Document:

Exhibit 10.30

 

IHOP CORP. SERVICING GUARANTEE

 

This GUARANTEE AGREEMENT, dated as of
November 29, 2007 (the “Agreement”), is executed and delivered by
IHOP Corp., a Delaware corporation (the “Guarantor”) for the benefit of
Applebee’s Enterprises LLC, Applebee’s IP LLC, and the  Restaurant Holders (collectively, the “Co-Issuers”).

 

RECITALS

 

WHEREAS, in connection with the Securitization
Transaction, the Co-Issuers have entered into the Base Indenture, dated as of
November 29, 2007, with Wells Fargo Bank, National Association, as
Indenture Trustee (as supplemented, amended and modified from time to time, the
“Applebee’s Indenture”), pursuant to which the Co-Issuers shall issue
one or more Series of Notes on the terms described therein;

 

WHEREAS, in connection with the Securitization
Transaction, Applebee’s Services, Inc. will act as the servicer (together
with its permitted successors and assigns in such capacity, the “Servicer”),
pursuant to the Servicing Agreement, dated as of November 29, 2007 (the “Servicing
Agreement”), entered into by and among the Servicer, Applebee’s
International Inc. (“Applebee’s International”), the Co-Issuers,  the Franchise Holder  and the Indenture Trustee;

 

WHEREAS, Applebee’s International, in its capacity
as the guarantor under the Servicing Agreement, will guarantee the obligations
of the Servicer under the Servicing Agreement and the other Transaction
Documents to which the Servicer is a party, including the Servicer’s
indemnification obligations under the Servicing Agreement; and

 

WHEREAS, pursuant to this Agreement, the Guarantor
will guarantee Applebee’s International’s obligations under the Transaction
Documents to which it is a party, including the Servicing Agreement.

 

NOW THEREFORE, in consideration of the premises and
the mutual agreements hereinafter set forth, the parties hereto agree as
follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1             Certain
Definitions.  Capitalized terms used
herein but not otherwise defined are defined in the Servicing Agreement or if
not defined therein, in Appendix A to the Applebee’s Indenture.

 

 

ARTICLE II

 

GUARANTEE

 

Section 2.1             Guarantee.  The Guarantor hereby unconditionally and
irrevocably guarantees the performance of all the obligations of Applebee’s
International set forth in the Transaction Documents to which Applebee’s
International is a party (the “Guarantee”) for the benefit of the
Co-Issuers.  This Guarantee shall be a
continuing and irrevocable guarantee of payment of all amounts due and
performance of all obligations of Applebee’s International under the
Transaction Documents to which Applebee’s International is a party, and the
Guarantor shall remain liable on its obligations hereunder until the payment in
full of all amounts due hereunder; provided that the Guarantee shall not
apply to any obligations of Applebee’s International arising after a Successor
Servicer is appointed under the Servicing Agreement that is not an Affiliate of
the Servicer; provided that such obligations are not related to
obligations of the Servicer or an Affiliate thereof.  The Guarantor hereby represents that it has
all requisite corporate power and authority to undertake its obligations set
forth in this Section 2.1 and to guarantee the full and prompt
payment of any amounts due hereunder.

 

Section 2.2             Liability
of Guarantor Absolute. The Guarantor agrees that its obligations hereunder
are irrevocable, absolute, independent and unconditional and shall not be
affected by any circumstance that constitutes a legal or equitable discharge of
a guarantor or surety.  In furtherance of
the foregoing and without limiting the generality thereof, the Guarantor agrees
as follows:  (a)  the obligations of
the Guarantor hereunder are independent of the obligations of Applebee’s
International under the Servicing Agreement or under the other Transaction
Documents; and (b) the obligations of the Guarantor hereunder shall be
valid and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason, including without limitation,
the occurrence of any of the following, whether or not the Guarantor shall have
had notice or knowledge of any of them: 
(i) any failure or omission to assert or enforce, or agreement or
election not to assert or enforce, or the stay or enjoining, by order of court,
by operation of law or otherwise, of the exercise or enforcement of, any claim
or demand or any right, power or remedy (whether arising at law, in equity or
otherwise) with respect to any failure of Applebee’s International under the
Servicing Agreement or under any of the other Transaction Documents;
(ii) any rescission, waiver, amendment or modification of, or any consent
to departure from any of the terms or provisions (including, without
limitation, provisions relating to events of default) of this Agreement, any of
the other Transaction Documents or any of the Serviced Documents, the Franchise
Documents or the Franchise Arrangements; (iii) Applebee’s International’s
consent to the addition, change, reorganization or termination of any of the
Securitization Entities or to any amendment to the documents governing the
formation or organization and operation of the Securitization Entities; or
(iv) any other act or thing or omission, or delay to do any other act or
thing, which may or might in any manner or to any extent vary the risk of the
Guarantor as an obligor in respect of Applebee’s International’s obligations
under the Transaction Documents to which Applebee’s International is a party.

 

Section 2.3             Waivers
by the Guarantor.  The Guarantor
agrees not to assert, and hereby waives, all rights (whether by counterclaim,
set-off or otherwise) and defenses (including, 

 

2

 

without limitation, the defense of fraud), whether
acquired by subrogation, assignment or otherwise, to the extent that such
rights and defenses may be used by the Guarantor to avoid performance
hereunder, including but not limited to: 
(a)  any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Applebee’s International
including, without limitation, any defense based on or arising out of the lack
of validity or the unenforceability of the Transaction Documents or by
cessation of liability of Applebee’s International for any cause other than the
full performance of all obligations of Applebee’s International set forth in
the Transaction Documents and payment in full of all amounts due thereunder;
(b) any defense based on Applebee’s International’s errors or omissions in
the performance of its obligations or payment of amounts due under the
Transaction Documents;  (c) any
defenses or benefits that may be derived from or afforded by law that would
limit the liability of or exonerate the Guarantor, (d) any legal or
equitable discharge of the Guarantor’s obligations hereunder; (e) the
benefit of any statute of limitations affecting the Guarantor’s liability
hereunder or the enforcement hereof; 
(f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
of this Guarantee, notices of default under the Transaction Documents, the
Serviced Documents or the Franchise Arrangements; and (g) any rights to
set-offs, recoupments and counterclaims.

 

Section 2.4             Representations
and Warranties of the Guarantor.  The
Guarantor represents and warrants as of the date hereof as follows:

 

(a)           Organization and Good Standing.  The Guarantor (i) is a corporation, duly
formed and organized, validly existing and in good standing under the laws of
the State of Delaware, (ii) is duly qualified to do business as a foreign
corporation and in good standing under the laws of each jurisdiction where the
character of its property, the nature of its business or the performance of its
obligations hereunder make such qualification necessary, except where the
failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect and (iii) has the power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is currently conducted and to perform its obligations under this
Agreement and any other Transaction Document to which it is a party or in
connection with which it acts as Guarantor.

