Document:

Exhibit 4.21

 

EXECUTION
COPY

 

Applebee’s Enterprises LLC,

Applebee’s IP LLC, and

the entities referred to herein as the “Restaurant Holders”

each as Co-Issuers

 

and

 

Wells Fargo Bank, National Association,

as Indenture Trustee

 

 

BASE INDENTURE

 

Dated as of November 29,
2007

 

Asset Backed Notes

(Issuable in Series)

 

 

TABLE
OF CONTENTS

 

ARTICLE I

DEFINITIONS

 

	
  Section 1.1

  	
   

  	
  Definitions

  	
   

  	
  5

  
	
  Section 1.2

  	
   

  	
  Rules of Construction

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  
	
  THE NOTES

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
   

  	
  Forms Generally

  	
   

  	
  6

  
	
  Section 2.2

  	
   

  	
  Forms and Issuance of Notes and
  Certificate of Authentication

  	
   

  	
  6

  
	
  Section 2.3

  	
   

  	
  Authorized Amount; Issuable in
  Series

  	
   

  	
  8

  
	
  Section 2.4

  	
   

  	
  Execution, Authentication,
  Delivery and Dating

  	
   

  	
  14

  
	
  Section 2.5

  	
   

  	
  Registration, Registration of
  Transfer and Exchange

  	
   

  	
  15

  
	
  Section 2.6

  	
   

  	
  Mutilated, Defaced, Destroyed,
  Lost or Stolen Note

  	
   

  	
  30

  
	
  Section 2.7

  	
   

  	
  Payment of Principal and
  Interest and Other Amounts; Rights Preserved

  	
   

  	
  31

  
	
  Section 2.8

  	
   

  	
  Persons Deemed Owners

  	
   

  	
  33

  
	
  Section 2.9

  	
   

  	
  Cancellation

  	
   

  	
  33

  
	
  Section 2.10

  	
   

  	
  Global Notes; Temporary Notes

  	
   

  	
  34

  
	
  Section 2.11

  	
   

  	
  No Gross Up

  	
   

  	
  35

  
	
  Section 2.12

  	
   

  	
  Tax Confidentiality Waiver

  	
   

  	
  35

  
	
  Section 2.13

  	
   

  	
  Actions under an Insurance
  Policy

  	
   

  	
  35

  
	
  Section 2.14

  	
   

  	
  Subrogation Rights of Insurers;
  Payment of Reimbursements

  	
   

  	
  37

  
	
  Section 2.15

  	
   

  	
  Additional Covenant of the
  Insurers

  	
   

  	
  39

  
	
  Section 2.16

  	
   

  	
  Applicability of Sections 2.13,
  2.14 and 2.15

  	
   

  	
  39

  
	
  Section 2.17

  	
   

  	
  Escheat

  	
   

  	
  39

  
	
  Section 2.18

  	
   

  	
  Tax Treatment

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  
	
  CONDITIONS PRECEDENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
   

  	
  General Provisions

  	
   

  	
  40

  
	
  Section 3.2

  	
   

  	
  Security for Notes

  	
   

  	
  42

  
	
  Section 3.3

  	
   

  	
  Issuance of New Notes

  	
   

  	
  45

  
	
  Section 3.4

  	
   

  	
  Use of Proceeds from the
  Issuance of Notes

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  
	
  SATISFACTION AND DISCHARGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
   

  	
  Satisfaction and Discharge of
  Indenture

  	
   

  	
  47

  

 

i

 

	
  Section 4.2

  	
   

  	
  Application of Trust Money

  	
   

  	
  50

  
	
  Section 4.3

  	
   

  	
  Reinstatement

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EVENTS OF DEFAULT AND REMEDIES

  
	
   

  
	
  Section 5.1

  	
   

  	
  Rapid Amortization Event

  	
   

  	
  50

  
	
  Section 5.2

  	
   

  	
  Partial Amortization

  	
   

  	
  51

  
	
  Section 5.3

  	
   

  	
  Events of Default

  	
   

  	
  51

  
	
  Section 5.4

  	
   

  	
  Acceleration of Maturity;
  Rescission and Annulment

  	
   

  	
  55

  
	
  Section 5.5

  	
   

  	
  Enforcement

  	
   

  	
  57

  
	
  Section 5.6

  	
   

  	
  Application of Monies Collected
  by Indenture Trustee

  	
   

  	
  63

  
	
  Section 5.7

  	
   

  	
  Waiver of Appraisement,
  Valuation, Stay and Right to Marshaling

  	
   

  	
  63

  
	
  Section 5.8

  	
   

  	
  Remedies Cumulative; Delay or
  Omission Not a Waiver

  	
   

  	
  64

  
	
  Section 5.9

  	
   

  	
  Control of Notes

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THE INDENTURE TRUSTEE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1

  	
   

  	
  Certain Duties and
  Responsibilities

  	
   

  	
  65

  
	
  Section 6.2

  	
   

  	
  Notice of Default

  	
   

  	
  67

  
	
  Section 6.3

  	
   

  	
  Certain Rights of Indenture
  Trustee

  	
   

  	
  67

  
	
  Section 6.4

  	
   

  	
  May Hold Notes

  	
   

  	
  68

  
	
  Section 6.5

  	
   

  	
  Money Held in Trust

  	
   

  	
  69

  
	
  Section 6.6

  	
   

  	
  Compensation and Reimbursement

  	
   

  	
  69

  
	
  Section 6.7

  	
   

  	
  Corporate Indenture Trustee
  Required; Eligibility

  	
   

  	
  70

  
	
  Section 6.8

  	
   

  	
  Resignation and Removal;
  Appointment of Successor

  	
   

  	
  71

  
	
  Section 6.9

  	
   

  	
  Acceptance of Appointment by
  Successor

  	
   

  	
  73

  
	
  Section 6.10

  	
   

  	
  Merger, Conversion,
  Consolidation or Succession to Business of Indenture Trustee

  	
   

  	
  73

  
	
  Section 6.11

  	
   

  	
  Co-Indenture Trustees and
  Separate Indenture Trustee

  	
   

  	
  73

  
	
  Section 6.12

  	
   

  	
  Fiduciary for Holders Only;
  Agent for Other Secured Parties

  	
   

  	
  74

  
	
  Section 6.13

  	
   

  	
  Withholding

  	
   

  	
  75

  
	
  Section 6.14

  	
   

  	
  Authenticating Agents

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  
	
  REPRESENTATIONS AND COVENANTS

  
	
   

  
	
  Section 7.1

  	
   

  	
  Payment of Principal and
  Interest

  	
   

  	
  76

  
	
  Section 7.2

  	
   

  	
  Maintenance of Office or Agency

  	
   

  	
  76

  
	
  Section 7.3

  	
   

  	
  Money for Security Payments to
  Be Held in Trust

  	
   

  	
  77

  
	
  Section 7.4

  	
   

  	
  Existence of the Co-Issuers;
  Independent Managers; Existence of Master Issuer

  	
   

  	
  77

  
	
  Section 7.5

  	
   

  	
  Protection of Indenture
  Collateral; Performance of Obligations

  	
   

  	
  77

  

 

ii

 

	
  Section 7.6

  	
   

  	
  Opinions as to Indenture
  Collateral

  	
   

  	
  79

  
	
  Section 7.7

  	
   

  	
  Payment and Performance of
  Obligations

  	
   

  	
  79

  
	
  Section 7.8

  	
   

  	
  Negative Covenants

  	
   

  	
  80

  
	
  Section 7.9

  	
   

  	
  No Other Business

  	
   

  	
  85

  
	
  Section 7.10

  	
   

  	
  Calculation Agent

  	
   

  	
  86

  
	
  Section 7.11

  	
   

  	
  Indebtedness

  	
   

  	
  87

  
	
  Section 7.12

  	
   

  	
  Representations and Warranties

  	
   

  	
  87

  
	
  Section 7.13

  	
   

  	
  Affirmative Covenants

  	
   

  	
  95

  
	
  Section 7.14

  	
   

  	
  Additional Securitization
  Entities

  	
   

  	
  101

  
	
  Section 7.15

  	
   

  	
  Further Assurances

  	
   

  	
  102

  
	
  Section 7.16

  	
   

  	
  Financial Covenants

  	
   

  	
  103

  
	
  Section 7.17

  	
   

  	
  Security Interest
  Representations, Warranties and Covenants of the Co-Issuers

  	
   

  	
  103

  
	
  Section 7.18

  	
   

  	
  RESERVED

  	
   

  	
  105

  
	
  Section 7.19

  	
   

  	
  Covenants Regarding the IP
  Assets

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  
	
  SUPPLEMENTAL INDENTURES

  
	
   

  
	
  Section 8.1

  	
   

  	
  Supplemental Indentures without
  the Consent of the Noteholders

  	
   

  	
  106

  
	
  Section 8.2

  	
   

  	
  Consents to Supplemental
  Indentures

  	
   

  	
  108

  
	
  Section 8.3

  	
   

  	
  Execution of Supplemental
  Indentures

  	
   

  	
  110

  
	
  Section 8.4

  	
   

  	
  Effect of Supplemental
  Indentures

  	
   

  	
  110

  
	
  Section 8.5

  	
   

  	
  Reference in Notes to
  Supplemental Indenture

  	
   

  	
  110

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  
	
  RESERVED

  
	
   

  
	
  ARTICLE X

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  COLLECTIONS AND ALLOCATION OF FUNDS AND MAINTENANCE OF ACCOUNTS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1

  	
   

  	
  Concentration Account

  	
   

  	
  111

  
	
  Section 10.2

  	
   

  	
  Servicing Accounts

  	
   

  	
  117

  
	
  Section 10.3

  	
   

  	
  Senior Notes Interest Reserve
  Account

  	
   

  	
  122

  
	
  Section 10.4

  	
   

  	
  Cash Trap Reserve Account

  	
   

  	
  123

  
	
  Section 10.5

  	
   

  	
  RESERVED

  	
   

  	
  124

  
	
  Section 10.6

  	
   

  	
  Hedge Payment Account

  	
   

  	
  124

  
	
  Section 10.7

  	
   

  	
  Collection Account

  	
   

  	
  125

  
	
  Section 10.8

  	
   

  	
  Collection Account
  Administrative Accounts

  	
   

  	
  125

  
	
  Section 10.9

  	
   

  	
  Indenture Trustee as Securities
  Intermediary

  	
   

  	
  127

  
	
  Section 10.10

  	
   

  	
  Establishment of Series Accounts

  	
   

  	
  129

  
	
  Section 10.11

  	
   

  	
  Collections and Investment Income

  	
   

  	
  129

  
	
  Section 10.12

  	
   

  	
  Application of Monthly
  Collections on Payment Dates

  	
   

  	
  131

  
	
  Section 10.13

  	
   

  	
  Notices to Insurers and the
  Rating Agencies

  	
   

  	
  136

  

 

iii

 

	
  ARTICLE XI

  
	
   

  
	
  APPLICATION OF FUNDS

  
	
   

  
	
  Section 11.1

  	
   

  	
  Application of Funds

  	
   

  	
  137

  
	
  Section 11.2

  	
   

  	
  Determination of Monthly
  Interest

  	
   

  	
  143

  
	
  Section 11.3

  	
   

  	
  Determination of Monthly
  Principal

  	
   

  	
  143

  
	
  Section 11.4

  	
   

  	
  Prepayment of Principal

  	
   

  	
  143

  
	
  Section 11.5

  	
   

  	
  Distributions in General

  	
   

  	
  143

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  
	
   

  
	
  REPORTS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.1

  	
   

  	
  Reports and Instructions to
  Indenture Trustee

  	
   

  	
  147

  
	
  Section 12.2

  	
   

  	
  Annual Noteholders’ Tax
  Statement

  	
   

  	
  150

  
	
  Section 12.3

  	
   

  	
  Rule 144A Information

  	
   

  	
  150

  
	
  Section 12.4

  	
   

  	
  Reports, Financial Statements
  and Other Information to Noteholders

  	
   

  	
  150

  
	
  Section 12.5

  	
   

  	
  Servicer

  	
   

  	
  151

  
	
  Section 12.6

  	
   

  	
  Standard of Conduct

  	
   

  	
  151

  
	
  Section 12.7

  	
   

  	
  Right to List of Holders

  	
   

  	
  151

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  
	
   

  
	
  HEDGE AGREEMENTS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.1

  	
   

  	
  Hedge Agreements

  	
   

  	
  151

  
	
  Section 13.2

  	
   

  	
  Terms of Hedge Agreements
  Contained in Series Supplement

  	
   

  	
  151

  
	
  Section 13.3

  	
   

  	
  Hedge Counterparties

  	
   

  	
  152

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  
	
   

  
	
  RELEASE OF EXCLUDED ASSETS FROM TRUST ESTATE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.1

  	
   

  	
  Release of Excluded Assets from
  the Trust Estate

  	
   

  	
  154

  
	
  Section 14.2

  	
   

  	
  Delivery of Documents by
  Indenture Trustee

  	
   

  	
  155

  
	
  Section 14.3

  	
   

  	
  Insurance/Condemnation Proceeds

  	
   

  	
  155

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XV

  
	
   

  
	
  AUCTION CALL REDEMPTION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 15.1

  	
   

  	
  Auction Call Redemption

  	
   

  	
  156

  

 

iv

 

	
  ARTICLE XVI

  
	
   

  
	
  MISCELLANEOUS

  
	
   

  
	
  Section 16.1

  	
   

  	
  RESERVED

  	
   

  	
  157

  
	
  Section 16.2

  	
   

  	
  Form of Documents Delivered
  to Indenture Trustee

  	
   

  	
  157

  
	
  Section 16.3

  	
   

  	
  Acts of Holders

  	
   

  	
  158

  
	
  Section 16.4

  	
   

  	
  Notices, etc

  	
   

  	
  158

  
	
  Section 16.5

  	
   

  	
  Notices to Holders; Waiver

  	
   

  	
  160

  
	
  Section 16.6

  	
   

  	
  Effect of Headings and Table of
  Contents

  	
   

  	
  160

  
	
  Section 16.7

  	
   

  	
  Successors and Assigns

  	
   

  	
  161

  
	
  Section 16.8

  	
   

  	
  No Bankruptcy Petition Against
  the Securitization Entities

  	
   

  	
  161

  
	
  Section 16.9

  	
   

  	
  Confidential Information

  	
   

  	
  161

  
	
  Section 16.10

  	
   

  	
  Separability

  	
   

  	
  162

  
	
  Section 16.11

  	
   

  	
  Benefits of Indenture

  	
   

  	
  162

  
	
  Section 16.12

  	
   

  	
  Legal Holidays

  	
   

  	
  162

  
	
  Section 16.13

  	
   

  	
  Governing Law

  	
   

  	
  162

  
	
  Section 16.14

  	
   

  	
  Submission to Jurisdiction

  	
   

  	
  162

  
	
  Section 16.15

  	
   

  	
  Counterparts

  	
   

  	
  163

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Appendix A

  	
   

  	
  Definitions

  	
   

  	
   

  
	
  Schedule 7.12(d)

  	
   

  	
  Litigation

  	
   

  	
   

  
	
  Schedule 7.12(u)

  	
   

  	
  Indebtedness

  	
   

  	
   

  
	
  Schedule 7.12(v)

  	
   

  	
  Insurance Coverage

  	
   

  	
   

  
	
  Schedule 7.12(x)

  	
   

  	
  Intellectual Property Registrations and
  Applications

  	
   

  	
   

  
	
  Schedule 7.12(y)

  	
   

  	
  Intellectual Property Proceedings

  	
   

  	
   

  
	
  Schedule 7.12(z)

  	
   

  	
  Taxes

  	
   

  	
   

  
	
  Schedule 7.17

  	
   

  	
  Liens

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of Series Supplement

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  Form of Transfer/Exchange Certificate
  (Reg S to Rule 144A)

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  Form of Transfer/Exchange Certificate
  (Rule 144A to Reg S)

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  Form of Transfer/Exchange Certificate
  (Definitive to Reg S)

  	
   

  	
   

  
	
  Exhibit E

  	
   

  	
  Form of Transfer/Exchange Certificate
  (Definitive to Definitive)

  	
   

  	
   

  
	
  Exhibit F

  	
   

  	
  Form of Transfer/Exchange Certificate
  (for Class A-1 Notes)

  	
   

  	
   

  
	
  Exhibit G

  	
   

  	
  Form of Important Section 3(c)(7) Notice

  	
   

  	
   

  
	
  Exhibit H

  	
   

  	
  Form of Transfer/Exchange Certificate

  	
   

  	
   

  
	
  Exhibit I

  	
   

  	
  Form of IP Security Agreements

  	
   

  	
   

  
	
  Exhibit J

  	
   

  	
  Form of Weekly Servicer’s Report

  	
   

  	
   

  
	
  Exhibit K

  	
   

  	
  Form of Monthly Servicer’s Certificate

  	
   

  	
   

  
	
  Exhibit L

  	
   

  	
  Form of Monthly Servicer’s Report

  	
   

  	
   

  
	
  Exhibit M

  	
   

  	
  Form of
  Monthly Noteholders’ Report

  	
   

  	
   

  
							

 

v

 

BASE INDENTURE,
dated as of November 29, 2007 (as amended or supplemented from time to
time, the “Base Indenture”), among Applebee’s Enterprises LLC, a
Delaware limited liability company (the “Master Issuer”), Applebee’s IP
LLC, a Delaware limited liability company (the “IP Holder”), and each of
the entities appearing in the definition of “Restaurant Holders” in
Appendix A hereto (together with any additional Restaurant Holders that become
a party to this Base Indenture after the date hereof pursuant to Section 7.14(a),
the “Restaurant Holders”) (each of the Master Issuer, IP Holder and
Restaurant Holders, a “Co-Issuer” and collectively, the “Co-Issuers”),
and Wells Fargo Bank, National Association, as trustee (herein, together with
its permitted successors in the trusts hereunder, the “Trustee” or “Indenture
Trustee”).

 

PRELIMINARY
STATEMENT

 

Each of the
Co-Issuers is duly authorized to execute and deliver this Base Indenture to
provide for the Notes issuable as provided in this Base Indenture. All
covenants and agreements made by the Co-Issuers herein are for the benefit of
the Indenture Trustee, each Note Owner, each Noteholder, each Hedge
Counterparty, if any, and each Insurer, if any, as applicable. The Indenture
Trustee (for its own benefit and for the benefit of each Note Owner and each
Noteholder), each Hedge Counterparty, if any, and each Insurer, if any, is
referred to herein as a “Secured Party” and collectively are referred to
herein as the “Secured Parties.” 
Each of the Co-Issuers is entering into this Base Indenture, and the
Indenture Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.

 

All things
necessary to make this Base Indenture a valid agreement of each of the
Co-Issuers in accordance with the terms hereof have been done.

 

GRANTING
CLAUSES

 

Subject to the
priorities and the exclusions, if any, specified below in these Granting
Clauses, each of the Co-Issuers hereby Grants to the Indenture Trustee, for its
own benefit and security and for the benefit and security of the other Secured
Parties, all of the Co-Issuers’ assets, respectively, including all of the
Co-Issuers’ right, title and interest in, to and under, in each case, whether
now owned or existing, or hereafter acquired or arising, all securities, loans,
investments, accounts, inventory, equipment, chattel paper, money, deposit
accounts, instruments, financial assets, documents, investment property,
general intangibles, letter of credit rights, and other supporting obligations
(in each case, as defined in the UCC), and other property (other than the
Excepted Property) of any type or nature in which the Co-Issuer has an
interest, relating thereto and all proceeds with respect to the foregoing
(subject to the exclusions noted below, the “Indenture Collateral”). Such
Grants include, but are not limited to:

 

(a)                                  with
respect to the Master Issuer, (i) the Existing U.S. Franchise Agreements
and all Franchise Payments thereon, (ii) its rights but none of its obligations
under the Post-Closing U.S. Restaurant Purchase Agreement, including the
revenues generated by the Post-Closing U.S. Restaurants (pending the transfer
of the assets relating to such Post-Closing U.S. Restaurants to the applicable
Restaurant Holders following the Closing Date), (iii) the IHOP

 

1

 

Residual
Certificate and any Replacement Residual Certificate, and (iv) the limited
liability company membership interests (and, with respect to each Restaurant
Holder that is a corporation, the capital stock) owned by the Master Issuer
that represents the 100% ownership interest in each of the Franchise Holder,
the IP Holder and the Restaurant Holders and its ownership interest in each
Liquor License Holder;

 

(b)                                 with
respect to the Restaurant Holders, (i) the Company-Owned U.S. Restaurant
Assets; (ii) the Company-Owned Real Property; and (iii) the payments
received by the Restaurant Holders on the Refranchised Restaurant Leases, if
any, Franchisee Sub-Leases, if any, and any other leases entered into by the
Restaurant Holders as the lessor or the sub-lessor, as applicable; provided,
that the Company-Owned U.S. Restaurant Assets and Company-Owned Real Property
relating to the Post-Closing U.S. Restaurants will not be property of the
Restaurant Holders included in the Indenture Collateral until such assets are
transferred to the applicable Restaurant Holder in the manner provided in the
Post-Closing U.S. Restaurant Purchase Agreement (although the right to the proceeds
of such assets will be included in the Indenture Collateral from the Closing
Date forward as described above);

 

(c)                                  with
respect to the IP Holder, the IP Assets and the right to bring an action at law
or in equity for any infringement, misappropriation, dilution or violation
thereof occurring prior to, on or after the Closing Date, and to collect all
damages, settlements and proceeds relating thereto;

 

(d)                                 any
and all other property of every name and nature, now or hereafter transferred,
mortgaged, pledged, or assigned as security for payment or performance of any
obligation of the Franchisees or other Persons, as applicable, to the Master
Issuer under the Existing U.S. Franchise Agreements and the rights evidenced
thereby or reflected therein (the assets, rights and interests described in
this clause (d), together with all payments, proceeds and accrued and
future rights to payment relating thereto, being referred to herein as the “Existing
Franchise Assets”);

 

(e)                                  the
Accounts (other than the Advertising Fees Account) and all amounts on deposit
in or otherwise credited to the Accounts; provided, that the security
interest of the Indenture Trustee to (i) the Lease Payment Account will be
subject to the rights of third party lessors to receive the amount on deposit
in such Account, (ii) the Gift Card Reserve Account will be subject to the
rights of ACMC, Inc. to receive the amount on deposit in such Account, (iii) the
Third Party Licensing Fee Account will be subject to the rights of Weight
Watcher’s International, Inc. and any other third party to receive the
amount on deposit in such Account, (iv) the Insurance Proceeds Account
will be subject to the prior rights of the Franchisees to receive the amount on
deposit in such Account pursuant to the related Franchise Agreement and (v) certain
Accounts maintained with local depositary institutions for the deposit of cash
revenues generated by Company-Owned U.S. Restaurants pending transfer to the
Concentration Account may not be subject to Account Control Agreements to
the extent permitted in the Servicing Agreement;

 

(f)                                    the
books and records (whether in physical, electronic or other form) of each of
the Co-Issuers, including those books and records maintained by the Servicer on
behalf

 

2

 

of the Master
Issuer relating to the Existing Franchise Assets and on behalf of the IP Holder
relating to the IP Assets;

 

(g)                                 the
rights, powers, remedies and authorities of the Co-Issuers under any agreements
relating to the IP Assets including any IP License Agreement entered into by
the Co-Issuers in connection therewith;

 

(h)                                 the
rights, powers, remedies and authorities of the Co-Issuers under (i) each
of the Transaction Documents (other than the Indenture) to which they are a
party and (ii) with respect to the Master Issuer, each of the documents
relating to the Existing Franchise Assets to which it is a party;

 

(i)                                     any
and all other property of the Co-Issuers now or hereafter acquired other than
the Excepted Property; and

 

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

 

provided,
that the Indenture Collateral will exclude the following property of the
Co-Issuers (the “Excepted Property”): 
(i) the liquor licenses owned by the Restaurant Holders, (ii) the
Company Leases, the Sale/Leaseback Leases, if any, the Franchisee Sub-Leases,
if any, and the Refranchised Restaurant Leases, if any (all of which leases are
referred to herein collectively as the “Leases”), (iii) the Excepted
IP Assets and (iv) the Advertising Fees Account and all amounts on deposit
in the Advertising Fees Account from time to time, which will be held by the
Servicer for the benefit of the Master Issuer; provided,
however, that all rights to payment and all payments received by the
Restaurant Holders on any Franchisee Sub-Leases, Refranchised Restaurant Leases
and any other leases that the Restaurant Holders are party to as lessor or
sublessor will be included in the Indenture Collateral as described above; provided,
further, that the Excluded Property will not be part of the
Indenture Collateral.

 

Such Grants
are made in trust, to secure the Notes equally and ratably without prejudice,
priority or distinction between any Note and any other Note by reason of difference
in time of issuance or otherwise, except as expressly provided in this Base
Indenture, and to secure the prompt and complete payment and observance and
performance of the Secured Obligations in accordance and subject to the
allocation priorities and the priorities of payment set forth in Article X
and Article XI including, without limitation, (i) the payment
of all amounts due on the Notes in accordance with their terms, (ii) the
payment of all other sums payable under this Base Indenture and the other
Transaction Documents (other than the Leases), respectively, and (iii) compliance
with the provisions of this Base Indenture, all as provided in this Base
Indenture and the other Transaction Documents, respectively.

 

The Co-Issuers’
obligations to pay the Accrued Insurer Premium Amount, the Insurer Expense
Amount, the Insurer Reimbursement Amount, if any, and any and all other
amounts, including but not limited to, reimbursements, indemnities and other
costs or liabilities incurred by each Insurer, if any, in connection with its
obligations as an insurer under or in connection with the Transaction
Documents, are secured equally and ratably with the amounts

 

3

 

due on the
Notes hereunder in accordance with and subject to the allocation priorities and
the priorities of payment set forth in Article X and Article XI.

 

The foregoing
Grants shall, for the purpose of determining the property subject to the Lien
of this Base Indenture, be deemed to include any securities and any investments
granted by or on behalf of the Co-Issuers to the Indenture Trustee for the
benefit of the Secured Parties, whether or not such securities or such
investments satisfy the criteria set forth in this Base Indenture. The
Co-Issuers hereby authorize the filing of one or more financing statements
naming the Co-Issuers as debtor and describing the Indenture Collateral covered
thereby as “all assets and property in which the debtor has an interest whether
now owned or existing or hereafter acquired or arising.”

 

Except to the
extent otherwise provided in this Base Indenture, each of the Co-Issuers does
hereby constitute and irrevocably appoint (until this Base Indenture is
terminated) the Indenture Trustee its true and lawful attorney with full power
(in the name of the Co-Issuers or otherwise) to exercise the rights of the
Co-Issuers with respect to the Indenture Collateral held for the benefit and
security of the Secured Parties and to ask, require, demand, receive, settle,
compromise, compound and give acquittance for any and all moneys and claims for
moneys due and to become due under or arising out of any of the Indenture
Collateral held for the benefit and security of the Secured Parties, to endorse
any checks or other instruments or orders in connection therewith and to file
any claims or take any action or institute any proceedings which the Indenture
Trustee may deem to be necessary or advisable in the premises. The power
of attorney granted pursuant to this Base Indenture and all authority hereby
conferred are granted and conferred solely to protect the Indenture Trustee’s
interest in the Indenture Collateral held for the benefit and security of the
Secured Parties and shall not impose any duty upon the Indenture Trustee to
exercise any power except as expressly provided herein or in any other
Transaction Documents. This power of attorney shall be irrevocable as one
coupled with an interest prior to the payment in full of all the obligations
secured hereby.

 

This Base
Indenture shall constitute a security agreement under the laws of the State of
New York applicable to agreements made and to be performed therein. Upon the
occurrence of any Event of Default with respect to the Notes, and in addition
to any other rights available under this Base Indenture or any other
instruments included in the Indenture Collateral held for the benefit and
security of the Secured Parties or otherwise available at law or in equity, the
Indenture Trustee shall have all rights and remedies of a secured party on
default under the laws of the State of New York and other applicable law to
enforce the assignments and security interests contained herein and, in
addition, shall have the right, subject to compliance with any mandatory
requirements of applicable law, to sell or apply any rights and other interests
assigned or pledged hereby in accordance with the terms hereof at public or
private sale, in each case, subject to the rights of the Series Controlling
Parties or the Aggregate Controlling Party, as applicable, under the relevant
Transaction Documents.

 

It is
expressly agreed that each of the Co-Issuers shall remain liable under any of
the Transaction Documents and other agreements to which such Co-Issuer is a
party to perform (or to engage the Servicer (or, to the extent permitted
under the Franchise Documents, other third parties) to perform on its
behalf) all the obligations assumed by it thereunder, all in accordance with
and pursuant to the terms and provisions thereof, and except as otherwise
expressly

 

4

 

provided
herein, the Indenture Trustee shall not have any obligations or liabilities
under such agreements by reason of or arising out of this Base Indenture, nor
shall the Indenture Trustee be required or obligated in any manner to perform or
fulfill any obligations of any of the Co-Issuers under or pursuant to such
agreements or to make any payment, to make any inquiry as to the nature or
sufficiency of any payment received by it, to present or file any claim, or to
take any action to collect or enforce the payment of any amounts which may have
been assigned to it or to which it may be entitled at any time or times.

 

The Indenture
Trustee acknowledges such Grants, accepts the trusts hereunder in accordance
with the provisions hereof and agrees to perform the duties herein in
accordance with, and subject to, the terms hereof in order that the interests
of the Secured Parties may be adequately and effectively protected in
accordance with this Base Indenture.

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1                                      Definitions.
Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used herein shall for all purposes of this Base
Indenture have the respective meanings provided in Appendix A hereto.

 

Section 1.2                                      Rules of
Construction. Unless the context otherwise clearly requires:

 

(i)             the definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined;

 

(ii)          whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms;

 

(iii)       the words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”;

 

(iv)      the word “will” shall be construed to have the
same meaning and effect as the word “shall”;

 

(v)         any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein);

 

(vi)      any reference herein to any Person, or to any Person
in a specified capacity, shall be construed to include such Person’s successors
and assigns or such Person’s successors in such capacity, as the case may be;

 

(vii)   all references in this instrument to designated “Articles,”
“Sections,” “subsections,” “clauses” and other
subdivisions are to the

 

5

 

designated Articles,
Sections, subsections, clauses and other subdivisions of this instrument as
originally executed, and the words “herein,” “hereof,” “hereunder”
and other words of similar import refer to this Base Indenture as a whole and
not to any particular Article, Section, subsection, clause or other
subdivision; and

 

(viii)   any determination
made by the Servicer shall be made in accordance with the Servicing Standard as
set forth in the Servicing Agreement.

 

ARTICLE II

 

THE NOTES

 

Section 2.1                                      Forms
Generally. The Notes and the Authenticating Agent’s certificate of
authentication thereon (the “Certificate of Authentication”) shall be in
substantially the forms required by this Article II, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Base Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon, as may be consistent herewith, determined by the
Authorized Officers of the Co-Issuers executing such Notes as evidenced by
their execution of such Notes. Any portion of the text of any Note may be
set forth on the reverse thereof, with an appropriate reference thereto on the face
of the Note. The Notes shall be typewritten, printed, lithographed or engraved
or produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officer(s) executing such Notes, as
evidenced by their execution of such Notes. Each Note shall be issued in
registered form and dated the date of its authentication. The terms of the
Notes set forth in the exhibits to the applicable Series Supplement are part of
the terms of this Base Indenture.

 

Section 2.2                                      Forms and
Issuance of Notes and Certificate of Authentication.

 

(a)                                  The form of the Notes,
including the Certificate of Authentication, shall be substantially as set
forth, respectively, as exhibits to the applicable Series Supplement, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Base Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may be consistent herewith, determined by
the Authorized Officers of the Co-Issuers executing such Notes as evidenced by
their execution of such Notes.

 

(b)                                 (i)   Unless
otherwise provided in the applicable Series Supplement, Notes offered and
sold in reliance on Rule 144A to Persons that are both QIBs and QPs shall
be issued initially in the form of one or more Rule 144A Global
Notes, which shall be deposited with the Indenture Trustee, as custodian for
DTC and registered in the name of DTC or a nominee of DTC, duly executed by the
Co-Issuers and authenticated by the Indenture Trustee as hereinafter provided. The
Aggregate Outstanding Principal Amount of the Rule 144A Global Notes of a Series of
Notes may from time to time be increased or decreased by adjustments made
on the records of the Indenture Trustee or DTC or its nominee, as the case may be,
as hereinafter provided.

 

6

 

(ii)          Notes offered and sold in reliance on Regulation S to
Persons that are (a) neither U.S. Persons nor U.S. Residents and (b) QPs
shall be issued in the form of one or more Regulation S Global Notes,
which shall be deposited with the Indenture Trustee, as custodian for DTC and
registered in the name of DTC or the nominee of DTC for the respective accounts
of Euroclear and Clearstream, duly executed by the Co-Issuers and authenticated
by the Indenture Trustee as hereinafter provided. The Aggregate Outstanding
Principal Amount of the Regulation S Global Notes of a Series of Notes may from
time to time be increased or decreased by adjustments made on the records of
the Indenture Trustee or DTC or its nominee, as the case may be, as
hereinafter provided.

 

(iii)       All Notes of any Series shall, except as
specified in the applicable Series Supplement, be equally and ratably
entitled as provided herein to the benefits hereof without preference, priority
or distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this Base
Indenture and any applicable Series Supplement. The aggregate principal
amount of Notes which may be authenticated and delivered under this Base
Indenture is unlimited. The Notes of each Series shall be issued in the
Authorized Minimum Denominations and, with respect to the Class A-1 Notes
only, as set forth in the applicable provisions of the applicable Series Supplement
or Class A-1 Note Purchase Agreement.

 

(c)                                  Definitive Notes.

 

(i)             Subject to Section 2.10, the Global Notes may be
issued in the form of one or more certificated notes in definitive, fully
registered form without interest coupons with the applicable legends as
set forth in exhibits to the applicable Series Supplement, respectively
added to the form of such securities (each, a “Definitive Note”).

 

(ii)          All Class A-1 Notes of any Series shall be
issued only in the form of Definitive Notes. The initial sale of the Class A
1 Notes of any Series is limited to Persons who have executed the related Class A
1 Note Purchase Agreement. The Class A 1 Notes of any Series may be
resold only as set forth in the related Series Supplement or  Class A 1 Note Purchase Agreement, as
applicable. Class A 1 Notes shall bear such face amounts and be issued in
such aggregate Outstanding principal amounts as are set forth in the related Series Supplement.
The Indenture Trustee shall record any increases or decreases with respect to
the Outstanding principal amount of the Class A-1 Notes as set forth in
the related Series Supplement.

 

(d)                                 Book-Entry Provisions. This clause (d) shall
apply only to securities in global form (the “Global Notes”)
deposited with or on behalf of DTC.

 

Agent Members
shall have no rights under this Base Indenture with respect to any Global Note
held on their behalf by the Indenture Trustee, as custodian for DTC, or under
the Global Note, and DTC may be treated by the Co-Issuers, the Indenture
Trustee, and any agent of

 

7

 

the Co-Issuers
or the Indenture Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Co-Issuers, the Indenture Trustee, or any agent of the Co-Issuers
or the Indenture Trustee from giving effect to any written certification, proxy
or other authorization furnished by DTC or impair, as between DTC and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Note.

 

(e)                                  Physical Delivery. Except as provided in clause (c) and
Section 2.10, owners of beneficial interests in a Series of
Global Notes shall not be entitled to receive physical delivery of certificated
Notes representing such Series of Global Notes. Holders of Class A-1
Notes of any Series shall be entitled to receive physical delivery of
certificated Notes representing such Class A-1 Notes.

(f)                                    The following shall be true with
respect to any Series of Class A-1 Notes, except to the extent that
the Series Supplement or Class A 1 Note Purchase Agreement with
respect to such Class of Notes shall provide otherwise:

 

(i)             for purposes of any provision of any Transaction
Document relating to any vote, consent, direction or the like to be given by
such Class A-1 Notes on any date, any commitments to extend credit under
such Class A 1 Note Purchase Agreement shall be treated as if they were
fully drawn and outstanding as Outstanding principal amount, without
duplication as among different sub-classes so as to ensure that for such
purpose the Outstanding principal amount 
does not exceed the maximum aggregate amount of such commitments; and

 

(ii)          for purposes of any provisions of any Transaction
Document relating to termination, discharge or the like, such Class A-1
Notes shall continue to be deemed Outstanding unless and until all commitments
to extend credit under such Class A 1 Note Purchase Agreement have been
terminated thereunder.

 

Section 2.3                                      Authorized
Amount; Issuable in Series.

 

(a)                                  The Aggregate Outstanding Principal
Amount of Notes which may be authenticated and delivered under this Base
Indenture is subject to the limitations and conditions imposed by this Base
Indenture, any Series Supplement and any other Transaction Documents.

 

(b)                                 The Notes (other than the Class A-1
Notes) shall be offered and sold by the Co-Issuers without registration under
the Securities Act in reliance upon Rule 144A or Regulation S of the
Securities Act. The Class A-1 Notes of any Series shall be offered
and sold by the Co-Issuers without registration under the Securities Act in a
transaction not involving any public offering within the meaning of the
Securities Act in reliance upon an exemption therefrom as contemplated by the
applicable Class A-1 Note Purchase Agreement.

 

(c)                                  The Notes may be issued in one
or more Series of Notes. Each Series of Notes shall be created by a Series Supplement
substantially in the form of Exhibit A

 

8

 

hereto. Notes of any Series of Notes not
issued on the Closing Date may not be issued prior to the third Accounting
Date following the Closing Date. Notes of a new or existing Series of
Notes may from time to time be executed by the Co-Issuers and delivered to
the Indenture Trustee for authentication and thereupon the same shall be
authenticated and delivered by the Indenture Trustee upon the receipt by the
Indenture Trustee of a Company Order at least three Business Days (except in
the case of the issuance of the Initial Series of Notes) in advance of the
date of issuance of such Series of Notes and upon delivery by the
Co-Issuers to the Indenture Trustee and each Insurer, if any, of the following:

 

(i)             a Company Order authorizing and directing the
authentication and delivery of the Notes of such new Series of Notes by
the Indenture Trustee and specifying the designation of such new Series, the
Aggregate Outstanding Principal Amount of Notes of such new Series to be
authenticated and the Series Note Interest Rate (or the method for
allocating interest payments or other cash flow) with respect to such new
Series;

 

(ii)          a Series Supplement executed by the Co-Issuers
and the Indenture Trustee and in form and substance consented to by each
Insurer, if any, of any Notes of such Series of Notes and specifying the
Principal Terms of such new Series;

 

(iii)       the related Series Hedge Agreement, if any,
executed by each of the Parties thereto;

 

(iv)      the Insurance Policy and the Insurance Agreement (or
other credit enhancement agreement), if any, executed by each of the parties
thereto;

 

(v)         if any Series of Notes will remain Outstanding at
the proposed Issuance Date of such Notes, written confirmation that the Rating
Agency Condition shall have been satisfied with respect to such other Series of
Notes that is rated after giving effect to such issuance;

 

(vi)      an Officer’s Certificate of each of the Co-Issuers
dated as of the Issuance Date to the effect that (A)  no Default or Event
of Default, Potential Rapid Amortization 
Event or Rapid Amortization Event under this Base Indenture has occurred
and is continuing, or is likely to occur as a result of such proposed issuance,
and all representations and warranties of the Co-Issuers in this Base Indenture
and the other Transaction Documents are true and correct and will continue to
be true and correct after giving effect to such issuance in all material
respects (other than any such representation and warranty that, by its terms,
speaks only as of the Closing Date); (B) if any Series 2007-1 Senior
Notes are Outstanding, the pro forma
Three-Month DSCR for the Payment Date preceding such Issuance Date and the two
immediately preceding Payment Dates, assuming the issuance of Additional Notes,
together with all other Series of Notes Outstanding, on the first day of
the sixth full month preceding the Payment Date immediately preceding the date
of the proposed issuance thereof, is at least 0.1

 

9

 

higher than the
Three-Month DSCR as of the Closing Date unless otherwise agreed by the Series 2007-1
Class A Insurer for such Series 2007-1 Senior Notes; (C) no
Servicer Termination Event has occurred and is continuing, or will occur with
notice or the lapse of time or both, or is likely to occur as a result of such
proposed issuance; (D) no Cash Trap Reserve Event has occurred and is continuing,
or is likely to occur as a result of such proposed issuance; (E) the
proposed issuance does not alter or change the terms of any Series of
Notes Outstanding or the Series Supplement relating thereto without such
consents as are required under Article VIII or the applicable Series Supplement;
(F) no Change of Control without the prior written consent of each of the
Insurers, if any, has occurred and is continuing, or will occur as a result of
such proposed issuance; (G) unless otherwise agreed by the Lead Insurer
with respect to the Series 2007-1 Senior Notes, the Senior ABS Leverage
Ratio is at least 0.25 lower than the Senior ABS Leverage Ratio as of the
Closing Date prior to and after giving effect to the proposed issuance; provided that the Lead Insurer with respect to
the Series 2007-1 Senior Notes may elect to waive the condition set
forth in this clause (G); (H) in the case of Additional Notes of
any existing Series to be issued, either (1) each Insurer, if any,
insuring such Series has consented thereto in writing or (2) without
the consent of each Insurer, if any, insuring such Series, the aggregate
principal amount to be issued is not greater than the excess, if any, of the
maximum authorized principal amount of such Series as set forth in the
applicable Series Supplement, over the aggregate principal amount of Notes
of such Series that have previously been issued (whether or not still
Outstanding); (I) all expenses with respect to the offering of such Notes
or relating to actions taken in connection therewith which are required to be
paid on such Issuance Date have been paid or will be paid from the proceeds
thereof; (J) such other applicable conditions set forth in the Series Supplement
and, if applicable, the related Class A-1 Note Purchase Agreement for any Series of
Notes (for so long as such Series of Notes is Outstanding) have been
satisfied; and (K) any and all other applicable conditions under this Base
Indenture and the other Transaction Documents have been satisfied;

 

(vii)   an Opinion of Counsel,
subject to the assumptions and qualifications stated therein, in form and
substance reasonably acceptable to the Series Controlling Parties, dated
the date of issuance of the new Series of Notes or additional Notes of any
existing Series, substantially to the effect that:

 

(A)      the Indenture has been duly authorized, executed and
delivered by the Co-Issuers and constitutes a legal, valid and binding
agreement of each of the Co-Issuers, enforceable against each of the Co-Issuers
in accordance with its terms;

 

(B)        the relevant Notes have been duly authorized by the
Co-Issuers, and, when such Notes have been duly authenticated and delivered by
the Indenture Trustee, such Notes will be legal, valid and binding obligations
of each of the

 

10

 

Co-Issuers,
enforceable against each of the Co-Issuers in accordance with their terms;

 

(C)        none of the Securitization Entities is required to be
registered under the Investment Company Act;

 

(D)       the issuance and sale by the Co-Issuers of such Notes (1) does
not require any consent, approval, license, authorization or validation of, or
filing, recording or registration with, any executive, legislative, judicial,
administrative or regulatory bodies pursuant to any laws, rules and
regulations, except those that may be required under state securities or
blue sky laws, and such other approvals that have been obtained and are in
effect, (2) does not result in a violation of any provision of any of the
Co-Issuers’ certificates of formation and limited liability company agreements
or certificates of incorporation and by-laws, as applicable, or any laws, rules and
regulations applicable to any of the Co-Issuers, and (3) does not breach
or result in a violation of, or default under, (x) any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement to which any
of the Co-Issuers is a party or by which any of the Co-Issuers or any of their
respective properties may be bound or (y) any judgment, decree or
order that is applicable to any of the Co-Issuers issued by any executive,
legislative, judicial, administrative or regulatory bodies having jurisdiction
over any of the Co-Issuers or any of their respective properties;

 

(E)         (1) any additional Senior Notes will be treated
as debt for tax purposes (and any additional Subordinated Series of Notes
will be treated for tax purposes in the manner described in the related
Offering Memorandum) and (2) the Additional Notes will not cause any
Senior Notes Outstanding to be treated as other than debt (and will not cause
any Subordinated Notes Outstanding to be treated other than in the manner
described in the related Offering Memorandum), and will not cause any Co-Issuer
that is not a corporation to be treated as a corporation, for U.S. federal
income tax purposes;

 

(F)         there is no legal or governmental action,
investigation or proceeding pending or threatened against any of the Co-Issuers
(1) asserting the invalidity of the Indenture or any Notes, (2) seeking
to prevent the issuance of such Notes or the consummation of any of the
transactions provided for in the Indenture, (3) that would materially and
adversely affect the ability of any of the Co-Issuers to perform its
obligations under, or the validity or enforceability (with respect to the
Co-Issuers) of, the Indenture or any Notes or (4) seeking to materially
affect adversely

 

11

 

the tax
treatment of the Co-Issuers, or the tax consequences to the Holders of any
Notes Outstanding as described in any applicable Offering Memorandum under the
heading “Certain Federal Income Tax Consequences” or otherwise cause any of the
statements under the heading “Certain U.S. Federal Income Tax Considerations”
in any applicable Offering Memorandum to be inaccurate or incorrect to any
material extent; and

 

(G)        it is not necessary in connection with the offer and
sale of such Notes by the Co-Issuers to the Initial Purchaser thereof or by the
Initial Purchaser to the initial investors in such Notes to register such Notes
under the Securities Act;

 

(viii)  if the Lead Insurer with respect to
the Series 2007-1 Notes is the Aggregate Controlling Party, the prior
written consent of the Lead Insurer with respect to the Series 2007-1
Notes; provided that such consent will not
be required if the issuance of such Additional Notes will not cause the Lead
Insurer with respect to the Series 2007-1 Notes to cease to be the
Aggregate Controlling Party;

 

(ix)        evidence of the Aggregate Controlling Party’s approval
of any scheduled amortization of any Additional Notes if such amortization is
scheduled to occur on or before the Anticipated Repayment Date for any Series of
Notes Outstanding;

 

(x)           a summary of the Principal Terms of the Series of
Notes to be issued; and

 

(xi)        such other documents, instruments, certifications,
agreements or other items as the Indenture Trustee may reasonably require.

 

Upon
satisfaction of such conditions and the conditions in Article III,
the Indenture Trustee shall authenticate and deliver, as provided above, such
Notes upon execution thereof by the Co-Issuers. The Co-Issuers shall deliver a
summary of the Principal Terms of any new Series of Notes issued pursuant
to this Section 2.3(c) to the Holders of all previously issued
Series of Notes Outstanding within ten (10) Business Days following
the date of issuance of such new Series of Notes.

 

(d)                                 In conjunction with the issuance of
a new Series of Notes, the parties hereto shall execute a Series Supplement,
which shall specify the relevant terms with respect to such new Series of
Notes, which shall include, as applicable:

 

(i)             its name or designation, each Class of Notes and
whether such Series or Class of Notes consists of Senior Notes or
Subordinated Notes, or both, as applicable;

 

12

 

(ii)          the Aggregate Outstanding Principal Amount of such Series of
Notes at issuance and the maximum permitted Aggregate Outstanding Principal
Amount of such Series of Notes that is authorized to be issued;

 

(iii)       the Series Interest Payment Amount relating to
such Series of Notes (and the method for calculating such Series Interest
Payment Amount, including the Note Interest Rate, Interest Accrual  Period, Senior Notes Monthly Interest Amount,
Series Contingent Additional Interest Amount, Series Make-Whole
Amount, if any, and the Rate Determination Date, if applicable) with respect to
such Series of Notes;

 

(iv)      the Series Contingent Additional Interest Amount
for such Series of Notes;

 

(v)         the date or dates from which interest shall accrue;

 

(vi)      the Series Insurer Premiums, if any;

 

(vii)   the names of any accounts to be used in relation to
such Series of Notes and the terms governing the operation of any such
account;

 

(viii) whether the Co-Issuers are required
to maintain in place a Series Hedge Agreement to hedge interest rate or
any other risk in respect of such Notes and, if so, the principal terms of each
such Series Hedge Agreement; provided,
however, that if the proposed issuance would cause the Aggregate
Outstanding Principal Amount of all Senior Notes (including the undrawn amount
of any variable funding Series of Notes) with floating interest rates to
be greater than the least of the Unhedged Floating Rate Note Principal Limits
applicable with respect to any Outstanding Senior Notes, such Series shall
be made subject to a Series Hedge Agreement in accordance with Section 13.2
unless otherwise consented to by the Aggregate Controlling Party;

 

(ix)        the initial Series Hedge Agreement and Series Hedge
Counterparty, if any;

 

(x)           the Series Anticipated Repayment Date and the
permitted Series Adjusted Repayment Dates, if any, for such Series of
Notes;

 

(xi)        the extension options for such Series of Notes,
and conditions to such extension, if any, that would extend such Series Anticipated
Repayment Date;

 

(xii)     in the case of Subordinated Notes, whether payment or
prepayment of such Notes is restricted for so long as any Senior Notes remains
Outstanding;

 

(xiii)  the Series Legal Final
Maturity Date;

 

13

 

(xiv)  the identity of each
Insurer, if any, relating to such Series of Notes;

 

(xv)  if applicable, the Series Make-Whole
Amount for such Series of Notes;

 

(xvi)  the Series Senior
Interest Reserve Account Required Amount, if any;

 

(xvii)  each Series Event of
Default, if any; provided that the
inclusion of any Series Event of Default shall be subject to the consent
of each Insurer, if any, of any Senior Notes that remain Outstanding at the
time of such issuance;

 

(xviii)  any Monthly Subordinated
Notes Amortization Amount, Partial Amortization Amount, Partial Amortization
Event, Partial Amortization Trigger, Residual Threshold Amount or other
relevant terms, triggers or thresholds that will apply specifically to such Series of
Notes; provided, however, that such terms do not change the terms of any Outstanding
Notes or otherwise materially conflict with the provisions of this Base
Indenture or the Series Supplement relating to any other Series of
Notes unless consented to in accordance with Article VIII (all such
terms, the “Principal Terms” of such Series of Notes).

 

Section 2.4                                      Execution,
Authentication, Delivery and Dating. The Notes shall be executed on behalf
of each of the Co-Issuers by an Authorized Officer of each of the Co-Issuers,
respectively. The signature of such Authorized Officer on the Notes may be
manual or facsimile.

 

Notes bearing
the manual or facsimile signatures of individuals who were at the time of
signing Authorized Officers of the applicable Co-Issuer shall bind such
Co-Issuer, notwithstanding the fact that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Notes or did not hold such offices at the date of issuance of such Notes.

 

At any time
and from time to time after the execution and delivery of this Base Indenture,
the Co-Issuers may deliver Notes executed by the Co-Issuers to the
Indenture Trustee or the Authenticating Agent for authentication, and the
Indenture Trustee or the Authenticating Agent, upon Company Order, shall
authenticate and deliver such Notes as provided in this Base Indenture and not
otherwise.

 

Each Note
authenticated and delivered by the Indenture Trustee or the Authenticating
Agent to or upon Company Order on the Closing Date shall be dated as of the Closing
Date. All other Notes that are authenticated after the Closing Date for any
other purpose under this Base Indenture shall be dated the date of their
authentication.

 

Notes issued
upon transfer, exchange or replacement of other Notes shall be issued in the
Authorized Minimum Denominations reflecting the original Aggregate Outstanding

 

14

 

Principal
Amount of the Notes so transferred, exchanged or replaced, but shall represent
only the current Aggregate Outstanding Principal Amount of the Notes so
transferred, exchanged or replaced. In the event that any Note is divided into
more than one Note in accordance with this Article II, the original
principal amount of such Note shall be proportionately divided among the Notes
delivered in exchange therefor and shall be deemed to be the original Aggregate
Outstanding Principal Amount of such subsequently issued Notes.

 

No Note shall
be entitled to any benefit under this Base Indenture or be valid or obligatory
for any purpose, unless there appears on such Note a Certificate of
Authentication, substantially in the form provided for herein, executed by
the Indenture Trustee or by the Authenticating Agent by the manual or facsimile
signature of one of their Authorized Officers, and such certificate upon any
Note shall be conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder.

 

Section 2.5                                      Registration,
Registration of Transfer and Exchange.

 

(a)                                  The Co-Issuers shall cause to be
kept a register (the “Note Register”) in which, subject to such
reasonable regulations as it may prescribe, the Co-Issuers shall provide for
the registration of Notes and the registration of transfers and exchanges of
Notes with respect to each Series. The Indenture Trustee is hereby appointed
the initial Paying Agent and “Note Registrar” for the purpose of registering
Notes and transfers and exchanges of such Notes. The Note Registrar shall keep
the Note Register (including the name and address of each such Noteholder) and
of their transfer and exchange. The Indenture Trustee shall indicate in its
books and records the commitment of each Noteholder and the principal amount
owing to each Noteholder from time to time. The Indenture Trustee shall send
copies of all notices and demands received by the Indenture Trustee (other than
those sent by the Co-Issuers to the Indenture Trustee and those addressed to
the Co Issuers) in connection with the Notes to the Co-Issuers. Upon any
resignation or removal of the Note Registrar, the Co-Issuers shall promptly
appoint a successor Note Registrar which satisfies the conditions set forth in Section 6.7.

 

If a Person
other than the Indenture Trustee is appointed by the Co-Issuers as Note
Registrar, the Co-Issuers shall give the Indenture Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Registrar, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Officer
thereof as to the names and addresses of the Holders of the Notes and the principal
amounts and numbers of such Notes.

 

Subject to
this Section 2.5, upon surrender for registration of transfer of
any Notes at the office or agency of the Co-Issuers to be maintained as
provided in Section 7.2, the surrendered Notes shall be returned to
the Co-Issuers marked “cancelled,” or retained by the Indenture Trustee in
accordance with its standard retention policy, and the Co-Issuers shall
execute, and the Indenture Trustee shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Notes of any
Authorized Minimum Denominations and of a like Aggregate Outstanding Principal
Amount.

 

15

 

Subject to the
provisions of this Section 2.5, at the option of the Holder, Notes may be
exchanged for Notes of like terms, in any Authorized Minimum Denominations and
of like Aggregate Outstanding Principal Amount, upon surrender of the Notes to
be exchanged at such office or agency. Whenever any Note is surrendered for exchange,
the Co-Issuers shall execute and the Indenture Trustee shall authenticate and
deliver the Notes that the Holder making the exchange is entitled to receive.

 

All Notes
issued and authenticated upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Co-Issuers, evidencing the same debt, and
entitled to the same benefits under this Base Indenture, as the Notes
surrendered upon such registration of transfer or exchange.

 

Every Note
presented or surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer in form satisfactory
to the Co-Issuers and the Note Registrar duly executed by the Holder thereof or
his attorney duly authorized in writing, with such signature guaranteed by an “eligible
guarantor institution” meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Security Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program”
as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Exchange Act, and
accompanied by such other documents as the Indenture Trustee and the Note
Registrar may require and as may be required by this Base Indenture,
and thereupon one or more new Notes of authorized denominations in the same
aggregate principal amount will be issued to such Holder (or his attorney) or
designated transferee or transferees, as applicable.

 

No service charge
shall be made to a Holder for any registration of transfer or exchange of
Notes, but the Indenture Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.

 

Neither the
Note Registrar nor the Co-Issuers shall be required (i) to issue, register
the transfer of or exchange any Note during a period beginning at the opening
of business fifteen (15) days before any selection of Notes to be redeemed and
ending at the close of business on the day of the mailing of the relevant
notice of redemption, or (ii) to register the transfer of or exchange any
Note so selected for redemption.

 

(b)                                 No Note may be sold or
transferred (including, without limitation, by pledge or hypothecation) unless
such sale or transfer is exempt from the registration requirements of the
Securities Act, is exempt from the registration requirements under applicable
state securities laws and will not cause any of the Co-Issuers or the pool of
Indenture Collateral to become subject to the requirement that it register as
an investment company under the Investment Company Act.

 

The following
sentences of this paragraph shall not apply to any Class A-1 Notes of any
Series, the transfer of which shall be governed by Section 2.5(e)(ii)(b) unless
otherwise provided in the applicable Series Supplement. No Note may be
offered, sold or delivered within the United States or to, or for the benefit
of, U.S. Persons except to Persons that are both QIBs and QPs purchasing for
their own account or for the accounts of one or more Persons that are

 

16

 

both QIBs and
QPs, for which the purchaser is acting as fiduciary or agent in accordance with
Rule 144A; provided that Persons purchasing the Subordinated Notes
must purchase the Subordinated Notes for their own account and may not be
Flow-Through Investment Vehicles. The Senior Notes may be sold or resold,
as the case may be, in offshore transactions to purchasers each of whom is
both a QP and a Non-U.S. Person and Non-U.S. Resident in reliance on Regulation
S; provided that if such sale or resale
occurs prior to the expiration of the Distribution Compliance Period, the
transferred interest must be held through Euroclear or Clearstream. None of the
Co-Issuers, the Indenture Trustee or any other Person may register the
Notes under the Securities Act or any state securities laws.

 

(c)                                  Upon final payment due on the
Maturity of a Note, the Holder thereof shall present and surrender such Note at
the Corporate Trust Office of the Indenture Trustee or at the office of any
Paying Agent (outside the United States if then required by applicable law in
the case of a Definitive Note issued in exchange for a beneficial interest in a
Regulation S Global Note pursuant to Section 2.5 and Section 2.10)
on or prior to such Maturity; provided that
if there is delivered to the Co-Issuers and the Indenture Trustee such
reasonable security or indemnity as may be required by them to save each
of them harmless and an undertaking thereafter to surrender such certificate,
then, in the absence of notice to the Co-Issuers or the Indenture Trustee that
the applicable Note has been acquired by a Protected Purchaser, such final
payment shall be made without presentation or surrender.

 

(d)                                 Notwithstanding any provision to the
contrary herein, so long as any Global Note remains Outstanding and is held by
or on behalf of DTC, transfers of such Global Note, in whole or in part, shall
only be made in accordance with Section 2.2(d) and this clause
(d).

 

(i)             Subject to clauses (ii), (iii) and (iv) of
this clause (d), transfers of a Global Note shall be limited to
transfers of such Global Note in whole, but not in part, to a nominee of DTC or
to a successor of DTC or such successor’s nominee.

 

(ii)          Regulation S Global Note to Rule 144A Global Note. If a Holder of a beneficial
interest in a Regulation S Global Note wishes at any time to exchange its
interest in such Regulation S Global Note for an interest in the corresponding Rule 144A
Global Note for such Series of Notes or to transfer its interest in such
Regulation S Global Note to a transferee who wishes to take delivery thereof in
the form of an interest in the corresponding Rule 144A Global Note,
such Holder may, subject to the immediately succeeding sentence and the rules and
procedures of Euroclear and Clearstream or DTC, as the case may be, cause
the exchange or transfer of such interest for an equivalent beneficial interest
in such Rule 144A Global Note; provided that
the remaining beneficial interest in such Regulation S Global Note held by such
Holder shall either equal zero or meet the Authorized Minimum Denominations. To
the extent that the Indenture Trustee, as Note Registrar, and the Co-Issuers
have received (A) instructions from Euroclear, Clearstream or DTC, as the
case may be, directing the Indenture Trustee, as Note Registrar, to cause
to be credited a beneficial interest in the Rule 144A Global Note equal to
the beneficial interest in the Regulation S Global Note

 

17

 

to be exchanged or
transferred but not less than the Authorized Minimum Denominations applicable
to Notes held through Rule 144A Global Notes, such instructions to contain
information regarding the participant account with DTC to be credited with such
increase, and (B) a certificate in the form of Exhibit B
attached hereto stating that the exchange or transfer of such interest has been
made in compliance with the transfer restrictions applicable to the Global
Notes, including that the Holder is both a QIB and a QP (in the case of an
exchange) or that is a QP that the Holder reasonably believes that the
transferee is a QIB (in the case of a transfer) and that the beneficial
interest is being exchanged or transferred in a transaction meeting the
requirements of Rule 144A and in accordance with any applicable securities
laws of any state of the United States or any other relevant jurisdiction, then
Euroclear or Clearstream or the Indenture Trustee, as Note Registrar, as the
case may be, shall instruct DTC to reduce the Regulation S Global Note by
the Aggregate Outstanding Principal Amount of the beneficial interest in the
Regulation S Global Note to be transferred or exchanged, and the Indenture
Trustee, as Note Registrar, shall instruct DTC, concurrently with such
reduction, to credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Rule 144A
Global Note equal to the reduction in the principal amount of the Regulation S
Global Note.

 

(iii)       Rule 144A Global Note to Regulation S Global Note. If a Holder of a beneficial
interest in a Rule 144A Global Note wishes at any time to exchange its
interest in such Rule 144A Global Note for an interest in the
corresponding Regulation S Global Note, or to transfer its interest in such Rule 144A
Global Note to a transferee who wishes to take delivery thereof in the form of
an interest in the corresponding Regulation S Global Note, such Holder, provided such holder or, in the case of a
transfer, such transferee, is a QP that is both a Non-U.S. Person and Non-U.S.
Resident, may, subject to the immediately succeeding sentence and the rules and
procedures of DTC, exchange or transfer or cause the exchange or transfer of
such interest for an equivalent beneficial interest in such Regulation S Global
Note; provided that the remaining
beneficial interest in such Rule 144A Global Note held by such Holder
shall either equal zero or meet the Authorized Minimum Denominations. Upon
receipt by the Indenture Trustee, as Note Registrar, and the Co-Issuers of (A) instructions
given in accordance with DTC’s procedures from an Agent Member directing the
Indenture Trustee to cause to be credited a beneficial interest in the
Regulation S Global Note in an amount equal to the beneficial interest in the Rule 144A
Global Note to be exchanged or transferred, but not less than the Authorized
Minimum Denominations applicable to Notes held through Regulation S Global
Notes, (B) a written order given in accordance with DTC’s procedures
containing information regarding the participant account of DTC and, in the
case of a transfer or exchange pursuant to and in accordance with Regulation S,
the Euroclear or Clearstream account to be credited with such increase, and (C) a
certificate in the form of Exhibit C attached hereto, given by
the Holder of such beneficial interest stating that the exchange or transfer of
such interest has been made in compliance with the transfer restrictions
applicable to the Global Notes, including in accordance with Rule 903 or
904 of Regulation S, and that the Holder or the

 

18

 

transferee (as
applicable) is a QP that is both a Non-U.S. Person and a Non-U.S. Resident, the
Indenture Trustee, as Note Registrar, shall instruct DTC to reduce the
principal amount of the Rule 144A Global Note and to increase the
principal amount of the Regulation S Global Note by the aggregate principal
amount of the beneficial interest in the Rule 144A Global Note to be
exchanged or transferred, and to credit or cause to be credited to the account
of the Person specified in such instructions a beneficial interest in the
Regulation S Global Note equal to the reduction in the principal amount of the Rule 144A
Global Note. A U.S. Person may not hold an interest in a Regulation S
Global Note at any time.

 

(iv)      Other Exchanges. In the event that a Global Note is exchanged for one
or more Physical Notes pursuant to Section 2.10, such Physical
Notes may be exchanged for one another only in accordance with such
procedures as are substantially consistent with the provisions above, including
certification requirements intended to ensure that such transfers (i) comply
with Rule 144A and are made only to QIBs and QPs, or (ii) comply with
Regulation S and are made only to transferees that are QPs that are both
Non-U.S. Persons and Non-U.S. Residents and otherwise comply with such
procedures as may be from time to time adopted by the Co-Issuers and the
Indenture Trustee.

 

(v)         Transfer of Interests in the Global Notes. Notwithstanding anything herein to
the contrary, transfers of interests in a Global Note may be made (a) by
book-entry transfer of beneficial interests within the relevant Clearing Agency
or (b)(i) in the case of transfers of interests in a Rule 144A Global
Note for interests in a Regulation S Global Note, in accordance with Section 2.5(d)(iii) or
(ii) in the case of transfers of interests in a Regulation S Global
Note for interests in a Rule 144A Global Note, in accordance with Section 2.5(d)(ii);
provided, that in the case of any such
transfer of interests pursuant to clause (a) or (b) above,
such transfer is made in accordance with subsection (vi) below.

 

(vi)      Restrictions on Transfers.

 

(1)                                  Transfers of interests in a
Regulation S Global Note to a U.S. Person or a U.S. Resident shall be made by
delivery of an interest in a Rule 144A Global Note and shall be limited to
transfers made pursuant to the provisions of Section 2.5(d). Beneficial
interests in a Regulation S Global Note may only be held through Euroclear
or Clearstream or, after the Distribution Compliance Period, by DTC, Euroclear
or Clearstream. Any transfer of an interest in a Regulation S Global Note to a
U.S. Person, a U.S. Resident or to a Person that is not a QP that takes
delivery in the form of an interest in a Regulation S Global Note shall be
invalid and shall not be given effect for any purpose hereunder, and the
Indenture Trustee shall hold any funds conveyed by the intended transferee of
such interest in such Regulation S Global Note in trust for the transferor and
shall promptly reconvey such funds to such Person in accordance with the
written instructions thereof delivered to the Indenture Trustee at its address
listed in Section 16.4.

 

19

 

(2)                                  Any transfer of an interest in a Rule 144A
Global Note to a U.S. Person that is not both a QIB and a QP shall be invalid
and shall not be given effect for any purpose hereunder, and the Indenture
Trustee shall hold any funds conveyed by the intended transferee of such
interest in such Rule 144A Global Note in trust for the transferor and
shall promptly reconvey such funds to such Person in accordance with the
written instructions thereof delivered to the Indenture Trustee at its address
listed in Section 16.4.

 

(3)                                  Any transfer or exchange of any
interest in a sub-class of the Series 2007-1 Class A-2-II Notes
will be required to be for an interest in the same sub-class of the Series 2007-1
Class A-2-II Notes. The Holder of an interest in a sub-class of Series 2007-1
Class A-2-II Notes will not be permitted to transfer or exchange such
interest for a different sub-class of the Series 2007-1 Class A-2-II
Notes.

 

(e)                                  Transfers of Definitive Notes, in
whole or in part, shall only be made in accordance with this Section 2.5(e).

 

(i)             Definitive Note to Regulation S Global Note. If a holder of a beneficial
interest in one or more Definitive Notes of a Series of Notes for which
there exists a Regulation S Global Note wishes at any time to exchange its
interest in such Definitive Note for an interest in a Regulation S Global Note
of the same Series of Notes, or to transfer its interest in such
Definitive Note to a Person who wishes to take delivery thereof in the form of
an interest in a Regulation S Global Note of the same Series of Notes,
such holder; provided, such holder or, in
the case of a transfer to another Person, such Person is not a U.S. Person, may exchange
or cause the exchange of such interest, or may so transfer such interest,
as the case may be, for an equivalent beneficial interest in a Regulation
S Global Note, pursuant to the terms of this Section 2.5(e)(i). Upon
receipt by the Indenture Trustee, as Note Registrar, of (A) such
Definitive Note properly endorsed for such transfer to the transferee and
written instructions from the Holder of such Definitive Note directing the
Indenture Trustee, as Note Registrar, to cause the Regulation S Global Note to
be increased by an amount equal to the beneficial interest in the Definitive
Note (but not less than the Authorized Minimum Denomination applicable to the
Notes of such Series of Notes), to be exchanged or transferred, (B) a
written order containing information regarding the Euroclear or Clearstream
account to be credited with such increase and (C) a certificate in the form of
Exhibit D hereto given by the prospective transferee of such
beneficial interest stating that the exchange or transfer of such interest has
been made in compliance with the transfer restrictions applicable to the
Regulation S Global Notes, including, in the case of a transfer, that the
transferee is a QP and is not a U.S. Person and that the transfer is being made
pursuant to Rule 903 or 904 of Regulation S, the Indenture Trustee, as
Note Registrar, shall cancel such Definitive Note in accordance with Section 2.9,
record the transfer in the Note Register in accordance with Section 2.5,
and increase the principal amount of the Regulation S Global Note of the same Series of
Notes by the aggregate principal amount of the beneficial interest in the

 

20

 

Definitive Note being
exchanged or transferred, and instruct DTC to credit or cause to be credited to
the account of the Person specified in such instructions a beneficial interest
in such Regulation S Global Note equal to such amount. Notwithstanding anything
to the contrary herein, Class A-1 Notes may not be exchanged for
Global Notes.

 

(ii)          Transfer of Definitive Notes.

