intellectual Property (as defined in the Guarantee and
Collateral Agreement) in which a lien, pursuant to applicable law, may only be
perfected by a filing with the United States Patent and Trademark Office or the
United States Copyright Office), in each case prior and superior in right to any
other person (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a lien on registered trademarks, trademark applications and
copyrights acquired by the grantors after the date hereof).
(d) Each Mortgage is effective to create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable Lien on all of the right, title and interest in and to the Mortgaged
Property thereunder and the proceeds thereof, and when filed in the offices
specified on Schedule 3.19(d) with respect thereto, each Mortgage shall
constitute a fully perfected Lien on, and security interest, in the Mortgaged
Property thereunder and the proceeds thereof, in each case prior and superior in
right to any other person, other than with respect to the rights of persons
pursuant to Liens expressly permitted by Section 6.02.
SECTION 3.20. Labor Matters. As of the date hereof and the Closing
Date, there are no strikes, lockouts or slowdowns against Parent, any Borrower
or any Subsidiary pending or, to the knowledge of Parent or any Borrower,
threatened. The hours worked by and payments made to employees of Parent, each
Borrower and each Subsidiary have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters (except for any violations that, individually or in
the aggregate, would not be material). All payments due from Parent, any
Borrower or any Subsidiary, or for which any claim may be made against Parent,
any Borrower or such Subsidiary, on account of wages and employee health and
welfare insurance and other benefits (except for any payments or claims that,
individually or in the aggregate, if not paid, would not be material), have been
paid or accrued as a liability on the books of Parent, any Borrower or such
Subsidiary. The consummation of the Transactions 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 Parent, any Borrower or any Subsidiary
is bound.
SECTION 3.21. Solvency. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan made on the Closing Date and after giving effect to the application
of the proceeds of such Loans, (a) the fair value of the assets of each Loan
Party, at a fair valuation, will exceed its debts and liabilities, subordinated,
contingent or otherwise; (b) in each case the present fair saleable value of (i)
the property of each Borrower and (ii) the business of Parent and the Subsidiary
Loan Parties, taken as a whole, will be greater than the amount that will be
required to pay its probable liabilities, subordinated, contingent or otherwise,
as such debts and other liabilities become absolute and matured; (c) each Loan
Party will be able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (d)
each Loan Party will not have
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unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
SECTION 3.22. Intellectual Property. Each of Parent, the Borrowers and
the 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 Parent, the Borrowers and the 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.
ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:
SECTION 4.01. All Credit Events. The obligations 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 (each such event being called a
"Credit Event"), is subject to the satisfaction of the following conditions:
(a) The Administrative Agent shall have received a Borrowing Request as
required by Section 2.03 (or such notice shall have been deemed given in
accordance with Section 2.03) and, in the case of a Swingline Loan, the
Swingline Lender shall have been advised in writing of such Borrowing Request
for a Swingline Loan as required by Section 2.04(b) or, in the case of the
issuance of a Letter of Credit, the Issuing Bank and the Administrative Agent
shall have received a notice requesting the issuance of such Letter of Credit as
required by Section 2.06.
(b) The representations and warranties set forth in Article III shall
be true and correct on and as of the date of such Credit Event with the same
effect as though made on and as of such date (before and after giving effect to
such Borrowing or issuance and to the application of the proceeds therefrom),
except to the extent such representations and warranties expressly relate to an
earlier date, including those with a corresponding schedule, in which case the
representations and warranties that expressly relate to an earlier date shall
have been true and correct as of such earlier date.
(c) The Borrowers and each other Loan Party shall be in compliance with
all the terms and provisions set forth herein and in each other Loan Document on
its part to be observed or performed, and at the time of and immediately after
such Credit Event, no Event of Default or Default shall have occurred and be
continuing.
Each Credit Event shall be deemed to constitute a representation and
warranty by Parent and each Borrower on the date of such Credit Event as to the
matters specified in paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. First Credit Event. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of
itself, the Lenders and the Issuing Bank, a favorable written opinion
of Xxxxxx & Bird, LLP, counsel for Parent, Denny's Holdings and the
Borrowers, substantially as set forth in Exhibit H, (A) dated the
Closing Date, (B) addressed to the Issuing Bank, the Administrative
Agent, the Collateral Agent and the Lenders and (C) covering such other
matters relating to the Loan Documents and the Transactions as the
Administrative Agent shall reasonably request, and Parent and the
Borrowers hereby request such counsel to deliver such opinions.
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(b) All legal matters incident to this Agreement, the
Borrowings and extensions of credit hereunder and the other Loan
Documents shall be satisfactory to the Lenders, to the Issuing Bank and
to Cravath, Swaine & Xxxxx, counsel for the Administrative Agent.
(c) The Administrative Agent shall have received (i) a copy of
the certificate or articles of incorporation, including all amendments
thereto, of each Loan Party, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate
as to the good standing of each Loan Party as of a recent date, from
such Secretary of State; (ii) a certificate of the Secretary or
Assistant Secretary of each Loan Party dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws of such Loan Party as in effect on the Closing Date and at all
times since a date prior to the date of the resolutions described in
clause (B) below, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of such Loan
Party authorizing the execution, delivery and performance of the Loan
Documents to which such person is a party and, in the case of the
Borrowers, the borrowings hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect,
(C) that the certificate or articles of incorporation of such Loan
Party have not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen signature
of each officer executing any Loan Document or any other document
delivered in connection herewith on behalf of such Loan Party; (iii) a
certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents as
the Lenders, the Issuing Bank or Cravath, Swaine & Xxxxx, counsel for
the Administrative Agent, may reasonably request.
(d) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Financial Officer
of Parent, confirming compliance with the conditions precedent set
forth in paragraphs (b) and (c) of Section 4.01.
(e) The Administrative Agent and the Initial Lenders 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 Borrowers hereunder or under any other Loan Document.
(f) The Collateral and Guarantee Requirement shall have been
satisfied 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.
(g) The Administrative Agent shall have received a copy of, or
a certificate as to coverage under, the insurance policies required by
Section 5.02 and the applicable provisions of the Security Documents,
each of which shall be endorsed or otherwise amended to include a
"standard" or "New York" lender's loss payable endorsement and to name
the Collateral Agent as additional insured, in form and substance
satisfactory to the Administrative Agent.
(h) The Administrative Agent shall have received a Borrowing
Request pursuant to Section 2.03(b).
(i) After giving effect to the consummation of the
Transactions and the other transactions contemplated hereby, Parent and
the Subsidiaries shall have no outstanding Indebtedness or preferred
stock other than (i) the loans and other extensions of credit under
this Agreement, (ii) the
42
Old Senior Notes, (iii) the New Senior Notes and (iv) other
Indebtedness permitted under Section 6.01(a), which is set forth in
Schedule 6.01. The amounts, terms and conditions of all Indebtedness
and Capital Lease Obligations to remain outstanding after the Closing
Date (including terms and conditions relating to the interest rate,
fees, amortization, maturity, prepayment requirements, mandatory call
or redemption features, sinking funds, security, subordination (if
any), covenants, events of default and remedies) shall be satisfactory
in all respects to the Lenders.
(j) All requisite Governmental Authorities and third parties
shall have approved or consented to the transactions contemplated
hereby to the extent required or deemed advisable by the Administrative
Agent and its counsel (and such approvals shall be in full force and
effect) and there shall be no action, actual or threatened, before any
Governmental Authority, court or arbitrator that (a) has a reasonable
likelihood of restraining, preventing or imposing burdensome conditions
on the transactions contemplated hereby or (b) if adversely determined,
could reasonably be expected to result in a Material Adverse Effect.
(k) Substantially simultaneously with or prior to the initial
Credit Event, (a) the principal of and interest on all loans
outstanding under, and all other amounts due with respect to, the
Existing Credit Agreement shall have been repaid in full, (b) all
commitments to lend under the Existing Credit Agreement shall have been
permanently terminated, (c) all obligations under or relating to the
Existing Credit Agreement and all security interests related thereto
shall have been discharged and (d) the Administrative Agent shall have
received satisfactory evidence of such repayment, termination and
discharge (the actions referred to in clauses (a), (b) and (c) above,
the "Refinancing").
(l) The Lenders shall have received unaudited consolidated and
consolidating balance sheets and related statements of income,
stockholders' equity and cash flows for the Borrowers for the fiscal
quarter ending September 30, 2002, which financial statements shall not
be materially inconsistent with the financial statements or forecasts
previously provided to the Lenders.
(m) The Lenders shall have received a detailed business plan
with financial projections of the Borrower and its subsidiaries for
fiscal years 2002 through 2004, in form and substance satisfactory to
the Administrative Agent.
(n) The Administrative Agent shall be reasonably satisfied
with all of Parent's and the Subsidiaries' material agreements and
other arrangements with their suppliers (including, without limitation,
the terms of sale and any financing arrangements with such suppliers),
service providers and franchisees after giving effect to the
Refinancing.
(o) The Lenders shall be reasonably satisfied as to the amount
and nature of capital expenditures required or expected to be made by
Parent and the Subsidiaries between the date hereof and the Maturity
Date and Parent's plans with respect to the funding of such
expenditures.
