Exhibit 10.1
EXECUTION COPY
Published CUSIP Number: [ ]
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CREDIT AGREEMENT
dated as of September 21, 2004,
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,
BANK OF AMERICA, N.A.,
as Administrative Agent,
and
UBS SECURITIES LLC,
as Syndication Agent
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
XXXX XX XXXXXXX SECURITIES LLC and UBS SECURITIES LLC,
as Joint Lead Arrangers and Joint Bookrunners
Table of Contents
ARTICLE I
Definitions
SECTION 1.01. Defined Terms....................................................1
SECTION 1.02. Classification of Loans and Borrowings..........................29
SECTION 1.03. Terms Generally.................................................29
SECTION 1.04. Accounting Terms; GAAP..........................................30
ARTICLE II
The Credits
SECTION 2.01. Commitments.....................................................30
SECTION 2.02. Loans...........................................................30
SECTION 2.03. Requests for Borrowings.........................................31
SECTION 2.04. Letters of Credit...............................................32
SECTION 2.05. Funding of Borrowings...........................................40
SECTION 2.06. Interest Elections..............................................40
SECTION 2.07. Termination and Reduction of Commitments........................42
SECTION 2.08. Repayment of Loans; Evidence of Debt............................44
SECTION 2.09. Prepayment......................................................45
SECTION 2.10. Fees............................................................46
SECTION 2.11. Interest........................................................47
SECTION 2.12. Alternate Rate of Interest......................................48
SECTION 2.13. Increased Costs.................................................49
SECTION 2.14. Break Funding Payments..........................................50
SECTION 2.15. Taxes...........................................................50
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Setoffs......52
SECTION 2.17. Mitigation Obligations; Replacement of Lenders..................53
SECTION 2.18. Covenant of Collateral Agent....................................54
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers............................................55
SECTION 3.02. Authorization...................................................55
SECTION 3.03. Enforceability..................................................55
SECTION 3.04. Governmental Approvals..........................................55
SECTION 3.05. Financial Statements............................................55
SECTION 3.06. No Material Adverse Change......................................56
SECTION 3.07. Title to Properties; Possession Under Leases....................56
SECTION 3.08. Subsidiaries....................................................56
SECTION 3.09. Litigation; Compliance with Laws................................56
SECTION 3.10. Agreements......................................................57
SECTION 3.11. Federal Reserve Regulations.....................................57
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act......57
SECTION 3.13. [RESERVED]......................................................57
SECTION 3.14. Tax Returns.....................................................57
SECTION 3.15. No Material Misstatements.......................................58
SECTION 3.16. Employee Benefit Plans..........................................58
SECTION 3.17. Environmental Matters...........................................58
SECTION 3.18. Insurance.......................................................59
SECTION 3.19. Security Documents..............................................59
SECTION 3.20. Labor Matters...................................................60
SECTION 3.21. Solvency........................................................61
SECTION 3.22. Intellectual Property...........................................61
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events...............................................61
SECTION 4.02. Conditions of Initial Credit Event..............................62
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties............................66
SECTION 5.02. Insurance.......................................................67
SECTION 5.03. Obligations and Taxes...........................................67
SECTION 5.04. Financial Statements, Reports, etc..............................67
SECTION 5.05. Litigation and Other Notices....................................69
SECTION 5.06. Employee Benefits...............................................69
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.......70
SECTION 5.08. Use of Proceeds.................................................70
SECTION 5.09. Compliance with Environmental Laws..............................70
SECTION 5.10. Preparation of Environmental Reports............................71
SECTION 5.11. Additional Subsidiaries.........................................71
SECTION 5.12. Further Assurances..............................................71
SECTION 5.13. Cash Management Arrangements....................................72
SECTION 5.14. Additional Mortgages............................................72
SECTION 5.15. Interest Rate Protection........................................72
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ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness....................................................72
SECTION 6.02. Liens...........................................................74
SECTION 6.03. Sale and Lease-Back Transactions................................75
SECTION 6.04. Investments, Loans and Advances.................................75
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.......76
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends................................77
SECTION 6.07. Transactions with Affiliates....................................79
SECTION 6.08. Other Indebtedness and Agreements...............................79
SECTION 6.09. Operating Leases................................................80
SECTION 6.10. Capital Expenditures; Acquisitions..............................80
SECTION 6.11. Consolidated Total Debt Ratio...................................81
SECTION 6.12. Consolidated Senior Secured Debt Ratio..........................81
SECTION 6.13. Consolidated Fixed Charge Coverage Ratio........................82
SECTION 6.14. Business of Parent, the Borrowers and the Subsidiaries..........83
SECTION 6.15. Accounting Policies and Fiscal Year.............................84
SECTION 6.16. Hedging Agreements..............................................84
ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent
SECTION 8.01. Appointment and Authority.......................................87
SECTION 8.02. Rights as a Lender..............................................87
SECTION 8.03. Exculpatory Provisions..........................................88
SECTION 8.04. Reliance by Administrative Agent................................89
SECTION 8.05. Delegation of Duties............................................89
SECTION 8.06. Resignation of Administrative Agent.............................89
SECTION 8.07. Non-Reliance on Administrative Agent and Other Lenders..........90
SECTION 8.08. No Other Duties, Etc............................................90
SECTION 8.09. Administrative Agent May File Proofs of Claim...................91
SECTION 8.10. Collateral and Guaranty Matters.................................91
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices.........................................................92
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SECTION 9.02. Waivers; Amendments.............................................93
SECTION 9.03. Expenses; Indemnity; Damage Waiver..............................94
SECTION 9.04. Successors and Assigns..........................................96
SECTION 9.05. Survival........................................................99
SECTION 9.06. Counterparts; Integration; Effectiveness.......................100
SECTION 9.07. Severability...................................................100
SECTION 9.08. Right of Setoff................................................100
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.....100
SECTION 9.10. WAIVER OF JURY TRIAL...........................................101
SECTION 9.11. Headings.......................................................101
SECTION 9.12. Confidentiality................................................101
SECTION 9.13. Interest Rate Limitation.......................................102
SECTION 9.14. Obligations Joint and Several..................................102
SECTION 9.15. Public Lenders.................................................103
SECTION 9.16. Intercreditor Agreement........................................103
SECTION 9.17. USA PATRIOT Act Notice.........................................103
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Exhibits and Schedules
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Assumption
Exhibit C Form of Notice of Borrowing
Exhibit D Form of Note
Exhibit E Form of Compliance Certificate
Exhibit F Form of Guarantee and Collateral Agreement
Exhibit G Form of Intercreditor Agreement
Exhibit H Form of Opinion of Xxxxxx & Bird LLP
Exhibit I Form of Secretary's Certificate
Schedule 1.01(a) Mortgaged Properties
Schedule 2.01 Commitments
Schedule 2.04(a) Existing Letters of Credit
Schedule 3.07(c) Condemnation Proceedings
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 Existing Liens
Schedule 6.04 Existing Investments
Schedule 6.06 Agreements Restricting Dividends
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CREDIT AGREEMENT dated as of September 21, 2004, (as
amended, supplemented, waived or otherwise modified from time to
time, 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 ("DFO"), the Lenders (as defined in Article
I), BANK OF AMERICA, N.A., as administrative agent (in such
capacity, the "Administrative Agent") and as collateral agent (in
such capacity, the "Collateral Agent") for the Lenders, and UBS
SECURITIES LLC, as syndication agent (in such capacity, the
"Syndication Agent") for the Lenders.
The Borrowers have requested that the Lenders provide a revolving
credit facility and term loan facility, and the Lenders are willing to do so
upon 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.
"ABR Revolving Loan" shall mean any Revolving Loan bearing interest at
a rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Act" shall have the meaning assigned to such term in Section 9.17.
"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.
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"Administrative Agent's Office" shall mean the Administrative Agent's
address as set forth in Section 9.01 or such other address as the Administrative
Agent may from time to time notify to the Borrowers and the Lenders.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A.
"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
Revolving 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 Revolving Commitment represented by such Lender's
Revolving Commitment. In the event the Revolving Commitments shall have expired
or been terminated, the Applicable Percentages shall be determined on the basis
of the Revolving Commitments most recently in effect, giving effect to any
assignments.
"Applicable Rate" shall mean: (a) with respect to any Revolving Loan,
(i) 2.00% per annum, in the case of an ABR Loan, or (ii) 3.50% per annum, in the
case of a Eurodollar Loan; and (b) with respect to any Term Loan, (i) 1.75% per
annum, in the case of an ABR Loan, or (ii) 3.25% per annum, in the case of a
Eurodollar Loan.
"Approved Fund" shall mean any person (other than a natural person)
that is engaged in making, purchasing, holding or investing in commercial loans
and similar extensions of credit in the ordinary course 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.
"Arrangers" shall mean Banc of America Securities LLC and UBS
Securities LLC.
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"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 real property, to any person other than Parent, any Borrower or any
Subsidiary; provided, however, that none of the following shall be deemed to be
an Asset Sale: (a) the sale of inventory in the ordinary course of business, (b)
leases or subleases of real property in the ordinary course of business not
interfering in any material respect with the business of any Loan Party or (c)
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).
"Assignment and Assumption" shall mean an assignment and assumption
entered into by a Lender and an assignee, substantially 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
Effective Date to but excluding the earlier of the Revolving Maturity Date and
the date of termination of the Revolving Commitments.
"Bank of America" means Bank of America, N.A. and its successors.
"BBA LIBOR" shall have the meaning assigned to such term in the
definition of the term "LIBO Rate".
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower Materials" shall have the meaning assigned to such term in
Section 9.15.
"Borrowing" shall mean Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans as
to which a single Interest Period is in effect.
"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.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which commercial banks in New York City or the state where the
Administrative Agent's Office is located 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.
"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
4
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. For the avoidance
of doubt, a Capital Lease Obligation will be deemed to be secured by the real
and/or personal property that is the subject of the lease.
"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
Closing Date) shall own, directly or indirectly, beneficially or of record,
shares representing more than 35% 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 or Denny's
Holdings is a party; 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 Closing Date, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the Closing Date or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.13(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 Closing Date.
"Charges" shall have the meaning assigned to such term in Section
9.13.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Term Loans and, when used in reference to any Commitment, refers to whether
such Commitment is a Revolving Commitment or Term Loan Commitment.
"Closing Date" shall mean September 21, 2004.
"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.
5
"Collateral Agent" shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.
"Collateral and Guarantee Requirement" shall mean the requirement
that:
(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 Effective 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 Collateral 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 Collateral 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 Effective Date, counterparts of Mortgages with respect to substantially
all the Mortgaged Properties that are owned by any person that was a Loan
Party on the Closing 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 10 days after the Effective Date, counterparts of Mortgages with
respect to any Mortgaged Properties that are owned by any person that was a
Loan Party on the Closing Date for which Mortgages were not delivered to
the Administrative Agent on or prior to the Effective 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
6
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; and
(f) 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 a Revolving Commitment or Term Loan Commitment
or any combination thereof (as the context requires).
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Borrowers dated August, 2004.
"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 (i) interest
capitalized during construction and (ii) 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
7
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 noncash charges, (iv) net total Federal, state and local income tax
expense, (v) Consolidated Interest Expense, (vi) extraordinary losses, (vii) the
cumulative effect of any change in accounting principles, (viii) any net loss
attributable to an Asset Sale and (ix) any non-recurring expenses related to,
arising out of or incurred in connection with the Recapitalization Transactions,
minus (b) extraordinary gains minus (c) the amount of cash expended in such
period in respect of any amount that, under clause (iii) 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 cash 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 11-1/4% Senior Notes outstanding on such date and (b) to the
extent included in computing such Consolidated Total Debt, the aggregate amount
of other unsecured Indebtedness of Parent or
8
Denny's Holdings at such date on a consolidated basis in accordance with GAAP
(including, but not limited to, the New Notes).
"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 all
reimbursement, payment or similar obligations of such person, contingent or
otherwise, under acceptance, letter of credit or similar facilities) of Parent,
the Borrowers and the Subsidiaries at such date on a consolidated basis in
accordance with GAAP (other than (a) 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 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, (b)(i) all Guarantees by such person of
Indebtedness of others; (ii) all Indebtedness referred to in clauses (a) through
(h) of the definition of the term "Indebtedness" 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; or (iii) all Indebtedness of any
partnership in which such person is a general partner, in each case to the
extent that the Indebtedness of the other person referred to in subclauses (i),
(ii) or (iii) of this clause (b) is Indebtedness of the type referred to in
clause (a) above and (c) Letters of Credit issued in an aggregate amount not to
exceed $45,000,000 (of which up to (i) $45,000,000 may be issued in support of
workers' compensation claims and (ii) $10,000,000 may be issued in support of
other obligations or claims), which aggregate amount shall be decreased
following the Effective Date upon the expiration or refinancing of any such
Letters of Credit in an amount equal to the expired or refinanced Letter of
Credit).
"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.
"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 Revolving Lender at
any time, the aggregate principal amount at such time of all outstanding
Revolving Loans of such Revolving Lender, plus the aggregate amount at such time
of such Revolving Lender's LC Obligations.
9
"Debtor Relief Laws" shall mean the Bankruptcy Code of the United
States, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"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.
"DFO" shall have the meaning assigned to such term in the preamble to
this Agreement.
"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.
"Effective Date" shall mean the date, not later than September 21,
2004, as of which all the conditions set forth or referred to in Sections 4.01
and 4.02 shall have been satisfied (or waived in accordance with Section 9.02).
"11-1/4% Senior Notes" shall mean Parent's 11-1/4% Senior Notes due
2008.
"11-1/4% Senior Notes Documents" shall mean the 11-1/4% Senior Notes,
the 11-1/4% 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.
"11-1/4% Senior Notes Indenture" shall mean the Indenture dated as of
January 7, 1998, between Parent and U.S. Bank Trust, National Association, as
Trustee, as amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof and thereof.