 

(1)                                  Transfer of Definitive Notes Other
than Class A-1 Definitive Notes. If a holder of a beneficial interest in a Definitive
Note, other than a Class A-1 Definitive Note, wishes at any time to
transfer its interest in such Definitive Note, such holder may transfer or
cause the transfer of such interest for an equivalent beneficial interest in
one or more Definitive Notes of the same Series of Notes as provided below.
Upon receipt by the Indenture Trustee, as Note Registrar, of (A) such
holder’s Definitive Note properly endorsed for assignment to the transferee or
accompanied by the written instrument of transfer referred to in Section 2.5(a) and
(B) a certificate in the form of Exhibit E hereto given
by the prospective transferee of such beneficial interest stating that the
transfer of such interest has been made in accordance with the applicable
restrictions in this Base Indenture, including that the transferee, (x) if
such Note is being offered, sold or delivered within the United States, or to,
or for the benefit of, a U.S. Person, such transferee is a QIB (who is also a
QP), or (y) if such Note is being offered and sold in reliance on
Regulation S, such transferee is a QP who is not a U.S. Person and is located
outside of the United States, then the Indenture Trustee, as Note Registrar,
shall cancel such Definitive Note in accordance with Section 2.9,
record the transfer in the Note Register in accordance with Section 2.5
and authenticate and deliver one or more Definitive Notes of the same Series of
Notes, registered in the names specified in the assignment described in clause
(A) above, in principal amounts designated by the transferee (the
aggregate of such amounts being equal to the beneficial interest in the
Definitive Notes surrendered by the transferor), which shall not be less than
the Authorized Minimum Denomination for the related Series of Notes;

 

(2)                                  Transfer of Class A-1 Notes. If a holder of an interest in a Class A-1
Note wishes at any time to transfer its interest in such Class A-1 Note,
such holder may transfer or cause the transfer of such interest for an
equivalent interest in one or more  Class A-1
Notes of the same Series of Notes as provided below. Upon receipt by the
Indenture Trustee, as Note Registrar, of (A) such holder’s Class A-1
Note properly endorsed for assignment to the transferee or accompanied by the
written instrument of transfer referred to in Section 2.5(a), and (B) a
certificate in the form of Exhibit F hereto given by the
prospective transferee of such interest, then the Indenture Trustee, as Note Registrar,
shall cancel such Class A-1 Note in accordance with Section 2.9,
record the transfer in the Note Register in accordance with Section 2.5
and authenticate and deliver one or more Class A-1 Notes of the same Series of
Notes, registered in the names specified in the assignment described in subclause
(A) above, in principal amounts designated by the transferee (the
aggregate of such amounts being equal

 

21

 

to the interest in
the Class A-1 Notes surrendered by the transferor), which shall not be
less than the Authorized Minimum Denomination for the related Series of
Notes.

 

(iii)       Exchange of Definitive Notes. If a holder of a beneficial
interest in one or more Definitive Notes wishes at any time to exchange such
Definitive Notes for one or more Definitive Notes of different principal
amounts of the same Series of Notes (but not less than the Authorized
Minimum Denomination applicable thereto) that will be beneficially owned by
such holder, such holder may exchange or cause the exchange of such
interest for an equivalent beneficial interest in Definitive Notes of the same Series of
Notes as provided below. Upon receipt by the Indenture Trustee, as Note
Registrar, of (A) such holder’s Definitive Notes properly endorsed for
such exchange or the written instrument of transfer referred to in Section 2.5(a) and
(B) written instructions from the holder (or such beneficial holder, as
identified by the holder) of such Definitive Note designating the number and
principal amounts of the Definitive Notes to be exchanged (the aggregate of
such principal amounts being equal to the Aggregate Outstanding Principal
Amount of the Definitive Notes surrendered for exchange) and certifying that
such exchange does not represent a change in beneficial ownership, then the
Indenture Trustee, as Note Registrar, shall cancel such Definitive Note in
accordance with Section 2.9, record the exchange in the Note
Register in accordance with Section 2.5 and authenticate and
deliver one or more Definitive Notes of the same Series of Notes,
registered in the same names as the Definitive Notes surrendered by such holder
or such different names as are specified in the endorsement described in clause
(A) above, in principal amounts designated by such holder (the
aggregate of such amounts being equal to the beneficial interest in the
Definitive Notes surrendered by such holder).

 

(iv)      Any transfer or exchange of any interest in a sub-class of
the Class A-1 Notes will be required to be for an interest in the same
sub-class of the Class A-1 Notes. The Holder of an interest in a sub-class of
Class A-1 Notes will not be permitted to transfer or exchange such
interest for a different sub-class of the Class A-1 Notes.

 

(f)                                    If Notes are issued upon the transfer,
exchange or replacement of Notes bearing the applicable legends set forth in
exhibits to the applicable Series Supplement, and if a request is made to
remove such applicable legend on such Notes, the Notes so issued shall bear
such applicable legend, or such applicable legend shall not be removed, as the
case may be, unless there is delivered to the Co-Issuers such satisfactory
evidence, which may include an Opinion of Counsel licensed to practice law
in the State of New York (and addressed to the Co-Issuers and the Indenture
Trustee), as may be reasonably required by the Co-Issuers to the effect
that neither such applicable legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the provisions
of the Securities Act, the Investment Company Act, ERISA or the Code, as
applicable. Upon provision of such satisfactory evidence, as confirmed in
writing by the Co-Issuers to the Indenture Trustee, the Indenture Trustee, at
the direction of the Co-Issuers, shall authenticate and deliver Notes that do
not bear such applicable legend.

 

22

 

(g)                                 Each purchaser who becomes a
beneficial owner of the Notes represented by an interest in a Rule 144A
Global Note shall be deemed to represent, certify and agree with the
Co-Issuers, Applebee’s International and the Initial Purchaser as follows
(terms used in this paragraph that are defined in Rule 144A are used
herein as defined therein):

 

(i)             The purchaser understands that the Notes have not been
recommended by any United States federal or state securities commission or
regulatory authority. The foregoing authorities have not confirmed the accuracy
or determined the adequacy of any Offering Memorandum. Any representation to
the contrary is a criminal offense.

 

(ii)          The purchaser (A) is a QIB (who is also a QP), (B) is
aware that the sale to it is being made in reliance on Rule 144A, (C) is
acquiring such Notes for its own account or for the account of a QIB (who is
also a QP) over which it exercises sole investment discretion, (D) is not
(and any such account is not) a pension, profit-sharing or other retirement
trust fund or plan in which the partners, beneficiaries or participants, as
applicable, may designate the particular investments to be made, (E) is
not a broker dealer of the type described in paragraph (a)(1)(ii) of Rule 144A
unless it owns and invests on a discretionary basis not less than U.S.
$25,000,000 in securities of issuers that are not affiliated to it, (b) a
participant-directed employee plan, such as a 401(k) plan, or any other
type of plan referred to in paragraph (a)(1)(i)(D) or (a)(1)(i)(E) of
Rule 144A, or a trust fund referred to in paragraph (a)(1)(i)(F) of Rule 144A
that holds the assets of such a plan, unless investment decisions with respect
to the plan are made solely by the fiduciary, trustee or sponsor of such plan, (F) was
not formed or capitalized for the specific purpose of investing in the Co-
Issuers (except where each beneficial owner is both a QIB and a QP), (G) is
not a (w) corporation, (x) partnership, (y) common trust fund or
(z) special trust, pension fund or retirement plan in which the
shareholders, equity owners, partners, beneficiaries, beneficial owners or
participants, as applicable, may designate the particular investments to
be made, (H) if formed on or before April 30, 1996, is not an
investment company that relies on the exclusion from the definition of “investment
company” provided by 

Section 3(c)(7) of the Investment Company Act (or a foreign
investment company under Section 7(d) thereof relying on Section 3(c)(7)
with respect to those of its holders that are U.S. Persons), unless, with
respect to its treatment as a QP, it has, in the manner required by Section 2(a)(51)(C) of
the Investment Company Act and the rules and regulations thereunder,
received the consent of its beneficial owners that acquired their interests on
or before April 30, 1996, and (I) is not an entity that, immediately
subsequent to its purchase or other acquisition of a beneficial interest in the
Notes, will have invested more than 40% of its assets in beneficial interests
in the Notes and/or in other securities of the Co-Issuers (unless all of the
beneficial owners of such entity’s securities are QPs).

 

(iii)       The purchaser understands that the Notes are being
offered in a transaction not involving any public offering in the United States
within the meaning of the Securities Act, that the Notes have not been and will
not be registered under the Securities Act and that if in the future it decides
to

 

23

 

offer, resell, pledge
or otherwise transfer any of the Notes, such Notes may be offered, resold,
pledged or otherwise transferred only (i) to QIBs (who are also QPs)
pursuant to Rule 144A or (ii) to a QP in an offshore transaction
complying with Rule 903 or Rule 904 of Regulation S, and in
accordance with the applicable legends.

 

(iv)      The purchaser acknowledges that none of the Co-Issuers
has been registered under the Investment Company Act.

 

(v)         The purchaser acknowledges that none of the
Co-Issuers, the Initial Purchaser, the Insurers, if any, the Indenture Trustee,
the Servicer, Applebee’s International, IHOP Corp., their respective Affiliates
or any Person representing the Co-Issuers, the Initial Purchaser, the Insurers,
if any, the Indenture Trustee, the Servicer, Applebee’s International, IHOP
Corp. or their respective Affiliates has made any representation to it with
respect to the Co-Issuers, the Servicer, Applebee’s International, IHOP Corp.
or their respective Affiliates or the offering or sale of the Notes, other than
the information contained in the Offering Memorandum and any representations
expressly set forth in a written agreement with such parties. None of the
Co-Issuers, the Initial Purchaser, the Insurers, if any, the Indenture Trustee,
the Servicer, Applebee’s International, IHOP Corp. or their respective
Affiliates is acting as a fiduciary or financial or investment advisor for it
and it is not relying (for purposes of making an investment decision) on any
written or oral advice or counsel of the Co-Issuers, the Initial Purchaser, the
Insurers, if any, the Indenture Trustee, the Servicer, Applebee’s
International, IHOP Corp. or their respective Affiliates, other than the
information contained in the Offering Memorandum and any representations
expressly set forth in a written agreement with such parties. It has consulted
with its own legal, regulatory, tax, business, investment, financial and accounting
advisors to the extent it has deemed necessary, and has made its own investment
decisions (including decisions regarding the suitability of any transactions
pursuant to the Indenture) based upon its own judgment and upon any advice from
such advisors as it has deemed necessary and not upon any view expressed by the
Co-Issuers, the Initial Purchaser, the Insurers, if any, the Indenture Trustee,
the Servicer, Applebee’s International, IHOP Corp. or their respective
Affiliates. The purchaser has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of its
investment in the Notes, and the purchaser, and any accounts for which it is
acting, are each able to bear the economic risk of the investment. It is
purchasing the Notes for its own account, or for one or more investor accounts
for which it is acting as a fiduciary or agent, in each case for investment,
and not with a view to, or for offer or sale in connection with, any
distribution thereof in violation of the Securities Act, subject to any
requirements of law that the disposition of its property or the property of
such investor account be at all times within its or their control and subject
to its or their ability to resell such Notes pursuant to Rule 144A. It
understands that an investment in the Notes involves certain risks, including
the risk of loss of a substantial part of its investment under certain
circumstances. It has had access to such financial and other information
concerning the Notes, the Co-Issuers and the

 

24

 

other Securitization
Entities as it deemed necessary or appropriate in order to make an informed
investment decision with respect to its purchase of the Notes, including an opportunity
to ask questions of, and request information from, the Co-Issuers. None of the
Co-Issuers, the Initial Purchaser, the Insurers, if any, the Indenture Trustee,
the Servicer, Applebee’s International, IHOP Corp. or their respective
Affiliates have given to the purchaser (directly or indirectly through any
other person) any assurance, guarantee or representation whatsoever as to the
expected or projected success, profitability, return, performance, result,
effect, consequence or benefit (including legal, regulatory, tax, financial,
accounting or otherwise) of the Indenture, the Notes or the other documentation
for the Notes. The purchaser has determined that the rates, prices or amounts
and other terms of the purchase and sale of the Notes reflect those in the
relevant market for similar transactions and the purchaser is purchasing the
Notes with a full understanding of all of the terms, conditions and risks
thereof (economic or otherwise) and it is capable of assuming and willing to
assume (financially and otherwise) those risks. The purchaser is a
sophisticated investor.

 

(vi)      The purchaser understands that the Notes will, unless
otherwise agreed by the Co-Issuers and the holder thereof in compliance with
applicable law, bear one or more legends substantially as set forth in the
applicable Series Supplement.

 

(vii)   The purchaser understands that the Notes offered in
reliance on Rule 144A will be represented by one or more Rule 144A
Global Notes. Before any interest in a Rule 144A Global Note may be offered,
resold, pledged or otherwise transferred to a person who takes delivery in the form of
an interest in a Regulation S Global Note, the transferor will be required to
provide the Indenture Trustee with a written certification as to compliance
with transfer restrictions as set forth in the Indenture.

 

(viii) The purchaser will not, at any time,
offer to buy or offer to sell the Notes by any form of general
solicitation or advertising, including, but not limited to, any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar medium or broadcast over television or radio or seminar or meeting
whose attendees have been invited by general solicitations or advertising.

 

(ix)        The purchaser understands that the Co-Issuers, the
other Securitization Entities, Applebee’s International, IHOP Corp., the
Initial Purchaser, the Series 2007-1 Class A Insurer (and any other
Insurer identified in the related Series Supplement, if applicable), the
Indenture Trustee, the Servicer, their respective Affiliates and their
respective counsel will rely upon the accuracy and truth of the foregoing
representations, and it hereby consents to such reliance.

 

(x)           The purchaser understands that the Co-Issuers shall
require certification reasonably acceptable to the Co- Issuers (i) as a
condition to the payment of principal of and interest on any Note without, or
at a reduced rate

 

25

 

of, U.S. withholding
or backup withholding tax, and (ii) to enable them to determine their
duties and liabilities with respect to any taxes or other charges that they,
the Indenture Trustee or any paying agent may be required to pay, deduct
or withhold from payments in respect of such Notes made to the holder of such
Notes under any present or future law or regulation of the United States or any
present or future law or regulation of any political subdivision thereof or
taxing authority therein or to comply with any reporting or other requirements
under any such law or regulation. Such certification may include U.S.
Federal income tax forms (such as IRS Form W-8BEN (Certification of
Foreign Status of Beneficial Owner), Form W-8IMY (Certification of Foreign
Intermediary Status), IRS Form W 9 (Request for Taxpayer Identification
Number and Certification), or IRS Form W-8ECI (Certification of Foreign
Person’s Claim for Exemption from Withholding on Income Effectively Connected
with Conduct of a U.S. Trade or Business) or any successors to such IRS forms).
Each purchaser agrees to provide any certification requested pursuant to this
paragraph within a reasonable time period after such request is initially made
and to update or replace such form or certification in accordance with its
terms or its subsequent amendments.

 

(xi)        The purchaser understands that the Notes represent the
obligation of the Co-Issuers only and other than payments that may arise
under certain representations and warranties or payments under certain express
guarantees made by certain of their Affiliates, payments on the Notes are not
the obligations of any of their Affiliates.

 

(xii)     The purchaser understands that the Co-Issuers have the
right under this Base Indenture to compel any nonpermitted holder of an
interest in the Notes to sell its interest in the Notes or may sell such
interest in the Notes on behalf of such owner. In connection therewith, (a) if
the purchaser is acquiring its interest in the Notes in the form of an
interest in a Global Note, the purchaser understands that the Indenture permits
the Co-Issuers to require that the Holder of (i) any interest in a Rule 144A
Global Note held by a Holder that is a U.S. Person, U.S. Resident or a Holder
who was sold such interest in the United States who is determined not to have
been both a QIB and a QP at the time of acquisition of such interest in a Rule 144A
Global Note or (ii) any interest in a Regulation S Global Note held by a
Holder that is a U.S. Person, U.S. Resident or a person who was sold such
interest in the United States, in each case at the time of the acquisition of
such interest, sell such interest to a transferee that is permitted under this
Base Indenture and, if the Holder does not comply with such demand within 30
days thereof, the Co-Issuers, acting at the direction of the Servicer, may sell
such Holder’s interest in the applicable Global Note on such terms as the
Co-Issuers may choose.

 

(h)                                 Each purchaser who becomes a
beneficial owner of the Notes represented by an interest in a Regulation S
Global Note shall be deemed to represent, certify and agree with the Co-Issuers
and the Initial Purchaser as to all of the matters set forth above under (i),
(iii), (iv), (v), (vi) and (viii) through (xiii) above and to have
further represented as follows (terms used in this paragraph are defined in
Regulation S and are used as defined):

 

26

 

(i)             In connection with the purchase of the Notes:  (a) the beneficial owner is not a U.S.
Person or U.S. Resident and is acquiring the Notes in reliance on the exemption
from registration provided by Regulation S thereunder, (b) such beneficial
owner is a QP and (c) such beneficial owner is not acquiring any Offered
Note as part of a plan to reduce, avoid or evade U.S. Federal income taxes
owed, owing or potentially owed or owing.

 

(ii)          The purchaser or beneficial owner is aware that the
sale of such Notes to it is being made in reliance on the exemption from
registration provided by Regulation S and are being offered only in a
transaction not involving any public offering in the United States within the
meaning of the Securities Act. Such Person further understands that the Notes
offered in reliance on Regulation S will be represented by one or more
Regulation S Global Notes. The purchaser and each beneficial owner of the Notes
is a QP and is not and will not be a U.S. Person, and its purchase of the Notes
will comply with all applicable laws in any jurisdiction in which it resides or
is located. Before any interest in a Regulation S Global Note may be
offered, resold, pledged or otherwise transferred, the transferor will be
required to provide the Indenture Trustee with a written certification as to
compliance with the transfer restrictions as set forth in this Base Indenture.
Such beneficial owner acknowledges that no representation has been made as to
the availability of any exemption under the Securities Act or any state or
foreign securities laws for resale of the Notes.

 

(iii)       The purchaser is aware that, except as otherwise
provided in this Base Indenture, the Notes being sold to it will be represented
(a) initially by one or more Temporary Regulation S Global Notes and (b) on
or after the last day of the period ending 40 days after the Initial Purchaser
notifies the Co-Issuers that the resale of the Offered Notes has been
completed, (the “Distribution Compliance Period”) by one or more
Regulation S Global Notes, and that during the Distribution Compliance Period,
beneficial interests therein may be held only through Euroclear or
Clearstream and after the last day of the Distribution Compliance Period,
beneficial interests therein may be held only through Euroclear,
Clearstream or DTC.

 

(iv)      The purchaser understands that, prior to the first
Business Day following the Distribution Compliance Period, any resale or other
transfer of beneficial interests in a Temporary Regulation S Global Note in the
United States or to U.S. Persons shall not be permitted.

 

(v)         The purchaser will not, at any time, offer to buy or
offer to sell the Notes by any form of general solicitation or
advertising, including, but not limited to, any advertisement, article, notice
or other communication published in any newspaper, magazine or similar medium
or broadcast over television or radio or seminar or meeting whose attendees
have been invited by general solicitations or advertising.

 

27

 

(i)                                     Any purported transfer of a Note not
in accordance with this Section 2.5 shall be null and void and
shall not be given effect for any purpose hereunder and shall not be
registered.

 

(j)                                     Notwithstanding anything contained
in this Base Indenture to the contrary, neither the Indenture Trustee nor the
Note Registrar (nor any other Transfer Agent) shall be responsible or liable
for compliance with applicable federal or state securities laws (including,
without limitation, the Securities Act), the Investment Company Act, ERISA or
the Code (or any applicable regulations thereunder); provided that if a specified transfer certificate or Opinion of
Counsel is required by the express terms of this Section 2.5 to be
delivered to the Indenture Trustee or Note Registrar prior to registration of
transfer of a Note, the Indenture Trustee and/or Note Registrar, as applicable,
shall be under a duty to receive such certificate or Opinion of Counsel and to
examine the same to determine whether it conforms on its face to the
requirements hereof (and the Indenture Trustee or Note Registrar, as the case may be,
shall promptly notify the party delivering the same if it determines that such
certificate or Opinion of Counsel does not so conform).

 

(k)                                  If the Indenture Trustee determines
or is notified by the Co-Issuers or the Initial Purchaser that (i) a
transfer or attempted or purported transfer of any interest in any Note was not
consummated in compliance with the provisions of this Section 2.5
on the basis of an incorrect form or certification from the transferee or
purported transferee, (ii) a transferee failed to deliver to the Indenture
Trustee any form or certificate required to be delivered hereunder or (iii) the
holder of any interest in a Note is in breach of any representation or
agreement set forth in any certificate or any deemed representation or
agreement of such holder, the Indenture Trustee shall not register such attempted
or purported transfer and if a transfer has been registered, such transfer
shall be absolutely null and void ab initio and
shall vest no rights in the purported transferee (such purported transferee, a “Disqualified
Transferee”) and the last preceding holder of such interest in such Note
that was not a Disqualified Transferee shall be restored to all rights as a
Holder thereof retroactively to the date of transfer of such Note by such
Holder.

 

(l)                                  The Co Issuers shall, upon two (2) Business
Days’ prior written notice, cause the Note Registrar to send, and the Note
Registrar hereby agrees to send on at least an annual basis a notice from the
Co Issuers to DTC in substantially the form of Exhibit G
hereto (the “Important Section 3(c)(7) Notice”), with a request
that DTC forward each such notice to the relevant DTC participants for further
delivery to the Note Owners. If DTC notifies the Co Issuers or the Note
Registrar that it will not forward such notices, the Co Issuers will request
DTC to deliver to the Co Issuers a list of all DTC participants holding an
interest in the Notes and the Note Registrar and Paying Agent will send the
Important Section 3(c)(7) Notice directly to such participants.

 

(m)                               With respect to each Series of
Notes, the Co-Issuers shall:

 

(i)             request DTC to include the “3c7” marker in the DTC 20
character security descriptor and the 48 character additional descriptor for
the Notes in order to indicate that sales to U.S. persons are limited to QPs;

 

28

 

(ii)          request DTC to cause each physical DTC delivery order
ticket delivered by DTC to purchasers to contain the 20 character security
descriptor and shall request DTC to cause each DTC delivery order ticket
delivered by DTC to purchasers in electronic form to contain the “3c7”
indicator and the related user manual for participants which will contain a
description of the relevant restrictions;

 

(iii)       request DTC, on the Closing Date or any Issuance Date
(as applicable), to send an Important 3(c)(7) Notice to all DTC
participants in connection with the offering of the Notes. The Important 3(c)(7) Notice
shall notify DTC’s participants that the Notes are Section 3(c)(7) securities;

 

(iv)  request that DTC include the Notes in DTC’s “Reference
Directory” of Section 3(c)(7) offerings;

 

(v)         cause each “CUSIP” number obtained for a Note
to have an attached “fixed field” that contains “3c7” and “144A”
indicators;

 

(vi)      from time to time request all third party vendors
which provide information on the Notes (including Bloomberg and Reuters Group
plc) to include on each screen containing information about the Notes
maintained by such vendors appropriate legends regarding the Rule 144A and
Section 3(c)(7) restrictions on the Notes;

 

(vii)   from time to time (upon the request of the Indenture
Trustee) request DTC to deliver to the Co-Issuers a list of all DTC
participants holding an interest in the Notes;

 

(viii) request Euroclear to include the “144A/3(c)(7)”
marker in the name for the Note included in the Euroclear securities database
in order to indicate that sales are limited to QIB/QPs;

 

(ix)        request Euroclear to cause each daily securities
balance report and each daily securities transaction report delivered to
Euroclear participants to contain the indicator “144A/3(c)(7)” in the name for
the Note;

 

(x)           request Euroclear to include a description of the Section 3(c)(7) restrictions
for the Note in its New Issues Acceptance Guide;

 

(xi)        instruct Euroclear to send an Important Section 3(c)(7) Notice
to all Euroclear participants holding positions in the 144A Global Note at
least once every calendar year, substantially in the form of Exhibit G
hereto;

 

(xii)     request Euroclear to deliver to the Co Issuers a list
of all Euroclear participants holding an interest in the Note and provide such
participants with notification substantially in the form of Exhibit G
hereto;

 

29

 

(xiii) request Clearstream to include
the “144A/3(c)(7)” marker in the name for the Note included in the Clearstream
securities database in order to indicate that sales are limited to QPs;

 

(xiv) request Clearstream to cause each
daily portfolio report and each daily settlement report delivered to
Clearstream participants to contain the indicator “144A/3(c)(7)” in the name
for the 144A Global Note;

 

(xv)    request Clearstream to include a description of the Section 3(c)(7) restrictions
in its Customer Handbook;

 

(xvi) instruct Clearstream to send an
Important Section 3(c)(7) Notice to all Clearstream participants
holding positions in the Note at least once every calendar year, substantially
in the form of Exhibit G hereto;

 

(xvii) from time to time request
Clearstream to deliver to the Co Issuers a list of all Clearstream participants
holding an interest in any series of Note and provide such participants
with notification substantially in the form of Exhibit G
hereto; and

 

(xviii) request Clearstream to include a
“3(c)(7)” marker in the name for the Note included in the list of securities
accepted in the Clearstream securities’ database made available to Clearstream
participants.

 

Section 2.6                                      Mutilated,
Defaced, Destroyed, Lost or Stolen Note. If (a) any mutilated or
defaced Note is surrendered to a Transfer Agent, or if there shall be delivered
to the Co-Issuers, the Indenture Trustee and the relevant Transfer Agent (each,
a “Specified Person”) evidence to their reasonable satisfaction of the
destruction, loss or theft of any Note, and (b) there is delivered to the
Specified Person such reasonable security or indemnity as may be required
by each Specified Person to save each of them and any agent of any of them
harmless, then, in the absence of notice to the Specified Persons that such
Note has been acquired by a Protected Purchaser, the Co-Issuers shall execute
and, upon Company Request, the Indenture Trustee shall authenticate and
deliver, in lieu of any such mutilated, defaced, destroyed, lost or stolen
Note, a new Note, of like tenor (including the same date of issuance) and equal
principal amount, registered in the same manner, dated the date of its
authentication, bearing interest from the date to which interest has been paid
on the mutilated, defaced, destroyed, lost or stolen Note and bearing a number
not contemporaneously outstanding.

 

If, after
delivery of such new Note, a Protected Purchaser of the predecessor Note
presents for payment, transfer or exchange such predecessor Note, any Specified
Person shall be entitled to recover such new Note from the Person to whom it
was delivered or any Person taking therefrom, and each Specified Person shall
be entitled to recover upon the security or indemnity provided therefor to the
extent of any loss, damage, cost or expense incurred by such Specified Person
in connection therewith.

 

In case any
such mutilated, defaced, destroyed, lost or stolen Note has become due and
payable, the Co-Issuers in their discretion may, instead of issuing a new Note,
pay such

 

30

 

Note without
requiring surrender thereof except that any mutilated or defaced Note shall be
surrendered.

 

Upon the
issuance of any new Note under this Section 2.6, the Co-Issuers may require
the payment by the registered holder thereof of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the Indenture
Trustee) connected therewith.

 

Every new Note
issued pursuant to this Section 2.6 in lieu of any mutilated,
defaced, destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Co-Issuers and such new Note shall be entitled,
subject to the second paragraph of this Section 2.6, to all the
benefits of this Base Indenture equally and proportionately with any and all
other Notes duly issued hereunder.

 

The provisions
of this Section 2.6 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, defaced, destroyed, lost or stolen Notes.

 

Section 2.7                                      Payment of
Principal and Interest and Other Amounts; Rights Preserved.

 

(a)                                  Interest on each Series of
Notes shall accrue during each Interest Accrual Period at the applicable Note
Interest Rate and as provided in the applicable Series Supplement and
shall be due and payable in arrears on the Payment Date related to such
Interest Accrual Period in accordance with Article XI. Except as
expressly provided herein, no payment of interest on the Notes shall be made by
the Co-Issuers hereunder other than on a Payment Date.

 

(b)                                 Principal of each Series of
Notes shall be paid on each Payment Date to the extent such payment is then due
and funds are available therefor in accordance with Article XI. Any
principal amounts thereof remaining unpaid on the applicable Series Legal
Final Maturity Date shall be due and payable on the applicable Series Legal
Final Maturity Date or earlier upon the occurrence of an acceleration, call for
redemption or otherwise.

 

(c)                                  Except as otherwise provided
pursuant to a Class A-1 Note Purchase Agreement to the extent that the
Paying Agent has been notified in writing of such exception by the Co-Issuers
or the applicable Class A-1 Administrative Agent, as a condition to the
payment of principal of and interest on and other amounts on any Note without
the imposition of U.S. withholding tax, the Co-Issuers, the Indenture Trustee
or any Paying Agent shall require, and Noteholder shall provide, certification
acceptable to it to enable the Co-Issuers, the Indenture Trustee and any Paying
Agent to determine their duties and liabilities with respect to any taxes or
other charges that they may be required to pay, deduct or withhold from
payments in respect of such Note or the Holder of such Note under any present
or future law or regulation of the United States or any present or future law
or regulation of any political subdivision thereof or taxing authority therein
or to comply with any reporting or other requirements under any such law or
regulation. Such certification may include U.S. federal income tax forms
(such as IRS Form W-8BEN (Certification of Foreign Status of Beneficial
Owner), Form W-8IMY (Certification of Foreign Intermediary Status), IRS Form W-9
(Request for Taxpayer Identification Number and

 

31

 

Certification) or IRS Form W-8ECI
(Certification of Foreign Person’s Claim for Exemption from Withholding on
Income Effectively Connected with Conduct of a U.S. Trade or Business) or any
successors to such IRS forms). In addition, except as otherwise provided
pursuant to a Class A-1 Note Purchase Agreement to the extent that the
Paying Agent has been notified in writing of such exception by the Co-Issuers
or the applicable Class A-1 Administrative Agent, the Co-Issuers, the
Indenture Trustee or any Paying Agent may require certification acceptable
to it to enable the Co-Issuers to qualify for a reduced rate of withholding in
any jurisdiction from or through which the Co-Issuers receive payments on their
assets. Each Holder of any Note agrees to provide any certification requested
pursuant to this paragraph within a reasonable time period after such request
is initially made and to update or replace such form or certification in
accordance with its terms or its subsequent amendments.

 

The Indenture
Trustee hereby provides notice to each Noteholder that the failure of such
Noteholder to provide the Indenture Trustee with appropriate tax certifications
will result in amounts being withheld from payments to such Noteholders under
the Indenture; provided, that amounts
withheld pursuant to applicable tax laws shall be considered as having been
paid by the Co -Issuers.

 

(d)                                 Payments in respect of interest on
and principal of the Notes shall be payable by wire transfer in immediately
available funds to a Dollar account maintained by the Holder or its nominee; provided that the Holder has provided wiring
instructions to the Indenture Trustee on or before the related Record Date or,
if wire transfer cannot be effected, by a Dollar check drawn on a bank in the
United States of America, or by a Dollar check mailed to the Holder at its
address in the Note Register. The transfer of funds by the Indenture Trustee
from the appropriate Indenture Trust Account to, or for further credit to, a
U.S. Dollar account of a Paying Agent outside the United States shall be
permitted under the preceding sentence (and it is acknowledged that any payment
by wire transfer of U.S. Dollars outside the United States is subject to
applicable banking procedures and limitations applicable to wire transfer of
U.S. Dollars). None of the Co-Issuers, the Indenture Trustee or any Paying
Agent shall have any responsibility or liability for any aspects of the records
maintained by DTC or its nominee or any of the Agent Members relating to or for
payments made thereby on account of beneficial interests in a Rule 144A
Global Note or a Regulation S Global Note. None of the Co-Issuers, the
Indenture Trustee or the Paying Agent shall have any responsibility or
liability with respect to any records maintained by the Holder of any Note with
respect to the beneficial holders thereof or payments made thereby on account
of beneficial interests held therein. In the case where any final payment of
principal and interest is to be made on any Note (other than on the Legal Final
Maturity Date thereof), the Co-Issuers or, upon Company Request, the Indenture
Trustee, in the name and at the expense of the Co-Issuers, shall, not more than
thirty (30) nor fewer than ten (10) days prior to the date on which such
payment is to be made, mail to the Persons entitled thereto at their addresses
appearing on the Note Register a notice which shall state the date on which
such payment will be made and the amount of such payment per $100,000 initial
principal amount of Notes and shall specify the place where such Notes may be
presented and surrendered for such payment.

 

(e)                                  Interest on any Note which is
payable and is punctually paid or duly provided for on any Payment Date shall
be paid to the Person in whose name that Note (or one or

 

32

 

more predecessor Notes) is registered at the
close of business on the Record Date for such interest.

 

(f)                                    Except to the extent otherwise
provided in the applicable Series Supplement, payments of principal to
Holders of the Notes of each Series of Notes shall be made in the
proportion that the Aggregate Outstanding Principal Amount of the Notes of such
Series of Notes registered in the name of each such Holder on such Record
Date bears to the Aggregate Outstanding Principal Amount of all Notes of such Series of
Notes on such Record Date.

 

(g)                                 All reductions in the principal
amount of a Note (or one or more predecessor Notes) effected by payments of
installments of principal made on any Payment Date (including any Redemption
Date) shall be binding upon all future Holders of such Note and of any Note
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Note.

 

(h)                                 Subject to the foregoing provisions
of this Section 2.7, each Note delivered under this Base Indenture
and upon registration of transfer of or in exchange for or in lieu of any other
Note shall carry the rights of unpaid interest and principal that were carried
by such other Note.

 

(i)                                     Notwithstanding any of the foregoing
provisions with respect to payments of principal of and interest on the Notes,
if the Notes have become or been declared due and payable following an Event of
Default and such acceleration of maturity and its consequences have not been
rescinded and annulled and the provisions of Section 2.5 are not
applicable, then payments of principal of and interest on such Notes shall be
made in accordance with Section 5.4.

 

Section 2.8                                      Persons Deemed
Owners. The Co-Issuers, the Indenture Trustee, the Note Registrar and any
agent of the Co-Issuers, the Indenture Trustee or the Note Registrar may treat
as the owner of a Note the Person in whose name such Note is registered on the
Note Register on the applicable Record Date for the purpose of receiving
payments of principal of and interest and other amounts on such Note and on any
other date for all other purposes whatsoever (whether or not such Note is
overdue), and neither the Co-Issuers nor the Indenture Trustee nor any agent of
the Co-Issuers or the Indenture Trustee shall be affected by notice to the
contrary; provided that DTC, or its
nominee, shall be deemed the owner of the Global Notes, and owners of
beneficial interests in Global Notes shall not be considered the owners of any
Notes for the purpose of receiving notices.

 

Section 2.9                                      Cancellation.
All Notes surrendered for payment, registration of transfer, exchange or
redemption, or deemed lost or stolen, shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee, and shall be
promptly canceled by the Indenture Trustee and may not be reissued or
resold. No Notes shall be authenticated in lieu of or in exchange for any Notes
canceled as provided in this Section 2.9, except as expressly
permitted by this Base Indenture. All canceled Notes held by the Indenture
Trustee shall be destroyed or held by the Indenture Trustee in accordance with
its standard retention policy unless the Co-Issuers shall direct by a Company
Order that they be returned to it.

 

33

 

Section 2.10                                Global Notes;
Temporary Notes.

 

(a)                                  A Global Note deposited with DTC
pursuant to Section 2.2 shall be transferred to the beneficial
owners thereof only if (1) (i) such transfer complies with Section 2.5
and (ii) either (x) DTC notifies the Co-Issuers that it is unwilling
or unable to continue as depositary for such Global Note or if at any time DTC
ceases to be a “Clearing Agency” registered under the Exchange Act and a
successor depositary that is so registered is not appointed by the Co-Issuers
within ninety (90) days of such notice, (y) in the case of a Global Note
held for the account of Euroclear or Clearstream, Euroclear or Clearstream, as
the case may be, is closed for business for a continuous period of 14 days
(other than by reason of statutory or other holidays) or announces an intention
permanently to cease business or does in fact do so or (2) an Event of
Default has occurred and is continuing and Note Owners holding greater than 50%
of the Aggregate Outstanding Principal Amount of such Series have notified
the Trustee and the applicable Clearing Agency in writing that continuation of
a book-entry system through the Clearing Agency is no longer in the best
interests of such Noteholders.

 

(b)                                 Any Global Note that is transferable
to the beneficial owners thereof pursuant to paragraph (a) above
shall be surrendered by DTC to the Indenture Trustee’s Corporate Trust Office
together with (i) necessary instruction for the registration and delivery
of Definitive Notes to the beneficial owners (or any such owner’s nominee)
holding the ownership interests in such Global Note, and (ii) a transfer
certificate substantially in the form of Exhibit H hereto from
such beneficial owner. Any such transfer shall be made, without charge, and the
Indenture Trustee shall authenticate and deliver, upon such transfer of each
portion of such Global Note, an equal Aggregate Outstanding Principal Amount of
Definitive Notes of the same Series of Notes and Authorized Minimum
Denominations. Any Definitive Note delivered in exchange for an interest in a
Global Note shall bear, except as otherwise provided by Section 2.5(f),
the applicable legend set forth in exhibits to the applicable Series Supplement
and shall be subject to the transfer restrictions referred to in such
applicable legends. The holder of such a registered individual Note may transfer
such Note by surrendering it at the office or agency maintained by the Co-Issuers
for this purpose in The City of New York, or at the Corporate Trust Office of
the Indenture Trustee, or at the office of any Paying Agent.

 

(c)                                  Subject to the provisions of Section 2.10(b),
the registered Holder of a Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members to take any action which a Holder is entitled
to take under this Base Indenture or the Notes.

 

(d)                                 In the event of the occurrence of
any of the events specified in paragraph (a) of this Section 2.10,
the Co-Issuers shall promptly make available to the Indenture Trustee a
reasonable supply of Notes in definitive, fully registered form without
interest coupons.

 

(e)                                  Pending the preparation of Definitive
Notes pursuant to this Section 2.10, the Co-Issuers may execute,
and upon Company Order the Indenture Trustee shall authenticate and deliver,
temporary Notes that are printed, lithographed, typewritten, mimeographed or
otherwise reproduced, in any Authorized Minimum Denominations, substantially of
the tenor of the Definitive Notes in lieu of which they are issued and with
such

 

34

 

appropriate insertions, omissions,
substitutions and other variations as the Officers executing such Notes may determine,
as conclusively evidenced by their execution of such Notes.

 

(f)                                    If temporary Notes are issued, the
Co-Issuers shall cause Definitive Notes to be prepared without unreasonable
delay. The Definitive Notes shall be printed, lithographed, typewritten or
otherwise reproduced, or provided by any combination thereof, or in any other
manner permitted by the rules and regulations of any applicable securities
exchange, all as determined by the Officers executing such Definitive Notes. After
the preparation of Definitive Notes, the temporary Notes shall be exchangeable
for Definitive Notes upon surrender of the applicable temporary Notes at the
office or agency maintained by the Co-Issuers for such purpose, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Notes, the Co-Issuers shall execute, and the Indenture Trustee shall
authenticate and deliver, in exchange therefor the same Aggregate Outstanding
Principal Amount of Definitive Notes of Authorized Minimum Denominations. Until
so exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Base Indenture as Definitive Notes.

 

Section 2.11                                No Gross Up. If
any of the Co-Issuers becomes subject to deduction, withholding, or other
charge or assessment from, or with respect to, payments to any Holder of the
Notes for any present or future tax, duty, assessment, or governmental charge,
then (i) the Master Issuer shall give prompt written notice of the
requirement to the Indenture Trustee and the Noteholders (which shall include
certification of the amount so deducted, withheld, charged, or assessed) and (ii) the
Indenture Trustee or other Paying Agent, as applicable, shall, except as
provided under any Series Supplement, reduce the amount payable in respect
of the Notes by the amount required to be deducted, withheld, charged, or
assessed from payments on the Notes on any Payment Date. Except as otherwise
provided under any Series Supplement, neither any Co-Issuer nor any
Insurer shall be obligated to pay any additional amounts to the Noteholders as
a result of any such deduction, withholding, charge, or assessment.

 

Section 2.12                                Tax Confidentiality
Waiver.

 

Notwithstanding
anything to the contrary contained in this Base Indenture, all Persons may disclose
to any and all Persons, without limitations of any kind, the U.S. Federal,
state and local tax treatment of the Notes, the Co-Issuers or any of the
transactions referred to in any Offering Memorandum, this Base Indenture or any
other transaction document described herein, any fact that may be relevant
to understanding the U.S. Federal, state and local tax treatment of the Notes,
the Co-Issuers or any of the transactions referred to in any Offering Memorandum,
this Base Indenture or any other transaction document described herein, and all
materials of any kind (including opinions or other tax analyses) relating to
such U.S. Federal, state and local tax treatment, other than the name of the
parties or any other Person named herein, or information that would permit
identification of the parties or such other Persons.

 

Section 2.13                                Actions under an
Insurance Policy.

 

(a)                                  Any payment made by an Insurer to
the Indenture Trustee for the benefit of the Holders of any Class of Notes
(whether under the applicable Insurance Policy or otherwise) shall not be
deemed to be a payment made by or on behalf of the Co-Issuers and shall not
discharge the obligations of the Co-Issuers with respect thereto or constitute
a cure of a

 

35

 

Default or Event of Default and such amounts
shall continue to be due and owing under such Notes until paid by or on behalf
of the Co-Issuers. All such payments shall be repayable by the Co-Issuers
pursuant to Section 11.1.

 

(b)                                 If payment by an Insurer is made in
respect of interest on any Senior Notes, such payment shall be applied solely
to the payment of such interest subject to the terms of the applicable
Insurance Policy and such Insurer shall be deemed to the extent of such payment
to have purchased from the Holders of such Senior Notes the right to receive
such interest on such Senior Notes to the extent the same is subsequently paid
by the Co-Issuers. If payment by an Insurer is made in respect of principal on
any Senior Notes, such payment shall be applied solely to the payment of such
principal subject to the terms of the applicable Insurance Policy and such
Insurer shall be deemed to have purchased Notes of such Senior Notes in an
Aggregate Outstanding Principal Amount equal to the amount so paid by such
Insurer and to be the sole owner of such Notes so deemed to have been purchased.
Such Insurer shall be deemed to be a Holder of such Senior Notes during any
period in which such Insurer may exercise subrogation rights pursuant to Section 2.14.

 

(c)                                  With respect to any Senior Notes
covered by an Insurance Policy, if, by 3:00 p.m. in the city in which the
Corporate Trust Office is located on the Accounting Date in respect of any
Payment Date, the amount then on deposit in the Collection Account, the Senior
Notes Interest Reserve Account, and the Cash Trap Reserve Account, after giving
effect to transfers of funds pursuant to Section 11.1 hereof is
insufficient to pay the Insured Obligations relating to the applicable Senior
Notes due on such Payment Date, then, on or before 10:00 a.m. (New York
time) on the Business Day following such Accounting Date, the Indenture Trustee
shall give written notice to the Insurers, if any, relating to such Senior
Notes of the amount of such deficiency, and thereupon submit a Notice of
Payment (as defined in the applicable Insurance Policy) in respect of such
amount, all in accordance with the terms of this Base Indenture and in strict
compliance with the terms of the applicable Insurance Policy.

 

(d)                                 In the event that the Indenture
Trustee has received a certified copy of an order of an appropriate court that
any Insured Obligation of principal of or interest on any Senior Notes has been
avoided in whole or in part as a preference payment under applicable
bankruptcy law, the Indenture Trustee shall so notify the Insurers, if any,
relating to such Senior Notes, shall comply with the provisions of the
applicable Insurance Policy to obtain payment by the Insurers, if any, relating
to such Senior Notes of such avoided payment, and shall, at the time it
provides notice to the Insurers, if any, relating to such Senior Notes, notify
Holders of such Senior Notes by mail that, in the event that any such
Noteholder’s Insured Obligation is so recovered, such Noteholder will be
entitled to payment pursuant to the terms of the applicable Insurance Policy. The
Indenture Trustee shall furnish to the Insurers, if any, relating to such
Senior Notes the Indenture Trustee’s records evidencing the payments of
principal of and interest on such Senior Notes, if any, which have been made by
the Indenture Trustee and subsequently recovered from the Noteholders, and the
dates on which such payments were made. Pursuant to but subject to the terms of
the applicable Insurance Policy, an Insurer relating to such Senior Notes will
make such payment on behalf of the Noteholder to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Final Order (as
defined in the applicable Insurance Policy) and not to the Indenture Trustee or
any Noteholder directly (unless a Noteholder has previously paid such payment
to the receiver, conservator, debtor-in-possession

 

36

 

or trustee in bankruptcy, in which case the
Insurers, if any, relating to such Senior Notes will make such payment to the
Indenture Trustee for distribution to such Noteholder upon proof of such
payment reasonably satisfactory to such Insurers).

 

(e)                                  The Indenture Trustee shall promptly
notify the Insurers, if any, relating to any Senior Notes of any proceeding or
the institution of any action (of which the Indenture Trustee has Actual
Knowledge) seeking the avoidance as a preferential transfer under applicable
bankruptcy, insolvency, receivership, rehabilitation or similar law (a “Preference
Claim”) of any distribution made with respect to such Senior Notes. With
respect to any Senior Notes covered by an Insurance Policy, each Noteholder, by
its purchase of such Senior Notes, and the Indenture Trustee hereby agree to
the provisions of the related Insurance Agreement and Insurance Policy and
agree that the Insurers, if any, relating to such Senior Notes may at any
time during the continuation of any proceeding relating to a Preference Claim
involving such Notes direct all matters relating to such Preference Claim
including, without limitation, (i) the direction of any appeal of any
order relating to any Preference Claim and (ii) the posting of any surety,
supersedeas or performance bond pending any such appeal at the expense
of the Insurers, if any, relating to such Senior Notes, but subject to
reimbursement as provided in the Insurance Agreement applicable to such Senior
Notes. In addition, and without limitation of the foregoing, as set forth in Section 2.14
hereof, an Insurer shall be subrogated to, and each Noteholder relating to a
Senior Notes and the Indenture Trustee hereby delegate and assign, to the
fullest extent permitted by law, the rights of the Indenture Trustee and each
such Noteholder relating to such Senior Notes to the Insurers, if any, of such
Senior Notes in the conduct of any proceeding with respect to a Preference
Claim, including, without limitation, all rights of any party to an adversary
proceeding with respect to any court order issued in connection with any such
Preference Claim.

 

(f)                                    By acceptance of a Note of a Senior
Notes with respect to which an Insurance Policy has been issued, each
Noteholder agrees to be bound by the terms of such Insurance Policy. Nothing in
this Base Indenture referring to or describing any obligation of an Insurer
under its Insurance Policy shall or is intended to modify any of the terms,
provisions or conditions of such Insurance Policy.

 

Section 2.14                                Subrogation Rights
of Insurers; Payment of Reimbursements.

 

(a)                                  Upon the payment by any Insurer
relating to a Senior Notes to the Indenture Trustee (or otherwise in accordance
with the applicable Insurance Policy) for the benefit of the Holders of such
Senior Notes, such Insurer, without the need for further action on the part of
such Insurer, the Co-Issuers, the Indenture Trustee or any other Person, shall
be fully subrogated to the rights, as applicable, of each such Noteholder to
receive payments of principal of and/or interest on such Senior Notes from the
Co-Issuers in accordance with Article XI, to the extent (i) of
the amounts paid by such Insurer under the applicable Insurance Policy, and (ii) that
such payment by the Co-Issuers is being made in respect of the specific principal
and/or interest payment as to which such Insurer made its payment. In addition,
until such Insurer is fully reimbursed in accordance with this Base Indenture
and the applicable Insurance Agreement for any amounts paid by such Insurer to
such Noteholders, such Insurer may exercise any option, vote, right, power
or the like with respect to such Senior Notes to the extent that it has made
payment of principal or interest for the benefit of Holders of such Senior
Notes pursuant to the

 

37

 

applicable Insurance Policy. In furtherance
of the foregoing, the Indenture Trustee shall give effect to such subrogation
by distributing to such Insurer (as subrogee of Holders of such Senior Notes)
the amounts that otherwise would have been distributed by the Indenture Trustee
to such Holders in respect of principal and interest on such Senior Notes to
the extent (i) of any payments by the Insurers, if any, relating to such
Senior Notes under the applicable Insurance Policy, and (ii) that such
payment by the Co-Issuers is being made in respect of the specific principal
and/or interest payment as to which such Insurer made its payment. To evidence
such subrogation to the rights of such Noteholders, the Note Registrar shall
note such Insurer’s rights as such subrogee in the Note Register upon receipt
from such Insurer of proof of payment by such Insurer in respect of interest on
or principal of such Senior Notes. In addition, and without limiting the
foregoing, (a) if an Insurer relating to any Senior Notes makes any
payment under the applicable Insurance Policy in respect of interest on such
Senior Notes, such Insurer shall be fully subrogated to the rights of Holders
of such Senior Notes to receive the relevant interest payment, together with
interest thereon under Article XI; and (b) if such Insurer
makes any payment under the applicable Insurance Policy in respect of principal
of such Senior Notes, such Insurer shall be fully subrogated to the rights of
such Noteholders to receive the relevant principal payment, together with
interest thereon under Article XI and to be deemed the owner of the
Senior Notes to the extent of such payment of principal.

 

(b)                                 Any Insurer may, at its option,
direct the allocation of any payment of Reimbursements as provided in Section 11.1
as being the repayment of principal and/or interest as to Reimbursements then
owing as of such reimbursement or payment date.

 

(c)                                  Anything hereunder notwithstanding,
it is understood and agreed that each Insurer, if any, shall be entitled to
payment of Reimbursement only at the times and as provided in this Base
Indenture and in the applicable Insurance Agreement and Insurance Policy. All
payments received by an Insurer pursuant to the exercise of its rights under
the Notes as subrogee as described in subsection (a) above
shall cause a corresponding reduction (on a dollar-for-dollar basis) in the
Reimbursement obligations owing to such Insurer, and all payments received by
such Insurer in respect of Reimbursement obligations as provided in subsection (b) above
shall cause a corresponding reduction (on a dollar-for-dollar basis) in the
amounts which may be owing to such Insurer pursuant to such subrogation
rights.

 

(d)                                 Each Insurer, if any, by its
execution of the applicable Insurance Agreement acknowledges and agrees that,
notwithstanding any of the provisions of this Base Indenture, the applicable
Insurance Agreement, the applicable Series Supplement or otherwise, it
shall have recourse only to the Indenture Collateral. The Indenture Collateral
having been fully applied in accordance with the terms hereof, each such
Insurer, if any, shall not be entitled to take any further actions against any
of the Co-Issuers to recover any sums due but still unpaid hereunder or thereunder,
all claims in respect of which shall be extinguished as against the Co-Issuers.
In particular, each Insurer, if any, by its execution of the applicable
Insurance Agreement agrees not to take any action or institute or join in
instituting any proceeding arising under any Insolvency Law against any of the
Co-Issuers (whether pursuant to its rights to be reimbursed for Reimbursements
or pursuant to its subrogation rights or otherwise), until at least one year
and one day, or if longer, the applicable preference period then in effect,
after the payment in full of all Notes issued hereunder (including any Series Supplement);
provided, that each Insurer, if any, may become a party to and
participate in any Proceeding or action under any

 

38

 

Insolvency Law applicable to any of the
Co-Issuers, respectively, that is initiated by any Person that is not an
Affiliate of such Insurer. For avoidance of doubt, this Section 2.14(d) shall
not include any actions taken against the Servicer or any other Affiliate of
the Servicer in respect of matters unrelated to Reimbursement by the
Co-Issuers.

 

Section 2.15                                Additional Covenant
of the Insurers. Each Insurer, if any, by its execution of the applicable
Insurance Agreement agrees to promptly notify in writing, promptly upon such
Insurer’s knowledge of such event, the Indenture Trustee of the actual or
prospective occurrence of any event which constitutes or would constitute an
Insurer Event of Default relating to such Insurer. The Indenture Trustee and
the Co-Issuers shall not be deemed to have knowledge of any such event until
receipt of written notice of such event from such Insurer, or until any other
Authorized Officer of the Indenture Trustee or the Co-Issuers, as the case may be,
responsible for administering the transactions herein described has Actual
Knowledge of such event.

 

Section 2.16                                Applicability of
Sections 2.13, 2.14 and 2.15. The provisions of Sections 2.13, 2.14
and 2.15 shall apply to Senior Notes only if and for so long as such
Senior Notes are insured pursuant to an Insurance Policy or any amount is owing
to any Insurer relating to such Senior Notes.

 

Section 2.17                                Escheat. Subject
to applicable laws with respect to escheat of funds, any money held by the
Indenture Trustee or any Paying Agent in trust for the payment of any amount
due to any Noteholder with respect to any Note and remaining unclaimed for two (2) years
after such amount has become due and payable shall be discharged from such
trust and be paid to the Co-Issuers upon delivery of a Servicer Order. The
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Co-Issuers (and not to the applicable Insurers, if any) for payment
thereof (but only to the extent of the amounts so paid to the Co-Issuers), and
all liability of the Indenture Trustee or the Paying Agent (as applicable) with
respect to such trust money paid to the Co-Issuers shall thereupon cease. The
Indenture Trustee may also adopt and employ, at the expense of the
Co-Issuers, any other commercially reasonable means of notification of such
repayment.

 

Section 2.18                                Tax Treatment. The
Co-Issuers have structured the Base Indenture and the Notes have been (or will
be) issued with the intention that the Notes will qualify under applicable tax
law as indebtedness of the Co-Issuers or, if any of the Co-Issuers is treated
as a division of another entity, such other entity and any entity acquiring any
direct or indirect interest in any Note by acceptance of its Notes (or, in the
case of a Note Owner, by virtue of such Note Owner’s acquisition of a
beneficial interest therein) agrees to treat the Notes (or beneficial interests
therein) for all purposes of Federal, state, local and foreign income or
franchise taxes and any other tax imposed on or measured by income, as
indebtedness of the Co-Issuers or, if any Co-Issuer is treated as a division of
another entity, such other entity.

 

39

 

ARTICLE III

 

CONDITIONS PRECEDENT

 

Section 3.1                                      General
Provisions. Any Notes issued by the Co-Issuers on the Closing Date or any
Issuance Date shall be executed by the Co-Issuers upon compliance with the
conditions of Sections 2.3, 3.2 and 3.3 and shall be
delivered to the Indenture Trustee for authentication, and thereupon the same
shall be authenticated and delivered by the Indenture Trustee upon receipt of a
Company Order and upon receipt by the Indenture Trustee and each Insurer, if
any, relating to the Series of Notes to be issued (and, in the case of
items (c), (d) and (e) below, also by the Co-Issuers, and in the case
of items (a), (b), (c), (f) and (g), each other Insurer) on such Closing
Date or Issuance Date (as applicable) of the following items:

 

(a)                                  an Officer’s Certificate of each of
the Co-Issuers (A) with respect to (1) the due authorization,
execution and delivery of each of the Transaction Documents and any other
related transaction documents to which either is a party and (2) the
execution, authentication and delivery of the relevant Notes and related Series Supplement
and (B) certifying that (1) the attached copy of the resolutions of
the Board of Managers or Board of Directors, as applicable, of each of the
Co-Issuers authorizing the Transaction Documents and the issuance of such Notes
is a true and complete copy thereof, (2) such resolutions have not been
rescinded and are in full force and effect on and as of such Issuance Date, (3) the
attached copy of each of the Co-Issuers’ limited liability company agreement or
certificate of incorporation and by-laws, as applicable, is a true and complete
copy thereof, (4) such limited liability company agreement or certificate
of incorporation and by-laws, as applicable, has not been rescinded and is in
full force and effect on and as of such Issuance Date, (5) the Authorized
Officers authorized to execute and deliver such documents hold the offices and
have the signatures indicated thereon and (6) if the Issuance Date is not
the Closing Date, the continued accuracy on such Issuance Date (as if made with
reference to such Issuance Date) of each representation made by the Co-Issuers
on the Closing Date herein, in the applicable Series Supplement and in any
other Transaction Document;

 

(b)                                 an Opinion of Counsel of the
Co-Issuers reasonably satisfactory in form and substance to the Indenture
Trustee and to each Insurer, if any, relating to the Series of Notes to be
issued, if any, to the effect that no authorization, approval or consent of any
governmental body is required for the valid issuance of the relevant Notes
except such as may have been given and covering such other matters as the
Indenture Trustee or the Insurers, if any, may reasonably request; provided that such Opinion of Counsel shall
state, among other things, the necessary events upon the occurrence of which
the security interest of the Indenture Trustee in the Indenture Collateral
shall be a perfected security interest with respect to Indenture Collateral in
which a Lien can be perfected under the laws of the United States (or the
applicable states), and confirm, with respect to IP Lien Filings, that the IP
security agreements substantially in the form of Exhibit I
have been executed by each Co-Issuer (as appropriate) and delivered for filing
to the Servicer with the appropriate Intellectual Property registry office with
copies to the Indenture Trustee; and provided, further, that
Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Co-Issuers,
shall be deemed to be satisfactory counsel for purposes of this subclause
(b);

 

40

 

(c)                                  an Opinion of Counsel to the
Indenture Trustee, dated such Closing Date or Issuance Date (as applicable), in
form and substance reasonably satisfactory to each of the Co-Issuers and
to each Insurer, if any, relating to the Series of Notes to be issued, if
any;

 

(d)                                 an Opinion of Counsel to the
relevant Hedge Counterparty, if any, dated such Issuance Date, in form and
substance reasonably satisfactory to each of the Co-Issuers and to each
Insurer, if any, relating to the Series of Notes to be issued, if any;

 

(e)                                  an Opinion of Counsel to each
Initial Purchaser or Placement Agent, as applicable, or their representative,
in form and substance satisfactory to each Initial Purchaser or Placement
Agent, as applicable, or their representative, as applicable, to the effect
that (1) any additional Senior Notes will be treated as debt for tax
purposes (and any additional Subordinated Notes will be treated for tax
purposes in the manner described in the related Offering Memorandum) and (2) the
Additional Notes will not cause any Series of Senior Notes Outstanding to
be treated as other than debt (and will not cause any Subordinated Notes
Outstanding to be treated other than in the manner described in the related
Offering Memorandum), and will not cause any Co-Issuer that is not a
corporation to be treated as a corporation, for U.S. federal income tax
purposes;

 

(f)                                    an Officer’s Certificate of each of
the Co-Issuers to the effect that (i) no Default or Event of Default,
Potential Rapid Amortization Event or Rapid Amortization Event under this Base
Indenture has occurred and is continuing, or is likely to occur as a result of
such proposed issuance, and all representations and warranties of the
Co-Issuers in this Base Indenture and the other Transaction Documents are true
and correct and will continue to be true and correct after giving effect to
such issuance in all material respects (other than any such representation and
warranty that, by its terms, speaks only as of the Closing Date); (ii) if
any Series 2007-1 Senior Notes are Outstanding, a pro forma
Three-Month DSCR for the Payment Date preceding such Issuance Date and the two
immediately preceding Payment Dates, assuming the issuance of Additional Notes,
together with all other Series of Notes Outstanding, on the first day of
the sixth full month preceding the Payment Date immediately preceding the date
of the issuance thereof, is at least 0.1 higher than the Three-Month DSCR as of
the Closing Date unless otherwise agreed by the Series 2007-1 Class A
Insurer; (iii) no Servicer Termination Event has occurred and is
continuing, or will occur with notice or the lapse of time or both, or shall
occur as a result of such proposed issuance; (iv) no Cash Trap Reserve
Event has occurred and is continuing, or shall occur as a result of such
proposed issuance; (v) the proposed issuance does not alter or change the
terms of any Series of Notes Outstanding or the Series Supplement
relating thereto without such consents as are required under Article VIII;
(vi) no Change of Control without the prior written consent of each of the
Insurers, if any, has occurred and is continuing, or shall occur as a result of
such proposed issuance; (vii) unless otherwise agreed by the Lead Insurer
with respect to each Series 2007-1 Senior Notes, the Senior ABS Leverage
Ratio is at least 0.25 lower than the Senior ABS Leverage Ratio as of the
Closing Date prior to and after giving effect to the proposed issuance; provided,
that the Lead Insurer with respect to the Series 2007-1 Notes may elect
to waive such condition; (viii) in the case of Additional Notes of any
existing Series to be issued, either (1) each Insurer, if any,
insuring such Series has consented thereto in writing or (2) without
the consent of each Insurer, if any, insuring such Series, the aggregate
principal amount to be issued is not greater than the excess, if any, of the
maximum authorized principal amount of such Series as set forth in the
applicable Series Supplement, over the aggregate principal

 

41

 

amount of Notes of such Series that have
previously been issued (whether or not still Outstanding); (ix) all
expenses with respect to the offering of such Notes or relating to actions
taken in connection therewith which are required to be paid on the Closing Date
or Issuance Date (as applicable) have been paid or will be paid in full from
the proceeds thereof; (x) such other applicable conditions set forth in
the Series Supplement for any Series of Notes (for so long as such Series of
Notes is Outstanding) have been satisfied; and (xi) all applicable conditions
under this Base Indenture and any Series Supplement have been satisfied;

 

(g)                                 on any issuance date other than the
Initial Issuance Date, an Accountant’s Certificate (i) confirming the
calculation of the Three-Month DSCR or Three-Month Adjusted DSCR for each
Outstanding Series of Notes (as specified in this Base Indenture or the
related Series Supplement), the Pro forma
Three-Month DSCR, and the Senior ABS Leverage Ratio for the most recent
Accounting Date, (ii)  after giving effect to such proposed issuance,
confirming compliance with all Senior ABS Leverage Ratio conditions, as
applicable and (iii) specifying the procedures undertaken by them in
connection with the data and computations in clauses (i) and (ii);
and

 

(h)                                 an executed counterpart of each
of the Transaction Documents (to the extent not previously provided).

 

Section 3.2                                      Security for
Notes. Prior to the issuance of any Notes on the Closing Date or any
Issuance Date (as applicable), the Co-Issuers shall cause the following
conditions to be satisfied:

 

(a)                                  Grant of the Existing Franchise
Assets. The
Grant pursuant to the Granting Clauses of this Base Indenture of each of the
Co-Issuers’ right, title and interest in and to the Indenture Collateral on the
Closing Date (such Grant to be evidenced by the Co-Issuers’ execution and
delivery of this Base Indenture);

 

(b)                                 Certificate of the Master Issuer. A certificate of an Authorized Officer
of the Master Issuer, dated as of the Closing Date or any Issuance Date (as
applicable), delivered to the Indenture Trustee and each Insurer, if any,
relating to the Notes to be issued, to the effect that, in the case of the
Existing Franchise Assets on the Closing Date, and immediately prior to the
delivery on the Issuance Date of any Notes:

 

(i)             the Master Issuer is the owner of the Master Issuer
Assets in existence as of such date free and clear of any Liens except for (A) those
which are being released on the Closing Date, (B) those Granted pursuant
to this Base Indenture or (C) Permitted Liens;

 

(ii)          the Master Issuer has acquired its ownership in the
Master Issuer Assets in good faith without notice of any adverse claim, except
as described in clause (i) above;

 

(iii)       the Franchise Documents with respect to each Franchise
that are held by the Master Issuer do not prohibit the Master Issuer from
Granting a security interest in and pledging such Existing Franchise Assets to
the Indenture Trustee; and

 

42

 

(iv)      except for the Permitted Liens, the Grant pursuant to
the Granting Clauses of this Base Indenture, upon filing of the Financing
Statement and the execution and delivery of all necessary Account Control
Agreements, shall result in a first priority perfected security interest in
favor of the Indenture Trustee for the benefit of the Secured Parties in all of
the Master Issuer’s right, title and interest in and to the Master Issuer
Assets included in the Indenture Collateral;

 

The Master
Issuer, on and as of the Closing Date, and on and as of any subsequent Issuance
Date to the extent contemplated by Section 3.1(a)(B)(6), hereby
represents and warrants as set forth above in clauses (i) through (iv);

 

(c)                                  Certificate of the IP Holder. A certificate of an Authorized
Officer of the IP Holder, dated as of the Closing Date or any Issuance Date (as
applicable), delivered to the Indenture Trustee and each Insurer, if any,
relating to the Notes to be issued, to the effect that, in the case of the IP
Assets owned by the IP Holder on the Closing Date, and immediately prior to the
delivery on the Issuance Date of any Notes:

 

(i)             the IP Holder is the owner of, or is licensed to use,
the IP Assets in existence as of such date free and clear of any Liens, claims
or encumbrances of any nature whatsoever that are effective or could become
effective, in each case except for (A) those which are being released on
the Closing Date, (B) those Granted pursuant to this Base Indenture or the
other Transaction Documents or (C) Permitted Liens;

 

(ii)          the IP Holder has acquired its ownership in the IP
Assets in existence as of such date in good faith without notice of any adverse
claim, except as described in clause (i) above; and

 

(iii)       except for the Permitted Liens, the Grant pursuant to
the Granting Clauses of this Base Indenture, upon filing of the Financing
Statement and timely filing of IP Lien Filings in the appropriate Intellectual
Property registry office, shall result in a first priority perfected security
interest in favor of the Indenture Trustee for the benefit of the Secured
Parties in all of the IP Assets included in the Indenture Collateral;

 

The IP Holder,
on and as of the Closing Date, and on and as of any subsequent Issuance Date to
the extent contemplated by Section 3.1(a)(B)(6), hereby represents
and warrants as set forth above in clauses (i) through (iii);

 

(d)                                 Certificate of the Restaurant
Holders. A
certificate of an Authorized Officer of each of the Restaurant Holders, dated
as of the Closing Date or any Issuance Date (as applicable), delivered to the
Indenture Trustee and each Insurer, if any, relating to the Notes to be issued,
to the effect that, in the case of the Company-Owned U.S. Restaurant Assets and
the Real Estate Assets (the “Restaurant Holder Assets”) owned by such
Restaurant Holder on the Closing Date, and immediately prior to the delivery on
the Issuance Date of any Notes:

 

43

 

(i)             the Restaurant Holder is the owner of Restaurant
Holder Assets in existence as of such date free and clear of any Liens, claims
or encumbrances of any nature whatsoever that are effective or could become
effective, in each case except for (A) those which are being released on
the Closing Date, (B) those Granted pursuant to this Base Indenture or (C) Permitted
Liens;

 

(ii)          the Restaurant Holder has acquired its ownership in
the Restaurant Holder Assets in good faith without notice of any adverse claim,
except as described in clause (i) above;

 

(iii)       the Restaurant Holder Asset documents with respect to
each Restaurant Holder Asset do not prohibit the Restaurant Holder from
Granting a security interest in and pledging such Restaurant Holder Assets to
the Indenture Trustee; and

 

(iv)      except for the Permitted Liens, the Grant pursuant to
the Granting Clauses of this Base Indenture, upon filing of the Financing
Statement shall result in a first priority perfected security interest in favor
of the Indenture Trustee for the benefit of the Secured Parties in all of the
Restaurant Holder’s right, title and interest in the Restaurant Holder Assets
(other than Real Estate Assets) included in the Indenture Collateral;

 

Each
Restaurant Holder, on and as of the Closing Date, and on and as of any
subsequent Issuance Date to the extent contemplated by Section 3.1(a)(B)(6),
hereby represents and warrants as set forth above in clauses (i) through
(iv);

 

(e)                                  Rating Letters. The delivery to the Indenture
Trustee and each Insurer, if any, relating to the Notes to be issued of (i) a
true and correct copy of a letter signed by Moody’s (if Moody’s will rate such
Notes) confirming that the Notes to be issued on the Closing Date or Issuance
Date (as applicable) have been assigned a rating specified in the applicable Series Supplement
and, in the case of any Insured Obligations of such Series, have received a
shadow rating (exclusive of the effect of any Insurance Policy) specified in
the applicable Series Supplement by Moody’s, and that such ratings are in
full force and effect on the Closing Date or Issuance Date (as applicable), (ii) a
true and correct copy of a letter signed by S&P (if S&P will rate such
Notes) confirming that the Notes to be issued on the Closing Date or Issuance
Date (as applicable) have been assigned a rating specified in the applicable Series Supplement
and, in the case of any Insured Obligations of such Series, have received a
shadow rating (exclusive of the effect of any Insurance Policy) specified in
the applicable Series Supplement by S&P, and that such ratings are in
full force and effect on the Closing Date or Issuance Date (as applicable), (iii) a
true and correct copy of a letter signed by Fitch (if Fitch will rate such
Notes) confirming that the Notes to be issued on the Closing Date or Issuance
Date (as applicable) have been assigned a rating specified in the applicable Series Supplement
and, in the case of any Insured Obligations of such Series, have received a
shadow rating (exclusive of the effect of any Insurance Policy) specified in
the applicable Series Supplement by Fitch, and that such ratings are in
full force and effect on the Closing Date or Issuance Date (as applicable), (iv) a
true and correct copy of a letter signed by any other rating agency confirming
that the Notes to

 

44

 

be issued on the Closing Date or Issuance
Date (as applicable) have been assigned a rating specified in the applicable Series Supplement
and, in the case of any Insured Obligations of such Series, have received a
shadow rating (exclusive of the effect of any Insurance Policy) specified in
the applicable Series Supplement by such Rating Agency, and that such
ratings are in full force and effect on the Closing Date or Issuance Date (as
applicable); provided, however, that in lieu of receiving a copy of a letter regarding any
shadow rating referred to in this Section 3.2(e), confirmation by
electronic mail prior to the issuance of such Notes on the Closing Date or such
Issuance Date, as the case may be, by the applicable Insurers, if any, to
the Indenture Trustee that such Insurers, if any, have received such a letter
conforming to the requirements of this Section 3.2(e) (or that
such Insurers, if any, have waived receipt thereof by the Insurers) shall
satisfy such condition in respect of the Indenture Trustee with respect to such
shadow rating;

 

(f)                                    Rating Agency Condition. With respect to any Notes that
will be Outstanding at the proposed Issuance Date, delivery of written
confirmation to each Insurer, if any, applicable to such Notes that the Rating
Agency Condition shall have been satisfied as to such Notes; provided that each such Insurer, if any, shall
promptly notify the Indenture Trustee of such confirmation;

 

(g)                                 Accounts. The Indenture Trustee shall
provide on the Closing Date or such Issuance Date (as applicable) prior to the
issuance of any Notes on such date evidence of the establishment or continued
maintenance (as applicable) of the Collection Account, the Collection Account
Administrative Accounts, the Senior Notes Interest Reserve Account, the Cash
Trap Reserve Account, the Hedge Payment Account and the Series Distribution
Account. JPMorgan Chase Bank, N.A., as financial institution, shall provide on
the Closing Date or such Issuance Date (as applicable) prior to the issuance of
any Notes on such date evidence of the establishment or continued maintenance
(as applicable) of the Concentration Account and the Servicing Accounts; and

 

(h)                                 Financing Statement. The delivery by each of the
Co-Issuers of an unfiled copy of the Financing Statement describing the
Indenture Collateral and naming each of the Co-Issuers respectively as debtor
and the Indenture Trustee as secured party (or amendments of such Financing
Statement or continuation statements, as applicable) which has been sent to a
nationally recognized filing service for filing by or on behalf of each of the
Co-Issuers with the Secretary of State of Delaware, the Secretary of State of
Vermont, the Secretary of State of Kansas, the Secretary of the Commonwealth of
Texas or the Secretary of State of any other relevant States not later than the
fifth (5th) Business Day following the Closing Date or the third (3rd) Business
Day following the Issuance Date, as applicable. The parties hereto acknowledge
that the Indenture Trustee shall not be obligated to have verified the
validity, accuracy or other substantive matters relating such Financing
Statement.