(p) The Lenders shall be reasonably satisfied as to the amount
and nature of any contingent liabilities (including but not limited to
environmental and employee health and safety exposures to which Parent
and the Subsidiaries may be subject), after giving effect to the
Refinancing and with the plans of the Borrowers with respect thereto,
and, to the extent requested by the Administrative Agent, the Lenders
shall have received environmental assessments satisfactory to the
Administrative Agent from an environmental consulting firm satisfactory
to the Administrative Agent with respect to the Mortgaged Properties.
(q) There shall be no litigation, arbitration or
administrative proceeding or consent decree that would reasonably be
expected to have a material adverse effect on the business, assets,
operations, properties, condition (financial or otherwise), prospects
or material agreements of Parent and the Subsidiaries, taken as a
whole, or on the ability of the parties to consummate the Refinancing
or the other transactions contemplated hereby.
43
(r) The Lenders shall be reasonably satisfied in all respects
with the tax position and the contingent tax liabilities of, and with
any tax sharing agreements among Parent, Denny's Holdings, the
Borrowers and their respective subsidiaries after giving effect to the
Refinancing and the other transactions contemplated hereby, and with
the plans of the Borrower with respect thereto.
(s) The Initial Lenders shall be reasonably satisfied with the
liquidity, and sufficiency of amounts available under this Agreement to
meet the ongoing working capital and other cash requirements, of Parent
and its subsidiaries following the consummation of the Refinancing and
the other transactions contemplated hereby.
(t) The Lenders shall have received a solvency certificate, in
form and substance and from an officer of each of the Borrowers
reasonably satisfactory to the Initial Lenders, together with such
other evidence reasonably requested by the Lenders, confirming the
solvency of such Borrower and its subsidiaries after giving effect to
the Refinancing and the other transactions contemplated hereby.
(u) The Lenders shall have received an appraisal (to the
extent deemed necessary or appropriate by, and satisfactory in form and
substance to, the Administrative Agent), from an appraiser satisfactory
to the Administrative Agent, of each Mortgaged Property, and full
appraisal reports with respect to 70 Mortgaged Properties to be
specified by the Administrative Agent.
(v) The Consolidated EBITDA of Parent and the Subsidiaries for
the most recently completed four-fiscal-quarter period ended at least
30 days prior to the Closing Date shall be at least $120,000,000.
(w) The Lenders shall have received the certificate of a
Financial Officer that the Consolidated EBITDA of Parent and the
Subsidiaries for each fiscal month after the most recent 2002 fiscal
quarter for which unaudited financial statements were received by the
Lenders and ended prior to the date of the initial Credit Event is not
materially inconsistent with the forecast for any such month previously
provided to the Initial Lenders.
(x) The Administrative Agent shall have received (a) written
instructions from First American Title Insurance Company to the effect
that the Mortgages that are required to be delivered on the Closing
Date are in proper form for filing in the jurisdictions in which such
Mortgages are required to be recorded and (b) legal opinions from local
counsel satisfactory to the Administrative Agent to the effect that
such Mortgages are sufficient to perfect the liens purported to be
created by such Mortgages with respect to Mortgaged Properties
representing at least 60% of the value of all the Mortgaged Properties.
(y) The consummation of the Refinancing and the other
transactions contemplated hereby shall not (a) violate any applicable
law, statute, consent decree, rule or regulation or (b) conflict with,
or result in a default or event of default under, any material
agreement of Parent or any of its subsidiaries, and the Administrative
Agent shall have received one or more legal opinions to such effect,
satisfactory to the Administrative Agent, from counsel to Borrowers
satisfactory to the Administrative Agent.
(z) 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) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
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ARTICLE V
Affirmative Covenants
Each of Parent, Denny's Holdings and the Borrowers, covenants and
agrees with each Lender that so long as this Agreement shall remain in effect
and until the Commitments have been terminated and the principal of and interest
on each Loan, all fees and all other expenses or amounts payable under any Loan
Document shall have been paid in full and all Letters of Credit have been
canceled or have expired and all amounts drawn thereunder have been reimbursed
in full, unless the Required Lenders shall otherwise consent in writing, each of
Parent, Denny's Holdings, and the Borrowers will, and will cause each of the
Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.05.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated; comply
in all material respects with all applicable laws, rules, regulations (including
any zoning, building, Environmental Law, ordinance, code or approval or any
building permits or any restrictions of record or agreements affecting the
Mortgaged Properties) and decrees and orders of any Governmental Authority,
whether now in effect or hereafter enacted; and at all times maintain and
preserve all property material to the conduct of such business and keep such
property in good repair, working order and condition and from time to time make,
or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times.
SECTION 5.02. Insurance. Maintain with responsible and reputable
insurance companies or associations insurance in such amounts and covering such
risks as is consistent with prudent business practice for comparable companies
in the industry or as otherwise are acceptable to the Administrative Agent in
its discretion and such additional insurance as is required by applicable law;
provided, however, that Parent, the Borrowers and the Subsidiaries may
self-insure, pursuant to policies adopted by the Board of Directors of Parent
and reviewed at least once annually, to the extent determined in good faith by
senior management of Parent to be consistent with prudent business practice, in
the best interest of Parent, the Borrowers and the Subsidiaries and not
materially adverse to the rights and interests of the Lenders under this
Agreement and the other Loan Documents.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and other
obligations promptly and in accordance with their terms and pay and discharge
promptly when due all taxes, assessments and govern mental charges or levies
(other than any tax, assessment or governmental charge or levy in an amount less
than $250,000, provided that the failure to pay or discharge the same,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect) imposed upon it or upon its income or profits or in
respect of its property, before the same shall become delinquent or in default,
as well as all lawful claims for labor, materials and supplies or otherwise
(other than any claim for an amount less than $250,000, provided that the
failure to pay or discharge the same, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect) that, if
unpaid, might give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required with
respect to any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and Parent and such Borrower, as applicable, shall have set aside on
its books adequate reserves with respect thereto in accordance with GAAP and
such contest operates to suspend collection of the contested obligation, tax,
assessment or charge and enforcement of a Lien and, in the case of the Mortgaged
Properties, there is no risk of forfeiture of such property.
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SECTION 5.04. Financial Statements, Reports, etc. In the case of
Parent, furnish to the Administrative Agent:
(a) within 90 days (or such shorter period as the Securities
and Exchange Commission shall specify for the filing of Annual Reports
on Form 10-K) after the end of each fiscal year, its consolidated and
consolidating balance sheets and related statements of operations,
stockholders' equity and cash flows showing the financial condition of
Parent and the consolidated Subsidiaries as of the close of such fiscal
year and the results of its operations and the operations of such
Subsidiaries during such year, all audited by Deloitte & Touche LLP or
other independent public accountants of recognized national standing
acceptable to the Required Lenders and accompanied by an opinion of
such accountants (which shall not be qualified in any material respect)
to the effect that such consolidated financial statements fairly
present the financial condition and results of operations of Parent and
the consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied;
(b) within 45 days (or such shorter period as the Securities
and Exchange Commission shall specify for the filing of Quarterly
Reports on Form 10-Q), after the end of each of the first three fiscal
quarters of each fiscal year its consolidated and consolidating balance
sheets and related statements of operations, stockholders' equity and
cash flows showing the financial condition of Parent and the
consolidated Subsidiaries as of the close of such fiscal quarter and
the results of its operations and the operations of such Subsidiaries
during such fiscal quarter and the then elapsed portion of the fiscal
year, all certified by one of its Financial Officers as fairly
presenting the financial condition and results of operations of Parent
and the consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit
adjustments;
(c) within 60 days after the end of the last fiscal month of
each fiscal year, 45 days after the end of the third, sixth and ninth
fiscal months of each fiscal year, and 35 days after the end of each
other fiscal month, its consolidated and consolidating balance sheets
and related statements of operations and stockholders' equity and
consolidated cash flows showing the financial condition of Parent and
the consolidated Subsidiaries as of the close of such month and the
results of its operations, the operations of such Subsidiaries during
such month and the then elapsed portion of the fiscal year and the
monthly management reports that have been provided historically by
Parent with such financial statements, all certified by one of its
Financial Officers as fairly presenting the financial condition and
results of operations of Parent and the consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments;
(d) concurrently with any delivery of financial statements
under paragraph (a) or (b) above, a certificate of the accounting firm
or Financial Officer, substantially as set forth in Exhibit J, (i)
opining on or certifying such statements (which certificate, when
furnished by an accounting firm, may be limited to accounting matters
and disclaim responsibility for legal interpretations) and certifying
that no Event of Default or Default has occurred or, if such an Event
of Default or Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with
respect thereto and (ii) setting forth (A) the amount of Net Cash
Proceeds (w) received from each Asset Sale, the Net Cash Proceeds from
which are to be applied to acquire Reinvestment Assets pursuant to
Section 2.09(b), (x) the date of such Asset Sale, (y) the amount of
such Net Cash Proceeds applied to acquire Reinvestment Assets during
such period and the nature of such Reinvestment Assets (if any) and (z)
the amount of such Net Cash Proceeds required to be applied to reduce
the commitments as set forth in Section 2.09(b) and (B) reasonably
detailed calculations demonstrating compliance with Sections 6.10,
6.11, 6.12, 6.13 and 6.14;
(e) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by Parent or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of
the functions
46
of said Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be;
(f) within 10 days of a request by the Administrative Agent
from time to time, such information as Parent has regarding the holders
of the New Senior Notes and the Old Senior Notes;
(g) not later than March 31, 2003, (i) projections prepared by
the management of Parent of statements concerning selected financial
data (consisting of net sales, earnings before interest and taxes,
working capital items, capital expenditures and depreciation), balance
sheets, income statements and cash flow statements, on a quarterly
basis, for fiscal years 2003 and 2004 and, on an annual basis, for
fiscal year 2005 and (ii) any revisions to the business plan and
financial projections of the Borrowers and their subsidiaries for
fiscal years 2003 and 2004 specified in Section 4.02(m); and
(h) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
Parent, any Borrower or any Subsidiary, or compliance with the terms of
any Loan Document, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.05. Litigation and Other Notices. Furnish to the
Administrative Agent, the Issuing Bank and each Lender prompt written notice of
the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to
be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against Parent, any Borrower or any Subsidiary
that could reasonably be expected to result in a Material Adverse
Effect; and
(c) any development that has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect.
