Document:

ex10_2.htm

 

EXHIBIT 10.2

 

 

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

 

 

 

 

 

 

Schedule I to

the Guarantee and

Collateral Agreement

 

 

Subsidiary Loan Parties

 

	
Subsidiary
	
Jurisdiction of Organization

	  	  
	
Denny's Holdings, Inc.
	
New York

	
Denny's, Inc.
	
California

	
DFO, LLC
	
Delaware

	
Denny's Realty, LLC
	
Delaware

 

 

 

 

 

 

 

Schedule II to

the Guarantee and

Collateral Agreement

 

EQUITY INTERESTS

 

	
Issuer
	
Number

of Issuer Certificate
	
Registered

    Owner    
	
Number and Class of

Equity Interests
	
Percentage of

Equity Interests

	  	  	  	  	  
	
Denny’s Holdings, Inc,
	
2
	
Denny’s Corporation
	
10,000 shares common stock
	
100%

	
Denny’s Inc.
	
5
	
Denny’s Holdings, Inc.
	
1,000 shares common stock
	
100%

	
Denny’s Realty, LLC
	
N/A
	
DFO, LLC
	
All membership interests
	
100%

	
DFO, LLC
	
N/A
	
Denny’s Inc.
	
All membership interests
	
100%

	
La Mirada Enterprises No. 1, Inc.
	
3
	
Denny’s, Inc.
	
1000 shares
	
100%

	
Simeus Holdings, Inc.
	
Replacement certificate to be provided
	
Denny’s Holdings, Inc.
	
25,000 shares of Series A cumulative convertible preferred stock
	
100% (this series only)

	
Advantica Systems, Inc.
	
1
	
Denny’s Corporation
	
200 shares common stock
	
100%

	
IM Purchasing, Inc.
	
2
	
Denny’s Corporation
	
10,000 shares common stock
	
100%

	
Flagstar Holdings, Inc.
	
2
	
Denny’s Corporation
	
218,700 shares common stock
	
100%

 

DEBT SECURITIES

 

	
Stated Payee
	
Stated Maker(s)
	
Stated Original 

Principal Amount
	
Principal Amount 

as of 08/31/04
	
Stated Date 

of Note
	
Maturity Date

	  	  	  	  	  	  
	
Denny's, Inc.
	
Denar LLC and Guillermo Perales
	
$728,750.00
	
$678,750.00
	
3/14/1999
	
5/27/2009

	
Denny's, Inc.
	
Leonard Avery
	
$550,000.00
	
$28,548.03
	
4/5/2001
	
04/25/2007

	  	
TOTAL DEBT SECURITIES
	  	
$707,298.03
	  	  

 

 

 

 

 

 

Schedule III to

Guarantee and

Collateral Agreement

 

OWNED COPYRIGHTS

 

None.

 

 

 

 

 

 

Schedule III

to Guarantee and

Collateral Agreement

 

OWNED PATENTS

 

None.

 

 

 

 

 

 

Schedule III

to Guarantee and

Collateral Agreement

 

OWNED TRADEMARK/TRADE NAMES

 

U.S. Trademarks

	
Domestic Mark 
	
Jurisdiction
	
Class
	
Owner
	
Status
	
Reg./Serial #
	
Reg./Filing Date
	
Renewal Date

	
All-American Slam
	
US
	
29
	
DFO, LLC
	
Registered
	
1,950,994
	
23-Jan-96
	
23-Jan-16

	
Applesauce Swimmers
	
US
	
29
	
DFO, LLC
	
Registered
	
3,045,056
	
17-Jan-06
	
17-Jan-16

	
Country Scramble
	
US
	
29
	
DFO, LLC
	
Registered
	
2,219,066
	
19-Jan-99
	
19-Jan-09

	
Cucumber Craverz
	
US
	
29
	
DFO, LLC
	
Registered
	
3,027,395
	
13-Dec-05
	
13-Dec-15

	
D-Zone
	
US
	
43
	
DFO, LLC
	
Registered
	
2,992,224
	
6-Sep-05
	
6-Sep-15

	

Denny's Classic Diner (and Design)

	
US
	
42
	
DFO, LLC
	
Registered
	
2,469,927
	
17-Jul-01
	
17-Jul-11

	

Denny's Classic Diner (and Design)

	
US
	
42
	
DFO, LLC
	
Registered
	
2,469,928
	
17-Jul-01
	
17-Jul-11

	

Denny's Classic Diner (and Design)

	
US
	
42
	
DFO, LLC
	
Registered
	
2,512,281
	
27-Nov-01
	
27-Nov-11

	
Denny's Diner (Stylized)
	
US
	
42
	
DFO, LLC
	
Registered
	
2,372,959
	
1-Aug-00
	
1-Aug-10

	
Denny's Diner (and Design)
	
US
	
42
	
DFO, LLC
	
Registered
	
2,372,993
	
1-Aug-00
	
1-Aug-10

	

Denny's Diner (and Design)

	
US
	
42
	
DFO, LLC
	
Registered
	
2,372,994
	
1-Aug-00
	
1-Aug-10

	

Denny's Diner (and Design)

	
US
	
42
	
DFO, LLC
	
Registered
	
2,377,637
	
15-Aug-00
	
15-Aug-10

	

Denny's Diner (and Design)

	
US
	
42
	
DFO, LLC
	
Registered
	
2,653,324
	
26-Nov-02
	
26-Nov-12

	

Denny's Diner (and Design)

	
US
	
42
	
DFO, LLC
	
Registered
	
1,720,986
	
29-Sep-92
	
29-Sep-12

	

Denny's Diner (and Design)

	
US
	
42
	
DFO, LLC
	
Registered
	
1,886,750
	
28-Mar-95
	
28-Mar-15

	

Denny's Diner (and Design)

	
US
	
42
	
DFO, LLC
	
Registered
	
2,320,275
	
22-Feb-00
	
22-Feb-10

	
Denny's (Stylized)
	
US
	
42
	
DFO, LLC
	
Registered
	
2,364,727
	
4-Jul-00
	
4-Jul-10

	
Denny's (Stylized)
	
US
	
42
	
DFO, LLC
	
Registered
	
866,599
	
11-Mar-69
	
11-Mar-09

	
Denny's (Stylized)
	
US
	
42
	
DFO, LLC
	
Registered
	
862,087
	
17-Dec-68
	
17-Dec-08

	
Denny's (Stylized)
	
US
	
42
	
DFO, LLC
	
Registered
	
1,903,868
	
4-Jul-95
	
4-Jul-15

	
Denny's
	
US
	
42
	
DFO, LLC
	
Registered
	
736,161
	
14-Aug-62
	
14-Aug-12

	
Denny's
	
US
	
29, 30, 32
	
DFO, LLC
	
Registered
	
1,053,390
	
23-Nov-76
	
23-Nov-06

	
Denny's (Stylized)
	
US
	
42
	
DFO, LLC
	
Registered
	
740,359
	
6-Nov-62
	
6-Nov-12

	
Denny's All Night (and Design)
	
US
	
43
	
DFO, LLC
	
Registered
	
2,888,674
	
28-Sep-04
	
28-Sep-14

	
Denny's Til Dawn
	
US
	
42
	
DFO, LLC
	
Registered
	
1,720,991
	
29-Sep-92
	
29-Sep-12

	
Denver Scramble
	
US
	
29
	
DFO, LLC
	
Registered
	
2,964,207
	
28-Jun-05
	
renewal June 28, 2015

	
Dusk 'Til Dawn
	
US
	
42
	
DFO, LLC
	
Registered
	
3,051,982
	
31-Jan-06
	
31-Jan-16

	
Fit Fare
	
US
	
42
	
DFO, LLC
	
Registered
	
1,996,275
	
20-Aug-96
	
20-Aug-16

	
(Design only)
	
US
	
43
	
DFO, LLC
	
Registered
	
2,761,133
	
9-Sep-03
	
9-Sep-13

	
French Slam
	
US
	
30
	
DFO, LLC
	
Registered
	
1,735,075
	
24-Nov-92
	
24-Nov-12

	
French-toastix
	
US
	
30
	
DFO, LLC
	
Registered
	
2980325
	
7-26-06
	
Renewal July 26, 2015

	
A Good Place to Sit and Eat
	
US
	
43
	
DFO, LLC
	
Registered
	
2,896,910
	
26-Oct-04
	
26-Oct-14

	
Grand Slam
	
US
	
29
	
DFO, LLC
	
Registered
	
1,813,884
	
28-Dec-93
	
28-Dec-13

	
Grand Slam Breakfast
	
US
	
29
	
DFO, LLC
	
Registered
	
1,277,223
	
8-May-84
	
8-May-14

	
Grand Slam Slugger
	
US
	
29
	
DFO, LLC
	
Registered
	
2,683,460
	
4-Feb-03
	
3-Feb-13

	
Great Food and Great Service by Great People...Every Time!
	
US
	
43
	
DFO, LLC
	
Registered
	
2,802,016
	
6-Jan-04
	
6-Jan-14

	
Heartland Scramble (Block letters)
	
US
	
29
	
DFO, LLC
	
Registered
	
3,086,695
	
25-Apr-06
	
25-Apr-16

	
Jr. Grand Slam
	
US
	
29
	
DFO, LLC
	
Registered
	
1,270,950
	
20-Mar-84
	
20-Mar-14

	
Major League Burgers
	
US
	
30
	
DFO, LLC
	
Registered
	
2,611,072
	
27-Aug-02
	
27-Aug-12

	
Moons Over My Hammy
	
US
	
30
	
DFO, LLC
	
Registered
	
1,946,766
	
9-Jan-96
	
9-Jan-16

	
(Design Only)
	
US
	
42
	
DFO, LLC
	
Registered
	
2,005,185
	
1-Oct-96
	
1-Oct-06

	
Pizza Party
	
US
	
30
	
DFO, LLC
	
Registered
	
2,577,906
	
11-Jun-02
	
11-Jun-12

	
Play It Again Slam
	
US
	
29
	
DFO, LLC
	
Registered
	
1,736,807
	
1-Dec-92
	
1-Dec-12

	
Potato Volcano
	
US
	
29
	
DFO, LLC
	
Registered
	
3,027,397
	
13-Dec-05
	
13-Dec-15

	
Senior Belgian Waffle Slam
	
US
	
30
	
DFO, LLC
	
Registered
	
1,757,060
	
03/09/1993
	
9-Mar-13

	
ShrimpsAhoy
	
US
	
29
	
DFO, LLC
	
Registered
	
2,881,173
	
7-Sep-04
	
7-Sep-14

	
Slam
	
U.S.
	
29, 30
	
DFO, LLC
	
Registered
	
2,592,374
	
9-Jul-02
	
9-Jul-12

	
Slim Slam
	
US
	
30
	
DFO, LLC
	
Registered
	
2,569,543
	
14-May-02
	
14-May-12

	
Southern Slam
	
US
	
29
	
DFO, LLC
	
Registered
	
1,743,375
	
29-Dec-92
	
29-Dec-12

	
Super Bird
	
US
	
30
	
DFO, LLC
	
Registered
	
1,378,319
	
14-Jan-86
	
14-Jan-16

	
Super Slam
	
US
	
29, 30
	
DFO, LLC
	
Registered
	
1,944,101
	
26-Dec-95
	
12/26/2005  renewal filed 6/16/06 - grace period

	
Super Scrambles (Block letters)
	
US
	
29
	
DFO, LLC
	
Registered
	
2,966,985
	
12-Jul-05
	
renewal July 12, 2015

	
The Triple Play
	
US
	
29
	
DFO, LLC
	
Registered
	
2,683,459
	
4-Feb-03
	
3-Feb-13

	
'Til Dawn
	
US
	
42
	
DFO, LLC
	
Registered
	
2,536,481
	
5-Feb-02
	
5-Feb-12

	
Triple Play Deal
	
US
	
29
	
DFO, LLC
	
Registered
	
2,695,449
	
11-Mar-03
	
11-Mar-13

	
Ultimate Omelette
	
US
	
29
	
DFO, LLC
	
Registered
	
1,645,411
	
21-May-91
	
21-May-11

Pending U.S. Trademark Applications

None

 

 

 

