Exhibit 10.20

 

AMENDMENT NO. 1 TO GUARANTY

 

AMENDMENT NO. 1, dated as of November 28, 2007 (this “Amendment”), to the
Guaranty, made and entered into as of March 16, 2007 (as amended by this
Amendment, and as the same may be further amended, amended and restated or
otherwise modified from time to time, the “Guaranty”), by IHOP Corp., a Delaware
corporation, as the guarantor (in such capacity, the “Guarantor”), in favor of
IHOP HOLDINGS LLC, a Delaware limited liability company, as the beneficiary (in
such capacity, the “Beneficiary”).

 

R E C I T A L S

 

WHEREAS, the Guarantor previously executed and delivered the Guaranty in favor
of the Beneficiary, pursuant to which the Guarantor guarantees the obligations
of International House of Pancakes, Inc., a Delaware corporation, as seller (the
“Seller”), under the Asset Sale Agreement, dated as of March 16, 2007 (as the
same may be amended, amended and restated or otherwise modified from time to
time, the “Asset Sale Agreement”), by and between the Seller and IHOP Holdings,
LLC, a Delaware limited liability company, as purchaser (the “Purchaser”), in
the manner provided therein and subject to the terms thereof;

 

WHEREAS, the Guarantor, CHLH Corp., a Delaware corporation that is a
wholly-owned subsidiary of IHOP Corp. (the “Merger Subsidiary”), and Applebee’s
International, Inc., a Delaware corporation (“Applebee’s”), have previously
executed and delivered an Agreement and Plan of Merger, dated July 15, 2007 (as
the same may be amended or otherwise modified from time to time, the “Merger
Agreement”), pursuant to which the Merger Subsidiary will be merged into
Applebee’s such that Applebee’s will be a direct, wholly-owned subsidiary of the
Guarantor following the consummation of the transactions contemplated by the
Merger Agreement;

 

WHEREAS, on or after the date hereof, the Guarantor may enter into the
documentation (the “Securitization Bridge Documentation”) relating to the
securitization bridge financing (the “Securitization Bridge Financing”) to be
made available by Lehman Brothers Commercial Bank (“LBCB”) and Lehman Commercial
Paper Inc. (“LCPI”) as the initial securitization bridge lenders (the “Initial
Securitization Bridge Lenders” and, together with the additional securitization
bridge lenders identified by the Initial Securitization Bridge Lenders from time
to time, the “Securitization Bridge Lenders”) to, among other things, finance
the transactions contemplated by the Merger Agreement;

 

WHEREAS, on or after the date hereof, Applebee’s is expected to securitize
certain assets (the “Applebee’s Securitization”) by transferring such assets
through one or more subsidiaries to multiple newly formed, special purpose
limited liability companies and corporations that will pledge such assets as
collateral under a master indenture pursuant to which such limited liability
companies and corporations will co-issue one or more series of notes to raise
proceeds for purposes of, among other things, (i) the repayment of the
Securitization Bridge Financing (if the Securitization Bridge

 

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Financing is consummated) or (ii) directly financing the transactions
contemplated by the Merger Agreement (if the Securitization Bridge Financing is
not consummated);

 

WHEREAS, on or after the date hereof, the Co-Issuers, the Indenture Trustee and
Financial Guaranty Insurance Company, a New York stock insurance company, not in
its individual capacity but solely as the Series Insurer (such capitalized terms
and the other capitalized terms used and not defined herein having the meanings
assigned thereto pursuant to Section 1.1 hereof) thereunder, shall execute and
deliver the Series Supplement (the “Series 2007-3 Supplement”) for the
Series 2007-3 Fixed Rate Term Notes (the “Series 2007-3 Notes”) pursuant to the
Base Indenture, dated as of March 16, 2007 (as supplemented by the Supplement
No. 1 thereto, dated as of November 28, 2007, and as the same may be further
supplemented, amended or otherwise modified and in effect from time to time, the
“Indenture”), which Series 2007-3 Notes are being issued to raise proceeds for
purposes of, among other things, (i) the repayment of the Securitization Bridge
Financing (if the Securitization Bridge Financing is consummated) or
(ii) directly financing the transactions contemplated by the Merger Agreement
(if the Securitization Bridge Financing is not consummated); and

 

WHEREAS, in connection with (i) the Securitization Bridge Financing, (ii) the
Applebee’s Securitization and (iii) the Series 2007-3 Notes, the parties hereto
desire to amend the Guaranty in the manner provided in this Amendment.