 

Section 3.3                                      Issuance of
New Notes. No new Notes or Series of Notes shall be issued unless the
following conditions are satisfied:

 

(a)                                  no Default or Event of Default,
Potential Rapid Amortization  Event or
Rapid Amortization Event under this Base Indenture has occurred and is
continuing, or is likely to occur as a result of such proposed issuance, and
all representations and warranties of the

 

45

 

Co-Issuers herein and in the other
Transaction Documents are true and correct and will continue to be true and
correct after giving effect to such issuance in all material respects;

 

(b)                                 if any Series 2007-1 Senior
Notes are Outstanding, a pro forma
Three-Month DSCR for the Payment Date preceding such Issuance Date and the two
immediately preceding Payment Dates, assuming the issuance of Additional Notes,
together with all other Series of Notes Outstanding, on the first day of
the sixth full month preceding the Payment Date immediately preceding the date
of the proposed issuance thereof, that is at least 0.1 higher than the
Three-Month DSCR as of the Closing Date unless otherwise agreed by the Series 2007-1
Class A Insurer;

 

(c)                                  no Servicer Termination Event has
occurred and is continuing, or will occur with notice or the lapse of time or
both or will occur as a result of such proposed issuance;

 

(d)                                 no Cash Trap Reserve Event has
occurred and is continuing, or will occur as a result of such proposed
issuance;

 

(e)                                  the proposed issuance does not alter
or change the terms of any Series of Notes Outstanding or the Series Supplement
relating thereto without such consents as are required under Article VIII;

 

(f)                                    no Change of Control without the
prior written consent of each of the Insurers, if any, has occurred and is
continuing, or will occur as a result of such proposed issuance;

 

(g)                                 unless otherwise agreed by the Lead
Insurer with respect to the Series 2007-1 Senior Notes, the Senior ABS
Leverage Ratio is at least 0.25 lower than the Senior ABS Leverage Ratio as of
the Closing Date prior to and after giving effect to the proposed issuance; provided,
that the Lead Insurer with respect to the Series 2007-1 Notes may elect
to waive such condition;

 

(h)                                 in the case of Additional Notes of
any existing Series to be issued, either (i) each Insurer, if any,
insuring such Series has consented thereto in writing or (ii) without
the consent of each Insurer, if any, insuring such Series, the aggregate
principal amount to be issued is not greater than the excess, if any, of the
maximum authorized principal amount of such Series as set forth in the
applicable Series Supplement, over the aggregate principal amount of Notes
of such Series that have previously been issued (whether or not still
Outstanding);

 

(i)                                     all expenses with respect to the
offering of such Notes or Series of Notes or relating to actions taken in
connection therewith which are required to be paid on such Issuance Date have
been paid or will be paid from the proceeds thereof;

 

(j)                                     such other applicable conditions set
forth in the Series Supplement for any Series of Notes (for so long
as such Series of Notes is Outstanding) have been satisfied; and

 

46

 

(k)                                  all applicable conditions under this
Base Indenture and the other Transaction Documents have been satisfied.

 

Section 3.4                                      Use of
Proceeds from the Issuance of Notes. Notwithstanding anything to the
contrary herein, on the Closing Date or any subsequent Issuance Date relating
to the issuance of any Series of Notes, the net proceeds from the offering
and sale of such Series of Notes will be applied in the manner specified
in the applicable Series Supplement relating to such newly issued Series of
Notes, or, in the event that the Series Supplement does not specify how
such net proceeds are to be applied, to or at the direction of the Master
Issuer.

 

ARTICLE IV

 

SATISFACTION AND DISCHARGE

 

Section 4.1                                      Satisfaction
and Discharge of Indenture.

 

(a)                                  This Base Indenture shall cease to
be of further effect with respect to the Notes except as to (1) rights of
registration of transfer and exchange, (2) substitution of mutilated,
destroyed, defaced, lost or stolen Notes, (3) rights of Noteholders to
receive payments of principal thereof and interest thereon and each Insurer, if
any, relating to any Series of Notes to receive any Reimbursement or other
amounts due or to become due hereunder or under the applicable Insurance
Agreement and/or Insurance Policy that have not been previously paid, (4) rights,
obligations and immunities of the Indenture Trustee hereunder including,
without limitation, the rights to compensation, reimbursement and
indemnification, (5) rights of the Co-Issuers to optional redemption
pursuant to the applicable Series Supplement and (6) rights of
Noteholders and the other Secured Parties as beneficiaries hereof with respect
to the property deposited with the Indenture Trustee and payable to all or any
of them, and all Indenture Collateral, rights and interest hereby conveyed or
assigned or pledged and not disposed of previously pursuant to the applicable Series Supplement
then remaining, if any, shall revert to the Co-Issuers, and the estate, right,
title and interest of the Indenture Trustee and the Secured Parties therein
shall thereupon cease, terminate and become void, and the Indenture Trustee, on
demand of and at the expense of the Co-Issuers, shall execute instruments in form and
substance reasonably satisfactory to the Co-Issuers and the Indenture Trustee
acknowledging satisfaction and discharge of this Base Indenture and releasing
the Indenture Collateral from the Lien of this Base Indenture, and execute and
deliver such other instruments or documents as may be reasonably requested
by the Co-Issuers to give effect to such release, and shall convey, assign and
transfer, or cause to be conveyed, assigned or transferred, and shall deliver
or cause to be delivered to the Co-Issuers, all such remaining Indenture Collateral,
including money, then held by the Indenture Trustee or any co trustee, other
than moneys deposited with the Indenture Trustee pursuant to clause (ii) below,
when:

 

(i)             either:

 

(A)      all Notes theretofore authenticated and delivered
(other than (x) Notes which have been destroyed, lost or stolen and which
have been paid or replaced as provided in Section 2.6 and (y) Notes
for whose payment money has

 

47

 

theretofore
been deposited in trust and thereafter repaid to the Co-Issuers or discharged
from such trust, as provided in Section 2.7) have been delivered to
the Indenture Trustee for cancellation; or

 

(B)        the Co-Issuers have irrevocably deposited in trust
with the Indenture Trustee or, at the option of the Indenture Trustee, with a
trustee reasonably satisfactory to the Aggregate Controlling Party, the
Indenture Trustee and the Co-Issuers under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Indenture Trustee and
the Aggregate Controlling Party, money or Eligible Investments in an amount
sufficient, in the opinion of a nationally recognized firm of independent
certified public accountants expressed in a written certification thereof
delivered to the Indenture Trustee, to pay, when due, principal, premium, if
any, and interest on the Notes to maturity, redemption or prepayment, as the
case may be, and to pay all other sums payable by them hereunder and under
each other Transaction Document and under any Insurance Agreement; provided,
however, that (1) the trustee of the irrevocable trust shall have been
irrevocably instructed to pay such money or the proceeds of such Eligible
Investments to the Indenture Trustee and (2) the Indenture Trustee shall
have been irrevocably instructed to apply such money or the proceeds of such
Eligible Investments to the payment of said principal and interest with respect
to the Notes and such other sums;

 

(ii)          the Co-Issuers have paid or caused to be paid all
other sums payable hereunder by the Co-Issuers and no other amounts will become
due and payable by the Co-Issuers and each of the Servicer and each other
Securitization Entity has paid all amounts payable by it under the Transaction
Documents;

 

(iii)       the Co-Issuers have delivered to the Indenture Trustee
and, if any Insurer is then the Series Controlling Party relating to any Series of
Notes, such Insurer, an Officers’ Certificate and an Opinion of Counsel each
stating that all conditions precedent herein provided for relating to the satisfaction
and discharge of this Base Indenture with respect to the Notes have been
complied with;

 

(iv)      the Insurance Policies relating to each Series of
Notes, if any, have expired or been terminated or canceled by the Indenture
Trustee in accordance with their terms and the Indenture Trustee has returned
each such Insurance Policy to the applicable Insurers, if any, and all amounts
payable to such Insurers, if any, have been paid; provided, however, the Indenture
Trustee shall be required to cancel such Insurance Policies and return them to
the Insurers, if any, if all amounts under the Notes and the applicable
Insurance Agreement have been paid and the Co-Issuers shall have provided to
each applicable Insurer,

 

48

 

if any, an Opinion of
Counsel, or such other adequate assurances as may be required by such
Insurers, if any, in their sole judgment, that the discharge of the Indenture
will not subject such Insurers, if any, to a risk of preference or recapture on
amounts previously paid by the Co-Issuers to discharge the Notes, and such
Insurers, if any, shall have confirmed in writing that such condition has been
satisfied; and

 

(v)         all commitments under all Class A-1 Note Purchase
Agreements have been terminated.

 

The foregoing
provisions notwithstanding, amounts owing in respect of Notes which shall have
been paid, or for which provision shall have been made, by a payment from the
Insurers, if any, pursuant to the applicable Insurance Policy, if any, shall
continue to be Outstanding under this Base Indenture, and the conditions set
forth in this Section 4.1 shall not be satisfied, and such
Insurers, if any, shall become the Holder of such Notes for all purposes of
this Base Indenture; provided, that if the Co-Issuers shall make payment
to such Insurers, if any, of all Reimbursements and all Insurer Expenses due
hereunder and under the applicable Insurance Agreement in respect of any
payments by such Insurers, if any, of principal of and interest on such Notes and
Insurer Expenses under the applicable Insurance Agreement, together with any
interest due under the applicable Insurance Agreement thereon, the obligation
of the Co-Issuers with respect to payment of such Notes shall cease to the
extent of such Reimbursement, and if such Reimbursement shall be sufficient to
pay all of the principal of and interest due on such Notes, such Notes shall no
longer be deemed Outstanding for purposes of this Base Indenture.

 

(b)                                 Notwithstanding the satisfaction and
discharge of this Base Indenture, the rights and obligations of the Co-Issuers,
the Noteholders and the Secured Parties under Section 2.7, Section 2.13,
Section 2.14, Section 2.15, Section 2.16, Section 4.2,
Section 6.5, Section 6.6, Section 7.1, Section 7.3,
Section 7.13(o) and Section 11.1 hereof shall
survive such satisfaction and discharge.

 

(c)                                  With respect to any Series, Class or
Sub-class of Notes, after (i) the Indenture Collateral and any other
Collateral allocable to, and available to be realized upon and applied to the
payment of, such Notes has been sold and all proceeds have been applied in
accordance with the terms hereof and of each Guaranty and Collateral Agreement,
(ii) if such Notes are insured pursuant to an Insurance Policy (x) the
related Insurer has made all requisite payments in respect of such Notes in
accordance with the terms of such Insurance Policy or (y) the related
Insurer has become the subject of a receivership or other insolvency-related
proceeding and (iii) a final distribution has been made in respect of the
claim arising under such Insurance Policy in respect of such Notes, none of the
Indenture Trustee, the Noteholders, any Insurer, the Initial Purchasers, the
Servicer or any Hedge Counterparty shall be entitled to take any further steps
against any of the Co-Issuers or guarantor under any such Guaranty and
Collateral Agreement to recover any sums due but still unpaid hereunder under
the Notes, any Insurance Agreement or any other Transaction Document, and all
claims against the Co-Issuers, each guarantor under any such Guaranty and
Collateral Agreement and the related Insurer, if any, in respect of which shall
be extinguished and such Notes shall be discharged.

 

49

 

Section 4.2                                      Application of
Trust Money. All monies, Cash or Eligible Investments deposited with the
Indenture Trustee pursuant to Section 4.1 shall be irrevocably held
in trust by the Indenture Trustee and applied by it, in accordance with the
provisions of the Notes and this Base Indenture and in Article XI
to the payment to the Person or Persons entitled thereto of the principal and
interest for whose payment such monies, Cash and Eligible Investments have been
deposited with the Indenture Trustee, and such monies, Cash and Eligible
Investments shall be held in a segregated trust account identified as being
held in trust for the benefit of the Noteholders and the other Secured Parties.

 

Section 4.3                                      Reinstatement.
If the Indenture Trustee is unable to apply any cash or Eligible Investments in
accordance with Section 4.1 by reason of any Proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
Co-Issuers’ obligations under this Base Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section 4.1
until such time as the Indenture Trustee is permitted to apply all such cash or
Eligible Investments in accordance with Section 4.1; provided, however,
that if the Co-Issuers have made any payment of principal of or interest on any
Notes because of the reinstatement of its obligations, the Co-Issuers shall be
subrogated to the rights of the holders who received such cash or Eligible
Investments to receive such payment from the funds held by the Indenture
Trustee.

 

ARTICLE V

 

EVENTS OF DEFAULT AND REMEDIES

 

Section 5.1                                      Rapid
Amortization Event.

 

(a)                                  Upon the occurrence of any of the
following events:

 

(i)             the failure to pay in full the accrued and unpaid
interest on and all principal of any Series of Notes by the applicable
Adjusted Repayment Date;

 

(ii)          the occurrence of a Series Rapid Amortization
Event specified in the Series Supplement relating to any Series of
Notes;

 

(iii)       the occurrence of a Servicer Termination Event; or

 

(iv)      the occurrence of an Event of Default,

 

a “Rapid
Amortization Event” shall be deemed to have occurred, without the giving of
further notice or any other action on the part of the Indenture Trustee or
any Holder of Notes.

 

(b)                                 Subject to the waiver of any Rapid
Amortization Event described in Section 5.1(c) below and the Series 2007-1
Rapid Amortization Cure Right, as applicable, upon the occurrence of a Rapid
Amortization Event (which, for avoidance of doubt, in each and every case shall
become applicable to all Series of Notes then Outstanding irrespective of
whether such

 

50

 

Rapid Amortization Event initially relates to
a particular Series or Class of Notes), the Indenture Trustee shall
apply all amounts available in accordance with the provisions of Articles X
and XI below, on each Payment Date thereafter (subject to Sections 11.1(e) and
11.1(g)) first, to the payment in full of the Aggregate
Outstanding Principal Amount of all Senior Notes then Outstanding and second,
to the Aggregate Outstanding Principal Amount of all Subordinated Notes then
Outstanding (in accordance with the provisions of Articles X and XI
below).

 

(c)                                  In connection with the occurrence of
a Rapid Amortization Event:

 

(i)             the Series Controlling Party of the Series of
Notes with respect to which a Rapid Amortization Event described in Sections
5.1(a)(i) and 5.1(a)(ii) occurs will be entitled to waive
such Rapid Amortization Event (in which case the Series Rapid Amortization
Event relating to a particular Series will be waived in respect of all
other Series of Notes Outstanding for purposes of Section 5.1(a)(ii) above
other than any Series of Notes with respect to which the same Series Rapid
Amortization Event has occurred pursuant to the related Series Supplement);
provided that a waiver of any Rapid
Amortization Event set forth in Section 5.1(a)(i) above will
also require the written consent of the Holders of 100% of the Aggregate
Outstanding Principal Amount of the applicable Series of Notes; and

 

(ii)          the Aggregate Controlling Party will be entitled to
waive any Rapid Amortization Event described in Sections 5.1(a)(ii), 5.1(a)(iii) and
5.1(a)(iv) above for purposes of all Series of Notes
Outstanding, other than, with respect to Section 5.1(a)(ii), any Series Rapid
Amortization Event that the related Series Supplement specifies cannot be
waived by the Aggregate Controlling Party.

 

Section 5.2                                      Partial
Amortization. On any Payment Date following the occurrence and continuance
of a Partial Amortization Event, the Indenture Trustee (in accordance with the
provisions of Articles X and XI) shall apply all amounts on
deposit in the applicable Principal Payment Accounts and the Cash Trap Reserve
Account that are allocable to the relevant Series of Notes to the extent
necessary toward the payment of principal on such Series of Notes; provided that on such Payment Date the
aggregate amount of principal prepaid shall not exceed an amount equal to the
applicable Partial Amortization Amount.

 

Section 5.3                                      Events of
Default.

 

(a)                                  “Event of Default,” wherever
used herein, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):

 

(i)             the Co-Issuers fail to pay any Senior Notes Monthly
Interest Amount (without giving effect to payments made on the Senior Notes
with the proceeds from the draw on an Insurance Policy, if any) or, following
the

 

51

 

payment in full of
all Senior Notes Outstanding, any Subordinated Notes Monthly Interest Amount,
and such failure continues for two (2) Business Days after such payment is
due (or, in the case of a failure to pay such interest when due resulting
solely from an administrative error or omission by the Indenture Trustee, such
default continues for a period of two (2) Business Days after the
Indenture Trustee receives written notice or has Actual Knowledge of such
administrative error or omission);

 

(ii)          the Co-Issuers fail to pay the principal of (x) any
Senior Notes in full on or prior to the Payment Date that occurs five years
prior to the Series Legal Final Maturity Date for such Senior Notes
(without giving effect to payments made on the Notes with the proceeds from the
draw on an Insurance Policy, if any) or (y) any Subordinated Notes in full
on or prior to the Series Legal Final Maturity Date for such Subordinated
Notes;

 

(iii)       any Securitization Entity fails to perform or
comply with any of the covenants (other than those covered by clauses (i) and
(ii) above or clause (xx) below) or representations or
warranties contained in any Transaction Document to which it is a party
(including any covenant to pay any amount other than interest on or principal
of the Notes when due in accordance with the Priority of Payments), or any of
its representations or warranties contained in any Transaction Document to
which it is a party proves to be incorrect in any material respect as of the
date made or deemed to be made, and such default, failure or breach continues
for a period of thirty (30) consecutive days (or, solely with respect to (x) a
failure to comply with any obligation to deliver a notice, report or other
communication within the specified time frame set forth in the applicable
Transaction Document, such failure continues for a period of five (5) consecutive
Business Days after the specified time frame for delivery has elapsed or (y) Sections
7.8, 7.9, 7.11 and Section 7.13(p), such failure
continues for a period of ten (10) consecutive Business Days) following
the earlier to occur of the knowledge of an Authorized Officer of such
Securitization Entity of such breach or failure and the default caused thereby
or written notice to such Securitization Entity by the Indenture Trustee, any Series Controlling
Party or any Insurer of such default, breach or failure;

 

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

 

(v)         any petition is filed, or any case or proceeding is
commenced, against any Securitization Entity 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;

 

52

 

(vi)      the institution by any Securitization Entity of
proceedings to be adjudicated as bankrupt or insolvent, or the consent by any
Securitization Entity to the institution of bankruptcy or insolvency
proceedings against it, or the filing by any Securitization Entity 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 any Securitization Entity of an assignment for the benefit of
creditors, or the admission by any Securitization Entity in writing of its
inability to pay its debts generally as they become due, or the taking of
action by any Securitization Entity in furtherance of any such action;

 

(vii)   any Securitization Entity registers, or is required to
register, as an “investment company” under the Investment Company Act, or any
body with jurisdiction makes a final determination that any Securitization
Entity is an “investment company” or an “affiliated person” of, or “promoter”
or “principal underwriter” for, an “investment company,” as such terms are
defined in the Investment Company Act;

 

(viii) the failure to satisfy the
minimum required Three-Month Adjusted DSCR with respect to any Series of
Notes Outstanding as specified in the applicable Series Supplement;

 

(ix)        any Transaction Document 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 Applebee’s International or any Securitization Entity asserts as such in
writing;

 

(x)           a draw is made under any Insurance Policy;

 

(xi)        the Indenture Trustee ceases to have a valid and
perfected security interest in or Lien on the Indenture Collateral in which
perfection can be achieved under the UCC or other applicable law in the United
States free and clear of any Lien except Permitted Liens other than (i) any
immaterial Indenture Collateral, (ii) any Indenture Collateral which has
been disposed of, solely to the extent permitted under the Indenture and (iii) unless
a Trigger Event has occurred and has not been waived within ninety (90) days
thereafter, the Company-Owned Real Property or (iv) except as otherwise
required under the Servicing Agreement, the accounts maintained with depository
institutions for the deposit of cash revenues generated by Company-Owned U.S.
Restaurants pending transfer to the Concentration Account;

 

(xii)     a final non-appealable ruling has been made by a court
of competent jurisdiction that the contribution of the Indenture Collateral
(other than any immaterial Indenture Collateral and any Indenture Collateral
which has been disposed of, to the extent permitted hereunder) pursuant to any

 

53

 

Asset Contribution
Agreement does not constitute a “true contribution” or other absolute transfer
of such Indenture Collateral pursuant to such Asset Contribution Agreement;

 

(xiii)  an outstanding final non-appealable
judgment exceeding $10,000,000 (when aggregated with the amount of all other
outstanding final non-appealable judgments) is rendered against any
Securitization Entity, and either (x) enforcement proceedings are
commenced by any creditor upon such judgment or order or (y) there will 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, will not
be in effect;

 

(xiv)  any Securitization Entity fails to
perform or comply with any material provision of its organizational
documents, which failure is reasonably likely to cause the contribution of the
Indenture Collateral to or from such Securitization Entity pursuant to the
related Asset Contribution Agreement to fail to constitute a “true contribution”
or other absolute transfer of such Indenture Collateral pursuant to such Asset
Contribution Agreement or is reasonably likely to cause a court of competent
jurisdiction to disregard the separate existence of such Securitization Entity
and such failure continues for more than thirty (30) consecutive days following
the earlier to occur of the Actual Knowledge of an Authorized Officer of such
Securitization Entity or written notice to such Securitization Entity from the
Indenture Trustee, any Series Controlling Party or any Insurer of such
failure;

 

(xv)    the IP Holder fails to have good title to any IP
Assets (other than any IP Assets that have been disposed of, solely to the
extent permitted hereunder) or any other Securitization Entity fails to have
good title to any of the Indenture Collateral owned by such Securitization
Entity (other than any Indenture Collateral that has been disposed of, solely
to the extent permitted under the Indenture) except in each case where such
failure individually or in the aggregate could not reasonably be expected to
have a Material Adverse Effect on the Indenture Collateral, or the ability of
the IP Holder or such other Securitization Entity to satisfy its obligations
under the Indenture or such other Transaction Documents to which it is a party;

 

(xvi)  (x) a Securitization Entity,
other than Applebee’s Holdings and the Restaurant Holders that are
corporations, ceases to be a disregarded entity for the purposes of the Code or
(y) Applebee’s Holdings ceases to be a partnership for purposes of the
Code;

 

(xvii)  (t) any Securitization Entity
engages in any “prohibited transaction” (as defined in Section 406 of
ERISA or Section 4975 of the Code) involving any Plan, (u) any “accumulated
funding deficiency” (as defined in Section 302 of ERISA), whether or not
waived, exists with respect to any Plan and is not discharged within thirty
(30) days thereafter, (v) any Lien in an amount equal to at least
$1,000,000 in favor of the PBGC or a Plan arises on

 

54

 

the assets of any
Securitization Entity and is not discharged within thirty (30) days thereafter,
(w) a Reportable Event shall occur with respect to, or proceedings
commence to have a trustee appointed, or a trustee is 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, (x) any Single Employer
Plan terminates for purposes of Title IV of ERISA, (y) any Securitization
Entity incurs, 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 or (z) any other event or condition occurs or exists
with respect to a Plan; and in each case in clauses (t) through (z) above,
such event or condition, together with all other such events or conditions, if
any, could reasonably be expected to have a Material Adverse Effect on any
Securitization Entity;

 

(xviii) any Lien in an amount equal to
at least $1,000,000 in favor of the IRS arises on the assets of any
Securitization Entity and is not discharged within thirty (30) days thereafter;

 

(xix) IHOP Franchising, LLC and IHOP IP,
LLC transfer all or substantially all of their respective assets subject to the
Lien of the IHOP Indenture to one or more Affiliates in order to effect a
refinancing by such Affiliates of indebtedness issued by IHOP Franchising, LLC
and IHOP IP, LLC pursuant to the IHOP Indenture, and simultaneously therewith
IHOP Corp. does not cause a Replacement Residual Certificate (or Replacement
Residual Certificates, as may be applicable if the assets of IHOP
Financing, LLC and IHOP IP, LLC have been transferred to more than one
Affiliate in connection with such a refinancing) to be contributed to the
capital of the Master Issuer, which Replacement Residual Certificate(s) shall
become subject to the Lien hereunder;

 

(xx)      Applebee’s International or the Servicer, as
applicable, fails to comply after the applicable notice and cure period with
its obligations to pay the Indemnification Amount in respect of the assets
relating to an Applebee’s Restaurant pursuant to the related First-Tier Asset
Contribution Agreement or the Servicing Agreement, as applicable, in the manner
described therein; or

 

(xxi) the Co-Issuers fail to prepay all
of the Series 2007-1 Notes Outstanding in full upon the occurrence of a
Change of Control to which the Series 2007-1 Class A Insurer has not
provided its prior written consent.

 

Section 5.4                                      Acceleration
of Maturity; Rescission and Annulment.

 

(a)                                  At any time after an Event of
Default has occurred and is continuing, other than an Event of Default
specified in Section 5.3(a)(iv), (v), or (vi), the
Indenture Trustee, if so directed by the Aggregate Controlling Party, shall
declare, on written notice to the

 

55

 

Co-Issuers (unless no written notice is
required under the Indenture), the Aggregate Outstanding Principal Amount of
all Outstanding Notes to be immediately due and payable, and upon any such
declaration, such Aggregate Outstanding Principal Amount, together with all
accrued and unpaid interest thereon, and other amounts payable under the
Indenture, shall automatically become immediately due and payable. If an Event
of Default specified in Section 5.3(a)(iv), (v), or (vi) has
occurred and is continuing, the Aggregate Outstanding Principal Amount,
together with all accrued and unpaid interest thereon, of all of the Notes, and
other amounts payable hereunder, shall automatically become due and payable. Notwithstanding
the foregoing, no such acceleration (whether occurring automatically or by the
declaration of the Indenture Trustee) shall result in an acceleration of
payments under any Insurance Policy.

 

(b)                                 If any Co-Issuer obtains knowledge
that an event that might reasonably be expected to constitute a Default or
Event of Default has occurred and is continuing, the Co-Issuers shall promptly
notify the Indenture Trustee, each Insurer, if applicable, and the Noteholders;
provided, that such notice, except as otherwise stated therein, shall
not constitute an admission that such event constitutes a Default or Event of
Default.

 

(c)                                  At any time after such a declaration
of acceleration of maturity has been made relating to the Notes and before a
judgment or decree for payment of the money due has been obtained by the
Indenture Trustee, the Aggregate Controlling Party (except in respect of an
Event of Default specified in Section 5.3(a)(iv), (v), or (vi),
in which case rescission shall be subject to the consent of each Series Controlling
Party), by written notice to the Co-Issuers and the Indenture Trustee, may rescind
and annul such declaration and its consequences if:

 

(i)             the Co-Issuers have paid or deposited with the
Indenture Trustee a sum sufficient to pay:

 

(A)      all overdue installments of interest and principal on
the Notes,

 

(B)        all unpaid taxes, administrative expenses and other
sums paid or advanced by the Indenture Trustee under the Indenture and the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee, its agents and counsel, and any due and unpaid Weekly Servicing Fees,
and

 

(C)        all outstanding Reimbursements, Insurer Expenses and
Accrued Insurer Premium Amounts owed to each Insurer, if any; and

 

(ii)          the Indenture Trustee has determined, after
consultation with counsel, that all Events of Default, other than the
non-payment of interest on or principal of the Notes that have become due
solely by such acceleration, have been cured and, if any Event of Default (not
including any Event of Default occurring for a Series solely as a result
of cross default to a Series Event of Default for another Series) was a Series Event
of Default only for

 

56

 

some but not all of
the Series of Notes, the Series Controlling Party for such Series of
Notes, by written notice to the Indenture Trustee, has agreed with such
determination (which agreement shall not be unreasonably withheld or delayed)
or has waived such Series Event of Default pursuant to the applicable Series Supplement.

 

No such
rescission and annulment shall affect any subsequent Default or Event of
Default or impair any right consequent thereon.

 

Section 5.5                                      Enforcement.

 

(a)                                  At any time after an Event of
Default has occurred and is continuing and the Notes have been accelerated, the
Indenture Trustee, upon receipt of an Aggregate Controlling Party Order, shall
exercise in respect of the Indenture Collateral, in addition to other rights
and remedies provided for herein or otherwise available to it, the rights and
remedies of a secured party upon default under the UCC (whether or not the UCC
applies to the affected Indenture Collateral) and also shall, pursuant to an
Aggregate Controlling Party Order:  (i) require
the Co-Issuers to, and each of the Co-Issuers hereby agrees that it will at its
expense and upon request of the Indenture Trustee forthwith, assemble all or part of
the Indenture Collateral as directed by the Indenture Trustee and make it
available to the Indenture Trustee at a place and time to be designated by the
Indenture Trustee that is reasonably convenient to both parties; (ii) without
notice except as specified below, sell the Indenture Collateral or any part thereof
in one or more parcels at public or private sale, at any of the Indenture
Trustee’s offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Indenture Trustee may deem commercially
reasonable, in accordance with, and subject to the proviso set forth in, the
following sentence; (iii) occupy any premises owned or leased by any
Co-Issuer where the Indenture Collateral or any part thereof is assembled
or located for a reasonable period in order to effectuate its rights and
remedies hereunder or under law, without obligation to any Co-Issuer in respect
of such occupation; and (iv) exercise any and all rights and remedies of
any Co-Issuer under or in connection with the Indenture Collateral. At any time
after an Event of Default has occurred and is continuing and the Notes have
been accelerated, the Indenture Trustee shall at the direction of the Aggregate
Controlling Party, pursuant to an Aggregate Controlling Party Order, sell or
dispose of any or all of the Indenture Collateral; provided, however, that the
Indenture Trustee may not sell or otherwise liquidate all or substantially
all of the Indenture Collateral following such an Event of Default unless (i) each
Insurer (other than an Insurer as to which an Insurer Event of Default has
occurred and is continuing), if any, consents thereto, (ii) the proceeds
of such sale or liquidation distributable to the Holders of all Senior Notes
are sufficient to discharge in full all amounts then due and unpaid upon such
Senior Notes for principal, premium, if any, and interest and all amounts owing
to the Insurers after taking into account payment of all amounts due prior
thereto pursuant to the Priority of Payments, (iii) the Aggregate
Controlling Party determines that the Indenture Collateral will not continue to
provide sufficient funds for all payments on the Senior Notes of all Series as
they would have become due if the Notes had not been declared due and payable,
and the Indenture Trustee obtains the written consent of each Series Controlling
Party to such sale or (iv) the sale involves a sale of the equity
interests in the Master Issuer and the Co-Issuers continue to be liable for
payment and performance of the obligations under the Indenture. In determining
such sufficiency or insufficiency with respect to clauses (ii) and (iii) in
the previous sentence, the Aggregate

 

57

 

Controlling Party may, but need not, obtain
and conclusively rely upon an opinion of an Independent investment banking or
accounting firm of national reputations as to the feasibility of such proposed
action and as to the sufficiency of the Indenture Collateral for such purpose. The
Co-Issuers agree that, to the extent notice of sale shall be required by law,
ten (10) days’ notice to the Co-Issuers of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Indenture Trustee shall not be
obligated to make any sale of Indenture Collateral regardless of notice of sale
having been given. The Indenture Trustee may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned. The Indenture Trustee shall not have any recourse to
the IHOP Securitization Entities or the assets of the IHOP Securitization
Entities for the obligations of the Co-Issuers under the Indenture and the
other Transaction Documents; provided, that the foregoing shall not limit
(i) any rights the Indenture Trustee may have with respect to
distributions that are paid or payable in respect of the IHOP Residual
Certificate or the right to exercise remedies under the Indenture against the
IHOP Residual Certificate, or (ii) any rights of the Indenture Trustee to
file any claim in or otherwise take any action permitted or required by
applicable laws with respect to any insolvency proceeding instituted by or
against Applebee’s International, IHOP Corp., any Co-Issuer, any other Securitization
Entity, any IHOP Securitization Entity, or any Affiliate thereof if the
Indenture Trustee (at the direction of the Aggregate Controlling Party)
determines that the failure to assert such claims or take such action would
prejudice the Indenture Trustee vis-à-vis any other third-party creditor of the
Co-Issuers who is asserting that the IHOP Securitization Entities should be
liable for the obligations of any Securitization Entity to such third-party
creditor or that the IHOP Securitization Entities should be substantively
consolidated with the Securitization Entities or any of their
non-securitization Affiliates. Any monies collected by the Indenture Trustee
under this subsection (a) shall be applied as provided in Section 5.6.

 

(b)                                 Upon the acceleration of the Notes
under Section 5.4, the Indenture Trustee, subject to the terms set
forth in Section 5.5(a) above, (i) shall (if and as
directed pursuant to an Aggregate Controlling Party Order relating to the
Notes), institute Proceedings to enforce the rights of the Indenture Trustee
with respect to the Indenture Collateral, including, without limitation, to
foreclose upon the Indenture Collateral or sell the Indenture Collateral under
a decree of a court or courts of competent jurisdiction, and (ii) may at
its discretion take any other action of a secured party as permitted by the
laws of the State of New York.

 

If, at any
time when the Indenture Trustee shall determine to exercise its right to sell
the whole or any part of the pledged Equity Interests hereunder (subject
to Section 5.5(a) above) and such pledged Equity Interests or
the part thereof to be sold shall not, for any reason whatsoever, be
effectively registered under the Securities Act, the Indenture Trustee (x) may,
in accordance with applicable securities laws, proceed to make such private
sale notwithstanding that a registration statement for the purpose of
registering such pledged Equity Interests or part thereof could be or
shall have been filed under the Securities Act (or similar statute), (y) may approach
and negotiate with a single possible purchaser to effect such sale, and (z) may restrict
such sale to purchasers each of whom is an accredited investor under the
Securities Act and who will represent and agree that such purchaser is purchasing
for its own account, for investment and not with a view to the distribution or
sale of such pledged Equity Interests or any part thereof.

 

58

 

 

Each Co-Issuer
acknowledges that any such private sale may result in prices and other
terms less favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall not
be deemed to have been made in a commercially unreasonable manner solely by
virtue of such sale being private. The Indenture Trustee shall be under no
obligation to delay a sale of any of the pledged Equity Interests for the
period of time necessary to permit any Pledged Entity to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if the Co-Issuers and such Pledged Entity would agree to
do so.

 

Each Co-Issuer
which is a pledgor of any pledged Equity Interests hereby irrevocably
constitutes and appoints the Indenture Trustee as the proxy and
attorney-in-fact of such Co-Issuer with respect to such pledged Equity
Interests, including the right, from and after an Event of Default, to vote the
same, with full power of substitution to do so. The appointment of the
Indenture Trustee as proxy and attorney-in-fact is coupled with an interest and
shall be irrevocable until all Notes under the Indenture and all other Secured
Obligations have been indefeasibly paid in full. In addition to the right to
vote the pledged Equity Interests, the appointment of the Indenture Trustee as
proxy and attorney-in-fact shall include the right to exercise all other
rights, powers, privileges and remedies to which a holder of the pledged Equity
Interests would be entitled (including giving or withholding written consents
of members, calling special meetings of members and voting at such meetings).
Such proxy shall be effective, automatically and without the necessity of any
action (including any transfer of any pledged Equity Interests on the record
books of the issuer thereof) by any person (including the issuer of the pledged
Equity Interests), upon the occurrence of an Event of Default. Notwithstanding
the foregoing, the Indenture Trustee shall not have any duty to exercise any
such right or to preserve the same and shall not be liable for any failure to
do so or for any delay in doing so.

 

(c)                                  In the case of an Insurer Event of
Default relating to any Series of Notes, the Indenture Trustee shall
institute such Proceedings or take such other action to enforce the obligations
of the defaulting Insurer relating to such Series of Notes under the
applicable Insurance Policy as the Holders of a Majority of the Series Outstanding
Principal Amount shall direct in writing.

 

(d)                                 No Noteholder relating to a Series of
Notes shall be entitled to institute Proceedings or take such other action
directly against any of the Co-Issuers, any other Securitization Entity, the
Servicer, the Insurers, if any, relating to such Series of Notes or the
Indenture Collateral with respect to any Notes, whether to enforce the
Co-Issuers’ obligations hereunder or under such Notes, or against any Indenture
Collateral securing the Notes, unless (i) the Indenture Trustee, having
become bound so to act, fails to institute Proceedings against the Co-Issuers
or with respect to any such Indenture Collateral within a reasonable time and
such failure is continuing, (ii) with respect to such Series of
Notes, an Insurer Event of Default has occurred and is continuing and (iii) holders
of at least 25% of the Aggregate Outstanding Principal Amount for such Series of
Notes agree in writing.

 

(e)                                  Upon any sale of any or all of the
Indenture Collateral securing the Notes as provided in this Base Indenture, the
following shall be applicable:

 

59

 

(i)             the Indenture Trustee is appointed as the true and
lawful attorney of the Co-Issuers to the extent permitted by law, in their name
and stead, to make all necessary deeds, bills of sale and instruments of
assignment, transfer or conveyance of the property thus sold; and for that
purpose may make instruments and instructions and may substitute one
or more Persons with like power; and the Co-Issuers ratify and confirm all that
its said attorney, or such substitute or substitutes, shall lawfully do;

 

(ii)          if so requested by the Indenture Trustee or by any
purchaser, the Co-Issuers shall ratify and confirm any such sale, or transfer
by executing and delivering to the Indenture Trustee or to such purchaser or
purchasers all proper deeds, bills of sale, instruments of assignment,
conveyance or transfer and releases as may be designated in any such
request;

 

(iii)       to the extent permitted by applicable law, any
Noteholder, the Indenture Trustee or any Insurer, if applicable, relating to
the Notes may bid for and purchase any of the Indenture Collateral, and
upon compliance with the terms of sale, may hold, retain, possess and
dispose of such;

 

(iv)      the receipt of the purchase price by the Indenture
Trustee or of the officer making such sale under a judicial proceeding shall be
sufficient discharge to any purchaser for his purchase money, and, after paying
such purchase money and receiving such receipt, such purchaser or its personal
representatives or assigns shall not be obligated to see to the application of
such purchase money, or be in any way answerable for any loss, misapplication
or nonapplication thereof;

 

(v)         any such sale, to the maximum extent permitted by law,
shall operate to divest the Co-Issuers of all right, title, interest, claim and
demand whatsoever, either at law or in equity or otherwise, in and to the
Indenture Collateral so sold and shall be a perpetual bar both at law and at
equity or otherwise against the Co-Issuers and their successors and assigns,
and any and all Persons claiming or who may claim the Indenture Collateral
sold or any part thereof from, through or under the Co-Issuers or their
successors and assigns; and

 

(vi)      any monies collected by the Indenture Trustee upon any
sale of, collection from, or other realization upon all or any of the Indenture
Collateral or otherwise upon the enforcement of this Base Indenture, shall be
applied as provided in Section 5.6.

 

(f)                                    In accordance with the terms of this
Base Indenture, at any time when the Indenture Trustee institutes with the
consent of the Aggregate Controlling Party (or is directed to institute by the
Aggregate Controlling Party) Proceedings to enforce the Notes or this Base
Indenture or any Indenture Collateral, the following shall be applicable:

 

(i)             The Indenture Trustee in its own name, or as Indenture
Trustee of an express trust, or as attorney-in-fact for Holders of Notes,

 

60

 

any Insurer or any
other Secured Party, as the case may be, or in any one or more of such
capacities shall be entitled and empowered to institute any suits, actions or
other Proceedings at law, in equity or otherwise, to recover judgment against
the Co-Issuers or any of them for the whole amount due and unpaid on the
Secured Obligations, and against any Insurer for any amounts owing under any
Insurance Policy and may prosecute any such claims or Proceedings to
judgment or final decree against the Co-Issuers or any of them or any Insurer
and collect the monies adjudged or decreed to be payable in any manner provided
by law, whether before or after or during the pendency of any Proceedings for
the enforcement of the Lien of this Base Indenture, or of any of the Indenture
Trustee’s rights or the rights of any Secured Party under this Base Indenture
or the Indenture Trustee’s rights under any Insurance Policy, and such power of
the Indenture Trustee shall not be affected by any sale hereunder or by the
exercise of any other right, power or remedy for the enforcement of the
provisions of this Base Indenture or for the foreclosure of the Lien hereof.

 

(ii)          In case of a sale of, collection from, or other
realization upon all or any of the Indenture Collateral and of the application
of the proceeds of such sale to the payment of the principal of and interest on
the Notes and other amounts owing hereunder in accordance with Article X
and XI (as applicable), the Indenture Trustee in its own name, and as
trustee of an express trust, subject to Section 2.14(d) and Section 5.5(g),
shall be entitled and empowered, by any appropriate means, legal, equitable or
otherwise, to enforce payment of, and to receive all amounts then remaining due
and unpaid to the Secured Parties, for the benefit of the Secured Parties,
with, as applicable, interest at the rate borne by such Notes or such other
rate as applicable thereto under the Transaction Documents. Notwithstanding the
foregoing, upon the occurrence of an Event of Default and the sale of all or
any part of the Indenture Collateral, amounts on deposit in the applicable
Principal Payment Account may, at the direction of the Aggregate Controlling
Party, be applied to amounts owing hereunder in accordance with Article X
and XI (as applicable), if any, prior to payment of principal in respect
of the immediately succeeding Payment Date.

 

(iii)       Except as required by applicable law or the terms of
such judgment or final decree, no recovery of any judgment or final decree by
the Indenture Trustee and no levy of any execution under any such judgment upon
any of the Indenture Collateral shall in any manner or to any extent affect the
Lien of this Base Indenture upon any of such Indenture Collateral, or any
rights, powers or remedies of the Indenture Trustee, but all such Liens,
rights, powers and remedies shall continue unimpaired as before.

 

(iv)      The Indenture Trustee in its own name, or as Indenture
Trustee of an express trust, or as attorney-in-fact for Holders of Notes or any
Insurer, as the case may be, or in any one or more of such capacities
(irrespective of whether the principal of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Indenture Trustee shall have made any demand on any of the
Co-Issuers for the

 

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payment of overdue
principal or interest), shall be entitled and empowered to file such proofs of
claim and other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee and of any Insurer and the
holders of Notes and/or any other Secured Obligation, as applicable (whether
such claims be based upon the provisions of such Notes, any Insurance
Agreement, any other Secured Obligation or this Base Indenture), allowed in any
receivership, insolvency, bankruptcy, moratorium, liquidation, readjustment,
reorganization or any other judicial or other Proceedings relative to the
Co-Issuers or any Insurer, the creditors of any of the Co-Issuers, any Insurer
or the Indenture Collateral, and any receiver, assignee, indenture trustee,
liquidator, sequestrator (or other similar official) in any such judicial or
other Proceeding is hereby authorized to make such payments to the Indenture
Trustee and, in the event that the Indenture Trustee shall consent to the
making of such payments directly to the Noteholders, any Insurer or any other
Secured Party, to pay to the Indenture Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee, its agents and counsel. The Indenture Trustee is hereby irrevocably
appointed (and the successive respective holders of the Secured Obligations by
taking and holding the Secured Obligations, shall be conclusively deemed to
have so appointed the Indenture Trustee) the true and lawful attorney-in-fact
of the respective Secured Parties with authority to (x) make and file in
the respective names of the Secured Parties (subject to deduction from any such
claims of the amounts of any claims filed by any of the Secured Parties
themselves to the extent permitted hereby) any claim, proof of claim or
amendment thereof, debt, proof of debt or amendment thereof, petition or other
document in any such Proceeding and to receive payment of amounts distributable
on account thereof, (y) execute any such other papers and documents and do
and perform any and all such acts and things for and on behalf of such
Secured Parties as may be necessary or advisable in order to have the
respective claims of the Secured Parties against the Co-Issuers or the
Indenture Collateral reorganized and enforced, and (z) receive payment of
or on account of such claims and debt; provided
that nothing contained in this Base Indenture shall be deemed to give to
the Indenture Trustee any right to accept or consent to any plan of
reorganization or otherwise by action of any character in any such Proceeding
to waive or change in any way any right of any Secured Party. Any monies
collected by the Indenture Trustee under this subsection (f) shall
be applied as provided in Section 5.6.

 

(v)         All rights of action and of asserting claims under
this Base Indenture, any Insurance Policy, or under any of the Notes
enforceable by the Indenture Trustee may be enforced by the Indenture
Trustee to the extent permitted by law without possession of any of such Notes
or the production thereof at the trial or other Proceedings relative thereto.

 

(vi)      In case the Indenture Trustee shall have proceeded to
enforce any right under this Base Indenture by suit, foreclosure or otherwise
and such Proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Indenture Trustee, then in every
such

 

62

 

case the Co-Issuers,
any Insurer and the Indenture Trustee shall, to the extent permitted by law, be
restored without further act to their respective former positions and rights
hereunder, and all rights, remedies and powers of the Indenture Trustee shall
continue as though no such Proceedings had been taken, except to the extent
determined in litigation adversely to the Indenture Trustee.

 

(g)                                 Notwithstanding any other provision
of this Base Indenture, the Notes, any Insurance Agreement, the Servicing
Agreement or any other Transaction Document or otherwise (but subject, for the
avoidance of doubt, to the provisions of Sections 5.5(a), 5.5(b),
5.5(c), 5.5(d), 5.5(e), 5.8 and 5.9 hereof),
the liability of the Co-Issuers to the Noteholders, any Insurer, the Servicer,
the Initial Purchaser, each Series Hedge Counterparty, if any, and the
Indenture Trustee under or in relation to the Notes, this Base Indenture, any
Insurance Agreement or any other Transaction Document to which such Co-Issuer
is a party, or otherwise, is limited in recourse to the Indenture Collateral. After
the Indenture Collateral has been sold and all proceeds have been applied in
accordance with the terms hereof, none of the Indenture Trustee, the Noteholders,
any Insurer, the Initial Purchaser, the Servicer or any Hedge Counterparty
shall be entitled to take any further steps against any of the Co-Issuers to
recover any sums due but still unpaid hereunder, under the Notes, any Insurance
Agreement or any of the other agreements or documents described in this
paragraph (g), all claims against the Co-Issuers in respect of which shall be
extinguished. In particular, the Indenture Trustee agrees, and each Noteholder
by its acceptance of a Note and each other Secured Party and the Servicer by
their acceptance of the benefits of this Base Indenture and each Insurer, if
any, by its execution of a Series Supplement will be deemed to have
agreed, not to take any action or institute any proceeding against any of the
Co-Issuers under any Insolvency Law applicable to any of the Co-Issuers; provided that each of the Indenture Trustee
and the Noteholders, each Insurer, if any, any other Secured Party and the
Servicer may become parties to and participate in any Proceeding or action
under any Insolvency Law applicable to any of the Co-Issuers that is initiated
by any other Person that is not an Affiliate of it.

 

Section 5.6                                      Application of
Monies Collected by Indenture Trustee. Any amounts obtained by the
Indenture Trustee on account of or as a result of the exercise by the Indenture
Trustee of any of its rights under the Indenture, including without limitation,
under this Article V, shall be deposited in the Collection Account
and applied in accordance with Articles  X and XI.

 

Section 5.7                                      Waiver of
Appraisement, Valuation, Stay and Right to Marshaling. To the extent it may lawfully
do so, each of the Co-Issuers for itself and for any Person who may claim
through or under it hereby:

 

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

 

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

 

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

 

(d)                                 consents and agrees that, subject to
the terms of this Base Indenture, all the Indenture Collateral may at any
such sale be sold by the Indenture Trustee in part or as an entirety.

 

Section 5.8                                      Remedies
Cumulative; Delay or Omission Not a Waiver. To the extent permitted by law,
every remedy given hereunder to the Indenture Trustee, any Insurer or to any of
the Noteholders shall not be exclusive of any other remedy or remedies, and
every such remedy shall be cumulative and in addition to every statute, law,
equity or otherwise. Subject to the terms of this Base Indenture specifically
including the rights of any Insurer as Series Controlling Party or
Aggregate Controlling Party relating to the Notes or a Series of Notes,
respectively (as applicable, so long as any Insurer is the Aggregate
Controlling Party relating to the Notes or the Series Controlling Party
relating to a Series of Notes), to direct actions of the Indenture Trustee
in accordance with the terms of this Base Indenture, the Indenture Trustee may exercise
all or any of the powers, rights or remedies given to it hereunder or which may be
now or hereafter given by statute, law, equity or otherwise, in its absolute
discretion. No course of dealing among the Co-Issuers, any Insurer and the
Indenture Trustee or the Noteholders or any delay or omission of the Indenture
Trustee, any Insurer or of the Noteholders to exercise any right, remedy or
power accruing upon any Event of Default shall impair any right, remedy or
power or shall be construed to be a waiver of any such Event of Default or of
any right of the Indenture Trustee, any Insurer or of the Noteholders or
acquiescence therein, and every right, remedy and power given by this Article V
to the Indenture Trustee, any Insurer or to the Noteholders may, to the extent
permitted by law, be exercised from time to time and as often as may be
deemed expedient by the Indenture Trustee, any such Insurer or by the
Noteholders.

 

Section 5.9                                      Control of
Notes. Notwithstanding any other provision of this Base Indenture (but
subject, for the avoidance of any doubt, to the provisions of Section 5.5(f)),
the Aggregate Controlling Party shall have the right to cause the institution
of, and direct the time, method and place of, exercising any right or remedy in
respect of any enforcement of the Indenture Collateral or conducting any
Proceeding for any remedy available to the Indenture Trustee under this Base
Indenture or any other Transaction Document and to direct the exercise of any
trust, right, remedy or power conferred on the Indenture Trustee, in all cases
insofar as such trust, right remedy or power is to be exercised with respect to
such Series of Notes provided that:

 

(a)                                  such direction shall be in writing
and shall not conflict with any rule of law or with this Base Indenture;

 

(b)                                 the Indenture Trustee may take
any other action deemed proper by the Indenture Trustee that is not
inconsistent with such direction or this Base Indenture; provided, however, that, subject to Section 6.1, the
Indenture Trustee need not take any action that it

 

64

 

determines might involve it in liability
(unless the Indenture Trustee has received satisfactory indemnity against such
liability as set forth below); and

 

(c)                                  the Indenture Trustee shall have
been provided with indemnity reasonably satisfactory to it, it being understood
and agreed by the Indenture Trustee that an indemnity by an Insurer, if any (so
long as there is no Insurer Event of Default relating to such Insurer), will be
satisfactory to the Indenture Trustee if the form and substance of such
indemnity is reasonably satisfactory to the Indenture Trustee.

 

ARTICLE VI

 

THE INDENTURE TRUSTEE

 

Section 6.1                                      Certain Duties
and Responsibilities.

 

(a)                                  Except during the continuance of an
Event of Default:

 

(i)             the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this Base
Indenture, and no implied covenants or obligations shall be read into this Base
Indenture against the Indenture Trustee; and

 

(ii)          in good faith on its part, the Indenture Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Indenture
Trustee and conforming to the requirements of this Base Indenture; provided that in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Indenture Trustee, the Indenture Trustee shall
be under a duty to examine the same to determine whether or not they
substantially conform to the requirements of this Base Indenture and shall
promptly, but in any event within one (1) Business Day in the case of an
Officer’s Certificate furnished by the Servicer, notify the party delivering
the same if such certificate or opinion does not conform. If a corrected form shall
not have been delivered to the Indenture Trustee within two (2) Business
Days after such notice from the Indenture Trustee, the Indenture Trustee shall
so notify the Holders and such Insurer.

 

(b)                                 In case an Event of Default known to
a Trust Officer of the Indenture Trustee has occurred and is continuing, the
Indenture Trustee shall, except in the case of the receipt of directions with
respect to such matter from the Aggregate Controlling Party in accordance with
the terms of this Base Indenture, exercise such of the rights and powers vested
in it by this Base Indenture, and use the same degree of care and skill in its
exercise as a prudent Person would exercise or use under the circumstances in
the conduct of such Person’s own affairs.

 

(c)                                  No provision of this Base Indenture
shall be construed to relieve the Indenture Trustee from liability for its own
negligent action, its own negligent failure to act, its own fraud, its own bad
faith or its own willful misconduct, except that:

 

65

 

(i)             this subsection shall not be construed to limit
the effect of subsection (a) of this Section 6.1;

 

(ii)          the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer, unless it shall be
proven that the Indenture Trustee was negligent in ascertaining the pertinent
facts;

 

(iii)       the Indenture Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Series Controlling Party of any Series of
Notes or the Aggregate Controlling Party in accordance with this Base Indenture
relating to the time, method and place of conducting any Proceeding for any
remedy available to the Indenture Trustee or exercising any trust or power
conferred upon the Indenture Trustee, under this Base Indenture;

 

(iv)      no provision of this Base Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers contemplated hereunder, if it shall
have reasonable grounds for believing that repayment of such funds or adequate
security or indemnity against such risk or liability is not reasonably assured
to it (if the amount of such funds or risk or liability does not exceed the
amount payable to the Indenture Trustee pursuant to Section 10.2(e) net
of the amounts specified in Section 6.6(a)(i), the Indenture
Trustee shall be deemed to be reasonably assured of such repayment); and

 

(v)         the Indenture Trustee shall not be liable to the
Holders for any action taken or omitted by it in good faith at the direction of
the Series Controlling Party of any Series of Notes or the Aggregate
Controlling Party and/or a Holder under circumstances in which such direction
is required or permitted by the terms of this Base Indenture.

 

(d)                                 For all purposes under this Base
Indenture, the Indenture Trustee shall not be deemed to have notice or
knowledge of any Default (other than any event described in Section 5.3(a)(i) or
5.3(a)(ii)) unless a Trust Officer assigned to and working in the
Corporate Trust Office has Actual Knowledge thereof or unless written notice of
any such event is received by the Indenture Trustee at the Corporate Trust
Office, and such notice references, as applicable, the Notes generally, the
Co-Issuers, the Indenture Collateral or this Base Indenture.

 

(e)                                  Whether or not therein expressly so
provided, every provision of this Base Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section 6.1 and Section 6.3.

 

(f)                                    The Indenture Trustee shall, upon
receipt of reasonable prior notice to the Indenture Trustee, permit any Insurer
or any representative of a Holder of a Note, during the Indenture Trustee’s
normal business hours, to examine all books of account, records, reports and
other papers of the Indenture Trustee relating to the Notes, to make copies and
extracts

 

66

 

therefrom (the reasonable out-of-pocket
expenses incurred in making any such copies or extracts to be reimbursed to the
Indenture Trustee by such Insurer or such Holder).

 

(g)                                 In connection with any Account
Control Agreement, the Indenture Trustee hereby agrees to give orders to
various entities on behalf of the Back-Up Manager as necessary after the
occurrence of a Servicer Termination Event.

 

(h)                                 The Indenture Trustee may request
written direction any time the Indenture provides that the Indenture Trustee may be
directed to act.

 

Section 6.2                                      Notice of
Default. Promptly (and in no event later than two (2) Business Days)
after the occurrence of any Default known to a Trust Officer of the Indenture
Trustee or after any declaration of acceleration has been made or delivered to
the Indenture Trustee pursuant to Section 5.4, the Indenture
Trustee shall transmit notice of such Default by mail or facsimile to the
Servicer, each Insurer, if any, each Rating Agency (so long as any of the Notes
are Outstanding and rated by such Rating Agency) and (unless an Insurer is then
the Series Controlling Party relating to a Series of Notes) all
Holders of Notes of such Series as their names and addresses appear on the
Note Register, unless, in any such case, such Default shall have been cured or
waived.

 

Section 6.3                                      Certain Rights
of Indenture Trustee. Except as otherwise provided in Section 6.1:

 

(a)                                  the Indenture Trustee may rely
and shall be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, note or other paper or document believed in good
faith by it to be genuine and to have been signed or presented by the proper
party or parties;

 

(b)                                 any request or direction of the
Co-Issuers mentioned herein shall be sufficiently evidenced by an Company
Request or Company Order, as the case may be;

 

(c)                                  whenever in the administration of
this Base Indenture the Indenture Trustee shall (i) deem it desirable that
a matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Indenture Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely
upon an Officer’s Certificate or (ii) be required to determine the value
of any Indenture Collateral or funds hereunder or the cash flows projected to
be received therefrom, the Indenture Trustee may, in the absence of bad faith
on its part, rely on reports of Independent, nationally recognized accountants,
investment bankers or other Persons qualified to provide the information
required to make such determination, including Independent, nationally
recognized dealers in securities of the type being valued and securities
quotation services;

 

(d)                                 as a condition to the taking or
omitting of any action by it hereunder, the Indenture Trustee may consult
with external counsel as to matters of law and the advice of such counsel or
any Opinion of Counsel delivered by external counsel shall be full and complete
authorization and protection in respect of any action taken or omitted by it
hereunder in good faith and in reliance therein;

 

67

 

(e)                                  the Indenture Trustee shall be under
no obligation to exercise or to honor any of the rights or powers vested in it
by this Base Indenture at the request or direction of any Insurer or any of the
Holders pursuant to this Base Indenture, unless such Insurer or such Holders
shall have offered to the Indenture Trustee reasonable security or indemnity
against all costs, expenses and liabilities which might reasonably be incurred
by it in compliance with such request or direction, it being understood and
agreed by the Indenture Trustee that an indemnity by such Insurer (so long as
there is no Insurer Event of Default relating to such Insurer) will be
satisfactory to the Indenture Trustee if the form and substance of such
indemnity is reasonably satisfactory to the Indenture Trustee;

 

(f)                                    the Indenture Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, note or other paper documents, but the
Indenture Trustee, in its discretion, may and, upon the written direction
of the Series Controlling Party of any Series of Notes, the Aggregate
Controlling Party or any Rating Agency shall, make such further inquiry or
investigation into such facts or matters as it may see fit or as it shall
be directed, and, the Indenture Trustee shall be entitled, on reasonable prior
notice to the Co-Issuers, to examine the books and records relating to the
Notes and the Indenture Collateral, as applicable, and the premises of any of
the Co-Issuers and the Servicer, personally or by agent or attorney during the
Co-Issuers’ or the Servicer’s normal business hours; provided that the Indenture Trustee shall, and shall cause its
agents to, hold in confidence all such information, except (i) to the
extent disclosure may be required by law by any regulatory authority and (ii) except
to the extent that the Indenture Trustee, in its sole judgment, may determine
that such disclosure is consistent with its obligations hereunder;

 

(g)                                 the Indenture Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys;

 

(h)                                 the Indenture Trustee shall not be
liable for any action it takes or omits to take in good faith that it
reasonably and, after the occurrence and during the continuation of an Event of
Default, subject to Section 6.1(b), prudently believes to be
authorized or within its rights or powers hereunder;

 

(i)                                     the Indenture Trustee shall not be
responsible for the accuracy of the books or records of, or for any acts or
omissions of, DTC, any Transfer Agent (other than the Indenture Trustee itself
acting in that capacity), Clearstream, Euroclear, any Calculation Agent (other
than the Indenture Trustee itself acting in that capacity) or any Paying Agent
(other than the Indenture Trustee itself acting in that capacity); and

 

(j)                                     the Indenture Trustee shall not be
liable for the actions or omissions of the Servicer, and, without limiting the
foregoing, the Indenture Trustee shall not (except to the extent, if at all,
otherwise expressly stated in this Base Indenture) be under any obligation to
monitor, evaluate or verify compliance by the Servicer with the terms hereof or
the Servicing Agreement.

 

Section 6.4                                      May Hold
Notes. The Indenture Trustee, any Paying Agent, Note Registrar or any other
agent of the Co-Issuers, in its individual or any other capacity, may

 

68

 

become the
owner or pledgee of Notes and may otherwise deal with the Co-Issuers or
any of its Affiliates with the same rights it would have if it were not
Indenture Trustee, Paying Agent, Note Registrar or such other agent.

 

Section 6.5                                      Money Held in
Trust. Money held by the Indenture Trustee hereunder shall be held in trust
to the extent required herein. The Indenture Trustee shall be under no
liability for interest on any Money received by it hereunder except as
otherwise agreed upon with the Co-Issuers and except to the extent of income or
other gain on investments which are deposits in or certificates of deposit of
the Indenture Trustee in its commercial capacity and income or other gain
actually received by the Indenture Trustee on Eligible Investments.

 

Section 6.6                                      Compensation
and Reimbursement.

 

(a)                                  The Co-Issuers agree, subject to Article X
and Article XI:

 

(i)             to pay the fees of the Indenture Trustee on each
Payment Date as compensation for all services rendered by it hereunder as set
forth in the separate letter agreement between the Co-Issuers and the Indenture
Trustee (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);

 

(ii)          except as otherwise expressly provided herein, to
reimburse the Indenture Trustee (subject to any written agreement between the
Co-Issuers and the Indenture Trustee) in a timely manner upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Indenture Trustee in accordance with any provision of this Base Indenture
(including securities transaction charges to the extent not waived, and the
reasonable compensation, expenses and disbursements of its agents and legal
counsel, except any such expense, disbursement or advance as may be
attributable to its negligence, willful misconduct, fraud or bad faith);

 

(iii)       to indemnify the Indenture Trustee and its officers,
directors, employees and agents for, and to hold them harmless against, any
loss, liability or expense incurred in good faith without negligence, willful
misconduct, fraud or bad faith on their part, arising out of or in connection
with the acceptance or administration of this trust, including the reasonable
costs and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their powers or duties
hereunder; and

 

(iv)      to pay the Indenture Trustee reasonable additional
compensation together with its expenses (including reasonable counsel fees) for
any collection action taken pursuant to Section 5.5.

 

(b)                                 The Co-Issuers may remit
payment for such fees and expenses to the Indenture Trustee or, in the absence
thereof, the Indenture Trustee may request that the Servicer from time to
time deduct payment of the Indenture Trustee’s fees and expenses hereunder from
Monies on deposit in the SPE Operating Expense Account in accordance with Articles
X and XI.

 

69

 

(c)                                  The Indenture Trustee hereby agrees
not to institute against, or join any other Person in instituting against, any
of the Securitization Entities any bankruptcy, reorganization, arrangement,
insolvency, moratorium or liquidation proceedings, or other proceedings under
the Bankruptcy Code or any other applicable bankruptcy, insolvency,
receivership or other similar law of any jurisdiction now or hereafter in effect,
for the non payment to the Indenture Trustee of any amounts provided by this Section 6.6
until at least one (1) year and one (1) day after the payment in
full of all Notes issued under this Base Indenture or, if longer, the
applicable preference period then in effect.

 

(d)                                 The Indenture Trustee agrees that
the payment of all amounts to which it is entitled pursuant to subsections
6.6(a)(i), (a)(ii) and (a)(iii) shall be subject to
Article XI and shall be payable only to the extent funds are
available therefor in accordance with Article XI.

 

Fees shall be
accrued on the actual number of days in the related Interest Accrual Period. The
Indenture Trustee shall receive amounts pursuant to this Section 6.6
only to the extent that such payment is made in accordance with Article XI
and the failure to pay such amounts to the Indenture Trustee shall not, by
itself, constitute an Event of Default. Subject to Section 6.8, the
Indenture Trustee shall continue to serve as Indenture Trustee under this Base
Indenture notwithstanding the fact that the Indenture Trustee shall not have
received amounts due it hereunder. No direction by the Series Controlling
Party of any Series of Notes or the Aggregate Controlling Party shall
affect the right of the Indenture Trustee to collect amounts owed to it under
this Base Indenture.

 

If on any
Payment Date when any amount shall be payable to the Indenture Trustee pursuant
to this Base Indenture is not paid because there are insufficient funds
available for the payment thereof in accordance with Articles X and XI,
all or any portion of such amount not so paid shall be deferred and payable on
any later Payment Date on which a fee shall be payable and sufficient funds are
available therefor in accordance with Articles X and XI.

 

Section 6.7                                      Corporate
Indenture Trustee Required; Eligibility. There shall at all times be a
Indenture Trustee hereunder which shall be a bank, corporation or trust company
organized and doing business under the laws of the United States of America or
of any State thereof, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $200,000,000, subject
to supervision or examination by federal or State authority, having a rating of
at least “Baa1” by Moody’s and at least “BBB+” by S&P, and having an office
within the United States. If such bank, corporation or trust company publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section 6.7, the combined capital and surplus of such bank,
corporation or trust company shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Indenture Trustee shall cease to be eligible in accordance with
the provisions of this Section 6.7, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article VI.

 

70

 

Section 6.8                                      Resignation
and Removal; Appointment of Successor.

 

(a)                                  No resignation or removal of the
Indenture Trustee and no appointment of a successor Indenture Trustee pursuant
to this Article VI shall become effective until the acceptance of
appointment by the successor Indenture Trustee under Section 6.9. The
indemnification in favor of a resigning or removed Indenture Trustee in Section 6.6
hereof shall survive any resignation and removal (to the extent of any
indemnified liabilities, costs, expenses and other amounts arising or incurred
prior to, or arising out of actions or omissions occurring prior to, such
resignation or removal).

 

(b)                                 The Indenture Trustee may resign
at any time by giving not less than thirty (30) days’ prior written notice thereof
to the Co-Issuers, each Insurer, if any, each Class A-1 Administrative
Agent, the Holders and the Rating Agencies. Upon receiving such notice of
resignation, the Co-Issuers, with the consent of the Aggregate Controlling
Party, shall promptly appoint a successor Indenture Trustee or Indenture
Trustees by written instrument, in duplicate, executed by an Authorized Officer
of the each of the Co-Issuers, one copy of which shall be delivered to the
Indenture Trustee so resigning and one copy to the successor Indenture Trustee
or Indenture Trustees, together with a copy to each Holder, each Insurer, if
any, each Class A-1 Administrative Agent, and the Servicer. If no
successor Indenture Trustee shall have been appointed and an instrument of
acceptance by a successor Indenture Trustee shall not have been delivered to
the Indenture Trustee within thirty (30) days after the giving of such notice
of resignation, at the direction of the Aggregate Controlling Party the
resigning Indenture Trustee, or on behalf of itself and all others similarly
situated, may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.

 

(c)                                  Subject to Section 6.8(a) and
6.8(e), the Indenture Trustee may be removed at any time by the
Aggregate Controlling Party by an Aggregate Controlling Party Order to such
effect, delivered to the Indenture Trustee and to the Co-Issuers.