International Trademarks

	
International Mark
	
Country
	
Class
	
Owner1
	
Status
	
App. #/Filing Date
	
Reg. #/Date
	
Renewal Date

	
Denny's and French Diamond Design
	
Argentina
	
42
	
DFO, LLC
	
Registered
	
1928848

07/24/94
	
1,593,942

03/18/96
	
18-Mar-06

	
Denny's
	
Aruba
	
43
	
DFO, LLC
	
Registered
	
4-Aug-03
	
22933

05/28/2004
	
4-Aug-13

	
Denny's
	
Australia
	
30
	
DFO, LLC
	
Registered
	
A454,325

10/27/86
	
A454,325

10/27/87
	
27-Oct-07

	
Denny's (word mark)
	
Australia
	
42
	
DFO, LLC
	
Registered
	
714,263

07/31/96
	
714263

10/07/97
	
31-Jul-16

	
Denny's
	
Australia
	
29
	
DFO, LLC
	
Registered
	
A454,324
	
A454324

10/27/96
	
27-Oct-07

	
Denny's (word mark)
	
Australia
	
42
	
DFO, LLC
	
Registered
	
A454,326
	
A454326

10/27/86
	
27-Oct-07

	
Denny's and Device
	
Australia
	
42
	
DFO, LLC
	
Registered
	
B338729
	
B338729

10/08/86
	
8-Oct-10

	
Super Bird
	
Australia
	
30
	
DFO, LLC
	
Registered
	
A454717A
	
A454717

10/11/86
	
31-Oct-07

	
Dely
	
Austria
	
29, 30, 31
	
DFO, LLC
	
Registered
	  	
100,159

07/21/82
	
21-Jul-02

	
Denny's
	
Austria
	
42
	
DFO, LLC
	
Registered
	  	
100,158

07/21/82
	
31-Jul-12

	
Denny's
	
Barbados
	
29
	
DFO, LLC
	
Registered
	
4-Aug-93
	
81/8407

02/25/99
	
25-Feb-09

	
Denny's
	
Barbados
	
30
	
DFO, LLC
	
Registered
	
4-Aug-93
	
81/8408

02/25/99
	
25-Feb-09

	
Denny's
	
Barbados
	
32
	
DFO, LLC
	
Registered
	
4-Aug-93
	
81/8406

02/25/99
	
25-Feb-09

	
Denny's within a French Diamond
	
Barbados
	
29
	
DFO, LLC
	
Registered
	
4-Aug-93
	
81/8405
	
25-Feb-09

	
Denny's within a French Diamond
	
Barbados
	
32
	
DFO, LLC
	
Registered
	
4-Aug-93
	
81/8403
	
25-Feb-09

	
Denny's within a French Diamond
	
Barbados
	
30
	
DFO, LLC
	
Registered
	
4-Aug-93
	
81/8404
	
25-Feb-09

	
Denny's
	
Benelux
	
30, 32
	
DFO, LLC
	
Registered
	  	
175818

05/12/70
	
21-Jan-90

	
Denny's
	
Benelux
	
6,9,16,29, 30, 32
	
DFO, LLC
	
Registered
	
24-Jun-71
	
044178

06/24/80
	
24-Jun-10

	
Denny's
	
Bolivia
	  	
DFO, LLC
	
Registered
	
1830

09/07/94
	
C-64209

09/07/1994
	
1-Jul-07

	
Denny's
	
Brazil
	
38 will be reclassed to 43 with renewal
	
DFO, LLC
	
Registered
	
813.342.961

02/26/87
	
813.342.961

12/01/92
	
12/01/2002 

renewal filed

	
Denny's and (maple leaf) Design 

(in B&W)
	
Canada
	
43
	
DFO, LLC
	
Registered
	
Serial No. 1,142,698
	
TMA601,698

02/09/2004
	
9-Feb-19

	
Denny's and (maple leaf) Design 

(in color)
	
Canada
	
43
	
DFO, LLC
	
Registered
	
Serial No. 1,129,676
	
598001

12-18-2003
	
18-Dec-18

	
Denny's and (French Diamond) Design 

(in color)
	
Canada
	
43
	
DFO, LLC
	
Registered
	
Serial No. 1,122,162
	
TMA601,581

02/06/2004
	
6-Feb-19

	
Denny's and (French Diamond) Design 

(in B&W)
	
Canada
	
43
	
DFO, LLC
	
Registered
	
Serial No. 1,122,165
	
TMA601,912

02/11/2004
	
11-Feb-19

	
Denny's and (Maple Leaf) Design 

(in B&W)
	
Canada
	
43
	
DFO, LLC
	
Registered
	
Serial No. 1,122,164
	
TMA601,728

02/10/2004
	
10-Feb-19

	
Denny's and (Maple Leaf) Design 

(in color)
	
Canada
	
43
	
DFO, LLC
	
Registered
	
Serial No. 1,122,166
	
TMA601,580

02/06/2004
	
6-Feb-19

	
Denny's
	
Canada
	
42
	
DFO, LLC
	
Registered
	
321494

04/12/1969
	
TMA169,549

06/05/70
	
5-Jun-15

	
Denny's and Design
	
Canada
	
42
	
DFO, LLC
	
Registered
	
739,942

10/28/93
	
TMA455,762

03/22/96
	
22-Mar-11

	
Denny's and Design
	
Canada
	
29, 30, 42
	
DFO, LLC
	
Registered
	
321,495
	
TMA169,550

06/05/70
	
5-Jun-15

	
Denny's Stylized within a French Diamond
	
Canada
	
42
	
DFO, LLC
	
Registered
	
739,991

10/28/93
	
TMA454,583 

02/23/96
	
23-Feb-11

	
Grand Slam Breakfast
	
Canada
	
29
	
DFO, LLC
	
Registered
	
753,198

05/03/94
	
TMA440,682  

03/17/95
	
17-Mar-10

	
Super Bird
	
Canada
	  	
DFO, LLC
	
Registered
	
687,647

08/14/91
	
TMA404,315  

10/30/92
	
30-Oct-07

	
Super Slam
	
Canada
	  	
DFO, LLC
	
Registered
	
1,135,704

04/05/02
	
TMA569,070   

10/18/02
	
18-Oct-17

	
The Ultimate Omlette
	
Canada
	  	
DFO, LLC
	
Registered
	
687,649

08/14/91
	
TMA404,316   

10/30/92
	
30-Oct-07

	
Denny's, Inc.
	
Chile
	
42
	
DFO, LLC
	
Registered
	
3677

06/03/82
	
395,511

12/02/82

653.999

01/08/03
	
8-Jan-13

	
Denny's In Chinese Characters
	
China
	
42
	
DFO, LLC
	
Registered
	
93094339

09/30/93
	
777369

02/06/95
	
6-Feb-15

	
Denny's Stylized
	
China
	
32
	
DFO, LLC
	
Registered
	  	
180767

07/05/83
	
4-Jul-13

	
Denny's Stylized
	
China
	
29
	
DFO, LLC
	
Registered
	  	
180766

07/05/83
	
4-Jul-13

	
Denny's
	
Community Trademark (Austria, Blegium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, United Kingdom, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia)

 
	
DFO, LLC
	
Registered
	  	
00789709

07/26/2002
	
26-Jul-12

 

 

 

 

 

 

 

	International Mark	Country	Class	
Owner1
	
Status
	
App. #/Filing Date
	
Reg. #/Date
	
Renewal Date

	
Denny's
	
Costa Rica
	
42
	
DFO, LLC
	
Registered
	  	
68.227

10/26/87
	
26-Oct-07

	
Denny's (stylized)
	
Costa Rica
	
42
	
DFO, LLC
	
Registered
	  	
113265

04/19/1999
	
19-Apr-09

	
Denny's (stylized in a French diamond)
	
Costa Rica
	
42
	
DFO, LLC
	
Registered
	  	
113266

04/19/1999
	
19-Apr-09

	
Denny's
	
Denmark
	
42
	
DFO, LLC
	
Registered
	
27-Jan-87
	
VR 01.493198

04/04/87
	
4-Apr-97

	
Denny's
	
Denmark
	
42
	
DFO, LLC
	
Registered
	
27-Jan-87
	
1493/1987

04/24/87
	
24-Apr-07

	
Denny's and French Diamond Design
	
Dominican Rep.
	
70
	
DFO, LLC
	
Registered
	
23,739

04/24/95
	
78,566

07/15/95
	
15-Jul-15

	
Denny's
	
Ecuador
	
trade name
	
DFO, LLC
	
Registered
	
8,388

09/18/95
	
793/95

09/18/95
	
18-Sep-05

	
Denny's
	
Ecuador
	
43
	
DFO, LLC
	
Registered
	
151.200

11/24/2004
	
1194-05

09/21/2005
	
21-Sep-15

	
Denny's
	
Egypt
	
42
	
DFO, LLC
	
Registered
	
133040

05/17/2000
	
133040

07/19/2004
	
17-May-10

	
Denny's
	
El Salvador
	
42
	
DFO, LLC
	
Registered
	
3466/94

09/20/94
	
171 Book 165
	
29-Jan-13

	
Denny's and Design
	
El Salvador
	
42
	
DFO, LLC
	
Registered
	  	
No. 160 book 188 pages 327328

02/10/2005
	
10-Feb-15

	
Denny's
	
Fed. Republic of Germany
	
42
	
DFO, LLC
	
Registered
	  	
1043588

06/06/89
	
30-Jun-09

	
Denny's
	
Fed. Republic of Germany
	
30
	
DFO, LLC
	
Registered
	  	
923334

01/20/80
	
31-Jan-10

	
Denny's
	
Finland
	
42
	
DFO, LLC
	
Registered
	
4793/83

09/13/83
	
93220

08/05/85
	
8-May-15

	
Denny's and French Diamond Design
	
Finland
	
42
	
DFO, LLC
	
Registered
	
1255/95

02/17/95
	
203660

12/31/96
	
31-Dec-06

	
Denny's
	
France
	
42
	
DFO, LLC
	
Registered
	
786,901

03/18/86
	
1347135

03/18/86
	
18-Mar-06

	
Denny's within a French Diamond
	
France
	
29,30,32,42 to 43
	
DFO, LLC
	
Registered
	
93/478.461

07/29/93
	
93478461

01/14/94
	
28-Jul-13

	
Denny's & Device
	
France
	
16,22,29,30,31,32,33
	
DFO, LLC
	
Registered
	
958,088

09/30/88
	
1491529

09/30/88
	
14-Sep-98

	
Denny's
	
Greece
	
29,30,32
	
DFO, LLC
	
Registered
	
70658

12/21/81
	
70658

10/17/84
	
21-Dec-01

	
Denny's
	
Guatemala
	
42
	
DFO, LLC
	
Registered
	  	
112566

03/09/2001
	
9-Feb-11

	
Denny's
	
Honduras
	
43
	
DFO, LLC
	
Registered
	
11476/2002

9/30/02
	
9.093

05/19/03
	
19-May-13

	
Denny's and Device
	
Italy
	
42
	
DFO, LLC
	
Registered
	
F198C001182

10/30/98
	
832214

01/16/01
	
30-Oct-08

	
Denny's and Device
	
Italy
	
42
	
DFO, LLC
	
Registered
	
32948C/82

02/02/1982
	
489672

03/09/88
	
2-Feb-02

	
Denny's Stylized
	
Italy
	
16,22,29,30,31,32,33,35
	
DFO, LLC
	
Registered
	
6-Oct-88
	
550713

10/16/91
	
10/06/1998

	
Denny's
	
Jordan
	
32
	
DFO, LLC
	
Registered
	
33895

12/27/93
	
33895

12/30/00
	
27-Dec-10

	
Denny's
	
Jordan
	
29
	
DFO, LLC
	
Registered
	
33894

12/23/93
	
33894

12/30/00
	
26-Dec-10

	
Denny's
	
Jordan
	
30
	
DFO, LLC
	
Registered
	
34223

12/27/93
	
34340

12/30/00
	
27-Dec-10

	
Denny's (word mark)
	
Korea (South)
	
42
	
DFO, LLC
	
Registered
	
78 1990
	
2776

11/14/80
	
14-Nov-10

	
Denny's and French Diamond Design (green checkerboard)
	
Korea (South)
	
112
	
DFO, LLC
	
Registered
	
94-10053

12/09/94
	
32941

09/06/96
	
6-Sep-06

	
Denny's with French Diamond 

(cartoon letters)
	
Korea (South)
	
112 will be reclassed as 43
	
DFO, LLC
	
Registered
	
51-2003-866 

reclass app  

56-2003-8728

06/26/03
	
20818

07/29/93
	
29-Jul-13

	
Grand Slam
	
Korea (South)
	