 

(b)           Power and Authority; No Conflicts.  The execution and delivery by the Guarantor
of this Agreement and any other Transaction Document to which it is a party and
its performance of, and compliance with, the terms hereof and any other
Transaction Document to which it is a party or in connection with which it acts
as Guarantor are within the power of the Guarantor and have been duly
authorized by all necessary corporate action on the part of the Guarantor.  Neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein contemplated to be
consummated by the Guarantor, nor compliance with the provisions hereof, shall
conflict with or result in a breach of, or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a breach or
default) under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Guarantor or its
properties, or the charter or bylaws or other organizational documents and
agreements of the Guarantor, or any of the provisions of any material
indenture, mortgage, lease, contract or other instrument to which the Guarantor
is a party or by which it or its property is 

 

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bound or result in the creation or imposition of
any lien, charge or encumbrance upon any of its property pursuant to the terms
of any such indenture, mortgage, leases, contract or other instrument.

 

(c)           Consents.  The Guarantor is not required to obtain the
consent of any other party or the consent, license, approval or authorization
of, or registration or declaration with, any Governmental Authority in
connection with the execution, delivery or performance by the Guarantor of this
Agreement and any other Transaction Document to which it is a party or in
connection with which it acts as Guarantor, or the validity or enforceability
of this Agreement and any other Transaction Document to which it is a party or
in connection with which it acts as Guarantor against the Guarantor.

 

(d)           Due Execution and Delivery.  This Agreement and any other Transaction
Document to which it is a party or in connection with which it acts as
Guarantor has been duly executed and delivered by the Guarantor and constitutes
a legal, valid and binding instrument enforceable against the Guarantor in
accordance with its terms (subject to applicable insolvency laws and to general
principles of equity).

 

(e)           Due Qualification.  The Guarantor has obtained or made all
material licenses, registrations, consents, approvals, waivers and
notifications of creditors, lessors and other Persons, in each case, in
connection with the execution and delivery of this Agreement and any other
Transaction Document to which it is a party or in connection with which it acts
as Guarantor by the Guarantor, and the consummation by the Guarantor of all the
transactions herein contemplated to be consummated by the Guarantor and the
performance of its obligations hereunder and under any other Transaction
Document to which it is a party or in connection with which it acts as
Guarantor.

 

Section 2.5             Certain
Covenants of the Guarantor.

 

(a)           If the IHOP Corp. Consolidated
Leverage Ratio is greater than or equal to 6.75x at a time when any
Subordinated Notes are Outstanding, the board of directors of IHOP Corp. will
not (i) declare any dividend on the common stock of IHOP Corp. in excess
of the most recently declared dividend on the common stock of IHOP Corp. prior
to the Closing Date, (ii) declare any dividend on the preferred stock of
IHOP Corp. in excess of the amount specified in the related certificates of
designation for such preferred stock (without giving effect to any subsequent
amendment or other modification to such certificates of designation); or
(iii) make any repurchase of the common stock or preferred stock of IHOP
Corp. (unless the repurchase is pursuant to a binding commitment entered into
on a date on which the IHOP Corp. Consolidated Leverage Ratio is less than
6.75x after giving effect on a pro forma
basis to any indebtedness to be incurred in connection with such
repurchase).  Notwithstanding the
foregoing, nothing herein shall prohibit IHOP Corp. from repurchasing its
preferred stock at any time, so long as (1) the purchase price needed for
any such repurchased preferred stock is paid solely with the proceeds of the
issuance of common stock or other non-redeemable equity securities and
(2) no Default or an Event of Default shall have occurred and be
continuing at the time of such repurchase. 
For so 

 

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long as any Series 2007-1 Notes are
Outstanding, IHOP Corp. will maintain an IHOP Corp. Consolidated Leverage Ratio
of no greater than (i) 8.0x for the period from and including the Closing
Date to but excluding the first anniversary of the Closing Date,
(ii) 7.75x for the period from and including the first anniversary of the
Closing Date to but excluding the second anniversary of the Closing Date and
(iii) 7.25x thereafter.  The Guarantor
shall provide the Series 2007-1 Class A Insurer, so long as the IHOP
Residual Certificate continues to be pledged as Indenture Collateral,
(i) a copy of the monthly servicing report prepared in connection with the
IHOP Securitization within five (5) Business Days of the Guarantor’s receipt
thereof and (ii) notice of the occurrence of any “Mandatory Redemption
Event”, “Event of Default” or “Trigger Reserve Event” (as such terms are
defined in the IHOP Indenture) or any other event that would cause
distributions on the IHOP Residual Certificate to cease, either temporarily or
permanently.  The Guarantor, as sole
indirect member of each of IHOP Franchising, LLC and IHOP IP, LLC, shall not
permit any additional notes to be issued pursuant to the IHOP Indenture after
the Closing Date unless (i) the pro forma Three-Month Adjusted DSCR after
giving effect to the issuance of such additional notes (calculated without
giving effect to any equity contributions otherwise included in the calculation
of Net Cash Flow) would be at least equal to the Three-Month Adjusted DSCR as
of the Closing Date, (ii) the conditions set forth under the IHOP
Indenture are satisfied and (iii) the prior written consent of the
Series 2007-1 Class A Insurer is obtained.  The Guarantor shall not permit any IHOP
Property Leases not satisfying the IHOP Type 1 Conditions as of the Closing
Date to be modified such that the IHOP Type 1 Conditions are subsequently
satisfied after the Closing Date without the prior written consent of Financial
Guaranty Insurance Company, as the aggregate controlling party under the IHOP
Securitization.

 

“IHOP Property Lease” is a lease between an
Affiliate of International House of Pancakes, Inc. and a third party, the
landlord, whereby such Affiliate of International House of Pancakes, Inc.
pays rent to the landlord.  IHOP
restaurants on these leases are either subleased to a franchisee or, in a few
instances, operated by International House of Pancakes, Inc.

 

“IHOP Type 1 Conditions” means the following
conditions with respect to leases of real properties where IHOP restaurants are
located:  (i) the leases are not
subject to any guarantee by IHOP Corp. or an Affiliate and (ii) the leases
are assignable to a corporate affiliate of the lessee without the lessor’s consent.

 

(f)            The Guarantor shall cause to be
delivered to the Aggregate Controlling Party the quarterly and annual reports
to be prepared by FTI Consulting, Inc. as the back-up servicer in
connection with the IHOP Securitization.

 

(g)           Simultaneously with the transfer of
all or substantially all of the respective assets of IHOP Franchising, LLC and
IHOP IP, LLC (which are subject to the Lien of the IHOP Indenture) to one or
more Affiliates in order to effect a refinancing by such Affiliates of
indebtedness issued by IHOP Franchising, LLC and IHOP IP, LLC pursuant to the
IHOP Indenture, the Guarantor shall cause a Replacement Residual Certificate
(or Replacement Residual Certificates, as may be applicable if the assets of
IHOP Financing, LLC and IHOP IP, LLC have been transferred to more than one
Affiliate in connection with such a refinancing) to 

 

5

 

be contributed to the capital of the Master Issuer,
which Replacement Residual Certificate(s) shall become subject to the Lien
of the Indenture.

 

ARTICLE III

 

MISCELLANEOUS
PROVISIONS

 

Section 3.1             Amendment
.. This Agreement may only be amended from time to time in writing, upon the
written consent of each Series Controlling Party, the Servicer, the
Indenture Trustee, IHOP Corp. and the Co-Issuers.

