Document:

Exhibit 10.17

 

AMENDMENT NO. 1 TO SERVICING AGREEMENT

 

AMENDMENT NO. 1, dated as of November 28, 2007
(this “Amendment”), to the Servicing Agreement, dated as of March 16,
2007 (as amended by this Amendment, and as the same may be further amended,
amended and restated or otherwise modified from time to time, the “Servicing
Agreement”), by and among (i) IHOP FRANCHISING, LLC, a Delaware
limited liability company, as the issuer (the “Issuer”), (ii) IHOP
IP, LLC, a Delaware limited liability company, as the co-issuer (the “Co-Issuer”
and, together with the Issuer, the “Co-Issuers”), (iii) IHOP
PROPERTY LEASING, LLC, a Delaware limited liability company, (iv) IHOP
PROPERTIES, LLC, a Delaware limited liability company, (v) IHOP REAL
ESTATE, LLC, a Delaware limited liability company, (vi) INTERNATIONAL
HOUSE OF PANCAKES, INC., a Delaware corporation, as servicer (in such capacity,
the “Servicer”), (vii) IHOP Corp., a Delaware corporation, as the
guarantor (in such capacity, the “Guarantor”), and (viii) WELLS
FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as indenture
trustee (in such capacity, the “Indenture Trustee”).

 

R  E  C
I  T  A  L  S

 

WHEREAS, the parties hereto have previously executed
and delivered the Servicing Agreement, pursuant to which the Servicer services
and administers the Serviced Assets (such capitalized terms and the other
capitalized terms used and not defined herein having the meanings assigned
thereto pursuant to Section 1.1 hereof) on behalf of the Securitization
Entities in the manner provided therein;

 

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

 

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

 

WHEREAS, on or after the date hereof, Applebee’s is
expected to securitize certain assets (the “Applebee’s Securitization”)
by transferring such assets through one or more subsidiaries to multiple newly
formed, special purpose limited liability companies and corporations that will
pledge such assets as collateral under a 

 

1

 

master indenture pursuant to
which such limited liability companies and corporations will co-issue one or
more series of notes to raise proceeds for purposes of, among other things, (i) the
repayment of the Securitization Bridge Financing (if the Securitization Bridge
Financing is consummated) or (ii) directly financing the transactions
contemplated by the Merger Agreement (if the Securitization Bridge Financing is
not consummated);

 

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

 

WHEREAS, Section 9.3 of the Servicing Agreement
permits the parties hereto to amend the Servicing Agreement by written
agreement, subject to the written consent of each Series Controlling
Party, the Securitization Entities party hereto, the Servicer and the Indenture
Trustee;

 

WHEREAS, in connection with (i) the
Securitization Bridge Financing, (ii) the Applebee’s Securitization and (iii) the
Series 2007-3 Notes, the parties hereto desire to amend the Servicing
Agreement in the manner provided in this Amendment pursuant to Section 9.3
of the Servicing Agreement;

 

WHEREAS, the written consent of (i) the Series Insurer,
not in its individual capacity but solely in its capacity as the Series Controlling
Party in respect of each Series of Notes Outstanding, (ii) each
Securitization Entity, (iii) the Servicer and (iv) the Indenture
Trustee to this Amendment are set forth on the signature pages hereof;

 

WHEREAS, promptly after the execution of this
Amendment, the Servicer shall send a copy of this amendment to each of the
Indenture Trustee, the Series Insurer, in its capacity as the Series Insurer
in respect of each Series of Notes Outstanding, and each Rating Agency,
pursuant to Section 9.3(b) of the Servicing Agreement; and

 

WHEREAS, the Indenture Trustee has received an
opinion of counsel pursuant to Section 9.3(d) of the Servicing
Agreement stating that (i) this Amendment is authorized pursuant to the
Servicing Agreement and complies therewith; (ii) this 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 this Amendment have been satisfied in full.

 

2

 

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

 

ARTICLE I

DEFINITIONS

 

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

 

ARTICLE II

AMENDMENTS

 

Section 2.1       Amendment
to Section 1.1 of the Servicing Agreement.  Section 1.1 of the Servicing Agreement
is hereby amended by amending and restating the definition of “Weekly Servicing
Fee” in its entirety to read as follows:

 

““ Weekly Servicing Fee” means, with respect to
each Weekly Allocation Date, an amount equal to the quotient of (i) the
sum of (a) $11,500,000, plus (b) $13,000 for every Restaurant
(excluding any Restaurant owned or operated by FMS Management Systems, Inc.)
located in the contiguous United States of America as of the last day of the
immediately preceding Monthly Collection Period that is contributing cash flow
to the Collection Account (excluding Restaurants subject to Type 2 Property
Leases that are not contributing cash flow to the Collection Account unless
such failure to contribute cash flow is solely as a result of a delinquency of
a franchisee), divided by (ii) 52; provided, that, each of
the amounts set forth in clauses (a) and (b) above will 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 will apply if after giving effect to such
increase the sum of amounts set forth in clauses (a) and (b) above
will exceed the product of (x) 35% and (y) the Collections
(after giving effect to the application of the Collections in accordance with
Sections 10.9(a) and (b) of the Base Indenture on such Weekly
Allocation Date), calculated with respect to the immediately preceding Weekly
Collections Allocation Period.”