7
	
DFO, LLC
	
Registered
	
96-53144

12/07/96
	
407949

07/06/1998
	
6-Jul-08

	
Denny's and French Diamond Design
	
Malaysia
	
30
	
DFO, LLC
	
Registered
	
94/08482

09/17/94
	
94/08482

09/26/01
	
17-Sep-11

	
All American Slam
	
Mexico
	
29
	
DFO, LLC
	
Registered
	
221523

01/12/1995
	
580276

06/30/98
	
12-Jan-15

	
All American Slam
	
Mexico
	
30
	
DFO, LLC
	
Registered
	
221508

01/12/95
	
490594

05/02/95
	
12-Jan-15

	
Denny's
	
Mexico
	
42
	
DFO, LLC
	
Registered
	
101064

06/11/76
	
204331 

07/13/77
	
11-Jun-11

	
Denny's
	
Mexico
	
46
	
DFO, LLC
	
Registered
	
160416

01/30/80
	
242337

03/13/80
	
12-Jan-15

	
Denny's & design
	
Mexico
	
43
	
DFO, LLC
	
Registered
	
675753

09/07/2004
	
856647

10/26/2004
	
7-Sep-14

	
Denny's Diner & Design
	
Mexico
	
42
	
DFO, LLC
	
Registered
	
464926
	
707755 

07/27/2001
	
8-Jan-11

	
Denny's Til Dawn
	
Mexico
	
43
	
DFO, LLC
	
Registered
	
221494

01/12/95
	
498610

07/26/95
	
12-Jan-15

	
Fit Fare
	
Mexico
	
29
	
DFO, LLC
	
Registered
	
225137

02/21/95
	
488121

04/21/95
	
21-Feb-15

	
Fit Fare
	
Mexico
	
43
	
DFO, LLC
	
Registered
	
221492

01/12/95
	
487283

04/12/95
	
12-Jan-15

 

 

 

 

 

 

 

	International Mark	Country	Class	
Owner1
	
Status
	
App. #/Filing Date
	
Reg. #/Date
	
Renewal Date

	French Slam	
Mexico
	
30
	
DFO, LLC
	
Registered
	
221496

01/12/95
	
490589

05/02/95
	
12-Jan-15

	French Slam	
Mexico
	
29
	
DFO, LLC
	
Registered
	
221498

01/12/95
	
517044

02/20/96
	
12-Jan-15

	
Grand Slam
	
Mexico
	
29
	
DFO, LLC
	
Registered
	  	
726539

0919/2001
	
19-Sep-11

	
Grand Slam
	
Mexico
	
30
	
DFO, LLC
	
Registered
	  	
726540

09/19/2001
	
19-Sep-11

	
Grand Slam Breakfast
	
Mexico
	
29
	
DFO, LLC
	
Registered
	
221507

01/12/95
	
497174

07/14/95
	
12-Jan-15

	
Grand Slam Breakfast
	
Mexico
	
30
	
DFO, LLC
	
Registered
	
221506

01/12/95
	
409593

07/14/95
	
12-Jan-15

	
Moons Over My Hammy
	
Mexico
	
30
	
DFO, LLC
	
Registered
	
221517

01/12/95
	
490596

05/02/95
	
12-Jan-15

	
Moons Over My Hammy
	
Mexico
	
29
	
DFO, LLC
	
Registered
	
221516

01/12/95
	
497177

07/14/95
	
12-Jan-15

	
Scram Slam
	
Mexico
	
29
	
DFO, LLC
	
Registered
	
221493

01/12/95
	
497171

07/14/95
	
12-Jan-15

	
Scram Slam
	
Mexico
	
30
	
DFO, LLC
	
Registered
	
221510

01/12/95
	
490595

05/02/95
	
12-Jan-15

	
The Super Bird
	
Mexico
	
29
	
DFO, LLC
	
Registered
	
221500

01/12/95
	
494073

06/12/95
	
12-Jan-15

	
The Super Bird
	
Mexico
	
30
	
DFO, LLC
	
Registered
	
221499

01/12/95
	
490590

05/02/95
	
12-Jan-15

	
Denny's
	
Netherland Antilles
	
43
	
DFO, LLC
	
Registered
	
08/05/2003

D-30042
	
10044

09/30/2003
	
5-Aug-13

	
Denny's
	
New Zealand
	
16
	
DFO, LLC
	
Registered
	  	
B143209

07/19/82
	
19-Jul-17

	
Denny's
	
New Zealand
	
29
	
DFO, LLC
	
Registered
	  	
B143208

07/19/82
	
19-Jul-17

	
Denny's
	
New Zealand
	
30
	
DFO, LLC
	
Registered
	  	
B92476

01/01/70
	
20-Jan-15

	
Denny's
	
New Zealand
	
32
	
DFO, LLC
	
Registered
	  	
B92477

01/20/77
	
20-Jan-15

	
Denny's (checkerboard background 

with Kiwi bird)
	
New Zealand
	
43
	
DFO, LLC
	
Registered
	
672625

01/30/03
	
672625

01/30/03
	
30-Jan-10

	
Denny's
	
Nicaragua
	
42
	
DFO, LLC
	
Registered
	  	
567200

11/10/76
	
9-Nov-16

	
Denny's
	
Norway
	
29,43
	
DFO, LLC
	
Registered
	
810540

02/23/81
	
112099 

09/23/82
	
23-Sep-12

	
Denny's
	
Panama
	
43
	
DFO, LLC
	
Registered
	  	
1032

08/17/76
	
8/17/2006  renewal filed 02/01/2006

	
Denny's
	
Paraguay
	
42
	
DFO, LLC
	
Registered
	
09693

05/27/94
	
268787

06/14/2004
	
14-Jun-14

	
Denny's
	
Paraguay
	
30
	
DFO, LLC
	
Registered
	
09692

05/27/94
	
272.708

10/26/04
	
26-Oct-14

	
Denny's
	
Paraguay
	
29
	
DFO, LLC
	
Registered
	
09691

05/27/94
	
233795

03/23/2001
	
23-Mar-10

	
Denny's and Design
	
Paraguay
	
42
	
DFO, LLC
	
Registered
	
9420250

09/30/94
	
268787

06/14/2004
	
14-Jun-14

	
Denny's
	
Peru
	
43
	
DFO, LLC
	
Registered
	
8/7/2003
	
00627
	
2-Nov-13

	
Denny's
	
Philippines
	
42
	
DFO, LLC
	
Registered
	
119,857

04/18/97
	
4-1997-119857

08/28/2004
	
28-Aug-24

	
Denny's
	
Saudi Arabia
	
43
	
DFO, LLC
	
Registered
	
23002

11/17/93
	
325/20

11/12/94
	
13-Apr-13

	
Denny's
	
Singapore
	
42
	
DFO, LLC
	
Published
	
S/10167/94 

11/22/94
	  	  
	
Denny's
	
Singapore
	
42
	
DFO, LLC
	
Registered
	
S/2555/97

03/05/97
	
T97/02555E

03/05/97
	
5-Mar-07

	
Denny's
	
Singapore
	
43
	
DFO, LLC
	
Registered
	
24-Jul-02
	
T02/11157B

07/24/02
	
24-Jul-12

	
Denny's
	
Spain
	
32
	
DFO, LLC
	
Registered
	
2285170/4

01/24/00
	
2285170

01/24/2000
	  
	
Denny's
	
Spain
	
43
	
DFO, LLC
	
Registered
	
02588786/6

03/29/2004
	
2588786

09/24/2004
	
29-Mar-14

	
Denny's
	
Spain
	
30
	
DFO, LLC
	
Registered
	  	
2285169
	  
	
Denny's
	
Sweden
	
43
	
DFO, LLC
	
Registered
	  	
186206

04/22/83
	
22-Apr-13

	
Denny's
	
Switzerland
	
30,32
	
DFO, LLC
	
Registered
	  	
379434

02/02/70
	
2-Feb-10

	
Denny's
	
Taiwan
	
19
	
DFO, LLC
	
Registered
	
80-33942

01/09/91
	
565210

07/16/92
	
15-Jul-02

	
Denny's
	
Taiwan
	
45
	
DFO, LLC
	
Registered
	  	
44743

01/01/71
	
31-Dec-10

	
Denny's
	
Taiwan
	
7
	
DFO, LLC
	
Registered
	  	
1631

10/01/78
	
30-Sep-08

	
Denny's and French Diamond Design
	
Taiwan
	
42
	
DFO, LLC
	
Registered
	
83049004

07/25/94
	
80513

01/01/96
	
30-Sep-98

	
Denny's in Chinese Characters
	
Taiwan
	
26
	
DFO, LLC
	
Registered
	  	
279328

04/15/95
	
15-Apr-05

	
Denny's (word mark)
	
Thailand
	
42
	
DFO, LLC
	
Registered
	
459786

07/17/01
	
SM17054

08/13/02
	
16-Jul-11

	
Denny's
	
Thailand
	
42
	
DFO, LLC
	
Registered
	
219066

09/11/91
	
163875

09/11/91
	
10-Sep-01

	
Denny's and French Diamond Design
	
Thailand
	
42
	
DFO, LLC
	
Registered
	
283406

03/31/95
	
SM4225

03/31/95
	
30-Mar-05

 

 

 

 

 

 

	International Mark	Country	Class	
Owner1
	Status	
App. #/Filing Date
	
Reg. #/Date
	
Renewal Date

	
Denny's
	
Turkey
	
42
	
DFO, LLC
	
Registered
	
13-Jan-00
	
2000 00540

01/13/00
	
13-Jan-10

	
Denny's
	
United Arab Emirates
	
43
	
DFO, LLC
	
Registered
	
64281

10/12/2004
	
58106

02/27/2006
	
12-Oct-14

	
Denny's and Design
	
Uruguay
	
42
	
DFO, LLC
	
Registered
	
272.046
	
272.046

11/08/96
	
8-Nov-06

	
Denny's
	
Venezuela
	
43
	
DFO, LLC
	
Registered
	  	
17,615D

09/22/83
	
22-Sep-08

	
Denny's
	
Venezuela
	
43
	
DFO, LLC
	
Registered
	
01053.83
	
13783-D

10/19/78
	
19-Oct-03

	
Denny's
	
Venezuela
	
46
	
DFO, LLC
	
Registered
	  	
136,159

09/23/88
	
23-Sep-03

 

 
1 Filings to change the name of the owner from DFO, Inc. to DFO, LLC are underway.  We expect most of the countries to have the name change recorded within a few months.

 

 

Pending International Trademarks

	International Mark	Country	Class	Owner	Status	App. #/Filing Date
	
Denny's
	
Argentina
	
43
	
DFO, LLC
	
Pending
	
2.653.103

02/24/2006

	
Denny's
	
Bahamas
	
42
	
DFO, LLC
	
Pending
	
24,762

3/28/2002

	
Denny's
	
Colombia
	
42
	
DFO, LLC
	
Pending
	
275278

08/28/87

	
Denny's
	
Columbia
	
32
	
DFO, LLC
	
Pending
	
275279

01/01/92

	
Denny's
	
Guatemala
	
43
	
DFO, LLC
	
Application
	
M-7590-2002

	
Denny's
	
Lebanon
	  	
DFO, LLC
	
Pending
	  
	
Denny's and French Diamond Design
	
Malaysia
	
31
	
DFO, LLC
	
published for opposition
	
94/08483

09/17/94

	
Denny's and French Diamond Design
	
Malaysia
	
29
	
DFO, LLC
	
published for opposition
	
94/08481

09/17/94

	
Denny's
	
Malaysia
	
43
	
DFO, LLC
	
published for opposition
	
04020457

12/28/2004

 

 

 

 

 

Schedule IV

to Guarantee and

Collateral Agreement

 

Insurance Requirements

 

(a)  Parent and the Borrowers will, and will cause each Subsidiary Loan Party to, maintain (or cause to be maintained on its behalf) with financially sound and reputable insurance companies:

 

(i)  fire, boiler and machinery, and extended coverage insurance, on a replacement cost basis, with respect to all personal property and improvements to real property (in each case constituting Collateral), in such amounts as are customarily
maintained by companies in the same or similar business operating in the same or similar locations;

 

(ii)  commercial general liability insurance against claims for bodily injury, death or property damage occurring upon, about or in connection with the use of any properties owned, occupied or controlled by it, providing coverage on
an occurrence basis with a combined single limit of not less than $1,000,000 and including the broad form CGL endorsement; and

 

(iii)  such other insurance as may be required by law.

