UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from to
Commission file number:
(Exact Name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of Incorporation or Organization) |
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(I.R.S. Employer Identification No.) |
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(Address of Principal Executive Offices) |
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(Zip Code) |
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(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of Each Class |
Trading Symbol |
Name of Each Exchange on Which Registered |
Domino’s Pizza, Inc. |
Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of July 17, 2023, Domino’s Pizza, Inc. had
Domino’s Pizza, Inc.
TABLE OF CONTENTS
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Page No. |
PART I. |
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Item 1. |
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3 |
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Condensed Consolidated Balance Sheets (Unaudited) – As of June 18, 2023 and January 1, 2023 |
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5 |
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6 |
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Notes to Condensed Consolidated Financial Statements (Unaudited) |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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26 |
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Item 4. |
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26 |
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PART II. |
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Item 1. |
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27 |
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Item 1A. |
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Item 2. |
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Item 3. |
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27 |
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Item 4. |
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Item 5. |
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Item 6. |
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2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Domino’s Pizza, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands) |
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June 18, 2023 |
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January 1, 2023 (1) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash and cash equivalents |
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Accounts receivable, net |
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Inventories |
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Prepaid expenses and other |
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Advertising fund assets, restricted |
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Total current assets |
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Property, plant and equipment: |
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Land and buildings |
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Leasehold and other improvements |
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Equipment |
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Construction in progress |
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Accumulated depreciation and amortization |
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Property, plant and equipment, net |
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Other assets: |
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Operating lease right-of-use assets |
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Goodwill |
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Capitalized software, net |
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Investment in DPC Dash |
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Deferred income tax assets, net |
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Other assets |
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Total other assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ deficit |
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Current liabilities: |
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Current portion of long-term debt |
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$ |
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$ |
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Accounts payable |
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Operating lease liabilities |
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Insurance reserves |
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Dividends payable |
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Advertising fund liabilities |
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Other accrued liabilities |
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Total current liabilities |
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Long-term liabilities: |
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Long-term debt, less current portion |
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Operating lease liabilities |
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Insurance reserves |
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Deferred income tax liabilities |
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Other accrued liabilities |
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Total long-term liabilities |
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Stockholders’ deficit: |
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Common stock |
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Additional paid-in capital |
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Retained deficit |
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Accumulated other comprehensive loss |
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Total stockholders’ deficit |
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Total liabilities and stockholders’ deficit |
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$ |
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$ |
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(1)
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Domino’s Pizza, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
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Fiscal Quarter Ended |
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Two Fiscal Quarters Ended |
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June 18, |
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June 19, |
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June 18, |
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June 19, |
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(In thousands, except per share data) |
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2023 |
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2022 |
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2023 |
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2022 |
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Revenues: |
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U.S. Company-owned stores |
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$ |
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$ |
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$ |
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$ |
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U.S. franchise royalties and fees |
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Supply chain |
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International franchise royalties and fees |
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U.S. franchise advertising |
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Total revenues |
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Cost of sales: |
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U.S. Company-owned stores |
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Supply chain |
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Total cost of sales |
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Gross margin |
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General and administrative |
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U.S. franchise advertising |
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Refranchising loss |
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Income from operations |
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Other expense |
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Interest income |
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Interest expense |
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Income before provision for income taxes |
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Provision for income taxes |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Earnings per share: |
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Common stock - basic |
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$ |
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$ |
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$ |
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$ |
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Common stock - diluted |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Domino’s Pizza, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
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Fiscal Quarter Ended |
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Two Fiscal Quarters Ended |
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June 18, |
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June 19, |
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June 18, |
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June 19, |
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(In thousands) |
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2023 |
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2022 |
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2023 |
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2022 |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Currency translation adjustment |
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Comprehensive income |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Domino’s Pizza, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
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Two Fiscal Quarters Ended |
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June 18, |
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June 19, |
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(In thousands) |
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2023 |
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2022 |
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Cash flows from operating activities: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
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Refranchising loss |
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Loss on sale/disposal of assets |
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Amortization of debt issuance costs |
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(Benefit) provision for deferred income taxes |
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Non-cash equity-based compensation expense |
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Excess tax benefits from equity-based compensation |
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Provision for losses on accounts and notes receivable |
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Unrealized loss on investments |
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Changes in operating assets and liabilities |
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Changes in advertising fund assets and liabilities, restricted |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Capital expenditures |
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Purchase of franchise operations and other assets |
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Other |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Repayments of long-term debt and finance lease obligations |
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Proceeds from exercise of stock options |
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Purchases of common stock |
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Tax payments for restricted stock upon vesting |
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Payments of common stock dividends and equivalents |
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( |
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( |
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Net cash used in financing activities |
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( |
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Effect of exchange rate changes on cash |
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Change in cash and cash equivalents, restricted cash and cash equivalents |
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Cash and cash equivalents, beginning of period |
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Restricted cash and cash equivalents, beginning of period |
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Cash and cash equivalents included in advertising fund assets, restricted, |
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Cash and cash equivalents, restricted cash and cash equivalents and cash and |
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Cash and cash equivalents, end of period |
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Restricted cash and cash equivalents, end of period |
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Cash and cash equivalents included in advertising fund assets, restricted, |
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Cash and cash equivalents, restricted cash and cash equivalents and cash and |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Domino’s Pizza, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited; tabular amounts in thousands, except percentages, share and per share amounts)
June 18, 2023
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, refer to the consolidated financial statements and footnotes for the fiscal year ended January 1, 2023 included in the Company’s 2022 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 23, 2023 (the “2022 Form 10-K”).
In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair statement have been included. Operating results for the fiscal quarter and two fiscal quarters ended June 18, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023.
2. Segment Information
The following tables summarize revenues and earnings before interest, taxes, depreciation, amortization and other, which is the measure by which the Company allocates resources to its segments and which the Company refers to as Segment Income, for each of its reportable segments. Intersegment revenues are comprised of sales of food, equipment and supplies from the supply chain segment to the Company-owned stores in the U.S. stores segment. Intersegment sales prices are market based. The “Other” column as it relates to Segment Income below primarily includes corporate administrative costs that are not allocable to a reportable segment, including labor, computer expenses, professional fees, travel and entertainment, rent, insurance and other corporate administrative costs.
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Fiscal Quarters Ended June 18, 2023 and June 19, 2022 |
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U.S. |
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Supply |
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International |
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Intersegment |
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Stores |
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Chain |
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Franchise |
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Revenues |
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Other |
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Total |
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Revenues |
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2023 |
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$ |
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$ |
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$ |
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$ |
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— |
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$ |
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2022 |
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— |
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Segment Income |
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2023 |
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$ |
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$ |
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$ |
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N/A |
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$ |
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$ |
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2022 |
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N/A |
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Two Fiscal Quarters Ended June 18, 2023 and June 19, 2022 |
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U.S. |
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Supply |
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International |
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Intersegment |
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Stores |
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Chain |
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Franchise |
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Revenues |
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Other |
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Total |
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Revenues |
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2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
— |
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$ |
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2022 |
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— |
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Segment Income |
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2023 |
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$ |
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$ |
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$ |
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N/A |
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$ |
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$ |
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2022 |
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N/A |
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The change in allocation methodology of certain software development costs resulted in an estimated increase in U.S. stores Segment Income of $
7
The following table reconciles total Segment Income to consolidated income before provision for income taxes.
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Fiscal Quarter Ended |
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Two Fiscal Quarters Ended |
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June 18, |
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June 19, |
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June 18, |
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June 19, |
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2023 |
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2022 |
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2023 |
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2022 |
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Total Segment Income |
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$ |
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$ |
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$ |
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$ |
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Depreciation and amortization |
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( |
) |
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( |
) |
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( |
) |
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( |
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Refranchising loss |
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— |
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— |
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( |
) |
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— |
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Loss on sale/disposal of assets |
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( |
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( |
) |
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|
( |
) |
|
|
( |
) |
Non-cash equity-based compensation expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income from operations |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other expense |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income before provision for income taxes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
3. Earnings Per Share
|
|
Fiscal Quarter Ended |
|
|
Two Fiscal Quarters Ended |
|
||||||||||
|
|
June 18, |
|
|
June 19, |
|
|
June 18, |
|
|
June 19, |
|
||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net income available to common stockholders - basic and diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Basic weighted average number of shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share – basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted weighted average number of shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share – diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The denominators used in calculating diluted earnings per share for common stock for the fiscal quarters and two fiscal quarters each ended June 18, 2023 and June 19, 2022 do not include the following because the effect of including these shares would be anti-dilutive or because the performance targets for these awards had not yet been met:
|
|
Fiscal Quarter Ended |
|
|
Two Fiscal Quarters Ended |
|
||||||||||
|
|
June 18, |
|
|
June 19, |
|
|
June 18, |
|
|
June 19, |
|
||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Anti-dilutive shares underlying stock-based awards |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock options |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted stock awards and units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Performance condition not met |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted stock awards and units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
4. Stockholders’ Deficit
The following table summarizes the changes in stockholders’ deficit for the second quarter of 2023.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|||||
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
Other |
|
|||||
|
|
Common Stock |
|
|
Paid-in |
|
|
Retained |
|
|
Comprehensive |
|
||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Loss |
|
|||||
Balance at March 26, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
Dividends declared on common stock and equivalents |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Issuance and cancellation of stock awards, net |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Tax payments for restricted stock upon vesting |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Purchases of common stock |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
Exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Non-cash equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Balance at June 18, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
8
The following table summarizes the changes in stockholders’ deficit for the two fiscal quarters of 2023.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|||||
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
Other |
|
|||||
|
|
Common Stock |
|
|
Paid-in |
|
|
Retained |
|
|
Comprehensive |
|
||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Loss |
|
|||||
Balance at January 1, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
Dividends declared on common stock and equivalents |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Issuance and cancellation of stock awards, net |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Tax payments for restricted stock upon vesting |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Purchases of common stock |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
Exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Non-cash equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Balance at June 18, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
Subsequent to the end of the second quarter of 2023, on
The following table summarizes the changes in stockholders’ deficit for the second quarter of 2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|||||
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
Other |
|
|||||
|
|
Common Stock |
|
|
Paid-in |
|
|
Retained |
|
|
Comprehensive |
|
||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Loss |
|
|||||
Balance at March 27, 2022 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
Dividends declared on common stock and equivalents |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Issuance and cancellation of stock awards, net |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Tax payments for restricted stock upon vesting |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Purchases of common stock |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
Exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Non-cash equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at June 19, 2022 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
The following table summarizes the changes in stockholders’ deficit for the two fiscal quarters of 2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|||||
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
Other |
|
|||||
|
|
Common Stock |
|
|
Paid-in |
|
|
Retained |
|
|
Comprehensive |
|
||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Loss |
|
|||||
Balance at January 2, 2022 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
Dividends declared on common stock and equivalents |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Issuance and cancellation of stock awards, net |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Tax payments for restricted stock upon vesting |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Purchases of common stock |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
Exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Non-cash equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at June 19, 2022 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
9
5
Fair value measurements enable the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
Fair Value of Cash Equivalents and Marketable Securities
The fair values of the Company’s cash equivalents and investments in marketable securities are based on quoted prices in active markets for identical assets.
Fair Value of Investments
The Company holds a non-controlling interest in DPC Dash Ltd (“DPC Dash”), the Company’s master franchisee in China that owns and operates Domino’s Pizza stores in that market. Prior to March 28, 2023, the Company’s investment in DPC Dash’s senior ordinary shares, which were not in-substance common stock, represented an equity investment without a readily determinable fair value and was recorded at cost with adjustments for observable changes in prices resulting from orderly transactions for the identical or a similar investment of the same issuer or impairments.
On March 28, 2023, DPC Dash completed its initial public offering on the Hong Kong Exchange (HK: 1405), at which point the Company’s
As of June 18, 2023, the fair value of the Company’s investment in DPC Dash is based on the active exchange quoted price for the equity security of HK$
10
The following tables summarize the carrying amounts and fair values of certain assets at June 18, 2023 and January 1, 2023:
|
|
At June 18, 2023 |
|
|||||||||||||
|
|
|
|
|
Fair Value Estimated Using |
|
||||||||||
|
|
Carrying |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
|
|
Amount |
|
|
Inputs |
|
|
Inputs |
|
|
Inputs |
|
||||
Cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Restricted cash equivalents |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Investments in marketable securities |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Advertising fund cash equivalents, restricted |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Investment in DPC Dash |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
|
|
At January 1, 2023 |
|
|||||||||||||
|
|
|
|
|
Fair Value Estimated Using |
|
||||||||||
|
|
Carrying |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
|
|
Amount |
|
|
Inputs |
|
|
Inputs |
|
|
Inputs |
|
||||
Cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Restricted cash equivalents |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Investments in marketable securities |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Advertising fund cash equivalents, restricted |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Investment in DPC Dash |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Fair Value of Debt
The estimated fair values of the Company’s fixed rate notes are classified as Level 2 measurements, as the Company estimates the fair value amount by using available market information. The Company obtained quotes from two separate brokerage firms that are knowledgeable about the Company’s fixed rate notes and, at times, trade these notes. The Company also performed its own internal analysis based on the information gathered from public markets, including information on notes that are similar to those of the Company. However, considerable judgment is required to interpret market data to estimate fair value. Accordingly, the fair value estimates presented are not necessarily indicative of the amount that the Company or the debtholders could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair values stated below.
Management estimated the approximate fair values of the Company’s 2015, 2017, 2018, 2019 and 2021 notes as follows:
|
|
June 18, 2023 |
|
|
January 1, 2023 |
|
||||||||||
|
|
Principal Amount |
|
|
Fair Value |
|
|
Principal Amount |
|
|
Fair Value |
|
||||
2015 Ten-Year Notes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
2017 Ten-Year Notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2018 7.5-Year Notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2018 9.25-Year Notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2019 Ten-Year Notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2021 7.5-Year Notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2021 Ten-Year Notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
11
6. Revenue Disclosures
Contract Liabilities
Contract liabilities primarily consist of deferred franchise fees and deferred development fees. Deferred franchise fees and deferred development fees of $
Changes in deferred franchise fees and deferred development fees for the two fiscal quarters of 2023 and the two fiscal quarters of 2022 were as follows:
|
|
Two Fiscal Quarters Ended |
|
|||||
|
|
June 18, |
|
|
June 19, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Deferred franchise fees and deferred development fees, beginning of period |
|
$ |
|
|
$ |
|
||
Revenue recognized during the period |
|
|
( |
) |
|
|
( |
) |
New deferrals due to cash received and other |
|
|
|
|
|
|
||
Deferred franchise fees and deferred development fees, end of period |
|
$ |
|
|
$ |
|
||
Advertising Fund Assets
As of June 18, 2023, advertising fund assets, restricted of $
As of January 1, 2023, advertising fund assets, restricted of $
Change in Advertising Fund Contributions and Technology Fees
Beginning in the second quarter of 2023, as of March 27, 2023, Domino's National Advertising Fund Inc., the Company’s consolidated not-for-profit advertising subsidiary, effectuated a temporary reduction of
Subsequent Events
Subsequent to the end of the second quarter of 2023, the Company entered into a new global agreement with Uber (NYSE:UBER) to allow customers to order Domino’s products through the Uber Eats and Postmates apps with delivery by the Company and its franchisees’ delivery experts. The Company expects the U.S. rollout of this agreement to be enabled by the end of fiscal 2023.
7. Leases
The Company leases certain retail store and supply chain center locations, vehicles, equipment and its corporate headquarters with expiration dates through 2041.
The components of operating and finance lease cost for the second quarter and two fiscal quarters of 2023, and the second quarter and two fiscal quarters of 2022 were as follows:
|
|
Fiscal Quarter Ended |
|
|
Two Fiscal Quarters Ended |
|
||||||||||
|
|
June 18, |
|
|
June 19, |
|
|
June 18, |
|
|
June 19, |
|
||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Operating lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Finance lease cost: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of right-of-use assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest on lease liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total finance lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
12
Rent expense totaled $
Supplemental balance sheet information related to the Company’s finance leases as of June 18, 2023 and January 1, 2023 was as follows:
|
|
June 18, |
|
|
January 1, |
|
||
|
|
2023 |
|
|
2023 |
|
||
Land and buildings |
|
$ |
|
|
$ |
|
||
Equipment |
|
|
|
|
|
|
||
Finance lease assets |
|
|
|
|
|
|
||
Accumulated depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
Finance lease assets, net |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
of long-term debt |
|
$ |
|
|
$ |
|
||
, less current portion |
|
|
|
|
|
|
||
Total principal payable on finance leases |
|
$ |
|
|
$ |
|
||
As of June 18, 2023 and January 1, 2023, the weighted average remaining lease term and weighted average discount rate for the Company’s operating and finance leases were as follows:
|
|
June 18, 2023 |
|
January 1, 2023 |
||||
|
|
Operating |
|
Finance |
|
Operating |
|
Finance |
|
|
Leases |
|
Leases |
|
Leases |
|
Leases |
Weighted average remaining lease term |
|
|
|
|
||||
Weighted average discount rate |
|
|
|
|
||||
Supplemental cash flow information related to leases for the second quarter and two fiscal quarters of 2023 and the second quarter and two fiscal quarters of 2022 were as follows:
|
|
Fiscal Quarter Ended |
|
|
Two Fiscal Quarters Ended |
|
||||||||||
|
|
June 18, |
|
|
June 19, |
|
|
June 18, |
|
|
June 19, |
|
||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating cash flows from operating leases |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Operating cash flows from finance leases |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financing cash flows from finance leases |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Right-of-use assets obtained in exchange for lease obligations: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating leases |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Finance leases |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Maturities of lease liabilities as of June 18, 2023 were as follows:
|
|
Operating |
|
|
Finance |
|
||
|
|
Leases |
|
|
Leases |
|
||
2023 |
|
$ |
|
|
$ |
|
||
2024 |
|
|
|
|
|
|
||
2025 |
|
|
|
|
|
|
||
2026 |
|
|
|
|
|
|
||
2027 |
|
|
|
|
|
|
||
Thereafter |
|
|
|
|
|
|
||
Total future minimum rental commitments |
|
|
|
|
|
|
||
Less, amounts representing interest |
|
|
( |
) |
|
|
( |
) |
Total lease liabilities |
|
$ |
|
|
$ |
|
||
13
As of June 18, 2023, the Company had additional leases for certain supply chain real estate and certain supply chain and U.S. Company-owned store vehicles that had not yet commenced with estimated future minimum rental commitments of $
The Company has guaranteed lease payments related to certain franchisees’ lease arrangements. The maximum amount of potential future payments under these guarantees was $
8. Supplemental Disclosures of Cash Flow Information
The Company had non-cash investing activities related to accruals for capital expenditures of $
9. Company-owned Store Transactions
During the first quarter of 2023, the Company refranchised one U.S. Company-owned store for proceeds of less than $
During the first quarter of 2022, the Company purchased
10
The Company has considered all new accounting standards issued by the Financial Accounting Standards Board (“FASB”) and adopted the following accounting standards during the second quarter of 2023.
Recently Adopted Accounting Standards
Accounting Standards Update (“ASU”) 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, updated by ASU 2022-06, Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”)
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform. On May 15, 2023, certain of the Company’s subsidiaries executed an amendment to the Company’s 2021 variable funding notes to affect the transition from LIBOR to the Secured Overnight Financing Rate (“Term SOFR”), plus a spread adjustment. In connection with this contract amendment, the Company adopted ASU 2020-04 (as updated by ASU 2022-06) in the second quarter of 2023. The amendment to the Company’s 2021 variable funding notes and the adoption of this accounting standard did not have a material impact on the Company’s condensed consolidated financial statements.
ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions
In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”), which clarifies and amends the guidance of measuring the fair value of equity securities subject to contractual sale restrictions. ASU 2022-03 also requires disclosure of the fair value of equity securities subject to contractual sale restrictions, the nature and remaining duration of the restrictions and the circumstances that could cause a lapse in the restrictions. The Company’s investment in DPC Dash (Note 5) is subject to contractual restrictions that prohibit the Company from selling the security for 360 days following DPC Dash’s initial public offering. The Company early adopted ASU 2022-03 in the second quarter of 2023 and the adoption of this accounting standard did not have a material impact on the Company’s condensed consolidated financial statements.
14
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(Unaudited; tabular amounts in millions, except percentages and store data)
The 2023 and 2022 second quarters referenced herein represent the twelve-week periods ended June 18, 2023 and June 19, 2022, respectively. The 2023 and 2022 two fiscal quarters referenced herein represent the twenty-four-week periods ended June 18, 2023 and June 19, 2022, respectively. In this section, we discuss the results of our operations for the second quarter and two fiscal quarters of 2023 as compared to the second quarter and two fiscal quarters of 2022.
Overview
Domino’s is the largest pizza company in the world, with more than 20,000 locations in over 90 markets around the world as of June 18, 2023, and operates two distinct service models within its stores with a significant business in both delivery and carryout. Founded in 1960, we are a highly recognized global brand, and we focus on value while serving neighborhoods locally through our large network of franchise and Company-owned stores through both the delivery and carryout service models. We are primarily a franchisor, with approximately 99% of Domino’s global stores owned and operated by our independent franchisees as of June 18, 2023.
The Domino’s business model is straightforward: Domino’s stores handcraft and serve quality food at a competitive price, with easy ordering access and efficient service, enhanced by our technological innovations. Our hand-tossed dough is made fresh and distributed to stores around the world by us and our franchisees.
Domino’s generates revenues and earnings by charging royalties and fees to our independent franchisees. We also generate revenues and earnings by selling food, equipment and supplies to franchisees primarily in the U.S. and Canada and by operating a number of U.S. Company-owned stores. Franchisees profit by selling pizza and other complementary items to their local customers. In our international markets, we generally grant geographical rights to the Domino’s Pizza® brand to master franchisees. These master franchisees are charged with developing their geographical area, and they may profit by sub-franchising and selling food and equipment to those sub-franchisees, as well as by running pizza stores directly. We believe that everyone in the system can benefit, including the end consumer, who can purchase Domino’s menu items for themselves and their family conveniently and economically.
Our financial results are driven largely by retail sales at our franchised and Company-owned stores. Changes in retail sales are driven by changes in same store sales and store counts. We monitor both of these metrics very closely, as they directly impact our revenues and profits, and we strive to consistently increase both metrics. Retail sales drive royalty payments from franchisees, as well as Company-owned store and supply chain revenues. Retail sales are primarily impacted by the strength of the Domino’s Pizza brand, the results of our extensive advertising through various media channels, the impact of technological innovation and digital ordering, our ability to execute our strong and proven business model and the overall global economic environment.
The Domino’s business model can yield strong returns for our franchise owners and our Company-owned stores. It can also yield significant cash flow to us, through a consistent franchise royalty payment and supply chain revenue stream, with moderate capital expenditures. We have historically returned cash to shareholders through dividend payments and share repurchases since becoming a publicly-traded company in 2004. We believe we have a proven business model for success, which includes leading with technology, service and product innovation and leveraging our global scale, which has historically provided strong returns for our shareholders.