"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.
10
"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 Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of Parent, either Borrower or any Subsidiary directly
or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"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.
"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
11
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 Cash Flow" shall mean, for any fiscal year, the sum (without
duplication) of:
(g) 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 Reduction Events; plus
(h) depreciation, amortization and other non-cash charges or losses
deducted in determining such consolidated net income (or loss) for such
fiscal year; plus
(i) the amount, if any, by which Net Working Capital decreased during
such fiscal year minus
(j) the sum of (i) any noncash 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
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(k) 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 or equity
contributions); minus
(l) the aggregate principal amount of Long-Term Indebtedness repaid or
prepaid by Denny's and its consolidated subsidiaries during such fiscal
year, excluding (i) Indebtedness in respect of Loans and Letters of Credit
and (ii) repayments or prepayments of Long-Term Indebtedness financed by
incurring other Long-Term Indebtedness.
"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 2.17(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 2.15(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 2.15(a).
"Existing Credit Agreement" means that certain Credit Agreement dated
as of December 16, 2002, as amended and restated as of September 26, 2003, and
as otherwise modified through the date hereof, among the Borrowers and Parent,
Denny's Holdings and DFO, as guarantors, the lenders named therein, JPMorgan
Chase Bank, as administrative agent, and Xxxxx Fargo Foothill, Inc. (f/k/a
Foothill Capital Corporation), as syndication agent.
"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 2.04(a).
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any person not in the ordinary course of business, including,
without limitation, tax refunds, pension plan reversions, proceeds of insurance
(other than proceeds of insurance included in clause (b) of the definition of
the term "Reduction Event" and proceeds of business interruption insurance to
the extent such proceeds constitute compensation for lost earnings), indemnity
payments and any purchase price adjustments; provided, however, that an
Extraordinary Receipt shall not include cash receipts received from proceeds of
insurance, indemnity payments or purchase price adjustments to the extent that
such proceeds, payments or adjustments are
13
received by any person in respect of any third party claim against such person
and applied to pay (or to reimburse such person for its prior payment of) such
claim and the costs and expenses of such person with respect thereto.
"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; provided that (i) if such day is
not a Business Day, the Federal Funds Effective Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (ii) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Effective Rate for such day
shall be the average rate (rounded upward, if necessary, to the next 1/100 of
1%) charged to the Administrative Agent on such day on such transactions as
determined by the Administrative Agent.
"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.
"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
14
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 Collateral Agent, in the form of Exhibit F.
"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 currency values 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.
"Honor Date" shall have the meaning assigned to such term is Section
2.04(c)(i).
"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
15
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 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 noncash 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 Closing Date, such
information is clearly identified as confidential at the time of delivery.
"Initial Lenders" shall mean Bank of America and UBS Loan Finance LLC.
"Intercreditor Agreement" means the Intercreditor Agreement dated as
of the date of this Agreement among Parent, Denny's Holdings, DFO, the
Borrowers, the Collateral Agent and the Second Lien Collateral Agent, in the
form of Exhibit G.
"Interest Election Request" shall mean a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.06.
"Interest Payment Date" shall mean (a) with respect to any ABR Loan,
the last Business Day of each March, June, September and December and (b) with
respect to any Eurodollar Loan, the last Business Day of the Interest Period
applicable to the Borrowing of
16
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 Business Day prior to
the last Business Day of such Interest Period that occurs at intervals of three
months' duration after the first Business 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.
"ISP" shall mean, with respect to any Letter of Credit, the
"International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance).
"Issuer Documents" shall mean with respect to any Letter of Credit,
the Letter of Credit Application, and any other document, agreement and
instrument entered into by the Issuing Bank and the applicable Borrower or in
favor the Issuing Bank and relating to any such Letter of Credit.
"Issuing Bank" shall mean Bank of America, any Affiliate of Bank of
America or one or more other issuing banks satisfactory to the Administrative
Agent.
"LC Advance" shall mean, with respect to each Revolving Lender, such
Revolving Lender's funding of its participation in any LC Borrowing in
accordance with its Applicable Percentage.
"LC Borrowing" shall mean an LC Disbursement which has not been
reimbursed on the date when made or refinanced as an ABR Revolving Borrowing.
"LC Commitment" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.04.
"LC Credit Extension" shall mean, with respect to any Letter of
Credit, the issuance thereof or extension of the expiry date thereof, or the
increase of the amount thereof.
17
"LC Disbursement" shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.
"LC Obligations" 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 Obligations of any Revolving Lender at any time
shall mean its Applicable Percentage of the aggregate LC Obligations at such
time. For purposes of computing the amount available to be drawn under any
Letter of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.05. For all purposes of this Agreement, if on any date
of determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be "outstanding" in the amount so
remaining available to be drawn.
"Lenders" shall mean (a) the lenders listed on Schedule 2.01 and (b)
any lender that has become a party hereto pursuant to an Assignment and
Acceptance (in each case, other than any such lender 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 2.04.
"Letter of Credit Application" shall mean an application and agreement
for the issuance or amendment of a Letter of Credit in the form from time to
time in use by the Issuing Bank.
"LIBO Rate" shall mean, for any Interest Period with respect to a
Eurodollar Borrowing, the rate per annum equal to the British Bankers
Association LIBOR Rate ("BBA LIBOR"), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as designated by
the Administrative Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for
Dollar deposits (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period. If such rate is not available at such
time for any reason, then the "LIBO Rate" for such Interest Period shall be the
rate per annum determined by the Administrative Agent to be the rate at which
deposits in Dollars for delivery on the first day of such Interest Period in
same day funds in the approximate amount of the Eurodollar Borrowing being made,
continued or converted by the Administrative Agent and with a term equivalent to
such Interest Period would be offered by the Administrative Agent's London
Branch to major banks in the London interbank eurodollar market at their request
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
18
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, the Intercreditor 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 Term Loans.
"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 is or will be a party or (c) material impairment of the rights of or
benefits available to the Lenders under any Loan Document.
"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, which properties are set
forth on Schedule 1.01(a).
"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
19
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 Notes" shall mean any unsecured senior or senior subordinated
notes of Parent and/or Denny's Holdings that (i) shall have a market rate of
interest determined at the time of their pricing, (ii) shall mature on a date
that is at least six months following the Term Loan Maturity Date, (iii) shall
not require the payment of principal or be mandatorily redeemable pursuant to a
sinking fund obligation or otherwise prior to the date that is at least six
months following the Term Loan Maturity Date, subject to certain exceptions
typical and customary for similar high yield debt securities, (iv) shall not be
guaranteed by, co-made by, or otherwise be recourse to, either Borrower or any
Subsidiary other than, in the case of notes issued by Parent, Denny's Holdings
and (v) shall otherwise contain terms and conditions (including with respect to
covenants and Guarantees) typical and customary for similar high yield debt
securities.
"New Notes Documents" shall mean the New Notes, the New 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 Notes Indenture" shall mean any indenture pursuant to which New
Notes are issued, among Parent and/or Denny's Holdings and the trustee for the
New Notes, as
20
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 have the meaning assigned to such term
in the Guarantee and Collateral Agreement.
"Permitted Amendments" means (a) any amendment or supplement to any of
the 11-1/4% Senior Notes Documents, the 12-3/4% Senior Notes Documents or the
New 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 180 days after the Term Loan 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 180 days after the Term Loan 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 11-1/4% Senior Notes Documents, the 12-3/4%
Senior Notes Documents or the New 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.
21
"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;
(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
22
(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 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 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, 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 Indebtedness permitted by Section 6.01(e),
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; (f) Liens in connection with
attachments or judgments (including judgment or appeal bonds) that do not
constitute an Event of Default under subsections (i) or (j) of Article VII,
provided that the judgments secured shall, within 30 days after the entry
thereof, have been discharged or execution thereof stayed pending appeal, or
shall have been discharged within 30 days after the expiration of such stay; (g)
leases or subleases granted to others in the ordinary course of business not
interfering in any material respect with the business of any Loan Party; (h) any
interest or title of a lessor under, and Liens arising from UCC financing
statements relating to, leases permitted by this Agreement; (i) normal and
customary rights of setoff upon deposits of cash in favor of banks or other
depository institutions; and (j) extensions, renewals or replacements of any
Lien referred to in paragraphs (a) through (i) 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.
22
"Permitted Real Estate Liens" shall have the meaning assigned to such
term in clause (d) of the definition of "Permitted Liens".
"Permitted Senior Notes Repurchases" shall mean (a) the repurchase or
redemption of 11-1/4% Senior Notes, at a price per Note not to exceed the
redemption price then in effect under the 11-1/4% Senior Notes Indenture plus
accrued and unpaid interest plus, in the case of a repurchase pursuant to a
tender, a tender premium at market rates, with the proceeds of Term Loans,
Indebtedness under the Second Lien Facility Documents, New Notes or issuances of
Equity Interests by Parent, and (b) the repurchase or redemption of 12-3/4%
Senior Notes pursuant to the defeasance and redemption or discharge procedures
required by Section 5.08 or the 12-3/4% Senior Notes Tender, at a price per Note
not to exceed the redemption price then in effect under the 12-3/4% Senior Notes
Indenture plus accrued and unpaid interest, plus, in the case of a repurchase
pursuant to the 12-3/4% Senior Notes Tender, a tender premium at market rates,
with the proceeds of Term Loans, Indebtedness under the Second Lien Facility
Documents or New Notes; provided that (i) before and after giving effect to any
Permitted Senior Notes Repurchase, no Default or Event of Default shall have
occurred and be continuing and (ii) the transactions related to any Permitted
Senior Notes Repurchase shall be on terms typical and customary for similar
transactions.
"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.
"Platform" shall have the meaning assigned to such term in Section
9.15.
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its "prime rate";
each change in the Prime Rate shall be effective from and including the date
such change is publicly announced as being effective. The "prime rate" is a rate
set by the Administrative Agent based upon various factors including the
Administrative Agent's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate.
"Properties" shall have the meaning assigned to such term in Section
3.17(a).
"Public Lender" shall have the meaning assigned to such term in
Section 9.15.
"Recapitalization Transactions" shall mean, collectively, the
refinancing of the Existing Credit Agreement pursuant to the consummation of the
transactions contemplated by
24
this Agreement, each of the transactions included within Permitted Senior Notes
Repurchases and the issuance of the New Notes by Parent and/or Denny's Holdings
pursuant to the New Notes Indenture (with each individual transaction included
within this definition a "Recapitalization Transaction").
"Reduction Event" shall mean:
(g) any Asset Sale;
(h) 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;
(i) receipt by Parent, any Borrower or any Subsidiary of any
Extraordinary Receipts, in each case under this clause (c) the Net Cash
Proceeds of which exceed $5,000,000;
(j) 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;
(k) the incurrence by any Borrower or any Subsidiary (other than
Denny's Holdings) of any Indebtedness, other than Indebtedness permitted
pursuant to Section 6.01; or
(l) the incurrence by Parent or Denny's Holdings of any Indebtedness,
other than Indebtedness permitted pursuant to Section 6.01.
"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 Closing
Date.
25
"Related Parties" shall mean, with respect to any person, such
person's Affiliates and the respective directors, officers, employees, agents,
trustees 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.
"Reorganization Transactions" shall mean any or all of the following
transactions: (a) the conversion of DFO and Denny's Realty, Inc. into limited
liability companies or the formation of two Delaware limited liability companies
and the merger of each of DFO and Denny's Realty, Inc. into such limited
liability companies, with such limited liability companies being the surviving
entities, in either case in connection with changing the organizational form of
DFO and Denny's Realty, Inc. into that of "pass-thru" entities for tax purposes,
provided that the organizational structure of the Parent and its Subsidiaries
shall not otherwise change (except as may be otherwise permitted under the terms
of this Agreement); and (b) the transfer of assets located outside the State of
South Carolina and owned by any Loan Party other than the Parent to the Parent
in an aggregate amount not to exceed $2,000,000 at any one time.
"Required Lenders" shall mean, at any time, Lenders having Loans, LC
Obligations and unused Commitments representing more than 50% of the sum of all
Loans outstanding, LC Obligations 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.
"Revolving Borrowing" shall mean a Borrowing comprised of Revolving
Loans.
"Revolving Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder and participate in
Letters of Credit, all as set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender assumed its Revolving Commitment, as
applicable, as the same may be (a) reduced
26
from time to time pursuant to Section 2.07 or pursuant to Section 2.17 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The aggregate amount of the Lenders' Revolving
Commitments on the Effective Date is $75,000,000.
"Revolving Lender" shall mean a Lender with a Revolving Commitment or,
if the Revolving Commitments have been terminated or have expired, a Lender with
a Credit Exposure.
"Revolving Loans" shall mean the revolving loans made by the Lenders
to the Borrowers pursuant to clause (b) of Section 2.01. Each Revolving Loan
shall be a Eurodollar Loan or an ABR Loan.
"Revolving Maturity Date" shall mean September 30, 2008.
"Second Lien Collateral Agent" shall mean the "Second Lien Collateral
Agent" as defined in the Intercreditor Agreement.
"Second Lien Credit Agreement" shall mean that certain Credit
Agreement in respect of a term loan facility, dated as of the date hereof, among
the Borrowers and Parent, Denny's Holdings and DFO, as guarantors, the lenders
named therein, Bank of America, N.A., as administrative agent and collateral
agent, and UBS Securities LLC, as syndication agent (as such agreement may be
amended, modified or supplemented, from time to time in accordance with the
terms hereof and thereof, together with any other agreements pursuant to which
any of the Indebtedness, commitments, obligations, costs, expenses, fees,
reimbursements, indemnities or other obligations payable or owing thereunder may
be refinanced, restructured, renewed, extended, increased, refunded or replaced,
in each case, in whole or in part, and any amendment, restatement, supplement,
renewal or other modification thereto, provided that any such refinancing,
restructuring, renewal, extension, increase, refunding or replacement of the
Second Lien Credit Agreement shall (a) contain terms as or more favorable to the
Lenders than those of the Second Lien Credit Agreement in effect at the time of
such refinancing, restructuring, renewal, extension, increase, refunding or
replacement, (b) have a market rate of interest determined at the time of
refinancing, restructuring, renewal, extension, increase, refunding or
replacement and (c) be subject to the Intercreditor Agreement in all respects).