 

Deductibles or self-insured retention shall not exceed $100,000 for fire, boiler and machinery and extended coverage policies or $500,000 for commercial general liability policies.

 

(b)  Fire, boiler and machinery and extended coverage policies maintained with respect to any Collateral shall be endorsed or otherwise amended to include (i) a lenders’ loss payable clause in favor of the Collateral Agent and providing
for losses thereunder to be payable to the Collateral Agent or its designee, (ii) a provision to the effect that neither any Loan Party, the Collateral Agent nor any other party shall be a coinsurer and (iii) such other provisions as the Collateral Agent may reasonably require from time to time to protect the interests of the Lenders.  Commercial general liability policies shall be endorsed to name the Collateral Agent as an additional insured.  Business interruption policies shall name the
Collateral Agent as loss payee.  Each such policy referred to in this paragraph also shall provide that it shall not be canceled, modified or not renewed (i) by reason of nonpayment of premium except upon not less than 10 days’ prior written notice thereof by the insurer to the Collateral Agent (giving the Collateral Agent the right to cure defaults in the payment of premiums) or (ii) for any other reason except upon not less than 30 days’ prior written notice thereof by the insurer to the
Collateral Agent.  The Borrowers shall deliver to the Collateral Agent, prior to the cancellation, modification or nonrenewal of any such policy of insurance, a copy of a renewal or replacement policy (or other evidence of renewal of a policy previously delivered to the Collateral Agent) together with evidence reasonably satisfactory to the Collateral Agent of payment of the premium therefor.

 

 

 

 

 

Exhibit I

to Guarantee and

Collateral Agreement

 

SUPPLEMENT NO. __ dated as of [_______] (this “Supplement”), to the Amended and Restated Guarantee and Collateral Agreement dated as of December [__], 2006 (the “Guarantee and Collateral Agreement”),
among Denny’s, Inc., a California corporation, and 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, and Bank of America, N.A. (“Bank of America”), as Collateral Agent (in such capacity, the “Collateral
Agent”) for the Secured Parties (as defined herein).

 

A.  Reference is made to the Amended and Restated Credit Agreement dated as of December [__], 2006 (as amended, supplemented, waived or otherwise modified from time to time, the “Credit Agreement”), among (i) the Borrowers, (ii) Parent, Denny’s
Holdings and DFO, as Guarantors, (iii) the Lenders party thereto (the “Lenders”), and (iv) Bank of America, as Administrative Agent and Collateral Agent.

 

B.  Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the Guarantee and Collateral Agreement referred to therein.

 

C.  The Grantors have entered into the Guarantee and Collateral Agreement in order to induce the Lenders to make Loans and the Issuing Bank to issue Letters of Credit.  Section 7.16 of the Guarantee and Collateral Agreement provides that additional Subsidiaries may become Subsidiary Loan Parties under the Guarantee
and Collateral Agreement by execution and delivery of an instrument in the form of this Supplement.  The undersigned Subsidiary (the “New Subsidiary”) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Subsidiary Loan Party under the Guarantee and Collateral Agreement in order to induce the Lenders to make additional Loans and the Issuing Bank to issue additional Letters of
Credit and as consideration for Loans previously made and Letters of Credit previously issued.

 

Accordingly, the Collateral Agent and the New Subsidiary agree as follows:

 

SECTION 1.  In accordance with Section 7.16 of the Guarantee and Collateral Agreement, the New Subsidiary by its signature below becomes a Subsidiary Loan Party, a Grantor and a Guarantor under the Guarantee and Collateral Agreement with the same force and effect as if originally named therein as a Subsidiary Loan Party, a Grantor
and a Guarantor, and the New Subsidiary hereby (a) agrees to all the terms and provisions of the Guarantee and Collateral Agreement applicable to it as a Subsidiary Loan Party, Grantor and Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor and Guarantor thereunder are true and correct on and as of the date hereof.  In furtherance of the foregoing, the New Subsidiary, as security for the payment and performance in full of the Obligations
(as defined in the Guarantee and Collateral Agreement), does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties and their successors and assigns, a security interest in and lien on all of the New Subsidiary’s right, title and interest in and to the Collateral (as defined in the Guarantee and Collateral Agreement) of the New Subsidiary.  Each reference to a “Subsidiary Loan Party”, a “Grantor” or a “Guarantor”
in the Guarantee and Collateral Agreement shall be deemed to include the New Subsidiary.  The Guarantee and Collateral Agreement is hereby incorporated herein by reference.

 

 

 

 

 

 

SECTION 2.  The New Subsidiary represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

 

SECTION 3.  This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which, when taken together, shall constitute a single contract. This Supplement shall become effective when (a) the Collateral Agent shall have received
a counterpart of this Supplement that bears the signature of the New Subsidiary and (b) the Collateral Agent has executed a counterpart hereof.  Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.

 

SECTION 4.  The New Subsidiary hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct schedule of the location of any and all Article 9 Collateral of the New Subsidiary, (b) set forth on Schedule II attached hereto is a true and correct schedule of all the Pledged Securities of the
New Subsidiary and (c) set forth under its signature hereto, is the true and correct legal name of the New Subsidiary, its jurisdiction of formation and the location of its chief executive office.

 

SECTION 5.  Except as expressly supplemented hereby, the Guarantee and Collateral Agreement shall remain in full force and effect.

 

SECTION 6.  THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SUPPLEMENT 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.  Any provision of this Supplement 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 of the Guarantee and Collateral Agreement; 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 8.  All communications and notices hereunder shall be in writing and given as provided in Section 7.01 of the Guarantee and Collateral Agreement.

 

SECTION 9.  The New Subsidiary agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, disbursements and other charges of counsel for the Collateral Agent.

 

IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly executed this Supplement to the Guarantee and Collateral Agreement as of the day and year first above written.

 

 

 

 

 

	 	
[NAME OF NEW SUBSIDIARY]

	 	
by                                                         

	 	
Name:
	  
	 	
Title:
	  
	 	  	  
	 	  	  
	 	
Legal Name:

Jurisdiction of

Formation:

Location of Chief

Executive Office:

 

	 	
BANK OF AMERICA, N.A, as,

Collateral Agent,

	 	
by                                                         

	 	
Name:
	  
	 	
Title:
	  
	 	  	  

 

 

 

 

 

 

CERTIFICATE OF ACKNOWLEDGMENT

 

COMMONWEALTH OR STATE OF                                                          )

                                                                                                                          
)  ss.

COUNTY OF                                                                                                    )

On this ___ day of __________________, 20__, before me, the undersigned notary public, personally appeared ______________________, proved to me through satisfactory evidence of identification, which were _____________________________, to be the person whose name is signed on the preceding or attached document, and acknowledged to me that
(he)(she) signed it voluntarily for its stated purpose (as ______________ for __________________, a _______________________).

 

______________________________

(official signature and seal of notary)

My commission expires:

 

 

 

 

 

 

Schedule I

to Supplement No.___ to the

Guarantee and

Collateral Agreement

 

LOCATION OF ARTICLE 9 COLLATERAL

 

	
Description
	
Location

	  	  
	  	  

 

 

 

 

 

 

Schedule II to

Supplement No. __

to the Guarantee and

Collateral Agreement

 

PLEDGED STOCK

 

	
Number of

Issuer Certificate
	
Registered

Owner
	
Number and Class

of Equity Interest
	
Percentage of

Equity Interests

	  	  	  	  
	  	  	  	  

 

 

PLEDGED DEBT SECURITIES

 

	
Issuer
	
Principal

Amount
	
Date of Note
	
Maturity Date

	  	  	  	  
	  	  	  	  

OTHER PROPERTY

 

 

 

 

 

 

EXHIBIT II

to Guarantee and

Collateral Agreement

[FORM OF]

PERFECTION CERTIFICATE

 

Reference is made to the Amended and Restated Credit Agreement dated as of December [__], 2006 (as amended, supplemented, waived or otherwise modified from time to time, the “Credit Agreement”), among Denny’s, Inc. and Denny’s Realty, LLC, as Borrowers,
Denny’s Corporation, Denny’s Holdings, Inc. and DFO, LLC, as Guarantors, the Lenders party thereto and Bank of America, N.A., as Administrative Agent.  Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Credit Agreement or the Guarantee and Collateral Agreement referred to therein, as applicable.

 

The undersigned, Financial Officers and Legal Officers, respectively, of Denny's, Inc. and Denny's Realty, LLC, hereby certify to the Administrative Agent and each other Secured Party as follows:

 

1.           Names.  (a)   The exact legal name of each Grantor, as such name appears in its respective certificate of formation, is as follows:

 

(b)  Set forth below is each other legal name each Grantor has had in the past five years, together with the date of the relevant change:

 

(c)  Except as set forth in Schedule 1 hereto, no Grantor has changed its identity or corporate structure in any way within the past five years.  Changes in identity or corporate structure would include mergers, consolidations and acquisitions, as well as any change in the form, nature or jurisdiction of organization.  If
any such change has occurred, include in Schedule 1 the information required by Sections 1 and 2 of this certificate as to each acquiree or constituent party to a merger or consolidation.

 

(d)  The following is a list of all other names (including trade names or similar appellations) used by each Grantor or any of its divisions or other business units in connection with the conduct of its business or the ownership of its properties at any time during the past five years:

 

(e)  Set forth below is the Organizational Identification Number, if any, issued by the jurisdiction of formation of each Grantor that is a registered organization:

 

	
 

Grantor
	
 

Jurisdiction
	
Organizational

Identification Number

	  	  	  

(f)  Set forth below is the Federal Taxpayer Identification Number of each Grantor:

 

	
 

Grantor
	
Federal Taxpayer

Identification Number

	  	  

 

 

 

 

 

 

2.  Current Locations.  (a)  The chief executive office of each Grantor is located at the address set forth opposite its name below:

	
Grantor
	
Mailing Address
	
County
	
State

	  	  	  	  

 

(b)  Set forth below opposite the name of each Grantor are all locations where such Grantor maintains any books or records relating to any Accounts Receivable or General Intangibles (with each location at which Chattel Paper, if any, is kept being indicated by an “*”):

	
Grantor
	
Mailing Address
	
County
	
State

	  	  	  	  

 

(c)  The jurisdiction of formation of each Grantor that is a registered organization is set forth opposite its name below:

 

	
Grantor
	
Jurisdiction

	  	  

 

(d) Set forth below opposite the name of each Grantor are all the locations where such Grantor maintains any Inventory or Equipment or other Collateral not identified above:

	
Grantor
	
Mailing Address
	
County
	
State

	  	  	  	  

 

(e)  Set forth below opposite the name of each Grantor are all the places of business of such Grantor not identified in paragraph (a), (b), (c) or (d) above:

	
Grantor
	
Mailing Address
	
County
	
State

	  	  	  	  

(f) Set forth below opposite the name of each Grantor are the names and addresses of all Persons other than such Grantor that have possession of any of the Collateral of such Grantor:

	
Grantor
	
Mailing Address
	
County
	
State

	  	  	  	  

3.  Unusual Transactions.  All Accounts have been originated by the Grantors and all Inventory has been acquired by the Grantors in the ordinary course of business.

 

4.  File Search Reports.  File search reports have been obtained from each Uniform Commercial Code filing office identified with respect to such Grantor in Section 2 hereof, and such search reports reflect no liens against any of the Collateral other than
those permitted under the Credit Agreement.

 

5.  UCC Filings.  UCC Financing statements in substantially the form of Schedule 5 hereto have been prepared for filing in the proper Uniform Commercial Code filing office in the jurisdiction in which each Grantor is located and, to the extent any of the
Collateral is comprised of fixtures, timber to be cut or as extracted Collateral from the wellhead or minehead, in the proper local jurisdiction, in each case as set forth with respect to such Grantor in Section 2 hereof.

 

6.  Schedule of Filings.  Attached hereto as Schedule 6 is a schedule setting forth, with respect to the filings described in Section 5 above, each filing and the filing office in which such filing is to be made.

 

 

 

 

 

 

7.  Stock Ownership and other Equity Interests.  Attached hereto as Schedule 7 is a true and correct list of all the issued and outstanding stock, partnership interests, limited liability company membership interests or other equity interests of each of
the Grantors and each Subsidiary of each of the Grantors and the record and beneficial owners of such stock, partnership interests, membership interests or other equity interests. Also set forth on Schedule 7 is each equity investment of each of the Grantors that represents 50% or less of the equity of the entity in which such investment was made.

