Document:

EXHIBIT
10.28

EXECUTION
COPY

 

$245,000,000

 

IHOP FRANCHISING, LLC

IHOP IP, LLC

 

7.0588%
Series 2007-3 Fixed Rate Term Notes

 

PURCHASE AGREEMENT

 

November 29, 2007

 

Lehman
Brothers Inc.

745
Seventh Avenue

New York,
New York  10019

 

Ladies
and Gentlemen:

 

IHOP FRANCHISING, LLC, a Delaware limited liability company (the “Master
Issuer”), and IHOP IP, LLC, a Delaware limited liability company (the “IP
Holder”, and together with the Master Issuer, the “Co-Issuers” and
each a “Co-Issuer”), propose, upon the terms and conditions set forth in
this agreement (the “Agreement”), to issue and sell to Lehman Brothers
Inc. U.S. $245,000,000 principal amount of their Series 2007-3 Fixed Rate
Term Notes due 2037 (the “Securities”), pursuant to the Series Supplement
for the Securities, dated as of the date hereof (the “Supplement”), by
and among the Co-Issuers and Wells Fargo Bank, National Association, as
indenture trustee (the “Trustee”), to the Base Indenture, dated as of March 16,
2007 and supplemented on November 28, 2007 (as supplemented, the “Base Indenture” and, together with
the Supplement, the “Indenture”),
by and among the Co-Issuers and the Trustee.

 

Each of the Co-Issuers is a wholly-owned
subsidiary of IHOP Corp., a Delaware corporation (“IHOP”), who is
entering into this Agreement as the guarantor of the obligations of
International House of Pancakes, Inc. (“IHOP Inc.” and, together
with IHOP, the “Parent Companies”), as Servicer under the Servicing
Agreement, dated as of March 16, 2007 (as amended, the “Servicing
Agreement”), among the Co-Issuers, IHOP Property Leasing LLC, a Delaware
limited liability company, IHOP Properties, LLC, a Delaware limited liability
company, IHOP Real Estate, LLC, a Delaware limited liability company, the
Parent Companies and the Trustee.  The
Co-Issuers and the Parent Companies hereby confirm their agreement with Lehman
Brothers Inc. (the “Initial Purchaser”) concerning the purchase of the
Securities from the Co-Issuers by the Initial Purchaser.

 

Pursuant to an Agreement and Plan of Merger, dated as
of July 15, 2007 (the “Merger
Agreement”), by and among Applebee’s International, Inc., a
Delaware 

 

 

corporation (“Applebee’s International”), IHOP
and CHLH Corp., a Delaware corporation (“Merger Sub”), which is a wholly-owned subsidiary of IHOP,
Merger Sub will merge with and into Applebee’s International (the “Merger”), and each outstanding
share of common stock of Applebee’s International (except for shares held by
IHOP and certain other shares), will be automatically converted into the right
to receive $25.50 in cash, without interest, subject to certain adjustments
(the “Acquisition”). Applebee’s International will be the surviving
corporation of the Merger and a wholly-owned subsidiary of IHOP.  IHOP expects to finance the Acquisition with (i) the
cash proceeds from the issuance of the Securities and (ii) cash proceeds
from the issuance of $1,814 million aggregate principal amount of additional
asset-backed securities (the “Applebee’s Securitization”) to be issued
by subsidiaries of Applebee’s International.

 

The Securities will be offered and sold to the Initial
Purchaser without being registered under the Securities Act of 1933 (the “Securities
Act”), in reliance upon an exemption therefrom.  IHOP and the Co-Issuers have prepared a draft
base offering circular, a draft supplemental offering circular and a term
sheet, together attached hereto as Exhibit 1 (collectively, the “Draft
Offering Memorandum”), materials circulated in connection with the
syndication of bridge loans to finance the Acquisition listed on Schedule
A-1 (collectively, the “Bridge Syndication Materials”) and the
preliminary marketing materials listed on Schedule A-2 (collectively,
the “Preliminary Marketing Materials”).

 

Pursuant to Sections 4(a) and (c) of
this Agreement, the Co-Issuers intend to prepare a final base offering circular
and a supplemental offering circular setting forth information concerning the
Parent Companies, the Co-Issuers, certain affiliated entities, and the
Securities.  Such base offering circular,
together with the supplemental offering circular, as amended to the Initial
Date (as defined herein), each Supplemental Date (as defined herein) and each
Bringdown Date (as defined herein) is referred to herein as the “Offering
Memorandum”.

 

Any reference to the Offering Memorandum or the Draft
Offering Memorandum shall be deemed to refer to and include (i) the most recent Annual Report on Form 10-K, (ii) the
Quarterly Reports on Form 10-Q filed since the most recent Annual Report
on Form 10-K and (iii) the Current Reports on Form 8-K filed
since the most recent Annual Report on Form 10-K, of IHOP, filed with the
United States Securities and Exchange Commission (the “Commission”)
pursuant to Section 13(a) or 15(d) of the United States
Securities Exchange Act of 1934 (the “Exchange Act”), on or prior to the
date of the Offering Memorandum, as the case may be.  All documents filed by IHOP under the
Exchange Act and so deemed to be included in the Draft Offering Memorandum or
the Offering Memorandum, as the case may be, or any amendment or supplement
thereto are hereinafter called the “Exchange Act Documents.”

 

“Free Writing Communication” means a written
communication (as such term is defined in Rule 405 under the Securities
Act) that constitutes an offer to sell or a solicitation of an offer to buy the
Securities and is made by means other than the Offering Memorandum.  “Issuer Free Writing Communication”
means a Free Writing 

 

2

 

Communication prepared by or on behalf of the Parent
Companies or the Co-Issuers, used or referred to by the Parent Companies or the
Co-Issuers or containing a description of the final terms of the Securities or
of their offering, in the form retained in the Parent Companies’ or the
Co-Issuers’ records.

 

Copies of the Offering Memorandum will be delivered by
the Co-Issuers and the Parent Companies to the Initial Purchaser pursuant to
the terms of this Agreement.  Any
references herein to the Offering Memorandum shall be deemed to include all
amendments and supplements thereto.  The
Co-Issuers and the Parent Companies hereby confirm that they have authorized
the use of the Offering Memorandum in connection with the offering and resale
of the Securities by the Initial Purchaser in accordance with Section 2.

 

For purposes of this Agreement, (a) capitalized
terms used but not defined herein shall have the meanings given to such terms
in the Indenture, (b) the term “business day” means any day on which the
New York Stock Exchange, Inc. is open for trading, (c) except
where otherwise expressly provided, the term “affiliate” has the meaning set
forth in Rule 405 under the Securities Act , (d) the term “Transaction
Documents” means the “Transaction Documents,” as defined in the Indenture,
plus the Type 1 Residual Certificate, and (e) the “Relevant Date”
means the date on which representations, warranties and agreements are being
made by the Co-Issuers or the Parent Companies (as the case may be) in
accordance with Section 1(c) or 1(d). 
The Base Indenture is attached hereto as Exhibit 2.  The Supplement is attached hereto as Exhibit 3.
As used herein

 

1.             Representations,
Warranties and Agreements of the Co-Issuers and the Parent Companies

 

(a)           Each
of the Co-Issuers, jointly and severally, represents and warrants to, and
agrees with, the Initial Purchaser, as of the Closing Date, that:

 

(i)            As
of the Closing Date, the Draft Offering Memorandum presents fairly, in all
material respects, the business, results of operations and financial condition
of the Co-Issuers.  As of the Relevant
Date, the Offering Memorandum does not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;

 

(ii)           As
of the Relevant Date, the Offering Memorandum contains all of the information
that, if requested by a prospective purchaser of the Securities, would be
required to be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under
the Securities Act;

 

(iii)          The Preliminary Marketing Materials and the Offering
Memorandum have been or will have been prepared by the Co-Issuers and the
Parent Companies for use by the Initial Purchaser in connection with the Exempt
Resales (as defined below).  No order or
decree preventing the use of the Preliminary Marketing Materials or the
Offering Memorandum, or any order asserting that the transactions 

 

3

 

contemplated by this Agreement are subject to the registration
requirements of the Securities Act has been issued, and no proceeding for that
purpose has commenced or is pending or, to the knowledge of the Co-Issuers or
the Parent Companies, is contemplated;

 

(iv)          As
of the Relevant Date, each of the Base Indenture, the Supplement and the
Securities will conform in all material respects to the description thereof
contained in the Offering Memorandum;

 

(v)           Assuming
the accuracy of the representations and warranties of the Initial Purchaser
contained in Section 2 and their compliance with the agreements set forth
therein, it is not necessary, in connection with the issuance and sale of the
Securities to the Initial Purchaser and the offer, resale and delivery of the
Securities by the Initial Purchaser in the manner contemplated by this
Agreement and the Indenture, to register the Securities under the Securities
Act or to qualify the Indenture under the Trust Indenture Act of 1939, as
amended;

 

(vi)          Each
of the Co-Issuers has been duly incorporated as a limited liability company and
is validly existing and in good standing under the laws of the jurisdiction of
its formation, is qualified to do business and is in good standing as a foreign
limited liability company in each jurisdiction in which the ownership or lease
of property or the conduct of its business requires such qualification except
for such failures to qualify to do business or be in good standing as a foreign
limited liability company as are not reasonably likely to result in a Material
Adverse Effect, and has the requisite power and authority under its operating
agreement to own or hold its properties and to conduct the business in which it
is engaged as described in the Draft Offering Memorandum (as of the Closing
Date) or the Offering Memorandum (as of the Relevant Date);

 

(vii)         Each of the Co-Issuers has the requisite limited liability
company power and authority under its operating agreement to execute and
deliver this Agreement, the Securities, the Indenture and any other Transaction
Document to which it is a party and perform its obligations hereunder and
thereunder;

 

(viii)        Neither Co-Issuer is in violation of (i) its
respective Charter Documents, (ii) any Requirements of Law (as defined
below) with respect to such party or (iii) any
indenture, contract, agreement, mortgage, deed of trust or other instrument to
which any of Co-Issuer or Guarantor is a party or by which either it or its
assets is bound (each, a “Contractual Obligation”), except, solely with
respect to clauses (ii) and (iii), to the extent such
violation could not reasonably be expected to result in a Material Adverse
Effect. 
The execution and delivery of this Agreement and the other Transaction
Documents, the application of the proceeds from the sale of the
Securities as described herein, in the Draft Offering Memorandum (as of the
Closing Date) and in the Offering Memorandum
(as of the Relevant Date) and the incurrence of the obligations and
consummation of the transactions herein and therein contemplated (a) requires
no action by or in respect of, or filing with, any Governmental Authority which
has not been obtained, (b) will not conflict with, or constitute a breach
of or default under, any Charter Documents of either Co-Issuer, and (c) do
not contravene, or constitute a default under, 

 

4

 

any Requirements of Law with respect to such Co-Issuer or any
Contractual Obligation with respect to such Co-Issuer or result in the creation
or imposition of any Lien on any property of either Co-Issuer, except for Liens
created by the Transaction Documents and except, in the case of clause (a) and
(c), solely with respect to the Asset Contribution Agreements, the violation of
which could reasonably be expected to have a Material Adverse Effect.  For purposes of this Agreement, “Requirements
of Law” means with respect to any Person or any of its property, the
certificate of incorporation or articles of association and by laws, limited
liability company agreement, partnership agreement or other organizational or
governing documents of such Person or any of its property, and any law, treaty,
rule or regulation, or determination of any arbitrator or Governmental
Authority (as defined below), in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject, whether federal, state, local or foreign; including usury laws, the
Federal Truth in Lending Act, state franchise laws and retail installment sales
acts, and “Governmental Authority” means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government;

 

(ix)           Each
Transaction Document to which a Co-Issuer is a party has been duly and validly
authorized, executed and delivered by such Co-Issuer, and, assuming due
authorization, execution and delivery by the other parties thereto, constitutes
the legal, valid and binding obligation of the applicable Co-Issuer and is
enforceable in accordance with its terms (except as such enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors’ rights generally or by
general equitable principles, whether considered in a proceeding at law or in
equity and by an implied covenant of good faith and fair dealing).  As of the Relevant Date, each of the
Transaction Documents will conform in all material respects to the description
thereof in the Offering Memorandum;

 

(x)            (1) The
Transaction Documents are in full force and effect; (2) there are no
outstanding defaults thereunder; and (3) no events have occurred which,
with the giving of notice, the passage of time or both, would constitute a
default thereunder;

 

(xi)           (a) Neither
Co-Issuer is a party to any contract or agreement of any kind or nature and (b) neither
Co-Issuer is subject to any material obligations or liabilities of any kind or
nature in favor of any third party, including, without limitation, guarantees,
keep well agreements, dividends, endorsements, letters of credit or other
contingent obligations.  Neither
Co-Issuer has engaged in any activities since its formation (other than those
incidental to its formation, the authorization and the issue of the Securities,
the execution of the Transaction Documents to which such Co-Issuer is a party
and the performance of the activities referred to in or contemplated by such
agreements);

 

(xii)          This Agreement has been duly authorized, executed and
delivered by the Co-Issuers and constitutes the legal, valid and binding
obligation of the Co-Issuers 

 

5

 

enforceable in accordance with its terms (except as
such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors’ rights
generally or by general equitable principles, whether considered in a
proceeding at law or in equity and by an implied covenant of good faith and
fair dealing and except that any indemnification or contribution provisions
herein may be deemed unenforceable);

 

(xiii)         The Securities have been duly authorized for issuance, offer
and sale by the Co-Issuers as contemplated by this Agreement and, when
authenticated by the Trustee and issued and delivered against payment of the
purchase price therefor, will constitute legal, valid and binding obligations
of the Co-Issuers enforceable in accordance with their terms (except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors’ rights
generally or by general equitable principles, whether considered in a
proceeding at law or in equity and by an implied covenant of good faith and
fair dealing);

 

(xiv)        No consent, action by or in respect of, approval or
other authorization of, or registration, declaration or filing with, any
Governmental Authority or other Person is required for the issuance, offer or
sale of the Securities by the Co-Issuers in accordance with the terms of this
Agreement, the execution, delivery and performance by the Co-Issuers of the
Securities, the Indenture, this Agreement and the Transaction Documents (to the
extent they are parties thereto), the application of the proceeds from the sale
of the Securities as described herein, in the Draft Offering Memorandum (as of
the Closing Date) and in the Offering Memorandum (as of the Relevant Date) or
for the consummation by the Co-Issuers of the transactions contemplated by this
Agreement and the other Transaction Documents or for the performance of any of
the Co-Issuers’ obligations hereunder or thereunder other than such consents,
approvals, authorizations, registrations, declarations or filings (a) as
have been obtained prior to the Closing Date or as permitted to be obtained
subsequent to the Closing Date or (b) relating to the performance of any
Franchise Document the failure of which to obtain consent is not reasonably
likely to have a Material Adverse Effect;

 

(xv)         There
is no action, suit, proceeding or investigation pending against or, to the
knowledge of either Co-Issuer, threatened against or affecting either Co-Issuer
or of which any property or assets of the
Co-Issuers is the subject before any court or arbitrator or any
Governmental Authority that would, individually or in the aggregate, affect the
validity or enforceability of this Agreement or any of the Transaction
Documents, materially adversely affect the performance by the Co-Issuers of
their obligations hereunder or thereunder or which is reasonably likely to have
a Material Adverse Effect;

 

(xvi)        The
Co-Issuers maintain insurance coverages in such amounts and covering such risks
as is adequate for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies engaged in
similar businesses in similar industries. 
All policies of insurance of the Co-Issuers are in full force and effect
and the Co-Issuers are in compliance with the terms of such policies in 

 

6

 

all material respects.  Neither
of the Co-Issuers has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not reasonably be expected to have a Material
Adverse Effect.  All such insurance is
primary coverage, all premiums therefor due on or before the date hereof have been
paid in full, and the terms and conditions thereof are no less favorable to the
Co-Issuers than the terms and conditions of insurance maintained by their
affiliates that are not Co-Issuers;

 

(xvii)       (1)  Each of the Co-Issuers owns and has good title to
its Collateral, free and clear of all Liens other than Permitted Liens.  The Co-Issuers’ rights under the collateral
documents relating to the security interests held by the Secured Parties
constitute general intangibles under the applicable UCC.  The Base Indenture constitutes a valid and
continuing Lien on the Collateral in favor of the Trustee on behalf of and for
the benefit of the Secured Parties, which Lien on the Collateral has been
perfected (except as described on Schedule 7.16 to the Base Indenture) and is
prior to all other Liens (other than Permitted Liens), and is enforceable as
such as against creditors of and purchasers from each Co-Issuer in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors’ rights generally or by general equitable principles,
whether considered in a proceeding at law or in equity and by an implied
covenant of good faith and fair dealing. 
The Co-Issuers have received all consents and approvals required by the
terms of the Collateral to the pledge of the Collateral to the Trustee under
the Base Indenture.  All actions
necessary to perfect such first-priority security interest have been duly
taken;

 

(2) 
Other than the security interest granted to the Trustee under the Base
Indenture, pursuant to the other Transaction Documents or any other Permitted
Lien, neither of the Co-Issuers has pledged, assigned, sold or granted a
security interest in the Collateral.  All
action necessary (including the filing of UCC-1 financing statements and
filings with the United States Patent and Trademark Office, the United States
Copyright Office or any applicable foreign intellectual property office or agency)
to protect and evidence the Trustee’s security interest in the Collateral in
the United States will have been duly and effectively taken consistent with the
obligations of Section 7.16(d) of the Base Indenture, except as
described on Schedule 7.16 to the Base Indenture).  No security agreement, financing statement,
equivalent security or lien instrument or continuation statement authorized by
either Co-Issuer and listing such Co-Issuer as debtor covering all or any part
of the Collateral is on file or of record in any jurisdiction in the United
States, except in respect of Permitted Liens or such as may have been filed,
recorded or made by such Co-Issuer in favor of the Trustee on behalf of the
Secured Parties in connection with the Base Indenture, and neither Co-Issuer
has authorized any such filing;

 

(xviii)      Each of the Co-Issuers possesses all licenses, permits, orders,
patents, franchises, certificates of need and other governmental and regulatory
approvals to own or lease its properties and conduct its business in the
jurisdictions in which such business is transacted as described in the Draft
Offering Memorandum (as of the Closing 

 

7

 

Date) and the Offering Memorandum (as of the Relevant
Date) with only such exceptions as would not, individually or in the aggregate,
have a Material Adverse Effect, and has not received any notice of proceedings
relating to the revocation or modification of any such license, permit, order
or approval, except for those whose revocation or modification would not
individually or in the aggregate, have a Material Adverse Effect;

 

(xix)         Except as described in the Draft Offering Memorandum (as of
the Closing Date) and the Offering Memorandum (as of the Relevant Date), no
labor disturbance by the employees of the Co-Issuers exists or, to the
knowledge of the Co-Issuers, is imminent that would reasonably be expected to
have a Material Adverse Effect;

 

(xx)          After
giving effect to the Restructuring, as of the Closing Date, neither of the
Co-Issuers will have any (i) employees, (ii) outstanding indebtedness
for borrowed money other than under the Indenture or (iii) material
liabilities except where such liabilities are expressly permitted by the
Transaction Documents;

 

(xxi)         Neither a Reportable Event nor an “accumulated funding
deficiency” (within the meaning of Section 412 of the Code or Section 302
of ERISA) has occurred during the six year period prior to the date on which
this representation is made or deemed made or is reasonably expected to occur
with respect to any Single Employer Plan, and each Plan (including, to the
actual knowledge of the Co-Issuers, a Multiemployer Plan or a multiemployer
welfare plan maintained pursuant to a collective bargaining agreement) has
complied in all respects with the applicable provisions of ERISA, the Code and
the constituent documents of such Plan, except for instances of non-compliance
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.  No termination of a
Single Employer Plan has occurred during such six-year period or is reasonably
expected to occur (other than a termination described in Section 4041(b) of
ERISA), and no Lien in favor of the PBGC or a Plan has arisen during such
six-year period or is reasonably expected to arise.  Except to the extent that any such excess
could not reasonably be expected to have a Material Adverse Effect, the present
value of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued
benefits.  Except to the extent that such
liability could not reasonably be expected to have a Material Adverse Effect,
neither of the Co-Issuers nor any affiliate thereof have had a complete or
partial withdrawal from any Multiemployer Plan, and the Co-Issuers would not
become subject to any liability under ERISA if a Co-Issuer or any affiliate
thereof were to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date on which this representation is
made or deemed made.  To the actual
knowledge of the Co-Issuers, no such Multiemployer Plan is in Reorganization,
insolvent or terminating or is reasonably expected to be in Reorganization,
become insolvent or be terminated. 
Except to the extent that any such excess could not reasonably be
expected to have a Material Adverse Effect, the present value (determined using
actuarial and other assumptions which are reasonable in respect of the benefits
provided and the employees participating) of the liability of the Co-Issuers
and each affiliate thereof for post retirement benefits to 

 

8

 

be provided to their current and former employees
under Plans which are welfare benefit plans (as defined in Section 3(1) of
ERISA) other than such liability disclosed in the financial statements of the
Co-Issuers does not, in the aggregate, exceed the assets under all such Plans
allocable to such benefits.  None of the
Co-Issuers nor any affiliate thereof has engaged in a prohibited transaction
under Section 406 of ERISA and/or Section 4975 of the Code in
connection with any Plan that would subject either Co-Issuer to liability under
ERISA and/or Section 4975 of the Code that could reasonably be expected to
have a Material Adverse Effect.  There is
no other circumstance which may give rise to a liability in relation to any
Plan that could reasonably be expected to have a Material Adverse Effect;

 

(xxii)        Each of the Co-Issuers has filed, or caused to be filed, all
federal, state, local and foreign Tax returns and all other Tax returns which,
to the knowledge of either Co-Issuer, are required to be filed by, or with
respect to the income, properties or operations of, such Co-Issuer (whether
information returns or not), and has paid, or caused to be paid, all Taxes due,
if any, pursuant to said returns or pursuant to any assessment received by
either Co-Issuer or otherwise, except such Taxes, if any, as are being
contested in good faith and by appropriate proceedings and for which adequate
reserves have been set aside in accordance with GAAP.  Except as would not reasonably be expected to
have a Material Adverse Effect, no tax deficiency has been determined adversely
to either Co-Issuer, nor does either Co-Issuer have any knowledge of any tax
deficiencies.  Each of the Co-Issuers has
paid all fees and expenses required to be paid by it in connection with the
conduct of its business, the maintenance of its existence and its qualification
as a foreign entity authorized to do business in each state and each Foreign
Country in which it is required to so qualify, except to the extent that the
failure to pay such fees and expenses is not reasonably likely to result in a
Material Adverse Effect;

 

(xxiii)       There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery of
this Agreement or the issuance by the Co-Issuers or sale by the Co-Issuers of
the Securities;

 

(xxiv)       All certificates, reports, statements, notices, documents and
other information furnished to the Trustee, or the Initial Purchaser by or on
behalf of the Co-Issuers or the Parent Companies pursuant to any provision of
the Indenture or any other Transaction Document, or in connection with or
pursuant to any amendment or modification of, or waiver under, the Indenture or
any other Transaction Document, are, at the time the same are so furnished,
complete and correct in all material respects (when taken together with all
other information furnished by or on behalf of the Co-Issuers) to the Trustee or the Initial Purchaser, as the case may be, and give the
Trustee or the Initial Purchaser, as the case may be, true and accurate
knowledge of the subject matter thereof in all material respects, and the
furnishing of the same to the Trustee or the Initial Purchaser, as the case may
be, shall constitute a representation and warranty by each of the Co-Issuers
made on the date the same are furnished to the Trustee or the Initial
Purchaser, as the case may be, to the effect specified herein;

 

9

 

(xxv)        Neither Co-Issuer is, after giving effect to the issuance of
the Securities, the transactions contemplated by the Transaction Documents and the
application of the proceeds from the sale of the Securities as described
herein, in the Draft Offering Memorandum (as of the Closing Date) and in the
Offering Memorandum (as of the Relevant Date),
an “investment company”, or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended (the “1940
Act”);

 

(xxvi)       The proceeds of the Securities will not be used to purchase or
carry any “margin stock” (as defined or used in the regulations of the Board of
Governors of the Federal Reserve System, including Regulations T, U and X
thereof) in such a way that could cause the transactions contemplated by the
Transaction Documents to fail to comply with the regulations of the Board of
Governors of the Federal Reserve System, including Regulations T, U, and X
thereof.  Neither Co-Issuer owns or is
engaged in the business of extending credit for the purpose of purchasing or
carrying any margin stock;

 

(xxvii)      No subsidiary of the Co-Issuers is currently prohibited,
directly or indirectly, from paying any dividends to its parent Co-Issuer, from
making any other distribution on such subsidiary’s capital stock or limited
liability company interests, from repaying its parent Co-Issuer any loans or
advances to such subsidiary from its parent Co-Issuer or from transferring any
such subsidiary’s property or assets to its parent Co-Issuer or any other
subsidiary of the parent Co-Issuer, except as described in the Draft Offering
Memorandum (as of the Closing Date) or in the Offering Memorandum (as of the
Relevant Date);

 

(xxviii)     The representations and warranties of each of the Co-Issuers
contained in the Transaction Documents to which such Co-Issuer is a party are
true and correct and are repeated herein as though fully set forth herein;

 

(xxix)       Neither of the Co-Issuers (after giving effect to the issuance
of the Securities and to the other transactions related thereto as described in
the Draft Offering Memorandum) is insolvent within the meaning of the
Bankruptcy Code or any applicable state law and neither of the Co-Issuers is
the subject of any voluntary or involuntary case or proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy or insolvency law and no Event of Bankruptcy has occurred
with respect to either Co-Issuer;

 

(xxx)        (A)          All of the issued and outstanding
limited liability company interests of the Master Issuer are owned by IHOP, all
of which limited liability company interests have been validly issued and are
owned of record by IHOP free and clear of all Liens other than Permitted Liens;

 

(B)           All of the issued and outstanding
limited liability company interests of the IP Holder are owned by the Master
Issuer, all of which limited liability company interests have been validly
issued and are owned of record by the Master Issuer, free and clear of all
Liens other than Permitted Liens; and

 

10

 

(C)           The Master Issuer has no subsidiaries
and owns no Equity Interests in any other Person, other than the IP Holder,
IHOP Real Estate, LLC, IHOP Properties, LLC and IHOP Property Leasing,
LLC.  The IP Holder has no subsidiaries
and own no Equity Interests in any other Person (for purposes of this
Agreement, the “Equity Interests” means (a) ownership, management or
membership interests in any limited liability company or unlimited company, (b) 
general or limited partnership interest in any partnership, (c)  common,
preferred or other stock interest in any corporation, (d)  share,
participation, unit or other interest in the property or enterprise of an
issuer that evidences ownership rights therein, (e)  ownership or
beneficial interest in any trust or (f)  option, warrant or other right to
convert into or otherwise receive any of the foregoing);

 

(xxxi)       The Securities satisfy the eligibility requirements of Rule 144A(d)(3) under
the Securities Act;

 

(xxxii)      No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) of either
Co-Issuer or of the Parent Companies contained in the Preliminary Marketing
Materials, the Draft Offering Memorandum (as of the Closing Date) or the
Offering Memorandum (as of the Relevant Date) has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith;

 

(xxxiii)     With respect to those Securities sold in reliance upon
Regulation S of the Securities Act (“Regulation S”) (i) none
of the Co-Issuers or any of their affiliates or any other person acting on
their behalf has engaged in any directed selling efforts within the meaning of Rule 902
of Regulation S and (ii) the Co-Issuers and their affiliates and each
person acting on their behalf have complied with the offering restrictions set
forth in Rule 902 of Regulation S;

 

(xxxiv)     Except pursuant to this Agreement, none of the Co-Issuers or any
of their affiliates or any other person acting on their behalf has,
within the six-month period prior to the date hereof, offered or sold in the
United States or to any U.S. person (as such terms are defined in Rule 902 of Regulation S) the Securities or any security of
the same class or series as the Securities;

 

(xxxv)      None
of the Co-Issuers or any of their affiliates has participated in a plan or
scheme to evade the registration requirements of the Securities Act through the
sale of the Securities pursuant to Regulation S;

 

(xxxvi)     Ernst & Young LLP (“E&Y”), who have audited
or reviewed the consolidated financial statements of IHOP contained in the
Draft Offering Memorandum (as of the Closing Date) and the Offering Memorandum
(as of the Relevant Date), are independent certified public accountants with
respect to the IHOP and Merger Sub within the meaning of Rule 101 of the
Code of Professional Conduct of the AICPA and its interpretations and rulings
thereunder.  The historical consolidated
financial statements (including the related notes and supporting schedules) of
IHOP contained in the Draft Offering Memorandum (as of the Closing Date) and
the Offering Memorandum (as of the

 

11

 

Relevant Date) have been prepared in accordance with
generally accepted accounting principles in the United States consistently
applied throughout the periods covered thereby and fairly present the financial
position of the entities purported to be covered thereby at the respective
dates indicated and the results of their operations and their cash flows for
the respective periods indicated; and the financial information contained in
the Draft Offering Memorandum (as of the Closing Date) and the Offering Memorandum
(as of the Relevant Date) under the headings “Capitalization of IHOP
Corp. and its Subsidiaries,” “Selected Historical and Pro Forma Financial Data
of IHOP Corp. and its Subsidiaries,” “Unaudited Pro Forma Condensed Combined
Financial Information of IHOP Corp.,” “Capitalization of IHOP Franchising, LLC,”
“Unaudited Pro Forma Condensed Consolidated Financial Information of IHOP
Franchising, LLC,” “IHOP Franchising, LLC Unaudited Supplemental Financial
Information” and in the Exchange
Act Documents under the heading “Management’s Discussion and Analysis of
Financial Condition and Results of Operations of IHOP” is derived from the accounting records of IHOP or the relevant subsidiary
of IHOP (each, an “IHOP Entity”) and fairly present the information purported
to be shown thereby.  The other
historical financial and statistical information and data of IHOP and the other
IHOP Entities contained in the Draft Offering Memorandum (as of the Closing
Date) and the Offering Memorandum (as of the Relevant Date) are, in all
material respects, fairly presented;

 

(xxxvii)            The pro forma financial information included in the Draft Offering Memorandum (as of the Closing
Date) and the Offering Memorandum (as of the Relevant Date) include
assumptions that provide a reasonable basis for presenting the significant
effects directly attributable to the transactions and events described therein
(it being understood that the securities that are assumed to be issued in the
pro forma financial information that is contained in the Draft Offering
Memorandum as of the Closing Date are different from the securities being
issued hereunder and in the Applebee’s Securitization), the related pro forma
adjustments give appropriate effect to those assumptions, and the pro forma
adjustments reflect the proper application of those adjustments to the
historical financial statement amounts in the pro forma financial information
included in the Draft Offering Memorandum (as
of the Closing Date) and the Offering Memorandum (as of the Relevant Date).  The pro forma financial information included
in the Draft Offering Memorandum (as of the
Closing Date) and the Offering Memorandum (as of the Relevant Date) comply
as to form in all material respects with the applicable requirements of
Regulation S-X under the Securities Act;

 

(xxxviii)           The Exchange Act
Documents did not, when filed with the Commission, contain an untrue statement
of material fact or omit to state a material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading. The
Exchange Act Documents, when filed with the Commission, conformed or will
conform in all material respects to the applicable requirements of the Exchange
Act and the applicable rules and regulations of the Commission thereunder;

 

(xxxix)      The market-related and customer-related data and
estimates included in the Preliminary Marketing Materials, the Draft Offering Memorandum (as of the Closing
Date) and the Offering Memorandum (as of the Relevant Date) are based on

 

12

 

or derived from sources that the Co-Issuers believe to be reliable and
accurate in all material respects or represent the Co-Issuers’ good faith
estimates made on the basis of data derived from such sources;

 

(xl)           The
Co-Issuers maintain and have maintained effective internal control over
financial reporting, as defined in Rule 13a-15 under the Exchange Act, and
a system of accounting controls that is sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorization; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles in the United States and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences;

 

(xli)          (i) Each of the Co-Issuers has established and
maintains disclosure controls and procedures (as such term is defined in Rule 13a-15
under the Exchange Act), (ii) such disclosure controls and procedures are
designed to ensure that the information required to be disclosed by each
Co-Issuer in the reports it files or submits under the Exchange Act (assuming
each Co-Issuer was required to file or submit such reports under the Exchange
Act) is accumulated and communicated to management of such Co-Issuer, including
their respective principal executive officers and principal financial officers,
as appropriate, to allow timely decisions regarding required disclosure to be
made; and (iii) such disclosure controls and procedures are effective in
all material respects to perform the functions for which they were established.

 

(xlii)         None of the Co-Issuers or any of their affiliates has,
directly or through any agent, sold, offered for sale, solicited offers to buy
or otherwise negotiated in respect of any security (as such term is defined in
the Securities Act), which is or will be integrated with the sale or resale of
the Securities in a manner that would require registration of the resale of the
Securities under the Securities Act;

 

(xliii)        None of the Co-Issuers or any of their affiliates or any
other person acting on their behalf has engaged, in connection with the
offering of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities
Act (including, but not limited to, advertisements, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising);

 

(xliv)       None of the Co-Issuers or any of their affiliates or any other
person acting on their behalf has offered, sold, contracted to sell or
otherwise disposed of, directly or indirectly, any securities under
circumstances where such offer, sale, contract or disposition would cause the
exemption afforded by Section 4(2) of the Securities Act or Section 3(c)(7) of
the 1940 Act to cease to be applicable to the offering, sale and resale of the
Securities as contemplated by this Agreement, the Draft Offering Memorandum (as
of the Closing Date) and the Offering Memorandum (as of the Relevant Date);

 

13

 

(xlv)        None of the Co-Issuers or any of their affiliates has taken
and none of the Co-Issuers or any of their affiliates will take any action
prohibited by Regulation M under the Exchange Act, in connection with the
offering or resale of the Securities;

 

(xlvi)       (A)          Neither of the Co-Issuers is subject
to any material liabilities or obligations pursuant to any Environmental Law,
which could, individually or in the aggregate, reasonably be expected to result
in the payment of a Material Environmental Amount; and

 

(B)           The Co-Issuers have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects, except such as are described in the Draft Offering Memorandum (as of the Closing
Date) and the Offering Memorandum (as of the Relevant Date) and such as
do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Co-Issuers; and all assets held under lease by the Co-Issuers are held by them
under valid, subsisting and enforceable leases, with such exceptions as do not
materially interfere with the use made and proposed to be made of such assets
by the Co-Issuers;

 

(xlvii)      There
is and has been no failure on the part of the Co-Issuers or any of the
Co-Issuers’ managers, directors or officers, in their capacities as such, to
comply with the provisions of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith;

 

(xlviii)     The
section entitled “Management’s Discussion and Analysis of Financial Condition
and Results of Operations – Critical Accounting Policies” contained  in the Exchange Act Documents and in the Draft Offering Memorandum (as of the Closing
Date) and the Offering Memorandum (as of the Relevant Date) accurately
and fully describes (A) the accounting policies that the Co-Issuers and
IHOP believe are the most important in the portrayal of IHOP’s financial
condition and results of operations and that require management’s most
difficult, subjective or complex judgments; (B) the judgments and
uncertainties affecting the application of critical accounting policies; and (C) the
likelihood that materially different amounts would be reported under different
conditions or using different assumptions and an explanation thereof;

 

(xlix)        Neither
of the Co-Issuers is in violation of or has received notice of any violation
with respect to any federal or state law relating to discrimination in the
hiring, promotion or pay of employees, or any applicable federal or state wage
and hour laws, or any state law precluding the denial of credit due to the
neighborhood in which a property is situated, the violation of any of which
would reasonably be expected to have a Material Adverse Affect;

 

(l)            The
operations of the Co-Issuers are and have been conducted at all times in
compliance with applicable financial record keeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as 

 

14

 

amended, the money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Co-Issuers with respect to the Money Laundering
Laws is pending or, to the knowledge of the Co-Issuers, threatened, except, in
each case, as would not reasonably be expected to have a Material Adverse
Effect;

 

(li)           Neither
of the Co-Issuers or, to the knowledge of the Co-Issuers, any director,
officer, agent, employee or affiliate of the Co-Issuers, is currently subject
to any U.S. sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department (“OFAC”); and the Co-Issuers will not
directly or indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner
or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC;

 

(lii)          (A)          All of the material registrations and
applications included in the IP Assets are subsisting, unexpired and have not
been abandoned in any applicable jurisdiction except where such abandonment
could not reasonably be expected to have a Material Adverse Effect;

 

(B)           (i) The use of the IP Assets
does not infringe or violate the rights of any third party, (ii) the IP
Assets are not being infringed or violated by any third party in a manner that could
reasonably be expected to have a Material Adverse Effect and (iii) there
is no action or proceeding pending or, to the Co-Issuers’ knowledge, threatened
alleging same that could reasonably be expected to have a Material Adverse
Effect;

 

(C)           No action or proceeding is pending
or, to the Co-Issuers’ knowledge, threatened that seeks to limit, cancel or
question the validity of any material IP Assets, or the use thereof, that could
reasonably be expected to have a Material Adverse Effect;

 

(D)          The IP Holder is the exclusive owner
of the IP Assets, free and clear of all Liens, set-offs, defenses and
counterclaims of whatsoever kind or nature (other than licenses granted in the
ordinary course of business and the rights granted under the IP License Agreements,
the Franchise Agreements and the Permitted Liens);

 

(E)           The Co-Issuers have not made and will
not hereafter make any material assignment, pledge, mortgage, hypothecation or
transfer of any of the IP Assets (other than licenses granted in the ordinary
course of business and the rights granted under the IP License Agreements, the
Franchise Agreements and the Permitted Liens);

 

(liii)         The
Co-Issuers have not taken any action or omitted to take any action (such as
issuing any press release relating to any Securities without an appropriate 

 

15

 

legend) which may result in the loss by the Initial Purchaser of the
ability to rely on any stabilization safe harbor provided by the Financial
Services Authority under the Financial Services and Markets Act 2000 (the “FSMA”).  The Co-Issuers have been informed of the
guidance relating to stabilization provided by the Financial Services
Authority; and

 

(liv)         Since the date as of which information is given in
the Draft Offering Memorandum (as of the Closing Date) or the Offering
Memorandum (as of the Relevant Date), there has not been any development in the
condition, financial or otherwise, of the Securitization Entities, taken as a
whole, or in the earnings, business affairs or management, whether or not
arising in the course of business of the Securitization Entities, taken as a
whole, that could reasonably be expected to result in a Material Adverse
Effect.

