FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

 

 

This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February [__], 2011 (this “Amendment”), modifies that certain Second Amended and Restated Credit Agreement, dated as of September 30, 2010 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”), among DENNY’S, INC., a California corporation (“Denny’s”), DENNY’S REALTY, LLC, a Delaware limited liability company (“Denny’s Realty” and, together with Denny’s, collectively, the “Borrowers” and each, individually, a “Borrower”), DENNY’S CORPORATION, a Delaware corporation (“Parent”), DENNY’S HOLDINGS, INC., a New York corporation (“Denny’s Holdings”) which was merged with and into Parent on November 23, 2010, DFO, LLC, a Delaware limited liability company (“DFO”), each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer.  Capitalized terms used herein and not defined shall have the meaning assigned to such terms in the Credit Agreement.

 

 

WHEREAS, the Borrowers have requested that the Administrative Agent and the Lenders agree to amend certain of the terms and provisions of the Credit Agreement, as specifically set forth in this Amendment; and

 

WHEREAS, the Administrative Agent and each of the Lenders are prepared to amend the Credit Agreement on the terms, subject to the conditions and in reliance on the representations set forth herein.

 

NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the parties hereto hereby agree as follows:

 

Section 1. Amendments to Credit Agreement.

(a) Section 1.01 (Defined Terms) of the Credit Agreement is hereby amended by restating the following definitions in their entirety as follows:

“Applicable Rate” means a per annum rate equal to (a) with respect to Base Rate Loans, 2.75%, (b) with respect to Eurodollar Rate Loans and Letters of Credit, 3.75%; and (c) with respect to the commitment fee payable pursuant to Section 2.09(a), 0.625%.

 

“Eurodollar Rate” means:

 

(a) for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to (x) the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or such other commercially available source providing quotations of BBA LIBOR as may be designated by the Administrative

 

 

Agent from time to time) at approximately 11:00 a.m., London time, two London Banking 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 or, (y) if such rate is not available at such time for any reason, 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 Rate Loan being made, continued or converted and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two London Banking Days prior to the commencement of such Interest Period; and

 

(b) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to (x) BBA LIBOR, at approximately 11:00 a.m., London time determined two London Banking Days prior to such date for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day or (y) if such published rate is not available at such time for any reason, the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the date of determination in same day funds in the approximate amount of the Base Rate Loan being made or maintained and with a term equal to one month would be offered by Bank of America’s London Branch to major banks in the London interbank Eurodollar market at their request at the date and time of determination.

 

“Mortgaged Property” shall mean, initially, each parcel of real property and the improvements thereto owned by a Loan Party, which properties are set forth on Schedule 5.08(c) of the Disclosure Schedules, and includes each other parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 6.12 or Section 6.15.

(b) Section 1.01 (Defined Terms) of the Credit Agreement is hereby amended by inserting the following new definition in the appropriate alphabetical order:

“Documentation Agent” means Regions Bank in its capacity as documentation agent.

(c) Paragraph (a) of Section 2.08 (Interest) of the Credit Agreement is hereby amended by restating such paragraph in its entirety as follows:

(a) Subject to the provisions of Section 2.08(b), (i) each Eurodollar Rate Loan under the Revolving Credit Facility shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each Eurodollar Rate Loan under the Term Facility shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to (A) the higher of (x) the Eurodollar Rate for such Interest Period and (y)

 

 

1.50% plus (B) the Applicable Rate; (iii) each Base Rate Loan under the Revolving Credit Facility shall bear interest on the outstanding principal amount thereof at a rate per annum equal to the Base Rate plus the Applicable Rate; and (iv) each Base Rate Loan under the Term Facility shall bear interest on the outstanding principal amount thereof at a rate per annum equal to (A) the higher of (x) the Base Rate and (y) 1.50% plus (B) the Applicable Rate.

(d) Section 6.05 (Preservation of Existence, Etc.) of the Credit Agreement is hereby amended by deleting the reference to “or 7.05” appearing in clause (a) of such Section 6.05.