SECTION 5.06. Employee Benefits. (a) Comply in all material respects
with the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent as soon as possible after, and in any event within 30 days
after any Responsible Officer of Parent or any Borrower or any ERISA Affiliate
knows or has reason to know that, any ERISA Event has occurred that, alone or
together with any other ERISA Event, could reasonably be expected to result in
liability of Parent or any Subsidiary in an aggregate amount exceeding
$5,000,000 or requiring payments exceeding $1,000,000 in any year, a statement
of a Financial Officer of Parent setting forth details as to such ERISA Event
and the action, if any, that Parent proposes to take with respect thereto.
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law are made of
all dealings and transactions in relation to its business and activities and
permit any representatives designated by the Administrative Agent or any Lender
to visit and inspect the financial records and the properties of Parent, any
Borrower or any Subsidiary at reasonable times and as often as reasonably
requested and to make extracts from and copies of such financial records, and
permit any representatives designated by the Administrative Agent or any Lender
to discuss the affairs, finances and condition of Parent, any Borrower or any
Subsidiary with the officers thereof and independent accountants therefor.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and
request the issuance of Letters of Credit only for the purposes set forth in
the preamble to this Agreement.
47
SECTION 5.09. Compliance with Environmental Laws. Comply, and cause all
lessees and other persons occupying its Properties to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to its
operations and Properties; obtain and renew all material Environmental Permits
necessary for its operations and Properties; and conduct any Remedial Action in
accordance with Environmental Laws; provided, however, that none of Parent, the
Borrowers or any of the Subsidiaries shall be required to undertake any Remedial
Action to the extent that its obligation to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being maintained
with respect to such circumstances.
SECTION 5.10. Preparation of Environmental Reports. (a) If a Default
caused by reason of a breach of Section 3.17 or 5.09 shall have occurred and be
continuing, at the request of the Required Lenders through the Administrative
Agent, provide to the Lenders within 60 days after such request, at the expense
of the Borrowers, an environmental site assessment report for the Properties
which are the subject of such Default prepared by an environmental consulting
firm acceptable to the Administrative Agent and indicating the presence or
absence of Hazardous Materials and the estimated cost of any compliance or
Remedial Action which any Loan Party could be reasonably expected to be legally
obligated to undertake in connection with such properties.
(b) Where there is a reasonable basis to believe that
Hazardous Materials may be present on a Mortgaged Property or that the value of
a Mortgaged Property may be materially impaired as a result thereof, provide
Phase I reports from an environmental consulting firm satisfactory to the
Administrative Agent with respect to the affected Mortgaged Properties specified
by the Administrative Agent in such request within 60 days of such request.
SECTION 5.11. Additional Subsidiaries. If any additional Subsidiary is
formed or acquired after the Closing Date, within three Business Days after such
Subsidiary is formed or acquired, notify the Administrative Agent and the
Lenders thereof and cause the Collateral and Guarantee Requirement to be
satisfied with respect to such Subsidiary (if it is a Subsidiary Loan Party) and
with respect to any Equity Interest in or Indebtedness of such Subsidiary owned
by or on behalf of any Loan Party.
SECTION 5.12. Further Assurances. (a) 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
and 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) Notify the Administrative Agent and the Lenders of the acquisition
of any material assets (including any real property or improvements thereto or
any interest therein) acquired by the Borrower or any Subsidiary Loan Party
after the Closing Date (other than assets constituting Collateral under the
Guarantee and Collateral Agreement that become subject to the Lien of the
Guarantee and Collateral Agreement upon acquisition thereof), and, if requested
by the Administrative Agent or the Required Lenders, Parent and the Borrowers
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.
(c)(i) Deliver in accordance with Section 9-513(c) of the Applicable
UCC an authenticated demand to each secured party listed on any Scheduled
Financing Statement for a termination statement in respect of each Scheduled
Financing Statement which relates to such secured party not later than 15
Business Days after the date of delivery to Denny's by counsel to the
administrative agent of complete copies of the Scheduled Financing Statements,
(ii) promptly upon receipt thereof from any such secured party, file in the
applicable filing office each termination statement in respect of a Scheduled
Financing Statement, (iii) in the
48
event that the relevant secured party has not sent a termination statement with
respect to a Scheduled Financing Statement in response to the delivery of a
demand to such secured party pursuant to clause (i), prepare and file in
accordance with Section 9-509(d)(2) of the Applicable UCC with the applicable
filing office a termination statement with respect to such Scheduled Financing
Statement not later than 90 days after the delivery to such secured party of a
demand pursuant to clause (i), (iv) provide to the Administrative Agent copies
of an acknowledgment copy of a termination statement with respect to each
Scheduled Financing Statement not later than 120 days after the date of the
delivery of the demand in respect of such Scheduled Financing Statement pursuant
to clause (i) above and (v) promptly provide to the Administrative Agent copies
of all demands made, and all termination statements received or filed, pursuant
to this clause (c) and copies of all correspondence relating to any of the
foregoing.
SECTION 5.13. Cash Management Arrangements. As and to the extent
provided in the Guarantee and Collateral Agreement, within 60 days of the
Closing Date establish and maintain, cash management procedures, including
restricted and concentration accounts, satisfactory to the Administrative Agent
and enter into control agreements for the benefit of the Collateral Agent and
the Administrative Agent, in form and substance satisfactory to the
Administrative Agent, with respect to those deposit and investment accounts of
Parent and its subsidiaries designated by the Administrative Agent.
SECTION 5.14. Mortgages Not Required at the Closing Date. (a) Not later
than 60 days after the Closing Date, counterparts of Mortgages with respect to
any Mortgaged Properties for which Mortgages were not delivered on or prior to
the Closing Date duly executed and completed, in recordable form and delivered
by the record owner of such Mortgaged Property.
(b) Deliver to the Administrative Agent, counterparts of duly executed
Mortgages with respect to any Property Held for Sale that ceases to be an
Excluded Property within five Business Days of such Property Held for Sale
ceasing to be an Excluded Property.