 

(b)           Each
of the Parent Companies, jointly and severally, represents and warrants to, and
agrees with, the Initial Purchaser, as of the Closing Date, that:

 

(i)            As
of the Closing Date, the Draft Offering Memorandum presents fairly, in all
material respects, the business, results of operations and financial condition
of the Co-Issuers.  As of the Relevant
Date, the Offering Memorandum does not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;

 

(ii)           The
Preliminary Marketing Materials and the Offering Memorandum have been or will
have been prepared by the Co-Issuers and the Parent Companies for use by the
Initial Purchaser in connection with the Exempt Resales (as defined
below).  No order or decree preventing
the use of the Preliminary Marketing Materials or the Offering Memorandum, or
any order asserting that the transactions contemplated by this Agreement are
subject to the registration requirements of the Securities Act has been issued,
and no proceeding for that purpose has commenced or is pending or, to the
knowledge of the Parent Companies, is contemplated;

 

(iii)          Each of the Parent Companies and the IHOP Securitization
Entities has been duly formed as a corporation or limited liability company and
is validly existing and in good standing under the laws of the State of
Delaware, is qualified to do business and is in good standing as a foreign
corporation or limited liability company in each jurisdiction in which the
ownership or lease of property or the conduct of its business requires such
qualification except for such failures to qualify to do business or be in good
standing as are not reasonably likely to result in a Material Adverse Effect,
and has the requisite corporate or limited liability company power and
authority to own or hold its properties and to conduct the business in which it
is engaged as described in the Draft Offering Memorandum (as of the Closing
Date) or the Offering Memorandum (as of the Relevant Date);

 

(iv)          Each
of the Parent Companies has the requisite corporate or limited liability
company power and authority to execute and deliver this Agreement and 

 

16

 

all other Transaction Documents to which it is a
party and perform its obligations hereunder and thereunder;

 

(v)           None
of the Parent Companies or the IHOP Securitization Entities (collectively the “Other
Entities”) is in violation of (i) its respective Securitization
Entity Charter Documents, (ii) any Requirements of Law with respect to
such Other Entity or (iii) any Contractual Obligation with respect to such
Other Entity except, solely with respect to clauses (ii) and (iii),
to the extent such violation could not reasonably be expected to result in a
Material Adverse Effect.  The execution and delivery of this Agreement
and the other Transaction Documents, the application of the proceeds
from the sale of the Securities as described as described herein and in the Offering
Memorandum (as of the Relevant Date) and the
incurrence of the obligations and consummation of the transactions herein and
therein contemplated (a) will not conflict with, or constitute a breach of
or default under, any Securitization Entity Charter Documents of any Other
Entity, and (b) does not contravene, or constitute a default under,
any Requirements of Law with respect to such Other Entity or any Contractual
Obligation with respect to such Other Entity or result in the creation or
imposition of any Lien on any property of any Other Entity, except for Liens
created by the Transaction Documents;

 

(vi)          Each
of the Transaction Documents to which any Other Entity is a party has been duly
and validly authorized, executed and delivered by it and, assuming due
authorization, execution and delivery by the other parties thereto, constitutes
its legal, valid and binding obligation enforceable in accordance with its
terms (except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors’ rights generally or by general equitable principles,
whether considered in a proceeding at law or in equity and by an implied
covenant of good faith and fair dealing).  Each of the Transaction Documents to which an
Other Entity is a party will conform in all material respects to the
description thereof in the Draft Offering
Memorandum (as of the Closing Date) or the Offering Memorandum (as of the
Relevant Date);

 

(vii)         (1) The Transaction Documents to which an Other Entity
is a party are in full force and effect; (2) there are no outstanding
defaults thereunder; and (3) no events shall have occurred which, with the
giving of notice, the passage of time or both, would constitute a default
thereunder;

 

(viii)        This Agreement has been duly authorized, executed and
delivered by each Parent Company party hereto and constitutes the legal, valid
and binding obligation of each Parent Company enforceable in accordance with
its terms (except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors’ rights generally or by general equitable principles,
whether considered in a proceeding at law or in equity and by an implied
covenant of good faith and fair dealing and except that any indemnification or
contribution provisions herein may be deemed unenforceable);

 

17

 

(ix)           There
is no consent, approval, authorization, order, registration or qualification of
or with any court or any regulatory authority or other governmental agency or
body which is required for, and the absence of which would materially affect,
the consummation of the transactions contemplated by this Agreement and the
other Transaction Documents, the issuance of the Securities, the execution,
delivery and performance by the Parent Companies of this Agreement and by the
Other Entities of the Transaction Documents (to the extent they are parties
thereto) or the application of the proceeds from the sale of the Securities as
described herein and in the Offering Memorandum (as of the Relevant Date);

 

(x)            Each
of the Other Entities possesses all licenses, permits, orders, patents,
franchises, certificates of need and other governmental and regulatory
approvals to own or lease its properties and conduct its business in the
jurisdictions in which such business is transacted as described in the Draft
Offering Memorandum (as of the Closing Date) or the Offering Memorandum (as of
the Relevant Date), with only such exceptions as would not individually or in
the aggregate have a Material Adverse Effect, and has not received any notice
of proceedings relating to the revocation or modification of any such license,
permit, order or approval, except for those whose revocation or modification
would not, individually or in the aggregate, have a Material Adverse Effect;

 

(xi)           Except
as described in the Draft Offering Memorandum (as of the Closing Date) or the Offering
Memorandum (as of the Relevant Date), no labor disturbance by the employees of
the Other Entities exists or, to the knowledge of the Other Entities, is
imminent that would reasonably be expected to have a Material Adverse Effect;

 

(xii)          After giving effect to the Restructuring, as of the
Closing Date, neither of the Co-Issuers will have any (i) employees, (ii) outstanding
indebtedness for borrowed money other than under the Indenture or (iii) material
liabilities except where such liabilities are expressly permitted by the
Transaction Documents;

 

(xiii)         Neither a Reportable Event nor an “accumulated funding deficiency”
(within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the six year period prior to the date on which this
representation is made or deemed made or is reasonably expected to occur with
respect to any Single Employer Plan, and each Plan (including, to the actual
knowledge of the Other Entities, a Multiemployer Plan or a multiemployer
welfare plan maintained pursuant to a collective bargaining agreement) has
complied in all respects with the applicable provisions of ERISA, the Code and
the constituent documents of such Plan, except for instances of non-compliance
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.  No termination of a
Single Employer Plan has occurred during such six-year period or is reasonably
expected to occur (other than a termination described in Section 4041(b) of
ERISA), and no Lien in favor of the PBGC or a Plan has arisen during such six-year period or is
reasonably expected to arise.  Except to
the extent that any such excess could not reasonably be expected to have a
Material Adverse Effect, the present value of all accrued benefits under each
Single Employer Plan (based on those assumptions used to fund such Plans) did
not, as of the last annual valuation date prior to 

 

18

 

the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits. 
Except to the extent that such liability could not reasonably be
expected to have a Material Adverse Effect, neither the Other Entities nor any
affiliate thereof have had a complete or partial withdrawal from any
Multiemployer Plan, and the Other Entities would not become subject to any
liability under ERISA if an Other Entity or any affiliate thereof were to
withdraw completely from all Multiemployer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed
made.  To the actual knowledge of the
Other Entities, no such Multiemployer Plan is in Reorganization, insolvent or
terminating or is reasonably expected to be in Reorganization, become insolvent
or be terminated.  Except to the extent
that any such excess could not reasonably be expected to have a Material
Adverse Effect, the present value (determined using actuarial and other
assumptions which are reasonable in respect of the benefits provided and the
employees participating) of the liability of the Other Entities and each
affiliate thereof for post retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) other than such liability disclosed in the
financial statements of the Other Entities does not, in the aggregate, exceed
the assets under all such Plans allocable to such benefits.  Neither the Other Entities nor any affiliate
thereof has engaged in a prohibited transaction under Section 406 of ERISA
and/or Section 4975 of the Code in connection with any Plan that would
subject either Other Entities to liability under ERISA and/or Section 4975
of the Code that could reasonably be expected to have a Material Adverse
Effect.  There is no other circumstance
which may give rise to a liability in relation to any Plan that could
reasonably be expected to have a Material Adverse Effect;

 

(xiv)        There is no action, suit, proceeding or investigation
pending against or, to the knowledge of each Parent Company, threatened against
or affecting any Other Entity or of which any property or assets of the Other
Entities is the subject before any court or arbitrator or any Governmental
Authority that would, individually or in the aggregate, affect the validity or
enforceability of this Agreement or any of the Transaction Documents,
materially adversely affect the performance by the Parent Companies of their
obligations hereunder or by the Other Entities thereunder or which is
reasonably likely to have a Material Adverse Effect;

 

(xv)         None
of the Other Entities is, after giving effect to the issuance of the
Securities, the transactions contemplated by the Transaction Documents and the
application of the proceeds from the sale of the Securities as described
herein, in the Draft Offering Memorandum (as of the Closing Date) and in the
Offering Memorandum (as of the Relevant Date), an “investment company”, or a
company “controlled” by an “investment company”, within the meaning of the 1940
Act;

 

(xvi)        Each of the Other Entities (after giving effect to the
transactions contemplated by the Transaction Documents) is not insolvent within
the meaning of the Bankruptcy Code and none of the Other Entities is the subject
of any voluntary or involuntary case or proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy or insolvency law and no Event of Bankruptcy has occurred with
respect to any of the Other Entities;

 

19

 

(xvii)       No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in
the Draft Offering Memorandum (as of the Closing Date) or the Offering
Memorandum (as of the Relevant Date) has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith;

 

(xviii)      Since the date as of which information is given in the Draft
Offering Memorandum (as of the Closing Date) or the Offering Memorandum (as of
the Relevant Date), there has not been any development in the condition,
financial or otherwise, of the Securitization Entities, taken as a whole, or in
the earnings, business affairs or management, whether or not arising in the
course of business of the Securitization Entities, taken as a whole, that could
reasonably be expected to result in a Material Adverse Effect;

 

(xix)         E&Y, who have audited or reviewed the consolidated
financial statements of IHOP contained in the Draft Offering Memorandum (as of
the Closing Date) and the Offering Memorandum (as of the Relevant Date), are
independent certified public accountants with respect to IHOP and Merger Sub
within the meaning of Rule 101 of the Code of Professional Conduct of the
AICPA and its interpretations and rulings thereunder.  The historical consolidated financial
statements (including the related notes and supporting schedules) of IHOP
contained in the Draft Offering Memorandum (as of the Closing Date) and the
Offering Memorandum (as of the Relevant Date) have been prepared in accordance
with generally accepted accounting principles in the United States consistently
applied throughout the periods covered thereby and fairly present the financial
position of the entities purported to be covered thereby at the respective
dates indicated and the results of their operations and their cash flows for
the respective periods indicated; and the financial information contained in
the Draft Offering Memorandum (as of the Closing Date) and the Offering
Memorandum (as of the Relevant Date) under the headings “Capitalization
of IHOP Corp. and its Subsidiaries,” “Selected Historical and Pro Forma
Financial Data of IHOP Corp. and its Subsidiaries,” “Unaudited Pro Forma Condensed
Combined Financial Information of IHOP Corp.,” “Capitalization of IHOP
Franchising, LLC,” “Unaudited Pro Forma Condensed Consolidated Financial
Information of IHOP Franchising, LLC,” “IHOP Franchising, LLC Unaudited
Supplemental Financial Information” and in the Exchange Act Documents under the heading “Management’s
Discussion and Analysis of Financial Condition and Results of Operations of
IHOP” is derived from the accounting records of
the applicable IHOP Entities and fairly present the information purported to be
shown thereby.  The other historical
financial and statistical information and data of IHOP and the other IHOP
Entities contained in the Draft Offering Memorandum (as of the Closing Date)
and the Offering Memorandum (as of the Relevant Date) are, in all material
respects, fairly presented;

 

(xx)          The
pro forma financial information included in the Draft Offering Memorandum (as of the Closing Date) and the Offering
Memorandum (as of the Relevant Date) include assumptions that provide a
reasonable basis for presenting the significant effects directly attributable
to the transactions and events described therein (it being understood that the
securities that are assumed to be issued in the pro forma 

 

20

 

financial information that is contained in the Draft Offering
Memorandum as of the Closing Date are different from the securities being
issued hereunder and in the Applebee’s Securitization), the related pro forma
adjustments give appropriate effect to those assumptions, and the pro forma
adjustments reflect the proper application of those adjustments to the
historical financial statement amounts in the pro forma financial information
included in the Draft Offering Memorandum (as
of the Closing Date) and the Offering Memorandum (as of the Relevant Date).  The pro forma financial information included in the Draft Offering Memorandum (as of the Closing
Date) and the Offering Memorandum (as of the Relevant Date) comply as to
form in all material respects with the applicable requirements of
Regulation S-X under the Securities Act;

 

(xxi)         The Exchange Act Documents did not, when filed with
the Commission, contain an untrue statement of material fact or omit to state a
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. The Exchange Act Documents, when filed with
the Commission, conformed or will conform in all material respects to the
applicable requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder;

 

(xxii)        The market-related and customer-related data and
estimates included in the Preliminary Marketing Materials, in the Draft Offering Memorandum (as of the Closing
Date) and the Offering Memorandum (as of the Relevant Date) are based on
or derived from sources that the Parent Companies believe to be reliable and
accurate in all material respects or represent the Parent Companies’ good faith
estimates made on the basis of data derived from such sources;

 

(xxiii)       The
Other Entities maintain and have maintained effective internal control over
financial reporting, as defined in Rule 13a-15 under the Exchange Act, and
a system of accounting controls that is sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles in the United States
and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences;

 

(xxiv)       (i) Each
of the Parent Companies and each of their respective  subsidiaries have established and maintain
disclosure controls and procedures (as such term is defined in Rule 13a-15
under the Exchange Act), (ii) such disclosure controls and procedures are
designed to ensure that the information required to be disclosed by the Parent
Companies in the reports they file or submit under the Exchange Act (assuming
the Parent Companies were required to file or submit such reports under the
Exchange Act) is accumulated and communicated to management of the Parent
Companies, including their respective principal executive officers and
principal financial officers, as appropriate, to allow timely decisions
regarding required disclosure to be made; and 

 

21

 

(iii) such disclosure controls and procedures are effective in all
material respects to perform the functions for which they were established;

 

(xxv)        Since the date of the most recent balance sheet of
IHOP and its consolidated subsidiaries reviewed or audited by E&Y and the
audit committee of the board of directors of IHOP, (i) IHOP has not been
advised of (A) any significant deficiencies in the design or operation of
internal control over financial reporting that would adversely affect the
ability of IHOP or any of its subsidiaries to record, process, summarize and
report financial data, or any material weaknesses in internal control over
financial reporting and (B) any fraud, whether or not material, that
involves management or other employees who have a significant role in the
internal controls of IHOP and each of its subsidiaries, and (ii) since
that date, there have been no significant changes in internal control over
financial reporting or in other factors that would significantly affect
internal control over financial reporting, including any corrective actions
with regard to significant deficiencies and material weaknesses;

 

(xxvi)       The representations and warranties of each of the Other
Entities, contained in the Transaction Documents to which it is a party are
true and correct and are repeated as though fully set forth herein;

 

(xxvii)      With respect to those Securities sold in reliance upon
Regulation S, (i) none of the Other Entities or any of their
affiliates or any other person acting on their behalf has engaged in any
directed selling efforts within the meaning of Rule 902 of
Regulation S and (ii) the Other Entities and their affiliates and
each person acting on their behalf have complied with the offering restrictions
set forth in Regulation S;

 

(xxviii)     None of the Other Entities or any of their affiliates or any
other person acting on their behalf have engaged, in connection with the
offering of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities
Act (including, but not limited to, advertisements, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising);

 

(xxix)       None of the Other Entities or any of their affiliates or any
other person acting on their behalf have offered, sold, contracted to sell or
otherwise disposed of, directly or indirectly, any securities under
circumstances where such offer, sale, contract or disposition would cause the
exemption afforded by Section 4(2) of the Securities Act or Section 3(c)(7) of
the 1940 Act to cease to be applicable to the offering, sale and resale of the
Securities as contemplated by this Agreement, the Draft Offering Memorandum (as
of the Closing Date) and the Offering Memorandum (as of the Relevant Date);

 

(xxx)        There
is and has been no failure on the part of the Other Entities or any of the
Other Entities’ managers, directors or officers, in their capacities as such,
to comply with the provisions of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith;

 

22

 

(xxxi)       The
section entitled “Management’s Discussion and Analysis of Financial Condition
and Results of Operations –Critical Accounting Policies” in the Exchange Act
Documents, the Draft Offering Memorandum (as of the Closing Date) and the
Offering Memorandum (as of the Relevant Date) accurately and fully describes (A) the
accounting policies that IHOP believes are the most important in the portrayal
of IHOP’s financial condition and results of operations and that require
management’s most difficult, subjective or complex judgments; (B) the
judgments and uncertainties affecting the application of critical accounting
policies; and (C) the likelihood that materially different amounts would
be reported under different conditions or using different assumptions and an
explanation thereof;

 

(xxxii)      None
of the Other Entities is in violation of or has received notice of any
violation with respect to any federal or state law relating to discrimination
in the hiring, promotion or pay of employees, or any applicable federal or
state wage and hour laws, or any state law precluding the denial of credit due
to the neighborhood in which a property is situated, the violation of any of
which would reasonably be expected to have a Material Adverse Affect;

 

(xxxiii)     The
operations of the Other Entities are and have been conducted at all times in
compliance with the Money Laundering
Laws and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Other
Entities with respect to the Money Laundering Laws is pending or, to the
knowledge of the Other Entities, threatened, except, in each case, as would not
reasonably be expected to have a Material Adverse Effect;

 

(xxxiv)     None
of the Other Entities or, to the knowledge of the Other Entities, any director,
officer, agent, employee or affiliate of the Other Entities is currently
subject to any U.S. sanctions administered by OFAC; and the Other Entities will
not directly or indirectly use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds to any subsidiary, joint
venture partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered
by OFAC;

 

(xxxv)      The Other Entities have not taken any action or omitted to take any action (such as issuing
any press release relating to any Securities without an appropriate legend)
which may result in the loss by the
Initial Purchaser of the ability to rely on any stabilization safe harbor provided by the FSMA.  The Other Entities  have been informed of the guidance
relating to stabilization provided by the Financial Services Authority;

 

(xxxvi)     As of the Closing Date, no Parent Company is aware of
any proposed Tax assessments against any Applebee’s Entity or any IHOP
Entity, except for those Tax assessments that would not have a Material Adverse
Effect;

 

(c)           Each
of the Co-Issuers, jointly and severally, shall make the representations and
warranties to the Initial Purchaser and agreements with the Initial Purchaser
contained in Section 1(a) as of the Initial Date and each Bringdown
Date; and

 

23

 

(d)           Each
of the Parent Companies, jointly and severally, shall make the representations
and warranties to the Initial Purchaser and agreements with the Initial
Purchaser contained in Section 1(b) as of the Initial Date and each
Bringdown Date.

 

2.             Purchase and Resale of the Securities

 

(a)           On
the basis of the representations, warranties and agreements contained herein,
and subject to the terms and conditions set forth herein, each of the
Co-Issuers, jointly and severally, agrees to issue and sell to the Initial
Purchaser, and the Initial Purchaser agrees to purchase from the Co-Issuers,
U.S. $245,000,000 principal amount of Series 2007-3 Fixed Rate Term Notes
at a purchase price of 99.999707% of the aggregate principal amount
thereof.  The Co-Issuers shall not be
obligated to deliver any of the Securities except upon payment for all of the
Securities to be purchased as provided herein. 
The Securities will accrue interest at an annual rate of 7.0588%.  In connection with the above purchase and
sale, the Co-Issuers shall pay, on the Closing Date, to the Initial Purchaser $5,019,121,
in immediately available funds.

 

(b)           The
Initial Purchaser has advised the Co-Issuers that it proposes to offer the
Securities for resale upon the terms and subject to the conditions set forth
herein.  The Initial Purchaser represents
and warrants to, and agrees with, the Co-Issuers, on the basis of the
representations, warranties and agreement of the Co-Issuers, IHOP, the Parent
Companies and the IHOP Securitization Entities that (i) it is purchasing the Securities pursuant to a private sale
exempt from registration under the Securities Act, (ii) neither it nor any
of its affiliates, nor any person acting on the Initial Purchaser’s behalf, has
solicited offers for, or offered or sold, and neither it, nor any of its
affiliates, nor any person acting on the Initial Purchaser’s behalf, will
solicit offers for, or offer or sell, the Securities by means of any form of
general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D under the Securities Act (“Regulation D”) or in
any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act, and (iii) it has solicited and will solicit offers
(the “Exempt Resales”) for the Securities only from, and have offered or
sold and will offer, sell or deliver the Securities, as part of its initial
offering, only to persons whom it reasonably believes to be: (A) (i) qualified
institutional buyers (“Qualified Institutional Buyers”) as defined in Rule 144A
under the Securities Act (“Rule 144A”), or if any such person is
buying for one or more institutional accounts for which such person is acting
as fiduciary or agent, only when such person has represented to it that each
such account is a Qualified Institutional Buyer to whom notice has been given
that such sale or delivery is being made in reliance on Rule 144A and, in
each case in transactions in accordance with Rule 144A and (ii) qualified
purchasers (“Qualified Purchasers”) within the meaning of Section 2(a)(51)
of the 1940 Act or (B) (i) neither “U.S. Persons” (as such
term is defined in Regulation S) nor U.S. Residents (within the meaning of
the 1940 Act) who acquire the Securities outside the U.S. in a transaction meeting the requirements of
Regulation S or (ii) Qualified Purchasers.  Those persons specified in clauses (A) and
(B) above are referred to herein as the “Eligible Purchasers”.  In addition
to the foregoing, the Initial Purchaser acknowledges and agrees that the
Co-Issuers and, for purposes of the opinions to be delivered to the Initial
Purchaser pursuant to Section 5, counsel for the Co-Issuers and for the
Initial Purchaser, respectively, may rely upon the accuracy of the 

 

24

 

representations and warranties of the Initial
Purchaser and its compliance with its agreements contained in this Section 2
(except clause (i) of this subsection (b)), and the Initial Purchaser
hereby consents to such reliance.

 

(c)           The
Co-Issuers acknowledge and agree that the Initial Purchaser may sell Securities
to any affiliate of the Initial Purchaser and that any such affiliate may sell
Securities purchased by it to the Initial Purchaser.  The Co-Issuers acknowledge and agree that the
Initial Purchaser may, from time to time, make one or more Exempt Resales
following the Closing Date, with respect to which the Initial Purchaser may
deliver a copy of the Offering Memorandum.

 

(d)           The
Initial Purchaser also represents and agrees that (i) it has complied and
will comply with all applicable provisions of the FSMA with respect to anything
done by it in relation to the Securities in, from or otherwise involving the
United Kingdom, and (ii) it has only communicated or caused to be
communicated and it will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning
of section 21 of the FSMA) received by it in connection with the issue or sale
of any Securities, in circumstances in which section 21(1) of the FSMA
does not apply to the Co-Issuers.

 

(e)           The
Initial Purchaser also represents and agrees that, in relation to each Member
State of the European Economic Area which has implemented the Prospectus
Directive (each, a “Relevant Member State”), with effect from and
including the date on which the Prospectus Directive is implemented in that
Relevant Member State (the “Relevant Implementation Date”), it has not
made and will not make an offer of the Securities to the public in that
Relevant Member State prior to the publication of a prospectus in relation to
the Securities which has been approved by the competent authority in that
Relevant Member State or, where appropriate, approved in another Relevant
Member State and notified to the competent authority in that Relevant Member
State, all in accordance with the Prospectus Directive, except that it may,
with effect from and including the Relevant Implementation Date, make an offer
of the Securities to the public in that Relevant Member State at any time:

 

(i)            to
legal entities which are authorized or regulated to operate in the financial
markets or, if not so authorized or regulated, whose corporate purpose is
solely to invest in securities;

 

(ii)           to
any legal entity which has two or more of (A) an average of at least 250
employees during the last financial year; (B) a total balance sheet of
more than €43,000,000 and (C) an annual net turnover of more than
€50,000,000, as shown in its last annual or consolidated accounts; or

 

(iii)          in
any other circumstances which do not require the publication by the issuer of a
prospectus pursuant to Article 3 of the Prospectus Directive.

 

For the purposes of this representation, the expression
an “offer of the Securities to the public” in any Relevant Member State means
the communication in any form and 

 

25

 

by any means of sufficient information on the terms of
the offer and the Securities to be offered so as to enable an investor to
decide to purchase or subscribe to the Securities, as the same may be varied in
that Relevant Member State by any measure implementing the Prospectus Directive
in that Relevant Member State and the expression “Prospectus Directive” means
Directive 2003/71/EC and includes any relevant implementing measure in each
Relevant Member State.

 

(f)            The
Initial Purchaser also represents and
agrees that that it will not offer or sell any Securities, directly or
indirectly, in Japan or to, or for the benefit of, any resident of Japan (which
term as used herein means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan), or to others
for re-offering or resale, directly or indirectly, in Japan or to a resident of
Japan, except pursuant to an exemption from the registration requirements of,
and otherwise in compliance with, the Securities and Exchange Law and any other
applicable laws, regulations and ministerial guidelines of Japan.

 

(g)           The
Initial Purchaser also represents and
agrees that it has not made and, unless it obtains the prior consent of the
Parent Companies and the Co-Issuers, will not make any offer relating to the
Securities that would constitute a Free Writing Communication, it being
understood that a Free Writing Communication that (i) contains only
information that describes the final terms of the Securities or their offering
and that is included in the Offering Memorandum or (ii) does not contain
any material information about the Co-Issuers or their securities that was
provided by or on behalf of the Co-Issuers, shall not be an Issuer Free Writing
Communication for purposes of this Agreement.

 

3.             Delivery
of and Payment for the Securities

 

(a)           Delivery
of and payment for the Securities shall be made at the offices of Skadden,
Arps, Slate, Meagher & Flom LLP, Four Times Square, New York,
New York, 10036 or at such other place as shall be agreed upon by the
Initial Purchaser and the Co-Issuers, at 10:00 A.M., New York City
time, on November 29, 2007 or at such other time or date as shall be
agreed upon by the Initial Purchaser and the Co-Issuers (such date and time of
payment and delivery being referred to herein as the “Closing Date”).

 

(b)           On
the Closing Date, payment of the purchase price for the Securities shall be
made to the Co-Issuers by wire or book-entry transfer of same-day funds to such
account or accounts as the Co-Issuers shall specify prior to the Closing Date
or by such other means as the parties hereto shall agree prior to the Closing
Date against delivery to the Initial Purchaser of the Securities through the
facilities of The Depository Trust Company (“DTC”).  Time shall be of the essence and delivery at
the time and place specified pursuant to this Agreement is a further condition
of the obligation of the Initial Purchaser hereunder.  Upon delivery, the Securities shall be in
global form, registered in such names and in such denominations as the Initial
Purchaser shall have requested.

 

26

 

4.             Further
Agreements of the Co-Issuers, the Parent Companies and the IHOP Securitization
Entities

 

Each of the Parent Companies and
each of the Co-Issuers, jointly and severally, agrees with the Initial
Purchaser:

 

(a)           to
provide, as soon as practicable after the Closing Date, a final Offering
Memorandum for the Securities, to be dated as of a date to be specified by the
Initial Purchaser (the “Initial Date”), (i) which shall not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and (ii) which
shall contain all financial statements and other data, including audited
financial statements, all unaudited financial statements (which shall have been
reviewed by independent registered public accountants as provided in Statement
on Auditing Standards No. 100) and all appropriate pro forma financial
statements prepared in accordance with Regulation S-X under the Securities Act
of 1933, as amended (to the extent deemed reasonably necessary by the Initial
Purchaser), and all other data (including selected financial data), in each
case, that the Commission would require in a registered offering of any or all
of the Securities (in each case, except as otherwise agreed) or that would be
necessary for the Initial Purchaser to receive customary “comfort” (including,
without limitation, “negative assurance” comfort) from independent registered
public accountants (collectively, the “Required Financial Information”);

 

(b)           on
the Initial Date, to use its best efforts:

 

(i)            to
cause to be furnished to the Initial Purchaser a letter (the “E&Y
Initial Comfort Letter”) of E&Y, in form and substance satisfactory to
the Initial Purchaser, addressed to the Initial Purchaser and dated the Initial
Date, (i) concerning the accounting, financial and certain of the
statistical information with respect to the Parent Companies and the Co-Issuers
set forth in the Offering Memorandum and (ii) covering such other matters
as are ordinarily covered by accountants’ “comfort letters” to initial
purchasers in connection with such offerings of securities;

 

(ii)           to
cause to be furnished to the Initial Purchaser a letter (the “Initial AUP
Letter”) of FTI Consulting, Inc., addressed to the Initial Purchaser
and dated the Initial Date, in form and substance satisfactory to the Initial
Purchaser, concerning certain agreed-upon procedures performed in respect of
the information presented in the Preliminary Marketing Materials, the
Supplemental Materials (if any), the Offering Memorandum and the Investor Model
Runs;

 

(iii)          to cause Skadden, Arps, Slate, Meagher & Flom LLP,
special counsel to the Co-Issuers, to furnish to the Initial Purchaser (1) a
“10b-5” disclosure letter, substantially in the form attached hereto as Exhibit 4
and (2) customary opinions with respect to (A) the exemption from
registration under the Securities Act of the offer and sale of the Securities
by the Co-Issuers and the initial resale of the Securities by the Initial
Purchaser and (B) the conformity of the Transaction Documents (as defined

 

27

 

herein) to the descriptions thereof and certain tax disclosures in the
Offering Memorandum, in a form to be agreed reasonably between IHOP and the
Initial Purchaser, in each case, dated as of the Initial Date; and

 

(iv)          to
cause to be furnished to the Initial Purchaser certificates with respect to the
Initial Date that are substantially similar to those to be furnished on the
Closing Date pursuant to Sections 5(s), (t), and (u), except that such certificates shall pertain to the
Offering Memorandum rather than the Draft Offering Memorandum, and shall state
that the relevant officer has no reason to believe that (A) the Offering
Memorandum, as of the Initial Date, included any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading or (B) since the date of the Offering Memorandum, any event
has occurred which should have been set forth in a supplement or amendment to
the Offering Memorandum;

 

(c)           if the
Exempt Resales of the Securities by the Initial Purchaser as contemplated by
this Agreement has not been completed by the date on which the independent
registered public accountants for IHOP are no longer able to deliver a comfort
letter with respect to the financial information for the quarter ended September 30,
2007 contained in the Offering Memorandum, to provide, as soon as practicable
after the filing of IHOP’s annual report on Form 10-K for the year ended December 31,
2007, an updated version of the Offering Memorandum, (i) which shall not
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and (ii) which shall contain all Required Financial Information;

 

(d)           (i)            to advise the Initial Purchaser
promptly and, if requested, confirm such advice in writing, of the happening of
any event which makes any statement of a material fact made in the Offering
Memorandum untrue or which requires the making of any additions to or changes
in the Offering Memorandum in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, (ii) to
advise the Initial Purchaser promptly of any order preventing or suspending the
use of the Preliminary Materials, the Supplemental Materials (as defined
herein) or the Offering Memorandum, of any suspension of the qualification of
the Securities for offering or sale in any jurisdiction and of the initiation
or threatening of any proceeding for any such purpose and (iii) to use
commercially reasonable efforts to prevent the issuance of any such order
preventing or suspending the use of the Preliminary Materials, the Supplemental
Materials or the Offering Memorandum or suspending any such qualification and,
if any such suspension is issued, to obtain the lifting thereof at the earliest
possible time;

 

(e)           to
prepare the Offering Memorandum in a form reasonably acceptable to the Initial
Purchaser and to furnish promptly to the Initial Purchaser and counsel for the
Initial Purchaser, without charge, as many copies of the Offering Memorandum
(and any amendments or supplements thereto) as may be reasonably requested;

 

28

 

(f)            prior to
making any amendment or supplement to the Offering Memorandum, to furnish a
copy thereof to the Initial Purchaser and counsel for the Initial Purchaser and
not to effect any such amendment or supplement without the consent of the
Initial Purchaser, which consent shall not be unreasonably withheld or delayed;

 

(g)           if, at
any time prior to completion of the resale of the Securities by the Initial
Purchaser (it being agreed that upon request by the Co-Issuers, the
Initial Purchaser will promptly advise the Co-Issuers as to when such resale
has been completed), any event shall occur or
condition exist as a result of which it is necessary, in the opinion of counsel
for the Initial Purchaser or counsel for the Co-Issuers, to amend or supplement
the Offering Memorandum in order that the Offering Memorandum will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, or if it is necessary, in the opinion of such counsel, at any such
time to amend or supplement the Offering Memorandum to comply with applicable
law, to promptly prepare such amendment or supplement as may be necessary to
correct such untrue statement or omission or so that the Offering Memorandum,
as so amended or supplemented, will comply with applicable law;

 

(h)           on the date of each supplement
furnished in accordance with Section 4(g) hereof and on each date
requested by the Initial Purchaser in connection with the resale of the
Securities (each of the foregoing, a “Bringdown Date”), to use its best
efforts:

 

(i)            to cause to be
furnished to the Initial Purchaser a letter of E&Y, in form and substance
satisfactory to the Initial Purchaser, addressed to the Initial Purchaser and
dated such Bringdown Date (i) confirming that it is a firm of independent
public accountants with respect to IHOP, IHOP Franchising and the Merger Sub
within the meaning of Rule 101 of the Code of Professional Conduct of the
AICPA and its interpretations and rulings thereunder and are in compliance with
the applicable requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the SEC, (ii) stating, as of such Bringdown Date (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Offering
Memorandum, as of a date not more than three business days prior to such
Bringdown Date), that the conclusions and findings of such accountants with
respect to the financial information and other matters covered by the E&Y
Initial Comfort Letter are accurate and (iii) confirming in all material
respects the conclusions and findings set forth in the E&Y Initial Comfort
Letter;

 

(ii)           to cause to be
furnished to the Initial Purchaser a letter 
of FTI Consulting, Inc., in form and substance satisfactory to the
Initial Purchaser, addressed to the Initial Purchaser and dated such Bringdown
Date (i) stating, as of such Bringdown Date (or, with respect to matters
involving changes or developments since the respective dates as of which
specified information is given in the Offering Memorandum, as of a date not
more than three business days prior to such Bringdown Date), that the
conclusions, procedures and findings of such company with respect to the
information and other matters covered by the Initial AUP Letter are accurate
and (ii) confirming in all 

 

29

 

material respects
the conclusions, procedures and findings set forth in the Initial AUP Letter;

 

(iii)          to cause Skadden,
Arps, Slate, Meagher & Flom LLP, special counsel to the Co-Issuers, to
furnish to the Initial Purchaser a  (1) a
“10b-5” disclosure letter, substantially in the form attached hereto as Exhibit 4
and (2) customary opinions with respect to (A) the exemption from
registration under the Securities Act of the offer and sale of the Securities
by the Co-Issuers and the initial resale of the Securities by the Initial
Purchaser and (B) the conformity of the Transaction Documents (as defined
herein) to the descriptions thereof and certain tax disclosures in the Offering
Memorandum, in a form to be agreed reasonably between IHOP and the Initial
Purchaser, in each case dated as of such Bringdown Date, and

 

(iv)          to cause to be
furnished to the Initial Purchaser certificates with respect to such Bringdown
Date that are substantially similar to those to be furnished on the Closing
Date pursuant to Sections 5(s), (t), and (u) except that such certificates shall pertain to the Offering Memorandum
rather than the Draft Offering Memorandum, and shall state that nothing has
come to each relevant officer’s attention that would lead such officer to
believe that (A) the Offering Memorandum, as of such Bringdown Date,
included any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading or (B) since
the date of the Offering Memorandum, any event has occurred which should have
been set forth in a supplement or amendment to the Offering Memorandum;

 

(i)            to cause the senior executive
officers of IHOP, Applebee’s International and the Co-Issuers (including,
without limitation, Julia Stewart and Thomas Conforti) to be available to
participate in such investor presentations and roadshows as the Initial
Purchaser may reasonably request in connection with the resale of the
Securities;

 

(j)            to provide such other supplemental
marketing material (the “Supplemental Materials”) as may be reasonably
requested by the Initial Purchaser in connection with the resales of the
Securities and agreed reasonably in writing by IHOP;

 

(k)           for a period commencing on the date
hereof and ending on the 180th day after the completion of the resale of the
Securities by the Initial Purchaser, not to, directly or indirectly, (A) offer
for sale, sell, or otherwise dispose of (or enter into any transaction or
device that is designed to, or would be expected to, result in the disposition
by any person at any time in the future of) any debt securities of the
Co-Issuers or the Parent Companies substantially similar to the Securities or
securities convertible into or exchangeable for such debt securities of the
Co-Issuers or the Parent Companies, or sell or grant options, rights or
warrants with respect to such debt securities of the Co-Issuers or the Parent
Companies or securities convertible into or exchangeable for such debt
securities of the Co-Issuers or the Parent Companies, (B) enter into any
swap or other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such debt
securities of the Co-Issuers or the Parent Companies, whether any such
transaction described in clause (1) or (2) above is to be 

 

30

 

settled by
delivery of debt securities of the Co-Issuers or the Parent Companies or other
securities, in cash or otherwise, (C) file or cause to be filed a
registration statement, including any amendments, with respect to the
registration of debt securities of the Co-Issuers or the Parent Companies
substantially similar to the Securities or securities convertible, exercisable
or exchangeable into debt securities of the Co-Issuers or the Parent Companies
or (D) publicly announce an offering of any debt securities of the
Co-Issuers or the Parent Companies substantially similar to the Securities or
securities convertible or exchangeable into such debt securities, in each case
without the prior written consent of the Initial Purchaser;

 

(l)            for so long as the Securities are
outstanding, to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the
Parent Companies after the date hereof pursuant to the Exchange Act;

 

(m)          for so
long as the Securities are outstanding and are “restricted securities” within
the meaning of Rule 144(a)(3) under the Securities Act, to furnish to
holders of the Securities and prospective purchasers of the Securities
designated by such holders, upon request of such holders or such prospective
purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act, unless the Co-Issuers are then subject to and in compliance
with Section 13 or 15(d) of the Exchange Act (the foregoing agreement
being for the benefit of the holders from time to time of the Securities and
prospective purchasers of the Securities designated by such holders);

 

(n)           to
promptly take from time to time such actions as the Initial Purchaser may
reasonably request to qualify the Securities for offering and sale under the
securities or Blue Sky laws of such jurisdictions as the Initial Purchaser may
designate and to continue such qualifications in effect for so long as required
for the resale of the Securities; and to arrange for the determination of the
eligibility for investment of the Securities under the laws of such
jurisdictions as the Initial Purchaser may reasonably request; provided
that none of the Co-Issuers shall be obligated to qualify as foreign corporations
in any jurisdiction in which they are not so qualified or to file a general
consent to service of process in any jurisdiction;

 

(o)           to assist
the Initial Purchaser in arranging for the Securities to be eligible for
clearance and settlement in the United States through DTC and in Europe through
Euroclear Bank, S.A./N.V., or Clearstream Banking, société anonyme;

 

(p)           to comply with all the terms and
conditions of all agreements set forth in the representation letters of the
Co-Issuers to DTC relating to the approval of the Securities by DTC for “book
entry” transfer;

 

(q)           not to take any action or omit to
take any action (such as issuing any press release relating to the Securities
without an appropriate legend) which may result in the loss by the Initial
Purchaser of the ability to rely on any stabilization safe harbor provided by
the Financial Services Authority under the FSMA;

 

31

 

(r)            not to,
and to cause their affiliates not to, sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as such term is defined
in the Securities Act) which could reasonably be expected to be integrated with
the sale of the Securities in a manner which would require registration of the
Securities under the Securities Act;

 

(s)           not to,
and to cause its affiliates not to, engage in any directed selling efforts
within the meaning of Regulation S;

 

(t)            to
comply, and to cause its affiliates to comply, with the offering restrictions
set forth in Regulation S;

 

(u)           not to,
and to cause their affiliates not to, authorize or knowingly permit any person
acting on their behalf to solicit any offer to buy or offer to sell the
Securities by means of any form of general solicitation or general advertising
within the meaning of Regulation D or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act;
and not to offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale, contract
or disposition would cause the exemption afforded by Section 4(2) or
of Rule 144A of the Securities Act or Section 3(c)(7) of the
1940 Act to cease to be applicable to the offering and sale of the Securities
as contemplated by this Agreement , the Draft Offering Memorandum and the
Offering Memorandum;

 

(v)           in
connection with the offering of the Securities, until the Initial Purchaser
shall have notified the Co-Issuers of the completion of the resale of the Securities,
not to, and to cause their affiliated purchasers (as defined in
Regulation M under the Exchange Act) not to, either alone or with one or
more other persons, bid for or purchase, for any account in which they or any
of their affiliated purchasers have a beneficial interest, any Securities, or
attempt to induce any person to purchase any Securities; and not to, and to
cause their affiliated purchasers not to, make bids or purchase for the purpose
of creating actual, or apparent, active trading in or of raising the price of
the Securities;

 

(w)          in
connection with the offering of the Securities, to make their officers,
employees, independent accountants and legal counsel available upon reasonable
request by the Initial Purchaser;

 

(x)            to furnish to the Initial Purchaser, prior to the
date of each Offering Memorandum, a copy of each signed independent accountants’
report to be included in such Offering Memorandum;

 

(y)           to apply
the net proceeds from the sale of the Securities as set forth in herein (as of
the Closing Date) and the Offering Memorandum under the heading “Use of
Proceeds” (as of the Initial Date and each Bringdown Date);

 

(z)            to the
extent that the ratings to be provided with respect to the Securities by Moody’s
Investors Service, Inc. (“Moody’s”), Standard & Poor’s
Ratings Services, a division of The McGraw-Hill Companies, Inc. (“S&P”)
and Fitch, Inc. (“Fitch”, and together with Moody’s and S&P,
the “Rating Agencies”) are conditional upon the 

 

32

 

furnishing of documents or the taking of any other actions by the
Co-Issuers, the Parent Companies or any of their affiliates, to furnish such
documents and take any such other action that is reasonably requested by the
Rating Agencies;

 

(aa)         for a period
from the date of this Agreement until the retirement of the Securities, or
until such time as the Initial Purchaser shall cease to maintain a secondary
market in the Securities, whichever occurs first, to furnish to the Initial
Purchaser, as soon as available, (i) copies of each report and certificate
and any financial information delivered to the holders of the Securities or
filed with any stock exchange or regulatory body and (ii) from time to
time such other information concerning the Co-Issuers and the Parent Companies
as the Initial Purchaser may reasonably request;

 

(bb)         unless it obtains the prior consent of
the Initial Purchaser, not to make (and each such party represents that it has
not made), any offer relating to the Securities that would constitute a Free
Writing Communication; if at any time following issuance of a Free Writing
Communication any event occurred or occurs as a result of which such Free
Writing Communication conflicts with the information in the Offering Memorandum
or, when taken together with the information in the Offering Memorandum,
includes an untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, as promptly as practicable after
becoming aware thereof, to give notice thereof to the Initial Purchaser and, if
requested by the Initial Purchaser, to prepare and furnish without charge to
the Initial Purchaser a Free Writing Offering Communication or other document
which will correct such conflict, statement or omission;

 

(cc)         to consent to the use by the Initial
Purchaser of (1) the Offering Memorandum, (2) the Preliminary
Marketing Materials, (3) the Supplemental Materials and (4) additional
marketing materials to be provided to prospective investors, consisting of
model runs (“Investor Model Runs”), which will be subject to the
procedures set forth in the Initial AUP Letter (as defined below);

 

(dd)         to
use its best efforts to assist the Initial Purchaser in marketing the
Securities after the Closing Date;

 

(ee)         to cooperate reasonably in any due diligence
investigations by representatives of the Initial Purchaser that may be required
in connection with the use of the Offering Memorandum; and

 

(ff)           to
promptly update the Offering Memorandum, upon the request of the Initial
Purchaser, until such time as the Initial
Purchaser shall cease to own any of the Securities.

 

5.             Conditions of Initial Purchaser’s Obligations

 

The obligations of the Initial Purchaser hereunder are
subject (i) to the accuracy, on and as of the date hereof, of the
representations and warranties of the Co-Issuers, the 

 

33

 

Guarantors, IHOP and the Merger Sub
contained herein, and on and as of the Closing Date of the representations and
warranties of the Co-Issuers, the Guarantors, the Parent Companies and the IHOP
Securitization Entities contained herein, (ii) to the accuracy of the
statements of each of the Co-Issuers, the Guarantors, the Parent Companies and
their respective officers made in any certificates delivered pursuant hereto, (iii) to
the performance by the Co-Issuers, the Guarantors, the Parent Companies and the
IHOP Securitization Entities of their obligations hereunder and (iv) to
each of the following additional terms and conditions:

 

(a)           No stop
order suspending the sale of the Securities in any jurisdiction shall have been
issued and no proceeding for that purpose shall have been commenced or shall be
pending or threatened.

 

(b)           The
Initial Purchaser shall not have discovered and disclosed to the Co-Issuers or
the Parent Companies on or prior to the Closing Date that the Draft Offering
Memorandum or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of counsel for the Initial Purchaser, is
material or omits to state any fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

 

(c)           All
corporate proceedings and other legal matters incident to the authorization,
form and validity of this Agreement, the Securities, each of the Transaction
Documents and the Offering Memorandum, and all other legal matters relating to
this Agreement, the Transaction Documents and the transactions contemplated
thereby, shall be satisfactory in all material respects to the Initial
Purchaser, and the Co-Issuers and the Parent Companies shall have furnished to
the Initial Purchaser all documents and information that the Initial Purchaser
or its counsel may reasonably request to enable it to pass upon such matters.

 

(d)           The
Supplement shall have been duly executed and delivered by the Co-Issuers and
the Trustee, and the Securities shall have been duly executed and delivered by
the Co-Issuers and duly authenticated by the Trustee.

 

(e)           Each of
the Transaction Documents shall have been duly executed and delivered by the
respective parties thereto and the Initial Purchaser shall have received
an original copy of each Transaction Document, duly executed and delivered by
the respective parties thereto.

 

(f)            The
Initial Purchaser shall have received a letter from each Rating Agency stating
that the Securities have received the ratings indicated in the table below:

 

	
  Moody’s Rating

  	
   

  	
  S&P Rating

  
	
  Baa2

  	
   

  	
  BBB-

  

 

34

 

(g)           Subsequent
to the execution and delivery of this Agreement there shall not have occurred
any of the following:  (i) trading
in securities generally on the New York Stock Exchange, the American Stock
Exchange, the Nasdaq Global Market or in the over-the-counter market, or
trading in any securities of IHOP, the Master Issuer or Applebee’s
International on any exchange or in the over-the-counter market, shall have
been suspended or materially limited or the settlement of such trading
generally shall have been materially disrupted or minimum prices shall have
been established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction (except that a suspension of trading in the securities of Applebee’s
International as a result of the completion of the Merger shall be permitted), (ii) a
banking moratorium shall have been declared by federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall have been
an escalation in hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the United States, (iv) a
material disruption in securities settlement or clearing or payment systems
shall have occurred or (v) there shall have occurred such a material
adverse change in general economic, political or financial conditions,
including, without limitation, as a result of terrorist activities after the
date hereof (or the effect of international conditions on the financial markets
in the United States shall be such), as to make it, in the judgment of the
Initial Purchaser, impracticable or inadvisable to proceed with the offering or
delivery of the Securities being delivered on the Closing Date on the terms and
in the manner contemplated hereby  or
that, in the judgment of the Initial Purchaser, would materially and adversely
affect the financial markets or the markets for the Securities and other debt
securities.

 

(h)           None
of (i) the issuance and sale of the Securities pursuant to this Agreement,
(ii) the transactions contemplated by the Transaction Documents or (iii) the
use of the Preliminary Marketing Materials, the Supplemental Materials or the
Offering Memorandum shall be subject to an injunction (temporary or permanent)
and no restraining order or other injunctive order shall have been issued; and
there shall not have been any legal action, order, decree or other
administrative proceeding instituted or threatened against the Co-Issuers or
the Parent Companies or the Initial Purchaser that would be reasonably likely
to adversely impact the issuance or resale of the Securities or the Initial Purchaser’s activities in
connection therewith or any other transactions contemplated hereby or by the
Transaction Documents.

 

(i)            The
Initial Purchaser shall have received an opinion of Skadden, Arps, Slate,
Meagher & Flom LLP, special counsel to the Co-Issuers and the Parent
Companies, dated the Closing Date and addressed to the Initial Purchaser,
substantially in the form attached hereto as Exhibit 5.

 

(j)            The Initial Purchaser shall have
received an opinion of Skadden, Arps, Slate,
Meagher & Flom LLP, special counsel to the Co-Issuers, the
Guarantors and the Parent Companies, dated the Closing Date and addressed to
the Initial Purchaser, substantially in the form attached hereto as Exhibit 6
regarding the substantive nonconsolidation of the assets and liabilities of the
Co-Issuers, the other Securitization Entities and their affiliates.

 

35

 

(k)           The Initial Purchaser shall have
received an opinion of Skadden, Arps, Slate,
Meagher & Flom LLP, special counsel to the Co-Issuers, the
other Securitization Entities and the Parent Companies, dated the Closing Date
and addressed to the Initial Purchaser, substantially in the form attached
hereto as Exhibit 7 regarding the treatment of the transfers of
assets as “true contributions” or other absolute transfers.

 

(l)            The Initial Purchaser shall have
received an opinion of Skadden, Arps, Slate,
Meagher & Flom LLP, special counsel to the Co-Issuers, dated
the Closing Date and addressed to the Initial Purchaser, substantially in the
form attached hereto as Exhibit 8 regarding the U.S. federal income
tax treatment of the Securities, among other things.

 

(m)          The Initial Purchaser shall have
received an opinion of Blackwell Sanders LLP, as franchise counsel to the
Co-Issuers and the Parent Companies, dated the Closing Date and addressed to
the Initial Purchaser, regarding compliance with applicable franchising laws
and regulations and such other matters as the Initial Purchaser may request, in
form and substance satisfactory to the Initial Purchaser and its counsel.

 

(n)           The Initial Purchaser shall have
received an opinion of in-house counsel to the Co-Issuers and the Parent
Companies dated the Closing Date and addressed to the Initial Purchaser,
regarding compliance with applicable franchising laws and regulations and such
other matters as the Initial Purchaser may request, in form and substance
satisfactory to the Initial Purchaser and its counsel.

 

(o)           The Initial Purchaser shall have
received an opinion of Skadden, Arps, Slate,
Meagher & Flom LLP, special Delaware counsel to the Co-Issuers,
dated the Closing Date and addressed to the Initial Purchaser, regarding the
filing of UCC-1 financing statements, the perfection and priority of the
security interests created under the Indenture and the absence of any prior
financing statements of record against any of the Co-Issuer organized in
Delaware identifying any of the Collateral (based on a review of UCC filings),
in form and substance satisfactory to the Initial Purchaser and its counsel.

 

(p)           The Initial Purchaser shall have
received an opinion of Chapman and Cutler LLP, counsel to the Trustee, dated
the Closing Date and addressed to the Initial Purchaser, in form and substance
satisfactory to the Initial Purchaser and its counsel.

 

(q)           The Initial Purchaser shall have
received an opinion of inhouse counsel to the Back-Up Servicer, dated the
Closing Date and addressed to the Initial Purchaser, in form and substance
satisfactory to the Initial Purchaser and its counsel.