 

8.  Debt Instruments.  Attached hereto as Schedule 8 is a true and correct list of all promissory notes and other evidence of indebtedness held by each of the Grantors that are required to be pledged under the Guarantee and Collateral Agreement, including
all intercompany notes between each of the Grantors and any of their respective Subsidiaries and any Subsidiary of a Grantor and any other Subsidiary such Grantor.

 

9.  Advances.  Attached hereto as Schedule 9 is (a) a true and correct list of all advances made by each of the Grantors to any Subsidiary of such Grantor made by any Subsidiary of a Grantor to such Grantor or to any other Subsidiary of such Grantor (other
than those identified on Schedule 8), which advances will be on and after the date hereof evidenced by one or more intercompany notes pledged to the Collateral Agent under the Guarantee and Collateral Agreement and (b) a true and correct list of all unpaid intercompany transfers of goods sold and delivered by or to each of the Grantors or any Subsidiary of any Grantor.

 

10.  Mortgage Filings.  Attached hereto as Schedule 10 is a schedule setting forth, with respect to each Mortgaged Property, (a) the exact name of the Person that owns such property as such name appears in its certificate of incorporation or other organizational
document, (b) if different from the name identified pursuant to clause (a), the exact name of the current record owner of such property reflected in the records of the filing office for such property identified pursuant to the following clause and (c) the filing office in which a Mortgage with respect to such property must be filed or recorded in order for the Collateral Agent to obtain a perfected security interest therein.

 

11.  Intellectual Property.  Attached hereto as Schedule 11(A) in proper form for filing with the United States Patent and Trademark Office is a schedule setting forth all of each Grantor’s Patents, Patent Licenses, Trademarks and Trademark Licenses,
including the name of the registered owner, the registration number and the expiration date of each Patent, Patent License, Trademark and Trademark License owned by any Grantor. Attached hereto as Schedule 11(B) in proper form for filing with the United States Copyright Office is a schedule setting forth all of each Grantor’s Copyrights and Copyright Licenses, including the name of the registered owner, the registration number and the expiration date of each Copyright or Copyright License owned by any Grantor.

 

12.  Commercial Tort Claims.  Attached hereto as Schedule 12 is a true and correct list of commercial tort claims in excess of $1,000,000 held by any Grantor, including a brief description thereof.

 

13.  Deposit Accounts.  Attached hereto as Schedule 13 is a true and correct list of deposit accounts maintained by each Grantor, including the name and address of the depositary institution, the type of account, and the account number.

 

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned have duly executed this certificate on this [   ] day of [       ], 2006.

 

DENNY'S, INC.

 

by

 

Name:

Title:    [Financial Officer]

 

by

 

Name:

Title:    [Legal Officer]

 

DENNY'S REALTY, LLC

 

by

 

Name:

Title:    [Financial Officer]

 

by

 

Name:

Title:    [Legal Officer]

 

 

 

 

SCHEDULE 1

 

Changes in Corporate Identity

 

 

 

 

 

 

SCHEDULE 5

 

Form of UCC Financing Statement

 

 

 

 

 

 

SCHEDULE 6

 

Schedule of Filings

 

 

 

 

 

 

SCHEDULE 7

 

Stock Ownership and Other Equity Interests

 

 

 

 

 

 

SCHEDULE 8

 

Debt Instruments

 

 

 

 

 

 

SCHEDULE 9

 

Advances

 

 

 

 

 

 

SCHEDULE 10

 

Mortgage Filings

 

 

 

 

 

 

SCHEDULE 11(A)

 

Intellectual Property

 

 

 

 

 

 

SCHEDULE 11(B)

 

Intellectual Property

 

 

 

 

 

 

SCHEDULE 12

 

Commercial Tort Claims

 

 

 

 

 

 

SCHEDULE 13

 

Deposit Accounts

 

 

 

 

 

 

EXHIBIT III to

Guarantee and

Collateral Agreement

 

[FORM OF]

DEPOSIT ACCOUNT CONTROL AGREEMENT

 

DEPOSIT ACCOUNT CONTROL AGREEMENT dated as of [        ], (this “Agreement”), among [GRANTOR], a [              ] [corporation] [limited liability company]
(the “Grantor”), BANK OF AMERICA, N.A (“Bank of America”), as collateral agent (in such capacity, the “Collateral Agent”), and

 

[            ], a [              ] banking corporation (the “Bank”).

 

A.  Reference is made to (a) the Amended and Restated Credit Agreement dated as of December [__], 2006 (as amended, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”), among Denny’s, Inc., a California corporation
and 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”), the Lenders party thereto and Bank of America, as Administrative Agent, and (b) the Amended and Restated Guarantee and Collateral Agreement dated as of December [__], 2006 (as amended, supplemented, restated or otherwise modified from time to time, the “Guarantee and Collateral Agreement”),
among the Borrowers, Parent, Denny’s Holdings, DFO, each other Subsidiary Loan Party and Bank of America, as Collateral Agent.

 

B.  Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the Guarantee and Collateral Agreement.

 

C.  The Bank has established the following deposit accounts in the name of and for the benefit of the Grantor (the “Accounts”):

 

Account Number                                           Account
Name

 

D.  The Grantor has granted to the Collateral Agent for the benefit of the Secured Parties a security interest in the Accounts.

 

E.  The Collateral Agent, the Grantor and the Bank are entering into this Agreement to perfect the security interest of the Collateral Agent in the Accounts and to provide for certain additional rights and obligations with respect thereto.

 

Accordingly, the Collateral Agent, the Bank and the Grantor agree as follows:

 

 

 

 

 

 

SECTION 1.  The Accounts.  All parties agree that the Accounts are “deposit accounts” within the meaning of Article 9 of the Uniform Commercial Code of the State of New York (the “New
York UCC”).  All funds at any time on deposit in the Accounts shall be held by the Bank subject to the terms of this Agreement.  The Bank has not and will not agree with any third party to comply with instructions or other directions concerning the Accounts or the disposition of funds in the Accounts originated by such third party without the prior written consent of the Collateral Agent.

 

SECTION 2.  Subordination of Setoff, etc.  Except as otherwise provided in the Credit Agreement with respect to rights of set off available to the Bank in its capacity as a Lender (if and so long as the Bank is a Lender thereunder), the Bank waives all
banker’s liens, security interests, encumbrances, claims and rights of setoff it may have, now or in the future, against the Accounts or any funds in the Accounts other than in connection with the payment of the Bank’s customary fees and charges with respect to the maintenance of the Accounts and for the reversal of provisional credits.

 

SECTION 3.  Control.  If no Default Notice (as defined below) is in effect, the Bank may comply with instructions directing the disposition of funds in the Accounts originated by the Grantor or its authorized representatives.  Immediately following
an Event of Default and the delivery by the Collateral Agent of a written notice to the Bank that the Collateral Agent is thereby exercising exclusive control over the Accounts (such notice referred to herein as a “Default Notice”), (a) the Accounts shall, without further action on the part of the Grantor, the Collateral Agent or the Bank, be placed under the sole dominion and control of the Collateral Agent, who shall possess all right,
title and interest in all of the items from time to time in the Accounts, (b) neither the Grantor nor any person or entity claiming by, through or under the Grantor shall have any right, title or interest in, or control over the use of, or any right to withdraw any amount from, the Accounts, (c) the Bank shall be entitled to rely on, and shall act in accordance with, all instructions given to it by the Collateral Agent with respect to the Accounts and without further consent by the Grantor or any other person
and (d) the Bank will not (i) deliver to the Grantor or any affiliate, employee or agent of the Grantor or permit the Grantor or any affiliate, employee or agent of the Grantor to withdraw or transfer any cash, proceeds or other items held in the Accounts or (ii) take any instruction from the Grantor or any affiliate, employee or agent of the Grantor with respect to the Accounts or any cash, proceeds or other item held therein.  The Collateral Agent hereby agrees not to deliver a Default Notice unless
an Event of Default has occurred and is continuing.

 

SECTION 4. Statements, Confirmations and Notices of Adverse Claims.  The Bank will send copies of all statements concerning the Accounts to each of the Grantor and the Collateral Agent at its address for notices set forth below its signature hereto. Upon receipt
of written notice of any lien, encumbrance or adverse claim against an Account or any funds credited thereto, the Bank will promptly notify the Collateral Agent and the Grantor thereof.

 

SECTION 5.  Limited Responsibility of the Bank.  Except for acting on the Grantor’s instructions in violation of Section 3 above, the Bank shall have no responsibility or liability to the Collateral Agent for complying with instructions concerning
the Accounts from the Grantor or the Grantor’s authorized representatives which are received by the Bank before the Bank receives a Default Notice.  The Bank shall have no responsibility or liability to the Grantor for complying with a Default Notice or complying with instructions concerning the Accounts originated by the Collateral Agent, and shall have no responsibility to investigate the appropriateness of any such instruction or Default Notice, even if the Grantor notifies the Bank that the
Collateral Agent is not legally entitled to originate any such instruction or Default Notice.

 

 

 

 

 

 

SECTION 6. Indemnification of the Bank.  The Grantor agrees to indemnify against, and to hold the Bank, its directors, officers, agents and employees harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel
fees, charges and disbursements, incurred by or asserted against the Bank, its directors, officers, agents and employees arising out of, in any way connected with, or as a result of (i) the execution or delivery of this Agreement, the performance by the parties hereto of their respective obligations hereunder or the consummation of the transactions contemplated hereby, or (ii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not the Bank, its directors, officers,
agents or employees are a party thereto; provided that such indemnity shall not 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 the Bank.

 

SECTION 7.  Customer Agreement.  In the event of a conflict between this Agreement and any other agreement between the Bank and the Grantor, the terms of this Agreement will prevail.

 

SECTION 8. Termination.  This Agreement shall continue in effect until the Collateral Agent has notified the Bank in writing that this Agreement, or the Collateral Agent’s security interest in the Accounts, is terminated. Upon receipt of such notice, the obligations
of the Bank hereunder with respect to the operation and maintenance of the Accounts after the receipt of such notice shall terminate, the Collateral Agent shall have no further right to originate instructions concerning the Accounts and any previous Default Notice delivered by the Collateral Agent shall be deemed to be of no further force and effect.

 

SECTION 9. Complete Agreement.  This Agreement and the instructions and notices required or permitted to be executed and delivered hereunder set forth the entire agreement of the parties with respect to the subject matter hereof, and, subject to Section 7 above,
supersede any prior agreement and contemporaneous oral agreements of the parties concerning its subject matter.

 

SECTION 10. Waivers; Amendment.  (a)  No failure or delay by the Collateral Agent in exercising any right, power or remedy hereunder 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 Collateral Agent are cumulative and are not exclusive of any rights, powers or remedies it would otherwise have.  No waiver of any provision of this Agreement or consent to any departure therefrom shall in any event be effective unless the same shall be permitted by paragraph
(b) of this Section 10, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice or demand on any Bank in any case shall entitle any Banks 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 Grantor, the Bank and the Collateral Agent 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 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 12.  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 the Grantor, the Bank or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.

 

SECTION 13. 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.

 

SECTION 14.  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.  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 15.  Organization; Powers.  (a)(i) The Grantor hereby represents and warrants that it is a [corporation] [limited liability company] duly organized, validly existing and in good standing under the laws of [          ]
and has full corporate power and authority under such laws to execute, deliver and perform its obligations under this Agreement, (ii) the Bank hereby represents and warrants that it is a [corporation] duly organized, validly existing and in good standing under the laws of [          ] and has full corporate power and authority under such laws to execute, deliver and perform its obligations under this Agreement and (iii) the Collateral Agent hereby represents and
warrants that it is a national banking association duly organized, validly existing and in good standing under the laws of The United States of America and has full corporate power and authority under such laws to execute, deliver and perform its obligations under this Agreement and (b) each of the Grantor, the Bank and the Collateral Agent hereby represents and warrants that (i) its execution, delivery and performance of its obligations under this Agreement have been duly and effectively authorized by all necessary
corporate action and (ii) this Agreement has been duly executed and delivered by it and constitutes its valid and binding obligation, enforceable in accordance with its terms.

 

SECTION 16.  Independence.  The Bank shall be an independent contractor.  This Agreement does not give rise to any partnership, joint venture or fiduciary relationship.

 

SECTION 17.  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 18.  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 18.

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first written above.