 

Section 3.2             Governing
Law.  THIS AGREEMENT SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CHOICE
OF LAW RULES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).

 

Section 3.3             Severability
of Provisions.  If one or more of the
provisions of this Agreement shall be for any reason whatever held invalid or
unenforceable, such provisions shall be deemed severable from the remaining
covenants, agreements and provisions of this Agreement and such invalidity or
unenforceability shall in no way affect the validity or enforceability of such
remaining provisions, or the rights set forth herein.  To the extent permitted by law, the parties
hereto waive any provision of law which renders any provision of this Agreement
invalid or unenforceable in any respect.

 

Section 3.4             Binding
Effect; Assignment; Third Party Beneficiaries.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the successors and assigns of the
Guarantor.  Any assignment of this
Agreement without the written consent of the Series Controlling Party
shall be null and void.  Each Insurer
shall be an express third party beneficiary of this Agreement, entitled to
enforce the provisions hereof as if a party hereto.

 

Section 3.5             Article and
Section Headings.  The
Article and Section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.

 

Section 3.6             Counterparts.  This Agreement may be executed in several
counterparts (including by facsimile or other electronic means of
communication), and all of which shall constitute but one and the same
instrument.

 

Section 3.7             Entire
Agreement.  This Agreement and the
other Transaction Documents constitute the entire contract between the parties
related to the subject matter hereof. 
Any previous agreement among the parties with respect to the subject
matter hereof is superseded by this Agreement and the other Transaction
Documents.

 

Section 3.8             Jurisdiction;
Consent to Service of Process.  (a) 
IHOP Corp. hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting 

 

6

 

in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other
Transaction Documents, or for recognition or enforcement of any judgment
related thereto, 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 court or, to the
extent permitted by law, in 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.

 

(b)           IHOP Corp. hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, 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
the other Transaction Documents in any New York State or Federal court.  IHOP Corp. 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.

 

Section 3.9             Waiver
of Jury Trial.  IHOP CORP. HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER
TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  IHOP CORP. (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
CO-ISSUERS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

[The
remainder of this page is intentionally left blank.]

 

7

 

IN WITNESS WHEREOF, IHOP Corp. has caused this
Guarantee Agreement to be duly executed by its officer thereunto duly
authorized as of the day and year first above written.

 

 

	
   

  	
  IHOP
  CORP.

  	 

	
   

  	
   

  	
   

  	 

	 
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Julia Stewart

  	 

	
   

  	
  Name:

  	
  Julia
  Stewart

  	 

	
   

  	
  Title:

  	
  Chairman
  and Chief Executive Officer

  	 

								

 

8Exhibit 10.31

 

GUARANTY AND COLLATERAL AGREEMENT

 

(APPLEBEE’S
FRANCHISING LLC)

 

THIS GUARANTY AND COLLATERAL AGREEMENT (this “Agreement”)
is made and entered into as of November 29, 2007, by and among APPLEBEE’S
FRANCHISING LLC, a Delaware limited liability company (the “Guarantor”),
APPLEBEE’S ENTERPRISES LLC, a Delaware limited liability company (the “Master
Issuer”) and WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Indenture
Trustee”).

 

This Agreement constitutes the entire and
full agreement of the parties with respect to the subject matter hereof. Capitalized
terms used but not defined herein are defined in (or incorporated by reference
into) the Base Indenture (the “Base Indenture”), dated as of the date
hereof, by and among APPLEBEE’S RESTAURANTS NORTH LLC, a Delaware limited
liability company, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, a Delaware limited
liability company, APPLEBEE’S RESTAURANTS WEST LLC, a Delaware limited
liability company, APPLEBEE’S RESTAURANTS VERMONT, INC., a Vermont
corporation, APPLEBEE’S RESTAURANTS TEXAS LLC, a Texas limited liability
company, APPLEBEE’S RESTAURANTS INC., a Kansas corporation, APPLEBEE’S
RESTAURANTS KANSAS LLC, a Kansas limited liability company (collectively, the “Restaurant
Holders”), the Master Issuer, APPLEBEE’S IP LLC, a Delaware limited
liability company (the “IP Holder”) (each of the Master Issuer, the IP
Holder and the Restaurant Holders is a “Co-Issuer” and are,
collectively, the “Co-Issuers”), and the Indenture Trustee, as amended
and supplemented by the series supplement relating to the Series 2007-1
Notes and any other Series of Notes issued pursuant thereto (each, a “Series Supplement”,
and together with the Base Indenture, the “Indenture”).

 

PRELIMINARY
STATEMENT

 

WHEREAS, the Co-Issuers may issue one or
more Series of Notes pursuant to the Indenture on and after the Closing
Date; and

 

WHEREAS, the issuance of any Series of
Notes pursuant to the Indenture is conditioned upon, among other things, the
Guarantor’s guaranty of the Co-Issuers’ obligations under the Indenture, the
Notes and the other Transaction
Documents (other than the Leases) to which the Co-Issuers are parties as
provided herein.

 

NOW, THEREFORE, in consideration of the
foregoing preliminary statement, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the parties
hereto, it is hereby agreed as follows:

 

ARTICLE I

GUARANTY

 

Section 1.1                                      Guaranty. The Guarantor
hereby unconditionally and irrevocably guarantees (the “Guaranty”) the obligations
of each of the Co-Issuers under the Indenture, all Notes issued thereunder
and the other Transaction Documents
(other than the Leases) to which the Co-Issuers are parties (the “Guaranteed Obligations”). The
Guaranty shall be a continuing and irrevocable guaranty of payment of all
amounts due by each of the Co-Issuers of the Guaranteed
Obligations, and the Guarantor
shall remain liable on its obligations hereunder until the payment in full of
any amounts due thereunder. The Guarantor hereby represents that it has all
requisite limited liability company power and authority to 

 

 

undertake
its obligations set forth in this Section 1.1 and to guaranty the
full and prompt payment of any of the Co-Issuers in respect of the Guaranteed
Obligations.

 

Section 1.2                                      Liability
of Guarantor Absolute. The
Guarantor agrees that its obligations under the Guaranty are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance that constitutes a legal or equitable discharge of a guarantor or
surety. In furtherance of the foregoing and without limiting the generality
thereof, the Guarantor agrees as follows: 
(a)  the obligations of the Guarantor hereunder are independent of
the obligations of the Co-Issuers under the Indenture, the Notes or any other
Transaction Documents; and (b) the obligations of the Guarantor hereunder
shall be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason, including
without limitation, the occurrence of any of the following, whether or not the
Guarantor shall have had notice or knowledge of any of them:  (i) any failure or omission to assert or
enforce or agreement or election not to assert or enforce, or the stay or
enjoining, by order of court, by operation of law or otherwise, of the exercise
or enforcement of, any claim or demand or any right, power or remedy (whether
arising at law, in equity or otherwise) with respect to any failure of any of
the Co-Issuers under the Indenture or under any of the other Transaction
Documents; (ii) any rescission, waiver, amendment or modification of, or
any consent to departure from any of the terms or provisions (including,
without limitation, provisions relating to events of default) of the
Transaction Documents; (iii) any amendment to the documents governing the
formation or organization and operation of the Securitization Entities or the
consent of any Co-Issuer to any such amendment; or (iv) any other act or
thing or omission, or delay to do any other act or thing, which may or
might in any manner or to any extent vary the risk of the Guarantor as an
obligor in respect of the Guaranteed Obligations.