 

(d)                                 If at any time:

 

(i)             the Indenture Trustee shall cease to be eligible under
Section 6.7 and shall fail to resign after written request therefor by the
Co-Issuers or by the Aggregate Controlling Party; or

 

(ii)          the Indenture Trustee shall become incapable of
acting; or

 

(iii)       a court having jurisdiction in the premises in respect
of the Indenture Trustee in an involuntary Proceeding under federal or state
banking or bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law shall
have entered a decree or order granting relief or appointing a receiver, liquidator,
assignee, custodian, trustee, conservator or sequestrator (or similar official)
for the Indenture Trustee or for any substantial part of the Indenture
Trustee’s property or ordering the winding up or liquidation of the Indenture
Trustee’s

 

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affairs; provided that any such decree or order shall
have continued unstayed and in effect for a period of sixty (60) consecutive
days; or

 

(iv)      the Indenture Trustee commences a voluntary Proceeding
under any federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy, insolvency or
other similar law or consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, conservator or sequestrator
(or other similar official) for the Indenture Trustee or for any substantial part of
the Indenture Trustee’s property or makes any assignment for the benefit of its
creditors or fails generally to pay its debts as such debts become due or takes
any corporate action in furtherance of any of the foregoing;

 

then, in any
such case (subject to Sections 6.8(a) and 6.8(e)), the
Aggregate Controlling Party or the Co-Issuers (with the consent of the Series Controlling
Party relating to each Series of Notes for as long as the Series Controlling
Party for such Series of Notes is an Insurer) may by the Aggregate
Controlling Party Order or Company Order (as applicable) (A) remove the
Indenture Trustee, and the Indenture Trustee hereby agrees to resign
immediately in the manner and with the effect provided in this Section 6.8,
or (B) any Series Controlling Party may, on behalf of itself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Indenture Trustee and the appointment of a successor Indenture
Trustee.

 

(e)                                  If the Indenture Trustee shall
resign, be removed or become incapable of acting, or if a vacancy shall occur
in the office of the Indenture Trustee for any reason, the Co-Issuers with the
consent of the Aggregate Controlling Party, by Company Order, shall promptly
appoint a successor Indenture Trustee as provided herein. If the Co-Issuers
shall fail to appoint a successor Indenture Trustee within thirty (30) days after
such resignation, removal or incapability or the occurrence of such vacancy, a
successor Indenture Trustee may be appointed by Act of the Aggregate
Controlling Party delivered to the Co-Issuers and the retiring Indenture
Trustee. The successor Indenture Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Indenture Trustee and
supersede any successor Indenture Trustee proposed by the Co-Issuers. If no
successor Indenture Trustee shall have been so appointed by the Co-Issuers or
the Aggregate Controlling Party and shall have accepted appointment in the
manner hereinafter provided, except as otherwise provided in this Base
Indenture, any Holder may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.

 

(f)                                    The Co-Issuers shall give prompt
notice of each resignation and each removal of the Indenture Trustee and each
appointment of a successor Indenture Trustee by mailing written notice of such
event by first-class mail, postage prepaid, to the Rating Agencies, each
Insurer, if any, each Class A-1 Administrative Agent and the Holders of
the Notes as their names and addresses appear in the Note Register. Each notice
shall include the name of the successor Indenture Trustee and the address of
its Corporate Trust Office. If the Co-Issuers fail to mail such notice within
ten (10) days after acceptance of appointment by the successor Indenture
Trustee, the successor Indenture Trustee shall cause such notice to be given at
the expense of the Co-Issuers.

 

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Section 6.9                                      Acceptance of
Appointment by Successor. Every successor Indenture Trustee appointed
hereunder shall execute, acknowledge and deliver to the Co-Issuers, each
Insurer, if any, and the retiring Indenture Trustee an instrument (in form and
substance reasonably satisfactory to each Insurer, if any) accepting such
appointment. Upon delivery of the required instruments, the resignation or
removal of the retiring Indenture Trustee shall become effective and such
successor Indenture Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts, duties and obligations of the
retiring Indenture Trustee; but, on request of the Co-Issuers or the Series Controlling
Party of any Series of Notes or the successor Indenture Trustee, such
retiring Indenture Trustee shall, upon payment of its charges then unpaid,
execute and deliver an instrument (in form and substance satisfactory to
each Insurer, if any) transferring to such successor Indenture Trustee all the
rights, powers and trusts of the retiring Indenture Trustee, and shall duly
assign, transfer and deliver to such successor Indenture Trustee all property
and Money held by such retiring Indenture Trustee hereunder, subject
nevertheless to its Lien, if any, provided for in Section 6.6(b). Upon
request of each Insurer, if any, or any such successor Indenture Trustee, the
Co-Issuers shall execute any and all instruments (in form and substance
satisfactory to such Insurers, if any, or successor Indenture Trustee) for more
fully and certainly vesting in and confirming to such successor Indenture
Trustee all such rights, powers and trusts.

 

For the
avoidance of doubt and notwithstanding anything to the contrary herein, no
successor Indenture Trustee shall accept its appointment unless at the time of
such acceptance such successor shall be qualified and eligible under this Article VI
and a Rating Agency Notification has been provided and the Aggregate
Controlling Party has consented with respect to such appointment.

 

Section 6.10                                Merger, Conversion,
Consolidation or Succession to Business of Indenture Trustee. Any
corporation or entity into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any corporation or
entity resulting from any merger, conversion or consolidation to which the
Indenture Trustee shall be a party, or any corporation or entity succeeding to
all or substantially all of the corporate trust business of the Indenture
Trustee shall be the successor of the Indenture Trustee hereunder; provided
such corporation or entity shall be otherwise qualified and eligible under this
Article VI, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any of the
Notes has been authenticated, but not delivered, by the Indenture Trustee then
in office, any successor by merger, conversion or consolidation to such
authenticating Indenture Trustee may adopt such authentication and deliver
the Notes so authenticated with the same effect as if such successor Indenture
Trustee had itself authenticated such Notes. The Indenture Trustee shall
provide written notice to each Insurer, if any, relating to a Series of
Notes, each Class A-1 Administrative Agent and the Co-Issuers of any such
merger, conversion or consolidation.

 

Section 6.11                                Co-Indenture
Trustees and Separate Indenture Trustee. At any time or times, for the
purpose of meeting the legal requirements of any jurisdiction in which any part of
the Indenture Collateral may at the time be located, the Co-Issuers and
the Indenture Trustee upon notice to each Class A-1 Administrative Agent
and with the consent of each Insurer, if any, that is a Series Controlling
Party (such consent not to be unreasonably withheld, conditioned or delayed)
shall have power to appoint a Co-Indenture Trustee (a “Co-Indenture

 

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Trustee”),
jointly with the Indenture Trustee of all or any part of the Indenture
Collateral, with the power to file such proofs of claim and take such other
actions pursuant to Section 5.8 herein and to make such claims and
enforce such rights of action on behalf of the Holders of the Notes, as such
Holders themselves may have the right to do, subject to the other
provisions of this Section 6.11.

 

The Co-Issuers
shall join with the Indenture Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint a
Co-Indenture Trustee. If the Co-Issuers do not join in such appointment within
fifteen (15) days after the receipt by them of a request to do so, the
Indenture Trustee shall have power to make such appointment.

 

Should any
written instrument from the Co-Issuers be required by any Co-Indenture Trustee
so appointed, more fully confirming to such Co-Indenture Trustee such property,
title, right or power, any and all such instruments shall, on request, be
executed, acknowledged and delivered by the Co-Issuers. The Co-Issuers agree to
pay in the case of a Co-Indenture Trustee to the extent that funds are
available therefor under Section 11.1(r), for any reasonable fees
and expenses in connection with such appointment.

 

Every
Co-Indenture Trustee shall, to the extent permitted by law, but to such extent
only, be appointed subject to the following terms:

 

(a)                                  the Notes shall be authenticated and
delivered solely by the Indenture Trustee and all rights, powers, duties and
obligations hereunder in respect of the custody of securities and any Cash or
other personal property held by, or required to be deposited or pledged with,
the Indenture Trustee hereunder, shall be exercised solely by the Indenture
Trustee;

 

(b)                                 the rights, powers, duties and
obligations hereby conferred or imposed upon the Indenture Trustee in respect
of any property covered by the appointment of a Co-Indenture Trustee shall be
conferred or imposed upon and exercised or performed by the Indenture Trustee
or by the Indenture Trustee and such Co-Indenture Trustee jointly in the case
of the appointment of a Co-Indenture Trustee, as shall be provided in the
instrument appointing such Co-Indenture Trustee;

 

(c)                                  no Co-Indenture Trustee hereunder
shall be personally liable by reason of any act or omission of the Indenture
Trustee hereunder;

 

(d)                                 the Indenture Trustee shall not be
liable by reason of any act or omission of a Co-Indenture Trustee; and

 

(e)                                  any Act of Holders delivered to the
Indenture Trustee shall be deemed to have been delivered to each Co-Indenture
Trustee, and the Indenture Trustee shall mail a copy thereof to each
Co-Indenture Trustee.

 

Section 6.12                                Fiduciary for
Holders Only; Agent for Other Secured Parties. With respect to the security
interests created hereunder, the pledge of any item of Indenture Collateral to
the Indenture Trustee is to the Indenture Trustee for its own benefit, as

 

74

 

representative
of the Holders of the Notes and as agent for the other Secured Parties. In
furtherance of the foregoing, the possession by the Indenture Trustee of any
item of Indenture Collateral are all undertaken by the Indenture Trustee in its
capacity as representative of the Holders of the Notes and agent for the other
Secured Parties.

 

Section 6.13                                Withholding. If
any amount is required to be deducted or withheld from any payment to any
Holder of Notes, such tax shall reduce the amount otherwise distributable to
such Holder of Notes and such reduction will not be covered by any Insurer in
connection with any withholding. The Indenture Trustee is hereby authorized to
withhold or deduct from amounts otherwise distributable to any Holder of Notes
sufficient funds for the payment of any tax that is legally required to be
withheld or deducted (but such authorization shall not prevent the Indenture
Trustee from contesting any such tax in appropriate Proceedings and legally
withholding payment of such tax, pending the outcome of such Proceedings). The
amount of any withholding tax imposed with respect to any Holder of Notes shall
be treated as Cash distributed to such Holder of Notes, as applicable, at the
time it is deducted or withheld by the Co-Issuers or the Indenture Trustee and
remitted to the appropriate taxing authority. If there is a possibility that
withholding tax is payable with respect to a distribution, the Indenture
Trustee may in its sole discretion withhold such amounts in accordance
with this Section 6.13. If any Holder of Notes wishes to apply for
a refund of any such withholding tax, the Indenture Trustee shall reasonably
cooperate with such Holder of Notes in making such claim so long as such Holder
of Notes agrees to reimburse the Indenture Trustee for any reasonable
out-of-pocket expenses incurred. Nothing herein shall impose an obligation on
the part of the Indenture Trustee to determine the amount of any tax or
withholding obligation on the part of the Co-Issuers or in respect of the
Notes.

 

Section 6.14                                Authenticating
Agents. Upon the request of the Co-Issuers, the Indenture Trustee shall,
and if the Indenture Trustee so chooses the Indenture Trustee may, appoint one
or more Authenticating Agents with power to act on its behalf and subject to
its direction in the authentication of Notes in connection with issuance,
transfers and exchanges under Article II, as fully to all intents
and purposes as though each such Authenticating Agent had been expressly
authorized by such Sections to authenticate such Notes. For all purposes of
this Base Indenture, the authentication of Notes by an Authenticating Agent
pursuant to this Section 6.14 shall be deemed to be the
authentication of Notes by the Indenture Trustee.

 

Any
corporation or entity into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation or
entity resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation or entity succeeding
to the corporate trust business of any Authenticating Agent, shall be the
successor of such Authenticating Agent hereunder, without the execution or
filing of any documents (except as required by law) or any further act on the part of
the parties hereto or such Authenticating Agent or such successor corporation
or entity. Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Indenture Trustee and the Co-Issuers. The
Indenture Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Co-Issuers. Upon receiving such notice of
resignation or upon such a termination, the Indenture Trustee shall promptly
appoint a successor Authenticating Agent and shall give written notice of such
appointment to the Co-Issuers.

 

75

 

 

The Indenture
Trustee agrees to pay to each Authenticating Agent appointed by it from time to
time reasonable compensation for its services, and reimbursement for its
reasonable expenses relating thereto and the Indenture Trustee shall be
entitled to be reimbursed for such payments, subject to Section 6.6
and Article XI. The provisions of Sections 2.9, 6.4
and 6.5 shall be applicable to any Authenticating Agent.

 

ARTICLE VII

REPRESENTATIONS
AND COVENANTS

 

Section 7.1                                      Payment of
Principal and Interest. Each Co-Issuer shall pay or cause to be paid the
principal of, and premium, if any, and interest on the Notes when due pursuant
to the provisions of this Base Indenture and any applicable Series Supplement.
Principal, premium, if any, and interest shall be considered paid on the date
due if the Paying Agent holds on that date money designated for and sufficient
to pay all principal, premium, if any, and interest then due. Except as
otherwise provided pursuant to a Class A-1 Note Purchase Agreement or any
other Transaction Document, amounts properly withheld under the Code or any
applicable state, local or foreign law by any Person from a payment to any
Noteholder of interest or principal or premium, if any, shall be considered as
having been paid by the Co-Issuers (or by any Insurer, as applicable) to such
Noteholder for all purposes of the Indenture and the Notes.

 

By acceptance
of its Notes, each Noteholder agrees that the failure to provide the Paying
Agent with appropriate tax certifications (which includes (i) an Internal
Revenue Service Form W-9 for United States persons (as defined under Section 7701(a)(30)
of the Code) or any applicable successor form or (ii) an applicable
Internal Revenue Service Form W-8, for Persons other than United States
persons, or applicable successor form) may result in amounts being
withheld from payments to such Noteholder under this Base Indenture and any Series Supplement
and that amounts withheld pursuant to applicable laws shall be considered as
having been paid by the Co-Issuers as provided in clause (a) above.

 

Section 7.2                                      Maintenance of
Office or Agency. The Co-Issuers hereby appoint the Indenture Trustee as a
Paying Agent for the payment of principal of and interest on the Notes, and as
the Co-Issuers’ agent where notices and demands to or upon the Co-Issuers in
respect of the Notes or this Base Indenture may be served and where Notes may be
surrendered for registration of transfer or exchange.

 

The Co-Issuers
may at any time and from time to time vary or terminate the appointment of
any such agent or appoint any additional agents for any or all of such
purposes; provided that the Co-Issuers
shall maintain in the Borough of Manhattan, The City of New York, an office or
agency where notices and demands to or upon the Co-Issuers in respect of the
Notes and this Base Indenture may be served and, subject to any laws or
regulations applicable thereto, an office or agency outside of the United
States where Notes may be presented and surrendered for payment; provided,
further, that no paying agent shall be appointed in a jurisdiction
outside of the United States which subjects payments on the Notes to
withholding tax. The Co-Issuers shall at all times maintain a duplicate copy of
the Note Register with respect to the Notes in the city in which the Corporate
Trust Office is located. The Co-Issuers shall give prompt written

 

76

 

notice to the
Indenture Trustee, each Insurer, if any, the Rating Agencies and the Holders of
the appointment or termination of any such agent and of the location and any
change in the location of any such office or agency.

 

If at any time
the Co-Issuers shall fail to maintain any such required office or agency in the
Borough of Manhattan, The City of New York, or outside the United States, or
shall fail to furnish the Indenture Trustee and each Insurer, if any, with the
address thereof, presentations and surrenders may be made (subject to the
limitations described in the preceding paragraph) at and notices and demands may be
served on the Co-Issuers, and Notes may be presented and surrendered for
payment to the appropriate Paying Agent at its main office and the Co-Issuers
hereby appoints the same as its agent to receive such respective presentations,
surrenders, notices and demands.

 

Section 7.3                                      Money for
Security Payments to Be Held in Trust. All payments of amounts due and
payable with respect to any Notes that are to be made from amounts withdrawn
from the Indenture Trust Accounts pursuant to this Base Indenture shall be made
on behalf of the Co-Issuers by the Indenture Trustee (from and to the extent of
available funds in such accounts as specified in this Base Indenture and
subject to Article XI).

 

Section 7.4                                      Existence of
the Co-Issuers; Independent Managers; Existence of Master Issuer. Each of
the Co-Issuers shall maintain in full force and effect its existence and rights
as a limited liability company or corporation validly existing, and in good
standing under the laws of its state of organization and shall obtain and
preserve its qualification to do business as a foreign limited liability
company or corporation in each jurisdiction in which such qualifications are or
shall be necessary to protect the validity and enforceability of this Base
Indenture or the Notes or to avoid any Material Adverse Effect. The Master
Issuer shall be owned or controlled, directly or indirectly, by Applebee’s
Holdings at all times.

 

Each of the
Co-Issuers shall ensure that all limited liability company, corporate or other
formalities regarding its existence (including holding regular board meetings,
or other similar meetings) are followed. None of the Co-Issuers shall take any
action or conduct its affairs nor cause any of the other Securitization
Entities to take any action or conduct its affairs in a manner that is likely
to result in its separate existence being ignored or in its assets and
liabilities being substantively consolidated with any other Person in a
bankruptcy, reorganization or other insolvency proceeding.

 

At all times
the managers or directors, as the case may be, of each of the
Securitization Entities shall include at least two (2) Independent
Managers or Independent Directors, as the case may be.

 

Section 7.5                                      Protection of
Indenture Collateral; Performance of Obligations.

 

(a)                                  Other than with respect to the
Company-Owned Real Property prior to the occurrence of any Trigger Event and as
otherwise permitted under the Servicing Agreement with respect to Account
Control Agreements for certain depository banks receiving cash funds from
Company-Owned Restaurants, the Co-Issuers shall from time to time authorize and
deliver all such supplements and amendments hereto and all such Financing
Statements,

 

77

 

continuation statements, instruments of
further assurance and other instruments, and shall take such other reasonable
action as may be necessary or advisable or desirable to secure the rights
and remedies of the Secured Parties hereunder and to:

 

(i)             Grant more effectively all or any portion of the
Indenture Collateral;

 

(ii)          maintain or preserve the Lien (and the priority
thereof) of this Base Indenture or to carry out more effectively the purposes
hereof and to maintain and preserve the status of the Indenture Collateral as
being free of Liens except from the Lien created hereby and Permitted Liens;

 

(iii)       perfect, publish notice of or protect the validity of
any Grant made or to be made by this Base Indenture (including, without
limitation, any and all actions necessary or desirable as a result of changes
in law or regulations);

 

(iv)      enforce any of the instruments or property included in
the Indenture Collateral;

 

(v)         preserve and defend title to the Indenture Collateral
and the rights of the Secured Parties in the Indenture Collateral against the
claims of all Persons; and

 

(vi)      (x) pay or cause to be paid any and all taxes
levied or assessed upon any of the Co-Issuers or in respect of all or any part of
the Indenture Collateral and timely file all tax returns and information
statements as required and to provide each beneficial owner of Notes any
information that the beneficial owner reasonably requests in order for the
beneficial owner to comply with its Federal, state or local tax and information
returns and reporting obligations and (y) if required to prevent the
withholding or imposition of United States income tax, deliver or cause to be
delivered a United States Internal Revenue Service Form W-9 or successor
applicable form, to each other Co-Issuer, counterparty or paying agent with
respect to (as applicable) any item included in the Indenture Collateral at the
time such item included in the Indenture Collateral is purchased or entered
into and thereafter prior to the expiration or obsolescence of such form.

 

The Co-Issuers
shall file (or cause to be filed) any Financing Statement, continuation
statement or other instrument required pursuant to this Section 7.5 as are
necessary to maintain perfection of the Indenture Collateral perfected by the
filing of Financing Statements. The Indenture Trustee agrees that it shall from
time to time, at the direction of the Aggregate Controlling Party or the
Co-Issuers, execute and cause to be filed Financing Statements and continuation
statements.

 

The Co-Issuers
hereby agree to file (or cause to be filed) any Financing Statements or
continuation statements, and amendments to Financing Statements, in any
jurisdictions and with any filing offices as the Indenture Trustee or the
Aggregate Controlling

 

78

 

Party may determine,
in its sole discretion, are necessary or advisable to perfect the security
interest granted to the Indenture Trustee in connection herewith. Such
Financing Statements may describe the Indenture Collateral in the same manner
as described in the Granting Clause of this Base Indenture or may contain
an indication or description of Indenture Collateral that describes such
property in any other manner as the Indenture Trustee may determine, in
its sole discretion, is necessary, advisable or prudent to ensure the
perfection of the security interest in the Indenture Collateral granted to the
Indenture Trustee in connection herewith, including, without limitation,
describing such property as “all assets” or “all personal property,” “whether
now owned or existing, or hereafter acquired or arising.”

 

(b)                                 The Indenture Trustee shall not,
except for payments, deliveries and distributions otherwise expressly permitted
or required under this Base Indenture, remove any portion of the Indenture
Collateral that consists of Cash or is evidenced by an instrument, certificate
or other writing (A) from the jurisdiction in which it was held at the
date the most recent Opinion of Counsel was delivered pursuant to Section 7.6
hereof (or from the jurisdiction in which it was held as described in the
Opinion of Counsel delivered at the Closing Date pursuant to Section 3.1(b),
if no Opinion of Counsel has yet been delivered pursuant to Section 7.6
hereof) or (B) from the possession of the Person who held it on such date.

 

(c)                                  The Co-Issuers shall pay or cause to
be paid taxes, if any, levied on account of the beneficial ownership by the
Co-Issuers of any of the Indenture Collateral.

 

Section 7.6                                      Opinions as to
Indenture Collateral. On or before September 30 of each year,
commencing in calendar year 2009, at the cost of the Co-Issuers, and at such
other times, upon request of any Series Controlling Party at such
requesting party’s cost (unless an Event of Default has occurred in which case
the Co-Issuers shall bear the cost), the Co-Issuers shall cause to be furnished
to the Indenture Trustee and each Insurer, if any, an Opinion of Counsel
stating that, in the opinion of such counsel, as of the date of such opinion,
the Lien and security interest created by this Base Indenture with respect to
the Indenture Collateral remains in effect, that no further action (other than
any action specified in such Opinion of Counsel) needs to be taken for the
continued effectiveness and perfected status of such Lien during the next
twelve months and confirming the matters set forth in the Opinion of Counsel,
furnished pursuant to Section 3.1(b), with regard to the perfection
and priority of such security interest (and such Opinion of Counsel may likewise
be subject to qualifications and assumptions similar to those set forth in the
opinion delivered pursuant to Section 3.1(b)); provided,
that this Section 7.6 shall not apply to any Company-Owned Real
Property prior to the occurrence of a Trigger Event.

 

Section 7.7                                      Payment and
Performance of Obligations.

 

(a)                                  None of the Co-Issuers shall take
any action, and each of the Co-Issuers shall use its reasonable efforts not to
permit any action to be taken by others, that would release any Person from any
of such Person’s covenants or obligations under any instrument included in the
Indenture Collateral.

 

(b)                                 The Co-Issuers will, and will cause
the other Securitization Entities to, pay and discharge and fully perform, at
or before maturity, all of their respective material

 

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obligations and liabilities, including,
without limitation, Tax liabilities and other governmental claims levied or
imposed upon the Securitization Entities or upon the income, properties or
operations of any Securitization Entity, judgments, settlement agreements and
all obligations of each Securitization Entity under the Transaction Documents,
except where the same may be contested in good faith by appropriate
proceedings (and without derogation from the material obligations of the
Co-Issuers hereunder and the Guarantors under the Guarantee and Collateral
Agreements regarding the protection of the Indenture Collateral from Liens
(other than Permitted Liens)), and will maintain, in accordance with GAAP,
reserves as appropriate for the accrual of any of the same.

 

(c)                                  The Co-Issuers may, with the prior
written consent of each Insurer, if any, and, where an Insurer is not the Series Controlling
Party as to a Series of Notes, if a Rating Agency Notification is provided
with respect to such Series (except in the case of the Servicing Agreement
as initially executed for which no consent is required), contract with other
Persons, including the Servicer, for the performance of actions and obligations
to be performed by any of the Co-Issuers hereunder by such Persons and the
performance of the actions and other obligations with respect to the Indenture
Collateral of the nature set forth in the Servicing Agreement by the Servicer. Notwithstanding
any such arrangement, the Co-Issuers shall remain primarily liable with respect
thereto. In the event of such contract, the performance of such actions and
obligations by such Persons shall be deemed to be performance of such actions
and obligations by the Co-Issuers; and each of the Co-Issuers shall punctually
perform, and use its commercially reasonable efforts to cause the Servicer or
such other Person to perform, all of their obligations and agreements contained
in the Servicing Agreement or such other agreement.

 

Section 7.8                                      Negative
Covenants.

 

(a)                                  None of the Co-Issuers shall, or
cause any Securitization Entity (or permit any Securitization Entity) to (as
applicable):

 

(i)             sell, transfer, assign, participate, exchange or
otherwise dispose of, or pledge, mortgage, hypothecate or otherwise encumber
(by security interest, Lien (statutory or otherwise), preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever or otherwise) (or permit such to occur or suffer such to exist), any
part of the Indenture Collateral, except for Permitted Liens or as
expressly permitted by this Base Indenture and the other Transaction Documents;

 

(ii)          claim any credit on, or make any deduction from, or
dispute the enforceability of, the payment of the principal or interest payable
in respect of the Notes (other than amounts required to be paid, deducted or
withheld in accordance with the Code or any other applicable laws) or assert
any claim against any present or future Holder by reason of the payment of any
taxes levied or assessed upon any part of the Indenture Collateral;

 

(iii)       except as may be expressly permitted hereby or by
the other Transaction Documents, (A) permit the validity or effectiveness
of this Base Indenture or any Grant hereunder to be impaired, or permit the
Lien of this

 

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Base Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to this
Base Indenture or the Notes, (B) except for the Lien of this Base
Indenture, Permitted Liens or as otherwise permitted under this Base Indenture,
permit any Lien (including, without limitation, any preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever or otherwise (other than the Lien of this Base Indenture)) to be
created on or extend to or otherwise arise upon or burden the Indenture
Collateral or any part thereof, any interest therein or the proceeds
thereof, or (C) subject to the perfection exceptions referred to herein,
take any action that would permit the Lien of this Base Indenture not to
constitute a valid, first-priority perfected security interest in the Indenture
Collateral, subject to Permitted Liens and other than as permitted hereunder;

 

(iv)      become liable in any way, whether directly or by
assignment or as a guarantor or other surety, for the obligations of any
Franchisee under any lease, except in the case of any assigned or sublet
Company Lease, Sale/Leaseback Lease or Franchisee Sub-lease;

 

(v)         remove the legend from any Notes without an Opinion of
Counsel that such action will not result in a violation under either the
Securities Act or the Investment Company Act;

 

(vi)      enter into any transaction with any Affiliate other
than the transactions contemplated by the Transaction Documents on terms less
favorable than those obtainable in an arm’s-length transaction with a wholly
unaffiliated Person;

 

(vii)   maintain, accept transfer of, or otherwise obtain any
bank account other than those pledged pursuant to this Base Indenture or the
applicable Guaranty and Collateral Agreement, including the Indenture Trust
Accounts (other than a bank account to be maintained by the Franchise Holder);

 

(viii) conduct business under any other
name or change its name or jurisdiction of organization without first
delivering to the Indenture Trustee, each Insurer, if any, and the Rating
Agencies notice thereof and an Opinion of Counsel that such activity or such
change in name or jurisdiction will not adversely affect the Lien or the
interest hereunder of the Secured Parties and, to the extent such name does not
incorporate the Applebee’s Brand, obtaining the consent of the Aggregate
Controlling Party; provided, that the foregoing shall not restrict the
Restaurant Holders from operating restaurants under the Applebee’s Brand;

 

(ix)        declare or pay any dividends or distributions on any
of its limited liability company interests or shares of stock, as the case may be;
provided, however, that so long as no
Partial Amortization Event, Rapid Amortization Event, Potential Rapid
Amortization Event, Default or Event of

 

81

 

Default has occurred
and is continuing with respect to any Series of Notes Outstanding or would
result therefrom, each of the Co-Issuers and any Securitization Entity may,
each in their sole discretion, declare and pay any dividends or distributions,
including, without limitation, from the net proceeds received from the offering
and sale of any Series of Notes, to the extent permitted under the
applicable laws of the relevant entity’s state of organization and its
Operating Agreement. Without limiting Section 7.8(a)(xiv), no
Co-Issuer will, or will permit any other Securitization Entity to, pay any
wages or salaries or other compensation to its officers, directors or other
agents except out of earnings computed in accordance with GAAP or except for
the fees paid to its Independent Manager or director, as the case may be. Except
as provided for in the Indenture and the other Transaction Documents, no
Co-Issuer will, or will permit any other Securitization Entity to, redeem,
purchase, retire or otherwise acquire for value any Equity Interest or other
security in or issued by such Securitization Entity or set aside or otherwise
segregate any amounts for any such purpose except as consented to by the
Aggregate Controlling Party. The Master Issuer will not, nor will it permit any
Subsidiary to, issue any Equity Interest other than the Equity Interests in
existence on the Closing Date, and any minority equity interest issued by a
Liquor License Holder, unless, in each case, such actions are taken as are
required, in the sole discretion of the Indenture Trustee, to ensure the Grant
to the Indenture Trustee and the perfection of a first priority perfected
security interest in such Equity Interest;

 

(x)           have any Subsidiaries other than the Subsidiaries in
existence on the Closing Date except with the consent of the Aggregate
Controlling Party;

 

(xi)        make, incur, or suffer to exist any loan, advance,
extension of credit or other investment in any Person other than (a) investments
in Eligible Investment held in any of the Indenture Trust Accounts, the
Concentration Account and the Servicing Accounts, (b) any loans or
advances to Franchisees made in the ordinary course of business in accordance
with the Servicing Standard, (c) in the case of the Master Issuer,
ownership of the equity of the Co-Issuers, the Liquor License Holders and the
Franchise Holder, (d) in the case of Applebee’s Holdings, ownership of the
equity of the Master Issuer, (e) in the case of the Franchise Holder,
investments in Eligible Investments held in an account subject to an Account
Control Agreement and intercompany loans to the Master Issuer, in each case,
limited to the proceeds of any capital contribution to the Franchise Holder to
maintain a certain minimum net worth or (f) as contemplated under this
Base Indenture.

 

(xii)     consolidate or merge with or into any Person, convey
or transfer all or substantially all of its assets to any Person, terminate its
existence, dissolve or liquidate in whole or in part, except as expressly
permitted hereunder;

 

82

 

(xiii) lend any of the Indenture Collateral
to any securities lending counterparty (including, without limitation, any
bank, insurance company, broker-dealer or other financial institution) pursuant
to any securities lending agreement or enter into any other similar securities
lending transaction;

 

(xiv) hire or have any employees (other
than any Restaurant Holder required to have employees to comply with applicable
law relating to the sale of alcoholic beverages);

 

(xv)    except for Permitted Liens, sell, transfer, exchange
or otherwise grant any rights in or dispose of its assets other than Excluded
Property or Excepted Property or the payment of distributions to its member to
the extent permitted under this Base Indenture; provided, that
Co-Issuers may, and will permit the Securitization Entities to, (a) dispose
of obsolete property and IP Assets that are no longer in use or, in the
reasonable business judgment of Co-Issuers, not otherwise commercially
reasonable to maintain, and may Grant licenses and sublicenses of IP
Assets in accordance with the Transaction Documents and (b) make such
Asset Disposition or other disposition of property pursuant to Section 7.8(a)(xxiii);

 

(xvi)  without the consent of each Series Controlling
Party that is an Insurer (or each Insurer, if any, if required under the Series Supplement
or otherwise applicable to the provision in question), or where any Series Controlling
Party is not an Insurer, without satisfaction of the Rating Agency Condition,
amend, supplement or otherwise modify any of the Transaction Documents or waive
any breach or proposed breach of any provision of the Transaction Documents or
give any consent thereunder;

 

(xvii)  terminate the appointment of the
Servicer other than in accordance with the Servicing Agreement;

 

(xviii)  take any action or fail to take any
action, if such action or failure to take action could reasonably be expected
to interfere in any material respect with the enforcement of any rights of any
Insurer or the Indenture Trustee under the agreements or instruments relating
to any of the Indenture Collateral, except to the extent such action or failure
to act is otherwise permitted by the Indenture or the other Transaction
Documents;

 

(xix)  (A) fail to pay any assessment,
including any tax assessment, charge or fee with respect to the Trust Estate in
excess of $1,000,000 in the aggregate at any one time outstanding and the
Co-Issuers shall not have remedied such failure to pay within 30 days of the
knowledge of an Authorized Officer of any of the Co-Issuers of such failure, or
(B) fail to defend any action known to a Authorized Officer of any of the
Co-Issuers, if, in any such case, such failure to pay or defend may adversely
affect the priority or enforceability of the Lien over the Indenture Collateral
created by this Base Indenture or materially reduce the amount of the Indenture
Collateral or otherwise would be reasonably

 

83

 

likely to have a
Material Adverse Effect; provided that the
Co-Issuers shall not be required to (1) pay any assessment, including any
tax assessment, charge or fee with respect to the Indenture Collateral if the
same is being contested in good faith, by appropriate proceedings diligently
pursued, so long as appropriate reserves are maintained and so long as such
nonpayment will not, under applicable law, entitle any Person to place a Lien
on or result in the forfeiture of the Indenture Collateral or any material
portion thereof or (2) defend an action or actions known to an Authorized
Officer of any of the Co-Issuers solely for civil damages not in excess of an
aggregate amount of $1,000,000, as confirmed in writing by external counsel;

 

(xx)      amend or agree to amend the Servicing Agreement to
increase the fees payable to the Servicer thereunder unless (i) the Rating
Agency Condition is satisfied and (ii) each Insurer (if any such Insurer
is then a Series Controlling Party), if applicable, consents thereto;

 

(xxi)  establish or maintain or contribute
to any Plan that is covered by Title IV of ERISA (other than in the case of any
Restaurant Holder that is required to have employees to comply with applicable
law relating to the sale of alcoholic beverages);

 

(xxii)  without the consent of the Aggregate
Controlling Party, issue any Senior Notes that would cause the Aggregate
Outstanding Principal Amount of all Senior Notes (including the undrawn amount
of any variable funding Series of Notes) with floating interest rates to
be greater than the least of the Unhedged Floating Rate Note Principal Limits
applicable with respect to any Outstanding Series of Senior Notes;

 

(xxiii)  sell, transfer, lease, license,
liquidate or otherwise dispose of any of its property (whether by means of a
single transaction or a series of related transactions), including any
Equity Interests of any other Securitization Entity, except in the case of the
following or as otherwise permitted in any Transaction Document:

 

(1)  any Refranchising Asset Disposition
or Non-Refranchising Asset Disposition (each, an “Asset Disposition”); provided that:

 

(A)      (i) no Event of Default or Rapid Amortization
Event has occurred and is continuing or, (ii) if an Event of Default or
Rapid Amortization Event has occurred and is continuing, the Aggregate
Controlling Party has consented thereto;

 

(B)        the cash proceeds from the Asset Dispositions will be
deposited to the Capital Expenditure Reserve Account, in accordance with Section 10.2(h) below,
pending a determination whether an amount equal to the related Asset
Disposition Prepayment Amount is required to be deposited to the

 

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Collection
Account for application to prepay principal of the Notes in accordance with Articles
X and XI;

 

(2)                                  any Obsolete Property Disposition; provided,
that all proceeds arising from such disposition shall be treated as Collections
with respect to the Monthly Collection Period in which such amounts are
received; and

 

(3)                                  any other sale, lease, license,
transfer or other disposition of property to which the Aggregate Controlling
Party has given the Master Issuer prior written consent and which is not
otherwise expressly permitted by the Indenture or other Transaction Documents; provided that all proceeds arising from such
sale, lease, license, transfer or other disposition are deposited in accordance
with the instructions provided by the Aggregate Controlling Party in the
document providing such prior written consent and that if such document does
not contain deposit instructions, then such proceeds shall be deposited into
the Concentration Account; provided  further, that the Master
Issuer shall deliver a copy of such prior written consent to the Rating
Agencies;

 

(xxiv)  take or omit to take any action with
respect to the maintenance, enforcement and defense of the IP Holder’s rights
in and to the IP Assets that would constitute a breach by the Servicer of the
Servicing Agreement if such action were taken or omitted by the Servicer on
behalf of any Securitization Entity;

 

(xxv)  permit any Liquor License Holder to
engage in any business or activity, which would not be permitted to be taken by
any Securitization Entity under this Section 7.8 or Section 7.9
or 7.13(p); and

 

(xxvi)  take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth above in this Section 7.8.

 

(b)                                 None of the Co-Issuers or the
Indenture Trustee shall sell, transfer, exchange or otherwise dispose of
Indenture Collateral, or enter into or engage in any business with respect to any
part of the Indenture Collateral, except as expressly permitted by this
Base Indenture and the Servicing Agreement.

 

(c)                                  The proceeds of the Notes 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. No Securitization Entity owns or is engaged in
the business of extending credit for the purpose of purchasing or carrying any
margin stock.

 

Section 7.9                                      No Other
Business. The Co-Issuers shall not, and will not permit any other
Securitization Entity to, engage in any business or activity other than issuing
and selling the Notes pursuant to this Base Indenture and any supplements
thereto, entering into any

 

85

 

Series Hedge
Agreements, acting as franchisor of the Applebee’s Restaurants, the Other U.S.
Franchise Business and the Other U.S. Products and Services and sublicensor of
the IP Assets  (with respect to the
Master Issuer and the Franchise Holder) or acting as licensor of the IP Assets
(with respect to the IP Holder), entering into the Transaction Documents and
acquiring, owning, holding, enforcing, pledging and disposing of, solely for
their own respective accounts, the Indenture Collateral in connection with the
Notes in accordance with the Transaction Documents, and such other activities
which are contemplated under the Transaction Documents or otherwise necessary,
suitable or convenient to accomplish the foregoing or are incidental thereto or
connected therewith. To the extent not precluded by the laws of the applicable
state of organization, none of the Co-Issuers shall amend its certificate of
formation or limited liability company agreement, or certificate of
incorporation or by-laws, in any such case, without providing a Rating Agency
Notification and obtaining consent of the Aggregate Controlling Party.

 

Section 7.10                                Calculation Agent.

 

(a)                                  The Co-Issuers hereby agree that for
so long as any of the Notes remain Outstanding there will at all times be an
agent appointed to calculate LIBOR or any other specified interest rate
(including the “swap rate” for any applicable term) in respect of each Interest
Accrual Period (or other applicable period) in accordance with the terms of
each Supplemental Indenture relating to any Notes that remain Outstanding (the “Calculation
Agent”). The Co-Issuers hereby appoint the Indenture Trustee as Calculation
Agent for purposes of determining LIBOR or any other specified interest rate
(including the “swap rate” for any applicable term) for each Interest Accrual
Period (or other applicable period) and the Indenture Trustee hereby accepts
such appointment.

 

(b)                                 The Calculation Agent may be
removed by the Co-Issuers at any time. If the Calculation Agent is unable or
unwilling to act as such or is removed by the Co-Issuers, the Co-Issuers shall
promptly appoint as a replacement Calculation Agent a leading bank which is
engaged in transactions in Dollar deposits in the international Dollar market
and which is not an Affiliate of any of the Co-Issuers. The Calculation Agent
shall not resign its duties without a successor having been duly appointed.

 

(c)                                  The Calculation Agent shall be
required to agree (and the Indenture Trustee, in its capacity as Calculation
Agent, does hereby agree) that, as soon as practicable after 11:00 a.m.
(London time) on each Rate Determination Date, but in no event later than 11:00 a.m.
(New York time) on the Business Day immediately following each Rate
Determination Date, the Calculation Agent shall calculate the Series Interest
Rate relating to each Series of Notes for the next Interest Accrual Period
and the Series Interest Payment Amount relating to each Series of
Notes, each as applicable (in each case rounded to the nearest cent, with half
a cent being rounded upward) on the related Payment Date, and shall communicate
such rates and amounts to the Co-Issuers, the Indenture Trustee, the Insurers,
if any, each Paying Agent and, if any Series of Notes is in the form of
a Regulation S Global Note, DTC, Euroclear and Clearstream. The Calculation
Agent shall also specify to the Co-Issuers and to each Insurer, if any, the
quotations upon which each Series Interest Rate is based, and in any event
the Calculation Agent shall notify the Co-Issuers before 5:00 p.m. (New
York time) on each Rate Determination Date if it has not determined the Series Interest
Rate, the Series Interest Payment Amount, together with

 

86

 

its reasons therefor. The determination of
the Series Interest Rate and the Series Interest Payment Amount, as
applicable, by the Calculation Agent shall, absent manifest error, be final and
binding on all parties.

 

Section 7.11                                Indebtedness. None
of the Co-Issuers shall incur, nor cause nor permit any of the Securitization
Entities to incur or have outstanding any Debt, or assume or guarantee any Debt
(excluding incurring or having outstanding any indebtedness arising from any
tax liabilities) of any Person other than pursuant to this Base Indenture, the
Notes (issued pursuant to Section 2.3) or the other Transaction
Documents, except as set forth on Schedule 7.12(u); provided,
that (i) the Franchise Holder may make loans to the other
Securitization Entities in connection with maintaining a minimum net worth, and
(ii) any Securitization Entity may guarantee the obligations of a
Restaurant Holder and/or a new Franchisee under a lease in connection with any
sale/leaseback transactions between a Restaurant Holder and a third party and
any assigned lease in respect of a new Franchisee; provided, further,
in the case of the foregoing clause (ii), that such guarantee and any
related documentation will be in form and substance acceptable to the
Aggregate Controlling Party (such acceptance not to be unreasonably withheld or
delayed).

 

Section 7.12                                Representations and
Warranties. Each of the Co-Issuers hereby represents, warrants and agrees
as of the date hereof and each date of issuance of any Additional Notes as
follows:

 

(a)                                  each of the Securitization Entities
and the Liquor License Holders is a limited liability company or corporation,
as the case may be, duly formed and validly existing under the laws of its
jurisdiction of organization and has all requisite power and authority to own
its properties, hold a liquor license, if applicable, and conduct its business
as such properties are presently owned and such business is presently
conducted, and to execute, deliver and perform its obligations under this
Base Indenture and any other document or instrument (including the Notes)
delivered by the issuer pursuant hereto or in connection herewith and is duly
qualified to do business and is in good standing, in all jurisdictions
necessary for the conduct of such business except where the failure to be so
qualified or in good standing would not have a Material Adverse Effect. The
Applebee’s Restaurants owned by the Restaurant Holders have the ability to
serve alcohol;

 

(b)                                 the execution and delivery of, and
the performance of its obligations under, this Base Indenture and each
Transaction Document to which any of the Securitization Entities is a party and
the consummation of the transactions provided for in this Base Indenture and
each Transaction Document to which any of the Securitization Entities is a
party have been duly authorized by all necessary action and authorized officers
of such Securitization Entity;

 

(c)                                  the execution and delivery of, and
the performance of its obligations under, this Base Indenture and each
Transaction Document to which any of the Securitization Entities is a party,
the consummation of the transactions contemplated by this Base Indenture and
each Transaction Document to which any of the Securitization Entities is a
party, and the fulfillment of the terms hereof and thereof applicable to any of
the Securitization Entities, will (A) not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, (x) the organizational
documents of any

 

87

 

of the Securitization Entities, (y) any
indenture, contract, agreement, mortgage, deed of trust or other instrument to
which any of the Securitization Entities is a party or by which either it or
its assets is bound or (z) any law, order, rule, regulation, judgment or
decree of any Governmental Authority having jurisdiction over any of the
Co-Issuers and (B) not result in or require the creation of any Lien on
any of the properties of any of the Securitization Entities, except for Liens
created or permitted under this Base Indenture;

 

(d)                                 there are no Proceedings or
investigations pending or, to the knowledge of the Co-Issuers, threatened
against any of the Securitization Entities or to which its properties are subject,
before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality, (A) questioning the validity of this Base
Indenture or any Transaction Documents to which any of the Securitization
Entities is a party, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Base Indenture or any Transaction Documents
to which any of the Securitization Entities is a party, (C) seeking any
determination or ruling that would, individually or in the aggregate,
materially and adversely affect the performance by any of the Securitization
Entities of its obligations under this Base Indenture or any Transaction
Documents to which any of the Securitization Entities is a party, except as set
forth on Schedule 7.12(d), (D) seeking any determination or
ruling that would, individually or in the aggregate, materially and adversely
affect the validity or enforcement of this Base Indenture or any Transaction
Documents to which any of the Securitization Entities is a party or (E) that
is reasonably likely to result in a Material Adverse Effect;

 

(e)                                  except for (i) filings of
Financing Statements, (ii) recordation of the IP Lien Filings with respect
to the IP Assets owned as of the Closing Date and those subsequently acquired
by the IP Holder, and (iii) recordings of any mortgages, all
authorizations, consents, orders and approvals of, notices to filings and
recordings and registrations, by any of the Securitization Entities with any
court or other governmental authority and all other governmental actions
necessary to be taken by any of the Securitization Entities in connection with
the execution and delivery of, and the performance of its obligations under,
this Base Indenture and any Transaction Documents to which any of the
Securitization Entities is a party and the consummation of the transactions
contemplated by this Base Indenture and any Transaction Documents to which any
of the Securitization Entities is a party have been obtained, made or taken, as
the case may be, and are in full force and effect;

 

(f)                                    each of this Base Indenture and each
Transaction Document to which any of the Securitization Entities is a party
constitutes a legal, valid and binding obligation of each of the Securitization
Entities (as applicable) enforceable against each of the Securitization
Entities (as applicable) in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors’ rights generally (including, without
limitation, fraudulent conveyance laws) and by general principles of equity
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of specific performance
or injunctive relief, regardless of whether considered in a proceeding in
equity or at law;

 

(g)                                 the Co-Issuers (considered
collectively) own, or are licensed to use, all of the Indenture Collateral, and
there are no Liens with respect to, no Liens upon, or any

 

88

 

restrictions on the transferability of, the
Indenture Collateral other than Permitted Liens and as otherwise provided in
this Base Indenture;

 

(h)                                 99% of the issued and outstanding
limited liability company interests of Applebee’s Holdings are owned by
Applebee’s International and 1% of the issued and outstanding limited liability
company interests of Applebee’s Holdings are owned by Applebee’s Holdings II
Corp., all of which limited liability company interests have been validly
issued and are owned of record by Applebee’s International and Applebee’s
Holdings II Corp., free and clear of all Liens other than Permitted Liens;

 

(i)                                     all of the issued and outstanding
limited liability company interests of the Master Issuer are owned by Applebee’s
Holdings, all of which limited liability company interests have been validly
issued and are owned of record by Applebee’s Holdings, free and clear of all
Liens other than Permitted Liens;

 

(j)                                     all of the issued and outstanding
limited liability company interests or shares of stock, as the case may be,
of the Franchise Holder, the IP Holder, and each of the Restaurant Holders and
a majority of the issued and outstanding limited liability company interests or
shares of stock, as the case may be, of each of the Liquor License
Holders, are owned by the Master Issuer, except in the case of the Liquor
License Holders, a nonvoting minority interest is owned by an individual to
comply with applicable law, all of which limited liability company interests or
shares of stock, as the case may be, have been validly issued and are
owned of record by the Master Issuer, free and clear of all Liens other than
Permitted Liens;

 

(k)                                  the Co-Issuers are not required in
connection with the sale of the Notes to register or qualify the Notes under
the Securities Act or, any applicable United States state securities law;

 

(l)                                     none of the Securitization Entities
has registered, or is required to register, as an “investment company” under
the Investment Company Act or is an “investment company” or an “affiliated
person” of, or “promoter” or “principal underwriter” for, an “investment
company,” as such terms are defined in the Investment Company Act;

 

(m)                               the Co-Issuers are not required in
connection with the sale of the Notes to qualify this Base Indenture under the
United States Trust Indenture Act of 1939, as amended;

 

(n)                                 the Notes satisfy the requirements
set forth in Rule 144A(d)(3) under the Securities Act;

 

(o)                                 the Notes shall be “debt securities”
within the meaning of Rule 902 of the Securities Act;

 

(p)                                 no Default has occurred and is
continuing;

 

(q)                                 none of the Securitization Entities
is (i) in violation of its organizational documents; (ii) in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any agreement to which it is a party or by which it

 

89

 

may be bound, except where such default
is not reasonably likely to have a Material Adverse Effect; or (iii) in
violation of any law, order, rule, regulation, writ, injunction, judgment or
decree of any Governmental Authority having jurisdiction over it or over its
properties, except where such violation is not reasonably likely to have a
Material Adverse Effect;

 

(r)                                    none of the Securitization Entities
has established or maintains any Plan covered by Title IV of ERISA (other than
any Restaurant Holder that may be required to have employees to comply
with applicable law relating to the sale of alcoholic beverages);

 

(s)                                  both before and immediately after
giving effect to the transactions contemplated by this Base Indenture and the
other Transaction Documents, each Securitization Entity is solvent within the
meaning of the Bankruptcy Code and any applicable state law and no such entity
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 such entity;

 

(t)                                    no payments to be made to the
Co-Issuers under any of the Existing Franchise Assets will be subject to any
value-added tax or other similar tax;

 

(u)                                 none of the Co-Issuers or the other
Securitization Entities has or will have (i) any employees (other than any
Restaurant Holder that may be required to have employees to comply with
applicable law relating to the sale of alcoholic beverages), (ii) any
outstanding indebtedness for borrowed money (to the extent that this
representation is deemed made after the Closing Date) other than the Notes and
the obligations of the Master Issuer under any intercompany loan from the
Franchise Holder except as set forth on Schedule 7.12(u), (iii) material
liabilities except where such liabilities are expressly permitted by the
Transaction Documents or (iv) entered into any material agreements other
than as expressly contemplated or permitted under the Transaction Documents;

 

(v)                                 the Securitization Entities will
have acquired on the Closing Date the insurance coverage described on Schedule 7.12(v) hereto,
in such amounts and covering such risks as are 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 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 Securitization Entities than the terms and
conditions of insurance maintained by their Affiliates that are not
Securitization Entities. All policies of insurance of the Securitization
Entities are in full force and effect and the Securitization Entities are in compliance
with the terms of such policies in all material respects;

 

(w)                               the IP Holder, the Master Issuer and
the Franchise Holder, through ownership of the IP Assets or license to use the
IP Assets, respectively, own and/or have the right to use all Intellectual
Property necessary to operate the Applebee’s System within the United States
substantially in the manner as conducted by Applebee’s International
immediately prior to the Closing Date;

 

90

 

 

(x)                                   except as set forth on Schedule 7.12(x) hereto,
all of the Trademark, Copyright and Patent registrations and applications  owned by IP Holder in the United States are
subsisting, unexpired, have not been abandoned in any applicable jurisdiction
and are, to the Co-Issuers’ knowledge, valid and enforceable;

 

(y)                                 (i) the use of the Initial IP
Assets in the manner in which they are currently used, and the operation of the
Applebee’s System in the manner in which it is currently operated, does not
infringe, dilute, misappropriate or otherwise violate the rights of any third
party in a manner that could reasonably be expected to have a Material Adverse
Effect, and, except as set forth on Schedule 7.12(y) hereto,
there are no such claims pending, or to the Co-Issuers’ knowledge, threatened,
against any of the Co-Issuers that could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; (ii) to the
Co-Issuers’ knowledge, no Initial IP Assets are being infringed, diluted, misappropriated
or otherwise violated by any third party in a manner that could reasonably be
expected to have a Material Adverse Effect; (iii) except as set forth on Schedule 7.12(y),
there is no action or proceeding pending or threatened, by the Co-Issuers alleging
the infringement, dilution, misappropriation or other violation of any Initial
IP Assets in which an adverse determination in connection therewith could ,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; (iv) except as set forth in Schedule 7.12(y) hereto,
no action or proceeding is pending or, to the Co-Issuers’ knowledge,
threatened, against any of the Co-Issuers that seeks to limit, cancel or
question the validity of any Initial IP Asset (including, without limitation,
the right to proceeds therefrom and the right to bring an action at law or in
equity for any infringement, dilution or violation of such Initial IP Asset and
to collect all damages, settlements and proceeds relating to such Initial IP
Asset), or the Co-Issuers’ rights or interests therein, or use thereof which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect;

 

(z)                                   each Securitization Entity 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 any Co-Issuer, are
required to be filed by, or with respect to the income, properties or
operations of, such Securitization Entity (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 any Securitization Entity 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. As of the Closing Date, except as set forth on Schedule 7.12(z),
no Co-Issuer is aware of any proposed Tax assessments against any
Securitization Entity. Except as would not reasonably be expected to have a
Material Adverse Effect, no tax deficiency has been determined adversely to any
Securitization Entity, nor does any Securitization Entity have any knowledge of
any tax deficiencies. Each Securitization Entity 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;

 

(aa)                            no events have occurred, and no
actions have been taken, at any time prior to the Closing Date (or, in the case
of any issuance of Additional Notes, since the Closing Date) that could give
rise to any claim or liability of any kind against any of the

 

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Securitization Entities or its assets which,
if determined adversely, would individually or in the aggregate be reasonably
likely to have a Material Adverse Effect.

 

(bb)                          since their formation none of the
Securitization Entities has engaged in any activities that would have rendered
untrue any representation or warranty, or would have violated any covenant or
agreement, relating to the separate existence of such Securitization Entity,
set forth in this Base Indenture, including without limitation Section 7.13(p),
had  this Base Indenture been in full
force and effect since the formation of the Securitization Entities;

 

(cc)                            true, accurate and complete copies
of all documents and information that are material with respect to the
business, financial condition or any material existing or potential liabilities
of any of the Securitization Entities or any of their respective Affiliates
have been provided to each Insurer, if any;

 

(dd)                          the Co-Issuers are not aware of any
facts pertaining to any of the Securitization Entities, any predecessor to any
of the Securitization Entities or any of their respective Affiliates which
would be reasonably likely to have a Material Adverse Effect on any of the
Securitization Entities, the Notes or the Indenture Collateral and which have
not been disclosed in the applicable Offering Memorandum, the Transaction
Documents or otherwise disclosed in writing to each Insurer, if any;

 

(ee)                            all certificates, reports,
statements, notices, documents and other written information furnished to the
Insurers, if any, by or on behalf of the Securitization Entities 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 (taking into
account the purposes for which such information is given, and when taken
together with all other information furnished by or on behalf of the
Securitization Entities to the Insurers, if any), and give the Insurers, if
any, true and accurate knowledge of the subject matter thereof in all material
respects, and the furnishing of the same to the Insurers, if any, shall
constitute a representation and warranty by each Securitization Entity made on
the date the same are furnished to the Insurers, if any, to the effect
specified herein.

 

(ff)                                each Insurer, if any, has received
all information reasonably requested;

 

(gg)                          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

 

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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 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 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. Neither 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;

 

(hh)                          each of the Securitization Entities
has good and marketable title to its assets, free of any Lien except Permitted
Liens or as created by any Transaction Document;

 

(ii)                                  the representations on Existing
Franchise Assets made by Applebee’s International in the First Tier Asset
Contribution Agreement are true and correct (and Applebee’s International’s
indemnity obligation and other obligations are assigned by Applebee’s Holdings
to the Master Issuer pursuant to the Second Tier Asset Contribution Agreement);

 

(jj)                                  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:

 

(A)      The Securitization Entities:  (i) are, and within the period of all
applicable statutes of limitation have been, in compliance with all applicable
Environmental Laws, (ii) hold all Environmental Permits (each of which is
in full force and effect) required for any of their current or intended
operations or for any property owned, leased, or otherwise operated by any of
them and (iii) are, and within the period of all applicable statutes of

 

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limitation
have been, in compliance with all of their Environmental Permits.

 

(B)        Materials of Environmental Concern are not present at,
on, under, in, or about any Owned Real Property or Leased Property now or
formerly owned, leased or operated by any Securitization Entity or any of its
Affiliates, 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 (i) give
rise to liability of any Securitization Entity or any of its Affiliates under
any applicable Environmental Law or otherwise result in costs to any
Securitization Entity or any of its Affiliates, (ii) interfere with any
Securitization Entity’s or any of its Affiliates’ continued operations or (iii) impair
the fair saleable value of any real property owned or leased by any
Securitization Entity or any of its Affiliates.

 

(C)     There is no judicial, administrative, or arbitral
proceeding (including, without limitation, any notice of violation or alleged
violation) under or relating to any Environmental Law to which any
Securitization Entity or any of its Affiliates is, or to the knowledge of the
Securitization Entities will be, named as a party that is pending or, to the
knowledge of the Securitization Entities, threatened.

 

(D)       Neither any Securitization Entity nor any of its
Affiliates has received any written request for information, or been notified
that it is a potentially responsible party under or relating to the federal
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, or any other Environmental Law, or with respect to any Materials of
Environmental Concern.

 

(E)         Neither any Securitization Entity nor any of its
Affiliates has 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.

 

(F)         Neither any Securitization Entity nor any of its
Affiliates has assumed or retained, by contract, conduct or operation of law,
any liabilities or obligations of any kind, fixed or contingent, known or
unknown, under any

 

94

 

Environmental
Law or with respect to any Materials of Environmental Concern.

 

Section 7.13                                Affirmative
Covenants. So long as any of the Notes remain Outstanding or the term of
any Insurance Policy shall not have expired, each of the Co-Issuers shall:

 

(a)                                  do or cause to be done all things
necessary to enable it to comply with all applicable legal and accounting rules and
regulations, including submitting or causing to be submitted financial and
other information to state and federal regulatory authorities as required under
the applicable franchising laws and regulations;

 

(b)                                 keep proper books of account and
records, appoint independent public accountants (reasonably acceptable to each
Insurer, if any) to audit the books of account and financial statements of the
Master Issuer and the Franchise Holder; and to prepare in accordance with GAAP
and deliver annual audited consolidated balance sheets, profit and loss
statements and retained earnings statements of the Master Issuer and its
Subsidiaries as provided for in Section 12.1(e) (and a copy of
each such audited financial statement shall be provided to each of the
Indenture Trustee, each Insurer, if any, and each Rating Agency then rating any
Outstanding Notes), and allow the Indenture Trustee, each Insurer, if any, the
Back-Up Manager and any Person appointed by any of them, access to the books of
account and records of each of the Securitization Entities at all reasonable
times upon reasonable notice during normal business hours, and permit the
Indenture Trustee, each Insurer, if any, and any Person appointed by any of
them to discuss the affairs, finances and accounts of each of the
Securitization Entities with any of its officers, directors and other representatives
to discuss the affairs, finances and accounts of each of the Securitization
Entities with the Co-Issuers’ independent public accountants and to inspect the
Indenture Collateral, all records related thereto (and to make extracts and
copies thereof) (such rights of any such Insurer to continue for so long as no
Insurer Event of Default has occurred with respect to any such Insurer);

 

(c)                                  give notice in writing to the
Indenture Trustee, the Servicer and each Insurer, if any, within three (3) Business
Days following the date of Actual Knowledge of the occurrence of any
circumstances that might reasonably be expected to constitute an Event of
Default, Default, Rapid Amortization Event or other event that might otherwise
reasonably be expected to have a Material Adverse Effect, and such notice shall
contain a description of the facts, circumstances or events that might
reasonably be expected to constitute such Event of Default, Default, Rapid
Amortization Event or other event, and shall specify the action, if any, the
Co-Issuers are taking with respect to such Event of Default, Default, Rapid
Amortization Event or other event; provided that
in connection with such notice, the Co-Issuers may disclaim in good faith
any admission that such circumstance does constitute an Event of Default,
Default, Rapid Amortization Event or other event that might otherwise
reasonably be expected to have a Material Adverse Effect;

 

(d)                                 so far as permitted by law, at all
times give to the Indenture Trustee and the Back-Up Manager such information as
it shall reasonably require for the purpose of the discharge of the duties,
powers, trusts, authorities and discretions vested in it by this Base

 

95

 

Indenture or in the Back-Up Manager Agreement
and to the Rating Agencies such information as such Rating Agencies may reasonably
request, as applicable;

 

(e)                                  take all reasonable actions
necessary so as to be exempt from registration under the Investment Company
Act;

 

(f)                                    maintain with insurers having a
rating from A.M. Best of not less than “A+” such insurance that in its
business judgment is appropriate and is customary for business operations of
the type conducted by the Co-Issuers; provided, that the Co-Issuers
shall cause the Servicer to list each Securitization Entity and the Indenture
Trustee as an “additional insured,” and the Indenture Trustee as “loss payee,”
on any insurance maintained by the Servicer for the benefit of the
Securitization Entities, which as of the Closing Date shall include every
insurance policy maintained by Applebee’s International with respect to the
businesses and assets contributed to the Securitization Entities. The terms and
conditions of all such insurance shall be no less favorable to the Co-Issuers
than the terms and conditions of insurance maintained by their Affiliates that
are not Securitization Entities;

 

(g)                                 take all reasonable actions
necessary so as to exempt from registration the Notes and the sale thereof
under the Securities Act, or under any applicable securities laws;

 

(h)                                 take all reasonable action to
maintain all licenses, permits, charters and registrations which are material
to the conduct of its business;

 

(i)                                     RESERVED.

 

(j)                                     deliver to the Indenture Trustee and
each Insurer, if any, as soon as practicable prior to the date of delivery, a
copy of the form of each Officer’s Certificate or notice to be delivered
to the Holders of the Notes (such notice to be in a form approved by the
Indenture Trustee and (if any such Insurer is then the Series Controlling
Party relating to a Series of Notes) each Insurer, if any (which approval
shall not be unreasonably withheld, conditioned or delayed));

 

(k)                                  timely file all income tax returns
of any jurisdiction which are required to be filed and timely pay all taxes, if
and to the extent such taxes become due; provided, however, the Co-Issuers shall not be required
to pay or discharge or cause to be paid or discharged any such taxes whose
amount, applicability or validity is being contested in good faith by appropriate
proceedings so long as (i) there shall be no material risk of forfeiture
of property in the Indenture Collateral and (ii) the Co-Issuers maintain
adequate reserves in accordance with GAAP for the payment of contested taxes;

 

(l)                                     in addition to any other notices,
certificates or information provided pursuant to this Base Indenture, promptly
inform the Indenture Trustee and, so long as any Notes are Outstanding,
each Insurer, if any, in writing of the following:

 

(i)             the commencement of any rulemaking or disciplinary
Proceeding or the promulgation of any proposed or final rule (other than a
rule or

 

96

 

proceeding which has
general applicability to Persons including the Co-Issuers) which could
reasonably be expected to have a Material Adverse Effect;

 

(ii)          the commencement of any Proceedings by or against any
of the Securitization Entities in any court of competent jurisdiction or before
any governmental body or agency, or before any arbitration board, or the threat
of any such proceedings, which might reasonably be expected to have a Material
Adverse Effect on the Securitization Entities (considered collectively) or on
the ability of any of the Securitization Entities to perform its
obligations under any provision of the Transaction Documents to which it is a
party or on which the Co-Issuers’ ability to comply with the Notes or otherwise
could reasonably be expected to have a Material Adverse Effect; and

 

(iii)       the receipt of notice from any Governmental Authority
having authority over the conduct of the business of any Securitization Entity
that (A) any Securitization Entity is being placed under regulatory
supervision, (B) any license, permit, charter, membership or registration
relating to the conduct of the business of any Securitization Entity is to be
suspended or revoked, and such suspension or revocation could reasonably be
expected to have a Material Adverse Effect or (C) any Securitization
Entity is to cease and desist any practice, procedure or policy employed by the
Securitization Entity in the conduct of its business, and such cessation could
reasonably be expected to have a Material Adverse Effect;

 

(m)                               maintain corporate records and books
of account separate from any Person;

 

(n)                                 so long as any Notes are
Outstanding, deliver to each Rating Agency by which the Notes are for the time
being rated such information as such Rating Agency may reasonably request
(including any such information which is material in maintaining its
surveillance of the transactions contemplated by the Transaction Documents);

 

(o)                                 generally pay its debts as they
become due;

 

(p)                                 with respect to each of the
Co-Issuers, and will cause each other Securitization Entity to,

 

(A)      act and conduct its business solely in its own name through
the Servicer or through other agents selected in accordance with its limited
liability company agreement or certificate of incorporation (as applicable),
including, without limitation, its Officers;

 

(B)        except as otherwise expressly permitted by this Base
Indenture or the other Transaction Documents, maintain separately its funds and
assets from those of any Affiliates that are not Securitization Entities or
predecessor Restaurant Holders owning Post-Closing U.S. Restaurants, and

 

97

 

such funds and
assets shall not be commingled with the funds and assets of any other Person
that is not a Securitization Entity or predecessor Restaurant Holder owning
Post-Closing U.S. Restaurants;

 

(C)        maintain complete and correct books and records of
account and minutes of the proceedings of the Securitization Entities (as
appropriate), separate from the books and records of any other Person or
entity;

 

(D)       use its own stationery, invoices, checks and other
business forms and not those of any Affiliate, and not have the appearance (x) of
conducting business on behalf of any Affiliate or (y) that its assets are
available to pay the creditors of any Affiliate (other than as contemplated in
this Base Indenture);

 

(E)         except as otherwise specified in its limited liability
company agreement or certificate of incorporation, this Base Indenture or the
Transaction Documents, as the case may be, pay all of its liabilities out
of its own funds;

 

(F)         not hold itself out as being liable for the debts of
any Affiliate (other than as contemplated in this Base Indenture);

 

(G)        not engage in any transaction with any Affiliate,
except as contemplated by the Servicing Agreement, and otherwise as required,
or specifically permitted by this Base Indenture or the other Transaction
Documents; provided, however, that any such transaction must be commercially reasonable
on terms similar to those available in an arm’s length transaction;

 

(H)       not incur any debt other than as contemplated by its
limited liability company agreement or certificate of incorporation, as the
case may be, or this Base Indenture;

 

(I)            maintain separate financial statements showing its
assets and liabilities separate and apart from those of any other Person;

 

(J)           except as otherwise expressly permitted by this Base
Indenture or the other Transaction Documents, not guarantee or become obligated
for the debts of any other Person or hold out its credit as being available to
satisfy the obligations of others;

 

98

 

(K)       allocate fairly and reasonably any overhead expenses
that are shared with Affiliates, including the payments for office space;

 

(L)         hold itself out as a separate entity, correct any
known misunderstandings regarding its separate identity, and not identify
itself as a division of any other Person;

 

(M)    maintain adequate capital in light of its contemplated
business operations;

 

(N)       while any amounts under this Base Indenture remain
outstanding, not dissolve, liquidate, merge, consolidate or sell substantially
all of its assets, except as permitted hereunder;

 

(O)       except as otherwise expressly permitted by this Base
Indenture or the other Transaction Documents, maintain bank accounts separate
from those of any other Person and not permit any Affiliate independent access
to such bank accounts;

 

(P)         not acquire obligations or securities of any Affiliate
other than as contemplated by the Transaction Documents;

 

(Q)       observe all limited liability company or corporate
formalities as the case may be, of its state of organization;

 

(R)        not pledge its assets for the benefit of any other
Person or make loans or advances to any Person other than as contemplated by
the Transaction Documents, including this Base Indenture;

 

(S)         cause its board of managers (or directors, as
applicable) and its agents, including the Servicer, to act at all times with
respect to such Co-Issuer consistently with, and in furtherance of the
foregoing and in the best interests of such Co-Issuer (subject, with respect to
the Servicer, to its rights under the terms of the Servicing Agreement); and

 

(T)        take, or refrain from taking, as the case may be,
all other actions that are necessary to be taken or not to be taken in order (a) to
ensure that the assumptions and factual recitations set forth in the opinion
delivered pursuant to Section 3.1(b) remain true and correct
in all material respects with respect to it (and, to the extent within its
control, to ensure that the

 

99

 

assumptions
and factual recitations set forth in such opinion remain true and correct with
respect to Affiliates of the Co-Issuers) and (b) to comply in all material
respects with those procedures described in such opinion that are applicable to
it;

 

(q)                                 comply with all directions of a Series Controlling
Party or the Aggregate Controlling Party properly given in accordance with the
terms of this Base Indenture;

 

(r)                                    if so requested by the Initial
Purchaser or Placement Agents, as applicable, use its best efforts to permit
any Series of Notes to be designated PORTAL securities in accordance with
the rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in the PORTAL market if so
requested by the Initial Purchaser or Placement Agents, as applicable;

 

(s)                                  permit compliance with Rule 144A
under the Securities Act in connection with the sale of the Notes, and furnish
upon request of a holder of a Note to such holder and a prospective purchaser
designated by such holder the information required to be delivered under Rule 144A(d)(4) under
the Securities Act if at the time of the request the Co-Issuers are not a
reporting company under Section 13 or Section 15(d) of the
Exchange Act;

 

(t)                                    perform its obligations under
each Transaction Document in all material respects and enforce the obligations
of the Securitization Entities under and pursuant to the Transaction Documents;

 

(u)                                 upon a redemption or other payment
of all of the Notes and the expiration of the term of each Insurance Policy, if
any, surrender such Insurance Policy for cancellation to each Insurer, if any,
relating to such Insurance Policy;

 

(v)                                 subject to Section 7.8(a)(xv),
in the case of the IP Holder, maintain ownership of the IP Assets and, in the
case of each of the Master Issuer and the Franchise Holder, maintain on behalf
of itself and the other Co-Issuers, the right to use the IP Assets, subject to
and in accordance with the applicable IP License Agreement;

 

(w)                               solely with respect to the Master
Issuer, cause each of its Subsidiaries (other than with respect to the
Franchise Holder to the extent of any capital contribution made to the
Franchise Holder to maintain a minimum net worth determined by the Servicer) to
dividend to the Master Issuer (not less frequently than monthly) any funds in
excess of such Subsidiary’s obligations under any Transaction Document subject
to any applicable law;

 

(x)                                   with respect to licenses of
third-party Intellectual Property entered into after the Closing Date by such
Co-Issuer (including, for the avoidance of doubt, the Servicer acting on behalf
of such Co-Issuer), use its commercially reasonable efforts to include terms
permitting the grant by such Co-Issuer of a security interest therein to the
Indenture Trustee for the benefit of the Secured Parties and to allow the
Servicer (and any Successor Servicer) or, as applicable, the Back-Up Manager
the right to use such Intellectual Property in the performance of Services
under the Servicing Agreement or, as applicable, the Back-Up Manager Agreement;

 

100

 

(y)                                 with respect to its participation in
any 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), comply 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; and

 

(z)                                   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, with
respect to the Co-Issuers, and will cause each other Securitization Entity to:

 

(A)      (i) comply with all applicable Environmental
Laws, (ii) hold all Environmental Permits (each of which is in full force
and effect) required for any of their current or intended operations or for any
property owned, leased, or otherwise operated by any of them and (iii) comply
with all of their Environmental Permits; and

 

(B)        not permit Materials of Environmental Concern to be
present at, on, under, in, or about any Owned Real Property or Leased Property
owned, leased or operated by any Securitization Entity or any of its
Affiliates, 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 (i) give
rise to liability of any Securitization Entity or any of its Affiliates under
any applicable Environmental Law or otherwise result in costs to any
Securitization Entity or any of its Affiliates, (ii) interfere with any
Securitization Entity’s or any of its Affiliates’ continued operations or (iii) impair
the fair saleable value of any real property owned or leased by any
Securitization Entity or any of its Affiliates.