 

	 	
[GRANTOR]

	 	
by

	 	  	                                                                                       
	 	  	
Name:

	 	  	
Title:

	 	  	
Address for Notices:

	 	
BANK OF AMERICA, N.A,

as Collateral Agent,

	 	
by

	 	  	                                                                                       
	 	  	
Name:

	 	  	
Title:

	 	  	
Address for Notices:

	 	
[BANK]

	 	
by

	 	  	                                                                                       
	 	  	
Name: 

	 	  	
Title: 

	 	  	
Address for Notices:ex10_1.htm

Exhibit 10.1

 

 

 

GRANITE CONSTRUCTION INCORPORATED

 

KEY MANAGEMENT DEFERRED COMPENSATION PLAN II

 

1. Introduction.

 

(a) The purpose of the Plan is to provide deferred compensation to a select group of executive employees and non-employee directors of the Company in recognition of their contributions to the Company and its affiliates.  This
document constitutes the written instrument under which the Plan is maintained.

 

(b) This Plan is the successor plan to the Granite Construction Incorporated Key Management Deferred Compensation Plan, as amended through December 31, 2004 and the Key Management Deferred Incentive Compensation Plan,
as amended through December 31, 2004 (collectively, the “Prior Plans”).  Effective December 31, 2004, the Prior Plans are frozen and no new deferrals or Company contributions will be made to them; provided, however, that any deferrals or Company contributions made under the Prior Plans before January 1, 2005 shall continue to be governed by the terms and conditions of the Prior Plans as in effect on December 31, 2004.

 

(c) Any deferrals and Company contributions made under the Prior Plans after December 31, 2004 are deemed to have been made under this Plan and all such deferrals and Company contributions shall be governed by the terms
and conditions of this Plan as it may be amended from time to time; provided, however, that deferrals and Company contributions made in 2005 through 2007 are governed by the terms and conditions of this Plan along with the terms and conditions set forth in the Appendix.

 

(d) This Plan is intended to be a plan that is unfunded and that is maintained by Granite Construction Incorporated primarily for the purpose of providing deferred compensation for a select group of management or highly
compensated employees within the meaning of the Employee Retirement Income Security Act and for the benefit of the Company’s non-employee directors.  This Plan also is intended to comply with the requirements of Section 409A of the Code.

 

(e) The Board approved the amendment and restatement of this Plan effective January 1, 2010.

 

2. Definitions.

 

(a) “Account” means as to any Participant the separate account(s) established and maintained by the Company in order to reflect his or her
interest in the Plan.  Each Participant’s Account or Accounts will reflect (i) allocations and earnings credited (or debited) thereto in accordance with Section 5 and (ii) amounts payable at different times and in different forms.

 

 

 

 

(b) “Beneficiary” means the person or persons designated by the Participant or by the Plan under Section 7(g) to receive payment of the Participant’s
Account in the event of the Participant’s death.

 

(c) “Board” means the Board of Directors of Granite Construction Incorporated.

 

(d) “Bonus” means any cash bonus earned by a Participant, including, but not limited to, (i) the cash bonus payable under the Granite Construction
Profit Sharing Cash Bonus Plan, if any and (ii) the Participant’s usual and customary annual cash incentive, if any.

 

(e) “Change in Control” means the effective date of any one of the following events but only to the extent that such change in control transaction
is a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company as defined in the regulations promulgated under Section 409A of the Code:

 

(i) an acquisition, consolidation, or merger of the Company with or into any other corporation or corporations, unless the stockholders of the Company retain, directly or indirectly, at least a majority of the beneficial
interest in the voting stock of the surviving or acquiring corporation or corporations; or

 

(ii) the sale, exchange, or transfer of all or substantially all of the assets of the Company to a transferee other than a corporation or partnership controlled by the Company or the stockholders of the Company; or

 

(iii) a transaction or series of related transactions in which stock of the Company representing more than thirty percent (30%) of the outstanding voting power of the Company is sold, exchanged, or transferred to any
single person or affiliated persons leading to a change of a majority of the members of the Board.

 

The Board shall have final authority to determine, in accordance with Section 409A of the Code, whether multiple transactions are related and the exact date on which a Change in Control has been deemed to have occurred under subsections (i), (ii), and (iii) above.

 

(f) “Code” means the Internal Revenue Code of 1986, as amended.

 

(g) “Committee” means the Compensation Committee of the Company’s Board of Directors and its delegatee, as applicable.

 

(h) “Company” means Granite Construction Incorporated, a Delaware corporation, and any other affiliated entity that is designated from time
to time by the Board.  As to a particular Participant, “Company” refers to the corporate entity which is his or her employer. For purposes of Sections 2(e) and (g), 5 and 10, “Company” refers only to Granite Construction Incorporated.

 

(i) “Disability” means that an individual is (i) unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months or (ii) by reason of any medically determinable physical o mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than three months under an accident and health plan covering employees of the Company.

 

 

2

 

(j) “Equity Incentive Plan” means the Granite Construction Incorporated Amended and Restated 1999 Equity Incentive Plan, as amended from time
to time.

 

(k) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

(l) “Identification Date” means each December 31.

 

(m) “Key Employee” means a Participant who, on an Identification Date, is:

 

(i) An officer of the Company having annual compensation greater than the compensation limit in Section 416(i)(1)(A)(i) of the Code, provided that no more than fifty officers of the Company shall be determined to be
Key Employees as of any Identification Date;

 

(ii) A five percent owner of the Company; or

 

(iii) A one percent owner of the Company having annual compensation from the Company of more than $150,000.

 

If a Participant is identified as a Key Employee on an Identification Date, then such Participant shall be considered a Key Employee for purposes of the Plan during the period beginning on the first April 1 following the Identification Date and ending on the next March 31.

 

(n) “Participant” means each employee and non-employee director of the Company who is designated as such from time to time by the Committee.

 

(o) “Performance Units” means an award granted pursuant to a Performance Unit Agreement under the Equity Incentive Plan.

 

(p) “Plan” means the Granite Construction Incorporated Key Management Deferred Compensation Plan II, as set forth in this instrument and as
hereafter amended.

 

(q) “Plan Year” means the calendar year.

 

(r) “Prior Plans” means the Granite Construction Incorporated Key Management Deferred Compensation Plan and the Granite Construction Incorporated
Key Management Deferred Incentive Compensation Plan.

 

(s) “Restricted Stock Units” means an award granted pursuant to a Restricted Stock Units Agreement under the Equity Incentive Plan.

 

 

3

 

(t) “Retirement” means an employee-Participant’s Separation from Service at or after (i) age 55 with ten years of service or (ii) age
65 with five years of service.  Retirement means a non-employee director-Participant’s Separation from Service at any time.

 

(u) “Separation from Service” means termination of employment with the Company, other than by reason of death.

 

(i) A Participant shall not be deemed to have Separated from Service if the Participant continues to provide services to the Company in a capacity other than as an employee and if the former employee is providing services
at an annual rate that is fifty percent (50%) or more of the services rendered, on average, during the immediately preceding three full calendar years of employment with the Company (or if employed by the Company less than three years, such lesser period).

 

(ii) A Participant shall be deemed to have Separated from Service if a Participant’s service with the Company is reduced to an annual rate that is less than twenty percent (20%) of the services rendered, on average,
during the immediately preceding three full calendar years of employment with the Company (or if employed by the Company less than three years, such lesser period).

 

(v) “Unforeseeable Emergency” means a severe financial hardship to the Participant or Beneficiary resulting from:

 

(i) An illness or accident of the Participant or Beneficiary, the Participant’s or Beneficiary’s spouse, or the Participant’s or Beneficiary’s dependent (as defined in Section 152(a) of the Code);
or

 

(ii) Loss of the Participant’s or Beneficiary’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance); or

 

(iii) Other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant or Beneficiary.

 

Hardship shall not constitute an Unforeseeable Emergency under the Plan to the extent that it is, or may be, relieved by:

 

(i) Reimbursement or compensation, by insurance or otherwise;

 

(ii) Liquidation of the Participant’s or Beneficiary’s assets to the extent that the liquidation of such assets would not itself cause severe financial hardship. Such assets shall include but not be limited
to stock options, Company stock, and 401(k) plan balances; or

 

(iii) Cessation of deferrals under the Plan.

 

 

4

 

An Unforeseeable Emergency under the Plan does not include (among other events):

 

(i) Sending a child to college; or

 

(ii) Purchasing a home.

 

3. Eligibility to Participate.  The Committee will, from time to time, designate Company employees to be Participants.  Each employee-Participant
selected by the Committee must belong to a select group of management or highly compensated employees of the Company. In addition, non-employee directors of the Company will become Participants upon notification of eligibility from the Committee.  Non-employee directors are not eligible for In-Service Distributions described in Section 7(c) or the survivor benefit under Section 8.

 

4. Vesting.  Each Participant will always be 100% vested in his or her Account; provided, however, that if a Participant is Separated from Service
for “Cause” (as such term is defined in Section 2.1(d) of the Equity Incentive Plan), the Participant will forfeit all amounts other than his or her own Bonus, Performance Units and Restricted Stock Units deferrals, if any.

 

5. Additions to Accounts.

 

(a) Participant Bonus Deferrals.  Each Participant may annually elect to defer the receipt of a whole percentage (up to 100% or such other percentage
as may be determined by the Board) of his or her Bonus(es).

 

(b) Participant Performance Unit Deferrals.  Effective June 15, 2007, each Participant who is at least 62 years of age on the last day of the
performance period applicable to of his or her Performance Units award may elect to defer the receipt of the 100% of the stock payable under his or her Performance Unit agreement.

 

(c) Participant Dividend Deferrals.  Each Participant may annually elect to defer the receipt of the full amount of the quarterly cash dividends
that are paid to the Participant under Section 13(a) of the Granite Construction Employee Stock Ownership Plan.

 

(d) Company Matching Contributions.  Effective January 1, 2008, the Company will credit, in accordance with the Company’s regular payroll
schedule, each employee-Participant's Account with an amount equal to six percent of the first $100,000 a Participant defers under Section 5(a) or Section 5(c) of the Plan in the applicable Plan Year.

 

(e) Deemed Investments.  For each Plan Year, the balance of each Participant’s Account (except that portion of the Account consisting of
deferred Performance Units or Restricted Stock Units awards) will be credited with earnings based upon the Participant’s investment allocation among a menu of investment options selected in advance by the Company’s Vice President and Director of Human Resources, Treasurer and Director of Compensation and Benefits (collectively, the “Investment Committee), which shall include a fixed-rate option.

 

 

5

 

(i) Investment options will be determined by the Investment Committee. The Investment Committee, in its sole discretion, shall be permitted to add or remove investment options from the Plan menu from time to time, provided
that any such additions or removals of investment options shall not be effective with respect to any period prior to the effective date of such change.

 

(ii) A Participant’s investment allocation constitutes a deemed, not actual, investment among the investment options comprising the investment menu. At no time shall a Participant have any real or beneficial ownership
in any investment option included in the investment menu, nor shall the Company or any trustee acting on its behalf have any obligation to purchase actual securities as a result of a Participant’s investment allocation. A Participant’s investment allocation shall be used solely for purposes of adjusting the value of a Participant’s Account.

 

A Participant shall specify an investment allocation for his Account, or components thereof, in accordance with procedures established by the Committee.  Allocation among the investment options must be designated in increments of 1%. The Participant’s investment allocation
will become effective in accordance with procedures established by the Committee.

 

A Participant may change an investment allocation, both with respect to future credits to the Plan and with respect to existing Accounts, and such changes shall become effective, in accordance with procedures adopted by the Committee.

 

(iii) If the Participant fails to make an investment allocation with respect to an Account, such Account shall be invested in an investment option, the primary objective of which is the preservation of capital, as determined
by the Investment Committee.

 

(iv) Dividend equivalents shall be credited in respect of the deferred Performance Units and Restricted Stock Units.  Such dividend equivalents shall be converted into additional deferred common stock equivalents
covered by the deferred awards by dividing (1) the aggregate amount or value of the dividends paid with respect to that number of stock equivalents covered by the deferred award by (2) the Fair Market Value (as defined in the Equity Incentive Plan) per share of Company common stock on the payment date for such dividend.  Any additional stock equivalents covered by the deferred Performance Units or Restricted Stock Units credited by reason of such dividend equivalents shall be deferred and subject to
all the terms and conditions of this Plan.