 

Section 1.3                                      Waivers
by the Guarantor. The Guarantor
agrees not to assert, and hereby waives, all rights (whether by counterclaim,
set-off or otherwise) and defenses (including, without limitation, the defense
of fraud), whether acquired by subrogation, assignment or otherwise, to the
extent that such rights and defenses may be used by the Guarantor to avoid
performance hereunder, including but not limited to:  (a) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of any
Co-Issuer including, without limitation, any defense based on or arising out of
the lack of validity or the unenforceability of the Transaction Documents or by
cessation of liability of any Co-Issuer for any cause other than the full
performance of all obligations of such Co-Issuer set forth in the Transaction
Documents and payment in full of all amounts due thereunder; (b) any
defense based on any Co-Issuer’s errors or omissions in the performance of its
obligations or payment of amounts due under the Transaction Documents; (c) any
defenses or benefits that may be derived from or afforded by law that
would limit the liability of or exonerate the Guarantor, (d) any legal or
equitable discharge of the Guarantor’s obligations hereunder; (e) the
benefit of any statute of limitations affecting the Guarantor’s liability
hereunder or the enforcement hereof;  (f) notices,
demands, presentments, protests, notices of protest, notices of dishonor and
notices of any action or inaction, including acceptance of this Agreement,
notices of default under any of the other Transaction Documents; and (g) any
rights to set-offs, recoupments and counterclaims.

 

Section 1.4                                      Payments,
Etc. No payment made by any of the Co-Issuers, the Guarantor, any other
guarantor or any other Person or received or collected by the Indenture Trustee
or any other Secured Party from any of the Co-Issuers, the Guarantor, any other
guarantor or any other Person by virtue of any action or proceeding or any set
off or appropriation or application at any time or from time to time in
reduction of or in payment of the Guaranteed Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of the Guarantor
which shall, notwithstanding any such payment (other than any payment made by
the Guarantor in respect of the Guaranteed Obligations or any payment received
or collected from the Guarantor in respect of the Guaranteed Obligations),
remain liable 

 

2

 

hereunder for the
Guaranteed Obligations up to the maximum liability of the Guarantor hereunder
until all of the Notes and other Guaranteed Obligations have been indefeasibly
paid in full.

 

Section 1.5                                      No
Subrogation. Notwithstanding any payment made by the Guarantor hereunder or
any set off or application of funds of the Guarantor by the Indenture Trustee or
any other Secured Party, the Guarantor shall not be entitled to be subrogated
to any of the rights of the Indenture Trustee or any other Secured Party
against the Co-Issuers or any other guarantor or any collateral security or
guarantee or right of offset held by the Indenture Trustee or any other Secured
Party for the payment of the Guaranteed Obligations, nor shall the Guarantor
seek or be entitled to seek any contribution or reimbursement from the
Co-Issuers or any other guarantor in respect of payments made by the Guarantor
hereunder, until all of the Notes and other Guaranteed Obligations have been
indefeasibly paid in full. If any amount shall be paid to the Guarantor on
account of such subrogation, contribution or reimbursement rights at any time when
all of the Guaranteed Obligations shall not have been paid in full, such amount
shall be held by the Guarantor in trust for the Indenture Trustee and the other
Secured Parties, segregated from other funds of the Guarantor, and shall,
forthwith upon receipt by the Guarantor, be turned over to the Indenture
Trustee in the exact form received by the Guarantor (duly endorsed by the
Guarantor to the Indenture Trustee, if required), to be applied against the
Guaranteed Obligations, whether matured or unmatured, in such order as the
Indenture Trustee may determine in accordance with the Indenture.

 

Section 1.6                                      Reinstatement.
The guarantee contained in this ARTICLE I shall continue to be
effective, or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any of the Guaranteed Obligations is rescinded or
must otherwise be restored or returned by the Indenture Trustee or any other
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any of the Co-Issuers, the Guarantor or any other guarantor,
or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, any of the Co-Issuers, the
Guarantor or any other guarantor or any substantial part of their
respective property, or otherwise, all as though such payments had not been
made.

 

ARTICLE II

PLEDGE

 

Section 2.1                                      Pledge.         To secure its obligations
under the Guaranty above, the Guarantor hereby pledges and collaterally grants
and assigns to the Indenture Trustee (the “Pledge”) a continuing
security interest in all of Guarantor’s assets, including its right, title and
interest in, to and under, in each case, whether now owned or existing, or hereafter
acquired or arising, in all securities, loans, investments, accounts, chattel
paper, money, deposit accounts, instruments, financial assets, documents,
investment property, general intangibles, letter of credit rights, and other
supporting obligations (in each case, as defined in the UCC), and other property
of any type or nature in which the Guarantor has an interest, relating thereto
and all proceeds with respect to the foregoing (the “Pledged Collateral”).
Such Pledged Collateral shall include, but is not limited to:

 

(a)                                  the
Existing U.S. Development Agreements and the Development Payments thereon;

 

(b)                                 the
New U.S. Franchise Agreements and the Franchise Payments thereon;

 

(c)                                  all
rights to enter into New U.S. Franchise Agreements and New U.S. Development
Agreements;

 

3

 

(d)                                 all
Franchise Assets acquired following the Closing Date;

 

(e)                                  the
books and records (whether in physical, electronic or other form) of the
Franchise Holder, including those books and records maintained by the Servicer
on behalf of the Franchise Holder relating to the New Franchise Assets;

 

(f)                                    the
rights, powers, remedies and authorities of the Franchise Holder under (i) each
of the Transaction Documents (other than the Franchise Holder Guaranty and
Collateral Agreement) to which it is a party and (ii) each of the
documents relating to the Franchise Assets acquired following the Closing Date to
which it is a party;

 

(g)                                 any
and all other property of the Franchise Holder now or hereafter acquired other
than certain de minimis excepted property;

 

(h)                                 the
inter-company loans from the Franchise Holder to the Master Issuer and any
deposit account held in the name of the Franchise Holder for purposes of
maintaining a minimum net worth; and

 

(i)                                     all
payments, proceeds and accrued and future rights to payment with respect to the
foregoing.

