Dunkin' Donuts 2012 Annual Report Download - page 22

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The terms of our indebtedness restrict our current and future operations, particularly our ability to respond to changes or to
take certain actions.
The credit agreement governing our senior credit facility contains a number of restrictive covenants that impose significant
operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest,
including restrictions on our ability to:
• incur certain liens;
• incur additional indebtedness and guarantee indebtedness;
• pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock;
• prepay, redeem or repurchase certain debt;
• make investments, loans, advances and acquisition;
• sell or otherwise dispose of assets, including capital stock of our subsidiaries;
• enter into transactions with affiliates;
• alter the business we conduct;
• enter into agreements restricting our subsidiaries' ability to pay dividends; and
• consolidate, merge or sell all or substantially all of our assets.
In addition, the restrictive covenants in the credit agreement governing our senior credit facility require us to maintain specified
financial ratios and satisfy other financial condition tests. Our ability to meet those financial ratios and tests can be affected by
events beyond our control.
A breach of the covenants under the credit agreement governing our senior credit facility could result in an event of default
under the applicable indebtedness. Such a default may allow the creditors to accelerate the related debt and may result in the
acceleration of any other debt to which a cross-acceleration or cross-default provision applies, including our interest rate swap
agreements. In addition, an event of default under the credit agreement governing our senior credit facility would permit the
lenders under our senior credit facility to terminate all commitments to extend further credit under that facility. Furthermore, if
we were unable to repay the amounts due and payable under our senior credit facility, those lenders could proceed against the
collateral granted to them to secure that indebtedness, which could force us into bankruptcy or liquidation. In the event our
lenders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that
indebtedness.
If our operating performance declines, we may in the future need to obtain waivers from the required lenders under our senior
credit facility to avoid being in default. If we breach our covenants under our senior credit facility and seek a waiver, we may
not be able to obtain a waiver from the required lenders. If this occurs we would be in default under our senior credit facility,
the lenders could exercise their rights, as described above, and we could be forced into bankruptcy or liquidation. See
“Management's discussion and analysis of financial condition and results of operations—Liquidity and capital resources,” and
“Description of indebtedness.”
Infringement, misappropriation or dilution of our intellectual property could harm our business.
We regard our Dunkin' Donuts® and Baskin-Robbins® trademarks as having significant value and as being important factors in
the marketing of our brands. We have also obtained trademark protection for several of our product offerings and advertising
slogans, including “America Runs on Dunkin' ® ” and “What are you Drinkin'? ® ” . We believe that these and other intellectual
property are valuable assets that are critical to our success. We rely on a combination of protections provided by contracts, as
well as copyright, patent, trademark, and other laws, such as trade secret and unfair competition laws, to protect our intellectual
property from infringement, misappropriation or dilution. We have registered certain trademarks and service marks and have
other trademark and service mark registration applications pending in the U.S. and foreign jurisdictions. However, not all of the
trademarks or service marks that we currently use have been registered in all of the countries in which we do business, and they
may never be registered in all of those countries. Although we monitor trademark portfolios both internally and through
external search agents and impose an obligation on franchisees to notify us upon learning of potential infringement, there can
be no assurance that we will be able to adequately maintain, enforce and protect our trademarks or other intellectual property
rights. We are aware of names and marks similar to our service marks being used by other persons in certain geographic areas
in which we have restaurants. Although we believe such uses will not adversely affect us, further or currently unknown
unauthorized uses or other infringement of our trademarks or service marks could diminish the value of our brands and may
adversely affect our business. Effective intellectual property protection may not be available in every country in which we have