GUARANTY AND SECURITY AGREEMENT
This Guaranty and Security Agreement (this "Agreement") is
entered into as of January 16, 1997, by and among Denny's, Inc., a Delaware
corporation ("Denny's"), El Pollo Loco, Inc., a Delaware corporation, DFO, Inc.,
a Delaware corporation, Flagstar Enterprises, Inc., an Alabama corporation, and
Quincy's Restaurants, Inc., an Alabama corporation (collectively, the
"Guarantors"), and Xxxxx X. Xxxxxxx (the "Executive").
Recitals
A. The Executive has entered into that certain Employment
Agreement with Flagstar Companies, Inc., a Delaware corporation (the "Company")
dated as of January 10, 1995 as amended by that certain First Amendment to
Employment Agreement dated as of February 27, 1995 and by that certain Second
Amendment to Employment Agreement dated as of December 31, 1996, (as amended,
the "Employment Agreement").
B. It is a requirement of the Employment Agreement that
Denny's execute and deliver this Agreement.
C. Each Guarantor is an indirect wholly-owned subsidiary of
the Company. The Executive, as the chairman, president and chief executive
officer of the Company, provides substantial and meaningful services and
guidance to the Guarantors, and it is to the advantage of the Guarantors that
the Company continue to employ the Executive.
X. Xxxxx'x has opened an interest bearing deposit account
(such account, and any successor or replacement account from time to time, being
the "Security Account") with Bank of America National Trust and Savings
Association, (the "Bank") at its office at Concord, California Account No.
12338-62163, in the amount of $5,000,000. The account shall bear interest
payable at such time as Denny's and the Bank shall agree and after an Event of
Default (as hereinafter defined) at such time as Executive and Bank shall agree.
Agreement
NOW, THEREFORE, in consideration of the above recitals and the
mutual covenants hereinafter set forth, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, terms defined
in the Employment Agreement and used herein shall have the meanings given them
in the Employment Agreement. Unless otherwise defined herein or in the
Employment Agreement, terms defined in Division 9 of the Uniform Commercial Code
in effect in the State of California (the "Code") are used herein as therein
defined.
"Obligations": any and all monetary obligations of the Company
in respect of (i) retention bonuses, direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, which may arise under,
out of, or in connection with Section 3(k) of the Employment Agreement and (ii)
payments which may become due under Section 5(b) of the Employment Agreement.
2. Guaranty. (a) The Guarantors hereby unconditionally and
irrevocably jointly and severally guarantee the full and prompt payment and the
punctual performance, when due and in accordance with the terms and conditions
of the Employment Agreement, of the Obligations, whether or not from time to
time reduced or extinguished or hereafter increased or incurred, whether or not
recovery may be or hereafter may become barred by any statute of limitations,
whether enforceable or unenforceable as against the Company, and whether or not
such action is taken against the Company, now or hereafter existing, or due or
to become due (all such Obligations being hereafter referred to as the
"Guarantied Obligations"). This is a guaranty of payment and performance and not
of collection only.
(b) The Guarantors further agree, jointly and severally, to
pay to the Executive upon written demand all reasonable out-of-pocket costs and
expenses and reasonable attorneys' fees and expenses paid or incurred by the
Executive in endeavoring to collect all or any part of the Guarantied
Obligations after the same become due and owing from, or in prosecuting any
action against, any Guarantor, or in connection with the failure by any
Guarantor to perform or observe any of the provisions hereof. Such costs, fees
and expenses shall also be Guarantied Obligations hereunder.