 

(r)            The Initial Purchaser shall have
received an opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP,
dated the Closing Date and addressed to the Initial Purchaser, with respect to
the validity of the Securities and such other matters as the Initial Purchaser
may reasonably request.

 

(s)           The
Initial Purchaser shall have received a certificate from each Co-Issuer
executed on behalf of such Co-Issuer by any two of the President, any Manager, the Chief Executive
Officer, any Vice President, the Chief Financial Officer, the Secretary, 

 

36

 

the General Counsel or the Treasurer of such Co-Issuer, dated the Closing Date, to the
effect that, to the best of each such officer’s knowledge (i) the
representations and warranties of such Co-Issuer in this Agreement are true and
correct on and as of the date hereof and the Closing Date and the
representations and warranties of such Co-Issuer in any other Transaction
Documents to which such Co-Issuer is a party are true and correct on and as of
the date hereof and the Closing Date; (ii) that such Co-Issuer has
complied in all material respects with all agreements and satisfied all
conditions on such Co-Issuer’s part to be performed or satisfied hereunder or
under the Transaction Documents at or prior to the Closing Date; (iii) subsequent
to the date as of which information is given in the Draft Offering Memorandum,
there has not been any development in the general affairs, business,
properties, capitalization, condition (financial or otherwise) or results of
operation of such Co-Issuer except as set forth or contemplated in the Draft
Offering Memorandum or as described in such certificate or certificates that
could reasonably be expected to result in a Material Adverse Effect; and (iv) nothing
has come to such officer’s attention that would lead such officer to believe
that (A) as of the Closing Date, the Draft Offering Memorandum did not
present fairly, in all material respects, the business, results of operations
and financial condition of the Co-Issuers or (B) since the date of the
Draft Offering Memorandum, any event has occurred which should have been set
forth in a supplement or amendment to the Draft Offering Memorandum so that it
would present fairly, in all material respects, the business, results of
operations and financial condition of the Co-Issuers.

 

(t)            The
Initial Purchaser shall have received a certificate from each Parent Company
executed on behalf of such Parent Company by any two of the President, any Manager, the Chief
Executive Officer, any Vice President, the Chief Financial Officer, the
Secretary, the General Counsel or the Treasurer of such Parent Company, dated the
Closing Date, to the effect that, to the best of each such officer’s knowledge (i) the
representations and warranties of such Parent Company in this Agreement are
true and correct on and as of the date hereof (to the extent made on and as of
the date hereof) and the Closing Date, and the representations and warranties
of such Parent Company in any other Transaction Documents to which such Parent
Company is a party are true and correct on and as of the date hereof (to the
extent made on and as of the date hereof) and the Closing Date; (ii) the
representations and warranties of each Securitization Entity in any Transaction
Documents to which such Securitization Entity is a party are true and correct
on and as of the date hereof and the Closing Date; (iii) that such Parent
Company has complied in all material respects with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder or under the
Transaction Documents at or prior to the Closing Date; (iv) subsequent
to the date as of which information is given in the Draft Offering Memorandum,
there has not been any development in or affecting particularly the business or
assets of such Parent Company and their subsidiaries considered as a whole or
in the financial position or results of operations of such Parent Company and
its subsidiaries considered as a whole, otherwise than as set forth or
contemplated in the Draft Offering Memorandum or as described in such
certificate or certificates that could reasonably be expected to result in a
Material Adverse Effect and (v) nothing has come to such officer’s
attention that would lead such officer to believe that (A) as of the
Closing Date, the Draft Offering Memorandum did not present fairly, in all
material respects, the business, results of operations and financial condition
of the Co-

 

37

 

Issuers or (B) since
the date of the Draft Offering Memorandum, any event has occurred which should
have been set forth in a supplement or amendment to the Draft Offering
Memorandum so that it would present fairly, in all material respects, the
business, results of operations and financial condition of the Co-Issuers.

 

(u)           The
Initial Purchaser shall have received a certificate from each Securitization
Entity that is not a Co-Issuer signed by any two of the President, any Manager, the Chief
Executive Officer, any Vice President, the Chief Financial Officer, the
Secretary, the General Counsel or the Treasurer of such Securitization Entity, dated the Closing Date, in which each such
officer shall state that, to the best of each such officer’s knowledge (i) the
representations and warranties of such Securitization Entity in this Agreement
are true and correct on and as of the Closing Date and the representations and
warranties of such Securitization Entity in any other Transaction Documents to
which such Securitization Entity is a party are true and correct on and as of
the Closing Date; (ii) that such Securitization Entity has complied in all
material respects with all agreements and satisfied all conditions on such
Securitization Entity’s part to be performed or satisfied hereunder or under
the Transaction Documents at or prior to the Closing Date and (iii) subsequent
to the date as of which information is given in the Draft Offering Memorandum,
there has not been any development in the general affairs, business,
properties, capitalization, condition (financial or otherwise) or results of
operation of such Securitization Entity except as set forth or contemplated in
the Draft Offering Memorandum or as described in such certificate or
certificates that could reasonably be expected to result in a Material Adverse
Effect.

 

(v)           The Merger shall have been completed
on the Closing Date on the terms specified in the Merger Agreement and as
contemplated by the Draft Offering Memorandum.

 

(w)          The Applebee’s Securitization shall
have been completed on the Closing Date as contemplated by the Draft Offering
Memorandum.

 

(x)            All necessary waivers, consents and
approvals for the issuance of the Securities and the completion of the
transactions contemplated by the Transaction Documents shall have been
obtained, including, without limitation, (i) waivers and consents by
Financial Guaranty Insurance Company, a New York stock insurance corporation
and (ii) confirmations and approvals by the Rating Agencies with respect
to such waivers and consents.

 

All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchaser.

 

6.             Termination.

 

The
obligations of the Initial Purchaser hereunder may be terminated at the sole
discretion of the Initial Purchaser by notice given to and received by the
Co-Issuers prior to delivery of and payment for the Securities if, prior to
that time, any of the events 

 

38

 

described in Sections 5(g) and 5(h) shall
have occurred and be continuing, any of the certifications in
Sections 5(s)(iii), (t)(iv), and (u)(iii) cease to be true and
correct, or if the Initial Purchaser shall decline to purchase the Securities
for any reason permitted under this Agreement, including, but not limited to,
the failure, refusal or inability by any of the Co-Issuers or the Parent
Companies to satisfy all conditions on its part to be performed or satisfied
hereunder on or prior to the Closing Date.

 

7.             Indemnification

 

(a)           Each
of the Co-Issuers and the Parent Companies shall, jointly and severally,
indemnify and hold harmless the Initial Purchaser, its affiliates, its
officers, directors, shareholders, partners, trustees, employees,
representatives and agents, and each person, if any, who controls the Initial
Purchaser within the meaning of the Securities Act or the Exchange Act
(collectively referred to for purposes of Sections 7(a) and 8 as the
Initial Purchaser), from and against any loss, claim, damage or liability, or
any action in respect thereof (including, without limitation, any loss, claim,
damage, liability or action relating to purchases and sales of the Securities),
to which the Initial Purchaser may become subject, whether commenced or
threatened, under the Securities Act, the Exchange Act, any other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in (A) the
Bridge Syndication Materials, the Preliminary Marketing Materials, the
Supplemental Materials or the Offering Memorandum or in any amendment or
supplement thereto, or in any Issuer Free Writing Communication, (B) any
other information provided pursuant to Section 4(j) or 4(cc) hereof
or (C) other materials provided to potential investors with the prior
written consent of the Co-Issuers or Parent Companies (collectively, the items
in (A), (B) and (C) above, the “Offering Materials”), (ii) the
omission or alleged omission to state in the Offering Materials a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, or (iii) any act or failure to act or any
alleged act or failure to act by the Initial Purchaser in connection with, or
relating in any manner to, the Securities or the offering contemplated hereby,
and which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon matters covered by clause (i) or
(ii) above (provided that the Co-Issuers and the Parent Companies shall
not be liable under this clause (iii) to the extent that it is determined
in a final judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by the Initial Purchaser through its
gross negligence or willful misconduct), and shall reimburse the Initial
Purchaser and each such director, officer, employee or controlling
person promptly upon demand for any legal or
other expenses reasonably incurred by the Initial Purchaser, director,
officer, employee or controlling person in
connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Co-Issuers and the Parent
Companies shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged 

 

39

 

omission made in
the Offering Materials, in reliance upon and in conformity with written
information concerning the Initial Purchaser furnished to the Co-Issuers by the
Initial Purchaser specifically for inclusion therein, which information
consists solely of the information specified in Section 13 (the “Initial Purchaser’s Information”).

 

(b)           The
Initial Purchaser shall indemnify and hold harmless each of the Parent
Companies and each of the Co-Issuers, and their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls
any of the Parent Companies or any of the Co-Issuers within the meaning of the
Securities Act or the Exchange Act (collectively referred to for purposes of
Sections 7(b) and 8 as the “IHOP Parties”), from and against
any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the IHOP Parties may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Offering Materials or (ii) the omission or
alleged omission to state in the Offering Materials a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, but in each
case only to the extent that the untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in conformity
with the information relating to the Initial Purchaser furnished to the
Co-Issuers by the Initial Purchaser specifically for use therein (as set forth
in Section 13 below), and shall reimburse the IHOP Parties, for any legal
or other expenses reasonably incurred by the IHOP Parties in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred.

 

(c)           Promptly
after receipt by an indemnified party under this Section 7 of notice of
any claim or the commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party pursuant
to Section 7(a) or 7(b), notify the indemnifying party in writing of
the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent that
it has been materially prejudiced (through the forfeiture of substantive or
procedural rights or defenses) by such failure; and, provided, further,
that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this Section 7.  If any such claim or action shall be brought
against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and,
to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. 
Except as otherwise set forth in this Section 7(c), after notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than 

 

40

 

reasonable costs of investigation. 
Any indemnified party shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying parties and an indemnified party and the indemnified
party has reasonably concluded that representation of both parties by the same
counsel would be inappropriate due to material actual or potential differing
interests between them.  It is understood
that the indemnifying parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all indemnified parties, and that all such reasonable fees and expenses shall
be reimbursed as they are incurred and paid. 
In the case of any such separate firm for the indemnified parties, such
firm shall be designated in writing by the indemnified parties. No indemnifying
party shall be liable for any settlement of any such action or claim effected
without its written consent (which consent shall not be unreasonably withheld),
but if settled with its written consent or if there be a final judgment for the
plaintiff in any such action or claim, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or liability
by reason of such settlement or judgment in accordance with the terms
hereof.  No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i) includes
an explicit and unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.

 

(d)           The
obligations of the Parent Companies, the Co-Issuers and the Initial Purchaser
in this Section 7 and in Section 8 are in addition to any other
liability that the Parent Companies, the Co-Issuers or the Initial Purchaser,
as the case may be, may otherwise have, including in respect of any breaches of
representations, warranties and agreements made herein by any such
party.

 

8.             Contribution

 

If the indemnification provided for in Section 7 is
unavailable or insufficient to hold harmless an indemnified party under Section 7(a) or
7(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in
respect thereof, (i) in such proportion as shall be appropriate to reflect
the relative benefits received by the IHOP Parties on the one hand and the
Initial Purchaser on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the IHOP Parties on the one hand and the Initial Purchaser on the other with
respect to the statements or omissions that resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations.  The
relative 

 

41

 

benefits received by the IHOP
Parties on the one hand and the Initial Purchaser on the other with respect to
such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities purchased under this Agreement
(before deducting expenses) received by or on behalf of the Co-Issuers on the
one hand, and the total discounts and commissions received by the Initial
Purchaser with respect to the Securities purchased under this Agreement, on the
other, bear to the total gross proceeds from the sale of the Securities under
this Agreement as set forth on the cover page of the Offering
Memorandum.  The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to IHOP Parties or information supplied by the
IHOP Parties on the one hand or to the Initial Purchaser’s Information on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission.  For purpose of the
preceding two sentences, the net proceeds deemed to be received by the
Co-Issuers shall be deemed to be also for the benefit of the Parent Companies,
and information supplied by the Co-Issuers shall also be deemed to have been
supplied by the Parent Companies.  The Parent Companies, the Co-Issuers and the
Initial Purchaser agree that it would not be just and equitable if
contributions pursuant to this Section 8 were to be determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to herein.  The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 8
shall be deemed to include, for purposes of this Section 8, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending or preparing to defend any such action or
claim.  Notwithstanding the provisions of
this Section 8, the Initial Purchaser shall not be required to contribute
any amount in excess of the amount by which the total discounts and commissions
received by the Initial Purchaser with respect to the Securities purchased by it under this Agreement exceeds the
amount of any damages which the Initial Purchaser has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission
or alleged omission.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

 

9.             Persons Entitled to Benefit of Agreement

 

This Agreement shall inure to the benefit of and be binding
upon the Initial Purchaser, the Co-Issuers, the Parent Companies and their
respective successors.  This Agreement
and the terms and provisions hereof are for the sole benefit of only those
persons, except as provided in Sections 7 and 8 with respect to
controlling persons of the Co-Issuers and the Initial Purchaser and in Section 4(k) with
respect to holders and prospective purchasers of the Securities.  Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 9, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.

 

42

 

10.           Expenses

 

(a)           The
Co-Issuers, jointly and severally, in accordance with this Agreement, agree to
pay (i) the costs incident to the authorization, issuance, sale, resale,
preparation and delivery of the Securities and any taxes payable in that
connection; (ii) the costs incident to the preparation, printing and
distribution of the Preliminary Marketing Materials, the Supplemental Materials
and the Offering Memorandum and any amendments or supplements thereto; (iii) the
costs of reproducing and distributing each of the Transaction Documents; (iv) the
costs incident to the preparation, printing and delivery of the global
certificates evidencing the Securities, including stamp duties and transfer
taxes, if any, payable upon issuance of the Securities; (v) the fees and
expenses of counsel to the Co-Issuers; (vi) the fees and expenses of
qualifying the Securities under the securities laws of the several
jurisdictions and of preparing, printing and distributing Blue Sky memoranda
(including related fees and expenses of counsel for the Initial Purchaser); (vii) any
fees charged by the Rating Agencies in connection with their rating of the
Securities; (viii) the fees and expenses of the Trustee and any paying
agent (including related fees and expenses of any counsel to such parties); (ix) all
expenses and application fees incurred in connection with the approval of the
Securities for book-entry transfer by DTC; (x) fees and expenses incurred
by the Co-Issuers in connection with any “roadshow” presentations to investors,
including, without limitation, expenses related to the use of any aircraft in
connection therewith; and (xi) all other costs and expenses incident to
the performance of the obligations of the Co-Issuers under this Agreement which
are not otherwise specifically provided for in this Section 10.

 

(b)           The
Parent Companies, in accordance with this Agreement, agree to pay (i) the
fees and expenses of counsel to the Parent Companies, (ii) the fees and
expenses of the independent accountants of the IHOP Entities; (iii) the
fees and expenses of the accountants incurred in connection with the delivery
of the comfort letters and “agreed upon procedures” letters to the Initial
Purchaser pursuant to the terms of this Agreement, (iv) the fees and
expenses incurred by the Parent Companies in connection with any “roadshow”
presentations to investors, including, without limitation, expenses related to
the use of any aircraft in connection therewith, (v) the fees and expenses
of the Initial Purchaser, incurred in connection with the transactions
contemplated by this Agreement, including but not limited to fees and expenses
incurred by the Initial Purchaser in connection with any “roadshow”
presentations to investors, including, without limitation, expenses related to
the use of any aircraft in connection therewith, the fees and expenses of Paul,
Weiss, Rifkind, Wharton & Garrison LLP, counsel to the Initial
Purchaser (including expenses incurred in connection with due diligence and
travel, courier, reproduction, printing and delivery expenses, but excluding
the IHOP Excluded Fees) the fees of outside accountants, the costs of any
diligence service and the fees of any other advisor retained by the Initial
Purchaser with the prior approval of the Parent Companies (not to be
unreasonably withheld) (whether incurred prior to or subsequent to the Closing
Date) and (vi) all other costs and expenses incident to the performance of
the obligations of the Parent Companies under this Agreement and under the
Transaction Documents which are not otherwise specifically provided for in this
Section 10.  Notwithstanding the
foregoing, if (a) this Agreement shall have been terminated pursuant to Section 6,
(b) the Co-Issuers shall fail to tender the Securities for delivery to the
Initial Purchaser for any 

 

43

 

reason permitted under this Agreement or (c) the Initial Purchaser
shall decline to purchase the Securities for any reason permitted under this
Agreement, the Parent Companies shall reimburse the Initial Purchaser for such
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
as shall have been reasonably incurred by the Initial Purchaser in connection
with this Agreement and the proposed purchase and resale of the Securities. For
purposes of this Agreement, the “IHOP Excluded Fees” means legal fees
and expenses of Paul, Weiss, Rifkind, Wharton & Garrison LLP incurred
prior to the Closing Date in connection with (x) such counsel’s due
diligence investigation of the assets and business of IHOP and its existing
subsidiaries (which, for the avoidance of doubt, excludes Applebee’s
International and its existing subsidiaries) and (y) the preparation,
review, negotiation, execution and delivery of all documentation in connection
with the Securities.

 

11.           Survival

 

The respective indemnities, rights of contribution,
representations, warranties and agreements of the Co-Issuers, the Parent
Companies and the Initial Purchaser contained in this Agreement or made by or
on behalf of the Co-Issuers, the Parent Companies or the Initial Purchaser
pursuant to this Agreement or any certificate delivered pursuant hereto shall
survive the delivery of and payment for the Securities and shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any of them or any of
their respective affiliates, officers, directors, employees, representatives,
agents or controlling persons.

 

12.           Notices,
etc.

 

All statements, requests, notices and agreements hereunder
shall be in writing, and:

 

(a)           if to the
Initial Purchaser, shall be delivered or sent by mail or facsimile transmission
to:

 

                             Lehman Brothers Inc.

745 Seventh Avenue 

New York, NY  10019

Attention: Scott C. Lechner

Facsimile No.:  (646) 758-4203

 

(b)           if to the
Co-Issuers or the Parent Companies, shall be delivered or sent by mail or
facsimile transmission to:

 

44

 

If to the Master Issuer:

c/o IHOP, Corp.

450 North Brand Boulevard

Glendale, California  91203-2306

ATT:  General Counsel

Facsimile No.:  818-637-5361

 

If to the IP Holder:

c/o IHOP, Corp.

450 North Brand Boulevard

Glendale, California  91203-2306

ATT:  General Counsel

Facsimile No.:  818-637-5361

 

If to the IHOP, Inc.:

International House of Pancakes, Inc.

450 North Brand Boulevard

Glendale, California  91203-2306

ATT:  General Counsel

Facsimile No.:  818-637-5361

 

If to IHOP Corp.:

c/o IHOP, Corp.

450 North Brand Boulevard

Glendale, California  91203-2306

ATT:  General Counsel

Facsimile No.:  818-637-5361

 

with copies to (which copies shall not constitute
notice to the Co-Issuers or each Parent Company):

 

                             Skadden, Arps, Slate,
Meagher & Flom LLP

Four Times Square

New York, NY  10036

Attention:  David H. Midvidy

Facsimile No.:  (917) 777-2089

Email:  dmidvidy@skadden.com

 

Any such statements, requests, notices or agreements shall take effect at
the time of receipt thereof.

 

45

 

13.           Initial
Purchaser’s Information

 

The
parties hereto acknowledge and agree that, for all purposes of this Agreement,
the “Initial Purchaser’s Information” consists solely of the information
to be specified in a letter signed by a representative of the Initial
Purchaser, dated the date of the relevant Offering Memorandum, and (ii) the
names and phone numbers of certain personnel of the Initial Purchaser on page 60
of the preliminary materials dated November 7, 2007 (posted on the
IntraLinks electronic data site on November 8, 2007).

 

14.          Governing Law

 

This Agreement shall be governed
by and construed in accordance with the laws of the State of New York
without regard to conflicts of law principles (other than Sections 5-1401
and 5-1402 of the General Obligations Law of the State New York).

 

15.           Waiver of Jury Trial.

 

EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

16.           Submission to Jurisdiction.

 

Each
of the parties hereto hereby irrevocably and unconditionally:

 

(a)           submits for itself and its property
in any legal action or proceeding relating to this Agreement or any of the
transactions contemplated hereby, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for the
Southern District of New York, and appellate courts from any thereof;

 

(b)           consents that any such action or
proceeding may be brought in such courts and waives any objection that it 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 any party hereto at its address set forth in Section 12
or at such other address of which such party shall have been notified pursuant
thereto; and

 

(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 sue in any other jurisdiction; and waives, to
the maximum extent not prohibited by law, any right it may 

 

46

 

have to claim or
recover in any legal action or proceeding referred to in this Section 16
any special, exemplary, punitive or consequential damages.

 

17.           Counterparts

 

This Agreement may be executed in one or more counterparts
(which may include counterparts delivered by facsimile) and, if executed in
more than one counterpart, the executed counterparts shall each be deemed to be
an original, but all such counterparts shall together constitute one and
the same instrument.

 

18.           Amendments

 

No
amendment or waiver of any provision of this Agreement, nor any consent or
approval to any departure therefrom, shall in any event be effective unless the
same shall be in writing and signed by the parties hereto.

 

19.           Headings

 

The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.

 

20.           Absence of Fiduciary Relationship

 

The Co-Issuers
and the Parent Companies acknowledge and agree that in connection with this
offering, sale and resale of the Securities or any other services the Initial
Purchaser may be deemed to be providing hereunder, notwithstanding any
preexisting relationship, advisory or otherwise, between the parties or any
oral representations or assurances previously or subsequently made by the
Initial Purchaser: (i) no fiduciary or agency relationship between the
Co-Issuers, the Parent Companies and any other person, on the one hand, and the
Initial Purchaser, on the other, exists; (ii) the Initial Purchaser is not
acting as an advisor, expert or otherwise, to the Co-Issuers and the Parent
Companies, including, without limitation, with respect to the determination of
the offering price of the Securities, and such relationship between the
Co-Issuers and the Parent Companies, on the one hand, and the Initial
Purchaser, on the other, is entirely and solely commercial, based on
arms-length negotiations; (iii) any duties and obligations that the
Initial Purchaser may have to the Co-Issuers and the Parent Companies shall be
limited to those duties and obligations specifically stated herein; and (iv) the
Initial Purchaser and its respective affiliates may have interests that differ
from those of the Co-Issuers and the Parent Companies.  The Co-Issuers and the Parent Companies
hereby waive any claims that the Co-Issuers and the Parent Companies may have
against the Initial Purchaser with respect to any breach of fiduciary duty in
connection with the offering of the Securities.

 

47

 

21.           Effect on Previous Letter
Agreement. 
This Agreement supersedes in its entirety the Letter Agreement, dated November 28,
2007, among IHOP, CHLH Corp., the Initial Purchaser and Lehman Commercial Paper
Inc.

 

[Remainder of page intentionally
left blank]

 

48

 

If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon
this instrument will become a binding agreement, effective as of the date first
written above, among the Co-Issuers, IHOP, IHOP Inc. and the Initial Purchaser in accordance with its
terms.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  IHOP CORP., as Parent Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Julia Stewart

  
	
   

  	
  Name:
  

  	
  Julia
  Stewart

  
	
   

  	
  Title:

  	
  Chairman
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INTERNATIONAL HOUSE OF PANCAKES, 

  INC., as Parent Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Tom Conforti

  
	
   

  	
  Name:
  

  	
  Tom
  Conforti

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  IHOP FRANCHISING, LLC, as Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Mark Weisberger

  
	
   

  	
  Name:
  

  	
  Mark
  Weisberger

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  IHOP IP, LLC, as Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Mark Weisberger

  
	
   

  	
  Name:
  

  	
  Mark
  Weisberger

  
	
   

  	
  Title:

  	
  Vice
  President

  
							

 

 

	
  Acknowledged and agreed:

  	
   

  
	
   

  	
   

  
	
  LEHMAN BROTHERS INC.,

  	
   

  
	
  as Initial Purchaser

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Cory Wishengrad

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  

 

 

SCHEDULE
A-1

 

BRIDGE SYNDICATION MATERIALS

 

1.               Rating
assessment letter of Standard & Poor’s Rating Evaluation Services
dated July 13, 2007.

 

2.               Financial
guaranty insurance policy agreement between Financial Guaranty Insurance
Company and IHOP Corporation dated July 15, 2007.

 

3.               Financial
guaranty insurance policy agreement between Financial Guaranty Insurance
Company and IHOP Corporation dated as of July 15, 2007.

 

4.               Financial
guaranty insurance policies agreement among Financial Guaranty Insurance Company,
Assured Guaranty Corp., XL Capital Assurance Inc., Applebee’s International
Inc. and IHOP Corporation dated as of July 15, 2007.

 

5.               Letter
of expression of interest of Spirit Finance Corporation and GE Capital
Franchise Finance Corporation to provide sale/lease back financing for
approximately 200 fee simple Applebee’s restaurants.

 

6.               Letter
of expression of interest of Corporate Property Associates 16 – Global
Incorporated to provide sale/lease back financing for approximately 200 fee
simple Applebee’s restaurants.

 

7.               The
Pro Forma Financial Assumptions

 

8.               The
Pro Forma Financial Statements

 

9.               The
2006 Applebee’s International Corporation Form of Franchise Agreement

 

10.         Summary
of Terms of First Lien Securitization Bridge Facilities

 

11.         The
Securities Demand

 

12.         Pro
Forma Financial Statements Summary

 

13.         WBS
Model

 

1

 

SCHEDULE
A-2

 

PRELIMINARY MARKETING MATERIALS

 

1.     Preliminary Materials dated
October 24, 2007.

 

2.     Preliminary Materials dated
November 7, 2007.

 

3.               Applebee’s and IHOP model runs made
available on IntraLinks data site October 31, 2007.

 

4.               Applebee’s and IHOP model runs made
available on IntraLinks data site November 8, 2007.

 

1

 

EXHIBIT
1

 

DRAFT OFFERING MEMORANDUM

 

1

 

EXHIBIT
2

 

BASE INDENTURE

 

1

 

EXHIBIT
3

 

SUPPLEMENT

 

1

 

EXHIBIT
4

 

FORM OF 10b-5 LETTER OF

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

 

1

 

EXHIBIT
5

 

FORM OF OPINION OF SKADDEN,
ARPS, SLATE, MEAGHER & FLOM LLP

PURSUANT TO SECTION 5(i) HEREIN

 

1

 

EXHIBIT
6

 

FORM OF OPINION OF SKADDEN,
ARPS, SLATE, MEAGHER & FLOM LLP

PURSUANT TO SECTION 5(j) HEREIN

 

1

 

EXHIBIT
7

 

FORM OF OPINION OF SKADDEN,
ARPS, SLATE, MEAGHER & FLOM LLP

PURSUANT TO SECTION 5(k) HEREIN

 

1

 

EXHIBIT
8

 

FORM OF OPINION OF SKADDEN,
ARPS, SLATE, MEAGHER & FLOM LLP

PURSUANT TO SECTION 5(l) HEREIN

 

1Exhibit
10.29

 

EXECUTION VERSION

 

SERVICING
AGREEMENT

 

Dated as of November 29, 2007

 

by and among

 

APPLEBEE’S ENTERPRISES LLC, as a Co-Issuer,

 

APPLEBEE’S IP LLC, as a Co-Issuer,

 

each RESTAURANT HOLDER named herein, as a Co-Issuer,

 

APPLEBEE’S FRANCHISING LLC, as a Securitization Entity,

 

APPLEBEE’S SERVICES, INC., as the Servicer,

 

APPLEBEE’S INTERNATIONAL, INC., as the Guarantor,

 

ASSURED GUARANTY CORP., as Series 2007-1 Class A
Insurer,

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Indenture
Trustee

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE I

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DEFINITIONS

  
	
   

  
	
  Section 1.1

  	
   

  	
  Certain Definitions

  	
   

  	
  3

  
	
  Section 1.2

  	
   

  	
  Other Defined Terms

  	
   

  	
  19

  
	
  Section 1.3

  	
   

  	
  Other Terms

  	
   

  	
  20

  
	
  Section 1.4

  	
   

  	
  Computation of Time Periods

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ADMINISTRATION AND SERVICING OF SERVICED ASSETS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
   

  	
  Applebee’s Services, Inc. to act as Servicer

  	
   

  	
  20

  
	
  Section 2.2

  	
   

  	
  Accounts

  	
   

  	
  24

  
	
  Section 2.3

  	
   

  	
  Records

  	
   

  	
  33

  
	
  Section 2.4

  	
   

  	
  Administrative Duties of Servicer

  	
   

  	
  34

  
	
  Section 2.5

  	
   

  	
  No Offset

  	
   

  	
  35

  
	
  Section 2.6

  	
   

  	
  Compensation

  	
   

  	
  35

  
	
  Section 2.7

  	
   

  	
  Indemnification

  	
   

  	
  35

  
	
  Section 2.8

  	
   

  	
  Nonpetition Covenant

  	
   

  	
  37

  
	
  Section 2.9

  	
   

  	
  Franchisor Consent

  	
   

  	
  37

  
	
  Section 2.10

  	
   

  	
  Appointment of Sub-servicers

  	
   

  	
  37

  
	
  Section 2.11

  	
   

  	
  Disposition of Indenture Collateral

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  STATEMENTS AND REPORTS

  
	
   

  
	
  Section 3.1

  	
   

  	
  Reporting by the Servicer

  	
   

  	
  38

  
	
  Section 3.2

  	
   

  	
  Appointment of Independent Accountant

  	
   

  	
  41

  
	
  Section 3.3

  	
   

  	
  Annual Accountants’ Reports

  	
   

  	
  41

  
	
  Section 3.4

  	
   

  	
  Available Information

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  
	
  THE SERVICER

  
	
   

  
	
  Section 4.1

  	
   

  	
  Representations and Warranties Concerning the Servicer

  	
   

  	
  42

  
	
  Section 4.2

  	
   

  	
  Existence; Status as Servicer

  	
   

  	
  47

  
	
  Section 4.3

  	
   

  	
  Performance of Obligations

  	
   

  	
  47

  
	
  Section 4.4

  	
   

  	
  Merger and Resignation

  	
   

  	
  51

  
	
  Section 4.5

  	
   

  	
  Notice of Certain Events

  	
   

  	
  52

  

 

i

 

	
  Section 4.6

  	
   

  	
  Capitalization

  	
   

  	
  53

  
	
  Section 4.7

  	
   

  	
  Franchise Law Determination

  	
   

  	
  53

  
	
  Section 4.8

  	
   

  	
  Maintenance of Separateness

  	
   

  	
  53

  
	
  Section 4.9

  	
   

  	
  Business Operations

  	
   

  	
  55

  
	
  Section 4.10

  	
   

  	
  Amendment of and Compliance with Collection Practices

  	
   

  	
  55

  
	
  Section 4.11

  	
   

  	
  Protection of Secured Parties’ Rights and Collectibility of Franchise
  Payments

  	
   

  	
  55

  
	
  Section 4.12

  	
   

  	
  Security Interest

  	
   

  	
  55

  
	
  Section 4.13

  	
   

  	
  Notices

  	
   

  	
  56

  
	
  Section 4.14

  	
   

  	
  Indebtedness

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  
	
  REPRESENTATIONS, WARRANTIES AND COVENANTS

  
	
   

  
	
  Section 5.1

  	
   

  	
  Representations and Warranties Made in Respect of New Assets

  	
   

  	
  57

  
	
  Section 5.2

  	
   

  	
  Other Transferred Assets

  	
   

  	
  64

  
	
  Section 5.3

  	
   

  	
  IP Assets

  	
   

  	
  64

  
	
  Section 5.4

  	
   

  	
  Allocated Note Amount attributable to Applebee’s Restaurants

  	
   

  	
  65

  
	
  Section 5.5

  	
   

  	
  Account Control Agreements for Deposits

  	
   

  	
  65

  
	
  Section 5.6

  	
   

  	
  Real Estate Mortgages

  	
   

  	
  66

  
	
  Section 5.7

  	
   

  	
  Special Provision regarding Non-Conforming Defective New Franchise
  Documents

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  
	
  SERVICER TERMINATION EVENTS

  
	
   

  
	
  Section 6.1

  	
   

  	
  Servicer Termination Events

  	
   

  	
  66

  
	
  Section 6.2

  	
   

  	
  Back-Up Manager Responsibilities

  	
   

  	
  70

  
	
  Section 6.3

  	
   

  	
  Lock-Box Account; Account Control Agreements

  	
   

  	
  73

  
	
  Section 6.4

  	
   

  	
  Servicer’s Transitional Role.

  	
   

  	
  73

  
	
  Section 6.5

  	
   

  	
  Intellectual Property

  	
   

  	
  75

  
	
  Section 6.6

  	
   

  	
  Third Party Intellectual Property

  	
   

  	
  75

  
	
  Section 6.7

  	
   

  	
  No Effect on Other Parties

  	
   

  	
  75

  
	
  Section 6.8

  	
   

  	
  Injunction

  	
   

  	
  75

  
	
  Section 6.9

  	
   

  	
  Rights Cumulative

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  
	
  CONFIDENTIALITY

  
	
   

  
	
  Section 7.1

  	
   

  	
  Confidentiality

  	
   

  	
  76

  

 

ii

 

	
  ARTICLE VIII

  
	
   

  
	
  GUARANTEE

  
	
   

  
	
  Section 8.1

  	
   

  	
  Guarantee

  	
   

  	
  76

  
	
  Section 8.2

  	
   

  	
  Liability of Guarantor Absolute

  	
   

  	
  77

  
	
  Section 8.3

  	
   

  	
  Waivers by the Guarantor

  	
   

  	
  77

  
	
  Section 8.4

  	
   

  	
  Representations and Warranties of the Guarantor

  	
   

  	
  77

  
	
  Section 8.5

  	
   

  	
  Debt Restrictions of the Guarantor

  	
   

  	
  79

  
	
   

  
	
  ARTICLE IX

  
	
   

  
	
  MISCELLANEOUS PROVISIONS

  
	
   

  
	
  Section 9.1

  	
   

  	
  Termination of Agreement

  	
   

  	
  79

  
	
  Section 9.2

  	
   

  	
  Survival

  	
   

  	
  80

  
	
  Section 9.3

  	
   

  	
  Amendment

  	
   

  	
  80

  
	
  Section 9.4

  	
   

  	
  Governing Law

  	
   

  	
  80

  
	
  Section 9.5

  	
   

  	
  Notices

  	
   

  	
  80

  
	
  Section 9.6

  	
   

  	
  Severability of Provisions

  	
   

  	
  81

  
	
  Section 9.7

  	
   

  	
  Delivery Dates

  	
   

  	
  81

  
	
  Section 9.8

  	
   

  	
  Limited Recourse

  	
   

  	
  81

  
	
  Section 9.9

  	
   

  	
  Binding Effect; Assignment; Third Party Beneficiaries

  	
   

  	
  81

  
	
  Section 9.10

  	
   

  	
  Article and Section Headings

  	
   

  	
  82

  
	
  Section 9.11

  	
   

  	
  Concerning the Indenture Trustee

  	
   

  	
  82

  
	
  Section 9.12

  	
   

  	
  Counterparts

  	
   

  	
  82

  
	
  Section 9.13

  	
   

  	
  Entire Agreement

  	
   

  	
  82

  
	
  Section 9.14

  	
   

  	
  Jurisdiction; Consent to Service of Process

  	
   

  	
  82

  
	
  Section 9.15

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  83

  

 

EXHIBIT A – MANAGEMENT ASSERTION

 

EXHIBIT B-1 – POWER OF ATTORNEY FOR IP HOLDER

 

EXHIBIT B-2 – POWER OF ATTORNEY FOR OTHER
SECURITIZATION ENTITIES

 

EXHIBIT C – FORM OF MONTHLY NOTEHOLDERS’
REPORT

 

EXHIBIT D – FORM OF MONTHLY SERVICER’S
CERTIFICATE/REPORT

 

EXHIBIT E – FORM OF WEEKLY SERVICER’S
REPORT

 

Schedule 2.1(f) – Franchisee Insurance Not
Providing Affiliate Coverage
 Schedule 2.1(h) – Servicer Insurance
 Schedule 2.10 – Subservicing Arrangements with Affiliates and Third
Parties  

Schedule 5.3 – Third Party  Consent
License Agreements

Schedule 5.5(a) – Banks without Account Control Agreements

 

iii

 

SERVICING
AGREEMENT

 

This SERVICING
AGREEMENT, dated as of November 29, 2007 (as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof, this “Agreement”), is entered into by and among Applebee’s
Enterprises LLC, a Delaware limited liability company (the “Master Issuer”), 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 Texas LLC, a Texas limited liability
company, Applebee’s Restaurants Inc., a Kansas corporation, Applebee’s
Restaurants Kansas LLC, a Kansas limited liability company, Applebee’s
Restaurants Vermont, Inc. a Vermont corporation, together with such
additional entities as may become parties to this Agreement from time to time
as New Restaurant Holders (collectively, the “Restaurant
Holders”), Applebee’s IP LLC, a Delaware limited liability company
(the “IP Holder,” and, together with the Master Issuer and the Restaurant
Holders, the “Co-Issuers”), Applebee’s Franchising LLC, a
Delaware limited liability company (the “Franchise Holder”), Applebee’s Services, Inc.
(formerly known as AII Services, Inc.), a Kansas corporation, as the
servicer (the “Servicer”), Applebee’s International, Inc., a Delaware
corporation, as the guarantor (the “Guarantor” or “Applebee’s
International”), Assured Guaranty Corp., as Series 2007-1 Class A
Insurer (the “Series 2007-1 Class A Insurer”), and Wells Fargo
Bank, National Association, not in its individual capacity but solely as
the indenture trustee (the “Indenture Trustee”).  For all purposes of this Agreement,
capitalized terms used herein but not otherwise defined herein shall have the
meanings assigned to such terms or incorporated by reference in Appendix A to
the Indenture (as defined below).

RECITALS

 

WHEREAS, the
Co-Issuers have entered into the Base Indenture, dated as of the date hereof,
with the Indenture Trustee (together with the Series Supplements thereto,
and as the same may be amended, supplemented, or otherwise modified from time
to time in accordance with the terms thereof, the “Indenture”),
pursuant to which the Co-Issuers shall issue one or more series of notes
(collectively, the “Notes”) from time to time, on the terms described
therein;

 

WHEREAS, as
security for the indebtedness represented by the Notes and the other Secured
Obligations, (i) the Co-Issuers shall grant to the Indenture Trustee on
behalf of the Secured Parties a security interest in the Indenture Collateral
owned by each of them pursuant to the Indenture and (ii) the Franchise
Holder and Applebee’s Holdings LLC, a Delaware limited liability company (“Applebee’s
Holdings”), shall irrevocably and unconditionally guarantee the obligations
of the Co-Issuers under the Notes and all other obligations of the Co-Issuers
under the Transaction Documents to which the Co-Issuers are a party and pledge
a security interest in the Indenture Collateral owned by each of them pursuant
to the related Guaranty and Collateral Agreement;

 

[Applebee’s
Servicing Agreement]

 

 

WHEREAS, from
and after the date hereof, all New Assets (as defined below) shall be originated
by the Master Issuer or its Subsidiaries following the Closing Date;

 

WHEREAS, the
Co-Issuers and the other Securitization Entities that are a party to this
Agreement desire to jointly engage the Servicer, and each of them desires to
have the Servicer enforce its rights and powers and perform its duties and
obligations under the Serviced Documents (as defined below) and the Transaction
Documents to which it is party in accordance with the Servicing Standard (as
defined below);

 

WHEREAS, each
of the Co-Issuers and the other Securitization Entities that are a party to
this Agreement deems it beneficial and efficient to become a party to this
Agreement;

 

WHEREAS, each
of the Co-Issuers and the other Securitization Entities that are a party to
this Agreement desires to have the Servicer enter into certain agreements and
acquire certain assets from time to time on its behalf, in each case in
accordance with the Servicing Standard;

 

WHEREAS, the
IP Holder desires to appoint the Servicer as its agent for providing
comprehensive intellectual property acquisition, development, management,
maintenance, protection, enforcement, licensing, contract administration
services, and any other duties or services in connection with the maintenance
of the IP Assets in accordance with the Servicing Standard;

 

WHEREAS, the
Servicer desires to enforce such rights and powers and perform such obligations
and duties, all in accordance with the Servicing Standard; and

 

WHEREAS, each
of the Co-Issuers and the other Securitization Entities that are a party to
this Agreement desires to enter into this Agreement to provide for, among other
things, the servicing of the respective rights, powers, duties and obligations
of the Co-Issuers and such other Securitization Entities, as applicable, under
or in connection with the Asset Contribution Agreements, the Franchise Assets,
the IP Assets, the Real Estate Assets, the Company-Owned U.S. Restaurants and
the Master Issuer’s equity interests in the IP Holder, the Franchise Holder and
the Restaurant Holders, and any other assets acquired by or transferred to the
Master Issuer (including the Post-Closing Restaurants if and when acquired by
the applicable Securitization Entity) or any of its Subsidiaries (collectively,
the “Serviced
Assets”) by the Servicer, all in
accordance with the Servicing Standard.

 

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

 

2

 

ARTICLE I

DEFINITIONS

 

Section 1.1             Certain Definitions. Capitalized terms used
herein but not otherwise defined herein or in Appendix A to the Indenture shall
have the following meanings

 

“Accountants’
Report” has the meaning set forth
in Section 3.3 hereof.

 

“Administrative
Services” means the services
described in Section 2.4 hereof, including basic administrative
services, including bookkeeping and accounting services, payroll services and
other services which operating companies frequently outsource to third parties.

 

“Agreement” has the meaning set forth in the preamble hereto.

 

“Applebee’s
System” means a system of restaurants that specialize in the sale of
moderately priced food and alcoholic beverages in a casual dining setting, that
includes proprietary rights in certain trade names, service marks and
trademarks, including the service mark “Applebee’s Neighborhood Grill &
Bar” and variations of such mark, designs, decor and color schemes for
restaurant premises, signs, equipment, procedures and formulas for preparing
food and beverage products, specifications for certain food and beverage
products, inventory methods, operating methods, financial control concepts,
training facilities and teaching techniques.

 

“Back-Up Manager
Proposal” has the meaning set forth
in Section 6.2(b)(ii) hereof.

 

“Business” means the business conducted by Applebee’s
International and its Affiliates immediately prior to the Closing Date
primarily relating to the franchising and operation of restaurants in the “casual dining” category (as such term is commonly used in the
restaurant industry).

 

“Co-Issuers” has the meaning set forth in the preamble hereto.

 

“Collection
Practices” has the meaning set
forth in Section 4.10(a) hereto.

 

“Competitive
Business” means the business of
franchising or operating restaurants in the United States that have or offer: (i) a
varied menu; (ii) table service; (iii) beer, wine and/or liquor; and (iv) a
per person average guest check that is between 70% and 130% of the per person
average guest check of the Company-Owned U.S. Restaurants as of such date of 

 

3

 

determination; provided that if the total number of
Company-Owned U.S. Restaurants is reduced to below 40 as of any date of
determination following the Closing Date, on and after such date the per person
average guest check of a representative sample of the Franchised U.S.
Restaurants shall be applied for purposes of clause (iv) of this
definition (and otherwise the per person average guest check for purposes of clause
(iv) of this definition shall be determined in such other manner as
may be mutually agreed upon by each of the Aggregate Controlling Party and the
Servicer).

 

“Continuing
Franchise Fees” means all royalty
fees, transfer fees, renewal fees, license fees and any similar fees (other
than Initial Franchise Fees or Advertising Fees), interest on late payments,
damages for breach, indemnities or insurance recoveries, due and to become due
under or in connection with a Franchise Agreement.

 

“Credit Card
Sub-Accounts” means the sub-accounts of the Concentration Account into
which the credit card processors will deposit credit card proceeds for
subsequent withdrawal and deposit to the Concentration Account in the manner
provided in Section 10.1 of the Indenture.

 

“Criteria” has the meaning set forth in Section 3.3
hereof.

 

“Current
Practice” means, in respect of any
action or inaction, (a) with respect to Applebee’s International, the
performance standards of Applebee’s International and its Affiliates immediately
prior to the Closing Date and (b) with respect to IHOP Corp., the
performance standards of IHOP Corp. and its Affiliates immediately prior to the
Closing Date.

 

“Defective New
Asset” means (a) any New Asset
(other than any Non-Conforming New Franchise Document) that does not satisfy
the applicable representations and warranties of ARTICLE V hereof on the
New Asset Addition Date for such New Asset or (b) any Defective
Non-Conforming New Franchise Document.