 

Section 2.2                                      Further
Assurances. Prior to or concurrently with the execution of this Agreement,
and thereafter at any time and from time to time, the Guarantor shall execute
and deliver to the Indenture Trustee all financing statements, continuation
financing statements, assignments, certificates and documents of title,
affidavits, reports, notices, schedules of account, letters of authority,
further pledges, powers of attorney and all other documents (collectively, the “Perfection
Documents”) in form and substance reasonably satisfactory to the
Indenture Trustee, and take such other action which the Indenture Trustee may request,
to perfect and continue perfected and to create and maintain the first priority
status of the Indenture Trustee’s security interest hereunder in the Pledged
Collateral. The Guarantor hereby authorizes the Indenture Trustee to file any
financing statement it reasonably deems necessary or advisable to perfect the
security interests granted herein and such financing statements may describe
the collateral in any manner Indenture Trustee reasonably deems necessary or
advisable. Such power, being coupled with an interest, is irrevocable until all
of the Guaranteed Obligations have been indefeasibly paid in full or otherwise
terminated in accordance with the Indenture and/or the Notes.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Guarantor makes the following representations
and warranties to the Indenture Trustee which shall be continuing representations
and warranties so long as any Guaranteed Obligation shall remain outstanding
and unsatisfied or could become due or unsatisfied:

 

Section 3.1                                      Organization
and Good Standing. The Guarantor (i) is a limited liability company,
duly formed and organized, validly existing and in good standing under the laws
of the State of Delaware, (ii) is duly qualified to do business as a
foreign limited liability company or corporation and in good standing under the
laws of each jurisdiction where the character of its property, the nature of
its business or the performance of its obligations hereunder make such
qualification necessary, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect and (iii) has the
power and authority to own its properties and to conduct its business as such
properties are 

 

4

 

currently owned and such
business is currently conducted and to perform its obligations under this
Agreement and any other Transaction Document to which it is a party.

 

Section 3.2                                      Power
and Authority; No Conflicts. The
execution and delivery by the Guarantor of this Agreement and any other
Transaction Document to which it is a party and its performance of, and compliance
with, the terms hereof and any other Transaction Document to which it is a
party are within the power of the Guarantor and have been duly authorized by
all necessary limited liability company action on the part of the
Guarantor. Neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated to be consummated by the
Guarantor, nor compliance with the provisions hereof, will conflict with or
result in a breach of, or constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a breach or default) under, any of
the provisions of any law, governmental rule, regulation, judgment, decree or
order binding on the Guarantor or its properties, or the organizational
documents and agreements of the Guarantor, or any of the provisions of any material
indenture, mortgage, lease, contract or other instrument to which the Guarantor
is a party or by which it or its property is bound or result in the creation or
imposition of any lien, charge or encumbrance upon any of its property pursuant
to the terms of any such indenture, mortgage, leases, contract or other
instrument.

 

Section 3.3                                      Consents.
The Guarantor is not required to obtain the consent of any other party or the
consent, license, approval or authorization of, or, except for filings of
financing statements and recording of mortgages or deeds of trust, registration
or declaration with, any Governmental Authority in connection with the
execution, delivery or performance by the Guarantor of this Agreement and any
other Transaction Document to which it is a party, or the validity or
enforceability of this Agreement and any other Transaction Document to which it
is a party.

 

Section 3.4                                      Due
Execution and Delivery. This Agreement and any other Transaction Document
to which it is a party has been duly executed and delivered by the Guarantor
and constitutes a legal, valid and binding instrument enforceable against the
Guarantor in accordance with its terms (subject to applicable insolvency laws
and to general principles of equity).

 

Section 3.5                                      Due
Qualification. The Guarantor has obtained or made all material licenses,
registrations, consents, approvals, waivers and notifications of creditors,
lessors and other Persons, in each case, in connection with the execution and
delivery of this Agreement and any other Transaction Document to which it is a
party by the Guarantor, and the consummation by the Guarantor of all the
transactions herein contemplated to be consummated by the Guarantor and the
performance of its obligations hereunder and under any other Transaction
Document to which it is a party.

 

Section 3.6                                      Good
Title. The Guarantor has good title to the Pledged Collateral pledged by
it, free and clear of all Liens and contractual restrictions other than
Permitted Liens and those in favor of the Indenture Trustee. None of the
Pledged Collateral shall be subject to any option to purchase or similar right
of any Person, expect as permitted under the Indenture, the Notes or any other
Transaction Documents. The security interest in the Pledged Collateral granted
to the Indenture Trustee pursuant to this Agreement constitutes a valid
perfected first priority security interest and Lien subject to the Lien of no
other Person other than Permitted Liens.

 

Section 3.7                                      No
Restriction. There are no restrictions upon the creation and perfection of
a security interest on the Pledged Collateral as of the Closing Date that have
not been duly waived and the Guarantor has the power and authority and right to
create and perfect such security interest the Pledged Collateral owned by the
Guarantor free of any encumbrances other than Permitted Liens and without
obtaining the consent of any other Person which consent has not been duly
obtained.

 

5

 

ARTICLE IV

COVENANTS

 

Section 4.1                                      No
Adverse Action. The Guarantor shall not take or permit to be taken any
action which could reasonably be expected to have a material adverse effect on
the aggregate value of the Pledged Collateral or on the security interests
created hereby.

 

Section 4.2                                      Defense.
The Guarantor shall defend the Pledged Collateral against all Persons at any
time claiming any interest therein.

 

Section 4.3                                      Compliance
with Law. The Guarantor shall comply with all applicable law in respect of
the Pledged Collateral unless any noncompliance would not individually or in
the aggregate result in a Material Adverse Effect.

 

Section 4.4                                      Taxes.
The Guarantor shall pay any and all material taxes, duties, fees or imposts of
any nature imposed by any Governmental Authority on any of the Pledged
Collateral, except (i) to the extent contested in good faith if a reserve
with respect thereto has been provided on its books in conformity with GAAP,
where applicable and (ii) other past due or delinquent taxes at any time
in an aggregate amount of less that $100,000.

 

Section 4.5                                      Additional
Collateral. To the extent, following the date hereof, the Guarantor
acquires additional assets constituting Pledged Collateral, such additional
Pledged Collateral shall be subject to the terms hereof and, upon such
acquisition, shall be deemed to be hereby pledged to the Indenture Trustee and the
Guarantor shall thereupon deliver to the Indenture Trustee any documents
necessary to implement the provisions and purposes of this Agreement as the Indenture
Trustee may reasonably request. Notwithstanding the foregoing, it is
understood and agreed that the security interest of the Indenture Trustee shall
attach to the Guarantor’s ownership interests to the extent provided in this
Agreement immediately upon the Guarantor’s acquisition of rights therein and
shall not be affected by the failure of the Guarantor to deliver any related
documentation as required hereby.

 

Section 4.6                                      No
Transfer; No Lien. During the term of this Agreement, the Guarantor shall
not (i) sell, assign, replace, convert, retire, transfer or otherwise
dispose of all or any portion of the Pledged Collateral in a manner that
violates this Agreement, nor (ii) create, incur, assume or suffer to exist
any Lien on the Pledged Collateral except Permitted Liens and the Indenture
Trustee’s Lien granted by this Agreement.

 

Section 4.7                                      Indebtedness.
The Guarantor shall not incur Debt except as expressly permitted under the
terms and provisions of this Agreement, the Indenture and any other Transaction
Document.