 

(v) In the event of any stock dividend, stock split, reverse stock split, recapitalization, merger, combination, exchange of shares, reclassification or similar change in the capital structure of the Company, appropriate
adjustments shall be made in the number and class of share equivalents subject to the deferred Performance Units and Restricted Stock Units awards.  Subject to Section 11(c) below, if a majority of the shares which are of the same class as the shares the underlie the share equivalents subject to deferred Performance Units and Restricted Stock Units awards are exchanged for, converted into, or otherwise become shares of another corporation (the “New Shares”), the Committee may unilaterally
amend the deferred awards to provide that shares that underlie the share equivalents subject to such deferred awards are New Shares.  In the event of any such amendment, the number of share equivalents subject to deferred awards shall be adjusted in a fair and equitable manner as determined by the Committee, in its discretion.  Notwithstanding the foregoing, any fractional share equivalents resulting from an adjustment pursuant to this Section 5(e)(v) shall be rounded down to the nearest whole
share equivalent.  The adjustments determined by the Committee pursuant to this Section 5(e)(v) shall be final, binding and conclusive.

 

 

6

 

(f) Non-Employee Director Deferrals.  Each Participant who is a non-employee director may annually elect to defer the receipt of a whole percentage
(up to 100% or such other percentage as may be determined by the Board) of his or her annual retainer and meeting fees.

 

(g) Participant Restricted Stock Unit Deferrals.  Effective for Restricted Stock Units granted and earned on or after January 1, 2010, each Participant
may elect to defer the receipt of a whole percentage (up to 100% or such other percentage as may be determined by the Board) of his or her Restricted Stock Units award under his or her Restricted Stock Units agreement.

 

6. Deferral Elections.  Each Participant must complete a deferral form for each Plan Year.  To be effective, each such deferral form
must satisfy the following rules:

 

(a) Content and Form Requirements.  The deferral election form must be signed and dated by the Participant, and must specify the form(s) of payment
and date(s) of distribution of the Participant’s Account.  A Participant’s deferral election is irrevocable on the first day of the Plan Year following the Plan Year in which it is made; provided, however, that a Participant’s election shall be suspended for the remainder of any Plan Year in which the such Participant receives a distribution on account of an Unforeseeable Emergency and thereafter the Participant must submit a new deferral election to resume participant in the Plan;
provided further, however, that a Participant’s deferral election will terminate on the date the Participant Separates from Service.

 

(b) Timing of Deferral Elections.  Except as provided in subsections (i) through (iii) below, a Participant’s deferral election must be
received by the Committee before the beginning of the Plan Year in which the amount to be deferred is earned.  Any such deferral election must be accompanied by an election as to the time and form of payment of the Participant’s Account.

 

(i) A Participant’s election to defer Performance Units must be received by the Committee at least six months prior to the date on which the Performance Units are no longer subject to a substantial risk of forfeiture
(the vesting date); provided, however, that such election shall be made prior to the date that the Performance Units are substantially certain to be paid or the number of Performance Units is readily ascertainable.

 

(ii) A Participant’s deferral election may be received by the Committee both (i) within 30 days of the date on which the employee is notified of his or her eligibility to participate in the Plan, and (ii) before
the date on which the amount subject to the deferral election is earned.

 

 

7

 

(iii) To the extent permitted by the Committee, a Participant’s deferral election pursuant to which the Participant defers “performance-based compensation” as defined in Section 409A(a)(4)(b)(iii)
of the Code and the regulations promulgated thereunder, may be received by the Committee no later than six months before the end of the applicable performance period.

 

(c) Special Distribution Election on or before December 31, 2007.  Each Participant may make a special distribution election to receive a distribution
of their Accounts in calendar year 2008 or later, provided that the distribution election is made at least twelve months in advance of the newly elected distribution date (and the previously scheduled distribution date, if any) and the election is made no later than December 31, 2007.  An election made pursuant to this Section 6(c) shall be subject to any special administrative rules imposed by the Committee including rules intended to comply with Section 409A of the Code, Notice 2005-1, A-19 and any
subsequent guidance published thereunder.  No election under this Section 6(c) shall (i) change the payment date of any distribution otherwise scheduled to be paid in 2007 or cause a payment to be paid in 2007, or (ii) be permitted after December 31, 2007.

 

7. Distribution of Accounts.

 

(a) Distribution prior to Retirement.  If a Participant Separates from Service prior to the time such Participant is eligible for Retirement
and not on account of his or her death or Disability, the Participant will receive a distribution of the balance of his or her Account in a lump sum at least six months (but not more than seven months) following the date he or she Separates from Service.

 

(b) Form of Distribution Upon Retirement.  Subject to the provisions of this Section 7 and Section 10, each Participant who Separates
from Service on account of Retirement, Disability or death will receive a distribution of the balance of his or her Account in the form specified in the Participant’s election form, which may be a lump sum payment and/or annual install­ments of substantially equal amounts payable over a period of years certain not to exceed ten.  Distributions made pursuant to this Section 7(b) shall be made, or shall begin, at least six months (but not more than seven months) following the date the Participant
Separates from Service on account of Retirement, Disability or death.  Participants who elect to defer Restricted Stock Units may make a separate distribution election applicable only  to the deferred Restricted Stock Units.  Distribution elections made with respect to distributions made on account of Retirement are irrevocable when made.

 

(c) Form of In-Service Distribution.

 

(i) Subject to the provisions of this Section 7 and Section 10, each Participant may elect to receive one or more in-service distributions of his or her Accounts in the form specified in the Participant’s election
form, which may be a lump sum payment and/or annual installments of substantial equal amounts payable over a period of years certain not to exceed ten.  Any such in-service distribution may be scheduled for any month and year prior to the Participant’s Separation from Service (as described below) and must be scheduled at least two years from the year in which the deferred amount is earned.  Any in-service distribution will commence on the first day of the month following the month designated
by the Participant as the distribution month.  Notwithstanding the foregoing, in-service distributions shall be made only prior to Separation from Service.  To the extent that a Participant Separates from Service, a distribution of the Participants Account(s) shall be made in accordance with Section 7(a) or Section 7(b); provided, however, that if an in-service distribution is an installment distribution and if it is in pay status, then such in-service distribution installments shall be paid
in accordance with the Participant’s in-service distribution election and not in accordance with Section 7(a) or Section 7(b).

 

 

8

 

(ii) A Participant who elects an in-service distribution may make a re-deferral election with respect to the in-service distribution election if the following conditions are met:  (1) the re-deferral election
does not take effect until twelve months after the date the re-deferral election is made, (2) the new in-service distribution date is at least five years after the scheduled distribution date in effect on the date the re-deferral election is made, and (3) the re-deferral election is made not less than twelve months prior to the scheduled distribution date in effect on the date the re-deferral election is made.

 

(d) Rules for Installment Distributions.  If, at any time after installment distributions have begun, the amount of any installment would be
less than $1,000, the remainder of the Participant’s Account will be distributed in a lump sum.  For purposes of the Plan, installment payments shall be treated as a single distribution under Section 409A of the Code.  Participant Accounts will continue to be credited with earnings under Section 5(e) while they are in pay status.

 

(e) Special Rule for Separation from Service for “Cause”.  If a Participant is Separated from Service for “Cause” (as
such term is defined in Section 2.1(d) of the Equity Incentive Plan) and the Participant forfeits all amounts other than his or her own Bonus, Performance Units and Restricted Stock Units deferrals, if any, then notwithstanding Sections 6 and 7, distribution of his or her Bonus, Performance Units and Restricted Stock Units deferrals, if any, will be made in a lump sum at least six months (but not more than seven months) following the date he or she Separates from Service.

 

(f) Default Distribution Election.  In the absence of an effective distribution election as to the timing and/or form of distribution of a Participant’s
Account, including but not limited to a Participant’s failure to make a distribution election in accordance with Section 6(c) above, distribution of the Participant’s Account shall be made in a lump sum at least six months (but not more than seven months) following the date he or she Separates from Service for any reason.

 

(g) Delayed Distribution to Key Employees.  Notwithstanding any other provision of Section 7 to the contrary, a distribution made on account
of Separation from Service to a Participant who is identified as a Key Employee shall be delayed for a minimum of six months following the Participant’s Separation from Service.  The determination of which Participants are Key Employees shall be made by the Committee in its sole discretion in accordance with Section 2(m) of the Plan and Sections 416(i) and 409A of the Code and the regulations promulgated thereunder.

 

 

9

 

(h) Beneficiary Designation.  Each Participant must designate a Beneficiary to receive a distribution of his or her Account if the Participant
dies before it is distributed to him or her.  A Beneficiary designation form must be signed, dated and delivered to the Committee to become effective.  In the absence of a valid or effective Beneficiary designation, the Participant’s surviving spouse will be his or her Beneficiary or if there is no such spouse, the Participant’s children in equal shares, or if none, the Participant’s estate will be his or her Beneficiary.

 

(i) Performance Units and Restricted Stock Units Distributions.  Notwithstanding any other provision of the Plan to the contrary, that portion
of the Participant’s Account consisting of Performance Units or Restricted Stock Units deferrals shall be distributed in shares of the Company’s Common Stock.

 

(j) Hardship Distributions.  In the event of an Unforeseeable Emergency, a Participant may apply to the Committee for a distribution of part
or all of his or her Account prior to the date that it would otherwise be distributed under this Section 7.  If the Committee approves such an application, it will make such distribution as a lump sum payment. Payments due to a Participant’s Unforeseeable Emergency shall be permitted only to the extent reasonably required to satisfy the Participant’s need.

 

(k) Prohibition on Acceleration.  Notwithstanding any other provision of the Plan to the contrary, no distribution shall be made from the Plan
that would constitute an impermissible acceleration of payment as defined in Section 409A(a)(3) of the Code and the regulations promulgated thereunder.

 

8. Survivor Benefit.  In addition to any other benefit provided under the Plan, the Beneficiary of an employee-Participant who dies prior to
his or her Separation from Service will be entitled to receive a payment equal to the Participant’s annualized salary in the year of death. Such payment will be made in a single lump sum within ninety days of the employee-Participant’s death.

 

9. Withholding.  The Company will withhold from any Plan distribution all required federal, state, local and other taxes and any other payroll
deductions required.  Each Participant agrees as a condition of participation in the Plan to have withheld annually from his or her salary such amounts as are necessary to satisfy all applicable taxes.

 

10. Administration.  The Plan is administered and interpreted by the Committee.  The Committee has delegated to the Company’s
Vice President and Director of Human Resources its delegable responsibilities under the Plan.  The Committee (and its delegatee) has the full and exclusive discretion to interpret and administer the Plan.  All actions, interpretations and decisions of the Committee (and its delegatee) are conclusive and binding on all persons, and will be given the maximum possible deference allowed by law.  The Company agrees to indemnify and hold harmless the members of the Committee and any employee
to whom the Committee delegates any responsibility under the Plan.

 

 

10

 

11. Amendment or Termination.

 

(a) Amendment or Suspension.  The Company reserves the right, in its sole and unlimited discretion, to amend the Plan at any time, without prior notice
to any Participant or Beneficiary.  The Board may, at any time, suspend the Plan.  Upon such suspension, Participants’ Accounts shall be paid in accordance with Section 7 of the Plan.

 

(b) Termination in General.  The Board may terminate the Plan at any time and in the Board’s discretion the Accounts of Participants may
be distributed within the period beginning twelve months after the date the Plan was terminated and ending twenty-four months after the date the Plan was terminated, or pursuant to Section 7, if earlier.  If the Plan is terminated and Accounts are distributed, the Company shall terminate all account balance non-qualified deferred compensation plans with respect to all participants and shall not adopt a new account balance non-qualified deferred compensation plan for at least three years after the date
the Plan was terminated.

 

(c) Change in Control.  The Board, in its discretion, may terminate the Plan thirty days prior to or within twelve months following a Change
in Control and distribute the Accounts of the Participants within the twelve-month period following the termination of the Plan.  If the Plan is terminated and Accounts are distributed, the Company shall terminate all substantially similar non-qualified deferred compensation plans sponsored by the Company and all of the benefits of the terminated plans shall be distributed within twelve months following the termination of the plans.

 

(d) Dissolution or Bankruptcy.  The Board, in its discretion, may terminate the Plan upon a corporate dissolution of the Company that is taxed
under Section 331 of the Code or with the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1(A), provided that the Participants’ Accounts are distributed and included in the gross income of the Participants by the latest of (i) the calendar year in which the Plan terminates or (ii) the first calendar year in which payment of the Accounts is administratively practicable.

 

12. Claims and Review Procedure.

 

(a) Informal Resolution of Questions.  Any Participant or Beneficiary who has questions or concerns about his or her benefits under the Plan
is encouraged to communicate with the Committee.  If this discussion does not give the Participant or Beneficiary satisfactory results, a formal claim for benefits may be made within one year of the event giving rise to the claim in accordance with the procedures of this Section 11.