 

“Defective
Non-Conforming New Franchise Document”
means each Non-Conforming New Franchise Document which (a) during any time
until and including the Accounting Date occurring in December 2012, shall
cause the (i) Weighted Average Royalty Rate to decline below 3.70% (to be
calculated assuming the Applebee’s Restaurant subject to such Non-Conforming
New Franchise Document had sales equal to the Applebee’s U.S. system-wide
average unit volume for the immediately preceding 12 Monthly Collection Periods
unless such Non-Conforming New Franchise Document relates to a then-existing
Applebee’s Restaurant, including a refranchised Applebee’s Restaurant, in which
event actual sales shall be used for such calculation) or (ii) the
aggregate number of Negative Leases to exceed 50 and (b) at any time after
the Accounting Date occurring in December 2012, shall cause the aggregate
number of Non-Conforming Franchise Documents to exceed the lesser of (i) 75
(up to 50 of which may be Negative Leases) and (ii) the number of Applebee’s
Restaurants equal to 4.00% of the total 

 

4

 

Franchised U.S. Restaurants and Company-Owned U.S. Restaurants, in each
case, as determined as of each Accounting Date; provided that each New
Franchise Document that was at one time a Non-Conforming New Franchise Document
but is subsequently modified such that the conditions under the definition of
Non-Conforming New Franchise Document are no longer applicable shall be
deducted from the foregoing calculations of Non-Conforming New Franchise Documents
as of the time of such subsequent modification.

 

“Discloser” has the meaning set forth in Section 7.1
hereof

 

“Disentanglement” has the meaning set forth in Section 6.4(a) hereof.

 

“Disentanglement
Period” has the meaning set forth
in Section 6.4(c) hereof.

 

“Disentanglement
Services” has the meaning set forth
in Section 6.4(a) hereof.

 

“Existing
Franchise Document” means any
Franchise Document entered into by Applebee’s International or any Affiliate
prior to the Closing Date.

 

“Former
Franchisor” means, with respect to
any Franchise Agreement or Development Agreement, Applebee’s International or
any Affiliate thereof, as applicable, that originally entered into such
Franchise Agreement or Development Agreement as franchisor thereunder prior to
the Closing Date.

 

“Franchise
Documents” means Franchise
Agreements, Development Agreements, Refranchised Restaurant Leases, Franchisee
Sub-Leases and other contracts, agreements or arrangements to which the Former
Franchisor or its Affiliates, the Master Issuer or the Franchise Holder, on the
one hand, and a Franchisee, on the other hand, is a party in connection with
the franchise system, together with any modifications, amendments, extensions
or replacements of the foregoing.

 

“Franchisee
Insurance Policy” means any
property and casualty insurance policy or policies required to be maintained by
a Franchisee for the benefit of the Master Issuer or any of its Affiliates,
whether direct or indirect and whether or not the Master Issuer or any of its
Affiliates is an additional insured, pursuant to the Franchise Agreements.

 

“Franchisee
Insurance Proceeds” means any
amounts paid upon settlement of a claim filed under a Franchisee Insurance
Policy, net of direct fees, out of pocket costs and disbursements incurred in
connection with the collection thereof, which amounts are the property of the
Franchisee.

 

5

 

“Franchisee
Lease Payments” means the rental
payments and any other amounts paid by any franchisee pursuant to any Refranchised
Restaurant Lease or Franchisee Sub-Lease.

 

“Guarantee” has the meaning set forth in Section 8.1
hereof.

 

“Guarantor” has the meaning set forth in the preamble hereto.

 

“Indemnitee” has the meaning set forth in Section 2.7
hereof.

 

“Indenture” has the meaning set forth in the recitals hereto.

 

“Indenture
Trustee” has the meaning set forth
in the preamble hereto.

 

“Indenture
Trustee Indemnitee” has the meaning
set forth in Section 2.7(d) hereof.

 

“Independent
Accountants” has the meaning set
forth in Section 3.2 hereof.

 

“Initial
Franchisee Fees” means all initial
franchise fees or franchise fee deposits due and to become due under or in
connection with any Franchise Agreement or Development Agreement, subject to
any reduction in accordance with the terms of the applicable Development
Agreement.

 

“IP Holder” has the meaning set forth in the preamble.

 

“IP Services” means performing the IP Holder’s obligations as
licensor under the IP License Agreements (and under any other agreements
pursuant to which the IP Holder licenses the use of any IP Assets); exercising
the IP Holder’s rights under the IP License Agreements (and under any other
agreements pursuant to which the IP Holder licenses the use of any IP Assets);
and acquiring, developing, managing, maintaining, protecting, enforcing,
defending, licensing and undertaking such other duties and services as may be
necessary in connection with the IP Assets, on behalf of the IP Holder,
including, without limitation, the following activities:

 

(a)           searching, screening and clearing
After-Acquired IP Assets to assess the risk of potential infringement;

 

(b)           filing, prosecuting and maintaining
applications and registrations for the IP Assets, in the United States (and,
with respect to the POS System, worldwide), in the IP 

 

6

 

Holder’s name, including, timely filing of
evidence of use, applications for renewal and affidavits of use and/or
incontestability, the timely payment of all registration and maintenance fees,
responding to third party oppositions of applications or challenges to
registrations, and responding to any office actions, reexaminations,
interferences or other office or examiner requests or requirements;

 

(c)           monitoring third party use and
registration of Trademarks and taking appropriate actions to oppose or contest
the use and any application or registration for Trademarks that could
reasonably be expected to infringe, dilute or otherwise violate the IP Assets
or IP Holder’s rights therein;

 

(d)           confirming the IP Holder’s legal
title in and to the IP Assets, including obtaining written assignments of IP
Assets to the IP Holder and recording transfers of title in the appropriate
intellectual property registry;

 

(e)           with respect to the IP Holder’s rights
and obligations under the IP License Agreements and any Transaction Documents
or other agreements pursuant to which the IP Holder licenses the use of any IP
Assets, monitoring the licensee’s use of each licensed Trademark and the
quality of its goods and services offered in connection with such Trademarks,
rendering approvals (or disapprovals) that are required under the applicable
license agreement(s), and ensuring that any use of such Trademarks by any such
licensee satisfies the quality control standards and usage provisions of the
applicable license agreement and is in compliance with all applicable laws and
the requirements of each of the Transaction Documents;

 

(f)            sublicensing the IP Assets to
suppliers, manufacturers, advertisers, and other service providers in
connection with the provision of products and services for use in the U.S.
Restaurant Business, the Other U.S. Products and Services, the Other U.S.
Franchise Business and the U.S. Territories Business;

 

(g)           protecting, policing, and, in the event
that the Servicer becomes aware of any unlicensed copying, imitation,
infringement, dilution, misappropriation, unauthorized use or other violation
of the IP Assets, or any portion thereof, enforcing such IP Assets, including, (i) preparing
and responding to and further prosecuting cease-and-desist, demand and notice
letters, and requests for a license; and (ii) commencing, prosecuting
and/or resolving claims or suits involving imitation, infringement, dilution,
misappropriation, the unauthorized use or other violation of the IP Assets, and
seeking all appropriate monetary and equitable remedies in connection
therewith; provided that the IP Holder shall, and hereby agrees to, join
as a party to any such suits to the extent necessary to maintain standing;

 

(h)           performing such functions and duties,
and preparing and filing such documents, as are required under the Indenture or
any other Transaction Document to be performed, prepared and/or filed by the IP
Holder, including (i) executing and recording such 

 

7

 

financing statements (including continuation
statements) or amendments thereof or supplements thereto or such other
instruments as the Indenture Trustee and Co-Issuer together or any Insurer (so
long as it is a Series Controlling Party) may from time to time reasonably
request in connection with the security interests in the IP Assets granted by
the IP Holder to the Indenture Trustee under the Indenture, (ii) preparing,
executing and delivering grants of security interests or any similar
instruments as the Indenture Trustee and the Co-Issuers together or any Insurer
(so long as it is a Series Controlling Party) may from time to time
reasonably request that are intended to evidence such security interests in the
IP Assets and recording such grants or other instruments with the relevant
authority including the PTO, the United States Copyright Office or, only with
respect to the POS System, with any applicable foreign intellectual property
office and (iii) disclosing to Applebee’s International all material
After-Acquired IP Assets for Applebee’s International’s exploitation thereof
outside the U.S. and U.S. Territories;

 

(i)            taking such actions as any licensee
under an IP License Agreement may request that are required by the terms,
provisions and purposes of such IP License Agreement (or by any other
agreements pursuant to which the IP Holder licenses the use of any IP Assets)
to be taken by the IP Holder, and preparing (or causing to be prepared) for
execution by the IP Holder all documents, certificates and other filings as the
IP Holder shall be required to prepare and/or file under the terms of such IP
License Agreements (or such other agreements);

 

(j)            paying or causing to be paid or
discharged any and all taxes, charges and assessments that may be levied,
assessed or imposed upon any of the IP Assets or contesting the same in good
faith;

 

(k)           obtaining licenses of third party
Intellectual Property for use and sublicense in connection with the U.S.
Restaurant Business, the Other U.S. Products and Services, the Other U.S.
Franchise Business and the U.S. Territories Business, including sublicense to
Franchisees pursuant to Participation Agreements or to Securitization Entities;
and

 

(l)            with respect to trade secrets and
other confidential information of the IP Holder, taking all reasonable measures
to maintain confidentiality and to prevent non-confidential disclosures.

 

“Master Issuer” has the meaning set forth in the preamble hereto.

 

“Monthly
Noteholders’ Report” has the meaning set forth in Section 3.1(b) hereof.

 

“Negative Lease” means, with respect to any Monthly Collection
Period, a Refranchised Restaurant Lease and Franchisee Sub-Lease that is
reasonably expected to yield negative Net Rental Revenue during such Monthly
Collection Period.

 

8

 

“Net Rental
Revenue” means, with respect to any
Franchisee Sub-Lease or Refranchised Restaurant Lease for any Monthly
Collection Period, the amount equal to (a) all Lease Receipts that are
scheduled to be paid to the applicable Restaurant Holder or Predecessor
Restaurant Holder by the Franchisee on such Franchisee Sub-Lease or
Refranchised Restaurant Lease, as applicable, during such Monthly Collection
Period minus (b) all Lease Payments, if
any, that are scheduled to be paid to the primary lessor of the related
property by the applicable Restaurant Holder or Predecessor Restaurant Holder
during such Monthly Collection Period.

 

“New Asset” means a New Franchise Document, a New Leased Real
Property or a Company-Owned Real Property or other Serviced Asset acquired or
entered into after the Closing Date.

 

“New Asset
Addition Date” means, with respect
to any New Asset, the earliest of (i) the date on which such New Asset is
acquired by a Securitization Entity, (ii) the later of (a) the date
upon which the closing occurs under the applicable contract giving rise to such
New Asset and (b) the date upon which all of the diligence contingencies
in the contract for purchase of the applicable New Asset expire and the
Securitization Entity acquiring such New Asset no longer has the right to
cancel such contract and (iii) the date on which a Securitization Entity
begins receiving Continuing Franchise Fees or Franchisee Lease Payments with
respect to such New Asset.

 

“New
Company-Owned Real Property” means
any real property owned by the Restaurant Holders and acquired after the
Closing Date.

 

“New Leased Real
Property” means any real property
leased by the Restaurant Holders from a third-party property lessor in respect
of which the lease was entered into after the Closing Date (including any
Company-Owned Real Property which was subsequently sold to and leased back from
third parties, but excluding, however, any asset that is acquired by any of the
Securitization Entities after the Closing Date pursuant to an Asset
Contribution Agreement).

 

“New Property” means, collectively, the New Company-Owned Real
Property and the New Leased Real Property.

 

“Non-Conforming
Existing Franchise Document” has
the meaning specified under the First-Tier Asset Contribution Agreement.

 

“Non-Conforming
New Franchise Document” means (i) with
respect to any date of determination, any Franchise Document that is a New
Franchise Agreement providing for a monthly royalty rate below 4.0% of “gross
sales” (as defined in the related Franchise Agreement) as of that date or (ii) any
Negative Lease; provided that Non-Conforming New Franchise

 

9

 

Document shall not include any Non-Conforming Existing Franchise
Document or Special Franchisee Document.

 

“Non-U.S.
Business” means any business activities of Applebee’s International and its
Subsidiaries (other than the Securitization Entities) located outside of the
United States.

 

“Operational
Audits” means the comprehensive
inspection and evaluation program of the food, services, sanitation,
appearance, employee training or equipment maintenance of Applebee’s
Restaurants and Franchisees in order to verify each such restaurant’s and Franchisee’s
compliance with the technical and operational standards.

 

“Post-Closing
Assets” has the meaning set forth
in Section 5.2(a) hereof.

 

“Post-Opening
Services” means the services
required to be performed under the Franchise Agreements or otherwise in
connection with the Franchise Agreements by the Franchise Holder or Master
Issuer, as applicable, after the opening of Applebee’s Restaurants to be
operated by the applicable Franchisee, including without limitation, (a) the
maintenance of a continuing advisory relationship with Franchisees, including
consultation in the areas of marketing, merchandising and general business
operations; (b) the provision to each Franchisee of the standards
established or approved by the IP Holder for use of the Applebee’s Brand and
other IP Assets; (c) the establishment of standards of quality,
cleanliness, appearance and service at all Applebee’s Restaurants; (d) the
administration of the Advertising Fees received pursuant to the applicable
Franchise Agreements and the direction of the development of all advertising
and promotional programs for the Applebee’s Brand; (e) the inspection of
the Applebee’s Restaurants operated by each Franchisee; and (f) such other
post-opening services as are required to be performed under the Franchise
Agreements or otherwise in connection with the Franchise Documents by the
Franchisor.

 

“Power of
Attorney” means the authority
granted by any Securitization Entity to the Servicer pursuant to a Power of
Attorney in substantially the form set forth as Exhibit B hereto.

 

“Pre-Closing
Date Net Collections Payment”
means, with respect to any Serviced Asset hereunder, all collections and
revenues received by Applebee’s International or its affiliates relating or
attributable to such Serviced Asset, including without limitation, all
Franchise Payments, for the period commencing on the Cut-Off Date and ending on
the Closing Date.

 

“Pre-Opening
Services” means the services
required to be performed under the Franchise Agreements or otherwise in connection
with the Franchise Documents by the Franchise Holder prior to the opening of
the Applebee’s Restaurants to be operated by the applicable Franchisee,
including without limitation, (a) the provision to each Franchisee of

 

10

 

standards for the design, construction, equipping and operation of the
Applebee’s Restaurants and the approval of locations meeting such standards; (b) the
provision to individuals designated by the Franchisee of the then current
initial training program to be conducted at one or more training centers or
other locations designated by the Servicer; (c) the provision to each
Franchisee of the Franchise Holder’s operations manual; and (d) the
provision to each Franchisee of such other assistance in the pre-opening,
opening and initial operation of the Applebee’s Restaurant as are required to
be provided under the Franchise Agreements or otherwise in connection with the
Franchise Documents by the Franchisor.

 

“Prior Terms” means, in respect of each type of contract
included in New Franchise Documents, the contractual terms and provisions,
exclusive of the applicable rates for Initial Franchise Fees or Continuing
Franchise Fees, Advertising Fees and similar fees and expenses, that were
generally prevailing for agreements of such type, entered into by a Former
Franchisor on or before the Closing Date.

 

“Properties” means, collectively, the Company-Owned Real
Property and the Leased Property.

 

“Quality Control
Programs” means the Operational
Audits and any other similar, successor or additional programs implemented for
quality control purposes.

 

“Real Estate
Assets” means (i) the
Company-Owned Real Property, (ii) the Company Leases, (iii) the
Sale/Leaseback Leases, if any, (iv) the Refranchised Restaurant Leases, if
any, and (v) the Franchisee Sub-Leases, if any.

 

“Real Estate
Services” means:

 

(a)           the negotiation, execution and
recording of leases, subleases, deeds and other contracts and agreements
relating to the Real Estate Assets on behalf of any Securitization Entity;

 

(b)           the management of the Real Estate
Assets, including, without limitation, (i) the management of the
Company-Owned Real Property and the Leased Property, (ii) the enforcement
of the Company Leases, Sale/Leaseback Leases, Refranchised Restaurant Leases
and the Franchisee Sub-Leases, (iii) the payment, extension, renewal,
modification, adjustment, prosecution, defense, compromise or submission to
arbitration or mediation of any obligation, suit, liability, cause of action or
claim, including taxes, and (iv) the collection of any amounts payable to
any Securitization Entity as a result of the use of the Real Estate Asset,
including, without limitation, rent;

 

11

 

(c)           causing
the Restaurant Holders, the Franchise Holder or any Additional Securitization
Entity created for such purpose to (i) acquire and enter into agreements
to acquire Real Estate Assets and (ii) sell, assign, transfer, encumber or
otherwise dispose of all or any portion of the Real Estate Assets;

 

(d)           environmental
evaluation and remediation activities on any real property owned or leased by a
Securitization Entity;

 

(e)           obtaining
appropriate levels of title insurance for the Company-Owned Real Property as of
the acquisition of such Company-Owned Real Property by the applicable
Securitization Entity; provided that the level of title insurance
maintained on the Closing Date for the Company-Owned Real Property in existence
on the Closing Date will be deemed to be the appropriate level of title
insurance for such Company-Owned Real Property on and after the Closing Date
for purposes of this clause (e);

 

(f)            making
or causing to be made all repairs and replacements to the existing improvements
and the construction of new improvements on the Real Estate Assets;

 

(g)           the
employment of agents, managers, brokers or other persons necessary or
appropriate to acquire, dispose of, maintain, own, lease, manage and operate
the Real Estate Assets (which for the avoidance of doubt, shall not include
persons employed in the day to day operations of Applebee’s Restaurants);

 

(h)           paying
or causing to be paid any and all taxes, charges and assessments that may be
levied, assessed or imposed upon any of the Real Estate Assets or contesting
the same in good faith;

 

(i)            to
the extent that the Servicer or any of its Affiliates participates in the same,
negotiating with Franchisees with respect to properties owned by Franchisees or
leased by Franchisees from a third party landlord and entering any
documentation with respect to the same; and

 

(j)            all
other actions or decisions relating to the acquisition, disposition,
maintenance, ownership, leasing, management and operation of the Real Estate
Assets.

 

“Recipient” has the
meaning ascribed to such term in Section 7.1 hereof.

 

“Requirements of Law” means with
respect to any Person or any of its property, the certificate of incorporation
or articles of association and by laws, limited liability company agreement,
partnership agreement or other organizational or governing documents of such

 

12

 

Person
or any of its property, and any law, treaty, rule or regulation, or
determination of any arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject, whether federal, state, local,
foreign or international (including, without limitation, usury laws, the
Federal Truth in Lending Act and retail installment sales acts).

 

“Serviced Affiliate” has the
meaning set forth in Section 4.9 hereto.

 

“Serviced Assets” has the
meaning set forth in the recitals hereto.

 

“Serviced Document” means any
contract, agreement, arrangement or understanding relating to any of the
Serviced Assets, including, without limitation, the Asset Contribution
Agreements, Franchise Documents and the IP License Agreements.

 

“Servicer” means Applebee’s
Services, Inc. in its capacity as Servicer hereunder, unless a successor
Person shall have become the Servicer pursuant to the applicable provisions of
the Indenture and this Agreement, and thereafter “Servicer” shall mean such
successor Person.

 

“Servicer Replacement Plan” has the meaning set forth in Section 6.2(b)(iv).

 

“Servicer Termination Event” has the meaning set forth in Section 6.1(a).

 

“Services” means the
servicing and administration by the Servicer of the Serviced Assets, in each
case in accordance with the terms of this Agreement (including, for the avoidance
of doubt, the Servicing Standard), the Indenture, the other Transaction
Documents and the Serviced Documents, as agent for the applicable
Securitization Entity, including, without limitation:

 

(a)           calculating
and compiling information required in connection with any report to be
delivered pursuant to the Transaction Documents;

 

(b)           preparing
and filing of all tax returns and tax reports required to be prepared by any
Securitization Entity;

 

(c)           paying
or causing to be paid or discharged any and all taxes, charges and assessments
required to be paid under applicable requirements of law by any Securitization
Entity;

 

13

 

(d)           administering
the Advertising Fees Account and the Servicing Accounts;

 

(e)           performing
the duties and obligations of, and enforcing the rights against Affiliates of,
the Securitization Entities pursuant to the Transaction Documents;

 

(f)            selecting
the assets to be acquired or otherwise transferred in accordance with the
applicable Asset Contribution Agreement;

 

(g)           making
collections on and otherwise servicing (i) the Master Issuer’s rights and
obligations under the Existing U.S. Franchise Agreements and the Post-Closing
Restaurant Purchase Agreement; (ii) the Franchise Holder’s rights and obligations
under the Development Agreements and the New U.S. Franchise Agreements; (iii) the
rights and obligations of Applebee’s International and its Affiliates under the
property relating to Post-Closing U.S. Restaurants and (iv) the right to
terminate and approve amendments, waivers and modifications of, the Franchise
Documents and to exercise all rights of the Franchise Holder and the Master
Issuer under such Franchise Documents;

 

(h)           causing
all Advertising Fees and Third Party Licensing Fees not paid to the
Concentration Account to be paid to the Advertising Fees Account and the Third
Party Licensing Fees Account, respectively;

 

(i)            on
behalf of the Franchise Holder, selecting and approving new Franchisees and
providing personnel to manage the selection and approval process;

 

(j)            on
behalf of the Franchise Holder, preparing New U.S. Franchise Agreements and New
U.S. Development Agreements, including, among other things, adopting variations
to the forms of agreements used in documenting New U.S. Franchise Agreements or
New U.S. Development Agreements and preparing and executing documentation of
franchise transfers, terminations, renewals, site relocations and ownership
changes, in all cases, subject to and in accordance with the terms of the
Transaction Documents;

 

(k)           on
behalf of the Franchise Holder, preparing and filing franchise offering
circulars relating to New U.S. Development Agreements and New U.S. Franchise
Agreements to comply in all material respects with applicable federal and state
laws;

 

(l)            on
behalf of the Master Issuer and the Franchise Holder, complying with franchise
industry specific government regulation and applicable laws;

 

(m)          performing
the obligations of the Securitization Entities under the Serviced Documents
including entering into new Serviced Documents from time to time;

 

14

 

(n)           arranging
for legal services with respect to the Serviced Assets, including with respect
to the enforcement of the Franchise Documents;

 

(o)           providing
accounting and financial reporting services (including, to the extent the
Servicer determines the failure of the Franchise Holder to obtain and maintain
the status as an exempt large franchisor could be reasonably expected to cause
a Material Adverse Effect, providing such services in connection with the
application for, and/or maintenance of, such status);

 

(p)           establishing
and/or providing quality control services and standards for food, equipment,
suppliers and distributors and monitoring compliance with such standards;

 

(q)           monitoring
industry conditions and adapting its practices accordingly to meet changing
consumer needs;

 

(r)            developing
new products and services (or modifying any existing products and services) to
be offered in connection with the Other U.S. Products and Services, the U.S.
Restaurant Business, the U.S. Territories Business and the Other U.S. Franchise
Business and supporting the development of programs for increasing awareness of
the Applebee’s Brand;

 

(s)           developing,
modifying, amending and disseminating (i) specifications for restaurant
operations, (ii) the Applebee’s Restaurants operating manual and (iii) new
menu items;

 

(t)            evaluating
and approving, on behalf of the Master Issuer and Franchise Holder, as
applicable, assignments of Franchise Agreements and other Franchise Documents
by Franchisees to third party franchisee candidates or existing Franchisees;

 

(u)           operating
the Company-Owned U.S. Restaurants, including maintaining appropriate levels of
property and casualty insurance in respect of Company-Owned U.S. Restaurants;

 

(v)           obtaining,
renewing and keeping in effect all licenses or other arrangements necessary for
the sale of alcoholic beverages at Company-Owned U.S. Restaurants;

 

(w)          on
behalf of Master Issuer and the Franchise Holder, as applicable, taking such
actions as are necessary or it deems advisable to enforce the obligations of
any Franchisee under the applicable Franchise Agreement and the riders and
addenda thereto in respect of the Weight Watchers Agreement;

 

15

 

(x)            performing
the Pre-Opening Services and Post-Opening Services on behalf of the Master
Issuer under the Existing U.S. Franchise Agreements and the Franchise Holder
under the Development Agreements and the New U.S. Franchise Agreements;

 

(y)           performing
the Real Estate Services, including paying, on behalf of the related Restaurant
Holder, real estate taxes and any other taxes or other amounts payable to any
governmental authority and causing any payments to be made to any third-party
landlords with respect to the Company Leases (and enforcing all rights of the
Restaurant Holders under all Company Leases);

 

(z)            performing
the IP Services;

 

(aa)         performing
the Administrative Services;

 

(bb)         managing
the rights of the Master Issuer under the IHOP Residual Certificate; and

 

(cc)         performing
such other services as may be necessary from time to time and consistent with
the Servicing Standard and the Transaction Documents in connection with the
Serviced Assets.

 

“Servicing Standard” means:

 

(a)           with respect to Applebee’s Services, Inc.,
in its capacity as the Servicer (and any Successor Servicer that is an
Affiliate of Applebee’s International):

 

(i)            with respect to
the Company-Owned U.S. Restaurants, standards maintained by the Servicer that
are at least equal when taken as a whole to the Current Practice of Applebee’s
International and are conducted in a commercially reasonable manner that is
normal and usual with respect to the Current Practice of Applebee’s International;
provided that the Servicer shall be free to modify such servicing
standards, including the franchising or refranchising of restaurants and the
sale/leaseback or other similarly structured transactions in respect of the
underlying real property, consistent with the standards set forth in clause (ii) below
as long as such modification by the Servicer shall not result in servicing
standards that differ materially in any adverse respect from common industry
practices and shall not have a Material Adverse Effect on the Securitization
Entities, the Insurers, if any, or the Indenture Collateral; and

 

(ii)           with respect to
Franchised U.S. Restaurants or otherwise other than in respect of matters
addressed in clause (i) above and clauses (a)(iii) and (b) below,
standards maintained by the Servicer that, when taken as a whole, are at least
equal to the Current Practice of IHOP Corp. and/or the Current Practice of
Applebee’s International (for which purpose the election between the Current
Practice of IHOP Corp. and 

 

16

 

Applebee’s International (or
election to apply both) shall be made at the discretion of the Servicer), and are conducted in a
commercially reasonable manner that, when taken as a whole, is normal and usual
with respect to the Current Practice of IHOP Corp. and/or the Current Practice
of Applebee’s International (for which purpose the election between the Current
Practice of IHOP Corp. and the Current Practice of Applebee’s International (or
election to apply both) shall be made at the discretion of the Servicer) and, to the extent of
changed circumstances, practices or technologies, the procedures that the
Servicer would use if the assets being serviced were owned by the Servicer and
the Servicer was not engaged in any business other than on behalf of the
Securitization Entities; and

 

(iii)          with respect to the Other U.S. Products and Services or the
Other U.S. Franchise Business, the standards that the Servicer would maintain
if the assets being serviced were owned by the Servicer and the Servicer was
not engaged in any business other than on behalf of the Securitization
Entities; provided, that such standards shall, when taken as a whole, be
conducted in a commercially reasonable manner that is normal and usual with
respect to then existing practice of Applebee’s International and/or Applebee’s
Services Inc.; and provided, further, that the application of
such standards shall not result in servicing standards that differ materially
in any adverse respect from common industry practices and could not reasonably
be expected to have a Material Adverse Effect on the Securitization Entities,
the Insurers, if any, or the Collateral; and

 

(b)           with respect to any Successor Servicer
that is not an Affiliate of Applebee’s International, standards comparable to
the standards set forth in clause (a) above, subject to
satisfaction of the Rating Agency Condition and the consent of the Lead Insurer
with respect to each Series of Notes Outstanding in connection with the
entry into the related servicing agreement;

 

provided that, in each
case, the Servicer shall be deemed to be in compliance with the Servicing Standard (i) in
its establishment of, and/or the procurement of products and services from, any
purchasing cooperative on behalf of Franchisees, the Securitization Entities
and/or other Affiliates of the Servicer, (ii) in connection with any
decision to consolidate, downsize or otherwise implement changes in respect of (A) support
services for the POS System, (B) field managers and operational service
units and (C) guest service centers, in each case, in order to enhance
efficiency in its discretion and (iii) for any other change to the
Servicing Standard set forth above with respect to which the Aggregate
Controlling Party has provided its prior written consent.

 

“Special
Franchisee Document” means any Franchise Document entered into in respect
of any Franchisee subject to the Former Franchisor’s “premier developer program”
or similar programs to be established by the Servicer or any Affiliate thereof,
pursuant to which the Former Franchisor, the Franchise Holder or the Servicer
(acting on behalf of the Master Issuer or the Franchise Holder), as the case
may be, agrees to waive or reduce the payment of the royalty or rent thereunder
for a period not to exceed one-year without renewal and/or provide other means
of incentives to such Franchisee for the development of Applebee’s Restaurants
in excess of the number of Applebee’s Restaurants as to which such Franchisee
has committed to develop pursuant to the applicable time period in the
Development Agreement; provided that such

 

17

 

incentives shall apply solely with respect to the Applebee’s
Restaurants developed in excess of such Franchisee’s committed number of
Applebee’s Restaurants for the applicable time period.

 

“Subservicing Arrangement” means an arrangement whereby the Servicer engages
any other Person (including any Affiliate) to perform certain of its duties
under this Agreement excluding the fundamental corporate functions of the
Servicer; provided that any agreement between the Servicer and third
party vendors pursuant to which the Servicer purchases a specific product or
service or outsources routine administrative functions shall not constitute a
Subservicing Arrangement.

 

“Successor Servicer” means any
successor to Applebee’s Services, Inc., as the initial Servicer,
performing the obligations of the Servicer hereunder, as appointed to act as
the Servicer pursuant the Back-Up Manager Proposal and approved by the
Aggregate Controlling Party.

 

“Supplemental Servicing
Fee” means an amount to be determined with the written consent of the
Aggregate Controlling Party.

 

“Term” shall have the
meaning set forth in Section 9.1 hereof.

 

“UFOC” means the
initial uniform franchise offering circular of Applebee’s Franchising LLC, as
modified, updated or supplemented from time to time.

 

“Weekly Servicer’s Report” has the meaning set forth in Section 3.1(d) hereof.

 

“Weekly Servicing Fee”
means, with respect to each Weekly Allocation Date, the amount determined by dividing:

 

(i) an amount equal to
the sum of (A) a $10,000,000 base fee, plus (B) $13,000 for
each Franchised U.S. Restaurant as of such date, plus (C) $135,000
for each Company-Owned U.S. Restaurant as of such date; by

 

(ii) 52;

 

provided, that the
Weekly Servicing Fee shall be adjusted on each Payment Date to reflect any
change to the number of Franchised U.S. Restaurants and Company-Owned U.S.
Restaurants as set forth in the related Monthly Servicer’s Certificate (which
change shall be effective on and after the first day of the Monthly Collection
Period immediately following delivery of the related Monthly Servicer’s
Certificate); provided, further, that each of the 

 

18

 

amounts
set forth in clauses (i)(A), (i)(B) and (i)(C) shall
be subject to a 2% annual increase on the first day of the Monthly Collection
Period that commences immediately following each anniversary of the Closing
Date; provided, further, that no such increase shall apply if
after giving effect to such increase the sum of the amounts set forth in clauses
(i)(A), (i)(B) and (i)(C) shall exceed 35% of the
aggregate Retained Collections over the preceding twelve Monthly Collection
Periods).

 

“Weighted Average Royalty
Rate” means, as of any time of determination, the percentage, expressed as
a fraction:

 

(i)            the numerator of which is the aggregate royalty fees
receivable from Franchisees (excluding for such purpose any Applebee’s
Restaurant owned by Restaurant Holders in their capacities as Franchisees) with
respect to the immediately preceding 12 Monthly Collection Periods (excluding
such amounts receivable in respect of Non-Conforming Existing Franchise
Documents and Special Franchisee Documents); and

 

(ii)           the denominator of which is the aggregate sales of
Franchised U.S. Restaurants (excluding for such purpose any Applebee’s
Restaurant owned by Restaurant Holders in their capacities as Franchisees)
during the corresponding 12 Monthly Collection Periods (excluding sales in
respect of Applebee’s Restaurants subject to Non-Conforming Existing Franchise
Documents and Special Franchisee Documents).

 

Section 1.2             Other Defined Terms.

 

(a)           Each
term defined in the singular form in Section 1.1 or elsewhere in
this Agreement shall mean the plural thereof when the plural form of such term
is used in this Agreement and each term defined in the plural form in Section 1.1
shall mean the singular thereof when the singular form of such term is used
herein.

 

(b)           The
words “hereof,” “herein,” “hereunder” and similar terms
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and article, section, subsection,
schedule and exhibit references herein are references to articles, sections,
subsections, schedules and exhibits to this Agreement unless otherwise
specified.

 

(c)           Any
reference herein to “knowledge” or “actual knowledge” of any
party hereto with respect to an event including, without limitation, a Servicer
Termination Event, shall mean the actual knowledge of (i) the Chief
Executive Officer, Chief Financial Officer, Treasurer, Controller, Senior Vice
President of Finance or General Counsel of the Servicer, (ii) any manager
or director (as applicable) of any Securitization Entity who is also a director
or an officer of the Servicer and/or IHOP Corp. or (iii) any Authorized
Officer of the Servicer directly 

 

19

 

responsible for managing the servicing activities on behalf
of such party or for administering the transactions relevant to such event.

 

(d)           Unless
as otherwise provided herein,  the word “including”
as used herein shall mean “including without limitation”.

 

Section 1.3             Other Terms.  All accounting terms not specifically defined
herein shall be construed in accordance with GAAP.  If at any time from and after the date of
this Agreement any change in GAAP would alter in any material respect the
computation of any financial ratio, 
restriction or definition set forth in any Transaction Document whose
definition directly or indirectly refers to GAAP (including, for example, to
increase (or decrease) the amount of Debt permitted to be incurred under any
Transaction Document or materially change the calculation of any amounts
required to be paid thereunder), and either the Servicer or the Aggregate
Controlling Party shall so request, the parties hereto and the Aggregate
Controlling Party shall negotiate in good faith to amend such ratio,
restriction or definition to preserve the original intent thereof in light of
such change in GAAP (subject to the written approval of the Servicer and the
Aggregate Controlling Party); provided that, until so amended, (i) such
ratio, restriction or definition shall continue to be computed in accordance
with GAAP as in effect prior to such change therein and (ii) the Servicer
shall provide to the Indenture Trustee and each Insurer, if any, concurrently
with all financial statements and other documents required to be delivered by
it or its Affiliates under any Transaction Document, a reconciliation between
calculations of such ratio, restriction or definition made before and after
giving effect to such change in GAAP. All terms used in Article 9 of the
UCC in the State of New York, and not specifically defined herein, are used
herein as defined in such Article 9.

 

Section 1.4             Computation of Time Periods.  Unless otherwise stated in this Agreement, in
the computation of a period of time from a specified date to a later specified
date, the word “from” means “from and including” and the words “to”
and “until” each means “to but excluding.”

 

ARTICLE II

 

ADMINISTRATION AND SERVICING OF
SERVICED ASSETS

 

Section 2.1             Applebee’s Services, Inc.
to act as Servicer.

 

(a) 
Engagement of the Servicer.  The
Servicer is hereby authorized by each applicable Securitization Entity, and
hereby agrees, to perform the Services (or refrain from the performance of the
Services) subject to and in accordance with the Servicing Standard and the
terms of this Agreement and the other Transaction Documents.  With respect to the IP Services, the Servicer
shall perform such IP Services in accordance with the Servicing Standard and
the IP License Agreements except that if the IP Holder determines, in its sole
discretion, that additional action is necessary or desirable in furtherance of
the protection of the IP Assets then the Servicer shall take such additional
action.  The Servicer shall have full
power and authority, acting alone and subject only to the specific requirements
and prohibitions of this Agreement and in accordance with the Servicing
Standard, the Indenture and the other Transaction Documents, to

 

20

 

do and take any and all
actions, or to refrain from taking any such actions, and to do any and all
things in connection with performing the Services which the Servicer determines
are necessary or desirable.  Without
limiting the generality of the foregoing, but subject to the provisions of this
Agreement, the Indenture and the other Transaction Documents, including,
without limitation, Section 2.8, the Servicer, in connection with
performing the Services, is hereby authorized and empowered to execute and
deliver, in the Servicer’s own name (in its capacity as agent for the
applicable Securitization Entity ) or in the name of any Securitization Entity
(pursuant to the applicable Power of Attorney), on behalf of any Securitization
Entity or the Indenture Trustee, as the case may be, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Serviced Assets,
including, without limitation, consents to sales, transfers or encumbrances of
the assets relating to an Applebee’s Restaurant by any Restaurant Holder or any
Franchisee or consents to assignments and assumptions of the Franchise
Agreements by any Franchisee in accordance with the terms thereof.  For the avoidance of doubt, the parties
hereto acknowledge and agree that (i)  the Servicer is providing Services
directly to each applicable Securitization Entity and (ii) the Master
Issuer is not providing, and is under no obligation to provide, any Services to
any of its Subsidiaries which are parties hereto.  Nothing in this Agreement shall preclude the
Securitization Entities from performing the Services on their own behalf at any
time, and from time to time.

 

(b)          Actions
to Perfect Security Interests. 
Subject to the terms of the Indenture and any applicable Series Supplement,
the Servicer shall take those actions that are required under the Transaction
Documents and Requirements of Law to maintain continuous perfection and
priority (subject to Permitted Liens) of any Securitization Entity’s and the
Indenture Trustee’s respective interests in the Indenture Collateral; provided,
however that there is no action required to be taken by the Servicer as
of the Closing Date to perfect certain Liens of the Indenture Trustee as set
forth in Section 5.5 and Section 5.6.  The Servicer shall prepare and deliver to the
Indenture Trustee executed real estate mortgages on all Company-Owned Real
Property within 180 days following the Closing Date (or such later date as may
be permitted in writing by the Aggregate Controlling Party with respect to all
or part of the Company-Owned Real Property) but shall not be required to record
such mortgages unless a Trigger Event has occurred and is continuing pursuant
to Section 5.6.  Without
limiting the foregoing, the Servicer shall file or cause to be filed with the
appropriate government office the financing statements on Form UCC-1, and
assignments of financing statements on Form UCC-3, and other filings
requested by the Co-Issuers, the Aggregate Controlling Party or the Indenture
Trustee,  to be filed in connection with
each Asset Contribution Agreement, the IP License Agreements, the IP Assets,
the Indenture, the other Transaction Documents and the transactions contemplated
thereby.  The Indenture Trustee’s sole
responsibility with respect to the mortgages delivered to it in accordance with
this Section 2.1(b) shall be to hold and safekeep such
mortgages. Upon the occurrence of a Trigger Event the Aggregate Controlling
Party shall direct the Indenture Trustee in writing to release such mortgages
to the Servicer for recordation in accordance with Section 5.6.

 

21

 

(c)           Ownership of
Servicer-Developed IP.

 

(i)            The
Servicer acknowledges and agrees that the Intellectual Property rights in all
IP Assets shall be owned by and inure exclusively to the benefit of the IP
Holder, including Servicer-Developed IP. 
The Servicer shall irrevocably assign and transfer, and hereby does irrevocably
assign and transfer, to the IP Holder any and all of the Servicer’s right,
title and interest, including in any goodwill connected with the use of and
symbolized by any Trademarks, in, to and under any Servicer-Developed IP.  The IP Holder and Servicer expressly agree
that, to the fullest extent allowed by law, any copyrightable material
contained in the Servicer-Developed IP shall be considered a “work made for
hire,” as that term is defined in Section 101 of the United States
Copyright Act, as amended, but, if any such works are not considered “works
made for hire” for any purpose, then they are deemed automatically covered by
the assignment provisions set forth in this subsection (c)(i).
Notwithstanding the foregoing, the Servicer-Developed IP transferred to the IP
Holder shall not include any rights of the Servicer under licenses for use of
third party Intellectual Property to the extent that such rights are not
assignable and sublicensable back to Servicer (and its sublicensees).

 

(ii)           The
Servicer hereby irrevocably assigns, transfers, and quitclaims to Applebee’s
International any and all Non-U.S. Intellectual Property Rights whether now or
hereafter created, developed, authored or acquired by the Servicer in, to, or
under (a) the Applebee’s Brand, (b) products or services sold or distributed
under the Applebee’s Brand, and (c) derivative works of, and other
variations on or improvements to the IP Assets or any non-U.S. equivalent
thereof (other than the POS System), including in any goodwill connected with
the use of and symbolized by any Trademarks included in such Non-U.S.
Intellectual Property Rights.  The
Servicer (i) shall not, and shall not permit any entity for whom it is
performing Services (other than Applebee’s International or an entity
designated by Applebee’s International), to submit an application to register,
or register, in its name any Patent, Trademark, Copyright or Internet Domain
Name included in the foregoing Non-U.S. Intellectual Property Rights, and (ii) shall
use commercially reasonable efforts to ensure that any license for third party
Intellectual Property entered into by the Servicer is not for use outside the
U.S. and the U.S. Territories.

 

(iii)           The
parties acknowledge and agree that Applebee’s International shall have the
right to enforce its rights and the Servicer’s and IP Holder’s obligations
under this Section 2.1 notwithstanding that Applebee’s
International is executing this Agreement as a guarantor.

 

(d)           Further
Assurances.  The Servicer agrees to
cooperate in good faith with Applebee’s International, at Applebee’s
International’s sole cost and expense, for the purpose of servicing and
preserving Applebee’s International’s rights in, to and under the Non-U.S.
Intellectual Property Rights to be assigned and transferred to Applebee’s
International under this Section 2.1(d), including executing any
documents and taking any actions, at Applebee’s International’s reasonable
request, to confirm, file, and record in any appropriate registry Applebee’s
International’s legal title in, to and under such Non-U.S. Intellectual
Property Rights.

 

22

 

The Servicer hereby appoints Applebee’s International as its
attorney-in-fact authorized to execute such documents in the event that the
Servicer fails to execute the same within twenty (20) days following Applebee’s
International’s request to do so (it being understood that such appointment is
a power coupled with an interest and therefore irrevocable) with full power of
substitution and delegation.

(e)           Grant
of Power of Attorney.  In order to
provide the Servicer with the authority to perform and execute its duties and
obligations as set forth herein, each Securitization Entity that is a party
hereto hereby agrees to execute, upon request of the Servicer, a Power of Attorney
in substantially the form set forth as Exhibit B-1 (with respect to
the IP Holder) or Exhibit B-2 (with respect to each other
Securitization Entity) hereto, which Powers of Attorney shall terminate in the
event that the Servicer’s rights under this Agreement are terminated as
provided herein.

 

(f)            Franchisee
Insurance.  The Servicer acknowledges
that, to the extent that it or any of its Affiliates is named as a “loss payee”
or “additional insured” under any Franchisee Insurance Policies, it shall use commercially
reasonable efforts to cause it to be so named in its capacity as the Servicer
on behalf of the Master Issuer or the Franchise Holder, as the case may be, and
the Servicer shall promptly remit to the Indenture Trustee for deposit in the
Franchisee Insurance Proceeds Account any Franchisee Insurance Proceeds
received by it or by the Master Issuer or any other Affiliate under the
Franchisee Insurance Policies to the extent such Franchisee Insurance Proceeds
relate to any Franchise Agreements.  The Servicer
shall use commercially reasonable efforts to cause the Master Issuer or the
Franchise Holder, as the case may be, to be named as an “additional insured”
under all Franchisee Insurance Policies at the earliest time such Franchisee
Insurance Policies are issued, renewed or replaced after the date hereof. With
respect to the Franchisee Insurance Policies which do not provide Affiliate
coverage, as set forth in Schedule 2.1(f) hereto, the Servicer
shall use commercially reasonable efforts to have the Master Issuer named as an
“additional insured” within three (3) months from the Closing Date.

 

(g)           Company-Owned
U.S. Restaurants Insurance. The Servicer shall cause each Restaurant
Holder, at its own expense, to procure and maintain an “all risk, fire, and
extended coverage” commercial property insurance policy with an “agreed amount”
endorsement in an amount not less than 100% of the full replacement cost of the
applicable Restaurant. Each such policy shall name the Indenture Trustee as a
loss payee and shall be issued by a reputable insurance company with an A.M.
Best rating of A+ or better.

 

(h)           Servicer
Insurance.  The Servicer agrees to
maintain adequate insurance consistent with the type and amount maintained by
the Servicer under the Current Practices of Applebee’s International, subject,
in each case, to any adjustments or modifications made in accordance with the
Servicing Standard.  Such insurance shall
cover each of the Securitization Entities, as an additional insured, to the
extent that such Securitization Entity has an insurable interest therein.  All insurance policies currently maintained
by the Servicer are listed on Schedule 2.1(h) hereto.

 

23

 

Section 2.2             Accounts.

 

(a)           Collection
of Payments; Remittances; Collection Account.  The Servicer shall cause the collection of
all amounts owing under the terms and provisions of each Serviced Document in
accordance with the Servicing Standard and subject to and in accordance with
the Transaction Documents.

