AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT


    Exhibit
      10.26

     

    EXECUTION
      VERSION

     

     

      
        
          

        


        
          	
                   

                   

                   

                   

                   

                   

                  AMENDED
                    AND RESTATED

                   

                  GUARANTEE
                    AND COLLATERAL AGREEMENT

                   

                
	
                  dated
                    as of

                   

                
	
                  December
                    15, 2006,

                   

                
	
                  among

                   

                
	
                  DENNY’S,
                    INC.,

                   

                
	
                  DENNY’S
                    REALTY, LLC,

                   

                
	
                  DENNY’S
                    CORPORATION,

                   

                
	
                  DENNY’S
                    HOLDINGS, INC.,

                   

                
	
                  DFO,
                    LLC,

                   

                
	
                  each
                    other Subsidiary Loan Party

                   

                
	
                  and

                   

                
	
                  BANK
                    OF AMERICA, N.A.,

                   

                
	
                  as
                    Collateral Agent

                   

                   

                   

                   

                   

                   

                   

                


        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Table
      of Contents

     

     

    

      
        	 	 	
                Page

              
	 	 	 
	
                ARTICLE
                  I

              	
                Definitions.............................................................................................................................................................................................

              	
                1

              
	 	 	 
	
                Section
                  1.01.

              	
                Credit
                  Agreement..........................................................................................................................................................................

              	
                1

              
	 	 	 
	
                Section
                  1.02.

              	
                Other
                  Defined
                  Terms....................................................................................................................................................................

              	
                2

              
	 	 	 
	
                ARTICLE
                  II

              	
                Guarantee...............................................................................................................................................................................................

              	
                5

              
	 	 	 
	
                Section
                  2.01.

              	
                Guarantee.......................................................................................................................................................................................

              	
                5

              
	 	 	 
	
                Section
                  2.02.

              	
                Guarantee
                  of
                  Payment..................................................................................................................................................................

              	
                5

              
	 	 	 
	
                Section
                  2.03.

              	
                No
                  Limitations,
                  Etc.......................................................................................................................................................................

              	
                6

              
	 	 	 
	
                Section
                  2.04.

              	
                Reinstatement...............................................................................................................................................................................

              	
                8

              
	 	 	 
	
                Section
                  2.05.

              	
                Agreement
                  To Pay;
                  Subrogation...............................................................................................................................................

              	
                8

              
	 	 	 
	
                Section
                  2.06.

              	
                Information....................................................................................................................................................................................

              	
                8

              
	 	 	 
	
                ARTICLE
                  III

              	
                Pledge
                  of
                  Securities..............................................................................................................................................................................

              	
                8

              
	 	 	 
	
                Section
                  3.01.

              	
                Pledge.............................................................................................................................................................................................

              	
                8

              
	 	 	 
	
                Section
                  3.02.

              	
                Delivery
                  of the Pledged
                  Collateral..............................................................................................................................................

              	
                9

              
	 	 	 
	
                Section
                  3.03.

              	
                Representations,
                  Warranties and
                  Covenants..........................................................................................................................

              	
                10

              
	 	 	 
	
                Section
                  3.04.

              	
                Certification
                  of Limited Liability Company and Limited Partnership
                  Interests....................................................................

              	
                11

              
	 	 	 
	
                Section
                  3.05.

              	
                Registration
                  in Nominee Name;
                  Denominations......................................................................................................................

              	
                11

              
	 	 	 
	
                Section
                  3.06.

              	
                Voting
                  Rights; Dividends and Interest,
                  etc..............................................................................................................................

              	
                11

              
	 	 	 
	
                ARTICLE
                  IV

              	
                Security
                  Interests in Personal
                  Property.............................................................................................................................................

              	
                12

              
	 	 	 
	
                Section
                  4.01.

              	
                Security
                  Interest............................................................................................................................................................................

              	
                12

              
	 	 	 
	
                Section
                  4.02.

              	
                Representations
                  and
                  Warranties................................................................................................................................................

              	
                14

              
	 	 	 
	
                Section
                  4.03.

              	
                Covenants......................................................................................................................................................................................

              	
                15

              
	 	 	 
	
                Section
                  4.04.

              	
                Other
                  Actions................................................................................................................................................................................

              	
                19

              
	 	 	 
	
                Section
                  4.05.

              	
                Covenants
                  Regarding Patent, Trademark and Copyright
                  Collateral.....................................................................................

              	
                21

              
	 	 	 
	
                ARTICLE
                  V

              	
                Remedies................................................................................................................................................................................................

              	
                23

              
	 	 	 
	
                Section
                  5.01.

              	
                Remedies
                  Upon
                  Default...............................................................................................................................................................

              	
                23

              
	 	 	 
	
                Section
                  5.02.

              	
                Application
                  of
                  Proceeds..............................................................................................................................................................

              	
                24

              
	 	 	 
	
                Section
                  5.03.

              	
                Grant
                  of License to Use Intellectual
                  Property..........................................................................................................................

              	
                25

              
	 	 	 
	
                Section
                  5.04.

              	
                Securities
                  Act,
                  etc.........................................................................................................................................................................

              	
                25

              
	 	 	 
	
                Section
                  5.05.

              	
                Registration,
                  etc............................................................................................................................................................................

              	
                26

              
	 	 	 
	
                ARTICLE
                  VI

              	
                Indemnity,
                  Subrogation and
                  Subordination.....................................................................................................................................

              	
                26

              
	 	 	 
	
                Section
                  6.01.

              	
                Indemnity
                  and
                  Subrogation........................................................................................................................................................

              	
                26

              
	 	 	 
	
                Section
                  6.02.

              	
                Contribution
                  and
                  Subrogation....................................................................................................................................................

              	
                26

              
	 	 	 
	
                Section
                  6.03.

              	
                Subordination................................................................................................................................................................................

              	
                27

              
	 	 	 
	
                ARTICLE
                  VII

              	
                Miscellaneous.......................................................................................................................................................................................

              	
                27

              
	 	 	 
	
                Section
                  7.01.

              	
                Notices...........................................................................................................................................................................................

              	
                27

              
	 	 	 
	
                Section
                  7.02.

              	
                Security
                  Interest
                  Absolute..........................................................................................................................................................

              	
                27

              
	 	 	 
	
                Section
                  7.03.

              	
                Survival
                  of
                  Agreement.................................................................................................................................................................

              	
                27

              


      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

         

        Table
          of Contents

        (continued)

      

       

      
        	 	 	Page
	 	 	 
	
                Section
                  7.04.

              	
                Binding
                  Effect; Several
                  Agreement............................................................................................................................................

              	
                28

              
	 	 	 
	
                Section
                  7.05.

              	
                Successors
                  and
                  Assigns.............................................................................................................................................................

              	
                28

              
	 	 	 
	
                Section
                  7.06.

              	
                Collateral
                  Agent’s Fees and Expenses;
                  Indemnification........................................................................................................

              	
                28

              
	 	 	 
	
                Section
                  7.07.

              	
                Collateral
                  Agent Appointed
                  Attorney-in-Fact.........................................................................................................................

              	
                29

              
	 	 	 
	
                Section
                  7.08.

              	
                GOVERNING
                  LAW.......................................................................................................................................................................

              	
                29

              
	 	 	 
	
                Section
                  7.09.

              	
                Waivers;
                  Amendment..................................................................................................................................................................

              	
                29

              
	 	 	 
	
                Section
                  7.10.

              	
                WAIVER
                  OF JURY
                  TRIAL..........................................................................................................................................................

              	
                30

              
	 	 	 
	
                Section
                  7.11.

              	
                Severability....................................................................................................................................................................................

              	
                30

              
	 	 	 
	
                Section
                  7.12.

              	
                Counterparts..................................................................................................................................................................................

              	
                30

              
	 	 	 
	
                Section
                  7.13.

              	
                Headings........................................................................................................................................................................................

              	
                31

              
	 	 	 
	
                Section
                  7.14.

              	
                Jurisdiction;
                  Consent to Service of
                  Process.............................................................................................................................

              	
                31

              
	 	 	 
	
                Section
                  7.15.

              	
                Termination
                  or
                  Release................................................................................................................................................................

              	
                31

              
	 	 	 
	
                Section
                  7.16.

              	
                Additional
                  Subsidiaries...............................................................................................................................................................

              	
                32

              
	 	 	 
	
                Section
                  7.17.

              	
                Right
                  of
                  Setoff...............................................................................................................................................................................

              	
                32

              
	 	 	 
	
                Section
                  7.18.

              	
                Effect
                  on Existing Guarantee and Collateral
                  Agreement.........................................................................................................

              	
                32

              


      

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

     

    

      
        	
                Schedules

              	
                 

              
	
                Schedule
                  I

              	
                Subsidiary
                  Loan Parties

              
	
                Schedule
                  II

              	
                Pledged
                  Equity Securities; Pledged Debt Securities

              
	
                Schedule
                  III

              	
                Intellectual
                  Property

              
	
                Schedule
                  IV

              	
                Insurance
                  Requirements

              
	
                 

              	
                 

              
	
                Exhibits

              	
                 

              
	
                Exhibit
                  I

              	
                Form
                  of Supplement to the Guarantee and Collateral Agreement

              
	
                Exhibit
                  II

              	
                Form
                  of Perfection Certificate

              
	
                Exhibit
                  III 

              	
                Form
                  Of Deposit Account Control
                  Agreement

              


      

       

      
        
           

        

        
          iii

          
            

          

        

        
           

        

      

    

     

     

    

      

        AMENDED
          AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT dated as of December 15,
          2006
          (this “Agreement”),
          among
          Denny’s, Inc., a California corporation, Denny’s Realty, LLC, a Delaware limited
          liability company (each of the foregoing individually, a “Borrower”
and
          collectively, the “Borrowers”),
          Denny’s Corporation, a Delaware corporation (“Parent”),
          Denny’s Holdings, Inc., a New York corporation (“Denny’s
          Holdings”),
          DFO,
          LLC, a Delaware limited liability company (“DFO”),
          each
          other Subsidiary Loan Party (as defined in the Credit Agreement) and Bank
          of
          America, N.A. (“Bank
          of America”),
          as
          Collateral Agent (in such capacity, the “Collateral
          Agent”)
          for
          the Secured Parties (as defined below).

         

        Reference
          is made to (a) the Guarantee and Collateral Agreement dated as of September
          21,
          2004 (as amended, supplemented, waived or otherwise modified from time
          to time,
          the “Existing
          Guarantee and Collateral Agreement”),
          among
          the Denny’s, Inc., Denny’s Realty, LLC (formerly known as Denny’s Realty, Inc.),
          Parent, Denny's Holdings, DFO (formerly known as DFO, Inc.), the Collateral
          Agent and such other parties from time to time party thereto and (b) the
          Amended
          and Restated Credit Agreement dated as of December 15, 2006 (as amended,
          supplemented, waived or otherwise modified from time to time, the “Credit
          Agreement”),
          among
          the Borrowers, Parent, Denny’s Holdings, and DFO, as Guarantors, the Lenders
          party thereto (the “Lenders”),
          and
          Bank of America, as Administrative Agent. 

         

        WHEREAS,
          the Borrowers have requested, among other things, to amend and restate
          the
          Existing Credit Agreement (as defined in the Credit Agreement) on the terms
          and
          conditions set forth in the Credit Agreement and the Administrative Agent,
          the
          Lenders and the other parties thereto are willing to amend and restate
          the
          Existing Credit Agreement on the terms and conditions set forth in the
          Credit
          Agreement;

         

        WHEREAS,
          the obligations of the Lenders to enter into the Credit Agreement and to
          extend
          credit to the Borrowers thereunder are conditioned upon, among other things,
          the
          amendment and restatement of the Existing Guarantee and Collateral Agreement
          in
          the form of this Agreement and the execution and delivery of this Agreement
          by
          the parties hereto; and 

         

        WHEREAS,
          Parent and the Subsidiary Loan Parties are affiliates of the Borrowers,
          will
          derive substantial benefits from the extension of credit to the Borrowers
          pursuant to the Credit Agreement and are willing to execute and deliver
          this
          Agreement in order to induce the Lenders to extend such credit. 

         

        NOW
          THEREFORE, the parties hereto agree that the Existing Guarantee and Collateral
          Agreement is hereby amended and restated as follows:

         

        ARTICLE
          I

         

        Definitions

         

        Section
          1.01.   Credit
          Agreement.
          (a)
          Capitalized terms used in this Agreement and not otherwise defined herein
          have
          the meanings specified in the Credit Agreement. All terms defined in the
          New
          York UCC (as defined herein) and not defined in this Agreement have the
          meanings
          specified therein; the term “instrument” shall have the meaning specified in
          Article 9 of the New York UCC.

         

        (b)  The
          rules
          of construction specified in Section 1.03 of the Credit Agreement also
          apply to
          this Agreement.

         

        
          
             

          

          
            
            

            
              

            

          

          
             

          

        

        Section
          1.02.   Other
          Defined Terms.
          As used
          in this Agreement, the following terms have the meanings specified
          below:

         

        “Account
          Debtor”
means
          any Person who is or who may become obligated to any Grantor under, with
          respect
          to or on account of an Account.

         

        “Article
          9 Collateral”
has
          the
          meaning assigned to such term in Section 4.01.

         

        “Cash
          Management Agreement”
means
          any agreement or arrangement to provide cash management services, including
          treasury, depository, overdraft, credit or debit card, electronic funds
          transfer
          and other cash management arrangements.

         

        “Claiming
          Guarantor”
has
          the
          meaning assigned to such term in Section 6.02.

         

        “Collateral”
means
          Article 9 Collateral and Pledged Collateral.

         

        “Collateral
          Agent”
has
          the
          meaning assigned to such term in the preamble of this Agreement.

         

        “Contributing
          Guarantor”
has
          the
          meaning assigned to such term in Section 6.02.

         

        “Copyright
          License”
means
          any written agreement, now or hereafter in effect, granting any right to
          any
          third party under any copyright now or hereafter owned by any Grantor or
          that
          any Grantor otherwise has the right to license, or granting any right to
          any
          Grantor under any copyright now or hereafter owned by any third party,
          and all
          rights of any Grantor under any such agreement.

         

        “Copyrights”
means
          all of the following now owned or hereafter acquired by any Grantor: (a)
          all
          copyright rights in any work subject to the copyright laws of the United
          States
          or any other country, whether as author, assignee, transferee or otherwise;
          and
          (b) all registrations and applications for registration of any such copyright
          in
          the United States or any other country, including registrations, recordings,
          supplemental registrations and pending applications for registration in
          the
          United States Copyright Office, including those listed on Schedule
          III.

         

        “Credit
          Agreement”
has
          the
          meaning assigned to such term in the preliminary statement of this
          Agreement.

         

        “Deposit
          Account Bank”
has
          the
          meaning assigned to such term in Section 4.04(b).

         

        “Deposit
          Account Control Agreement”
means
          an agreement substantially in the form of Exhibit III, or any other form
          approved by the Collateral Agent, among a Grantor, the Collateral Agent
          and a
          Sub-Agent.

         

        “Equity
          Interests”
means
          shares of capital stock, partnership interests, membership interests in
          a
          limited liability company, beneficial interests in a trust or other equity
          ownership interests in a Person of whatever nature and rights, warrants
          or
          options to acquire any of the foregoing.