15
Second Quarter of 2023 Highlights
Two Fiscal Quarters of 2023 Highlights
Excluding the negative impact of foreign currency, Domino’s experienced global retail sales growth during the second quarter and two fiscal quarters of 2023, driven by both same store sales growth and net store count growth. U.S. same store sales increased 0.1% and 1.8% in the second quarter and two fiscal quarters of 2023, respectively, rolling over a decline in U.S. same store sales of 2.9% and 3.3% in the second quarter and two fiscal quarters of 2022, respectively. The increases in U.S. same store sales in the second quarter and two fiscal quarters of 2023 were attributable to a higher average ticket per transaction resulting from increases in menu and national offer pricing. In the two fiscal quarters of 2023 in the U.S., we also launched our newest menu item, Domino’s Loaded Tots. International same store sales (excluding foreign currency impact) increased 3.6% and 2.3% in the second quarter and two fiscal quarters of 2023, respectively, rolling over a decline in international same store sales (excluding foreign currency impact) of 2.2% and 0.5% in the second quarter and two fiscal quarters of 2022, respectively. Our U.S. and international same store sales (excluding foreign currency impact) continue to be pressured by our fortressing strategy, which includes increasing store concentration in certain markets where we compete, as well as changes in consumer behavior.
We continued our global expansion with the opening of 197 net stores in the second quarter of 2023, bringing our year-to-date total to 325. We had 27 net stores open in the U.S. and 170 net stores open internationally during the second quarter of 2023.
Overall, we believe our continued global store growth, along with our global retail sales growth (excluding foreign currency impact), emphasis on technology, operations and marketing initiatives, have combined to strengthen our brand.
16
Statistical Measures
The tables below outline certain statistical measures we utilize to analyze our performance. This historical data is not necessarily indicative of results to be expected for any future period.
Global Retail Sales Growth (excluding foreign currency impact)
Global retail sales growth (excluding foreign currency impact) is a commonly used statistical measure in the quick-service restaurant industry that is important to understanding performance. Global retail sales refers to total worldwide retail sales at Company-owned and franchised stores. We believe global retail sales information is useful in analyzing revenues because franchisees pay royalties and, in the U.S., advertising fees that are based on a percentage of franchise retail sales. We review comparable industry global retail sales information to assess business trends and to track the growth of the Domino’s Pizza brand. In addition, supply chain revenues are directly impacted by changes in franchise retail sales in the U.S. and Canada. Retail sales for franchised stores are reported to us by our franchisees and are not included in our revenues. Global retail sales growth, excluding foreign currency impact, is calculated as the change of international local currency global retail sales against the comparable period of the prior year.
|
|
Second Quarter |
|
Second Quarter |
|
Two Fiscal Quarters |
|
Two Fiscal Quarters |
U.S. stores |
|
+ 1.7% |
|
(0.6)% |
|
+ 3.4% |
|
(1.0)% |
International stores (excluding foreign currency impact) |
|
+ 10.1% |
|
+ 3.7% |
|
+ 8.3% |
|
+ 6.0% |
Total (excluding foreign currency impact) |
|
+ 5.8% |
|
+ 1.5% |
|
+ 5.8% |
|
+ 2.5% |
Same Store Sales Growth
Same store sales growth is a commonly used statistical measure in the quick-service restaurant industry that is important to understanding performance. Same store sales growth is calculated for a given period by including only sales from stores that also had sales in the comparable weeks of both periods. International same store sales growth is calculated similarly to U.S. same store sales growth. Changes in international same store sales are reported on a constant dollar basis, which reflects changes in international local currency sales. Same store sales growth for transferred stores is reflected in their current classification.
|
|
Second Quarter |
|
Second Quarter |
|
Two Fiscal Quarters |
|
Two Fiscal Quarters |
U.S. Company-owned stores |
|
+ 5.5% |
|
(9.2)% |
|
+ 6.4% |
|
(9.8)% |
U.S. franchise stores |
|
(0.1)% |
|
(2.5)% |
|
+ 1.6% |
|
(2.9)% |
U.S. stores |
|
+ 0.1% |
|
(2.9)% |
|
+ 1.8% |
|
(3.3)% |
International stores (excluding foreign currency impact) |
|
+ 3.6% |
|
(2.2)% |
|
+ 2.3% |
|
(0.5)% |
Store Growth Activity
Net store growth is a commonly used statistical measure in the quick-service restaurant industry that is important to understanding performance. Net store growth is calculated by netting gross store openings with gross store closures during the period. Transfers between Company-owned stores and franchised stores are excluded from the calculation of net store growth.
|
|
U.S. |
|
|
U.S. |
|
|
Total |
|
|
International Stores |
|
|
Total |
|
|||||
Store count at March 26, 2023 |
|
|
285 |
|
|
|
6,423 |
|
|
|
6,708 |
|
|
|
13,300 |
|
|
|
20,008 |
|
Openings |
|
|
1 |
|
|
|
29 |
|
|
|
30 |
|
|
|
223 |
|
|
|
253 |
|
Closings |
|
|
— |
|
|
|
(3 |
) |
|
|
(3 |
) |
|
|
(53 |
) |
|
|
(56 |
) |
Store count at June 18, 2023 |
|
|
286 |
|
|
|
6,449 |
|
|
|
6,735 |
|
|
|
13,470 |
|
|
|
20,205 |
|
Second quarter 2023 net store growth |
|
|
1 |
|
|
|
26 |
|
|
|
27 |
|
|
|
170 |
|
|
|
197 |
|
Trailing four quarters net store growth |
|
|
— |
|
|
|
116 |
|
|
|
116 |
|
|
|
795 |
|
|
|
911 |
|
17
Income Statement Data
|
|
Second Quarter |
|
|
Second Quarter |
|
|
Two Fiscal Quarters |
|
|
Two Fiscal Quarters |
|
||||||||||||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Company-owned stores |
|
$ |
87.7 |
|
|
|
|
|
$ |
112.5 |
|
|
|
|
|
$ |
172.6 |
|
|
|
|
|
$ |
216.4 |
|
|
|
|
||||
U.S. franchise royalties and fees |
|
|
139.3 |
|
|
|
|
|
|
128.1 |
|
|
|
|
|
|
272.1 |
|
|
|
|
|
|
250.4 |
|
|
|
|
||||
Supply chain |
|
|
615.7 |
|
|
|
|
|
|
646.6 |
|
|
|
|
|
|
1,239.9 |
|
|
|
|
|
|
1,256.1 |
|
|
|
|
||||
International franchise royalties and fees |
|
|
70.5 |
|
|
|
|
|
|
66.9 |
|
|
|
|
|
|
140.2 |
|
|
|
|
|
|
135.7 |
|
|
|
|
||||
U.S. franchise advertising |
|
|
111.5 |
|
|
|
|
|
|
111.1 |
|
|
|
|
|
|
224.2 |
|
|
|
|
|
|
217.7 |
|
|
|
|
||||
Total revenues |
|
|
1,024.6 |
|
|
|
100.0 |
% |
|
|
1,065.2 |
|
|
|
100.0 |
% |
|
|
2,049.0 |
|
|
|
100.0 |
% |
|
|
2,076.3 |
|
|
|
100.0 |
% |
Cost of sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Company-owned stores |
|
|
71.4 |
|
|
|
|
|
|
94.1 |
|
|
|
|
|
|
142.0 |
|
|
|
|
|
|
181.4 |
|
|
|
|
||||
Supply chain |
|
|
548.5 |
|
|
|
|
|
|
584.9 |
|
|
|
|
|
|
1,116.8 |
|
|
|
|
|
|
1,140.0 |
|
|
|
|
||||
Total cost of sales |
|
|
620.0 |
|
|
|
60.5 |
% |
|
|
678.9 |
|
|
|
63.7 |
% |
|
|
1,258.8 |
|
|
|
61.4 |
% |
|
|
1,321.4 |
|
|
|
63.6 |
% |
Gross margin |
|
|
404.7 |
|
|
|
39.5 |
% |
|
|
386.3 |
|
|
|
36.3 |
% |
|
|
790.2 |
|
|
|
38.6 |
% |
|
|
754.9 |
|
|
|
36.4 |
% |
General and administrative |
|
|
97.8 |
|
|
|
9.5 |
% |
|
|
97.1 |
|
|
|
9.2 |
% |
|
|
193.0 |
|
|
|
9.4 |
% |
|
|
194.6 |
|
|
|
9.4 |
% |
U.S. franchise advertising |
|
|
111.5 |
|
|
|
10.9 |
% |
|
|
111.1 |
|
|
|
10.4 |
% |
|
|
224.2 |
|
|
|
11.0 |
% |
|
|
217.7 |
|
|
|
10.5 |
% |
Refranchising loss |
|
|
— |
|
|
|
0.0 |
% |
|
|
— |
|
|
|
0.0 |
% |
|
|
0.1 |
|
|
|
0.0 |
% |
|
|
— |
|
|
|
0.0 |
% |
Income from operations |
|
|
195.4 |
|
|
|
19.1 |
% |
|
|
178.1 |
|
|
|
16.7 |
% |
|
|
372.9 |
|
|
|
18.2 |
% |
|
|
342.7 |
|
|
|
16.5 |
% |
Other expense |
|
|
(15.0 |
) |
|
|
(1.5 |
)% |
|
|
— |
|
|
|
0.0 |
% |
|
|
(15.0 |
) |
|
|
(0.7 |
)% |
|
|
— |
|
|
|
0.0 |
% |
Interest expense, net |
|
|
(42.4 |
) |
|
|
(4.1 |
)% |
|
|
(44.6 |
) |
|
|
(4.2 |
)% |
|
|
(86.6 |
) |
|
|
(4.2 |
)% |
|
|
(91.5 |
) |
|
|
(4.4 |
)% |
Income before provision for income taxes |
|
|
138.0 |
|
|
|
13.5 |
% |
|
|
133.5 |
|
|
|
12.5 |
% |
|
|
271.4 |
|
|
|
13.3 |
% |
|
|
251.2 |
|
|
|
12.1 |
% |
Provision for income taxes |
|
|
28.7 |
|
|
|
2.8 |
% |
|
|
31.0 |
|
|
|
2.9 |
% |
|
|
57.2 |
|
|
|
2.8 |
% |
|
|
57.7 |
|
|
|
2.8 |
% |
Net income |
|
$ |
109.4 |
|
|
|
10.7 |
% |
|
$ |
102.5 |
|
|
|
9.6 |
% |
|
$ |
214.2 |
|
|
|
10.5 |
% |
|
$ |
193.5 |
|
|
|
9.3 |
% |
Revenues
|
|
Second Quarter |
|
|
Second Quarter |
|
|
Two Fiscal Quarters |
|
|
Two Fiscal Quarters |
|
||||||||||||||||||||
U.S. Company-owned stores |
|
$ |
87.7 |
|
|
|
8.5 |
% |
|
$ |
112.5 |
|
|
|
10.6 |
% |
|
$ |
172.6 |
|
|
|
8.4 |
% |
|
$ |
216.4 |
|
|
|
10.4 |
% |
U.S. franchise royalties and fees |
|
|
139.3 |
|
|
|
13.6 |
% |
|
|
128.1 |
|
|
|
12.0 |
% |
|
|
272.1 |
|
|
|
13.3 |
% |
|
|
250.4 |
|
|
|
12.1 |
% |
Supply chain |
|
|
615.7 |
|
|
|
60.1 |
% |
|
|
646.6 |
|
|
|
60.7 |
% |
|
|
1,239.9 |
|
|
|
60.5 |
% |
|
|
1,256.1 |
|
|
|
60.5 |
% |
International franchise royalties and fees |
|
|
70.5 |
|
|
|
6.9 |
% |
|
|
66.9 |
|
|
|
6.3 |
% |
|
|
140.2 |
|
|
|
6.8 |
% |
|
|
135.7 |
|
|
|
6.5 |
% |
U.S. franchise advertising |
|
|
111.5 |
|
|
|
10.9 |
% |
|
|
111.1 |
|
|
|
10.4 |
% |
|
|
224.2 |
|
|
|
11.0 |
% |
|
|
217.7 |
|
|
|
10.5 |
% |
Total revenues |
|
$ |
1,024.6 |
|
|
|
100.0 |
% |
|
$ |
1,065.2 |
|
|
|
100.0 |
% |
|
$ |
2,049.0 |
|
|
|
100.0 |
% |
|
$ |
2,076.3 |
|
|
|
100.0 |
% |
Revenues primarily consist of retail sales from our Company-owned stores, royalties and fees and advertising contributions from our U.S. franchised stores, royalties and fees from our international franchised stores and sales of food, equipment and supplies from our supply chain centers to substantially all of our U.S. franchised stores and certain international franchised stores. Company-owned store and franchised store revenues may vary from period to period due to changes in store count mix. Supply chain revenues may vary significantly from period to period as a result of fluctuations in commodity prices as well as the mix of products we sell.
U.S. Stores Revenues
|
|
Second Quarter |
|
|
Second Quarter |
|
|
Two Fiscal Quarters |
|
|
Two Fiscal Quarters |
|
||||||||||||||||||||
U.S. Company-owned stores |
|
$ |
87.7 |
|
|
|
25.9 |
% |
|
$ |
112.5 |
|
|
|
32.0 |
% |
|
$ |
172.6 |
|
|
|
25.8 |
% |
|
$ |
216.4 |
|
|
|
31.6 |
% |
U.S. franchise royalties and fees |
|
|
139.3 |
|
|
|
41.2 |
% |
|
|
128.1 |
|
|
|
36.4 |
% |
|
|
272.1 |
|
|
|
40.7 |
% |
|
|
250.4 |
|
|
|
36.6 |
% |
U.S. franchise advertising |
|
|
111.5 |
|
|
|
32.9 |
% |
|
|
111.1 |
|
|
|
31.6 |
% |
|
|
224.2 |
|
|
|
33.5 |
% |
|
|
217.7 |
|
|
|
31.8 |
% |
Total U.S. Stores |
|
$ |
338.4 |
|
|
|
100.0 |
% |
|
$ |
351.7 |
|
|
|
100.0 |
% |
|
$ |
668.9 |
|
|
|
100.0 |
% |
|
$ |
684.5 |
|
|
|
100.0 |
% |
U.S. Company-owned Stores
Revenues from U.S. Company-owned store operations decreased $24.8 million, or 22.1%, in the second quarter of 2023, and decreased $43.8 million, or 20.2%, in the two fiscal quarters of 2023 primarily due to a decrease in the average number of U.S. Company-owned stores open during the period resulting from the refranchising of 114 U.S. Company-owned stores in Arizona and Utah in the fourth quarter of 2022 to certain of our U.S. franchisees (the “2022 Store Sale”). This decrease was partially offset by higher same store sales, and, to a lesser extent in the two fiscal quarters of 2023, our purchase of 23 U.S. franchise stores in Michigan in the first quarter of 2022.
U.S. Company-owned same store sales increased 5.5% in the second quarter of 2023 and increased 6.4% in the two fiscal quarters of 2023. U.S. Company-owned same store sales declined 9.2% in the second quarter of 2022 and declined 9.8% in the two fiscal quarters of 2022.
18
U.S. Franchise Royalties and Fees
Revenues from U.S. franchise royalties and fees increased $11.2 million, or 8.7%, in the second quarter of 2023, and increased $21.7 million, or 8.7%, in the two fiscal quarters of 2023 primarily due to an increase in fees paid by our franchisees for the use of our technology platforms and an increase in the average number of U.S. franchised stores open during the period resulting from net store growth and the 2022 Store Sale. Revenues from U.S. franchise royalties and fees were also benefited by higher same store sales in the two fiscal quarters of 2023.
U.S. franchise same store sales declined 0.1% and increased 1.6% in the second quarter and two fiscal quarters of 2023, respectively. U.S. franchise same store sales declined 2.5% and 2.9% in the second quarter and two fiscal quarters of 2022, respectively.
U.S. Franchise Advertising
Revenues from U.S. franchise advertising increased $0.4 million, or 0.3%, in the second quarter of 2023, and increased $6.5 million, or 3.0%, in the two fiscal quarters of 2023 due to an increase in the average number of U.S. franchised stores open during the period resulting from net store growth and the 2022 Store Sale. Revenues from U.S. franchise advertising also benefited from higher same store sales in the two fiscal quarters of 2023. These increases were partially offset by a reduction of 0.25% to the standard 6.0% advertising contribution which was effectuated at the beginning of the second quarter of 2023.
Supply Chain
Supply chain revenues decreased $30.9 million, or 4.8%, in the second quarter of 2023 due to lower order volumes at our U.S. franchised stores as well as a decrease in our market basket pricing to stores of 2.4% in the second quarter of 2023, which resulted in an estimated $13.4 million decrease in supply chain revenues. Supply chain revenues decreased $16.2 million, or 1.3%, in the two fiscal quarters of 2023 due primarily to lower order volumes at our U.S. franchised stores, but this decrease was partially offset by an increase in our market basket pricing to stores. Our market basket pricing to stores increased 1.1% during the two fiscal quarters of 2023 which resulted in an estimated $11.7 million increase in supply chain revenues. The market basket pricing change, a statistical measure utilized by management, is calculated as the percentage change of the market basket purchased by an average U.S. store (based on average weekly unit sales) from our U.S. supply chain centers against the comparable period of the prior year. We believe this measure is important to understanding Company performance because as our market basket prices fluctuate, our revenues, cost of sales and gross margin percentages in our supply chain segment also fluctuate.
International Franchise Royalties and Fee Revenues
Revenues from international franchise royalties and fees increased $3.6 million, or 5.4%, in the second quarter of 2023, and increased $4.4 million, or 3.3%, in the two fiscal quarters of 2023 due primarily to same store sales growth (excluding foreign currency impact) and an increase in the average number of international franchised stores open during the period, resulting from net store growth. The negative impact of changes in foreign currency exchange rates of $2.0 million in the second quarter of 2023 and $6.3 million in the two fiscal quarters of 2023 partially offset the increases in international franchise royalties and fees revenues. The impact of changes in foreign currency exchange rates on international franchise royalty revenues, a statistical measure utilized by management, is calculated as the difference in international franchise royalty revenues resulting from translating current year local currency results to U.S. dollars at current year exchange rates as compared to prior year exchange rates. We believe this measure is important to understanding Company performance given the significant variability in international franchise royalty revenues that can be driven by changes in foreign currency exchange rates.
Excluding the impact of foreign currency exchange rates, international franchise same store sales increased 3.6% in the second quarter of 2023 and increased 2.3% in the two fiscal quarters of 2023. Excluding the impact of foreign currency exchange rates, international franchise same store sales declined 2.2% and 0.5% in the second quarter and two fiscal quarters of 2022, respectively.
19
Cost of Sales / Gross Margin
|
|
Second Quarter |
|
|
Second Quarter |
|
|
Two Fiscal Quarters |
|
|
Two Fiscal Quarters |
|
||||||||||||||||||||
Total revenues |
|
$ |
1,024.6 |
|
|
|
100.0 |
% |
|
$ |
1,065.2 |
|
|
|
100.0 |
% |
|
$ |
2,049.0 |
|
|
|
100.0 |
% |
|
$ |
2,076.3 |
|
|
|
100.0 |
% |
Total cost of sales |
|
|
620.0 |
|
|
|
60.5 |
% |
|
|
678.9 |
|
|
|
63.7 |
% |
|
|
1,258.8 |
|
|
|
61.4 |
% |
|
|
1,321.4 |
|
|
|
63.6 |
% |
Gross margin |
|
$ |
404.7 |
|
|
|
39.5 |
% |
|
$ |
386.3 |
|
|
|
36.3 |
% |
|
$ |
790.2 |
|
|
|
38.6 |
% |
|
$ |
754.9 |
|
|
|
36.4 |
% |
Consolidated cost of sales consists of U.S. Company-owned store and supply chain costs incurred to generate related revenues. Components of consolidated cost of sales primarily include food, labor, delivery and occupancy costs. Consolidated gross margin (which we define as revenues less cost of sales) increased $18.4 million, or 4.8%, in the second quarter of 2023, and increased $35.3 million, or 4.7%, in the two fiscal quarters of 2023 due primarily to higher global franchise revenues. Franchise revenues do not have a cost of sales component, so changes in these revenues have a disproportionate effect on gross margin. Additionally, as our market basket prices fluctuate, our revenues and gross margin percentages in our supply chain segment also fluctuate; however, actual product-level dollar margins remain unchanged.
As a percentage of revenues, the consolidated gross margin increased 3.2 percentage points in the second quarter of 2023 and increased 2.2 percentage points in the two fiscal quarters of 2023. U.S. Company-owned store gross margin increased 2.2 percentage points in the second quarter of 2023 and increased 1.5 percentage points in the two fiscal quarters of 2023. Supply chain gross margin increased 1.4 percentage points in the second quarter of 2023 and increased 0.7 percentage points in the two fiscal quarters of 2023. These changes in gross margin are described in more detail below.
U.S. Company-Owned Store Gross Margin
|
|
Second Quarter |
|
|
Second Quarter |
|
|
Two Fiscal Quarters |
|
|
Two Fiscal Quarters |
|
||||||||||||||||||||
Revenues |
|
$ |
87.7 |
|
|
|
100.0 |
% |
|
$ |
112.5 |
|
|
|
100.0 |
% |
|
$ |
172.6 |
|
|
|
100.0 |
% |
|
$ |
216.4 |
|
|
|
100.0 |
% |
Cost of sales |
|
|
71.4 |
|
|
|
81.4 |
% |
|
|
94.1 |
|
|
|
83.6 |
% |
|
|
142.0 |
|
|
|
82.3 |
% |
|
|
181.4 |
|
|
|
83.8 |
% |
Store gross margin |
|
$ |
16.3 |
|
|
|
18.6 |
% |
|
$ |
18.4 |
|
|
|
16.4 |
% |
|
$ |
30.6 |
|
|
|
17.7 |
% |
|
$ |
35.0 |
|
|
|
16.2 |
% |
U.S. Company-owned store gross margin (which does not include certain store-level costs such as royalties and advertising) decreased $2.1 million, or 11.7%, in the second quarter of 2023 and decreased $4.4 million, or 12.4%, in the two fiscal quarters of 2023 due primarily to the 2022 Store Sale. As a percentage of store revenues, the U.S. Company-owned store gross margin increased 2.2 percentage points in the second quarter of 2023 and increased 1.5 percentage points in the two fiscal quarters of 2023. These changes in gross margin as a percentage of revenues are discussed in additional detail below.