 

(b)           Collections.  Except as otherwise set forth in this
Agreement, the Servicer shall cause all funds due and to become due to any
Securitization Entity and to the Predecessor Restaurant Holders (with respect
to the Post-Closing U.S. Restaurants) to be deposited to the Concentration
Account for further credit to the Collection Account in accordance with Section 10.1(a) of
the Indenture; provided, that (i) Advertising Fees payable by the
Franchisees (excluding for this purpose the Restaurant Holders and the
Predecessor Restaurant Holders in their capacity as Franchisees) will be
deposited by the Servicer in the Advertising Fees Account; (ii) Asset
Disposition proceeds will be deposited by the Servicer in the Capital
Expenditure Reserve Account; (iii) all insurance and condemnation proceeds
will be deposited by the Servicer in the Insurance Proceeds Account; (iv) Third
Party Licensing Fees collected from Franchisees (excluding for this purpose the
Restaurant Holders and the Predecessor Restaurant Holders in their capacity as
Franchisees) will be deposited by the Servicer in either the Third Party
Licensing Fee Account or the Concentration Account; (v) any
Indemnification Amounts and Series Hedge Agreement Receipts shall be
deposited directly into the Collection Account, provided that any Liquor
License Related Indemnification Amounts will be deposited into the Collection
Account in accordance with the procedures set forth in Section 2.2(n)(ii) below; (vi) any Insurance Proceeds Amounts shall be withdrawn
from the Insurance Proceeds Account and deposited directly into the Collection
Account; and (vii) any Asset Disposition Prepayment Amounts shall be
withdrawn from the Capital Expenditure Reserve Account and deposited directly
into the Collection Account.

 

(c)           Deposits
to Concentration Account.   On or
prior to the Closing Date, the Servicer shall establish and maintain the
Concentration Account into which the Servicer shall deposit (or cause to be
deposited) the following amounts:

 

(i)            all
amounts payable by Franchisees, including all Franchise Payments and
Development Payments, within three (3) Business Days following the
Servicer’s receipt of such payments, to the extent that such payments are not
deposited directly to the Concentration Account, any Servicing Account or such
other account, in each case in accordance with the terms of the Indenture or
this Agreement, as applicable;

 

(ii)           all cash
revenues generated at Company-Owned U.S. Restaurants and Post-Closing U.S.
Restaurants (unless and until such Restaurants become Reacquired U.S.
Restaurants) within three (3) Business Days following the Servicer’s or
its Affiliates’ receipt of such cash revenues;  provided, however,
that to the extent required under applicable laws, the Servicer shall be
permitted to deposit revenues attributable to alcohol

 

24

 

sales at Company-Owned U.S. Restaurants and Post-Closing U.S.
Restaurants that operate as Texas private clubs into one or more accounts
maintained in the name of such Texas private clubs;  provided, further,
that the Servicer shall withdraw from such accounts and deposit into the
Concentration Account within ten (10) Business Days after the end of each
fiscal month the amount remaining in such accounts after the payment of
applicable taxes and fees relating to the operation of the Texas private clubs;

 

(iii)          all
credit card proceeds for transactions at Company-Owned U.S. Restaurants and
Post-Closing U.S. Restaurants (unless and until such Restaurants become
Reacquired U.S. Restaurants) (which shall
be deposited by the Servicer to the Concentration Account within three (3) Business
Days after the date on which such credit card proceeds are deposited by the
related credit card processor to the applicable credit card sub-account of the
Concentration Account);

 

(iv)          the
aggregate amount, if any,
withdrawn from the Gift Card Reserve Account for deposit to the Concentration
Account on a weekly basis on each Weekly Allocation Date in an amount equal to
the aggregate dollar amount of the redemption at Company-Owned U.S. Restaurants
and Post-Closing U.S. Restaurants of ACMC Gift Cards sold at Company-Owned U.S.
Restaurants or Post-Closing U.S. Restaurants, as applicable, over the related
Weekly Collections Allocation Period;

 

(v)           the amount
received from ACMC, Inc. in respect of the redemption at Company-Owned
U.S. Restaurants and Post-Closing U.S. Restaurants of ACMC Gift Cards sold
other than at Company-Owned U.S. Restaurants or Post-Closing U.S. Restaurants,
as applicable;

 

(vi)          the amount
deposited to the Concentration Account by ACMC, Inc. or its third party
processor in respect of Applebee’s Branded Gift Cards issued by unaffiliated
Franchisees that are sold at Franchised U.S. Restaurants and redeemed at
Company-Owned U.S. Restaurants or Post-Closing U.S. Restaurants, as applicable;

 

(vii)         the Lease
Receipts, if any, paid to the Restaurant Holders within three (3) Business
Days of receipt by or on behalf of the Restaurant Holders;

 

(viii)        all amounts received upon the disposition of obsolete
inventory, equipment, furniture, fixtures and other assets (other than IP
Assets) relating to the Company-Owned U.S. Restaurants within three (3) Business
Days of receipt by the Restaurant Holders or Predecessor Restaurant Holders, as
applicable

 

(ix)           all amounts, if any, received in respect of the IP Assets;

 

25

 

(x)            the IHOP
Residual Amount, if any, received by the Servicer on behalf of the Master
Issuer or by the Master Issuer on a weekly basis;

 

(xi)           the
equity contributions, if any, made by Applebee’s International to Applebee’s
Holdings for contribution to the Master Issuer, but only to the extent that
Applebee’s International does not direct that such equity contributions be made
directly to the Collection Account or any Collection Account Administrative
Account; and

 

(xii)          all other
amounts constituting Collections not referred to in the preceding clauses,
including any royalty fees or other amounts received in respect of IP Assets,
other than the Indemnification Amounts, Insurance Proceeds Amounts, Asset
Disposition Prepayment Amounts and other amounts required to be deposited
directly to the Collection Account (subject, in the case of Liquor License
Related Indemnification Amounts, to Section 2.2(n)(ii) hereunder
and Section 10.2(b) of
the Indenture).

 

(d)           Withdrawals
from Concentration Account.  On and
after the Closing Date, the Servicer may withdraw funds from the Concentration
Account in order to:

 

(i)            pay the
cash operating expenses that are incurred or committed to be paid by the
Restaurant Holders (or the Liquor License Holders) relating to the operation of the Company-Owned U.S.
Restaurants and the Predecessor Restaurant Holders relating to the Post-Closing
U.S. Restaurants (pursuant to Section 10.1(b)(i) of the
Indenture), as applicable, including, without limitation, the cost of goods
sold, labor, repair and maintenance expenses, insurance, liquor taxes, gift
card redemption expenses, the local advertising fees allocable to the
Company-Owned U.S. Restaurants, lease and other occupancy expenses, including
the Lease Payments payable by the Restaurant Holders and, with respect to the
Post-Closing U.S. Restaurants, the Predecessor Restaurant Holders, to third
parties, in each case on any Business Day in accordance with the terms hereof;

 

(ii)           withdraw
funds from the Concentration Account to the extent of the amounts previously
deposited to the Concentration Account that the Servicer determines were
required to be deposited directly to another account pursuant to this Agreement
or pursuant to Section 10.1(b)(ii) of the Indenture, including
any Advertising Fees payable by Franchisees that were required to be deposited
to the Advertising Fees Account and any amounts not constituting Collections
that were deposited to the Concentration Account in error, in each case, on any
Business Day;

 

(iii)          make the
payments and deposits required to be made pursuant to the Weekly Collections
Allocation Priority on each Weekly Allocations Date pursuant to Section 10.1(b)(iii) of
the Indenture; and

 

26

 

(iv)          provided
that no Rapid Amortization Event has occurred and is continuing, on each Weekly
Allocation Date during the first seven (7) Weekly Collections Allocation
Periods following the Closing Date, following the payment of the amounts
required to be paid on such Weekly Allocation Date pursuant to the Weekly
Collections Allocation Priority, the Servicer shall have the right, but not the obligation, to withdraw up to the
Weekly Residual Amount, plus any Weekly Residual Amount not withdrawn on
a preceding Weekly Allocation Date, from the Concentration Account for
distribution to or at the direction of the Master Issuer, so long as the Weekly
Debt Service Allocation Amount, plus any Weekly Debt Service Allocation
Amount not previously deposited in the Collection Account on a preceding Weekly
Allocation Date, has been withdrawn from the Concentration Account and deposited
into the Collection Account with respect to each such Weekly Collections
Allocation Period.  In addition to the
foregoing, the Servicer shall be
permitted to withdraw the Initial Residual Deposit Amount on any Weekly
Allocation Date in the second Monthly Collection Period, so long as no Rapid
Amortization Event has occurred and is continuing and an amount equal to the
Debt Service with respect to the Payment Date occurring in February 2008 shall have been deposited into the Collection Account on or
before such Weekly Allocation Date; and

 

(v)           to make
the deposits to the Collection Account on each Accounting Date in accordance
with the terms of the Indenture.

 

(e)           Deposit
of Misdirected Funds; No Commingling; Misdirected Payments.  The Servicer shall promptly deposit into the
Concentration Account, the Collection Account, the Advertising Fees Account or
such other appropriate account by the third Business Day immediately following
actual knowledge of the Servicer or any of its Affiliates of the receipt
thereof and in the form received or in cash, all payments in respect of the
Serviced Assets incorrectly deposited into another account.  In the event that any funds not constituting Collections
are incorrectly deposited in the Concentration Account, the Servicer shall
promptly withdraw such amounts following actual knowledge thereof and shall pay
such amounts to the person legally entitled to such funds.  The Servicer
shall not commingle any monies that relate to Serviced Assets with its own
assets and shall keep separate, segregated and appropriately marked and
identified all Serviced Assets and any other property comprising any part of
the Indenture Collateral, and for such time, if any, as such Serviced Assets or
such other property are in the possession or control of the Servicer to the
extent such Serviced Assets or such other property is Indenture Collateral, the
Servicer shall hold the same in trust for the benefit of the Indenture Trustee
and the Secured Parties (or, following termination of the Indenture, the
applicable Securitization Entity). 
Additionally, the Servicer shall notify the Indenture Trustee in the
Weekly Servicer’s Report of any amounts incorrectly deposited into the
Collection Account, and arrange for the prompt remittance by the Indenture
Trustee of such funds from the Collection Account to the Servicer.  The Indenture Trustee shall have no
obligation to verify any information provided to it by the Servicer in any
Weekly Servicer’s Report and shall remit such funds to the Servicer based
solely on such Weekly Servicer’s Report.

 

27

 

(f)            Advertising Fees Account.  Except as set forth in the following
sentence, all Advertising Fees payable by Franchisees on a monthly basis after
the Cut-Off Date shall be paid to the Advertising Fees Account, which shall not
be subject to the lien of the Indenture Trustee.  All Advertising Fees payable by Restaurant
Holders and Predecessor Restaurant Holders (with respect to the Post-Closing
Restaurants) will be withdrawn from the Concentration Account and deposited to
the Advertising Fees Account in accordance with the Weekly Collections
Allocation Priority.  The Servicer shall
cause all Advertising Fees on deposit as of the Cut-Off Date in any of its bank
accounts to be remitted to the Advertising Fees Account (including by
transferring the title to any such account to the Master Issuer and/or causing
such account to become the Advertising Fees Account) on the Closing Date.  The Servicer shall not make or permit or
cause any other person to make or permit any borrowings to be made or liens to
be levied against the Advertising Fees. 
All interest and earnings (net of losses and investment expenses) paid
on funds on deposit in the Advertising Fees Account shall be for the sole
benefit of the Securitization Entities and/or Franchisees.  All amounts from time to time on deposit in
the Advertising Fees Account shall be invested in Eligible Investments.  The Servicer, acting on behalf of the
Franchise Holder and the Master Issuer, may in accordance with the Servicing
Standard and the terms of the Franchise Agreements, increase or reduce the
percentage of the gross sales paid by the Franchisees pursuant to the Franchise
Agreements as Advertising Fees.  The
Servicer shall apply amounts on deposit in the Advertising Fees Account on a
daily basis to cover the costs and expenses associated with the National
Advertising Fund (including those costs and expenses incurred prior to the
Closing Date) in accordance with this Agreement; provided that the
Servicer may apply interest and earnings (net of losses and investment
expenses) for general purposes that directly benefit one or more Securitization
Entities and/or the Franchisees in its discretion.

 

(g)           Lease
Payment Account.  On each Weekly
Allocation Date, the Lease Payment Allocation Amount required to be paid on
Sale/Leaseback Leases shall be withdrawn from the Concentration Account and
deposited into the Lease Payment  Account.  The “Lease Payment Allocation Amount”
means, (A) on each of the first three Weekly Allocation Dates that occur
during each Monthly Collection Period, an amount equal to one-third of the
Lease Payments scheduled to be paid on the Sale/Leaseback Leases, if any, over
the immediately following Monthly Collection Period together with the
shortfall, if any, in the amount required to be deposited to the Lease Payment
Account pursuant to Section 10.1(b)(iii)(3) of the Indenture on any
preceding Weekly Allocation Date (unless the related Lease Payment has already
been paid in full or discharged) and (B) on the fourth and (if applicable)
fifth Weekly Allocation Date that occurs during each Monthly Collection Period,
the shortfall, if any, in the amount required to be deposited to the Lease
Payment Account pursuant to Section 10.1(b)(iii)(3) of the Indenture
on any preceding Weekly Allocation Date (unless the related Lease Payment has
already been paid in full or discharged). 
The Servicer shall cause all Lease Payment Allocation Amounts to be
remitted to the Lease Payment Account (including by transferring the title to
any such account to the Master Issuer and/or causing such account to become the
Lease Payment Account) on each Weekly Allocation Date.  The Servicer
shall apply amounts on deposit in the Lease Payment Account on any Business Day
to make Lease Payments under Sale/Leaseback Leases on behalf of the Restaurant
Holders and the Predecessor Restaurant Holders (in respect of Post-Closing U.S.
Restaurants) in accordance with the Leases.

 

28

 

(h)           Third
Party Licensing Fees Account.  The
Servicer shall promptly deposit all Third Party Licensing Fees collected from
Franchisees (other than Restaurant Holders and Predecessor Restaurant Holders
in their capacities as Franchisees) after the Cut-Off Date into the Third Party
Licensing Fees Account by the third Business Day immediately following actual
knowledge of the receipt thereof by the Servicer or any of its Affiliates.  On each Weekly Allocation Date, the Servicer shall
withdraw an amount equal to all Third Party Licensing Fees collected during the
immediately preceding Weekly Collections Allocation Period from the
Concentration Account, excluding any such third party licensing fees that were
deposited directly into the Third Party Licensing Fee Account, and deposit such
amount into the Third Party Licensing Fee Account.  The Servicer shall cause all Third Party
Licensing Fees accrued (whether or not yet due) as of the Cut-Off Date in any
of its bank accounts to be remitted to the Third Party Licensing Fee Account
(including by transferring the title to any such account to the Master Issuer
and/or causing such account to become the Third Party Licensing Fee Account) on
the Closing Date.  The Servicer shall not
make or permit or cause any other person to make or permit any borrowings to be
made or liens to be levied against the Third Party Licensing Fees.  Subject to the terms of the Indenture, all
interest and earnings (net of losses and investment expenses) paid on funds on
deposit in the Third Party Licensing Fee Account shall be for the sole benefit
of the Co-Issuers and the Franchise Holder. 
All amounts from time to time on deposit in the Third Party Licensing
Fee Account shall be invested in Eligible Investments.  The Servicer shall apply amounts on deposit
in the Third Party Licensing Fee Account to pay the Third Party Licensing Fees
to Weight Watchers International, Inc. or to pay the applicable royalties,
licensing fees or other similar amounts to such other applicable third party
licensors on such periodic basis as may be required from time to time under the
applicable license agreement; provided that if the amount on deposit in
the Third Party Licensing Fee Account is not sufficient to pay the minimum
Weight Watchers Fees (as provided in the Weight Watchers Agreement) or such
other royalties, licensing fees or other similar amounts to such other
applicable third party licensors as may be required from time to time under the
applicable license agreement, the amount of such deficiency may be paid out of
the Advertising Fees Account (to the extent the Franchisees have agreed thereto
in their respective Franchise Agreements); provided, further,
that, subject to the terms of the Indenture, the Servicer may apply interest
and earnings (net of losses and investment expenses) for general purposes that
directly benefit one or more Securitization Entities in its discretion.  The Servicer may apply Collections in the
Concentration Account to make deposits to the Third Party Licensing Fee Account
for subsequent payment to third parties in connection with such other
agreements pursuant to which royalty fees, licensing fees or other similar fees
may be payable to third parties from time to time in the future.

 

(i)            Insurance
Proceeds Account.  The Servicer will
deposit or cause to be deposited to the Insurance Proceeds Account all
insurance and condemnation proceeds received by or on behalf of the
Securitization Entities on the Collateral within three (3) Business Days
following receipt of such proceeds, pending a determination by the Servicer
whether such amounts are required to be applied as Insurance Proceeds Amounts
on the following Payment Date.  The
Servicer may withdraw any such amounts not required to be applied as Insurance Proceeds
Amounts on any Business Day for the restoration of the related property or for
investment in the New U.S. Restaurant Business. 
All such insurance and condemnation proceeds deposited in the Insurance
Proceeds Account which the Servicer has determined not to apply to restore the
related property or for investment in the New U.S. Restaurant Business and
which the

 

29

 

Servicer has determined are not required to be applied as
Insurance Proceeds Amounts will be withdrawn by the Servicer for deposit to the
Concentration Account.  To the extent
that such amounts are not applied directly to Franchisee Insurance Restoration
Payments in accordance with the related Franchise Agreements, all Franchisee
Insurance Proceeds received by or on behalf of the Franchisees after the
Cut-Off Date shall be deposited directly into the Insurance Proceeds Account, which shall be subject to the Lien of the Indenture Trustee
pursuant to the Transaction Documents and subject to the rights of the
Franchisees to such amounts pursuant to the related Franchise Agreements; provided,
however, that, Franchisee Insurance Proceeds incorrectly deposited into
the Concentration Account or a Collection Account shall be released therefrom
pursuant to paragraph (e) above. 
Servicer shall cause all Franchisee Insurance Proceeds on deposit as of
the Cut-Off Date in any of its bank accounts to be remitted to the Insurance
Proceeds Account (including by transferring the title to such account to the Master
Issuer and/or causing such account to become the Insurance Proceeds Account) on
the Closing Date.  The Servicer may
withdraw amounts on deposit in the Insurance Proceeds Account on any Business
Day to make Franchisee Insurance Restoration Payments in accordance with the
Franchise Agreements and the Indenture.

 

(j)            Credit
and Debit Card Accounts.  The
Servicer hereby covenants that it shall not change the Current Practice of
Applebee’s International under which customer payments made by credit and debit
cards are deposited directly into sub-accounts of the Concentration Account
maintained in respect of one or more credit card systems and then swept
automatically into the Concentration Account; provided that any
termination or engagement of credit and debit card systems or processor shall
not be deemed a change in such Current Practice of Applebee’s International.

 

(k)           Gift
Card Reserve Account.  Subject to the
terms of the Indenture, the Servicer shall withdraw from the Concentration
Account for deposit to the Gift Card Reserve Account on each Weekly Allocation
Date an amount equal to the proceeds from the sale of ACMC Gift Cards by the
Restaurant Holders and the Predecessor Restaurant Holders (with respect to the
Post-Closing U.S. Restaurants) over the immediately preceding Weekly
Collections Allocation Period (but only to the extent of available funds for
such purpose in accordance with the Weekly Allocation Priority on such Weekly
Allocation Date).  The Servicer shall
withdraw from the Gift Card Reserve Account for deposit to the Concentration
Account on each Weekly Allocation Date an amount equal to the dollar amount of
the redemption over the immediately preceding Weekly Collections Allocation
Period by the Restaurant Holders and the Predecessor Restaurant Holders (with
respect to the Post-Closing U.S. Restaurants) of ACMC Gift Cards which were
sold by the Restaurant Holders and the Predecessor Restaurant Holders (with
respect to the Post-Closing U.S. Restaurants); provided, that if there
are insufficient funds on deposit in the Gift Card Reserve Account for such
purpose, the shortfall will be withdrawn from the Gift Card Reserve Account for
deposit to the Concentration Account on the immediately following Weekly
Allocation Date on which such funds are available.  On the fifth calendar day of each calendar
month, or if such date is not a Business Day, the immediately following
Business Day, the Servicer will withdraw from the Gift Card Reserve Account for
payment to, or at the direction of, ACMC, Inc. (for payment or credit by
ACMC, Inc. to Franchisees (excluding Restaurant Holders and Predecessor
Restaurant Holders in their

 

30

 

capacities as Franchisees)) an amount equal to the dollar
value of the redemption by Franchisees (excluding Restaurant Holders and
Predecessor Restaurant Holders in their capacities as Franchisees) of ACMC Gift
Cards sold by Restaurant Holders and the Predecessor Restaurant Holders (with
respect to the Post-Closing U.S. Restaurants) in the immediately preceding
Monthly Collection Period.  On May 5th
of each year, or if such date is not a Business Day, the immediately following
Business Day, the Servicer will withdraw an amount equal to the Excess Gift
Card Reserve Amount from the Gift Card Reserve Account for payment to or at the
direction of ACMC, Inc.

 

(l)            SPE
Operating Expense Account.  The
Servicer shall withdraw amounts on deposit in the Concentration Account for
deposit, on each Weekly Allocation Date and each Payment Date, to the SPE
Operating Expense Account in an amount equal to any previously accrued and
unpaid SPE Operating Expenses up to the Capped SPE Operating Expense Amount
with respect to the annual period in which such Weekly Allocation Date or
Payment Date, as applicable, occurs after giving effect to all deposits
previously made to the SPE Operating Expense Account on any Weekly Allocation
Date or Payment Date in such annual period (which annual period will be
measured from the Closing Date to the anniversary thereof and from each
anniversary thereof to the next anniversary thereof).  The Servicer shall on any Business Day apply
amounts on deposit in the SPE Operating Expense Account to pay any SPE
Operating Expenses that are due and payable on such date, incurred by or on
behalf of the Securitization Entities; provided, however, that if
there are insufficient funds on deposit in the SPE Operating Expense Account to
pay all accrued and unpaid SPE Operating Expenses on any date, the amount on
deposit will be applied to pay such SPE Operating Expenses in the order of
priority set forth in the definition of “SPE Operating Expenses.”

 

(m)          Sales
Tax Account.  Subject to Section 10.2(g) of
the Indenture, the Servicer will calculate the percentage of the revenues
received with respect to sales by the Restaurant Holders and the Predecessor
Restaurant Holders (with respect to Post-Closing U.S. Restaurants) that are
attributable to sales tax and will withdraw such amount from the Concentration
Account for deposit into the Sales Tax Account on each Weekly Allocation
Date.  The Servicer will withdraw amounts
on deposit in the Sales Tax Account on any Business Day for application to pay
such sales taxes to the appropriate authorities.

 

(n)           Capital
Expenditure Reserve Account.

 

(i)            On and after
the Closing Date, the Servicer shall deposit the gross proceeds from Asset
Dispositions to the Capital Expenditure Reserve Account within three (3) Business
Days following receipt of such proceeds by or on behalf of the Securitization
Entities.  The Servicer may withdraw from
the Capital Expenditure Reserve Account on any Business Day the portion of such
proceeds representing taxes then know to be due and payable in connection with
such Asset Disposition, transaction costs and other direct costs associated
with the related Asset Disposition.  The
Servicer will withdraw from the Capital Expenditure Reserve Account by the next
Accounting Date that portion of such Asset Disposition proceeds, if any, that
constitutes an Asset

 

31

 

Disposition Prepayment Amount for deposit to the Collection
Account for application to pay principal of the Notes in accordance with the
Priority of Payments on the next Payment Date; provided, that prior to the Series 2007-1
Class A-2-I Initial Anticipated Repayment Date, such Asset Disposition
Prepayment Amount may be retained on deposit in a segregated trust account
unless the Co-Issuers shall elect to apply such Asset Disposition Prepayment
Amount to pay principal on the Notes on each Payment Date following
receipt.  The Servicer may withdraw on
any Business Day any Asset Disposition proceeds on deposit in the Capital
Expenditure Reserve Account for investment in the New U.S. Restaurant Business
following the determination by the Servicer that such amounts will not be
required to be applied as Asset Disposition Prepayment Amounts.  All Asset Disposition proceeds deposited in
the Capital Expenditure Reserve Account which the Servicer has determined not
to apply for investment in the New U.S. Restaurant Business and which the
Servicer has determined are not required to be applied as Asset Disposition
Prepayment Amounts will be withdrawn by the Servicer for deposit to the
Concentration Account.

 

(ii)           The
Servicer may direct that any Liquor License Related Indemnification Amount be
deposited in the Capital Expenditure Reserve Account for a period not longer
than six months following the Closing Date (such period, the “Liquor License
Procural Period”)  if at the time of
payment of the Liquor License Related Indemnification Amount Applebee’s
International delivers written notice to each of the Indenture Trustee, the
Servicer and each Insurer that, with respect to the relevant Applebee’s
Restaurant, it will seek to obtain another temporary liquor license or
permanent liquor license (or other alternative arrangement to serve alcoholic
beverages at such Applebee’s Restaurant) by the expiration of the Liquor
License Procural Period.  Subject to the
terms of the relevant Transaction Documents, the Liquor License Related
Indemnification Amount will be withdrawn from the Capital Expenditure Reserve
Account as follows:

 

(1)           if
Applebee’s International procures such liquor license (or other alternative
arrangement to serve alcoholic beverages at such Applebee’s Restaurant) on or
before the expiration of the Liquor License Procural Period, (i) the
assets relating to such Applebee’s Restaurant or (ii) the rights to the
proceeds generated by such Applebee’s Restaurant, as the context requires, will
be transferred to the applicable Restaurant Holder (in accordance with the
terms of the relevant Transaction Documents) and the related Liquor License
Related Indemnification Amount will be withdrawn from the Capital Expenditure
Reserve Account by the Servicer for payment to Applebee’s International; and

 

(2)           if
Applebee’s International fails to procure such liquor license (or other
alternative arrangement to serve alcoholic beverages at such Applebee’s
Restaurant) on or before the expiration of the Liquor License Procural Period,
the Liquor License Related Indemnification Amount will be withdrawn from the
Capital Expenditure Reserve Account within three (3) Business Days
following the expiration of such period for deposit to the Collection Account.

 

32

 

(o)           Indenture
Trust Accounts.  The Indenture
Trustee shall maintain the Indenture Trust Accounts in accordance with the
Indenture.

 

(p)           Pre-Closing
Date Net Collections Payment.    The
Servicer shall remit all Pre-Closing Date Net Collections Payments to the
Concentration Account on the Closing Date.

 

Section 2.3             Records.

 

(a)           The
Servicer shall retain all data (including, without limitation, computerized
records) relating directly to, or maintained in connection with, the servicing
of the Serviced Assets at its address indicated in Section 9.5 (or
at an off site storage facility reasonably acceptable to the Master Issuer,
each Insurer, if any, and the Back-Up Manager) or, upon thirty (30) days’
notice to the Master Issuer, the IP Holder, the Rating Agencies, each Insurer,
if any, the Back-Up Manager and the Indenture Trustee, at such other place
where the servicing office of the Servicer is located provided, that the
servicing office of the Servicer shall at all times be located in the United
States, and shall give the Indenture Trustee, each Insurer, if any, and the
Back-Up Manager access to all such data in accordance with the terms and
conditions of the Transaction Documents; provided, however, that
the Indenture Trustee shall not be obligated to verify, recalculate or review
any such data. The IP Holder shall own the Intellectual Property rights in all
such data; provided, further, that to the extent any such data,
or the books and records described in Section 2.3(b) relates
to businesses, products or services (including Applebee’s Branded restaurants)
located outside the United States, the Servicer or any other party who acquires
such rights hereby assigns all its right, title and interest in such data and
books and records to Applebee’s International, subject to a perpetual,
non-exclusive license to the Servicer and the IP Holder to access and use such
data as reasonably necessary or desirable in connection with the performance of
the Services or operation of Applebee’s Restaurants.

 

(b)           If
the rights of Applebee’s Services, Inc., as the initial Servicer, shall
have been terminated in accordance with Section 6.1 or if this
Agreement shall have been terminated pursuant to Section 9.1,
Applebee’s Services, Inc., as the initial Servicer, shall, upon demand of
the Indenture Trustee (based upon the written direction of the Aggregate
Controlling Party), in the case of a termination pursuant to Section 6.1,
or upon the demand of the Master Issuer, in the case of a termination pursuant
to Section 9.1, deliver to the Back-Up Manager or the Successor
Servicer all data in its possession or under its control (including, without
limitation, computerized records) necessary or desirable for the servicing of
the Serviced Assets; provided, however, that Applebee’s Services, Inc.,
as the initial Servicer, may retain a single set of copies of any books and
records that it reasonably believes shall be required by it for the purpose of
performing any of its accounting, public reporting or other administrative
functions that are performed in the ordinary course of its business; and provided,
further, that Applebee’s Services, Inc., as the initial Servicer,
shall have access, during normal business hours and upon reasonable notice, to
all books and records that it reasonably believes would be necessary or
desirable for it in connection with the preparation of any tax or other
governmental reports and filings and other uses; and provided, further,
that if the Master Issuer or the Indenture Trustee shall desire to dispose of
any of such books and records at any time within five years of termination of

 

33

 

Applebee’s Services, Inc., as the initial Servicer, the
Master Issuer shall, prior to such disposition, give Applebee’s Services, Inc.,
as the initial Servicer, and Applebee’s
International, respectively, a reasonable opportunity, at the expense of
Applebee’s Services, Inc., to segregate and remove such books and records
as the initial Servicer or Applebee’s
International may select.  The
provisions of this Section 2.3 shall be deemed to require the
initial Servicer to transfer any proprietary material or customized computer
programs that are necessary or desirable for uninterrupted use of the data in
the same manner as Applebee’s Services, Inc., as the initial Servicer, has
used it during the Term of this Agreement.

 

Section 2.4             Administrative Duties of
Servicer.

 

(a)           Duties
with Respect to the Transaction Documents. 
The Servicer, in accordance with the Servicing Standard, shall perform
the duties of the applicable Securitization Entities under the Transaction
Documents except for those duties that are required to be performed by the
equity holders, stockholders, directors, or managers of such Securitization
Entity pursuant to applicable law.  In
furtherance of the foregoing, the Servicer shall consult with the managers or
the directors, as the case may be, of the Securitization Entities as the
Servicer deems appropriate regarding the duties of the Securitization Entities
under the Transaction Documents.  The
Servicer shall monitor the performance of the Securitization Entities and,
promptly upon obtaining knowledge thereof, shall advise the applicable
Securitization Entity when action is necessary to comply with such
Securitization Entity’s duties under the Transaction Documents.  The Servicer shall prepare for execution by
the Securitization Entities or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments, certificates,
notices and opinions as it shall be the duty of the Securitization Entities to
prepare, file or deliver pursuant to the Transaction Documents.

 

(b)           Duties
with Respect to the Securitization Entities.  In addition to the duties of the Servicer set
forth in this Agreement or any of the Transaction Documents, the Servicer, in
accordance with the Servicing Standard, shall perform such calculations and
shall prepare for execution by the Securitization Entities or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates, notices and opinions as it shall be the
duty of the Securitization Entities to prepare, file or deliver pursuant to
applicable law, including, for the avoidance of doubt, securities laws and
franchise laws.  Pursuant to the
directions of the Securitization Entities and in accordance with the Servicing
Standard, the Servicer shall administer, perform or supervise the performance
of such other activities in connection with the Securitization Entities as are
not covered by any of the foregoing provisions and as are expressly requested
by any Securitization Entity and are reasonably within the capability of the
Servicer, subject to the Servicing Standard.

 

(c)           Records.  The
Servicer shall maintain appropriate books of account and records relating to
the Services performed under this Agreement, which books of account and records
shall be accessible for inspection by the Indenture Trustee, the Master Issuer
and each Insurer, if any, during normal business hours and upon reasonable
notice.

 

34

 

Section 2.5             No Offset.  The obligations of the Servicer under this
Agreement shall not be subject to, and the Servicer hereby waives, in
connection with the performance of such obligations, any defense, counterclaim
or right of offset which the Servicer has or may have against the Indenture
Trustee, each Insurer, if any, the Master Issuer or any of the other
Securitization Entities, whether in respect of this Agreement, the other
Transaction Documents, any Related Document, any document governing any Serviced
Asset or otherwise.

 

Section 2.6             Compensation.  As compensation for the performance of its
obligations under this Agreement, the Servicer shall be entitled to receive the
Weekly Servicing Fee and, if any, the Supplemental Servicing Fee, on the Weekly
Allocation Date, subject to and in accordance with Article X of the
Indenture.

 

Section 2.7             Indemnification.  (a)  The Servicer agrees to indemnify
and hold the Co-Issuers, the other Securitization Entities, each Insurer, if
any, and the Indenture Trustee and their respective members, officers,
directors, managers, employees and agents (each, an “Indemnitee”)
harmless against all claims, losses, penalties, fines, forfeitures, legal fees,
liabilities, obligations, damages, actions, suits and related costs and
judgments and other costs, fees and reasonable expenses that any of them may
incur as a result of (i) the failure of the Servicer to perform or observe
its obligations under this Agreement or any other Transaction Document to which
it is a party in its capacity as Servicer, (ii) the breach by the Servicer
of any representation, warranty or covenant under this Agreement or any other
Transaction Document to which it is a party in its capacity as Servicer or
relating to the acquisition of, or entry into, any Defective New Asset, (iii) claims
that any Servicer-Developed IP violates, dilutes, misappropriates or infringes
any third-party Intellectual Property rights or (iv) the Servicer’s
negligence, bad faith or willful misconduct; provided, however,
that there shall be no indemnification under this Section 2.7(a) for
a breach of any representation, warranty or covenant relating to any New Asset
provided in ARTICLE V hereof so long as the Servicer has complied with Section 2.7(b) and
Section 2.7(c) hereunder; provided, further,
that the Servicer shall have no obligation of indemnity to the extent any such
claims, losses, liabilities, obligations, and so forth are caused by the gross
negligence, willful misconduct, or breach of this Agreement by the Indenture
Trustee or any Insurer.  In the event the
Servicer is required to make an indemnification payment pursuant to this Section 2.7(a),
the Servicer shall promptly notify the Indenture Trustee and each Insurer, if
any, and deposit such indemnification amount directly to the Collection
Account, subject to the additional provisions of Section 2.7(b) in
the event of representations, warranties or covenants relating to New Assets.

 

(b)           In
the event of a breach of any representation, warranty or covenant relating to
any New Asset provided in ARTICLE V hereof, the Servicer shall promptly
notify the Indenture Trustee and each Insurer, if any, and shall pay to the
Master Issuer liquidated damages in an amount equal to the Indemnification
Amount, which payment shall be deposited directly to the Collection
Account.  Upon payment by the Servicer of
the Indemnification Amount to the Master Issuer with respect to any Defective
New Asset in accordance with the preceding sentence and all amounts, if any,
owing at such time under Section 2.7(c) below, the Co-Issuers
or the applicable Securitization Entity shall, to the extent permitted by
applicable law, assign such Defective New Asset to the Servicer or an Affiliate
thereof (together with a master franchise or license agreement permitting the
Servicer and its Affiliates the right to sub-franchise

 

35

 

such Defective New Asset, as applicable) and the Servicer
shall accept, or cause its Affiliate to accept, as applicable, assignment of such
Defective New Asset from the relevant Securitization Entity.  Such Securitization Entity shall, in such
event, make all assignments of such Defective New Asset necessary to effect
such assignment, as applicable.  Any such
assignment by the Master Issuer shall be without recourse to, or representation
or warranty by, Master Issuer and such Defective New Asset shall no longer be
subject to the lien of the Indenture. 
All costs and expenses associated with the foregoing shall be paid by
the Servicer on demand to or at the direction of the Master Issuer.

 

(c)           In
addition to the rights provided in Section 2.7(b) above, the
Servicer agrees to indemnify and hold each Indemnitee harmless if any action or
proceeding (including any governmental investigation and/or the assessment of
any fines or similar items) shall be brought or asserted against such
Indemnitee in respect of a material breach of any representation, warranty or
covenant relating to any New Asset provided in ARTICLE V hereof to the
extent provided in Section 2.7.

 

(d)           Any
Indemnitee that proposes to assert the right to be indemnified under Section 2.7
shall promptly, after receipt of notice of the commencement of any action, suit
or proceeding against such party in respect of which a claim is to be made
against the Servicer, notify the Servicer of the commencement of such action,
suit or proceeding, enclosing a copy of all papers served.  In the event that any action, suit or
proceeding shall be brought against any Indemnitee (other than the Indenture
Trustee and its officers, directors, employees and agents), such Indemnitee
shall notify the Servicer of the commencement thereof and the Servicer shall be
entitled to participate in, and to the extent that it shall wish, to assume the
defense thereof, with its counsel reasonably satisfactory to such Indemnitee
(which, in the case of a Securitization Entity, shall be reasonably
satisfactory to the Aggregate Controlling Party, as well), and after notice
from the Servicer to such Indemnitee of its election to assume the defense
thereof, the Servicer shall not be liable to such Indemnitee for any legal
expenses subsequently incurred by such Indemnitee in connection with the
defense thereof; provided that the Servicer shall not enter into any
settlement with respect to any claim or proceeding unless such settlement
includes an unconditional release of such Indemnitee from all liability on
claims that are the subject matter of such settlement and fully discharges with
prejudice against the plaintiff the claim or action against such Indemnitee,
does not include a statement as to, or an admission of, fault, culpability or
failure to act by or on behalf of such Indemnitee and does not require such
indemnitee to take, or refrain from taking, any action other than the payment
of monetary damages; and provided, further, that the Indemnitee
shall have the right to employ its own counsel in any such action the defense
of which is assumed by the Servicer in accordance with this Section 2.7(d),
but the fees and expenses of such counsel shall be at the expense of such
Indemnitee unless (i) the employment of counsel by such Indemnitee has
been specifically authorized by the Servicer, (ii) the Servicer shall have
failed within a reasonable period of time to assume the defense of such action
or proceeding and employ counsel reasonably satisfactory to the Indemnitee in
any such action or proceeding or (iii) the named parties to any such
action or proceeding (including any impleaded parties) include both the
Indemnitee and the Servicer, and the Indemnitee shall have been advised by
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Servicer (in which case,
the Indemnitee

 

36

 

notifies the Servicer in writing that it elects to employ
separate counsel at the expense of the Servicer, the reasonable fees and
expenses of such Indemnitee’s counsel shall be borne by the Servicer and the
Servicer shall not have the right to assume the defense of such action or
proceeding on behalf of such Indemnitee, it being understood, however, that the
Servicer shall not, in connection with any one such action or proceeding or
separate but substantially similar or related actions or proceedings in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
at any time for the Indemnitees, which firm shall be designated in writing by
such Indemnitee).  In the event that any
action, suit or proceeding shall be brought against any Indenture Trustee or
any of its officers, directors, employees or agents (each, a “Indenture Trustee
Indemnitee”), it shall notify the
Servicer of the commencement thereof and the Indenture Trustee Indemnitee shall
have the right to employ its own counsel in any such action at the expense of
the Servicer.  No Indemnitee shall settle
or compromise any claim covered pursuant to this Section 2.7
without the prior written consent of the Servicer, which shall not be
unreasonably withheld or delayed.  The
provisions of this Section 2.7 shall survive the termination of
this Agreement or the earlier resignation or removal of any party hereto; provided,
however, that no Successor Servicer shall be liable under this Section 2.7
with respect to any Defective New Asset or any other matter occurring prior to
its succession hereunder. Notwithstanding anything in this Section 2.7
to the contrary, any delay or failure by an Indemnitee or Indenture Trustee
Indemnitee in providing the Servicer with notice of any action shall not
relieve the Servicer of its indemnification obligations except to the extent
the Servicer is materially prejudiced by such delay or failure of notice.

 

Section 2.8             Nonpetition Covenant.  The Servicer shall not, prior to the date
that is one year and one day after the payment in full of the Outstanding
Principal Amount of the Notes of each Series and all other Secured
Obligations, petition or otherwise invoke the process of any court or
governmental authority for the purpose of commencing or sustaining a case
against any Securitization Entity, Applebee’s Holdings II Corp. or any Liquor
License Holder under any insolvency law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of any
Securitization Entity or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of any Securitization Entity, Applebee’s
Holdings II Corp. or any Liquor License Holder.

 

Section 2.9             Franchisor Consent.  Subject to the Servicing Standard and the
terms of the Indenture, the Servicer shall have the authority, on behalf of the
Master Issuer and Franchise Holder, to grant or withhold consents of the “franchisor”
required under the Franchise Documents; provided that the Servicer may
only consent to the assignment, renewal, modification or termination of a
Franchise Agreement or the release of any Franchisee from its obligations under
a Franchise Agreement if such consent or release is consistent with the
Servicing Standard and the relevant Transaction Documents.

 

Section 2.10           Appointment of Sub-servicers.  The Servicer may enter into Subservicing
Arrangements; provided that, other than with respect to any existing
Subservicing Arrangement set forth in Schedule 2.10, no Subservicing
Arrangement shall be effective unless and until (i) such sub-servicer
executes and delivers an agreement to perform and observe, or in the case of an
assignment, an assumption by such successor entity of the due and punctual
performance and observance of, the applicable covenants and conditions to be
performed or observed by the Servicer under this Agreement; provided
that such Subservicing Arrangement

 

37

 

(including any
Subservicing Arrangements between the Servicer and an Affiliate of the
Servicer) shall be terminable by the Aggregate Controlling Party upon a
Servicer Termination Event and shall contain transitional servicing provisions
substantially similar to those provided in Section 6.4 herein; and (ii) a
written notice has been provided to each Insurer.  The Servicer shall not enter into any
Subservicing Arrangement which delegates the performance of any fundamental
business operations such as responsibility for the franchise development,
operations and marketing strategies for the Applebee’s Brand without receiving
the prior written consent of the Aggregate Controlling Party.  Any such Subservicing Arrangement entered
into after the date hereof shall be reported to the Back-Up Manager quarterly
in accordance with the Back-Up Manager Agreement.  Notwithstanding anything to the contrary
herein or in any Subservicing Arrangement, the Servicer shall remain primarily
and directly liable for its obligations hereunder and in connection with any
Subservicing Arrangement.

 

Section 2.11           Disposition of Indenture
Collateral.

 

(a)           The
Servicer, on behalf of the Co-Issuers, shall be permitted pursuant to Section 7.8(a)(xxiii)
of the Indenture to dispose of assets, including Company-Owned U.S. Restaurants
and other Real Estate Assets, in accordance with the Servicing Standard in
connection with any Asset Disposition. The Servicer shall apply the proceeds
received from any Asset Disposition in accordance with Section 2.2(n) of
this Agreement and Section 7.8(a)(xxiii) of the Indenture and Section 4.7(c)(iii) of
the Series 2007-1 Supplement. The Aggregate Controlling Party shall have
the right to consent (such consent not to be unreasonably withheld or delayed)
to any documentation in connection with Asset Dispositions involving
sale/leaseback of any Company-Owned Real Property or any guarantees executed in
connection with a Refranchising Asset Disposition prior to the execution of such
documentation.

 

(b)           In
addition to any Asset Disposition, the Servicer, acting in accordance with the
Servicing Standard, shall be permitted to dispose of any other assets deemed
obsolete in the ordinary course of business. The Servicer, acting on behalf of
the Master Issuer, may direct the Indenture Trustee to release the IHOP
Residual Certificate from the lien under the Indenture for delivery to or at
the direction of the Master Issuer upon satisfaction of the conditions set
forth therein.

 

ARTICLE III

 

STATEMENTS AND REPORTS

 

Section 3.1             Reporting by the Servicer.

 

(a)           Reports
Required Pursuant to the Indenture. 
The Servicer, on behalf of the Master Issuer, shall furnish, or cause to
be furnished, to the Indenture Trustee and each Insurer, if any, all reports
and notices required to be delivered by any Securitization Entity pursuant to
the Indenture or any other Transaction Document.

 

38

 

(b)           Monthly
Noteholders’ Report.  The Servicer, on behalf of the Master Issuer,
shall furnish, or cause to be furnished, to the Indenture Trustee, the Back-Up
Manager and each Insurer, if any, two (2) Business Days prior to each
Payment Date, with respect to each series of Notes, (i) a monthly
statement (the “Monthly
Noteholders’ Report”)
substantially in the form of Exhibit C hereto setting forth the
information described therein relating to the distributions to be made to the
Noteholders of that series on such Payment Date, the allocations of Collections
received and payments made during the Monthly Collection Period preceding the
Payment Date and certain measures of the performance of the Indenture
Collateral, and (ii) such other information as the Indenture Trustee or
each Insurer, if any, may reasonably request. 
A copy of the Monthly Noteholders’ Report and any information provided under this Section 3.1(b) shall
simultaneously be provided to the Rating Agencies.  Each Monthly Noteholders’ Report
shall include a certification by
the Servicer that (A) to its knowledge, any historical information
contained therein is true and correct in all material respects, (B) any
forward looking information contained therein has been prepared in good faith
based on information in the Servicer’s possession and/or reasonably available
to the Servicer as of the date thereof and (C) the Servicer has performed
in all material respects its obligations under each Transaction Document since
the date of the previously delivered Monthly Noteholders’ Report
(or, if there has been a material
default in the performance of any such obligation, specifying each such default
and the nature and status thereof).