3. Waivers. Each Guarantor hereby absolutely, unconditionally
and irrevocably waives and agrees not to assert or take advantage of:
(a) any right to require the Executive to proceed against or
exhaust his recourse against the Company or any other person or any security or
collateral securing the Guarantied Obligations at any time or to pursue any
other remedy in his power against any person before being entitled to payment
from or performance by such Guarantor of the Guarantied Obligations or before
proceeding against such Guarantor or any other person;
(b) the defense of the statute of limitations in any action
hereunder or for the collection or performance of any Guarantied Obligation;
(c) any defense that may arise by reason of (i) the
incapacity, lack of authority, death or disability, as applicable, of the
Company, such Guarantor or any other or others, (ii) the revocation or
repudiation hereof by such Guarantor or the revocation or repudiation of the
Employment Agreement by the Company or any other or others, (iii) the failure of
the Executive to file or enforce a claim against the estate (either in
administration, bankruptcy or any other proceeding) of the Company or any other
or others, (iv) the unenforceability in whole or in part of the Employment
Agreement or any other instrument, document or agreement, (v) the Executive's
election, in any proceeding by or against the Company or any other party under
the federal Bankruptcy Code, of the application of Section 1111(b)(2) of the
federal Bankruptcy
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Code, or (vi) any borrowing or grant of a security interest under Section 364 of
the federal Bankruptcy Code;
(d) presentment, demand for payment, protest, notice of
discharge, notice of acceptance of this Agreement or incurrence of, or any
default in connection with, the indebtedness guarantied hereunder, and
indulgences and notices of any other kind whatsoever, including without
limitation notice of the disposition of any collateral for the Guarantied
Obligations;
(e) any defense based upon an election of remedies (including,
if available, an election to proceed by non-judicial foreclosure) or other
action or omission by the Executive or any other person or entity which destroys
or otherwise impairs any indemnification, contribution or subrogation rights of
such Guarantor or the right of such Guarantor, if any, to proceed against the
Company for reimbursement, or any combination thereof;
(f) any defense based upon any taking, modification or release
of any collateral or guarantees for the Guarantied Obligations, or any failure
to create or perfect any security interest in, or the taking of or failure to
take any other action with respect to, any collateral securing payment or
performance of the Guarantied Obligations;
(g) any right to assert any counter-claim or cross-claim or to
assert any rights or defenses based upon any right to offset or claimed offset
by such Guarantor with respect to this Agreement against any indebtedness or
obligation including, without limitation, the Guarantied Obligations now or
hereafter owed to such Guarantor by the Company, the Executive or any other
person; or
(h) any rights or defenses based upon any rights or defenses
of the Company to the Guarantied Obligations, or any of them (including, without
limitation, the failure or value of consideration, any statute of limitations,
accord and satisfaction, and the insolvency of the Company); it being intended
that such Guarantor shall remain liable as principal, to the extent set forth
herein, until the full and final payment and performance of all of the
Guarantied Obligations notwithstanding any act, omission or thing which might
otherwise operate as a legal or equitable discharge of such Guarantor, the
Company or any other person; or
(i) any other action, event or precondition to the enforcement
of this Agreement or the performance by such Guarantor of the obligations
hereunder (other than the occurrence of an Event of Default (as defined in
Section 14 below)).
4. Creation of Security Interest. Denny's hereby assigns,
pledges and grants to the Executive a security interest in and lien on all of
Denny's right, title and interest in and to the following collateral (the
"Collateral"): (i) the Security Account, all funds held therein and all
certificates and instruments, if any, from time to time representing or
evidencing the Security Account, (ii) all interest payable with respect to the
Security Account from time to time, and all certificates and instruments, if
any, from time to time representing or evidencing the Security Account, (iii)
all notes, certificates of deposit, deposit accounts, checks and other
instruments from time to time hereafter delivered to or otherwise possessed by
the Bank in substitution for
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or in addition to any or all of the then existing Collateral, (iv) all interest,
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the then existing Collateral, and (v) all proceeds of any and all of the
foregoing Collateral whether the same arise or are acquired before or after the
commencement of a case under Title 11 of the Bankruptcy Code, in order to secure
the payment and performance of the Guarantied Obligations.
5. Non-Payment. If any Guarantied Obligation is not paid when
due, a late charge shall accrue upon such Obligation, commencing on such due
date, at the prime rate established by Citibank, N.A. plus 3% per annum from the
due date until paid, as liquidated damages for such nonpayment. The imposition
of this late charge does not imply or constitute any agreement by the Executive
to forbear collection of the delinquent Guarantied Obligation. The amount of
such late charge shall also be a Guarantied Obligation.
6. Delivery of Collateral. All certificates or instruments, if
any, representing or evidencing the Collateral shall be delivered to and held by
or on behalf of the Executive pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Executive. The Executive shall have the right, at any time in his discretion and
without notice to Denny's or any other Guarantor, to transfer to or register in
the name of the Executive or any of his nominees any or all of the Collateral.
In addition, the Executive shall have the right at any time to exchange
certificates or instruments representing or evidencing Collateral for
certificates or instruments of smaller or larger denominations.
7. Maintaining the Security Account. So long as any Obligation
shall remain unpaid, Denny's shall maintain the Security Account with the Bank.
The Security Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate banking or governmental authority, as may now or
hereafter be in effect. Denny's shall pay the Bank (i) for all returned checks,
service charges and other fees and charges associated with the Blocked Account
Agreement attached hereto as Exhibit 2 (the "Blocked Account Agreement"), and
the Account agreement referred to therein, and (ii) all amounts required to be
paid in respect of the Company's indemnification obligations to the Bank under
the Blocked Account Agreement.