"Second Lien Facility Documents" shall mean the Second Lien Credit
Agreement, the Intercreditor Agreement and all material agreements, documents
and instruments related thereto (including all security documents), as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof and thereof.
"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, the Intercreditor Agreement and each of the security
agreements, mortgages and
27
other instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.12.
"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.
"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
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. For the avoidance of doubt, the
definition of the term "Synthetic Purchase Agreement" is not intended to cover
any Hedging Agreement permitted under the terms of this Agreement.
28
"Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Borrowing" shall mean a Borrowing comprised of Term Loans.
"Term Lender" shall mean a Lender with a Term Loan Commitment or an
outstanding Term Loan.
"Term Loan Commitment" shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make Term Loans hereunder on the Effective
Date, expressed as an amount representing the maximum principal amount of the
Term Loan to be made by such Lender hereunder, all as set forth on Schedule
2.01, as the same may be (a) reduced from time to time pursuant to Section 2.07
or pursuant to Section 2.17 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04. The
initial aggregate amount of the Lenders' Term Loan Commitments is $225,000,000.
"Term Loan Maturity Date" shall mean September 30, 2009.
"Term Loans" shall mean the term loans made by the Term Lenders to the
Borrowers pursuant to clause (a) of Section 2.01. Each Term Loan shall be a
Eurodollar Loan or an ABR Loan.
"Total Revolving Commitment" shall mean, at any time, the aggregate
amount of the Revolving Commitments, as in effect at such time and which on the
Closing Date is $75,000,000.
"Transactions" shall have the meaning assigned to such term in Section
3.02.
"12-3/4% Senior Notes" shall mean the 12-3/4% Senior Notes Due 2007 of
Parent and Denny's Holdings, as joint obligors.
"12-3/4% Senior Notes Documents" shall mean the 12-3/4% Senior Notes,
the 12-3/4% 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.
"12-3/4 Senior Notes Indenture" shall mean the Indenture dated as of
April 15, 2002, among Parent, Denny's Holdings and U.S. Bank National
Association, as Trustee, with respect to the 12-3/4% Senior Notes, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof and thereof.
"12-3/4% Senior Notes Tender" shall mean the tender offer and consent
solicitation dated September 7, 2004, by Parent and Denny's Holdings in respect
of the 12-3/4% Senior Notes pursuant to which Parent and Denny's Holdings
offered to purchase any and all
29
outstanding 12-3/4% Senior Notes pursuant to the tender offer and consent
solicitation materials distributed on such date.
"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 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.
30
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 Effective Date 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.
SECTION 1.05. Letter of Credit Amounts. Unless otherwise specified
herein, the amount of a Letter of Credit at any time shall be deemed to be the
stated amount of such Letter of Credit in effect at such time; provided,
however, that with respect to any Letter of Credit that, by its terms or the
terms of any Issuer Document related thereto, provides for one or more automatic
increases in the stated amount thereof, the amount of such Letter of Credit
shall be deemed to be the maximum stated amount of such Letter of Credit after
giving effect to all such increases, whether or not such maximum stated amount
is in effect at such time.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, (a) each Term Lender agrees to make a Term Loan to any Borrower on
the Effective Date in an aggregate principal amount not exceeding such Lender's
Term Loan Commitment, (b) each Revolving Lender agrees to make Revolving Loans
to any Borrower from time to time during the Availability Period in an aggregate
principal amount that will not result in (i) such Lender's Credit Exposure
exceeding such Lender's Revolving Commitment or (ii) the Aggregate Credit
Exposure exceeding the Total Revolving Commitment. Within the foregoing limits
and subject to the terms and conditions set forth herein, the Borrowers may
borrow, prepay and reborrow Revolving Loans. Amounts prepaid or repaid in
respect of Term Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans of the same Class and Type made by the Lenders
ratably in accordance with their respective Commitments of the applicable Class.
The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.
(b) Subject to Section 2.12, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
applicable Borrower may
31
request in accordance herewith. 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 $500,000 and not less than $5,000,000. At the time that each ABR
Borrowing is made, such Borrowings shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $500,000; provided that an ABR
Revolving Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the Total Revolving Commitment or that is required to finance
the reimbursement of an LC Disbursement as contemplated by Section 2.04(c)(i).
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 seven Eurodollar
Borrowings outstanding.
(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
Revolving Maturity Date or the Term Loan Maturity Date, as applicable.
SECTION 2.03. Requests for Borrowings. To request a Revolving
Borrowing or Term Borrowing, 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, 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) in the case of Loans made on the Effective Date, whether such
Borrowing is to be a Revolving Borrowing or Term Borrowing;
(iii) the aggregate amount of the requested Borrowing;
(iv) the date of such Borrowing, which shall be a Business Day;
(v) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
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(vi) 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
(vii) 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 2.05.
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, three
Business Days before the date of the proposed Borrowing other than an ABR
Borrowing), 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. Letters of Credit. (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the
Issuing Bank agrees, in reliance upon the agreements of the Revolving
Lenders set forth in this Section 2.04, (1) from time to time on any
Business Day during the period from the Closing Date until the date that is
five Business Days prior to the Revolving Maturity Date, to issue Letters
of Credit for the account of either Borrower or any other Loan Party, and
to amend Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drawings by beneficiaries under the
Letters of Credit; and (B) the Revolving Lenders severally agree to
participate in Letters of Credit issued for the account of a Borrower or
other Loan Party and any drawings thereunder; provided that after giving
effect to any LC Credit Extension with respect to any Letter of Credit, (x)
the LC Obligations shall not exceed $45,000,000 and (y) the Aggregate
Credit Exposure shall not exceed the Total Revolving Commitment. Each
request by a Borrower for the issuance or amendment of a Letter of Credit
shall be deemed to be a representation by such Borrower that the LC Credit
Extension so requested complies with the conditions set forth in the
proviso to the preceding sentence. Within the foregoing limits, and subject
to the terms and conditions hereof, a Borrower's ability to obtain Letters
of Credit shall be fully revolving, and accordingly such Borrower may,
during the foregoing period, obtain Letters of Credit to replace Letters of
Credit that have expired or that have been drawn upon and reimbursed.
(ii) The Issuing Bank shall not issue any Letter of Credit, if: (A)
the expiry date of such requested Letter of Credit would occur more than
twelve months after the date of issuance, unless the Required Lenders have
approved such expiry date; or (B) the expiry date of such requested Letter
of Credit would occur after the date that is five Business
33
Days prior to the Revolving Maturity Date, unless all the Revolving Lenders
have approved such expiry date.
(iii) The Issuing Bank shall not be under any obligation to issue any
Letter of Credit if: (A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain
the Issuing Bank from issuing such Letter of Credit, or any law applicable
to the Issuing Bank or any request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over the
Issuing Bank shall prohibit, or request that the Issuing Bank refrain from,
the issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Bank with respect to such
Letter of Credit any restriction, reserve or capital requirement (for which
the Issuing Bank is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon the Issuing Bank any unreimbursed
loss, cost or expense which was not applicable on the Closing Date and
which the Issuing Bank in good xxxxx xxxxx material to it; (B) the issuance
of such Letter of Credit would violate one or more policies of the Issuing
Bank; (C) except as otherwise agreed by the Administrative Agent and the
Issuing Bank, such Letter of Credit is in an initial stated amount less
than $100,000, provided that this subclause (C) shall not apply if 30 or
fewer Letters of Credit are outstanding as of the date of issuance of such
Letter of Credit; (D) such Letter of Credit is to be denominated in a
currency other than dollars; (E) such Letter of Credit contains any
provisions for automatic reinstatement of the stated amount after any
drawing thereunder; or (F) a default of any Revolving Lender's obligations
to fund under Section 2.04(c) exists or any Revolving Lender has failed to
fund any portion of the participations in LC Obligations required to be
funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, unless the Issuing Bank has entered into
satisfactory arrangements with the applicable Borrower or such Revolving
Lender to eliminate the Issuing Bank's risk with respect to such Revolving
Lender.
(iv) The Issuing Bank shall not amend any Letter of Credit if the
Issuing Bank would not be permitted at such time to issue such Letter of
Credit in its amended form under the terms hereof.
(v) The Issuing Bank shall be under no obligation to amend any Letter
of Credit if (A) the Issuing Bank would have no obligation at such time to
issue such Letter of Credit in its amended form under the terms hereof, or
(B) the beneficiary of such Letter of Credit does not accept the proposed
amendment to such Letter of Credit.
(vi) The Issuing Bank shall act on behalf of the Revolving Lenders
with respect to any Letters of Credit issued by it and the documents
associated therewith, and the Issuing Bank shall have all of the benefits
and immunities (A) provided to the Administrative Agent in Article VIII
with respect to any acts taken or omissions suffered by the Issuing Bank in
connection with Letters of Credit issued by it or proposed to be issued by
it and Issuer Documents pertaining to such Letters of Credit as fully as if
the
34
term "Administrative Agent" as used in Article VIII included the Issuing
Bank with respect to such acts or omissions, and (B) as additionally
provided herein with respect to the Issuing Bank.
(b) Procedures for Issuance and Amendments of Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of the applicable Borrower delivered to the Issuing
Bank (with a copy to the Administrative Agent) in the form of a Letter of
Credit Application, appropriately completed and signed by a Responsible
Officer of such Borrower. Such Letter of Credit Application must be
received by the Issuing Bank and the Administrative Agent not later than
12:00 noon at least two Business Days (or such later date and time as the
Administrative Agent and the Issuing Bank may agree in a particular
instance in their sole discretion) prior to the proposed issuance date or
date of amendment, as the case may be. In the case of a request for an
initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the Issuing Bank: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the
name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the
full text of any certificate to be presented by such beneficiary in case of
any drawing thereunder; and (G) such other matters as the Issuing Bank may
reasonably require. In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the Issuing Bank (A) the Letter
of Credit to be amended; (B) the proposed date of amendment thereof (which
shall be a Business Day); (C) the nature of the proposed amendment; and (D)
such other matters as the Issuing Bank may reasonably require.
Additionally, the applicable Borrower shall furnish to the Issuing Bank and
the Administrative Agent such other documents and information pertaining to
such requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the Issuing Bank or the Administrative Agent may reasonably
require.
(ii) Promptly after receipt of any Letter of Credit Application, the
Issuing Bank will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter
of Credit Application from the applicable Borrower and, if not, the Issuing
Bank will provide the Administrative Agent with a copy thereof. Unless the
Issuing Bank has received written notice from any Lender, the
Administrative Agent or any Loan Party, at least one Business Day prior to
the requested date of issuance or amendment of the applicable Letter of
Credit, that one or more applicable conditions contained in Section 4.01
shall not then be satisfied, then, subject to the terms and conditions
hereof, the Issuing Bank shall, on the requested date, issue a Letter of
Credit for the account of the applicable Borrower or other Loan Party or
enter into the applicable amendment, as the case may be, in each case in
accordance with the Issuing Bank's usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Revolving
Lender shall be deemed to, and hereby
35
irrevocably and unconditionally agrees to, purchase from the Issuing Bank a
risk participation in such Letter of Credit in an amount equal to the
product of such Revolving Lender's Applicable Percentage times the amount
of such Letter of Credit.
(iii) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or
to the beneficiary thereof, the Issuing Bank will also deliver to the
Borrower and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the Issuing Bank shall
notify the applicable Borrower and the Administrative Agent thereof. The
Borrowers shall reimburse the Issuing Bank through the Administrative Agent
in an amount equal to the amount of such drawing not later than 12:00 noon
on the date of any payment by the Issuing Bank under a Letter of Credit
(each such date, an "Honor Date"), if the Borrowers have received notice of
such drawing (and the amount of such drawing) prior to 10:00 a.m. on such
Honor Date, or, if such notice has not been received by the Borrowers prior
to such time on such Honor Date, then not later than 12:00 noon on (A) the
Business Day that the Borrowers receive such notice, if such notice is
received prior to 10:00 a.m. on the day of receipt, or (B) the Business Day
immediately following the day that such Borrower receives such notice, if
such notice is not received prior to 10:00 a.m. on the day of receipt. If
the Borrowers fail to so reimburse the Issuing Bank by such time, the
Administrative Agent shall promptly notify each Revolving Lender of the
Honor Date, the amount of the LC Disbursement, and the amount of such
Revolving Lender's Applicable Percentage thereof. In such event, the
applicable Borrower shall be deemed to have requested an ABR Revolving
Borrowing to be disbursed on the Honor Date in an amount equal to the LC
Disbursement, without regard to the minimum and multiples specified in
Section 2.02(c) for the principal amount of ABR Revolving Borrowings, but
subject to the amount of the unutilized portion of the Total Revolving
Commitment and the conditions set forth in Section 4.01 (other than the
delivery of a Borrowing Request). Any notice given by the Issuing Bank or
the Administrative Agent pursuant to this Section 2.04(c)(i) may be given
by telephone if immediately confirmed in writing; provided that the lack of
such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.
(ii) Each Revolving Lender shall upon any notice pursuant to Section
2.04(c)(i) make funds available to the Administrative Agent for the account
of the Issuing Bank at the Administrative Agent's Office in an amount equal
to its Applicable Percentage of the LC Disbursement not later than 1:00
p.m. on the Business Day specified in such notice by the Administrative
Agent, whereupon, subject to the provisions of Section 2.04(c)(iii), each
Revolving Lender that so makes funds available shall be deemed to have made
an
36
ABR Revolving Loan to the applicable Borrower in such amount. The
Administrative Agent shall remit the funds so received to the Issuing Bank.