 

Section 2.2       Amendment
to Section 3.1 of the Servicing Agreement.  Section 3.1(g) of the Servicing
Agreement is hereby amended by inserting the following at the end thereof:

 

“In addition, the Servicer shall on an annual basis
allow the Back-Up Servicer access to its books of account (as well as those
pertaining to the Securitization Entities and Applebee’s) and records and
permit the Back-Up 

 

3

 

Servicer to discuss the affairs, finances and accounts
relating to the IHOP and Applebee’s inter-company arrangements with any of its
officers, directors and other representatives”

 

Section 2.3       Amendment
to Section 4.15 of the Servicing Agreement.  Section 4.15 of the Servicing Agreement
is hereby amended and restated in its entirety to read as follows:

 

“None of the Guarantor, IHOP, Inc., Applebee’s
International, Inc., a Delaware corporation (“Applebee’s”), or
their respective Affiliates shall incur Debt (including, but not limited to,
guaranties or pledges of its property) other than (a) with respect to the
Guarantor, IHOP, Inc., Applebee’s and their respective Affiliates, but
excluding the Securitization Entities (as such term is defined in the
Indenture) (referred to herein as the “IHOP Securitization Entities”)
and the special purpose vehicles established by Applebee’s (the “Applebee’s
Securitization Entities”) in connection with the securitization of
substantially all of the assets of Applebee’s situated in the U.S. (the “Applebee’s
Securitization”), Debt (excluding from the definition of “Debt” for this
purpose, any “capital leases” in effect as of November 29, 2007) not in
excess of U.S. $95,000,000 in aggregate outstanding principal amount at any
time; provided, that in the event that Applebee’s is no longer
affiliated with IHOP, Inc., the Debt allowed pursuant to this clause (a) shall
not exceed U.S.$25,000,000 in aggregate outstanding principal amount at any
time,  (b) with respect to the
Guarantor, IHOP, Inc., Applebee’s and their respective Affiliates,
including the Applebee’s Securitization Entities but excluding the IHOP Securitization
Entities, Debt incurred in connection with the sale-leaseback transactions
contemplated by and in accordance with the requirements of the term sheet
attached as a schedule to the letter, dated July 15, 2007, delivered by
Financial Guaranty Insurance Company, a New York stock insurance company (the “Insurer”),
and the other insurers identified therein, to the Guarantor and Applebee’s
(such term sheet being referred to herein as the “Applebee’s Securitization
Term Sheet”); provided, that, on a pro  forma basis
after giving effect to the sale-leaseback transaction, the ratio of the
adjusted debt (calculated by capitalizing lease obligations whether treated as
operating leases or capital leases under GAAP at 8x annual rent) to EBITDAR of
the Guarantor is equal to or less than 7.30x to and including November 30,
2008 and 7.0x following such date, (c) Debt incurred by the Guarantor,
IHOP, Inc., Applebee’s and their respective Affiliates pursuant to (i) the
Indenture, (ii) the Applebee’s Securitization, and (iii) during the
period from the date hereof to the date of the Applebee’s Securitization (and
thereafter to the extent provided in clause (B) below), the loans (the “Acquisition
Loans”) extended to the Guarantor pursuant to the securitization bridge
financing (the “Securitization Bridge Financing”) to be provided by
Lehman Brothers Commercial Bank (“LBCB”) and Lehman Commercial Paper
Inc. (“LCPI”), as the initial securitization bridge lenders (together
with their 

 

4

 

successors and assigns in such capacity, the “Initial
Securitization Bridge Lenders”), and such other securitization bridge
lenders as may be identified by the Initial Securitization Bridge Lenders from
time to time; provided, that (A) the aggregate outstanding
principal amount of the Acquisition Loans may in no event exceed U.S.
$2,150,000,000 (including any unfunded commitment under any revolving credit
facility that is a part of the Securitization Bridge Financing), (B) upon
the consummation of the Applebee’s Securitization, the aggregate outstanding
principal amount of the Acquisition Loans shall be permanently reduced to no
more than U.S. $175,000,000 (or such higher amount as may be consented to in
writing by the Insurer, such consent not to be unreasonably withheld or
delayed) less the proceeds, if any, from the offering and sale of the Series 2007-3
Fixed Rate Term Notes issued by the Co-Issuers pursuant to the Indenture or any
other equity investment issued in substitution therefor, and (C) if the
Applebee’s Securitization is not consummated on or prior to January 15,
2008, or such later date, if any, to which the Insurer’s commitment has been
extended with its written consent, then the Guarantor, IHOP, Inc.,
Applebee’s and their respective Affiliates (other than the IHOP Securitization
Entities) shall repay the Acquisition Loans and other Debt from the net
proceeds of the disposition of those certain assets, as would have been
required pursuant to the Applebee’s Securitization Term Sheet had the Applebee’s
Securitization been consummated, and the aggregate outstanding principal amount
of the Acquisition Loans shall be permanently decreased by a corresponding
amount; (d) trade debt incurred in the ordinary course of business, and (e) debt
incurred in connection with any indemnification obligations of the Servicer; provided,
that, for the avoidance of doubt, (x) clauses (a) through (e) of
this Section 4.15 shall each constitute separate baskets of permitted Debt
of the Guarantor, IHOP, Inc., Applebee’s and their respective Affiliates
and (y) the Debt permitted to be incurred by the Guarantor, IHOP, Inc.,
Applebee’s and their respective Affiliates pursuant to clauses (a) through
(e) of this Section 4.15 shall be subject to compliance with all
applicable ratios, restrictions, tests and other requirements in effect under
the Transaction Documents as amended or otherwise modified or waived from time
to time.”