         

        “Federal
          Securities Laws”
has
          the
          meaning assigned to such term in Section 5.04.

         

        “General
          Intangibles”
means
          all “General Intangibles” as defined in the New York UCC, including payment
          intangibles, all choses in action and causes of action and all other intangible
          personal property of any Grantor of every kind and nature (other than Accounts)
          now owned or hereafter acquired by any Grantor, including corporate or
          other
          business records, indemnification claims, contract rights (including rights
          under leases, whether entered into as lessor or lessee, Hedging Agreements,
          franchise agreements and other agreements) and rights to payment, Intellectual
          Property, goodwill, registrations, franchises, tax refund claims and any
          letter
          of credit, guarantee, claim, security interest or other security held by
          or
          granted to any Grantor to secure payment by an Account Debtor of any of
          the
          Accounts.

         

        
          
             

          

          
            5

            
              

            

          

          
             

          

        

        “Grantors”
means
          Parent, the Borrowers and the Subsidiary Loan Parties.

         

        “Guarantors”
means
          Parent, the Borrowers and the Subsidiary Loan Parties.

         

        “Intellectual
          Property”
means
          all intellectual and similar property of every kind and nature now owned
          or
          hereafter acquired by any Grantor, including inventions, designs, Patents,
          Copyrights, Licenses, Trademarks, trade secrets, domain names, confidential
          or
          proprietary technical and business information, know-how, show-how or other
          data
          or information, software and databases and all embodiments or fixations
          thereof
          and related documentation, registrations and franchises, and all additions,
          improvements and accessions to, and books and records describing or used
          in
          connection with, any of the foregoing.

         

        “Investment
          Property”
means
          a
          security, whether certificated or uncertificated, security entitlement,
          securities account, commodity contract or commodity account; provided
          that for
          purposes of this Agreement, the capital stock of Simeus Holdings, Inc.
          owned by
          Denny’s Holdings and scheduled on Schedule 6.04 to the Credit Agreement shall
          not be Investment Property.

         

        “License”
means
          any Patent License, Trademark License, Copyright License or other license
          or
          sublicense agreement to which any Grantor is a party, other than those
          license
          or sublicense agreements (a) in existence on the date hereof and (b) entered
          into after the date hereof, in each case that by their terms prohibit a
          grant of
          a security interest by such Grantor as licensee thereunder; provided
          that (i)
          in the case of clause (b), such Grantor has used commercially reasonable
          efforts
          to prevent the inclusion of such a prohibition over such license or sublicense
          and (ii) in the case of any licenses or sublicenses excluded pursuant to
          clauses
          (a) and (b), such licenses or sublicenses, individually or in the aggregate,
          are
          not material to the business of such Grantor. For the avoidance of doubt,
          any
          money or property received in respect of any license that is not a License
          shall
          not be excluded from the Collateral solely as a result of the exclusion
          of such
          license from the Collateral.

         

        “Loan
          Document Obligations”
means
          (a) the due and punctual payment by the Borrowers of (i) the principal
          of and
          interest (including interest accruing during the pendency of any bankruptcy,
          insolvency, receivership or other similar proceeding, regardless of whether
          allowed or allowable in such proceeding) on the Loans, when and as due,
          whether
          at maturity, by acceleration, upon one or more dates set for prepayment
          or
          otherwise, (ii) each payment required to be made by the Borrowers under
          the
          Credit Agreement in respect of any Letter of Credit or any Credit-Linked
          Deposits, when and as due, including payments in respect of reimbursement
          of
          disbursements, interest and fees thereon and obligations to provide cash
          collateral in respect of such Letters of Credit, and (iii) all other monetary
          obligations of the Borrowers to any of the Secured Parties under the Credit
          Agreement and each of the other Loan Documents, including obligations to
          pay
          fees, expense and reimbursement obligations and indemnification obligations,
          whether primary, secondary, direct, contingent, fixed or otherwise (including
          monetary obligations incurred during the pendency of any bankruptcy, insolvency,
          receivership or other similar proceeding, regardless of whether allowed
          or
          allowable in such proceeding), (b) the due and punctual performance of
          all other
          obligations of the Borrowers under or pursuant to the Credit Agreement
          and each
          of the other Loan Documents and (c) the due and punctual payment and performance
          of all the obligations of each other Loan Party under or pursuant to this
          Agreement and each of the other Loan Documents.

         

        
          
             

          

          
            6

            
              

            

          

          
             

          

        

        “New
          York UCC”
means
          the Uniform Commercial Code as from time to time in effect in the State
          of New
          York.

         

        “Obligations”
means
          (a) Loan Document Obligations, (b) the due and punctual payment and performance
          of all obligations of each Loan Party under each Hedging Agreement that,
          in
          either case, if and to the extent permitted by the Credit Agreement (i)
          is in
          effect on the Closing Date with a counterparty that is a Lender or an Affiliate
          of a Lender as of the Closing Date or (ii) is entered into after the Closing
          Date with any counterparty that is a Lender or an Affiliate of a Lender
          at the
          time such Hedging Agreement is entered into and (c) the due and punctual
          payment
          and performance of all obligations in respect of overdrafts and other
          liabilities owed to the Administrative Agent or any of its Affiliates or
          any
          Lender arising from treasury, depositary and cash management services in
          connection with any automated clearinghouse transfers of funds (including,
          without limitation, any Cash Management Agreements).

         

        “Patent
          License”
means
          any written agreement, now or hereafter in effect, granting to any third
          party
          any right to make, use or sell any invention on which a patent, now or
          hereafter
          owned by any Grantor or that any Grantor otherwise has the right to license,
          is
          in existence, or granting to any Grantor any right to make, use or sell
          any
          invention on which a patent, now or hereafter owned by any third party,
          is in
          existence, and all rights of any Grantor under any such agreement.

         

        “Patents”
means
          all of the following now owned or hereafter acquired by any Grantor: (a)
          all
          letters patent of the United States or the equivalent thereof in any other
          country, all registrations and recordings thereof, and all applications
          for
          letters patent of the United States or the equivalent thereof in any other
          country, including registrations, recordings and pending applications in
          the
          United States Patent and Trademark Office or any similar offices in any
          other
          country, including those listed on Schedule III; and (b) all reissues,
          continuations, divisions, continuations-in-part, renewals or extensions
          thereof,
          and the inventions disclosed or claimed therein, including the right to
          make,
          use and/or sell the inventions disclosed or claimed therein.

         

        “Perfection
          Certificate”
means
          a
          certificate substantially in the form of Exhibit II, completed and supplemented
          with the schedules and attachments contemplated thereby, and duly executed
          by a
          Financial Officer and a legal officer of the Borrowers.

         

        “Pledged
          Collateral”
has
          the
          meaning assigned to such term in Section 3.01.

         

        “Pledged
          Debt Securities”
has
          the
          meaning assigned to such term in Section 3.01.

         

        “Pledged
          Securities”
means
          any promissory notes, stock certificates or other securities now or hereafter
          included in the Pledged Collateral, including all certificates, instruments
          or
          other documents representing or evidencing any Pledged Collateral.

         

        “Pledged
          Stock”
has
          the
          meaning assigned to such term in Section 3.01.

         

        “Secured
          Parties”
means
          (a) the Lenders (and any Affiliate of any Lender to which any obligation
          referred to in clause (c) of the definition of the term “Obligations” is owed),
          (b) the Administrative Agent (and any Affiliate of the Administrative Agent
          to
          which any obligation referred to in clause (c) of the definition of the
          term
“Obligations” is owed), (c) the Collateral Agent, (d) each Issuing Bank, (e)
          each counterparty to any Hedging Agreement entered into with a Loan Party
          the
          obligations under which constitute Obligations, (f) the beneficiaries of
          each
          indemnification obligation undertaken by any Loan Party under any Loan
          Document
          and (g) the successors and assigns of each of the foregoing.

         

        
          
             

          

          
            7

            
              

            

          

          
             

          

        

        “Security
          Interest”
has
          the
          meaning assigned to such term in Section 4.01.

         

        “Sub-Agent”
means
          a
          financial institution that has delivered to the Collateral Agent an executed
          Deposit Account Control Agreement.

         

        “Trademark
          License”
means
          any written agreement, now or hereafter in effect, granting to any third
          party
          any right to use any trademark now or hereafter owned by any Grantor or
          that any
          Grantor otherwise has the right to license, or granting to any Grantor
          any right
          to use any trademark now or hereafter owned by any third party, and all
          rights
          of any Grantor under any such agreement.

         

        “Trademarks”
means
          all of the following now owned or hereafter acquired by any Grantor: (a)
          all
          trademarks, service marks, trade names, corporate names, company names,
          business
          names, fictitious business names, trade styles, trade dress, logos, other
          source
          or business identifiers, designs and general intangibles of like nature,
          now
          existing or hereafter adopted or acquired, all registrations and recordings
          thereof, and all registration and recording applications filed in connection
          therewith, including registrations and registration applications in the
          United
          States Patent and Trademark Office or any similar offices in any State
          of the
          United States or any other country or any political subdivision thereof,
          and all
          extensions or renewals thereof, including those listed on Schedule III;
          (b) all
          goodwill associated therewith or symbolized thereby; and (c) all other
          assets,
          rights and interests that uniquely reflect or embody such goodwill.

         

        ARTICLE
          II

         

        Guarantee

         

        Section
          2.01.   Guarantee.
          Each
          Guarantor hereby ratifies and affirms its unconditional guarantee made
          under
          Section 2.01 of the Existing Guarantee and Collateral Agreement and, for
          the
          avoidance of doubt, hereby unconditionally guarantees, jointly with the
          other
          Guarantors and severally, as a primary obligor and not merely as a surety,
          the
          due and punctual payment and performance of the Obligations. Each Guarantor
          further agrees that the Obligations may be extended or renewed, in whole
          or in
          part, without notice to or further assent from it, and that it will remain
          bound
          upon its guarantee notwithstanding any extension or renewal of any Obligation.
          Each Guarantor waives presentment to, demand of payment from and protest
          to the
          Borrowers or any other Loan Party of any of the Obligations, and also waives
          notice of acceptance of its guarantee and notice of protest for
          nonpayment.

         

        Section
          2.02.   Guarantee
          of Payment.
          Each
          Guarantor further agrees that its guarantee hereunder constitutes a guarantee
          of
          payment when due and not of collection, and waives any right to require
          that any
          resort be had by the Collateral Agent or any other Secured Party to any
          security
          held for the payment of the Obligations or to any balance of any deposit
          account
          or credit on the books of the Collateral Agent or any other Secured Party
          in
          favor of the Borrowers or any other Person.

         

        Section
          2.03.   No
          Limitations, Etc.
          (a)
          Except
          for termination of a Guarantor’s obligations hereunder as expressly provided in
          Section 7.15, the obligations of each Guarantor hereunder shall not be
          subject
          to any reduction, limitation, impairment or termination for any reason,
          including any claim of waiver, release, surrender, alteration or compromise,
          and
          shall not be subject to any defense or setoff, counterclaim, recoupment
          or
          termination whatsoever by reason of the invalidity, illegality or
          unenforceability of the Obligations or otherwise. Without limiting the
          generality of the foregoing, the obligations of each Guarantor hereunder
          shall
          not be discharged or impaired or otherwise affected by (i) the failure
          of the
          Administrative Agent, the Collateral Agent or any other Secured Party to
          assert
          any claim or demand or to exercise or enforce any right or remedy under
          the
          provisions of any Loan Document or otherwise; (ii) any rescission, waiver,
          amendment or modification of, or any release from any of the terms or provisions
          of, any Loan Document or any other agreement, including with respect to
          any
          other Guarantor under this Agreement; (iii) the failure to perfect any
          security
          interest in, or the release of, any security held by the Collateral Agent
          or any
          other Secured Party for the Obligations; (iv) any default, failure or delay,
          wilful or otherwise, in the performance of the Obligations; (v) any other
          act or
          omission that may or might in any manner or to any extent vary the risk
          of any
          Guarantor or otherwise operate as a discharge of any Guarantor as a matter
          of
          law or equity (other than the indefeasible payment in full in cash of all
          the
          Obligations) or (vi) any law or regulation of any jurisdiction or any other
          event affecting any term of a guaranteed obligation. Each Guarantor expressly
          authorizes the Secured Parties to take and hold security for the payment
          and
          performance of the Obligations, to exchange, waive or release any or all
          such
          security (with or without consideration), to enforce or apply such security
          and
          direct the order and manner of any sale thereof in their sole discretion
          or to
          release or substitute any one or more other guarantors or obligors upon
          or in
          respect of the Obligations, all without affecting the obligations of any
          Guarantor hereunder.

         

        
          
             

          

          
            8

            
              

            

          

          
             

          

        

        (b)  (i)
          To
          the
          fullest extent permitted by applicable law, each Guarantor waives any defense
          based on or arising out of any defense of the Borrowers or any other Loan
          Party
          or the unenforceability of the Obligations or any part thereof from any
          cause,
          or the cessation from any cause of the liability of the Borrowers or any
          other
          Loan Party, other than the indefeasible payment in full in cash of all
          the
          Obligations. The Collateral Agent may, at its election, foreclose on any
          security held by it by one or more judicial or nonjudicial sales, accept
          an
          assignment of any such security in lieu of foreclosure, compromise or adjust
          any
          part of the Obligations, make any other accommodation with the Borrowers
          or any
          other Loan Party or exercise any other right or remedy available to them
          against
          the Borrowers or any other Loan Party, without affecting or impairing in
          any way
          the liability of any Guarantor hereunder except to the extent the Obligations
          have been fully and indefeasibly paid in full in cash. To the fullest extent
          permitted by applicable law, each Guarantor waives any defense arising
          out of
          any such election even though such election operates, pursuant to applicable
          law, to impair or to extinguish any right of reimbursement or subrogation
          or
          other right or remedy of such Guarantor against the Borrowers or any other
          Loan
          Party, as the case may be, or any security.

         

        (ii)
            Each
          Guarantor waives any right it may have to require the Collateral Agent
          or the
          Lenders to proceed against any Borrower or any other Guarantor, proceed
          against
          or exhaust any security held from any Borrower or any other Guarantor,
          or pursue
          any other remedy in their respective power to pursue, as well as any defense
          based on any claim that Guarantor’s obligations exceed or are more burdensome
          than those of any Borrower. To the extent that the laws of the State of
          California may be deemed to apply to the Guarantees, the rights which each
          Guarantor hereby waives include all rights of subordination, reimbursement,
          indemnification and contribution and any other rights and defenses that
          are or
          may become available to such Guarantor by reason of Section 2787 to 2855,
          inclusive, of the California Civil Code; provided
          that
          these waivers shall not limit the express rights of the Guarantors that
          are set
          forth in Sections 6.01 and 6.02 hereof.