(iii) With respect to any LC Disbursement that is not fully refinanced
by an ABR Revolving Loan because the conditions set forth in Section 4.01
cannot be satisfied or for any other reason, the applicable Borrower shall
be deemed to have incurred from the Issuing Bank an LC Borrowing in the
amount of the LC Disbursement that is not so refinanced, which LC Borrowing
shall be due and payable on demand (together with interest) and shall bear
interest at the applicable rate specified in clause (c) of Section 2.11. In
such event, each Revolving Lender's payment to the Administrative Agent for
the account of the Issuing Bank pursuant to Section 2.04(c)(ii) shall be
deemed payment in respect of its participation in such LC Borrowing and
shall constitute an LC Advance from such Revolving Lender in satisfaction
of its participation obligation under this Section 2.04.
(iv) Until each Revolving Lender funds its ABR Revolving Loan or LC
Advance pursuant to this Section 2.04(c) to reimburse the Issuing Bank for
any amount drawn under any Letter of Credit, interest in respect of such
Revolving Lender's Applicable Percentage of such amount shall be solely for
the account of the Issuing Bank.
(v) Each Revolving Lender's obligation to make ABR Revolving Loans or
LC Advances to reimburse the Issuing Bank for amounts drawn under Letters
of Credit, as contemplated by this Section 2.04(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right which such
Revolving Lender may have against the Issuing Bank, the Borrowers or any
other Person for any reason whatsoever; (B) the occurrence or continuance
of a Default, or (C) any other occurrence, event or condition, whether or
not similar to any of the foregoing; provided, however, that each Revolving
Lender's obligation to make ABR Revolving Loans pursuant to this Section
2.04(c) is subject to the conditions set forth in Section 4.01 (other than
delivery by the applicable Borrower of a Borrowing Request). No such making
of an LC Advance shall relieve or otherwise impair the obligation of the
Borrowers to reimburse the Issuing Bank for the amount of any payment made
by the Issuing Bank under any Letter of Credit, together with interest as
provided herein.
(vi) If any Revolving Lender fails to make available to the
Administrative Agent for the account of the Issuing Bank any amount
required to be paid by such Revolving Lender pursuant to the foregoing
provisions of this Section 2.04(c) by the time specified in Section
2.04(c)(ii), the Issuing Bank shall be entitled to recover from such
Revolving Lender (acting through the Administrative Agent), on demand, such
amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the
Issuing Bank at a rate per annum equal to the greater of the Federal Funds
Rate and a rate determined by the Issuing Bank in accordance with banking
industry rules on interbank compensation. A certificate of the
37
Issuing Bank submitted to any Revolving Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (vi) shall be
conclusive absent manifest error.
(d) Repayment of Participations.
(i) At any time after the Issuing Bank has made a payment under any
Letter of Credit and has received from any Revolving Lender such Revolving
Lender's LC Advance in respect of such payment in accordance with Section
2.04(c), if the Administrative Agent receives for the account of the
Issuing Bank any payment in respect of the related LC Disbursement or
interest thereon (whether directly from the Borrowers or otherwise,
including proceeds of cash collateral applied thereto by the Administrative
Agent), the Administrative Agent will distribute to such Revolving Lender
its Applicable Percentage thereof (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such
Revolving Lender's LC Advance was outstanding) in the same funds as those
received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the
account of the Issuing Bank pursuant to Section 2.04(c)(i) is required to
be returned under any of the circumstances set forth in this Agreement
(including pursuant to any settlement entered into by the Issuing Bank in
its discretion), each Lender shall pay to the Administrative Agent for the
account of the Issuing Bank its Applicable Percentage thereof on demand of
the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned by such Lender, at a rate per
annum equal to the Federal Funds Rate from time to time in effect. The
obligations of the Lenders under this clause shall survive the payment in
full of the Obligations and the termination of this Agreement.
(e) Obligations Absolute. The obligation of the Borrowers to reimburse
the Issuing Bank for each drawing under each Letter of Credit and to repay each
LC Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:
(i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other Loan Document;
(ii) the existence of any claim, counterclaim, setoff, defense or
other right that either Borrower or any Subsidiary may have at any time
against any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be acting),
the Issuing Bank or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit
or any agreement or instrument relating thereto, or any unrelated
transaction;
38
(iii) any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the Issuing Bank under such Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit; or any payment made by the
Issuing Bank under such Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to
any beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of,
either Borrower or any Subsidiary.
(f) Role of Issuing Bank. Each Revolving Lender and each Borrower
agree that, in paying any drawing under a Letter of Credit, the Issuing Bank
shall not have any responsibility to obtain any document (other than any sight
draft, certificates and documents expressly required by the Letter of Credit) or
to ascertain or inquire as to the validity or accuracy of any such document or
the authority of the Person executing or delivering any such document. None of
the Issuing Bank, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of the Issuing Bank shall
be liable to any Revolving Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Revolving Lenders
or the Required Lenders, as applicable; (ii) any action taken or omitted in the
absence of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Issuer Document. Each Borrower hereby assumes all
risks of the acts or omissions of any beneficiary or transferee with respect to
its use of any Letter of Credit; provided, however, that this assumption is not
intended to, and shall not, preclude either Borrower's pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement. None of the Issuing Bank, the Administrative Agent, any of
their respective Related Parties nor any correspondent, participant or assignee
of the Issuing Bank shall be liable or responsible for any of the matters
described in clauses (i) through (v) of Section 2.04(e); provided, however, that
anything in such clauses to the contrary notwithstanding, each Borrower may have
a claim against the Issuing Bank, and the Issuing Bank may be liable to either
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by such Borrower which such
Borrower proves were caused by the Issuing Bank's willful misconduct or gross
negligence or the Issuing Bank's willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept documents that
39
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary, and the
Issuing Bank shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
(g) Cash Collateral. (i) 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, Revolving Lenders with LC Obligations representing greater
than 50% of the total LC Obligations) demanding the deposit of cash collateral
pursuant to this paragraph (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) or (ii) upon the request of the Administrative
Agent, (A) if the Issuing Bank has honored any full or partial drawing request
under any Letter of Credit and such drawing has resulted in an LC Borrowing, or
(B) if, as of the date that is five Business Days prior to the Revolving
Maturity Date, any LC Obligation for any reason remains outstanding, the
Borrowers shall, in each case, immediately deposit in a blocked, interest
bearing deposit 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 Obligations as of such date plus any accrued and unpaid
interest thereon. Such cash collateral 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. Moneys in such account
(including any interest accrued thereon) 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
Obligations at such time or, if the maturity of the Loans has been accelerated
(but subject to the consent of Revolving Lenders with LC Obligations
representing greater than 50% of the total LC Obligations), 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 (including any interest accrued thereon), 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.
(h) Applicability of ISP and UCP. Unless otherwise expressly agreed by
the Issuing Bank and the Borrowers when a Letter of Credit is issued (including
any such agreement applicable to an Existing Letter of Credit), (i) the rules of
the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the
Uniform Customs and Practice for Documentary Credits, as most recently published
by the International Chamber of Commerce at the time of issuance shall apply to
each commercial Letter of Credit.
(i) Conflict with Issuer Documents. In the event of any conflict
between the terms hereof and the terms of any Issuer Document, the terms hereof
shall control.
40
(j) Letters of Credit Issued for Loan Parties other than a Borrower.
Notwithstanding that a Letter of Credit issued or outstanding hereunder is in
support of any obligations of, or is for the account of, a Loan Party other than
a Borrower, the Borrowers shall be obligated to reimburse the Issuing Bank
hereunder for any and all drawings under such Letter of Credit. The Borrowers
hereby acknowledge that the issuance of Letters of Credit for the account of
Loan Parties other than a Borrower inures to the benefit of the Borrowers, and
that the businesses of the Borrowers derive substantial benefits from the
businesses of such other Loan Parties.
SECTION 2.05. 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 2:00 p.m., New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the applicable Borrower by promptly crediting the amounts so received, in
like funds, to an account of such Borrower maintained with the Administrative
Agent and designated by such Borrower in the applicable Borrowing Request;
provided that ABR Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.04(c) shall be remitted by the
Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such Borrowing
within 24 hours of the time such Lender is required to make such Loan pursuant
to Section 2.03, 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 2.06. 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
41
ratably among the Lenders holding the Loans comprising such Borrowing, and the
Loans comprising each such portion shall be considered a separate Borrowing.
(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 Revolving 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 2.03:
(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.
(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
42
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 2.07. Termination and Reduction of Commitments. (a) Unless
previously terminated in accordance with the terms hereof, (i) the Term Loan
Commitments shall automatically terminate at 5:00 p.m., New York City time, on
the Effective Date and (ii) the Revolving Commitments and the LC Commitment
shall automatically terminate on the Revolving 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 Reduction Event, the Term Loans shall be prepaid on the third Business Day
following the occurrence of such Reduction Event by an amount equal to (i) if
such Reduction Event is an event described in clause (a), (b), (c) or (e) of the
definition of the term "Reduction Event", 100% of the Net Cash Proceeds received
with respect to such Reduction Event and (ii) if such Reduction Event is an
event described in clause (d) or (f) of the definition of the term "Reduction
Event", 50% of the Net Cash Proceeds received with respect to such Reduction
Event, and, to the extent the amount of any prepayment required pursuant to
clause (i) or (ii) above exceeds the aggregate amount of (A) Term Loans then
outstanding, the Revolving Loans shall be prepaid (but no reduction in the
Revolving Commitments shall be required) and (B) Term Loans and Revolving Loans
then outstanding, the Letters of Credit shall be cash collateralized in
accordance with the terms of Section 2.04(g), in each case, on the third
Business Day following the occurrence of such Reduction Event by an amount equal
to such excess, provided that any Net Cash Proceeds from an Asset Sale that is a
Reduction Event shall not be applied to prepay Term Loans and, if applicable, to
prepay Revolving Loans and cash collateralize Letters of Credit, in accordance
with this Section 2.07(b) until the aggregate amount of Net Cash Proceeds not
yet applied in accordance with this Section 2.07(b) exceeds $1,000,000, at which
time all such Net Cash Proceeds shall be so applied. Notwithstanding the
foregoing, (x) in the case of any event described in clause (a) of the
definition of the term "Reduction Event" that, when combined with all other such
events occurring in any 12-month period, results in aggregate Net Cash Proceeds
of not more than $5,000,000 for such 12-month period, 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
prepayment of Term Loans and, if applicable, prepayment of Revolving Loans and
cash collateralization of Letters of Credit, shall be required pursuant to this
Section 2.07(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 prepayment of Term Loans and, if applicable, prepayment
of Revolving Loans (but no reduction in the Revolving Commitments shall be
required) and cash collateralization of Letters of Credit, shall be required in
an amount equal to such Net Cash Proceeds that have not been so applied,
provided that 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 Reduction
Event for which a prepayment of Term Loans and, if applicable, prepayment of
Revolving Loans and cash collateralization of Letters of Credit, is required
pursuant to this Section 2.07(b) setting forth a reasonably detailed calculation
43
of the amount of such Net Cash Proceeds, (y) in the case of any event described
in clause (b) of the definition of the term "Reduction Event" which exceeds the
dollar thresholds set forth therein, 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 prepayment of
Term Loans and, if applicable, prepayment of Revolving Loans and cash
collateralization of Letters of Credit, shall be required pursuant to this
Section 2.07(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 prepayment of Term Loans and, if applicable, prepayment
of Revolving Loans (but no reduction in the Revolving Commitments shall be
required) and cash collateralization of Letters of Credit, shall be required in
an amount equal to such excess Net Cash Proceeds that have not been so applied,
provided that 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 any such Reduction Event for which
a prepayment of Term Loans and, if applicable, prepayment of Revolving Loans and
cash collateralization of Letters of Credit, is required pursuant to this
Section 2.07(b) setting forth a reasonably detailed calculation of the amount of
such Net Cash Proceeds and (z) in the case of any event described in clause (d)
of the definition of the term "Reduction Event", no prepayment of Term Loans or
prepayment of Revolving Loans or cash collateralization of Letters of Credit
shall be required pursuant to this Section 2.07(b) except to the extent that
such Reduction Event, when combined with all other such events, occurring after
the Effective Date, results in aggregate Net Cash Proceeds in excess of
$100,000,000 and then a prepayment of Term Loans and, if applicable, prepayment
of Revolving Loans (but no reduction in the Revolving Commitments shall be
required) and cash collateralization of Letters of Credit, shall be required
pursuant to this Section 2.07(b) only to the extent of such excess, provided
that 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 equity issuance or capital contribution
that is a Reduction Event for which a prepayment of Term Loans and, if
applicable, prepayment of Revolving Loans and cash collateralization of Letters
of Credit, is required pursuant to this Section 2.07(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 28, 2005, the Term Loans shall be prepaid
in an aggregate amount equal to 50% of Excess Cash Flow for such fiscal year
and, to the extent the amount of such required prepayment exceeds the aggregate
amount of (i) Term Loans then outstanding, the Revolving Loans shall be prepaid
(but no reduction in the Revolving Commitments shall be required) and (ii) Term
Loans and Revolving Loans then outstanding, the Letters of Credit shall be cash
collateralized in accordance with the terms of Section 2.04(g), in each case, by
an amount equal to such excess for such fiscal year. Prepayments of Term Loans
and, if applicable, prepayments of Revolving Loans and cash collateralizations
of Letters of Credit pursuant to this paragraph shall be made 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).