 

(b) Formal Benefits Claim – Review by Committee.  A Participant or Beneficiary may make a written request for review of any matter concerning
his or her benefits under this Plan.  The claim must be addressed to the Committee, Key Management Deferred Compensation Plan II, Granite Construction Incorporated, 585 West Beach Street, PO Box 50085, Watsonville, California 95077.  The Committee shall decide the action to be taken with respect to any such request and may require additional information if necessary to process the request.  The Committee shall review the request and shall issue its decision, in writing, no later
than 90 days after the date the request is received, unless the circumstances require an extension of time.  If such an extension is required, written notice of the extension shall be furnished to the person making the request within the initial 90-day period, and the notice shall state the circumstances requiring the extension and the date by which the Committee expects to reach a decision on the request.  In no event shall the extension exceed a period of 90 days from the end of the initial
period.

 

 

11

 

(c) Notice of Denied Request.  If the Committee denies a request in whole or in part, it shall provide the person making the request with written
notice of the denial within the period specified in Section 11(b) above.  The notice shall set forth the specific reason for the denial, reference to the specific Plan provisions upon which the denial is based, a description of any additional material or information necessary to perfect the request, an explanation of why such information is required, and an explanation of the Plan’s appeal procedures and the time limits applicable to such procedures, including a statement of the claimant’s
right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review.

 

(d) Appeal to Committee.

 

(i) A person whose request has been denied in whole or in part (or such person’s authorized representative) may file an appeal of the decision in writing with the Committee within 60 days of receipt of the notification
of denial.  The appeal must be addressed to:  Committee, Key Management Deferred Compensation Plan II, Granite Construction Incorporated, 585 West Beach Street, PO Box 50085, Watsonville, California 95077.  The Committee, for good cause shown, may extend the period during which the appeal may be filed for another 60 days.  The appellant and/or his or her authorized representative shall be permitted to submit written comments, documents, records and other information relating
to the claim for benefits.  Upon request and free of charge, the applicant should be provided reasonable access to and copies of, all documents, records or other information relevant to the appellant’s claim.

 

(ii) The Committee’s review shall take into account all comments, documents, records and other information submitted by the appellant relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination.  The Committee shall not be restricted in its review to those provisions of the Plan cited in the original denial of the claim.

 

(iii) The Committee shall issue a written decision within a reasonable period of time but not later than 60 days after receipt of the appeal, unless special circumstances require an extension of time for processing,
in which case the written decision shall be issued as soon as possible, but not later than 120 days after receipt of an appeal.  If such an extension is required, written notice shall be furnished to the appellant within the initial 60-day period.  This notice shall state the circumstances requiring the extension and the date by which the Committee expects to reach a decision on the appeal.

 

(iv) If the decision on the appeal denies the claim in whole or in part, written notice shall be furnished to the appellant.  Such notice shall state the reason(s) for the denial, including references to specific
Plan provisions upon which the denial was based.  The notice shall state that the appellant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits.  The notice shall describe any voluntary appeal procedures offered by the Plan and the appellant’s right to obtain the information about such procedures.  The notice shall also include a statement of the appellant’s
right to bring an action under Section 502(a) of ERISA.

 

 

12

 

(v) The decision of the Committee on the appeal shall be final, conclusive and binding upon all persons and shall be given the maximum possible deference allowed by law.

 

(e) Exhaustion of Remedies.  No legal or equitable action for benefits under the Plan shall be brought unless and until the claimant has submitted
a written claim for benefits in accordance with Section 11(b) above, has been notified that the claim is denied in accordance with Section 11(c) above, has filed a written request for a review of the claim in accordance with Section 11(d) above, and has been notified in writing that the Committee has affirmed the denial of the claim in accordance with Section 11(d) above; provided, however, that an action for benefits may be brought after the Committee has failed to act on the claim within the time prescribed
in Section 11(b) and Section 11(d), respectively.

 

13. Source of Payments.

 

(a) No Plan Assets.  Subject to Section 12(b), all cash payments under the Plan will be paid in cash from the general funds of the Company.  No
separate fund will be established under the Plan, and the Plan will have no assets.  Any right of any person to receive any payment under the Plan is no greater than the right of any other unsecured creditor of the Company.  The Plan constitutes a mere promise by the Company to pay benefit payments in the future and is unfunded for purposes of both Title I of ERISA and the Code.

 

(b) Rabbi Trust.  The Company will (i) establish a trust, (ii) fund such trust in the event that it determines that a Change in Control
is imminent, and (iii) arrange to have such trust assume its obligations to pay benefits under the Plan.  Any trust created by the Company to assist it in meeting its obligations under the Plan will conform to the terms of the model trust as described in Revenue Ruling 92-64.

 

14. Inalienability.  A Participant’s rights to benefits under the Plan are not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or the Participant’s Beneficiary.  Notwithstanding the foregoing, the procedures established by the Company for the determination of the qualified status of domestic relations orders and for making distributions under qualified domestic relations orders, as provided in Section 206(d) of ERISA, shall apply to the Plan, to the extent pertinent.  Amounts awarded to an alternate payee under
a qualified domestic relations order shall be distributed in the form of a lump sum distribution as soon as administratively feasible following the determination of the qualified status of the domestic relations order.

 

15. Applicable Law.  The provisions of the Plan will be construed, administered and enforced in accordance with ERISA and, to the extent applicable,
the laws of the State of California.

 

 

13

 

16. Severability.  If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability will not affect any other
provision of the Plan, and the Plan will be construed and enforced as if such provision had not been included.

 

17. No Employment Rights.  Neither the adoption nor maintenance of the Plan will be deemed to constitute a contract of employment between the
Company and any employee, or to be a consideration for, or an inducement or condition of, any employment.  Nothing contained in this Plan will be deemed to give an employee the right to be retained in the service of the Company or to interfere with the right of the Company to discharge, with or without cause, any employee at any time.

 

18. Status of Plan as ERISA “Top Hat” Plan.  The Plan is intended to be an unfunded plan maintained primarily for the purpose of
providing deferred compensation for a select group of management and highly compensated employees and will be administered and construed to effectuate this intent.  Accordingly, the Plan is subject to Title I of ERISA, but is exempt from Parts 2, 3 and 4 of such Title.

 

19. Execution.

 

IN WITNESS WHEREOF, Granite Construction Incorporated, by its duly authorized officers, has executed the Plan on the date(s) indicated below.

 

GRANITE CONSTRUCTION INCORPORATED

 

By__/s/ William G. Dorey                                                             

        William G. Dorey

 

         Its Chief Executive Officer

Dated       8/31/09                                                             

 

By   /s/ Michael Futch                                                             

    Michael Futch

 

     Its VP, General Counsel & Secretary

 

Dated      8/31/09                                                             

 

 

14

 

 

APPENDIX

 

Deferrals and Company contributions made in Plan Years 2005 through 2007 are governed by the terms and conditions of the Plan along with the terms and conditions set forth in this Appendix.  Defined terms not defined in this Appendix A but defined in the Plan will have the same definition as in the Plan.

 

1. Definitions.

 

(a) “Compensation” means “compensation” (as defined in the Company’s tax-qualified retirement plans) in excess of $210,000
in 2005 (as indexed under Section 401(a)(17) of the Code) but not in excess of $310,000 in 2005 (as indexed from time to time by the Committee).

 

(b) “Excess Cash Incentive” means Compensation that exceeds a Participant’s usual and customary Compensation (as determined by the Committee).

 

2. Additions to Accounts.

 

(a) Participant Cafeteria Plan Deferrals.  Effective for Plan Years 2005 through 2007, under rules established by the Committee, each Participant
may elect to defer the amount payable to the Participant under the Company’s “cafeteria plan” under Section 125 of the Code.

 

(b) Participant Profit Sharing Deferrals.  Effective for Plan Years 2005 through 2007, each Participant may elect to defer an amount up to 85%
of the Participant's cash bonus (in 5% increments) payable under the Granite Construction Profit Sharing Cash Bonus Plan.

 

(c) Company Matching Contributions.  Effective for Plan Years 2005 through 2007, the Company will annually credit each Participant's Account
with an amount equal to a percentage of the Compensation deferred by the Participant, which percentage will equal the matching contribution percentage determined under the Granite Construction Profit Sharing and 401(k) Plan for such Plan Year.

 

(d) Company Discretionary Contributions.  Effective for Plan Years 2005 through 2007 in which a Participant elects to defer a portion of his
or her Compensation, the Company will credit each Participant's Account with an amount equal to a percentage of the Participant's Compensation that is equal to the total discretionary contribution percentage determined by the Board for the Granite Construction Profit Sharing and 401(k) Plan and the Granite Construction Employee Stock Ownership Plan with respect to the Plan Year for which such Compensation was deferred.

 

(e) Hypothetical Investment Experience.  Effective for Plan Years 2005 through 2007, the balance of each Participant’s Excess Cash Incentive
Compensation Account will be credited quarterly with hypothetical earnings (or losses) equal to an amount determined by the Committee as though such Account had been invested in shares of Company common stock for such period.

 

 

1

 

3. Deferral Elections.

 

(a) Content and Form Requirements.  Effective for Plan Years 2005 through 2007, each annual Bonus deferral must be for a minimum amount of at
least $1,000 and must be for a period of at least five years.  Also effective for Plan Years 2005 through 2007, a Participant may extend (but not reduce) the length of his or her deferral period for five-year periods, so long as such extensions are made at least twelve months prior to an otherwise schedule distribution date.

 

(b) Special Elections in 2005 regarding Deferrals.  In accordance with IRS Notice 2005-1, A-20, (i) on or before March 15, 2005, Participants
were permitted to defer Compensation earned on or before December 31, 2005.  Elections made pursuant to this Section 3(b) are irrevocable and subject to any special administrative rules imposed by the Committee consistent with Section 409A of the Code and Notice 2005-1, A-20.  No special election under this Section 3(b) shall be permitted after December 31, 2005.

 

(c) Distribution Election.  Effective for Plan Years 2005 through 2007, any deferral election under Section 6 of the Plan also shall include
an election as to the time and form of payment of the Compensation deferred and Company contributions attributable to services performed in the Plan Year following the Plan Year in which the distribution election is made.  Participants shall be permitted to make a separate distribution election with respect to each Plan Year.  A distribution election is irrevocable on the first day of the Plan Year following the Plan Year in which it is made.

 

(d) Special Distribution Election on or before December 31, 2006.  Certain Participants who are identified by the Committee in its sole discretion
may make a special distribution election to receive a distribution of their Accounts in calendar year 2007 or later, provided that the distribution election is made at least twelve months in advance of the newly elected distribution date (and the previously scheduled distribution date, if any) and the election is made no later than December 31, 2006.  An election made pursuant to this Section 3(d) shall be subject to any special administrative rules imposed by the Committee including rules intended
to comply with Section 409A of the Code and Notice 2005-1, A-19.  No election under this Section 3(d) shall (i) change the payment date of any distribution otherwise scheduled to be paid in 2006 or cause a payment to be paid in 2006, or (ii) be permitted after December 31, 2006.

 

4. Distribution of Accounts.

 

(a) Distribution upon Retirement, Disability or Death.  Effective for Plan Years 2005 through 2007, if a Participant Separates from Service on
account of Retirement, Disability or death, the Participant will receive a distribution of the balance of his or her Account, in accordance with his or her election described in Section 7(b) of the Plan, at least six months (but not more than seven months) following the date he or she Separates from Service; provided, however, that a Participant may elect, in accordance with Section 6 of the Plan, to receive or begin receiving his or her Account balance 13 months, 25 months, 37 months, 49 months or 61 months
following the date he or she Separates from Service.

 

(b) Delayed Distribution of Excess Cash Incentive Account.  Effective for Plan Years 2005 through 2007, notwithstanding any other provision of
Section 7 of the Plan to the contrary, a Participant’s Excess Cash Incentive Account must be deferred for a minimum of five years and distribution of this account shall be delayed until such minimum deferral period has been satisfied regardless of the Participant’s distribution election.  If distribution of the Excess Cash Incentive Account is delayed in accordance with this Section 4(b), then any payment that otherwise would have been made during such five-year deferral period, shall be
made in one lump sum payment within thirty days following the date that is at least five years following the date that the Excess Cash Incentive was deferred.
                                          

 

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00164-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00164-of-00352.parquet"}]]