 

Section 7.14                                Additional Securitization
Entities.

 

(a)                                  The Master Issuer shall be
permitted, with the prior written consent of the Aggregate Controlling Party
(which consent may not be unreasonably withheld or delayed), to establish
a new Restaurant Holder to be a directly owned subsidiary of the Master Issuer;
provided, that any such Restaurant Holder must become a Co-Issuer
hereunder and, in connection with the organization of any such Additional
Co-Issuer and as a condition precedent to the contribution of any assets to
such Additional Co-Issuer, (i) the Co-Issuers shall cause such Additional
Co-Issuer to promptly execute a Supplement to this Base Indenture pursuant to
which such Additional Co-Issuer shall become jointly and severally obligated
under the Indenture with the other Co-Issuers, (ii) the Master Issuer
shall have caused the pledged Equity Interests of such Additional
Securitization Entity to be pledged as Indenture Collateral hereunder and shall
have taken all steps necessary to perfect the security interest of the
Indenture Trustee in such Pledged

 

101

 

Equity Assets, (iii) the Master Issuer
shall cause any new Restaurant Holder to become party to the Indenture and the
other Transaction Documents to which the existing Restaurant Holders are
parties pursuant to an assumption agreement and customary documentation
required in connection therewith, and (iv) the Co-Issuers shall have
caused to be delivered to the Indenture Trustee and each Insurer, if any, an
opinion or opinions of counsel as to (a) the due formation and valid
existence of such Additional Co-Issuer, (b) the enforceability of such
Supplement, (c) the perfection of the security interests in the pledged
Equity Interests, (d) issues of substantive consolidation and, if applicable,
true sale, with respect to such Additional Co-Issuer and any assets contributed
by any Affiliate that is not a Securitization Entity directly or indirectly to
such Additional Co-Issuer and (e) such other matters as the Aggregate
Controlling Party may reasonably request, including without limitation an
opinion as to the matters described in Section 2.3(c)(vii) as
to such Additional Co-Issuer.

 

(b)                                 Upon the execution and delivery of a
Supplement as required by clause (i) above, any Additional Co-Issuer
party thereto will become a party to this Base Indenture with the same force
and effect as if originally named therein as a Co-Issuer and, without limiting
the generality of the Indenture, will assume all Obligations and liabilities of
a Co-Issuer hereunder.

 

Section 7.15                                Further Assurances.

 

(a)                                  The Co-Issuers or the Indenture
Trustee at the direction of the Co-Issuers, shall execute and deliver, or cause
to be executed and delivered, all such additional instruments, and do, or cause
to be done, all such additional acts as (i) may be necessary or
proper, consistent with the Granting Clauses, to carry out the purposes of this
Base Indenture and to make subject to the Lien hereof any property intended so
to be subject, including in the event of any change in applicable law or
regulations, (ii) may be necessary or proper to transfer to any
successor Indenture Trustee the estate, powers, instruments and funds held in
trust hereunder and to confirm the Lien of this Base Indenture, or (iii) the
Indenture Trustee or, for so long as any Notes are Outstanding, any amount is
owed to any Insurer or the applicable Insurance Policy has not been cancelled
or returned, an Insurer, may reasonably request. In addition, the
Co-Issuers shall (at the direction or with the consent of the Aggregate
Controlling Party) take all actions, and shall direct the Indenture Trustee in
writing to take all actions as shall be specified to the Co-Issuers, necessary
to preserve and protect the security interest in the Indenture Collateral created
hereunder, free of any Liens, including but not limited to the removal and
transfer of any such Indenture Collateral from any existing location or
jurisdiction to another location or jurisdiction so as to prevent the
impairment of the security interest in such Indenture Collateral created by
this Base Indenture.

 

(b)                                 All oral and written communications
made by the Co-Issuers or by any Person on behalf of the Co-Issuers, including,
without limitation, letters, invoices, purchase orders, contracts, statements,
loan applications, and all notices, certificates or information required to be
delivered or communicated pursuant to this Base Indenture, shall be made or
delivered by the Co-Issuers or by any such Person on behalf of the Co-Issuers.

 

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(c)                                  The Indenture Trustee shall
cooperate in all respects with any reasonable written request by the Co-Issuers
to preserve or enforce the Co-Issuers’ rights and interests under this Base
Indenture or any other Transaction Documents.

 

Section 7.16                                Financial Covenants.
If funds on deposit in the Senior Notes Interest Reserve Account are less than
the Series 2007-1 Senior Notes Interest Reserve Amount, then all
investment income earned on funds on deposit in the Senior Notes Interest
Reserve Account shall be retained in such account until the funds in such
account are equal to or greater than the Series 2007-1 Senior Notes
Interest Reserve Amount. If funds on deposit in the Senior Notes Interest
Reserve Account are greater than or equal to the applicable Series 2007-1
Senior Notes Interest Reserve Amount, then all investment income earned on such
funds, shall, except as otherwise required under this Base Indenture, be
released to the Collection Account.

 

Section 7.17                                Security Interest
Representations, Warranties and Covenants of the Co-Issuers.

 

(a)                                  Other than with respect to the
Company-Owned Real Property prior to the occurrence of any Trigger Event and as
otherwise permitted under the Servicing Agreement with respect to Account
Control Agreements for certain depository banks receiving cash funds from
Company-Owned Restaurants, this Base Indenture creates a valid and continuing
security interest (as defined in the applicable UCC) in the Indenture
Collateral in favor of the Indenture Trustee for the benefit of the Secured
Parties, which security interest is prior to all other Liens except Permitted
Liens, and is enforceable as such as against creditors of and purchasers from
the Co-Issuers.

 

(b)                                 Except as set forth in Schedule 7.17,
each Co-Issuer owns and has good and marketable title to its Indenture
Collateral, free and clear of any Lien except Permitted Liens, Liens granted
pursuant to the Transaction Documents or otherwise permitted pursuant to the
Transaction Documents.

 

(c)                                  Each of the Co-Issuers shall, within
three (3) Business Days of the Closing Date, file all appropriate
Financing Statements in the proper filing office in the appropriate
jurisdictions under applicable law in order to perfect the security interest in
the Indenture Collateral perfectible under the UCC or other applicable law and
deliver to the Servicer the IP filings in appropriate form for filing in
the PTO, with copies to the Indenture Trustee, and Granted to the Indenture
Trustee hereunder and deliver copies of such Financing Statement to the
Indenture Trustee and each Insurer, if any, if the Indenture Trustee or any
such Insurer requests.

 

(d)                                 Other than the security interests
granted to the Indenture Trustee pursuant to this Base Indenture and Permitted
Liens, none of the Co-Issuers has pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Indenture Collateral. None of the
Co-Issuers has authorized the filing of, nor is aware of any Financing
Statements against, any of the Co-Issuers that include a description of
Indenture Collateral covering any Indenture Collateral other than any Financing
Statement relating to the security interest granted to the Indenture Trustee
hereunder or that has been terminated. None of the

 

103

 

Co-Issuers is aware of any judgment, Pension
Benefit Guaranty Corporation or tax Lien filings against any of the Co-Issuers.

 

(e)                                  None of the “instruments” (as
defined in the applicable UCC) that constitute or evidence the Indenture
Collateral has any marks or notations indicating that they have been pledged,
assigned or otherwise conveyed to any Person other than the Indenture Trustee.

 

(f)                                    Each of the Co-Issuers has received
all applicable consents and approvals required by the terms of the Indenture
Collateral to transfer to the Indenture Trustee its interest and rights in the
Indenture Collateral hereunder.

 

(g)                                 The Indenture Trust Accounts are not
in the name of any Person other than the Indenture Trustee. None of the
Co-Issuers have consented to the securities intermediary of any of the
Indenture Trust Accounts to comply with entitlement orders or other
instructions of any Person other than the Indenture Trustee.

 

(h)                                 All of the Indenture Collateral
consisting of “security entitlements” (within the meaning of the applicable
UCC) has been credited to the Indenture Trust Accounts. The Indenture Trustee,
as securities intermediary for each of the Indenture Trust Accounts, agrees to
treat all assets credited to each of the Indenture Trust Accounts as “financial
assets” (within the meaning of the applicable UCC).

 

(i)                                     If the securities intermediary for
any of the Indenture Trust Accounts is, at any time, a Person other than the
Indenture Trustee, the Co-Issuers shall promptly deliver to the Indenture
Trustee a fully executed agreement pursuant to which such securities
intermediary agrees to comply with all instructions originated by the Indenture
Trustee relating to the Indenture Trust Accounts (as applicable) without
further consent by the Co-Issuers.

 

(j)                                     Each of the Indenture Trust Accounts
is a “securities account” (within the meaning of the applicable UCC).

 

(k)                                  Other than the Indenture Trust
Accounts and the Real Estate Assets, the Indenture Collateral consists of
securities, loans, investments, accounts, inventory, equipment, chattel paper,
money, deposit accounts, instruments, financial assets, documents, investment
property, general intangibles, letter of credit rights, and other supporting
obligations (in each case, as defined in the UCC).

 

(l)                                     Each of the foregoing
representations shall, as applicable, be deemed repeated each time new assets
become part of the Indenture Collateral.

 

(m)                               Other than with respect to the
Company-Owned Real Property prior to the occurrence of any Trigger Event and as
otherwise permitted under the Servicing Agreement with respect to Account
Control Agreements for certain depository banks receiving cash funds from
Company-Owned Restaurants, the security interest of the Indenture Trustee in
the Indenture Collateral shall, until payment in full of the indebtedness
secured hereunder and termination of this Base Indenture, be first-priority as
to any other Liens, subject to Permitted Liens and subject to the perfection
exceptions described herein, perfected security interest upon

 

104

 

the taking of actions set forth in subsection (c) above,
any IP Lien Filings necessary with respect to After-Acquired IP Assets, and the
rights of Co-Issuers to dispose of Indenture Collateral hereunder.

 

(n)                                 The foregoing representations shall
survive termination of this Base Indenture.

 

Section 7.18                                RESERVED.

 

Section 7.19                                Covenants Regarding
the IP Assets.

 

(a)                                  The Co-Issuers shall notify the Trustee
and the Aggregate Controlling Party in writing within ten (10) Business
Days of any Co-Issuer’s first knowing or having reason to know that any
application or registration relating to any material IP Assets in the United
States that is reasonably likely to become abandoned or dedicated to the public
domain, or of any material adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the PTO, the United States Copyright Office or any court, but excluding any
non-final determinations (other than in an adversarial proceeding) of the PTO)
regarding the validity or any Securitization Entity’s ownership of any material
IP Assets, its right to register the same, or to keep and maintain the same. The
parties hereto acknowledge and agree that the IP Holder may cancel,
withdraw, abandon, or allow to lapse U.S. state registrations for Trademarks
which are no longer in use or for which there is a corresponding U.S. federal
registration and no notice of abandonment need be provided to the Indenture
Trustee.

 

(b)                                 The IP Holder agrees to, and each
other Co-Issuer agrees to cause the IP Holder to, execute, deliver and file the
IP Lien Filings, and any other instruments or documents as may be reasonably
necessary or desirable in the Aggregate Control Party’s opinion to perfect or
protect the Trustee’s security interest granted under this Base Indenture in
the Patents, Trademarks and Copyrights included in the Indenture Collateral.

 

(c)                                  If any Co-Issuer, either itself or
through any agent, licensee or designee, shall file an application for the
registration of any Patent, Trademark or Copyright with the PTO or the United
States Copyright Office, such Co-Issuer in a reasonable time after such filing
(and in any event within ninety (90) days with regard to Patents and Trademarks
and thirty (30) days with regard to Copyrights) (i) shall give the Trustee
and the Aggregate Controlling Party written notice thereof and (ii) upon
reasonable request of the Aggregate Controlling Party, shall execute and
deliver all instruments and documents, and take all further action, that the
Aggregate Controlling Party may so request in order to continue, perfect
or protect the security interest granted hereunder in the United States,
including, without limitation, executing and delivering supplemental grants of
security interest in Trademarks, Patents and Copyrights substantially in the Form of
Exhibit I.

 

(d)                                 In the event that any material IP
Assets are materially infringed upon, misappropriated, diluted or otherwise
violated by a third party, the IP Holder, upon becoming aware of such
infringement, misappropriation, dilution or violation, shall promptly notify
the Trustee and the Aggregate Controlling Party in writing. The IP Holder shall
take all

 

105

 

appropriate action consistent with Applebee’s
International’s current business practices, at its expense, to protect or
enforce such material IP Assets, including suing for infringement,
misappropriation, dilution or violation and seeking an injunction (including,
if appropriate, temporary and/or preliminary injunctive relief) against such
infringement, misappropriation, dilution or violation, unless the failure to
take such actions on behalf of the IP Holder by the Servicer would not
constitute a breach by the Servicer of the Servicing Agreement; provided that if the IP Holder decides not to
take action with respect to a material infringement, misappropriation, dilution
or violation, the IP Holder shall promptly (and in any event, in advance of any
deadline for taking such action) deliver written notice to the Trustee and the
Aggregate Controlling Party setting forth in reasonable detail the basis for
its decision not to act.

 

ARTICLE VIII

 

SUPPLEMENTAL INDENTURES

 

Section 8.1                                      Supplemental
Indentures without the Consent of the Noteholders.

 

(a)                                  The Co-Issuers, and the Indenture
Trustee, without the consent of the Noteholders at any time and from time to
time, may, if the Rating Agency Condition has been satisfied (except that
ratings confirmation need not be requested for any amendments that could not
reasonably be deemed to be disadvantageous to any Noteholder in the reasonable
judgment of the Aggregate Controlling Party) and with the consent of the
Insurers, if any (and so long as any such Insurer is a Series Controlling
Party of each Series of Notes affected thereby, or is the Aggregate
Controlling Party) enter into one or more indentures supplemental hereto, in form satisfactory
to the Indenture Trustee:

 

(i)             to correct or amplify the description of any property
at any time subject to the Lien of this Base Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or required
to be subject to the Lien of this Base Indenture (including, without
limitation, in order to obtain a security interest thereto in a manner
consistent with Section 7.17), or to subject to the Lien of this
Base Indenture additional property;

 

(ii)          to evidence the succession of another Person to any of
the Co-Issuers, and the assumption by any such successor of the covenants
contained herein and in the Notes;

 

(iii)       to add to the covenants of any of the Co-Issuers, in
each case only to the extent not adverse to the interests of any Noteholder or
each Insurer, if any, or to surrender any right or power herein conferred upon
any of the Co-Issuers;

 

(iv)      to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee for the benefit of Secured Parties or
add to the conditions, limitations or restrictions on the authorized amount,
terms and purposes of the issue, authentication and delivery of Notes;

 

106

 

 

(v)         to evidence and provide for the acceptance of
appointment hereunder by a successor Indenture Trustee and to add to or change
any of the provisions as shall be necessary to facilitate the administration of
the trusts hereunder by more than one Indenture Trustee, pursuant to the
requirements of Section 6.11;

 

(vi)      to correct any manifest error or to cure any ambiguity
or to correct or supplement any provisions herein or in any supplemental
indenture which may be inconsistent with any other provision herein or in
any Series Supplement, supplemental indenture or any Offering Memorandum
pursuant to which any Notes have been issued;

 

(vii)   to facilitate the transfer of Notes in accordance with
applicable law (as evidenced by an Opinion of Counsel), which may include
providing for the maintenance of a book-entry trading system;

 

(viii) to take any action necessary and
appropriate to facilitate the originations of New U.S. Franchise Agreements,
the servicing of Existing Franchise Assets and the preservation and maintenance
of the Existing Franchise Assets, in each case, as determined in accordance
with the Servicing Standard;

 

(ix)        to take any action necessary or advisable to
effectuate any lockbox arrangements entered into by any Co-Issuer;

 

(x)           to establish the form or terms of the Notes of
any Series of Notes pursuant to a Series Supplement in accordance with the
provisions of Section 2.3 (which shall not require the consent of
the Aggregate Controlling Party or any Series Controlling Party except to
the extent specified in Section 2.3);

 

(xi)        to take any action necessary or helpful to avoid the
imposition, under and in accordance with applicable law, of any Tax including
withholding tax; or

 

(xii)     to make any change required by the Irish Stock
Exchange or any other stock exchange on which the Notes are listed, or to be
listed, in order to permit or maintain such listing.

 

(b)                                 The Indenture Trustee is hereby
authorized to join in the execution of any such supplemental indenture and to
make any further appropriate agreements and stipulations that may be
therein contained, but the Indenture Trustee shall not be obligated to enter
into any such supplemental indenture that materially adversely affects the
Indenture Trustee’s own rights, duties, liabilities or immunities under this
Base Indenture or otherwise except to the extent required by law.

 

(c)                                  Copies of any supplemental indenture
entered into in accordance with this Section 8.1 shall be available
upon request by any Noteholder or Insurer duly given to

 

107

 

the Indenture Trustee. No supplemental
indenture shall be amended or modified without the written consent of the
Indenture Trustee, the Co-Issuers and any Insurer that is a party thereto.

 

Section 8.2                                      Consents to
Supplemental Indentures.

 

(a)                                  The Co-Issuers (with the written
consent of each Series Controlling Party) and the Indenture Trustee (at
the written direction of the Co-Issuers) may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Base
Indenture or of modifying in any manner the rights of the Noteholders under
this Base Indenture; provided, however, that any such supplemental indenture
for which approval of Noteholders has not been obtained as provided in this Section 8.2(a) may be
entered into only with the written confirmation by each Rating Agency that such
action would not have an adverse effect upon the ratings of any Notes without
giving effect to any Insurance Policy; provided, further, that no
supplemental indenture shall be entered into without the written consent of
each Insurer, if any (nor shall waivers of any similar matters be effective
without the written consent of each Insurer, if any) and, other than in the
case of clause (xi) below, all the holders of Notes affected thereby (in
which event such confirmation from the Rating Agencies shall not be required)
that would do any of the following:

 

(i)             change the Series Legal Final Maturity Date, or
the due date of any installment of principal of or interest on, any Series of
Notes, or change the principal amount thereof or the Series Note Interest
Rate thereon, change any place where, or the coin or currency in which, any
Note or the interest thereon is payable, or the date or manner of payment, or
impair the right to institute suit for the enforcement of any such payment on
or after the Series Legal Final Maturity Date thereof (or, in the case of
the termination of the obligations of the Co-Issuers hereunder, on or after the
date on which the obligations of the Co-Issuers hereunder are terminated
pursuant to Section 4.1 of this Base Indenture);

 

(ii)          reduce the percentage in the Aggregate Outstanding
Principal Amount of the Notes, the consent of the Noteholders of which is
required for the execution of any such supplemental indenture, or the consent
of the Noteholders of which is required for any waiver of compliance with any
provisions of this Base Indenture or any Defaults hereunder and their
consequences provided for in this Base Indenture;

 

(iii)       impair or adversely affect the Trust Estate except as
otherwise permitted herein;

 

(iv)      permit the creation of any Lien ranking prior to or on
a parity with the Lien of this Base Indenture with respect to any part of
the Trust Estate or terminate the Lien of this Base Indenture on any property
at any time subject hereto or deprive any Noteholder of the security afforded
by the Lien of this Base Indenture except as otherwise permitted herein;

 

108

 

(v)         reduce the percentage of the aggregate Outstanding
Principal Amount of the Notes, the consent of the Noteholders of which is
required to request that the Indenture Trustee preserve the Trust Estate or to
rescind the Indenture Trustee’s election to preserve the Trust Estate or to
sell or liquidate the Trust Estate pursuant to Section 5.5;

 

(vi)      modify any of the provisions of this Section 8.2,
except to increase the percentage of the Aggregate Outstanding Principal Amount
of the Notes the consent of the Holders of which is required for any
supplemental indenture or to provide that certain other provisions of this Base
Indenture cannot be modified or waived without the consent of the Noteholder of
each Outstanding Note affected thereby;

 

(vii)   modify the definition of the term “Outstanding”;

 

(viii)   release any Insurer from all or any part of
its obligation to make each and every payment under the applicable Insurance
Policy, if any;

 

(ix)        modify any of the provisions of this Base Indenture in
such a manner as to affect the calculation of the amount of any payment of
interest or principal on any Payment Date (including the calculation of any of
the individual components of such calculation) or to reduce the amount payable
upon the redemption of such Notes or change the time at which any Note may be
redeemed;

 

(x)           adversely affect the tax treatment of any Co-Issuer or
the tax consequences to the Holders of any Class of Notes as described in
the related Offering Memorandum under the heading “Certain U.S. Federal Income
Tax Considerations” (or such other equivalent heading) to any material extent
or otherwise cause any of the statements described in the related Offering
Memorandum under the heading “Certain U.S. Federal Income Tax Considerations”
(or such other equivalent heading) to be inaccurate or incorrect to any
material extent; or

 

(xi)        (A) modify the premium or other compensation
payable to such Insurer, if any, or the calculation of any right to
reimbursement or other payment or interest accrued thereon, or the timing or
priority of payment of such premium or other compensation, reimbursement or
payment, (B) increase or may increase the amounts payable at a
priority ahead of payments on the Notes having the benefit of the Insurance
Policy or amounts reimbursable or payable to such Insurer, if any, (C) has
or may have the effect of increasing or accelerating such Insurer’s, if
any, payment obligations under the Insurance Policy or otherwise materially and
adversely affecting the rights, interests or obligations of such Insurer, if
any under this Base Indenture or the other Transaction Documents, or (D) modify
provisions of this Base Indenture or related Indenture Supplement

 

109

 

or other Transaction
Documents relating to such Insurer’s, if any, subrogation or other rights or
any requirements that the consent of the Insurers be obtained.

 

(b)                                 With respect to any supplemental
indenture entered into in accordance with this Section 8.2, it
shall not be necessary for Noteholders to approve the particular form of
any proposed supplemental indenture, only the substance thereof.

 

Section 8.3                                      Execution of
Supplemental Indentures. In executing or accepting the additional trusts
created by any supplemental indenture permitted by this Article VIII
or the modifications thereby of the trusts created by this Base Indenture, the
Indenture Trustee shall be entitled to receive, and (subject to Section 6.3,
including, without limitation, Section 6.3(f)) shall be fully
protected in relying conclusively upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Base Indenture and that such supplemental indenture is the legal, valid and
binding obligation of each of the Co-Issuers enforceable against each of the
Co-Issuers in accordance with its terms (subject to customary exceptions). The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that materially adversely affects the Indenture Trustee’s
own rights, duties or immunities under this Base Indenture or otherwise. For so
long as any Class of Notes is listed on the Irish Stock Exchange and the rules of
such exchange so require, the Indenture Trustee shall deliver written notice to
the Irish Paying Agent (for notification to the Irish Stock Exchange) of any
supplemental indenture within ten (10) days following the date of such
supplemental indenture.

 

Section 8.4                                      Effect of
Supplemental Indentures. Upon the execution of any supplemental indenture
under this Article VIII, this Base Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of
this Base Indenture for all purposes, and every Outstanding Note theretofore
and thereafter authenticated and delivered hereunder shall be bound thereby.

 

Section 8.5                                      Reference in
Notes to Supplemental Indenture. Notes authenticated and delivered after
the execution of any supplemental indenture pursuant to this Article VIII
may, and if required by the Indenture Trustee shall, bear a notation in form satisfactory
to the Indenture Trustee as to any matter provided for in such supplemental
indenture. If the Co-Issuers shall so determine, new Notes, so modified as to
conform in the opinion of the Indenture Trustee and the Co-Issuers to any
such supplemental indenture, may be prepared and executed by the
Co-Issuers and authenticated and delivered by the Indenture Trustee in exchange
for Outstanding Notes.

 

110

 

ARTICLE IX

 

RESERVED

 

ARTICLE X

 

COLLECTIONS AND ALLOCATION OF
FUNDS AND MAINTENANCE OF ACCOUNTS

 

Section 10.1                                Concentration
Account.

 

(a)                                  Deposits. On or prior to the Closing Date,
the Servicer will establish and maintain an account in the name and for the
benefit of the Master Issuer (the “Concentration Account”) into which
the Servicer will 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
this Base Indenture or the Servicing Agreement, as applicable. (For the
avoidance of doubt, the Franchise Payments payable to the Master Issuer by the
Restaurant Holders in respect of the Company-Owned U.S. Restaurants and the
Predecessor Restaurant Holders in respect of the Post-Closing U.S. Restaurants
will be deemed to be paid when due since such Franchise Payments would
otherwise be paid out of amounts on deposit in the Concentration Account for
deposit back to the Concentration Account);

 

(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 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) within three (3) Business
Days after the date on which such credit card proceeds are deposited by the
related

 

111

 

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;

 

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

 

112

 

required to be
deposited directly to the Collection Account (subject, in the case of Liquor
License Related Indemnification Amounts, to Section 10.2(h)).

 

(b)                                 Withdrawals. The Servicer will be permitted or
required, in accordance with the Servicing Agreement, to withdraw amounts on
deposit in the Concentration Account as follows:

 

(i)             on a daily basis in accordance with the Servicing
Agreement in order to 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,
such as 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;

 

(ii)          on a daily basis in accordance with the Servicing
Agreement 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 the Servicing Agreement,
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;

 

(iii)       On Friday of each calendar week or, if such day is not
a Business Day, the immediately following Business Day (each such date, a “Weekly
Allocation Date”), commencing with December 7, 2007, the Servicer
will, based solely on the information contained in the Weekly Servicer’s
Report, apply the amount on deposit in the Concentration Account as of the last
day of the immediately preceding Weekly Collections Allocations Period to make
the following payments and deposits in the following order of priority in
respect of the immediately preceding Weekly Collections Allocation Period (the “Weekly
Collections Allocation Priority”):

 

(1)                                  first, to deposit to the SPE Operating
Expense Account, an amount equal to any accrued and unpaid government taxes
(other than Federal, state and local income taxes), and any filing fees and
registration fees (other than liquor license fees) payable by the Co-Issuers to
any Federal, state or local government entities;

 

(2)                                  second, to deposit to the Sales Tax
Account any sales taxes payable to the applicable state and local taxing
authorities that are owed with respect to Company-Owned U.S. Restaurants and
Post-Closing U.S.

 

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Restaurants (unless
and until such Restaurants become Reacquired U.S. Restaurants);

 

(3)                                  third, to deposit to the Lease Payment
Account, (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 this clause third 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
this clause third on any preceding Weekly Allocation Date (unless the
related Lease Payment has already been paid in full or discharged);

 

(4)                                  fourth, to deposit to the Gift Card
Reserve Account, an amount equal to the sum of (A) the proceeds from the
sale of ACMC Gift Cards at Company-Owned U.S. Restaurants and Post-Closing U.S.
Restaurants over the immediately preceding Weekly Collections Allocation
Period, plus (B) any amount previously required to be deposited to
the Gift Card Reserve Account pursuant to this clause fourth that has
not been deposited to the Gift Card Reserve Account;

 

(5)                                  fifth, to deposit to the Third Party
Licensing Fee Account, an amount equal to the aggregate amount of the accrued
and unpaid licensing fees or royalty fees or other similar amounts payable to
third parties in connection with the sale or use of their products or services
at Company-Owned U.S. Restaurants, Post-Closing U.S. Restaurants and Franchised
U.S. Restaurants accrued (whether or not yet due and payable) over the
immediately preceding Weekly Collections Allocation Period (together with any
previously accrued and unpaid amounts), including, without limitation, the Weight
Watchers Fees (which amount is expected to be paid on a quarterly basis to
Weight Watchers International, Inc., pursuant to the Weight Watchers
Agreement, from the amount on deposit in the Third Party Licensing Fee
Account), but only to the extent that such amounts are not deposited directly
to the Third Party Licensing Fee Account by Franchisees;

 

(6)                                  sixth, to deposit to the Advertising Fees
Account an amount equal to the sum of (A) the aggregate amount of the Advertising
Fees determined to be payable by the Restaurant Holders on the Company-Owned
U.S. Restaurants and the Predecessor Restaurant Holders on the Post-Closing
U.S. Restaurants based on sales activity during the preceding Weekly
Collections Allocation Period plus (B) any amount required to be deposited
to the Advertising Fees Account pursuant to this clause sixth on a

 

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previous Weekly
Allocation Date that was not deposited to such account on or after such date;

 

(7)                                  seventh, to deposit to the SPE Operating
Expense Account, an amount equal to any previously accrued and unpaid SPE
Operating Expenses together with any SPE Operating Expenses that are expected
to be payable prior to the immediately following Weekly Allocation Date (or, if
earlier, the immediately following Payment Date) in an amount not to exceed the
Capped SPE Operating Expense Amount with respect to the annual period in which such
Weekly Allocation Date occurs after giving effect to all deposits previously
made to the SPE Operating Expense Account pursuant to the Weekly Collections
Allocation Priority or the Priority of Payments during the annual period in
which such Weekly Allocation Date occurs (which annual period will be measured
from the Closing Date to the anniversary thereof and from each anniversary
thereof to the next anniversary thereof); and

 

(8)                                  eighth, to pay to itself in its capacity
as Servicer, an amount equal to the sum of (A) the Weekly Servicing Fee
for such date, plus (B) any previously accrued and unpaid Weekly Servicing
Fee (without the payment of interest thereon), plus (C) the
aggregate amount of the Excluded Amounts payable to the Servicer pursuant to
this Base Indenture that have been deposited to the Concentration Account
during the immediately preceding Weekly Collections Allocation Period that have
not previously been paid back to the Servicer pursuant to this clause eighth.

 

(iv)      Notwithstanding anything to the contrary herein, and provided that no Rapid Amortization Event has
occurred and is continuing, then 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 so long as 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.

 

115

 

(v)         On a monthly basis on each Accounting Date, to make
the deposits to the Collection Account provided under Section 10.11(a).

 

(c)                                  Eligible Accounts. The Concentration Account shall be
an Eligible Account that is pledged to, and subject to an account control
agreement in favor of, the Indenture Trustee. If the Concentration Account is
at any time no longer an Eligible Account, the Master Issuer shall, within five
(5) Business Days of obtaining knowledge that such Concentration Account
is no longer an Eligible Account, notify each Series Controlling Party and
establish a new Concentration Account that is an Eligible Account and that is
pledged to the Indenture Trustee for the benefit of the Secured Parties. If a
new Concentration Account is established, the Master Issuer shall transfer, or
cause the Servicer to transfer, all cash and investments from the
non-qualifying Concentration Account into the new Concentration Account.

 

(d)                                 Administration of the Concentration
Account. All
amounts held in the Concentration Account shall be invested in Eligible
Investments at the written direction of the Master Issuer and such amounts may be
transferred by the Master Issuer into a money market account for the sole
purpose of investing in Eligible Investments so long as such money market
account is (A) an Eligible Account and (B) pledged by the Master
Issuer to the Trustee for the benefit of the Secured Parties pursuant to this
Base Indenture; provided, however, that any such investment in any
Concentration Account (or in any such money market account) shall mature not
later than the date on which such amount is required to be withdrawn from the
Concentration Account as set forth in this Article X. In the
absence of written investment instructions hereunder, funds on deposit in the
Concentration Account shall remain uninvested. The Master Issuer shall neither
direct nor permit the disposal of any Eligible Investments prior to the
maturity thereof to the extent such disposal would result in a loss of the
initial purchase price of such Permitted Investment.

 

(e)                                  Earnings from the Concentration
Account. All
interest and earnings (net of losses and investment expenses) paid on funds on
deposit in the Concentration Accounts shall be deemed to be Investment Income
on deposit for distribution to the Collection Account in accordance with Section 10.11.

 

(f)                                    Control of Concentration Account
Following Trigger Event. If a Trigger Event occurs, (i) the Aggregate
Controlling Party may direct the Servicer to notify the Franchisees to
make all Franchise Payments, all payments on the Refranchised Restaurant
Leases, if any, and the Franchisee Sub-Leases, if any, and all Development
Payments to 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, (ii) except to the extent that the Aggregate
Controlling Party waives such requirement, the Servicer will use commercially
reasonable efforts to cause all depositary institutions that receive funds
generated by the Company-Owned U.S. Restaurants to enter into Account Control
Agreements with the Indenture Trustee pursuant to which such depositary
institutions will act at the direction of the Indenture Trustee; provided,
that the Servicer will not be liable for any inability to cause the Indenture
Trustee or such depositary institutions to enter into such Account Control
Agreements if the Servicer has exercised commercially reasonable efforts to
obtain such agreements, and (iii) the Servicer will be required to record
the mortgages relating to the Company-Owned Real Property within ninety (90)
days following the occurrence of any Trigger Event. If the Servicer is 

 

116

 

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 to the Servicing Agreement within 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 10.2                                Servicing Accounts.
Each Servicing Account shall be an Eligible Account that is pledged to, and
subject to an account control agreement in favor of, the Indenture Trustee.

 

(a)                                  Advertising Fees Account. On or prior to the Closing Date,
the Servicer will establish and maintain an account designated as the “Advertising
Fees Account” in the name and for the benefit of the Master Issuer. The
advertising fees paid by the Franchisees (referred to herein as the “Advertising
Fees”) pursuant to their respective Franchise Agreements will not be
included in the Indenture Collateral and will not be deposited to the
Concentration Account. Instead, the Advertising Fees will be deposited by the
Servicer to the Advertising Fees Account within three (3) Business Days of
the Servicer’s receipt of the Advertising Fees (to the extent that the
Franchisees do not make the payment of the Advertising Fees directly to the
Advertising Fees Account), except with respect to Advertising Fees payable by
the Restaurant Holders and the Predecessor Restaurant Holders, which will be
withdrawn from the Concentration Account and deposited to the Advertising Fees
Account in accordance with the Weekly Collections Allocation Priority. The
Servicer, acting on behalf of the Master Issuer or the Franchise Holder in
accordance with the Servicing Agreement, may increase or reduce the
percentage of the aggregate amount paid by the Franchisees pursuant to the
Franchise Agreements that are applied to cover Advertising Fees. The Servicer
will apply the amount on deposit in the Advertising Fees Account on a daily
basis to cover the costs and expenses associated with the National Advertising
Fund in accordance with the Servicing Agreement.

 

Notwithstanding
anything to the contrary in the foregoing paragraph, if the amount on deposit
in the Third Party Licensing Fee Account is not sufficient to pay certain third
party licensing fees, then the amount of such deficiency may be paid out
of the Advertising Fees Account, in accordance with Section 10.2(c).

 

(b)                                 Gift Card Reserve Account.

 

(i)             On or prior to the Closing Date, the Servicer will
establish and maintain an account designated as the “Gift Card Reserve
Account” in the name and for the benefit of the Master Issuer subject to
the right of ACMC, Inc. to receive amounts on deposit in such account in
the manner provided in the Servicing Agreement. On each Weekly Allocation Date,
the Servicer will withdraw from the Concentration Account for deposit to the
Gift Card Reserve Account an amount equal to the proceeds from the sale of ACMC
Gift Cards at Company-Owned U.S. Restaurants and 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
Collections Allocation Priority on such Weekly Allocation Date).

 

117

 

(ii)          On each Weekly Allocation Date, the Servicer will
withdraw from the Gift Card Reserve Account for deposit to the Concentration
Account an amount equal to the dollar amount of the redemption, over the
immediately preceding Weekly Collections Allocation Period, 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;
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.

 

(iii)       On a weekly basis, as funds are received from ACMC, Inc.
for such purpose, the Servicer will deposit to the Concentration Account an
amount equal to the proceeds of the redemption at Company-Owned U.S.
Restaurants or Post-Closing U.S. Restaurants, as applicable, of ACMC Gift Cards
sold other than at Company-Owned U.S. Restaurants or Post-Closing U.S.
Restaurants, as applicable.

 

(iv)      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
the Franchisees) an amount equal to the proceeds from the sale of ACMC Gift
Cards sold at Company-Owned U.S. Restaurants or Post-Closing U.S. Restaurants,
as applicable, that were redeemed at Franchised U.S. Restaurants in the
immediately preceding Monthly Collection Period.

 

(v)         On the sixth calendar day of each calendar month, or
if such date is not a Business Day, the immediately following Business Day, ACMC, Inc.
will deposit, or cause its third party processor to deposit, to the
Concentration Account, the amount due to the Restaurant Holders and the
Predecessor Restaurant Holders in an amount equal to the proceeds from
redemptions occurring in the immediately preceding Monthly Collection Period of
Applebee’s Branded Gift Cards sold at Franchised U.S. Restaurants and redeemed
at Company-Owned U.S. Restaurants or Post-Closing U.S. Restaurants, as
applicable.

 

(vi)      On May 5th of each year or, if such day is not a
Business Day, the immediately following Business Day, commencing with May 5,
2008, 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. The Excess Gift Card Reserve Amount, if any, as of
May 5th of each year will be an amount equal to the income recognized by
ACMC, Inc. in respect of the preceding calendar year in accordance with
U.S. GAAP attributable to the proceeds from the sale of an ACMC Gift Card
purchased at a Company-Owned U.S. Restaurant or Post-Closing U.S. Restaurant
which will not be redeemed.

 

118

 

(c)                                  Third Party Licensing Fee Account. On or prior to the Closing Date,
the Servicer will establish and maintain an account designated as the “Third
Party Licensing Fee Account” in the name and for the benefit of the Master
Issuer. On each Weekly Allocation Date, in accordance with the Weekly
Collections Allocation Priority, the Servicer will withdraw available amounts
on deposit in the Concentration Account for deposit to the Third Party
Licensing Fee Account in an amount equal to the royalties, licensing fees or
other similar amounts payable to third parties in connection with the sale and
use of their products in Franchised U.S. Restaurants, Company-Owned U.S.
Restaurants and Post-Closing U.S. Restaurants 
to the extent that such amounts are not deposited directly to the Third
Party Licensing Fee Account by Franchisees. As of the initial Closing Date,
such royalties, licensing fees or other similar amounts will be limited to the
licensing fees payable on a quarterly basis to Weight Watchers International, Inc.
pursuant to the Weight Watchers Agreement (referred to herein as the “Weight
Watchers Fees”). The Servicer will apply amounts on deposit in the Third
Party Licensing Fee Account to pay the Weight Watchers 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 a
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). On each Weekly Allocation
Date, the Servicer may apply any available amount on deposit in the
Concentration Account in accordance with the Weekly Collections Allocation
Priority 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. The Third Party
Licensing Fee Account and the amount on deposit in the Third Party Licensing
Fee Account will be included in the Indenture Collateral subject to the rights
of Weight Watchers International, Inc. and other third parties to the
amounts therein.

 

(d)                                 Insurance Proceeds Account.

 

(i)             On or prior to the Closing Date, the Servicer will
establish and maintain an account designated as the “Insurance Proceeds
Account” in the name and for the benefit of the Master Issuer. The Servicer
will deposit or cause to be deposited to the Insurance Proceeds Account all
Insurance/Condemnation Proceeds received by or on behalf of the Securitization
Entities on the Collateral within three Business Days following receipt pending
a determination by the Servicer whether such proceeds are required to be
withdrawn for deposit to the Collection Account for application as the
Insurance Proceeds Amount to pay principal of the Notes on the immediately
following Payment Date pursuant to Section 10.12. The Servicer may withdraw
Insurance/Condemnation Proceeds previously deposited by the Servicer to the
Insurance Proceeds Account that are not required to be applied as the Insurance
Proceeds Amount on any Business Day for the restoration of the related property
that was the source of the Insurance/Condemnation Proceeds or for investment in

 

119

 

the New U.S.
Restaurant Business in accordance with Section 14.3. All such
Insurance/Condemnation Proceeds deposited in the Insurance Proceeds Account
will be withdrawn by the Servicer for deposit to the Concentration Account
following any determination by the Servicer that such amounts will not be
applied in accordance with the preceding sentence and are not required to be
applied as Insurance Proceeds Amounts.

 

(ii)          Any Franchisee Insurance Proceeds received by or on
behalf of the Master Issuer or the Franchise Holder pursuant to the related
Franchise Documents will also be deposited to the Insurance Proceeds Account to
the extent that such amounts are not applied directly to Franchisee Insurance
Restoration Payments in accordance with the related Franchise Documents. The
Servicer may withdraw amounts on deposit in the Insurance Proceeds Account
on any Business Day for application as Franchisee Insurance Restoration
Payments in accordance with the related Franchise Agreement. The Insurance
Proceeds Account and the amount on deposit in such account will be included in
the Collateral subject to the rights of the Franchisees to such amounts
pursuant to the related Franchise Agreements. Subject to Section 10.2(d)(i),
if the Servicer determines that any amount on deposit in the Insurance Proceeds
Account is not allocable to Franchisee Insurance Restoration Payments, such
amount will be withdrawn for deposit to the Collection Account for application
as Collections that are available to prepay principal of the Notes in
accordance with Articles X and XI.

 

(e)                                  SPE Operating Expense Account. On or prior to the Closing Date,
the Servicer will establish and maintain an account designated as the “SPE
Operating Expense Account” in the name and for the benefit of the Master
Issuer. On each Weekly Allocation Date and each Payment Date, the Servicer will
withdraw available amounts on deposit in the Concentration Account in
accordance with the Weekly Collections Allocation Priority or the Priority of
Payments, as applicable, for deposit 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). If
there are insufficient amounts on deposit in the SPE Operating Expense Account
to pay all accrued and unpaid SPE Operating Expenses on any date, the amount on
deposit in the SPE Operating Expense Account will be applied to pay such SPE
Operating Expenses in the order of priority set forth in the definition of “SPE
Operating Expenses.”  The SPE
Operating Expense Account and the amount on deposit therein will be included in
the Indenture Collateral.

 

(f)                                    Lease Payment Account. On or prior to the Closing Date,
the Servicer will establish and maintain an account designated as the “Lease
Payment Account” in the name and for the benefit of the Master Issuer. On
each Weekly Allocation Date, the Servicer will withdraw amounts on deposit in
the Concentration Account for deposit to the Lease Payment Account in
accordance with the Weekly Collections Allocation Priority, in an amount

 

120

 

equal to (A) on each of the first three
Weekly Allocation Dates that occur during each Monthly Collection Period,
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 the Weekly Collections Allocation
Priority 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 Collections Allocations 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 the Weekly
Collections Allocation Priority on any preceding Weekly Allocation Date (unless
the related Lease Payment has already been paid in full or discharged). The
Lease Payment Account and the amount on deposit therein will be included in the
Collateral subject to the rights of the third parties that are the lessors
under the Sale/Leaseback Leases to the amount on deposit in such account.

 

(g)                                 Sales Tax Account. On or prior to the Closing Date,
the Servicer will establish and maintain an account designated as the “Sales
Tax Account” in the name and for the benefit of the Master Issuer. The
Servicer will calculate the percentage of the revenues received with respect to
Company-Owned U.S. Restaurants and Post-Closing U.S. Restaurants (unless and
until such Restaurants become Reacquired 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 a weekly basis in accordance
with the Weekly Collections Allocation Priority on each Weekly Allocation Date.
The Servicer will withdraw amounts on deposit in the Sales Tax Account on a
daily basis for application to pay such taxes to the appropriate authorities.

 

(h)                                 Capital Expenditure Reserve Account. On or prior to the Closing Date,
the Servicer will establish and maintain an account designated as the “Capital
Expenditure Reserve Account” in the name and for the benefit of the Master
Issuer. The Servicer will deposit the gross proceeds from Asset Dispositions to
the Capital Expenditure Reserve Account within three (3) Business Days
following receipt 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 gross proceeds representing taxes then known to be due and payable in
connection with such Asset Disposition, transaction costs and other direct
costs associated with the Asset Disposition. The Servicer will withdraw from
the Capital Expenditure Reserve Account for deposit to the Collection Account
by the next Accounting Date that portion of the gross proceeds, if any, that
constitutes an Asset 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 as described herein; 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 elect to apply
such proceeds to pay principal on each Payment Date following receipt. The
Servicer may withdraw any remaining amount on deposit in the Capital
Expenditure Reserve Account on any Business Day for reinvestment in the New
U.S. Restaurant Business in accordance with Section 11.1(s). All
Asset Disposition proceeds deposited to the Capital Expenditure Reserve Account
will be withdrawn by the Servicer for deposit to the Concentration Account to
the extent that the Servicer determines that such amounts will not be reinvested
in the New U.S. Restaurant Business in the manner described in the preceding
sentence and are not required to be applied as Asset Disposition Prepayment
Amounts.

 

121

 

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:

 

(x)                                   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

 

(y)                                 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.

 

(i)                                     Administration of the Servicing
Accounts. The
Servicer will invest and reinvest funds deposited in the Servicing Accounts in
Eligible Investments maturing no later than the Business Day preceding each
Payment Date. All income or other gain from such Eligible Investments will be
credited to the related Servicing Account, and any loss resulting from such
investments will be charged to the related Servicing Account.

 

(j)                                     Earnings from the Servicing Accounts. All Investment Income (net of
losses and investment expenses) paid on funds on deposit in the Servicing
Accounts shall be deemed to be Investment Income on deposit for application to
amounts required to be on deposit in the Servicing Accounts or for distribution
to the Collection Account in accordance with Section 10.11; provided that all such interest and earnings
paid on funds on deposit in the Advertising Fees Account shall remain in the
Advertising Fees Account, to be applied and used in accordance with the
Servicing Agreement.

 

Section 10.3                                Senior Notes
Interest Reserve Account.

 

(a)                                  Establishment of the Senior Notes
Interest Reserve Account. On or prior to the Closing Date, the Master Issuer,
or the Servicer on behalf of the Master Issuer, shall establish and maintain an
account in the name of the Indenture Trustee for the benefit of the Holders of
Senior Notes, the Indenture Trustee, solely in its capacity as trustee for the
Holders of

 

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Senior Notes, and the Insurers, if any,
bearing a designation clearly indicating that the funds deposited therein
(other than reserves for Insurer Premiums, if any, which shall be held solely
for the benefit of the Insurers, if any, as Secured Parties) are held for the
benefit of the foregoing Secured Parties (the “Senior Notes Interest Reserve
Account”). The Senior Notes Interest Reserve Account shall be an Eligible
Account. If the Senior Notes Interest Reserve Account is at any time no longer
an Eligible Account, the Master Issuer shall, within five (5) Business
Days of obtaining knowledge that the Senior Notes Interest Reserve Account is
no longer an Eligible Account, notify the applicable Series Controlling
Parties and establish a new Senior Notes Interest Reserve Account that is an
Eligible Account. If a new Senior Notes Interest Reserve Account is established
the Master Issuer shall instruct the Indenture Trustee in writing to transfer
all cash and investments from the non-qualifying Senior Notes Interest Reserve
Account into the new Senior Notes Interest Reserve Account. Initially, the
Senior Notes Interest Reserve Account will be established with the Indenture
Trustee.

 

(b)                                 Administration of the Senior Notes
Interest Reserve Account. All amounts held in the Senior Notes Interest
Reserve Account shall be invested in Eligible Investments at the written
direction of the Master Issuer; provided, however, that any such investment in the
Senior Notes Interest Reserve Account shall mature not later than the Business
Day prior to the next succeeding Payment Date. In the absence of written
investment instructions hereunder, funds on deposit in the Senior Notes
Interest Reserve Account shall remain uninvested. The Master Issuer shall not
direct (or permit) the disposal of any Eligible Investments prior to the
maturity thereof to the extent such disposal would result in a loss of the
initial purchase price of such Permitted Investment.

 

(c)                                  Earnings from the Senior Notes
Interest Reserve Account. All interest and earnings (net of losses and
investment expenses) paid on funds on deposit in the Senior Notes Interest
Reserve Account shall be deemed to be Investment Income on deposit for
application to amounts required to be on deposit in the Senior Notes Interest
Reserve Account or for distribution to the Collection Account in accordance
with Section 10.11.

 

Section 10.4                                Cash Trap Reserve
Account.

 

(a)                                  Establishment of the Cash Trap
Reserve Account.
On or prior to the Closing Date, the Master Issuer, or the Servicer on behalf
of the Master Issuer, shall establish and maintain an account in the name of
the Indenture Trustee for the benefit of the Secured Parties, bearing a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Secured Parties (the “Cash Trap Reserve Account”). The
Cash Trap Reserve Account shall be an Eligible Account. If the Cash Trap
Reserve Account is at any time no longer an Eligible Account, the Master Issuer
shall, within five (5) Business Days of obtaining knowledge that the Cash
Trap Reserve Account is no longer an Eligible Account, notify the Series Controlling
Parties and establish a new Cash Trap Reserve Account that is an Eligible
Account. If a new Cash Trap Reserve Account is established the Master Issuer
shall instruct the Trustee in writing to transfer all cash and investments from
the non-qualifying Cash Trap Reserve Account into the new Cash Trap Reserve
Account. Initially, the Cash Trap Reserve Account will be established with the
Indenture Trustee.

 

123

 

(b)                                 Administration of the Cash Trap
Reserve Account.
All amounts held in the Cash Trap Reserve Account shall be invested in Eligible
Investments at the written direction of the Master Issuer; provided, however, that any such
investment in the Cash Trap Reserve Account shall mature not later than the
Business Day prior to the next succeeding Payment Date. In the absence of
written investment instructions hereunder, funds on deposit in the Cash Trap
Reserve Account shall remain uninvested. The Master Issuer shall not direct (or
permit) the disposal of any Eligible Investments prior to the maturity thereof
to the extent such disposal would result in a loss of the initial purchase
price of such Permitted Investment.

 

(c)                                  Earnings from the Cash Trap Reserve
Account. All
interest and earnings (net of losses and investment expenses) paid on funds on
deposit in the Cash Trap Reserve Account shall be deemed to be Investment
Income on deposit for application to amounts

 

required to be on
deposit in the Cash Trap Reserve Account or for distribution to the Collection
Account in accordance with Section 10.11.

 

Section 10.5                                RESERVED.

 

Section 10.6                                Hedge Payment
Account.

 

(a)                                  Establishment of the Hedge Payment
Account. On
or prior to the Closing Date, the Master Issuer, or the Servicer on behalf of
the Master Issuer,  shall establish and
maintain an account in the name of the Indenture Trustee for the benefit of the
Secured Parties, bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Secured Parties (the “Hedge
Payment Account”). The Hedge Payment Account shall be an Eligible Account. If
the Hedge Payment Account is at any time no longer an Eligible Account, the
Master Issuer shall, within five (5) Business Days of obtaining knowledge
that the Hedge Payment Account is no longer an Eligible Account, notify the Series Controlling
Parties and establish a new Hedge Payment Account that is an Eligible Account. If
a new Hedge Payment Account is established the Master Issuer shall instruct the
Trustee in writing to transfer all cash and investments from the non-qualifying
Hedge Payment Account into the new Hedge Payment Account. Initially, the Hedge
Payment Account will be established with the Indenture Trustee.

 

(b)                                 Administration of the Hedge Payment
Account. All
amounts held in the Hedge Payment Account shall be invested in Eligible
Investments at the written direction of the Master Issuer; provided, however, that any such
investment in the Hedge Payment Account shall mature not later than the
Business Day prior to the next succeeding Payment Date. In the absence of
written investment instructions hereunder, funds on deposit in the Hedge
Payment Account shall remain uninvested. The Master Issuer shall not direct (or
permit) the disposal of any Eligible Investments prior to the maturity thereof
to the extent such disposal would result in a loss of the initial purchase
price of such Permitted Investment.

 

(c)                                  Earnings from the Hedge Payment
Account. All
interest and earnings (net of losses and investment expenses) paid on funds on
deposit in the Hedge Payment Account shall be deemed to be Investment Income on
deposit for application to amounts required to be on deposit in the Hedge
Payment Account or for distribution to the Collection Account in accordance
with Section 10.11.

 

124

 

Section 10.7                                Collection Account.

 

(a)                                  Establishment of Collection Account. On or prior to the Closing Date,
the Master Issuer or the Servicer on behalf of the Master Issuer shall
establish and shall maintain the Collection Account in the name of the
Indenture Trustee for the benefit of the Secured Parties, bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Secured Parties (the “Collection Account”). The Collection Account
shall be an Eligible Account. If the Collection Account is at any time no
longer an Eligible Account, the Master Issuer shall, within five (5) Business
Days of obtaining knowledge that the Collection Account is no longer an
Eligible Account, notify the applicable Series Controlling Parties and
establish a new Collection Account that is an Eligible Account. If a new
Collection Account is established the Master Issuer shall instruct the Trustee
in writing to transfer all cash and investments from the non-qualifying
Collection Account into the new Collection Account. Initially, the Collection
Account will be established with the Indenture Trustee.

 

(b)                                 Administration of the Collection
Account. All
amounts held in the Collection Account shall be invested in Eligible
Investments at the written direction of the Master Issuer; provided, however, that any such
investment in the Collection Account shall mature not later than the Business
Day prior to the next succeeding Payment Date. In the absence of written
investment instructions hereunder, funds on deposit in the Collection Account
shall remain uninvested. The Master Issuer shall not direct (or permit) the
disposal of any Eligible Investments prior to the maturity thereof to the
extent such disposal would result in a loss of the initial purchase price of
such Permitted Investment.

 

(c)                                  Earnings from Collection Account. All interest and earnings (net of
losses and investment expenses) paid on funds on deposit in the Collection
Account shall be deemed to be Investment Income on deposit for distribution in
accordance with Section 10.12.

 

Section 10.8                                Collection Account
Administrative Accounts.

 

(a)                                  Establishment of Collection Account
Administrative Accounts. The Master Issuer or the Servicer on behalf of the
Master Issuer shall establish and maintain ten administrative accounts
associated with the Collection Account, each of which shall be an Eligible
Account, for the benefit of the Secured Parties bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Secured Parties (each, a “Collection Account Administrative Account”):

 

(i)             an account for the deposit of Senior Notes Monthly
Interest Amount (the “Senior Notes Interest Payment Account”);

 

(ii)          an account for the deposit of the Insurer Premiums
(the “Insurer Premiums Account”);

 

(iii)       an account for the deposit of Series 2007-1 Class A-1
Commitment Fees Amount (the “Class A-1 Commitment Fees Account”);

 

125

 

(iv)      an account for the deposit of the amounts allocable to
the payment of principal of the Senior Notes (the “Senior Notes Principal
Payment Account”);

 

(v)         an account for the deposit of the Subordinated Notes
Monthly Interest Amount (the “Subordinated Notes Interest Payment Account”
and together with the Senior Notes Interest Payment Account, the “Interest
Payment Accounts”);

 

(vi)      an account for the deposit of the amounts allocable to
the payment of principal of the Subordinated Notes (the “Subordinated Notes
Principal Payment Account” and, together with the Senior Notes Principal
Payment Account, the “Principal Payment Accounts”);

 

(vii)   an account for the deposit of Senior Notes Monthly Contingent
Additional Interest Amount (the “Senior Notes Monthly Contingent Additional
Interest Account”);

 

(viii) an account for the deposit of the
Subordinated Notes Monthly Contingent Additional Interest Amount (the “Subordinated
Notes Monthly Contingent Additional Interest Account” and, together with
the Senior Notes Monthly Contingent Additional Interest Account, the “Contingent
Additional Interest Accounts”);

 

(ix)        an account for the deposit of the Senior Notes Monthly
Excess Adjusted Interest Amount (the “Senior Notes Excess Adjusted Interest
Account”); and

 

(x)           an account for the deposit of the Class A-1
Excess Interest Amount (the “Class A-1 Excess Interest Account”);

 

provided that if any Collection Account
Administrative Account is at any time no longer an Eligible Account, the Master
Issuer shall, within five (5) Business Days of obtaining knowledge that
such Collection Account Administrative Account is no longer an Eligible
Account, notify the applicable Series Controlling Parties and establish a new
Collection Account Administrative Account that is an Eligible Account to
replace such non-qualifying Collection Account Administrative Account. If a new
Collection Account Administrative Account is established the Master Issuer
shall instruct the Indenture Trustee in writing to transfer all cash and
investments from the non-qualifying Collection Account Administrative Account
into the new Collection Account Administrative Account.

 

(b)                                 Administration of the Collection
Account Administrative Accounts. All amounts held in the Collection Account
Administrative Accounts shall be invested in Eligible Investments at the
written direction of the Master Issuer; provided, however, that any such investment in the
Collection Account Administrative Accounts shall mature not later than the
Business Day prior to the next succeeding Payment Date. In the absence of
written investment instructions hereunder, funds on deposit in the Collection
Account Administrative Accounts shall remain uninvested. The Master Issuer
shall not direct (or permit) the disposal of

 

126

 

any Eligible Investments prior to the
maturity thereof to the extent such disposal would result in a loss of the
initial purchase price of such Permitted Investment.

 

(c)                                  Earnings from the Collection Account
Administrative Accounts. All interest and earnings (net of losses and
investment expenses) paid on funds on deposit in the Collection Account
Administrative Accounts shall be deposited therein and shall be deemed to be
Investment Income on deposit for distribution in accordance with Section 10.12.

 

Section 10.9                                Indenture Trustee as
Securities Intermediary.

 

(a)                                  The Indenture Trustee or other
Person holding any Account held in the name of the Indenture Trustee for the
benefit of the Secured Parties (collectively the “Master Issuer Trustee
Accounts”) shall be the “Securities Intermediary.”  If the Securities Intermediary in respect of
any Master Issuer Trustee Account is not the Indenture Trustee, the Master
Issuer shall obtain the express agreement of such other Person to the
obligations of the Securities Intermediary set forth in this Section 10.9.

 

(b)                                 The Securities Intermediary agrees
that:

 

(i)             The Master Issuer Trustee Accounts are accounts to
which “financial assets” within the meaning of Section 8-102(a)(9) (“Financial
Assets”) of the UCC in effect in the State of New York (the “New York
UCC”) will or may be credited;

 

(ii)          The Master Issuer Trustee Accounts are “securities
accounts” within the meaning of Section 8-501 of the New York UCC and the
Securities Intermediary qualifies as a “securities intermediary” under Section 8-102(a) of
the New York UCC;

 

(iii)       All securities or other property (other than cash)
underlying any Financial Assets credited to any Master Issuer Trustee Account
shall be registered in the name of the Securities Intermediary, indorsed to the
Securities Intermediary or in blank or credited to another securities account
maintained in the name of the Securities Intermediary and in no case will any
Financial Asset credited to any Master Issuer Trustee Account be registered in
the name of the Master Issuer, payable to the order of the Master Issuer or
specially indorsed to the Master Issuer;

 

(iv)      All property delivered to the Securities Intermediary
pursuant to this Base Indenture will be promptly credited to the appropriate
Master Issuer Trustee Account;

 

(v)         Each item of property (whether investment property,
security, instrument or cash) credited to a Master Issuer Trustee Account shall
be treated as a Financial Asset under Article 8 of the New York UCC;

 

(vi)      If at any time the Securities Intermediary shall
receive any entitlement order from the Indenture Trustee (including those
directing

 

127

 

transfer or
redemption of any Financial Asset) relating to the Master Issuer Trustee
Accounts, the Securities Intermediary shall comply with such entitlement order
without further consent by the Master Issuer or any other Person;

 

(vii)   The Master Issuer Trustee Accounts shall be governed
by the laws of the State of New York, regardless of any provision of any other
agreement. For purposes of all applicable UCCs, New York shall be deemed to be
the Securities Intermediary’s jurisdiction and the Master Issuer Trustee
Accounts (as well as the “securities entitlements” (as defined in Section 8-102(a)(17)
of the New York UCC) related thereto) shall be governed by the laws of the
State of New York;

 

(viii) The Securities Intermediary has
not entered into, and until termination of this Base Indenture, will not enter
into, any agreement with any other Person relating to the Master Issuer Trustee
Accounts and/or any Financial Assets credited thereto pursuant to which it has
agreed to comply with entitlement orders (as defined in Section 8-102(a)(8) of
the New York UCC) of such other Person and the Securities Intermediary has not
entered into, and until the termination of this Base Indenture will not enter
into, any agreement with the Master Issuer purporting to limit or condition the
obligation of the Securities Intermediary to comply with entitlement orders as
set forth in Section 10.9(b)(vi); and

 

(ix)        Except for the claims and interest of the Indenture
Trustee, the Secured Parties, the Master Issuer and the other Securitization
Entities in the Master Issuer Trustee Accounts, neither the Securities
Intermediary nor, in the case of the Indenture Trustee, any Trust Officer knows
of any claim to, or interest in, the Master Issuer Trustee Accounts or in any
Financial Asset credited thereto. If the Securities Intermediary or, in the
case of the Trustee, a Trust Officer has Actual Knowledge of the assertion by
any other person of any Lien, encumbrance, or adverse claim (including any
writ, garnishment, judgment, warrant of attachment, execution or similar
process) against any Master Issuer Trustee Account or in any Financial Asset
carried therein, the Securities Intermediary will promptly notify the Trustee,
the Control Party and the Master Issuer thereof.

 

(c)                                  At any time after the occurrence and
during the continuation of an Event of Default, the Indenture Trustee shall
possess all right, title and interest in all funds on deposit from time to time
in the Master Issuer Trustee Accounts and all other Eligible Accounts held
with, or subject to an account control agreement in favor of, the Indenture
Trustee, and in all proceeds thereof, and (acting at the direction of the
applicable Series Controlling Party) shall be the only Person authorized
to originate entitlement orders in respect of the Master Issuer Trustee
Accounts; provided, however, that at all other times the Master Issuer shall, subject
to the terms of the Indenture and the other related documents, be authorized to
instruct the Indenture Trustee to originate entitlement orders in respect of
the Master Issuer Trustee Accounts.

 

128

 

Section 10.10                          Establishment of Series Accounts.
To the extent specified in the Series Supplement with respect to any Series of
Notes, the Indenture Trustee may establish and maintain one or more Series Accounts
and/or administrative accounts of any such Series Account in accordance
with the terms of such Series Supplement.

 

Section 10.11                          Collections and Investment
Income.

 

(a)                                  Deposits to Collection Account. Until
the Indenture is terminated pursuant to Article IV:

 

(i)             on or prior to each Accounting Date, the Servicer will
withdraw from the Concentration Account for deposit to the Collection Account
an amount equal to the following amounts deposited to the Concentration Account
over the preceding Monthly Collection Period to the extent remaining after
giving effect to the application of the Weekly Collections Allocation Priority
on each Weekly Allocation Date and any amounts withdrawn from the Concentration
Account pursuant to Section 10.1(b)(iv) over such Monthly
Collection Period:

 

(A)      all Franchise Payments and Development Payments
received over such period;

 

(B)        all amounts equaling the Restaurant Holder Profits
generated over such period;

 

(C)        any IHOP Residual Amounts received over such period;

 

(D)       without duplication of the preceding amounts, all
other Collections deposited to the Concentration Account over such period
(other than Excluded Amounts and all or any part of the initial deposit to
the Concentration Account on the Closing Date that has not been previously
withdrawn and that the Servicer elects to retain on deposit in the
Concentration Account).

 

(ii)          on and after the Closing Date, the Servicer will also
deposit or cause to be deposited to the Collection Account (or to such other
account specified below) the following amounts:

 

(A)      any Indemnification Amounts within three (3) Business
Days following the receipt by the Servicer or any of its Affiliates of such
amounts; provided, that any Liquor License Related Indemnification
Amounts shall be deposited into the Collection Account in accordance with the
procedures set forth in Section 10.2(h); provided, further,
that upon the deposit of such Liquor License Related Indemnification Amounts
into the Collection Account, such amounts shall be

 

129

 

allocated,
distributed and applied in all respects as any other Indemnification Amounts
under the Indenture;

 

(B)        any Insurance Proceeds Amounts (which will be
deposited to the Insurance Proceeds Account within three (3) Business Days
following receipt by the Servicer or its Affiliates and then withdrawn for
deposit to the Collection Account by the next Accounting Date);

 

(C)        any Asset Disposition Prepayment Amounts (which will
be deposited to the Capital Expenditure Reserve Account within three (3) Business
Days following receipt by the Servicer or its Affiliates and then withdrawn for
deposit to the Collection Account by the next Accounting Date);

 

(D)       the Series Hedge Agreement Receipts, if any,
received by the Co-Issuers in respect of any Series Hedge Agreements
entered into by the Co-Issuers in connection with the issuance of Additional
Notes following the Closing Date within two (2) Business Days following
receipt thereof by the Master Issuer or the Servicer, as the case may be;

 

(E)         all Retained Collections required to be withdrawn from
the Concentration Account under Section 10.1(b) at the time
required thereunder or received from any other source within two (2) Business
Days of receipt thereof by the Master Issuer or the Servicer, as the case may be;

 

(F)         any amounts obtained by the Indenture Trustee on
account of or as a result of the exercise by the Indenture Trustee of any of
its rights under the Indenture, including without limitation, under Article V
hereof;

 

(G)        any amounts obtained by the Indenture Trustee from the
sale and transfer of the Collateral pursuant to the Auction for purposes of
implementing the Auction Call Redemption; and

 

(H)       all amounts, if any, relating to the Cash Collateral
required to be deposited into the Collection Account in accordance with Section 11.1(e) hereof.

 

(b)                                 Investment Income. On each Accounting Date, (i) the
Servicer will withdraw an amount equal to the Investment Income earned (net of
losses and expenses) on amounts on deposit in the Concentration Account and
each Servicing Account (other than the Advertising Fees Account) over the
preceding Monthly Collection Period for deposit to the Collection Account, and (ii) the
Indenture Trustee will withdraw an amount equal to the Investment Income earned
(net of losses and expenses) on amounts on deposit in the Senior

 

130

 

Notes Interest Reserve Account, the Cash Trap
Reserve Account, the Hedge Payment Account, the Series Distribution
Accounts or the Collection Account Administrative Accounts over the preceding
Monthly Collection Period for deposit to the Collection Account.

 

(c)                                  Payment Instructions. In accordance with and subject to
the terms of the Servicing Agreement, the Master Issuer shall cause the
Servicer to instruct (i) each Franchisee or Franchise Developer obligated
at any time to make any payment pursuant to any Franchise Agreement or
Development Agreement, respectively, to make such payment to the Concentration
Account or its related Lock-Box Account, (ii) each Restaurant Holder
obligated at any time to make any payments pursuant to any arrangements with
Applebee’s International or any of its Affiliates (including the Securitization
Entities) to make such payments to the Concentration Account or its related
Lock-Box Account, and (iii) any Person (not an Affiliate of the
Securitization Entities) obligated at any time to make any payments with
respect to the Indenture Collateral, including, without limitation, the IP
Assets, to make such payment to the Concentration Account or the Collection
Account or such accounts’ related Lock-Box Account, as determined by the Master
Issuer or Servicer.