 

NOW, THEREFORE, in consideration of the foregoing, other good and valuable
consideration, and the mutual terms contained herein, the receipt and
sufficiency of which are hereby acknowledged by the undersigned, the parties
hereto hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1       Definitions.  The capitalized terms used herein (including the
preamble and the recitals hereto) and not otherwise defined herein shall have
the meanings assigned thereto or incorporated by reference in the Guaranty.

 

ARTICLE II

AMENDMENTS

 

Section 2.1       Amendment to Section 3.3 of the Guaranty.  Section 3.3 of the
Guaranty is hereby amended and restated in its entirety to read as follows:

 

“None of the Guarantor, IHOP, Inc., Applebee’s International, Inc., a Delaware
corporation (“Applebee’s”), or their respective Affiliates shall incur Debt
(including, but not limited to, guaranties or pledges of its property) other
than (a) with respect to the Guarantor, IHOP, Inc., Applebee’s and their
respective Affiliates, but excluding the Securitization Entities (as such term
is defined in the Indenture) (referred to herein as the “IHOP Securitization
Entities”) and the special purpose vehicles established by Applebee’s (the
“Applebee’s Securitization Entities”) in

 

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connection with the securitization of substantially all of the assets of
Applebee’s located in the United States (the “Applebee’s Securitization”), Debt
(excluding from the definition of “Debt” for this purpose, any “capital leases”
in effect as of November 29, 2007) not in excess of U.S. $95,000,000 in
aggregate outstanding principal amount at any time; provided, that in the event
that Applebee’s is no longer affiliated with IHOP, Inc., the Debt allowed
pursuant to this clause (a) shall not exceed U.S.$25,000,000 in aggregate
outstanding principal amount at any time, (b) with respect to the Guarantor,
IHOP, Inc., Applebee’s and their respective Affiliates, including the Applebee’s
Securitization Entities but excluding the IHOP Securitization Entities, Debt
incurred in connection with the sale-leaseback transactions contemplated by and
in accordance with the requirements of the term sheet attached as a schedule to
the letter, dated July 15, 2007, delivered by Financial Guaranty Insurance
Company, a New York stock insurance company (the “Insurer”), and the other
insurers identified therein, to the Guarantor and Applebee’s (such term sheet
being referred to herein as the “Applebee’s Securitization Term Sheet”);
provided, that, on a pro forma basis after giving effect to the sale-leaseback
transaction, the ratio of the adjusted debt (calculated by capitalizing lease
obligations whether treated as operating leases or capital leases under GAAP at
8x annual rent) to EBITDAR of the Guarantor, IHOP, Inc., Applebee’s and their
respective Affiliates is equal to or less than 7.30x to and including
November 30, 2008 and 7.0x following such date, (c) Debt incurred by the
Guarantor, IHOP, Inc., Applebee’s and their respective Affiliates pursuant to
(i) the Indenture, (ii) the Applebee’s Securitization, and (iii) during the
period from the date hereof to the date of the Applebee’s Securitization (and
thereafter to the extent provided in clause (B) below), the loans (the
“Acquisition Loans”) extended to the Guarantor pursuant to the securitization
bridge financing (the “Securitization Bridge Financing”) to be provided by
Lehman Brothers Commercial Bank (“LBCB”) and Lehman Commercial Paper Inc.
(“LCPI”), as the initial securitization bridge lenders (together with their
successors and assigns in such capacity, the “Initial Securitization Bridge
Lenders”), and such other securitization bridge lenders as may be identified by
the Initial Securitization Bridge Lenders from time to time; provided, that
(A) the aggregate outstanding principal amount of the Acquisition Loans may in
no event exceed U.S. $2,150,000,000 (including any unfunded commitment under any
revolving credit facility that is a part of the Securitization Bridge
Financing), (B) upon the consummation of the Applebee’s Securitization, the
aggregate outstanding principal amount of the Acquisition Loans shall be
permanently reduced to no more than U.S. $175,000,000 (or such higher amount as
may be consented to in writing by the Insurer, such consent not to be
unreasonably withheld or delayed) less the proceeds, if any, from the offering
and sale of the Series 2007-3 Fixed Rate Term Notes issued by the Co-Issuers
pursuant to the Indenture or any other equity investment issued in substitution
therefor, and (C) if the Applebee’s Securitization is not consummated on or
prior to January 15,

 