 

(c)           Monthly
Servicer’s Certificate.  The Servicer
shall furnish, or cause to be furnished, to the Co-Issuers, the applicable
Securitization Entity, the Indenture Trustee, the Back-Up Manager, each
Insurer, if any, and the Paying Agent on each Accounting Date, a certificate
substantially in the form of Exhibit D (each, a “Monthly Servicer’s
Certificate”) with a monthly
servicer report substantially in the form of Exhibit D hereto,
including a certification to the effect that, except as otherwise provided in
any other notice hereunder, no Servicer Termination Event, Potential Rapid
Amortization Event or Rapid Amortization Event, Default or Event of Default has
occurred or is continuing, and no trademark registrations are within 3 months
of lapsing, except with respect to such trademark registrations that the
Servicer has determined to allow to lapse within such time period pursuant to
the Servicing Standard (each, a “Monthly Compliance Certificate”, and
together with the Monthly Servicer’s Certificate, each, a “Monthly Servicer’s
Report”). A copy of the Monthly
Servicer’s Report provided under this Section 3.1(c) shall
simultaneously be provided to the Rating Agencies.

 

(d)           Weekly
Servicer’s Report.  The Servicer
shall furnish, or cause to be furnished, to the Co-Issuers, the applicable
Securitization Entity, the Indenture Trustee, the Back-Up Manager, the Rating
Agencies, and each Insurer, if any, on the Business Day prior to each Weekly
Allocation Date (or if one or more non-Business Days occur during the same
calendar week as such Weekly Allocation Date, on such Weekly Allocation Date),
by no later than 12:00 p.m. (noon) EST, a weekly servicer report (the “Weekly Servicer’s Report”) substantially in the form of Exhibit E
hereto setting forth the information described therein with respect to each
Serviced Asset of the Master Issuer, the IP Holder or the other Securitization
Entities, as applicable, for the one week commencing on the Sunday and ending
on the Saturday immediately preceding such date. Such Weekly Servicer’s Report
shall also include all

 

39

 

information that the Indenture Trustee requires to make such
payments and allocations in Article X of the Base Indenture.

 

(e)           Delivery
of Financial Statements.  The
Servicer shall provide the financial statements of the Master Issuer, the
Franchise Holder, Applebee’s International and IHOP Corp. in accordance with Section 12.1(e),
(f) and (g) of the Indenture.

 

(f)            Termination
Notices.  The Servicer shall send, as
soon as reasonably practicable but in no event later than five (5) Business
Days of the receipt thereof, the Indenture Trustee and each Insurer, if any, a
copy of any notices of termination sent by the Servicer to any Franchisee.

 

(g)   Notice
Regarding Company Leases and Sale/Leaseback Leases.  In the event that any Restaurant Holder, or
the Servicer on behalf of any Restaurant Holder, receives any notice from a
lessor of Company Leases or Sale/Leaseback Leases regarding the lack of payment
or alleging any breach, violation or default under the applicable Company
Leases or Sale/Leaseback Leases or otherwise requesting payment of rent
thereunder or action be taken to remedy a breach, violation or default,
excluding any such notice in respect of non-monetary breach, violation or
default as to which the Servicer is contesting or expects to contest in good
faith, the Servicer shall promptly, but in any event within five (5) Business
Days from such receipt, notify the Indenture Trustee and each Insurer, if any.

 

(h)           Additional
Information; Access to Books and Records. 
The Servicer shall furnish from time to time such additional information
regarding the Indenture Collateral or compliance with the covenants and other
agreements of Applebee’s International and any Securitization Entity and/or any
Affiliate or Subsidiary under the Transaction Documents as the Indenture
Trustee, the Rating Agencies or any Insurer may reasonably request, subject at
all times to compliance with the Exchange Act, the Securities Act and any other
applicable law by Applebee’s International, and any Affiliate or Subsidiary
thereof, the Servicer, Applebee’s Holdings LLC and any Securitization
Entity.  Once during each successive
annual period commencing on the Closing Date, the Servicer, Applebee’s
International and each Securitization Entity and/or any Affiliate or Subsidiary
shall allow the Indenture Trustee, each Series Controlling Party and any
Person appointed by any of them (in each case, at the expense of the Servicer; provided,
however, that in the case of a Series Controlling Party or its
appointee, such expense shall not exceed a reasonable amount to be agreed upon
between the Servicer and the relevant Series Controlling Party prior
thereto), access to its books of account (as well as those pertaining to the
Securitization Entities) and records, solely in respect of the business subject
to the Securitization Transaction, upon reasonable notice, and permit the
Indenture Trustee, each Insurer, if any, and any Person appointed by any of
them to discuss its affairs, finances and accounts with any of its officers,
directors and other representatives, to discuss its affairs, finances and
accounts with its independent public accountants and to inspect the Serviced
Assets and all records related thereto (and to make extracts and copies
thereof); provided, further, that each Series Controlling
Party shall be allowed additional access, solely in respect of the business
subject to the Securitization Transaction, upon reasonable notice at the
expense of such Series

 

40

 

Controlling Party, or at the expense of the Servicer upon the
occurrence of a Default, Event of Default or Servicer Termination Event.

 

(i)            The
Servicer shall promptly notify each Insurer, if any, of any change in personnel
at the executive level of IHOP Corp. or Applebee’s International.

 

(j)            IHOP
Monthly Servicing Report.  The Servicer
shall cause IHOP Corp. to 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 (A) the monthly servicing report and (B) the
quarterly and annual reports to be prepared by FTI Consulting, Inc. as the
back-up servicer, each prepared in connection with the IHOP Securitization
within five (5) Business Days of the IHOP Corp.’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.

 

Section 3.2             Appointment of Independent
Accountant.  On or before the Closing
Date, the Master Issuer shall appoint a firm of independent public accountants
of recognized national reputation that is reasonably acceptable to the
Aggregate Controlling Party to serve as the independent accountants (“Independent Accountants”) for purposes of preparing and delivering the
reports required by Section 3.3. 
It is hereby acknowledged that the accounting firm of Ernst &
Young LLP is acceptable for purposes of serving as Independent
Accountants.  The Master Issuer may not
remove the Independent Accountants without first giving ninety (90) days’ prior
written notice to the Independent Accountants, with a copy of such notice also
given concurrently to the Indenture Trustee, the Rating Agencies, each Insurer,
if any, and the Servicer.  Upon any
resignation by such firm or removal of such firm, the Master Issuer shall
promptly appoint a successor thereto that shall also be a firm of independent
public accountants of recognized national reputation to serve as the
Independent Accountants hereunder.  If
the Master Issuer shall fail to appoint a successor firm of Independent
Accountants which has resigned or been removed within sixty (60) days after the
effective date of such resignation or removal, the Aggregate Controlling Party
shall promptly appoint a successor firm of independent public accountants of
recognized national reputation that is reasonably satisfactory to the Servicer
to serve as the Independent Accountants hereunder.  The fees of any Independent Accountants shall
be payable by the Master Issuer.

 

Section 3.3             Annual Accountants’ Reports.  On or before 180 days after the end of the
fiscal year ending on or about December 31, 2007, and on or before 120
days after the end of each subsequent fiscal year of the Servicer, the Servicer
shall deliver to the Master Issuer, the Indenture Trustee, each Insurer, if
any, and the Rating Agencies a separate report (the “Accountants’ Report”),
concerning the fiscal year just ended (or such other first period since the
date of this Agreement), prepared by the Independent Accountants, to the effect
that:  (A) such firm has examined
the management assertion, prepared substantially in the form of Exhibit A
hereto, delivered by the Servicer; (B) such examination was made in
accordance with the generally accepted auditing standards established by the
American Institute of Certified Public Accountants and accordingly included
examining, on a test basis, evidence about management’s

 

41

 

compliance, as Servicer,
with the minimum servicing criteria as set forth in the Securities and Exchange
Commission’s Regulation AB (the “Criteria”), to
the extent such Criteria are applicable to the servicing obligations set forth
in the Agreement; (C) management of the Servicer has asserted to such firm
that the Servicer has complied with the minimum servicing standards identified
in the Criteria, as of the end of and for the preceding fiscal year, to the
extent that such standards are applicable to the servicing obligations set
forth in this Agreement;  and, (D) except
as described in the report, management’s assertion is fairly stated in all
material respects.  The report shall also
indicate that the firm is independent of the Servicer within the meaning of the
Code of Professional Ethics of the American Institute of Certified Public
Accountants.  In the event such
Independent Accountants require the Indenture Trustee to agree to the
procedures to be performed by such firm in any of the reports required to be
prepared pursuant to this Section 3.3, the Servicer shall direct
the Indenture Trustee in writing to so agree; it being understood and agreed
that the Indenture Trustee shall deliver such letter of agreement in conclusive
reliance upon the direction of the Servicer, and the Indenture Trustee has not
made any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures.

 

Section 3.4             Available Information.  The Servicer, on behalf of the Master Issuer,
shall make available the information requested by prospective purchasers
necessary to satisfy the requirements of Rule 144A under the Securities
Act of 1933, as amended, and the Investment Company Act of 1940, as
amended.  The Servicer shall deliver such
information, and shall promptly deliver copies of all Monthly Noteholders’ Report and Accountants’ Reports, to the Indenture Trustee as
contemplated by Section 12.1 of the Base Indenture, to enable the
Indenture Trustee to redeliver such information to purchasers or prospective
purchasers of the Notes.

ARTICLE IV

 

THE SERVICER

 

Section 4.1             Representations and Warranties
Concerning the Servicer.  The
Servicer represents and warrants to each Insurer, if any, the Master Issuer and
each other Securitization Entity party hereto and the Indenture Trustee, as of
the Closing Date and each Issuance Date (except if otherwise expressly noted),
as follows:

 

(a)           Organization
and Good Standing.  The Servicer (i) is
a corporation, duly formed and organized, validly existing and in good standing
under the laws of the State of Kansas, (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 under the Transaction Documents make such
qualification necessary 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.

 

42

 

(b)           Power
and Authority; No Conflicts.  The
execution and delivery by the Servicer of this Agreement and its performance
of, and compliance with, the terms hereof are within the power of the Servicer
and have been duly authorized by all necessary corporate action on the part of
the Servicer.  Neither the execution and
delivery of this Agreement, nor the consummation of the transactions herein
contemplated to be consummated by the Servicer, 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 default) under, any of the provisions of any law, governmental
rule, regulation, judgment, decree or order binding on the Servicer or its
properties, or the charter or bylaws or other organizational documents and
agreements of the Servicer, or any of the provisions of any material indenture,
mortgage, lease, contract or other instrument to which the Servicer 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.

 

(c)           Consents.  Except for registrations as a franchise
broker or franchise sales agent as may be required under state franchise
statutes and regulations or as a co-licensee in respect of the Liquor Licenses,
the Servicer 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 Servicer of this Agreement, or the validity or
enforceability of this Agreement against the Servicer, except to the extent
that a state or foreign franchise law requires filing and other compliance
actions by virtue of considering the Servicer as a “subfranchisor”.

 

(d)           Due
Execution and Delivery.  This
Agreement has been duly executed and delivered by the Servicer and constitutes
a legal, valid and binding instrument enforceable against the Servicer in
accordance with its terms (subject to applicable insolvency laws and to general
principles of equity).

 

(e)           No
Litigation.  There are no actions,
suits, investigations or proceedings pending or, to the knowledge of the
Servicer, threatened against or affecting the Servicer, before or by any
Governmental Authority having jurisdiction over the Servicer or any of its
properties or with respect to any of the transactions contemplated by this
Agreement (i) asserting the illegality, invalidity or unenforceability, or
seeking any determination or ruling that would affect the legality, binding
effect, validity or enforceability of this Agreement, or (ii) which could
reasonably be expected to have a Material Adverse Effect.  The Servicer is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.

 

(f)            Due
Qualification.  Except for
registrations as a franchise broker or franchise sales agent as required under
state or foreign franchise statutes and regulations, the filings as to which
shall have been made on or prior to the date hereof or within five (5) Business
Days thereafter, and except to the extent that a state or foreign franchise law
requires filing and other compliance actions by virtue of considering the
Servicer as a “subfranchisor”, the Servicer

 

43

 

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 by the Servicer, and the consummation by the Servicer of all the
transactions herein contemplated to be consummated by the Servicer and the
performance of its obligations hereunder.

 

(g)           No
Default.  The Servicer is not in
default under any agreement, contract, instrument or indenture to which the
Servicer is a party or by which it or its properties is or are bound, or with
respect to any order of any Governmental Authority which could have a Material
Adverse Effect; and no event has occurred which with notice or lapse of time or
both would constitute such a default with respect to any such agreement,
contract, instrument or indenture, or with respect to any such order of any
Governmental Authority.

 

(h)           Taxes.  The Servicer has filed or caused to be filed
and shall file or cause to be filed all federal tax returns and all state and
other tax returns that are required to be filed.  The Servicer has paid or caused to be paid,
and shall pay or cause to be paid, all taxes owed by the Servicer and all
assessments made against it or any of its property (other than any amount of
tax the validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in accordance with
GAAP have been provided on the books of the Servicer).  The charges, accruals and reserves on the
Servicer’s books in respect of taxes are and shall be adequate.

 

(i)            Accuracy
of Information.  All information (as
amended, supplemented and superseded) provided by the Servicer to the Back-Up
Manager or any Insurer prior to and after the Closing Date in connection with
this Agreement or the other Transaction Documents is true and accurate in all
material respects; provided, however, that, no amendment,
supplement or superseding document shall be effective to cure previously
nonconforming information if the Back-Up Manager or any Insurer has relied upon
such information to its detriment.

 

(j)            Financial
Statements.  As of the Closing Date,
the audited combined balance sheets of Applebee’s International and Affiliates
as of December 31, 2006, December 25, 2005 and December 26, 2004
and the related combined statements of income and shareholders’ equity included
in the Offering Circular, reported on and accompanied by an unqualified report
from Independent Accountants, present fairly the financial condition of
Applebee’s International and Affiliates as of such date, and the results of
operations and shareholders’ equity for the respective periods then ended.  All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
(except as otherwise stated therein) applied consistently through the periods
involved.

 

(k)           No
Material Adverse Change.  Since December 31,
2006, there has been no development or event that has had or could reasonably
be expected to have a Material Adverse Effect.

 

44

 

(l)            ERISA.  Neither a Reportable Event nor an “accumulated
funding deficiency” or failure to meet “minimum funding standards” (within the
meaning of Section 412 of the Code or Section 302 of ERISA) has occurred
during the six year period prior to the date on which this representation is
made or deemed made or is reasonably expected to occur with respect to any
Single Employer Plan, and each such Plan (and, to the actual knowledge of the
Servicer, a Multiemployer Plan or a multiemployer welfare plan maintained
pursuant to a collective bargaining agreement) has complied in all respects
with the applicable provisions of ERISA, the Code and the constituent documents
of such plan, except for instances of deficiencies, failures, Reportable Events
or non-compliance that, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.  No
termination of a Single Employer Plan has occurred during such six-year period
or is reasonably expected to occur (other than a termination described in Section 4041(b) of
ERISA), and no Lien in favor of the PBGC or a Plan has arisen during such
six-year period or is reasonably expected to arise.  Except to the extent that any such excess
could not reasonably be expected to have a Material Adverse Effect, the present
value of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued
benefits.  Except to the extent that such
liability could not reasonably be expected to have a Material Adverse Effect,
neither the Servicer nor any Affiliate thereof has had a complete or partial
withdrawal from any Multiemployer Plan, and the Servicer would not become
subject to any liability under ERISA if the Servicer or any Affiliate thereof
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made.  To the actual knowledge of
the Servicer, no such Multiemployer Plan is in Reorganization, insolvent or
terminating or is reasonably expected to be in Reorganization, become insolvent
or be terminated.  Except to the extent
that any such excess could not reasonably be expected to have a Material
Adverse Effect, the present value (determined using actuarial and other
assumptions which are reasonable in respect of the benefits provided and the
employees participating) of the liability of the Servicer and each Affiliate
thereof for post retirement benefits to be provided to their current and former
employees under plans which are welfare benefit plans (as defined in Section 3(1) of
ERISA) other than such liability disclosed in the financial statements of the
Servicer does not, in the aggregate, exceed the assets under all such plans
allocable to such benefits.  Neither the
Servicer nor any Affiliate thereof has engaged in a prohibited transaction
under Section 406 of ERISA and/or Section 4975 of the Code in
connection with any Plan that would subject the Servicer to liability under
ERISA and/or Section 4975 of the Code that could reasonably be expected to
have a Material Adverse Effect.  There is
no other circumstance which may give rise to a liability in relation to any
Plan that could reasonably be expected to have a Material Adverse Effect.

 

(m)          Environmental Matters.  Other than exceptions to any of the following
that could not, individually or in the aggregate, reasonably be expected to
result in the payment of a Material Environmental Amount, the Servicer hereby
represents and warrants as follows:

 

(i)            The
Servicer:  (A) is, and within the
period of all applicable statutes of limitation has been, in compliance with
all applicable Environmental Laws, (B) holds all Environmental Permits
(each of which is in full force and effect) required for any of its

 

45

 

current or intended operations or for any property owned,
leased or otherwise operated by it and (C) is, and within the period of
all applicable statutes of limitation has been, in compliance with all of its
Environmental Permits.

 

(ii)           Materials
of Environmental Concern are not present at, on, under, in, or about any real
property now or formerly leased, owned, or operated by the Servicer, or at any
other location (including, without limitation, any location to which Materials
of Environmental Concern have been sent for re-use or recycling or for
treatment, storage, or disposal) which could be expected to (A) give rise
to liability of the Servicer under any applicable Environmental Law or
otherwise result in costs to the Servicer, (B) interfere with the Servicer’s
continued operations or (C) impair the fair saleable value of any real
property owned or leased by the Servicer.

 

(iii)          There is
no judicial, administrative or arbitral proceeding or action (including,
without limitation, any notice of violation or alleged violation) under or
relating to any Environmental Law to which the Servicer is, or, to the
knowledge of the Servicer, shall be, named as a party that is pending or, to
the knowledge of the Servicer, threatened.

 

(iv)          The
Servicer has not received any written request for information, or has been
notified that it is a potentially responsible party under or relating to the
federal Comprehensive Environmental Response, Compensation and Liability Act or
any other Environmental Law, or with respect to any Materials of Environmental
Concern.

 

(v)           The
Servicer has not entered into or agreed to any consent decree, order or
settlement or other agreement, or is subject to any judgment, decree or order
or other agreement, in any judicial, administrative, arbitral or other forum
for dispute resolution, relating to compliance with or liability under any
Environmental Law.

 

(vi)          The
Servicer has not assumed or retained, by contract, conduct or operation of law,
any liability or obligation of any kind, fixed or contingent, known or unknown,
under any Environmental Law or with respect to any Materials of Environmental
Concern.

 

(n)           No
Servicer Termination Event.  No
Servicer Termination Event has occurred or is continuing, and, to the knowledge
of the Servicer, there is no event which, with notice or lapse of time, or
both, would constitute a Servicer Termination Event.

 

(o)           Location
of Records.  The offices at which the
Servicer keeps its records concerning the Serviced Assets are located at each
of the Company-Owned U.S. Restaurants and at the addresses indicated in Section 9.5.

 

46

 

(p)           DISCLAIMER. 
EXCEPT FOR SERVICER’S REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 4.1
OF THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, NO PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES OF ANY NATURE TO ANY OTHER PARTY WITH RESPECT TO
THE SERVICES, THE IP ASSETS, OR OTHER SUBJECT MATTER OF THIS AGREEMENT,
INCLUDING ANY WARRANTIES OF NON-INFRINGEMENT WITH RESPECT TO THE IP ASSETS, OR
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND
EACH PARTY HEREBY EXPRESSLY DISCLAIMS ANY SUCH WARRANTIES.

 

Section 4.2             Existence; Status
as Servicer.  The Servicer shall keep
in full effect its existence under the laws of the state of its incorporation,
and maintain its rights and privileges necessary or desirable in the normal conduct
of its business and the performance of its obligations hereunder, and shall
obtain and preserve its qualification to do business in each jurisdiction in
which the failure to so qualify either individually or in the aggregate would
be reasonably likely to have a Material Adverse Effect.

 

Section 4.3             Performance of
Obligations.

 

(a)           Punctual Performance. 
The Servicer shall punctually perform and observe all of its obligations
and agreements contained in this Agreement and the other Transaction Documents
in accordance with the terms hereof and thereof and in accordance with the
Servicing Standard, it being understood that the Servicing Standard shall be
applied by the Servicer in good faith and in a manner that (A) would
enable the Servicer, when acting on behalf of any Securitization Entity, to
comply in all material respects with all of the duties and obligations of the
Securitization Entities under the Transaction Documents and each Franchise
Document and (B) is in compliance with all Requirements of Law, except to
the extent failure to be in compliance would not have any Material Adverse
Effect.

 

(b)           Special Provisions as to IP Assets. 
The Servicer acknowledges and agrees that the IP Holder has the right
and duty to control the quality of the goods and services offered under the
Trademarks included in the IP Assets and the manner in which such Trademarks
are used in order to maintain the validity, enforceability and its ownership of
the Trademarks included in the IP Assets. 
The Servicer shall consult with, and obtain the prior approval of the IP
Holder with respect to, (i) the promulgation of standards with respect to
the operation of Applebee’s Restaurants and Applebee’s Branded restaurants
located in the U.S. Territories, including quality of food, cleanliness,
appearance, and level of service (or the making of material changes to the
existing standards), (ii) the promulgation of standards with respect to
new businesses, products and services which the IP Holder approves for
inclusion in the license granted under any IP License Agreement (or other
license agreement or sublicense agreement for which the Servicer is performing
IP Services), (iii) the nature and implementation of the Quality Control
Programs and other means of monitoring and controlling adherence to the
standards, (iv) the terms of any Franchise Agreements or other sublicense
agreements relating to the quality standards which licensees must follow with
respect to businesses, products, and services offered under the Trademarks
included in the IP Assets and the usage of such Trademarks, (v) the

 

47

 

commencement and prosecution of enforcement
actions with respect to the Trademarks included in the IP Assets and the terms
of any settlements thereof, (vi) the adoption of any variations on the
Applebee’s Brand which are not in use on the date hereof, or other new
Trademarks to be included in the IP Assets, 
(vii) the abandonment of any IP Assets; and (viii) any uses of
the IP Assets that are not consistent with the Current Practice of Applebee’s
International.  The IP Holder shall have
the right to monitor the Servicer’s compliance with the foregoing and its
performance of the IP Services and, in furtherance thereof, Servicer shall
provide IP Holder, at IP Holder’s request from time to time, with copies of
Franchise Documents and other sublicenses, samples of products and materials
bearing the Trademarks included in the IP Assets used by Franchisees and other
licensees and sublicensees, and the results of Quality Control Programs.  Nothing in this Agreement shall limit the IP
Holder’s rights or the licensees’ obligations, under the IP License Agreements
or any other agreement with respect to which the Servicer is performing IP
Services.

 

(c)           The Servicer is hereby granted a
non-exclusive, royalty-free license during the term of this Agreement, to use
and sublicense the IP Assets solely in connection with the performance of the
Services under this Agreement.  In connection
with the Servicer’s use of any Trademark included in the IP Assets pursuant to
the foregoing license, the Servicer agrees to adhere to the quality control
provisions which are contained in Article 3 of each IP License Agreement,
as applicable to the product or service to which such Trademark pertains, as if
such provisions were incorporated by reference herein.

 

(d)           Right to Receive Instructions. 
Without limiting the Servicer’s obligations under Section 4.3(b) above,
in the event that the Servicer is unable to decide between alternative courses
of action, or is unsure as to the application of any provision of this
Agreement or any Related Document, or any such provision is, in the good faith
judgment of the Servicer, ambiguous as to its application, or is, or appears to
be, in conflict with any other applicable provision, or in the event that this
Agreement or any Related Document permits any determination by the Servicer or
is silent or is incomplete as to the course of action which the Servicer is
required to take with respect to a particular set of facts, the Servicer may
give notice (in such form as shall be appropriate under the circumstances) to
the Aggregate Controlling Party and the Indenture Trustee requesting written
instructions in accordance with the Indenture and the other Transaction
Documents and, to the extent that the Servicer shall have acted or refrained
from acting in good faith in accordance with any such instructions received
from the Aggregate Controlling Party, the Servicer shall not be liable on
account of such action or inaction to any Person.  Subject to the Servicing Standard, if the
Servicer shall not have received appropriate instructions from the Aggregate
Controlling Party within fifteen (15) days of such notice, the Servicer (i) shall
promptly notify each Series Controlling Party of the absence of any such
instructions and (ii) until such later time, if any, as the Servicer
receives appropriate instructions from the Aggregate Controlling Party, may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Transaction Documents, as the Servicer
shall reasonably deem to be in the best interests of the Aggregate Controlling
Party and the Securitization Entities; provided, however, that if
an Insurer or group of Insurers is not the Aggregate Controlling Party, the
Servicer shall also prepare and provide to the Indenture Trustee all notices,
forms and consent solicitations to be delivered to the related Noteholders in

 

48

 

connection with such notice and request for
instructions; and provided, further, that if no Insurer or group
of Insurers is the Aggregate Controlling Party and if the Servicer shall not
have received appropriate instructions from the Aggregate Controlling Party
within twenty (20) days of such notice, the Servicer may, but shall be under no
duty to, take or refrain from taking such action, not inconsistent with this
Agreement or the Transaction Documents, as the Servicer shall deem to be in the
best interests of the Aggregate Controlling Party and the Securitization
Entities.  The Servicer shall have no
liability to any Person for such action or inaction taken in reliance on the
preceding sentence except for the Servicer’s own willful misconduct or
negligence.

 

(e)           Limitation on Servicer’s Duties and
Responsibilities.

 

(i)            The Servicer shall not have any duty or obligation to
manage, make any payment in respect of, register, record, sell, reinvest,
dispose of, create, perfect or maintain title to, or any security interest in,
or otherwise deal with the Indenture Collateral, to prepare or file any report
or other document or to otherwise take or refrain from taking any action under,
or in connection with, any document contemplated hereby to which the Servicer
is a party, except as expressly provided by the terms of this Agreement or the
other Transaction Documents and consistent with the Servicing Standard, and no
implied duties or obligations shall be read into this Agreement against the
Servicer.  The Servicer nevertheless
agrees that it shall, at its own cost and expense, promptly take all action as
may be necessary to discharge any Liens on any part of the Serviced Assets
which result from valid claims against the Servicer personally whether or not
related to the ownership or administration of the Serviced Assets or the
transactions by the Transaction Documents.

 

(ii)           Except as otherwise set forth herein, the Servicer
shall have no responsibility under this Agreement other than to render the
Services in good faith and consistent with the Servicing Standard.

 

(iii)          The Servicer shall not manage, control, use, sell,
reinvest, dispose of or otherwise deal with any part of the Indenture
Collateral except in accordance with the powers granted to, and the authority
conferred upon, the Servicer pursuant to this Agreement or the other
Transaction Documents.

 

(f)            Limitations on the Servicer’s
Liabilities, Duties and Responsibilities.  Subject to Section 2.7
and except for any loss, liability, expense, damage, action, suit or injury
arising out of, or resulting from, (i) any breach or default by the
Servicer in the observance or performance of any of its agreements contained in
this Agreement or the other Transaction Documents, (ii) the breach by the
Servicer of any representation, warranty or covenant made by it herein or (iii) acts
or omissions constituting the Servicer’s own willful misconduct, bad faith or
negligence in the performance of its duties hereunder or under the other
Transaction Documents or otherwise, neither the Servicer nor any of its
Affiliates (other than any Securitization Entity), managers, officers, members
or employees shall be liable to any Securitization Entity, each

 

49

 

Insurer, if any, the Noteholders or any other
Person under any circumstances, including, without limitation:

 

(1)           for any action taken or omitted to be taken by the
Servicer in good faith in accordance with the instructions of the Aggregate
Controlling Party or Series Controlling Party (as applicable) made in
accordance herewith or the other Transaction Documents;

 

(2)           for any representation, warranty, covenant, agreement
or indebtedness of any Securitization Entity under the Notes or any Related
Document, or for any other liability or obligation of any Securitization
Entity;

 

(3)           for or in respect of the validity (other than as to
the obligations of the Servicer) or sufficiency of this Agreement or for the
due execution hereof by any party hereto other than the Servicer, or for the
form, character, genuineness, sufficiency, value or validity of any part of the
Indenture Collateral, or for or in respect of the validity or sufficiency of
the Transaction Documents; and

 

(4)           for any action or inaction of the Indenture Trustee, any
Series Controlling Party or the Aggregate Controlling Party, or for the
performance of, or the supervision of the performance of, any obligation under
this Agreement or any other Transaction Document that is required to be
performed by the Indenture Trustee, Series Controlling Party or the
Aggregate Controlling Party under this Agreement or any other Transaction
Document.

 

(g)           No Financial Liability. 
No provision of this Agreement (other than the last sentence of paragraph
(d) and (e)(i) above) shall require the Servicer to expend or
risk its funds or otherwise incur any financial liability in the performance of
any of its rights or powers hereunder, if the Servicer shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not compensated by the payment of the Weekly
Servicing Fees hereunder and is otherwise not reasonably assured or provided to
it.  Further, the Servicer shall not be
obligated to perform any services not enumerated or otherwise contemplated
hereunder, unless the Servicer determines that it is more likely than not that
it shall be reimbursed for all of its expenses incurred in connection with such
performance.

 

(h)           Reliance. 
The Servicer may, reasonably and in good faith, conclusively rely on,
and shall be protected in acting or refraining from acting when doing so, in
each case in accordance with any signature, instrument, notice, resolution,
request, consent, order, certificate, report, opinion, bond or other document
or paper reasonably believed by it to be genuine and believed by it to be
signed by the proper party or parties other than its Affiliates.  The Servicer may reasonably accept a
certified copy of a resolution of the board of directors or other governing body
of any corporate party other than its Affiliates as conclusive evidence that
such 

 

50

 

resolution has been duly adopted by such body
and that the same is in full force and effect. 
As to any fact or matter the manner or ascertainment of which is not
specifically prescribed herein, the Servicer may in good faith for all purposes
hereof reasonably rely on a certificate, signed by any Authorized Officer of
the relevant party, as to such fact or matter, and such certificate reasonably
relied upon in good faith shall constitute full protection to the Servicer for
any action taken or omitted to be taken by it in good faith in reliance
thereon.

 

(i)            Consultations with Third Parties;
Advice of Counsel.  In the exercise and performance of its duties
and obligations hereunder or under any of the Transaction Documents, the
Servicer (A) may act directly or through agents or attorneys pursuant to
agreements entered into with any of them, provided that the Servicer
shall remain primarily liable hereunder for the acts or omissions of such
agents or attorneys and (B) may, at the expense of the Servicer, consult
with external counsel or accountants selected and monitored by the Servicer in
good faith and in the absence of negligence, and the Servicer shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the advice or opinion of any such external counsel or accountants with
respect to legal or accounting matters.

 

(j)            Independent Contractor. 
In performing its obligations as servicer hereunder the Servicer acts
solely as an independent contractor of the Master Issuer and the other
Securitization Entities, except to the extent the Servicer is deemed to be an
agent of the Master Issuer and the Franchise Holder by virtue of engaging in
franchise sales activities as broker or receiving payments on behalf of the
Franchise Holder or the Master Issuer, as applicable.  Nothing in this Agreement shall, or shall be
deemed to, create or constitute any joint venture, partnership, employment, or
any other relationship between the Master Issuer and the Servicer other than
the independent contractor contractual relationship established hereby.  Nothing herein shall be deemed to vest in the
Servicer title to the IP Assets.  Except
as otherwise provided herein or in the other Transaction Documents, the
Servicer shall not be, nor shall be deemed to be, liable for any acts or
obligations of the Securitization Entities, any Series Controlling Party,
the Aggregate Controlling Party or the Indenture Trustee (except as set forth
in Section 2.3 hereof) and, without limiting the foregoing, the
Servicer shall not be liable under or in connection with the Notes.  The Servicer shall not be responsible for any
amounts required to be paid by the Indenture Trustee under or pursuant to the
Indenture.

 

Section 4.4             Merger and
Resignation.

 

(a)           Preservation of Existence. 
The Servicer shall not merge into any other Person or convey, transfer
or lease substantially all of its assets; provided, however, that
nothing contained in this Agreement shall be deemed, absent a Rapid
Amortization Event or any Potential Rapid Amortization Event, to prevent (i) the
merger into the Servicer of another Person, (ii) the consolidation of the Servicer
and another Person, (iii) the merger of the Servicer into another Person
or (iv) the sale of substantially all of the property or assets of the
Servicer to another Person, so long as (A) the surviving Person of the
merger or consolidation or the purchaser of the assets of the Servicer shall
continue to be engaged in the same line of business as the Servicer and shall
have the capacity to perform its obligations hereunder with at least the

 

51

 

same degree of care, skill and diligence as
measured by customary practices with which the Servicer is required to perform
such obligations hereunder, (B) in the case of a merger, consolidation or
sale, the surviving Person of the merger or the purchaser of the assets of the
Servicer shall expressly assume the obligations of the Servicer under this
Agreement and expressly agree to be bound by all other provisions applicable to
the Servicer under this Agreement in a supplement to this Agreement in form and
substance reasonably satisfactory to the Indenture Trustee and the Aggregate
Controlling Party and (C) with respect to such event, in and of itself,
the Rating Agency Condition has been met and the written consent of the
Aggregate Controlling Party has been obtained. 
Notwithstanding anything to the contrary contained in this Section 4.4(a),
the Servicer shall be permitted to reorganize into a Delaware limited liability
company, the sole member of which is Applebee’s International or any Affiliate
thereof, without having to satisfy any of the requirements of the preceding
sentence.

 

(b)           Resignation. 
The Servicer shall not resign from the rights, powers, obligations and
duties hereby imposed on it except upon determination that (A) the
performance of its duties hereunder is no longer permissible under applicable
law and (B) there is no reasonable action which the Servicer could take to
make the performance of its duties hereunder permissible under applicable
law.  As to clause (A) above,
any such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Indenture
Trustee and each Insurer, if any.  No
such resignation shall become effective until a Successor Servicer shall have
assumed the responsibilities and obligations of the Servicer in accordance with
Section 6.1(b).  The
Indenture Trustee, the Master Issuer, each Insurer, if any, and the Rating
Agencies shall be given not less than sixty (60) days’ prior written notice of
such resignation by the Servicer.  From
and after such effectiveness, the Successor Servicer shall be, to the extent of
the assignment, the “Servicer” hereunder.  Except as provided above in this Section 4.4
the Servicer may not assign this Agreement or any of its rights, powers, duties
or obligations hereunder.  The Servicer
agrees to cooperate with the Aggregate Controlling Party after providing such
notice of resignation in connection with the search and engagement of the
Successor Servicer, including any transitional services in accordance with Section 6.4
hereof.

 

(c)           Term of Servicer’s Obligations. 
Except as provided in Section 4.4(a) and Section 4.4(b),
the duties and obligations of the Servicer under this Agreement shall commence
on the date hereof and continue until this Agreement shall have been terminated
as provided in Section 6.1(a) or Section 9.1 and
shall survive the exercise by the Master Issuer, each Insurer, if any, or the
Indenture Trustee of any right or remedy under this Agreement (other than the
right of termination pursuant to Section 6.1(a)), or the
enforcement by the Master Issuer, each Insurer, if any, the Indenture Trustee
or any Noteholder, or any subrogee of same, of any provision of the Indenture,
the Notes, this Agreement or the other Transaction Documents.

 

Section 4.5             Notice of Certain
Events.  Upon the occurrence of any
of the following events:  (a) the
Co-Issuers or any Affiliate thereof shall engage in any “prohibited transaction”
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (b) any “accumulated funding deficiency” or failure to
meet “minimum funding standard” (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan, or any Lien in
favor of the PBGC or a Plan shall arise on the assets of either the Co-Issuer
or any

 

52

 

Affiliate
thereof, (c) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Aggregate Controlling Party, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (d) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (e) the
Master Issuer or any Co-Issuers or any Affiliate thereof incur, or in the
reasonable opinion of the Aggregate Controlling Party are likely to incur, any
liability in connection with a complete or partial withdrawal from, or the
Insolvency, Reorganization or termination of, a Multiemployer Plan; (f) any
other event or condition shall occur or exist with respect to a Plan (but in
each case in clauses (a) through (f) above, only if
such event or condition, together with all other such events or conditions, if
any, could reasonably be expected to have a Material Adverse Effect); (g) a
Servicer Termination Event, an Event of Default or other Rapid Amortization
Event or any event which would, with the passage of time or giving of notice or
both, would become one or more of the same; or (h) any action, suit,
investigation or proceeding pending or, to the knowledge of the Servicer, threatened
against or affecting the Servicer, before or by any court, administrative
agency, arbitrator or governmental body having jurisdiction over the Servicer
or any of its properties either asserting the illegality, invalidity or
unenforceability of any of the Transaction Documents, seeking any determination
or ruling that would affect the legality, binding effect, validity or
enforceability of any of the Transaction Documents or which could reasonably be
expected to have a Material Adverse Effect, the Servicer shall provide written
notice to the Indenture Trustee, each Insurer, if any, and the Rating Agencies
of the same promptly and in any event within five (5) Business Days of
obtaining knowledge of same.

 

Section 4.6             Capitalization.  The Servicer shall have sufficient capital to
perform all of its obligations under this Agreement at all times from the
Closing Date and until the Indenture has been terminated in accordance with the
terms thereof.

 

Section 4.7             Franchise Law
Determination.

 

(a)           Within
fifteen (15) Business Days after the Closing Date, the Servicer shall
file such documents as are necessary to register as a franchise broker or
franchise sales agent as required by applicable state franchising
authorities.  Upon final determination by
any state franchising authority that the Servicer is considered by such state
franchising authority to be a “subfranchisor”, the Servicer within one hundred
and twenty (120) days of such determination shall file such documents and take
such other compliance actions as are required by such state franchising
authority or under such state’s franchise laws.

 

(b)           Upon
final determination by any state franchising authority that the Franchise
Holder is considered by such state franchising authority to be a “subfranchisor”,
the Servicer within one hundred and twenty (120) days of such determination
shall, on behalf of the Franchise Holder, file such documents and take such
other compliance actions as are required by such state franchising authority or
under such state’s franchise laws.

 

Section 4.8             Maintenance of
Separateness.  The Servicer covenants
that, except as contemplated by the Transaction Documents:

 

53

 

(a)           the books and records of each
Securitization Entity shall be maintained separately from those of the Servicer
and each of its Affiliates that is not a Securitization Entity;

 

(b)           the Servicer shall observe (and
shall cause each of its Affiliates that is not a Securitization Entity to
observe) corporate and limited liability company formalities in its dealing
with any Securitization Entity;

 

(c)           all financial statements of the
Servicer that are consolidated to include any Securitization Entity and that
are distributed to any party shall contain detailed notes clearly stating that (i) all
of such Securitization Entity’s assets are owned by such Securitization Entity
and (ii) such Securitization Entity is a separate entity and has separate
creditors;

 

(d)           the Servicer shall not (and shall
not permit any of its Affiliates that is not a Securitization Entity to)
commingle its funds with any funds of any Securitization Entity; provided
that the foregoing shall not prohibit the Servicer or any successor to or
assign of the Servicer from holding funds of the Securitization Entity in its
capacity as Servicer for such entity in a segregated account identified for
such purpose;

 

(e)           the Servicer shall (and shall cause
each of its Affiliates that is not a Securitization Entity to) maintain arm’s
length relationships with each Securitization Entity and each of the Servicer
and its Affiliates that are not Securitization Entities shall be compensated at
market rates for any services it renders or otherwise furnishes to such
Securitization Entity, it being understood that the Weekly Servicing Fee is
representative of such arm’s length relationship as between the Servicer and
its Affiliates that are not Securitization Entities, on the one hand, and the
Securitization Entities, on the other hand, and that the Servicer shall be
responsible for any compensation of its Affiliates to whom it delegates any of
its duties hereunder or under the other Transaction Documents;

 

(f)            the Servicer shall not be, and shall
not hold itself out to be, liable for the debts of any Securitization Entity or
the decisions or actions in respect of the daily business and affairs of any
Securitization Entity and the Servicer shall not permit any Securitization
Entity to hold the Servicer out to be liable for the debts of such
Securitization Entity or the decisions or actions in respect of the daily
business and affairs of such Securitization Entity; and

 

(g)           upon an officer or other responsible
party of the Servicer obtaining actual knowledge that any of the foregoing
provisions in this Section 4.8 hereof has been breached or violated
in any material respect, the Servicer shall promptly notify the Indenture
Trustee, each Insurer, if any, that is a Series Controlling Party and the
Rating Agencies of same and shall take such actions as may be reasonable and
appropriate under the circumstances to correct and remedy such breach or
violation as soon as reasonably practicable under such circumstances.

 

54

 

Section 4.9             Business
Operations.  The Servicer shall not
engage in any Competitive Business or any business other than (a) the
performance of its obligations under this Agreement and (b) the
performance of services for future and existing Affiliates (each, a “Serviced Affiliate”), pursuant to a written servicing or management services
agreement, on an arm’s length basis reasonably customary in the applicable
industry; provided that (i) the costs to the Servicer in providing
such services, including without limitation, overhead, administrative and
employee related expenses, shall be fairly and reasonably borne by all such
Serviced Affiliates, (ii) such rendering of services not related to the
Applebee’s Brand or the IHOP Brand shall not result in a Material Adverse
Effect; (iii) the Servicer shall cause to be prepared and validated
separate financial statements for the provision of services pursuant to this
Agreement and the other Transaction Documents, (iv) the Servicer shall at
all times maintain adequate offices, equipment and employees necessary to
perform its obligations under this Agreement and the other Transaction
Documents and (v) neither the Servicer nor any of its Affiliates shall
engage in a Competitive Business other than as provided herein and in the other
Transaction Documents.

 

Section 4.10           Amendment of and
Compliance with Collection Practices.

 

(a)           Without the prior written consent of
the Aggregate Controlling Party, the Servicer shall not make or permit to be
made any change or modification to the Current Practice of Applebee’s
International with respect to the collection of the Franchise Payments of the
Existing Franchise Assets (the “Collection Practices”),
except (i) if such changes or modifications are required under applicable
law or (ii) if such changes or modifications would not, in the Servicer’s
reasonable business judgment, materially negatively affect the collectibility
or timing of, or materially decrease the amount of, the Franchise Payments.

 

(b)           The Servicer shall perform its
obligations hereunder in accordance with and comply in all material respects with
the Collection Practices (as modified from time to time pursuant to Section 4.10(a)).

 

Section 4.11           Protection of
Secured Parties’ Rights and Collectibility of Franchise Payments.  The Servicer hereby agrees that it shall take
no action, nor omit to take any action, which could reasonably be expected to (a) materially
adversely impair the rights, remedies or interests of the Noteholders or the
other Secured Parties under the Transaction Documents in respect of the
Indenture Collateral or (b) materially impair the collectibility or timing
with respect to the Franchise Payments of the Franchise Assets or any monies
due with respect to the IP Assets.  For
purposes of clarification, nothing in the preceding sentence shall prevent the
Servicer or its Affiliates from taking any action with respect to the Applebee’s
System that is not otherwise prohibited under any other provision of this
Agreement or the other Transaction Documents, and is permitted by the Franchise
Agreements, including changes to the Operating Manuals, so long as such actions
are in accordance with the Servicing Standard.

 

Section 4.12           Security Interest.  Subject to Section 5.5 and Section 5.6,
the Servicer hereby covenants and agrees that it shall promptly take all
actions, including but not limited to all filings and other acts advisable
under the UCC or other applicable law or otherwise

 

55

 

as reasonably requested by the Indenture Trustee or an Insurer, if any,
in order to continue the valid, perfected and enforceable security interest of
the Indenture Trustee in all Serviced Assets now owned or hereafter created or
acquired (to the extent that a security interest may be perfected therein under
the UCC or other applicable law). The Servicer hereby covenants that the
Mortgages to be delivered by it to the Indenture Trustee under Section 2.1(b) above
and under Section 5.1(b)(xiv) below shall be in recordable form and
shall have been executed by the applicable Co-Issuer. Each such Mortgage shall
be effective, as and when recorded, to create in favor of the Indenture Trustee
for the benefit of the Secured Parties, legal, valid and enforceable first
priority Lien on, and security interest in, all of such Co-Issuer’s right,
title and interest in and to the Company-Owned Real Property relating to such
Mortgage and the proceeds thereof, subject to any Permitted Liens.

 

Section 4.13          Notices.  The Servicer shall give written notice to the
Co-Issuers, the Indenture Trustee and each Insurer, if any, promptly (but in
any event within three (3) Business Days) upon the Servicer having
knowledge of the occurrence of (a) any Rapid Amortization Event or any
Potential Rapid Amortization Event, or (b) the occurrence of any other
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.