Supply Chain Gross Margin
|
|
Second Quarter |
|
|
Second Quarter |
|
|
Two Fiscal Quarters |
|
|
Two Fiscal Quarters |
|
||||||||||||||||||||
Revenues |
|
$ |
615.7 |
|
|
|
100.0 |
% |
|
$ |
646.6 |
|
|
|
100.0 |
% |
|
$ |
1,239.9 |
|
|
|
100.0 |
% |
|
$ |
1,256.1 |
|
|
|
100.0 |
% |
Cost of sales |
|
|
548.5 |
|
|
|
89.1 |
% |
|
|
584.9 |
|
|
|
90.5 |
% |
|
|
1,116.8 |
|
|
|
90.1 |
% |
|
|
1,140.0 |
|
|
|
90.8 |
% |
Supply chain gross margin |
|
$ |
67.2 |
|
|
|
10.9 |
% |
|
$ |
61.7 |
|
|
|
9.5 |
% |
|
$ |
123.1 |
|
|
|
9.9 |
% |
|
$ |
116.1 |
|
|
|
9.2 |
% |
Supply chain gross margin increased $5.5 million, or 8.8%, in the second quarter of 2023, and increased $7.0 million, or 6.0%, in the two fiscal quarters of 2023. As a percentage of supply chain revenues, the supply chain gross margin increased 1.4 percentage points in the second quarter of 2023 due primarily to lower food costs as a percentage of supply chain revenues, as well as procurement productivity. As a percentage of supply chain revenues, the supply chain gross margin increased 0.7 percentage points in the two fiscal quarters of 2023 due primarily to procurement productivity but was partially offset by higher food cost as a percentage of supply chain revenues. The improvements in supply chain gross margin as a percentage of supply chain revenues were partially offset in both the second quarter and two fiscal quarters of 2023 by higher labor costs.
20
General and Administrative Expenses
General and administrative expenses increased $0.7 million, or 0.7%, in the second quarter of 2023, driven primarily by higher labor costs. General and administrative expenses decreased $1.6 million, or 0.8%, in the two fiscal quarters of 2023, driven primarily by lower professional fees and travel costs, partially offset by higher labor costs.
U.S. Franchise Advertising Expenses
U.S. franchise advertising expenses increased $0.4 million, or 0.3%, in the second quarter of 2023, and increased $6.5 million, or 3.0%, in the two fiscal quarters of 2023 consistent with the increase in U.S. franchise advertising revenues. U.S. franchise advertising costs are accrued and expensed when the related U.S. franchise advertising revenues are recognized, as our consolidated not-for-profit advertising fund is obligated to expend such revenues on advertising and other activities that promote the Domino’s brand, and these revenues cannot be used for general corporate purposes.
Other Expense
During the second quarter of 2023, we recorded a $15.0 million unrealized loss on our investment in DPC Dash (Note 5) based on the active exchange quoted price for the equity security. We did not record any adjustments to the carrying amount in the first quarter of 2023 or two fiscal quarters of 2022.
Interest Expense, Net
Interest expense, net decreased $2.2 million, or 5.0%, in the second quarter of 2023, and decreased $4.9 million, or 5.4%, in the two fiscal quarters of 2023 each driven by higher interest income on our cash equivalents.
Our weighted average borrowing rate was 3.8% in the second quarter and two fiscal quarters of 2023 and 2022.
Provision for Income Taxes
Provision for income taxes decreased $2.3 million, or 7.5%, in the second quarter of 2023 due to a lower effective tax rate, partially offset by higher income before provision for income taxes. The effective tax rate decreased to 20.8% during the second quarter of 2023 as compared to 23.2% in the second quarter of 2022, driven in part by higher foreign tax credits and a higher foreign derived intangible income deduction. Provision for income taxes decreased $0.5 million, or 0.9%, in the two fiscal quarters of 2023 due to a lower effective tax rate, partially offset by higher income before provision for income taxes. The effective tax rate decreased to 21.1% during the two fiscal quarters of 2023 as compared to 23.0% in the two fiscal quarters of 2022, driven in part by higher foreign tax credits and a higher foreign derived intangible income deduction.
21
Segment Income
We evaluate the performance of our reportable segments and allocate resources to them based on earnings before interest, taxes, depreciation, amortization and other, referred to as Segment Income. Segment Income for each of our reportable segments is summarized in the table below. Other Segment Income primarily includes corporate administrative costs that are not allocable to a reportable segment, including labor, computer expenses, professional fees, travel and entertainment, rent, insurance and other corporate administrative costs.
In the first quarter of 2023, we changed our allocation methodology for certain costs which support certain internally developed software used across our franchise system. The change in allocation methodology of certain software development costs resulted in an estimated increase in U.S. stores Segment Income of $15.8 million, an estimated increase in international franchise Segment Income of $1.9 million and an estimated decrease in other Segment Income of $17.7 million in the second quarter of 2023. The change in allocation methodology of certain software development costs resulted in an estimated increase in U.S. stores Segment Income of $25.9 million, an estimated increase in international franchise Segment Income of $3.8 million and an estimated decrease in other Segment Income of $29.7 million in the two fiscal quarters of 2023.
|
|
Second Quarter |
|
|
Second Quarter |
|
|
Two Fiscal Quarters |
|
|
Two Fiscal Quarters |
|
||||
U.S. stores |
|
$ |
123.6 |
|
|
$ |
104.1 |
|
|
$ |
236.3 |
|
|
$ |
201.3 |
|
Supply chain |
|
|
60.0 |
|
|
|
53.6 |
|
|
|
108.5 |
|
|
|
100.0 |
|
International franchise |
|
|
58.9 |
|
|
|
52.9 |
|
|
|
117.0 |
|
|
|
107.9 |
|
Other |
|
|
(18.9 |
) |
|
|
(5.6 |
) |
|
|
(34.6 |
) |
|
|
(13.3 |
) |
U.S. Stores
U.S. stores Segment Income increased $19.5 million, or 18.8%, in the second quarter of 2023, primarily due to the change in allocation methodology for certain software development costs, as well as higher U.S. franchise royalties and fees revenues, each as discussed above. These increases were partially offset by the $2.1 million decrease in U.S. Company-owned store gross margin, as discussed above. U.S. stores Segment Income increased $34.9 million, or 17.3%, in the two fiscal quarters of 2023, primarily due to the change in allocation methodology for certain software development costs, as well as higher U.S. franchise royalties and fees revenues, each as discussed above. These increases were partially offset by the $4.4 million decrease in U.S. Company-owned store gross margin, as discussed above. U.S. franchise revenues do not have a cost of sales component, so changes in these revenues have a disproportionate effect on U.S. stores Segment Income. U.S. franchise advertising costs are accrued and expensed when the related U.S. franchise advertising revenues are recognized and had no impact on U.S. stores Segment Income.
Supply Chain
Supply chain Segment Income increased $6.4 million, or 11.9%, in the second quarter of 2023, primarily due to the $5.5 million increase in supply chain gross margin described above. Supply chain Segment Income increased $8.6 million, or 8.6%, in the two fiscal quarters of 2023, primarily due to the $7.0 million increase in supply chain gross margin described above.
International Franchise
International franchise Segment Income increased $6.0 million, or 11.3%, in the second quarter of 2023, primarily due to higher international franchise royalties and fees revenues as well as the change in allocation methodology for certain software development costs, each as discussed above. International franchise Segment Income increased $9.1 million, or 8.4%, in the two fiscal quarters of 2023, primarily due to higher international franchise royalties and fees revenues as well as the change in allocation methodology for certain software development costs, each as discussed above. International franchise revenues do not have a cost of sales component, so changes in these revenues have a disproportionate effect on international franchise Segment Income.
Other
Other Segment Income decreased $13.2 million, or 235.6%, in the second quarter of 2023, and decreased $21.3 million, or 159.4%, in the two fiscal quarters of 2023 due primarily to the change in allocation methodology for certain software development costs as discussed above, as well as higher labor costs. These decreases were partially offset by lower professional fees and travel costs in the two fiscal quarters of 2023.
22
Liquidity and Capital Resources
Historically, our receivable collection periods and inventory turn rates are faster than the normal payment terms on our current liabilities resulting in efficient deployment of working capital. We generally collect our receivables within three weeks from the date of the related sale and we generally experience multiple inventory turns per month. In addition, our sales are not typically seasonal, which further limits variations in our working capital requirements. These factors allow us to manage our working capital and our ongoing cash flows from operations to invest in our business and other strategic opportunities, pay dividends and repurchase and retire shares of our common stock. As of June 18, 2023, we had working capital of $58.7 million, excluding restricted cash and cash equivalents of $189.7 million, advertising fund assets, restricted, of $154.1 million and advertising fund liabilities of $150.4 million. Working capital includes total unrestricted cash and cash equivalents of $77.0 million.
Our primary sources of liquidity are cash flows from operations and availability of borrowings under our 2022 and 2021 Variable Funding Notes (as defined below). During the second quarter and two fiscal quarters of 2023, we experienced an increase in both U.S. and international same store sales (excluding foreign currency impact) versus the comparable periods in the prior year. Additionally, both our U.S. and international businesses grew store counts during the second quarter and two fiscal quarters of 2023. These factors contributed to our continued ability to generate positive operating cash flows. In addition to our cash flows from operations, we have two variable funding note facilities. These facilities include our Series 2022-1 Variable Funding Senior Secured Notes, Class A-1 Notes (the “2022 Variable Funding Notes”), which allows for advances of up to $120.0 million, as well as our Series 2021-1 Variable Funding Senior Secured Notes, Class A-1 Notes (the “2021 Variable Funding Notes,” and, together with the 2022 Variable Funding Notes, the “2022 and 2021 Variable Funding Notes”), which allows for advances of up to $200.0 million and certain other credit instruments, including letters of credit. The letters of credit primarily relate to our casualty insurance programs. As of June 18, 2023, we had no outstanding borrowings and $277.8 million of available borrowing capacity under our 2022 and 2021 Variable Funding Notes, net of letters of credit issued of $42.2 million.
We expect to continue to use our unrestricted cash and cash equivalents, cash flows from operations, any excess cash from our recapitalization transactions and available borrowings under our 2022 and 2021 Variable Funding Notes to, among other things, fund working capital requirements, invest in our core business and other strategic opportunities, service our indebtedness, pay dividends and repurchase shares of our common stock.
Our ability to continue to fund these items and continue to service our debt could be adversely affected by the occurrence of any of the events described under “Risk Factors” in our 2022 Form 10-K. There can be no assurance that our business will generate sufficient cash flows from operations or that future borrowings will be available under our 2022 and 2021 Variable Funding Notes or otherwise to enable us to service our indebtedness, or to make anticipated capital expenditures. Our future operating performance and our ability to service, extend or refinance our outstanding senior notes and to service, extend or refinance our 2022 and 2021 Variable Funding Notes will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.
Restricted Cash
As of June 18, 2023, we had $138.5 million of restricted cash held for future principal and interest payments and other working capital requirements of our asset-backed securitization structure, $51.0 million of restricted cash held in a three-month interest reserve as required by the related debt agreements and $0.2 million of other restricted cash for a total of $189.7 million of restricted cash and cash equivalents. As of June 18, 2023, we also held $139.1 million of advertising fund restricted cash and cash equivalents, which can only be used for activities that promote the Domino’s brand.
Long-Term Debt
As of June 18, 2023, we had approximately $5.0 billion of long-term debt, of which $55.7 million was classified as a current liability. As of June 18, 2023, our fixed rate notes from the recapitalizations we completed in 2021, 2019, 2018, 2017 and 2015 had original scheduled principal payments of $25.8 million in the remainder of 2023, $51.5 million in 2024, $1.17 billion in 2025, $39.3 million in 2026, $1.31 billion in 2027, $811.5 million in 2028, $625.9 million in 2029, $10.0 million in 2030 and $905.0 million in 2031.
In accordance with our debt agreements, the payment of principal on the outstanding senior notes may be suspended if our leverage ratio is less than or equal to 5.0x total debt to adjusted EBITDA, as defined in the related agreements, and no catch-up provisions are applicable.
The notes are subject to certain financial and non-financial covenants, including a debt service coverage ratio calculation. The covenant requires a minimum coverage ratio of 1.75x total debt service to securitized net cash flow, as defined in the related agreements. In the event that certain covenants are not met, the notes may become due and payable on an accelerated schedule.
23
Share Repurchase Programs
Our share repurchase programs have historically been funded by excess operating cash flows, excess proceeds from our recapitalization transactions and borrowings under our 2022 and 2021 Variable Funding Notes. On July 20, 2021, our Board of Directors authorized a share repurchase program to repurchase up to $1.0 billion of our common stock.
During the second quarter of 2023, we repurchased and retired 292,030 shares of our common stock under our Board of Directors-approved share repurchase program for a total of approximately $90.8 million. During the two fiscal quarters of 2023, we repurchased and retired 392,545 shares of our common stock under our Board of Directors-approved share repurchase program for a total of approximately $120.8 million As of June 18, 2023, we had a total remaining authorized amount for share repurchases of approximately $289.5 million.
Dividends
On April 25, 2023, our Board of Directors declared a $1.21 per share quarterly dividend on our outstanding common stock for shareholders of record as of June 15, 2023, which was paid on June 30, 2023. We had approximately $43.6 million accrued for common stock dividends at June 18, 2023. Subsequent to the end of the second quarter, on July 20, 2023, our Board of Directors declared a $1.21 per share quarterly dividend on our outstanding common stock for shareholders of record as of September 15, 2023, to be paid on September 29, 2023.
Sources and Uses of Cash
The following table illustrates the main components of our cash flows:
|
|
Two Fiscal Quarters |
|
|
Two Fiscal Quarters |
|
||
Cash flows provided by (used in) |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
$ |
242.3 |
|
|
$ |
153.4 |
|
Net cash used in investing activities |
|
|
(39.2 |
) |
|
|
(39.9 |
) |
Net cash used in financing activities |
|
|
(193.0 |
) |
|
|
(166.7 |
) |
Effect of exchange rate changes on cash |
|
|
0.5 |
|
|
|
(0.6 |
) |
Change in cash and cash equivalents, restricted cash and cash equivalents |
|
$ |
10.6 |
|
|
$ |
(53.9 |
) |
Operating Activities
Cash provided by operating activities increased $88.9 million in the two fiscal quarters of 2023, primarily due to the positive impact of changes in operating assets and liabilities of $69.2 million. The positive impact of changes in operating assets and liabilities primarily related to the timing of payments on accrued liabilities and inventory as well as changes in inventory pricing and the timing of receipts on accounts receivable in the two fiscal quarters of 2023 as compared to the two fiscal quarters of 2022. Additionally, net income increased $20.7 million and non-cash adjustments increased $4.7 million, resulting in an overall increase to cash provided by operating activities in the two fiscal quarters of 2023 as compared to the two fiscal quarters of 2022 of $25.4 million. These increases in cash provided by operating activities were partially offset by a $5.7 million negative impact of changes in advertising fund assets and liabilities, restricted, in the two fiscal quarters of 2023 as compared to the two fiscal quarters of 2022 due to payments for advertising activities outpacing receipts for advertising contributions.
Investing Activities
Cash used in investing activities was $39.2 million in the two fiscal quarters of 2023, which primarily consisted of $38.0 million of capital expenditures (driven primarily by investments in technological initiatives, supply chain centers and corporate store operations).
Financing Activities
Cash used in financing activities was $193.0 million in the two fiscal quarters of 2023, which included the repurchase of approximately $120.8 million in common stock under our Board of Directors-approved share repurchase program, dividend payments of $42.9 million, repayments of long-term debt and finance lease obligations of $27.2 million and tax payments for the vesting of restricted stock of $3.1 million. These uses of cash were partially offset by proceeds from the exercise of stock options of $1.1 million.
Critical Accounting Estimates
For a description of the Company’s critical accounting estimates, refer to “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2022 Form 10-K. The Company considers its most significant accounting policies and estimates to be long-lived assets, casualty insurance reserves and income taxes. There have been no material changes to the Company’s critical accounting estimates since January 1, 2023.
24
Forward-Looking Statements
This filing contains various forward-looking statements about the Company within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”) that are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. The following cautionary statements are being made pursuant to the provisions of the Act and with the intention of obtaining the benefits of the “safe harbor” provisions of the Act. You can identify forward-looking statements by the use of words such as “anticipates,” “believes,” “could,” “should,” “estimates,” “expects,” “intends,” “may,” “will,” “plans,” “predicts,” “projects,” “seeks,” “approximately,” “potential,” “outlook” and similar terms and phrases that concern our strategy, plans or intentions, including references to assumptions. These forward-looking statements address various matters including information concerning future results of operations and business strategy, our anticipated profitability, estimates in same store sales growth, store growth and the growth of our U.S. and international business in general, our ability to service our indebtedness, our future cash flows, our operating performance, trends in our business and other descriptions of future events reflect the Company’s expectations based upon currently available information and data. While we believe these expectations and projections are based on reasonable assumptions, such forward-looking statements are inherently subject to risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from our expectations are more fully described under the section headed “Risk Factors” in this filing and in our other filings with the Securities and Exchange Commission, including under the section headed “Risk Factors” in our 2022 Form 10-K for the fiscal year ended January 1, 2023. Actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors, including but not limited to: our substantial increased indebtedness as a result of our recapitalization transactions and our ability to incur additional indebtedness or refinance or renegotiate key terms of that indebtedness in the future; the impact a downgrade in our credit rating may have on our business, financial condition and results of operations; our future financial performance and our ability to pay principal and interest on our indebtedness; the strength of our brand, including our ability to compete in the U.S. and internationally in our intensely competitive industry, including the food service and food delivery markets; our ability to successfully implement our growth strategy; labor shortages or changes in operating expenses resulting from increases in prices of food (particularly cheese), fuel and other commodity costs, labor, utilities, insurance, employee benefits and other operating costs or negative economic conditions; our ability to manage difficulties associated with or related to the COVID-19 pandemic and the effects of COVID-19 and related regulations and policies on our business and supply chain, including impacts on the availability of labor; the effectiveness of our advertising, operations and promotional initiatives; shortages, interruptions or disruptions in the supply or delivery of fresh food products and store equipment; the impact of social media and other consumer-oriented technologies on our business, brand and reputation; the impact of new or improved technologies and alternative methods of delivery on consumer behavior; new product, digital ordering and concept developments by us, and other food-industry competitors; our ability to maintain good relationships with and attract new franchisees, and franchisees’ ability to successfully manage their operations without negatively impacting our royalty payments and fees or our brand’s reputation; our ability to successfully implement cost-saving strategies; our ability and that of our franchisees to successfully operate in the current and future credit environment; changes in the level of consumer spending given general economic conditions, including interest rates, energy prices and consumer confidence or negative economic conditions in general; our ability and that of our franchisees to open new restaurants and keep existing restaurants in operation and maintain demand for new stores; the impact that widespread illness, health epidemics or general health concerns, severe weather conditions and natural disasters may have on our business and the economies of the countries where we operate; changes in foreign currency exchange rates; changes in income tax rates; our ability to retain or replace our executive officers and other key members of management and our ability to adequately staff our stores and supply chain centers with qualified personnel; our ability to find and/or retain suitable real estate for our stores and supply chain centers; changes in government legislation and regulations, including changes in laws and regulations regarding information privacy, payment methods and consumer protection and social media; adverse legal judgments or settlements; food-borne illness or contamination of products or food tampering or other events that may impact our reputation; data breaches, power loss, technological failures, user error or other cyber risks threatening us or our franchisees; the impact that environmental, social and governance matters may have on our business and reputation; the effect of war, terrorism, catastrophic events or climate change; our ability to pay dividends and repurchase shares; changes in consumer tastes, spending and traffic patterns and demographic trends; changes in accounting policies; and adequacy of our insurance coverage. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this filing might not occur. All forward-looking statements speak only as of the date of this filing and should be evaluated with an understanding of their inherent uncertainty. Except as required under federal securities laws and the rules and regulations of the Securities and Exchange Commission, or other applicable law, we will not undertake, and specifically disclaim, any obligation to publicly update or revise any forward-looking statements to reflect events or circumstances arising after the date of this filing, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on the forward-looking statements included in this filing or that may be made elsewhere from time to time by, or on behalf of, us. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.
25
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Market Risk
We do not engage in speculative transactions, nor do we hold or issue financial instruments for trading purposes. In connection with the recapitalizations of our business, we have issued fixed rate notes and entered into our 2022 and 2021 Variable Funding Notes and, at June 18, 2023, we are exposed to interest rate risk on borrowings under our 2022 and 2021 Variable Funding Notes. As of June 18, 2023, we had no outstanding borrowings under our 2022 and 2021 Variable Funding Notes.
Our 2022 and 2021 Variable Funding Notes bear interest at fluctuating interest rates based on the Secured Overnight Financing Rate (“Term SOFR”), plus a spread adjustment. Accordingly, a rising interest rate environment could result in higher interest expense due on borrowings under our 2022 and 2021 Variable Funding Notes, in which event we may have difficulties making interest payments and funding our other fixed costs, and our available cash flow for general corporate requirements may be adversely affected.
Our fixed-rate debt exposes the Company to changes in market interest rates reflected in the fair value of the debt and to the risk that the Company may need to refinance maturing debt with new debt at a higher rate.
We are exposed to market risks from changes in commodity prices. During the normal course of business, we purchase cheese and certain other food products that are affected by changes in commodity prices and, as a result, we are subject to volatility in our food costs. Severe increases in commodity prices or food costs, including as a result of inflation, could affect the global and U.S. economies and could also adversely impact our business, financial condition or results of operations. We may periodically enter into financial instruments to manage this risk, although we have not done so historically. We do not engage in speculative transactions or hold or issue financial instruments for trading purposes. In instances when we use fixed pricing agreements with our suppliers, these agreements cover our physical commodity needs, are not net-settled and are accounted for as normal purchases.
Foreign Currency Exchange Risk
We have exposure to various foreign currency exchange rate fluctuations for revenues generated by our operations outside the U.S., which can adversely impact our net income and cash flows. Approximately 6.9% of our total revenues in the second quarter of 2023, approximately 6.8% of our total revenues in the two fiscal quarters of 2023, approximately 6.3% of our total revenues in the second quarter of 2022 and approximately 6.5% of our total revenues in the two fiscal quarters of 2022 were derived from our international franchise segment, a majority of which were denominated in foreign currencies. We also operate dough manufacturing and distribution facilities in Canada, which generate revenues denominated in Canadian dollars. We do not enter into financial instruments to manage this foreign currency exchange risk. We estimate that a hypothetical 10% adverse change in the foreign currency rates for our international markets would have resulted in a negative impact on royalty revenues of approximately $12.4 million in the two fiscal quarters of 2023.
Item 4. Controls and Procedures.
Management, with the participation of the Company’s Chief Executive Officer, Russell J. Weiner, and Executive Vice President and Chief Financial Officer, Sandeep Reddy, performed an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, Mr. Weiner and Mr. Reddy concluded that the Company’s disclosure controls and procedures were effective.
During the quarterly period ended June 18, 2023, there were no changes in the Company’s internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
26
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
We are a party to lawsuits, revenue agent reviews by taxing authorities and administrative proceedings in the ordinary course of business which include, without limitation, workers’ compensation, general liability, automobile and franchisee claims. We are also subject to suits related to employment practices.