         

        (iii)
            Each
          Guarantor understands and acknowledges that if the Collateral Agent forecloses
          judicially or nonjudicially against any real property security for the
          Obligations, such foreclosure could impair or destroy any right or ability
          that
          any Guarantor may have to seek reimbursement, contribution or indemnification
          for any amounts paid by such Guarantor under its Guarantee. To the extent
          that
          the laws of the State of California may be deemed to apply to the Guarantees,
          each Guarantor further understands and acknowledges that, in the absence
          of this
          waiver, such potential impairment or destruction of the Guarantor’s rights, if
          any, may entitle the Guarantor to assert a defense to its Guarantee based
          on
          California Code of Civil Procedure §580d as interpreted in Union
          Bank v. Gradsky,
          (1968)
          265 CA 2d 40, 71 CR 64, on the grounds, among others, that a lender should
          be
          estopped from pursuing a guarantor when the lender’s election to foreclose has
          impaired or destroyed the guarantor’s rights of subrogation, reimbursement,
          contribution or indemnification rights. By execution of this Agreement,
          each
          Guarantor intentionally, freely, irrevocably, and unconditionally: (A)
          waives
          and relinquishes that defense and agrees that such Guarantor will be liable
          under its Guarantee even though the Collateral Agent had foreclosed judicially
          or nonjudicially against any real or personal property collateral for the
          Obligations or any of the Guarantees; and (B) agrees that such Guarantor
          will
          not assert that defense in any action or proceeding which the Collateral
          Agent
          or the Lenders may commence to enforce its Guarantee. Without limiting
          the
          foregoing, each Guarantor waives all rights and defenses arising out of
          an
          election of remedies by the Collateral Agent or the Lenders, even though
          that
          election of remedies, such as nonjudicial foreclosure with respect to security
          for a guaranteed obligation, has destroyed such Guarantor’s rights of
          subrogation and reimbursement against the principal or another Guarantor
          by the
          operation of Section 580d of the California Code of Civil
          Procedure.

         

        
          
             

          

          
            9

            
              

            

          

          
             

          

        

        (iv)
            To
          the
          extent that the laws of the State of California may be deemed to apply
          to the
          Guarantees, each Guarantor intentionally, freely, irrevocably and
          unconditionally waives and relinquishes all rights which may be available
          to it
          under any provision of California law or under any California judicial
          decision,
          including Section 580a and 726(b) of the California Code of Civil Procedure,
          to
          seek to limit the amount of any deficiency judgment or other judgment which
          may
          be obtained against such Guarantor under its Guarantee to not more than
          the
          amount by which the unpaid Obligations guaranteed hereby exceed the fair
          market
          value or fair value of any real or personal property securing said Obligations,
          including, without limitation, all rights to an appraisement of, judicial
          or
          other hearing on, or other determination of the value of said
          property.

         

        (v)
            To
          the
          extent that the laws of the State of California may be deemed to apply
          to the
          Guarantees, and without limiting any of the other waivers and provisions
          set
          forth herein, if the debt of any Borrower or another Guarantor’s Guarantee is
          secured by real property, each Guarantor hereby intentionally, freely,
          irrevocably and unconditionally waives all rights and defenses that Guarantor
          may have because the debt of such Borrower or another Guarantor’s Guarantee is
          secured by real property; this means, among other things: (A) the Collateral
          Agent and the Lenders may collect from that Guarantor without first foreclosing
          on any real or personal property collateral pledged by any Borrower or
          another
          Guarantor; (B) the amount of the Obligations may be reduced only by the
          price
          for which that collateral is sold at the foreclosure sale, even if the
          collateral is determined to be worth more than the sale price; and (C)
          the
          Collateral Agent and the Lenders may collect from that Guarantor even if
          the
          Collateral Agent, by foreclosing on the real property collateral, has destroyed
          any right the Guarantor may have to collect from such Borrower or another
          Guarantor. This is an unconditional and irrevocable waiver of any rights
          and
          defenses that such Guarantor may have under circumstances where the debt
          of any
          Borrower or another Guarantor’s Guarantee is secured by real property. These
          rights and defenses include, but are not limited to, any rights or defenses
          based upon Section 580a, 580b, 580d or 726 of the California Code of Civil
          Procedure.

         

        Section
          2.04.   Reinstatement.
          Each
          Guarantor agrees that its guarantee hereunder shall continue to be effective
          or
          be reinstated, as the case may be, if at any time payment, or any part
          thereof,
          of any Obligation is rescinded or must otherwise be restored by the
          Administrative Agent or any other Secured Party upon the bankruptcy or
          reorganization of the Borrowers, any other Loan Party or otherwise.

         

        
          
             

          

          
            10

            
              

            

          

          
             

          

        

        Section
          2.05.   Agreement
          To Pay; Subrogation.
          In
          furtherance of the foregoing and not in limitation of any other right that
          the
          Collateral Agent or any other Secured Party has at law or in equity against
          any
          Guarantor by virtue hereof, upon the failure of the Borrowers or any other
          Loan
          Party to pay any Obligation when and as the same shall become due, whether
          at
          maturity, by acceleration, after notice of prepayment or otherwise, each
          Guarantor hereby promises to and will forthwith pay, or cause to be paid,
          to the
          Collateral Agent for distribution to the applicable Secured Parties in
          cash the
          amount of such unpaid Obligation. Upon payment by any Guarantor of any
          sums to
          the Collateral Agent as provided above, all rights of such Guarantor against
          the
          Borrowers or any other Guarantor arising as a result thereof by way of
          right of
          subrogation, contribution, reimbursement, indemnity or otherwise shall
          in all
          respects be subject to Article VI.

         

        Section
          2.06.   Information.
          Each
          Guarantor assumes all responsibility for being and keeping itself informed
          of
          the Borrowers’ and each other Loan Party’s financial condition and assets, and
          of all other circumstances bearing upon the risk of nonpayment of the
          Obligations and the nature, scope and extent of the risks that such Guarantor
          assumes and incurs hereunder, and agrees that none of the Collateral Agent
          or
          the other Secured Parties will have any duty to advise such Guarantor of
          information known to it or any of them regarding such circumstances or
          risks.

         

        ARTICLE
          III

         

        Pledge
          of Securities

         

        Section
          3.01.   Pledge.
          Each
          Grantor hereby ratifies and affirms its pledge, assignment and grant of
          security
          interests made pursuant to Section 3.01 of the Existing Guarantee and Collateral
          Agreement, and, for the avoidance of doubt, as security for the payment
          or
          performance, as the case may be, in full of the Obligations, each Grantor
          hereby
          assigns and pledges to the Collateral Agent, its successors and assigns,
          for the
          benefit of the Secured Parties, and hereby grants to the Collateral Agent,
          its
          successors and assigns, for the benefit of the Secured Parties, a security
          interest in all of such Grantor’s right, title and interest in, to and under (a)
          the shares of capital stock and other Equity Interests owned by it and
          listed on
          Schedule II and any other Equity Interests obtained in the future by such
          Grantor and the certificates representing all such Equity Interests (the
          “Pledged
          Stock”);
          provided
          that the
          Pledged Stock shall not include (i) more than 65% of the issued and outstanding
          voting Equity Interests of any Foreign Subsidiary, (ii) to the extent applicable
          law requires that a subsidiary of such Grantor issue directors’ qualifying
          shares, such qualifying shares or (iii) any Equity Interests received by
          Denny’s
          Holdings in respect of shares of Series A Cumulative Convertible Preferred
          Stock
          of Simeus Holdings, Inc. to the extent that, on the date such Equity Interests
          are received, the Equity Rights Agreement entered into as of August 30,
          2001, by
          and among Simeus Holdings, Inc. and Denny’s Holdings restricts the pledge of
          such Equity Interests; (b)(i) the debt securities listed opposite the name
          of
          such Grantor on Schedule II, (ii) any debt securities in the future issued
          to
          such Grantor and (iii) the promissory notes and any other instruments,
          if any,
          evidencing such debt securities (the “Pledged
          Debt Securities”);
          (c)
          all other property that may be delivered to and held by the Collateral
          Agent
          pursuant to the terms of this Section 3.01; (d) subject to Section 3.06,
          all
          payments of principal or interest, dividends, cash, instruments and other
          property from time to time received, receivable or otherwise distributed
          in
          respect of, in exchange for or upon the conversion of, and all other Proceeds
          received in respect of, the securities referred to in clauses (a) and (b)
          above
          and the property referred to in clause (c) above; (e) subject to Section
          3.06,
          all rights and privileges of such Grantor with respect to the securities
          and
          other property referred to in clauses (a), (b), (c) and (d) above; and
          (f) all
          Proceeds of any of the foregoing (the items referred to in clauses (a)
          through
          (f) above being collectively referred to as the “Pledged
          Collateral”). 

         

        
          
             

          

          
            11

            
              

            

          

          
             

          

        

        TO
          HAVE
          AND TO HOLD the Pledged Collateral, together with all right, title, interest,
          powers, privileges and preferences pertaining or incidental thereto, unto
          the
          Collateral Agent, its successors and assigns, for the benefit of the Secured
          Parties, forever; subject,
          however,
          to the
          terms, covenants and conditions hereinafter set forth.

         

        Section
          3.02.   Delivery
          of the Pledged Collateral.

         

        (a)  Each
          Grantor agrees promptly to deliver or cause to be delivered to the Collateral
          Agent certificates, instruments and other documents representing or evidencing
          any Pledged Securities having a value in excess of $10,000.

         

        (b)  Each
          Grantor will cause any Indebtedness for borrowed money (other than trade
          debt
          incurred in the ordinary course of business) owed to such Grantor by any
          Person
          in excess of $10,000 in principal amount to be evidenced by a duly executed
          promissory note that is pledged and delivered to the Collateral Agent pursuant
          to the terms hereof.

         

        (c)  Upon
          delivery to the Collateral Agent, (i) any Pledged Securities shall be
          accompanied by stock powers duly executed in blank or other instruments
          of
          transfer satisfactory to the Collateral Agent and by such other instruments
          and
          documents as the Collateral Agent may reasonably request to perfect its
          security
          interest therein and (ii) all other property composing part of the Pledged
          Collateral shall be accompanied by proper instruments of assignment duly
          executed by the applicable Grantor and such other instruments or documents
          as
          the Collateral Agent may reasonably request to perfect its security interest
          therein. Each delivery of Pledged Securities shall be accompanied by a
          schedule
          describing the securities, which schedule shall be attached hereto as Schedule
          II and made a part hereof; provided
          that
          failure to attach any such schedule hereto shall not affect the validity
          of such
          pledge of such Pledged Securities. Each schedule so delivered shall supplement
          any prior schedules so delivered.

         

        Section
          3.03.   Representations,
          Warranties and Covenants.
          The
          Grantors jointly and severally represent, warrant and covenant to and with
          the
          Collateral Agent, for the benefit of the Secured Parties, that:

         

        (a)  Schedule
          II correctly sets forth the percentage of the issued and outstanding shares
          of
          each class of the Equity Interests of the issuer thereof represented by
          such
          Pledged Stock and includes all Equity Interests, debt securities and promissory
          notes required to be pledged hereunder in order to satisfy the Collateral
          and
          Guarantee Requirement;

         

        (b)  the
          Pledged Stock and Pledged Debt Securities have been duly and validly authorized
          and issued by the issuers thereof and (i) in the case of Pledged Stock
          issued by
          a corporation, are fully paid and nonassessable, (ii) in the case of Pledged
          Debt Securities other than Pledged Debt Securities issued by Parent, any
          Borrower or any other Subsidiary, to the knowledge of the Grantor pledging
          any
          such Pledged Debt Securities, are legal, valid and binding obligations
          of the
          issuers thereof and (iii) in the case of Pledged Debt Securities issued
          by
          Parent, any Borrower or any other Subsidiary, are legal, valid and binding
          obligations of the issuer thereof;

         

        (c)  except
          for the security interests granted hereunder, each Grantor (i) is and,
          subject
          to any transfers made in compliance with the Credit Agreement, will continue
          to
          be the direct owner, beneficially and of record, of the Pledged Securities
          indicated on Schedule II as owned by such Grantor, (ii) holds the same
          free and
          clear of all Liens, other than Liens created by this Agreement and Permitted
          Liens, (iii) will make no assignment, pledge, hypothecation or transfer
          of, or
          create or permit to exist any security interest in or other Lien on, the
          Pledged
          Collateral, other than Liens created by this Agreement and Permitted Liens
          and
          (iv) will defend its title or interest hereto or therein against any and
          all
          Liens (other than Liens created by this Agreement and Permitted Liens),
          however
          arising, of all Persons;

         

        
          
             

          

          
            12

            
              

            

          

          
             

          

        

        (d)  except
          for restrictions and limitations imposed by the Loan Documents, the Pledged
          Collateral is and will continue to be freely transferable and assignable
          (subject to restrictions imposed under applicable law), and none of the
          Pledged
          Collateral is or will be subject to any option, right of first refusal,
          shareholders agreement, charter or by-law provisions or contractual restriction
          of any nature that might prohibit, impair, delay or otherwise affect the
          pledge
          of such Pledged Collateral hereunder, the sale or disposition thereof pursuant
          hereto or the exercise by the Collateral Agent of rights and remedies
          hereunder;

         

        (e)  each
          Grantor has the power and authority to pledge the Pledged Collateral pledged
          by
          it hereunder in the manner hereby done or contemplated;

         

        (f)  no
          consent or approval of any Governmental Authority, any securities exchange
          or
          any other Person was or is necessary to the validity of the pledge effected
          hereby (other than such as have been obtained and are in full force and
          effect);

         

        (g)  by
          virtue
          of the execution and delivery by the Grantors of this Agreement, when any
          Pledged Securities are delivered to the Collateral Agent in accordance
          with this
          Agreement, the Collateral Agent will obtain a legal, valid and perfected
          first
          priority lien upon and security interest in such Pledged Securities as
          security
          for the payment and performance of the Obligations; and

         

        (h)  the
          pledge effected hereby is effective to vest in the Collateral Agent, for
          the
          benefit of the Secured Parties, the rights of the Collateral Agent in the
          Pledged Collateral as set forth herein.

         

        Section
          3.04.   Certification
          of Limited Liability Company and Limited Partnership Interests.
          Each
          interest in any limited liability company or limited partnership controlled
          by
          any Grantor and pledged hereunder shall be represented by a certificate,
          shall
          be a “security” within the meaning of Article 8 of the New York UCC and shall be
          governed by Article 8 of the New York UCC.

         

        Section
          3.05.   Registration
          in Nominee Name; Denominations.
          The
          Collateral Agent, on behalf of the Secured Parties, shall have the right
          (in its
          sole and absolute discretion) to hold the Pledged Securities in its own
          name as
          pledgee, the name of its nominee (as pledgee or as sub-agent) or the name
          of the
          applicable Grantor, endorsed or assigned in blank or in favor of the Collateral
          Agent. Upon Collateral Agent’s request, each Grantor will promptly give to the
          Collateral Agent copies of any notices or other communications received
          by it
          with respect to Pledged Securities registered in the name of such Grantor.
          The
          Collateral Agent shall at all times have the right to exchange the certificates
          representing Pledged Securities for certificates of smaller or larger
          denominations for any purpose consistent with this Agreement.

         

        Section
          3.06.   Voting
          Rights; Dividends and Interest, etc.
          (a)
          Unless
          and until an Event of Default shall have occurred and be
          continuing:

         

        (i)
            Each
          Grantor shall be entitled to exercise any and all voting and/or other consensual
          rights and powers inuring to an owner of Pledged Securities or any part
          thereof
          for any purpose consistent with the terms of this Agreement, the Credit
          Agreement and the other Loan Documents; provided
          that
          such rights and powers shall not be exercised in any manner that could
          materially and adversely affect the rights inuring to a holder of any Pledged
          Securities, the rights and remedies of any of the Collateral Agent or the
          other
          Secured Parties under this Agreement, the Credit Agreement or any other
          Loan
          Document or the ability of the Secured Parties to exercise the
          same.