 

Section 2.4       Amendment
to Section 6.1 of the Servicing Agreement.  Section 6.1(a)(xi) of the Servicing
Agreement is hereby amended by deleting the two references therein to “or IHOP
Holdings” and substituting therefor the following language:

 

“, IHOP
Holdings or any Applebee’s Securitization Entity (as such term is defined in Section 4.15
hereof)”.

 

5

 

ARTICLE III

MISCELLANEOUS

 

Section 3.1       Effectiveness of Amendment.

 

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

 

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

 

(ii)           the
execution and delivery of this Amendment by each of the Series Insurer,
the Co-Issuers, the Indenture Trustee, the Servicer, the Guarantor and its
other Affiliates identified on the signature pages hereof.

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

7

 

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

 

	
   

  	
  IHOP FRANCHISING, LLC,

  
	
   

  	
  as the Issuer

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Weisberger

  
	
   

  	
   

  	
  Name:

  	
  Mark Weiseberger

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  IHOP IP, LLC,

  
	
   

  	
  as the Co-Issuer

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Weisberger

  
	
   

  	
   

  	
  Name:

  	
  Mark Weiseberger

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  IHOP PROPERTY LEASING, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Weisberger

  
	
   

  	
   

  	
  Name:

  	
  Mark Weiseberger

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  IHOP PROPERTIES, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Weisberger

  
	
   

  	
   

  	
  Name:

  	
  Mark Weiseberger

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  IHOP REAL ESTATE, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tom Conforti

  
	
   

  	
  Name:

  	
  Tom Conforti

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  INTERNATIONAL HOUSE OF PANCAKES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tom Conforti

  
	
   

  	
  Name:

  	
  Tom Conforti

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  IHOP CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tom Conforti

  
	
   

  	
  Name:

  	
  Tom Conforti

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
													

 

 

	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, not in its individual

  
	
   

  	
  capacity but as the Indenture Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jennifer C. Davis

  
	
   

  	
  Name:

  	
  Jennifer C. Davis

  
	
   

  	
  Title:

  	
  Assistant Vice President

  
				

 

 

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

Indenture, Section 9.3
of the Servicing Agreement and

Section 6.01 of the
Insurance Agreement relating to the

Series 2007-1 Notes and
the Series 2007-2 Notes

 

FINANCIAL GUARANTY INSURANCE

COMPANY, as Series Insurer
in respect of

the Series 2007-1 and
2007-2 Notes

 

 

	
  By:

  	
  /s/ Rajat Basu

  	
   

  
	
   

  	
  Name:

  	
  Rajat Basu

  
	
   

  	
  Title:

  	
  Managing DirectorExhibit 10.20

 

AMENDMENT NO. 1 TO GUARANTY

 

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

 

R  E  C
I  T  A  L  S

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

ARTICLE I

DEFINITIONS

 

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

 

ARTICLE II

AMENDMENTS

 

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

 

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

 

2

 

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

 

3

 

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

 

ARTICLE III

MISCELLANEOUS

 

Section 3.1       Effectiveness
of Amendment.

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

[Remainder
of Page Intentionally Blank]

 

5

 

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

 

	
   

  	
  IHOP CORP., as the Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tom Conforti

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Tom Conforti

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
					

 

 

Consented to for purposes of the Guaranty:

 

IHOP HOLDINGS, LLC,

as the Beneficiary

 

 

	
  By:

  	
  /s/ Mark Weisberger

  	
   

  
	
   

  	
  Name:

  	
  Mark Weisberger

  
	
   

  	
  Title:

  	
  Vice President

  
				

 

 

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

Indenture and Section 6.01
of the Insurance Agreement

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

 

FINANCIAL GUARANTY INSURANCE

COMPANY, as Series Insurer
in respect of

the Series 2007-1 and
2007-2 Notes

 

 

	
  By:

  	
  /s/ Rajat Busu

  	
   

  
	
   

  	
  Name:

  	
  Rajat Busu

  
	
   

  	
  Title:

  	
  Managing Director

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