ARTICLE VI
Negative Covenants
Each of Parent, Denny's Holdings, and the Borrowers covenants and
agrees with each Lender that, so long as this Agreement shall remain in effect
and until the Commitments have been terminated and the principal of and interest
on each Loan, all fees and all other expenses or amounts payable under any Loan
Document have been paid in full and all Letters of Credit have been canceled or
have expired and all amounts drawn thereunder have been reimbursed in full,
unless the Required Lenders shall otherwise consent in writing, neither Parent
nor Denny's Holdings nor the Borrowers will, nor will they cause or permit any
of the Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist
any Indebtedness, except:
(a) Indebtedness existing on the date hereof and set forth in
Schedule 6.01;
(b) Indebtedness arising hereunder or pursuant to a Permitted
Senior Notes Exchange or evidenced by (i) the Loan Documents, (ii) the
Old Senior Notes Documents or (iii) the New Senior Notes Documents,
provided that Indebtedness evidenced by the New Senior Notes shall be
incurred only pursuant to Permitted Senior Notes Exchanges;
(c) Indebtedness incurred by Parent, any Borrower or any
Subsidiary Loan Party subsequent to the Closing Date secured by
purchase money Liens in an aggregate amount not to exceed $5,000,000 at
any one time outstanding;
49
(d) Subject to Section 6.10, Capex Financings and Indebtedness
incurred in connection with investments permitted under Section 6.04(j)
in an aggregate amount not to exceed $10,000,000;
(e) Subject to Section 6.10, and in addition to Indebtedness
permitted under Section 6.01(d), Capital Lease Obligations entered into
after the date hereof of which a general description is contained in
the Confidential Information Memorandum in an aggregate amount not to
exceed $20,000,000;
(f) Indebtedness arising under (i) any purchasing card program
established to enable headquarters and field staff of Parent or any
Subsidiary Loan Party to purchase goods and supplies from vendors and
(ii) any travel and entertainment card program established to enable
headquarters and field staff of Parent or any Subsidiary Loan Party to
make payments for expenses incurred related to travel and
entertainment, provided that the aggregate amount of such Indebtedness
shall not exceed $1,000,000 at any time outstanding;
(g) Indebtedness arising from investments among Parent, any
Borrower and any Subsidiary Loan Party that are permitted hereunder;
(h) Indebtedness owed to JPMCB or any of its banking
Affiliates in respect of any overdrafts and related liabilities arising
from treasury, depository and cash management services or in connection
with any automated clearing house transfers of funds, provided that the
aggregate principal amount of such Indebtedness shall not exceed
$40,000,000 at any one time outstanding;
(i) in the case of Parent, any Borrower or Subsidiary Loan
Party (other than a First-Tier Subsidiary):
(A) all interest, fees, reimbursement and indemnification
amounts, and all other accruals and obligations under the
Indebtedness described in Section 6.01(a) and renewals,
extensions, modifications or refinancings of such
Indebtedness, provided that such renewals, extensions,
modifications and refinancings (i) do not increase the
outstanding principal amount of the Indebtedness being
renewed, extended, modified or refinanced, or shorten the
maturity thereof to a date earlier than one year after the
Maturity Date, and (ii) are otherwise on terms consistent with
prudent business practice and then prevailing market practices
and prices in the applicable geographic area; and
(B) additional unsecured Indebtedness not otherwise
permitted by this Section 6.01 aggregating not more than
$10,000,000 in principal amount at any one time outstanding;
and
(j) Indebtedness of Denny's Holdings issued to (i) Farallon or
an Affiliate of Farallon in an aggregate principal amount not to exceed
$25,000,000 and (ii) any third party (other than (x) Farallon or an
Affiliate of Farallon and (y) any Lender or an Affiliate of any Lender)
reasonably satisfactory to the Administrative Agent in an aggregate
principal amount not to exceed $25,000,000; provided, that, in either
case, (A) unless such Indebtedness consists of notes issued by Parent
and Denny's Holdings and has terms (other than interest rate) identical
to the terms of the New Senior Notes, any subsequent holder of such
Indebtedness shall be reasonably satisfactory to the Administrative
Agent, (B) such Indebtedness has a final maturity at least six months
after the Maturity Date, (C) such Indebtedness does not amortize prior
to its final maturity, (D) such Indebtedness is unsecured and has no
credit support (whether in the form of a Guarantee or otherwise) from
any Subsidiary other than Denny's Holdings, (E) the proceeds of such
Indebtedness are applied contemporaneously with such incurrence solely
to (x) repurchase Old Senior Notes in a principal amount that is
greater than the principal amount of such Indebtedness or (y)
permanently repay Loans (with a concurrent reduction in the
Commitments), (F) if the proceeds of such Indebtedness are used to
repurchase Old Senior Notes, the interest expense (including any
accretion of principal) attributable to such Indebtedness shall be less
than the interest expense attributable to the Old Senior Notes
repurchased with the proceeds of such Indebtedness, (G) at the time of
such
50
issuance, no Default or Event of Default shall have occurred and be
continuing and no Default or Event of Default will result from such
issuance or the application of the proceeds thereof and (H) the
documentation governing such Indebtedness contains terms (including
terms relating to fees, prepayment requirements, mandatory redemption
features, covenants, events of default and remedies) that are less
restrictive of Parent and the Subsidiaries than the terms of this
Agreement, and such terms and all other transactions related to such
incurrence shall otherwise be reasonably satisfactory to the
Administrative Agent, provided further that if such Indebtedness
consists of notes issued by Parent and Denny's Holdings that have terms
(other than interest rate) identical to the terms of the New Senior
Notes and bear interest at a fixed rate that is equal either to (1) the
interest rate applicable to the New Senior Notes outstanding on October
29, 2002 or (2) a market rate at the time of the issuance thereof, then
the requirements of this clause (H) shall be deemed satisfied as to
such Indebtedness.
SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien
on any property or assets (including stock or other securities of any person,
including any Subsidiary) now owned or hereafter acquired by it or on any income
or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Borrowers and
Subsidiaries existing on the date hereof and set forth in Schedule
6.02, provided that such Liens shall secure only those obligations
which they secure on the date hereof, and with respect to Liens
existing on the property of the Borrowers or Subsidiary Loan Parties
(other than the First-Tier Subsidiaries), extensions, renewals,
refinancings or replacements thereof; provided, however, that no such
extensions, renewals refinancings or replacements will extend to or
cover any property not theretofore subject to the Lien being extended,
renewed, refinanced or replaced; and provided further that the
Borrowers and Subsidiary Loan Parties (other than the First-Tier
Subsidiaries) may substitute for the property subject to any such Lien
other property with substantially the same Fair Market Value and not
otherwise subject to the Lien of a Loan Document, so long as the
property for which such substitution is made is fully and effectively
released from such Lien;
(b) any Lien created pursuant to any Indebtedness permitted
under Section 6.01(b)(i), (c), (d) and (e);
(c) Permitted Liens;
(d) Liens in favor of the Administrative Agent, Collateral
Agent and the Lenders; and
(e) unperfected Liens on property of the Borrowers or
Subsidiary Loan Parties (other than First-Tier Subsidiaries) in favor
of other Borrowers or Subsidiary Loan Parties (other than First-Tier
Subsidiaries) arising in connection with intercompany transactions
among Borrowers or Subsidiary Loan Parties.
SECTION 6.03. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer (other than pursuant to Section 6.05(c)) any property, real or
personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred; provided, however, that Parent, any Borrower or any
Subsidiary may enter into such a transaction provided that the Fair Market Value
of all property sold or transferred pursuant to such transactions shall not
exceed in the aggregate $5,000,000.
51
SECTION 6.04. Investments, Loans and Advances. Purchase, hold or
acquire any capital stock,
52
evidences of indebtedness or other securities of, make or permit to exist any
loans or advances to, or make or permit to exist any investment or any other
interest in, any other person, except:
53
(a) investments by Parent, the Borrowers or the Subsidiaries
existing on the date hereof in the capital stock of their respective
subsidiaries and investments existing on the date hereof and set forth
in Schedule 6.04;
(b) Permitted Investments;
(c) subject to Section 6.15(a), advances and loans made by any
Subsidiary to Parent in the ordinary course of business and (i)
advances and loans made by any Subsidiary to and (ii) investments made
by any Subsidiary in any other Subsidiary that is a Borrower or a
Subsidiary Loan Party in the ordinary course of business;
(d) advances and loans made by Parent to any Borrower in the
ordinary course of business so long as no Default or Event of Default
shall have occurred and be continuing;
(e) investments by any Borrower or any Subsidiary (other than
First-Tier Subsidiaries) made pursuant to joint venture or franchise
arrangements entered into in accordance with prudent business practice
and in an aggregate amount of not more than $2,500,000 at any one time
outstanding;
(f) non-cash consideration received from any sale, lease,
transfer or other disposition of assets permitted under Section 6.05;
(g) loans or advances to employees made in the ordinary course
of business consistent with prudent business practice and in an
aggregate amount not to exceed $1,000,000 at any one time outstanding;
(h) investments by Parent and Denny's Holdings in Old Senior
Notes to the extent permitted by Section 6.08(a);
(i) additional investments not otherwise permitted by this
Section 6.04 in an aggregate amount not to exceed $3,000,000; and
(j) subject to Section 6.10, acquisitions of properties and
related assets by means of investments in new operations, properties or
franchises through the purchase or other acquisition of assets of any
person or stock of new Subsidiary Loan Parties where any Borrower or
any Subsidiary Loan Party making such purchase or acquisition
determines in its prudent business judgment that such purchase or
acquisition would be beneficial in lieu of making Consolidated Capital
Expenditures.