(e) Sections 6.20 (Interest Rate Hedging) and 6.21 (Holdings) of the Credit Agreement are hereby deleted in their entirety:

(f) Clause (m) of Section 7.02 (Indebtedness) of the Credit Agreement is hereby amended by restating such clause in its entirety as follows:

(m) additional Indebtedness aggregating not more than $10,000,000 in principal amount at any one time outstanding.

(g) Clauses (g) and (h) of Section 7.03 (Investments) of the Credit Agreement are hereby amended by restating such clauses in their entirety as follows:

(g) additional Investments in an aggregate amount not to exceed $10,000,000 at any time outstanding after the Closing Date, provided that the aggregate amount of Investments made pursuant to this clause (g) in any single Person (including any franchisee) shall not exceed $1,000,000 at any time outstanding;

(h) additional Investments by the Loan Parties and their Subsidiaries so long as (i) the aggregate amount of (A) Investments made pursuant to this clause (h), (B) Restricted Payments made pursuant to Section 7.06(a)(v) and (C) Consolidated Capital Expenditures made pursuant to Section 7.12(b) shall not exceed $10,000,000 during the term of this Agreement, (ii) if such Investment shall be made with proceeds of Revolving Credit Borrowings in excess of $2,500,000, Parent shall be in pro forma compliance with each of the financial covenants set forth in Section 7.11 as of the Measurement Period most recently ended, and (iii) at the time of the making of such Investment and immediately after giving effect thereto, no Default or Event of Default shall have occurred and is continuing or would result therefrom;

(h) Section 9.08 (No Other Duties, Etc.) of the Credit Agreement is hereby amended by restating such clause in its entirety as follows:

9.08.No Other Duties, Etc.  Anything herein to the contrary notwithstanding, none of the Syndication Agent, Bookrunners, Arrangers or Documentation Agent (whether or not 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 L/C Issuer hereunder.

 

Section 2. Conditions Precedent.  This Amendment shall become effective as of the date first written above (the “Effective Date”) upon the satisfaction of the following conditions precedent:

 

(a)  Documentation.  The Administrative Agent shall have received all of the following, in form and substance satisfactory to the Administrative Agent:

 

(i) a fully-executed and effective Amendment by the Borrowers, the Guarantors, the Administrative Agent and each of the Lenders; and

 

(ii) such additional documents, instruments and information as the Administrative Agent may reasonably request to effect the transactions contemplated hereby.

 

(b) No Default.  On the Effective Date and after giving effect to this Amendment, no event shall have occurred and be continuing that would constitute a Default or an Event of Default.

 

(c) Repricing Transaction Fee.  In accordance with Section 2.05(c) of the Credit Agreement, the Administrative Agent shall have received, for the account of each Term Lender, a fee in an amount equal to 1.00% of the aggregate amount of Term Loans held by such Term Lender on the Effective Date (such fees, collectively, the “Repricing Transaction Fee”).  Once paid, the Repricing Transaction Fee shall not be refundable for any reason whatsoever.

 

(d) Arrangement Fees etc.  Each Arranger and each Revolving Credit Lender shall have received such fees as may be separately agreed to in writing between such Person and the Borrowers.

 

Section 3. Denny’s Holdings.  Each of the parties hereto hereby acknowledge and agree that Denny’s Holdings was merged with and into Parent on November 23, 2010 and, as of such date, Denny’s Holdings ceased to be a separate Guarantor and a separate Loan Party under the Loan Documents.  For the avoidance of any doubt, from and after the date of the above-referenced merger of Denny’s Holdings, references to the Guarantors (or a Guarantor) and the Loan Parties (or a Loan Party) under the Credit Agreement and the other Loan Documents (including this Amendment) shall not include Denny’s Holdings.