         

        
          
             

          

          
            13

            
              

            

          

          
             

          

        

        (ii)
            Subject
          to paragraphs (b) and (c) of this Section 3.06, the Collateral Agent authorizes
          each Grantor to exercise the voting and/or consensual rights and powers
          it is
          entitled to exercise pursuant to subparagraph (i) above and to receive
          the cash
          dividends it is entitled to receive pursuant to subparagraph (iii) below.
          

         

        (iii)
            Each
          Grantor shall be entitled to receive and retain any and all dividends,
          interest,
          principal and other distributions paid on or distributed in respect of
          the
          Pledged Securities to the extent and only to the extent that such dividends,
          interest, principal and other distributions are permitted by, and otherwise
          paid
          or distributed in accordance with, the terms and conditions of the Credit
          Agreement, the other Loan Documents and applicable laws; provided
          that any
          noncash dividends, interest, principal or other distributions that would
          constitute Pledged Stock or Pledged Debt Securities, whether resulting
          from a
          subdivision, combination or reclassification of the outstanding Equity
          Interests
          of the issuer of any Pledged Securities or received in exchange for Pledged
          Securities or any part thereof, or in redemption thereof, or as a result
          of any
          merger, consolidation, acquisition or other exchange of assets to which
          such
          issuer may be a party or otherwise, shall be and become part of the Pledged
          Collateral, and, if received by any Grantor, shall not be commingled by
          such
          Grantor with any of its other funds or property but shall be held separate
          and
          apart therefrom, shall be held in trust for the benefit of the Collateral
          Agent
          and shall be forthwith delivered to the Collateral Agent in the same form
          as so
          received (with any necessary endorsement).

         

        (b)  Upon
          the
          occurrence and during the continuance of an Event of Default, all rights
          of any
          Grantor to dividends, interest, principal or other distributions that such
          Grantor is authorized to receive pursuant to paragraph (a)(iii) of this
          Section
          3.06 shall cease, and all such rights shall thereupon become vested in
          the
          Collateral Agent, which shall have the sole and exclusive right and authority
          to
          receive and retain such dividends, interest, principal or other distributions.
          All dividends, interest, principal or other distributions received by any
          Grantor contrary to the provisions of this Section 3.06 shall be held in
          trust
          for the benefit of the Collateral Agent, shall be segregated from other
          property
          or funds of such Grantor and shall be forthwith delivered to the Collateral
          Agent in the same form as so received (with any necessary endorsement).
          Any and
          all money and other property paid over to or received by the Collateral
          Agent
          pursuant to the provisions of this paragraph (b) shall be retained by the
          Collateral Agent in an account to be established by the Collateral Agent
          upon
          receipt of such money or other property and shall be applied in accordance
          with
          the provisions of Section 5.02. After all Events of Default have been cured
          or
          waived and the Borrowers have delivered to the Collateral Agent a certificate
          to
          that effect, the Collateral Agent shall promptly repay to each Grantor
          (without
          interest) all dividends, interest, principal or other distributions that
          such
          Grantor would otherwise be permitted to retain pursuant to the terms of
          paragraph (a)(iii) of this Section 3.06 and that remain in such
          account.

         

        (c)  Upon
          the
          occurrence and during the continuance of an Event of Default, all rights
          of any
          Grantor to exercise the voting and consensual rights and powers it is entitled
          to exercise pursuant to paragraph (a)(i) of this Section 3.06, and the
          obligations of the Collateral Agent under paragraph (a)(ii) of this Section
          3.06, shall cease, and all such rights shall thereupon become vested in
          the
          Collateral Agent, which shall have the sole and exclusive right and authority
          to
          exercise such voting and consensual rights and powers; provided
          that,
          unless otherwise directed by the Required Lenders, the Collateral Agent
          shall
          have the right, from time to time following and during the continuance
          of an
          Event of Default to permit the Grantors to exercise such rights. After
          all
          Events of Default have been cured or waived and the Borrowers have delivered
          to
          the Collateral Agent a certificate to that effect, each Grantor will have
          the
          right to exercise the voting and consensual rights and powers that such
          Grantor
          would otherwise be entitled to exercise pursuant to the terms of paragraph
          (a)(i) above.

         

        
          
             

          

          
            14

            
              

            

          

          
             

          

        

        ARTICLE
          IV

         

        Security
          Interests in Personal Property

         

        Section
          4.01.   Security
          Interest.
          (a)
          Each Grantor hereby ratifies and affirms its pledge, assignment and grant
          of
          security interest made pursuant to Section 4.01 of the Existing Guarantee
          and
          Collateral Agreement, and, for the avoidance of doubt, as security for
          the
          payment or performance, as the case may be, in full of the Obligations,
          each
          Grantor hereby assigns and pledges to the Collateral Agent, its successors
          and
          assigns, for the benefit of the Secured Parties, and hereby grants to the
          Collateral Agent, its successors and assigns, for the benefit of the Secured
          Parties, a security interest (the “Security
          Interest”)
          in all
          right, title and interest in or to any and all of the following assets
          and
          properties now owned or at any time hereafter acquired by such Grantor
          or in
          which such Grantor now has or at any time in the future may acquire any
          right,
          title or interest (collectively, the “Article
          9 Collateral”):

         

        (i)
            all
          Accounts;

         

        (ii)
            all
          Chattel Paper;

         

        (iii)
            all
          cash
          and Deposit Accounts;

         

        (iv)
            all
          Documents;

         

        (v)
            all
          Equipment;

         

        (vi)
            all
          General Intangibles;

         

        (vii)
            all
          Instruments;

         

        (viii)
            all
          Inventory;

         

        (ix)
            all
          Investment Property;

         

        (x)
            all
          insurance claims and proceeds;

         

        (xi)
            all
          Letter-of-credit rights;

         

        (xii)
            all
          books
          and records pertaining to the Article 9 Collateral; and

         

        (xiii)
            to
          the
          extent not otherwise included, all Proceeds, Supporting Obligations and
          products
          of any and all of the foregoing and all collateral security and guarantees
          given
          by any Person with respect to any of the foregoing.

         

        (b)  Each
          Grantor hereby irrevocably authorizes the Collateral Agent at any time
          and from
          time to time to file in any relevant jurisdiction any initial financing
          statements (including fixture filings) with respect to the Article 9 Collateral
          or any part thereof and amendments thereto that contain the information
          required
          by Article 9 of the Uniform Commercial Code of each applicable jurisdiction
          for
          the filing of any financing statement or amendment, including (i) whether
          such
          Grantor is an organization, the type of organization and any organizational
          identification number issued to such Grantor, (ii) in the case of a financing
          statement filed as a fixture filing, a sufficient description of the real
          property to which such Article 9 Collateral relates and (iii) a description
          of
          collateral that describes such property in any other manner as the Collateral
          Agent may reasonably determine is necessary or advisable to ensure the
          perfection of the security interest in the Article 9 Collateral granted
          to the
          Collateral Agent, including describing such property as “all assets” or “all
          property”. Each Grantor agrees to provide such information to the Collateral
          Agent promptly upon request.

         

        
          
             

          

          
            15

            
              

            

          

          
             

          

        

        Each
          Grantor also ratifies its authorization for the Collateral Agent to file
          in any
          relevant jurisdiction any initial financing statements or amendments thereto
          if
          filed prior to the date hereof.

         

        The
          Collateral Agent is further authorized to file with the United States Patent
          and
          Trademark Office or United States Copyright Office (or any successor office
          or
          any similar office in any other country) such documents as may be necessary
          or
          advisable for the purpose of perfecting, confirming, continuing, enforcing
          or
          protecting the Security Interest granted by each Grantor, without the signature
          of any Grantor, and naming any Grantor or the Grantors as debtors and the
          Collateral Agent as secured party.

         

        (c)  The
          Security Interest is granted as security only and shall not subject the
          Collateral Agent or any other Secured Party to, or in any way alter or
          modify,
          any obligation or liability of any Grantor with respect to or arising out
          of the
          Article 9 Collateral.

         

        Section
          4.02.   Representations
          and Warranties.
          The
          Grantors jointly and severally represent and warrant to the Collateral
          Agent and
          the Secured Parties that:

         

        (a)  Each
          Grantor has good and valid rights in and title to the Article 9 Collateral
          with
          respect to which it has purported to grant a Security Interest hereunder
          and has
          full power and authority to grant to the Collateral Agent the Security
          Interest
          in such Article 9 Collateral pursuant hereto and to execute, deliver and
          perform
          its obligations in accordance with the terms of this Agreement, without
          the
          consent or approval of any other person other than any consent or approval
          that
          has been obtained and is in full force and effect.

         

        (b)  The
          Perfection Certificate has been duly prepared, completed and executed and
          the
          information set forth therein, including the exact legal name of each Grantor,
          is correct and complete as of the Closing Date. Uniform Commercial Code
          financing statements (including fixture filings, as applicable) or other
          appropriate filings, recordings or registrations containing a description
          of the
          Article 9 Collateral have been prepared and filed by the Collateral Agent
          in
          connection with the Existing Guarantee and Collateral Agreement and such
          filings, recordings or registrations are consistent with the information
          provided to the Collateral Agent in the Perfection Certificate delivered
          in
          connection with this Agreement and remain appropriate for filing in each
          governmental, municipal or other office specified in Schedule 6 to the
          Perfection Certificate (or specified by notice from the Borrowers to the
          Collateral Agent after the Closing Date in the case of filings, recordings
          or
          registrations required by Section 5.12 or 5.14 of the Credit Agreement),
          and
          constitute all the filings, recordings and registrations (other than filings
          required to be made in the United States Patent and Trademark Office and
          the
          United States Copyright Office in order to perfect the Security Interest
          in
          Article 9 Collateral consisting of United States Patents, Trademarks and
          Copyrights) that are necessary to publish notice of and protect the validity
          of
          and to establish a legal, valid and perfected security interest in favor
          of the
          Collateral Agent (for the benefit of the Secured Parties) in respect of
          all
          Article 9 Collateral in which the Security Interest may be perfected by
          filing,
          recording or registration in the United States (or any political subdivision
          thereof) and its territories and possessions, and no further or subsequent
          filing, refiling, recording, rerecording, registration or reregistration
          is
          necessary in any such jurisdiction, except as provided under applicable
          law with
          respect to the filing of continuation statements or amendments. Each Grantor
          represents and warrants that a fully executed agreement in the form hereof
          or in
          a form reasonably satisfactory to the Collateral Agent containing a description
          of all Article 9 Collateral consisting of Intellectual Property with respect
          to
          United States registered Patents (and Patents for which United States
          registration applications are pending), United States registered Trademarks
          (and
          Trademarks for which United States registration applications are pending)
          and
          United States registered Copyrights (and Copyrights for which United States
          registration applications are pending) has been delivered to the Collateral
          Agent for recording with the United States Patent and Trademark Office
          and the
          United States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or
          17 U.S.C. § 205 and the regulations thereunder, as applicable, and otherwise as
          may be required pursuant to the laws of any other applicable jurisdiction
          and
          reasonably requested by the Collateral Agent, to protect the validity of
          and to
          establish a legal, valid and perfected security interest in favor of the
          Collateral Agent (for the benefit of the Secured Parties) in respect of
          all
          Article 9 Collateral consisting of such Intellectual Property in which
          a
          security interest may be perfected by recording with the United States
          Patent
          and Trademark Office and the United States Copyright Office, and no further
          or
          subsequent filing, refiling, recording, rerecording, registration or
          reregistration is necessary (other than such actions as are necessary to
          perfect
          the Security Interest with respect to any Article 9 Collateral consisting
          of
          Patents, Trademarks and Copyrights (or registration or application for
          registration thereof) acquired or developed after the date hereof).


         

        
          
             

          

          
            16

            
              

            

          

          
             

          

        

        (c)  The
          Security Interest constitutes (i) a legal and valid security interest in
          all the
          Article 9 Collateral securing the payment and performance of the Obligations,
          (ii) subject to the filings described in Section 4.02(b), a perfected security
          interest in all Article 9 Collateral in which a security interest may be
          perfected by filing, recording or registering a financing statement or
          analogous
          document in the United States (or any political subdivision thereof) and
          its
          territories and possessions pursuant to the Uniform Commercial Code or
          other
          applicable law in such jurisdictions and (iii) a security interest that
          shall be
          perfected in all Article 9 Collateral in which a security interest may
          be
          perfected upon the receipt and recording of this Agreement with the United
          States Patent and Trademark Office and the United States Copyright Office,
          as
          applicable, and otherwise as may be required pursuant to the laws of any
          other
          applicable jurisdiction. The Security Interest is and shall be prior to
          any
          other Lien on any of the Article 9 Collateral, other than Liens expressly
          permitted to be prior to the Security Interest pursuant to Section 6.02
          of the
          Credit Agreement.

         

        (d)  The
          Article 9 Collateral is owned by the Grantors free and clear of any Lien,
          other
          than Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement.
          None of the Grantors has filed or consented to the filing of (i) any financing
          statement or analogous document under the Uniform Commercial Code or any
          other
          applicable laws covering any Article 9 Collateral, (ii) any assignment
          in which
          any Grantor assigns any Article 9 Collateral or any security agreement
          or
          similar instrument covering any Article 9 Collateral with the United States
          Patent and Trademark Office or the United States Copyright Office or (iii)
          any
          assignment in which any Grantor assigns any Article 9 Collateral or any
          security
          agreement or similar instrument covering any Article 9 Collateral with
          any
          foreign governmental, municipal or other office, which financing statement
          or
          analogous document, assignment, security agreement or similar instrument
          is
          still in effect, except, in each case, for Liens expressly permitted pursuant
          to
          Section 6.02 of the Credit Agreement.

         

        (e)  None
          of
          the Grantors holds any Commercial Tort Claim as of the Closing Date except
          as
          indicated on the Perfection Certificate.

         

        (f)  All
          Accounts have been originated by the Grantors and all Inventory has been
          acquired by the Grantors in the ordinary course of business.

         

        Section
          4.03.   Covenants.

         

        (a)  Each
          Grantor agrees promptly to notify the Collateral Agent in writing of any
          change
          (i) in its corporate name, (ii) in the location of any office in which
          it
          maintains books or records relating to Article 9 Collateral owned by it
          or any
          office or facility at which Article 9 Collateral owned by it is located
          (including the establishment of any new such office or facility), (iii)
          in its
          identity or type of organization or corporate structure, (iv) in its Federal
          Taxpayer Identification Number or organizational identification number
          or (v) in
          its jurisdiction of organization. Each Grantor agrees promptly to provide
          the
          Collateral Agent with certified organizational documents reflecting any
          of the
          changes described in clauses (i), (iii) and (v) of the immediately preceding
          sentence. Each Grantor agrees not to effect or permit any change referred
          to in
          the first sentence of this paragraph (a) unless all filings have been made
          under
          the Uniform Commercial Code or otherwise that are required in order for
          the
          Collateral Agent to continue at all times following such change to have
          a valid,
          legal and perfected first priority security interest in all the Article
          9
          Collateral. Each Grantor agrees promptly to notify the Collateral Agent
          if any
          material portion of the Article 9 Collateral owned or held by such Grantor
          is
          damaged or destroyed.