44
(d) Subject to adjustment pursuant to paragraph (e), the Term Loans
shall be repaid (i) on the last Business Day of each month set forth below in an
aggregate amount equal to the amount set forth opposite such month or (ii) in
the case of the Term Loan Maturity Date, as to the outstanding principal balance
thereof, on the Term Loan Maturity Date:
Date Amount
---- ------
March 2005 $ 562,000
June 2005 $ 562,000
September 2005 $ 562,000
December 2005 $ 562,000
March 2006 $ 562,000
June 2006 $ 562,000
September 2006 $ 562,000
December 2006 $ 562,000
March 2007 $ 562,000
June 2007 $ 562,000
September 2007 $ 562,000
December 2007 $ 562,000
March 2008 $ 562,000
June 2008 $ 562,000
September 2008 $ 562,000
December 2008 $ 562,000
March 2009 $ 562,000
June 2009 $ 562,000
Term Loan Maturity Date $214,884,000
(e) Any prepayments of the Term Loans pursuant to Section 2.07(b) or
2.07(c) shall be applied to reduce the scheduled repayments of Term Loans 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 Revolving Commitments; provided, however, that (i) each partial reduction of
the Revolving Commitments shall be in an integral multiple of $1,000,000 and in
a minimum amount of $5,000,000 and (ii) the Total Revolving Commitment shall not
be reduced to an amount that is less than the Aggregate Credit Exposure at the
time.
(g) Each reduction in the Revolving Commitments hereunder shall be
made ratably among the Lenders in accordance with their respective Commitments.
SECTION 2.08. Repayment of Loans; Evidence of Debt. (a) The Borrowers
hereby unconditionally promise to pay (i) to the Administrative Agent for the
account of each
45
Revolving Lender the then unpaid principal amount of each Revolving Loan of such
Lender on the Revolving Maturity Date and (ii) to the Administrative Agent for
the account of each Term Lender the then unpaid principal amount of each Term
Loan of such Lender on the Term Loan Maturity Date.
(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 2.09. 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 (A)
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 (B) 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 (X)
$5,000,000 in the case of Eurodollar Borrowings or (Y) $1,000,000 in the case of
ABR Borrowings. Any prepayments of the Term Loans pursuant to this Section 2.09
shall be applied to reduce the scheduled repayments of Term Loans to be made
pursuant to Section 2.07(d) ratably.
46
(b) Voluntary prepayments of Term Loans, and mandatory prepayments of
Term Loans required pursuant to Section 2.07(b) as a result of any event
described in clause (d), (e) or (f) of the definition of the term "Reduction
Event", made as of any date during any period set forth below shall be
accompanied by a payment of a prepayment fee in an amount (expressed as a
percentage of the principal amount of the Term Loans to be repaid) set forth
opposite such period:
Period Percentage
------ ----------
September 21, 2004 to September 21, 2005 2.00%
September 22, 2005 to September 21, 2006 1.00%
September 22, 2006 and thereafter 0%
(c) In the event of any termination of all the Revolving Commitments,
the Borrowers shall prepay all outstanding Revolving 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 Revolving 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 Revolving 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 Revolving Loans (if
any) and, second, to the extent of any remaining excess (after the prepayment of
Revolving 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
2.04(g).
(d) Each notice of prepayment shall specify the Borrowing or
Borrowings to be prepaid, 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 2.09 shall be
subject to Section 2.14 but, except as set forth in paragraph (b) of this
Section, otherwise without premium or penalty. All prepayments under this
Section 2.09 shall be accompanied by accrued interest on the principal amount
being prepaid to the date of payment.
SECTION 2.10. Fees. (a) The Borrowers agree to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee,
which shall accrue at a rate of 0.875% per annum on the daily unused amount of
the Revolving Commitment of such Lender during the period from and including the
Closing Date. Accrued commitment fees shall be payable in arrears on the last
Business Day of March, June, September and December of each year and on the date
on which the Revolving Commitments terminate, commencing on the first such date
to occur after the Closing Date. 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
47
first day but excluding the last day). For purposes of computing commitment
fees, a Revolving Commitment of a Revolving Lender shall be deemed to be used to
the extent of the outstanding Revolving Loans and LC Obligations of such
Revolving Lender.
(b) The Borrowers agree to pay (i) to the Administrative Agent for the
account of each Revolving Lender a participation fee with respect to such
Revolving 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
Revolving Loans on the average daily amount of such Revolving Lender's LC
Obligations (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 Revolving Lender's Revolving
Commitment terminates and the date on which such Revolving Lender ceases to have
any LC Obligations, and (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate of 0.125% per annum on the average daily amount of the LC
Obligations (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 Revolving Commitments and
the date on which there ceases to be any LC Obligations, 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
first 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 Revolving Commitments terminate and any such fees accruing
after the date on which the Revolving 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.
(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 2.10(c) shall be paid directly
to such Initial Lender. Fees paid shall not be refundable under any
circumstances.
SECTION 2.11. Interest. (a) The Loans constituting each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans constituting each Eurodollar Borrowing shall bear
interest, at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
48
(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, in the case of Revolving Loans, upon
termination of the Revolving 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 Revolving Loan prior to the end of the Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
(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 2.12. 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
49
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 2.13. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit 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
50
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 2.14. 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 2.17, 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 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 2.15. 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.
51
(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) Except for an assignment pursuant to Section 9.04(b)(vi), 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. In the case of an assignment pursuant to
Section 9.04(b)(vi), such properly completed and executed documentation shall
instead be delivered to the assigning Lender.
(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 2.15, 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
2.15 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 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
52
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 2.16. 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 2.13, 2.14 or 2.15, 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 setoff 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 the Administrative
Agent's Office, except payments to be made directly to the Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.13,
2.14, 2.15 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, outstanding Letters of Credit, 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, (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,
and (iii) third, towards the cash collateralization of the Letters of Credit by
depositing cash in an account with the Administrative Agent on the terms set
forth in Section 2.04(g).
(c) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Revolving Loans, Term Loans, and participations
in LC Disbursements and accrued interest thereon than the proportion received by
any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Revolving Loans, Term
Loans and participations in LC Disbursements of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans, Term Loans and
participations in LC Disbursements; 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
53
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 setoff 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.
(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
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), 2.05(b) or 2.16(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 2.17. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.13, 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 2.15, then such
Lender shall use reasonable commercial 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 2.13 or 2.15, 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.
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(b) If any Lender requests compensation under Section 2.13, 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 2.15,
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, 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 2.13 or payments required
to be made pursuant to Section 2.15, 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 2.18. 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 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 such 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 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 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, DFO and the Borrowers represents and
warrants to the Administrative Agent, the Collateral Agent, the Issuing Bank and
each of the Lenders that:
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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 and the borrowings hereunder
(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, DFO and each Borrower and
constitutes, and each other Loan Document when executed and delivered by each
Loan 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, statements of income and cash flows
(i) as of and for the fiscal year ended December 31, 2003, which in the case of
such consolidated statements have been audited by and accompanied by the opinion
of KPMG LLP, independent public accountants, and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended June
56
30, 2004, 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, 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 31, 2003.
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.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing
Date and the Effective 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
57
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 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. [RESERVED]
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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 Closing Date, 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
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;
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(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 Closing Date and the
Effective 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
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 and first
priority Lien on, and security interest in, all right, title and interest of the
pledgors
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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 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 Effective Date).
(d) Each Mortgage is effective to create in favor of the Collateral
Agent, for the 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 Closing Date and the Effective
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
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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 or the Effective Date and immediately
following the making of each Loan made on the Closing Date or the Effective 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 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 or the Effective 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) 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
2.04.
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(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. Conditions of Initial Credit Event. With respect to only
the initial Credit Event occurring on the Effective Date, the obligations of the
Lenders to make Loans and of the Issuing Bank to issue Letters of Credit
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each dated the Effective Date (or, in the case of
certificates of governmental officials, a recent date before the Effective Date)
and each in form and substance satisfactory to the Administrative Agent and each
of the Lenders:
(i) from each party hereto either (A) a counterpart of this Agreement
signed on behalf of such party or (B) 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;
(ii) a note in the form of Exhibit D executed by the Borrowers in
favor of each Lender requesting a note;
(iii) a solvency certificate, from the chief financial officer or
treasurer of each of the Borrowers and in form and substance reasonably
satisfactory to the Initial Lenders, together with such other evidence
reasonably requested by the Initial Lenders, confirming the solvency of
such Borrower and its subsidiaries after giving effect to the transactions
contemplated hereby;
(iv) 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
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the Effective 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 Initial
Lenders shall reasonably request, including that consummation of the
transactions contemplated hereby shall not (1) violate any applicable law,
statute, consent decree, rule or regulation or (2) conflict with, or result
in a default or event of default under, any material agreement of Parent or
any of its Subsidiaries, and Parent and the Borrowers hereby request such
counsel to deliver such opinions;
(v) favorable written opinions from local counsel in California,
Florida, Illinois, Michigan, Ohio, Pennsylvania and Texas satisfactory to
the Initial Lenders to the effect that the Mortgages to be filed in such
states are sufficient to perfect the liens purported to be created by such
Mortgages and the Borrowers hereby request such counsel to deliver such
opinions;
(vi) a favorable written opinion of local counsel in California
satisfactory to the Initial Lenders covering such other matters relating to
the Loan Documents and the Transactions as the Initial Lenders shall
reasonably request and the Borrowers hereby request such counsel to deliver
such opinion;
(vii) 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 Initial Lenders;
(viii) (A) 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; (B) a certificate of the Secretary or
Assistant Secretary of each Loan Party substantially as set forth in
Exhibit I dated the Effective Date and certifying (1) that attached thereto
is a true and complete copy of the by-laws of such Loan Party as in effect
on the Effective Date and at all times since a date prior to the date of
the resolutions described in clause (2) below, (2) 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, (3) 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 (A) above, and (4) 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; (C) a certificate of
another officer as to the incumbency and specimen signature of the
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Secretary or Assistant Secretary executing the certificate pursuant to (B)
above; and (D) such other documents as the Lenders, the Issuing Bank or
Cravath, Swaine & Xxxxx LLP, counsel for the Administrative Agent, may
reasonably request;
(ix) a certificate, dated the Effective 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;
(x) a completed Perfection Certificate dated the Effective 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 Initial Lenders that the Liens indicated by such financing statements
(or similar documents) are permitted by Section 6.02 or have been released;
and
(xi) a Borrowing Request signed by the applicable Borrower pursuant to
Section 2.03(b).
(b) There shall have been no event or circumstance since December 31,
2003 that has had or could be reasonably expected to have, either individually
or in the aggregate, a Material Adverse Effect.
(c) (i) The Collateral and Guarantee Requirement shall have been
satisfied, (ii) all filing and recording fees and taxes shall have been duly
paid, (iii) the Borrowers shall have delivered, and caused each Loan Party to
deliver, to the Collateral Agent all certificates representing Equity Interests
required to be pledged pursuant to the Collateral and Guarantee Requirement
(other than the Equity Interests in La Mirada Enterprises No. 1, Inc.) and (iv)
the Collateral Agent, for the ratable benefit of the Lenders, shall have a fully
perfected first priority Lien on, and security interest in, the Collateral.
(d) 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 Initial Lenders and their counsel (and such
approvals shall be in full force and effect).
(e) There shall be no action, suit, investigation or proceeding,
actual or, to the knowledge of Parent, Denny's Holdings, the Borrowers or any of
the Subsidiaries, threatened, in any court or before any arbitrator or
Governmental Authority that, individually or in the aggregate, (i) has a
reasonable likelihood of restraining, preventing or imposing burdensome
conditions on the transactions contemplated hereby or (ii) could reasonably be
expected to result in a Material Adverse Effect.
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(f) All Loans and Letters of Credit shall be in full compliance with
the provisions of the Regulations of the Board, including Regulation U or
Regulation X.
(g) 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 11-1/4% Senior Notes,
(iii) the 12-3/4% Senior Notes, provided that the Administrative Agent shall
have received evidence satisfactory to it of the effectiveness of the amendment
of the 12-3/4% Senior Notes Indenture as described in the 12-3/4% Senior Notes
Tender or the discharge or defeasance and the associated call for redemption or
repurchase pursuant to Sections 9.1 or 9.5(b) of the 12-3/4% Senior Notes
Indenture, as the case may be, (iv) the Indebtedness under the Second Lien
Facility Documents, (v) other Indebtedness permitted under Section 6.01, which
is set forth in Schedule 6.01 and (vi) the shares of Series A Junior Preferred
stock of Xxxxxx Holdings, Inc. held by Denny's Holdings. The amounts, terms and
conditions of all Indebtedness, including intercompany Indebtedness and Capital
Lease Obligations, to remain outstanding after the Effective 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 Initial Lenders.
(h) The Initial Lenders shall be satisfied as to the amount and nature
of all material actual or 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 transactions
contemplated hereby and with the plans of the Borrowers with respect thereto,
and, to the extent requested by the Initial Lenders, the Lenders shall have
received environmental assessments satisfactory to the Initial Lenders from an
environmental consulting firm satisfactory to the Initial Lenders with respect
to any Mortgaged Properties acquired since December 16, 2002.
(i) The Initial Lenders shall be satisfied that (i) each of Parent,
the Borrowers and the Subsidiaries will be able to meet its obligations under
all employee and retiree welfare plans, (ii) the defined contribution and
defined benefit plans of Parent, Denny's Holdings, the Borrowers and their ERISA
Affiliates are, in all material respects, funded in accordance with the minimum
statutory requirements, (iii) no "reportable event" (as defined in ERISA, but
excluding events for which reporting has been waived) has occurred as to any
such employee benefit plan and (iv) no termination of, or withdrawal from, any
such employee benefit plan has occurred or is contemplated that could reasonably
be expected to result in a material liability.
(j) The Administrative Agent and the Initial Lenders shall have
received all fees and other amounts due and payable on or prior to the Effective
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 (including the fees and expenses of Cravath,
Swaine & Xxxxx LLP as sole outside counsel for the Initial Lenders and
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local counsel for the Initial Lenders) to the Administrative Agent or the
applicable Initial Lender, as the case may be.