Section 4. Representations and Warranties; Reaffirmation of Grant.  Each Loan Party hereby represents and warrants to Administrative Agent and the Lenders that, as of the date hereof and after giving effect to this Amendment, (a) all representations and warranties of the Loan Parties set forth in the Credit Agreement and in any other Loan Document are true and correct on and as of the date hereof to the same extent as though made on and as of such date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct on and as of

 

 

Section 5. Survival of Representations and Warranties.  All representations and warranties made in this Amendment or any other Loan Document shall survive the execution and delivery of this Amendment, and no investigation by the Administrative Agent or the Lenders shall affect the representations and warranties or the right of the Administrative Agent and the Lenders to rely upon them.

Section 6. Amendment as Loan Document.  This Amendment constitutes a “Loan Document” under the Credit Agreement.  Accordingly, it shall be an immediate Event of Default under the Credit Agreement if any Loan Party fails to perform, keep or observe any term, provision, condition, covenant or agreement contained in this Amendment or if any representation or warranty made by any Loan Party under or in connection with this Amendment shall have been untrue, false or misleading when made.

Section 7. Costs and Expenses.  The Borrowers shall pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent (including the reasonable fees, charges and disbursements of counsel to the Administrative Agent) incurred in connection with the preparation, negotiation, execution and delivery of this Amendment.

Section 8. Governing Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE DOMESTIC SUBSTANTIVE LAWS OF ANY OTHER STATE).

Section 9. Execution.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed hall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Amendment by telecopier (or electronic mail (including in PDF format)) shall be effective as delivery of a manually executed counterpart of this Amendment.

Section 10. Limited Effect.  This Amendment relates only to the specific matters expressly covered herein, shall not be considered to be an amendment or waiver of any rights or remedies that the Administrative Agent or any Lender may have under the Credit

 

Section 11. Ratification by Guarantors.  Each of the Guarantors acknowledges that its consent to this Amendment is not required, but each of the undersigned nevertheless does hereby agree and consent to this Amendment and to the documents and agreements referred to herein.  Each of the Guarantors agrees and acknowledges that notwithstanding the effectiveness of this Amendment, such Guarantor’s obligations under the Loan Documents shall remain in full force and effect and nothing herein shall in any way limit such obligations, all of which are hereby ratified, confirmed and affirmed in all respects.  Each of the Guarantors hereby further acknowledges that the Borrowers, the Administrative Agent and any Lender may from time to time enter into any further amendments, modifications, terminations and/or amendments of any provisions of the Loan Documents without notice to or consent from such Guarantor and without affecting the validity or enforceability of such Guarantor’s obligations under the Loan Documents or giving rise to any reduction, limitation, impairment, discharge or termination of such Guarantor’s obligations under the Loan Documents.

[Remainder of page intentionally blank.]

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date first above written.

 

BORROWERS:

 

 

By:      /s/  Ross B. Nell   

Name: Ross B. Nell

Title:   Vice President, Tax and Treasurer

 

 

By: DFO, LLC, its Sole Member

 

By: Denny’s Inc., its Sole Member

 

By:      /s/  Ross B. Nell   

Name: Ross B. Nell

Title:   Vice President, Tax and Treasurer

 

 

 

GUARANTORS:

 

 

By:      /s/  Ross B. Nell   

Name: Ross B. Nell

Title:   Vice President, Tax and Treasurer

 

 

 

By: Denny’s Inc., its Sole Member

 

By:      /s/  Ross B. Nell   

Name: Ross B. Nell

Title:   Vice President, Tax and Treasurer

 

 

 

BANK OF AMERICA, as Administrative Agent, L/C Issuer and as a Lender

 

By:      /s/ John H. Schmidt     

Name: John H. Schmidt

Title:   Director

 

 

 

LENDERS (cont’d):

 

 

By:      /s/ Stephen A. Leon    

Name: Stephen A. Leon

Title:   Managing Director

 

 

 

 

 

 

 

 

LENDERS (cont’d):

 

 

 

By:      /s/ Elizabeth MacLean    

Name: Elizabeth MacLean

Title:   Portfolio Manager

 

LENDERS (cont’d):

 

 

 

LENDERS (cont’d):