While we may occasionally be party to large claims, including class action suits, we do not believe that any existing matters, individually or in the aggregate, will materially affect our financial position, results of operations or cash flows.
Item 1A. Risk Factors.
There have been no material changes with respect to those risk factors previously disclosed in Item 1A “Risk Factors” in Part I of our 2022 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
c. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
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Maximum |
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||||
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|
|
|
|
|
|
Total Number of Shares |
|
|
Value of Shares that |
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||||
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Total Number |
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|
|
|
Purchased as Part of |
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May Yet Be Purchased |
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||||
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of Shares |
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Average Price Paid |
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Publicly Announced |
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Under the Program (2) |
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||||
Period |
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Purchased (1) |
|
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Per Share |
|
|
Program (2) |
|
|
(in thousands) |
|
||||
Period #4 (March 27, 2023 |
|
|
1,575 |
|
|
$ |
331.34 |
|
|
|
— |
|
|
$ |
380,275 |
|
Period #5 (April 24, 2023 |
|
|
293,122 |
|
|
|
310.83 |
|
|
|
291,723 |
|
|
|
289,604 |
|
Period #6 (May 22, 2023 |
|
|
1,762 |
|
|
|
301.45 |
|
|
|
307 |
|
|
|
289,511 |
|
Total |
|
|
296,459 |
|
|
$ |
310.88 |
|
|
|
292,030 |
|
|
$ |
289,511 |
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(1) |
4,429 shares in the second quarter of 2023 were purchased as part of the Company’s employee stock payroll deduction plan at an average price of $316.00.
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(2) |
On July 20, 2021, the Company’s Board of Directors authorized a share repurchase program to repurchase up to $1.0 billion of the Company’s common stock. As of June 18, 2023, $289.5 million remained available for future purchases of the Company’s common stock under this share repurchase program.
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Authorization for the repurchase program may be modified, suspended, or discontinued at any time. The repurchase of shares in any particular period and the actual amount of such purchases remain at the discretion of the Board of Directors, and no assurance can be given that shares will be repurchased in the future. |
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
27
Item 6. Exhibits.
Exhibit Number |
|
Description |
10.1 |
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31.1 |
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31.2 |
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32.1 |
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32.2 |
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101.INS |
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XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document. |
101.CAL |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
101.DEF |
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Inline XBRL Taxonomy Extension Definition Linkbase Document. |
104 |
|
Cover page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101). |
28
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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DOMINO’S PIZZA, INC. (Registrant) |
Date: July 24, 2023 |
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/s/ Sandeep Reddy |
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Sandeep Reddy |
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Executive Vice President, Chief Financial Officer (Principal Financial Officer) |
29
FIRST AMENDMENT TO CLASS A-1 NOTE PURCHASE AGREEMENT
This First Amendment to the Class A-1 Note Purchase Agreement, dated as of May 15, 2023 (this “Amendment”), is by and between DOMINO’S PIZZA MASTER ISSUER LLC, DOMINO’S SPV CANADIAN HOLDING COMPANY INC., DOMINO’S PIZZA DISTRIBUTION LLC, and DOMINO’S IP HOLDER LLC, each as a co-issuer (collectively, the “Co-Issuers” and each a “Co-Issuer”), DOMINO’S PIZZA FRANCHISING LLC, DOMINO’S PIZZA INTERNATIONAL FRANCHISING INC., DOMINO’S PIZZA CANADIAN DISTRIBUTION ULC, DOMINO’S RE LLC, DOMINO’S EQ LLC, and DOMINO’S SPV GUARANTOR LLC, each as a guarantor (collectively, the “Guarantors” and each a “Guarantor”), DOMINO’S PIZZA LLC, as Manager (the “Manager”) and COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH (the “Administrative Agent”) and acknowledged and agreed to by the Committed Note Purchasers party hereto.
RECITALS
WHEREAS, the parties hereto are parties to a Class A-1 Note Purchase Agreement (the “Existing Class A-1 NPA”), dated as of April 16, 2021, by and among the Master Issuer, the Guarantors, the Manager, the Conduit Investors thereto, the Committed Note Purchasers thereto, the Funding Agents thereto and the Administrative Agent;
WHEREAS, the Advances, Swingline Loans and Unreimbursed L/C Drawings under the Existing Class A-1 NPA may accrue interest based on the Eurodollar Funding Rate in accordance with the terms of the Existing Class A-1 NPA;
WHEREAS, the parties have determined, in accordance with the Existing Class A-1 NPA, that a Benchmark Transition Event has occurred and that the Eurodollar Funding Rate should be replaced with Term SOFR for purposes of the Existing Class A-1 NPA;
WHEREAS, the parties hereto desire to amend the Existing Class A-1 NPA as set forth in this Amendment; and
WHEREAS, each Co-Issuer has authorized the execution and delivery of this Amendment.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and intending to be legally bound, the parties to this Amendment hereby agree as follows:
[Signature Page Follows]
IN WITNESS WHEREOF, each of the parties hereto have caused this Amendment to be duly executed by its respective duly authorized officer as of the day and year first written above.
DOMINO’S PIZZA MASTER ISSUER LLC,
as a Co-Issuer
By: /s/ Sandeep Reddy
Name: Sandeep Reddy
Title: Executive Vice President, Chief
Financial Officer
DOMINO’S SPV CANADIAN HOLDING COMPANY INC.,
as a Co-Issuer
By: /s/ Sandeep Reddy
Name: Sandeep Reddy
Title: Executive Vice President, Chief
Financial Officer
DOMINO’S PIZZA DISTRIBUTION LLC,
as a Co-Issuer
By: /s/ Sandeep Reddy
Name: Sandeep Reddy
Title: Executive Vice President, Chief
Financial Officer
DOMINO’S IP HOLDER LLC,
as a Co-Issuer
By: /s/ Sandeep Reddy
Name: Sandeep Reddy
Title: Executive Vice President, Chief
Financial Officer
DOMINO’S PIZZA FRANCHISING LLC
as Guarantor
By: /s/ Sandeep Reddy
Name: Sandeep Reddy
Title: Executive Vice President, Chief
Financial Officer
DOMINO’S PIZZA INTERNATIONAL FRANCHISING INC.
as Guarantor
By: /s/ Sandeep Reddy
Name: Sandeep Reddy
Title: Executive Vice President, Chief
Financial Officer
DOMINO’S PIZZA CANADIAN DISTRIBUTION ULC
as Guarantor
By: /s/ Sandeep Reddy
Name: Sandeep Reddy
Title: Executive Vice President, Chief
Financial Officer
DOMINO’S RE LLC
as Guarantor
By: /s/ Sandeep Reddy
Name: Sandeep Reddy
Title: Executive Vice President, Chief
Financial Officer
DOMINO’S EQ LLC
as Guarantor
By: /s/ Sandeep Reddy
Name: Sandeep Reddy
Title: Executive Vice President, Chief
Financial Officer
DOMINO’S SPV GUARANTOR LLC
as Guarantor
By: /s/ Sandeep Reddy
Name: Sandeep Reddy
Title: Executive Vice President, Chief
Financial Officer
DOMINO’S PIZZA LLC
as Manager
By: /s/ Sandeep Reddy
Name: Sandeep Reddy
Title: Executive Vice President, Chief
Financial Officer
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH, as Administrative Agent
By: /s/ Jinyang Wang
Name: Jinyang Wang
Title: Executive Director
By: /s/ Robyn Carmel
Name: Robyn Carmel
Title: Executive Director
Acknowledged and Agreed to by:
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH,
as Committed Note Purchaser
By:/s/ Jinyang Wang
Name: Jinyang Wang
Title: Executive Director
By:/s/ Robyn Carmel
Name: Robyn Carmel
Title: Executive Director
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH,
as related Funding Agent
By:/s/ Jinyang Wang
Name: Jinyang Wang
Title: Executive Director
By:/s/ Robyn Carmel
Name: Robyn Carmel
Title: Executive Director
Exhibit A
[See attached.]
CLASS A-1 NOTE PURCHASE AGREEMENT
(SERIES 2021-1 VARIABLE FUNDING SENIOR NOTES, CLASS A-1)
dated as of April 16, 2021
among
DOMINO’S PIZZA MASTER ISSUER LLC,
DOMINO’S SPV CANADIAN HOLDING COMPANY INC.,
DOMINO’S PIZZA DISTRIBUTION LLC, and
DOMINO’S IP HOLDER LLC,
each as a Co-Issuer,
DOMINO’S PIZZA FRANCHISING LLC,
DOMINO’S PIZZA INTERNATIONAL FRANCHISING INC.,
DOMINO’S PIZZA CANADIAN DISTRIBUTION ULC,
DOMINO’S RE LLC,
DOMINO’S EQ LLC, and
DOMINO’S SPV GUARANTOR LLC
each as a Guarantor,
DOMINO’S PIZZA LLC,
as Manager,
CERTAIN CONDUIT INVESTORS,
each as a Conduit Investor,
CERTAIN FINANCIAL INSTITUTIONS,
each as a Committed Note Purchaser,
CERTAIN FUNDING AGENTS,
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH,
as L/C Provider,
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH,
as Swingline Lender,
and
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH,
as Administrative Agent
TABLE OF CONTENTS
Page
Article I DEFINITIONS 2
Section 1.01 Definitions 2
Section 1.02 Defined terms. 3
Section 1.03 Benchmark Calculations. 18
Article II PURCHASE AND SALE OF SERIES 2021-1 CLASS A-1 NOTES 2119
Section 2.01 The Advance Notes. 2119
Section 2.02 Advances. 2219
Section 2.03 Borrowing Procedures. 2321
Section 2.04 The Series 2021-1 Class A-1 Notes 2623
Section 2.05 Reduction in Commitments. 2624
Section 2.06 Swingline Commitment. 2927
Section 2.07 L/C Commitment. 3230
Section 2.08 L/C Reimbursement Obligations. 3734
Section 2.09 L/C Participations. 3936
Article III INTEREST AND FEES 4038
Section 3.01 Interest. 4038
Section 3.02 Fees. 4240
Section 3.03 EurodollarSOFR Lending Unlawful 4240
Section 3.04 Deposits Unavailable 43Benchmark Replacement 40
Section 3.05 Increased Costs, etc. 4642
Section 3.06 Funding Losses 4742
Section 3.07 Increased Capital or Liquidity Costs 4743
Section 3.08 Taxes. 4844
Section 3.09 Change of Lending Office 5147
Article IV OTHER PAYMENT TERMS 5247
Section 4.01 Time and Method of Payment (Amounts Distributed by the Administrative Agent) 5247
Section 4.02 Order of Distributions (Amounts Distributed by the Trustee or the Paying Agent) 5248
Section 4.03 L/C Cash Collateral 5349
Section 4.04 Alternative Arrangements with Respect to Letters of Credit 5450
Article V THE ADMINISTRATIVE AGENT AND THE FUNDING AGENTS 5450
Section 5.01 Authorization and Action of the Administrative Agent 5450
Section 5.02 Delegation of Duties 5551
Section 5.03 Exculpatory Provisions 5551
Section 5.04 Reliance 5651
Section 5.05 Non-Reliance on the Administrative Agent and Other Purchasers 5652
Section 5.06 The Administrative Agent in its Individual Capacity 5652
Section 5.07 Successor Administrative Agent; Defaulting Administrative Agent. 5652
Section 5.08 Authorization and Action of Funding Agents 5854
Section 5.09 Delegation of Duties 5854
Section 5.10 Exculpatory Provisions 5854
Section 5.11 Reliance 5955
Section 5.12 Non-Reliance on the Funding Agent and Other Purchasers 5955
Section 5.13 The Funding Agent in its Individual Capacity 5955
Section 5.14 Successor Funding Agent 6055
Article VI REPRESENTATIONS AND WARRANTIES 6056
Section 6.01 The Co-Issuers and Guarantors 6056
Section 6.02 The Manager 6157
Section 6.03 Lender Parties 6257
Article VII CONDITIONS 6359
Section 7.01 Conditions to Issuance and Effectiveness 6359
Section 7.02 Conditions to Initial Extensions of Credit 6359
Section 7.03 Conditions to Each Extension of Credit 6459
Article VIII COVENANTS 6561
Section 8.01 Covenants 6561
Article IX MISCELLANEOUS PROVISIONS 6762
Section 9.01 Amendments 6762
Section 9.02 No Waiver; Remedies 6864
Section 9.03 Binding on Successors and Assigns. 6864
Section 9.04 Survival of Agreement 6965
Section 9.05 Payment of Costs and Expenses; Indemnification. 7065
Section 9.06 Characterization as Related Document; Entire Agreement 7268
Section 9.07 Notices 7368
Section 9.08 Severability of Provisions 7369
Section 9.09 Tax Characterization 7369
Section 9.10 No Proceedings; Limited Recourse. 7369
Section 9.11 Confidentiality 7470
Section 9.12 GOVERNING LAW; CONFLICTS WITH INDENTURE 7571
Section 9.13 JURISDICTION 7571
Section 9.14 WAIVER OF JURY TRIAL 7571
Section 9.15 Counterparts 7672
Section 9.16 Third-Party Beneficiary 7672
Section 9.17 Assignment. 7672
Section 9.18 Defaulting Investors 7874
Section 9.19 No Fiduciary Duties 8177
Section 9.20 No Guarantee by the Manager 8177
Section 9.21 Term; Termination of Agreement 8277
Section 9.22 Acknowledgement and Consent to Bail-In of EEA Financial Institutions 8277
Section 9.23 [Reserved] 8278
Section 9.24 USA Patriot Act 8278
SCHEDULES AND EXHIBITS
SCHEDULE I Investor Groups and Commitments
SCHEDULE II Notice Addresses for Lender Parties, Agents, Co-Issuers and Manager
SCHEDULE III Additional Closing Conditions
SCHEDULE IV Letters of Credit
EXHIBIT A-1 Form of Advance Request
EXHIBIT A-2 Form of Swingline Loan Request
EXHIBIT B Form of Assignment and Assumption Agreement
EXHIBIT C Form of Investor Group Supplement
EXHIBIT D Form of Purchaser’s Letter
EXHIBIT E Form of Joinder Agreement
CLASS A-1 NOTE PURCHASE AGREEMENT
THIS CLASS A-1 NOTE PURCHASE AGREEMENT, dated as of April 16, 2021 (as amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms hereof, this “Agreement”), is made by and among:
BACKGROUND
DEFINITIONS
“Acquiring Committed Note Purchaser” has the meaning set forth in Section 9.17(a).
“Acquiring Investor Group” has the meaning set forth in Section 9.17(c).
“Additional Committed Note Purchaser” has the meaning set forth in Section 2.02.
“Adjusted Term SOFR” means, for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation plus (b) the Term SOFR Adjustment; provided that if Adjusted Term SOFR as so determined shall ever be less than the Floor, then Adjusted Term SOFR shall be deemed to be the Floor.
“Administrative Agent Indemnified Parties” has the meaning set forth in Section 9.05(d).
“Advance” has the meaning set forth in the Recitals.
“Advance Request” has the meaning set forth in Section 7.03(c).
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affected Person” has the meaning set forth in Section 3.05.
“Agent Indemnified Liabilities” has the meaning set forth in Section 9.05(c).
“Agent Indemnified Parties” has the meaning set forth in Section 9.05(c).
“Aggregate Unpaids” has the meaning set forth in Section 5.01.
“Anti-Corruption Laws” means the laws, rules, and regulations of the jurisdictions applicable to any Co-Issuer or Guarantor or its subsidiaries from time to time concerning or relating to bribery or corruption, including the U.S. Foreign Corrupt Practices Act of 1977, as amended.
“Anti-Terrorism Laws” means any laws, regulations, or orders of any Governmental Authority of the United States, the United Nations, the United Kingdom, the European Union or the Netherlands relating to terrorism financing or money laundering, including, but not limited to, the International Emergency Economic Powers Act (50 U.S.C. § 1701 et seq.), the Trading With the Enemy Act (50 U.S.C. § 5 et seq.), the International Security Development and Cooperation Act (22 U.S.C. § 2349aa-9 et seq.), the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (the “USA Patriot Act”), and any rules or regulations promulgated pursuant to or under the authority of any of the foregoing.
“Applicable Agent Indemnified Liabilities” has the meaning set forth in Section 9.05(d).
“Applicable Agent Indemnified Parties” has the meaning set forth in Section 9.05(d).
“Application” means an application, in such form as the applicable L/C Issuing Bank may specify from time to time, requesting such L/C Issuing Bank to issue a Letter of Credit.
“Assignment and Assumption Agreement” has the meaning set forth in Section 9.17(a).
“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, anythe tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Eurodollar Interest Period” pursuant to Section 3.04(c)(iv).
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Base Rate” means, for purposes of the Series 2021-1 Class A-1 Notes, on any day, a fluctuating rate per annum equal to (i) the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as established from time to time by the Administrative Agent as its “prime rate” at its principal U.S. office, and (c) the Eurodollar Base Rate (Reserve Adjusted) applicable to one month Interest Periods on the date of determination of the Base Rate plus 0.50% plus (ii)sum of (a) 1.50% for an Advance and 1.30% for a Swingline Loan plus (b) the greater of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Rate in effect on such day plus 0.50% and (iii) Adjusted Term SOFR in effect on such day plus 0.50%; provided, that any change in the Base Rate will in no event be higher than the maximum rate permitted by applicable Law. 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. Any change in such prime rate established by the Administrative Agent shall take effect atdue to a change in the Prime Rate, the Federal Funds Rate or Adjusted Term SOFR shall be effective as of the opening of business on the effective day of such change is effective.in the Prime Rate, the Federal Funds Rate or Adjusted Term SOFR, respectively; provided, further, that changes in any rate of interest calculated by reference to the Base Rate shall take effect simultaneously with each change in the Base Rate.
“Base Rate Advance” means an Advance that bears interest at a rate of interest determined by reference to the Base Rate during such time as it bears interest at such rate, as provided in this Agreement.
“Base Rate Term SOFR Determination Day” has the meaning specified in the definition of “Term SOFR”.
“Benchmark” means, initially, the Eurodollar FundingTerm SOFR Reference Rate; provided that if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date havehas occurred with respect to the Eurodollar FundingTerm SOFR Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 3.04(c)(ia).
“Benchmark Cessation Changes” means any replacement of a Benchmark hereunder and all documents, instruments, and amendments executed, delivered or otherwise implemented or effected (automatically or otherwise) after the date hereof in accordance with or in furtherance of Section 3.04(c).
“Benchmark Replacement” means, for any Available Tenor” means with respect to any Benchmark Transition Event, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:
(1) : (a) Daily Simple SOFR, and (b) the the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment;
(2) the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;
(3) the sum of: (ax) the alternate benchmark rate that has been selected by the Administrative Agent and the Co-Issuers as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate
by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement forto the then-current Benchmark for U.S. dollar-denominatedDollar-denominated syndicated credit facilities at such time and (by) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Related Documents.
provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion. If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Related Documents; provided further that, notwithstanding anything to the contrary in this Agreement or in any other Related Document, upon the occurrence of a Term SOFR Transition Event, and the delivery of a Term SOFR Notice, on the applicable Benchmark Replacement Date the “Benchmark Replacement” shall revert to and shall be deemed to be the sum of (a) Term SOFR and (b) the Term SOFR Adjustment, as set forth in clause (1) of this definition (subject to the first proviso above regarding such rate being displayed on a screen or other information service).
“Benchmark Replacement Adjustment” means, with respect to any replacement of the then- current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:
(1) for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the first alternative set forth in the order below that can be determined by the Administrative Agent:
(a) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor;
(b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and
(2) for purposes of clause (3) of the definition of “Benchmark Replacement,” Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Co-Issuers for the applicable Corresponding Tenor giving due consideration to (ia) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such
Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (iib) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominatedDollar-denominated syndicated credit facilities;.
provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by the Administrative Agent in its reasonable discretion.
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definitions of “Base Rate”, “CP Funding Rate”, “Eurodollar Advance”, “Eurodollar Business Day”, “Eurodollar Funding Rate”, “Eurodollar Funding Rate (Reserve Adjusted)”, “Eurodollar Interest Period”, “Eurodollar Rate”, “Eurodollar Reserve Percentage”, “Eurodollar Tranche” and “Series 2019-1 Class A-1 Note Rate” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions and other technical, administrative or operational matters) that the Administrative Agent, after consultation with the Co-Issuers, decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Related Documents).
“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark:
(1) (a) in the case of clause (1a) or (2b) of the definition of “Benchmark Transition Event,”, the later of (aA) the date of the public statement or publication of information referenced therein and (bB) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(2) (b) in the case of clause (3c) of the definition of “Benchmark Transition Event,”, the first date of the publicon which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by or on behalf of the administrator of such Benchmark (or such component thereof) or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; provided that such non-representativeness, non-compliance or non-alignment will be determined by reference to the most recent statement or publication of information referenced therein; in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
(3) in the case of a Term SOFR Transition Event, the date that is thirty (30) days after the date a Term SOFR Notice is provided to the Investors and the Co-Issuers pursuant to Section 3.04(c)(ii); or
(4) in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Investors, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Investors, written notice of objection to such Early Opt-in Election from the Required Investor Groups.
For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1a) or (2b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:
(1) (a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely,; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
(2) (b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve SystemBoard, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely,; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(3) (c) a public statement or publication of information by the regulatory supervisor foror on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) or the regulatory supervisor for the
administrator of such Benchmark (or such component thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longernot, or as of a specified future date will not be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability Period” means, the period (if any) (xa) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Related Document in accordance with Section 3.04(c) and (yb) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Related Document in accordance with Section 3.04(c).
“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Rule.
“Beneficial Ownership Rule” means 31 C.F.R. § 1010.230.
“Borrowing” has the meaning set forth in Section 2.02(c).
“Breakage Amount” has the meaning set forth in Section 3.06.
“Cash Collateral Account” has the meaning set forth in Section 4.03(b).
“Change in Law” means (a) any law, rule or regulation or any change therein or in the interpretation or application thereof (whether or not having the force of law), in each case, adopted, issued or occurring after the Series 2021-1 Closing Date or (b) any request, guideline or directive (whether or not having the force of law) from any government or political subdivision or agency, authority, bureau, central bank, commission, department or instrumentality thereof, or any court, tribunal, grand jury or arbitrator, or any accounting board or authority (whether or not a Governmental Authority) which is responsible for the establishment or interpretation of national or international accounting principles, in each case, whether foreign or domestic (each, an “Official Body”) charged with the administration, interpretation or application thereof, or the compliance with any request or directive of any Official Body (whether or not having the force of law) made, issued or occurring after the Series 2021-1 Closing Date; provided, however, for purposes of this definition, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all regulations, requests, guidelines or directives issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case, pursuant to Basel III, are deemed to have gone into effect and been adopted subsequent to the date hereof.