SECTION 6.05. Mergers, Consolidations, Sales of Assets and
Acquisitions. 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
any substantial part of its assets (whether now owned or hereafter acquired) or
any capital stock of any Subsidiary, or purchase, lease or otherwise acquire (in
one transaction or a series of transactions) all or any substantial part of the
assets of any other person, except that:
(a) Parent, any Borrower or any Subsidiary Loan Party may
purchase and sell inventory, fixtures and equipment in the ordinary
course of business;
(b) Parent, any Borrower or any Subsidiary Loan Party may sell
or otherwise dispose of obsolete or worn out property, in each case in
the ordinary course of business and consistent with past practice,
provided that the aggregate Fair Market Value of all such assets
disposed of pursuant to this clause (b) in any fiscal year shall not
exceed $5,000,000;
(c) Parent, any Borrower or any Subsidiary Loan Party may
exchange real property, fixtures and improvements for other real
property, fixtures and improvements, provided that any
54
consideration (other than real property, fixtures and improvements)
received by any Loan Party in connection with such exchanges is
received by such Loan Party in cash;
(d) subject to Section 6.15, any Subsidiary may sell,
transfer or otherwise dispose of any of its assets to any Subsidiary
Loan Party;
(e) dispositions of the Excluded Properties or other
dispositions of all or any portion of the assets constituting the
restaurants of Denny's Holdings and its subsidiaries (other than sales,
but not licenses, of Trademarks (as defined in the Guarantee and
Collateral Agreement)), in each case for consideration determined by
the senior management of Parent to be equal to the Fair Market Value of
the assets disposed of, provided that the aggregate Fair Market Value
of the assets (other than Excluded Properties) disposed of pursuant to
this subsection shall not exceed $10,000,000 in any fiscal year;
(f) Parent, any Borrower or any Subsidiary Loan Party may
sell, transfer or otherwise dispose of underperforming restaurants (as
determined in the good faith judgment of Parent) for consideration
determined by the board of directors of the person that owns such
restaurants (which board of directors shall include members of senior
management of Parent) to be equal to the Fair Market Value of the
restaurants sold, transferred or otherwise disposed of, provided that
the aggregate Fair Market Value of all assets disposed of pursuant to
this clause (f) shall not exceed $5,000,000 in any fiscal year;
(g) any Subsidiary Loan Party (other than a First-Tier
Subsidiary) may (i) merge or consolidate with or transfer all or
substantially all of its assets to any other Subsidiary Loan Party;
(h) Denny's or any of its subsidiaries may (i) sell or
transfer the rights to operate restaurants under the Denny's name as
franchisees (but not the restaurant buildings themselves (the "Retained
Denny's Restaurants") or the land on which such restaurants are located
(the "Retained Denny's Land")) to franchisees of Denny's (the "Denny's
Franchisees") generally in accordance with Parent's October 2002
Business Plan for cash consideration equal to the Fair Market Value of
such rights and (ii) may lease or sublease the Retained Denny's
Restaurants and the Retained Denny's Land to the Denny's Franchisees
that operate such Retained Denny's Restaurants pursuant to operating
leases or subleases on terms determined in good faith by Denny's or the
applicable Subsidiary to be market terms at the time such leases or
subleases are entered into, provided that (i) such Retained Denny's
Restaurants continue to be operated by such Denny's Franchisees under
the Denny's name for so long as Parent's senior management reasonably
believes such continued operation is in the best interest of Parent and
(ii) such sales, and such leases or subleases, do not violate, conflict
with, result in the breach of or constitute a default under any
provision of, or give rise to any right to terminate, any indenture,
agreement or other instrument to which Parent, any Borrower or any
Subsidiary is a party;
(i) Borrower may sell, transfer or otherwise dispose of
Properties Held for Sale to an unaffiliated third party; and
(j) any Borrower or any Subsidiary Loan Party other than a
First-Tier Subsidiary may effect any transaction permitted by Section
6.04(j).
provided, however, that any sale, transfer, exchange or other disposition of
assets (x) permitted by clause (b), (c), (e) or (i) above shall not be permitted
unless such disposition is for Fair Market Value and (y) for gross consideration
in excess of (A) $100,000 for any individual sale, transfer, exchange or other
disposition and (B) $500,000 for all such sales, transfers, exchanges or other
dispositions permitted by clause (b), (e), (f) or (i) shall not be permitted
unless such disposition is for at least 60% cash consideration and all noncash
consideration received in respect thereof shall be in the form of a note, an
asset or such other form as shall be reasonably satisfactory to the
Administrative Agent; and provided further that any transaction permitted
55
by clause (c), (e), (f) or (g) above shall not be permitted unless at the time
thereof and immediately after giving effect thereto no Event of Default or
Default shall have occurred and be continuing.
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends. (a) Declare or pay, directly or indirectly, any
dividend or make any other distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, with respect to
any shares of its capital stock or directly or indirectly redeem, purchase,
retire or otherwise acquire for value (or permit any Subsidiary to purchase or
acquire) any shares of any class of its capital stock or set aside any amount
for any such purpose; provided, however, that (i) subject to Section 6.15, any
Subsidiary may declare and pay dividends or make other distributions to Parent,
to the Borrowers or to the Subsidiary Loan Parties, and (ii) Parent may declare
and distribute to its stockholders a dividend comprised of rights to purchase
preferred stock and/or common stock of Parent, provided that (A) such rights are
issued and distributed to Parent's stockholders pursuant to the Rights
Agreement, dated as of December 15, 1998, between Denny's and Continental Stock
Transfer and Trust Company, as Rights Agent and (B) no Default or Event of
Default shall have occurred or be continuing or would result therefrom.
(b) Permit any Subsidiary to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such subsidiary to (i) pay any dividends or
make any other distributions on its capital stock or any other interest or (ii)
make or repay any loans or advances to Parent, any Borrower, any Subsidiary or
the parent of such Subsidiary (subclauses (i) and (ii) above are collectively
referred to as an "Upstream Payment") except for such encumbrances or
restrictions existing under or by reason of (A) applicable law, (B) this
Agreement, any other Loan Document or any other agreement entered into hereunder
or thereunder or as contemplated hereby or thereby, (C) the Old Senior Notes
Documents, (D) customary provisions restricting (1) subletting or assignment of
any lease governing a leasehold interest of Parent or any of the Subsidiaries,
(2) the transfer of intellectual property rights held by Parent or any of the
Subsidiaries through license agreements with the owners of such rights and (3)
the assignment of supply contracts, (E) any instrument governing Indebtedness
permitted under Section 6.01 of a person acquired by any Borrower or Subsidiary
(other than a First-Tier Subsidiary) after the date hereof, provided that (1)
such instrument was in existence at the time of such acquisition and was not
created in contemplation of or in connection with such acquisition, (2) the
officers of Parent reasonably believe at the time of such acquisition that the
terms of such instrument will not encumber or restrict the ability of such
acquired person to make an Upstream Payment and (3) such instrument contains no
express encumbrances or restrictions on the ability of such acquired person to
make an Upstream Payment, (F) the New Senior Notes Documents or (G) Indebtedness
and other contractual obligations of Parent or any of the Subsidiaries existing
on the Closing Date and set forth on Schedule 6.06 and any amendment,
modification, renewal, extension, replacement, refinancing or refunding thereof
permitted under the terms of this Agreement, provided that the encumbrances and
restrictions contained in any such amendment, modification, renewal, extension,
replacement, refinancing or refunding are in the aggregate no less favorable in
all material respects to the Lenders.
(c) Enter into, or be party to, or make any payment under, any
Synthetic Purchase Agreement unless (i) in the case of any Synthetic Purchase
Agreement related to any capital stock, the payments required to be made by
Parent, the Borrowers and the other Subsidiaries are limited to the amount
permitted to be paid under Section 6.06(a) (and such payments shall be deemed
made pursuant to the applicable clause of Section 6.06(a)), (ii) in the case of
any Synthetic Purchase Agreement related to any Restricted Indebtedness, the
payments required to be made by Parent, the Borrowers and the other Subsidiaries
thereunder are limited to the amount permitted to be paid under Section 6.08(a)
(and such payments shall be deemed made pursuant to the applicable clause of
Section 6.08(a)) and (iii) in the case of any Synthetic Purchase Agreement, the
obligations of Parent, the Borrowers and the other Subsidiaries thereunder are
subordinated to the Senior Obligations on terms satisfactory to the Required
Lenders.
SECTION 6.07. Transactions with Affiliates. Sell or transfer any
property or assets to, or purchase or acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates except,
(i) for Permitted Senior Notes Exchanges and the consummation of the
transactions contemplated thereby and (ii) that Parent, any Borrower or any
Subsidiary may engage in any of the
56
foregoing transactions in the ordinary course of business at prices and on terms
and conditions not less favorable to Parent, such Borrower or such Subsidiary
than could be obtained on an arm's-length basis from unrelated third parties;
provided that Parent may issue and distribute to its stockholders that are
Affiliates rights to purchase preferred stock and/or common stock of Parent to
the extent that such rights are permitted to be issued and distributed to
Parent's stockholders pursuant to Section 6.06(a)(iii).
SECTION 6.08. Other Indebtedness and Agreements. (a) Make any voluntary
or optional payments, prepayments or redemptions of principal or premium or
voluntarily repurchase, acquire or retire for value prior to the stated maturity
with respect to Indebtedness (other than Indebtedness arising under the Loan
Documents); provided that:
(i) Parent and Denny's Holdings shall be permitted to
acquire voluntarily (A) Old Senior Notes pursuant to clause
(a) of the definition of the term "Permitted Senior Notes
Exchanges" and (B) New Senior Notes pursuant to clause (b) of
the definition of the term "Permitted Senior Notes Exchanges";
(ii) Parent and Denny's Holdings shall be permitted to
acquire voluntarily Old Senior Notes with the proceeds of
Indebtedness incurred pursuant to Section 6.01(h); and
(iii) Parent, any Borrower and any Subsidiary Loan Party
shall have the right to prepay secured Indebtedness up to an
aggregate amount of $5,000,000;
provided further that such payments shall be permitted to retire
Indebtedness to the extent required under a "due on sale" clause
applicable to any disposition of assets permitted under Section 6.05;
(b) Except for Permitted Amendments, permit, or permit any
Subsidiary to permit, any waiver, supplement, modification, amendment,
termination or release of the Old Senior Notes Documents, the New
Senior Notes Documents or any indenture, instrument or agreement
pursuant to which any Indebtedness or preferred stock is outstanding;
and
(c) If, as a result of the receipt of any cash proceeds by
Parent or any Subsidiary in connection with an Asset Sale or any loss,
damage or destruction, to the extent covered by insurance, of assets,
business units, individual business assets or property, Denny's
Holdings or Parent would be required by the terms of the New Senior
Notes Indenture or the Old Senior Notes Indenture to make an offer to
repurchase New Senior Notes or Old Senior Notes, respectively, prior to
the respective maturity dates of such Notes, then Parent shall or shall
cause one or more of the Subsidiaries to invest such cash proceeds in
assets or businesses of Parent or the Subsidiaries in a manner that is
permitted by the other provisions of this Agreement and that will
eliminate any requirement under the New Senior Notes Indenture or the
Old Senior Notes Indenture to offer to repurchase, New Senior Notes or
Old Senior Notes, respectively. Any such investment shall be made prior
to the first day on which Denny's Holdings or Parent, as the case may
be, would be required to commence a tender offer to repurchase with
such cash proceeds, New Senior Notes or Old Senior Notes, under the New
Senior Notes Indenture or Old Senior Notes Indenture, respectively.