 

(d)                                 Misdirected Collections. The Co-Issuers agree that if any
Collections shall be received by any Co-Issuer or any other Securitization
Entity (or by the Servicer on their behalf) in an account other than a
Concentration Account or the Collection Account or in any other manner, such
monies, instruments, cash and other proceeds will not be commingled by such
Co-Issuer or such other Securitization Entity (or, in each case, by the
Servicer, as the case may be) with any of their other funds or property,
if any, but will be held separate and apart therefrom and shall be held in
trust by such Co-Issuer or such other Securitization Entity (or, in each case,
but the Servicer, as the case may be) for the benefit of the Secured
Parties, and, within one (1) Business Day of the identification of such
payment shall be deposited to the Concentration Account, or paid over to the
Indenture Trustee, with any necessary endorsement. In the event the Servicer
determines that amounts previously held in the Concentration Account should
have been applied in accordance with the Weekly Collections Allocation
Priority, but were instead misdirected to the Collection Account, the Indenture
Trustee shall withdraw from the Collection Account any monies on deposit
therein that the Servicer certifies to it and the Series Controlling
Parties are monies incorrectly deposited into the Collection Account and pay
such amounts to or at the direction of the Servicer. All monies, instruments,
cash and other proceeds received by the Indenture Trustee pursuant to the Indenture
shall be immediately deposited in the Collection Account and shall be applied
as provided in this Article X.

 

(e)                                  Segregation of Money; Investments. The Indenture Trustee shall
segregate and hold all money and property received by it in trust for the
Secured Parties, and shall apply it as provided in this Base Indenture. Absent
any Servicer Order or other written instructions from the Servicer hereunder,
the Indenture Trustee shall invest and reinvest the funds held in any Indenture
Trust Account in one or more Eligible Investments of the type described in clause
(e) of the definition thereof.

 

Section 10.12                          Application of Monthly
Collections on Payment Dates. On each Payment Date, the Indenture Trustee
shall, based solely on the information contained in the Monthly Servicer’s
Report, withdraw the amount on deposit in the Collection Account in respect

 

131

 

of the
preceding Monthly Collection Period for allocation or payment in the following
order of priority (the “Priority of Payments”) after giving effect to
all allocations and payments made pursuant to the Weekly Collections Allocation
Priority on each Weekly Allocation Date that occurred during such Monthly
Collection Period:

 

(i)             first, to deposit to (A) the SPE Operating Expense
Account an amount equal to any accrued and unpaid government taxes (other than
Federal, state and local income taxes), filing fees and registration fees
(other than liquor license fees) payable by the Securitization Entities to any
Federal, state or local government entities, in each case after giving effect
to the payment of such amounts on any Weekly Allocation Date during the
preceding Monthly Collection Period and then (B) the Sales Tax Account an
amount equal to any accrued and unpaid sales taxes owed with respect to all
Company-Owned U.S. Restaurants and Post-Closing U.S. Restaurants and not
previously deposited to the Sales Tax Account pursuant to the Weekly
Collections Allocation Priority (unless and until such Restaurants become
Reacquired U.S. Restaurants)  and payable
to the applicable taxing authority;

 

(ii)          second, to deposit to the Senior Notes Principal Payment
Account or, if no Senior Notes are Outstanding (or the amount on deposit in the
Senior Notes Principal Payment Account equals the Aggregate Outstanding
Principal Amount of the Senior Notes Outstanding after giving effect to any
deposit to such account on or prior to such Payment Date), to deposit to the
Subordinated Notes Principal Payment Account, an amount equal to (A) the
Insurance Proceeds Amount, if any, (B) the Asset Disposition Prepayment
Amount, if any, and (C) the Indemnification Amount, if any, in each case
with respect to such Payment Date; provided, that if the pro forma Three-Month DSCR at least equals 3.5x as of such
Payment Date (after giving effect to the elimination of future revenues from
the assets reconveyed to Applebee’s International in exchange for the
Indemnification Amount and after giving effect to all other payments of
principal on such Payment Date including any partial application of the
Indemnification Amount pursuant to this clause second on such Payment
Date), then the Indemnification Amount will not be deposited to the Principal
Payment Accounts pursuant to this clause second and instead will be
applied in the manner provided in the remaining clauses of this Priority of
Payments;

 

(iii)       third, to deposit to the SPE Operating Expense Account, an
amount equal to any previously accrued and unpaid SPE Operating Expenses
together with any SPE Operating Expenses that are expected to be payable prior
to the immediately following Weekly Allocation Date in an amount not to exceed
the Capped SPE Operating Expense Amount with respect to the annual period in
which such Weekly Allocation Date occurs after giving effect to all deposits
previously made to the SPE Operating Expense Account;

 

(iv)      fourth, to deposit to the applicable Indenture Trust
Account, ratably according to the amounts required to be deposited set forth in
subclauses (A) through (D) below, the following amounts
until the amount

 

132

 

required to be
deposited pursuant to subclauses (A) through (D) below
is deposited in full:

 

(A)      to the Senior Notes Interest Payment Account, the Senior
Notes Monthly Interest Amount;

 

(B)        to the Insurer Premiums Account, the Accrued Insurer
Premium Amount, if any;

 

(C)        to the Class A-1 Commitment Fees Account, the Class A-1
Commitment Fees Amount; and

 

(D)       to the Hedge Payment Account, the accrued and unpaid Series Hedge
Payment Amount, if any, payable to each Hedge Counterparty, if any, which will
be paid to each Hedge Counterparty, if any, pro rata
according to the amount due and payable to each of them; provided, that
the deposit to the Hedge Payment Account pursuant to this subclause (D) will
exclude any termination payment payable to a Hedge Counterparty, if any,
without regard to whether such Hedge Counterparty, if any, was the defaulting
party or an affected party or any other unscheduled amount due and payable to a
Hedge Counterparty, if any, and will exclude any indemnity payment, tax
payments or other similar amounts not constituting regularly scheduled hedge
payments;

 

(v)         fifth, to pay to each Insurer, if any, the Insurer Expense
Amount, if any, for such Payment Date, pro rata based
on the Insurer Expense Amount owing to each Insurer, if any, on such date;

 

(vi)      sixth, to pay to each Insurer, if any, the Insurer
Reimbursement Amount, if any, for such Payment Date, pro rata
based on the Insurer Reimbursement Amount owing to each Insurer, if any, on
such date;

 

(vii)   seventh, to pay to the Class A-1 Administrative Agent
(or other Person acting in a similar capacity in respect of the Class A-1
Notes) pursuant to each Class A-1 Note Purchase Agreement (or other
similar agreement), an amount equal to any accrued and unpaid Class A-1
Note Administrative Expenses due under each Class A-1 Note Purchase
Agreement (or other similar agreement) in an aggregate amount up to the Capped Class A-1
Note Administrative Expense Amount for such Payment Date, pro rata
based on all such amounts due under each Class A-1 Note Purchase Agreement
for such Payment Date;

 

(viii)  eighth, to deposit to the Senior Notes
Interest Reserve Account, an amount equal to the Senior Notes Interest Reserve
Deficit Amount on such Payment Date with respect to the Senior Notes of each Series of
Notes Outstanding in accordance with the related Series Supplement; provided,
that no

 

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amount with respect
to any Senior Notes of any Series of Notes Outstanding will be deposited
to the Senior Notes Interest Reserve Account pursuant to this clause eighth
on any Payment Date that occurs during the Monthly Collection Period immediately
preceding the Series Legal Final Maturity Date for such Senior Notes;

 

(ix)        ninth, to pay to the Servicer the Supplemental Servicing
Fee, if any, together with any previously accrued and unpaid Supplemental
Servicing Fee;

 

(x)           tenth, if no Rapid Amortization Event has occurred (other
than a Rapid Amortization Event that has been waived or cured pursuant to a
Rapid Amortization Cure Right or with respect to which amounts are being
trapped in a trust account pursuant to a prospective Rapid Amortization Cure
Right) but a Partial Amortization Event has occurred and is continuing with
respect to any Series of Notes Outstanding on such Payment Date, to
deposit to the Senior Notes Principal Payment Account the Partial Amortization
Amount applicable to such Series of Notes;

 

(xi)        eleventh, if no Rapid Amortization Event has occurred (other
than a Rapid Amortization Event that has been waived or cured pursuant to a
Rapid Amortization Cure Right or with respect to which amounts are being
trapped in a trust account pursuant to a prospective Rapid Amortization Cure
Right) but a Cash Trap Reserve Event has occurred and is continuing with
respect to the Senior Notes of any Series of Notes Outstanding on such
Payment Date, to deposit to the Cash Trap Reserve Account the Cash Trap Reserve
Amount applicable to such Series of Notes;

 

(xii)     twelfth, if a Rapid Amortization Event has occurred (other
than a Rapid Amortization Event that has been waived or cured pursuant to a
Rapid Amortization Cure Right), to deposit to the Senior Notes Principal
Payment Account (or, if amounts are being trapped in a separate trust account
pursuant to a prospective Rapid Amortization Cure Right, to such separate trust
account) an amount equal to the lesser of (A) the remaining amount on
deposit in the Collection Account with respect to such Payment Date and (B) the
Aggregate Outstanding Principal Amount of all Senior Notes after giving effect
to any deposit to such account pursuant to the preceding clauses;

 

(xiii)  thirteenth, to deposit to the SPE Operating Expense
Account, an amount equal to any accrued and unpaid SPE Operating Expenses
(together with any SPE Operating Expenses that are expected to be payable prior
to the immediately following Weekly Allocation Date) in excess of the Capped
SPE Operating Expense Amount after giving effect to clause third above;

 

(xiv)  fourteenth, to pay to each Class A-1
Administrative Agent (or other Person acting in a similar capacity in respect
of the Class A-1 Notes) pursuant to each Class A-1 Note Purchase
Agreement (or other similar

 

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agreement), an amount
equal to any accrued and unpaid Class A-1 Note Administrative Expenses due
under the related Class A-1 Note Purchase Agreement (or other similar
agreement) for such Payment Date in excess of the Capped Class A-1 Note
Administrative Expense Amount after giving effect to clause seventh
above, pro rata based on all such amounts due
under each Class A-1 Note Purchase Agreement for such Payment Date;

 

(xv)    fifteenth, to pay to the Class A-1 Administrative Agent
(or other Person acting in a similar capacity in respect of the Class A-1
Notes) pursuant to each Class A-1 Note Purchase Agreement (or other
similar agreement), an amount equal to any accrued and unpaid amounts due under
the related Class A-1 Note Purchase Agreement (or other similar
agreement), pro rata based on all such amounts due
under each Class A-1 Note Purchase Agreement for such Payment Date;

 

(xvi) sixteenth, to deposit to
the Subordinated Notes Interest Payment Account, the Subordinated Notes Monthly
Interest Amount with respect to each Class of Subordinated Notes
Outstanding until the amount on deposit in such account equals the Subordinated
Notes Monthly Interest Amount with respect to each Class of Subordinated
Notes Outstanding for the related Payment Date;

 

(xvii) seventeenth, if no Rapid
Amortization Event has occurred (other than a Rapid Amortization Event that has
been waived or cured pursuant to a Rapid Amortization Cure Right or with
respect to which amounts are being trapped in a trust account pursuant to a
prospective Rapid Amortization Cure Right) but a Partial Amortization Event has
occurred with respect to any Series of Notes Outstanding on such Payment
Date, to deposit to the Subordinated Notes Principal Payment Account any
Partial Amortization Amount applicable to such Series of Notes (after
giving effect to any deposit of the Partial Amortization Amount applicable to
such Series of Notes pursuant to clause tenth above);

 

(xviii) eighteenth, if a Rapid
Amortization Event has occurred (other than a Rapid Amortization Event that has
been waived or cured pursuant to a Rapid Amortization Cure Right), to deposit
to the Subordinated Notes Principal Payment Account (or, if amounts are being
trapped in a separate trust account pursuant to a prospective Rapid
Amortization Cure Right, to such separate trust account) an amount equal to the
lesser of (A) the remaining amount on deposit in the Collection Account
with respect to such Payment Date and (B) the Aggregate Outstanding
Principal Amount of all Subordinated Notes after giving effect to any deposit
to such account pursuant to the preceding clauses;

 

(xix) nineteenth, to deposit, pro rata according to the amount required to be deposited to
the applicable account, to (A) the Class A-1 Excess Interest Account,
the Class A-1 Excess Interest Amount, if any, (B) Senior Notes Excess
Adjusted Interest Account, the Senior Notes Monthly Excess Adjusted Interest
Amount and (C) to the Senior Notes Monthly Contingent

 

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Additional Interest
Account, the Senior Notes Monthly Contingent Additional Interest Amount, in
each case for such Payment Date;

 

(xx)      twentieth, to deposit to the Subordinated Notes Monthly
Contingent Additional Interest Account, the Subordinated Notes Monthly
Contingent Additional Interest Amount for such Payment Date;

 

(xxi) twenty-first, to deposit to
the Hedge Payment Account, (A) any accrued and unpaid Series Hedge
Payment Amount that constitutes a termination payment payable to a Hedge
Counterparty, if any, and (B) any other amount payable to a Hedge
Counterparty, if any, pursuant to the related Hedge Agreement, in each case pro rata to each Hedge Counterparty, if any, according to
the amount due and payable to each of them;

 

(xxii) twenty-second, to deposit
to the Senior Notes Principal Payment Account and, on and after the Payment
Date on which the Senior Notes will be paid in full, the Subordinated Notes
Principal Payment Account, the Monthly Aggregate Extension Prepayment Amount,
if any, for such Payment Date;

 

(xxiii) twenty-third, to deposit
to the applicable Interest Payment Account the accrued and unpaid Make-Whole
Amount, if any, on each Class of Notes Outstanding in the following order
of priority:  first, on each Class of
Senior Notes pro rata according to the amount
then due and payable and second, on each Class of Subordinated
Notes sequentially according to alphanumerical designation (which with respect
to each Class of Subordinated Notes bearing the same alphanumerical
designation will be paid pro rata
according to the amount then due and payable);

 

(xxiv) twenty-fourth, to deposit
to the Subordinated Notes Principal Payment Account for each Series of
Notes an amount equal to the lesser of (i) the applicable Monthly
Subordinated Notes Amortization Amount for such Series of Notes, if any
(together with any accrued but unpaid Monthly Subordinated Notes Amortization
Amount), and (ii) the amount, if any, by which the remaining amount of
funds on deposit in the Collection Account after giving effect to clause
twenty-third above, exceeds the Residual Threshold Amount for such Series of
Notes (such lesser amount, the “Subordinated Notes Principal Amortization
Amount”); and

 

(xxv) twenty-fifth, to pay the remaining
amount, if any (the “Residual Amount”), to or at the direction of the
Master Issuer.

 

Section 10.13                          Notices to Insurers and
the Rating Agencies. The Indenture Trustee shall, promptly after receipt,
deliver copies of the following documents to each Insurer, if any, any Class A-1
Administrative Agent, and the Rating Agencies or, as the case may be, give
prior notice to (and, if unable to give prior notice, to the extent the
Indenture Trustee has Actual Knowledge thereof, notify promptly, and in any
event within ten (10) Business Days after the

 

136

 

occurrence
thereof) each Insurer, if any, any Class A-1 Administrative Agent, and the
Rating Agencies of the following events:

 

(a)                                  the occurrence of a Default or an
Event of Default under this Base Indenture;

 

(b)                                 any resignation or removal of the
Indenture Trustee or appointment of a successor Indenture Trustee;

 

(c)                                  any change in the Servicer; and

 

(d)                                 any redemption of Notes.

 

ARTICLE XI

 

APPLICATION OF FUNDS

 

Section 11.1                                Application of Funds.

 

(a)                                  Senior Notes Interest Payment
Account. On
each Accounting Date, after giving effect to the allocations set forth in the
Priority of Payments, the Master Issuer shall instruct the Indenture Trustee in
writing to withdraw on the following Payment Date:  (i) the funds allocated to the Senior
Notes Interest Payment Account on such Payment Date with respect to the
immediately preceding Monthly Collection Period to be paid to the Senior Notes
from the Collection Account, up to the accrued and unpaid Senior Notes Monthly
Interest Amount, in the order of priority set forth in Section 11.5,
and deposit such funds into the applicable Series Distribution Accounts,
and (ii) if the amount of funds allocated to the Senior Notes Interest
Payment Account referred to in the immediately preceding clause (i) is
less than the accrued and unpaid Senior Notes Monthly Interest Amount for the
Interest Accrual Period with respect to each Class of Senior Notes ending
most recently prior to such Payment Date, as applicable, an amount equal to the
lesser of (A) such insufficiency and (B) after giving effect to the
ratable manner in which funds are allocated in clause fourth of the
Priority of Payments, such ratable portion of the Senior Notes Available
Reserve Account Amount which is allocable to pay off the Senior Notes Monthly
Interest Amount for such Interest Accrual Period, from first, the Senior
Notes Interest Reserve Account, and second, the Cash Trap Reserve
Account, to be paid to the Senior Notes, up to the accrued and unpaid Senior
Notes Monthly Interest Amount, in the order of priority set forth in Section 11.5
below, and deposit such funds into the applicable Series Distribution
Accounts.

 

(b)                                 Insurer Premiums Account. On each Accounting Date, after
giving effect to the allocations set forth in the Priority of Payments, the
Master Issuer shall instruct the Indenture Trustee in writing to withdraw on
the following Payment Date:  (i) the
funds allocated to the Insurer Premiums Account on such Payment Date with
respect to the immediately preceding Monthly Collection Period and to pay such
funds pro rata among the Insurers, if any,
based upon the Policy Exposure of any such Insurer as of such Payment Date to
the applicable Insurers, if any, and (ii) if the amount of funds allocated
to the Insurer Premiums Account referred to in the immediately preceding clause
(i) above with respect to the immediately preceding Monthly Collection
Period is less than the accrued and unpaid Accrued Insurer

 

137

 

Premiums Amount for the Interest Accrual
Period ending most recently prior to such Payment Date, an amount equal to the
lesser of (A) such insufficiency and (B) after giving effect to the
ratable manner in which funds are allocated in clause fourth of the
Priority of Payments, such ratable portion of the Senior Notes Available
Reserve Account Amount which is allocable to pay off the Accrued Insurer
Premiums Amount for such Interest Accrual Period from, first, the Senior
Notes Interest Reserve Account, and second, the Cash Trap Reserve
Account, to pay such funds to the Insurers, if any, as applicable.

 

(c)                                  Class A-1 Monthly Commitment
Fees Account.
On each Accounting Date, after giving effect to the allocations set forth in
the Priority of Payments, the Master Issuer shall instruct the Indenture
Trustee in writing to withdraw on the following Payment Date:  (i) the funds allocated to the Class A-1
Commitment Fees Account on such Payment Date with respect to the immediately
preceding Monthly Collection Period to be paid to the Class A-1 Notes from
the Collection Account, up to the Class A-1 Monthly Commitment Fees Amount
accrued and unpaid with respect to the Class A-1 Notes, pro rata among each Class of Class A-1 Notes based
upon the Class A-1 Monthly Commitment Fees Amount payable with respect to
each such Class, and deposit such funds into the applicable Series Distribution
Accounts and (ii) if the amount of funds allocated to the Class A-1
Commitment Fees Account referred to in the immediately preceding clause (i) above
with respect to the immediately preceding Monthly Collection Period is less
than the accrued and unpaid Class A-1 Monthly Commitment Fees Amount for
the Interest Accrual Period ending most recently prior to such Payment Date, an
amount equal to the lesser of (A) such insufficiency and (B) after
giving effect to the ratable manner in which funds are allocated in clause
fourth of the Priority of Payments, such ratable portion of the Senior
Notes Available Reserve Account Amount which is allocable to pay off the Class A-1
Monthly Commitment Fees Amount for such Interest Accrual Period from, first,
the Senior Notes Interest Reserve Account, and second, the Cash Trap
Reserve Account, to be paid to the Class A-1 Notes up to the Class A-1
Monthly Commitment Fees Amount, pro rata among
each Class of Class A-1  Notes
based upon the Class A-1 Monthly Commitment Fees Amount payable with
respect to each such Class, and deposit such funds into the applicable Series Distribution
Accounts.

 

(d)                                 Hedge Payment Account. On each Accounting Date, after
giving effect to the allocations set forth in the Priority of Payments, the
Master Issuer shall instruct the Indenture Trustee in writing to withdraw on
the following Payment Date the funds allocated to the Hedge Payment Account on
such Payment Date with respect to the immediately preceding Monthly Collection
Period and to pay such funds pro rata among
the Hedge Counterparties according to the amount due and payable to each such
Hedge Counterparties as of such Payment Date.

 

(e)                                  Senior Notes Principal Payment
Account. On
each Accounting Date, after giving effect to the allocations set forth in the
Priority of Payments, the Master Issuer shall instruct the Indenture Trustee in
writing to withdraw on the following Payment Date:  (i) the funds allocated to the Senior
Notes Principal Payment Account on such Payment Date with respect to the
immediately preceding Monthly Collection Period to be paid, in the following order,
(A) to each applicable Class of Senior Notes from the Collection
Account up to the aggregate amount of accrued and unpaid Indemnification
Amounts, Asset Disposition Prepayment Amounts, and Insurance Proceeds Amounts
(to the extent required to pay down

 

138

 

principal on Notes), owed to each such Class of
Senior Notes in the order of priority set forth in Section 11.5, (B) to
each applicable Class of Senior Notes from the Collection Account up to
the aggregate amount of  accrued and
unpaid Partial Amortization Amount, owed to each such Class of Senior
Notes in the order of priority set forth in Section 11.5, (C) to
each applicable Class of Senior Notes from the Collection Account up to
the amounts distributed to such administrative account pursuant to clause
twelfth of the Priority of Payments owed to each such Class of Senior
Notes, in the order of priority set forth in Section 11.5, and (D) to
each applicable Class of Senior Notes from the Collection Account up to
the aggregate amount of the accrued and unpaid Monthly Aggregate Extension
Prepayment Amounts, owed to each such Class of Senior Notes in the order
of priority set forth in Section 11.5, and deposit such funds into
the applicable Series Distribution Accounts, and (ii) if a Rapid
Amortization Event has occurred and is continuing or will occur on such Payment
Date, the amounts on deposit in the Cash Trap Reserve Account (after giving
effect to any payments made from the Cash Trap Reserve Account pursuant to Sections
11.1(a)(ii), 11.1(b)(ii) or 11.1(c)(ii)), if any, to be
paid to each applicable Class of Senior Notes up to the Aggregate
Outstanding Principal Amount of all Senior Notes after giving effect to the
application of the amounts on deposit in the Senior Notes Principal Payment
Account referred to in the immediately preceding clause (i) above,
in the order of priority set forth in Section 11.5, and deposit
such funds into the applicable Series Distribution Accounts; provided,
that any payment of principal of any Class A-1 L/C Notes of any Series of
Notes pursuant to this paragraph may require the deposit of funds (the “Cash
Collateral”) with the applicable L/C Provider that has issued the related
letters of credit underlying such Class A-1 L/C Notes to serve as
collateral and act as security to guarantee any obligations of the Co-Issuers
relating to such letters of credit (the “Collateralized Letters of Credit”);
provided, further, that upon the expiration of the Collateralized
Letters of Credit (x) so long as any Series of Notes remain
Outstanding, the Cash Collateral shall be deposited into the Collection Account
to be applied in accordance with the Priority of Payments, or (y) if no Series of
Notes remain Outstanding, the Cash Collateral shall be returned to the
applicable Co-Issuers.

 

(f)                                    Subordinated Notes Interest Payment
Account. On
each Accounting Date, after giving effect to the allocations set forth in the
Priority of Payments, the Master Issuer shall instruct the Indenture Trustee in
writing to withdraw on the following Payment Date:  (i) the funds allocated to the
Subordinated Notes Interest Payment Account on such Payment Date with respect
to the immediately preceding Monthly Collection Period to be paid to each Class of
Subordinated Notes from the Collection Account, up to the accrued and unpaid
Subordinated Notes Monthly Interest Amount with respect to each such Class of
Subordinated Notes in the order of priority set forth in Section 10.1(b),
and deposit such funds into the applicable Series Distribution Accounts
and (ii) if the amount of funds allocated to the Subordinated Notes
Interest Payment Account on each Payment Date with respect to the immediately
preceding Monthly Collection Period referred to in the immediately preceding clause
(i) is less than the accrued and unpaid Subordinated Notes Monthly
Interest Amount for the Interest Accrual Period ending most recently prior to
such Payment Date and no Senior Notes are Outstanding and there are no amounts
due but unpaid to any Insurer or Hedge Counterparty, if any, the amounts on
deposit in the Cash Trap Reserve Account (after giving effect to any payments
made from the Cash Trap Reserve Account pursuant to Sections 11.1(a)(ii),
11.1(b)(ii), 11.1(c)(ii) or 11.1(e)(ii)), if any, to
be paid to each applicable Class of Subordinated Notes, up to the accrued
and unpaid Subordinated Notes Monthly Interest Amount, after giving effect to
the application of the amounts on deposit in the Subordinated Notes Interest
Payment Account referred to in the

 

139

 

immediately preceding clause (i), in
the order of priority set forth in Section 11.5, and deposit such
funds into the applicable Series Distribution Accounts.

 

(g)                                 Subordinated Notes Principal Payment
Account. On
each Accounting Date, after giving effect to the allocations set forth in the
Priority of Payments, the Master Issuer shall instruct the Indenture Trustee in
writing to withdraw on the following Payment Date:  (i) the funds allocated to the
Subordinated Notes Principal Payment Account on such Payment Date with respect
to the immediately preceding Monthly Collection Period to be paid, in the
following order, (A) to each applicable Class of Subordinated Notes
from the Collection Account up to the aggregate amount of accrued and unpaid
Indemnification Amounts, Asset Disposition Prepayment Amounts, and Insurance
Proceeds Amounts (to the extent required to pay down principal on Notes), owed
to each such Class of Subordinated Notes in the order of priority set
forth in Section 11.5, (B) to each applicable Class of
Subordinated Notes from the Collection Account up to the aggregate amount
of  accrued and unpaid Partial
Amortization Amount, owed to each such Class of Subordinated Notes in the
order of priority set forth in Section 11.5, (C) to each
applicable Class of Subordinated Notes from the Collection Account up to
the amounts distributed to such administrative account pursuant to clause
(xvii) of the Priority of Payments owed to each such Class of
Subordinated Notes, in the order of priority set forth in Section 11.5,
(D) to each applicable Class of Subordinated Notes from the
Collection Account up to the aggregate amount of the accrued and unpaid Monthly
Aggregate Extension Prepayment Amounts, owed to each such Class of
Subordinated Notes in the order of priority set forth in Section 11.5,
and (E) to each applicable Class of Subordinated Notes from the
Collection Account up to the aggregate amount of the accrued and unpaid
Subordinated Notes Principal Amortization Amounts owed to each such Class of
Subordinated Notes, in the order of priority set forth in Section 11.5,
and deposit such funds into the applicable Series Distribution Accounts,
and (ii) if a Rapid Amortization Event has occurred and is continuing or
will occur on such Payment Date, the amounts on deposit in the Cash Trap
Reserve Account (after giving effect to any payments made from the Cash Trap
Reserve Account pursuant to Sections 11.1(a)(ii), 11.1(b)(ii), 11.1(c)(ii),
11.1(e)(ii) or 11.1(f)(ii)), if any, to be paid to each
applicable Class of Subordinated Notes up to the Aggregate Outstanding
Principal Amount of all Subordinated Notes after giving effect to the
application of the amounts on deposit in the Subordinated Notes Principal Payment
Account referred to in the immediately preceding clause (i) above,
in the order of priority set forth in Section 11.5, and deposit
such funds into the applicable Series Distribution Accounts.

 

(h)                                 Class A-1 Excess Interest
Account. One
each Accounting Date, after giving effect to the allocations set forth in the
Priority of Payments, the Master Issuer shall instruct the Indenture Trustee in
writing to withdraw on the following Payment date the funds allocated to the Class A-1
Excess Interest Account on such Payment Date with respect to the immediately
preceding Monthly Collection Period, to be paid to the applicable Class A-1
Notes from the Collection Account, up to the accrued and unpaid Class A-1
Excess Interest Amounts distributed to such administrative account owe to each
such Class A-1 Notes in the order of priority set forth in Section 11.5,
and deposit such funds into the applicable Series Distribution Accounts.

 

(i)                                     Senior Notes Excess Adjusted
Interest Account.
On each Accounting Date, after giving effect to the allocations set forth in
the Priority of Payments, the

 

140

 

Master Issuer shall instruct the Indenture
Trustee in writing to withdraw on the following Payment Date the funds
allocated to the Senior Notes Excess Adjusted Interest Account on such Payment
Date with respect to the immediately preceding Monthly Collection Period, to be
paid to each applicable Class of Senior Notes from the Collection Account,
up to the accrued and unpaid Senior Notes Excess Adjusted Interest Amount
distributed to such administrative account owed to each such Class of
Senior Notes in the order of priority set forth in Section 11.5,
and deposit such funds into the applicable Series Distribution Accounts.

 

(j)                                     Senior Notes Monthly Contingent
Additional Interest Account. On each Accounting Date, after giving effect to the
allocations set forth in the Priority of Payments, the Master Issuer shall
instruct the Indenture Trustee in writing to withdraw on the following Payment
Date the funds allocated to the Senior Notes Monthly Contingent Additional
Interest Account on such Payment Date with respect to the immediately preceding
Monthly Collection Period, to be paid to each applicable Class of Senior
Notes from the Collection Account, up to the amount of accrued and unpaid
Senior Notes Monthly Contingent Additional Interest distributed to such
administrative account owed to each such Class of Senior Notes in the
order of priority set forth in Section 11.5, and deposit such funds
into the applicable Series Distribution Accounts.

 

(k)                                  Subordinated Notes Monthly
Contingent Additional Interest Account. On each Accounting Date, after giving effect to the
allocations set forth in the Priority of Payments, the Master Issuer shall
instruct the Indenture Trustee in writing to withdraw on the following Payment
Date the funds allocated to the Subordinated Notes Monthly Contingent
Additional Interest Account on such Payment Date with respect to the
immediately preceding Monthly Collection Period, to be paid to each applicable Class of
Subordinated Notes from the Collection Account up to the amount of accrued and
unpaid Subordinated Notes Monthly Contingent Additional Interest distributed to
such administrative account owed to each such Class of Subordinated Notes
in the order of priority set forth in Section 11.5, and deposit
such funds into the applicable Series Distribution Accounts.

 

(l)                                     Senior Notes Interest Reserve
Account.

 

(i)             On the Accounting Date preceding the first Payment Date
that coincides with or follows any Senior Notes Interest Reserve Step-Down
Date, the Master Issuer shall instruct the Indenture Trustee in writing to
withdraw on such Payment Date funds then on deposit in the Senior Notes
Interest Reserve Account equal to the Senior Notes Interest Reserve Step-Down
Release Amount and deposit such funds into the Collection Account.

 

(ii)          If the Master Issuer determines, with respect to any Series of
Senior Notes, that the amount to be deposited in any Series Distribution Account
in accordance with the terms of this Section 11.1 on any Series Legal
Final Maturity Date related to such Series of Senior Notes is less than
the Aggregate Outstanding Principal Amount of such Series of Senior Notes,
on the Accounting Date immediately preceding such Series Legal Final
Maturity Date, the Master Issuer shall instruct the Indenture Trustee thereof
in writing, and the Indenture Trustee shall, in accordance with such
instruction on such Series Legal

 

141

 

Final Maturity Date,
withdraw from the Senior Notes Interest Reserve Account and deposit in the
order of priority set forth in Section 11.5 into the applicable Series Distribution
Accounts, an amount equal to the lesser of such insufficiency and the Available
Senior Notes Interest Reserve Account Amount (after giving effect to any
payments made from the Senior Notes Interest Reserve Account pursuant to clause
(ii) of Section 11.1(a), clause (ii) of Section 11.1(b),
and clause (ii) of Section 11.1(c)) on such Series Legal
Final Maturity Date.

 

(m)                               Cash Trap Reserve Account. On the Accounting Date preceding
any Payment Date that is anticipated to be a Cash Trap Reserve Cure Date, the
Master Issuer shall instruct the Indenture Trustee in writing to withdraw on
such Payment Date any amounts then on deposit in the Cash Trap Reserve Account
and deposit such funds into the Collection Account; provided that such Payment Date constitutes a Cash Trap Reserve Cure
Date.

 

(n)                                 Lease Payment Account. Subject to and in accordance with Section 10.2(f),
the Servicer may withdraw amounts on deposit in the Lease Payment Account
on any Business Day to pay the Lease Payments payable by the Restaurant Holders
and, with respect to the Post-Closing U.S. Restaurants, the Predecessor
Restaurant Holders as the lessees under the Sale/Leaseback Leases, if any,
entered into with third parties in connection with the Company-Owned Real
Property sold to the third parties in sale/leaseback transactions;

 

(o)                                 Gift Card Reserve Account. Subject to and in accordance with Section 10.2(b),
the Servicer may withdraw amounts on deposit in the Gift Card Reserve
Account (i) on a monthly basis on the fifth calendar day of each month or,
if such day is not a Business Day, the immediately following Business Day, for
payment to or at the direction of ACMC, Inc. the amount payable to ACMC, Inc.
in connection with the redemption of ACMC Gift Cards sold on behalf of ACMC, Inc.
at Company-Owned U.S. Restaurants or Post-Closing U.S. Restaurants, as applicable,
and redeemed at Franchised U.S. Restaurants and (ii) on a weekly basis for
deposit to the Concentration Account 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;

 

(p)                                 Third Party Licensing Fee Account. Subject to and in accordance with Section 10.2(c),
the Servicer may withdraw amounts on deposit in the Third Party Licensing
Fee Account, on any Business Day to pay the accrued and unpaid licensing fees
or royalty fees or other similar amounts payable to third parties in connection
with the sale or use of their products or services at Company-Owned U.S.
Restaurants, Post-Closing U.S. Restaurants and Franchised U.S. Restaurants,
which as of the Closing Date will include the Weight Watchers Fees payable on a
quarterly basis to Weight Watchers International, Inc. pursuant to the Weight
Watchers Agreement;

 

(q)                                 Advertising Fees Account. Subject to and in accordance with Section 10.2(a),
the Servicer may withdraw amounts on deposit in the Advertising Fees
Account, on any Business Day to pay fees and expenses relating to the National
Advertising Fund , and subject to and in accordance with Sections 10.2(a) and
10.2(c), may, in certain instances, if the amount on deposit in the
Third Party Licensing Fee Account is not sufficient to pay certain third

 

142

 

party licensing fees, withdraw amounts on
deposit in the Advertising Fees Account to pay the amount of such deficiency;

 

(r)                                    SPE Operating Expense Account. Subject to and in accordance with Section 10.2(e),
the Servicer may withdraw amounts on deposit in the SPE Operating Expense
Account, on any Business Day to pay any amount described in clause (i) of
the Weekly Collections Allocation Priority and any other SPE Operating Expenses
that are due and payable on such date;

 

(s)                                  Capital Expenditure Reserve Account. Subject to and in accordance with Section 10.2(h),
the Servicer may withdraw amounts on deposit in the Capital Expenditure
Reserve Account, on any Business Day to pay any taxes, transaction costs and
other direct costs associated with Asset Dispositions, to reinvest in the New
U.S. Restaurant Business and to deposit the Asset Disposition Prepayment Amount
and any Liquor License Related Indemnification Amount into the Collection
Account;

 

(t)                                    Sales Tax Account. Subject to and in accordance with Section 10.2(g),  the Servicer may withdraw amounts on
deposit in the Sales Tax Account, on any Business Day to pay sales taxes
payable to the applicable state and local taxing authorities that are owed with
respect to Company-Owned U.S. Restaurants and Post-Closing U.S. Restaurants
(unless and until such Restaurants become Reacquired U.S. Restaurants); and

 

(u)                                 Insurance Proceeds Account. Subject to and in accordance with Section 10.2(d),  the Servicer may withdraw amounts on
deposit in the Insurance Proceeds Account, on any Business Day to pay the
Franchisee Insurance Restoration Payments on behalf of Franchisees or to apply
the amounts on deposit therein to reinvest in the New U.S. Restaurant Business
to the extent that such amounts are not required to be applied as an Insurance
Proceeds Amount pursuant to Section 10.12.

 

Section 11.2                                Determination of
Monthly Interest. Monthly payments of interest and fees on each Series of
Notes shall be determined, allocated and distributed in accordance with the procedures
set forth in the applicable Series Supplement.

 

Section 11.3                                Determination of
Monthly Principal. Monthly payments of principal, if any, of each Series of
Notes shall be determined, allocated and distributed in accordance with the
procedures set forth in the applicable Series Supplement.

 

Section 11.4                                Prepayment of
Principal. Mandatory prepayments of principal, if any, of each Series of
Notes shall be determined, allocated and distributed in accordance with the
procedures set forth in the applicable Series Supplement, if not otherwise
described herein.

 

Section 11.5                                Distributions in
General.

 

(a)                                  Unless otherwise specified in the
applicable Series Supplement or in this Base Indenture, on each Payment
Date, the Paying Agent shall pay to the Noteholders of each Series of
record on the preceding Record Date the amounts payable thereto (i) by
wire transfer in immediately available funds released by the Paying Agent from
the applicable Series Distribution Account no later than 12:30 p.m.
(New York City time) if a Noteholder has

 

143

 

provided to the Paying Agent and the Trustee
wiring instructions at least five (5) Business Days prior to the
applicable Payment Date or (ii) by check mailed first-class postage prepaid
to such Noteholder at the address for such Noteholder appearing in the Note
Register if such Noteholder has not provided wire instructions pursuant to clause
(i) above; provided, however, that the final principal payment due
on a Note shall only be paid upon due presentment and surrender of such Note
for cancellation in accordance with the provisions of the Note at the
applicable Corporate Trust Office.

 

(b)                                 Unless otherwise specified in the
applicable Series Supplement or in this Base Indenture (including Section 10.12),
and except to the limited extent described below,

 

(i)             on each Payment Date, the Co-Issuers will make
payments of interest, make-whole amount and any other amount other than
payments of principal on the Notes in the following order of priority:

 

(A)      first, on each Class of Senior Notes, pro rata according to the amount of interest payable on each
Class of Senior Notes until paid in full, and

 

(B)        second, on each Class of Subordinated Notes
sequentially in alphanumerical order until paid in full (for which purpose each
Class of Subordinated Notes bearing the same alphanumerical designation
will be paid pro rata according to the amount
of interest, make-whole or such other amount payable on each of such Classes of
Subordinated Notes);

 

provided,
that the Additional Interest Amount, if any, payable on each Class of
Notes Outstanding will be paid on a subordinated basis in accordance with the
Priority of Payments on each Payment Date (which with respect to the Additional
Interest Amount payable at each priority level in the Priority of Payments will
be allocated to each of the applicable Classes of Notes Outstanding in the
order of priority described in clauses (A) and (B) of
this subclause (b)(i).

 

(ii)          On each Payment Date, the Co-Issuers will make
mandatory prepayments of principal, if any, in connection with Series 2007-1
Monthly Aggregate Extension Prepayment Amounts, any Indemnification Amount, any
Asset Disposition Prepayment Amount, any Insurance Proceeds Amount, any
Subordinated Notes Principal Amortization Amounts, a Rapid Amortization Event
or a Partial Amortization Event in the following order of priority:

 

(A)      if no Rapid Amortization Event and no Partial
Amortization Event has occurred,

 

(1)                                              first, on the Class A-2-I Notes of
all Series of Notes Outstanding until paid in full,

 

144

 

(2)       second, on the Class A-2-II
Notes of all Series of Notes Outstanding until paid in full,

 

(3)       third, on the Class A-1 Notes
of all Series of Notes Outstanding until paid in full; provided,
that any payment of principal of any Class A-1 L/C Notes of any Series of
Notes pursuant to this clause third may require the deposit of the Cash
Collateral with the applicable L/C Provider in connection with the
Collateralized Letters of Credit, all in accordance with the terms set forth in
the final two provisos of Section 11.1(e) above, and 

 

(4)       fourth, on each Class of
Subordinated Notes of each Series of Notes Outstanding sequentially in
alphanumerical order;

 

(B)   if either a Rapid Amortization Event that is
potentially subject to the one-time Series 2007-1 Rapid Amortization Cure
Right or a Partial Amortization Event has occurred,

 

(1)       first, on the Class A-2 Notes
of all Series of Notes Outstanding until paid in full,

 

(2)       second, on the Class A-1
Notes of all Series of Notes Outstanding until paid in full; provided,
that any payment of principal of any Class A-1 L/C Notes of any Series of
Notes pursuant to this clause second may require the deposit of the Cash
Collateral with the applicable L/C Provider in connection with the
Collateralized Letters of Credit, all in accordance with the terms set forth in
the final two provisos of Section 11.1(e) above, and

 

(3)       third, on each Class of
Subordinated Notes of each Series of Notes Outstanding sequentially in
alphanumerical order;

 

provided, that principal to be paid pursuant
to a series specific Partial Amortization Event will be allocable only to the
relevant Series;

 

(C)   if a Rapid Amortization Event that is not
potentially subject to the one-time Series 2007-1 Rapid Amortization Cure
Right has occurred,

 

(1)       first, on the Class A-1 Notes
of all Series of Notes Outstanding until paid in full; provided,
that any payment of principal of any Class A-1 L/C Notes of any Series of
Notes pursuant to this clause first may require the deposit of the Cash
Collateral with the applicable L/C Provider in connection with the
Collateralized Letters of Credit, all in accordance with the terms set forth in
the final two provisos of Section 11.1(e) above,

 

(2)       second, on the Class A-2
Notes of all Series of Notes Outstanding until paid in full, and

 

145

 

(3)       third, on each Class of
Subordinated Notes of each Series of Notes Outstanding sequentially in
alphanumerical order;

 

 (D) if
the Aggregate Controlling Party has directed the Indenture Trustee to liquidate
the Indenture Collateral following the occurrence of an Event of Default and an
acceleration of the Notes,

 

(1)       first, to all Classes of Senior
Notes of all Series of Notes Outstanding pro rata
based on the Aggregate Outstanding Principal Amount until paid in full; provided,
that any payment of principal of any Class A-1 L/C Notes of any Series of
Notes pursuant to this clause first may require the deposit of the Cash
Collateral with the applicable L/C Provider in connection with the
Collateralized Letters of Credit, all in accordance with the terms set forth in
the final two provisos of Section 11.1(e) above, and

 

(2)       second, to each Class of
Subordinated Notes of all Series of Notes Outstanding sequentially in
alphanumerical order.

 

(iii)      Payments of principal on each Class of
Notes of all Series of Notes Outstanding at each priority level described
above will be paid pro rata
according to the Aggregate Outstanding Principal Amount of each Class of
Notes Outstanding.

 

(iv)      Notwithstanding the foregoing, the
Co-Issuers may apply an equity contribution made by Applebee’s International to
Applebee’s Holdings for contribution to the Master Issuer to optionally prepay
in whole or in part one or more Classes of Notes without regard to the
alphanumerical designation of such Class or Classes of Notes in an
Optional Prepayment on any Optional Prepayment Date; provided, that any
Optional Prepayment of Series 2007-1 Subordinated Notes prior to the
payment in full of Senior Notes will require satisfaction of such conditions
described in Section 4.7(e) of the Series 2007-1
Supplement.

 

(v)       If a Class of Senior Notes has
multiple sub-classes, unless otherwise specified in the related Series Supplement,
the sub-classes will rank pari passu with
each other for purposes of all payments thereon but may earn different stated
rates of interest, all or just individual subclasses may or may not   be insured with respect to the amounts of
principal and interest owed there by different Insurers, if any, and even if
insured, such sub-classes may be insured by different Insurers that will be
severally and not jointly liable for their obligations to the Holders of the
related sub-Class of Senior Notes. 
Payments of interest on each sub-class of a Class of Senior Notes
will be paid pro rata according to the
aggregate amount of interest due (or such other amount payable) on each
sub-class on each Payment Date.  For the
avoidance of doubt, the Series 2007-1 Class A-2-II-A Notes (issued in
accordance with the applicable Insurance Policy) and the Series 2007-1 Class A-2-II-X
Notes (which are not insured by any Insurer) 

 

146

 

will rank pari passu with each other for purposes of all payments
thereon but each sub-class may earn a separate rate of interest. 

 

(vi)      All Notes issued under the Indenture that
are part of a Class with an alphanumerical designation that contains the
letter “A” together with any subclasses thereof will be classified as “Senior
Notes” for all purposes under the Indenture. All Notes issued under the
Indenture that are part of a Class with an alphanumerical designation that
does not contain the letter “A” will be classified as “Subordinated Notes”
for all purposes under the Indenture.

 

(c)     Unless otherwise specified in the
applicable Series Supplement, the Indenture Trustee shall distribute all
amounts owed to the Noteholders of any Class of Notes pursuant to the
instructions of the Co-Issuers whether set forth in a Servicer’s Certificate, a
Company Order or otherwise.

 

ARTICLE XII

 

REPORTS

 

Section 12.1   Reports and Instructions to Indenture
Trustee.

 

(a)        Weekly Servicer’s Report.  By 12:00 p.m. (noon) (New York City
time) on the Business Day immediately preceding 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), the Servicer
shall furnish or cause to be furnished, to the Indenture Trustee, the Rating
Agencies, the Back-Up Manager and each Insurer, if any, a weekly servicer
report substantially in the form of Exhibit J hereto (each, a “Weekly
Servicer’s Report”).

 

(b)        Monthly Servicer’s Certificate.  On or before 10:00 a.m. (New York City
time) on each Accounting Date, the Servicer shall furnish or cause to be
furnished, to the Indenture Trustee, the Rating Agencies, the Back-Up Manager,
each Paying Agent and each Insurer, if any, a monthly servicer’s certificate
substantially in the form of Exhibit K hereto (each, a “Monthly
Servicer’s Certificate”), with a monthly servicer report substantially in
the form of Exhibit L hereto, including a certification to the
effect that, except as provided in any other  notice given hereunder, no Servicer
Termination Event, Rapid Amortization Event, Potential Rapid Amortization
Event, Default or Event of Default has occurred or is continuing and no
trademark registrations are within three (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 Servicer’s Report”). 

 

(c)        Monthly Noteholders’ Report.  On or before 10:00 a.m. (New York City
time) on the second Business Day prior to each Payment Date, the Co-Issuers (or
the Servicer on the Co-Issuers’ behalf) shall furnish, or cause to be
furnished, to the Indenture Trustee, the Rating Agencies, the Back-Up Manager
and each Insurer, if any, the Monthly Noteholders’ Report with respect to each Series of
Notes substantially in the form of Exhibit M hereto or provided in
the applicable Series Supplement, which with respect to the Series 2007-1
Notes will contain the information set forth in Section 12.4.

 

147

 

(d)        Annual Accountants’ Reports.  As soon as available to the Master Issuer
pursuant to the Servicing Agreement, the Master Issuer shall furnish, or cause
to be furnished, to the Indenture Trustee, the Rating Agencies, the Back-Up
Manager and each Insurer, if any, the reports of the Independent Accountants
required to be delivered to the Master Issuer by the Servicer thereunder.

 

(e)        Master Issuer and Franchise Holder
Financial Statements.  The Servicer,
on behalf of the Co-Issuers, shall deliver to the Indenture Trustee, the Rating
Agencies, the Back-Up Manager and each Insurer, if any:

 

(i)     as soon as available and in any event
within forty five (45) days after the end of each of the first three quarters
of each fiscal year, an unaudited balance sheet of the Master Issuer and the
Franchise Holder as of the end of each of the first three quarters of each
fiscal year and unaudited statements of income, changes in shareholders’ equity
and cash flows of the Master Issuer and the Franchise Holder for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter; and

 

(ii)    as soon as available and in any event within
one hundred and twenty (120) days after the end of each fiscal year, an audited
balance sheet of the Master Issuer and the Franchise Holder as of the end of
each fiscal year and audited statements of income, changes in shareholders’
equity and cash flows of the Master Issuer and the Franchise Holder for such
fiscal year, setting forth in comparative form the figures for the previous
fiscal year, prepared in accordance with GAAP and accompanied by an opinion
thereon of independent public accountants of recognized national standing
stating such audited financial statements present fairly, in all material
respects, the financial position of the companies being reported on and their
results of operations and have been prepared in accordance with GAAP,

 

provided, that during the first fiscal year
following the Closing Date, the quarterly unaudited financial statements of the
Master Issuer and the Franchise Holder shall be delivered within sixty (60)
days after the end of each of the first three quarters of the fiscal year and
the annual audited financial statements of the Master Issuer and the Franchise
Holder shall be delivered within one hundred and fifty (150) days after the end
of the fiscal year.

 

(f)         Applebee’s International Financial
Statements.  The Servicer, on behalf
of the Co-Issuers, shall deliver to the Indenture Trustee, the Back-Up Manager,
the Rating Agencies and each Insurer, if any:

 

(i)     as soon as available and in any event
within forty five (45) days after the end of each of the first three quarters
of each fiscal year, an unaudited consolidated balance sheet of Applebee’s
International as of the end of each of the first three quarters of each fiscal
year and unaudited consolidated statements of income, changes in shareholders’
equity and cash flows of Applebee’s International for the period commencing at
the end of the previous fiscal year and ending with the end of such quarter;
and

 

148

 

(ii)    as soon as available and in any event within
one hundred and twenty (120) days after the end of each fiscal year, an audited
consolidated balance sheet of Applebee’s International as of the end of each
fiscal year and audited consolidated statements of income, changes in
shareholders’ equity and cash flows of Applebee’s International for such fiscal
year, setting forth in comparative form the figures for the previous fiscal
year, prepared in accordance with GAAP and accompanied by an opinion thereon of
independent public accountants of recognized national standing stating such
audited consolidated financial statements present fairly, in all material
respects, the financial position of the companies being reported on and their
results of operations and have been prepared in accordance with GAAP,

 

provided, that during the first fiscal year
following the Closing Date, the quarterly unaudited consolidated financial
statements of Applebee’s International shall be delivered within sixty (60)
days after the end of each of the first three quarters of the fiscal year and
the annual audited consolidated financial statements of Applebee’s
International shall be delivered within one hundred and fifty (150) days after
the end of the fiscal year.

 

(g)        IHOP Corp. Financial Statements.  The Servicer, on behalf of the Co-Issuers,
shall deliver to the Indenture Trustee, the Rating Agencies, the Back-Up
Manager, and each Insurer, if any:

 

(i)     as soon as available and in any event
within forty five (45) days after the end of each of the first three quarters
of each fiscal year, an  unaudited
consolidated balance sheet of IHOP Corp. as of the end of each of the first
three quarters of each fiscal year and unaudited consolidated statements of
income, changes in shareholders’ equity and cash flows of IHOP Corp. for the
period commencing at the end of the previous fiscal year and ending with the
end of such quarter; and 

 

(ii)    as soon as available and in any event within
one hundred and twenty (120) days after the end of each fiscal year, an audited
consolidated balance sheet of IHOP Corp. as of the end of each fiscal year and
audited consolidated statements of income, changes in shareholders’ equity and
cash flows of IHOP Corp. for such fiscal year, setting forth in comparative
form the figures for the previous fiscal year, prepared in accordance with GAAP
and accompanied by an opinion thereon of independent public accountants of
recognized national standing stating such audited consolidated financial
statements present fairly, in all material respects, the financial position of
the companies being reported on and their results of operations and have been
prepared in accordance with GAAP.

 

(h)       Additional Information.  (i) The Servicer, on behalf of the
Co-Issuers, will furnish, or cause to be furnished, from time to time such
additional information regarding the Indenture Collateral or compliance with
the covenants and other agreements of any Securitization Entity under the
Transaction Documents as the Indenture Trustee or any Series Controlling
Party may reasonably request, subject at all times to compliance with the
Exchange 

 

149

 

Act, the Securities
Act and any other applicable law by IHOP Corp., Applebee’s International, the
Servicer, and any Securitization Entity; and (ii) the Master Issuer or the
Servicer will furnish, or cause to be furnished, to the Indenture Trustee and
each Insurer, if any, notice of the occurrence of any Partial Amortization
Event or Rapid Amortization Event within two (2) days of the occurrence of
such event.

 

(i)         Instructions as to Withdrawals and
Payments.  The Master Issuer or the
Servicer will furnish, or cause to be furnished, to the Indenture Trustee or
the Paying Agent, as applicable, written instructions to make withdrawals and
payments from the Collection Account and any other Trust Account, as
contemplated herein and in any Series Supplement.  The Indenture Trustee and the Paying Agent
shall promptly follow any such written instructions.

 

(j)         Electronic Distribution.  Notwithstanding anything to the contrary
herein, the certificates, statements, reports and other information to be
furnished pursuant to this Section 12.1 may be furnished in
electronic form complying with technological requirements reasonably acceptable
to the recipient thereof.

 

Section 12.2     Annual Noteholders’ Tax Statement.  On or before January 31 of each calendar
year, beginning with calendar year 2009, the Paying Agent shall furnish, to
each Person who at any time during the preceding calendar year was a
Noteholder, a statement prepared by the Master Issuer containing the
information which is required to be contained in the   Monthly Noteholders’ Reports with respect to
each Series of Notes aggregated for such calendar year or the applicable
portion thereof during which such Person was a Noteholder, together with such
other customary information (consistent with the treatment of the Notes as
indebtedness) as the Master Issuer deems necessary or desirable to enable the
Noteholders to prepare their tax returns (each such statement, an “Annual
Noteholders’ Tax Statement”). 

 

Section 12.3    Rule 144A Information.  For so long as any of the Notes are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities
Act, the Co-Issuers agree to provide to any Noteholder or Note Owner and to any
prospective purchaser of Notes designated by such Noteholder or Note Owner upon
the request of such Noteholder or Note Owner or prospective purchaser, any
information required to be provided to such holder or prospective purchaser to
satisfy the conditions set forth in Rule 144A(d)(4) under the
Securities Act.

 

Section 12.4    Reports, Financial Statements and Other
Information to Noteholders.  The
Indenture Trustee will make the Monthly Servicer’s Reports and the Monthly
Noteholders’ Reports available each month to Noteholders, Note Owners, each
Insurer, if any, and the Ratings Agencies via the Indenture Trustee’s internet
website with the use of a password provided by the Indenture Trustee to the
Noteholders, Note Owners, each Insurer, if any, and the Rating Agencies.  The Indenture Trustee’s website will
initially be located at CTSLink.com or such other address as the Indenture
Trustee notifies such parties from time to time.  Assistance in using the website can be
obtained by calling the Indenture Trustee’s customer service desk at (866)
846-4526.  The Indenture Trustee shall
have no obligation to provide such information described in this Section 12.4
until it has received the requisite information from the Co-Issuers or the
Servicer.  The Indenture Trustee will
make no representation or warranties as to the accuracy or completeness of such
documents and will assume no responsibility therefore. In

 

150

 

connection with providing access to the Indenture Trustee’s Internet
website, the Indenture Trustee may require registration and the acceptance of a
disclaimer.  The Indenture Trustee shall
not be liable for the dissemination of information in accordance with this Base
Indenture.  For so long as any Class of
Notes is listed on the Irish Stock Exchange and the rules of such exchange
so require, the Co-Issuers shall notify the Irish Paying Agent (for
notification to the Irish Stock Exchange) if the rating assigned by any Rating
Agency to such Class of Notes is reduced or withdrawn.

 

Section
12.5    Servicer.  Pursuant to the Servicing Agreement, the
Servicer has agreed to provide certain reports, instructions and other services
on behalf of the Co-Issuers.  The
Noteholders by their acceptance of the Notes consent to the provision of such
reports to the Indenture Trustee by the Servicer in lieu of the
Co-Issuers.  Any such reports that are
required to be delivered to the Noteholders hereunder shall be delivered by the
Indenture Trustee.  The Indenture Trustee
shall have no obligation whatsoever to verify, reconfirm or recalculate any information
or material contained in any of the reports, financial statements or other
information delivered to it pursuant to this Article XII or the
Servicing Agreement.  All distributions,
allocations, remittances and payments to be made by the Indenture Trustee or
the Paying Agent hereunder or under any Supplement or Class A-1 Note
Purchase Agreement shall be made based solely upon the most recently delivered
written reports and instructions provided to the Indenture Trustee or Paying
Agent, as the case may be, by the Servicer (subject to Section 6.1(c)).

 

Section 12.6    Standard
of Conduct.  In exercising any of its
or their voting rights, rights to direct and consent or any other rights as a
Holder under this Base Indenture, subject to the terms and conditions of this
Base Indenture, a Holder or Holders shall not have any obligation or duty to
any Person or to consider or take into account the interests of any Person and
shall not be liable to any Person for any action taken by it or them or at its
or their direction or any failure by it or them to act or to direct that an
action be taken, without regard to whether such action or inaction benefits or
adversely affects any Holder, the Co-Issuers, or any other Person, except for
any liability to which such Holder may be subject to the extent the same
results from such Holder taking or directing an action or failing to take or
direct an action, in bad faith or in violation of the express terms of this
Base Indenture.

 

Section 12.7    Right
to List of Holders.  Any Holder shall
have the right, upon five (5) Business Days’ prior notice to the Indenture
Trustee, to obtain a complete list of Holders.

 

ARTICLE XIII

 

HEDGE AGREEMENTS

 

Section 13.1    Hedge
Agreements.  The Co-Issuers shall
enter into a Series Hedge Agreement in connection with the issuance of any
Series of Notes if and to the extent provided in the applicable Series Supplement.  The Co-Issuers shall Grant its rights under
each Series Hedge Agreement to the Indenture Trustee pursuant to the
Granting Clauses hereof.

 

Section 13.2    Terms
of Hedge Agreements Contained in Series Supplement.  The Co-Issuers’ obligation to enter into and
maintain any Series Hedge Agreement with respect to any Series of
Notes, and the principal terms of each such Series Hedge Agreement, shall
be 

 

151

 

solely as provided in the applicable Series Supplement.  None of the Co-Issuers may enter into a Series Hedge
Agreement in connection with any Series of Notes nor may any Hedge
Counterparty be granted any third party beneficiary rights hereunder unless the
Aggregate Controlling Party has consented as to the form and substance of the Series Hedge
Agreement.

 

Section 13.3           Hedge
Counterparties.  Any Hedge
Counterparty shall be required to satisfy the following rating requirements
(the “Hedge Counterparty Required Ratings”) at the time that the related
Series Hedge Agreement is entered into:

 

(i)    Such Hedge Counterparty shall be required to
have a short-term debt rating from Moody’s;

 

(ii)   if such Hedge Counterparty has only a
short-term debt rating by Moody’s, then such Hedge Counterparty will be
required to have a short-term debt rating by Moody’s of “P-1” or, if such Series Hedge
Counterparty has only a long-term debt rating by Moody’s, then such Hedge
Counterparty will be required to have a long-term debt rating by Moody’s of at
least “A1” (and, if such rating is “A1,” such Hedge Counterparty may not be on
credit watch for a possible downgrade of such rating);

 

(iii)  if such Hedge Counterparty has both short-term
and long-term debt ratings by Moody’s, then such Hedge Counterparty will be
required to have both (x) a short-term debt rating by Moody’s of “P-1” and
that is not on credit watch for a possible downgrade and (y) a long-term
debt rating by Moody’s of at least “A2” (and, if such rating is “A2,” such
Hedge Counterparty may not be on credit watch for a possible downgrade of such
rating);

(iv)  such Hedge Counterparty shall be required to
have a short-term debt rating by S&P of at least “A-1” or, if such Hedge
Counterparty has only a long-term debt rating by S&P, then such  Hedge Counterparty will be required to have a
long-term debt rating by S&P of “A+”; and

 

(v)  such Hedge Counterparty shall be required to
have a short-term debt rating by Fitch of “F-1” or, if such Hedge Counterparty
has only a long-term debt rating by Fitch, then such Hedge Counterparty shall
be required to have a long-term debt rating by Fitch of “A.”

 

If at any time after a Series Hedge Agreement is entered into, the
applicable Hedge Counterparty fails to continue to have the Hedge Counterparty
Required Ratings with respect to Moody’s, but a Moody’s Second Trigger Event
has not yet occurred, then such Hedge Counterparty shall be required, at its
sole expense, within ten (10) Business Days following the applicable
downgrade to:

 

(i)    post collateral in a segregated account in
the amount specified in the relevant Series Hedge Agreement to secure the
Hedge Counterparty’s obligations under such Series Hedge Agreement;

 

152

 

(ii)   obtain a guarantor that has a Hedge
Counterparty Required Rating with respect to Moody’s; or

 

(iii)  replace itself under the related Series Hedge
Agreement with a substitute Hedge Counterparty that has the Hedge Counterparty
Required Ratings with respect to Moody’s or cause such substitute Hedge
Counterparty to enter into a substantially equivalent Series Hedge
Agreement with the Co-Issuers.

 

If at any time after a Series Hedge Agreement is entered into, the
applicable Hedge Counterparty has either (A) a short-term debt rating by
Moody’s, and its short-term Moody’s rating is “P-3” or below or is suspended or
withdrawn, or (B) a long-term debt rating by Moody’s and its long-term
Moody’s rating is “A3” or below or is suspended or withdrawn (such event, a “Moody’s
Second Trigger Event”), then such Hedge Counterparty will be required   within ten (10) Business Days of such
Moody’s Second Trigger Event to both (1) obtain a guarantor or replace
itself in the manner described in the preceding clauses (ii) or (iii),
as applicable, and (2) in the interim, within five (5) Business Days
following the applicable downgrade, post collateral in a segregated account in
the amount specified in the relevant Series Hedge Agreement to secure such
Hedge Counterparty’s obligations under such Series Hedge Agreement. 

 

If at any time after a Series Hedge Agreement is entered into, a
Hedge Counterparty has a short-term debt rating by S&P or Fitch below “A-1”
or “F-1” respectively, or, if a Hedge Counterparty has no short-term debt
rating by S&P or Fitch, a long-term debt rating by S&P or Fitch below “A+”
or “A,” respectively, or that has been suspended or withdrawn, then such Hedge
Counterparty shall be required, at its sole expense, within ten (10) Business
Days, to either:

 

(i)    post collateral in a segregated account as
required by the relevant Series Hedge Agreement to secure such Hedge
Counterparty’s obligations under the relevant Series Hedge Agreement, in
an amount and of the type sufficient to cause the Rating Agency Condition with
respect to S&P or Fitch, as applicable, to be satisfied and provide an
Opinion of Counsel as to the validity of the security interest in such posted
collateral; or

 

(ii)    (x) obtain a guarantor that has a Hedge
Counterparty Required Rating with respect to S&P or Fitch, as applicable,
and that will satisfy the Rating Agency Condition with respect to S&P with
respect to its appointment; (y) replace itself under a substantially
equivalent Series Hedge Agreement with a substitute Hedge Counterparty
that has a Hedge Counterparty Required Rating with respect to S&P or Fitch,
as applicable, and the appointment of which will satisfy the Rating Agency
Condition with respect to S&P or Fitch, as applicable; or (z) take
such other actions necessary to satisfy the Rating Agency Condition with
respect to S&P or Fitch, as applicable.

 

If at any time the short-term debt rating of a Hedge Counterparty by
S&P or Fitch is lowered to below “A-2” or “F-2,” as applicable, or the
long-term debt rating of a Hedge 

 

153

 

Counterparty is lowered to below “A-” by
S&P or “BBB+” by Fitch, such Hedge Counterparty shall be required, at its
sole expense, to immediately (but within no later than ten (10) Business
Days) replace itself under the related Series Hedge Agreement with a
substitute Hedge Counterparty that has a Hedge Counterparty Required Ratings
and the appointment of which will satisfy the Rating Agency Condition with
respect to S&P and Fitch or cause such substitute Hedge Counterparty to
enter into a substantially equivalent Series Hedge Agreement with the
Co-Issuers.

 

Any
and all collateral posted by a Series Hedge Counterparty pursuant to the
foregoing provisions of this Section 13.3 shall be held by the
Indenture Trustee for the benefit of   the
Secured Parties, and the Co-Issuer’s rights with respect thereto shall
constitute part of the Indenture Collateral. 

 

ARTICLE XIV

 

RELEASE OF EXCLUDED ASSETS FROM
TRUST ESTATE

 

Section 14.1           Release
of Excluded Assets from the Trust Estate.

 

(a)        Upon:

 

(i)    receipt by the Indenture Trustee of the
applicable Indemnification Amount in accordance with the applicable Transaction
Document and all other amounts (if any) required to be paid at such time
thereunder in connection with all of the assets relating to the applicable
Company-Owned U.S. Restaurant, Post-Closing U.S. Restaurant or Franchised U.S.
Restaurant, as the case may be;

 

(ii)   deposit into the Capital Expenditure Reserve
Account of the proceeds of an Asset Disposition;

 

(iii) receipt by the Indenture Trustee of an IHOP
Certificate Release Request from the Master Issuer; provided that the IHOP Certificate Release Request shall be
effective only:

 

(1)   if
the IHOP Certificate Release Request is made by the Master Issuer (or Servicer
acting on its behalf) on or after the last day of the first full fiscal month
following the three-year anniversary of the Closing Date;

 

(2)   if
as of the Payment Date immediately preceding the effective time of such IHOP
Certificate Release Request, the One-Year DSCR is greater than 3.00x;

 

(3)   if
at the effective time of such IHOP Certificate Release Request, no Rapid
Amortization Event has occurred and is continuing; and

 

154

 

(4)   if
at the effective time of such IHOP Certificate Release Request, no Subordinated
Notes are Outstanding;

 

(iv)       a
Franchise Asset Termination;

 

(v)        receipt
by the Indenture Trustee of the proceeds from an Obsolete Property Disposition;
or

 

(vi)  receipt by the Indenture Trustee of all
amounts obtained from the sale and transfer of the Indenture Collateral
pursuant to the Auction for purposes of implementing the Auction Call
Redemption and the satisfaction of the Auction Consummation Conditions (each of
clauses (i) through (vi), an “Indenture Collateral
Release Event”),

 

each in the ordinary course of business and otherwise in accordance
with the Transaction Documents, the security interest granted to the Secured
Parties under the Granting Clauses in any part of the Indenture Collateral (the
“Released Indenture Collateral Asset”) relating to such Indenture
Collateral Release Events shall automatically terminate and such applicable
Indenture Collateral shall be released from the Trust Estate.  For the avoidance of doubt, the Released
Indenture Collateral Asset in the case of any Asset Disposition or Franchise
Asset Termination shall be limited to the Indenture Collateral disposed of or
terminated, as the case may be.

 

Section 14.2  
Delivery of Documents by Indenture Trustee.  The Indenture Trustee shall deliver any such
documents as any Co-Issuer or the Servicer shall reasonably request to evidence
the termination of a security interest in an Excluded Asset or Released
Indenture Collateral Asset or the release of an Excluded Asset or Released
Indenture Collateral Asset from the Trust Estate.

 

Section 14.3  
Insurance/Condemnation Proceeds. 
All Insurance/Condemnation Proceeds on the Collateral received by or on
behalf of the Securitization Entities in excess of $10 million during any
fiscal year, commencing with the fiscal year in which the Closing Date occurs,
will be applied to prepay principal of each Series of Notes Outstanding in
an amount equal to such excess (such excess, the “Insurance Proceeds Amount”)
in accordance with the Priority of Payments on the Payment Date immediately
following the receipt of such proceeds; provided
that, notwithstanding the foregoing, the Insurance Proceeds Amount will not
include (i) any proceeds that are invested by the applicable Securitization
Entity in the restoration of the applicable Applebee’s Restaurants, the New
U.S. Restaurant Business, property on which Applebee’s Restaurants are proposed
to be developed and/or improvements and equipment relating to Applebee’s
Restaurants within 360 days of the casualty or condemnation giving rise to such
proceeds, (ii) any Franchisee Insurance Proceeds that are allocable to
Franchisee Insurance Restoration Payments or otherwise allocable to the related
Franchisee pursuant to the related Franchise Agreement, and (iii) any
Insurance/Condemnation Proceeds that are otherwise required to be reinvested in
the Collateral pursuant to the Franchise Documents or otherwise.  Any Insurance Proceeds Amounts shall be
deposited into the Insurance Proceeds Account to be administered in accordance
with Section 10.2(d) of this Base Indenture.