 

Section 4.14           Indebtedness.  Neither the Servicer nor any Affiliate of
Applebee’s International (other than the Securitization Entities) may incur any
Debt without (a) the consent of the Aggregate Controlling Party and (b) notice
to the Rating Agencies; provided that clauses (a) and (b) shall
not be required for (w) (i) the issuance of Series 2007-3 Notes
pursuant to the IHOP Indenture up to an aggregate maximum principal amount of
$445,000,000, which amount includes the aggregate maximum principal amounts of
the Series 2007-1 Notes and the Series 2007-2 Notes issued pursuant
to the IHOP Indenture after giving effect to such issuance of such additional
notes, (ii) the issuance of additional notes pursuant to the IHOP
Indenture up to an aggregate maximum principal amount of $575,000,000,
inclusive of all Series of Notes outstanding under the IHOP Indenture; provided
that (A) an amount of indebtedness is paid off under the Applebee’s
Securitization equal to the amount of additional notes offered pursuant to the
IHOP Indenture and (B) no such additional Notes under the IHOP Indenture
may be issued unless (1) the Three-Month Adjusted DSCR after
giving effect to such issuance of such additional notes (calculated without
giving effect to any equity contributions otherwise included in the calculation
of Net Cash Flow) is at least equal to the Three-Month Adjusted DSCR as of the
Closing Date and (2) the prior written consent of the Series 2007-1 Class A
Insurer is obtained, and (iii) the payment of the L/C Reimbursement
Amount and L/C Other Reimbursement Costs in accordance with the Class A-1
Note Purchase Agreement and reimbursement obligations, if any, with respect to
the letters of credit existing immediately prior to the date hereof, (x) up
to $95 million of indebtedness (excluding any existing “capital leases” in
effect as of November 29, 2007 of IHOP Corp. and its affiliates and
indebtedness contemplated by (w) above and (y) below) and (y) indebtedness
incurred by Applebee’s International or any of its subsidiaries in connection
with sale/leaseback transactions; provided that, on a pro forma basis,
after giving effect to such sale/leaseback transactions, the ratio of adjusted
debt (calculated by capitalizing lease obligations, whether treated as
operating leases or capital operating leases under GAAP, at 8x annual rent) to
EBITDAR for IHOP Corp. and its affiliates is equal to or less than 7.30x during
the twelve (12) month period following the Closing

 

56

 

Date and 7.0x thereafter; provided that any such transactions
involving a Securitization Entity must comply with the provisions of the
Indenture.

ARTICLE V

 

REPRESENTATIONS,
WARRANTIES AND COVENANTS

 

Section 5.1             Representations
and Warranties Made in Respect of New Assets.

 

(a)           New Franchise Documents. 
As of the applicable New Asset Addition Date with respect to the New
Franchise Document acquired on such New Asset Addition Date, the Servicer shall
be deemed to make the following representations and warranties:

(i)            Such New Franchise Document is genuine, and is the
legal, valid and binding obligation of the parties thereto, has been fully and
properly executed by the parties thereto, and is enforceable against the
parties thereto in accordance with its terms (except as such enforceability may
be limited by bankruptcy or insolvency laws and by general principles of
equity, regardless of whether such enforceability shall be considered in a
proceeding in equity or at law);

 

(ii)           Such New Franchise Document complies in all material
respects with all applicable Requirements of Law in the United States;

 

(iii)          No Franchisee party to such New Franchise Document is
the subject of a bankruptcy proceeding;

 

(iv)          Royalties or similar fees payable pursuant to such New
Franchise Document are payable at least monthly; provided, however,
that the Servicer may cause the Franchise Holder to enter into or acquire a New
Franchise Document that provides for royalties to be payable less frequently
than monthly if the aggregate fees payable under all New Franchise Agreements
that provide for payment of royalties less frequently than monthly are not
reasonably anticipated to exceed 5% of total Collections in the twelve month
period immediately following the commencement or addition of any such New
Franchise Document;

 

(v)           To the extent the Servicer determines to implement a
system of electronic funds transfer (“EFT”) with respect to
substantially all of the Franchisees, the Master Issuer shall have the right to
require payment of Continuing Franchise Fees by EFT pursuant to the Franchise
Agreement or otherwise, other than with respect to Franchisees who are parties
to Existing Franchise Documents as to whom the application of EFT

 

57

 

either has been waived by the Servicer or may
not be required with respect to one or more applicable Franchise Agreements;

 

(vi)          Except as required by law, such New Franchise Document
contains no contractual rights of setoff or contractual defenses to obligations
to make payment of any amounts payable by the Franchisee under such New
Franchise Document;

 

(vii)         Such New Franchise Document is freely assignable by
the Franchise Holder or the relevant Securitization Entity, as applicable;

 

(viii)        Such New Franchise Document does not contain terms and
conditions that are reasonably expected to result in (A) a material
decrease in the amount of Collections, taken as a whole, (B) a material
adverse change in the nature, quality or timing of Collections, taken as a
whole, or (C) a material adverse change in the types of underlying assets
generating Collections, taken as a whole, in each case when compared to the
amount, nature or quality of, or types of assets generating, Collections that
could have been reasonably expected to result had such New Franchise Document
been entered into in accordance with the Prior Terms.

 

(ix)           The relevant Securitization Entity shall not have
entered into or acquired a New Franchise Document that (A) is materially
different, in the good faith reasonable business judgment of the Servicer, from
a New Franchise Document that such Securitization Entity would have entered
into or acquired had the Serviced Assets affected by such New Franchise Document
or other agreement been owned by the Servicer, or from the Current Practice of
Applebee’s International, subject to the Servicing Standard, (B) would
cause a breach of the Indenture or any other Transaction Document, (C) would,
in the reasonable good faith business judgment of the Servicer, materially
negatively affect the collectibility or timing of, or materially decrease the
amount of, Collections and other payments relating to the Serviced Assets
affected by such New Franchise Document, (D) would restrict the Franchise
Holder’s or the relevant Securitization Entity’s right to assign such New
Franchise Document (other than any Non-Conforming New Franchise Document) or (E) would
permit the Franchisee or other party to such New Franchise Document to set off
any amount against Collections or other payments payable by such Franchisee or
other party under such New Franchise Document. 
Without limiting the generality of the foregoing:

 

(1)           If such New Franchise Document is a New Franchise
Agreement, such New Franchise Agreement (a) does not materially deviate
from the standard form Franchise Agreement attached to the UFOC or such other
form approved as of the date hereof by each Insurer, if any, that is a Series Controlling
Party; provided that for the purpose of this subclause (1), the
form of franchise agreement attached to an Existing U.S. Development Agreement
shall be deemed an approved form with respect to a franchisee, and (b) is
either (i) a Non-Conforming 

 

58

 

New Franchise Document that is not a
Defective Non-Conforming New Franchise Document or (ii) does not
materially deviate from the prevailing royalty rates adopted by Applebee’s
International for its franchise system as applicable as of the date of this
Agreement, payment arrangements implemented in accordance with the Servicing
Standard, or any other rates as previously approved by each Insurer, if any,
that is a Series Controlling Party. 
In addition, as of the New Asset Addition Date, the Franchisee under any
New Franchise Agreement (i) has been determined to have the ability to
perform its current and future obligations under such New Franchise Agreement
by the Servicer in accordance with the Servicing Standard, (ii) is
committed to employ trained restaurant management and to maintain proper
staffing levels and (iii) if also a Franchisee under any other Franchise
Agreement, is determined to the knowledge of the Servicer to be in compliance
in all material respects with all such Franchise Agreements when taken together
as a whole.

 

(2)           If such New Franchise Document is a Refranchised
Restaurant Lease or Franchisee Sub-Lease, such Refranchised Restaurant Lease,
or Franchisee Sub-Lease does not materially deviate from the prevailing forms
adopted by the Servicer for its franchise system as of the date of this
Agreement, or any other forms as previously approved by each Insurer, if any,
and if such New Franchise Document is a Refranchised Restaurant Lease or
Franchisee Sub-Lease, such Refranchised Restaurant Lease or Franchisee
Sub-Lease is on such terms regarding rent and other expenses payable by such
tenant as shall reasonably be expected to return an aggregate net profit (on a
gross basis) to such Securitization Entity at all times, after taking into account
acquisition expense, in the case of properties owned in fee or rent and other
amounts payable by such Securitization Entity to a prime landlord with respect
to such property.

 

(b)           New Company-Owned Real Property. 
As of the applicable New Asset Addition Date with respect to the New
Company-Owned Real Property acquired on such date, the Servicer shall be deemed
to have made the following representations and warranties:

 

(i)            The Servicer has conducted or caused to be conducted a
Phase I environmental study on such Property prior to its acquisition, and has,
in accordance with the Servicing Standard, taken or caused to be taken all
action which the Servicer, in accordance with the Servicing Standard, has
determined to be prudent and appropriate remediation, which may include follow
up study or clean up measures on such Property as recommended or otherwise
indicated by such Phase I environmental study;

 

(ii)           The Servicer has obtained, on behalf of the applicable
Securitization Entity, an appropriate level of title insurance and property
insurance as necessary in the good faith reasonable judgment of the Servicer in
accordance with the Servicing Standard to ensure the vesting of title in such
Securitization Entity, and, to the knowledge of the Servicer, neither the
Servicer nor any Securitization Entity, has received written notice

 

59

 

from any insurance company or rating
organization to the effect that the physical condition of such New
Company-Owned Real Property would prevent obtaining new insurance policies at
reasonable rates;

 

(iii)          The Securitization Entity holding such New
Company-Owned Real Property has good, marketable and insurable fee simple title
to the premises of such New Company-Owned Real Property, free and clear of all
Liens whatsoever (other than Permitted Liens);

 

(iv)          To the knowledge of the Servicer after due inquiry,
there are no claims that have been filed for payment for work, labor or
materials affecting such New Company-Owned Real Property which are or may
become a Lien upon the interest of the applicable Securitization Entity in such
New Company-Owned Real Property except for Permitted Liens;

 

(v)           The Securitization Entity holding such New
Company-Owned Real Property, (x) is not in material default in any respect
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions applicable to such New Company-Owned Real Property and (y) does
not have any financial obligations under any indenture, mortgage, deed of
trust, loan agreement or other debt agreement or instrument to which it is a
party or by which it or such New Company-Owned Real Property is otherwise
bound, other than the Transaction Documents, Permitted Liens and obligations
incurred in the ordinary course of the operation of the Properties, none of
which are secured by a Lien (other than a Permitted Lien) upon any Property;

 

(vi)          Each applicable New Company-Owned Real Property and
the use thereof complies in all material respects with all applicable legal
requirements, including, without limitation, building and zoning ordinances and
codes.  Neither the Securitization Entity
holding such New Company-Owned Real Property, nor, to the knowledge of the
Servicer, any Franchisee leasing or subleasing such Property from a
Securitization Entity, is in material default or violation of any order, writ,
injunction, decree or demand of any Governmental Authority in respect of such
Property.  There has not been committed by
the Securitization Entity holding such New Company-Owned Real Property or, to
the knowledge of the Servicer, any Franchisee in occupancy of or involved with
the operation or use of such Property any act or omission affording any
Governmental Authority the right of forfeiture as against such Property or any
material part thereof;

 

(vii)         No condemnation or similar proceeding has been
commenced nor, to the knowledge of the Servicer, is threatened with respect to
all or any material portion of such New Company-Owned Real Property or for the
relocation of roadways providing access to such New Company-Owned Real Property
that, in either case, was not considered in the acquisition of such New
Company-Owned Real Property;

 

60

 

(viii)        Such
New Company-Owned Real Property is comprised of one (1) or more parcels
which, to the knowledge of the Servicer, constitute a separate tax lot or lots
and does not constitute a portion of any other tax lot not a part of such New
Company-Owned Real Property, other than New Company-Owned Real Property with
respect to which the Servicer is taking appropriate action on behalf of the
applicable Securitization Entity to obtain separate tax lot classification,
and, in any event, no such failure to constitute or obtain such separate tax
lot classification shall have a Material Adverse Effect with respect to the
aggregate pool of Company-Owned Real Property;

 

(ix)           To the knowledge of the Servicer after due inquiry, there
are no material pending or proposed special or other assessments for public
improvements materially affecting such New Company-Owned Real Property that
were not considered in the acquisition of such New Company-Owned Real Property;

 

(x)            Except pursuant to the Transaction Documents, no Securitization
Entity has pledged any of its interest in such New Company-Owned Real Property
or related Refranchised Restaurant Lease, nor pledged or assigned any portion
of the rent due and payable thereunder or to become due and payable thereunder
to any Person;

 

(xi)           All material certifications, permits, licenses and
approvals, including without limitation, certificates of completion and
occupancy permits required for the legal use, occupancy and operation of such
New Company-Owned Real Property as an Applebee’s Restaurant, if such property
is open for business, have been obtained and are in full force and effect.  The use being made of such New Company-Owned
Real Property, if opened for business, is in conformity with the certificate of
occupancy issued for such Property;

 

(xii)          Such New Company-Owned Real Property is not subject to any
leases other than the Refranchised Restaurant Leases, except as would not
materially detract from the value of such Property.  No Person (other than the applicable
Securitization Entity) has any possessory interest in such New Company-Owned
Real Property or right to occupy the same except under and pursuant to the
provisions of the Refranchised Restaurant Leases;

 

(xiii)         The Servicer has paid, caused to be paid, or confirmed that
all transfer taxes, deed stamps, intangible taxes or other amounts in the
nature of transfer taxes required to be paid by any Person under applicable
Requirements of Law currently in effect in connection with the acquisition of
such New Company-Owned Real Property have been paid in full; and

 

(xiv)        The Servicer shall have delivered a Mortgage with respect to
such New Company-Owned Property, duly executed by the applicable Co-Issuer, in
recordable

 

61

 

form and to be held in escrow pending
recordation following a Trigger Event in accordance with Section 5.6
hereof.

 

(c)           New Leased Real Property.  As of the applicable New Asset Addition Date
with respect to the New Leased Real Property acquired on such New Asset
Addition Date, the Servicer shall be deemed to have made the following
representations and warranties:

(i)            With respect to any such New Leased Real Property on
which the Servicer or any Securitization Entity has constructed or intends to
construct a new Applebee’s Restaurant where there is previously no existing
structure, the Servicer has conducted or caused to be conducted a Phase I
environmental study on such Property prior to it being leased and has taken or
caused to be taken all action which the Servicer, in accordance with the
Servicing Standard, has determined to be prudent and appropriate remediation,
which may include follow up study or clean up measures on such Property as
recommended or otherwise indicated by such Phase I environmental study;

 

(ii)           Such New Leased Real Property is not reasonably expected
to be a Negative Lease; provided, however, that any New Leased
Real Property subject to a Non-Conforming New Franchise Document that is not a
Defective Non-Conforming New Franchise Document shall not be deemed to be a
Negative Lease for purposes of this clause (ii);

 

(iii)          With respect to New Leased Real Property, the
Securitization Entity party to such Company Lease or Sale/Leaseback Lease and
related Franchisee Sub-Lease, if any, has valid leasehold title to such Company
Lease or Sale/Leaseback Lease and related Franchisee Sub-Lease, if any, free
and clear of all Liens (other than Permitted Liens).  The Servicer has made available to the
Indenture Trustee full and complete copies of all new Leases entered into by
the Securitization Entity relating to such New Leased Property (including all
amendments to any existing Leases). No material default by the Securitization
Entity or, to the knowledge of the Servicer, by any other party, exists under
any provision of any such Lease, and no condition or event exists which after
notice or lapse of time or both would constitute a material default thereunder
by such Securitization Entity or, to the knowledge of the Servicer, by any
other party;

 

(iv)          The New Leased Real Property and the use thereof complies
in all material respects with all applicable legal requirements, including,
without limitation, building and zoning ordinances and codes.  Neither the Securitization Entity holding
such New Leased Real Property, nor, to the knowledge of the Servicer, any
Franchisee leasing or subleasing such Property from a Securitization Entity, is
in material default or violation of any order, writ, injunction, decree or
demand of any Governmental Authority in respect of such Property.  There has not been committed by the
Securitization Entity holding such New Leased Real Property or, to the
knowledge of the Servicer, any Franchisee in occupancy of or involved with the
operation or use of such Property any act

 

62

 

or omission affording any Governmental
Authority the right of forfeiture as against such Property or any material part
thereof;

 

(v)           No condemnation or similar proceeding has been commenced
nor, to the knowledge of the Servicer, is threatened with respect to all or any
material portion of such New Leased Real Property or for the relocation of
roadways providing access to such New Leased Real Property that, in either
case, was not considered in the leasing of such New Leased Real Property;

 

(vi)          All of the policies of insurance (x) required to be
maintained by the applicable Securitization Entity under such Company Lease or
Sale/Leaseback Lease and (y) to the knowledge of the Servicer, required to
be maintained by Franchisees under the Franchisee Sub-Lease related thereto, if
applicable, are valid and in full force and effect; and to the knowledge of the
Servicer, neither the Servicer nor any Securitization Entity, received written
notice from any insurance company or rating organization to the effect that the
physical condition of such New Leased Real Property would prevent obtaining new
insurance policies at reasonable rates. 
Notwithstanding anything to the contrary herein, the representation set
forth in this Section 5.1(c)(vi) with respect to the policies
to be maintained by the applicable Securitization Entity pursuant to such
Company Lease or Sale/Leaseback Lease shall be deemed accurate if the
applicable Securitization Entity has contractually obligated the Franchisee
party to such related Franchisee Sub-Lease to maintain insurance with respect
to such Franchisee Sub-Lease in a manner that is customary for business
operations of this type and in accordance with the Servicing Standard.

 

(vii)         All material certifications, permits, licenses and
approvals, including without limitation, certificates of completion and
occupancy permits required for the legal use, occupancy and operation of such
New Leased Real Property as an Applebee’s 
Restaurant, if such property is open for business, have been obtained
and are in full force and effect.  The
use being made of such New Leased Real Property, if open for business, is in
conformity with all Requirements of Law and with the certificate of occupancy
issued for such Property;

 

(viii)        Such New Leased Real Property is not subject to any leases,
other than the Company Leases, Sale/Leaseback Leases and the Franchisee
Sub-Leases, except as would not materially detract from the value of such
property.  No Person has any possessory
interest in such New Leased Real Property or right to occupy the same except
under and pursuant to the provisions of the Company Leases, Sale/Leaseback
Leases and the Franchisee Sub-Leases, except as would not materially detract
from the value of such Property; and

 

(ix)           The Servicer has paid, caused to be paid, or confirmed
that all transfer taxes, deed stamps, intangible taxes or other amounts in the
nature of transfer taxes

 

63

 

required to be paid by any Person under
applicable Requirements of Law currently in effect in connection with the
entering into of the Company Lease or Sale/Leaseback Lease and the related
Franchisee Sub-Leases for such New Leased Real Property have been paid in full.

 

(d)           The Servicer will not enter into any
Leases, including any Sale/Leaseback Leases, after the Closing Date which (i) require
IHOP Corp. or Applebee’s International to provide a guaranty or (ii) include
any event of default under such Lease due to a bankruptcy of either IHOP Corp.
or Applebee’s International.

 

Section 5.2             Other Transferred Assets.  (a)  The Servicer (i) shall cause
the Master Issuer or its applicable Subsidiary (such as the IP Holder) to enter
into or acquire, (A) all Franchise Documents, (B) all Licensee-Developed
IP and Servicer-Developed IP and (C) any New Company-Owned Real Property
or New Leased Real Property relating to Applebee’s Restaurants and (ii) subject
to the prior satisfaction of the Rating Agency Condition and the prior written
consent of the Aggregate Controlling Party may, but shall not be obligated to,
cause the Master Issuer or its applicable Subsidiary to enter into, develop or
acquire, any other asset or liability. 
Notwithstanding the foregoing, the Servicer shall not be required to
cause the applicable Restaurant Holder to acquire the Company-Owned U.S.
Restaurant Assets relating to the Applebee’s Restaurant to be located at Blue
Ridge Mall, Kansas City, Missouri until six months after the commencement of
operations at such Applebee’s Restaurant, which shall otherwise be treated as a
Post-Closing U.S. Restaurant pursuant to the Post-Closing U.S. Restaurant
Purchase Agreement; provided that such Applebee’s Restaurant shall not
be counted towards the permitted number of Post-Closing U.S. Restaurants to be
retained after by the Predecessor Restaurant Holders after the Closing
Date.   The Aggregate Controlling Party
shall have the right to approve the Securitization Entities that shall hold any
of the assets obtained after the Closing Date described in this Section 5.2(a) and
entered into, developed or acquired by the Master Issuer or a Subsidiary
thereof (the “Post-Closing Assets”), including the right to direct that any
Post-Closing Assets be held by one or more newly formed Securitization Entities
if the Aggregate Controlling Party reasonably believes that such Post-Closing
Assets could impair the Indenture Collateral; provided that the IP
Assets which constitute the Applebee’s Brand or are exclusively related
thereto, shall be held by the IP Holder.

 

(b)           Unless otherwise agreed to in writing
by the Aggregate Controlling Party, any contribution to, or development or
acquisition by, the Master Issuer or a Subsidiary thereof of Post-Closing
Assets shall be subject to all applicable provisions of the Indenture, this
Agreement (including the applicable representations and warranties and
covenants in Articles II and V of this Agreement), the IP License
Agreements and the other Transaction Documents. 
Any Franchise Document that is a Post-Closing Asset shall be deemed to
be a New Franchise Document for the purposes of this Agreement.

 

Section 5.3             IP Assets.

 

(a)           All IP Assets shall be owned
exclusively by the IP Holder and shall not be assigned or transferred by the IP
Holder to any other entity.

 

64

 

(b)           The Servicer and Applebee’s
International will use commercially reasonable efforts to obtain, within one
hundred twenty (120) days of the Closing Date, the consent of the third party
licensors under the third party license agreements set forth on Schedule 5.3
hereto (“Third Party Consent License Agreements”) to the assignment of
the Servicer’s rights thereunder to the IP Holder, with the right to sublicense
back such rights to the Servicer to enable the Servicer to perform its
obligations hereunder, and, at the option of Applebee’s International, either
to sublicense to Applebee’s International or another Affiliate of Applebee’s
International all rights to use the licensed Intellectual Property outside the
United States and the U.S. Territories, or to separate any rights to use the
licensed Intellectual Property outside the United States and the U.S.
Territories into a separate agreement (which rights may remain with Applebee’s
Services, Inc, but not in its capacity as Servicer, or with Applebee’s
International or another Affiliate of Applebee’s International which is not a
Securitization Entity, in Applebee’s International’s discretion); provided
that the expiry of such 120-day period without any such consent shall not
relieve the Servicer and Applebee’s International from their obligation to
continue seeking consent (unless it is no longer commercially reasonable to
seek such consent). With respect to those Third Party Consent License
Agreements which have Participation Agreements issued thereunder, the Servicer,
Applebee’s International and the IP Holder shall mutually agree, such agreement
not to be unreasonably withheld, with the applicable third party licensor as to
how such Participation Agreement will be handled, with such agreement further
subject to the approval of the Aggregate Controlling Party; provided that it
shall be agreeable to the Servicer, Applebee’s International, the IP Holder and
the Aggregate Controlling Party, if the Participation Agreements are structured
as sublicenses from the IP Holder to the relevant Franchisee or as sublicense
from the Servicer to the relevant Franchisee.

 

Section 5.4             Allocated Note Amount
attributable to Applebee’s Restaurants.  The Servicer will recalculate the Allocated
Note Amount attributable to each Applebee’s Restaurant (including each
Post-Closing Restaurant) as of each date on which Applebee’s International or
the Servicer is required to reacquire the assets relating to an Applebee’s
Restaurant in accordance with the definition of Allocated Note Amount.  The Allocated Note Amount determined by the
Servicer in such manner shall be recorded in the books and records of the
Servicer.

 

Section 5.5             Account Control Agreements for
Deposits.

 

(a)           If and for so long as any depositary
institution receives $6,000,000 or more in revenues generated by the Restaurant
Holders over any 12-month period, the Servicer shall use commercially
reasonable efforts to cause such depositary institution to enter into an
Account Control Agreement with the Indenture Trustee pursuant to which the
local depositary institution will act at the direction of the Indenture Trustee
if it receives written notice from the Indenture Trustee that a Servicer
Termination Event or an Event of Default has occurred and is continuing. In
connection with the foregoing, the Servicer has obtained executed Account
Control Agreements will all requisite banks other than the banks listed on Schedule
5.5(a) hereto for which the Servicer shall obtain an executed Account
Control Agreement on or before the one-year anniversary of the Closing Date (or
replace such banks with financial institutions that have entered into such
Account Control Agreements within such one-year period).

 

65

 

(b)           Subject to Section 6.3,
if a Trigger Event occurs, the Servicer shall, unless waived by the Aggregate
Controlling Party, cause all depositary institutions receiving revenues
generated by the Restaurant Holders at such time to enter into an Account
Control Agreement with the Indenture Trustee within ninety (90) calendar days
of the occurrence of the Trigger Event pursuant to which such depositary
institutions shall act at the direction of the Indenture Trustee.  If the Servicer is unable to cause any such
depositary institution to enter into an Account Control Agreement in any
circumstance requiring the depositary institution to enter into an Account
Control Agreement pursuant the terms of this Agreement, including this Section 5.5
and Section 6.3, within ninety (90) days following the occurrence
of the Trigger Event, the Servicer will be required to replace such depositary
institution with another depositary institution that enters into an Account
Control Agreement within such 90-day period.

 

Section 5.6             Real Estate Mortgages.
If a Trigger Event has occurred and is continuing, the Servicer will record the
real estate mortgages prepared pursuant to Section 2.1(b) within
ninety (90) days thereafter except to the extent that such requirement is
waived in whole or in part by the Aggregate Controlling Party.

 

Section 5.7             Special Provision regarding
Non-Conforming Defective New Franchise Documents.
Notwithstanding anything to the contrary herein, the Servicer shall not be
deemed to have breached any representation, warranty, covenant or agreement
contained herein as to itself, any New Asset or otherwise, solely for entering
into any Non-Conforming New Franchise Document, unless such Non-Conforming New
Franchise Document constitutes a Defective Non-Conforming New Franchise
Document and the Servicer has failed to pay the Indemnification Amount in
accordance with Section 2.7 hereof.

 

ARTICLE VI

 

SERVICER
TERMINATION EVENTS

 

Section 6.1             Servicer Termination Events.

 

(a)           Servicer Termination Events.  Any of the following acts or occurrences shall
constitute a “Servicer Termination Event” under this Agreement, the
assertion as to the occurrence of which may be made, and notice of which may be
given, by either the Master Issuer or the Indenture Trustee (acting at the
written direction of the Aggregate Controlling Party):

 

(i)            a failure by the Servicer to pay or remit (or cause to be
paid or remitted) any amount required to be paid or remitted by the Servicer
under the terms of this Agreement or any other Transaction Document within two (2) Business
Days of the date on which such amount was required to be paid or remitted under
this Agreement or such other Transaction Document (it being understood that the
Servicer will not be responsible for the failure of the Indenture Trustee to
remit funds that were received by the Indenture Trustee from or on behalf of
the Servicer in accordance with this Agreement or such other Transaction
Document);

 

66

 

(ii)           the failure by the Securitization Entities to maintain a
Three-Month Adjusted DSCR calculated for each Payment Date at least equal to
1.2x;

 

(iii)          any failure by the Servicer to deliver (x) any Monthly
Noteholders’ Report, any Monthly Servicer’s Certificate
required to be delivered by the Servicer pursuant to this Agreement with
respect to any Series of Notes or the periodic financial statements of
Applebee’s International, the Master Issuer or the Franchise Holder required to
be delivered by the Servicer pursuant to this Agreement on its due date and
such failure continues for a period of five (5) consecutive days following
the earlier to occur of the actual knowledge of the Servicer of such failure or
written notice to the Servicer by the Indenture Trustee, any Series Controlling
Party or any Insurer of such failure (or, in the case of any Monthly
Noteholders’ Report or any Monthly Servicer’s Certificate, within 5 consecutive
days after such report is due) or (y)(i) one or more Weekly Servicer
Report required to be delivered by the Servicer pursuant to this Agreement
during any of the first three (3) fiscal months following the Closing Date
and the total number of days elapsed following the date(s) such Weekly
Servicer Report(s) was due exceeds ten (10) days during any such
fiscal month or (ii) any Weekly Servicer Report required to be delivered
by the Servicer pursuant to this Agreement on its due date during any fiscal
month thereafter and such failure continues for a period of ten (10) consecutive
days following the date such Weekly Servicer Report was due; provided,
that the ten-day grace period in this subclause (y)(ii) shall only be
applicable one time in any such fiscal month.

 

(iv)          any failure by the Servicer to perform or comply with any
other covenant or agreement contained in this Agreement, and such failure
continues for a period of thirty (30) consecutive days following the earlier to
occur of the knowledge of the Servicer of such failure or written notice to the
Servicer of such failure by the Indenture Trustee, any Series Controlling
Party or any Insurer;

 

(v)           any representation, warranty or statement made by the
Servicer in this Agreement or any certificate, report or other writing
delivered by the Servicer pursuant to this Agreement that is not qualified by
materiality or a Material Adverse Effect proves to be incorrect in any material
respect, or any such representation, warranty or statement that is qualified by
materiality or Material Adverse Effect proves to be incorrect, in each case as
of the time when the same was made or deemed to have been made or as of any
other date specified in this Agreement, and such breach continues for a period
of thirty (30) consecutive days following the earlier to occur of the knowledge
of the Servicer of such breach or written notice to the Servicer of such breach
by the Indenture Trustee, any Series Controlling Party or any Insurer;

 

(vi)          if and for so long as the Servicer is an Affiliate of
Applebee’s International, any failure by Applebee’s International to perform or
comply with any covenant or agreement of Applebee’s International contained in
any Transaction Document to which it is a party, or the breach of any
representation or warranty of Applebee’s International contained in any
Transaction Document to which it is a party, but in each case only to the

 

67

 

extent that such failure or breach could
reasonably be expected to have a Material Adverse Effect, and such failure
continues for a period of thirty (30) consecutive days following the earlier to
occur of the knowledge of Applebee’s International of such failure or breach,
as applicable, or written notice to Applebee’s International (with a copy to
the Servicer) of such failure or breach, as applicable, by the Indenture
Trustee, any Series Controlling Party or any Insurer of such failure; provided
that any failure by Applebee’s International to compensate the Master Issuer
for the Indemnification Amount payable by Applebee’s International in
connection with the breach of a representation, warranty or covenant in respect
of the Indenture Collateral (including the failure to procure the liquor
license or other arrangement or the landlord consent, as applicable, necessary
to convey a Post-Closing U.S. Restaurant to the Master Issuer within the time
period specified in the applicable Post-Closing U.S. Restaurant Purchase
Agreement), shall be deemed to have a Material Adverse Effect for purposes of
this clause; provided, further, that any such failure by Applebee’s
International to compensate the Master Issuer in such manner shall be deemed to
be cured upon the payment of the related Indemnification Amount or other
liquidated damages amount or other amount determined in the manner provided in
the related Transaction Document;

 

(vii)         an effective resolution is passed by the Servicer for the
winding up or liquidation of the Servicer, except a winding up for the purpose
of a merger, reconstruction or amalgamation, in accordance with the terms of
the Indenture, the terms of which have previously been approved in writing by
the Series Controlling Party of each Series of Notes;

 

(viii)        any petition is filed, or any case or proceeding is
commenced, against the Servicer under the Bankruptcy Code, or any other similar
applicable federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization, and such filing, case or
proceeding has not been dismissed within sixty (60) days after such filing or
commencement;

 

(ix)           the institution by the Servicer of proceedings to be
adjudicated as bankrupt or insolvent, or the consent by the Servicer to the
institution of bankruptcy or insolvency proceedings against it, or the filing
by the Servicer of a petition or answer or consent seeking reorganization
relief under the Bankruptcy Code or any other similar applicable federal or
state law, or the consent by either to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee or sequestrator
(or other similar official) of either, or of any substantial part of its
property, or the making by the Servicer of an assignment for the benefit of
creditors, or the admission by the Servicer in writing of its inability to pay
its debts generally as they become due, or the taking of action by the Servicer
in furtherance of any such action;

 

(x)            an outstanding final non-appealable judgment, when
aggregated with the amount of other outstanding final non-appealable judgments,
exceeding $10,000,000 is rendered against the Servicer or any of its direct or
indirect Subsidiaries, and either (i)

 

68

 

enforcement proceedings are commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
thirty (30) consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect;

 

(xi)           this Agreement or a material portion thereof ceases to be
in full force and effect or enforceable in accordance with its terms (other
than in accordance with the express termination provisions thereof), or the
Servicer asserts as such in writing;

 

(xii)          the failure to pay in full all amounts then due and payable
on the Series 2007-1 Notes upon a Change of Control that occurs without
the prior written consent of the Series 2007-1 Class A Insurer and,
if different, the Series Controlling Party for the Series 2007-1 Class A
Notes;

 

(xiii)         indebtedness of the Servicer and its Affiliates (excluding
for such purpose the Notes issued by the Co-Issuers and the indebtedness issued
by IHOP Franchising, LLC and IHOP IP, LLC pursuant to the IHOP Indenture) in an
amount in excess of $50,000,000 is accelerated in accordance with the terms
thereof for failure to pay such indebtedness after any applicable notice and
cure period;

 

(xiv)        the Aggregate Controlling Party delivers written notice to
the Indenture Trustee to commence the liquidation of the Indenture Collateral
in the manner provided in the Indenture following the occurrence of an Event of
Default and an acceleration of the Notes or the Collateral has been sold in
connection with an Auction Call Redemption and the buyer thereunder has elected
to terminate this Agreement; or

 

(xv)         any failure by the Guarantor to comply with any indebtedness
covenants set forth in Section 8.5 below, or IHOP Corp. to comply
with any of the covenants set forth in the IHOP Corp. Servicing Guaranty, or
any representation or warranty made by the Guarantor or IHOP Corp. in this
Agreement or the IHOP Corp. Servicing Guaranty, respectively, proves to be
incorrect in any material respect, which breach continues for a period of
thirty (30) consecutive days following the earlier to occur of the knowledge of
the Guarantor or IHOP Corp., as applicable, of such failure or written notice
to the Guarantor (with a copy to the Servicer) or IHOP Corp., as applicable, of
such failure by the Indenture Trustee, any Series Controlling Party or any
Insurer; provided, that a breach by (A) the Guarantor of an
indebtedness covenant set forth herein or (B) IHOP Corp. of a covenant
relating to the IHOP Corp. Consolidated Leverage Ratio set forth in the IHOP
Corp. Servicing Guaranty shall not be subject to a notice and cure period.

 

If a Servicer Termination Event has occurred and is continuing, the
Aggregate Controlling Party may direct the Indenture Trustee in writing to
terminate the Servicer in its capacity as such by the delivery of a termination
notice (a “Termination Notice”) to the Servicer (with a copy to each of
the Master Issuer, each Insurer, if any, the Back-Up Manager and the

 

69

 

Rating
Agencies); provided, that the delivery of a Termination Notice shall not
be required in the circumstances set forth in clauses (vii), (viii) and
(ix) above; provided, further, that the termination
of the Servicer shall not be effective until the appointment of a Successor
Servicer in the manner provided herein.

 

(b)           From and during the continuation of a
Servicer Termination Event, each Securitization Entity and the Indenture
Trustee are hereby irrevocably authorized and empowered to execute and deliver,
on behalf of the Servicer, as attorney in fact or otherwise, all documents and
other instruments (including any notices to Franchisees deemed necessary or
advisable by the Master Issuer or the Aggregate Controlling Party), and to do
or accomplish all other acts or take other measures necessary or appropriate,
to effect such vesting and assumption of such duties by the Back-Up Manager in
accordance with the Transaction Documents and subject to the direction of the
Aggregate Controlling Party.

 

Section 6.2             Back-Up Manager Responsibilities.

 

(a)           Trigger Event Services.

 

(i)            Within two (2) days of obtaining knowledge of (i) the
occurrence and continuance of any Trigger Event, the Master Issuer, the
Indenture Trustee or the Servicer shall notify the Back-Up Manager, the
Aggregate Controlling Party, each Insurer, if any, each Series Controlling
Party and each Rating Agency in writing of such occurrence.  Upon receipt of such notice, the Back-Up
Manager shall immediately commence performance of the Trigger Event Services
pursuant to the Back-Up Manager Agreement and shall, within fifteen (15) days
after receipt of such written notice, have taken all steps necessary to enable
itself to provide the Trigger Event Services (as defined in the Back-Up Manager
Agreement).

 

(ii)           The Servicer agrees to fully cooperate and provide such
access and assistance to the Back-Up Manager as the Back-Up Manager may request
to permit the Back-Up Manager to integrate itself into the business of the
Servicer and to put itself in a position to provide the Trigger Event Services
in accordance with the terms of the Back-Up Manager Agreement.  As soon as the Back-Up Manager is prepared to
provide the Trigger Event Services, it shall deliver a written notice thereof
to the Master Issuer, the Indenture Trustee and the Servicer (with a copy to
each Insurer, if any), in accordance with the manner of delivery specified in
the Back-Up Manager Agreement.  In the
event that the Servicer fails to cooperate or to provide access or assistance
to the Back-Up Manager, the Back-Up Manager shall promptly advise each Insurer,
if any, and the Indenture Trustee of such failure.  The parties hereto agree that time is of the
essence and that such obligations of the Servicer under this Section 6.2(a)(ii) would
not be sufficiently remedied only by money damages and that the Back-Up Manager
or the Aggregate Controlling Party may seek equitable relief for any such failure
of the Servicer to perform its obligations hereunder.

 

70

 

(b)           Servicer Termination Event Services.

 

(i)            If the Indenture Trustee, acting at the written
direction of the Aggregate Controlling Party, delivers a Termination Notice to
the Servicer pursuant to Section 6.1(a) (or automatically upon
the occurrence of any Servicer Termination Event described in clauses (vii), (viii) and
(ix) of Section 6.1(a)), all rights, powers, duties,
obligations and responsibilities of the Servicer under this Agreement (other
than with respect to Indemnification Amount payments) and the other Transaction
Documents, including with respect to the Serviced Assets, the Indenture Trust
Accounts, the Advertising Fees Account, the Servicing Accounts or otherwise
shall vest in and be assumed by the Back-Up Manager; provided, that the
Back-Up Manager shall act only in consultation with, and at the direction of,
the Aggregate Controlling Party (and, if otherwise required under this
Agreement, the Co-Issuers and the Franchise Holder).  The Back-Up Manager has agreed to assume such
duties, obligations and responsibilities following a Servicer Termination Event
under the Back-Up Manager Agreement. The Indenture Trustee shall provide a
written notice to each depositary institution at which a Servicing Account has
been established and maintained (each of such depositary institutions being
referred to herein as a “Non-Trust Account Bank”) (with a copy to the
Back-Up Manager and each Insurer, if any) upon the occurrence of a Servicer
Termination Event in accordance with the Back-Up Manager Agreement and the
Account Control Agreements, which notice shall inform the Non-Trust Account
Banks of such occurrence and instruct it to deny any access to the related
Servicing Accounts (and any funds on deposit therein) by the Master Issuer or
the Servicer.  Thereafter, the Indenture
Trustee, at the direction of the Back-Up Manager, shall provide instructions to
the Non-Trust Account Banks as required by the Transaction Documents relating
to the Servicing Accounts (and any funds on deposit therein).

 

(ii)           At the time that any rights, powers, duties,
obligations and responsibilities of the Servicer vest in and are assumed by the
Back-Up Manager, the Servicer shall be deemed to have become a sub-servicer for
the Back-Up Manager, and in such capacity shall perform such duties,
obligations and responsibilities of the Back-Up Manager under this Agreement
and the other Transaction Documents and the Serviced Documents as the Back-Up
Manager shall direct. The Back-Up Manager shall compensate the Servicer as
sub-servicer from the Weekly Servicing Fee and, if applicable, the Supplemental
Servicing Fee, after payment of amounts due to the Back-Up Manager and if such
fee is insufficient, the Back-Up Manager shall request an increase in the
Supplemental Servicing Fee from the Aggregate Controlling Party (though, for
the avoidance of doubt, the Aggregate Controlling Party shall have no
obligation to agree thereto).

 

(iii)          Following the delivery to the Servicer of a
Termination Notice pursuant to Section 6.1(a) (or
automatically upon the occurrence of any Servicer Termination Event described
in clauses (vii), (viii) and (ix) of Section 6.1(a)), the
Back-Up Manager shall have all rights and powers that the Servicer would have
had if such Servicer Termination Event had not occurred; provided that
the Back-Up Manager shall only exercise such 

 

71

 

rights and powers and dispatch such duties,
obligations and responsibilities in consultation with, and at the direction of,
the Aggregate Controlling Party (and, if otherwise required under this
Agreement, the Co-Issuers and the Franchise Holder). In addition, the Back-Up
Manager shall exercise commercially reasonable efforts to develop and deliver
to each Insurer, if any, the Co-Issuers and the Franchise Holder within ninety
(90) days from the occurrence of the relevant Servicer Termination Event a
comprehensive proposal (the “Back-Up Manager Proposal”) setting forth,
among other things, a recommendation in respect of the Successor Servicer or
the Servicer, which may include, but is not limited to, the reorganization
and/or re-engagement of the Servicer and to identify alternative suppliers and
providers of distribution services and retest suppliers as directed by the
Aggregate Controlling Party. In preparing such Back-Up Manager Proposal, the
Back-Up Manager shall consult and cooperate with the Aggregate Controlling
Party in developing the Back-Up Manager Proposal.

 

(iv)          If the Back-Up Manager Proposal contemplates the
engagement of a Successor Servicer, the Back-Up Manager shall, in a prompt and
timely manner (in addition to performing the Trigger Event Services and other
services specified in the Back-Up Manager Agreement and assuming all of the
rights, powers, duties, obligations (other than financial and indemnification
obligations) and responsibilities of the Servicer hereunder):

 

(1)           develop a plan for identifying one or more Persons
that would be suitable to serve as a Successor Servicer under this Agreement (a
“Servicer Replacement Plan”); provided that any Servicer
Replacement Plan shall, among other things, address the issues set forth on
Schedule A to the Back-Up Manager Agreement; provided, further
that in preparing such Servicer Replacement Plan the Back-Up Manager may have
discussions with third parties;

 

(2)          assist the Aggregate Controlling Party in selecting
one or more Persons to serve as a Successor Servicer;

 

(3)           develop a plan for such Successor Servicer to take
over the administration of the Advertising Fees Account; and

 

(4)           develop an action plan for ensuring that all notices
to, or filings with, applicable state and local authorities have been made so
that engagement of a Successor Servicer will not result in, or otherwise
constitute, grounds for revocation or termination of any liquor license.

 

(c)           Back-Up Manager Proposal; Approvals.

 

72

 

(i)            The Back-Up Manager shall first submit the Back-Up
Manager Proposal to the Insurers, if any, and the Indenture Trustee for the
approval of the Aggregate Controlling Party, and to the extent such approval is
not granted, both the Back-Up Manager and the Aggregate Controlling Party shall
continue to work in good faith to achieve such approval.

 

(ii)           If the Back-Up Manager Proposal provides for the
re-engagement of the Servicer, the Servicer shall continue to provide the
sub-services until all conditions to such re-engagement have been
satisfied.  If the Back-Up Manager
Proposal contemplates the re-engagement of the Servicer and such proposal is approved
by the Aggregate Controlling Party, then the Back-Up Manager shall submit the
Back-Up Manager Proposal to the Servicer. 
In the event that such Back-Up Manager Proposal is rejected by the
Servicer, the Servicer shall continue to provide such sub-servicing duties as
the Back-Up Manager requests pending the appointment of a Successor Servicer.

 

(iii)          If the Back-Up Manager Proposal does not contemplate
the re-engagement of the Servicer but the engagement of a Successor Servicer,
the Servicer shall continue to provide such sub-servicing duties as the Back-Up
Manager requests pending the appointment of a Successor Servicer.  Upon appointment of a Successor Servicer
without any arrangement for further services to be provided by the Servicer,
the Servicer shall be immediately terminated and thereafter shall be prohibited
to act in any capacity in respect of the Services except to provide the
Disentanglement Services (as defined below) and as otherwise consented to by
the Back-Up Manager and the Aggregate Controlling Party.

 

Section 6.3             Lock-Box Account;
Account Control Agreements.  If a
Trigger Event has occurred, the Aggregate Controlling Party may direct the
Servicer to (a) notify all Franchisees to make Franchise Payments,
Development Payments and Lease Payments to one or more lock-box accounts (each,
a  “Lock-Box Account”) established
and maintained by a Lock-Box Provider to the extent that the Franchisees do not
make such payments directly to the Concentration Account; and (b) use
commercially reasonable efforts to cause all or part of the local depositary
institutions that receive cash revenues generated by the Restaurant Holders to
enter into Account Control Agreements with the Indenture Trustee in accordance
with Section 5.5(b).

 

Section 6.4             Servicer’s Transitional
Role.