SECTION 6.09. Operating Leases. Permit the aggregate amount of
payments under Operating Leases of Parent, any Borrower or any Subsidiary to be
in excess of the fair rental value of the properties subject to such Operating
Leases.
57
SECTION 6.10. Capital Expenditures; Acquisitions. (a) Incur
Consolidated Capital Expenditures and make acquisitions of properties or
related assets pursuant to Section 6.04(j) in excess of, for any fiscal year
ending on or about any date set forth below, the amount set forth below
opposite such date:
Maximum Consolidated
Fiscal Year Capital Expenditures and Acquisitions
2002 $ 45,000,000
2003 $ 45,000,000
2004 $ 60,000,000
(b) Notwithstanding anything to the contrary contained in
Section 6.10(a), the lesser of (i) any amount permitted under Section 6.10(a) in
any given year that is not expended in such year and (ii) 25% of the amount
permitted under Section 6.10(a) in such year may be carried forward to the
succeeding fiscal year, provided, that in any fiscal year, amounts permitted
under Section 6.10(a) shall be applied towards Consolidated Capital Expenditures
before any amount permitted under this Section 6.10(b) shall be so applied.
(c) Notwithstanding anything to the contrary contained in
Sections 6.10(a) and Section 6.10(b), not more than $45,000,000 (plus any amount
carried forward from fiscal year 2003 pursuant to 6.10(b)) of Consolidated
Capital Expenditures and acquisitions of properties or related assets pursuant
to 6.04(j) during the 2004 fiscal year may be funded from sources other than
Indebtedness permitted to be incurred under Section 6.01.
SECTION 6.11. Consolidated Total Debt Ratio. Permit the Consolidated
Total Debt Ratio for any period of four consecutive fiscal quarters ending on
or about any date set forth below to be greater than the ratio set forth below
opposite such date:
Date Ratio
March 31, 2003 6.25 to 1.00
June 30, 2003 6.25 to 1.00
September 30, 2003 6.25 to 1.00
December 31, 2003 6.25 to 1.00
March 31, 2004 5.90 to 1.00
June 30, 2004 5.90 to 1.00
September 30, 2004 5.75 to 1.00
Following consummation of the Permitted Senior Notes Exchanges, each of the
ratios set forth in the table above shall be adjusted to equal the difference
(rounded to the nearest hundredth) between (a) such ratio as set forth in the
table and (b) (i) the quotient obtained by dividing (A) the aggregate amount of
the reduction in Consolidated Total Debt (net of transaction expenses and taxes,
in each case resulting from consummation of the Permitted Senior Notes
Exchanges) resulting from consummation of the Permitted Senior Notes Exchanges
by (B) $1,000,000, multiplied by (ii) 0.0078.
SECTION 6.12. Consolidated Senior Secured Debt Ratio. Permit the
Consolidated Senior Secured Debt Ratio for any period of four consecutive fiscal
quarters ending on or about any date set forth below to be greater than the
ratio set forth below opposite such date:
Date Ratio
March 31, 2003, and thereafter 1.50 to 1.00
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SECTION 6.13. Minimum Consolidated EBITDA. Permit the Consolidated
EBITDA for any period of four consecutive fiscal quarters ending on or about
any date set forth below to be less than the amount set forth below opposite
such date:
Date Amount
March 31, 2003 $105,000,000
June 30, 2003 $105,000,000
September 30, 2003 $105,000,000
December 31, 2003 $110,000,000
March 31, 2004 $110,000,000
June 30, 2004 $110,000,000
September 30, 2004 $115,000,000
SECTION 6.14. Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters ending on or about any date set forth below to be less than the
ratio set forth opposite such date:
Date Ratio
March 31, 2003 1.25 to 1.00
June 30, 2003 1.25 to 1.00
September 30, 2003 1.25 to 1.00
December 31, 2003 1.25 to 1.00
March 31, 2004 1.30 to 1.00
June 30, 2004 1.30 to 1.00
September 30, 2004 1.35 to 1.00
SECTION 6.15. Business of Parent, the Borrowers and the Subsidiaries.
(a) In the case of Parent, conduct any business or enter into any transaction
inconsistent with its status as a holding company, or permit a First-Tier
Subsidiary to conduct any business or enter into any transaction inconsistent
with such First-Tier Subsidiary's status as a holding company, (b) engage at any
time in any business or business activity other than the conduct of restaurant
operations and other business currently conducted by it and business activities
reasonably incidental thereto or (c) in the case of Denny's Realty, engage in
any business other than the acquisition, leasing and financing of real property,
improvements and personalty comprising restaurants and other activities incident
to, connected with or necessary or convenient to the foregoing. Parent shall not
(i) own or acquire any assets other than Old Senior Notes acquired by Parent or
contributed to Parent pursuant to Permitted Senior Notes Exchanges, shares of
capital stock of Parent's subsidiaries, assets owned by Parent on June 20, 2000,
other assets acquired by Parent after such date in the ordinary course of
Parent's business, cash and Permitted Investments, provided that the amount of
such cash, together with the Fair Market Value of such Permitted Investments,
shall not at any time exceed $250,000 other than on any day on which (1) any
payment is due in respect of the Old Senior Notes (and no Default or Event of
Default shall have occurred and be continuing), (2) Parent is making any payment
to purchase Old Senior Notes pursuant to Section 6.08(a)(ii), (3) any payment to
be made by Parent is due in respect of the New Senior Notes (and no Default or
Event of Default shall have occurred and be continuing) or (4) any payment is
due in respect of any liabilities referred to below in clause (ii)(B) or (C), in
which event Parent may, during such day, hold additional cash in an amount up to
the aggregate amount of such payment to enable Parent to make such payment) or
(ii) incur any liabilities (other than (A) liabilities under the Old Senior
Notes Indenture, the New Senior Notes Indenture and the Loan Documents, (B)
liabilities imposed by law, including tax liabilities, and (C) other liabilities
incidental to its existence and permitted business and activities). Parent shall
not permit Denny's Holdings to (and Denny's Holdings shall not) (i) own or
acquire any assets (other than Old Senior Notes acquired pursuant to Permitted
Senior Notes Exchanges, shares of capital stock of Denny's Holdings'
subsidiaries, the shares of Xxxxxx Holdings Inc. listed on Schedule 6.04, cash
and Permitted Investments, provided that the amount of such cash, together with
the Fair Market Value of such Permitted Investments,
59
shall not at any time exceed $50,000 other than on any day on which (1) any
payment to be made by Denny's Holdings is due in respect of the New Senior Notes
(and no Default or Event of Default shall have occurred and be continuing) or
(2) any payment is due in respect of any liabilities referred to in clause
(ii)(B) or (C), in which event Denny's Holdings may during such day hold
additional cash in an amount up to the aggregate amount of such payment to
enable Denny's Holdings to make such payment) or (ii) incur any liabilities
(other than (A) liabilities under the Loan Documents or the New Senior Notes
Documents, (B) liabilities imposed by law, including tax liabilities, and (C)
other liabilities incidental to its existence and permitted business and
activities).
(b) The Borrowers will not, and Parent, Denny's Holdings, and the
Borrowers will not permit the Subsidiaries to, engage to any material extent in
any business other than businesses of the type conducted by the Borrowers and
the Subsidiaries on the date of execution of this Agreement and businesses
reasonably related thereto.
SECTION 6.16. Fiscal Year. Change the end of its fiscal year from
the last Wednesday before December 31 in each year to any other date.
SECTION 6.17. Hedging Agreements. Enter into any Hedging Agreement.