         

        
          
             

          

          
            17

            
              

            

          

          
             

          

        

        (b)  Each
          Grantor agrees to maintain, at its own cost and expense, such complete
          and
          accurate records with respect to the Article 9 Collateral owned by it as
          is
          consistent with its current practices and in accordance with reasonably
          prudent
          and standard practices used in industries that are the same as or similar
          to
          those in which such Grantor is engaged, but in any event to include complete
          accounting records indicating all payments and proceeds received with respect
          to
          any part of the Article 9 Collateral, and, at such time or times as the
          Collateral Agent may reasonably request, promptly to prepare and deliver
          to the
          Collateral Agent a duly certified schedule or schedules in form and detail
          satisfactory to the Collateral Agent showing the identity, amount and location
          of any and all Article 9 Collateral.

         

        (c)  Each
          year, at the time of delivery of annual financial statements with respect
          to the
          preceding fiscal year pursuant to Section 5.04(a) of the Credit Agreement,
          the
          Borrowers shall deliver to the Collateral Agent a certificate executed
          by a
          Financial Officer and a legal officer of the Borrowers (i) setting forth
          the
          information required pursuant to Schedule 6 of the Perfection Certificate
          or
          confirming that there has been no change in such information since the
          date of
          such certificate or the date of the most recent certificate delivered pursuant
          to this Section 4.03(c) and (ii) certifying that all Uniform Commercial
          Code
          financing statements (including fixture filings, as applicable) or other
          appropriate filings, recordings or registrations, including all refilings,
          rerecordings and reregistrations, containing a description of the Collateral
          have been filed of record in each governmental, municipal or other appropriate
          office in each jurisdiction identified pursuant to clause (i) of this Section
          4.03(c) to the extent necessary to protect and perfect the Security Interest
          for
          a period of not less than 18 months after the date of such certificate
          (except
          as noted therein with respect to any continuation statements to be filed
          within
          such period). Each certificate delivered pursuant to this Section 4.03(c)
          shall
          identify in the format of Schedule III to this Agreement all Intellectual
          Property of any Grantor in existence on the date thereof and not then listed
          on
          such Schedules or previously so identified to the Collateral Agent.

         

        (d)  Each
          Grantor shall, at its own expense, take any and all actions necessary to
          defend
          title to the Article 9 Collateral against all Persons and to defend the
          Security
          Interest of the Collateral Agent in the Article 9 Collateral and the priority
          thereof against any Lien not expressly permitted to be prior to the Security
          Interest pursuant to Section 6.02 of the Credit Agreement.

         

        (e)  Each
          Grantor agrees, at its own expense, to execute, acknowledge, deliver and
          cause
          to be duly filed all such further instruments and documents and take all
          such
          actions as the Collateral Agent may from time to time reasonably request
          to
          better assure, preserve, protect and perfect the Security Interest and
          the
          rights and remedies created hereby, including the payment of any fees and
          taxes
          required in connection with the execution and delivery of this Agreement,
          the
          granting of the Security Interest and the filing of any financing statements
          (including fixture filings) or other documents in connection herewith or
          therewith. 

         

        
          
             

          

          
            18

            
              

            

          

          
             

          

        

        Without
          limiting the generality of the foregoing, each Grantor hereby authorizes
          the
          Collateral Agent, with prompt notice thereof to the Grantors, to supplement
          this
          Agreement by supplementing Schedule III or adding additional schedules
          hereto to
          specifically identify any asset or item that may constitute Copyrights,
          Licenses, Patents or Trademarks; provided
          that any
          Grantor shall have the right, exercisable within 10 days after it has been
          notified by the Collateral Agent of the specific identification of such
          Article
          9 Collateral, to advise the Collateral Agent in writing of any inaccuracy
          of the
          representations and warranties made by such Grantor hereunder with respect
          to
          such Article 9 Collateral. Each Grantor agrees that it will use its commercially
          reasonable efforts to take such action as shall be necessary in order that
          all
          representations and warranties hereunder shall be true and correct with
          respect
          to such Article 9 Collateral within 30 days after the date it has been
          notified
          by the Collateral Agent of the specific identification of such Article
          9
          Collateral.

         

        (f)  The
          Collateral Agent and such Persons as the Collateral Agent may reasonably
          designate shall have the right, at the Grantors’ own cost and expense, to
          inspect the Article 9 Collateral, all records related thereto (and to make
          extracts and copies from such records) and the premises upon which any
          of the
          Article 9 Collateral is located, at reasonable times and intervals during
          normal
          business hours upon reasonable advance notice to the respective Grantor,
          to
          discuss the Grantors’ affairs with the officers of the Grantors and their
          independent accountants and to verify under reasonable procedures, in accordance
          with Section 5.07 of the Credit Agreement, the validity, amount, quality,
          quantity, value, condition and status of, or any other matter relating
          to, the
          Article 9 Collateral, including, in the case of Accounts or Article 9 Collateral
          in the possession of any third person, by contacting Account Debtors or
          the
          third person possessing such Article 9 Collateral for the purpose of making
          such
          a verification. Subject to Section 9.12 of the Credit Agreement, the Collateral
          Agent shall have the right to share any information it gains from such
          inspection or verification with any Secured Party.

         

        (g)  At
          its
          option, the Collateral Agent may discharge past due taxes, assessments,
          charges,
          fees, Liens, security interests or other encumbrances at any time levied
          or
          placed on the Article 9 Collateral and not permitted pursuant to Section
          6.02 of
          the Credit Agreement, and may pay for the maintenance and preservation
          of the
          Article 9 Collateral to the extent any Grantor fails to do so as required
          by the
          Credit Agreement or this Agreement, and each Grantor jointly and severally
          agrees to reimburse the Collateral Agent on demand for any payment made
          or any
          expense incurred by the Collateral Agent pursuant to the foregoing
          authorization; provided,
          however, that nothing in this Section 4.03(g) shall be interpreted as excusing
          any Grantor from the performance of, or imposing any obligation on the
          Collateral Agent or any Secured Party to cure or perform, any covenants
          or other
          promises of any Grantor with respect to taxes, assessments, charges, fees,
          Liens, security interests or other encumbrances and maintenance as set
          forth
          herein or in the other Loan Documents.

         

        (h)  If
          at any
          time any Grantor shall take a security interest in any property of an Account
          Debtor or any other Person to secure payment and performance of an Account,
          such
          Grantor shall promptly assign such security interest to the Collateral
          Agent to
          the extent permitted by any contracts or arrangements to which such property
          is
          subject. Such assignment need not be filed of public record unless necessary
          to
          continue the perfected status of the security interest against creditors
          of and
          transferees from the Account Debtor or other Person granting the security
          interest.

         

        (i)  Each
          Grantor shall remain liable to observe and perform all the conditions and
          obligations to be observed and performed by it under each contract, agreement
          or
          instrument relating to the Article 9 Collateral, all in accordance with
          the
          terms and conditions thereof, and each Grantor jointly and severally agrees
          to
          indemnify and hold harmless the Collateral Agent and the Secured Parties
          from
          and against any and all liability for such performance.

         

        
          
             

          

          
            19

            
              

            

          

          
             

          

        

        (j)  None
          of
          the Grantors shall make or permit to be made an assignment, pledge or
          hypothecation of the Article 9 Collateral or shall grant any other Lien
          in
          respect of the Article 9 Collateral, except as expressly permitted by the
          Credit
          Agreement. None of the Grantors shall make or permit to be made any transfer
          of
          the Article 9 Collateral and each Grantor shall remain at all times in
          possession of the Article 9 Collateral owned by it, except that (i) Inventory
          may be sold in the ordinary course of business and (ii) unless and until
          the
          Collateral Agent shall notify the Grantors that an Event of Default shall
          have
          occurred and be continuing and that during the continuance thereof the
          Grantors
          shall not sell, convey, lease, assign, transfer or otherwise dispose of
          any
          Article 9 Collateral (which notice may be given by telephone if promptly
          confirmed in writing), the Grantors may use and dispose of the Article
          9
          Collateral in any lawful manner not inconsistent with the provisions of
          this
          Agreement, the Credit Agreement or any other Loan Document. Without limiting
          the
          generality of the foregoing, each Grantor agrees that it shall not permit
          any
          Inventory to be in the possession or control of any warehouseman, bailee,
          agent
          or processor at any time unless such warehouseman, bailee, agent or processor
          shall have been notified of the Security Interest and shall have acknowledged
          in
          writing, in form and substance reasonably satisfactory to the Collateral
          Agent,
          that such warehouseman, agent, bailee or processor holds the Inventory
          for the
          benefit of the Collateral Agent subject to the Security Interest and shall
          act
          upon the instructions of the Collateral Agent without further consent from
          the
          Grantor, and that such warehouseman, bailee, agent or processor further
          agrees
          to waive and release any Lien held by it with respect to such Inventory,
          whether
          arising by operation of law or otherwise; provided
          that
          such written acknowledgment shall not be required until the fair market
          value of
          all Inventory in such possession or under such control exceeds $1,000,000
          in
          aggregate amount.

         

        (k)  None
          of
          the Grantors will, without the Collateral Agent’s prior written consent, grant
          any extension of the time of payment of any Accounts included in the Article
          9
          Collateral, compromise, compound or settle the same for less than the full
          amount thereof, release, wholly or partly, any Person liable for the payment
          thereof or allow any credit or discount whatsoever thereon, other than
          extensions, credits, discounts, compromises or settlements granted or made
          in
          the ordinary course of business and consistent with its current practices
          and in
          accordance with reasonably prudent and standard practice used in industries
          that
          are the same as or similar to those in which such Grantor is
          engaged.

         

        (l)  The
          Grantors, at their own expense, shall maintain or cause to be maintained
          insurance covering physical loss or damage to the Inventory and Equipment
          in
          accordance with the requirements set forth in Schedule IV hereto and Section
          5.02 of the Credit Agreement. Each Grantor irrevocably makes, constitutes
          and
          appoints the Collateral Agent (and all officers, employees or agents designated
          by the Collateral Agent) as such Grantor’s true and lawful agent (and
          attorney-in-fact) for the purpose, during the continuance of an Event of
          Default, of making, settling and adjusting claims in respect of Article
          9
          Collateral under policies of insurance, endorsing the name of such Grantor
          on
          any check, draft, instrument or other item of payment for the proceeds
          of such
          policies of insurance and for making all determinations and decisions with
          respect thereto. In the event that any Grantor at any time or times shall
          fail
          to obtain or maintain any of the policies of insurance required hereby
          or to pay
          any premium in whole or part relating thereto, the Collateral Agent may,
          without
          waiving or releasing any obligation or liability of the Grantors hereunder
          or
          any Event of Default, in its sole discretion, obtain and maintain such
          policies
          of insurance and pay such premium and take any other actions with respect
          thereto as the Collateral Agent deems advisable. All sums disbursed by
          the
          Collateral Agent in connection with this Section 4.03(l), including reasonable
          attorneys’ fees, court costs, expenses and other charges relating thereto, shall
          be payable, upon demand, by the Grantors to the Collateral Agent and shall
          be
          additional Obligations secured hereby.

         

        (m)  Each
          Grantor shall maintain, in form and manner reasonably satisfactory to the
          Collateral Agent, its Chattel Paper and its books, records and documents
          evidencing or pertaining thereto with an appropriate reference to the fact
          that
          such Chattel Paper has been assigned to the Collateral Agent for the benefit
          of
          the Secured Parties and that the Collateral Agent has a security interest
          therein.

         

        
          
             

          

          
            20

            
              

            

          

          
             

          

        

        Section
          4.04.   Other
          Actions.
          In
          order to further insure the attachment, perfection and priority of, and
          the
          ability of the Collateral Agent to enforce, the Collateral Agent’s security
          interest in the Article 9 Collateral, each Grantor agrees, in each case
          at such
          Grantor’s own expense, to take the following actions with respect to the
          following Article 9 Collateral:

         

        (a)  Instruments
          and Tangible Chattel Paper.
          If any
          Grantor shall at any time hold or acquire any Tangible Chattel Paper having
          a
          value in excess of $10,000, such Grantor shall forthwith endorse, assign
          and
          deliver the same to the Collateral Agent, accompanied by such instruments
          of
          transfer or assignment duly executed in blank as the Collateral Agent may
          from
          time to time reasonably request.

         

        (b)  Deposit
          Accounts.

         

        (i)
            (x)
          For
          deposit accounts holding in the aggregate at least 80% of all amounts held
          by
          all Grantors in all deposit accounts that are maintained as of the Closing
          Date,
          the applicable Grantors shall execute and deliver, and cause the bank with
          which
          such Grantor maintains such deposit accounts (each such bank a “Deposit
          Account Bank”)
          to
          execute and deliver Deposit Account Control Agreements as required by Section
          5.13 of the Credit Agreement and (y) for any deposit account that any Grantor
          at
          any time opens after the Closing Date, such Grantor shall execute and deliver,
          and use its best efforts to cause the Deposit Account Bank in which any
          such
          deposit account is maintained to execute and deliver, a Deposit Account
          Control
          Agreement; provided,
          that no
          Grantor shall permit the aggregate amount held in any such deposit account
          opened after the Closing Date for which the applicable Deposit Account
          Bank has
          not executed and delivered a Deposit Account Control Agreement to exceed
          $25,000
          at any one time. The Grantors shall not permit the aggregate amount held
          in
          accounts for which no Deposit Account Control Agreement has been executed
          by a
          Deposit Account Bank and delivered to the Administrative Agent to exceed
          $500,000 at any time. Grantors will maintain cash management systems reasonably
          acceptable to the Collateral Agent (it being understood that the cash management
          system as in effect on the Closing Date is acceptable to the Collateral
          Agent).
          The provisions of this clause (i) shall not apply to any deposit account
          for
          which the Collateral Agent is the Deposit Account Bank or the customer
          of such
          bank with respect to such deposit account. 

         

        (ii)
            Each
          Grantor acknowledges and agrees that (x) the funds on deposit in the deposit
          accounts shall continue to be collateral security for all the Obligations
          and
          (y) upon the occurrence and during the continuance of an Event of Default
          and if
          expressly consented to in writing by the Required Lenders (which consent
          may not
          be unreasonably withheld), the funds on deposit in such deposit accounts
          shall
          be applied as provided in Section 5.02. Each Grantor irrevocably authorizes
          the
          Collateral Agent to (A) notify each Sub-Agent of the occurrence of an Event
          of
          Default and (B) following the occurrence of an Event of Default and if
          expressly
          consented to in writing by the Required Lenders (which consent may not
          be
          unreasonably withheld), instruct each Sub-Agent to apply the funds on deposit
          in
          such deposit account in accordance with Section 5.02. Each Grantor hereby
          agrees
          to irrevocably direct each Sub-Agent to comply with the instructions of
          the
          Collateral Agent with respect to the relevant deposit account without further
          consent from the Grantor or any other Person.