“Class A-1 Amendment Expenses” has the meaning set forth in Section 9.05(a)(ii).
“Class A-1 Taxes” has the meaning set forth in Section 3.08(a).
“Commercial Paper” means, with respect to any Conduit Investor, the promissory notes issued in the commercial paper market by or for the benefit of such Conduit Investor.
“Commitment Amount” means, as to each Committed Note Purchaser, the amount set forth on Schedule I opposite such Committed Note Purchaser’s name as its Commitment Amount or, in the case of a Committed Note Purchaser that becomes a party to this Agreement pursuant to an Assignment and Assumption Agreement, an Investor Group Supplement or a Joinder Agreement, the amount set forth therein as such Committed Note Purchaser’s Commitment Amount, in each case, as such amount may be (i) reduced pursuant to Section 2.05 or (ii) increased or reduced by any Assignment and Assumption Agreement or Investor Group Supplement entered into by such Committed Note Purchaser in accordance with the terms of this Agreement.
“Commitment Percentage” means, on any date of determination, with respect to any Investor Group, the ratio, expressed as a percentage, which such Investor Group’s Maximum Investor Group Principal Amount bears to the Series 2021-1 Class A-1 Maximum Principal Amount on such date.
“Commitments” means the obligations of each Committed Note Purchaser included in each Investor Group to fund Advances pursuant to Section 2.02(a) and to participate in Swingline Loans and Letters of Credit pursuant to Sections 2.06 and 2.08, respectively, in an aggregate stated amount up to its Commitment Amount.
“Commitment Term” means the period from and including the Series 2021-1 Closing Date to but excluding the earlier of (a) the Commitment Termination Date and (b) the date on which the Commitments are terminated or reduced to zero in accordance with this Agreement.
“Commitment Termination Date” means the Series 2021-1 Class A-1 Senior Notes Renewal Date (as such date may be extended pursuant to Section 3.06(b) of the Series 2021-1 Supplement).
“Committed Note Purchaser” has the meaning set forth in the preamble.
“Committed Note Purchaser Percentage” means, on any date of determination, with respect to any Committed Note Purchaser in any Investor Group, the ratio, expressed as a percentage, which the Commitment Amount of such Committed Note Purchaser bears to such Investor Group’s Maximum Investor Group Principal Amount on such date.
“Conduit Assignee” means, with respect to any Conduit Investor, any commercial paper conduit whose Commercial Paper is rated by at least two of the Specified Rating Agencies and is rated at least “A-1” from S&P Global Ratings, “P-1” from Moody’s and/or “F1” from Fitch, as applicable, that is administered by the Funding Agent with respect to such Conduit Investor or any Affiliate of such Funding Agent, in each case, designated by such Funding Agent to accept an assignment from such Conduit Investor of the Investor Group Principal Amount or a portion thereof with respect to such Conduit Investor pursuant to Section 9.17(b).
“Conduit Investor” has the meaning set forth in the preamble.
“Confidential Information” for the purposes of this Agreement has the meaning set forth in Section 9.11.
“Conforming Changes” means, with respect to either the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate”, “CP Funding Rate”, “Term SOFR Reference Rate”, “SOFR Interest Accrual Period” or any similar or analogous
definition (or the addition of a concept of “interest period”) and “Adjusted Term SOFR”, timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section 3.06 and other technical, administrative or operational matters) that the Administrative Agent, in consultation with the Co-Issuers, decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides in its reasonable discretion that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines in its reasonable discretion and in consultation with the Co-Issuers that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Related Documents).
“Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.
“CP Advance” means an Advance that bears interest at a rate of interest determined by reference to the CP Rate during such time as it bears interest at such rate, as provided in this Agreement.
“CP Funding Rate” means, with respect to each Conduit Investor, for any day during any Interest Period, for any portion of the Advances funded or maintained through the issuance of Commercial Paper by such Conduit Investor, the per annum rate equivalent to the weighted average cost (as determined by the related Funding Agent, and which shall include (without duplication) the fees and commissions of placement agents and dealers, incremental carrying costs incurred with respect to Commercial Paper maturing on dates other than those on which corresponding funds are received by such Conduit Investor, other borrowings by such Conduit Investor and any other costs associated with the issuance of Commercial Paper) of or related to the issuance of Commercial Paper that are allocated, in whole or in part, by such Conduit Investor or its related Funding Agent to fund or maintain such Advances for such Interest Period (and which may also be allocated in part to the funding of other assets of the Conduit Investor); provided, however, that if any component of any such rate is a discount rate, in calculating the “CP Funding Rate” for such Advances for such Interest Period, the related Funding Agent shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum.
“CP Rate” means, on any day during any Interest Period, an interest rate per annum equal to the sum of (i) the CP Funding Rate for such Interest Period plus (ii) 1.50% for an Advance and 1.30% for a Swingline Loan; provided that the CP Rate will in no event be higher than the maximum rate permitted by applicable law.
“Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which willmay include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans at such times; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative AgentInvestor Groups, then the Administrative Agent may establish another convention in its reasonable discretion.
“Defaulting Administrative Agent Event” has the meaning set forth in Section 5.07(b).
“Defaulting Investor” means any Investor that has (a) failed to make a payment required to be made by it under the terms of this Agreement within one (1) Business Day of the day such payment is required to be made by such Investor thereunder, (b) notified the Administrative Agent in writing that it does not intend to make any payment required to be made by it under the terms of this Agreement within one (1) Business Day of the day such payment is required to be made by such Investor thereunder or (c) become the subject of an Event of Bankruptcy.
“Early Opt-in Election” means, if the then-current Benchmark is the Eurodollar Funding Rate, the occurrence of:
(1) a notification by the Administrative Agent to (or the request by the Co-Issuers to the Administrative Agent to notify) each of the other parties hereto that at least five currently outstanding U.S. dollar-denominated syndicated credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review), and
(2) the joint election by the Administrative Agent and the Co-Issuers to trigger a fallback from Eurodollar Funding Rate and the provision by the Administrative Agent of written notice of such election to the Investors.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Conduit Investor” means, at any time, any Conduit Investor whose Commercial Paper at such time is rated by at least two of the Specified Rating Agencies and is rated at least “A-1” from S&P Global Ratings, “P-1” from Moody’s and/or “F1” from Fitch, as applicable.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Eurodollar Advance” means an Advance that bears interest at a rate of interest determined by reference to the Eurodollar Rate during such time as it bears interest at such rate, as provided in this Agreement.
“Eurodollar Business Day” means any Business Day on which dealings are also carried on in the London interbank market and banks are open for business in London.
“Eurodollar Funding Rate” means, for any Eurodollar Interest Period, the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two (2) Eurodollar Business Days prior to the beginning of such Eurodollar Interest Period by reference to the London interbank offered rate administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for U.S. Dollars for a period equal in length to such Eurodollar Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen or, in the event such rate does not appear on either of such Reuters pages, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate as shall be selected by the Administrative Agent from time to time in its reasonable discretion; provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the “Eurodollar Funding Rate” shall be the rate (rounded upward, if necessary, to the nearest one hundred-thousandth of a percentage point), determined by the Administrative Agent to be the average of the offered rates for deposits in U.S. Dollars in the amount of $1,000,000 for a period of time comparable to such Eurodollar Interest Period which are offered by three leading banks in the London interbank market at approximately 11:00 a.m. (London time) on the date that is two (2) Eurodollar Business Days prior to the beginning of such Eurodollar Interest Period as selected by the Administrative Agent (unless the Administrative Agent is unable to obtain such rates from such banks, in which case it will be deemed that a Eurodollar Funding Rate cannot be ascertained for purposes of Section 3.04). In respect of any Eurodollar Interest Period that is less than one (1) month in duration and if no Eurodollar Funding Rate is otherwise determinable with respect thereto in accordance with the preceding sentence of this definition, the Eurodollar Funding Rate shall be determined through the use of straight-line interpolation by reference to two rates calculated in accordance with the preceding sentence, one of which shall be determined as if the maturity of the U.S. Dollar deposits referred to therein were the period of time for which rates are available next shorter than the Eurodollar Interest Period and the other of which shall be determined as if such maturity were the period of time for which rates are available next longer than the Eurodollar Interest Period.
“Eurodollar Funding Rate (Reserve Adjusted)” means, for any Eurodollar Interest Period, an interest rate per annum (rounded upward to the nearest 1/100th of 1%) determined pursuant to the following formula:
Eurodollar Funding Rate |
= |
Eurodollar Funding Rate |
(Reserve Adjusted) |
|
1.00 - Eurodollar Reserve Percentage |
The Eurodollar Funding Rate (Reserve Adjusted) for any Eurodollar Interest Period will be determined by the Administrative Agent on the basis of the Eurodollar Reserve Percentage in effect two (2) Eurodollar Business Days before the first day of such Eurodollar Interest Period.
“Eurodollar Interest Period” means, with respect to any Eurodollar Advance, the period commencing on and including the Eurodollar Business Day such Advance first becomes a Eurodollar Advance in accordance with Section 3.01(b) and ending on but excluding a date, as elected by the Master Issuer pursuant to such Section 3.01(b), that is either (i) one (1) month
subsequent to such date, (ii) two (2) months subsequent to such date, (iii) three (3) months subsequent to such date or (iv) six (6) months subsequent to such date, or such other time period subsequent to such date not to exceed six months as agreed upon by the Master Issuer and the Administrative Agent; provided, however, that (i) no Eurodollar Interest Period may end subsequent to the second Business Day before the Accounting Date occurring immediately prior to the then-current Series 2021-1 Class A-1 Senior Notes Renewal Date and (ii) upon the occurrence and during the continuation of any Rapid Amortization Period or any Event of Default, any Eurodollar Interest Period with respect to the Eurodollar Advances of all Investor Groups may be terminated at the end of the then-current Eurodollar Interest Period (or, if the Class A-1 Senior Notes have been accelerated in accordance with Section 9.2 of the Base Indenture, immediately), at the election of the Administrative Agent or Investor Groups holding in the aggregate more than 50% of the Eurodollar Tranche, by notice to the Co-Issuers, the Manager, the Control Party and the Funding Agents, and upon such election the Eurodollar Advances in respect of which interest was calculated by reference to such terminated Eurodollar Interest Period shall be converted to Base Rate Advances.
“Eurodollar Rate” means, on any day during any Eurodollar Interest Period, an interest rate per annum equal to the sum of (i) the Eurodollar Funding Rate (Reserve Adjusted) for such Eurodollar Interest Period plus (ii) 1.50% for an Advance and 1.30% for a Swingline Loan; provided that the Eurodollar Rate will in no event be higher than the maximum rate permitted by applicable Law.
“Eurodollar Reserve Percentage” means, for any Eurodollar Interest Period, the reserve percentage (expressed as a decimal) equal to the maximum aggregate reserve requirements (including all basic, emergency, supplemental, marginal and other reserves and taking into account any transitional adjustments or other scheduled changes in reserve requirements) specified under regulations issued from time to time by the F.R.S. Board and then applicable to liabilities or assets constituting “Eurocurrency Liabilities,” as currently defined in Regulation D of the F.R.S. Board, having a term approximately equal or comparable to such Eurodollar Interest Period.
“Eurodollar Tranche” means any portion of the Series 2021-1 Class A-1 Outstanding Principal Amount funded or maintained with Eurodollar Advances.
“Extension Fees” has the meaning given to such term in the Class A-1 VFN Fee Letter.
“FATCA” means (a) Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future Treasury regulations thereunder or official interpretations thereof, (b) any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the United States and any other jurisdiction with the purpose (in either case) of facilitating the implementation of (a) above, or (c) any agreement pursuant to the implementation of paragraphs (a) or (b) above with the U.S. Internal Revenue Service or any other Governmental Authority in the United States.
“Federal Funds Rate” means, for any specified period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the overnight federal funds rates as published in Federal Reserve Board Statistical Release H.15(519) or any successor
or substitute publication selected by the Administrative Agent (or, if such day is not a Business Day, for the next preceding Business Day), or if, for any reason, such rate is not available on any day, the rate determined, in the reasonable opinion of the Administrative Agent, to be the rate at which overnight federal funds are being offered in the national federal funds market at 9:00 a.m. (New York City time).
“Fitch” means Fitch, Inc., doing business as Fitch Ratings, or any successor thereto. “F.R.S. Board” means the Board of Governors of the Federal Reserve System. “Funding Agent” has the meaning set forth in the preamble.
“Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Eurodollar Funding Rate. As of the Series 2021-1 Closing Date, “Floor” means 0.0%.
“Floor” means 0.0%.
“Increased Capital Costs” has the meaning set forth in Section 3.07.
“Increased Costs” has the meaning set forth in Section 3.05.
“Increased Tax Costs” has the meaning set forth in Section 3.08.
“Indemnified Liabilities” has the meaning set forth in Section 9.05(b).
“Indemnified Parties” has the meaning set forth in Section 9.05(b).
“Interest Reserve Letter of Credit” means any letter of credit issued hereunder for the benefit of the Trustee and the Senior Noteholders or the Senior Subordinated Noteholders, as applicable.
“Investor” means any one of the Conduit Investors and the Committed Note Purchasers and “Investors” means the Conduit Investors and the Committed Note Purchasers collectively.
“Investor Group” means (i) for each Conduit Investor, collectively, such Conduit Investor, the related Committed Note Purchaser(s) set forth opposite the name of such Conduit Investor on Schedule I (or, if applicable, set forth for such Conduit Investor in the Assignment and Assumption Agreement, Investor Group Supplement or Joinder Agreement pursuant to which such Conduit Investor or Committed Note Purchaser becomes a party thereto), any related Program Support Provider(s) and the related Funding Agent (which shall constitute the Series 2021-1 Class A-1 Noteholder for such Investor Group) and (ii) for each other Committed Note Purchaser that is not related to a Conduit Investor, collectively, such Committed Note Purchaser, any related Program Support Provider(s) and the related Funding Agent (which shall constitute the Series 2021-1 Class A-1 Noteholder for such Investor Group).
“Investor Group Increase Amount” means, with respect to any Investor Group, for any Business Day, the portion of the Increase, if any, actually funded by such Investor Group on such Business Day.
“Investor Group Principal Amount” means, with respect to any Investor Group, (a) when used with respect to the Series 2021-1 Closing Date, an amount equal to (i) such Investor Group’s Commitment Percentage of the Series 2021-1 Class A-1 Initial Advance Principal
Amount, plus (ii) such Investor Group’s Commitment Percentage of the Series 2021-1 Class A-1 Outstanding Subfacility Amount outstanding on the Series 2021-1 Closing Date, and (b) when used with respect to any other date, an amount equal to (i) the Investor Group Principal Amount with respect to such Investor Group on the immediately preceding Business Day (excluding any Series 2021-1 Class A-1 Outstanding Subfacility Amount included therein), plus (ii) the Investor Group Increase Amount with respect to such Investor Group on such date, minus (iii) the amount of principal payments made to such Investor Group on the Series 2021-1 Class A-1 Advance Notes on such date, plus (iv) such Investor Group’s Commitment Percentage of the Series 2021-1 Class A-1 Outstanding Subfacility Amount outstanding on such date.
“Investor Group Supplement” has the meaning set forth in Section 9.17(c).
“ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.
“ISP” means “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc.
“Joinder Agreement” means a Joinder Agreement in the form attached hereto as Exhibit E.
“L/C Commitment” means the obligation of the L/C Provider to provide Letters of Credit pursuant to Section 2.07, in an aggregate Undrawn L/C Face Amount, together with any Unreimbursed L/C Drawings, at any one time outstanding not to exceed $100,000,000, as such amount may be reduced or increased pursuant to Section 2.07(g) or reduced pursuant to Section 2.05(b).
“L/C Issuing Bank” has the meaning set forth in Section 2.07(h).
“L/C Obligations” means, at any time, an amount equal to the sum of (i) any Undrawn L/C Face Amounts outstanding at such time and (ii) any Unreimbursed L/C Drawings outstanding at such time.
“L/C Other Reimbursement Amounts” has the meaning set forth in Section 2.08(a).
“L/C Provider” means Coöperatieve Rabobank U.A., New York Branch, in its capacity as provider of any Letter of Credit under this Agreement, and its permitted successors and assigns in such capacity.
“L/C Quarterly Fees” has the meaning set forth in Section 2.07(d).
“L/C Reimbursement Amount” has the meaning set forth in Section 2.08(a).
“Lender Party” means any Investor, the Swingline Lender or the L/C Provider and “Lender Parties” means the Investors, the Swingline Lender and the L/C Provider, collectively.
“Letter of Credit” has the meaning set forth in Section 2.07(a).
“Margin Stock” means “margin stock” as defined in Regulation U of the F.R.S. Board, as amended from time to time.
“Maximum Investor Group Principal Amount” means, as to each Investor Group existing on the Series 2021-1 Closing Date, the amount set forth on Schedule I to this Agreement as such Investor Group’s Maximum Investor Group Principal Amount or, in the case of any other Investor Group, the amount set forth as such Investor Group’s Maximum Investor Group Principal Amount in the Assignment and Assumption Agreement, Investor Group Supplement or Joinder Agreement by which the members of such Investor Group become parties to this Agreement, in each case, as such amount may be (i) reduced pursuant to Section 2.05 of this Agreement or (ii) increased or reduced by any Assignment and Assumption Agreement, Investor Group Supplement or Joinder Agreement entered into by the members of such Investor Group in accordance with the terms of this Agreement.
“Money Laundering Laws” has the meaning set forth in Section 6.01(i).
“Non-Excluded Taxes” has the meaning set forth in Section 3.08(a).
“Non-Funding Committed Notes Purchaser” has the meaning set forth in Section 2.02(a).
“OFAC” has the meaning set forth in Section 6.01(j).
“Official Body” has the meaning set forth in the definition of “Change in Law.”
“Other Class A-1 Transaction Expenses” means all amounts payable pursuant to Section 9.05, including Pre-Closing Costs, Out-of-Pocket Expenses and Other Post-Closing Expenses, but excluding Class A-1 Amendment Expenses.
“Other Post-Closing Expenses” has the meaning set forth in Section 9.05(a).
“Out-of-Pocket Expenses” has the meaning set forth in Section 9.05(a).
“Parent Companies” means, collectively, Domino’s Pizza, Inc., a Delaware corporation, and Domino’s Inc., a Delaware corporation.
“Pre-Closing Costs” has the meaning set forth in Section 9.05(a)(i).
“Prime Rate” means the rate of interest in effect from time to time as established by the Administrative Agent as its “prime rate” at its principal U.S. office.
“Program Support Agreement” means, with respect to any Investor, any agreement entered into by any Program Support Provider in respect of any Commercial Paper and/or Series 2021-1 Class A-1 Note of such Investor providing for the issuance of one or more letters of credit for the account of such Investor, the issuance of one or more insurance policies for which such Investor is obligated to reimburse the applicable Program Support Provider for any drawings thereunder, the sale by such Investor to any Program Support Provider of the Series 2021-1 Class A-1 Notes (or portions thereof or interests therein) and/or the making of loans and/or other extensions of credit to such Investor in connection with such Investor’s securitization program, together with any letter of credit, insurance policy or other instrument issued thereunder or guaranty thereof (but excluding any discretionary advance facility provided by a Committed Note Purchaser).
“Program Support Provider” means, with respect to any Investor, any financial institutions and any other or additional Person now or hereafter extending credit or having a commitment to extend credit to or for the account of, and/or agreeing to make purchases from, such Investor in respect of such Investor’s Commercial Paper and/or Series 2021-1 Class A-1 Note, and/or agreeing to issue a letter of credit or insurance policy or other instrument to support any obligations arising under or in connection with such Investor’s securitization program as it relates to any Commercial Paper issued by such Investor, and/or holding equity interests in such Investor, in each case pursuant to a Program Support Agreement, and any guarantor of any such Person.
“Reference Time” with respect to any setting of the then-current Benchmark means (1) if such Benchmark is the Eurodollar Funding Rate, 11:00 a.m. (London time) on the day that is two London banking days preceding the date of such setting, and (2) if such Benchmark is not the Eurodollar Funding Rate, the time determined by the Administrative Agent in its reasonable discretion.
“Reimbursement Obligation” means the obligation of the Co-Issuers to reimburse the L/C Provider pursuant to Section 2.08 for amounts drawn under Letters of Credit.
“Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.
“Required Expiration Date” had the meaning set forth in Section 2.07(a).
“Required Investor Groups” means the Investor Groups holding more than (i) if no single Investor Group holds more than 50% of the Commitments, 50% of the Commitments or (ii) if a single Investor Group holds more than 50% of the Commitments, three-fourths of the Commitments (provided, in either case, that the Commitment of any Defaulting Investor shall be disregarded in the determination of whether such threshold percentage of Commitments has been met).
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Sale Notice” has the meaning set forth in Section 9.18(b).
“Sanctioned Person” has the meaning set forth in Section 6.01(j).
“Sanctions” means any sanctions administered by or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, the Netherlands, or other relevant sanctions authority.
“Sanctioned Person” has the meaning set forth in Section 6.01(j).
“Series 2021-1 Class A-1 Allocated Payment Reduction Amount” has the meaning set forth in Section 2.05(b)(iv).
“Series 2021-1 Class A-1 Senior Notes Other Amounts” means, as of any date of determination, the aggregate unpaid Breakage Amount, Indemnified Liabilities, Agent Indemnified Liabilities, Increased Capital Costs, Increased Costs, Increased Tax Costs, Pre-Closing Costs, Other Post-Closing Expenses, Out-of-Pocket Expenses, Upfront Commitment Fees
and Extension Fees then due and payable. For purposes of the Base Indenture, the “Series 2021-1 Class A-1 Senior Notes Other Amounts” shall be deemed to be “Class A-1 Notes Other Amounts.”
“SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day publishedas administered by the SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding Business Day.
“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
“SOFR Interest Accrual Period” means, as to any SOFR Advance, the period commencing on the date of such Advance and ending on the numerically corresponding day in the calendar month that is one (1), three (3) or six (6) months thereafter (subject to the availability thereof), as specified by the Co-Issuers; provided that (i) if any SOFR Interest Accrual Period would end on a day other than a Business Day, such SOFR Interest Accrual 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 SOFR Interest Accrual Period shall end on the immediately preceding Business Day, (ii) any SOFR Interest Accrual Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such SOFR Interest Accrual Period) shall end on the last Business Day of the last calendar month of such SOFR Interest Accrual Period, (iii) no SOFR Interest Accrual Period shall extend beyond the Rated Maturity Date and (iv) no tenor that has been removed from this definition pursuant to the terms hereof shall be available for specification in any Advance Request. For purposes hereof, the date of an Advance initially shall be the date on which such Advance is made and thereafter shall be the effective date of the most recent conversion or continuation of such Advance.