8. Representation and Warranties. (a) Denny's represents and
warrants as follows:
(i) Ownership of Collateral. Denny's is and at all times will
be the legal and beneficial owner of the Collateral free and clear of any lien,
security interest, option or other charge or encumbrance except for the security
interest created by this Agreement.
(ii) Perfected Security Interest. The pledge and assignment of
the Collateral pursuant to this Agreement creates a valid and legal security
interest in the Collateral, securing payment of the Guarantied Obligations and,
upon the execution and delivery by Denny's and the Executive of the Notice
attached as Exhibit 1 hereto (the "Notice"), and upon the giving of such
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Notice to the Bank in accordance with Section 9302(1)(g)(ii) of the Code, will
create a perfected first priority lien thereon.
(b) Each Guarantor represents and warrants as follows:
(i) No Conflict. The execution, delivery and performance of
this Agreement by such Guarantor and the consummation of the transactions
contemplated hereby will not conflict with or result in a breach of any of the
terms and provisions of, or constitute a default under, any agreement,
indenture, mortgage, deed of trust, equipment lease, instrument or other
document to which the Company or such Guarantor is a party.
(ii) Effectiveness. There are no conditions precedent to the
effectiveness of this Agreement that have not been satisfied or waived.
(iii) Authorization. Such Guarantor has the authorization,
power and right to deliver, execute and fully perform its obligations under this
Agreement in accordance with its terms.
9. Covenants. (a) Denny's covenants and agrees as follows:
(i) No Transfer. Denny's shall not sell, assign (by operation
of law or otherwise), exchange or otherwise voluntarily or involuntarily
transfer or dispose of the Collateral or any portion thereof or encumber, or
hypothecate, or create or permit to exist any lien, security interest, charge or
encumbrance or adverse claim upon or other interest in the Collateral without
the prior written consent of the Executive.
(ii) Acknowledgement and Consent. On or prior to the date
hereof, Denny's shall cause the Bank to execute and deliver the Blocked Account
Agreement by and among Denny's, the Executive and the Bank attached hereto as
Exhibit 2.
(iii) Notice. On or prior to the date hereof, Denny's shall
execute and deliver to the Bank the Notice.
(iv) Legal Opinion. On or prior to January 20, 1997, Denny's
shall deliver to the Executive the executed legal opinion of Xxxxxx & Xxxxxxx,
counsel to Denny's, in form and substance reasonably satisfactory to the
Executive.
(b) The Executive covenants and agrees that on or prior to the
date hereof, the Executive shall execute and deliver to the Bank the Notice.
10. Further Assurances. Denny's agrees that at any time and
from time to time, at the expense of Denny's, Denny's will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Executive may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Executive to exercise and enforce his rights and
remedies hereunder with respect to any Collateral.
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11. Executive Appointed Attorney-in-Fact. Denny's hereby
appoints the Executive as Denny's attorney-in-fact, with full authority in the
place and stead of Denny's and in the name of Denny's or otherwise, from time to
time in the Executive's discretion to take any action and to execute any
instrument which the Executive may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to receive, indorse
and collect all instruments made payable to the Company's representing any
interest payment, dividend or other distribution in respect of the Collateral or
any part thereof and to give full discharge for the same.
12. Executive May Perform. If any Guarantor fails to perform
any agreement contained herein, the Executive may himself perform, or cause
performance of, such agreement, and the expenses of the Executive incurred in
connection therewith shall be payable by the Guarantors under Section 2(b).
13. Executive's Duties. The powers conferred on the Executive
hereunder are solely to protect his interest in the Collateral and shall not
impose any duty upon him to exercise any such powers. Except for the safe
custody of any Collateral in his possession and the accounting for moneys
actually received by him hereunder, the Executive shall have no duty as to any
collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to the
Collateral, whether or not the Executive has or is deemed to have knowledge of
such matters, or as to the taking of any necessary steps to preserve his rights
against any parties or any other rights pertaining to the Collateral. The
Executive shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in his possession if such Collateral is accorded
treatment substantially equal to that which Denny's accords its own property.