 

155

 

ARTICLE XV

 

AUCTION CALL REDEMPTION

 

Section 15.1  
Auction Call Redemption. 
In accordance with the procedures set forth below (the “Auction
Procedures”), the Indenture Trustee and an auction agent (such entity, the “Auction
Agent”) selected by the Aggregate Controlling Party will, on behalf of the
Secured Parties, at the expense of the Co-Issuers (which expenses will be paid
by the Co-Issuers in accordance with the Priority of Payments and will be
required to be reasonable and customary in all respects), conduct an auction
(an “Auction”) of the Collateral if any Notes are Outstanding on the
date fifteen (15) Business Days prior to the Payment Date occurring in December 2022
or the date fifteen (15) Business Days prior to the two year anniversary of
each prior Auction Date thereafter until no Notes are Outstanding (each such
date, an “Auction Date”). The Servicer, the Holders of the Subordinated
Notes, the Indenture Trustee, the Back-Up Manager and any Hedge Counterparty
and their respective Affiliates may, but will not be required to, bid at the
Auction. The Indenture Trustee will sell and transfer or terminate the
Collateral at the Auction; provided, that:  (i) the Servicer or the Auction Agent
certifies that bids from one or more bidders would result in the sale of all or
a portion of the Collateral for a purchase price (paid in cash) which together
with Eligible Investments held by the Co-Issuers (other than any Eligible
Investments held by the Co-Issuers in any Servicing Account or the Advertising
Fees Account) will be at least equal to the Total Redemption Amount; and (ii) each
bidder selected by the Servicer enters into a written agreement with the Master
Issuer (which the Master Issuer will execute if the conditions set forth herein
are satisfied) that obligates it to purchase all or a portion of the Collateral
and provides for payment in full (in cash) of the purchase price to the
Indenture Trustee on the relevant Auction Date. 
If the conditions set forth in clauses (i) and (ii) above
have been met (the “Auction Consummation Conditions”), the Indenture
Trustee will sell and transfer the Collateral without representation, warranty
or recourse, to the applicable selected bidder in accordance with and upon
completion of the Auction Procedures. The Indenture Trustee will deposit the
purchase price for or proceeds from the termination or disposition of, the
Collateral in the Collection Account, and each Class of Series 2007-1
Notes will be redeemed on the Payment Date immediately following the relevant
Auction Date in an amount equal to the outstanding principal balance of such Class of
Notes plus any accrued but unpaid interest owed thereon (such
redemption, the “Auction Call Redemption”). If any of the Auction
Consummation Conditions are not met with respect to any Auction or if any
selected bidder fails to pay the purchase price before the 6th Business Day
following the relevant Auction Date, (a) the Auction Call Redemption will
not occur on the Payment Date following the relevant Auction Date, (b) the
Indenture Trustee will give notice of the withdrawal of the notice of Auction
Call Redemption, (c) the Indenture Trustee will decline to consummate such
sale and, subject to clause (d) below, may not solicit any further
bids or otherwise negotiate any further sale or termination of Collateral
Assets in relation to such Auction and (d) unless the Series 2007-1
Notes are redeemed in full prior to the next succeeding Auction Date, the
Indenture Trustee and the Auction Agent will conduct another Auction on the
next succeeding Auction Date.  The
Auction Procedures may be modified by the Co-Issuers and the Indenture Trustee
subject to the prior written consent of the Aggregate Controlling Party.

 

Notice of an Auction Call Redemption will be given by the Indenture
Trustee by first-class mail, postage prepaid, mailed not less than 10 Business
Days prior to the Payment 

 

156

 

Date immediately following the relevant
Auction Date, to each Holder of Notes at such Holder’s address in the Note
Register maintained by the Note Registrar in accordance with the provisions of
the Indenture. Failure to give notice of redemption, or any defect therein, to
any Holder of any Note selected for redemption will not impair or affect the
validity of the redemption of any other Notes. Notes called for redemption must
be surrendered at the office of any Paying Agent, other than the Irish Paying
Agent, appointed under the Indenture in order to receive all amounts that
remain due and payable on the Notes.  If
any Notes to be redeemed in an Auction Call Redemption are listed on the Irish
Stock Exchange, the Indenture Trustee shall also deliver notice of such
redemption to the Irish Paying Agent at least ten (10) days prior to the
Payment Date on which the Auction Call Redemption shall occur (and the Irish
Paying Agent shall then forward such notice to the Irish Stock Exchange).

 

All notices of redemption with respect to the Notes will state:  (a) the Payment Date on which the
Auction Call Redemption will occur, (b) the amount to be paid with respect
to each Class of Notes, (c) that all the Notes are being paid in full
and that interest on such Notes will cease to accrue on the date specified in
the notice and (d) the place or places where such Notes to be redeemed are
to be surrendered for payment which will be the office of the Note Registrar or
the office of any Paying Agent other than the Irish Paying Agent.

 

ARTICLE XVI

 

MISCELLANEOUS

 

Section 16.1  
RESERVED.

 

Section 16.2  
Form of Documents Delivered to Indenture Trustee.  In any case where several matters are
required to be certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or covered by
only one document, but one such Person may certify or give an opinion with respect
to some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.

 

Any
certificate of an Authorized Officer of any of the Co-Issuers or an Opinion of
Counsel may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such
Authorized Officer or such Person giving such Opinion of Counsel knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
Opinion of Counsel is based are erroneous. 
Any such certificate of an Authorized Officer of any of the Co-Issuers
(as applicable) or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, any
of the Co-Issuers (as applicable), the Servicer or any other Person, stating  that the information with respect to such factual
matters is in the possession of such Co-Issuer, the Servicer or such other
Person, unless  such Authorized Officer
of any of the Co-Issuers (as applicable) or such counsel knows that the
certificate or opinion or representations with respect to such matters are
erroneous.  Any Opinion of Counsel may
also be based insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an Authorized Officer of any of the
Co-Issuers (as applicable) stating  

157

 

that the information with respect to such
matters is in the possession of any of the Co-Issuers (as applicable) unless
such counsel knows that the certificate or opinion or representations with
respect to such matters are erroneous. 

 

Where any Person is required to make, give or execute two (2) or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Base Indenture, they may, but need not, be
consolidated and form one instrument.

 

Whenever in this Base Indenture it is provided
that the absence of the occurrence and continuation of a Default, Event of
Default or Rapid Amortization Event is a condition precedent to the taking of
any action by the Indenture Trustee at the request or direction of the
Co-Issuers, then, notwithstanding that the satisfaction of such condition is a
condition precedent to the Co-Issuers’ rights to make such request or
direction, the Indenture Trustee shall be protected in acting in accordance
with such request or direction if a Trust Officer does not have knowledge of
the occurrence and continuation of such Default, Event of Default or Rapid
Amortization Event as provided in Section 6.1(d).

 

Section 16.3           Acts of Holders.

 

(a)        Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Base
Indenture to be given or taken by the Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Co-Issuers.  Such instrument or instruments (and the
action or actions embodied therein and evidenced thereby) are herein sometimes
referred to as the “Act” of the Holders signing such instrument or
instruments.  Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Base Indenture and conclusive in favor of the Indenture
Trustee and the Co-Issuers, if made in the manner provided in this Section 16.3.

 

(b)        The fact and date of the execution by
any Person of any such instrument or writing may be proved in any manner which
the Indenture Trustee deems sufficient.

 

(c)        The principal amount and registered
numbers of Notes held by any Person, and the date of such Person’s holding the
same, shall be proved by the Note Register.

 

(d)        Any request, demand, authorization,
direction, notice, consent, waiver or other action by the Holder of any Note
shall bind the Holder (and any transferee thereof) of such Note and of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Co-Issuers in reliance thereon, whether or not
notation of such action is made upon such Note.

 

Section 16.4  
Notices, etc.  Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other documents provided or permitted by this Base Indenture to be made upon,
given or furnished to, or filed with:

 

158

 

(a)        the Indenture Trustee by any Holder, the
Co-Issuers, the Servicer or by each Insurer, if any, shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to and
mailed, by certified mail, return receipt requested, hand delivered, sent by
overnight courier service guaranteeing next day delivery or by telecopy in
legible form, to Wells Fargo Bank, National Association, Sixth Street and
Marquette Avenue, MAC N9311-161, Minneapolis, MN 5547, Attn:  Corporate Trust Services/Asset-Backed
Administration, or at any other address previously furnished in writing to each
Co-Issuer, the Servicer, each Insurer, if any, or Holders by the Indenture
Trustee;

 

(b)        the Master Issuer by the Indenture
Trustee, the Servicer, each Insurer, if any, or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class, postage prepaid, hand
delivered, sent by overnight courier service or by telecopy in legible form, to
c/o Applebee’s Services, Inc., 11201 Renner Blvd., Lenexa, Kansas 66219,
Attn:  Deputy General Counsel,
facsimile:  (913) 980-9100, or at any
other address previously furnished in writing to the Indenture Trustee by the
Master Issuer;

 

(c)        any Co-Issuer by the Indenture Trustee,
the Servicer, each Insurer, if any, or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first class, postage prepaid, hand delivered, sent by
overnight courier service or by telecopy in legible form, to c/o Applebee’s
Services, Inc., 11201 Renner Blvd., Lenexa, Kansas 66219, Attn:  Deputy General Counsel, facsimile:  (913) 980-9100, or at any other address
previously furnished in writing to the Indenture Trustee by the Co-Issuer;

 

(d)        the Servicer by the Co-Issuers, the
Indenture Trustee, each Insurer, if any, or by any Holder shall be sufficient
for every purpose hereunder if in writing and mailed, first-class, postage
prepaid, hand delivered, sent by overnight courier service or by telecopy in
legible form, to Applebee’s Services, Inc., 11201 Renner Blvd., Lenexa,
Kansas 66219, Attn:  Deputy General
Counsel, facsimile:  (913) 980-9100, or
at any other address previously furnished in writing to the Co-Issuers, the
Indenture Trustee, each Insurer, if any, or the Initial Purchaser;

 

(e)        Moody’s, by the Co-Issuers, the Servicer
or the Indenture Trustee, shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) to Moody’s at Moody’s Investors
Service, Inc., 7 World Trade Center at 250 Greenwich Street, New York, NY
10007, Attn:  John Wikoff;

 

(f)         S&P, by the Co-Issuers, the
Servicer or the Indenture Trustee, shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) to S&P at Standard &
Poor’s Ratings Service, 55 Water Street, 42nd Floor, New York, NY 10041-0003,
Attn:  ABS Surveillance Group - New
Assets (Servicer_reports@sandp.com);

 

(g)        Fitch, by the Co-Issuers, the Servicer
or the Indenture Trustee, shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) to Fitch Ratings, 70 W. Madison
Street, Chicago, Illinois 60602, Attn: 
ABS Monitoring Group – Whole Business, Facsimile:  (312) 368-2069; or

 

159

 

(h)        each Insurer, if any, by the Co-Issuers,
the Servicer or the Indenture Trustee shall be sufficient for every purpose
hereunder (unless otherwise provided herein or in the Insurance Policy or the
Insurance Agreement) if in writing and mailed, first-class, postage prepaid,
hand delivered, sent by overnight courier service or by telecopy in legible
form to such Insurers, if any, at the address specified in the applicable Series Supplement,
or at any other address previously furnished in writing to the Co-Issuers, the
Servicer or the Indenture Trustee by the Insurers, if any.

 

Section 16.5  
 Notices to Holders; Waiver.  Except as otherwise expressly provided
herein, where this Base Indenture provides for notice to Holders of Notes of
any event:

 

(a)        such notice shall be sufficiently given
to Holders of Notes if in writing and mailed, first-class, postage prepaid, to
each Holder of a Note affected by such event, at the address of such Holder as
it appears in the Note Register, not earlier than the earliest date and not
later than the latest date, prescribed for the giving of such notice; and

 

(b)        such notice shall be in the English
language.

 

Notwithstanding clause (a) above, a Holder of Notes may
give the Indenture Trustee a written notice that it is requesting that notices
to it be given by facsimile transmissions and stating the telecopy number for
such transmission.  Thereafter, the
Indenture Trustee shall give notices to such Holder by facsimile transmission; provided that if such notice also requests
that notices be given by mail, then such notice shall also be given by mail in
accordance with clause (a) above.

 

The Indenture Trustee shall deliver to the Holders of the Notes any
readily available information required hereunder or notice requested to be so
delivered by at least 25% of the Holders of any Series of Notes.

 

Neither the failure to mail any notice, nor any defect in any notice so
mailed, to any particular Holder of a Note shall affect the sufficiency of such
notice with respect to other Holders of Notes.

 

Where this Base Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice.  Waivers of notice by
Holders shall be filed with the Indenture Trustee but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.

 

In the event that, by reason of the suspension of the regular mail
service as a result of a strike, work stoppage or similar activity, it
shall be impractical to mail notice of any event to Holders when such notice is
required to be given pursuant to any provision of this Base Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.

 

Section 16.6  
Effect of Headings and Table of Contents.  The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.

 

160

 

Section 16.7           Successors and Assigns.  All covenants and agreements in this Base
Indenture by the each of the Co-Issuers shall bind its successors and assigns,
whether so expressed or not.  Any
assignment of this Base Indenture without the written consent of each Series Controlling
Party shall be null and void.

 

Section 16.8           No Bankruptcy Petition Against the
Securitization Entities.  Each of the
Noteholders, the Indenture Trustee and the other Secured Parties hereby
covenants and agrees that, prior to the date which is one year and one day
after the payment in full of the latest maturing Note, it will not institute
against, or join with any other Person in instituting against, any
Securitization Entity any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings, or other proceedings, under any Insolvency Law; provided,
however, that nothing in this Section 16.8 shall constitute a
waiver of any right to indemnification, reimbursement or other payment from the
Securitization Entities pursuant to the Indenture or any other Transaction
Document; provided, further, that each Insurer, if any, each
Noteholder, the Indenture Trustee and other Secured Parties may become a party
to and participate in any Proceeding under Insolvency Law applicable to any
Securitization Entity that is initiated by any person that is not an Affiliate
of such Secured Party.  In the event that
any such Noteholder or Secured Party or the Indenture Trustee takes action in
violation of this Section 16.8, each affected Securitization Entity
shall file or cause to be filed an answer with the bankruptcy court or
otherwise properly contesting the filing of such a petition by any such
Noteholder or Secured Party or the Trustee against such Securitization Entity
or the commencement of such action and raising the defense that such Noteholder
or Secured Party or the Indenture Trustee has agreed in writing not to take
such action and should be estopped and precluded therefrom and such other
defenses, if any, as its counsel advises that it may assert. The provisions of
this Section 16.8 shall survive the termination of the Indenture
and the resignation or removal of the Indenture Trustee.  Nothing contained herein shall preclude
participation by any Noteholder or any other Secured Party or the Indenture
Trustee in the assertion or defense of its claims in any such proceeding
involving any Securitization Entity.

 

Section 16.9           Confidential Information.  Each of the parties hereto acknowledges that
during the Term of the Indenture such party (the “Recipient”) may
receive Confidential Information from another party hereto (the “Discloser”).  Recipient agrees to maintain the Confidential
Information in the strictest of confidence and will not, at any time, except as
otherwise provided in the Transaction Documents, use, disseminate or disclose
any Confidential Information of the Discloser to any person or entity other
than those of its employees or representatives who have a “need to know,” who
have been apprised of this restriction. 
Recipient shall be liable for any breach of this Section 16.9
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 Discloser.  Upon
termination of this Base Indenture, Recipient will return to Discloser, or at
Discloser’s request, destroy, all documents and records in its possession
containing the Confidential Information of 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 Discloser; (ii) is or becomes part of the public domain
other than by breach of this Agreement by, or other wrongful act of, Recipient;
(iii) is developed by Recipient independently of and without reference to
any Confidential Information; (iv) is received by Recipient from a third
party who is not under any obligation to Discloser to maintain the
confidentiality of such information; or (v) is required to be disclosed by

 

161

 

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.

 

Section 16.10         Separability.  In case any provision in this Base Indenture
or in the Notes 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 16.11         Benefits of Indenture.  Nothing in this Base Indenture or in the
Notes, expressed or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, the Servicer and the Secured Parties any
benefit or any legal or equitable right, remedy or claim under this Base
Indenture.  Each Insurer, if any, is an
express third party beneficiary of this Base Indenture entitled to enforce the
provisions hereof as if a party hereto.

 

Section 16.12         Legal Holidays.  In the event that the date of any Payment Date
or Redemption Date shall not be a Business Day, then, notwithstanding any other
provision of the Notes or this Base Indenture, payment need not be made on such
date, but may be made on the next Business Day with the same force and effect
as if made on the nominal date of any such Payment Date or Redemption Date, as
the case may be.  With respect to the
Notes, interest shall accrue on any such payment for the period from and after
any such nominal date at the rate applicable to each Series of Notes.

 

Section 16.13         Governing Law.  THIS BASE INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED 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 OF NEW YORK).

 

Section 16.14         Submission to Jurisdiction.  The Co-Issuers and Indenture Trustee hereby,
and each Insurer, if any, by its execution of a Series Supplement
irrevocably submit to the nonexclusive jurisdiction of any New York State or
federal court sitting in the Borough of Manhattan in The City of New York in
any action or proceeding arising out of or relating to the Notes or this Base
Indenture, and the Co-Issuers and Indenture Trustee hereby, and each Insurer,
if any, by its execution of a Series Supplement irrevocably agree that all
claims in respect of such action or proceeding may be heard and determined in
such New York State or federal court. 
The Co-Issuers and Indenture Trustee hereby, and each Insurer, if any,
by its execution of a Series Supplement irrevocably waive, to the fullest
extent that they may legally do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. 
The Co-Issuers each irrevocably consents to the service of any and all
process in any action or proceeding by the mailing or delivery of copies of
such process to it at the office of its Delaware registered agent.  The Co-Issuers, Indenture Trustee and each
Insurer, if any, agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.

 

162

 

Section 16.15         Counterparts.  This instrument and any Series Supplement
may be executed in any number of counterparts (including by facsimile or other
electronic means of communication), each of which so executed shall be deemed
to be an original, but all such counterparts shall together constitute but one
and the same instrument.

 

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163

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above mentioned.

 

 

	
   

  	
  APPLEBEE’S ENTERPRISES
  LLC,

  
	
   

  	
  as Master Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
  Name:  Carin
  Stutz

  
	
   

  	
  Title:  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S IP LLC,

  
	
   

  	
  as IP Holder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
  Name:  Carin
  Stutz

  
	
   

  	
  Title:  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  NORTH

  
	
   

  	
  LLC,

  
	
   

  	
  as a Restaurant Holder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
  Name:  Carin
  Stutz

  
	
   

  	
  Title:  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  MID-

  
	
   

  	
  ATLANTIC LLC,

  
	
   

  	
  as a Restaurant Holder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
  Name:  Carin
  Stutz

  
	
   

  	
  Title:  President

  
						

 

 

Signature
Page to Base Indenture

 

 

	
   

  	
  APPLEBEE’S RESTAURANTS
  WEST

  
	
   

  	
  LLC,

  
	
   

  	
  as a Restaurant Holder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Beverly Elving

  
	
   

  	
   

  	
  Name:  Beverly
  Elving

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  TEXAS

  
	
   

  	
  LLC,

  
	
   

  	
  as a Restaurant Holder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
   

  	
  Name:  Carin
  Stutz

  
	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  KANSAS

  
	
   

  	
  LLC,

  
	
   

  	
  as a Restaurant Holder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rebecca Tilden

  
	
   

  	
   

  	
  Name:  Rebecca
  Tilden

  
	
   

  	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS 

  
	
   

  	
  VERMONT INC.,

  
	
   

  	
  as a Restaurant Holder

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rebecca Tilden

  
	
   

  	
   

  	
  Name:  Rebecca
  Tilden

  
	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS INC.,

  
	
   

  	
  as a Restaurant Holder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Stutz

  
	
   

  	
   

  	
  Name:  Carin
  Stutz

  
	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  
					

 

Signature Page to Base
Indenture

 

 

	
   

  	
  WELLS FARGO BANK, NATIONAL

  
	
   

  	
  ASSOCIATION,

  
	
   

  	
  as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Melissa Philibert

  
	
   

  	
   

  	
  Name:  Melissa
  Philibert

  
	
   

  	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  	
   

  

 

Signature Page to Base
Indenture

 

 

APPENDIX
A

 

DEFINITIONS

 

“Accounts”:  Collectively, the Indenture Trust Accounts,
the Servicing Accounts and the Restaurant Accounts.

 

“Account Control Agreement”:  The Account Control Agreement (Indenture
Trust Accounts), the Account Control Agreement (Servicing Accounts), the
Account Control Agreements (Restaurant Accounts) or such other control
agreement in form and substance reasonably satisfactory to the Aggregate
Controlling Party .

 

“Account Control Agreement (Indenture
Trust Accounts)”:  The Account
Control Agreement, dated as of the Closing Date, by and among the Master
Issuer, the Indenture Trustee and Wells Fargo Bank, National Association, in
its additional capacity as the securities intermediary thereunder, relating to
the Indenture Trust Accounts, as the same may be amended or otherwise modified
from time to time in accordance with the terms thereof.

 

“Account Control Agreements (Restaurant
Accounts)”:  The Account Control
Agreements, each dated as of the Closing Date, by and among the Master Issuer,
the Servicer, the Back-Up Manager, the Indenture Trustee and the financial
institutions named therein, relating to the Restaurant Accounts, as each may be
amended or otherwise modified from time to time in accordance with the terms
thereof.

 

“Account Control Agreement (Servicing
Accounts)”:  The Account Control
Agreement, dated as of the Closing Date, by and among the Master Issuer, the
Servicer, the Back-Up Manager, the Indenture Trustee and JPMorgan Chase Bank,
N.A., in its capacity as the securities intermediary thereunder, relating to
the Concentration Account and the Servicing Accounts, as the same may be
amended or otherwise modified from time to time in accordance with the terms
thereof.

 

“Accountant’s Certificate”:  A certificate of a firm of Independent
certified public accountants of national reputation in form and substance
acceptable to the Indenture Trustee confirming the calculation provided for in Section 3.1(h).

 

“Accounting Date”:  With respect to any Payment Date, the third
Business Day preceding such Payment Date.

 

“Accrued Insurer Premiums Amount”:  With respect to each Payment Date, the
aggregate amount of the Insurer Premiums for all Classes of Senior Notes for
the Interest Accrual Period ending on the related Payment Date plus any
Carryover Accrued Insurer Premium Amount for such Payment Date.

 

“ACMC Gift Card”:  A Gift Card issued by ACMC, Inc. for
redemption in Applebee’s Restaurants.

 

A-1

 

“ACMC, Inc.”:  The meaning specified in the definition of “Excluded
Property” in this Appendix A.

 

“ACMC-Developed IP”:  U.S. Intellectual Property Rights in all of
the following created, developed, authored or acquired by ACMC, Inc. under
the ACMC IP License Agreement:  (i) the
Applebee’s Brand and (ii) derivative works of and other variations on the
Trademarks included in the IP Assets.

 

“ACMC IP License Agreement”:  The ACMC Intellectual Property License
Agreement, dated as of the Closing Date between the IP Holder, as the licensor,
and ACMC, Inc., as the licensee.

 

“Act”: 
The meaning specified in Section 16.3 of the Base Indenture.

 

“Actual Knowledge”:  The actual knowledge of (i) the Chief
Executive Officer, the Chief Financial Officer, the Treasurer, the Comptroller,
the General Counsel or the Senior Vice President of Finance of the Servicer, (ii) any
manager or director (as applicable) of the relevant Securitization Entity who
is also a director or an officer of the Servicer and/or IHOP Corp. (iii) an
Authorized Officer of the Servicer or the Co-Issuers directly responsible for
managing the servicing of the relevant asset or for administering the
transactions relevant to such event or (iv) an Authorized officer of the
Indenture Trustee responsible for administering the transactions relevant to
such event.

 

“Additional Co-Issuer”:  Any entity that, after the Closing Date,
becomes a “Co-Issuer” pursuant to Section 7.14(a) of the Base
Indenture.

 

“Additional Interest Amount”:  With respect to (i) the Series 2007-1
Notes, the Series 2007-1 Additional Interest Amount and (ii) any
additional Series of Notes, the Contingent Additional Interest Amount, if
any, the Post-ARD Contingent Additional Interest Amount, if any, the Class A-2-I
Note Excess Adjusted Interest Amount, if any, and the Senior Notes Monthly
Excess Adjusted Interest Amount, if any.

 

“Additional Notes”:  Additional Series of Notes.

 

“Additional Securitization Entity”:  Any Subsidiary (direct or otherwise) of the
Master Issuer or other Securitization Entity formed after the Closing Date.

 

“Adjusted Repayment Date”:  With respect to (i) the Series 2007-1
Notes, the Series 2007-1 Adjusted Repayment Date and (ii) any
additional Series of Notes, the meaning, if any, specified in the related Series Supplement.

 

“Advance”:  Loans made by investors in the Series 2007-1
Class A-1 Note Purchase Agreement that will constitute the purchase of Series 2007-1
Class A-1 Outstanding Principal Amounts.

 

“Advertising Fees”:  The meaning specified in Section 10.2(a) of
the Base Indenture.

 

A-2

 

“Advertising Fees Account”:  The meaning specified in Section 10.2(a) of
the Base Indenture.

 

“Affiliate” or “Affiliated”:  With respect to any specified Person, any
other Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, such specified
Person.  For the purposes of this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities or other
beneficial interest, by contract or otherwise; and the terms “controlling” and “controlled”
have the meanings correlative to the meaning of “control.”

 

“After-Acquired IP Assets”:  All U.S. Intellectual Property Rights (and,
with respect to the POS System, worldwide Intellectual Property rights)
created, developed, authored or acquired by the IP Holder after the Closing
Date pursuant to the Transaction Documents or otherwise, including all Servicer-Developed
IP, Licensee-Developed IP and ACMC-Developed IP.

 

“Agent Members”:  Members of, or participants in, DTC.

 

“Aggregate Controlling Party”:  The Series Controlling Party with
respect to a Majority of all Senior Notes Outstanding or, if no Senior Notes
are Outstanding, a Majority of all Subordinated Notes Outstanding; provided that in determining such Majority,
with respect to any Series of Notes for which the Lead Insurer is the Series Controlling
Party, the Lead Insurer will be entitled to vote the entire Aggregate
Outstanding Principal Amount relating to such Series of Notes unless
otherwise provided in the applicable Series Supplement; provided, further,
that for the Series 2007-1 Class A-1 Notes and any other variable
funding Series of Notes, the Aggregate Outstanding Principal Amount, for
purposes of the definitions of “Aggregate Controlling Party” and “Series Controlling
Party,” will include the maximum possible Aggregate Outstanding Principal
Amount under such variable funding series of notes; provided, further,
that so long as any Series 2007-1 Class A-1-A Notes or any Series 2007-1
Class A-2-II-A Notes remain Outstanding, Assured Guaranty shall be deemed
to be the Aggregate Controlling Party with respect to all Series of Notes
Outstanding (except in circumstances in which an Insurer Event of Default has
occurred and is continuing in respect of Assured Guaranty, in which case the “Aggregate
Controlling Party” shall be determined as otherwise set forth in this
definition).

 

“Aggregate Controlling Party Order”:  A written order or request signed on behalf
of the Aggregate Controlling Party.

 

“Aggregate Outstanding Principal Amount”:  With respect to any Series of Notes or
otherwise, the aggregate principal amount Outstanding at the date of determination.

 

“Allocated Note Amount”:  With respect to (i) each Company-Owned
U.S. Restaurant, Post-Closing U.S. Restaurant or Franchised U.S. Restaurant in
existence on the Closing Date, the portion of the Aggregate Outstanding
Principal Amount of the Notes allocated to such Applebee’s Restaurant on the
Closing Date based on such Applebee’s Restaurant’s relative contribution to the
cash flows attributable to the Applebee’s Restaurants over the twelve-month
period ending September 30, 2007; and (ii) any Applebee’s Restaurant
contributed to the

 

A-3

 

applicable Restaurant Holder or
any new Franchised U.S. Restaurant coming into existence following the Closing
Date, the dollar amount based on such Applebee’s Restaurant’s relative
contribution to the Retained Contributions attributable to the Applebee’s
Restaurants for the most recent twelve-month period (which with respect to any
Applebee’s Restaurant with less than a twelve month record will be assumed to
equal the system-wide average amount of franchise royalties collected or
Restaurant Holder Profit collected, as applicable for all Applebee’s
Restaurants over such period); provided, that in the case of a
Refranchised Restaurant, such contribution will be determined as if such
Refranchised Restaurant had been a Franchised U.S. Restaurant for the most
recent twelve-month period; provided, further, that in each case
the Allocated Note Amount with respect to each Applebee’s Restaurant will be at
least $10,000.  The Servicer will
recalculate the Allocated Note Amount with respect to all of the Applebee’s
Restaurants as of each date on which Applebee’s International or the Servicer
is required to reacquire the assets relating to an Applebee’s Restaurant
according to the cash proceeds attributable to each of the remaining Applebee’s
Restaurants over the most recent twelve-month period taking into account any
change to the number of Applebee’s Restaurants and the Aggregate Outstanding
Principal Amount of the Notes.

 

“Annual Aggregate Asset Disposition
Threshold”:  With respect to any
fiscal year, $10,000,000.

 

“Annual Noteholders’ Tax Statement”:  The meaning specified in Section 12.2
of the Base Indenture.

 

“Anticipated Repayment Date”:  With respect to (i) the Series 2007-1
Notes, the Series 2007-1 Anticipated Repayment Date and (ii) any
additional Series of Notes, the meaning, if any, specified in the related Series Supplement.

 

“Applebee’s Brand”:  The Trademark “Applebee’s,” alone or in
combination with other words or symbols, any variations or derivatives thereof,
and any names or marks confusingly similar thereto and when used as an
adjective, “Applebee’s Branded.”

 

“Applebee’s Holdings”:  Applebee’s Holdings LLC, a newly formed,
special purpose Delaware limited liability company.

 

“Applebee’s Holdings Guaranty and
Collateral Agreement”:  The Guaranty
and Collateral Agreement, by and among Applebee’s Holdings, the Master Issuer
and the Indenture Trustee, dated as of the Closing Date.

 

“Applebee’s Holdings II”:  Applebee’s Holdings II Corp., a newly formed,
special purpose Delaware corporation.

 

“Applebee’s Holdings II First-Tier Asset
Contribution Agreement”:  The asset
contribution agreement, dated as of the Closing Date, between Applebee’s
International and Applebee’s Holdings II.

 

“Applebee’s Holdings II Second-Tier Asset
Contribution Agreement”:  The asset
contribution agreement, dated as of the Closing Date, between Applebee’s
Holdings II and Applebee’s Holdings.

 

A-4

 

“Applebee’s International”:  Applebee’s International, Inc., a
Delaware corporation.

 

“Applebee’s International First-Tier Asset
Contribution Agreement”:  The asset
contribution agreement, dated as of the Closing Date, between Applebee’s
International, as the contributor, and Applebee’s Holdings, as the contributee.

 

“Applebee’s International Retained U.S.
Restaurants IP License Agreement”: 
The Applebee’s International Intellectual Property License Agreement
(Retained U.S. 

 

Restaurant), dated as of the Closing Date,
between the IP Holder, as the licensor, and Applebee’s International, as the
licensee.

 

“Applebee’s International U.S.
Territories/POS System IP License Agreement”:  The Applebee’s International Intellectual
Property License Agreement (U.S. Territories and POS System), dated as of the
Closing Date, between the IP Holder, as the licensor, and Applebee’s
International, as the licensee.

 

“Applebee’s Restaurants”:  As of any date of determination, any
restaurant operated under the Applebee’s Brand located in the United States,
including “Applebee’s Neighborhood Grill and Bar” and “TJ Applebee’s
Neighborhood Grill and Bar,” excluding restaurants operated under the Applebee’s
Brand opened after the Closing Date that do not have or offer all of the
following:  (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 Applebee’s Branded restaurants located in the United States
that are owned and operated by the Restaurant Holders as of such date of
determination; provided, that if the total number of such 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 Applebee’s Branded restaurants located in the United States that
are owned and operated by franchisees unaffiliated with the Restaurant Holders
that satisfy the conditions set forth in clauses (i) through (iii) will
be applied for purposes of this clause (iv) and otherwise the per
person average guest check for purpose of clause (iv) of this
definition will be determined in such other manner as may be mutually agreed
upon by each of the Aggregate Controlling Party and the Servicer.

 

“Applebee’s System”:  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.

 

“Asset Contribution Agreements”:  A First-Tier Asset Contribution Agreement,
the Applebee’s Holdings II Second-Tier Asset Contribution Agreement, the
Second-Tier Asset Contribution Agreement or a Third-Tier Asset Contribution
Agreement, as the context may require.

 

A-5

 

“Asset Disposition”:  The meaning specified in Section 7.8(a)(xxiii)(1) of
the Base Indenture.

 

“Asset Disposition Additional Prepayment
Amount”:  An amount equal to:  (a) in the case of a Refranchising Asset
Disposition, if:  (i) the pro forma Three-Month DSCR after giving effect to such
Refranchising Asset Disposition and the application of the proceeds of such
Refranchising Asset Disposition is at least 0.1 higher than the pro forma Three-Month DSCR as of the Closing Date (as set
forth in the Servicing Agreement), then $0; or (ii) the pro forma Three-Month DSCR after giving effect to such
Refranchising Asset Disposition and the application of the proceeds of such
Refranchising Asset Disposition is less than 0.1 higher than the pro forma Three-Month DSCR as of the Closing Date (as set
forth in the Servicing Agreement), then an amount equal to the product of (x) the
net after-tax cash proceeds of such Refranchising Asset Disposition minus any
related Reinvested Amounts multiplied by (y) one minus a fraction, (A) the
numerator of which is equal to the amount of cash flow related to the assets
being refranchised that would have been generated for the benefit of the
Securitization Entities if such assets had been refranchised as of the first
day of the immediately preceding twelve Monthly Collection Periods (or, if
sooner, the Closing Date) and (B) the denominator of which is equal to the
amount of Net Cash Flow (without including any equity contributions
contemplated in the definition thereof) actually generated by such assets for
the benefit of the Securitization Entities for the last twelve Monthly
Collection Periods; and (b) in the case of a Non-Refranchising Asset
Disposition, after giving effect to such Non-Refranchising Asset Disposition
and the application of the proceeds of such Non-Refranchising Asset
Disposition, (i) if the Senior ABS Leverage Ratio, after giving effect to
such Non-Refranchising Asset Disposition and the application of the proceeds of
such Non-Refranchising Asset Disposition, is at least 0.25x lower than the
Senior ABS Leverage Ratio as of the Closing Date, $0; or (ii) if such
Senior ABS Leverage Ratio is not 0.25x or more lower than the Senior ABS
Leverage Ratio as of the Closing Date, then an amount equal to the net
after-tax cash proceeds of such Non-Refranchising Asset Disposition (minus
any related Reinvested Amounts) multiplied by 50%.

 

“Asset Disposition Consolidated Leverage
Test”:  A test that will be satisfied
as of any date of determination if the IHOP Corp. Consolidated Leverage Ratio
for the immediately preceding twelve-month fiscal period is equal to or less
than 6.00x.

 

“Asset Disposition Prepayment Amount”:  An amount equal to:

 

(a) prior to the satisfaction of the
Asset Disposition Consolidated Leverage Test and the repayment of principal of
the Series 2007-1 Class A-2 Notes in an amount equal to or greater
than $450 million, 100% of the net after-tax cash proceeds received from Asset
Dispositions; and

 

(b) after the satisfaction of the Asset
Disposition Consolidated Leverage Test and the repayment of principal of the Series 2007-1
Class A-2 Notes in an amount equal to or greater than $450 million, any
net after-tax cash proceeds received from Asset Dispositions in excess of the
Annual Aggregate Asset Disposition Threshold, up to a maximum amount equal to
the Asset Disposition Additional Prepayment Amount; provided, that the
Asset Disposition Additional Prepayment Amount will not include any Reinvested
Amounts.

 

A-6

 

“Assured Guaranty”:  Assured Guaranty Corp., a Maryland-domiciled
insurance company, and any successor thereto.

 

“Auction”:  The meaning specified in Section 15.1
of the Base Indenture.

 

“Auction Date”:  The meaning specified in Section 15.1
of the Base Indenture.

 

“Auction Call Redemption”:  The meaning specified in Section 15.1
of the Base Indenture.

 

“Auction Consummation Conditions”:  The meaning specified in Section 15.1
of the Base Indenture.

 

“Authenticating Agent”:  With respect to the Notes or a Series of
Notes, the Person designated by the Indenture Trustee to authenticate such
Notes on behalf of the Indenture Trustee pursuant to Section 6.14
hereof of the Base Indenture.

 

“Authorized Minimum Denominations”:  The Notes will be issuable in minimum
denominations of $200,000 and integral multiples of $1,000 in excess thereof.

 

“Authorized Officer”:  With respect to (i) any Securitization
Entity, any Officer (or attorney-in-fact appointed by such Securitization
Entity) who is authorized to act for such Securitization Entity in matters
relating to, and binding upon such Securitization Entity, including an
Authorized Officer of the Servicer authorized to act on behalf of such
Securitization Entity;  (ii) the
Servicer, the Chief Executive Officer, Chief Financial Officer, Treasurer,
Directors, Comptroller, the General Counsel or the Senior Vice President of
Finance or any other Officer of the Servicer who is directly responsible for
managing the servicing of the relevant Existing Franchise Asset or for
administering the transactions relevant to such event or otherwise authorized
to act for the Servicer in matters relating to, and binding upon, the Servicer
with respect to the subject matter of the request, certificate or order in
question;  (iii) the Indenture
Trustee or any other bank or trust company acting as trustee of an express
trust or as custodian, a Trust Officer. 
Each party may receive and accept a certification of the authority of
any other party as conclusive evidence of the authority of any person to act,
and such certification may be considered as in full force and effect until
receipt by such other party of written notice to the contrary.

 

“Available Senior Notes Interest Reserve
Account Amount”:  As of any date of
determination, the amount (excluding Investment Income thereon) on deposit in
the Senior Notes Interest Reserve Account.

 

“Back-Up Manager”:  FTI Consulting Inc., a Maryland Corporation,
in its capacity as back up manager pursuant to the Back-Up Manager Agreement,
and any successor back up servicer.

 

“Back-Up Manager Agreement”:  The Back-Up Manager and Consulting Agreement,
dated as of the Closing Date, by and among the Servicer, the Back-Up Manager,
the Securitization Entities (other than Applebee’s Holdings), the Series 2007-1
Class A Insurer and the Indenture Trustee.

 

A-7

 

“Bankruptcy Code”:  The Federal Bankruptcy Code, Title 11 of the
United States Code, as amended.

 

“Bankruptcy Court”:  A bankruptcy court of competent jurisdiction.

 

“Base Indenture”:  The Base Indenture, dated as of the Closing
Date, by and among the Co-Issuers and Wells Fargo Bank, National Association,
as indenture trustee, as amended, supplemented or otherwise modified from time
to time, exclusive of any Series Supplement.

 

“Base Rate”:  Solely for purposes of the Series 2007-1
Class A-1 Note Purchase Agreement, on any day, a rate per annum equal to
the greater of (i) the Prime Rate in effect on such day and (ii) the
Federal Funds Rate in effect on such day; provided, that any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds Rate will
be effective as of the opening of business on the effective day of such change
in the Prime Rate or the Federal Funds Rate, respectively; provided, further,
that changes in any rate of interest calculated by reference to the Base Rate
will take effect simultaneously with each change in the Base Rate.

 

“Base Rate Advance”:  Solely for the purpose of the Series 2007-1
Class A-1 Note Purchase Agreement, an Advance including, without
limitation, a swingline loan or an unreimbursed drawing on the Series 2007-1
Class A-1 L/C Subfacility, that bears interest at a rate of interest
determined by reference to the Base Rate during such time as it bears interest
at such rate, as provided in the Series 2007-1 Class A-1 Note
Purchase Agreement.

 

“Book-Entry Note”:  A Note in the form of a fully registered
book-entry note, deposited with, or on behalf of, DTC, and registered in the
name of a nominee of DTC.

 

“Business Day”:  Any day other than a Saturday or Sunday on which
commercial banks and foreign exchange markets settle payments in each of New
York, NY, and Minneapolis, Minnesota and the city in which the Corporate Trust
Office of any successor to the Indenture Trustee is located if so required by
such successor; provided, that, if and for so long as the Series 2007
1 Class A 2 Notes are listed on the Irish Stock Exchange and any action is
required of the Irish Paying Agent under the Indenture, then, for purposes of
determining when such action is required of the Irish Paying Agent, “Business
Day” shall also be required to be a day on which banking institutions are open
for business in Dublin, Ireland.

 

“Calculation Agent”:  The meaning specified in Section 7.10(a) of
the Base Indenture.

 

“Capital Expenditure Reserve Account”:  The meaning specified in Section 10.2(h) of
the Base Indenture.

 

“Capped Class A-1 Note Administrative
Expense Amount”:  For each Payment
Date, an amount equal to the lesser of:

 

(a)           the
Class A-1 Note Administrative Expenses that have become due and payable
during the immediately preceding Monthly Collection Period and have not been
previously paid; and

 

A-8

 

(b)           the
amount by which (i) $250,000 exceeds (ii) the aggregate amount of Class A-1
Note Administrative Expenses previously paid on each preceding Payment Date
that occurred (x) in the case of a Payment Date occurring during the
annual period following the Closing Date and ending on the first anniversary of
the Closing Date, since the Closing Date and (y) in the case of a Payment
Date occurring during any other annual period beginning with the annual period
following the first anniversary of the Closing Date, since the most recent
anniversary of the Closing Date.

 

“Capped SPE Operating Expense Amount”:  For any Weekly Allocation Date that occurs
either (x) during each annual period beginning on the Closing Date and
ending on the first anniversary of the Closing Date, and (y) each annual
period beginning with the annual period following the first anniversary of the
Closing Date, the amount by which $500,000 exceeds the aggregate SPE Operating
Expenses already paid during such annual period; provided, that prior to
the occurrence of an Event of Default, up to $85,000 of the Capped SPE
Operating Expense Amount will be allocated to the fees and expenses of the
Indenture Trustee over each annual period; provided, further,
that following the occurrence of an Event of Default, up to $235,000 of the
Capped SPE Operating Expense Amount will be allocated to the fees and expenses
of the Indenture Trustee over each annual period commencing with the annual
period in which Event of Default occurs.

 

“Carryover Accrued Insurer Premiums Amount”:  For any Payment Date, the amount, if any, by
which the  amount allocated to pay
Insurer Premiums on the preceding Payment Date was less than the Accrued
Insurer Premium Amount for such preceding Payment Date.

 

“Cash”:  Such coin or currency of the United States of
America as at the time shall be legal tender for payment of all public and
private debts.

 

“Cash Collateral”:  The meaning specified in Section 11.1(e) of
the Base Indenture.

 

“Cash Trap Reserve Account”:  The meaning specified in Section 10.4(a) of
the Base Indenture.

 

“Cash Trap Reserve Amount”:  With respect to any Payment Date upon and
following the occurrence of a Cash Trap Reserve Event but prior to a Cash Trap
Reserve Cure Date, (a) 25% of the amounts remaining on deposit in the
Collection Account after giving effect to the application of funds pursuant to clauses
(i) through (x) of the Priority of Payments, and (b) 50%
of the amounts remaining on deposit in the Collection Account after giving
effect to the application of funds pursuant to clauses (i) through (x) of
the Priority of Payments, if on such Payment Date the Three-Month Adjusted DSCR
is less than 1.75x.

 

“Cash Trap Reserve Event”:  Occurs when the Three-Month Adjusted DSCR is
less than 1.85x with respect to any Payment Date and ends on a Cash Trap
Reserve Cure Date.

 

“Cash Trap Reserve Cure Date”:  Any Payment Date following the occurrence of
a Cash Trap Reserve Event with respect to which the Three-Month Adjusted DSCR
has been at least 1.85x for three consecutive Payment Dates (including such
Payment Date).

 

A-9

 

“Certificate of Authentication”:  The meaning specified in Section 2.1
of the Base Indenture.

 

“Change of Control”:  The occurrence of any of the following
events:

 

(a)           an
event or series of events by which any Person other than (i) IHOP Corp. or
any direct or indirect wholly-owned Subsidiary of IHOP Corp. becomes the owner
of more than 50% of the voting stock in Applebee’s International or (ii) IHOP
Corp., Applebee’s International, Applebee’s Holdings or any of their respective
direct or indirect wholly-owned Subsidiaries becomes the owner of more than 50%
of the membership interests in the Master Issuer;

 

(b)           IHOP
Corp. merges with another entity unaffiliated with IHOP Corp. and IHOP Corp. is
not the surviving entity unless (i) such surviving entity has executed an
assumption agreement pursuant to which it agrees to assume all of the
obligations of IHOP Corp. and its Affiliates under the Transaction Documents to
which IHOP Corp. or such Affiliate is a party, and (ii) the Rating Agency
Condition is satisfied with respect to each Series of Notes Outstanding;
or

 

(c)           an
event or series of events by which any person or group (i) acquires more
than 50% of the equity interests of IHOP Corp. or (ii) controls, either
directly or indirectly, more than 50% of the common stock of IHOP Corp. or an
amount of common stock in IHOP Corp. that entitles such person or group to
exercise more than 50% of the voting power of IHOP Corp.’s security holders or
gives such person or group the power to appoint the majority of IHOP Corp.’s
board of directors unless, with respect to any such event described in the
foregoing clauses (i) and (ii) the Rating Agency
Condition is satisfied with respect to each Series of Notes Outstanding.

 

“Charter Document”:  With respect to (i) a limited liability
company, the certificate of formation and limited liability company agreement, (ii) a
corporation, the certificate of incorporation and by-laws and (iii) a
partnership, the certificate of partnership and the partnership agreement.

 

“Class”:  With respect to any Series of Notes, any
one of the classes of Notes of such Series as specified in the applicable Series Supplement.

 

“Class A-1 Administrative Agent”:  With respect to (i) the Series 2007-1
Class A-1 Notes, Lehman Commercial Paper Inc., in its capacity as such
pursuant to the Series 2007-1 Class A-1 Note Purchase Agreement, and
its permitted successors and assigns in such capacity, and (ii) with
respect to the Class A-1 Notes of any additional Senior Notes, the Person
acting in such capacity pursuant to the related Class A-1 Note Purchase
Agreement.

 

“Class A-1 Aggregate Commitment Fees”:  With respect to any Interest Accrual Period,
the aggregate Class A-1 Monthly Commitment Fee Amount due and payable on
all Class A-1 Notes Outstanding with respect to such Interest Accrual
Period.

 

A-10

 

“Class A-1 Commitment Fees”:  For Class A-1 Notes for any Interest
Accrual Period, the commitment fees payable to the Holders of  such Class A-1 Notes pursuant to the
related Class A-1 Note Purchase Agreement.

 

“Class A-1 Commitment Fee Adjustment Amount”:  For Class A-1 Notes for any Interest
Accrual Period, the aggregate amount, if any, for such Interest Accrual Period
that is identified as the “Commitment Fee Adjustment Amount” in the applicable Series Supplement.

 

“Class A-1 Commitment Fees Account”:  The meaning specified in Section 10.8(a)(iii) of
the Base Indenture.

 

“Class A-1 Commitment Fees Amount”:  With respect to all Class A-1 Notes
Outstanding for each Monthly Collection Period, an amount equal to the sum of:

 

(a)           (i) the
aggregate amount of the Class A-1 Commitment Fees for the Interest Accrual
Period ending in the next succeeding Monthly Collection Period, and (ii) if
such Payment Date occurs on or after a Payment Date on which amounts are
withdrawn from the Class A-1 Commitment Fees Account to cover any Class A-1
Commitment Fee Adjustment Amount, the amount so withdrawn (without duplication
for amounts previously allocated pursuant to this clause (ii)); and

 

(b)           the amount, if any,
by which (i) Class A-1 Commitment Fees for the Interest Accrual
Period ending in the next succeeding Monthly Collection Period exceeds  (ii) the aggregate amount previously
allocated to the Class A-1 Commitment Fees Account on each preceding
Payment Date with respect to the Monthly Collection Period.

 

“Class A-1 Excess Interest Account”:  The meaning specified in Section 10.8(a)(x) of
the Base Indenture.

 

“Class A-1 Excess Interest Amount”:  With respect to the (i) Series 2007-1
Notes, the Series 2007-1 Class A-1 Excess Interest Amount and with
respect to (ii) any other Series of Notes Outstanding, the meaning,
if any, set forth in the related Series Supplement.

 

“Class A-1 Indemnities”: 
All indemnification obligations of the Securitization Entities to the Class A-1
Noteholders pursuant to any Class A-1 Note Purchase Agreement.

 

“Class A-1 Note Administrative Expenses”:  With respect to any Series of Class A-1
Notes, all amounts due and payable to the Class A-1 Administrative Agent
pursuant to the related Class A-1 Purchase Agreement that are identified
as “Class A-1 Note Administrative Expenses” in the related Series Supplement.

 

“Class A-1 Note Purchase Agreement”:  With respect to (i) the Series 2007-1
Class A-1 Notes, the Series 2007-1 Class A-1 Note Purchase
Agreement (as defined in the Series 2007-1 Supplement) and (ii) any
additional Class A-1 Notes, the meaning specified in the related Series Supplement.

 

A-11

 

“Class A-1 Notes”: 
With respect to (i) the Series 2007-1 Class A-1 Notes,
the 2007-1 Class A-1 Notes (as defined in the Series 2007-1
Supplement) and (ii) any additional Class A-1 Notes, the meaning
specified in the related Series Supplement.

 

“Class A-2 Notes”: 
With respect to (i) the Series 2007-1 Class A-2 Notes,
the Series 2007-1 Class A-2 Notes (as defined in the Series 2007-1
Supplement) and (ii) any additional Class A-2 Notes, the meaning
specified in the related Series Supplement.

 

“Class A-2-I Notes”: 
With respect to (i) the Series 2007-1 Class A-2-I Notes,
the Series 2007-1 Class A-2-I Notes (as defined in the Series 2007-1
Supplement) and (ii) any additional Class A-2-I Notes, the meaning
specified in the related Series Supplement.

 

“Class A-2-II Notes”: 
With respect to (i) the Series 2007-1 Class A-2-II Notes,
the Series 2007-1 Class A-2-II Notes (as defined in the Series 2007-1
Supplement) and (ii) any additional Class A-2-II Notes, the meaning
specified in the related Series Supplement.

 

“Clearing Agency”:  An
organization registered as a “clearing agency” pursuant to Section 17A
of the Exchange Act.

 

“Clearstream”: 
Clearstream Banking, société anonyme,
a corporation organized under the laws of the Grand Duchy of Luxembourg.

 

“Closing Date”:  November 29,
2007.

 

“Code”:  The U.S. Internal
Revenue Code of 1986, as amended.

 

“Co Indenture Trustee”: 
The meaning specified in Section 6.11 of the Base Indenture.

 

“Co Issuers”: 
Collectively, the Master Issuer, the IP Holder, the Restaurant Holders
and any Additional Co Issuer.

 

“Co Issuer Certificate of Formation”:  Each certificate of formation of each of the
related Co-Issuers, dated August 8, 2007, and any related Additional Co
Issuer certificate of formation, as amended, modified or supplemented from time
to time.

 

“Co Issuer Limited Liability Company Agreement”:  Each limited liability company agreement of
each of the related Co-Issuers, and any related Additional Co Issuer limited
liability company agreement, in each case, as amended, modified or supplemented
from time to time.

 

“Collateral”:  All of the
Securitization Entities’ right, title and interest in, to and under all of
their respective assets, now existing or hereafter created, other than the
Excepted Property described below, and the proceeds thereof, including the
following property:

(a)        with respect
to the Master Issuer, (i) the Existing U.S. Franchise Agreements and all
Franchise Payments thereon, (ii) its rights but none of its obligations
under the Post-Closing U.S. Restaurant Purchase Agreement, including the
revenues generated by the

 

A-12

 

Post-Closing
U.S. Restaurants (pending the transfer of the assets relating to such
Post-Closing U.S. Restaurants to the applicable Restaurant Holders following
the Closing Date), (iii) the IHOP Residual Certificate and any Replacement
Residual Certificate, and (iv) the limited liability company membership
interests (and, with respect to each Restaurant Holder that is a corporation,
the capital stock) owned by the Master Issuer that represents the 100%
ownership interest in each of the Franchise Holder, the IP Holder and the
Restaurant Holders and its ownership interest in each Liquor License Holder;

 

(b)        with respect
to the Franchise Holder, (i) the Existing U.S. Development Agreements and
all Development Payments thereon; (ii) the New U.S. Franchise Agreements
and all Franchise Payments thereon; (iii) all rights to enter into New
U.S. Franchise Agreements and New U.S. Development Agreements; (iv) the
intercompany loans from the Franchise Holder to the Master Issuer; and (v) any
deposit account held in the name of the Franchise Holder for purposes of
maintaining a minimum net worth;

 

(c)           (c)     with
respect to the Restaurant Holders, (i) the Company-Owned U.S. Restaurant
Assets; (ii) the Company-Owned Real Property owned by the Restaurant
Holders; and (iii) the payments received by the Restaurant Holders on the
Refranchised Restaurant Leases, if any, Franchisee Sub-Leases, if any, and any
other leases entered into by the Restaurant Holders as the lessor or the
sub-lessor, as applicable; provided, that the Company-Owned U.S.
Restaurant Assets and Company-Owned Real Property relating to the Post-Closing
U.S. Restaurants will not be property of the Restaurant Holders included in the
Collateral until such assets are transferred to the applicable Restaurant
Holder in the manner provided in the Post-Closing U.S. Restaurant Purchase
Agreement (although the right to the proceeds of such assets will be included
in the Collateral from the Closing Date forward as described above);

 

(d)        with respect
to the IP Holder, the IP Assets and the right to bring an action at law or in
equity for any infringement, misappropriation, dilution or violation thereof
occurring prior to, on or after the Closing Date, and to collect all damages,
settlements and proceeds relating thereto;

 

(e)        with respect
to Applebee’s Holdings, the limited liability company membership interest in
the Master Issuer (which represents the 100% ownership interest in the Master
Issuer);

 

(f)         any and all
other property of every name and nature, now or hereafter transferred,
mortgaged, pledged, or assigned as security for payment or performance of any
obligation of the Franchisees or other Persons, as applicable, to the Master
Issuer or the Franchise Holder, as applicable, under the Franchise Agreements and
the rights evidenced thereby or reflected therein;

 

(g)        the Accounts
and all amounts on deposit in or otherwise credited to the Accounts; provided,
that the security interest of the Indenture Trustee to (i) the Lease
Payment Account will be subject to the rights of third party lessors to receive
the amount on deposit in such account, (ii) the Gift Card Reserve Account
will be subject to the rights of ACMC, Inc. to receive the amount on
deposit in such account, (iii) the Third Party Licensing Fee Account will
be subject to the rights of Weight Watcher’s International, Inc. and any
other third

 

A-13

 

party to
receive the amount on deposit in such account, (iv) the Insurance Proceeds
Account will be subject to the rights of the Franchisees to receive the amount
on deposit in such account pursuant to the related Franchise Agreement and (v) certain
accounts maintained with depositary institutions for the deposit of cash
revenues generated by Company-Owned U.S. Restaurants pending transfer to the
Concentration Account may not be subject to Account Control Agreements to the
extent permitted under the Servicing Agreement;

 

(h)        the books and
records (whether in physical, electronic or other form) of each of the Co-Issuers,
including those books and records maintained by the Servicer on behalf of the
Master Issuer relating to the Existing Franchise Assets and on behalf of the IP
Holder relating to the IP Assets;

 

(i)         the rights,
powers, remedies and authorities of the Co-Issuers under (i) each of the
Transaction Documents (other than the Indenture) to which they are a party and (ii) with
respect to the Master Issuer, each of the documents relating to the Existing
Franchise Assets to which it is a party;

 

(j)         any and all
other property of the Co-Issuers now or hereafter acquired other than the
Excepted Property;

 

(k)        the rights,
powers, remedies and authorities of the Securitization Entities under any
agreements relating to the IP Assets including any IP License Agreement entered
into by the Securitization Entities in connection therewith; and

 

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

 

(m)       provided,
that the Collateral will exclude the following property of the Securitization
Entities (the “Excepted Property”): 
(i) the liquor licenses owned by the Restaurant Holders, (ii) the
Company Leases, the Sale/Leaseback Leases, if any, the Franchisee Sub-Leases,
if any, and the Refranchised Restaurant Leases, if any (all of which leases are
referred to herein collectively as the “Leases”), (iii) the
Excepted IP Assets and (iv) the Advertising Fees Account and all amounts
on deposit in the Advertising Fees Account from time to time, which will be
held by the Servicer for the benefit of the Securitization Entities; provided,
however, that all rights to payment and all payments received by the
Restaurant Holders on any Franchisee Sub-Leases, Refranchised Restaurant Leases
and any other leases that the Restaurant Holders are party to as lessor or
sublessor will be included in the Collateral as described above; provided,
further, that the Excluded Property will not be part of the Collateral.

 

“Collateralized Letters of Credit”:  The meaning specified in Section 11.1(e) of
the Base Indenture.

 

“Collection Account”:  The
trust account established pursuant to Section 10.7(a) of the
Base Indenture.

 

“Collection Account Administrative Account”:  The meaning specified in Section 10.8(a) of
the Base Indenture.

 

A-14

 

“Collections”:  With
respect to each Monthly Collection Period, all amounts received by or for the
account of the Securitization Entities during such Monthly Collection Period,
including (without duplication):

 

(i)    the Franchise Payments and Development
Payments deposited to the Concentration Account during such Monthly Collection
Period;

 

(ii)   all cash revenues and credit card proceeds
generated by the Company-Owned U.S. Restaurants and Post-Closing U.S.
Restaurants over such period, including (without duplication) (A) the
aggregate amount of the proceeds from the redemption at such restaurants of
ACMC Gift Cards sold at such restaurants that are withdrawn from the Gift Card
Reserve Account for deposit to the Concentration Account on a weekly basis as
described herein, (B) the funds received from ACMC, Inc. and
deposited to the Concentration Account on a weekly basis in respect of
redemptions at Company-Owned U.S. Restaurants and Post Closing U.S. Restaurants
of ACMC Gift Cards sold other than at such restaurants and (C) the amount,
if any, 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;

 

(iii)   the
Lease Receipts, if any;

 

(iv)   all
amounts received in respect of the IP Assets;

 

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

 

(vi)   Indemnification
Amounts, Insurance Proceeds Amounts, Asset Disposition Prepayment Amounts and
(without duplication of Asset Disposition Prepayment Amounts) all other amounts
received upon the disposition of the Collateral including 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;

 

(vii)  the
Series Hedge Receipts, if any, received by the Co-Issuers in respect of
any Series Hedge Agreements entered into by the Co-Issuers in connection with
the issuance of additional Series of Notes following the Closing Date;

 

(viii)  the
Investment Income (net of losses and expenses) earned on amounts on deposit in
the applicable accounts established pursuant to the Servicing Agreement and the
Indenture;

 

(ix)   the
equity contributions, if any, that Applebee’s International elects to make to Applebee’s
Holdings for contribution to the Master

 

A-15

 

Issuer (which will include the initial deposit to be made to
the Concentration Account on the Closing Date only to the extent that the
Servicer directs such deposit to be withdrawn from the Concentration Account
for deposit to the Collection Account for application as Collections during any
Monthly Collection Period);

 

(x)    to the extent not otherwise included above,
the Excluded Amounts;

 

(xi)   rebates from vendors associated with supplies
to Company-Owned U.S. Restaurants or other similar amounts; and

 

(xii)  any other payments or proceeds (including all
insurance and condemnation proceeds) received with respect to the Collateral.

 

“Company Leases”:  The
leases for the real property on which Company-Owned U.S. Restaurants are
located entered into between a third party, as the lessor, and the applicable
Predecessor Restaurant Holder (prior to the Closing Date) and the applicable
Restaurant Holder (on and after the Closing Date), as the lessee.

 

“Company Order” and “Company Request”:  A written order or request, as the case may
be, dated and signed in the name of each of the Co-Issuers by an Authorized
Officer of each of the Co-Issuers, or by an Authorized Officer of the Servicer
pursuant to the Servicing Agreement.

 

“Company-Owned Real Property”: 
The real property (including the land, buildings and fixtures) on which
a Company-Owned U.S. Restaurant is located and owned prior to the Closing Date
by the applicable Predecessor Restaurant Holder and following the Closing Date
by the applicable Restaurant Holder.

 

“Company-Owned U.S. Restaurant Assets”:  All of the assets associated with owning and
operating the Company-Owned U.S. Restaurants (such as furnishings, cooking
equipment, cooking supplies and computer equipment), other than (i) the
Real Estate Assets, (ii) the IP Assets (other than the right to use the IP
Assets granted to each Restaurant Holder pursuant to the related Franchise
Agreement), (iii) any employee agreements (except to the extent that any
Restaurant Holder is required to employ the employees of a Company-Owned U.S.
Restaurant owned by such Restaurant Holder in order to comply with applicable
liquor license laws) and (iv) any supply agreements (for which purpose
such supply agreements will be of the type set forth in a schedule to the
First-Tier Asset Contribution Agreements).

 

“Company-Owned U.S. Restaurants”:  Collectively, the Existing Company-Owned U.S.
Restaurants, the Post-Closing U.S. Restaurants, from and after the date, if
any, that they are transferred to a Restaurant Holder, the New Company-Owned
U.S. Restaurants, if any, and any Retained U.S. Restaurants which are
subsequently transferred to a Restaurant Holder.

 

“Concentration Account”: 
The meaning specified in Section 10.1(a) of the Base
Indenture.

 

A-16

 

“Confidential Information”: 
Trade secrets and other information (including know how, ideas,
techniques, recipes, formulas, customer lists, customer information, business
methods and processes, marketing plans, specifications, and other similar
information) that is confidential and proprietary to its owner and that is
disclosed by one party to an agreement to another party thereto whether in
writing or disclosed orally, and whether or not designated as
confidential.  “Confidential Information”
shall include the amount of premium fees being paid to Assured Guaranty
pursuant to its Insurance Policy.

 

“Consolidated Earnings Before Discontinued Operations and Cumulative
Effect of Change in Accounting Principle”: 
With respect to IHOP Corp., Applebee’s International and their
Affiliates for any specified period, the amount (not less than zero) equal to
their consolidated net earnings, plus losses and minus gains from discontinued
operations, each net of tax, and the elimination of the impact on net earnings
of the cumulative effect of changes in accounting principles, each as defined
by GAAP.

 

“Consolidated Net Interest Expense”:  With respect to any Person for any period,
total interest expense, whether paid or accrued (including the interest
component of capital leases), of such Person and its subsidiaries, including,
without limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and net costs under interest rate contracts
and foreign exchange contracts, and amortization of discount, but excluding
interest expense not payable in cash (including interest accruing on deferred
compensation obligations) other than amortization of discount, all as
determined in conformity with GAAP.

 

“Contingent Additional Interest Accounts”:  The Senior Notes Monthly Contingent
Additional Interest Account and the Subordinated Notes Monthly Contingent
Additional Interest Account.

 

“Contingent Additional Interest Amount”:  With respect to the (i) Series 2007-1
Notes, the Series 2007-1 Contingent Additional Interest, if any, and with
respect to (ii) each other Series of Notes, the meaning specified in
the related Series Supplement.

 

“Controlled Group”:  With
respect to any Person, such Person, whether or not incorporated, and any
corporation, trade, business, organization or other entity that is, along with
such Person, treated as a single employer under Sections 414(b), (c), (m) or
(o) of the Code or Section 4001(a)(14) of ERISA.

 

“Copyrights”:  The meaning
specified in the definition of “Intellectual Property” in this Appendix
A.

 

“Corporate Trust Office”: 
The principal corporate trust office of the Indenture Trustee, currently
located at Sixth Street and Marquette Avenue, MAC N9311-161, Minneapolis, MN
55479, Attn:  Corporate Trust
Services/Asset Backed Administration, or such other address as the Indenture
Trustee may designate from time to time by notice to the Holders, each Insurer,
if any (if such Insurer is then a Series Controlling Party in relation to
a Series of Notes), each Rating Agency and the Co-Issuers or the principal
corporate trust office of any successor Indenture Trustee.

 

A-17

 

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

 

“Cut-Off Date”:  12:00 a.m.
(New York time) on November 26, 2007 (which will be Monday of the week in
which the Closing Date occurs).

 

“Debt”:  With respect to
any Person as of any date of determination (without duplication):  (a) all indebtedness for borrowed money
in any form, including derivatives, (b) that portion of obligations with
respect to any lease of any property (whether real, personal or mixed) that is
properly classified as a liability on a balance sheet in conformity with GAAP,
including all capitalized lease obligations incurred by such Person, (c) notes
payable, (d) any obligation owed for all or any part of the deferred
purchase price for property or services, which purchase price is (i) due
more than six months from the date of the incurrence of the obligation in
respect thereof or (ii) evidenced by a note or similar written instrument
(other than an earn out obligation until such obligation becomes a liability on
the balance sheet of such Person under GAAP), (e) all indebtedness secured
by any Lien on any property or asset owned by that Person or is nonrecourse to
the credit of that Person, (f) any reimbursement obligations in respect of
any letters of credit, contingent or otherwise, and (g) all contingent
obligations of such Person in respect of the foregoing; provided, that
notwithstanding the foregoing, Debt shall not include any liability for
federal, state, local or other Taxes owed or owing to any governmental entity.

 

“Debt Service”:  With
respect to any Payment Date, the sum of (i) the Senior Notes Monthly
Interest Amount, plus (ii) the Class A-1 Commitment Fees
Amount, plus (iii) the Accrued Insurer Premium Amount, plus (iv) the
Series Hedge Payments payable pursuant to subclause (D) of clause
(iv) of the Priority of Payments; plus (v) the Class A-1
Note Administrative Expenses due under each Class A-1 Note Purchase
Agreement (or other similar agreement) in an aggregate amount up to the Capped Class A-1
Note Administrative Expense Amount, in each case with respect to such Payment
Date; provided, that for purposes of calculating the Debt Service
Coverage Ratio in respect of the first Payment Date, Debt Service will be
deemed to be the product of (i) the sum of clauses (i) through
(v) above multiplied by (ii) a fraction the numerator of which
is 30 and the denominator of which is the number of days elapsed between the
Initial Closing Date and the first Payment Date, based on a 360-day year of
twelve 30-day months.

 

“Default”:  With respect
to the Notes, any Event of Default or any occurrence that with notice or the
lapse of time or both would become an Event of Default.

 

“Definitive Note”:  The
meaning specified in Section 2.2(c) of the Base Indenture.

 

“Development Agreements”: 
Collectively, the Existing U.S. Development Agreements and the New U.S.
Development Agreements.

 

“Development Payments”: 
All amounts payable by Franchisees pursuant to the Development
Agreements other than Excluded Amounts.

 

“Discloser”:  The meaning
specified in Section 16.9 of the Base Indenture.

 

A-18

 

“Disqualified Transferee”: 
The meaning specified in Section 2.5(k) of the Base
Indenture.

 

“Distribution Compliance Period”:  The meaning specified in Section 2.5(h)(iii) of
the Base Indenture.

 

“Dollar” or “$” or “U.S.$” or “U.S. Dollar”:  The lawful currency of the United States.

 

“DTC”:  The Depository
Trust Company, its nominees, and their respective successors.

 

“EBITDA”:  For any specified
period, the amount (not less than zero) equal to:

 

(a)  the sum of (i) the Consolidated Earnings Before
Discontinued Operations and Cumulative Effect of Change in Accounting Principle
of IHOP Corp., Applebee’s International and their Affiliates plus (ii) to
the extent any of the following are adjusted in calculating the amount
specified in clause (i):  (A) the
Consolidated Net Interest Expense for such period, (B) the U.S. Federal,
state, local and foreign income taxes for such period, (C) non-cash losses
from the sale or disposition of assets not in the ordinary course of business
and other non-cash extraordinary or non-cash nonrecurring items, (D) non-cash
stock based compensation expense for such period, (E) depreciation and
amortization, (F) impairment losses and non-cash store closure expenses, (G) non-cash
loss of any joint venture, and (H) non-cash adjustments and actuarial
estimates related to Neighborhood Insurance; minus;

 

(b)  to the extent added in calculating the Consolidated Earnings
Before Discontinued Operations and Cumulative Effect of Change in Accounting
Principle, (A) gains from the sale or disposition of fixed assets not in
the ordinary course of business and other extraordinary or nonrecurring items,
and (B) the non-cash income for any joint venture.

 

“EBITDAR”:  For each
Payment Date and any other date of determination, as determined as of the
immediately preceding Accounting Date, the sum of (a) EBITDA for each of
the last twelve fiscal months, plus (b) the amounts expensed by
Applebee’s International and IHOP Corp. under operating leases for each of the
last twelve fiscal months.

 

“EDSF Rate”:  When used
with respect to any Business Day, the rate derived from the Eurodollar
Synthetic Forward Curve appearing on Bloomberg (or any successor service or, if
such service or successor service is not available, a substitute rate, which
will be the median of three quoted rates determined by the Indenture Trustee
requesting at the expense of the Co-Issuers substitute rate quotes from three
broker dealers of nationally recognized standing), adjusted for 30/360 day
count convention expressed as a number of basis points per annum.

 

“Eligible Account”:  A (a) segregated
identifiable trust account established in the trust department of a Qualified
Trust Institution or (b) separately identifiable deposit or securities
account established at a Qualified Institution.