“Solvent” means, with respect to any Person as of any date of determination, that on such date (i) the present fair market value (or present fair saleable value) of the assets of such Person are not less than the total amount required to pay the liabilities of such Person on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured,
(ii) the Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business,
(iii) assuming the completion of the transactions contemplated by the Related Documents, the Person is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature, (iv) the Person is not engaged in any business or transaction, and is not about to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such entity is engaged, and (v) the Person is not a defendant in any civil action that would result in a judgment that such Person is or would become unable to satisfy.
“Specified Rating Agencies” means any of S&P Global Ratings, Moody’s or Fitch, as applicable.
“Swingline Commitment” means the obligation of the Swingline Lender to make Swingline Loans pursuant to Section 2.06 in an aggregate principal amount at any one time outstanding not to exceed $30,000,000, as such amount may be reduced or increased pursuant to Section 2.06(i) or reduced pursuant to Section 2.05(b).
“Swingline Lender” means Coöperatieve Rabobank U.A., New York Branch, in its capacity as maker of Swingline Loans, and its permitted successors and assigns in such capacity.
“Swingline Loan” has the meaning set forth in Section 2.06(a).
“Swingline Loan Request” has the meaning set forth in Section 2.06(b).
“Swingline Participation Amount” has the meaning set forth in Section 2.06(f).
“Term SOFR” means,
(a) for any calculation with respect to a SOFR Advance, the Term SOFR Reference Rate for a tenor comparable to the applicable SOFR Interest Accrual Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such SOFR Interest Accrual Period, as such rate is published by the SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day, and
(b) for any calculation with respect to an Base Rate Advance on any day, the Term SOFR Reference Rate for a tenor of three (3) months on the day (such day, the “Base Rate Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to such day, as such rate is published by the SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Base Rate Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Base Rate Term SOFR Determination Day.
“Term SOFR Adjustment” means, 0.10% (10 basis points) for an Available Tenor of one-month’s duration, 0.15% (15 basis points) for an Available Tenor of three-months’ duration and 0.25% (25 basis points) for an Available Tenor of six-months’ duration.
“Term SOFR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, Reference Rate” means the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“Term SOFR Adjustment” means, the Benchmark Replacement Adjustment which can be determined as of the Benchmark Replacement Date for the Term SOFR Transition Event and if no such Benchmark Replacement Adjustment can be determined, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar- denominated syndicated credit facilities; provided, that, the Administrative Agent shall provide the Investors with notice of the Benchmark Replacement Adjustment so identified at least five (5) Business Days prior to the Benchmark Replacement Date for the Term SOFR Transition Event.
“Term SOFR Notice” means a notification by the Administrative Agent to the Investors and the Co-Issuers of the occurrence of a Term SOFR Transition Event.
“Term SOFR Transition Event” means the determination by the Administrative Agent that (a) Term SOFR has been recommended for use by the Relevant Governmental Body, (b) the administration of Term SOFR is administratively feasible for the Administrative Agent in its sole discretion, and (c) a Benchmark Transition Event or an Early Opt-in Election, as applicable, has previously occurred resulting in a Benchmark Replacement in accordance with Section 3.04(c) that is not Term SOFR.
“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“Undrawn Commitment Fees” has the meaning set forth in Section 3.02(b).
“Undrawn L/C Face Amounts” means, at any time, the aggregate then undrawn and unexpired face amount of any Letters of Credit outstanding at such time.
“Unreimbursed L/C Drawings” means, at any time, the aggregate amount of any L/C Reimbursement Amounts that have not then been reimbursed pursuant to Section 2.08.
“Upfront Commitment Fee” has the meaning given to such term in the Class A-1 VFN Fee Letter.
“U.S. Government Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income department of its members be closed for the entire day for purposes of trading in United States government securities.
“USA PATRIOT Act” has the meaning given to such term in Section 9.24.
“Voluntary Cash Collateral” has the meaning set forth in Section 4.03(a).
“Write-down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
PURCHASE AND SALE OF SERIES 2021-1 CLASS A-1 NOTES
Each Letter of Credit shall (x) be denominated in Dollars, (y) have a face amount of at least $25,000 or, if less than $25,000, shall bear a reasonable administrative fee to be agreed upon by the Co-Issuers and the L/C Provider and (z) expire no later than the earlier of (A) the first anniversary of its date of issuance and (B) the date that is five (5) Business Days prior to the Commitment Termination Date (the “Required Expiration Date”); provided that any Letter of Credit may provide for the automatic renewal thereof for additional periods, each individually not to exceed one year (which shall in no event extend beyond the Required Expiration Date) unless the L/C Provider notifies the beneficiary of such Letter of Credit at least 30 calendar days prior to the then-applicable expiration date (or no later than the applicable notice date, if earlier, as specified in such Letter of Credit) that such Letter of Credit shall not be renewed; provided, further, that any Letter of Credit may have an expiration date that is later than the Required Expiration Date so long as either (x) the Undrawn L/C Face Amount with respect to such Letter of Credit has been fully cash collateralized by the Co-Issuers in accordance with Section 4.02(b) or 4.03 as of the Required Expiration Date or (y) other than with respect to Interest Reserve Letters of Credit, arrangements satisfactory to the L/C Provider in its sole and absolute discretion have been made with the L/C Provider (and, if the L/C Provider is not the L/C Issuing Bank with respect to such Letter of Credit, the L/C Issuing Bank) pursuant to Section 4.04 such that such Letter of Credit shall cease to be deemed outstanding or to be deemed a “Letter of Credit” for purposes of this Agreement as of the Commitment Termination Date.
Additionally, each Interest Reserve Letter of Credit shall (1) name the Trustee, for the benefit of the Senior Noteholders or the Senior Subordinated Noteholders, as applicable, as the beneficiary thereof; (2) allow the Trustee or the Control Party on its behalf to submit a notice of drawing in respect of such Interest Reserve Letter of Credit whenever amounts would otherwise be required to be withdrawn from the Senior Notes Interest Reserve Account or the Senior Subordinated Notes Interest Reserve Account, as applicable, pursuant to the Indenture and (3) indicate by its terms that the proceeds in respect of drawings under such Interest Reserve Letter of Credit shall be paid directly into the Senior Notes Interest Reserve Account or the Senior Subordinated Notes Interest Reserve Account, as applicable.
The L/C Provider shall not at any time be obligated to (I) provide any Letter of Credit hereunder if such issuance would violate, or cause any L/C Issuing Bank to exceed any limits imposed by, any applicable Requirement of Law or (II) amend any Letter of Credit hereunder if (1) the L/C Provider would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof or (2) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
Unless otherwise expressly agreed by the L/C Provider and the Co-Issuers when a Letter of Credit is issued and subject to applicable laws, the Letters of Credit shall be governed by
and subject to ISP or the rules of the Uniform Customs and Practice for Documentary Credits, as published in its most recent version by the International Chamber of Commerce on the date any Letter of Credit is issued.
INTEREST AND FEES
. If the Administrative Agent shall have determined that:
(a) by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the interest rate applicable hereunder to the Eurodollar Advances; or
(b) with respect to any interest rate otherwise applicable hereunder to any Eurodollar Advances the Eurodollar Interest Period for which has not then commenced, Investor Groups holding in the aggregate more than 50% of the Eurodollar Advances have determined that such interest rate will not adequately reflect the cost to them of funding, agreeing to fund or maintaining such Eurodollar Advances for such Eurodollar Interest Period, then, upon notice from the Administrative Agent (which, in the case of clause (b) above, the Administrative Agent shall give upon obtaining actual knowledge that such percentage of the Investor Groups have so determined) to the Funding Agents, the Manager and the Master Issuer (on behalf of the Co-Issuers), the obligations of the Investors to fund or maintain any Advance as a Eurodollar Advance after the end of the then-current Eurodollar Interest Period, if any, with respect thereto shall forthwith be suspended and on the date such notice is given such Advances will convert to Base Rate Advances until the Administrative Agent has notified the Funding Agents and the Master Issuer (on behalf of the Co-Issuers) that the circumstances causing such suspension no longer exist.
(i)
(ii) Notwithstanding anything to the contrary herein or in any other Related Document and subject to the proviso below in this paragraph, if a Term SOFR Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then Term SOFR plus the Term SOFR Adjustment will replace the then-current Benchmark for all purposes hereunder or under any Related Document in respect of such Benchmark setting and subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Related Document; provided that, this clause (b) shall not be effective unless the Administrative Agent has delivered to the Investors and the Co-Issuers a Term SOFR Notice. Notwithstanding anything contained herein to the contrary, the Administrative Agent shall not be required to deliver a Term SOFR Notice after a Term SOFR Transition Event and may do so in its sole discretion. For the avoidance of doubt, any applicable provisions set forth in this Section 3.04(c) shall apply with respect to any Term SOFR transition pursuant to this paragraph (ii) as if such forward-looking term rate was initially determined in accordance herewith including, without limitation, the provisions set forth in this Section 3.04(c)(iii) and Section 3.04(c)(vii).
(vii) Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration of, submission of, calculation of, or any other matter related to the London interbank offered rate or other rates in the definition of “Eurodollar Funding Rate” or any alternative or successor rate thereto, or replacement rate thereof (including, without limitation, (i) any such alternative, successor or replacement rate implemented pursuant to this Section 3.04(c)(vii), whether upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, and (ii) the implementation of any Benchmark Replacement Conforming Changes pursuant to Section 3.04(c)(iii), including without limitation, (A) whether the composition or characteristics of any such alternative, successor or replacement reference rate for any currency will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the applicable Eurodollar
Funding Rate for Advances denominated in such currency as did the London interbank offered rate prior to its discontinuance or unavailability, and (B) the impact or effect of such alternative, successor or replacement reference rate or Benchmark Replacement Conforming Changes on any other financial products or agreements in effect or offered by or to any Co-Issuer, Guarantor or Investor or any of their respective Affiliates.
(viii) Each Co-Issuer and Guarantor (including those that that become party hereto after the date hereof), in its respective capacity as a Co-Issuer or Guarantor, or other similar capacity in which such party acts as direct or indirect, or primary or secondary, obligor, accommodation party or guarantor or grants liens or security interests in or to its properties hereunder or under any other Related Document, hereby acknowledges and agrees to be bound by the provisions of this Section 4.03(c) (including, without limitation, the implementation from time to time of any Benchmark Replacement and any Benchmark Replacement Conforming Changes in accordance herewith) and, in furtherance of the forgoing (and without, in any way express or implied, invalidating, impairing or otherwise negatively affecting any obligations heretofore provided) hereby acknowledges and agrees that in connection with and after giving effect to any Benchmark Cessation Changes: (i) its Obligations shall not in any way be novated, discharged or otherwise impaired, and shall continue, be ratified and be affirmed and shall remain in full force in effect, (ii) its grant of a guarantee, pledge, assignment or any other accommodation, lien or security interests in or to its properties relating to this Agreement or any other Related Document shall continue, be ratified and be affirmed, and shall remain in full force and effect and shall not be novated, discharged or otherwise impaired and (iii) the Loan Documents and its obligations thereunder (contingent or otherwise) shall continue, be ratified and be affirmed and shall remain in full force and effect and shall not be novated, discharged or otherwise impaired. In addition, each Co-Issuer and Guarantor hereby fully waives any requirements to notify Co-Issuer or Guarantor of any Benchmark Cessation Changes (except as expressly provided in this Section 3.04(c)). From time to time, each Co-Issuer or Guarantor shall execute and deliver, or cause to be executed and delivered, such instruments, agreements, certificates or documents, and take all such actions, as the Administrative Agent may reasonably request for the purposes implementing or effectuating the provisions of this Section 3.04(c), or of renewing, continuing, reaffirming or ratifying the rights of the Administrative Agent and the Investors with respect to the Obligations or the Collateral.
The Co-Issuers and each Guarantor (including those that that become party hereto after the date hereof), in its respective capacity as a Co-Issuer, a Guarantor, debtor, obligor, grantor, pledgor, assignor, or other similar capacity in which such party acts as direct or indirect, or primary or secondary, obligor, accommodation party or guarantor or grants liens or security interests in or to its properties hereunder or under any other Related Document, hereby acknowledges and agrees to be bound by the provisions of Section 3.04 (including, without limitation, the implementation from time to time of any Benchmark Replacement and any Conforming Changes in accordance herewith) and, in furtherance of the forgoing (and without, in any way express or implied, invalidating, impairing or otherwise negatively affecting any obligations heretofore provided) hereby acknowledges and agrees that in connection with and after giving effect to any Conforming Changes: (i) its obligations shall not in any way be novated, discharged or otherwise impaired, and shall continue, be ratified and be affirmed and shall remain in full force in effect, (ii) its grant of a guarantee, pledge, assignment or any other accommodation, lien or security interests in or to its properties relating to this Agreement or any other Related Document shall continue, be ratified and be affirmed, and shall remain in full force and effect and shall not be novated, discharged or otherwise impaired and (iii) the Related Documents and its obligations thereunder (contingent or otherwise) shall continue, be ratified and be affirmed and shall remain in full force and effect and shall not be novated, discharged or otherwise impaired. In addition, the Co-Issuers and each Guarantor hereby fully waives any requirements to notify the Co-Issuers or such Guarantor, as applicable, of any Conforming Changes (except as expressly provided in Section 3.04). From time to time, each Co-Issuer and each Guarantor shall execute and deliver, or cause to be executed and delivered, such instruments, agreements, certificates or documents, and take all such actions, as the Administrative Agent may reasonably request for the purposes of implementing or effectuating the provisions of Section 3.04, or of renewing, continuing, reaffirming or ratifying the rights of the Administrative Agent, and the other Secured Parties with respect to the Co-Issuer’s or Guarantor’s obligations or the Collateral.
OTHER PAYMENT TERMS
Except as otherwise provided in Section 2.07 and Section 4.02, all amounts payable to the Swingline Lender or the L/C Provider hereunder or with respect to the Swingline Loans and L/C Obligations shall be made to or upon the order of the Swingline Lender or the L/C Provider, respectively, by wire transfer of immediately available funds in Dollars not later than 1:00 p.m. (New York City time) on the date due. Any funds received after that time on such date will be deemed to have been received on the next Business Day.
The Co-Issuers’ obligations hereunder in respect of any amounts payable to any Investor shall be discharged to the extent funds are disbursed by the Co-Issuers to the Administrative Agent as provided herein or by the Trustee or Paying Agent in accordance with Section 4.02, whether or not such funds are properly applied by the Administrative Agent or by the Trustee or Paying Agent. The Administrative Agent’s obligations hereunder in respect of any amounts payable to any Investor shall be discharged to the extent funds are disbursed by the Administrative Agent to the applicable Funding Agent as provided herein whether or not such funds are properly applied by such Funding Agent.
Upon expiration of all then-outstanding Letters of Credit and payment in full of all Unreimbursed L/C Drawings, any balance remaining in the Cash Collateral Account shall be paid over first, to the Master Issuer, in an amount equal to the lesser of such balance and the amount of Voluntary Cash Collateral in the Cash Collateral Account, and then, from funds remaining on deposit in the Cash Collateral Account, (i) if the Base Indenture and any Series Supplement remain in effect, to the Trustee to be deposited into the Collection Account and distributed in accordance with the terms of the Base Indenture and (ii) otherwise to the Master Issuer; provided that, upon an Investor ceasing to be a Defaulting Investor in accordance with Section 9.18(d), any amounts of cash collateral provided pursuant to Section 9.18(c)(ii) upon such Investor becoming a
Defaulting Investor shall be released and applied as such amounts would have been applied had such Investor not become a Defaulting Investor.
THE ADMINISTRATIVE AGENT AND THE FUNDING AGENTS
REPRESENTATIONS AND WARRANTIES
CONDITIONS
The giving of any notice pursuant to Sections 2.03, 2.06 or 2.07, as applicable, shall constitute a representation and warranty by the Co-Issuers and the Manager that all conditions precedent to such funding or provision have been satisfied or will be satisfied concurrently therewith.
COVENANTS
Promptly following any change in the information included in the Beneficial Ownership Certification that would result in a change to the list of beneficial owners or control parties identified in part (c) or (d) of such certification, each Co-Issuer or Guarantor, as applicable, shall execute and deliver to the Administrative Agent an updated Beneficial Ownership Certification.
Promptly following any request therefor, each Co-Issuer or Guarantor, as applicable, shall deliver to the Administrative Agent all documentation and other information required by bank regulatory authorities requested by a Committed Lender for purposes of compliance with applicable “know your customer” requirements under the Patriot Act, the Beneficial Ownership Rule or other applicable anti-money laundering laws, rules and regulations.
MISCELLANEOUS PROVISIONS
Each Committed Note Purchaser will notify the Co-Issuers in writing whether or not it will consent to a proposed amendment, waiver or other modification of this Agreement and, if applicable, any condition to such consent, waiver or other modification. If a Committed Note Purchaser notifies the Co-Issuers in writing that such Committed Note Purchaser either (I) will not consent to an amendment to or waiver or other modification of any provision of this Agreement or (II) conditions its consent to such an amendment, waiver or other modification of any provision of this Agreement upon the payment of an amendment fee, the Co-Issuers may replace every member (but not any subset thereof) of such Committed Note Purchaser’s entire Investor Group
by giving written notice to each member of such Investor Group and the Administrative Agent designating one or more Persons that are willing and able to purchase each member of such Investor Group’s rights and obligations under this Agreement for a purchase price that with respect to each such member of such Investor Group will equal the amount owed to each such member of such Investor Group with respect to the Series 2021-1 Class A-1 Advance Notes (whether arising under the Indenture, this Agreement, the Series 2021-1 Class A‑1 Advance Notes or otherwise). Upon receipt of such written notice, each member of such Investor Group shall assign its rights and obligations under this Agreement pursuant to and in accordance with Sections 9.17(a), (b) and (c), as applicable, in consideration for such purchase price and at the reasonable expense of the Co-Issuers (including, without limitation, the reasonable documented fees and out-of-pocket expenses of counsel to each such member); provided, however, that no member of such Investor Group shall be obligated to assign any of its rights and obligations under this Agreement if the purchase price to be paid to such member is not at least equal to the amount owed to such member with respect to the Series 2021-1 Class A‑1 Advance Notes (whether arising under the Indenture, this Agreement, the Series 2021-1 Class A-1 Advance Notes or otherwise).
The Co-Issuers and the Lender Parties shall negotiate any amendments, waivers, consents, supplements or other modifications to this Agreement or the other Related Documents that require the consent of the Lender Parties in good faith, and any consent required to be given by the Lender Parties shall not be unreasonably denied, conditioned or delayed. Pursuant to Section 9.05(a), the Lender Parties shall be entitled to reimbursement by the Co-Issuers, jointly and severally, for the reasonable expenses incurred by the Lender Parties in reviewing and approving any such amendment, waiver, consent, supplement or other modification to this Agreement or any Related Document.
except for any such Indemnified Liabilities arising for the account of a particular Indemnified Party by reason of the relevant Indemnified Party’s gross negligence or willful misconduct or breach of representations set forth herein. If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Co-Issuers hereby jointly and severally agree to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable law. The indemnity set forth in this Section 9.05(b) shall in no event include indemnification for special, punitive, consequential or indirect damages of any kind or for any Taxes which shall be covered by (or expressly excluded from) the indemnification provided in Section 3.08 or for any transfer Taxes with respect to its sale or assignment of all or any part of its respective rights and obligations under this Agreement and the Series 2021-1 Class A-1 Notes pursuant to Section 9.17. The Co-Issuers shall give notice to the Rating Agencies of any claim for Indemnified Liabilities made under this Section 9.05(b).
“Confidential Information” means information that the Co-Issuers or the Manager furnishes to a Lender Party, but does not include (i) any such information that is or becomes generally available to the public other than as a result of a disclosure by a Lender Party or other Person to which a Lender Party delivered such information, (ii) any such information that was in the possession of a Lender Party prior to its being furnished to such Lender Party by the Co-Issuers or the Manager or (iii) any such information that is or becomes available to a Lender Party from a source other than the Co-Issuers or the Manager; provided that with respect to clauses (ii) and (iii) herein, such source is not (x) known to a Lender Party to be bound by a confidentiality agreement with the Co-Issuers or the Manager, as the case may be, with respect to the information or (y) known to a Lender Party to be otherwise prohibited from transmitting the information by a contractual, legal or fiduciary obligation.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized officers and delivered as of the day and year first above written.
DOMINO’S PIZZA MASTER ISSUER LLC,
as Master Issuer and as a Co-Issuer
By
Name:
Title:
DOMINO’S PIZZA DISTRIBUTION LLC,
as the Domestic Distributor and as a Co-Issuer
By:
Name:
Title:
DOMINO’S IP HOLDER LLC,
as the IP Holder and as a Co-Issuer
By:
Name:
Title:
DOMINO’S SPV CANADIAN HOLDING COMPANY INC.,
as the SPV Canadian HoldCo and as a Co-Issuer
By:
Name:
Title:
DOMINO’S PIZZA FRANCHISING LLC,
as a Guarantor
By:
Name:
Title:
DOMINO’S PIZZA INTERNATIONAL FRANCHISING INC.,
as a Guarantor
By:
Name:
Title:
DOMINO’S PIZZA CANADIAN DISTRIBUTION ULC,
as a Guarantor
By:
Name:
Title:
DOMINO’S RE LLC,
as a Guarantor
By:
Name:
Title:
DOMINO’S EQ LLC,
as a Guarantor
By:
Name:
Title:
DOMINO’S SPV GUARANTOR LLC,
as a Guarantor
By:
Name:
Title:
DOMINO’S PIZZA LLC,
as Manager
By:
Name:
Title:
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH,
as Administrative Agent
By:
Name:
Title:
By:
Name:
Title:
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH,
as L/C Provider
By:
Name:
Title:
By:
Name:
Title:
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH,
as Swingline Lender
By:
Name:
Title:
By:
Name:
Title:
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH,
as Committed Note Purchaser
By:
Name:
Title:
By:
Name:
Title:
BARCLAYS BANK PLC,
as Committed Note Purchaser
By:
Name:
Title:
|
SCHEDULE I TO CLASS A-1 |
|
||||
INVESTOR GROUPS AND COMMITMENTS |
||||||
Investor |
Maximum |
Conduit |
Committed Note |
Commitment |
||
Group/Funding |
Investor Group |
Lender (if any) |
Purchaser(s) |
Amount |
||
Agent |
Principal |
|
|
|
||
|
Amount |
|
|
|
||
Coöperatieve |
$150,000,000 |
N/A |
Coöperatieve |
$150,000,000 |
||
Rabobank U.A., New York Branch |
|
|
Rabobank U.A., New York Branch |
|
||
Barclays Bank PLC |
$50,000,000 |
N/A |
Barclays Bank |
$50,000,000 |
||
|
|
|
PLC |
|
||
SCHEDULE II TO CLASS A-1
NOTE PURCHASE AGREEMENT
NOTICE ADDRESSES FOR LENDER PARTIES, AGENTS, CO-ISSUERS AND
MANAGER
CONDUIT INVESTORS
N/A
COMMITTED PURCHASERS
Coöperatieve Rabobank U.A., New York Branch
245 Park Avenue, 37th Floor
New York, NY 10167
Attention: General Counsel
With a copy by e-mail to: tmteam@rabobank.com
And a copy to:
Susan Williams
Assistant Vice President
245 Park Avenue, 38th Floor
New York, NY 10167
Fax: 914.304.9326
fm.us.bilateralloansfax@rabobank.com
Barclays Capital
745 Seventh Avenue
New York, New York 10019
Chin-Yong Choe
With a copy by e-mail to: barcapconduitops@barclays.com
And a copy by e-mail to:
asgreports@barclays.com
FUNDING AGENTS
Coöperatieve Rabobank U.A., New York Branch
245 Park Avenue, 37th Floor
New York, NY 10167
Attention: General Counsel
With a copy by e-mail to: tmteam@rabobank.com
And a copy to:
Susan Williams
Assistant Vice President
245 Park Avenue, 38th Floor
New York, NY 10167
Fax: 914.304.9326
fm.us.bilateralloansfax@rabobank.com
ADMINISTRATIVE AGENT
Coöperatieve Rabobank U.A., New York Branch
245 Park Avenue, 37th Floor
New York, NY 10167
Attention: General Counsel
With a copy by e-mail to: tmteam@rabobank.com
And a copy to:
Susan Williams
Assistant Vice President
245 Park Avenue, 38th Floor
New York, NY 10167
Fax: 914.304.9326
fm.us.bilateralloansfax@rabobank.com
SWINGLINE LENDER
Coöperatieve Rabobank U.A., New York Branch
245 Park Avenue, 37th Floor
New York, NY 10167
Attention: General Counsel
With a copy by e-mail to: tmteam@rabobank.com
And a copy to:
Susan Williams
Assistant Vice President
245 Park Avenue, 38th Floor
New York, NY 10167
Fax: 914.304.9326
fm.us.bilateralloansfax@rabobank.com
L/C PROVIDER
Coöperatieve Rabobank U.A., New York Branch
245 Park Avenue, 37th Floor
New York, NY 10167
Attention: General Counsel
With a copy by e-mail to: tmteam@rabobank.com
And a copy to:
Bibi Mohamed
Vice President
245 Park Avenue, 38th Floor
New York, NY 10167
Phone: 212.574.7315
Fax: 201.499.5479
rabonysblc@rabobank.com
CO-ISSUERS
Domino’s Pizza Master Issuer LLC
24 Frank Lloyd Wright Drive
P.O. Box 485
Ann Arbor, MI 48105
Attention: Secretary
Fax: 866.282.3872
And a copy to (which shall not constitute notice):
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199
Attention: Patricia Lynch
Facsimile: 617-235-9384
Domino’s SPV Canadian Holding Company Inc.