         

        (c)  Investment
          Property.
          Except
          to the extent otherwise provided in Article III, if any Grantor shall at
          any
          time hold or acquire any Certificated Security having a value in excess
          of
          $10,000, such Grantor shall forthwith endorse, assign and deliver the same
          to
          the Collateral Agent, accompanied by such instruments of transfer or assignment
          duly executed in blank as the Collateral Agent may from time to time specify.
          If
          any securities now or hereafter acquired by any Grantor are uncertificated
          and
          are issued to such Grantor or its nominee directly by the issuer thereof,
          such
          Grantor shall immediately notify the Collateral Agent thereof and, at the
          Collateral Agent’s request and option, pursuant to an agreement in form and
          substance reasonably satisfactory to the Collateral Agent, either (i) cause
          the
          issuer to agree to comply with instructions from the Collateral Agent as
          to such
          securities, without further consent of any Grantor or such nominee, or
          (ii)
          arrange for the Collateral Agent to become the registered owner of the
          securities. If any securities, whether certificated or uncertificated,
          or other
          investment property now or hereafter acquired by any Grantor are held by
          such
          Grantor or its nominee through a securities intermediary or commodity
          intermediary, such Grantor shall immediately notify the Collateral Agent
          thereof
          and, at the Collateral Agent’s request and option, pursuant to an agreement in
          form and substance reasonably satisfactory to the Collateral Agent, either
          (A)
          cause such securities intermediary or (as the case may be) commodity
          intermediary to agree to comply with entitlement orders or other instructions
          from the Collateral Agent to such securities intermediary as to such securities
          or other investment property or (as the case may be) to apply any value
          distributed on account of any commodity contract as directed by the Collateral
          Agent to such commodity intermediary, in each case without further consent
          of
          any Grantor or such nominee, or (B) in the case of Financial Assets or
          other
          Investment Property held through a securities intermediary, arrange for
          the
          Collateral Agent to become the entitlement holder with respect to such
          investment property, with the Grantor being permitted, only with the consent
          of
          the Collateral Agent, to exercise rights to withdraw or otherwise deal
          with such
          investment property. The Collateral Agent agrees with each of the Grantors
          that
          the Collateral Agent shall not give any such entitlement orders or instructions
          or directions to any such issuer, securities intermediary or commodity
          intermediary, and shall not withhold its consent to the exercise of any
          withdrawal or dealing rights by any Grantor, unless an Event of Default
          has
          occurred and is continuing or, after giving effect to any such investment
          and
          withdrawal rights, would occur. The provisions of this paragraph (c) shall
          not
          apply to any financial assets credited to a securities account for which
          the
          Collateral Agent is the securities intermediary.

         

        
          
             

          

          
            21

            
              

            

          

          
             

          

        

        (d)  Electronic
          Chattel Paper and Transferable Records.
          If any
          Grantor at any time holds or acquires an interest in any Electronic Chattel
          Paper or any “transferable record” having a value in excess of $10,000, as that
          term is defined in Section 201 of the Federal Electronic Signatures in
          Global
          and National Commerce Act or in Section 16 of the Uniform Electronic
          Transactions Act as in effect in any relevant jurisdiction, such Grantor
          shall
          promptly notify the Collateral Agent thereof and, at the request of the
          Collateral Agent, shall take such action as the Collateral Agent may reasonably
          request to vest in the Collateral Agent control under New York UCC Section
          9-105
          of such Electronic Chattel Paper or control under Section 201 of the Federal
          Electronic Signatures in Global and National Commerce Act or, as the case
          may
          be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in
          such jurisdiction, of such transferable record. The Collateral Agent agrees
          with
          such Grantor that the Collateral Agent will arrange, pursuant to procedures
          reasonably satisfactory to the Collateral Agent and so long as such procedures
          will not result in the Collateral Agent’s loss of control, for the Grantor to
          make alterations to the Electronic Chattel Paper or transferable record
          permitted under UCC Section 9-105 or, as the case may be, Section 201 of
          the
          Federal Electronic Signatures in Global and National Commerce Act or Section
          16
          of the Uniform Electronic Transactions Act for a party in control to allow
          without loss of control, unless an Event of Default has occurred and is
          continuing or would occur after taking into account any action by such
          Grantor
          with respect to such Electronic Chattel Paper or transferable
          record.

         

        (e)  Letter-of-Credit
          Rights.
          If any
          Grantor is at any time a beneficiary under a letter of credit having a
          stated
          amount in excess of $10,000 now or hereafter issued in favor of such Grantor,
          such Grantor shall promptly notify the Collateral Agent thereof and, at
          the
          request and option of the Collateral Agent, such Grantor shall, pursuant
          to an
          agreement in form and substance satisfactory to the Collateral Agent, either
          (i)
          arrange for the issuer and any confirmer of such letter of credit to consent
          to
          an assignment to the Collateral Agent of the proceeds of any drawing under
          the
          letter of credit or (ii) arrange for the Collateral Agent to become the
          transferee beneficiary of the letter of credit, with the Collateral Agent
          agreeing, in each case, that the proceeds of any drawing under the letter
          of
          credit are to be paid to the applicable Grantor unless an Event of Default
          has
          occurred or is continuing.

         

        
          
             

          

          
            22

            
              

            

          

          
             

          

        

        (f)  Commercial
          Tort Claims.
          If any
          Grantor shall at any time hold or acquire a Commercial Tort Claim in an
          amount
          reasonably estimated to exceed $1,000,000, the Grantor shall promptly notify
          the
          Collateral Agent thereof in a writing signed by such Grantor, including
          a
          summary description of such claim, and grant to the Collateral Agent in
          writing
          a security interest therein and in the proceeds thereof, all upon the terms
          of
          this Agreement, with such writing to be in form and substance reasonably
          satisfactory to the Collateral Agent.

         

        Section
          4.05.   Covenants
          Regarding Patent, Trademark and Copyright Collateral.

         

        (a)  Each
          Grantor agrees that it will not do any act or omit to do any act (and will
          exercise commercially reasonable efforts to prevent its licensees from
          doing any
          act or omitting to do any act) whereby any Patent that is material to the
          conduct of such Grantor’s business may become invalidated or dedicated to the
          public, and agrees that it shall continue to mark any products covered
          by a
          Patent with the relevant patent number as necessary and sufficient to establish
          and preserve its maximum rights under applicable patent laws.

         

        (b)  Each
          Grantor (either itself or through its licensees or its sublicensees) will,
          for
          each Trademark material to the conduct of such Grantor’s business, (i) maintain
          such Trademark in full force free from any claim of abandonment or invalidity
          for non-use, (ii) maintain the quality of products and services offered
          under
          such Trademark, (iii) display such Trademark with notice of Federal or
          foreign
          registration to the extent necessary and sufficient to establish and preserve
          its maximum rights under applicable law and (iv) not knowingly use or knowingly
          permit the use of such Trademark in violation of any third-party
          rights.

         

        (c)  Each
          Grantor (either itself or through its licensees or its sublicensees) will,
          for
          each work covered by a Copyright material to the conduct of such Grantor’s
          business, continue to publish, reproduce, display, adopt and distribute
          the work
          with appropriate copyright notice as necessary and sufficient to establish
          and
          preserve its maximum rights under applicable copyright laws.

         

        (d)  Each
          Grantor shall notify the Collateral Agent immediately if it knows or has
          reason
          to know that any Patent, Trademark or Copyright material to the conduct
          of such
          Grantor’s business may become abandoned, lost or dedicated to the public, or of
          any materially adverse determination or development (including the institution
          of, or any such determination or development in, any proceeding in the
          United
          States Patent and Trademark Office, United States Copyright Office or any
          court
          or similar office of any country) regarding such Grantor’s ownership of any such
          Patent, Trademark or Copyright, its right to register the same or its right
          to
          keep and maintain the same.

         

        (e)  In
          no
          event shall any Grantor, either itself or through any agent, employee,
          licensee
          or designee, file an application for any Patent or for the registration
          of any
          Trademark or Copyright with the United States Patent and Trademark Office,
          the
          United States Copyright Office or any office or agency in any political
          subdivision of the United States or in any other country or any political
          subdivision thereof, unless it promptly informs the Collateral Agent thereof,
          and, upon the request of the Collateral Agent, executes and delivers any
          and all
          agreements, instruments, documents and papers as the Collateral Agent may
          reasonably request to evidence the Collateral Agent’s security interest in such
          Patent, Trademark or Copyright, and each Grantor hereby appoints the Collateral
          Agent as its attorney-in-fact to execute and file such writings for the
          foregoing purposes, all acts of such attorney being hereby ratified and
          confirmed; such power, being coupled with an interest, is
          irrevocable.

         

        
          
             

          

          
            23

            
              

            

          

          
             

          

        

        (f)  Each
          Grantor will take all necessary steps that are consistent with the practice
          in
          any proceeding before the United States Patent and Trademark Office, the
          United
          States Copyright Office or any office or agency in any political subdivision
          of
          the United States or in any other country or any political subdivision
          thereof
          to maintain and pursue each material application relating to the Patents,
          Trademarks and/or Copyrights (and to obtain the relevant grant or registration)
          and to maintain each issued Patent and each registration of the Trademarks
          and
          Copyrights that is material to the conduct of such Grantor’s business, including
          timely filings of applications for renewal, affidavits of use, affidavits
          of
          incontestability and payment of maintenance fees, and, if consistent with
          good
          business judgment, to initiate opposition, interference and cancellation
          proceedings against third parties.

         

        (g)  In
          the
          event that any Grantor has reason to believe that any Article 9 Collateral
          consisting of a material Patent, Trademark or Copyright has been or is
          about to
          be infringed, misappropriated or diluted by a third party, such Grantor
          shall
          promptly notify the Collateral Agent and shall, if consistent with good
          business
          judgment and if it is reasonably determined by the Grantor that there is
          a
          potential risk of material damage to the Patent, Trademark or Copyright,
          promptly sue for infringement, misappropriation or dilution and to recover
          any
          and all damages for such infringement, misappropriation or dilution, and
          take
          such other actions as are appropriate under the circumstances to protect
          such
          Article 9 Collateral.

         

        (h)  Upon
          and
          during the continuance of an Event of Default, each Grantor shall use
          commercially reasonable efforts to obtain all requisite consents or approvals
          from the licensor under each Copyright License, Patent License or Trademark
          License to effect the assignment of all such Grantor’s right, title and interest
          thereunder to the Collateral Agent or its designee.

         

        ARTICLE
          V

         

        Remedies

         

        Section
          5.01.   Remedies
          Upon Default.
          Upon
          the occurrence and during the continuance of an Event of Default, each
          Grantor
          agrees to deliver each item of Collateral to the Collateral Agent on demand,
          and
          it is agreed that the Collateral Agent shall have the right to take any
          of or
          all the following actions at the same or different times: (a) with respect
          to
          any Article 9 Collateral consisting of Intellectual Property, on demand,
          to
          cause the Security Interest to become an assignment, transfer and conveyance
          of
          any of or all such Article 9 Collateral by the applicable Grantors to the
          Collateral Agent or to license or sublicense, whether general, special
          or
          otherwise, and whether on an exclusive or nonexclusive basis, any such
          Article 9
          Collateral throughout the world on such terms and conditions and in such
          manner
          as the Collateral Agent shall determine (other than in violation of any
          then-existing licensing arrangements to the extent that waivers cannot
          be
          obtained); and (b) with or without legal process and with or without prior
          notice or demand for performance, to take possession of the Article 9 Collateral
          and without liability for trespass to enter any premises where the Article
          9
          Collateral may be located for the purpose of taking possession of or removing
          the Article 9 Collateral and, generally, to exercise any and all rights
          afforded
          to a secured party under the Uniform Commercial Code or other applicable
          law.
          Without limiting the generality of the foregoing, each Grantor agrees that
          the
          Collateral Agent shall have the right, subject to the mandatory requirements
          of
          applicable law, to sell or otherwise dispose of all or any part of the
          Collateral at a public or private sale or at any broker’s board or on any
          securities exchange, for cash, upon credit or for future delivery as the
          Collateral Agent shall deem appropriate. The Collateral Agent shall be
          authorized at any such sale of securities (if it deems it advisable to
          do so) to
          restrict the prospective bidders or purchasers to Persons who will represent
          and
          agree that they are purchasing the Collateral for their own account for
          investment and not with a view to the distribution or sale thereof, and
          upon
          consummation of any such sale of Collateral the Collateral Agent shall
          have the
          right to assign, transfer and deliver to the purchaser or purchasers thereof
          the
          Collateral so sold. Each such purchaser at any such sale shall hold the
          property
          sold absolutely, free from any claim or right on the part of any Grantor,
          and
          each Grantor hereby waives and releases (to the extent permitted by law)
          all
          rights of redemption, stay, valuation and appraisal that such Grantor now
          has or
          may at any time in the future have under any rule of law or statute now
          existing
          or hereafter enacted.

         

        
          
             

          

          
            24

            
              

            

          

          
             

          

        

        The
          Collateral Agent shall give the applicable Grantors 10 days’ written notice
          (which each Grantor agrees is reasonable notice within the meaning of Section
          9-611 of the New York UCC or its equivalent in other jurisdictions) of
          the
          Collateral Agent’s intention to make any sale of Collateral. Such notice, in the
          case of a public sale, shall state the time and place for such sale and,
          in the
          case of a sale at a broker’s board or on a securities exchange, shall state the
          board or exchange at which such sale is to be made and the day on which
          the
          Collateral, or portion thereof, will first be offered for sale at such
          board or
          exchange. Any such public sale shall be held at such time or times within
          ordinary business hours and at such place or places as the Collateral Agent
          may
          fix and state in the notice (if any) of such sale. At any such sale, the
          Collateral, or portion thereof, to be sold may be sold in one lot as an
          entirety
          or in separate parcels, as the Collateral Agent may (in its sole and absolute
          discretion) determine. The Collateral Agent shall not be obligated to make
          any
          sale of any Collateral if it shall determine not to do so, regardless of
          the
          fact that notice of sale of such Collateral shall have been given. The
          Collateral Agent may, without notice or publication, adjourn any public
          or
          private sale or cause the same to be adjourned from time to time by announcement
          at the time and place fixed for sale, and such sale may, without further
          notice,
          be made at the time and place to which the same was so adjourned. In case
          any
          sale of all or any part of the Collateral is made on credit or for future
          delivery, the Collateral so sold may be retained by the Collateral Agent
          until
          the sale price is paid by the purchaser or purchasers thereof, but the
          Collateral Agent shall not incur any liability in case any such purchaser
          or
          purchasers shall fail to take up and pay for the Collateral so sold and,
          in case
          of any such failure, such Collateral may be sold again upon like notice.
          At any
          public (or, to the extent permitted by law, private) sale made pursuant
          to this
          Section 5.01, any Secured Party may bid for or purchase for cash, free
          (to the
          extent permitted by law) from any right of redemption, stay, valuation
          or
          appraisal on the part of any Grantor (all said rights being also hereby
          waived
          and released to the extent permitted by law), the Collateral or any part
          thereof
          offered for sale and such Secured Party may, upon compliance with the terms
          of
          sale, hold, retain and dispose of such property without further accountability
          to any Grantor therefor. For purposes hereof, a written agreement to purchase
          the Collateral or any portion thereof shall be treated as a sale thereof;
          the
          Collateral Agent shall be free to carry out such sale pursuant to such
          agreement
          and no Grantor shall be entitled to the return of the Collateral or any
          portion
          thereof subject thereto, notwithstanding the fact that after the Collateral
          Agent shall have entered into such an agreement all Events of Default shall
          have
          been remedied and the Obligations paid in full. As an alternative to exercising
          the power of sale herein conferred upon it, the Collateral Agent may proceed
          by
          a suit or suits at law or in equity to foreclose this Agreement and to
          sell the
          Collateral or any portion thereof pursuant to a judgment or decree of a
          court or
          courts having competent jurisdiction or pursuant to a proceeding by a
          court-appointed receiver. Any sale pursuant to the provisions of this Section
          5.01 shall be deemed to conform to the commercially reasonable standards
          as
          provided in Section 9-610(b) of the New York UCC or its equivalent in other
          jurisdictions.