 

(a)           Disentanglement. 
Following the delivery of a Termination Notice to the Servicer pursuant
to Section 6.1(a) or Section 6.2 above or notice
of resignation of the Servicer pursuant to Section 4.4(b), the
Servicer shall (i) continue to cooperate with the Back-Up Manager in the
conduct of the Back-Up Services and the implementation of the Back-Up Manager
Proposal until a Successor Servicer is identified and (ii) accomplish a
complete transition to the Successor Servicer, without interruption or adverse
impact on the provision of Services (the “Disentanglement”).  Thereafter, the Servicer shall cooperate
fully with the Successor Servicer and otherwise promptly take all actions
required to assist in effecting a complete Disentanglement and shall follow any
directions that may be provided by the Back-Up 

 

73

 

Manager. 
The Servicer shall provide all information and assistance regarding the
terminated Services required for Disentanglement, including data conversion and
migration, interface specifications, and related professional services.  The Servicer shall provide for the prompt and
orderly conclusion of all work, as the Back-Up Manager and the Aggregate Controlling
Party may direct, including completion or partial completion of projects,
documentation of all work in progress, and other measures to assure an orderly
transition to the Successor Servicer. 
All services relating to Disentanglement (“Disentanglement Services”), including all reasonable training for personnel
of the Back-Up Manager, the Successor Servicer or the Successor Servicer’s
designated alternate service provider in the performance of the Services, shall
be deemed a part of the Services to be performed by the Servicer.  The Servicer shall use commercially
reasonable efforts to utilize existing resources to perform the Disentanglement
Services.

 

(b)           Fees and Charges for the Back-Up and
Transitional Services.  During the
Disentanglement Period (as defined below), the Servicer shall continue to be
entitled to payment of fees under Section 6.2(b)(ii). Upon the
Successor Servicer’s assumption of the obligation to perform all Services
hereunder, the Servicer shall be entitled to reimbursement of its actual costs
for the provision of any Disentanglement Services.

 

(c)           Duration of Obligations. 
The Servicer’s obligation to provide Disentanglement Services shall not
cease during the period (the “Disentanglement Period”) commencing on the date that a Servicer
Termination Event occurs and ending upon the date on which the Successor
Servicer or the re-engaged Servicer shall assume all of the obligations of the
Servicer hereunder.

 

(d)           Subservicing Arrangements;
Authorizations.

 

(i)            With respect to each Subservicing Arrangement and
unless the Aggregate Controlling Party elects to terminate such Subservicing
Arrangement in accordance with Section 2.10 hereof, the Servicer
shall:

 

(x)            assign to the
Successor Servicer (or such Successor Servicer’s designated alternate service
provider) all of the Servicer’s rights under such Subservicing Arrangement to
which it is party used by the Servicer in performance of the transitioned
Services; and

 

(y)           procure any third party
authorizations necessary to grant the Successor Servicer (or such Successor
Servicer’s designated alternate service provider) the use and benefit of such
Subservicing Arrangement to which it is party (used by the Servicer in
performing the transitioned Services), pending their assignment to the
Successor Servicer under this Agreement.

 

74

 

(ii)           If the Aggregate Controlling Party elects to terminate
such Subservicing Arrangement in accordance with Section 2.10
hereof, the Servicer shall take all reasonable actions necessary or reasonably
requested by the Aggregate Controlling Party to accomplish a complete
transition of the Services performed by such sub-servicer to the Successor
Servicer, or to any alternate service provider designated by the Aggregate
Controlling Party, without interruption or adverse impact on the provision of
Services.

 

Section 6.5             Intellectual
Property.  Within thirty (30) days of
termination of this Agreement for any reason, the Servicer shall deliver and
surrender up to the IP Holder (with a copy to the Back-Up Manager) any and all
products, materials, or other physical objects containing the Trademarks
included in the IP Assets or Confidential Information of the IP Holder and any
copies of copyrighted works included in the IP Assets in the Servicer’s
possession or control, and shall terminate all use of all IP Assets, including
trade secrets.

 

Section 6.6             Third Party
Intellectual Property.  The Servicer
shall assist and fully cooperate with the Successor Servicer or its designated
alternate service provider in obtaining any necessary licenses or consents to
use any third party Intellectual Property then being used by the Servicer or
any sub-servicer.  The Servicer shall
assign any such license or sublicense directly to the Successor Servicer or its
designated alternate service provider to the extent the Servicer has the
necessary rights to assign such agreements to the Successor Servicer without
incurring any additional cost.

 

Section 6.7             No Effect on Other
Parties.  Upon any termination of the
rights and powers of the Servicer from time to time pursuant to Section 6.1
or upon any appointment of a Successor Servicer, all the rights, powers,
duties, obligations, and responsibilities of the Securitization Entities or the
Indenture Trustee under this Agreement, the Indenture and the other
Transactions Documents shall remain unaffected by such termination or
appointment and shall remain in full force and effect thereafter, except as
otherwise expressly provided in this Agreement or in the Indenture.

 

Section 6.8             Injunction.  The Servicer agrees that a breach or
violation of Section 4.3 or Section 4.9 or ARTICLE
VI, ARTICLE VII or ARTICLE VIII of this Agreement is likely
to result in immediate and irreparable injury and harm to the other
parties.  In such event, the
non-breaching party shall have, in addition to any and all available remedies,
the right to an injunction, specific performance or other equitable relief to
prevent the violation of obligations under this Agreement.

 

Section 6.9             Rights Cumulative.  All rights and remedies from time to time
conferred upon or reserved to the Securitization Entities, the Indenture
Trustee, each Insurer, if any, or the Noteholders or to any or all of the
foregoing are cumulative, and none is intended to be exclusive of another or
any other right or remedy which they may have at law or in equity.  Except as otherwise expressly provided
herein, no delay or omission in insisting upon the strict observance or
performance of any provision of this Agreement, or in exercising any right or
remedy, shall be construed as a waiver or relinquishment of such provision, nor
shall it impair such right or remedy. 
Every such right and remedy may be exercised from time to time and as
often as deemed expedient.

 

75

 

ARTICLE VII

CONFIDENTIALITY

 

Section 7.1             Confidentiality.  Each of the parties hereto acknowledges that
during the Term of this Agreement such party (the “Recipient”) may
receive Confidential Information from another party hereto (the “Discloser”).  Each such party agrees to maintain the
Confidential Information of the other party in the strictest of confidence and
shall not, except as otherwise contemplated herein, at any time, use,
disseminate or disclose any Confidential Information to any person or entity
other than those of its employees or representatives who have a “need to know”
and who have been apprised of this restriction. 
The Recipient shall be liable for any breach of this Section 7.1
by any of its employees or representatives and shall immediately notify
Discloser in the event of any loss or disclosure of any Confidential
Information of the Discloser.  Upon
termination of this Agreement, Recipient shall return to the Discloser, or at
Discloser’s request, destroy, all documents and records in its possession
containing the Confidential Information of the Discloser.  Confidential Information shall not include
information that:  (i) is already
known to Recipient without restriction on use or disclosure prior to receipt of
such information from the Discloser; (ii) is or becomes part of the public
domain other than by breach of this Agreement by, or other wrongful act of, the
Recipient; (iii) is developed by the Recipient independently of and
without reference to any Confidential Information; (iv) is received by the
Recipient from a third party who is not under any obligation to the Discloser
to maintain the confidentiality of such information; or (v) is required to
be disclosed by applicable law, statute, rule, regulation, subpoena, court
order or legal process; provided that the Recipient shall promptly
inform the Discloser of any such requirement and cooperate with any attempt by
the Discloser to obtain a protective order or other similar treatment.  It shall be the obligation of Recipient to
prove that such an exception to the definition of Confidential Information
exists.

 

 

ARTICLE VIII

GUARANTEE

 

Section 8.1             Guarantee.  The Guarantor hereby unconditionally and
irrevocably guarantees the performance of all the obligations (including, but
not limited to, the obligations set forth in Section 2.7 hereof) of
the Servicer set forth in, and subject to the terms of, this Agreement and the
other Transaction Documents to which the Servicer is a party (the “Guarantee”).  This
Guarantee shall be a continuing and irrevocable guarantee of payment of all
amounts due and performance of all obligations of Applebee’s Services, Inc.
hereunder and under the other Transaction Documents to which the Servicer 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 a Successor Servicer hereunder
that is not an Affiliate of the Servicer. 
The Guarantor hereby represents that it has all requisite corporate
power and authority to undertake its obligations set forth in this Section 8.1
and to guarantee the full and prompt payment of any amounts due hereunder.

 

76

 

Section 8.2             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 the Servicer
hereunder 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 the Servicer hereunder 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 Documents; (iii) the
Servicer’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 the Servicer’s obligations
under this Agreement.

 

Section 8.3             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 the Servicer including, without
limitation, any defense based on or arising out of the lack of validity or the
unenforceability of this Agreement or by cessation of liability of the Servicer
for any cause other than the full performance of all obligations of the
Servicer set forth in this Agreement and payment in full of all amounts due
hereunder; (b) any defense based on the Servicer’s errors or omissions in
the performance of its obligations or payment of amounts due under this
Agreement or under the other 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 this
Agreement, any of the other Transaction Documents, the Serviced Documents or
the Franchise Documents; and (g) any rights to set-offs, recoupments and
counterclaims.

 

Section 8.4             Representations
and Warranties of the Guarantor.  The
Guarantor represents and warrants as of the date hereof as follows:

 

77

 

(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 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.

 

(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 

 

78

 

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 8.5             Debt Restrictions
of the Guarantor.  Neither IHOP nor
the Guarantor nor any of their respective Affiliates (other than the
Securitization Entities) may incur any Debt without (a) the consent of the
Aggregate Controlling Party and (b) notice to the Rating Agencies;
provided that clauses (a) and (b) shall not be required for (w) (i) the
issuance of Series 2007-3 Notes pursuant to the IHOP Indenture up to an
aggregate maximum principal amount of $445,000,000, which amount includes the
aggregate maximum principal amounts of the Series 2007-1 Notes and the Series 2007-2
Notes issued pursuant to the IHOP Indenture after giving effect to the issuance
of such additional notes, (ii) the issuance of additional notes pursuant
to the IHOP Indenture up to an aggregate maximum principal amount of
$575,000,000, inclusive of all Series of Notes outstanding under the IHOP
Indenture; provided that (A) an amount of indebtedness is paid off
under the Applebee’s Securitization equal to the amount of additional notes
offered pursuant to the IHOP Indenture and (B) no such additional Notes
under the IHOP Indenture may be issued unless (1) the Three-Month Adjusted
DSCR after giving effect to such issuance of such additional notes (calculated
without giving effect to any equity contributions otherwise included in the
calculation of Net Cash Flow) is at least equal to the Three-Month Adjusted
DSCR as of the Closing Date and (2) the prior written consent of the Series 2007-1
Class A Insurer is obtained, and (iii) the payment of the L/C
Reimbursement Amount and L/C Other Reimbursement Costs in accordance with the Class A-1
Note Purchase Agreement and reimbursement obligations, if any, with respect to
the letters of credit existing immediately prior to the date hereof, (x) up
to $95 million of indebtedness (excluding any existing “capital leases” in
effect as of November 29, 2007 of IHOP Corp. and its affiliates and
indebtedness contemplated by (w) above and (y) below); and (y) indebtedness
incurred by Applebee’s International or any of its subsidiaries in connection
with sale/leaseback transactions; provided that, on a pro forma basis,
after giving effect to such sale/leaseback transactions, the ratio of adjusted
debt (calculated by capitalizing lease obligations, whether treated as
operating leases or capital leases under GAAP, at 8x annual rent) to EBITDAR
for IHOP Corp. and its affiliates is equal to or less than 7.30x during the
twelve (12) month period following the Closing Date and 7.0x thereafter; provided
that any such Debt described in clause (x) above shall not be
permitted if, after giving effect thereto, the ratio of Consolidated Adjusted
Debt to Consolidated EBITDAR would exceed the sum of such ratio as of the
Closing Date plus 1.5x; provided, further, that any such
transactions involving a Securitization Entity must comply with the provisions
of the Indenture.

 

 

ARTICLE IX

MISCELLANEOUS PROVISIONS

 

Section 9.1             Termination of
Agreement.  The respective duties and
obligations of the Servicer and the Securitization Entities created by this
Agreement shall commence on the date hereof and shall, unless earlier
terminated pursuant to Section 6.1(a) terminate upon the 

 

79

 

latest to occur of (x) the final payment or other liquidation of
the last outstanding Serviced Asset included in the Indenture Collateral and (y) the
satisfaction and discharge of the Indenture pursuant to Article XI
of the Indenture (the “Term”).  Upon termination of this Agreement pursuant
to this Section 9.1, the Servicer shall pay over to the applicable
Securitization Entity or any other Person entitled thereto all proceeds of the
Serviced Assets held by the Servicer.

 

Section 9.2             Survival.  The provisions of Section 2.1(c) and
(d), Section 2.7, Section 2.8, Section 4.3(e)(ii),
Section 4.4(c), Section 5.1, ARTICLE VI, ARTICLE
VII, ARTICLE VIII and this Section 9.2, Section 9.5
and Section 9.9 shall survive termination of this Agreement.

 

Section 9.3             Amendment.  (a)  This Agreement may only be amended
from time to time in writing, upon the written consent of each Series Controlling
Party, by the Securitization Entities party hereto, the Servicer and the
Indenture Trustee.

 

(b)           Promptly after the execution of any
such amendment, the Servicer shall send to the Indenture Trustee, each Insurer,
if any, and each Rating Agency a conformed copy of such amendment, but the
failure to do so shall not impair or affect its validity.

 

(c)          Any such amendment or modification
effected contrary to the provisions of this Section 9.3 shall be
null and void.

 

(d)           In executing and delivering any
amendment or modification to this Agreement, the Indenture Trustee shall be
entitled to an Opinion of Counsel stating that: 
(i) such amendment is authorized pursuant to this Agreement and
complies therewith; (ii) such amendment shall not adversely affect the
interests of the Secured Parties in any material respect; and (iii) all
conditions precedent to the execution, delivery and performance of such
amendment shall have been satisfied in full. 
The Indenture Trustee may, but shall have no obligation to, execute and
deliver any amendment or modification which would affect its duties, powers,
rights, immunities or indemnities hereunder.

 

Section 9.4             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 9.5             Notices.  All notices, requests or other communications
desired or required to be given under this Agreement shall be in writing and
shall be sent by (a) certified or registered mail, return receipt requested,
postage prepaid, (b) national prepaid overnight delivery service, (c) telecopy
or other facsimile transmission (following with hard copies to be sent by
national prepaid overnight delivery service) or (d) personal delivery with
receipt acknowledged in writing, to the address set forth in Section 16.4
of the Indenture.  Any party hereto may
change its address for notices hereunder by giving notice of such change to the
other parties hereto, with a copy to each Series Controlling Party that is
an Insurer.  Any change of address of a
Noteholder shown on a Note Register shall, after the date of such change, be
effective to change 

 

80

 

the address for such Noteholder hereunder.  All notices and demands shall be deemed to
have been given either at the time of the delivery thereof to any officer or
manager of the Person entitled to receive such notices and demands at the
address of such Person for notices hereunder, or on the third day after the
mailing thereof to such address, as the case may be.

 

Section 9.6             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 of any parties hereto.  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 9.7             Delivery Dates.  If the due date of any notice, certificate or
report required to be delivered by the Servicer hereunder falls on a day that
is not a Business Day, the due date for such notice, certificate or report
shall be automatically extended to the next succeeding day that is a Business
Day.

 

Section 9.8             Limited Recourse.  The obligations of the Master Issuer under this
Agreement are solely the limited liability company obligations of the Master
Issuer.  Each of the Servicer and the
Indenture Trustee agrees that the Master Issuer shall be liable for any claims
that either may have against the Master Issuer only to the extent that funds
are available to pay such claims under Section 11.1 of the
Indenture and that, to the extent that any such claims remain unpaid after the
application of such funds in accordance with the Indenture, such claims shall
be extinguished.  The terms of this Section 9.8
shall survive the termination of this Agreement.

 

Section 9.9             Binding Effect;
Assignment; Third Party Beneficiaries. 
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto.  Any assignment of this Agreement without the
written consent of each Series Controlling Party shall be null and
void.  Each Insurer, if any, shall be an
express third party beneficiary of this Agreement, entitled to enforce the
provisions hereof as if a party hereto. 
Except as provided in the this Section 9.9, nothing in this
Agreement expressed or implied, shall be construed to give any Person other
than the parties hereto and the parties indicated in the preceding sentence any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any covenants, agreements, representations or provisions contained
herein.  The parties hereto acknowledge
and agree that (i) although this Agreement, the Insurance Agreement(s) and
the Back-Up Manager Agreement are separate documents, they are intended to be
integrated as one indivisible, non-separable agreement, (ii) the Servicer
(and any Successor Servicer) in accepting the servicing role set forth in this
Agreement (including but in no way limited to any Successor Servicer assuming
the rights and obligations set forth in this Agreement after a bankruptcy of
the predecessor Servicer) (and performing certain covenants on behalf of the
Co-Issuers under the Indenture) hereby acknowledges and assumes, in partial
consideration for its appointment as Servicer under this Agreement, any and all
obligations of the Servicer hereunder, any Insurance Agreement and the Back-Up
Manager Agreement, (iii) the provisions of the Insurance Agreement(s) shall
be deemed to be incorporated into this Agreement as if they were set forth
herein, (iv) this paragraph is fundamental to their 

 

81

 

understanding of this Agreement and is not in any manner severable from
the remainder of this Agreement, (v) each Insurer, if any, would not have
agreed to enter into the relevant Insurance Agreement (without which the
transaction contemplated by this Agreement and such Insurance Agreement(s) would
not have been entered into) without the benefit of and reliance upon all
cross-default provisions contained herein and in any of the other Transaction
Documents contemplated hereby (including but in no way limited to this
Agreement), (vi) the rights, privileges, obligations and liabilities of
such parties have been set forth in separate agreements for administrative
convenience only, and (vii) it would be inequitable for any party hereto
to enjoy the benefits of such single, integrated transaction without also meeting
its obligations hereunder, whether such obligations are set forth in this
Agreement or any other such agreement. 
Each Insurer, if any, and its successors and assigns shall be deemed
parties to this Agreement solely for purposes of benefiting from the right to
enforce any right, remedy or claim conferred, given or granted to it hereunder
and not for the purpose of assuming any obligation hereunder.  To the extent that this Agreement confers
upon or gives or grants to an Insurer any right, remedy or claim under or by
reason of an Insurance Agreement, each Insurer, if any, may enforce any such
right, remedy or claim conferred, given or granted hereunder or thereunder.

 

Section 9.10           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 9.11           Concerning the
Indenture Trustee.  In acting under
this Agreement, the Indenture Trustee shall be afforded the rights, privileges,
immunities and indemnities set forth in the Indenture as if fully set forth
herein.

 

Section 9.12           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 9.13           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. Applebee’s
International and Applebee’s Services, Inc. hereby agree that the
Agreement to Provide Applebee’s Services, dated January 1, 1996, between
Applebee’s International and Applebee’s Services, Inc., is hereby
terminated.

 

Section 9.14           Jurisdiction;
Consent to Service of Process.  (a) 
Each of the parties hereto 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 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 

 

82

 

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)           Each of the parties hereto 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.  Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

(c)           Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices
in Section 9.5.  Nothing in
this Agreement shall affect the right of any party to this Agreement to serve
process in any other manner permitted by law.

 

Section 9.15           Waiver of Jury Trial.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN 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).  EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT 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.]

 

83

 

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

 

 

	
   

  	
  APPLEBEE’S SERVICES, INC., as 

  Servicer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rebecca Tilden

  
	
   

  	
   

  	
  Name: Rebecca Tilden

  
	
   

  	
   

  	
  Title:   Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S ENTERPRISES LLC, as 

  Master Issuer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
   

  	
  Name: Carin Stutz

  
	
   

  	
   

  	
  Title:   President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S IP LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
   

  	
  Name: Carin Stutz

  
	
   

  	
   

  	
  Title:   President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS NORTH 

  LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
   

  	
  Name: Carin Stutz

  
	
   

  	
   

  	
  Title:   President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS MID-

  ATLANTIC LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
   

  	
  Name: Carin Stutz

  
	
   

  	
   

  	
  Title:   President

  

 

[Applebee’s Servicing Agreement]

 

 

	
   

  	
  APPLEBEE’S RESTAURANTS WEST 

  LLC, as Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Beverly Elving

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS TEXAS 

  LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
   

  	
  Name: Carin Stutz

  
	
   

  	
   

  	
  Title:   President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS INC., as 

  Co-Issuer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
   

  	
  Name: Carin Stutz

  
	
   

  	
   

  	
  Title:   President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS KANSAS 

  LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
   

  	
  Name: Carin Stutz

  
	
   

  	
   

  	
  Title:   President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS 

  VERMONT, Inc., as Co-Issuer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rebecca Tilden

  
	
   

  	
   

  	
  Name: Rebecca Tilden

  
	
   

  	
   

  	
  Title:   President

  

 

[Applebee’s Servicing Agreement]

 

 

	
   

  	
  APPLEBEE’S FRANCHISING LLC,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
   

  	
  Name:

  	
  Carin Stutz

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S INTERNATIONAL, INC., as 

  Guarantor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Beverly Elving

  
	
   

  	
   

  	
  Name:

  	
  Beverly Elving

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK, NATIONAL 

  ASSOCIATION, as Indenture Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Melissa Philibert

  
	
   

  	
   

  	
  Name:

  	
  Melissa Philibert

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ASSURED GUARANTY CORP., as Series 

  2007-1 Class A Insurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel S. Bevill

  
	
   

  	
   

  	
  Name:

  	
  Daniel S. Bevill

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  

 

[Applebee’s Servicing Agreement]

 

 

EXHIBIT A

 

MANAGEMENT ASSERTION

 

Re: Annual Accountant’s Report

 

Reference is made to the
Servicing Agreement, dated as of November 29, 2007 (the “Servicing
Agreement”) among Applebee’s Enterprises LLC, Applebee’s IP LLC, Applebee’s
Restaurants North LLC, Applebee’s Restaurants Mid-Atlantic LLC, Applebee’s
Restaurants West LLC, Applebee’s Restaurants Texas LLC, Applebee’s Restaurants
Inc., Applebee’s Restaurants Kansas LLC, Applebee’s Restaurants Vermont, Inc.,
Applebee’s Franchising LLC, Applebee’s Services, Inc. (the “Servicer”),
Applebee’s International, Inc. (the “Guarantor”), Assured Guaranty Corp.
and Wells Fargo Bank, National Association (the “Indenture
Trustee”). Capitalized terms otherwise not defined herein shall have the
meanings set forth in the Servicing Agreement.

 

Pursuant to Section 3.3
of the Servicing Agreement, I, [NAME], the [TITLE] of Applebee’s Services, Inc.,
hereby certify that:

 

1.             I
have reviewed the Weekly Servicing Reports and Monthly Servicing Reports
prepared and delivered pursuant to the Servicing Agreement for the period
beginning on [          ]  and ending on [           ];

 

2.             To
the best of my knowledge, based on such review, the information in each such
report, taken as a whole, is true and correct in all material respects; and

 

3.             I
am responsible for reviewing the activities performed by the Servicer under the
Servicing Agreement and based upon my knowledge, and except as disclosed in any
Weekly Servicing Report or Monthly Servicing Report, the Servicer has fulfilled
its obligations under the Servicing Agreement.

 

 

 

 

	
  By: _____________________________

  
	
  Name:

  
	
  Title

  
	
  Date:

  

 

 

A1

 

EXHIBIT B-1

 

POWER OF ATTORNEY OF IP HOLDER

 

KNOW ALL MEN
BY THESE PRESENTS, that in connection with the Servicing Agreement, dated as of
the date hereof, among Applebee’s IP LLC, a Delaware limited liability company
(the “IP Holder”), Applebee’s Services, Inc., a Delaware
corporation (as the “Servicer”), Applebee’s International, Inc.
(the “Guarantor”), Wells Fargo Bank, National Association (the
“Indenture Trustee”) and the other parties identified therein (as the
same may be amended or otherwise modified from time to time, the “Servicing Agreement”), the IP Holder hereby appoints the Servicer and any
and all officers thereof as its true and lawful attorney in fact, with full
power of substitution, in connection with the IP Services described below being
performed with respect to the IP Assets, with full irrevocable power and
authority in the place of the IP Holder and in the name of the IP Holder or in
its own name as agent of the IP Holder, to take any and all appropriate action
and to execute any and all documents and instruments which may be necessary or
desirable to accomplish the foregoing, subject to the Servicing Agreement,
including, without limitation, the full power to perform:

(i)            searching,
screening and clearing After-Acquired IP Assets to assess the risk of potential
infringement;

 

(ii)           filing,
prosecuting and maintaining applications and registrations for the IP Assets,
in the United States (and, with respect to the POS System, worldwide), in the
IP Holder’s name, including, timely filing of evidence of use, applications for
renewal and affidavits of use and/or incontestability, the timely payment of
all registration and maintenance fees, responding to third party oppositions of
applications or challenges to registrations, and responding to any office
actions, reexaminations, interferences or other office or examiner requests or
requirements;

 

(iii)          monitoring
third party use and registration of Trademarks and taking appropriate actions
to oppose or contest the use and any application or registration for Trademarks
that could reasonably be expected to infringe, dilute or otherwise violate the
IP Assets or IP Holder’s rights therein;

 

(iv)          confirming
the IP Holder’s legal title in and to the IP Assets, including obtaining
written assignments of IP Assets to the IP Holder and recording transfers of
title in the appropriate intellectual property registry;

 

(v)           with
respect to the IP Holder’s rights and obligations under the IP License
Agreements and any Transaction Documents or other agreements pursuant to which
the

 

B-1-1

 

IP Holder licenses the use of any IP Assets,
monitoring the licensee’s use of each licensed Trademark and the quality of its
goods and services offered in connection with such Trademarks, rendering
approvals (or disapprovals) that are required under the applicable license agreement(s),
and ensuring that any use of any such Trademarks by any such licensee satisfies
the quality control standards and usage provisions of the applicable license
agreement and is in compliance with all applicable laws and the requirements of
each of the Transaction Documents;

 

(vi)          sublicensing
the IP Assets to suppliers, manufacturers, advertisers, and other service
providers in connection with the provision of products and services for use in
the U.S. Restaurant Business, the Other U.S. Products and Services, the Other
U.S. Franchise Business and the U.S. Territories Business;

 

(vii)         protecting,
policing, and, in the event that the Servicer becomes aware of any unlicensed
copying, imitation, infringement, dilution, misappropriation, unauthorized use
or other violation of the IP Assets, or any portion thereof, enforcing such IP
Assets, including, (i) preparing and responding to and further prosecuting
cease and desist, demand and notice letters, and requests for a license; and (ii) commencing,
prosecuting and/or resolving claims or suits involving imitation, infringement,
dilution, misappropriation, the unauthorized use or other violation of the IP
Assets, and seeking all appropriate monetary and equitable remedies in
connection therewith; provided that the IP Holder shall, and hereby agrees to,
join as a party to any such suits to the extent necessary to maintain standing;

 

(viii)        performing
such functions and duties, and preparing and filing such documents, as are
required under the Indenture or any other Transaction Document to be performed,
prepared and/or filed by the IP Holder, including (i) executing and
recording such financing statements (including continuation statements) or
amendments thereof or supplements thereto or such other instruments as the
Indenture Trustee and Co-Issuer together or any Insurer (so long as it is a Series Controlling
Party) may from time to time reasonably request in connection with the security
interests in the IP Assets granted by the IP Holder to the Indenture Trustee
under the Indenture, (ii) preparing, executing and delivering grants of
security interests or 

any similar instruments as the Indenture
Trustee and the Co-Issuers together or any Insurer (so long as it is a Series Controlling
Party) may from time to time reasonably request that are intended to evidence
such security interests in the IP Assets and recording such grants or other
instruments with the relevant authority including the PTO, the United States
Copyright Office or, only with respect to the POS System, with any applicable
foreign intellectual property office and (iii) disclosing to Applebee’s
International all material After-Acquired IP Assets for Applebee’s
International’s exploitation thereof outside the U.S. and U.S. Territories;

 

(ix)           taking
such actions as any licensee under an IP License Agreement may request that are
required by the terms, provisions and purposes of such IP License Agreement (or
by any other agreements pursuant to which the IP Holder licenses the use 

 

B-1-2

 

of any IP Assets) to be taken by the IP
Holder, and preparing (or causing to be prepared) for execution by the IP
Holder all documents, certificates and other filings as the IP Holder shall be
required to prepare and/or file under the terms of such IP License Agreements
(or such other agreements);

 

(x)            paying
or causing to be paid or discharged any and all taxes, charges and assessments
that may be levied, assessed or imposed upon any of the IP Assets or contesting
the same in good faith;

 

(xi)           obtaining
licenses of third party Intellectual Property for use and sublicense in
connection with the U.S. Restaurant Business, the Other U.S. Products and
Services, the Other U.S. Franchise Business and the U.S. Territories Business,
including sublicense to Franchisees pursuant to Participation Agreements or to
Securitization Entities; and

 

(xii)          with
respect to trade secrets and other confidential information of the IP Holder,
taking all reasonable measures to maintain confidentiality and to prevent
non-confidential disclosures.

 

IP Holder
shall provide all requested cooperation and assistance to the Servicer in
furtherance of the Servicer’s need or desire to accomplish the foregoing.  This power of attorney is coupled with an
interest. Capitalized terms used herein, and not defined herein, shall have the
meanings applicable to such terms in the Servicing Agreement.

 

THIS POWER OF
ATTORNEY IS GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO POWERS
OF ATTORNEY MADE AND TO BE EXERCISED WHOLLY WITHIN SUCH STATE.

 

	
  Dated:

  	
  This [November 29], 2007

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S IP LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

B-1-3

 

	
  STATE OF [         ]  
  )

  	
   

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF [           ]

  	
  )

  	
   

  
	
   

  	
   

  	
   

  

 

On the [29th
day of November], 2007, before me the undersigned, personally appeared                  ,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his capacity, and that by his signature on
the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

B-1-4

 

EXHIBIT B-2

 

POWER OF ATTORNEY OF [     ]

 

KNOW ALL MEN
BY THESE PRESENTS, that [                 
], a [                 ] (the “Company”), hereby appoints Applebee’s Services, Inc.,
a Delaware corporation (“Applebee’s
Services”), and any and all
officers thereof as its true and lawful attorney in fact, with full power of
substitution, in connection with the services to be provided to the Company by
Applebee’s
Services pursuant to the Servicing Agreement, dated as of the date hereof, by and
among the Company, Applebee’s Services, in its capacity as the
Servicer (the “Servicer”), Applebee’s International, Inc. (the “Guarantor”),
Wells
Fargo Bank, National Association (the “Indenture Trustee”) and
the other parties identified therein (as the same may be amended or otherwise
modified from time to time, the “Servicing Agreement”),
with full irrevocable power and authority in the place of the Company and in
the name of the Company or in its own name as agent of the Company, to take any
and all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the foregoing, subject to the
Servicing Agreement, including, without limitation, the full power to:

(a)           perform such functions and duties,
and prepare and file such documents, as are required under the Indenture to be
performed, prepared and/or filed by the Company, including:  (i) executing and recording such
financing statements (including continuation statements) or amendments thereof
or supplements thereto or other instruments as the Indenture Trustee and the
Company may from time to time reasonably request in order to perfect and
maintain the security interests in the Indenture Collateral granted by the
Company to the Indenture Trustee under the Transaction Documents in accordance
with the UCC; and (ii) executing grants of security interests or any
similar instruments required under the Transaction Documents to evidence such
security interests in the Indenture Collateral;

(b)           take such actions on behalf of
Company as Master Issuer or Servicer may reasonably request that are expressly
required by the terms, provisions and purposes of the Servicing Agreement; or
cause the preparation by other appropriate persons, of all documents, certificates
and other filings as the Company shall be required to prepare and/or file under
the terms of the Servicing; and

(c)           pay or arrange for payment or
discharge taxes and liens levied or placed on or threatened against the IP
Assets.

[         ] shall provide all requested
cooperation and assistance to Applebee’s Services, Inc. in furtherance of
Applebee’s Services, Inc.’s need or desire to accomplish the
foregoing.  This power of attorney is
coupled with an interest. Capitalized terms used herein, and not defined herein
shall have the meanings applicable to such terms in the Servicing Agreement.

 

B-2-1

 

THIS POWER OF
ATTORNEY IS GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO POWERS
OF ATTORNEY MADE AND TO BE EXERCISED WHOLLY WITHIN SUCH STATE.

 

	
  Dated:

  	
  This [November 29], 2007

  
	
   

  	
   

  
	
   

  	
  [                            ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

B-2-2

 

	
  STATE OF [            ] 
  )

  	
   

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF [            ]

  	
  )

  	
   

  

 

On the [29th
day of November], 2007, before me the undersigned, personally appeared                  ,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

B-2-3

 

EXHIBIT C

 

FORM OF MONTHLY NOTEHOLDERS’ REPORT

	
  [DATE]

  
	
   

  
	
  Series 20[]-[] Notes

  
	
  Monthly Collection Period: [MM/DD/YY] – [MM/DD/YY]

  
	
  Payment Date: [MM/DD/YY]

  

 

Reference is made to the Base Indenture, dated as of November 29,
2007, among Applebee’s Enterprises LLC, Applebee’s IP LLC, Applebee’s
Restaurants North LLC, Applebee’s Restaurants Mid-Atlantic LLC, Applebee’s
Restaurants West LLC, Applebee’s Restaurants Texas LLC, Applebee’s Restaurants
Inc., Applebee’s Restaurants Kansas LLC, Applebee’s Restaurants Vermont, Inc.,
and Wells Fargo Bank, National Association (the “Indenture
Trustee”) (as amended, supplemented and otherwise modified from time to
time, the “Indenture”) and the Servicing Agreement, dated as of November 29,
2007, among Applebee’s Enterprises LLC, Applebee’s IP LLC, Applebee’s
Restaurants North LLC, Applebee’s Restaurants Mid-Atlantic LLC, Applebee’s
Restaurants West LLC, Applebee’s Restaurants Texas LLC, Applebee’s Restaurants
Inc., Applebee’s Restaurants Kansas LLC, Applebee’s Restaurants Vermont, Inc.,
Applebee’s Franchising LLC, Applebee’s Services, Inc. (the “Servicer”),
Applebee’s International, Inc. (the “Guarantor”), Assured Guaranty
Corp. and the Indenture Trustee (the “Servicing Agreement”).  Capitalized terms otherwise not defined
herein shall have the meaning assigned to them in the Indenture or the
Servicing Agreement.

 

This Monthly Noteholders’ Report is delivered pursuant to Section 12.1(c) of
the Indenture and Section 3.1(b) of the Servicing Agreement. The
undersigned, on behalf of the Servicer and the Master Issuer, hereby certifies
as follows:

 

(A) To the knowledge of the Servicer, the historical information
contained herein is true and correct in all material respects;

 

(B) The forward looking information contained herein has been
prepared in good faith based on information in the Servicer’s possession and/or
reasonably available to the Servicer as of the date hereof; and

 

(C) Except as otherwise set forth herein, the Servicer has
performed in all material respects its obligations under each Transaction
Document since the date of the previously delivered Monthly Noteholders’ Report.

 

C-1

 

	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  [ATTACH MONTHLY SERVICER’S REPORT]

  

 

 

EXHIBIT D

 

FORM OF MONTHLY SERVICER’S CERTIFICATE & REPORT

 

[DATE]

 

Series 20[  ]-[  ] Notes

Monthly Collection Period: [MM/DD/YY] – [MM/DD/YY]

Payment Date: [MM/DD/YY]

 

Reference is made to the Base Indenture, dated as of November 29,
2007, among Applebee’s Enterprises LLC, Applebee’s IP LLC, Applebee’s
Restaurants North LLC, Applebee’s Restaurants Mid-Atlantic LLC, Applebee’s
Restaurants West LLC, Applebee’s Restaurants Texas LLC, Applebee’s Restaurants
Inc., Applebee’s Restaurants Kansas LLC, Applebee’s Restaurants Vermont, Inc.,
and Wells Fargo Bank, National Association (the “Indenture
Trustee”) (as amended, supplemented and otherwise modified from time to
time, the “Indenture”) and the Servicing Agreement, dated as of November 29,
2007, among Applebee’s Enterprises LLC, Applebee’s IP LLC, Applebee’s
Restaurants North LLC, Applebee’s Restaurants Mid-Atlantic LLC, Applebee’s
Restaurants West LLC, Applebee’s Restaurants Texas LLC, Applebee’s Restaurants
Inc., Applebee’s Restaurants Kansas LLC, Applebee’s Restaurants Vermont, Inc.,  Applebee’s Franchising LLC, Applebee’s
Services, Inc., (the “Servicer”), Applebee’s International, Inc.
(the “Guarantor”), Assured Guaranty Corp. and the Indenture Trustee (the
“Servicing Agreement”). 
Capitalized terms otherwise not defined herein shall have the meaning
assigned to them in the Indenture or the Servicing Agreement.

 

This Monthly Servicer’s Certificate is delivered pursuant to Section 12.1(b) of
the Indenture and Section 3.1(c) of the Servicing Agreement. The undersigned,
on behalf of the Servicer, hereby certifies as follows:

 

(A) Attached is a true and correct copy of the Monthly Servicer’s
Report; and

 

(B) Except as otherwise previously provided in any other notices,
no Servicer Termination Event, Event of Default, Default, Rapid Amortization
Event or Potential Rapid Amortization Event has occurred or is continuing.

 

(C) No trademark registrations are within 3 months of lapsing,
except for the following trademark registrations that the Servicer has
determined that it will allow to lapse within such time period pursuant to the
Servicing Standard:

 

D-1

 

	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[ATTACH MONTHLY SERVICER’S REPORT]

 

D-2

 

EXHIBIT E

 

FORM OF WEEKLY SERVICER’S REPORT

 

E-1

 

SCHEDULE 2.1(f)

 

FRANCHISEE INSURANCE NOT PROVIDING AFFILIATE
COVERAGE

 

None

 

1

 

SCHEDULE 2.1(h)

 

SERVICER INSURANCE

 

	
  Coverage

  	
   

  	
  Insurance Carrier

  	
   

  	
  Policy Term

  	
   

  	
  Comment

  
	
  Aircraft

  	
   

  	
  USAIG

  	
   

  	
  6/26/07 - 6/26/08

  	
   

  	
  3rd party and property insurance for aircraft.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Automobile Liability – Owned/Hire & Non-owned

  	
   

  	
  ACE

  	
   

  	
  1/01/07 - 1/01/08

  	
   

  	
  Coverage for “hired & non-owned autos. Insures associates
  while renting autos on company business. Insures the company against claims
  made for incidents when associates are driving their own vehicle.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Crime—Employee Dishonesty

  	
   

  	
  St. Paul

  	
   

  	
  1/01/07 - 1/01/08

  	
   

  	
  Employee theft and/or forgery of money, securities, or other property.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D&O Liability

  	
   

  	
  National Union, Chubb, Liberty, St. Paul

  	
   

  	
  12/15/06 - 12/15/07

  	
   

  	
  Traditional and broad form Side-A coverage for Directors and Officers.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fiduciary

  	
   

  	
  Chubb & St. Paul

  	
   

  	
  12/31/06 - 12/31/07

  	
   

  	
  Insures against wrongful acts committed, attempted, or allegedly
  committed by employees with respect to sponsored employee benefit plans.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Foreign Package

  	
   

  	
  ACE

  	
   

  	
  1/01/07 - 1/01/08

  	
   

  	
  Independent insurance program covering associates while traveling
  internationally.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  General Liability

  	
   

  	
  ACE

  	
   

  	
  1/01/07 - 1/01/08

  	
   

  	
  Covers injury or illness to guests. Also covers damage to loss of
  guests’ property.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kidnap Ransom

  	
   

  	
  Liberty Mutual

  	
   

  	
  12/15/06 - 12/15/07

  	
   

  	
  Insurance and investigative protocols for kidnap, ransom, extortion,
  detention, etc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Property (Includes Earth Movement)

  	
   

  	
  Lloyds of London

  	
   

  	
  1/01/07 - 1/01/08

  	
   

  	
  Covers loss or damage to property owned or leased by the company.

  
	
  Property DIC/Earth Movement

  	
   

  	
  United Fire & Casualty

  	
   

  	
  1/01/07 - 1/01/08

  	
   

  	
   

  
	
  Property DIC/Earthquake

  	
   

  	
  AXIS

  	
   

  	
  1/01/07 - 1/01/08

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trade Name Restoration

  	
   

  	
  Lloyds of London

  	
   

  	
  1/01/07 - 1/01/08

  	
   

  	
  Protects the company as a 1st party insured for loss of
  business income and restoration of the trade name in the event of a food
  borne illness, accidental contamination, and/or malicious contamination.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Umbrella & Excess Umbrella

  	
   

  	
  ACE, Fireman’s Fund, Liberty

  	
   

  	
  1/01/07 - 1/01/08

  	
   

  	
  Umbrella & excess umbrella above the company’s General
  Liability, Auto, Employer’s Liability, Foreign Package.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Workers’ Compensation AOS (Deductible)

  	
   

  	
  ACE

  	
   

  	
  1/01/07 - 1/01/08

  	
   

  	
  State statutory & employer’s liability for injury/illness to
  associates.

  
	
  Workers’ Compensation - Wisconsin

  	
   

  	
  ACE

  	
   

  	
  1/1/07 – 1/1/08

  	
   

  	
   

  

 

SC2.1(g)-1

 

 

SCHEDULE 2.10

 

SUBSERVICING ARRANGEMENTS

 

None

 

 

SCHEDULE 5.3(b)

 

THIRD PARTY CONSENT LICENSE AGREEMENTS

 

A.       Contracts with AII
Services, Inc.

 

1.        Application Services
Provider Agreement, dated March 10, 2006, between Arrowstream, Inc.
and AII Services, Inc.

 

2.        Software License and
Services Agreement, dated December 12, 2000, between Astute, Inc. and
AII Services, Inc.

 

3.        End-User License
Agreement, dated August 1, 2004, between Barlap Compliance Corporation, Inc.
and AII Services, Inc.

 

4.        Hardware Purchase &
Software License Agreement, dated September 14, 2004, as amended, between
Commerciant, L.P. and AII Services, Inc.

 

5.        Restated and Amended
Software License Agreement, dated June 29, 2005, as amended, between EATEC
Corporation and AII Services, Inc.

 

6.        Master Services
Agreement, dated April 1, 2007, between e-Dialog, Inc. and AII
Services, Inc.

 

7.        End-User License
Agreement, dated October 2005 v.2, as amended, between FrontRange
Solutions USA, Inc. and AII Services, Inc.

 

8.        Sales, Software License
and Services Agreement, dated April 5, 2007, as amended, between Kronos
Incorporated and AII Services, Inc.

 

9.        Microsoft Business
Agreement, dated September 19, 2001, between MSLI, GP and AII Services, Inc.

 

10.      Microsoft Select
Agreement, dated December 23, 2002, as amended, between MSLI, GP and AII
Services, Inc.

 

 

11.      Universal Agreement,
dated June 26, 1990, as amended, between NCR and AII Services, Inc.
(also assigned to AFSS, Inc. pursuant to Amendment dated November 18,
2003)

 

12.      Master Software License
Agreement, dated June 12, 2007, between Passlogix, Inc. and AII
Services, Inc.

 

13.      Software License and
Services Agreement, dated December 31, 2001, as amended, between
PeopleSoft USA, Inc. (acquired by Oracle Corporation) and AII Services, Inc.

 

14.      Professional Services
Schedule and related Statement of Work, dated July 31, 2007, between
SAVVIS and AII Services, Inc.

 

15.      Database Management
Services License Agreement, dated April 1, 2007, between SMG-II LLC and
AII Services, Inc.

 

16.      Maintenance Agreement,
dated July 1, 2007, between Spartan Computer Services, Inc. and AII
Services, Inc.

 

17.      License Agreement, dated December 27,
2005, between Steton Technology Group, Inc. and AII Services, Inc.

 

18.      Research Services
Agreement, dated December 13, 2002, between Synovate, Inc. and AII
Services, Inc.

 

19.      Software License
Agreement, dated November 22, 2004, between Tequila Software Incorporated
and AII Services, Inc.

 

20.      Software License
Agreement, dated April 6, 2005, between Trabon Solutions, LLC and AII
Services, Inc.

 

21.      Statement of Work
(Applebee’s Learning Center), dated December 13, 2006, between TrioMedia,
LLC and AII Services, Inc.

 

22.      Enterprise-Wide Software
License Agreement, dated December 14, 2006, between XPIENT Solutions, LLC
and AII Services, Inc.

 

B.        Contracts with Applebee’s
International, Inc.

 

 

1.        User-Based Software
License Agreement, dated October 27, 2003, between BEA Systems, Inc.
(formerly Plumtree Software, Inc.) and Applebee’s International, Inc.

 

2.        Purchase Web Agreement,
dated December 22, 2000, between Instill Corporation and Applebee’s
International, Inc.

 

3.        Clickwrap Software
License, dated April 15, 2004, between MicroStrategy Services Corporation
and Applebee’s International, Inc.

 

4.        QSR Automations Software
License, Maintenance and Purchase Agreement, dated February 5, 2004,
between QSR Automations, Inc. and Applebee’s International, Inc.

 

5.        Teradata Division
Support Services Addendum, dated January 1, 2002, between Teradata
Division (NCR Corporation) and Applebee’s International, Inc (addendum to
Universal Agreement, dated June 26, 1990, as amended, between NCR and AII
Services, Inc.)

 

 

SCHEDULE 5.5(a)

 

BANKS WITHOUT REQUIRED ACCOUNT CONTROL AGREEMENTS

 

Citizens Bank

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]