 

Section 4.8                                      Maintenance
of Office. The Guarantor will maintain an office or agency (which may be
an office of the Indenture Trustee, the Registrar or co-registrar) in the
United States where notices and demands to or upon the Guarantor in respect of
this Agreement may be served. The Guarantor will give prompt written
notice to the Indenture Trustee and each Insurer of the location, and any
change in the location, of such office or agency. If at any time the Guarantor
shall fail to maintain any such required office or agency or shall fail to
furnish the Indenture Trustee and each Insurer with the address thereof, such
presentations, surrenders, notices and demands may be made or served c/o
the Indenture Trustee at the Corporate Trust Office and the Guarantor hereby
designates the applicable Corporate Trust Office as one such office or agency
of the Guarantor.

 

6

 

Section 4.9                                      Covenants
in Base Indenture. The Guarantor acknowledges the terms and provisions of
the Base Indenture and acknowledges that it is a Securitization Entity as
defined thereunder. The Guarantor, as a Securitization Entity, agrees to be
bound by the terms and provisions thereof which purport to limit the actions of
the Securitization Entities, to the same extent as if fully set forth herein,
including without limitation the covenants set forth in Sections 7.7, 7.8 and
7.9 of the Base Indenture. The Guarantor further agrees to observe the
covenants set forth in Section 7.13 of the Base Indenture to the same
extent as if it were a Co-Issuer, including without limitation the covenants
regarding maintenance of separate existence, and to take, or refrain from
taking as the case may be, each action that is required to be taken or not
taken on its part in order for the representations and warranties set
forth in Section 7.12 of the Base Indenture to be true and correct with
respect to the Guarantor.

 

Section 4.10                                Further
Assurances.

 

(a)                                  The Guarantor will do such
further acts and things, and execute and deliver to the Indenture Trustee and
the Insurers, upon the request of the Aggregate Controlling Party, such
additional assignments, agreements, powers and instruments, as are necessary or
desirable to obtain or maintain the security interest of the Indenture Trustee
in the Pledged Collateral on behalf of the Secured Parties as a perfected
security interest subject to no prior Liens (other than Permitted Liens), to
carry into effect the purposes of this Agreement or the other Transaction
Documents or to better assure and confirm unto the Indenture Trustee and the
other Secured Parties their rights, powers and remedies hereunder including,
without limitation, the filing of any financing or continuation statements or
amendments under the UCC in effect in any jurisdiction with respect to the
liens and security interests granted hereby. The Guarantor intends the security
interests granted pursuant to this Agreement in favor of the Secured Parties to
be prior to all other Liens (other than Permitted Liens) in respect of the
Pledged Collateral, and the Guarantor shall take all actions necessary to
obtain and maintain, in favor of the Indenture Trustee for the benefit of the
Secured Parties, a first lien on and a first priority, perfected security
interest in the Pledged Collateral (except with respect to Permitted Liens). If
the Guarantor fails to perform any of its agreements or obligations under
this Section 4.10, the Indenture Trustee may perform such
agreement or obligation, and the expenses of the Indenture Trustee incurred in
connection therewith shall be payable by the Guarantor upon the Indenture
Trustee’s demand therefor. The Indenture Trustee is hereby authorized to
execute and file without the signature of the Guarantor to the extent permitted
by applicable law any financing statements, continuation statements, amendments
or other instruments necessary or appropriate to perfect or maintain the
perfection of the Indenture Trustee’s security interest in the Pledged
Collateral.

 

(b)                                 If
any amount payable under or in connection with any of the Pledged Collateral
shall be or become evidenced by any promissory note, chattel paper or other
instrument, such note, chattel paper or instrument shall be deemed to be held
in trust and immediately pledged and within two (2) Business Days
physically delivered to the Indenture Trustee hereunder, and shall, subject to
the rights of any Person in whose favor a prior Lien has been perfected, be
duly endorsed in a manner satisfactory to the Indenture Trustee and delivered
to the Indenture Trustee promptly.

 

Section 4.11                                Legal
Name, Location Under Section 9-301 or 9-307.  The Guarantor shall not change its location
(within the meaning of Section 9-301 or 9-307 of the applicable UCC) or
its legal name without at least thirty (30) days’ prior written notice to the
Indenture Trustee, each Insurer and the Rating Agencies with respect to each Series of
Notes Outstanding. In the event that the Guarantor desires to so change its
location or change its legal name, the Guarantor will make any required filings
and prior to actually changing its location or its legal name the Guarantor
will deliver to the Indenture Trustee and each Insurer (i) an Officer’s
Certificate and an Opinion of Counsel confirming that all 

 

7

 

required filings have been made to continue the perfected interest of
the Indenture Trustee on behalf of the Secured Parties in the Pledged
Collateral under Article 9 of the applicable UCC or other applicable law
in respect of the new location or new legal name of the Guarantor and (ii) copies
of all such required filings with the filing information duly noted thereon by
the office in which such filings were made.

 

Section 4.12                                Stamp,
Other Similar Taxes and Filing Fees. The Guarantor shall indemnify and hold
harmless the Indenture Trustee and each Secured Party from any present or
future claim for liability for any stamp, documentary or other similar tax and
any penalties or interest and expenses with respect thereto, that may be
assessed, levied or collected by any jurisdiction in connection with this
Agreement, any other Transaction Document or any Pledged Collateral. The
Guarantor shall pay indemnify and hold harmless each Secured Party against, any
and all amounts in respect of, all search, filing, recording and registration
fees, taxes, excise taxes and other similar imposts that may be payable or
determined to be payable in respect of the execution, delivery, performance
and/or enforcement of this Agreement or any other Transaction Document.

 

ARTICLE V
 REMEDIAL
PROVISIONS

 

Section 5.1                                      Rights of Aggregate Controlling Party and
Indenture Trustee upon Event of Default.

 

(a)                                  Proceedings
To Collect Money. In case the Guarantor shall fail forthwith to
pay such amounts due on this Agreement upon such demand, the Indenture Trustee
(at the direction of the Aggregate Controlling Party), in its own name and as
trustee of an express trust, may institute a Proceeding for the collection
of the sums so due and unpaid, and may prosecute such Proceeding to
judgment or final decree, and may enforce the same against the Guarantor
and collect in the manner provided by law out of the property of the Guarantor,
wherever situated, the moneys adjudged or decreed to be payable.

 

(b)                                 Other
Proceedings. If and whenever an Event of Default shall have
occurred and be continuing, the Indenture Trustee, at the direction of the
Aggregate Controlling Party pursuant to an Aggregate Controlling Party Order,
shall:

 

(i)                                      proceed
to protect and enforce its rights and the rights of the other Secured Parties,
by such appropriate Proceedings as the Indenture Trustee (at the direction of
the Aggregate Controlling Party) or the Aggregate Controlling Party shall deem
most effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Agreement or any other Transaction
Document or in aid of the exercise of any power granted therein, or to enforce
any other proper remedy or legal or equitable right vested in the Indenture
Trustee by this Agreement or any other Transaction Document or by law,
including any remedies of a secured party under applicable law;

 

(ii)                                   (A) direct
the Guarantor to exercise (and the Guarantor agrees to exercise) all rights,
remedies, powers, privileges and claims of the Guarantor against any party to
any Transaction Document arising as a result of the occurrence of such Event of
Default or otherwise, including the right or power to take any action to compel
performance or observance by any such party of its obligations to the
Guarantor, and any right of the Guarantor to take such action independent of
such direction shall be suspended, and (B) if (x) the Guarantor shall
have failed, within ten (10) Business Days of receiving the direction of
the Indenture Trustee (given at the 