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2008, or such later date, if any, to which the Insurer’s commitment has been
extended with its written consent, then the Guarantor, IHOP, Inc., Applebee’s
and their respective Affiliates (other than the IHOP Securitization Entities)
shall repay the Acquisition Loans and other Debt from the net proceeds of the
disposition of those certain assets, as would have been required pursuant to the
Applebee’s Securitization Term Sheet had the Applebee’s Securitization been
consummated, and the aggregate outstanding principal amount of the Acquisition
Loans shall be permanently decreased by a corresponding amount; (d) trade debt
incurred in the ordinary course of business, and (e) debt incurred in connection
with any indemnification obligations of the Servicer; provided, that, for the
avoidance of doubt, (x) clauses (a) through (e) of this Section 3.3 shall each
constitute separate baskets of permitted Debt of the Guarantor, IHOP, Inc.,
Applebee’s and their respective Affiliates and (y) the Debt permitted to be
incurred by the Guarantor, IHOP, Inc., Applebee’s and their respective
Affiliates pursuant to clauses (a) through (e) of this Section 3.3 shall be
subject to compliance with all applicable ratios, restrictions, tests and other
requirements in effect under the Transaction Documents as amended or otherwise
modified or waived from time to time.”

 

ARTICLE III

MISCELLANEOUS

 

Section 3.1       Effectiveness of Amendment.

 

(a)           This Amendment shall become effective upon (x) the consummation of
the Securitization Bridge Financing and/or the Applebee’s Securitization and
(y) the satisfaction of the following conditions:

 

(i)            the Series Insurer’s receipt of written confirmation from each
Rating Agency that the amendments contemplated by this Amendment will not have
an adverse effect on the ratings of any Notes Outstanding (without giving effect
to any Insurance Policy); and

 

(ii)           the execution and delivery of this Amendment by each of the
Series Insurer, the Guarantor and the Beneficiary.

 

(b)           This Amendment shall cease to be effective if:

 

(i)            the Guarantor executes and delivers the Securitization Bridge
Documentation (as such term is defined in the recitals to this Amendment) and
the Securitization Bridge Documentation does not include the “Acquisition Loan
Covenants” to be made by the Securitization Bridge Lenders set forth in the term
sheet attached as a schedule to the commitment letter, dated July 15, 2007,
delivered to the Guarantor by the Series Insurer relating to, among other
things, this Amendment and the issuance of the Series 2007-3 Notes;

 

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(ii)           the transactions contemplated by the Merger Agreement are not
consummated and the Merger Agreement is terminated in the manner provided
therein; or

 

(iii)          Supplement No.1 dated as of the date hereof to the Indenture
ceases to be in effect in accordance with such Section 3.1(b) thereof.

 

Section 3.2       Ratification of Guaranty.  The Guaranty as modified by this
Amendment and all rights and remedies of the Guarantor and the Beneficiary
thereunder are and shall continue to be in full force and effect in accordance
with the terms thereof, and the same as modified by this Amendment are hereby
ratified and confirmed in all such respects by each of the Guarantor and the
Beneficiary.

 

Section 3.3       Effect of Section Headings.  The section headings in this
Amendment are for convenience only and shall not affect the construction of this
Amendment.

 

Section 3.4       Separability.  In case any provision of this Amendment shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

 

Section 3.5       Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CHOICE OF LAW RULES
(OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

Section 3.6       Counterparts.  This Amendment may be executed in any number of
counterparts (including by facsimile or other electronic means of
communication), each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.

 

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IN WITNESS WHEREOF, the undersigned have caused this Amendment No. 1 to the
Guaranty to be duly executed as of the date and year first above written.

 

 

IHOP CORP., as the Guarantor

 

 

 

 

 

By:

/s/ Tom Conforti

 

 

 

Name:

Tom Conforti

 

 

Title:

Chief Financial Officer

 

 

Consented to for purposes of the Guaranty:

 

IHOP HOLDINGS, LLC,

as the Beneficiary

 

 

By:

/s/ Mark Weisberger

 

 

Name:

Mark Weisberger

 

Title:

Vice President

 

 

Consented to for purposes of Section 7.8(a)(xvii) of the

Indenture and Section 6.01 of the Insurance Agreement

relating to the Series 2007-1 Notes and the Series 2007-2 Notes:

 

FINANCIAL GUARANTY INSURANCE

COMPANY, as Series Insurer in respect of

the Series 2007-1 and 2007-2 Notes

 

 

By:

/s/ Rajat Busu

 

 

Name:

Rajat Busu

 

Title:

Managing Director

 

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