         

        Section
          5.02.   Application
          of Proceeds.
          The
          Collateral Agent shall apply the proceeds of any collection or sale of
          Collateral, as well as any Collateral consisting of cash, that it has obtained
          as follows:

         

        FIRST,
          to
          the payment of all costs and expenses incurred by the Administrative Agent
          and
          the Collateral Agent in connection with such collection or sale or otherwise
          in
          connection with this Agreement, any other Loan Document or any of the
          Obligations, including all court costs and the fees and expenses of its
          agents
          and legal counsel, the repayment of all advances made by the Administrative
          Agent or the Collateral Agent hereunder or under any other Loan Document
          on
          behalf of any Grantor and any other costs or expenses incurred in connection
          with the exercise of any right or remedy hereunder or under any other Loan
          Document;

         

        
          
             

          

          
            25

            
              

            

          

          
             

          

        

        SECOND,
          to the Collateral Agent for distribution to the Secured Parties as provided
          in
          Section 2.16(b)(ii) of the Credit Agreement for the payment in full of
          the
          Obligations owed to the Secured Parties.

         

        THIRD,
          to
          the Grantors, their successors or assigns, or as a court of competent
          jurisdiction may otherwise direct.

         

        The
          Collateral Agent shall have absolute discretion as to the time of application
          of
          any such proceeds, moneys or balances in accordance with this Agreement.
          Upon
          any sale of Collateral by the Collateral Agent (including pursuant to a
          power of
          sale granted by statute or under a judicial proceeding), the receipt of
          the
          purchase money by the Collateral Agent or of the officer making the sale
          shall
          be a sufficient discharge to the purchaser or purchasers of the Collateral
          so
          sold and such purchaser or purchasers shall not be obligated to see to
          the
          application of any part of the purchase money paid over to the Collateral
          Agent
          or such officer or be answerable in any way for the misapplication
          thereof.

         

        Section
          5.03.   Grant
          of License to Use Intellectual Property.
          For the
          purpose of enabling the Collateral Agent to exercise rights and remedies
          under
          this Agreement at such time as the Collateral Agent shall be lawfully entitled
          to exercise such rights and remedies, each Grantor hereby grants to the
          Collateral Agent an irrevocable, nonexclusive license (exercisable without
          payment of royalty or other compensation to the Grantors) to use, license
          or
          sublicense any of the Article 9 Collateral consisting of Intellectual Property
          now owned or hereafter acquired by such Grantor, wherever the same may
          be
          located, and including in such license reasonable access to all media in
          which
          any of the licensed items may be recorded or stored and to all computer
          software
          and programs used for the compilation or printout thereof. The use of such
          license by the Collateral Agent may be exercised, at the option of the
          Collateral Agent and, upon the occurrence and during the continuation of
          an
          Event of Default; provided
          that any
          license, sublicense or other transaction entered into by the Collateral
          Agent in
          accordance herewith shall be binding upon the Grantors notwithstanding
          any
          subsequent cure of an Event of Default.

         

        Section
          5.04.   Securities
          Act, etc.
          In view
          of the position of the Grantors in relation to the Pledged Collateral,
          or
          because of other current or future circumstances, a question may arise
          under the
          Securities Act of 1933, as now or hereafter in effect, or any similar statute
          hereafter enacted analogous in purpose or effect (such Act and any such
          similar
          statute as from time to time in effect being called the “Federal
          Securities Laws”)
          with
          respect to any disposition of the Pledged Collateral permitted hereunder.
          Each
          Grantor understands that compliance with the Federal Securities Laws might
          very
          strictly limit the course of conduct of the Collateral Agent if the Collateral
          Agent were to attempt to dispose of all or any part of the Pledged Collateral,
          and might also limit the extent to which or the manner in which any subsequent
          transferee of any Pledged Collateral could dispose of the same. Similarly,
          there
          may be other legal restrictions or limitations affecting the Collateral
          Agent in
          any attempt to dispose of all or part of the Pledged Collateral under applicable
          Blue Sky or other state securities laws or similar laws analogous in purpose
          or
          effect. Each Grantor recognizes that in light of such restrictions and
          limitations the Collateral Agent may, with respect to any sale of the Pledged
          Collateral, limit the purchasers to those who will agree, among other things,
          to
          acquire such Pledged Collateral for their own account, for investment,
          and not
          with a view to the distribution or resale thereof. Each Grantor acknowledges
          and
          agrees that in light of such restrictions and limitations, the Collateral
          Agent,
          in its sole and absolute discretion, (a) may proceed to make such a sale
          whether
          or not a registration statement for the purpose of registering such Pledged
          Collateral or part thereof shall have been filed under the Federal Securities
          Laws and (b) may approach and negotiate with a single potential purchaser
          to
          effect such sale. Each Grantor acknowledges and agrees that any such sale
          might
          result in prices and other terms less favorable to the seller than if such
          sale
          were a public sale without such restrictions. In the event of any such
          sale, the
          Collateral Agent shall incur no responsibility or liability for selling
          all or
          any part of the Pledged Collateral at a price that the Collateral Agent,
          in its
          sole and absolute discretion, may in good faith deem reasonable under the
          circumstances, notwithstanding the possibility that a substantially higher
          price
          might have been realized if the sale were deferred until after registration
          as
          aforesaid or if more than a single purchaser were approached. The provisions
          of
          this Section 5.04 will apply notwithstanding the existence of a public
          or
          private market upon which the quotations or sales prices may exceed
          substantially the price at which the Collateral Agent sells.

         

        
          
             

          

          
            26

            
              

            

          

          
             

          

        

        ARTICLE
          VI

         

        Indemnity,
          Subrogation and Subordination

         

        Section
          6.01.   Indemnity
          and Subrogation.
          In
          addition to all such rights of indemnity and subrogation as the Guarantors
          may
          have under applicable law (but subject to Section 6.03), the Borrowers
          agree
          that (a) in the event a payment shall be made by any Guarantor under this
          Agreement in respect of any Obligation, the Borrowers shall, jointly and
          severally, indemnify such Guarantor for the full amount of such payment
          and such
          Guarantor shall be subrogated to the rights of the Person to whom such
          payment
          shall have been made to the extent of such payment and (b) in the event
          any
          assets of any Guarantor shall be sold pursuant to this Agreement or any
          other
          Security Document to satisfy in whole or in part an Obligation, the Borrowers
          shall, jointly and severally, indemnify such Guarantor in an amount equal
          to the
          greater of the book value or the fair market value (as reasonably determined
          by
          the Borrowers) of the assets so sold.

         

        Section
          6.02.   Contribution
          and Subrogation.
          Each
          Guarantor (a “Contributing
          Guarantor”)
          agrees
          (subject to Section 6.03) that, in the event a payment shall be made by
          any
          other Guarantor hereunder in respect of any Obligation or assets of any
          other
          Guarantor shall be sold pursuant to any Security Document to satisfy any
          Obligation owed to any Secured Party and such other Guarantor (the “Claiming
          Guarantor”)
          shall
          not have been fully indemnified by the Borrowers as provided in Section
          6.01,
          the Contributing Guarantor shall indemnify the Claiming Guarantor in an
          amount
          equal to the amount of such payment or the greater of the book value or
          the fair
          market value of such assets, as the case may be, in each case multiplied
          by a
          fraction of which the numerator shall be the net worth of the Contributing
          Guarantor on the date hereof and the denominator shall be the aggregate
          net
          worth of all the Guarantors on the date hereof (or, in the case of any
          Guarantor
          becoming a party hereto pursuant to Section 7.16, the date of the supplement
          hereto executed and delivered by such Guarantor). Any Contributing Guarantor
          making any payment to a Claiming Guarantor pursuant to this Section 6.02
          shall
          be subrogated to the rights of such Claiming Guarantor under Section 6.01
          to the
          extent of such payment.

         

        Section
          6.03.   Subordination.

         

        (a)  Notwithstanding
          any provision of this Agreement to the contrary, all rights of the Guarantors
          under Sections 6.01 and 6.02 and all other rights of indemnity, contribution
          or
          subrogation under applicable law or otherwise shall be fully subordinated
          to the
          indefeasible payment in full in cash of the Obligations. No failure on
          the part
          of any Borrower or any Guarantor to make the payments required by Sections
          6.01
          and 6.02 (or any other payments required under applicable law or otherwise)
          shall in any respect limit the obligations and liabilities of any Guarantor
          with
          respect to its obligations hereunder, and each Guarantor shall remain liable
          for
          the full amount of the obligations of such Guarantor hereunder.

         

        
          
             

          

          
            27

            
              

            

          

          
             

          

        

        (b)  Each
          Guarantor hereby agrees that all Indebtedness and other monetary obligations
          owed by it to any other Guarantor or any Subsidiary shall be fully subordinated
          to the indefeasible payment in full in cash of the Obligations.

         

        ARTICLE
          VII

         

        Miscellaneous

         

        Section
          7.01.   Notices.
          All
          communications and notices hereunder shall (except as otherwise expressly
          permitted herein) be in writing and given as provided in Section 9.01 of
          the
          Credit Agreement. All communications and notices hereunder to any Subsidiary
          Loan Party shall be given to it in care of the Borrowers as provided in
          Section
          9.01 of the Credit Agreement.

         

        Section
          7.02.   Security
          Interest Absolute.
          All
          rights of the Collateral Agent hereunder, the Security Interest, the security
          interest in the Pledged Collateral and all obligations of each Grantor
          and
          Guarantor hereunder shall be absolute and unconditional irrespective of
          (a) any
          lack of validity or enforceability of the Credit Agreement, any other Loan
          Document, any agreement with respect to any of the Obligations or any other
          agreement or instrument relating to any of the foregoing, (b) any change
          in the
          time, manner or place of payment of, or in any other term of, all or any
          of the
          Obligations, or any other amendment or waiver of or any consent to any
          departure
          from the Credit Agreement, any other Loan Document or any other agreement
          or
          instrument, (c) any exchange, release or non-perfection of any Lien on
          other
          collateral, or any release or amendment or waiver of or consent under or
          departure from any guarantee, securing or guaranteeing all or any of the
          Obligations, (d) any law or regulation of any jurisdiction or any other
          event
          affecting any term of a guaranteed obligation or (e) any other circumstance
          that
          might otherwise constitute a defense available to, or a discharge of, any
          Grantor or Guarantor in respect of the Obligations or this
          Agreement.

         

        Section
          7.03.   Survival
          of Agreement.
          All
          covenants, agreements, representations and warranties made by the Loan
          Parties
          in the Loan Documents and in the certificates or other instruments prepared
          or
          delivered in connection with or pursuant to this Agreement or any other
          Loan
          Document shall be considered to have been relied upon by the Lenders and
          shall
          survive the execution and delivery of the Loan Documents and the making
          of any
          Loans and the issuance of any Letters of Credit, regardless of any investigation
          made by any Lender or on its behalf and notwithstanding that the Administrative
          Agent, the Collateral Agent, the Issuing Bank or any Lender may have had
          notice
          or knowledge of any Default or incorrect representation or warranty at
          the time
          any credit is extended under the Credit Agreement, and shall continue in
          full
          force and effect as long as the principal of or any accrued interest on
          any Loan
          or any fee or any other amount payable under any Loan Document is outstanding
          and unpaid or any Letter of Credit is outstanding and so long as the Commitments
          have not expired or terminated.

         

        Section
          7.04.   Binding
          Effect; Several Agreement.
          This
          Agreement shall become effective as to any Loan Party when a counterpart
          hereof
          executed on behalf of such Loan Party shall have been delivered to the
          Administrative Agent and a counterpart hereof shall have been executed
          on behalf
          of the Collateral Agent, and thereafter shall be binding upon such Loan
          Party
          and the Collateral Agent and their respective permitted successors and
          assigns,
          and shall inure to the benefit of such Loan Party, the Collateral Agent
          and the
          other Secured Parties and their respective permitted successors and assigns,
          except that no Loan Party shall have the right to assign or transfer its
          rights
          or obligations hereunder or any interest herein or in the Collateral (and
          any
          such assignment or transfer shall be void) except as expressly contemplated
          by
          this Agreement or the Credit Agreement. This Agreement shall be construed
          as a
          separate agreement with respect to each Loan Party and may be amended,
          modified,
          supplemented, waived or released with respect to any Loan Party without
          the
          approval of any other Loan Party and without affecting the obligations
          of any
          other Loan Party hereunder.

         

        
          
             

          

          
            28

            
              

            

          

          
             

          

        

        Section
          7.05.   Successors
          and Assigns.
          Whenever in this Agreement any of the parties hereto is referred to, such
          reference shall be deemed to include the permitted successors and assigns
          of
          such party; and all covenants, promises and agreements by or on behalf
          of any
          Grantor or the Collateral Agent that are contained in this Agreement shall
          bind
          and inure to the benefit of their respective permitted successors and
          assigns.

         

        Section
          7.06.   Collateral
          Agent’s Fees and Expenses; Indemnification.

         

        (a)  The
          parties hereto agree that the Collateral Agent shall be entitled to
          reimbursement of its expenses incurred hereunder as provided in Section
          9.03 of
          the Credit Agreement.

         

        (b)  Without
          limitation of its indemnification obligations under the other Loan Documents,
          each Grantor jointly and severally agrees to indemnify the Collateral Agent
          and
          the other Indemnitees (as defined in Section 9.03 of the Credit Agreement)
          against, and hold each Indemnitee harmless from, any and all losses, claims,
          damages, liabilities and related expenses, including the reasonable fees,
          charges and disbursements of any counsel for any Indemnitee, incurred by
          or
          asserted against any Indemnitee arising out of, in connection with, or
          as a
          result of, the execution, delivery or performance of this Agreement or
          any
          claim, litigation, investigation or proceeding relating hereto, or to the
          Collateral, whether or not any Indemnitee is a party thereto; provided
          that
          such indemnity shall not, as to any Indemnitee, be available to the extent
          that
          such losses, claims, damages, liabilities or related expenses are determined
          by
          a court of competent jurisdiction by final and nonappealable judgment to
          have
          resulted from the gross negligence or wilful misconduct of such
          Indemnitee.

         

        (c)  Any
          such
          amounts payable as provided hereunder shall be additional Obligations secured
          hereby and by the other Security Documents. The provisions of this Section
          7.06
          shall remain operative and in full force and effect regardless of the
          termination of this Agreement or any other Loan Document, the consummation
          of
          the transactions contemplated hereby, the repayment of any of the Obligations,
          the invalidity or unenforceability of any term or provision of this Agreement
          or
          any other Loan Document, or any investigation made by or on behalf of the
          Collateral Agent or any other Secured Party. All amounts due under this
          Section
          7.06 shall be payable on written demand therefor.