 

8

 

direction of the Aggregate Controlling Party), to take
commercially reasonable action to accomplish such directions of the Indenture
Trustee, (y) the Guarantor refuses to take such action or (z) the
Aggregate Controlling Party reasonably determines that such action must be
taken immediately, take such previously directed action (and any related action
as permitted under this Agreement thereafter determined by the Indenture
Trustee or the Aggregate Controlling Party to be appropriate without the need
under this provision or any other provision under this Agreement to direct the
Guarantor to take such action);

 

(iii)                                institute
Proceedings from time to time for the complete or partial foreclosure of this
Agreement or, to the extent applicable, any other Transaction Document, with
respect to the Pledged Collateral; provided that the Indenture Trustee
shall not be required to take title to any real property in connection with any
foreclosure or other exercise of remedies hereunder and title to such property
shall instead be acquired in an entity designated and (unless owned by a third
party) controlled by the Aggregate Controlling Party; and/or

 

(iv)                               sell
all or a portion of the Pledged Collateral at one or more public or private
sales called and conducted in any manner permitted by law; provided, however,
that the Indenture Trustee shall not proceed with any such sale without the
prior written consent of the Aggregate Controlling Party and the Indenture
Trustee will provide notice to the Guarantor and each Holder of Notes of a
proposed sale of Pledged Collateral.

 

(c)                                  Sale
of Pledged Collateral. In connection with any sale of the Pledged
Collateral hereunder (which may proceed separately and independently from
the exercise of remedies under the Indenture) or under any judgment, order or
decree in any judicial proceeding for the foreclosure or involving the
enforcement of this Agreement or any other Transaction Document:

 

(i)                                      the
Indenture Trustee and/or any other Secured Party may bid for and purchase
the property being sold, and upon compliance with the terms of the sale may hold,
retain, possess and dispose of such property in its own absolute right without
further accountability;

 

(ii)                                   the
Indenture Trustee (at the direction of the Aggregate Controlling Party) may make
and deliver to the purchaser or purchasers a good and sufficient deed, bill of
sale and instrument of assignment and transfer of the property sold;

 

(iii)                                all
right, title, interest, claim and demand whatsoever, either at law or in equity
or otherwise, of the Guarantor of, in and to the property so sold shall be
divested; and such sale shall be a perpetual bar both at law and in equity
against the Guarantor, its successors and assigns, and against any and all
Persons claiming or who may claim the property sold or any part thereof
from, through or under such Guarantor or its successors or assigns; and

 

(iv)                               the
receipt of the Indenture Trustee or of the officer thereof making such sale
shall be a sufficient discharge to the purchaser or purchasers at such sale for
his or their purchase money, and such purchaser or purchasers, and his or their
assigns or personal representatives, shall not, after paying such purchase
money and receiving such receipt of the Indenture Trustee or of such officer
therefor, be obliged to see to the application of such purchase money or be in
any way answerable for any loss, misapplication or non-application thereof.

 

(d)                                 Application of Proceeds. Any amounts obtained by the
Indenture Trustee on account of or as a result of the exercise by the Indenture
Trustee of any right hereunder shall be held by the Indenture Trustee as
additional collateral for the repayment of the Guaranteed Obligations, shall be
deposited into the Collection Account and shall be applied as provided in
Articles X and XI of the Base 

 

9

 

Indenture; provided,
however, that unless otherwise provided in this Article V or Article V
to the Base Indenture, with respect to any distribution to any Series of
Notes, notwithstanding the provisions of Articles X and XI of the Base
Indenture, such amounts shall be distributed sequentially in order of
alphabetical designation and pro rata among each Series of Notes of the
same alphabetical designation based upon the Outstanding Principal Amount of
the Notes of each such Series.

 

(e)                                  Additional
Remedies. In addition to any rights and remedies now or
hereafter granted hereunder or under applicable law with respect to the Pledged
Collateral, the Indenture Trustee shall have all of the rights and remedies of
a secured party under the UCC and similar laws as enacted in any applicable
jurisdiction.

 

(f)                                    Proceedings. The
Indenture Trustee may maintain a Proceeding even if it does not possess
any of the Notes or does not produce any of them in the Proceeding, and any
such Proceeding instituted by the Indenture Trustee shall be in its own name as
trustee. All remedies are cumulative to the extent permitted by law.

 

(g)                                 Power
of Attorney. To the fullest extent permitted by applicable
law, the Guarantor hereby grants to the Indenture Trustee an absolute and
irrevocable power of attorney, upon the occurrence and during the continuance
of an Event of Default, (i) to sign the name of the Guarantor on all or
any of the Perfection Documents which the Indenture Trustee determines must be
executed, filed, recorded or sent in order to perfect or continue perfected the
Indenture Trustee’s security interest hereunder in the Pledged Collateral in
any jurisdiction, and (ii) to sign any document which may be required
by the United States Patent and Trademark Office, United States Copyright
Office, any similar office or agency in each foreign country in which any IP
Asset is located, or any other Governmental Authority in order to effect an
absolute assignment of all right, title and interest in or to any IP Asset, and
record the same.

 

Section 5.2                                      Waiver
of Appraisal, Valuation, Stay and Right to Marshaling. To the extent it may lawfully
do so, the Guarantor for itself and for any Person who may claim through
or under it hereby:

 

(a)                                  agrees
that neither it nor any such Person will step up, plead, claim or in any manner
whatsoever take advantage of any appraisal, valuation, stay, extension or
redemption laws, now or hereafter in force in any jurisdiction, which may delay,
prevent or otherwise hinder (i) the performance, enforcement or
foreclosure of this Agreement, (ii) the sale of any of the Pledged
Collateral or (iii) the putting of the purchaser or purchasers thereof
into possession of such property immediately after the sale thereof;

 

(b)                                 waives
all benefit or advantage of any such laws;

 

(c)                                  waives
and releases all rights to have the Pledged Collateral marshaled upon any
foreclosure, sale or other enforcement of this Agreement; and

 

(d)                                 consents
and agrees that, subject to the terms of this Agreement, all the Pledged
Collateral may at any such sale be sold by the Indenture Trustee as an
entirety or in such portions as the Indenture Trustee may (upon direction
by the Aggregate Controlling Party) determine.

 

10

 

Section 5.3                                      Limited
Recourse. Notwithstanding any other provision of this Agreement, any
Insurance Agreement or any other Transaction Document or otherwise, the
liability of the Guarantor to the Secured Parties under or in relation to this
Agreement, any Insurance Agreement or any other Transaction Document or otherwise,
is limited in recourse to the Pledged Collateral. The Pledged Collateral having
been applied in accordance with the terms hereof, none of the Secured Parties
shall be entitled to take any further steps against the Guarantor to recover
any sums due but still unpaid hereunder or under any of the other agreements or
documents described in this Section 5.3, all claims in respect of which
shall be extinguished.