ARTICLE VII
Events of Default
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made or in
connection with any Loan Document or the borrowings or issuances of
Letters of Credit hereunder, shall prove to have been false or
misleading in any respect when so made, deemed made or furnished, or
any material representation, warranty, statement or information
contained in any report, certificate, financial statement or other
instrument furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of
any Loan or the reimbursement with respect to 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 by acceleration
thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or any fee or LC Disbursement or any other amount (other than
an amount referred to in (b) above) due under any Loan Document, when
and as the same shall become due and payable, and such default shall
continue unremedied for a period of three Business Days;
(d) default shall be made in the due observance or performance
by Parent, any Borrower or any Subsidiary of any covenant, condition or
agreement contained in Section 5.01(a), 5.02, 5.03, 5.05, 5.08,
5.10(b), 5.12(c) or 5.14 or in Article VI;
(e) default shall be made in the due observance or performance
by Parent, any Borrower or any Subsidiary of any covenant, condition or
agreement contained in any Loan Document (other than those specified in
(b), (c) or (d) above) and such default shall continue unremedied for a
period of more than 10 days;
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(f) Parent, any Borrower or any Subsidiary shall (i) fail to
pay any principal or interest, regardless of amount, due in respect of
any Indebtedness in a principal amount in excess of $10,000,000, when
and as the same shall become due and payable, or (ii) fail to observe
or perform any other term, covenant, condition or agreement contained
in any agreement or instrument evidencing or governing any such
Indebtedness if the effect of any failure referred to in this clause
(ii) is to cause, or to permit the holder or holders of such
Indebtedness or a trustee on its or their behalf (with or without the
giving of notice, the lapse of time or both) to cause, such Indebted
ness to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of Parent, any Borrower or
any Subsidiary, or of a substantial part of the property or assets of
Parent, any Borrower or any Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Parent, any Borrower
or any Subsidiary or for a substantial part of the property or assets
of Parent, any Borrower or any Subsidiary or (iii) the winding-up or
liquidation of Parent, any Borrower or any Subsidiary; and such
proceeding or petition shall continue undismissed for 30 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(h) Parent, any Borrower or any Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in (g) above,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for Parent,
any Borrower or any Subsidiary or for a substantial part of the
property or assets of Parent, any Borrower or any Subsidiary, (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, (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they become due or
(vii) take any action for the purpose of effecting any of the
foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 shall be rendered against
Parent, any 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 levy upon assets or
properties of Parent, any Borrower or any Subsidiary to enforce any
such judgment;
(j) any non-monetary judgment or order shall be rendered
against Parent, any Borrower or any Subsidiary that is reasonably
likely to have a Material Adverse Effect and either (x) enforcement
proceedings shall have been commenced by any person upon such judgment
or order and a stay of such enforcement proceedings shall not be in
effect or (y) there shall be any period of 20 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect;
(k) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other such ERISA
Events, could reasonably be expected to result in liability of Parent,
any Borrower and its ERISA Affiliates in an aggregate amount exceeding
$5,000,000 or requires payments exceeding $1,000,000 in any year;
(l) (i) any security interest purported to be created by any
Security Document shall cease to be, or shall be asserted by any Loan
Party not to be, a valid, perfected, first priority (except as
otherwise expressly provided in this Agreement or such Security
Document) security interest in the Collateral covered thereby, except
to the extent that any such loss of perfection or priority results
61
from the failure of the Collateral Agent to maintain possession of
certificates representing securities pledged under the Guarantee and
Collateral Agreement or, subject to compliance by the Loan Parties with
Sections 5.11, 5.12 and 5.14 hereof and with the other Loan Documents,
any other action or inaction of the Collateral Agent with respect to
any of its obligations or duties under this Agreement or any other Loan
Document and except to the extent that such loss is covered by a
lender's title insurance policy and the related insurer promptly after
such loss shall have acknowledged in writing that such loss is covered
by such title insurance policy or (ii) any Guarantee purported to be
created by any Security Document shall cease to be, or shall be
asserted by any Loan Party not to be, a valid and enforceable
obligation of the applicable Loan Party; or
(m) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to Parent or any
Borrower described in paragraph (g) or (h) above), 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 Borrowers, take either
or both of the following actions, at the same or different times: (i) terminate
forthwith the Commitments and (ii) declare the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities of Parent or any Borrower
accrued hereunder and under any other Loan Document, shall become forthwith due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by Parent and the Borrowers,
anything contained herein or in any other Loan Document to the contrary
notwithstanding; and in any event with respect to Parent or any Borrower
described in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of Parent
or any Borrower accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by Parent
and the Borrowers, anything contained herein or in any other Loan Document to
the contrary notwithstanding.
ARTICLE VIII
The Administrative Agent and the Collateral Agent; Syndication Agent
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 of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.
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 Parent, the Borrowers 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 in the Loan Documents. 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 by the Loan Documents
that the Administrative Agent is required to exercise in writing 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 in the Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to
62
Parent, the Borrowers or any of the 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 wilful misconduct. The Administrative Agent shall not be
deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Administrative Agent by Parent, the Borrowers 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 any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, 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 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 each 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 the
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank and the Borrowers.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrowers, 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 Borrowers to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrowers 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.
The Syndication Agent shall not have any duties or obligations except
those expressly set forth in this Agreement (if any).
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,
63
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 other Loan Document or related
agreement or any document furnished hereunder or thereunder.
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 courier service,
mailed by certified or registered mail or sent by telecopy, as follows:
(i) if to the Borrowers, Parent, Denny's Holdings or DFO,
Inc., to it at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention of Treasurer (Telecopy No. (000) 000-0000);
(ii) if to the Administrative Agent or the Issuing Bank, to
JPMorgan Chase Bank, Loan and Agency Services Group, 101111 Fannin, 69,
Houston, Texas, Attention of Xxxxxx Xxxxxx (Telecopy No.
(000) 000-0000), with a copy to JPMorgan Chase Bank, 000 Xxxx Xxxxxx,
Xxx Xxxx 00000, Attention of Xxxxx Xxxxxxx (Telecopy No.
(000) 000-0000); and
(iii) if to any other Lender, to it at its address (or
telecopy number) set forth in its Administrative Questionnaire.
(b) 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 a
Borrower (on behalf of the other Borrower, Parent and Denny's Holdings) 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.
(c) 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 Collateral 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 a Borrower, Parent or Denny's Holdings
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 Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time. No
notice or demand on any Loan Party in any case shall entitle any Loan Party to
any other or further notice or demand in similar or other circumstances.
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(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 Borrowers, Parent, Denny's Holdings and the Required Lenders
or by the Borrowers, Parent, Denny's Holdings and the Administrative Agent with
the consent of the Required Lenders; provided that no such agreement shall (i)
change, except as permitted hereunder, the Commitment 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 2.18(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this Section
or clause (i) of the first sentence of Section 9.04(a) or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender, (vi) release all or any substantial part of the
Collateral (other than in connection with any sale of Collateral permitted by
this Agreement) or (viii) release Parent or any Subsidiary from its Guarantee
under the Guarantee and Collateral Agreement (except as expressly provided in
the Guarantee and Collateral Agreement or (ix) change the provision of Section
9.08 requiring the consent of all Lenders prior to the exercise of a right of
set-off by any Lender, the Administrative Agent or the Collateral Agent, or any
similar provision in any Loan Document; provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent or the Issuing Bank or a Swingline Lender hereunder without
the prior written consent of the Administrative Agent or the Issuing Bank or
such Swingline Lender, as the case may be.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrowers
agree to pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, Farallon and Foothill, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, counsel for Farallon and counsel for Foothill, in connection with the
syndication of the credit facilities provided for herein, the preparation 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 Borrowers shall indemnify the Administrative Agent, the
Collateral Agent, the Issuing Bank and each Lender, and each Related Party of
any of the foregoing persons (each such person being called an "Indemnitee")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable 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 Transactions 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 actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by a Borrower or any of the
Subsidiaries, or any Environmental Liability related in any way to a Borrower or
any of the 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
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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 wilful misconduct of such Indemnitee.
(c) To the extent that the Borrowers fail to pay any amount required to
be paid by it to the Administrative Agent or the Issuing Bank under paragraph
(a) or (b) of this Section (and without affecting any Borrower's obligations to
pay such amounts), each Lender severally agrees to pay to the Administrative
Agent or the Issuing Bank, 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 or the Issuing Bank in its capacity as such.
(d) To the extent permitted by applicable law, the Borrowers shall not
assert, and each 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 Transactions, any Loan or Letter of Credit or the use of the proceeds
thereof.
(e) All amounts due under this Section shall be payable on 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)
a 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 a 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 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 Borrowers; provided that no consent of the Borrower
shall be required for an assignment to a Lender, an Affiliate of a
Lender, an Approved Fund or any Federal Reserve Bank or, if an Event of
Default under clause (a), (b), (g) or (h) of Article VII 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 of a
Commitment to an assignee that is a Lender with a Commitment
immediately prior to giving effect to such assignment.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender or an
Affiliate of a Lender 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
$2,250,000 unless the Borrowers and the Administrative Agent
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otherwise consent; provided that no such consent of the Borrowers shall
be required if an Event of Default under clause (a), (b), (g) or (h) of
Article VII has occurred and is continuing;
(B) 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;
(C) 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; and
(D) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire.
(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, as well as to any fees accrued for its account and
not yet paid). 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 9.04.
(iv) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, 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 Borrowers, 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 Borrowers, 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 Borrowers, the
Administrative Agent or the Issuing Bank, 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) Parent, Denny's Holdings, the Borrowers, 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 in clause (i), (ii), (iii) or (vi) of the first proviso to Section
9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this
Section,
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the Borrowers agree 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 that such
Participant agrees to be bound by and subject to Sections 2.18(c) and 9.08 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 prior written
consent of the Borrowers. 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
Borrowers are notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with Section
2.17(e) as though it were a Lender.
(d) Any Lender may 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 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 Parent, Denny's Holdings and the Borrowers herein, in the
other Loan Documents, and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement and the other Loan Documents 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 4.02, 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.
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.