24 Frank Lloyd Wright Drive
P.O. Box 485
Ann Arbor, MI 48105
Attention: Secretary
Fax: 866.282.3872
And a copy to (which shall not constitute notice):
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199
Attention: Patricia Lynch
Facsimile: 617-235-9384
Domino’s Pizza Distribution LLC
24 Frank Lloyd Wright Drive
P.O. Box 485
Ann Arbor, MI 48105
Attention: Secretary
Fax: 866.282.3872
And a copy to (which shall not constitute notice):
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199
Attention: Patricia Lynch
Facsimile: 617-235-9384
Domino’s IP Holder LLC
24 Frank Lloyd Wright Drive
P.O. Box 485
Ann Arbor, MI 48105
Attention: Secretary
Fax: 866.282.3872
And a copy to (which shall not constitute notice):
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199
Attention: Patricia Lynch
Facsimile: 617-235-9384
MANAGER
DOMINO’S PIZZA LLC
24 Frank Lloyd Wright Drive
P.O. Box 485
Ann Arbor, MI 48105
Attention: Secretary
Fax: 866.282.3872
And a copy to (which shall not constitute notice):
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199
Attention: Patricia Lynch
Facsimile: 617-235-9384
SCHEDULE III TO CLASS A-1 NOTE PURCHASE AGREEMENT
ADDITIONAL CLOSING CONDITIONS
The following are the additional conditions to initial issuance and effectiveness referred to in Section 7.01(c):
Each Lender Party shall have received an opinion from Stewart McKelvey, Nova Scotia counsel, Stikeman Elliot LLP, Alberta, British Columbia and Ontario counsel, Thompson Dorman Sweatman LLP, Manitoba counsel, and Loyens Loeff, Dutch counsel, each addressed to the Committed Purchasers and dated as of the Series 2021-1 Closing Date, in form and substance reasonably satisfactory to each Lender Party and its counsel.
The representations and warranties of each of the Co-Issuers, the Parent Companies and the Manager (to the extent a party thereto) contained in the Related Documents to which each of the Co-Issuers, the Parent Companies and the Manager is a party will be true and correct (i) if qualified as to materiality or Material Adverse Effect, in all respects, and (ii) if not so qualified, in all material respects, as of the Series 2021-1 Closing Date (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct (x) if qualified as to materiality, in all respects, and (y) if not so qualified, in all material respects, as of such earlier date).
SCHEDULE IV TO CLASS A-1 NOTE PURCHASE AGREEMENT
Letters of Credit
Letter of Credit |
Beneficiary |
Amount |
Maturity Date |
SB19941 |
ACE American Insurance Company |
$33,143,044 |
10/21/2021 |
SB19942 |
Arrowood Indemnity Company |
$310,000 |
10/21/2021 |
SB19943 |
Old Republic Insurance Company |
$8,944,405 |
10/21/2021 |
SB50062 |
Rabobank Nederland |
$60,000 |
6/22/2021 |
EXHIBIT A-1 TO CLASS A-1
NOTE PURCHASE AGREEMENT
ADVANCE REQUEST
DOMINO’S PIZZA MASTER ISSUER LLC
DOMINO’S SPV CANADIAN HOLDING COMPANY INC.
DOMINO’S PIZZA DISTRIBUTION LLC and
DOMINO’S IP HOLDER LLC
SERIES 2021-1 VARIABLE FUNDING SENIOR NOTES, CLASS A-1
TO: Coöperatieve Rabobank U.A., New York Branch, as Administrative Agent Ladies and Gentlemen:
This Advance Request is delivered to you pursuant to Section 2.03 of that certain Series 2021-1 Class A-1 Note Purchase Agreement, dated as of April 16, 2021 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “Series 2021-1 Class A-1 Note Purchase Agreement”), by and among Domino’s Pizza Master Issuer LLC, Domino’s SPV Canadian Holding Company Inc., Domino’s Pizza Distribution, LLC and Domino’s IP Holder LLC, as Co-Issuers, Domino’s Pizza Franchising LLC, Domino’s Pizza International Franchising Inc., Domino’s Pizza Canadian Distribution ULC, Domino’s Re LLC, Domino’s EQ LLC And Domino’s SPV Guarantor LLC, as Guarantors, Domino’s Pizza LLC, as Manager, the Conduit Investors, Committed Note Purchasers and Funding Agents named therein, the L/C Provider and Swingline Lender named therein, and Coöperatieve Rabobank U.A., New York Branch, as Administrative Agent (in such capacity, the “Administrative Agent”).
Unless otherwise defined herein or as the context otherwise requires, terms used herein have the meaning assigned thereto under or as provided in the Recitals and Section 1.01 of the Series 2021-1 Class A-1 Note Purchase Agreement.
The undersigned hereby requests that Advances be made in the aggregate
principal amount of $ on , 20___.
[IF THE CO-ISSUERS IS ELECTING EURODOLLAR RATEADJUSTED TERM SOFR FOR THESE ADVANCES ON THE DATE MADE IN ACCORDANCE WITH SECTION 3.01(b) OF THE CLASS A-1 NOTE PURCHASE AGREEMENT, ADD THE
FOLLOWING SENTENCE: The undersigned hereby elects that the Advances that are not funded at the CP Rate by an Eligible Conduit Investor shall be EurodollarSOFR Advances and the related EurodollarSOFR Interest Accrual Period shall commence on the date of such EurodollarSOFR Advances and end on but excluding the date [one month subsequent to such date] [two months subsequent to such date] [three months subsequent to such date] [six months subsequent to such date] [or such other time period subsequent to such date not to exceed six months as agreed upon by the Master Issuer and Administrative Agent.]]
The undersigned hereby acknowledges that the delivery of this Advance Request and the acceptance by the undersigned of the proceeds of the Advances requested hereby constitute a representation and warranty by the undersigned that, on the date of such Advances, and before and after giving effect thereto and to the application of the proceeds therefrom, all conditions set forth in Section 7.03 of the Series 2021-1 Class A-1 Note Purchase Agreement have been satisfied and all statements set forth in Section 6.01 of the Series 2021-1 Class A-1 Note Purchase Agreement are true and correct.
The undersigned agrees that if prior to the time of the Advances requested hereby any matter certified to herein by it will not be true and correct at such time as if then made, it will immediately so notify both you and each Investor. Except to the extent, if any, that prior to the time of the Advances requested hereby you and each Investor shall receive written notice to the contrary from the undersigned, each matter certified to herein shall be deemed once again to be certified as true and correct at the date of such Advances as if then made.
Please wire transfer the proceeds of the Advances, first, $[ ] to the Swingline Lender and $[ ] to the L/C Provider for application to repayment of outstanding Swingline Loans and Unreimbursed L/C Drawings, as applicable, and, second, pursuant to the following instructions:
[insert payment instructions]
The undersigned has caused this Advance Request to be executed and delivered, and the certification and warranties contained herein to be made, by its duly Authorized Officer this ____ day of , 20___.
DOMINO’S PIZZA LLC,
as Manager on behalf of the Co-Issuers
By:
Name:
Title:
EXHIBIT A-2 TO CLASS A-1
NOTE PURCHASE AGREEMENT
SWINGLINE LOAN REQUEST
DOMINO’S PIZZA MASTER ISSUER LLC,
DOMINO’S SPV CANADIAN HOLDING COMPANY INC.,
DOMINO’S PIZZA DISTRIBUTION LLC, AND
DOMINO’S IP HOLDER LLC
SERIES 2021-1 VARIABLE FUNDING SENIOR NOTES, CLASS A-1
TO: Coöperatieve Rabobank U.A., New York Branch, as Swingline Lender
Ladies and Gentlemen:
This Swingline Loan Request is delivered to you pursuant to Section 2.06 of that certain Series 2021-1 Class A-1 Note Purchase Agreement, dated as of April 16, 2021 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “Series 2021-1 Class A-1 Note Purchase Agreement”), by and among Domino’s Pizza Master Issuer LLC, Domino’s SPV Canadian Holding Company Inc., Domino’s Pizza Distribution, LLC and Domino’s IP Holder LLC, as Co-Issuers, Domino’s Pizza Franchising LLC, Domino’s Pizza International Franchising Inc., Domino’s Pizza Canadian Distribution ULC, Domino’s Re LLC, Domino’s EQ LLC And Domino’s SPV Guarantor LLC, as Guarantors, Domino’s Pizza LLC, as Manager, the Conduit Investors, Committed Note Purchasers and Funding Agents named therein, the L/C Provider and Swingline Lender named therein, and Coöperatieve Rabobank U.A., New York Branch, as Administrative Agent (in such capacity, the “Administrative Agent”).
Unless otherwise defined herein or as the context otherwise requires, terms used herein have the meaning assigned thereto under or as provided in the Recitals and Section 1.01 of the Series 2021-1 Class A-1 Note Purchase Agreement.
The undersigned hereby requests that Swingline Loans be made in the
aggregate principal amount of $ on , 20___.
The undersigned hereby acknowledges that the delivery of this Swingline Loan Request and the acceptance by the undersigned of the proceeds of the Swingline Loans requested hereby constitute a representation and warranty by the undersigned that, on the date of such Advances, and before and after giving effect thereto and to the application of the proceeds therefrom, all conditions set forth in Section 7.03 of the Series 2021-1 Class A-1 Note Purchase Agreement have been satisfied and all statements set forth in Section 6.01 of the Series 2021-1 Class A-1 Note Purchase Agreement are true and correct.
The undersigned agrees that if prior to the time of the Swingline Loans requested hereby any matter certified to herein by it will not be true and correct at such time as if then made, it will immediately so notify you. Except to the extent, if any, that prior to the time of the Swingline Loans requested hereby you shall receive written notice to the contrary from the undersigned, each matter certified to herein shall be deemed once again to be certified as true and correct at the date of such Swingline Loans as if then made.
Please wire transfer the proceeds of the Swingline Loans pursuant to the following instructions:
[insert payment instructions]
The undersigned has caused this Swingline Loan Request to be executed and delivered, and the certification and warranties contained herein to be made, by its duly
Authorized Officer this ____ day of , 20___.
DOMINO’S PIZZA LLC,
as Manager on behalf of the Co-Issuers
By:
Name:
Title:
EXHIBIT B TO CLASS A-1
NOTE PURCHASE AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of [ ], by and
among [ ] (the “Transferor”), each purchaser listed as an Acquiring Committed
Note Purchaser on the signature pages hereof (each, an “Acquiring Committed Note Purchaser”), the Funding Agent with respect to such Acquiring Committed Note Purchaser listed on the signature pages hereof (each, a “Funding Agent”), and the Co-Issuers, Swingline Lender and L/C Provider listed on the signature pages hereof.
W I T N E S S E T H:
WHEREAS, this Assignment and Assumption Agreement is being executed and delivered in accordance with Section 9.17(a) of the Series 2021-1 Class A-1 Note Purchase Agreement, dated as of April 16, 2021 (as from time to time amended, supplemented or otherwise modified in accordance with the terms thereof, the “Series 2021-1 Class A-1 Note Purchase Agreement”; terms used but not otherwise defined herein having the meanings ascribed to such terms therein), by and among the Co-Issuers, the Guarantors, the Manager, the
Conduit Investors, Committed Note Purchasers and Funding Agents named therein, the L/C Provider and Swingline Lender named therein, Domino’s Pizza LLC, as Manager, and Coöperatieve Rabobank U.A., New York Branch, as Administrative Agent (in such capacity, the “Administrative Agent”);
WHEREAS, each Acquiring Committed Note Purchaser (if it is not already an existing Committed Note Purchaser) wishes to become a Committed Note Purchaser party to the Series 2021-1 Class A-1 Note Purchase Agreement; and
WHEREAS, the Transferor is selling and assigning to each Acquiring Committed Note Purchaser, [all] [a portion of] its rights, obligations and commitments under the Series 2021-1 Class A-1 Note Purchase Agreement, the Series 2021-1 Class A-1 Advance Notes and each other Related Document to which it is a party with respect to the percentage of its Commitment Amount specified on Schedule I attached hereto;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Upon the execution and delivery of this Assignment and Assumption Agreement by each Acquiring Committed Note Purchaser, each related Funding Agent, the Transferor, the Swingline Lender, the L/C Provider and, to the extent required by Section 9.17(a) of the Series 2021-1 Class A-1 Note Purchase Agreement, the Co-Issuers (the date of such execution and delivery, the “Transfer Issuance Date”), each Acquiring Committed Note Purchaser shall be a Committed Note Purchaser party to the Series 2021-1 Class A-1 Note Purchase Agreement for all purposes thereof.
The Transferor acknowledges receipt from each Acquiring Committed Note Purchaser of an amount equal to the purchase price, as agreed between the Transferor and such Acquiring Committed Note Purchaser (the “Purchase Price”), of the portion being purchased by such Acquiring Committed Note Purchaser (such Acquiring Committed Note Purchaser’s “Purchased Percentage”) of (i) the Transferor’s Commitment under the Series 2021-1 Class A-1
Note Purchase Agreement and (ii) the Transferor’s Committed Note Purchaser Percentage of the related Investor Group Principal Amount. The Transferor hereby irrevocably sells, assigns and transfers to each Acquiring Committed Note Purchaser, without recourse, representation or warranty, and each Acquiring Committed Note Purchaser hereby irrevocably purchases, takes and assumes from the Transferor, such Acquiring Committed Note Purchaser’s Purchased Percentage of (x) the Transferor’s Commitment under the Series 2021-1 Class A-1 Note Purchase Agreement and (y) the Transferor’s Committed Note Purchaser Percentage of the related Investor Group Principal Amount.
The Transferor has made arrangements with each Acquiring Committed Note Purchaser with respect to (i) the portion, if any, to be paid, and the date or dates for payment, by the Transferor to such Acquiring Committed Note Purchaser of any program fees, undrawn facility fee, structuring and commitment fees or other fees (collectively, the “Fees”) [heretofore received] by the Transferor pursuant to Section 3.02 of the Series 2021-1 Class A-1 Note Purchase Agreement prior to the Transfer Issuance Date [and (ii) the portion, if any, to be paid, and the date or dates for payment, by such Acquiring Committed Note Purchaser to the
Transferor of Fees or [ ] received by such Acquiring Committed Note Purchaser
pursuant to the Series 2021-1 Supplement from and after the Transfer Issuance Date].
From and after the Transfer Issuance Date, amounts that would otherwise be payable to or for the account of the Transferor pursuant to the Series 2021-1 Supplement or the Series 2021-1 Class A-1 Note Purchase Agreement shall, instead, be payable to or for the account of the Transferor and the Acquiring Committed Note Purchasers, as the case may be, in accordance with their respective interests as reflected in this Assignment and Assumption Agreement, whether such amounts have accrued prior to the Transfer Issuance Date or accrue subsequent to the Transfer Issuance Date.
Each of the parties to this Assignment and Assumption Agreement agrees that, at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Assignment and Assumption Agreement.
By executing and delivering this Assignment and Assumption Agreement, the Transferor and each Acquiring Committed Note Purchaser confirm to and agree with each other and the other parties to the Series 2021-1 Class A-1 Note Purchase Agreement as follows: (i) other than the representation and warranty that it is the legal and beneficial owner of the interest being assigned hereby free and clear of any adverse claim, the Transferor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Series 2021-1 Supplement, the Series 2021-1 Class A-1 Note Purchase Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Indenture, the Series 2021-1 Class A-1 Notes, the Related Documents or any instrument or document furnished pursuant thereto; (ii) the Transferor makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Co-Issuers or the performance or observance by the Co-Issuers of any of the Co-Issuers’ obligations under the Indenture, the Series 2021-1 Class A-1 Note Purchase Agreement, the Related Documents or any other instrument or document furnished pursuant hereto; (iii) each
Acquiring Committed Note Purchaser confirms that it has received a copy of the Indenture, the Series 2021-1 Class A-1 Note Purchase Agreement and such other Related Documents and other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption Agreement; (iv) each Acquiring Committed Note Purchaser will, independently and without reliance upon the Administrative Agent, the Transferor, the Funding Agent or any other Investor Group and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Series 2021-1 Class A-1 Note Purchase Agreement; (v) each Acquiring Committed Note Purchaser appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Series 2021-1 Class A-1 Note Purchase Agreement as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto, all in accordance with Article V of the Series 2021-1 Class A-1 Note Purchase Agreement; (vi) each Acquiring Committed Note Purchaser appoints and authorizes its related Funding Agent to take such action as agent on its behalf and to exercise such powers
under the Series 2021-1 Class A-1 Note Purchase Agreement as are delegated to such Funding Agent by the terms thereof, together with such powers as are reasonably incidental thereto, all in accordance with Article V of the Series 2021-1 Class A-1 Note Purchase Agreement; (vii) each Acquiring Committed Note Purchaser agrees that it will perform in accordance with their terms all of the obligations that by the terms of the Series 2021-1 Class A-1 Note Purchase Agreement are required to be performed by it as a Committed Note Purchaser; and (viii) each Acquiring Committed Note Purchaser hereby represents and warrants to the Co-Issuers and the Manager that: (A) it has had an opportunity to discuss the Co-Issuers’ and the Manager’s business, management and financial affairs, and the terms and conditions of the proposed purchase, with the Co-Issuers and the Manager and their respective representatives; (B) it is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and otherwise meets the criteria in Section 6.03(b) of the Series 2021-1 Class A-1 Note Purchase Agreement and has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of investing in, and is able and prepared to bear the economic risk of investing in, the Series 2021-1 Class A-1 Notes; (C) it is purchasing the Series 2021-1 Class A-1 Notes for its own account, or for the account of one or more “qualified institutional buyers” within the meaning of Rule 144A under the Securities Act that meet the criteria described in clause (viii)(B) above and for which it is acting with complete investment discretion, for investment purposes only and not with a view to distribution, subject, nevertheless, to the understanding that the disposition of its property shall at all times be and remain within its control, and neither it nor its Affiliates has engaged in any general solicitation or general advertising within the meaning of the Securities Act with respect to the Series 2021-1 Class A-1 Notes; (D) it understands that (I) the Series 2021-1 Class A-1 Notes have not been and will not be registered or qualified under the Securities Act or any applicable state securities laws or the securities laws of any other jurisdiction and are being offered only in a transaction not involving any public offering within the meaning of the Securities Act and may not be resold or otherwise transferred unless so registered or qualified or unless an exemption from registration or qualification is available and an opinion of counsel shall have been delivered in advance to the Co-Issuers, (II) the Co-Issuers is not required to register the Series 2021-1 Class A-1 Notes, (III) any permitted transferee hereunder must be a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and must otherwise meet the criteria described under clause (viii)(B) above and (IV) any transfer must comply with the provisions of
Section 2.8 of the Base Indenture, Section 4.03 of the Series 2021-1 Supplement and Sections 9.03 or 9.17, as applicable, of the Series 2021-1 Class A-1 Note Purchase Agreement; (E) it will comply with the requirements of clause (viii)(D) above in connection with any transfer by it of the Series 2021-1 Class A-1 Notes; (F) it understands that the Series 2021-1 Class A-1 Notes in the form of definitive notes will bear the legend set out in the form of Series 2021-1 Class A-1 Notes attached to the Series 2021-1 Supplement and that the Series 2021-1 Class A-1 Notes will be subject to the restrictions on transfer described in such legend; (G) it will obtain for the benefit of the Co-Issuers from any purchaser of the Series 2021-1 Class A-1 Notes substantially the same representations and warranties contained in the foregoing paragraphs; and (H) it has executed a Purchaser’s Letter substantially in the form of Exhibit D to the Series 2021-1 Class A-1 Note Purchase Agreement.
Schedule I hereto sets forth (i) the Purchased Percentage for each Acquiring Committed Note Purchaser, (ii) the revised Commitment Amounts of the Transferor and each Acquiring Committed Note Purchaser, and (iii) the revised Maximum Investor Group Principal Amounts for the Investor Groups of the Transferor and each Acquiring Committed Note Purchaser (it being understood that if the Transferor was part of a Conduit Investor’s Investor Group and the Acquiring Committed Note Purchaser is intended to be part of the same Investor Group, there will not be any change to the Maximum Investor Group Principal Amount for that Investor Group) and (iv) administrative information with respect to each Acquiring Committed Note Purchaser and its related Funding Agent.