14. Events of Defaults. The Guarantors shall be in default
under this Agreement upon the happening of any one or more of the following
events (each, an "Event of Default"):
(a) Failure to Pay. The Guarantors fail to pay any Guarantied
Obligation in accordance with the terms of this Agreement;
(b) Collateral. All or any portion of the Collateral is
seized, sold, assigned, transferred or otherwise disposed of in violation of
Section 9(b) hereof or is levied upon by writ of attachment, garnishment,
execution or otherwise, and such seizure or levy is not released within thirty
(30) days thereof;
(c) Insolvency. The Company or any Guarantor executes a
general assignment for the benefit of its creditors, ceases to conduct its
business in the ordinary course as it is now conducted, convenes any meeting of
its creditors, becomes insolvent, admits in writing its insolvency or inability
to pay its debts, or is unable to pay or is generally not paying its debts as
they become due or any case or proceeding is voluntarily commenced by the
Company or any Guarantor under any provision of the federal Bankruptcy Code or
any other federal or state law relating to debtor rehabilitation, insolvency,
bankruptcy, liquidation or reorganization, or any such case or proceeding is
involuntarily commenced against the Company or any Guarantor;
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(d) Receiver. A receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over the Company or any
Guarantor is appointed to take possession of all or any portion of the
Collateral or all or any substantial portion of the Company's or any Guarantor's
assets;
(e) Breach of Employment Agreement. The Company or Denny's
defaults in its obligations under Section 3(k) of the Employment Agreement.
15. Remedies Upon Default. If any Event of Default shall have
occurred and be continuing:
(a) The Executive may declare all Guarantied Obligations to be
immediately due and payable. Thereupon, the Executive without any action
whatsoever on the part of the Guarantors may instruct the Bank to wire all cash
in the Account to such account as the Executive shall designate, and the
Executive shall have the rights and remedies of a secured party under the Code
(whether or not the Code applies to the affected Collateral), and may also,
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any location, for
cash, on credit or for future delivery, and upon such other terms as the
Executive may deem commercially reasonable. Denny's agrees that, to the extent
notice of sale shall be required by law, at least ten day's notice to the
Guarantors of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The
Executive shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Executive may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. The Bank shall be entitled to rely upon and
shall be fully protected in relying upon a certification under penalty of
perjury of the Executive that an Event of Default has occurred.
(b) Any cash held by the Executive as Collateral and all cash
proceeds received by the Executive in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral shall be applied
(after payment of any amounts payable to the Executive pursuant to Section 2(b))
in whole by the Executive against the Guarantied Obligations in the order that
such Obligations become due. Any surplus of such cash or cash proceeds held by
the Executive and remaining after payment in full of all the Guarantied
Obligations (and after payment of expenses pursuant to Section 2(b)) shall be
paid over to Denny's or to whomsoever may be lawfully entitled to receive such
surplus.
(c) Denny's hereby expressly waives and releases all rights to
have any of the Collateral marshalled upon the exercise of any remedies under
this Agreement.
16. Right of Set Off. In addition to and not in limitation of
any other right or remedy hereunder, the Executive shall have, at any time, the
right, but not the obligation, to set off any indebtedness or Guarantied
Obligation of any Guarantor against any indebtedness or obligation of the
Executive to the Company or such Guarantor, without notice to or demand upon the
Company or such Guarantor, any guarantor of any such indebtedness or obligation
or
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any other person, whether or not such Guarantied Obligation or indebtedness is
liquidated, contingent or mature at the time of such offset and however such
indebtedness or obligations were created or incurred.
17. Continuing Security Interest. This Agreement shall be
absolute and irrevocable and remain in effect as to any and all of the
Guarantied Obligations until all Guarantied Obligations then outstanding have
been indefeasibly paid in full in cash whereupon this Agreement shall
automatically terminate without any further action on the part of any party
hereto.
18. Notices. All notices required or permitted to be made
hereunder shall be in writing and may be delivered personally or sent by
telegram, telecopy, facsimile, telex, first class mail or overnight courier,
postage prepaid, to the parties at the addresses set forth below. Such notices
sent as provided hereinabove shall be effective when received by the addressee
thereof, unless sent by registered or certified mail, postage prepaid, in which
case they shall be effective exactly three (3) business days after being
deposited in the United States mail. The parties hereto may change their
addresses by giving notice thereof to the other parties hereto in conformity
with this paragraph.
If to any Guarantor: c/o Flagstar Corporation
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Executive: Xxxxx X. Xxxxxxx
c/o Flagstar Companies, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxx Xxxxxxxx, Esq.
Battle Xxxxxx LLP
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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If to the Bank: Bank of America
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Account Administrator
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
19. Headings. The various headings in this Agreement are
inserted for convenience only and shall not affect the meaning or interpretation
of this Agreement or any provision hereof.