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SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each of the Administrative Agent, the Collateral
Agent and each Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, (i) to effect an administrative hold with respect to any and all deposits
at any time held and (ii) only if expressly consented to in writing by all
Lenders (which consent may not be unreasonably withheld 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 a Borrower against any of and
all the obligations of such 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 the Administrative Agent, the Collateral Agent and each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such party 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) Each of the Borrowers, Parent and Denny's Holdings each 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 Borrowers,
Parent or Denny's Holdings or their respective properties in the courts of any
jurisdiction.
(c) Each of the Borrowers, Parent and Denny's Holdings each 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 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.
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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 (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, under any other Loan
Document or any suit, action or proceeding relating to this Agreement or the
enforcement of rights hereunder, or any other Loan Document, (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 any Borrower and its obligations, (g) with
the consent of the Borrowers 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 Borrowers. 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. Irrevocable Proxy. (a) Subject to the conditions
contained in the last sentence of this Section 9.14(a), each Lender (i) agrees
to vote (in the same manner proportionally as all such claims under this
Agreement that are not voted pursuant to this Section 9.14(a)) in any bankruptcy
or similar proceedings with respect to Parent or any of the Subsidiaries the
portion of such Lender's claims against Parent and the Subsidiaries arising
under this Agreement ("Facility Claims") that exceed 20% of the aggregate amount
of all the Lenders' Facility Claims (such excess amount, the "Excess Amount")
and (ii) in that connection, grants to the Administrative Agent an irrevocable
proxy, coupled with an interest, to vote such Facility Claims in the
proportional manner described above; provided that the foregoing proxy shall not
apply to any Assigned Claims. Each Lender whose Facility Claims (prior to giving
effect to the assignments of such Lender's Facility Claims contemplated by
Section 9.14(b)(i)) exceed 20% of the aggregate amount of all the Lenders'
Facility Claims shall be referred to herein as an "Assigning Lender". The voting
agreement and irrevocable proxy granted under this Section 9.14(a) shall
automatically become effective with respect to such Lender if, and remain
effective for so long as, such Lender (or, with respect to any Lenders other
than The Foothill Group, Inc. or Foothill, any Affiliate of such Lender) holds
(i) if such Lender is not Farallon or an Affiliate of Farallon, any record or
beneficial interest in Indebtedness of Denny's Holdings or Parent permitted
under Section 6.01(j) or any Old Senior Notes or New Senior Notes ("Specified
Debt") or (ii) if such Lender is Farallon or an Affiliate of Farallon, record or
beneficial ownership of Specified Debt in an aggregate amount of greater than or
equal to $30,000,000.
(b) (i) Each Lender agrees that, subject to the conditions set forth in
the last sentence of Section 9.14(a), upon the delivery by the Administrative
Agent of a notice to all Lenders pursuant to this clause (b)(i) following the
occurrence of an Event of Default specified in clause (g) or (h) of Article VII,
each Assigning Lender shall be deemed to have assigned as of the date of such
notice (a "Trigger Date") to each Lender that
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is not an Assigning Lender (each, a "Non-Assigning Lender") an amount of such
Assigning Lender's Facility Claims equal to such Non-Assigning Lender's pro rata
share (based on the Credit Exposure on such Trigger Date (immediately prior to
giving effect to such assignments) of the Non-Assigning Lenders) of the Excess
Amount with respect to such Assigning Lender (such assigned Facility Claims for
so long as they are held by a Lender that is not an Assigning Lender, "Assigned
Claims") solely in consideration for a promise by each Non-Assigning Lender
promptly to deliver to each Assigning Lender any money or property received on
or after such Trigger Date by such Non-Assigning Lender in respect of Assigned
Claims relating to such Assigning Lender assigned on such Trigger Date, which
money or property shall be delivered in the form in which it is received by such
Non-Assigning Lender and without interest.
(ii) Each Lender agrees that, upon delivery of a notice (a "Third-Party
Assignment Notice") by an Assigning Lender to the Administrative Agent of an
intention of such Assigning Lender to assign pursuant to Section 9.04 all or a
portion of such Assigning Lender's Facility Claims (which Third-Party Assignment
Notice shall specify the amount of such Facility Claims to be assigned (such
amount, the "Third-Party Assignment Amount") and the proposed assignee thereof)
to a third party that is not an Affiliate of such Assigning Lender or another
Assigning Lender pursuant to a bona fide assignment (such an assignment, a
"Third-Party Assignment"), each Lender holding Assigned Claims relating to such
Assigning Lender shall be deemed to have assigned to such Assigning Lender,
effective immediately prior to the effectiveness of such Third-Party Assignment
under Section 9.04, such Assigned Claims or, if less, such Lender's pro rata
share (based on the aggregate amount of the Assigned Claims relating to such
Assigning Lender held by such Lenders) of the Third-Party Assignment Amount
solely in consideration for the termination of such Lender's obligations
pursuant to clause (b)(i) and, to the extent applicable, any obligations assumed
by such Lender pursuant to clause (b)(iii) in respect of the Assigned Claims
deemed assigned pursuant to this sentence. The Administrative Agent agrees
promptly to give notice of each Third-Party Assignment Notice to each Lender
that holds Assigned Claims relating to the Assigning Lender that delivered such
Third-Party Assignment Notice.
(iii) Each Lender agrees that upon any assignment by it of all or any
part of its Facility Claims (other than Assigned Claims) pursuant to Section
9.04, a pro rata portion (based on the proportion of such Lender's Credit
Exposure being assigned thereby) of the Assigned Claims relating to each
Assigning Lender held by such Lender immediately prior to the effectiveness of
such assignment pursuant to Section 9.04 shall be deemed upon effectiveness of
such assignment to have been assigned to the assignee specified in the
applicable Assignment and Assumption solely in consideration for the assumption
by such assignee of such Lender's obligations pursuant to clause (b)(i) and, to
the extent applicable, any obligations assumed by such Lender pursuant to this
clause (b)(iii) in respect of such pro rata portion of such Assigned Claims.
Each Lender agrees that Assigned Claims may not be assigned or otherwise
disposed of other than pursuant to this Section 9.14(b) or Section 9.14(c).
(c) Upon delivery by the Administrative Agent to an Assigning Lender
(with a copy to each of the other Lenders) of a notice pursuant to this Section
9.14(c), each Lender holding Assigned Claims relating to such Assigning Lender
shall be deemed as of the date of such notice to have assigned all such Assigned
Claims to such Assigning Lender and such Lender's obligations pursuant to clause
(b)(i) and, to the extent applicable, any obligations assumed by such Lender
pursuant to this clause (b)(iii), in each case relating to such Assigned Claims
shall automatically terminate as of such date. Upon the receipt of notice from
an Assigning Lender of the failure of one of the conditions contained in the
last sentence of Section 9.14(a) to be satisfied with respect to such Assigning
Lender, the Administrative Agent shall promptly deliver the notice specified in
the first sentence of this Section 9.14(c) with respect to such Assigning
Lender.
(d) Each Lender agrees to take, and to cause its Affiliates to take,
such other actions reasonably required by the Administrative Agent to effectuate
the intent of this Section 9.14.
(e) Except for the recordation in the Register by the Administrative
Agent of each deemed assignment pursuant to this Section 9.14, Section 9.04
shall not apply to any deemed assignment pursuant to this Section 9.14.
71
SECTION 9.15. Obligations Joint and Several. (a) Each Borrower agrees
that it shall, jointly with each other Borrower and severally, be liable for all
the Obligations. Each Borrower further agrees that the Obligations of any other
Borrower may be extended and renewed, in whole or in part, without notice to or
further assent from it, and that it will remain bound upon its agreement
hereunder notwithstanding any extension or renewal of any Obligation of any
other Borrower. Upon payment by a Borrower of any sums as provided above, all
rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full in
cash of the Obligations.
72
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.
DENNY'S, INC.,
by /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
and Treasurer
XXXXX'X REALTY, INC.,
by /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
and Treasurer
XXXXX'X CORPORATION,
by /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
and Treasurer
XXXXX'X HOLDINGS, INC.,
by /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Secretary/
Vice President
DFO, INC.,
by /s/ Xxxxxxx X. Xxxxx
-------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
and Treasurer
JPMORGAN CHASE BANK, individually and as
Administrative Agent, Collateral Agent and
Issuing Bank,
by /s/ Xxxx X. Xxxxxxx
------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
JPMorgan Chase Bank
73
FOOTHILL CAPITAL CORPORATION,
individually and as Syndication Agent,
by /s/ Amelie Yehnos
----------------
Name: Amelie Yehnos
Title: Vice President
THE FOOTHILL GROUP, INC.,
by /s/ Xxxx Xxxxxx
--------------
Name: Xxxx Xxxxxx
Title: Executive Vice President
74
CIT GROUP/BUSINESS CREDIT, INC.,
by /s/ Xxxxx X. Xxxxxxx, Xx.
------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: Vice President
75
TRANSAMERICA BUSINESS CAPITAL
CORPORATION,
by /s/ Xxxxxx Xxxxxxx
------------------
Name: Xxxxxx Xxxxxxx
Title: SVP
76
FARALLON DINING INVESTORS III, LLC
by FARALLON CAPITAL MANAGEMENT, L.L.C.,
by /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Member