(k) Substantially simultaneously with or prior to the initial Credit
Event (i) 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, (ii) all commitments to lend under the Existing Credit Agreement
shall have been permanently terminated, (iii) all obligations under or relating
to the Existing Credit Agreement and all security interests related thereto
shall have been discharged and (iv) the Administrative Agent shall have received
satisfactory evidence of such repayment, termination and discharge.
(l) 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
LLP, counsel for the Administrative Agent.
Without limiting the generality of the provisions of Section 8.04, for purposes
of determining compliance with the conditions specified in this Article IV, each
Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
ARTICLE V
Affirmative Covenants
Each of Parent, Denny's Holdings, DFO 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, DFO 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
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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 governmental 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.
SECTION 5.04. Financial Statements, Reports, etc. In the case of
Parent, furnish to the Administrative Agent:
(a) within 90 days (or within 5 days after any shorter period as the
Securities and Exchange Commission shall specify for the filing of Annual
Reports on Form 10-K) after
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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 KPMG 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 within 5 days after any 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, at the request of the Administrative Agent
(which request shall be made not less than 15 days after the end of the
applicable fiscal month), 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 E, (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
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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 2.07(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 Loans as set forth in Section
2.07(b), (B) the amount of Net Cash Proceeds (x) received from each equity
issuance or capital contribution, (y) the date of such equity issuance or
capital contribution and (z) the amount of such Net Cash Proceeds required
to be applied to reduce the Loans as set forth in Section 2.07(b) and (C)
reasonably detailed calculations demonstrating compliance with Sections
6.10, 6.11, 6.12 and 6.13;
(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 of
said Commission, or with any national securities exchange, or distributed
to its shareholders, as the case may be;
(f) not later than March 31st of each year, 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 such
fiscal year; and
(g) 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
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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 (a) a portion of
the Term Loans to prepay all amounts outstanding under the Existing Credit
Agreement, (b) a portion of the Term Loans to redeem or repurchase all or a
portion of the outstanding 12-3/4% Senior Notes pursuant to the discharge or
defeasance of all or a portion of the outstanding 12-3/4% Senior Notes pursuant
to Sections 9.1 or 9.5(b) of the 12-3/4% Senior Notes Indenture or the 12-3/4%
Senior Notes Tender, (c) a portion of the Term Loans to pay fees and expenses in
connection with the transactions contemplated by this Agreement and the
Recapitalization Transactions and (d) the remainder of the Term Loans to
repurchase outstanding 11-1/4% Senior Notes, which amount shall be placed in a
blocked account pursuant to arrangements satisfactory to the Administrative
Agent and the Borrowers pending such repurchase of 11-1/4% Senior Notes and (e)
the Revolving Loans and any remaining balance of the Term Loans for working
capital and other general corporate purposes and will request the issuance of
Letters of Credit to support payment obligations incurred in the ordinary course
of business by the Borrowers and their respective subsidiaries, including, on
the Effective Date, to replace the Existing Letters of Credit or to support
payment obligations in respect of the Existing Letters of Credit to the extent
they are not replaced.
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
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proper proceedings and appropriate reserves are being maintained with respect to
such circumstances.
SECTION 5.10. Preparation of Environmental Reports. 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.
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) Not later than 5 Business Days after the Effective Date, deliver
to the Collateral Agent all certificates or other instruments representing all
the Equity Interests of La
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Mirada Enterprises No. 1, Inc., together with stock powers or other instruments
of transfer with respect thereto endorsed in blank.
SECTION 5.13. Cash Management Arrangements. As and to the extent
provided in the Guarantee and Collateral Agreement, within 90 days of the
Closing Date establish and maintain, cash management procedures, including
restricted 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. Additional Mortgages. Not later than 10 days after the
Effective Date, deliver to the Administrative Agent counterparts of duly
executed Mortgages with respect to all Mortgaged Properties that are owned by a
person that was a Loan Party on the Closing Date for which Mortgages were not
delivered to the Administrative Agent on or prior to the Effective Date in
recordable form.
SECTION 5.15. Interest Rate Protection. As promptly as practicable,
and in any event within 120 days after the Effective Date, the Borrowers will
enter into, and thereafter for a period of not less than three years from the
Effective Date will maintain in effect, one or more interest rate caps, collars,
swaps or similar agreements, on such terms and with such parties as shall be
reasonably satisfactory to the Administrative Agent, in a notional amount that,
when taken together with the aggregate principal amount of Consolidated Total
Debt subject to a fixed interest rate, will result in at least 30% of the
aggregate principal amount of all Consolidated Total Debt being either fixed,
hedged or capped.
ARTICLE VI
Negative Covenants
Each of Parent, Denny's Holdings, DFO 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 DFO 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 Effective Date and set forth in
Schedule 6.01;
73
(b) Indebtedness arising hereunder or evidenced by (i) the Loan
Documents, (ii) the 11-1/4% Senior Notes Documents or (iii) for a period of
time not to exceed 35 days following the Effective Date, the 12-3/4% Senior
Notes Documents;
(c) Indebtedness evidenced by the Second Lien Facility Documents in an
aggregate principal amount not to exceed $120,000,000 at any time
outstanding, provided that Indebtedness incurred pursuant to this Section
6.01(c) shall be used to refinance the 11-1/4% Senior Notes and the 12-3/4%
Senior Notes, in each case, pursuant to Permitted Senior Note Repurchases;
(d) Indebtedness evidenced by the New Note Documents in an aggregate
amount at any time outstanding not to exceed $320,000,000 less the
aggregate amount of Indebtedness outstanding under the Second Lien Facility
Documents, provided that Indebtedness incurred pursuant to this Section
6.01(d) shall be used to refinance the 11-1/4% Senior Notes and the 12-3/4%
Senior Notes, in each case, pursuant to Permitted Senior Notes Repurchases;
(e) Indebtedness incurred by Parent, any Borrower or any Subsidiary
Loan Party subsequent to the Closing Date secured by purchase money Liens,
provided that the aggregate amount of Indebtedness permitted under this
Section 6.01(e) shall not exceed $5,000,000 at any one time outstanding;
(f) Subject to Sections 6.10, and in addition to Indebtedness
permitted under Section 6.01(e), Capital Lease Obligations entered into
after the Closing Date;
(g) 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
$3,000,000 at any time outstanding;
(h) Indebtedness arising from investments among Parent, any Borrower
and any Subsidiary Loan Party that are permitted hereunder;
(i) Indebtedness owed to the Administrative Agent 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
$15,000,000 at any one time outstanding;
(j) Indebtedness under interest rate protection agreements permitted
by Section 6.16; and
74
(k) 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 Term Loan 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.
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 Closing Date and set forth in Schedule 6.02, provided that
such Liens shall secure only those obligations which they secure on the
Closing Date, 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), (e), (f) and, subject to the Intercreditor Agreement,
(c);
(c) Permitted Liens;
(d) Liens in favor of the Administrative Agent, Collateral Agent and
the Lenders;
(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
75
Parties (other than First-Tier Subsidiaries) arising in connection with
intercompany transactions among Borrowers or Subsidiary Loan Parties; and
(f) Liens on cash deposited with the trustee (i) for the 12-3/4%
Senior Notes pursuant to the discharge or defeasance of the 12-3/4% Senior
Notes in accordance with Sections 9.1 or 9.5(b) of the 12-3/4% Senior Notes
Indenture and, if applicable, (ii) for the 11-1/4% Senior Notes pursuant to
the discharge or defeasance of the 11-1/4% Senior Notes in accordance with
Sections 9.1 or 9.5(b) of the 11-1/4% Senior Notes Indenture.
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 since the
Closing Date shall not exceed in the aggregate $5,000,000.
SECTION 6.04. Investments, Loans and Advances. Purchase, hold or
acquire any capital stock, 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:
(a) investments by Parent, the Borrowers or the Subsidiaries existing
on the Closing Date in the capital stock of their respective subsidiaries
and investments existing on the Closing Date and set forth in Schedule
6.04;
(b) Permitted Investments;
(c) subject to Section 6.14(a), (i) advances and loans made by any
Subsidiary to Parent in the ordinary course of business and (ii) advances
and loans made by any Subsidiary to, and 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) noncash consideration received from any sale, lease, transfer or
other disposition of assets permitted under Section 6.05;
(f) 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;
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(g) investments by Parent and Denny's Holdings in 11-1/4% Senior Notes
and 12-3/4% Senior Notes, as the case may be, to the extent permitted by
Section 6.08(a);
(h) additional investments not otherwise permitted by this Section
6.04 in an aggregate amount not to exceed $3,000,000 after the Closing
Date;
(i) 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, provided, that the
properties or assets so purchased or acquired shall be operated under the
Denny's name;
(j) pursuant to the Reorganization Transactions, provided that the
parties thereto comply with the Collateral and Guarantee Requirement; and
(k) purchases or redemptions of up to 35% of the aggregate principal
amount of New Notes outstanding on the date of initial issuance of the New
Notes with the proceeds of issuances of Equity Interests by the Parent by
means of a bona fide public offering or an arm's-length private placement
providing for the registration of such Equity Interests.
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 damaged, 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 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 6.14, any Subsidiary may sell, transfer or
otherwise dispose of any of its assets to any Subsidiary Loan Party;
77
(e) Parent, any Borrower or any Subsidiary Loan Party may sell,
transfer, sell a franchise in or otherwise dispose of 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 (e) shall not exceed $5,000,000 in any fiscal year;
(f) any Subsidiary Loan Party (other than a First-Tier Subsidiary) may
merge or consolidate with or transfer all or substantially all of its assets to
any other Subsidiary Loan Party (other than a First-Tier Subsidiary);
(g) any Borrower or any Subsidiary Loan Party other than a First-Tier
Subsidiary may effect any transaction permitted by Section 6.04(i);
(h) Parent, any Borrower or any Subsidiary Loan Party may purchase,
lease or otherwise acquire (in one transaction or a series of transactions) the
assets of any other person in connection with its application or reinvestment of
Net Cash Proceeds from any Reduction Event to the extent that such Reduction
Event or the application or reinvestment of such proceeds does not result in a
mandatory prepayment pursuant to Section 2.07(b);
(i) in addition to any other purchases permitted under this Section
6.05, Parent, any Borrower or any Subsidiary Loan Party may purchase tangible
assets useful in the conduct of restaurant operations and other business
currently conducted by it and business activities reasonably incidental thereto
with a Fair Market Value of up to $ 5,000,000 during any 12 month period
following the Effective Date; and
(j) the parties to the Reorganization Transactions shall be permitted
to consummate any or all such transactions, provided that such parties comply
with the Collateral and Guarantee Requirement;
provided, however, that any sale, transfer, exchange or other disposition of
assets (x) permitted by clause (b) or (c) 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) or (e) shall not be permitted unless such
disposition is for at least 60% cash consideration.
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 6.14 and so
long as no Default or Event of Default
78
has occurred and is continuing, any Subsidiary may declare and pay dividends or
make other distributions to Parent or Denny's Holdings at such times and in such
amounts as shall be necessary to permit Parent and Denny's Holdings to pay (A)
scheduled interest as and when due in respect of Indebtedness permitted by
Sections 6.01(b)(ii) and (iii) and 6.01(d), (B) in the case of the 11-1/4%
Senior Notes and the 12-3/4% Senior Notes, scheduled principal payments as and
when due or to repurchase or redeem 11-1/4% Senior Notes or 12-3/4% Senior Notes
to the extent permitted by Section 6.08(a) and (C) liabilities imposed by law,
including tax liabilities, and other liabilities incidental to its existence and
permitted business and activities, in an aggregate amount not to exceed
$1,000,000 per fiscal year, (ii) subject to Section 6.14, any Subsidiary may
declare and pay dividends or make other distributions to the Borrowers or to any
Subsidiary Loan Parties (other than Denny's Holdings), and (iii) 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 11-1/4% 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 Closing Date, 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 Notes Documents, (G) the Second Lien
Facility Documents or (H) 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.
79
(c) Directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon the ability of Parent, either Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any its property or assets,
provided that the foregoing shall not apply to (i) restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (ii) customary provisions in leases and
other contracts restricting the assignment thereof.
(d) 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 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 Repurchases and the consummation of the
transactions contemplated thereby and (ii) that Parent, any Borrower or any
Subsidiary may engage in any of the 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 (A) to acquire
voluntarily 11-1/4% Senior Notes pursuant to clause (a) of the definition
of the term "Permitted Senior Notes Repurchases" and (B) acquire
voluntarily, discharge or defease and redeem 12-3/4% Senior Notes pursuant
to clause (b) of the definition of the term "Permitted Senior Notes
Repurchases"; provided that no such acquisition shall be permitted unless
(A) at the time thereof and immediately after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing and (B)
Denny's shall have delivered a written statement to the Administrative
Agent that (1) certifies that the condition set forth
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in clause (A) has been satisfied, (2) specifies the identity of the
purchaser and (3) specifies the aggregate principal amount of the 11-1/4%
Senior Notes and 12-3/4% Senior Notes to be purchased;
(ii) any Borrower and any Subsidiary Loan Party shall have the right
to prepay secured Indebtedness, other than Indebtedness under the Second
Lien Facility Documents (which cannot be prepaid pursuant to this clause
(ii)), after the Closing Date up to an aggregate amount of $5,000,000; and
(iii) Parent and/or Denny's Holdings shall be permitted to purchase or
redeem the New Notes to the extent permitted by clause (k) of Section 6.04;
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 11-1/4% Senior Notes Documents, the 12-3/4% Senior Notes
Documents, the New Notes Documents, the Second Lien Facility Documents or any
indenture, instrument or agreement pursuant to which any Indebtedness or
preferred stock is outstanding; provided that the foregoing shall not prohibit
any waiver, supplement, modification or amendment which (i) extends the date or
reduces the amount of any required repayment, prepayment or redemption of the
principal of such Indebtedness, (ii) reduces the rate or extends the date for
payment of the interest, premium or fees payable on such Indebtedness or (iii)
makes the covenants, events of default or remedies relating to such Indebtedness
less restrictive on the Borrowers.