20. Amendments. This Agreement or any provision hereof may be
changed, waived, or terminated only by a statement in writing signed by the
party against which such change, waiver or termination is sought to be enforced,
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
21. Incorporation by Reference. The parties hereby agree that
Section 3 of the Blocked Account Agreement is incorporated by reference herein,
with the same effect as if such Section had been set forth herein, and shall
remain a part of this Agreement notwithstanding the termination of the Blocked
Account Agreement.
22. Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and is intended as a complete
and exclusive statement of the terms and conditions thereof. Acceptance of or
acquiescence in a course of performance rendered under this Agreement shall not
be relevant to determine the meaning of this Agreement even though the accepting
or acquiescing party had knowledge of the nature of the performance and
opportunity for objection.
23. Severability. If any provision or obligation of this
Agreement should be found to be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions and obligations or any other agreement executed in connection
herewith, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby and shall nonetheless remain in
full force and effect to the maximum extent permitted by law.
24. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
regard to conflicts of law principles, except that perfection of the security
interest hereunder, or remedies hereunder, in respect of any particular
Collateral shall be governed by the internal laws of the State of California,
without regard to conflicts of law principles (except that the provisions of the
California Civil Code validating the choice of California law shall be
applicable).
25. Submission to Jurisdiction; Waivers. Each of the
Guarantors and the Executive hereby irrevocably and unconditionally:
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(a) submits for itself and himself and its and his property in
any legal action or proceeding relating to arising out of this Agreement, or the
conduct of any party with respect thereto, or for recognition and enforcement of
any judgment in respect thereof, to the nonexclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of America for
the Southern District of New York, the Courts of the State of California, the
courts of the United States of America for the Central District of California,
the Courts of the State of South Carolina, the courts of the United States of
America for the State of South Carolina, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives to the fullest extent permitted by law any objection
that it or he may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Guarantor or the Executive, as applicable, at its or his address set forth in
Section 18, or at such other address of which such Guarantor or the Executive,
as applicable, shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it or he may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or consequential
damages.
26. Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which shall together constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Guaranty and Security Agreement as of the date first above
written.
DENNY'S, INC.
By: ______________________________
Name: ______________________________
Title: ______________________________
EL POLLO LOCO, INC.
By: ______________________________
Name: ______________________________
Title: ______________________________
DFO, INC.
By: ______________________________
Name: ______________________________
Title: ______________________________
FLAGSTAR ENTERPRISES, INC.
By: ______________________________
Name: ______________________________
Title: ______________________________
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QUINCY'S RESTAURANTS, INC.
By: ______________________________
Name: ______________________________
Title: ______________________________
----------------------------------------
Xxxxx X. Xxxxxxx
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EXHIBIT 1
NOTICE
The undersigned hereby notify Bank of America National Trust
and Savings Association (the "Bank"), in accordance with Section 9302(1)(g)(ii)
of the Uniform Commercial Code in effect in the State of California:
(a) of, the terms and provisions of, the foregoing Guaranty
and Security Agreement (the "Agreement", the terms defined therein being used
herein as therein defined) by and among Denny's, Inc., a Delaware corporation,
El Pollo Loco, Inc., a Delaware corporation, DFO, Inc., a Delaware corporation,
Flagstar Enterprises, Inc., an Alabama corporation, and Quincy's Restaurants,
Inc., an Alabama corporation (collectively, the "Guarantors"), and Xxxxx X.
Xxxxxxx (the "Executive"), c/o Flagstar Companies, Inc., 000 Xxxx Xxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000.
(b) that notwithstanding anything to the contrary in any other
agreement relating to the Security Account or other Collateral, the Security
Account, and all amounts now or hereafter deposited into, evidenced by or
constituting the Security Account, are and will be subject to the terms and
conditions of the Agreement and are and will be subject to the security interest
of the Executive.
This Notice shall be binding upon each undersigned and its
successors and assigns, and shall inure to the benefit of the Bank. This Notice
shall be governed by and construed in accordance with the internal laws of the
State of California, without regard to conflicts of law principles (except that
the provisions of the California Civil Code validating the choice of California
law shall be applicable).
IN WITNESS WHEREOF, the undersigned have duly executed this
Notice as of the date set opposite its name below.
Dated: as of January 16, 1997
DENNY'S, INC.
By: ______________________________
Name: ______________________________
Title: ______________________________
----------------------------------------
Xxxxx X. Xxxxxxx
EXHIBIT 2
BLOCKED ACCOUNT AGREEMENT
See following pages
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