This Assignment and Assumption Agreement may be executed in any number of counterparts (which may include facsimile or other electronic transmission of counterparts) and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original, and all of which together shall constitute one and the same instrument.
This Assignment and Assumption Agreement and all matters arising under or in any manner relating to this Assignment and Assumption Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to any choice of law or conflict provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York), and the obligations, rights and remedies of the parties hereto shall be determined in accordance with such law.
ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ON THE SERIES 2021-1 CLASS A-1 NOTE PURCHASE AGREEMENT, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS ASSIGNMENT AND ASSUMPTION AGREEMENT OR THE SERIES 2021-1 CLASS A-1 NOTE PURCHASE AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS ASSIGNMENT AND ASSUMPTION AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Assumption Agreement to be executed by their respective duly authorized officers as of the date first set forth above.
[ ], as Transferor
By:
Name:
Title:
By:
Name:
Title:
[ ], as Acquiring Committed Note Purchaser
By:
Name:
Title:
[ ], as Funding Agent
By:
Name:
Title:
CONSENTED AND ACKNOWLEDGED BY THE CO-ISSUERS:
DOMINO’S PIZZA MASTER ISSUER LLC, as a Co-Issuer
By:
Name:
Title:
DOMINO’S SPV CANADIAN HOLDING COMPANY INC., as a Co-Issuer
By:
Name:
Title:
DOMINO’S PIZZA DISTRIBUTION LLC, as a Co-Issuer
By:
Name:
Title:
DOMINO’S IP HOLDER LLC, as a Co-Issuer
By:
Name:
Title:
CONSENTED BY:
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH, as Swingline Lender
By:
Name:
Title:
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH, as L/C Provider
By:
Name:
Title:
SCHEDULE I TO
ASSIGNMENT AND ASSUMPTION AGREEMENT
LIST OF ADDRESSES FOR NOTICES
AND OF COMMITMENT AMOUNTS
[____________________], as Transferor Prior Commitment Amount: $[ |
] |
|
Revised Commitment Amount: |
$[ |
] |
Prior Maximum Investor Group |
|
|
Principal Amount: $[ |
] |
|
Revised Maximum Investor |
|
|
Group Principal Amount: $[ |
] |
|
Related Conduit Investor |
] |
|
[ |
], as |
|
Acquiring Committed Note Purchaser Address:
Attention:
Telephone:
Facsimile:
Purchased Percentage of
Transferor’s Commitment: [ ]%
Prior Commitment Amount: $[ ]
Revised Commitment Amount: $[ ]
Prior Maximum Investor Group
Principal Amount: $[ ]
Revised Maximum Investor
Group Principal Amount: $[ ]
Related Conduit Investor
(if applicable) [ ]
[ ], as
related Funding Agent
Address:
Attention:
Telephone:
Facsimile:
EXHIBIT C TO CLASS A-1
NOTE PURCHASE AGREEMENT
INVESTOR GROUP SUPPLEMENT, dated as of [ ], by and among
(i) [ ] (the “Transferor Investor Group”), (ii) [ ] (the “Acquiring
Investor Group”), (iii) the Funding Agent with respect to the Acquiring Investor Group listed on the signature pages hereof (each, a “Funding Agent”), and (iv) the Co-Issuers, the Swingline Lender and the L/C Provider listed on the signature pages hereof.
W I T N E S E T H:
WHEREAS, this Investor Group Supplement is being executed and delivered in accordance with Section 9.17(c) of the Series 2021-1 Class A-1 Note Purchase Agreement, dated as of April 16, 2021 (as from time to time amended, supplemented or otherwise modified in accordance with the terms thereof, the “Series 2021-1 Class A-1 Note Purchase Agreement”; terms used but not otherwise defined herein having the meanings ascribed to such terms therein), by and among the Co-Issuers, the Guarantors, the Manager, the Conduit Investors, Committed Note Purchasers and Funding Agents named therein, the L/C Provider and Swingline Lender named therein, Domino’s Pizza LLC, as Manager, and Coöperatieve Rabobank U.A., New York Branch, as Administrative Agent (in such capacity, the “Administrative Agent”);
WHEREAS, the Acquiring Investor Group wishes to become a Conduit Investor and [a] Committed Note Purchaser[s] with respect to such Conduit Investor under the Series 2021-1 Class A-1 Note Purchase Agreement; and
WHEREAS, the Transferor Investor Group is selling and assigning to the Acquiring Investor Group [all] [a portion of] its respective rights, obligations and commitments under the Series 2021-1 Class A-1 Note Purchase Agreement, the Series 2021-1 Class A-1 Advance Notes and each other Related Document to which it is a party with respect to the percentage of its Commitment Amount specified on Schedule I attached hereto;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Upon the execution and delivery of this Investor Group Supplement by the Acquiring Investor Group, each related Funding Agent with respect thereto, the Transferor Investor Group, the Swingline Lender, the L/C Provider and, to the extent required by Section
9.17(c) of the Series 2021-1 Class A-1 Note Purchase Agreement (the date of such execution and delivery, the “Transfer Issuance Date”), the Co-Issuers, the Conduit Investor and the Committed Note Purchaser[s] with respect to the Acquiring Investor Group shall be parties to the Series 2021-1 Class A-1 Note Purchase Agreement for all purposes thereof.
The Transferor Investor Group acknowledges receipt from the Acquiring Investor Group of an amount equal to the purchase price, as agreed between the Transferor Investor Group and the Acquiring Investor Group (the “Purchase Price”), of the portion being purchased by the Acquiring Investor Group (the Acquiring Investor Group’s “Purchased Percentage”) of (i) the aggregate Commitment[s] of the Committed Note Purchaser[s] included in the Transferor Investor Group under the Series 2021-1 Class A-1 Note Purchase Agreement and (ii) the aggregate related Committed Note Purchaser Percentage[s] of the related Investor Group
Principal Amount. The Transferor Investor Group hereby irrevocably sells, assigns and transfers to the Acquiring Investor Group, without recourse, representation or warranty, and the Acquiring Investor Group hereby irrevocably purchases, takes and assumes from the Transferor Investor Group, such Acquiring Investor Group’s Purchased Percentage of (x) the aggregate Commitment[s] of the Committed Note Purchaser[s] included in the Transferor Investor Group under the Series 2021-1 Class A-1 Note Purchase Agreement and (y) the aggregate related Committed Note Purchaser Percentage[s] of the related Investor Group Principal Amount.
The Transferor Investor Group has made arrangements with the Acquiring Investor Group with respect to (i) the portion, if any, to be paid, and the date or dates for payment, by the Transferor Investor Group to such Acquiring Investor Group of any program fees, undrawn facility fee, structuring and commitment fees or other fees (collectively, the “Fees”) [heretofore received] by the Transferor Investor Group pursuant to Section 3.02 of the Series 2021-1 Class A-1 Note Purchase Agreement prior to the Transfer Issuance Date [and (ii) the portion, if any, to be paid, and the date or dates for payment, by such Acquiring Investor Group to the Transferor
Investor Group of Fees or [ ] received by such Acquiring Investor Group pursuant to the
Series 2021-1 Supplement from and after the Transfer Issuance Date].
From and after the Transfer Issuance Date, amounts that would otherwise be payable to or for the account of the Transferor Investor Group pursuant to the Series 2021-1 Supplement or the Series 2021-1 Class A-1 Note Purchase Agreement shall, instead, be payable to or for the account of the Transferor Investor Group and the Acquiring Investor Group, as the case may be, in accordance with their respective interests as reflected in this Investor Group Supplement, whether such amounts have accrued prior to the Transfer Issuance Date or accrue subsequent to the Transfer Issuance Date.
Each of the parties to this Investor Group Supplement agrees that, at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Investor Group Supplement.
The Acquiring Investor Group has executed and delivered to the Administrative Agent a Purchaser’s Letter substantially in the form of Exhibit D to the Series 2021-1 Class A-1 Note Purchase Agreement.
By executing and delivering this Investor Group Supplement, the Transferor Investor Group and the Acquiring Investor Group confirm to and agree with each other and the other parties to the Series 2021-1 Class A-1 Note Purchase Agreement as follows: (i) other than the representation and warranty that it is the legal and beneficial owner of the interest being assigned hereby free and clear of any adverse claim, the Transferor Investor Group makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Series 2021-1 Supplement, the Series 2021-1 Class A-1 Note Purchase Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Indenture, the Series 2021-1 Class A-1 Notes, the Related Documents or any instrument or document furnished pursuant thereto; (ii) the Transferor Investor Group makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Co-Issuers or the performance or observance by the
Co-Issuers of any of the Co-Issuers’ obligations under the Indenture, the Series 2021-1 Class A-1 Note Purchase Agreement, the Related Documents or any other instrument or document furnished pursuant hereto; (iii) the Acquiring Investor Group confirms that it has received a copy of the Indenture, the Series 2021-1 Class A-1 Note Purchase Agreement and such other Related Documents and other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Investor Group Supplement; (iv) the Acquiring Investor Group will, independently and without reliance upon the Administrative Agent, the Transferor Investor Group, the Funding Agents or any other Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Series 2021-1 Class A-1 Note Purchase Agreement; (v) the Acquiring Investor Group appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Series 2021-1 Class A-1 Note Purchase Agreement as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto, all in accordance with Article V of the Series 2021-1 Class A-1 Note Purchase Agreement; (vi) each member of the Acquiring Investor Group appoints and authorizes its related Funding Agent, listed on Schedule I hereto, to take such action as agent on its behalf and to exercise such powers under the Series 2021-1 Class A-1 Note Purchase Agreement as are delegated to such Funding Agent by the terms thereof, together with such powers as are reasonably incidental thereto, all in accordance with Article V of the Series 2021-1 Class A-1 Note Purchase Agreement; (vii) each member of the Acquiring Investor Group agrees that it will perform in accordance with their terms all of the obligations that by the terms of the Series 2021-1 Class A-1 Note Purchase Agreement are required to be performed by it as a member of the Acquiring Investor Group; and (viii) each member of the Acquiring Investor Group hereby represents and warrants to the Co-Issuers and the Manager that: (A) it has had an opportunity to discuss the Co-Issuers’ and the Manager’s business, management and financial affairs, and the terms and conditions of the proposed purchase, with the Co-Issuers and the Manager and their respective representatives; (B) it is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of investing in, and is able and prepared to bear the economic risk of investing in, the Series 2021-1 Class A-1 Notes; (C) it is purchasing the Series 2021-1 Class A-1 Notes for its own account, or for the account of one or more “qualified institutional buyers” within the meaning of Rule 144A under the Securities Act that meet the criteria described in
clause (viii)(B) above and for which it is acting with complete investment discretion, for investment purposes only and not with a view to distribution, subject, nevertheless, to the understanding that the disposition of its property shall at all times be and remain within its control, and neither it nor its Affiliates has engaged in any general solicitation or general advertising within the meaning of the Securities Act with respect to the Series 2021-1 Class A-1 Notes; (D) it understands that (I) the Series 2021-1 Class A-1 Notes have not been and will not be registered or qualified under the Securities Act or any applicable state securities laws or the securities laws of any other jurisdiction and are being offered only in a transaction not involving any public offering within the meaning of the Securities Act and may not be resold or otherwise transferred unless so registered or qualified or unless an exemption from registration or qualification is available and an opinion of counsel shall have been delivered in advance to the Co-Issuers, (II) the Co-Issuers is not required to register the Series 2021-1 Class A-1 Notes, (III) any permitted transferee hereunder must meet the criteria described under clause (viii)(B) above
and (IV) any transfer must comply with the provisions of Section 2.8 of the Base Indenture, Section 4.03 of the Series 2021-1 Supplement and Sections 9.03 or 9.17, as applicable, of the Series 2021-1 Class A-1 Note Purchase Agreement; (E) it will comply with the requirements of clause (viii)(D) above in connection with any transfer by it of the Series 2021-1 Class A-1 Notes; (F) it understands that the Series 2021-1 Class A-1 Notes in the form of definitive notes will bear the legend set out in the form of Series 2021-1 Class A-1 Notes attached to the Series 2021-1 Supplement and that the Series 2021-1 Class A-1 Notes will be subject to the restrictions on transfer described in such legend; (G) it will obtain for the benefit of the Co-Issuers from any purchaser of the Series 2021-1 Class A-1 Notes substantially the same representations and warranties contained in the foregoing paragraphs; and (H) it has executed a Purchaser’s Letter substantially in the form of Exhibit D to the Series 2021-1 Class A-1 Note Purchase Agreement.
Schedule I hereto sets forth (i) the Purchased Percentage for the Acquiring Investor Group, (ii) the revised Commitment Amounts of the Transferor Investor Group and the Acquiring Investor Group, and (iii) the revised Maximum Investor Group Principal Amounts for the Transferor Investor Group and the Acquiring Investor Group and (iv) administrative information with respect to the Acquiring Investor Group and its related Funding Agent.
This Investor Group Supplement and all matters arising under or in any manner relating to this Investor Group Supplement shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to any choice of law or conflict provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York, and the obligations, rights and remedies of the parties hereto shall be determined in accordance with such law.
ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ON THE SERIES 2021-1 CLASS A-1 NOTE PURCHASE AGREEMENT, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS INVESTOR GROUP SUPPLEMENT OR THE SERIES 2021-1 CLASS A-1 NOTE PURCHASE AGREEMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS INVESTOR GROUP SUPPLEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Investor Group Supplement to be executed by their respective duly authorized officers as of the date first set forth above.
[ ], as Transferor Investor Group
By:
Name:
Title
[ ], as Acquiring Investor Group
By:
Name:
Title:
[ ], as Funding Agent
By:
Name:
Title
CONSENTED AND ACKNOWLEDGED BY THE CO-ISSUERS:
DOMINO’S PIZZA MASTER ISSUER LLC, as a Co-Issuer
By:
Name:
Title:
DOMINO’S SPV CANADIAN HOLDING COMPANY INC., as a Co-Issuer
By:
Name:
Title:
DOMINO’S PIZZA DISTRIBUTION LLC, as a Co-Issuer
By:
Name:
Title:
DOMINO’S IP HOLDER LLC, as a Co-Issuer
By:
Name:
Title:
CONSENTED BY:
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH, as Swingline Lender
By:
Name:
Title:
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH, as L/C Provider
By:
Name:
Title:
SCHEDULE I TO
INVESTOR GROUP SUPPLEMENT
LIST OF ADDRESSES FOR NOTICES AND OF COMMITMENT AMOUNTS
[____________________], as
Transferor Investor Group
Prior Commitment Amount: $[ ]
Revised Commitment Amount: $[ ]
Prior Maximum Investor Group
Principal Amount: $[ ]
Revised Maximum Investor
Group Principal Amount: $[ ]
[_______________________], as
Acquiring Investor Group
Address:
Attention:
Telephone:
Facsimile:
Purchased Percentage of
Transferor Investor Group’s Commitment: [ ]%
Prior Commitment Amount: $[ ]
Revised Commitment Amount: $[______]
Prior Maximum Investor Group
Principal Amount: $[ ]
Revised Maximum Investor
Group Principal Amount: $[ ]
[ ], as
related Funding Agent
Address: Attention:
Telephone:
Facsimile:
EXHIBIT D TO CLASS A-1
NOTE PURCHASE AGREEMENT
[FORM OF PURCHASER’S LETTER]
[INVESTOR]
[INVESTOR ADDRESS]
Attention: [INVESTOR CONTACT] [Date]
Ladies and Gentlemen:
Reference is hereby made to the Class A-1 Note Purchase Agreement dated April 16, 2021 (the “NPA”) relating to the offer and sale (the “Offering”) of Series 2021-1 Variable Funding Senior Notes, Class A-1 (the “Securities”) of Domino’s Pizza Master Issuer LLC, Domino’s SPV Canadian Holding Company Inc., Domino’s Pizza Distribution, LLC and Domino’s IP Holder LLC (collectively, the “Co-Issuers”). The Offering will not be required to be registered with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Act”) under an exemption from registration granted in Section 4(a)(2) of the Act. Coöperatieve Rabobank U.A., New York Branch is acting as administrative agent (the “Administrative Agent”) in connection with the Offering. Unless otherwise defined herein, capitalized terms have the definitions ascribed to them in the NPA. Please confirm with us your acknowledgement and agreement with the following:
(“ERISA”), Section 4975 of the Code, or provisions under any Similar Law (as defined in the Series 2021-1 Supplemental Definitions List attached to the Series 2021-1 Supplement as Annex A) or (ii) your purchase and holding of the Securities does not constitute and will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a violation of any applicable Similar Law; and
(j) You will obtain for the benefit of the Co-Issuers from any purchaser of the
Securities substantially the same representations and warranties contained in the foregoing paragraphs.
This letter agreement will be governed by and construed in accordance with the laws of the State of New York without giving effect to any choice of law or conflict provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.
You understand that the Administrative Agent will rely upon this letter agreement in acting as an Administrative Agent in connection with the Offering. You agree to notify the Administrative Agent promptly in writing if any of your representations, acknowledgements or agreements herein cease to be accurate and complete. You irrevocably authorize the Administrative Agent to produce this letter to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters set forth herein.
[ ]
By:
Name:
Title:
Agreed and Acknowledged: [INVESTOR]
By:
Name:
Title:
EXHIBIT E TO CLASS A-1
NOTE PURCHASE AGREEMENT
[FORM OF JOINDER AGREEMENT
TO SERIES 2021-1 CLASS A-1 NOTE PURCHASE AGREEMENT]
This JOINDER AGREEMENT, dated as of [ ], is by and among [ ], as
Committed Purchaser (the “Additional Committed Note Purchaser”), [ ], as Funding Agent
(the “Additional Funding Agent”) [and [ ], as Conduit Investor (the “Additional Conduit
Investor”)] and the Co-Issuers, the Swingline Lender and the L/C Provider listed on the signature pages hereof.
W I T N E S E T H:
WHEREAS, this Joinder Agreement is being executed and delivered in connection with the Class A-1 Note Purchase Agreement, dated as of April 16, 2021 (as from time to time amended, supplemented or otherwise modified in accordance with the terms thereof, the “Agreement”), by and among Domino’s Pizza Master Issuer LLC, Domino’s SPV Canadian Holding Company Inc., Domino’s Pizza Distribution LLC and Domino’s IP Holder LLC, as Co-Issuers, Domino’s Pizza Franchising LLC, Domino’s Pizza Canadian Distribution ULC, Domino’s RE LLC, Domino’s EQ LLC and Domino’s SPV Guarantor LLC, as Guarantors, Domino’s Pizza LLC, as Manager, the Conduit Investors, Committed Note Purchasers, and Funding Agents listed on Schedule I thereto, and Coöperatieve Rabobank U.A., New York Branch, as Administrative Agent, L/C Provider and Swingline Lender; and
WHEREAS, [ ] (the “Additional Committed Note Purchaser”), [ ] (the
“Additional Funding Agent”) and [ ] (the “Additional Conduit Investor”) wish to become a
party to the Agreement;
WHEREAS, terms used but not otherwise defined herein have the meanings given to such terms in the Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
As of [ ] (the “Effective Date”), the Additional Committed Note Purchaser
hereby joins and is made a party to the Agreement as a Committed Note Purchaser, the Additional Funding Agent hereby joins and is made a party to the Agreement as a Funding Agent and a part of such Additional Committed Note Purchaser’s Investor Group[, and the Additional Conduit Investor hereby joins and is made a party to the Agreement as a Conduit Investor and a part of such Additional Committed Note Purchaser’s Investor Group], each with the same effect as if an original signatory to the Agreement and each agrees to be bound by all the terms and provisions thereof.
By executing and delivering this Joinder Agreement, the Additional Committed Note Purchaser confirms and agrees with the parties hereto and the other parties to the Agreement as follows:
general advertising within the meaning of the Securities Act with respect to the Series 2021-1 Class A-1 Notes;
Set forth below is the Additional Committed Purchaser’s information for inclusion in Schedule I to the Agreement:
Investor Maximum Conduit Committed Note Commitment
Group/Funding Investor Group Lender (if any) Purchaser(s) Amount
Agent Principal
Amount
[ ] [ ] [ ] [ ] [ ]
Set forth below is administrative information for inclusion in Schedule II to the Agreement:
Committed Purchaser: [ ]
Funding Agent: [ ]
Conduit Investors: [ ]
This Joinder Agreement may be executed in any number of counterparts (which may include facsimile or other electronic transmission of counterparts) and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original, and all of which together shall constitute one and the same instrument.
This Joinder Agreement and all matters arising under or in any manner relating to this Joinder Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to any choice of law or conflict provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York), and the obligations, rights and remedies of the parties hereto shall be determined in accordance with such law.
ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ON THE AGREEMENT, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS ASSIGNMENT AND ASSUMPTION AGREEMENT OR THE AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS JOINDER AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Joinder Agreement to be executed by their respective duly authorized officers as of the date first set forth above.
[ ], as Additional Committed Note Purchaser
By:
Name:
Title:
[ ], as Additional Funding Agent
By:
Name:
Title:
[ ], as Additional Conduit Investor
By:
Name:
Title:
CONSENTED AND ACKNOWLEDGED BY THE CO-ISSUERS:
DOMINO’S PIZZA MASTER ISSUER LLC, as a Co-Issuer
By:
Name:
Title:
DOMINO’S SPV CANADIAN HOLDING COMPANY INC., as a Co-Issuer
By:
Name:
Title:
DOMINO’S PIZZA DISTRIBUTION LLC, as a Co-Issuer
By:
Name:
Title:
DOMINO’S IP HOLDER LLC, as a Co-Issuer
By:
Name:
Title:
CONSENTED BY:
COÖPERATIEVE RABOBANK U.A.,
NEW YORK BRANCH, as Swingline Lender
By:
Name:
Title:
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH, as L/C Provider
By:
Name:
Title:
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER OF DOMINO’S PIZZA, INC.
I, Russell J. Weiner, certify that:
July 24, 2023 |
|
/s/ Russell J. Weiner |
Date |
|
Russell J. Weiner |
|
|
Chief Executive Officer |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER OF DOMINO’S PIZZA, INC.
I, Sandeep Reddy, certify that:
July 24, 2023 |
|
/s/ Sandeep Reddy |
Date |
|
Sandeep Reddy |
|
|
Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Domino’s Pizza, Inc. (the “Company”) on Form 10-Q for the period ended June 18, 2023, as filed with the Securities and Exchange Commission (the “Report”), I, Russell J. Weiner, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:
_/s/ Russell J. Weiner___________________
Russell J. Weiner
Chief Executive Officer
Dated: July 24, 2023
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Domino’s Pizza, Inc. and will be retained by Domino’s Pizza, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Domino’s Pizza, Inc. (the “Company”) on Form 10-Q for the period ended June 18, 2023, as filed with the Securities and Exchange Commission (the “Report”), I, Sandeep Reddy, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:
_/s/ Sandeep Reddy________________
Sandeep Reddy
Chief Financial Officer
Dated: July 24, 2023
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Domino’s Pizza, Inc. and will be retained by Domino’s Pizza, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.