         

        Section
          7.07.   Collateral
          Agent Appointed Attorney-in-Fact.
          Each
          Grantor hereby appoints the Collateral Agent the attorney-in-fact of such
          Grantor for the purpose of carrying out the provisions of this Agreement
          and
          taking any action and executing any instrument that the Collateral Agent
          may
          deem necessary or advisable to accomplish the purposes hereof, which appointment
          is irrevocable and coupled with an interest. Without limiting the generality
          of
          the foregoing, the Collateral Agent shall have the right, upon the occurrence
          and during the continuance of an Event of Default, with full power of
          substitution either in the Collateral Agent’s name or in the name of such
          Grantor: (a) to receive, endorse, assign and/or deliver any and all notes,
          acceptances, checks, drafts, money orders or other evidences of payment
          relating
          to the Collateral or any part thereof; (b) to demand, collect, receive
          payment
          of, give receipt for and give discharges and releases of all or any of
          the
          Collateral; (c) to ask for, demand, sue for, collect, receive and give
          acquittance for any and all moneys due or to become due under and by virtue
          of
          any Collateral; (d) to sign the name of any Grantor on any invoice or bill
          of
          lading relating to any of the Collateral; (e) to send verifications of
          Accounts
          to any Account Debtor; (f) to commence and prosecute any and all suits,
          actions
          or proceedings at law or in equity in any court of competent jurisdiction
          to
          collect or otherwise realize on all or any of the Collateral or to enforce
          any
          rights in respect of any Collateral; (g) to settle, compromise, compound,
          adjust
          or defend any actions, suits or proceedings relating to all or any of the
          Collateral; (h) to notify, or to require any Grantor to notify, Account
          Debtors
          to make payment directly to the Collateral Agent; and (i) to use, sell,
          assign,
          transfer, pledge, make any agreement with respect to or otherwise deal
          with all
          or any of the Collateral, and to do all other acts and things necessary
          to carry
          out the purposes of this Agreement, as fully and completely as though the
          Collateral Agent were the absolute owner of the Collateral for all purposes;
          provided,
          that
          nothing herein contained shall be construed as requiring or obligating
          the
          Collateral Agent to make any commitment or to make any inquiry as to the
          nature
          or sufficiency of any payment received by the Collateral Agent, or to present
          or
          file any claim or notice, or to take any action with respect to the Collateral
          or any part thereof or the moneys due or to become due in respect thereof
          or any
          property covered thereby. The Collateral Agent and the other Secured Parties
          shall be accountable only for amounts actually received as a result of
          the
          exercise of the powers granted to them herein, and neither they nor their
          officers, directors, employees or agents shall be responsible to any Grantor
          for
          any act or failure to act hereunder, except for their own gross negligence
          or
          wilful misconduct.

         

        
          
             

          

          
            29

            
              

            

          

          
             

          

        

        Section
          7.08.   GOVERNING
          LAW.
          THIS
          AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT
          SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
          OF
          NEW YORK, WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS
          OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
          WOULD BE REQUIRED THEREBY.

         

        Section
          7.09.   Waivers;
          Amendment.

         

        (a)  No
          failure or delay by the Administrative Agent, the Collateral Agent, the
          Issuing
          Bank or any Lender in exercising any right, power or remedy hereunder or
          under
          any other Loan Document shall operate as a waiver thereof, nor shall any
          single
          or partial exercise of any such right, power or remedy, or any abandonment
          or
          discontinuance of steps to enforce such a right, power or remedy, preclude
          any
          other or further exercise thereof or the exercise of any other right, power
          or
          remedy. The rights, powers and remedies of the Administrative Agent, the
          Collateral Agent, the Issuing Bank and the Lenders hereunder and under
          the other
          Loan Documents are cumulative and are not exclusive of any rights, powers
          or
          remedies that they would otherwise have. No waiver of any provision of
          this
          Agreement or consent to any departure by any Loan Party therefrom shall
          in any
          event be effective unless the same shall be permitted by paragraph (b)
          of this
          Section 7.09, and then such waiver or consent shall be effective only in
          the
          specific instance and for the purpose for which given. Without limiting
          the
          generality of the foregoing, the making of a Loan or the issuance of a
          Letter of
          Credit shall not be construed as a waiver of any Default, regardless of
          whether
          the Administrative Agent, the Collateral Agent, any Lender or the Issuing
          Bank
          may have had notice or knowledge of such Default at the time. No notice
          or
          demand on any Loan Party in any case shall entitle any Loan Party to any
          other
          or further notice or demand in similar or other circumstances.

         

        (b)  Neither
          this Agreement nor any provision hereof may be waived, amended or modified
          except pursuant to an agreement or agreements in writing entered into by
          the
          Collateral Agent and the Loan Party or Loan Parties with respect to which
          such
          waiver, amendment or modification is to apply, subject to any consent required
          in accordance with Section 9.02 of the Credit Agreement.

         

        Section
          7.10.   WAIVER
          OF JURY TRIAL.
          EACH
          PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
          LAW,
          ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
          OR
          INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
          DOCUMENT
          OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT
          OR ANY
          OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
          AGENT OR
          ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
          SUCH
          OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
          FOREGOING
          WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
          INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
          WAIVERS
          AND CERTIFICATIONS IN THIS SECTION 7.10.

         

        
          
             

          

          
            30

            
              

            

          

          
             

          

        

        Section
          7.11.   Severability.
          Any
          provision of this Agreement held to be invalid, illegal or unenforceable
          in any
          jurisdiction shall, as to such jurisdiction, be ineffective to the extent
          of
          such invalidity, illegality or unenforceability without affecting the validity,
          legality and enforceability in such jurisdiction of the remaining provisions
          hereof; and the invalidity of a particular provision in a particular
          jurisdiction shall not invalidate such provision in any other jurisdiction.
          The
          parties hereto shall endeavor in good-faith negotiations to replace the
          invalid,
          illegal or unenforceable provisions with valid provisions the economic
          effect of
          which comes as close as possible to that of the invalid, illegal or
          unenforceable provisions.

         

        Section
          7.12.   Counterparts.
          This
          Agreement may be executed in counterparts (and by different parties hereto
          on
          different counterparts), each of which shall constitute an original but
          all of
          which, when taken together, shall constitute a single contract, and shall
          become
          effective as provided in Section 7.04. Delivery of an executed signature
          page to
          this Agreement by facsimile transmission shall be as effective as delivery
          of a
          manually signed counterpart of this Agreement.

         

        Section
          7.13.   Headings.
          Article
          and Section headings used herein are for the purpose of reference only,
          are not
          part of this Agreement and are not to affect the construction of, or to
          be taken
          into consideration in interpreting, this Agreement.

         

        Section
          7.14.   Jurisdiction;
          Consent to Service of Process.

         

        (a)  Each
          of
          the Loan Parties hereby irrevocably and unconditionally submits, for itself
          and
          its property, to the nonexclusive jurisdiction of the Supreme Court of
          the State
          of New York sitting in New York County and of the United States District
          Court
          of the Southern District of New York, and any appellate court from any
          thereof,
          in any action or proceeding arising out of or relating to this Agreement
          or any
          other Loan Document, or for recognition or enforcement of any judgment,
          and each
          of the parties hereto hereby irrevocably and unconditionally agrees that
          all
          claims in respect of any such action or proceeding may be heard and determined
          in such New York State or, to the extent permitted by law, such Federal
          court.
          Each of the parties hereto agrees that a final judgment in any such action
          or
          proceeding shall be conclusive and may be enforced in other jurisdictions
          by
          suit on the judgment or in any other manner provided by law. Nothing in
          this
          Agreement or any other Loan Document shall affect any right that the
          Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
          may
          otherwise have to bring any action or proceeding relating to this Agreement
          or
          any other Loan Document against any Grantor or Guarantor, or its properties,
          in
          the courts of any jurisdiction.

         

        (b)  Each
          of
          the Loan Parties hereby irrevocably and unconditionally waives, to the
          fullest
          extent permitted by law, any objection that it may now or hereafter have
          to the
          laying of venue of any suit, action or proceeding arising out of or relating
          to
          this Agreement or any other Loan Document in any court referred to in paragraph
          (a) of this Section 7.14. Each of the parties hereto hereby irrevocably
          waives,
          to the fullest extent permitted by law, the defense of an inconvenient
          forum to
          the maintenance of such action or proceeding in any such court.

         

        (c)  Each
          party to this Agreement irrevocably consents to service of process in the
          manner
          provided for notices in Section 7.01. Nothing in this Agreement or any
          other
          Loan Document will affect the right of any party to this Agreement to serve
          process in any other manner permitted by law.

         

        
          
             

          

          
            31

            
              

            

          

          
             

          

        

        Section
          7.15.   Termination
          or Release.

         

        (a)  This
          Agreement, the guarantees made herein, the Security Interest and all other
          security interests granted hereby shall terminate when all the Loan Document
          Obligations have been indefeasibly paid in full and the Lenders have no
          further
          commitment to lend under the Credit Agreement, the LC Facility LC Obligations
          and the Revolving LC Obligations have been reduced to zero and the LC Facility
          Issuing Bank and the Revolving Issuing Bank have no further obligations
          to issue
          Letters of Credit under the Credit Agreement.

         

        (b)  A
          Subsidiary Loan Party shall automatically be released from its obligations
          hereunder and the security interests in the Collateral of such Subsidiary
          Loan
          Party shall be automatically released upon the consummation of any transaction
          permitted by the Credit Agreement as a result of which such Subsidiary
          Loan
          Party ceases to be a Subsidiary of the Parent; provided
          that the
          Required Lenders shall have consented to such transaction (to the extent
          required by the Credit Agreement) and the terms of such consent did not
          provide
          otherwise.

         

        (c)  Upon
          any
          sale or other transfer by any Grantor of any Collateral that is permitted
          under
          the Credit Agreement to any Person that is not a Grantor, or upon the
          effectiveness of any written consent to the release of the security interest
          granted hereby in any Collateral pursuant to Section 9.02 of the Credit
          Agreement, the security interest in such Collateral shall be automatically
          released; provided
          that the
          Proceeds resulting from such sale or other transfer shall be included in
          the
          Collateral.

         

        (d)  In
          connection with any termination or release pursuant to paragraph (a), (b)
          or (c)
          of this Section 7.15, the Collateral Agent shall execute and deliver to
          any
          Grantor at such Grantor’s expense all documents that such Grantor shall
          reasonably request to evidence such termination or release. Any execution
          and
          delivery of documents pursuant to this Section 7.15 shall be without recourse
          to
          or warranty by the Collateral Agent.

         

        Section
          7.16.   Additional
          Subsidiaries.
          Pursuant to Section 5.11 of the Credit Agreement, each Subsidiary of a
          Loan
          Party that was not in existence or not a Subsidiary on the date of the
          Credit
          Agreement and is not a Foreign Subsidiary is required to enter into this
          Agreement as a Subsidiary Loan Party upon becoming such a Subsidiary. Upon
          execution and delivery by the Collateral Agent and a Subsidiary of an instrument
          in the form of Exhibit I hereto, such Subsidiary shall become a Subsidiary
          Loan
          Party hereunder with the same force and effect as if originally named as
          a
          Subsidiary Loan Party herein. The execution and delivery of any such instrument
          shall not require the consent of any other Loan Party hereunder. The rights
          and
          obligations of each Loan Party hereunder shall remain in full force and
          effect
          notwithstanding the addition of any new Loan Party as a party to this
          Agreement.

         

        Section
          7.17.   Right
          of Setoff.
          Subject
          to Section 9.08 of the Credit Agreement, if an Event of Default shall have
          occurred and be continuing, each Lender and each of its Affiliates is hereby
          authorized at any time and from time to time, to the fullest extent permitted
          by
          law, to set off and apply any and all deposits (general or special, time
          or
          demand, provisional or final) at any time held and other obligations at
          any time
          owing by such Lender or Affiliate to or for the credit or the account of
          any
          Subsidiary Loan Party against any of and all the obligations of such Subsidiary
          Loan Party now or hereafter existing under this Agreement owed to such
          Lender,
          irrespective of whether or not such Lender shall have made any demand under
          this
          Agreement and although such obligations may be unmatured.

         

        Section
          7.18.   Effect
          on Existing Guarantee and Collateral Agreement.
          Upon
          the
          execution and delivery by the parties hereto of this Agreement and the
          satisfaction of the conditions set forth in Sections 4.01 and 4.02 of the
          Credit
          Agreement, (i) this Agreement shall, except to the extent explicitly provided
          herein, be deemed to amend, restate and supersede the Existing Guarantee
          and
          Collateral Agreement; provided
          that the
          obligations of the Loan Parties (party hereto) under the Existing Guarantee
          and Collateral Agreement
          and the
          grant of security interest in the Collateral by the relevant Loan Parties
          under
          the Existing Guarantee
          and Collateral Agreement
          shall
          continue under this Agreement, and shall not in any event be terminated,
          extinguished or annulled, but shall hereafter be governed by this Agreement
          and
(ii)
          all
          Obligations under the Existing Guarantee and Collateral Agreement shall
          continue
          to be outstanding except as expressly modified by this Agreement and shall
          be
          governed in all respects by this Agreement, it being agreed and understood
          that
          this Agreement does not constitute a novation or satisfaction of any Obligation
          under the Existing Guarantee and Collateral Agreement except as expressly
          modified by this Agreement, nor does it operate as a waiver of any right,
          power
          or remedy of any Lender under any “Loan Documents” (as
          defined in the Existing Credit Agreement).

         


        
          
             

          

          
            32

            
              

            

          

          
             

          

        


        


        IN
          WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
          of the
          day and year first above written.

         

         

                            DENNY’S,
          INC.

         

                            By:
/s/
          Alex Lewis   

                            Name:
          Alex
          Lewis

                            Title: Vice
          President and Treasurer

        


         

        


        
          
             

          

          
            
            

            
              

            

          

          
             

          

        

         


         

                            DENNY’S
          REALTY,
          LLC

         

        


        


                            By: DFO,
          LLC

                            Its: Sole
          Member

        


        


                            By: Denny’s
          Inc.

                            Its: Sole
          Member

        


        


                            By:
/s/
          Alex Lewis   

                            Name:
          Alex
          Lewis

                            Title: Vice
          President and Treasurer

                


         

        


        
          
             

          

          
            
            

            
              

            

          

          
             

          

        

         


         

                            DENNY’S
          CORPORATION

         

                            By:
/s/
          Alex Lewis   

                            Name:
          Alex
          Lewis

                            Title: Vice
          President and Treasurer

        


         

        


         

        
          
             

          

          
            
            

            
              

            

          

          
             

          

        


         

                            DENNY’S
          HOLDINGS,
          INC.

         

                            By:
/s/
          Nicholas Fortuna  

                            Name:
          Nicholas
          Fortuna

                            Title: Vice
          President and Secretary

        


        


         

        


        
          
             

          

          
            
            

            
              

            

          

          
             

          

        

         


         

                            DFO,
          LLC

         

        


        


                            By: Denny’s
          Inc.

                            Its: Sole
          Member

        


                            By:
/s/
          Alex Lewis   

                            Name:
          Alex
          Lewis

                            Title: Vice
          President and Treasurer

        


        


         

        


        
          
             

          

          
            
            

            
              

            

          

          
             

          

        

         


                            BANK
          OF AMERICA,
          N.A.,

                            as
          Collateral
          Agent

        


                            By:
/s/
          Tamisha U. Eason 

                            Name: Tamisha
          U. Eason

                                                            Title: Vice
          President