(c) Amend, modify or waive any of its rights under its certificate of
incorporation, by-laws or other organizational documents, provided that any
certificate of incorporation, by-laws or other organizational documents
described in this clause (c) may be amended or modified (and any rights
thereunder may be waived) in any respect that is not materially adverse to the
interests of the Lenders.
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.
SECTION 6.10. Capital Expenditures; Acquisitions. (a) Incur
Consolidated Capital Expenditures and make acquisitions of properties or related
assets pursuant to Section 6.04(i) in excess of, for any fiscal year set forth
below, the amount set forth below opposite such fiscal year:
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Maximum Consolidated
Fiscal Year Capital Expenditures and Acquisitions
----------- -------------------------------------
2004 $50,000,000
2005 $75,000,000
2006 $80,000,000
2007 $80,000,000
2008 $80,000,000
2009 $65,000,000
(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.
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
---- -----
December 31, 2004 5.40 to 1.00
March 31, 2005 5.40 to 1.00
June 30, 2005 5.40 to 1.00
September 30, 2005 5.40 to 1.00
December 31, 2005 5.40 to 1.00
March 31, 2006 5.40 to 1.00
June 30, 2006 5.40 to 1.00
September 30, 2006 5.40 to 1.00
December 31, 2006 5.20 to 1.00
March 31, 2007 5.20 to 1.00
June 30, 2007 5.20 to 1.00
September 30, 2007 5.20 to 1.00
December 31, 2007 4.70 to 1.00
March 31, 2008 4.70 to 1.00
June 30, 2008 4.70 to 1.00
September 30, 2008 4.70 to 1.00
December 31, 2008 4.20 to 1.00
March 31, 2009 4.20 to 1.00
June 30, 2009 4.20 to 1.00
September 30, 2009 4.20 to 1.00
SECTION 6.12. Consolidated Senior Secured Debt Ratio. Permit the
Consolidated Senior Secured Debt Ratio for any period of four consecutive fiscal
quarters ending
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on or about any date set forth below to be greater than the ratio set forth
below opposite such date:
Date Ratio
---- -----
December 31, 2004 3.75 to 1.00
March 31, 2005 3.75 to 1.00
June 30, 2005 3.75 to 1.00
September 30, 2005 3.75 to 1.00
December 31, 2005 3.75 to 1.00
March 31, 2006 3.75 to 1.00
June 30, 2006 3.75 to 1.00
September 30, 2006 3.75 to 1.00
December 31, 2006 3.70 to 1.00
March 31, 2007 3.70 to 1.00
June 30, 2007 3.70 to 1.00
September 30, 2007 3.70 to 1.00
December 31, 2007 3.30 to 1.00
March 31, 2008 3.30 to 1.00
June 30, 2008 3.30 to 1.00
September 30, 2008 3.30 to 1.00
December 31, 2008 3.00 to 1.00
March 31, 2009 3.00 to 1.00
June 30, 2009 3.00 to 1.00
September 30, 2009 3.00 to 1.00
SECTION 6.13. 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
---- -----
December 31, 2004 1.20 to 1.00
March 31, 2005 1.20 to 1.00
June 30, 2005 1.20 to 1.00
September 30, 2005 1.20 to 1.00
December 31, 2005 1.40 to 1.00
March 31, 2006 1.40 to 1.00
June 30, 2006 1.40 to 1.00
September 30, 2006 1.40 to 1.00
December 31, 2006 1.40 to 1.00
March 31, 2007 1.40 to 1.00
June 30, 2007 1.40 to 1.00
September 30, 2007 1.40 to 1.00
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December 31, 2007 1.50 to 1.00
March 31, 2008 1.50 to 1.00
June 30, 2008 1.50 to 1.00
September 30, 2008 1.50 to 1.00
December 31, 2008 1.60 to 1.00
March 31, 2009 1.60 to 1.00
June 30, 2009 1.60 to 1.00
September 30, 2009 1.60 to 1.00
SECTION 6.14. 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 constituting 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 11-1/4% Senior Notes or
12-3/4% Senior Notes acquired by Parent or contributed to Parent pursuant to
Permitted Senior Notes Repurchases, 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,
Permitted Investments and assets acquired pursuant to any Reorganization
Transaction, 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
11-1/4% Senior Notes (and no Default or Event of Default shall have occurred and
be continuing), (2) Parent is making any payment to purchase 11-1/4% Senior
Notes or 12-3/4% Senior Notes pursuant to Section 6.08(a), (3) any payment to be
made by Parent is due in respect of the 12-3/4% Senior Notes (and no Default or
Event of Default shall have occurred and be continuing), (4) any payment to be
made by Parent is due in respect of the New Notes (and no Default or Event of
Default shall have occurred and be continuing) or (5) 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 11-1/4% Senior Notes
Indenture, the 12-3/4% Senior Notes Indenture, the New Notes Indenture, the
Second Lien Facility Documents 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 11-1/4% Senior Notes or 12-3/4% Senior Notes acquired pursuant
to Permitted Senior Notes Repurchases, 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, shall not at
any time exceed $50,000
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other than on any day on which (1) any payment to be made by Denny's Holdings is
due in respect of the 12-3/4% Senior Notes (and no Default or Event of Default
shall have occurred and be continuing), (2) any payment to be made by Denny's
Holdings is due in respect of the New Notes (and no Default or Event of Default
shall have occurred and be continuing) or (3) 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
12-3/4% Senior Notes Indenture, the New Notes Indenture, the Second Lien
Facility Documents 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).
(b) The Borrowers will not, and Parent, Denny's Holdings, DFO 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 Closing Date and businesses reasonably related thereto.
SECTION 6.15. Accounting Policies and Fiscal Year. Change in any
material respect its accounting policies or change the end of its fiscal year
from the last Wednesday of December to any other date.
SECTION 6.16. Hedging Agreements. The Borrowers, Parent, Denny's
Holdings, DFO will not, and will not permit any of their respective Subsidiaries
to, enter into any Hedging Agreement, other than (a) Hedging Agreements required
by Section 5.15 and (b) Hedging Agreements entered into in the ordinary course
of business to hedge or mitigate risks to which the Borrowers, Parent, Denny's
Holdings, DFO or any of their respective Subsidiaries are exposed in the conduct
of their respective businesses or the management of their respective
liabilities.
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
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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, 5.14 or 5.15 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;
(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 indenture, 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
Indebtedness 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
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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 $10,000,000 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 $10,000,000 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, the Intercreditor 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 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 and 5.12 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;
(m) there shall have occurred a Change in Control; or
(n) on the date that is six months prior to the maturity date of any
Indebtedness permitted under Section 6.01(b)(ii), Parent or Denny's Holdings
shall, with respect to the aggregate amount of such Indebtedness in excess of
$25,000,000, if any, have failed to repay or
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refinance such Indebtedness or extend the maturity of such Indebtedness to a
date at least six months following the Term Loan Maturity Date.
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 Revolving 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 Revolving 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
SECTION 8.01. Appointment and Authority. Each of the Lenders and the
Issuing Bank hereby irrevocably appoints Bank of America to act on its behalf as
the Administrative Agent hereunder and under the other Loan Documents and
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto. The provisions of this Article are solely for the benefit of
the Administrative Agent, the Lenders and the Issuing Bank, and neither the
Borrower nor any other Loan Party shall have rights as a third party beneficiary
of any of such provisions.
SECTION 8.02. Rights as a Lender. The person 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 the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated or unless the context otherwise requires,
include the person serving as the Administrative Agent hereunder in its
individual capacity. Such person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of
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business with the Borrowers or any Subsidiary or other Affiliate thereof as if
such person were not the Administrative Agent hereunder and without any duty to
account therefor to the Lenders.
SECTION 8.03. Exculpatory Provisions. The Administrative Agent shall
not have any duties or obligations except those expressly set forth herein and
in the other Loan Documents. Without limiting the generality of the foregoing,
the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents), provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to either of the Borrowers or any
of its Affiliates that is communicated to or obtained by the person serving as
the 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 (i) with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary, or as
the Administrative Agent shall believe in good faith shall be necessary, under
the circumstances as provided in Section 9.02 and Article VII) or (ii) in the
absence of its own gross negligence or willful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
notice describing such Default is given to the Administrative Agent by the
Borrowers, a Lender or the Issuing Bank.
The Administrative Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
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SECTION 8.04. Reliance by 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 (including any electronic message, Internet or
intranet website posting or other distribution) believed by it to be genuine and
to have been signed, sent or otherwise authenticated 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 have been made by the proper person, and shall
not incur any liability for relying thereon. In determining compliance with any
condition hereunder to the making of a Loan, or the issuance of a Letter of
Credit, that by its terms must be fulfilled to the satisfaction of a Lender or
the Issuing Bank, the Administrative Agent may presume that such condition is
satisfactory to such Lender or the Issuing Bank unless the Administrative Agent
shall have received notice to the contrary from such Lender or the Issuing Bank
prior to the making of such Loan or the issuance of such Letter of Credit. 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.
SECTION 8.05. Delegation of Duties. The Administrative Agent may
perform any and all of its duties and exercise its rights and powers hereunder
or under any other Loan Document 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 of its duties and exercise its rights and powers
by or through their respective Related Parties. The exculpatory provisions of
this Article shall apply to any such sub agent and to the Related Parties of the
Administrative Agent and any such sub agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
SECTION 8.06. Resignation of Administrative Agent. The Administrative
Agent may at any time give notice of its resignation to the Lenders, the Issuing
Bank and the Borrowers. Upon receipt of any such notice of resignation, the
Required Lenders shall have the right, in consultation with the Borrowers, to
appoint a successor, which shall be a bank with an office in the United States,
or an Affiliate of any such bank with an office in the United States. If no such
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 meeting the qualifications set forth above; provided that if the
Administrative Agent shall notify the Borrowers and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the Administrative Agent on behalf of the Lenders or
the Issuing Bank under any of the Loan Documents, the retiring Administrative
Agent shall continue to hold such collateral security until such time as a
successor Administrative Agent is appointed) and (2) all payments,
communications and determinations
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provided to be made by, to or through the Administrative Agent shall instead be
made by or to each Lender and the Issuing Bank directly, until such time as the
Required Lenders appoint a successor Administrative Agent as provided for above
in this Section. Upon the acceptance of a successor's appointment as
Administrative Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring (or
retired) Administrative Agent, and the retiring Administrative Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Loan Documents (if not already discharged therefrom as provided above in this
Section). 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 retiring Administrative
Agent's resignation hereunder and under the other Loan Documents, 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 the retiring Administrative Agent was acting as Administrative Agent.
Any resignation by Bank of America as Administrative Agent pursuant to
this Section shall also constitute its resignation as Issuing Bank and as
Collateral Agent. Upon the acceptance of a successor's appointment as
Administrative Agent hereunder, (a) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
Issuing Bank and Collateral Agent, (b) the retiring Issuing Bank and Collateral
Agent shall each be discharged from all of their respective duties and
obligations hereunder or under the other Loan Documents, and (c) the successor
Issuing Bank shall issue letters of credit in substitution for the Letters of
Credit, if any, outstanding at the time of such succession or make other
arrangement satisfactory to the retiring Issuing Bank to effectively assume the
obligations of the retiring Issuing Bank with respect to such Letters of Credit.
SECTION 8.07. Non-Reliance on Administrative Agent and Other Lenders.
Each Lender and the Issuing Bank acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender or any of
their Related Parties 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 and the Issuing Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties 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 any related agreement or any document furnished
hereunder or thereunder.
SECTION 8.08. No Other Duties, Etc. Anything herein to the contrary
notwithstanding, none of the Joint Bookrunners, Joint Lead Arrangers or the
Syndication Agent listed on the cover page hereof shall have any powers, duties
or responsibilities under this Agreement or any of the other Loan Documents,
except in its capacity, as applicable, as the Administrative Agent, a Lender or
the Issuing hereunder.
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SECTION 8.09. Administrative Agent May File Proofs of Claim. In case
of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or LC Obligations shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrowers)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, LC Obligations and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Lenders, the
Issuing Bank and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders,
the Issuing Bank and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders, the Issuing Bank and the
Administrative Agent under Sections 2.10 and 9.03) allowed in such judicial
proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the Issuing Bank to make such payments to the Administrative
Agent and, in the event that the Administrative Agent shall consent to the
making of such payments directly to the Lenders and the Issuing Bank, to pay to
the Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent and its agents
and counsel, and any other amounts due the Administrative Agent under Sections
2.10 and 9.03.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender or the Issuing Bank any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender
or to authorize the Administrative Agent to vote in respect of the claim of any
Lender in any such proceeding.