 

Section 5.4                                      Optional
Preservation of the Pledged Collateral. If the maturity of the Outstanding
Notes of each Series has been accelerated pursuant to Section 5.4 of
the Base Indenture following an Event of Default and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee, at
the direction of the Aggregate Controlling Party pursuant to an Aggregate
Controlling Party Order, shall elect to maintain possession of such portion, if
any, of the Pledged Collateral as the Aggregate Controlling Party shall in its
discretion determine.

 

Section 5.5                                      Control
by the Aggregate Controlling Party. Notwithstanding any other provision
hereof, the Aggregate Controlling Party may cause the institution of and
direct the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee or exercise any trust or power conferred on
the Indenture Trustee; provided that:

 

(a)                                  such
direction of time, method and place shall not be in conflict with any rule of
law or with this Agreement;

 

(b)                                 the
Aggregate Controlling Party may take any other action deemed proper by the
Aggregate Controlling Party that is not inconsistent with such direction (as
the same may be modified by the Aggregate Controlling Party); and

 

(c)                                  such
direction shall be in writing;

 

provided
further that, subject to Section 6.1 of the Base Indenture, the
Indenture Trustee need not take any action that it determines might involve it
in liability unless it has received an indemnity for such liability as provided
in the Base Indenture. The Indenture Trustee shall take no action referred to
in this Section 5.5 unless instructed to do so by the Aggregate
Controlling Party.

 

Section 5.6                                      The
Indenture Trustee May File Proofs of Claim. The Indenture Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee, its agents and counsel) and any other
Secured Party (as applicable) allowed in any judicial proceedings relative to
the applicable Insurer or the Guarantor, its creditors or its property, and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claim and any custodian in
any such judicial proceeding is hereby authorized by each Secured Party to make
such payments to the Indenture Trustee and, in the event that the Indenture
Trustee shall consent to the making of such payments directly to any other Secured
Party, to pay the Indenture Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee,
its agents and counsel, and any other amounts due the Indenture Trustee under Section 6.6
of the Base Indenture. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel, and any other amounts due the Indenture Trustee under Section 

 

11

 

6.6 of the Base Indenture out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money and
other properties which any other Secured Party may be entitled to receive
in such proceeding whether in liquidation or under any plan of reorganization
or arrangement or otherwise. Nothing herein contained shall be deemed to
authorize the Indenture Trustee to authorize or consent to or accept or adopt
on behalf of any other Secured Party any plan of reorganization, arrangement,
adjustment or composition affecting the Guaranteed Obligations or the rights of
any other Secured Party, or to authorize the Indenture Trustee to vote in
respect of the claim of any Secured Parties in any such proceeding.

 

Section 5.7                                      Undertaking
for Costs. In any suit for the enforcement of any right or remedy under
this Agreement or in any suit against the Indenture Trustee for any action taken
or omitted by it as a Indenture Trustee, a court in its discretion may require
the filing by any party litigant in the suit of any undertaking to pay the
costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys’ fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 5.7 does not apply to a suit by
the Indenture Trustee, a suit by the Aggregate Controlling Party, or a suit by
Noteholders of more than 10% of the Aggregate Outstanding Principal Amount of
all Series of Notes.

 

Section 5.8                                      Restoration
of Rights and Remedies. If the Indenture Trustee or any other Secured Party
has instituted any Proceeding to enforce any right or remedy under this
Agreement or any other Transaction Document and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to
the Indenture Trustee or to such other Secured Party, then and in every such
case the Indenture Trustee and any such other Secured Party shall, subject to
any determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the other Secured Parties shall continue as though no
such Proceeding had been instituted.

 

Section 5.9                                      Rights
and Remedies Cumulative. No right or remedy herein conferred upon or
reserved to the Indenture Trustee or to any other Secured Party is intended to
be exclusive of any other right or remedy, and every right or remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given under this Agreement or any other Transaction Document or now
or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy under this Agreement or any other Transaction
Document, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

 

Section 5.10                                Delay
or Omission Not Waiver. No delay or omission of the Indenture Trustee, the
Aggregate Controlling Party or of any other Secured Party to exercise any right
or remedy accruing upon any Partial Amortization Event, Rapid Amortization
Event, Default or Event of Default shall impair any such right or remedy or
constitute a waiver of any such Partial Amortization Event, Rapid Amortization
Event, Default or Event of Default or an acquiescence therein. Every right and
remedy given by this Article V or by law to the Indenture Trustee, the
Aggregate Controlling Party or to any other Secured Party may be exercised
from time to time to the extent not inconsistent with the Indenture or this
Agreement, and as often as may be deemed expedient, by the Indenture
Trustee, the Aggregate Controlling Party or by any other Secured Party, as the
case may be.

 

Section 5.11                                Waiver
of Stay or Extension Laws. The Guarantor covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, that may affect
the covenants or the performance of this Agreement or any other Transaction
Document; and the Guarantor (to the extent that it may lawfully do so)
hereby 

 

12

 

expressly waives all benefit or advantages of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee or the Aggregate Controlling Party, but
will suffer and permit the execution of every such power as though no such law
had been enacted.

 

ARTICLE VI
 MISCELLANEOUS

 

Section 6.1                                      Third-Party
Beneficiary. Each Insurer shall constitute an express third-party
beneficiary of this Agreement.

 

Section 6.2                                      Effect
of Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.

 

Section 6.3                                      Successors
and Assigns. All covenants and agreements in this Agreement by the Guarantor
shall bind its successors and assigns, whether so expressed or not. Any
assignment of this Agreement without the written consent of each Series Controlling
Party shall be null and void.

 

Section 6.4                                      Separability.
In case any provision in this Agreement 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 6.5                                      Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO CHOICE OF LAW RULES (OTHER THAN SECTIONS 5-1401
AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

Section 6.6                                      Submission
to Jurisdiction. The parties hereto irrevocably submit to the nonexclusive
jurisdiction of any New York State or federal court sitting in the Borough of
Manhattan in The City of New York in any action or proceeding arising out of or
relating to this Agreement, and the parties hereto irrevocably agree that all
claims in respect of such action or proceeding may be heard and determined
in such New York State or federal court. The parties hereto irrevocably waive,
to the fullest extent that they may legally do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding. The Guarantor
and Master Issuer each irrevocably consents to the service of any and all
process in any action or proceeding by the mailing or delivery of copies of
such process to it at the office of its Delaware registered agent. The parties
hereto agree 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.

 

Section 6.7                                      Counterparts.
This Agreement may be executed in any number of counterparts, 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.

 

[SIGNATURE PAGE FOLLOWS]

 

13

 

IN WITNESS
WHEREOF, the parties have caused this instrument to be executed this 29th
day of November, 2007.

 

 

	
   

  	
  APPLEBEE’S
  FRANCHISING LLC,

  
	
   

  	
  as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
  Name:

  	
  Carin Stutz

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  ENTERPRISES LLC,

  
	
   

  	
  as Master Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
  Name:

  	
  Carin Stutz

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, NATIONAL

  
	
   

  	
  ASSOCIATION,

  
	
   

  	
  as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Melissa Philibert

  
	
   

  	
  Name:

  	
  Melissa Philibert

  
	
   

  	
  Title:

  	
  Vice President

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