SECTION 8.10. Collateral and Guaranty Matters. The Lenders and the
Issuing Bank irrevocably authorize the Administrative Agent, at its option and
in its discretion,
(a) to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the Total
Revolving Commitment and payment in full of all Obligations (other than
contingent indemnification obligations) and the expiration or termination of all
Letters of Credit, (ii) that is sold or to be sold as part of or in connection
with any sale permitted hereunder or under any other Loan Document, or (iii)
subject to Section 9.02, if approved, authorized or ratified in writing by the
Required Lenders;
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(b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 6.02 and prior to the Lien under the Loan
Documents or 2.18(b); and
(c) to release any Subsidiary Loan Party from its obligations under
the Guarantee and Collateral Agreement if such person ceases to be a Subsidiary
as a result of a transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent's authority to release
or subordinate its interest in particular types or items of property, or to
release any Subsidiary Loan Party from its obligations under the Guarantee and
Collateral Agreement pursuant to this Section 8.10.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight 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, 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 (in connection with payments and
Requests for Borrowings), to Bank of America, N.A., 0000 Xxxxxxx Xxxx.,
Xxxxxxx, XX 00000, Attention of Xxxxx Xxxx (Telephone No. (000) 000-0000,
Telecopy No. (000) 000-0000, e-mail: xxxxx.xxxx@xxxxxxxxxxxxx.xxx);
(iii) if to the Administrative Agent (in connection with other
notices), to Bank of America, N.A., Agency Management, 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxx, XX 00000, Attention of Xxxx X. Xxxxx, Vice President
(Telephone No. (000) 000-0000, Telecopy No. (000) 000-0000, e-mail:
xxxx.x.xxxxx@xxxxxxxxxxxxx.xxx);
(iv) if to the Issuing Bank, to Bank of America, N.A., Trade
Operations, 000 X. Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, XX 00000-0000,
Attention of Xxxxxx Xxxx (Telephone No. (000) 000-0000, Telecopy No. (213)
345-6694, e-mail: xxxxxx.xxxx@xxxxxxxxxxxxx.xxx); and
(v) if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.
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(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, Denny's Holdings and DFO)
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, Denny's Holdings or
DFO 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.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the Borrowers, Parent,
Denny's Holdings, DFO and the Required Lenders or by the Borrowers, Parent,
Denny's Holdings, DFO 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 or forgive the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any fees payable
hereunder (including prepayment fees set forth in Section 2.09), 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
(including the Term Loan Maturity Date and Revolving Maturity Date), or any
interest thereon, or any fees payable hereunder, or reduce the amount of, waive
or excuse such payment, postpone the scheduled date of expiration of any
Commitment, or waive,
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amend or modify Section 2.07(b) or Section 5.02 of the Guarantee and Collateral
Agreement, without the written consent of each Lender affected thereby, (iv)
change Section 2.16(b) or (c) in a manner that would alter the pro rata sharing
of payments among Lenders 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 (or
Lenders of any Class) 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 (or each Lender of such Class, as the case may be), (vi)
release all or substantially all of the Collateral (other than in connection
with any sale of Collateral permitted by this Agreement) without the written
consent of each Lender, (vii) release Parent or any Subsidiary from its
Guarantee under the Guarantee and Collateral Agreement (except as expressly
provided in the Guarantee and Collateral Agreement) without the written consent
of each Lender, (viii) permit an Interest Period with a duration in excess of
six months without the consent of each applicable Lender, (ix) change any of the
provisions of Section 9.16 or any other provision hereof or of any other Loan
Document insofar as such provision references the Intercreditor Agreement,
without the written consent of each Lender, (x) change any provision of this
Agreement or any other Loan Document in a manner that by its terms adversely
affects the rights in respect of Collateral of, or payments due to, Lenders
holding Loans of any Class differently than those holding Loans of any other
Class, without the written consent of Lenders holding more than 50% of the
Loans, LC Obligations and unused Commitments of the affected Class at such time
or (xi) change any provision of this Agreement or any other Loan Document in a
manner that would result in any mandatory prepayments pursuant to Section 2.07
in an aggregate amount in excess of $20,000,000 or that would affect the
obligations of the Revolving Lenders to make any Revolving Loans hereunder,
without the written consent of Revolving Lenders holding more than 50% of the
Revolving Loans, LC Obligations and unused Revolving Commitments at such time;
provided further that (A) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent or the Collateral Agent
or the Issuing Bank without the prior written consent of the Administrative
Agent or the Collateral Agent or the Issuing Bank, as the case may be, and (B)
any waiver, or modification of this Agreement or any other Loan Document that by
its terms affects the rights or duties under this Agreement or such other Loan
Document of the Revolving Lenders (but not the Term Lenders) or the Term Lenders
(but not the Revolving Lenders) may be effected by an agreement or agreements in
writing entered into by the Borrowers, Parent, Denny's Holdings and the
requisite percentage in interest of the affected Class of Lenders that would be
required to consent thereto under this Section if such Class of Lenders were the
only Class of Lenders hereunder or thereunder at the time.
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, the Syndication Agent and its
Affiliates and the Initial Lenders and their Affiliates, including the
reasonable fees, charges and disbursements of Cravath, Swaine & Xxxxx LLP as
sole outside counsel for the Initial Lenders and local counsel for the Initial
Lenders, 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
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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 reasonable
out-of-pocket expenses incurred by the Administrative Agent, the Syndication
Agent, the Issuing Bank or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent, the Syndication
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
Syndication 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 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 pro rata share
(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, in the
case of the Revolving Lenders, the Issuing Bank in its capacity as such. For
purposes hereof, (i) a Lender's "pro rata share" of amounts due to the
Administrative Agent under this Section shall be determined based upon its share
of the sum of the total Credit Exposures, outstanding Term Loans and unused
Commitments at the
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time and (ii) a Revolving Lender's "pro rata share" of amounts due to the
Issuing Bank under this Section shall be determined based upon its share of the
sum of the total Revolving Commitments at the time.
(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 or delayed) of the Administrative
Agent; provided that no consent of the Administrative Agent shall be required
for an assignment of a Term Loan to an assignee that is a Lender, an Affiliate
of a Lender or an Approved Fund immediately prior to giving effect to such
assignment.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender, an Affiliate
of a Lender or an Approved Fund or an assignment of the entire
remaining amount of the assigning Lender's Loans or Commitment, the
amount of the Loans or 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 $2,000,000, or, in the
case of a Term Loan, $1,000,000, unless the Borrowers and
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the Administrative Agent otherwise consent; provided that no such
consent of the Borrowers shall be required if an Event of Default 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; provided that this clause shall not
be construed to prohibit the assignment of a proportionate part of all
the assigning Lender's rights and obligations in respect of one Class
of Commitments or Loans;
(C) except in the case of an assignment to an Affiliate of a
Lender or an Approved Fund, 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) except in the case of an assignment to an Affiliate of a
Lender or an Approved Fund, 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 (except as otherwise provided in Section
9.04(b)(vi)), 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 2.13, 2.14, 2.15
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, including, without
limitation, assignments under Section 9.04(b)(vi), 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
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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. In the case of any assignment by a Lender to an Affiliate of
such Lender or an Approved Fund that is made pursuant to paragraph (b)(vi)
of this Section, such assignment need not be reflected in the Register and
the assigning Lender shall maintain a comparable register.
(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, record the information contained therein in the
Register and promptly provide written notice thereof to the Borrowers
(which notice shall include a copy of the Assignment and Assumption). No
assignment shall be effective for purposes of this Agreement (except for an
assignment pursuant to paragraph (b)(vi) of this Section) unless it has
been recorded in the Register as provided in this paragraph.
(vi) Anything contained in this Section to the contrary
notwithstanding, a Lender may assign any or all of its rights hereunder to
an Affiliate of such Lender or an Approved Fund without delivering an
executed Assignment and Assumption to the Administrative Agent and without
otherwise complying with all the conditions for assignment under paragraph
(b) of this Section; provided, however, that (x) the Borrowers and the
Administrative Agent may continue to deal solely and directly with the
assigning Lender until all the conditions for assignment under paragraph
(b) of this Section have been complied with, (y) the failure of such
assigning Lender to deliver an Assignment and Assumption and to otherwise
comply with all the conditions for assignment under paragraph (b) of this
Section shall not affect the legality, validity or binding effect of such
assignment as between the assigning Lender and the Affiliate of such Lender
or an Approved Fund and (z) such Assignment and Assumption shall be
effective as of the date of execution by the assigning Lender and its
Affiliate or the Approved Fund.
(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
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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, the Borrowers agree that each
Participant shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 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 2.16(c) and 9.08 as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.13 or 2.15 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 2.15 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 2.15(e) as though it were
a Lender.
(d) Without the consent of or notice to the Administrative Agent or
the Borrowers, any Lender may at any time grant a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any grant to secure obligations to a Federal Reserve Bank, and
this Section shall not apply to any such grant of a security interest; provided
that no such grant of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such secured party for such Lender as a
party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by Parent, Denny's Holdings, DFO 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 2.13, 2.14, 2.15 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.
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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.
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) to setoff 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
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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.
SECTION 9.12. Confidentiality. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information, 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
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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. 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.
SECTION 9.15. Public Lenders. The Borrowers hereby acknowledge that
(a) the Administrative Agent and/or the Arrangers will make available to the
Lenders and the Issuing Bank materials and/or information provided by or on
behalf of the Borrowers hereunder (collectively, "Borrower Materials") by
posting the Borrower Materials on IntraLinks or another similar electronic
system (the "Platform") and (b) certain of the Lenders may be "public-side"
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Lenders (i.e., Lenders that do not wish to receive material non-public
information with respect to the Borrowers or their respective securities) (each,
a "Public Lender"). The Borrowers hereby agree that (w) all Borrower Materials
that are to be made available to Public Lenders shall be clearly and
conspicuously marked "PUBLIC" which, at a minimum, shall mean that the word
"PUBLIC" shall appear prominently on the first page thereof; (x) by marking
Borrower Materials "PUBLIC," the Borrowers shall be deemed to have authorized
the Administrative Agent, the Arrangers, the Issuing Bank and the Lenders to
treat such Borrower Materials as either publicly available information or not
material information (although it may be sensitive and proprietary) with respect
to the Borrowers or their respective securities for purposes of United States
Federal and state securities laws; (y) all Borrower Materials marked "PUBLIC"
are permitted to be made available through a portion of the Platform designated
"Public Investor;" and (z) the Administrative Agent and the Arrangers shall be
entitled to treat any Borrower Materials that are not marked "PUBLIC" as being
suitable only for posting on a portion of the Platform not designated "Public
Investor."
SECTION 9.16. Intercreditor Agreement. Each Lender hereby appoints
Bank of America to act as Collateral Agent under this Agreement, the
Intercreditor Agreement and the Security Documents, and authorizes the
Collateral Agent to execute the Intercreditor Agreement in the name of and for
the benefit of the Lenders. By making the Loans and accepting the obligations of
the Borrowers hereunder, each Lender hereby expressly accepts and agrees to the
terms and provisions of the Intercreditor Agreement.
SECTION 9.17. USA PATRIOT Act Notice. Each Lender that is subject to
the Act (as hereinafter defined) and the Administrative Agent (for itself and
not on behalf of any Lender) hereby notifies each Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Act"), it is required to obtain, verify and record
information that identifies each Borrower, which information includes the name
and address of each Borrower and other information that will allow such Lender
or the Administrative Agent, as applicable, to identify each Borrower in
accordance with the Act.
[space intentionally left blank]
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:
Title:
DFO, INC.,
by /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
and Treasurer
BANK OF AMERICA, N.A.,
as Administrative Agent and
Collateral Agent,
by /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
BANK OF AMERICA, N.A.,
as Issuing Bank,
by /s/ Xxxxxxx Xxxxxxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxxxxxx
Title: Vice President
UBS SECURITIES LLC,
as Syndication Agent,
by /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Managing Director
by /s/ Xxxxxx Jevey
-----------------------------------
Name: Xxxxxx Jevey
Title: Director and Counsel
Region Americas Legal
SIGNATURE PAGE TO CREDIT
AGREEMENT DATED AS OF
, 2004
----------------
Farallon Dining Investors V, L.L.C.
By: Farallon Capital
Management, L.L.C., its
manager
/s/ Xxxxx Xxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Member
BANK OF AMERICA, N.A.
as Lender,
by /s/ Xx Xxxxxxxx
-----------------------------------
Name: Xx Xxxxxxxx
Title: Senior Vice President
UBS LOAN FINANCE LLC,
as Lender
by /s/ Xxxxxxx X. Saint
-----------------------------------
Name: Xxxxxxx X. Saint
Title: Director
Banking Products
Services, US
/s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Associate Director
Banking Products
Services, US
SIGNATURE PAGE TO CREDIT
AGREEMENT DATED AS OF
SEPTEMBER 21, 2004
XXXXX FARGO FOOTHILL, INC.
By: /s/ Xxxxxx Xxxxx
------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
SIGNATURE PAGE TO CREDIT
AGREEMENT DATED AS OF
, 2004
----------------
Name of Institution: THE CIT GROUP/BUSINESS
CREDIT, INC.,
by: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
SIGNATURE PAGE TO CREDIT
AGREEMENT DATED AS OF
SEPTEMBER 21, 2004
Name of Institution: NORTH FORK BUSINESS
CAPITAL CORPORATION
by: /s/ Xxxxx Goetschlus
------------------------------
Name: Xxxxx Goetschlus
Title: Senior Vice President
SIGNATURE PAGE TO CREDIT
AGREEMENT DATED AS OF
SEPTEMBER 21, 2004
Name of Institution: KZH STERLING LLC
by: /s/ Xxxxx Xxx
------------------------------
Name: Xxxxx Xxx
Title: Authorized Agent
SIGNATURE PAGE TO CREDIT
AGREEMENT DATED AS OF
SEPTEMBER 21, 2004
Name of Institution: KZH CYPRESS TREE-1 LLC
by: /s/ Xxxxx Xxx
------------------------------
Name: Xxxxx Xxx
Title: Authorized Agent
SIGNATURE PAGE TO CREDIT
AGREEMENT DATED AS OF
, 2004
----------------
Name of Institution: ERSTE BANK NEW YORK BRANCH
by: /s/ Xxxx Xxxxxxx
------------------------------
Name: Xxxx Xxxxxxx
Title: Director
by: /s/ Xxxx Xxx
------------------------------
Name: Xxxx Xxx
Title: Director
SIGNATURE PAGE TO CREDIT
AGREEMENT DATED AS OF
SEPTEMBER 21, 2004
Name of Institution: GENERAL ELECTRIC CAPITAL CORPORATION
by: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Duly Authorized Signatory