 

“Eligible Investments”: 
Any one or more negotiable instruments or securities, purchased at or
less than their par value, payable in Dollars, issued by an entity organized
under

 

A-19

 

the laws of the United States of America (or
by the United States of America) and represented by instruments in bearer or
registered or in book-entry form which evidence (excluding any security with
the “r” symbol attached to its rating and any security the payments on which
are subject to withholding tax):

 

(a)           obligations that are
direct obligations the full and timely payment of which is to be made by, or
obligations that are fully guaranteed as to principal and interest by, the
United States of America other than financial contracts whose value depends on
the values or indices of asset values; provided
that such obligations are backed by the full faith and credit of the United
States of America and have a predetermined, fixed amount of principal due at
maturity (that cannot vary or change) and that each such obligation has a fixed
interest rate or has its interest rate tied to a single interest rate index
plus a single fixed spread;

 

(b)           demand deposits of,
time deposits in, or certificates of deposit issued by, any depositary
institution or trust company incorporated under the laws of the United States
of America or any state thereof whose short-term debt is rated in the highest
short-term debt rating category respectively by each of Moody’s, S&P and
Fitch (if rated by Fitch) and which is subject to supervision and examination
by federal or state banking or depositary institution authorities; provided,
however, that at the time of the investment the long-term unsecured debt
obligations (other than such obligations whose rating is based on collateral or
on the credit of a Person other than such institution or trust company) of such
depositary institution or trust company will have a credit rating from each of
S&P, Moody’s and Fitch (if rated by Fitch) in the highest long-term debt
rating category respectively;

 

(c)           commercial paper
having, original maturities of not more than 270 days and a remaining term to
maturity upon purchase of not later than the Business Day preceding the next
Payment Date, a rating from each of Moody’s, S&P and Fitch (if rated by
Fitch) in the highest short-term debt rating category, respectively, and that
has a predetermined fixed amount of principal due at maturity (that cannot vary
or change) and has a fixed interest rate or has its interest rate tied to a
single interest rate index plus a single fixed spread;

 

(d)           bankers’ acceptances
issued by any depositary institution or trust company described in clause (b) above;

 

(e)           investments in money
market funds that have as one of their investment objectives the maintenance of
a constant net asset value rated “Aaa” by Moody’s and “AAA” by each of S&P,
Moody’s and Fitch (if rated by Fitch) or otherwise approved in writing by the
Aggregate Controlling Party and the Rating Agencies; and

 

(f)            any other
instruments or securities, if approved in writing by the Aggregate Controlling
Party and the Rating Agencies confirm in writing that the investment in such
instruments or securities will not adversely affect any ratings with respect to
any Series of Notes;

 

provided that (i) no
investment described will evidence either the right to receive (A) only
interest with respect to such investment or (B) a yield to maturity
greater than 120% of the yield to maturity at par of the underlying obligations
and (ii) such Eligible Investments will mature

 

A-20

 

prior to the immediately succeeding Payment
Date.  Each Eligible Investment will not
be subject to deduction or withholding for or on account of any withholding or
similar tax, unless the payor is required to make “gross up” payments that
ensure that the net amount actually received by the Co-Issuers (free and clear of
taxes, whether assessed against such obligor or the Co-Issuers) will equal the
full amount that the Co-Issuers would have received had no such deduction or
withholding been required.  Eligible
Investments may include, without limitation, investments for which the
Indenture Trustee or an Affiliate of the Indenture Trustee provides services
and, in each case, that otherwise fall within the foregoing provisions of this
definition.

 

“Environmental Law”:  Any
and all laws, rules, order, regulations, statutes, ordinances, guidelines,
codes, decrees, agreements or other legally enforceable requirements (including
common law) of any international authority, foreign government, the United
States, or any state, local, municipal or other governmental authority, regulating,
relating to or imposing liability or standards of conduct concerning protection
of the environment or of human health, or employee health and safety, as has
been, is now, or may at any time hereafter be, in effect.

 

“Environmental Permits”: 
Any and all permits, licenses, approvals, registrations, notifications,
exemptions and other authorizations required under any Environmental Law.

 

“Equity Interest”:  Any (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.

 

“ERISA”:  The Employee
Retirement Income Security Act of 1974, as amended, and any successor statute
of similar import, in each case as in effect from time to time, and references
to sections of ERISA also refer to any successor sections.

 

“Euroclear”:  Euroclear
Clearance System.

 

“Eurodollar Business Day”: 
Any day on which commercial banks are open for business (including
dealings in foreign exchange and foreign currency deposits) in London.

 

“Eurodollar Rate”:  For
purposes of (a) the Series 2007-1 Class A-1 Notes, the meaning
specified in the Series 2007-1 Class A-1 Note Purchase Agreement and (b) the
Class A-1 Notes of any additional Series of Notes, the meaning
specified in the related Class A-1 Note Purchase Agreement.

 

“Event of Bankruptcy”:  An
event which shall be deemed to have occurred with respect to any Person if:

 

(a)           a case or other
proceeding shall be commenced, without the application or consent of such
Person, in any court, seeking the liquidation, reorganization, debt
arrangement, dissolution, winding up, or composition or readjustment of debts
of such Person, the appointment of a trustee, receiver, custodian, liquidator,
assignee, sequestrator or the like for such Person or all or any substantial
part of its assets, or any similar action with respect to such Person under

 

A-21

 

any law relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts, and such case
or proceeding shall continue undismissed, or unstayed and in effect, for a
period of sixty (60) consecutive days; or an order for relief in respect of
such Person shall be entered in an involuntary case under the federal
bankruptcy laws or other similar laws now or hereafter in effect; or

 

(b)           such Person shall
commence a voluntary case or other proceeding under any applicable bankruptcy,
insolvency, reorganization, debt arrangement, dissolution or other similar law
now or hereafter in effect, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) for such Person or for any substantial
part of its property, or shall make any general assignment for the benefit of
creditors; or

 

(c)           the board of
directors or board of managers (or similar body) of such Person shall vote to
implement any of the actions set forth in clause (b) above.

 

“Event of Default”:  The
meaning specified in Section 5.3 of the Base Indenture.

 

“Excepted IP Assets” :  (a) Non-U.S.
Intellectual Property Rights (other than Non-U.S. Intellectual Property Rights
in the POS System) arising after the Closing Date; (b) any right to use
third party Intellectual Property pursuant to a license to the extent such
rights are not able to be pledged; and (c) any application for
registration of a Trademark that would be invalidated, canceled, voided or
abandoned due to the grant and/or enforcement of an assignment or security
interest, including intent-to-use applications filed with the PTO pursuant to
15 U.S.C. Section 1051(b) prior to the filing of a statement of use
or amendment to allege use pursuant to 15 U.S.C. 1051(c) or (d); provided,
that at such time as the grant and/or enforcement of the assignment or security
interest would not cause such application to be invalidated, canceled, voided
or abandoned, then such Trademark application will not be considered an
Excepted IP Asset; provided, further, that with respect to
licenses of third party Intellectual Property entered into after the Closing
Date by the Co-Issuers (including, for the avoidance of doubt, the Servicer
acting on behalf of the Co-Issuers, as applicable), the Co-Issuers will use
commercially reasonable efforts to include terms permitting the grant by the
Co-Issuers of a security interest therein to the Indenture Trustee for the
benefit of the Secured Parties and to allow the Servicer (and any Successor
Servicer) the right to use such Intellectual Property in the performance of its
duties under the Servicing Agreement or, as applicable, the Back-Up Manager
Agreement.

 

“Excepted Property”:  The
meaning specified in the definition of “Collateral” in this Appendix A.

 

“Excess Gift Card Reserve Amount”:  An amount equal to the income recognized by
the Master Issuer in respect of the preceding calendar year in accordance with
U.S. GAAP following a determination by the Servicer on behalf of the Master
Issuer that an ACMC Gift Card purchased at a Company-Owned U.S. Restaurant or
Post-Closing U.S. Restaurant will not be redeemed, if any, as of the 5th day of
May of each year or, if such day is not a Business Day, the immediately following
Business Day.

 

A-22

 

“Exchange Act”:  The
United States Securities Exchange Act of 1934, as amended.

 

“Excluded Amounts”:  The
amounts received by the Securitization Entities that will not be included in
Retained Collections, which will be (i) the initial franchise fees
(including deposits representing initial franchise fees not yet due and
payable), transfer fees, territory fees and renewal fees, if any, payable by
Franchisees pursuant to Franchise Agreements and Development Agreements, (ii) Advertising
Fees, (iii) the proceeds from the sale of ACMC Gift Cards at Company-Owned
U.S. Restaurants and Post-Closing U.S. Restaurants, (iv) the licensing
fees and royalty fees and other similar amounts payable to third parties in
connection with the sale or use of their products or services at Company-Owned
U.S. Restaurants and Post-Closing U.S. Restaurants, including, without
limitation, the Weight Watchers Fees, (v) the revenues received with
respect to Company-Owned U.S. Restaurants and Post-Closing U.S. Restaurants
that are due and payable to the applicable Governmental Authorities as sales
tax or other comparable tax and (vi) any other amounts received from
Franchisees pursuant to Participation Agreements and other agreements that
represent payments owed by Applebee’s International and its Affiliates to third
party licensors of Intellectual Property.

 

“Excluded IP Assets”:  (a) Non-U.S.
Intellectual Property Rights (other than Non-U.S. Intellectual Property Rights
in the POS System) existing as of the Closing Date; (b) any right to use
third party Intellectual Property pursuant to a license to the extent such
rights are not assignable; (c) any right to use third party Intellectual
Property that has been licensed to the Servicer and sublicensed to Franchisees
pursuant to Participation Agreements; (d) Intellectual Property owned by
ACMC, Inc. and ACMC, Inc.’s rights under licenses of Intellectual
Property to ACMC, Inc., in each case, that pertain exclusively to ACMC, Inc.’s
Gift Card Business; and (e) Intellectual Property jointly owned with
Weight Watchers International, Inc. to the extent non-assignable; and (f) any
application for registration of a Trademark that would be invalidated,
canceled, voided or abandoned due to the grant and/or enforcement of an
assignment or security interest, including intent-to-use applications filed
with the PTO pursuant to 15 U.S.C. Section 1051(b) prior to the
filing of a statement of use or amendment to allege use pursuant to 15 U.S.C.
1051(c) or (d); provided, that at such time as the grant and/or
enforcement of the assignment or security interest would not cause such
application to be invalidated, canceled, voided or abandoned, then such
Trademark application will not be considered an Excluded IP Asset.

 

“Excluded Property”:  The
following property of Applebee’s International and its Subsidiaries:

 

(a)           the contract
expiring on December 31, 2008 (the “Weight Watchers Agreement”), by
and between Weight Watchers International, Inc. and Applebee’s
International, pursuant to which Applebee’s International is a licensee of
certain intellectual property of Weight Watchers International, Inc. and
all Intellectual Property jointly owned with Weight Watchers International, Inc.
to the extent non-assignable;

 

(b)           the tangible and
intangible property of Applebee’s International relating to businesses,
products, and services (including the franchising and operation of Applebee’s
Branded restaurants) located, sold or offered for sale outside the United
States other than (i) IP Assets in the U.S. Territories, and (ii) worldwide
Intellectual Property rights in the POS System;

 

A-23

 

(c)           the ownership
interest in the tangible and intangible property of the Predecessor Restaurant
Holders relating to the Post-Closing U.S. Restaurants unless and until such
property is conveyed to the applicable Restaurant Holder pursuant to the
Post-Closing U.S. Restaurant Purchase Agreement; provided, that the
rights and obligations of the Master Issuer under the Post-Closing U.S.
Restaurant Purchase Agreement, including all amounts received on the assets
relating to the Post-Closing U.S. Restaurants, will not be Excluded Property;

 

(d)           the Franchise
Agreements and all other assets relating to up to 6 Applebee’s Restaurants that
will not be contributed by Applebee’s International and its Subsidiaries on or
after the Closing Date because Applebee’s International has determined that
such Applebee’s Restaurants will be permanently closed or otherwise cannot
satisfy the applicable representations and warranties set forth in the related
First-Tier Asset Contribution Agreement on or after the Closing Date and which
will be identified in a schedule to the related First-Tier Asset Contribution
Agreement (collectively, the “Excluded U.S. Restaurants”);

 

(e)           the U.S. Territories
Business;

 

(f)            with respect to the
IP Holder and each of the other Co-Issuers, the Excluded IP Assets;

 

(g)           the Participation
Agreements entered into by the Servicer and Franchisees prior to the Closing
Date, except for those pertaining to the POS System (which POS System, and the
related Participation Agreements, will be assigned by the Servicer or Applebee’s
International, as applicable, to the IP Holder);

 

(h)           Applebee’s
International’s direct and indirect ownership interest in each of its
Subsidiaries other than the Master Issuer and its Subsidiaries and the property
owned by such Subsidiaries (other than the property owned by the Predecessor
Restaurant Holders or any other Subsidiary of Applebee’s International that is
to be contributed to the Securitization Entities on the Closing Date in the
manner described herein), which Subsidiaries and/or properties include but are
not limited to (i) Applebee’s Services, Inc. (which is the Servicer),
(ii) Applebee’s Holdings, (iii) Applebee’s Holdings II (which holds a
1% ownership interest in Applebee’s Holdings), (iv) the Predecessor
Restaurant Holders, (v) the special purpose entities previously formed by
Applebee’s International to hold liquor licenses in compliance with applicable
liquor license laws (the “Predecessor Liquor License Holders”), (vi) ACMC, Inc.
(“ACMC, Inc.”), a Virginia corporation that is a direct,
wholly-owned Subsidiary of Applebee’s International, which issues ACMC Gift
Cards for use in Applebee’s Restaurants; and (vii) Neighborhood Insurance, Inc.
(“Neighborhood Insurance”), a Vermont corporation that is a direct,
wholly-owned Subsidiary of Applebee’s International that is Applebee’s
International’s captive insurance company (which ceased writing new insurance
policies in 2006);

 

(i)            Applebee’s
International’s current (and any future) headquarters and the tangible personal
property located in the headquarters and any other real property owned or
leased (and the tangible personal property located therein) by Applebee’s
International and its Subsidiaries that is not held in connection with the
operation of the U.S. Restaurant Business (which will include all tangible
personal and real property associated with Company-Owned U.S. 

 

A-24

 

Restaurants that have permanently closed
prior to the Closing Date), as set forth in a schedule to the related
First-Tier Asset Contribution Agreement;

 

(j)            Applebee’s International’s
national marketing fund (referred to herein as the “National Advertising
Fund”),

 

(k)           the liquor licenses
owned by the applicable Predecessor Restaurant Holders and Predecessor Liquor
License Holders and the rights and obligations of any Predecessor Restaurant
Holder under any interim operating agreement or similar contract that permits a
Predecessor Restaurant Holder to sell alcoholic beverages at an Applebee’s
Restaurant;

 

(l)            any employment
agreements previously entered into by Applebee’s International and its
Subsidiaries (other than any employment agreements pursuant to which any
Restaurant Holder employs the employees of a Company-Owned U.S. Restaurant in
order to comply with applicable liquor license laws);

 

(m)          any supply agreements
previously entered into by Applebee’s International and its Subsidiaries;

 

(n)           real property
owned or leased by Predecessor Restaurant Holders, which are intended to be
developed as Applebee’s Restaurants and which will be set forth in a schedule
to the related First-Tier Asset Contribution Agreement;

 

(o)           all other tangible
and intangible assets of Applebee’s International and its Subsidiaries set
forth in a schedule to the related First-Tier Asset Contribution Agreement; and

 

(p)           the proceeds of all
of such property.

 

“Excluded U.S. Restaurants”: 
The meaning specified in the definition of “Excluded Property” in this
Appendix A.

 

“Existing Company-Owned U.S. Restaurants”:  The Applebee’s Restaurants located in the
United States that are owned and operated by the Predecessor Restaurant Holders
as of the Business Day immediately preceding the Closing Date (other than the
Retained U.S. Restaurants).

 

“Existing Franchise Assets”: 
The meaning specified in paragraph (d) of the Granting Clauses of
the Base Indenture.

 

“Existing Franchised U.S. Restaurants”:  The Applebee’s Restaurants located in the
United States that are owned and operated by Franchisees that are unaffiliated
with Applebee’s International and its Affiliates as of Closing Date.

 

“Existing U.S. Development Agreements”:  As of the Closing Date, all of Applebee’s
International rights and obligations under all existing development agreements
for Applebee’s Restaurants.

 

A-25

 

“Existing U.S. Franchise Agreements”:  Franchise agreements entered into by Applebee’s
International on or prior to the Closing Date in connection with Applebee’s
Restaurants, including all renewals or extensions of such franchise agreements.

 

“Existing U.S. Restaurant Business”:  The (i)  franchising (and the ownership
by Franchisees) of the Existing Franchised U.S. Restaurants and (ii) the
ownership and operation of the Existing Company-Owned U.S. Restaurants.

 

“Federal Funds Rate”: 
Solely for purposes of the Series 2007-1 Class A-1 Note
Purchase Agreement, for any specified period, a fluctuating interest rate per
annum equal for each Business Day during such period to the weighted average of
the overnight federal funds rates as published in Federal Reserve Board
Statistical Release H.15(519) or any successor or substitute publication
selected by the Class A-1 Administrative Agent (or, if such day is not a
Business Day, for the next preceding Business Day), or if, for any reason, such
rate is not available on any day, the rate determined, in the reasonable
opinion of the Class A-1 Administrative Agent, to be the rate at which
overnight federal funds are being offered in the national federal funds market
at 9:00 a.m. (New York time).

 

“Final Order”:  The meaning
specified in the applicable Insurance Policy.

 

“Financial Assets”:  The
meaning specified in Section 10.9(b)(i) of the Base Indenture.

 

“Financing Statements”: 
Financing statements relating to the Indenture Collateral naming the
Master Issuer or Co-Issuer (as applicable) as debtor and the Indenture Trustee
on behalf of the Secured Parties as the secured party.

 

“First-Tier Asset Contribution Agreements”:  The Applebee’s Holdings II First-Tier Asset
Contribution Agreement and the Applebee’s International First-Tier Asset
Contribution Agreement.

 

“Fitch”:  Fitch, Inc.,
doing business as Fitch Ratings, or any successor thereto.

 

“Foreign Country”:  Any
country which is not the United States or a U.S. Territory.

 

“Franchise Agreements”: 
Collectively, the Existing U.S. Franchise Agreements and New U.S.
Franchise Agreements.

 

“Franchise Asset Termination”: 
The expiration of any Existing Franchise Asset in the ordinary course of
business.

 

“Franchise Documents”: 
Franchise Agreements, Development Agreements, Leases and other
agreements to which Applebee’s International 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.

 

A-26

 

“Franchise Holder”: 
Applebee’s Franchising LLC, a Delaware limited liability company, and
its permitted successors and assigns.

 

“Franchise Holder Guaranty and Collateral Agreement”:  The Guaranty and Collateral Agreement, dated
as of the Closing Date, by and among the Franchise Holder, the Master Issuer
and the Indenture Trustee.

 

“Franchise Holder IP License Agreement”:  The Franchise Holder Intellectual Property
License Agreement, dated as of the Closing Date, between the IP Holder, as the
licensor, and the Franchise Holder, as the licensee.

 

“Franchise Payments”:  All
amounts payable to the Master Issuer or the Franchise Holder by Franchisees
(including Restaurant Holders) pursuant to the Franchise Agreements (including
Participation Agreements pertaining to the POS System) other than Excluded
Amounts.

 

“Franchised U.S. Restaurants”: 
Collectively, the Existing Franchised U.S. Restaurants and the New
Franchised U.S. Restaurants.

 

“Franchisee”:  Any Person
(including a Restaurant Holder) that is a franchisee under a Franchise
Agreement.

 

“Franchisee Insurance Policy”: 
Any insurance policy maintained by a Franchisee for the benefit of the
applicable Predecessor Restaurant Holder (prior to the Closing Date) or the
applicable Restaurant Holder (following the Closing Date) or any of their
respective Affiliates, whether direct or indirect and without regard to whether
the applicable Predecessor Restaurant Holder (prior to the Closing Date) or the
applicable Restaurant Holder (following the Closing Date) is an additional
insured, pursuant to the applicable Franchise Agreement.

 

“Franchisee Insurance Proceeds”: 
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.

 

“Franchisee Insurance Restoration Payment”:  Any payment to service providers or lessees
(as applicable) pursuant to the applicable agreement relating to the
restoration or compensation for (as applicable) destroyed or damaged property.

 

“Franchisee Sub-Leases”: 
Sub-leases entered into between Restaurant Holders, as sub-lessors, and
the Franchisees, as sub-lessees, in connection with (A) the Company-Owned
Real Property, if any, that is sold to third parties in sale-leaseback
transactions and then leased by the third party to the applicable Restaurant
Holder for sub-lease to the Franchisee following the refranchising of the
related Company-Owned U.S. Restaurant or (B) the real property on which a
Company-Owned U.S. Restaurant is located that is leased by the applicable
Restaurant Holder pursuant to a Company Lease and then sub-leased by the applicable
Restaurant Holder to the Franchisee following the refranchising of the
Company-Owned U.S. Restaurant.

 

A-27

 

“Franchisor”:  The Master
Issuer (in respect of the Existing U.S. Franchise Agreements) or the Franchise
Holder (in respect of the New U.S. Franchise Agreements), in its capacity as
the franchisor under the Franchise Agreements.

 

“Franchisor Holding Account”: 
The account, subject to the Account Control Agreement (Servicing
Accounts), for the benefit of the Franchise Holder for the purposes of
satisfying certain minimum net worth or other liquidity concerns raised by
applicable Governmental Authorities.

 

“FTC”:  The Federal Trade
Commission.

 

“GAAP”:  The generally accepted
accounting principles promulgated or adopted by the Financial Accounting
Standards Board and its predecessors and successors from time to time, as
modified to reflect changes adopted by the Financial Accounting Standards Board
that are made effective for purposes of the Transaction Documents in the manner
provided in the Servicing Agreement.

 

“Gift Card”:  A gift card
redeemable at an Applebee’s Branded restaurant located in the United States or
U.S. Territories.

 

“Gift Card Business”:  The
manufacturing, marketing, issuance, sale and distribution of, and any other
transactions in relation to, Gift Cards.

 

“Gift Card Reserve Account”: 
The meaning specified in Section 10.2(b) of the Base
Indenture.

 

“Global Notes”:  The
meaning specified in Section 2.2(d) of the Base Indenture.

 

“Governmental Authority”: 
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.

 

“Grant”:  To grant,
hypothecate, mortgage, pledge, create and grant a security interest in and
right of set off against, deposit, set over and confirm.  A Grant of the Collateral (including the
Existing Franchise Assets or any other agreement, security or instrument) shall
include all rights, powers and options (but none of the obligations) of the
granting party thereunder, including the immediate continuing right to claim
for, collect, receive and receipt for principal, interest and fee payments in
respect of the Collateral (including the Existing Franchise Assets or any other
agreement, security or instrument), and all other Cash payable thereunder, to
give and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in the
name of the granting party or otherwise, and generally to do and receive anything
that the granting party is or may be entitled to do or receive thereunder or
with respect thereto.

 

“Guarantors”: 
Collectively, Applebee’s Holdings and the Franchise Holder.

 

A-28

 

“Guaranty and Collateral Agreements”:  The Franchise Holder Guaranty and Collateral
Agreement and the Applebee’s Holdings Guaranty and Collateral Agreement.

 

“Hedge Counterparty”:  An
institution which enters into an agreement with the Master Issuer (or all of
the Co-Issuers) to provide certain financial protections with respect to
changes in interest rates applicable to a Series of Notes relating to such
Notes if and as specified in the applicable Series Supplement.

 

“Hedge Counterparty Required Rating”:  The meaning specified in Section 13.3
of the Base Indenture.

 

“Hedge Payment Account”: 
The meaning specified in Section 10.6(a) of the Base
Indenture.

 

“Holder”:  A holder of
notes.

 

“IFSRA”:  The Irish
Financial Services Regulatory Authority.

 

“IHOP Certificate Release Request”:  A request by the Servicer, acting at the
direction of the Master Issuer addressed to the Indenture Trustee, to terminate
the security interest in the IHOP Residual Certificate and release the IHOP
Residual Certificate from the Trust Estate.

 

“IHOP Corp.”:  IHOP Corp.,
a Delaware corporation.

 

“IHOP Corp. Consolidated Leverage Ratio”:  As of any date of determination, the
following ratio determined as of the immediately preceding Accounting Date (or,
if such date of determination is an Accounting Date, such Accounting Date):

 

(a)           the sum of (i) aggregate
Debt outstanding in respect of IHOP Corp. and all of its Affiliates as of the
end of the immediately preceding fiscal calendar quarter plus (ii) the
product of (x) 8 and (y) the amounts expensed by IHOP Corp. and all
of its Affiliates under leases that are accounting for as operating leases in
conformity with GAAP for the last twelve months ending as of the end of the
last fiscal quarter; divided by

 

(b)           EBITDAR for the last
twelve months ending as of the end of the last fiscal quarter;

 

provided, that in calculating the
ratio set forth above, any variable funding note Outstanding of IHOP Corp. and
its Affiliates will be deemed to be fully drawn.

 

“IHOP Corp. Servicing Guaranty”: 
IHOP Corp. Servicing Guaranty, dated as of the Closing Date, by IHOP
Corp. for the benefit of the Co-Issuers pursuant to the Servicing Agreement.

 

“IHOP Indenture”:  The
Base Indenture, dated as of March 16, 2007, among IHOP Franchising LLC,
IHOP IP, LLC and Wells Fargo Bank, National Trustee (as amended, modified or
supplemented from time to time).

 

A-29

 

“IHOP Residual Amount”: 
Such residual amount, if any, remaining in the Collections Account (as
defined in the IHOP Indenture) created pursuant to the IHOP Indenture in
connection with the IHOP Securitization, which constitutes “Type 1 Cash Flow”
and is distributable under Section 10.9 of the IHOP Indenture on a
weekly basis after all property deposited and allocations specified in the
Weekly Collections Account Allocation Priority (as defined in the IHOP
Indenture) has been made.

 

“IHOP Residual Certificate”: 
A non-voting certificate issued by IHOP Franchising, LLC representing
the right of the holder thereof to receive the IHOP Residual Amount.

 

“IHOP Securitization”: 
The securitization of assets in connection with the issuance of
asset-backed notes by IHOP Franchising, LLC and IHOP IP, LLC pursuant to the
IHOP Indenture.

 

“Important 3(c)(7) Notice”: 
The meaning specified in Section 2.5(l) of the Base
Indenture.

 

“Indemnification Amount”: 
The amount payable by Applebee’s International or the Servicer, as
applicable, as of any date of determination (i) in respect of a breach of
certain representations, warranties or covenants in any Transaction Document
relating to a Company-Owned U.S. Restaurant, a Post-Closing U.S. Restaurant or
a Franchised U.S. Restaurant (including in each case the related Franchise
Agreement) that is not cured within the applicable cure period, if any, or (ii) as
otherwise required under the terms of any applicable Transaction Document,
which, in each case, will be an amount (not less than zero) equal to the
Allocated Note Amount assigned to such Applebee’s Restaurant on the Closing
Date or such later date on which the applicable Restaurant Holder acquired the
assets relating to such Applebee’s Restaurant. 
For the avoidance of doubt, any Liquor License Related Indemnification
Amount shall be deemed in all respects to constitute “Indemnification Amounts”
under the Indenture.

 

“Indenture”: 
Collectively, the Base Indenture and each Series Supplement
executed pursuant to Section 2.3(c) of the Base Indenture, as
amended, modified or supplemented from time to time.

 

“Indenture Collateral”: 
The meaning specified in the first paragraph of the “Granting Clauses”
to the Base Indenture.

 

“Indenture Collateral Release Event”:  The meaning specified in Section 14.1(a)(vi) of
the Base Indenture.

 

“Indenture Trust Account”: 
Individually, the Collection Account Administrative Accounts, the
Collection Account, the Senior Notes Interest Reserve Account, the Cash Trap
Reserve Account, the Hedge Payment Account and the applicable Series Distribution
Accounts.

 

“Indenture Trustee”: 
Wells Fargo Bank, National Association, a national banking association
and its permitted successors and assigns in such capacity.

 

A-30

 

“Indenture Trustee Fee”: 
Fees, expenses and costs payable to the Indenture Trustee pursuant to
the letter agreement between the Master Issuer and the Indenture Trustee, dated
October 3, 2007, and any amounts payable in accordance with the terms of
the Transaction Documents.

 

“Independent”:  As to any
Person, any other Person (including, in the case of an accountant, or lawyer, a
firm of accountants or lawyers and any member thereof or an investment bank and
any member thereof) who (i) does not have and is not committed to acquire
any material direct or any material indirect financial interest in such Person
or in any Affiliate of such Person, and (ii) is not connected with such
Person or an Affiliate of such Person as an Officer, employee, promoter,
underwriter, voting trustee, partner, director or Person performing similar
functions.  “Independent” when used with
respect to any accountant may include an accountant who audits the books of
such Person if, in addition to satisfying the criteria set forth above, the
accountant is independent with respect to such Person within the meaning of Rule 101
of the Code of Ethics of the American Institute of Certified Public
Accountants.

 

Whenever any Independent Person’s opinion or certificate is to be
furnished to the Indenture Trustee, such opinion or certificate shall state
that the signer has read this definition and that the signer is Independent
within the meaning hereof.

 

“Independent Accountants”: 
The firm of independent certified public accountants of recognized
national reputation, appointed by the Master Issuer pursuant to the Servicing
Agreement, that is reasonably acceptable to the Aggregate Controlling Party to
serve as the independent accountants.

 

“Independent Manager” and “Independent Director”:  A manager or director, as applicable, who
does not have and is not committed to acquire any material direct or any
material indirect financial interest in the entity on whose Board such Person
is a manager or a director, as applicable, or in any Affiliate of such entity,
and is not connected with such entity or an Affiliate of such entity as an
Officer, employee, promoter, underwriter, voting trustee, partner, director or
Person performing similar functions.

 

“Initial IP Assets”:  All
right, title and interest of Applebee’s International and its direct and
indirect Subsidiaries, in each case, as of the Closing Date in the following:  (i) U.S. Intellectual Property Rights
in:  (A) the Applebee’s Brand and (B) other
U.S. Intellectual Property used in connection with Applebee’s Restaurants, and
with Applebee’s Branded restaurants in the U.S. Territories, and (ii) worldwide
Intellectual Property rights in the POS System, except, in each case, for
Excluded IP Assets.

 

“Initial Payment Date”:  January 20,
2008 or, if such date is not a Business Day, the next Business Day.

 

“Initial Purchaser”: 
Lehman Brothers, Inc.

 

“Initial Residual Deposit Amount”:  $2,800,000, to be deposited into the
Concentration Account as of the Closing Date.

 

A-31

 

“Insolvency”: 
Liquidation, insolvency, bankruptcy, rehabilitation, composition,
reorganization or conservation; and when used as an adjective “Insolvent.”

 

“Insolvency Law”:  Any
applicable federal, state or provincial law relating to liquidation,
insolvency, bankruptcy, rehabilitation, composition, reorganization,
conservation or other similar law now or hereafter in effect.

 

“Insurance Agreement”: 
With respect to any Series of Notes or any sub-class thereof, the
insurance agreement (if any) dated as of the execution date of the Series Supplement
relating to such Series of Notes or sub-class, as applicable, among the
Co-Issuers, the Insurer or the Insurers specified in the Series Supplement
relating to such Series of Notes or sub-class, as applicable, the
Indenture Trustee and such other parties as may execute and deliver such
agreement, as amended, modified or supplemented from time to time.

 

“Insurance/Condemnation Proceeds”:  An amount equal to:  (i) any cash payments or proceeds
received by the Securitization Entities (a) by reason of theft, physical
destruction or damage or any other similar event with respect to any properties
or assets of the Securitization Entities under any policy of insurance required
to be maintained (other than liability insurance) in respect of a covered loss
thereunder or (b) as a result of any non-temporary condemnation, taking,
seizing or similar event with respect to any properties or assets of the
Securitization Entities by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, minus (ii) (a) any
actual and reasonable documented costs incurred by the Securitization Entities
in connection with the adjustment or settlement of any claims of the
Securitization Entities in respect thereof and (b) any bona fide direct
costs incurred in connection with any disposition of such assets as referred to
in clause (i)(b) of this definition, including income taxes
reasonably estimated to be actually payable by the Securitization Entities’
consolidated group as a result of any gain recognized in connection therewith.

 

“Insurance Policy”:  With
respect to any Series of Notes or any sub-class thereof, the financial
guaranty insurance policy (if any), dated as of the execution date for the Series Supplement
relating to such Series of Notes, or sub-class as applicable, issued by
the Insurer specified in the Series Supplement relating to such Series of
Notes or sub-class as applicable, for the benefit of the Indenture Trustee, on
behalf of the Holders of outstanding Notes relating to such Series of
Notes or sub-class, as applicable.

 

“Insurance Proceeds Account”: 
The meaning specified in Section 10.2(d) of the Base
Indenture.

 

“Insurance Proceeds Amount”: 
The meaning specified in Section 14.3 of the Base Indenture.

 

“Insured Obligations”: 
Those obligations of the Co-Issuers specified in the applicable
Insurance Policy.

 

“Insurer”:  An insurer
identified in a Series Supplement as insuring the timely payment of
interest on the related Notes when due and the payment of principal of such
Notes on their Legal Final Maturity Date (and such other amounts,

 

A-32

 

or exclusions from any such amounts, as are
specified in such Series Supplement) pursuant to an Insurance Policy; provided,
that with respect to any Series 2007-1 Class A-1 Notes or any Series 2007-1
Class A-2-II Notes, the Insurer shall be Assured Guaranty.

 

“Insurer Event of Default”: 
With respect to any Class of Senior Notes insured by an Insurer
(or, in the case of a Class of Senior Notes insured by more than one
Insurer, the sub-class of such Class of Senior Notes insured by an
Insurer), the occurrence and continuance of any of the following events:

 

(a)           the Insurer relating
to such Class or sub-class of Senior Notes shall have failed to make a
payment required under the applicable Insurance Policy in accordance with its
terms and such failure has continued for two business days (as defined in the
related Insurance Policy);

 

(b)           the Insurer relating
to such Class or sub-class of Senior Notes shall have (i) filed a
petition or commenced any case or proceeding under any provision or chapter of
the Bankruptcy Code or any other similar federal or state law relating to
insolvency, bankruptcy, liquidation or reorganization, (ii) made a general
assignment for the benefit of its creditors, or (iii) had an order for
relief entered against it under the Bankruptcy Code or any other similar
federal or state law relating to insolvency, bankruptcy, liquidation or
reorganization which is final and nonappealable; or

 

(c)           a court of competent
jurisdiction, the New York Department of Insurance or other competent
regulatory authority shall have entered a final and nonappealable order,
judgment or decree (i) appointing a custodian, trustee, agent or receiver
for the Insurer relating to such Class or sub-class of Senior Notes or for
all or any material portion of its property or (ii) authorizing the taking
of possession by a custodian, trustee, agent or receiver of such Insurer (or
the taking of possession of all or any material portion of the property of such
Insurer).

 

“Insurer Expense Amount”: 
With respect to each Payment Date, an amount equal to the aggregate
amount of Insurer Expenses due but unpaid as of such Payment Date.

 

“Insurer Expenses”:  With
respect to any Class or sub-class of Senior Notes that is insured pursuant
to an Insurance Policy, all expenses, cost, indemnification amounts and any
other amounts payable to the Insurer relating to such Class or sub-class
of Notes pursuant to the terms of the applicable Insurance Agreement.

 

“Insurer Premium”:  With
respect to any Insurer, the aggregate amount of the premium payable to the
Insurer calculated in the manner provided in the related Insurer Premium
Letter.

 

“Insurer Premium Letter”: 
A letter agreement among the Co-Issuers, the Franchise Holder and the
applicable Insurer relating to any Insurer Premium and other applicable fees,
if any, with respect to a Series of Notes.

 

“Insurer Premiums Account”: 
The meaning specified in Section 10.8(a)(ii) of the
Base Indenture.

 

A-33

 

“Insurer Reimbursement Amount”: 
The aggregate amount of the reimbursements that an Insurer is entitled
to receive pursuant to the related Insurance Agreement and the related
Insurance Policy.

 

“Intellectual Property”:  (i) Trademarks;
(ii) patents (including, during the term of a patent, the inventions
claimed thereunder) and industrial designs (including any continuations,
extensions, divisionals, continuations in part, provisionals, reissues, and
re-examinations thereof) (“Patents”); (iii) rights in computer
programs, including in both source code and object code therefor, together with
related documentation and explanatory materials and databases, including any
Copyrights, Patents and trade secrets therein (“Software”); (iv) 
copyrights (whether registered or unregistered) in unpublished and published
works (“Copyrights”); (v) trade secrets and other confidential or
proprietary information, including with respect to recipes, unpatented
inventions, operating procedures, know how, procedures and formulas for
preparing food and beverage products, specifications for certain food and
beverage products, inventory methods, financial control methods, and training
techniques; and (vi) any registrations, applications for registration or
issuances, recordings, renewals and extensions relating to any of the
foregoing.

 

“Interest Accrual Period”: 
Solely with respect to (a)  any Class A-1 Notes, a period
commencing on and including the date that is two (2) Business Days prior
to an Accounting Date and ending on but excluding the day that is two (2) Business
Days (or as otherwise provided in the related Series Supplement) prior to
the next succeeding Accounting Date; and with respect to (b) any other Class of
Notes, a period commencing on and including a Payment Date (or as otherwise
provided in the related Series Supplement) and ending on but excluding the next
succeeding Payment Date; provided, that the initial Interest Accrual
Period for any Class of Notes will commence on and include the related Series Closing
Date and end on the date specified in the applicable Series Supplement; provided,
further, that the Interest Accrual Period with respect to each Class of
Notes that immediately precedes the Payment Date on which the last payment will
be made on such Class of Notes will end on such Payment Date.

 

“Interest Payment Accounts”: 
Collectively, the Subordinated Notes Monthly Interest Amount and the
Senior Notes Interest Payment Account.

 

“Internet Domain Names”: 
The unique addresses on the Internet consisting of at least a top level
domain (generic top-level domain (gTLD) or country or region code top-level
domain (ccTLD)) and a second level domain, regardless of whether there is any content
on the website related thereto.

 

“Investment Company Act”: 
The United States Investment Company Act of 1940, as amended.

 

“Investment Income”:  The
investment income earned on a specified account during a specified period, in
each case net of all losses and expenses allocable thereto.

 

“IP Assets”: 
Collectively, the Initial IP Assets and the After-Acquired IP Assets,
except that for purposes of the licenses granted under the IP License
Agreements, “IP Assets” will not include any rights to use licensed third party
Intellectual Property to the extent that such rights are not sublicensable.

 

A-34

 

“IP Holder”:  Applebee’s
IP LLC, a newly formed, special purpose Delaware limited liability company, and
its permitted successors and assigns.

 

“IP License Agreements”: 
The Master Issuer IP License Agreement, the Franchise Holder IP License
Agreement, the Applebee’s International Retained U.S. Restaurants IP License
Agreement, the Applebee’s International U.S. Territories/POS System IP License
Agreement and the ACMC IP License Agreement.

 

“IP Lien Filings”: 
Duly-executed instruments substantially in the form of Exhibit H
to the Base Indenture, granting a lien in the Copyrights, Patents and
Trademarks included in the Initial IP Assets and owned by the Master Issuer or
any Co-Issuer, to the extent that any of the Co-Issuers own the related type of
Intellectual Property registration or application, that name the appropriate
Co-Issuer as the grantor and the Indenture Trustee as the secured party and
other instruments or documents as may be reasonably necessary or desirable
under the laws of any appropriate jurisdiction in the United States to
evidence, perfect, protect and record in the appropriate Intellectual Property
registry office, the Indenture Trustee’s security interest granted under the
Indenture in the Initial IP Assets.

 

“Irish Listing Agent”:  If
and for so long as any Class of Notes are listed on the Irish Stock
Exchange, Dillon Eustace in its capacity as such, and its permitted successors
and assigns in such capacity.

 

“Irish Paying Agent”:  If
and for so long as any Class of Notes are listed on the Irish Stock
Exchange, Custom House Administration and Corporate Services in its capacity as
such, and its permitted successors and assigns in such capacity.

 

“Irish Stock Exchange”: 
The Irish Stock Exchange Limited.

 

“IRS”:  The U.S. Internal
Revenue Service.

 

“Issuance Date”:  The
Closing Date and any other date on which the Co-Issuers issue Notes pursuant to
the Base Indenture and the related Series Supplement.

 

“Lead Insurer”:  With
respect to any Series of Notes Outstanding as of any date of
determination, the Insurer (without giving effect to any Insurer with respect
to which an Insurer Event of Default has occurred and is continuing) for which
the Policy Exposure is greater than 50% of the aggregate Policy Exposure with
respect to such Series under the, or each, Insurance Policy issued by the,
or any, Insurer (other than any Insurer with respect to which an Insurer Event
of Default has occurred and is continuing); provided, that so long as
any Series 2007-1 Class A-1-A Notes or any Series 2007-1 Class A-2-II-A
Notes remain Outstanding, Assured Guaranty shall be deemed the Lead Insurer
with respect to the Series 2007-1 Notes. 
The Lead Insurer with respect to any Notes that are insured by one or
more  Insurers will control the voting
and consent rights and other rights of 100% of the Notes that are insured
without giving effect to any Insurer with respect to which an Insurer Event of
Default has occurred and is continuing.

 

“Leases”:  The meaning
specified in the definition of “Collateral” in this Appendix A.

 

A-35

 

“Lease Payment”:  Any
lease payment payable by (i) a Restaurant Holder as the lessee under a
Company Lease or a Sale/Leaseback Lease or (ii) a Predecessor Restaurant
Holder as the lessee under a lease relating to a Post-Closing U.S. Restaurant
(unless and until such restaurant becomes a Reacquired U.S. Restaurant).

 

“Lease Payment Account”: 
The meaning specified in Section 10.2(f) of the Base
Indenture.

 

“Lease Receipt”:  Any
lease payment payable to a Restaurant Holder as the lessor or the sub-lessor,
as applicable, under a Refranchised Restaurant Lease, if any, or a Franchisee
Sub-Lease, if any.

 

“Leased Property”:  Any
real property on which an Applebee’s Restaurant is located that is subject to a
Lease.

 

“Legal Final Maturity Date”: 
With respect to (i) the Series 2007-1 Notes, the Series 2007-1
Legal Final Maturity Date and (ii) any additional Series of Notes,
the meaning specified in the related Series Supplement.

 

“Licensee-Developed IP”: 
All of the following created, developed, authored or acquired by a
licensee  (other than ACMC, Inc.)
under its respective IP License Agreement: 
(i) U.S. Intellectual Property Rights in:  (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, and (ii) worldwide
Intellectual Property rights in new versions, updates, or other modifications
to the POS System.

 

“Lien”:  All pledges,
charges, encumbrances (including encumbrances and restrictions described in clause
(d) of the definition of “Permitted Liens”), security interests or
other similar rights.

 

“Liquor License Holders”: 
The special purpose limited liability companies formed by the Master
Issuer solely for the purpose of holding liquor licenses to serve alcoholic
beverages in Company-Owned U.S. Restaurants in compliance with applicable
liquor license laws.

 

“Liquor License Related Indemnification Amount”:  Any Indemnification Amount paid pursuant to
the relevant Transaction Document in connection with (i) the repurchase of
assets relating to any Company-Owned U.S. Restaurant or (ii) the
repurchase of the rights to the proceeds generated by any Post-Closing U.S.
Restaurant, in each case if such assets or rights to the proceeds, as the
context requires, are conveyed to the applicable Restaurant Holder on the basis
of a temporary liquor license (or other temporary arrangement to serve
alcoholic beverages at such Applebee’s Restaurant) that expires before a
permanent liquor license (or other permanent arrangement) is procured.

 

“Lock-Box Account”:  An
account established and maintained at the Lock-Box Provider designated as the “Lock-Box
Account.”

 

A-36

 

“Lock-Box Provider”:  a
Qualified Institution designated by the Master Issuer and consented to by each
applicable Series Controlling Party (for so long as such Series Controlling
Party is an Insurer) or as to which a Rating Agency Notification is provided
(if any Series Controlling Party is not an Insurer).

 

“Make-Whole Amount”:  With
respect to (i) the Series 2007-1 Notes, the Series 2007-1
Make-Whole Amount and (ii) any additional Series of Notes, the
meaning specified in the related Series Supplement.

 

“Majority”:  With respect
to any Series of Notes, the Holders of more than 50% of the Aggregate
Outstanding Principal Amount of such Series of Notes (for which purpose
the Series 2007-1 Class A-1 Notes and any other variable funding Series of
Notes will be deemed to be fully drawn).

 

“Majority Insurers”:  With
respect to any Series of Notes Outstanding as of any date of
determination, any one or more Insurers (without giving effect to any Insurer
with respect to which an Insurer Event of Default has occurred and is
continuing) for which the Policy Exposure is greater than 50% of the aggregate Policy
Exposure with respect to such Series under each Insurance Policy issued by
any Insurer (other than any Insurer with respect to which an Insurer Event of
Default has occurred and is continuing). 
The Majority Insurers with respect to any Notes that are insured by such
Insurers will control the voting and consent rights and other rights of 100% of
the Notes that are insured without giving effect to any Insurer with respect to
which an Insurer Event of Default has occurred and is continuing.

 

“Master Issuer”:  Applebee’s
Enterprises LLC, a newly formed, special purpose Delaware limited liability
company, and its permitted successors and assigns.

 

“Master Issuer Assets”: 
All property and assets of the Master Issuer other than Excepted
Property.

 

“Master Issuer IP License Agreement”:  The Master Issuer Intellectual Property
License Agreement, dated as of the Closing Date, between the IP Holder, as the
licensor, and the Master Issuer, as the licensee.

 

“Master Issuer Trustee Accounts”:  The meaning specified in Section 10.9(a) of
the Base Indenture.

 

“Material Adverse Effect”: 
(a) With respect to the Servicer, a material adverse effect on (i) its
condition, financial or otherwise, (ii) its assets, earnings or business
affairs, (iii) its ability to own its properties or to conduct its
business or to enter into or perform its obligations under the Servicing
Agreement or any other Transaction Document, (iv) the Collateral, taken as
a whole, or (v) the ability of the Master Issuer or any Co-Issuer to
perform its obligations under the Transaction Documents;

 

(b)           with respect to the
Collateral, a material adverse effect with respect to (i) any material IP
Assets individually or with respect to the IP Assets taken as a whole, the
enforceability of the terms thereof, the likelihood of the payment of the
amounts required with respect thereto in accordance with the terms thereof, the
value thereof, or the security interest in

 

A-37

 

the rights thereto granted by the Co-Issuers
under the terms of the Indenture, or (ii) the existing and reasonably
anticipated future Existing Franchise Assets taken as a whole or any other
Collateral taken as a whole, the enforceability of the terms thereof, the
likelihood of the payment of the amounts required with respect thereto in
accordance with the terms thereof, the value thereof, the ownership thereof by
the Co-Issuers (as applicable) or the security interest in the rights thereto
Granted under the Indenture by each of the Co-Issuers;

 

(c)           with respect to any
Securitization Entity, a materially adverse effect on the business, assets,
operations, earnings or condition (financial or otherwise) of the
Securitization Entity or the ability of such Securitization Entity to own its
properties or conduct its business or to perform in any material respect its
obligations under any of the Transaction Documents; provided, that for
purposes of this clause (c), a material adverse effect on the Restaurant
Holders means a material adverse effect on one or more Restaurant Holders that
individually or in the aggregate represent more than 7.5% of the revenues
earned over the most recent twelve consecutive Monthly Collection Periods; or

 

(d)           with respect to any
Person or matter, a material impairment to the rights of or benefits, taken as
a whole, available to the Co-Issuers, the Indenture Trustee, the Noteholders or
any Insurer, if applicable, under any Transaction Document or the
enforceability of any Transaction Document;

 

provided, that where “Material Adverse
Effect” is used in any Transaction Document without specific reference, such
term will have the meaning specified in clauses (a) through (d),
as the context may require; provided, further, the fact that the
Three-Month Adjusted DSCR Test is then, or would remain, at any particular
ratio will not, solely in and of itself, preclude or negate the determination
of a Material Adverse Effect in any instance.

 

“Material Environmental Amount”: 
With respect to any Person, an amount or amounts payable by such Person
and/or its Subsidiaries, in the aggregate in excess of $2,000,000 per incident
or $5,000,000 in the aggregate over any twelve-month period, for (a) costs
to comply with any Environmental Law; (b) costs of any investigation, and
any remediation, of any Material of Environmental Concern and (c) compensatory
damages (including, without limitation, damages to natural resources), punitive
damages, fines and penalties pursuant to any Environmental Law.

 

“Materials of Environmental Concern”:  Any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products (virgin or unused),
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity and any other materials, substances of any kind, whether
or not any such material or substance is defined as hazardous or toxic under
any Environmental Law, that is regulated pursuant to or could reasonably be
expected to give rise to liability under any Environmental Law.

 

“Maturity Date”:  With
respect to any Note, the date on which the unpaid principal of such Note
becomes due and payable as therein or herein provided, whether at the Legal
Final Maturity Date or by declaration of acceleration, call for redemption or
otherwise.

 

“Money”:  The meaning
specified in Section 1 201(24) of the UCC.

 

A-38

 

“Monthly Aggregate Extension Prepayment
Amount”:  With respect to (i) the
Series 2007-1 Notes, the Series 2007-1 Monthly Aggregate Extension
Prepayment Amount and (ii) any additional Series of Notes, the
meaning, if any, specified in the related Series Supplement.

 

“Monthly Collection Period”: 
Each monthly period commencing on the first calendar day of the first
(1st), fifth (5th) and ninth (9th) Weekly Collections Allocation Periods and
ending on the last calendar day of the fourth (4th), eighth (8th) and
thirteenth (13th) Weekly Collections Allocation Periods, respectively, during
each quarterly period (so that the first two “Monthly Collection Periods” in
each quarterly period will be comprised of four Weekly Collections Allocation
Periods and the third “Monthly Collection Period” in each quarterly period will
be comprised of five Weekly Collections Allocation Periods); provided,
that in any year in which there is a fourteenth (14th) week in the Co-Issuers’
last fiscal quarter of the fiscal year, the final Monthly Collection Period
will end on the last calendar day of the fourteenth (14th) Weekly Collections
Allocation Period (so that such Monthly Collection Period will be comprised of
six Weekly Collections Allocation Periods). The first Monthly Collection Period
will be the period from and including the Cut-Off Date to but excluding December 31,
2007.

 

“Monthly Noteholders’ Report”: 
With respect to each Series of Notes, a monthly statement
containing information relating to the distributions to be made to the holders
of the Notes of that Series on the corresponding Payment Date, the
allocations of Collections received during such monthly period and certain
measures of the performance of the Collateral.

 

“Monthly Servicer’s Certificate”:  The meaning specified in Section 12.1(b) of
the Base Indenture.

 

“Monthly Servicer’s Report”: 
The meaning specified in Section 12.1(b) of the Base
Indenture.

 

“Monthly Subordinated Notes Amortization Amount”:  (i) With respect to the Series 2007-1
Notes, the Series 2007-1 Monthly Subordinated Notes Amortization Amount
(as defined in the Series 2007-1 Supplement), and (ii) with respect
to any other Series of Notes, as specified in the applicable Series Supplement.

 

“Moody’s”:  Moody’s
Investors Service, Inc., and its successors in interest.

 

“Moody’s Second Trigger Event”: 
The meaning specified in Section 13.3 of the Base Indenture.

 

“Mortgage Recordation Fees”: 
The fees and expenses incurred by or on behalf of the Servicer in
connection with recording and filing real estate mortgages and other related
instruments relating to Company-Owned Real Property.

 

“Multiemployer Plan”:  Any
“multiemployer plan” as defined in Section 4001 of ERISA.

 

“National Advertising Fund”: 
The meaning specified in the definition of “Excluded Property” in this Appendix
A.

 

A-39

 

“Neighborhood Insurance”: 
The meaning specified in the definition of “Excluded Property” in this Appendix
A.

 

“Net Cash Flow”:  With
respect to any Monthly Collection Period, the amount (not less than zero) equal
to:

 

(a)           the Retained
Collections with respect to such Monthly Collection Period; minus

 

(b)           the amount (without
duplication) equal to the sum of (i) all amounts not constituting Excluded
Amounts that were paid pursuant to the Weekly Collections Allocation Priority
on each Weekly Allocations Date that occurs during such Monthly Collection
Period, (ii) all amounts paid pursuant to clauses first and third
of the Priority of Payments on the related Payment Date, (iii) the IHOP
Residual Amount, if any, included in such Retained Collections and (iv) any
Indemnification Amount, Insurance Proceeds Amount or Asset Disposition
Prepayment Amount included in such Retained Collections; minus

 

(c)           the amount, if any,
by which the equity contributions included in such Retained Collections exceed
the Retained Collections Contribution.

 

provided, that for purposes of
calculating Net Cash Flow for purposes of calculating the Three-Month DSCR,
Three-Month Adjusted DSCR, One-Year DSCR and One-Year Adjusted DSCR in order to
determine if the conditions to a draw on the Series 2007-1 Class A-1
Commitments (as defined in the Series 2007-1 Supplement) or the conditions
to prepayment of any Subordinated Notes or the conditions to a release of funds
on deposit in the Senior Notes Interest Reserve Account are satisfied, any
equity contribution to the Master Issuer will be excluded from Retained
Collections; provided, further, that any portion of the initial
deposit made to the Concentration Account and which the Servicer elects to
deposit to the Collection Account in addition to other Collections will not be
included in the Retained Collections for purposes of calculating the
Three-Month DSCR, the Three-Month Adjusted DSCR, the One-Year DSCR or the
One-Year Adjusted DSCR unless the Servicer elects to have such amounts treated
as an equity contribution counting towards the Retained Collections
Contribution.

 

“New Company-Owned U.S. Restaurants”:  Applebee’s Restaurants opened after the
Closing Date and owned and operated by a Restaurant Holder (if any).

 

“New Franchise Document”: 
New U.S. Franchise Agreements and any other Franchise Document entered
into pursuant to a New U.S. Franchise Agreement.

 

“New Franchised U.S. Restaurants”:  Applebee’s Restaurants that are opened after
the Closing Date and are owned and operated by Franchisees that are
unaffiliated with Applebee’s International and its Affiliates.

 

“New U.S. Development Agreements”:  Following the Closing Date, all additional
development agreements entered into by the Franchise Holder, in its capacity as
the Franchisor for Applebee’s Restaurants.

 

A-40

 

“New U.S. Franchise Agreements”: 
All additional franchise agreements for Applebee’s Restaurants entered
into following the Closing Date (including all substitute or replacement
franchise agreements for existing Applebee’s Restaurants).

 

“New U.S. Restaurant Business”: 
The (i) franchising (and the ownership by Franchisees) of the New
Franchised U.S. Restaurants and (ii) the ownership and operation of the
New Company-Owned U.S. Restaurants

 

“New York UCC”:  The
meaning specified in Section 10.9(b)(i) of the Base Indenture.

 

“Non-Refranchising Asset Disposition”:  The disposition of Collateral in connection
with any circumstance other than a Refranchising Asset Disposition in which the
Servicer, acting on behalf of the Securitization Entities in accordance with
the Servicing Standard, elects to dispose of assets in accordance with the
Servicing Standard including, without limitation, the sale of Company-Owned
Real Property in sale/leaseback transactions.

 

“Non-U.S. Intellectual Property Rights”:  The (i) Intellectual Property rights
that are established under any laws other than the laws of the United States
(including U.S. Federal law and the laws of any state or political subdivision
of the U.S.) and (ii) rights in Internet Domain Names that include a ccTLD
for a country or region other than the United States.

 

“Non-U.S. IP Rights Agreement”: 
The Non-U.S. Intellectual Property Rights Agreement, dated as of the
Closing Date, entered into by and among the IP Holder, the Master Issuer, the
Franchise Holder, ACMC, Inc. and Applebee’s International.

 

“Non-U.S. Person”:  Any
person who is not a “U.S. person” as such term is defined in Rule 902
under the Securities Act.

 

“Non-U.S. Resident”:  Any
person who is not a “U.S. resident” within the meaning of the Investment
Company Act.

 

“Note Interest Rate”:  The
rate specified in the applicable Series Supplement at which interest on
the Aggregate Outstanding Principal Amount of the Notes will accrue.

 

“Note Owner”:  With
respect to a Global Note, the person who is the beneficial owner of such
Book-Entry Note, as reflected on the books of the Clearing Agency that holders
the Book-Entry Note, or on the books of a Person holding an account with such
Clearing Agency.

 

“Note Purchase Agreement”: 
(i) With respect to the Series 2007-1 Notes, (a) the Series 2007-1
Class A-1 Note Purchase Agreement (as defined in the Series 2007-1
Supplement) and (b) the Series 2007-1 Term Note Purchase Agreement,
in each case, as amended, modified or supplemented from time to time, and (ii) with
respect to each other Series of Notes, such other note purchase agreements
similar to the agreements described in the foregoing clause (i), as the
applicable parties shall enter into from time to time.

 

A-41

 

“Note Register”:  A
register in which, subject to such reasonable regulations as they may
prescribe, the Co-Issuers will provide for the registration of Notes and the
registration of transfers of Notes with respect to each Series.

 

“Note Registrar”:  The
Indenture Trustee in its capacity of registering Notes and transfers of Notes.

 

“Noteholder”:  Any Holder
of a Note.

 

“Notes”:  The asset-backed
notes offered by the Co-Issuers from time to time in a Series pursuant to
the Indenture.

 

“Notice of Payment”:  With
respect to any Series of Notes, the notice delivered by the Indenture
Trustee to an Insurer pursuant to the applicable Insurance Policy.

 

“Obligations”:  With
respect to (a) all principal, interest and premium, if any, at any time
and from time to time, owing by the Co Issuers on the Notes or owing by the
Guarantors pursuant to each Guaranty and Collateral Agreement, (b) the
payment and performance of all other obligations, covenants and liabilities of
the Co Issuers or the Guarantors arising under the Indenture, the Notes, any
other Transaction Document or any Insurance Agreement, including, without
limitation, the payment of Insurer Premiums, Insurer Reimbursement Amounts and
Insurer Expenses, or of the Guarantors under each Agreement and (c) the
obligation of the Co Issuers to pay all Indenture Trustee Fees to the Indenture
Trustee when due and payable as provided in the Indenture.

 

“Obsolete Property Disposition”: 
Any sale or other disposition of an interest in any of the
Securitization Entities’ inventory, equipment, furniture, fixtures and other
assets (other than IP Assets) relating to the Company-Owned U.S. Restaurants
deemed obsolete in the ordinary course of business in accordance with the
Servicing Standard.

 

Offered Notes”:  The
Series Class A-1 Notes, Series 2007-1 Class A-2  Notes and Series 2007-1 Class M-1
Notes.

 

“Offering Memorandum”:  In
relation to any Series of Notes, the offering memorandum relating to such Series of
Notes, if any.

 

“Officer”:  With respect
to any corporation, any Director, the Chairman of the board of directors, the
President, any Vice President, the Secretary, an Assistant Secretary, the
Treasurer or an Assistant Treasurer of such entity; with respect to any
Co-Issuer or other Securitization Entity and any limited liability company, any
managing member thereof or any person to whom the rights and powers of
management thereof are delegated in accordance with the limited liability
company agreement of such limited liability company; with respect to any
partnership, any general partner thereof; and with respect to the Indenture
Trustee, any Trust Officer.

 

“Officer’s Certificate”: 
A certificate signed by an Authorized Officer of the party delivering
such certificate.

 

A-42

 

“One-Year Adjusted DSCR”: 
The One Year DSCR recalculated to add to the numerator thereof the IHOP
Residual Amount, if any, received by the Servicer on behalf of the Master
Issuer or Master Issuer or over the twelve immediately preceding Monthly
Collection Periods.  For the avoidance of
doubt, One-Year Adjusted DSCR shall not be calculated for any purpose under the
Indenture during the first twelve (12) Monthly Collection Periods.

 

“One Year DSCR”:  With
respect to each Payment Date, the ratio calculated by dividing (i) the
Net Cash Flow over the twelve immediately preceding Monthly Collection Periods
by (ii) the Debt Service due on such Payment Date and the immediately
preceding eleven Payment Dates.  For the
avoidance of doubt, One-Year DSCR shall not be calculated for any purpose under
the Indenture during the first twelve (12) Monthly Collection Periods.

 

“Opinion of Counsel”:  A
written opinion addressed to the Indenture Trustee, each Insurer and each
Rating Agency, in form and substance reasonably satisfactory to the Indenture
Trustee and each Insurer (if such Insurer is then a Series Controlling
Party), of an attorney at law admitted to practice before the highest court of
the State of New York or of Delaware, as applicable, which attorney may, except
as otherwise expressly provided in the Indenture, be counsel for the Co-Issuers
and which attorney shall be reasonably satisfactory to the Indenture Trustee
and each Insurer (if such Insurer is then a Series Controlling
Party).  Whenever an Opinion of Counsel
is required under the Indenture, such Opinion of Counsel may rely on opinions
of other counsel who are so admitted and so satisfactory which opinions of
other counsel shall accompany such Opinion of Counsel and shall either be
addressed to the Indenture Trustee, each Insurer and each Rating Agency or
shall state that the Indenture Trustee, each Insurer and each Rating Agency
shall be entitled to rely thereon.

 

“Optional Prepayment”: 
Any Optional Prepayment of Notes effected by the Co Issuers pursuant to Section 4.7(e) of
the Series Supplement.

 

“Optional Prepayment Date”: 
The Payment Date specified for an Optional Prepayment pursuant to Section 4.7(e) of
the Series Supplement.

 

“Other U.S. Franchise Business”: 
The franchising and operation (by franchisees) of any restaurant located
in the United States other than (i) Applebee’s Restaurants and (ii) restaurants
opened after the Closing Date that have or offer all of the following:  (a) a varied menu; (b) table
service; (c) beer, wine and/or liquor; and (d) a per person average
guest check that is between 70% and 130% of the per person average guest check
of the Applebee’s Branded restaurants located in the United States that are
owned and operated by the Restaurant Holders as of such date of determination.

 

“Other U.S. Products and Services”:  Any and all businesses, products, or services
provided in the United States other than the franchising of any restaurants and
the U.S. Restaurant Business.

 

“Outstanding”:  With
respect to the Notes, as of any date of determination, all of the Notes or Series of
Notes, as the case may be, theretofore authenticated and delivered under the
Indenture except:

 

A-43

 

(i)            Notes theretofore
canceled by the Note Registrar or delivered to the Note Registrar for
cancellation;

 

(ii)           Notes or portions
thereof for whose payment or redemption funds in the necessary amount have been
theretofore irrevocably deposited with the Indenture Trustee in trust for the
Holders of such Notes pursuant to the Indenture; provided
that, if such Notes or portions thereof are to be redeemed, notice of such
redemption has been duly given pursuant to the Indenture or provision therefore
reasonably satisfactory to the Indenture Trustee has been made;

 

(iii)          Notes in exchange
for or in lieu of which other Notes have been authenticated and delivered
pursuant to the Indenture, unless proof reasonably satisfactory to the
Indenture Trustee is presented that any such Notes are held by a holder in due
course; and

 

(iv)          Notes alleged to
have been mutilated, destroyed, lost or stolen for which replacement Notes have
been issued as provided in the Indenture;

 

provided that, (A) in
determining whether the Holders of the requisite Aggregate Outstanding
Principal Amount have given any request, demand, authorization, direction,
notice, consent, waiver or vote hereunder, the following Notes shall be
disregarded and deemed not to be Outstanding: 
(x) Notes owned by the Co-Issuers or any other obligor upon the
Notes or any Affiliate of any of them, or (y) Notes held in any accounts
with respect to which the Servicer or any Affiliate thereof exercises
discretionary voting authority; provided, further, that in
determining whether the Indenture Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent, waiver or
vote, only Notes as described under clause (x) or (y) above
that an Officer of the Indenture Trustee knows to be so owned shall be so
disregarded; (B) Notes owned in the manner indicated in clause (x) or
(y) above that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee’s right so to act with respect to such Notes and that the
pledgee is not a Co-Issuer or any other obligor or the Servicer, an Affiliate
thereof, or an account for which the Servicer or an Affiliate of the Servicer
exercises discretionary voting authority; and (C) to the extent that any
Notes have been paid with proceeds of an Insurance Policy, such Notes shall
continue to remain Outstanding for purposes of the Indenture until the Insurer
relating to such Insurance Policy has been paid as subrogee under the Indenture
or reimbursed pursuant to the applicable Insurance Agreement as evidenced by a
written notice from such Insurer delivered to the Indenture Trustee, and such
Insurer shall be deemed to be the Holder of such Notes to the extent of any
corresponding payments thereon made by such Insurer.

 

“Outstanding Notes”:  All
Notes that are Outstanding.

 

“Outstanding Series of Notes”:  A Series of Notes that is Outstanding.

 

“Partial Amortization Amount”: 
With respect to (i) the Series 2007-1 Notes, a Series 2007-1
Partial Amortization Amount (as defined in the Series 2007-1 Supplement)
and (ii) any Series of Notes, the meaning specified in the applicable
Series Supplement.

 

“Partial Amortization Event”: 
With respect to (i) the Series 2007-1 Notes, a Series 2007-1
Partial Amortization Event (as defined in the Series 2007-1 Supplement),
and (ii) any additional Series of Notes, the meaning specified in the
related Series Supplement.

 

A-44

 

“Partial Amortization Trigger”: 
With respect to (i) the Series 2007-1 Notes, a Series 2007-1
Partial Amortization Trigger (as defined in the Series 2007-1 Supplement),
and (ii) any additional Series of Notes, the meaning specified in the
related Series Supplement.

 

 

“Participation Agreement”: 
An agreement between a Franchisee (including any Restaurant Holder in
its capacity as a Franchisee under such agreement), on the one hand, and the IP
Holder, Servicer, and/or a third party licensor, on the other hand, which
licenses or sublicenses to such Franchisee, the right to use in connection with
the related Franchise Agreement certain Intellectual Property owned by, or
licensed to, the IP Holder, Servicer, or third party licensor.

 

“Patents”:  The meaning
specified in the definition of “Intellectual Property” in this Appendix
A.

 

“Paying Agent”:  Any
paying agent appointed by the Co-Issuers for the Notes pursuant to the Base
Indenture.

 

“Payment Date”:  The 20th
day of each calendar month or, if such date is not a Business Day, the next
Business Day, commencing in January 2008 (the “Initial Payment Date”).

 

“Permitted Liens”:  (a) Liens
for (i) Taxes, assessments or other governmental charges not delinquent or
(ii) Taxes, assessments or other charges being contested in good faith and
by appropriate proceedings and with respect to which adequate reserves have
been established, and are being maintained, in accordance with GAAP, (b) all
Liens created or permitted under the Transaction Documents in favor of the
Indenture Trustee for the benefit of the Secured Parties, (c) Liens
existing on the Closing Date, which shall be released on such date, (d) encumbrances
in the nature of (i) a ground lessor’s fee interest, (ii) zoning
restrictions, (iii) easements, (iv) restrictions of record on the use
of real property, (v) landlords’ and lessors’ Liens on rented premises, (vi) restrictions
on transfers or assignment of leases or licenses of Intellectual Property,
which, in each case (as described in clauses (d)(i) through (vi) above),
do not detract from the value of the encumbered property or impair the use
thereof in the business of any Securitization Entity, (vii) contractual
transfer restrictions in existence on the Closing Date and thereafter any such
contractual transfer restriction so long as the inclusion of such contractual
transfer restriction in any contract entered into on behalf of any
Securitization Entity by the Servicer would not constitute a breach by the
Servicer of the Servicing Agreement, (viii) the interest of a lessee in
property leased to a Franchisee and (ix) any licenses granted in the
Intellectual Property under any Franchise Agreement or other license agreements
in effect on the Closing Date and thereafter, to the extent issued in the
ordinary course, (e) deposits or pledges made (i) in connection with
casualty insurance maintained in accordance with the Transaction Documents, (ii) to
secure the performance of bids, tenders, contracts or leases, (iii) to
secure statutory obligations or surety or appeal bonds or (iv) to secure
indemnity, performance or other similar bonds in the ordinary course of
business of any Securitization Entity, (f) Liens of carriers, warehouses,
mechanics and similar Liens, in each case (i) in existence less than forty
five (45) days from the date of creation thereof or (ii) being contested
in good faith by any Securitization Entity in appropriate proceedings (so long
as such Securitization Entity shall, in accordance with GAAP, have set aside on
its books adequate reserves with respect thereto), (g) restrictions under
federal, state or foreign securities laws on the transfer of securities, (h) any
permitted cash

 

A-45

 

management liens, (i) any matter
disclosed in the most recent title report obtained on each real property prior
to the Closing Date and (j) the license and other rights granted to the
licensee under the IP License Agreements.

 

“Person”:  An individual,
corporation (including a business trust), partnership, limited liability
partnership, limited liability company, joint venture, association, joint stock
company, trust (including any beneficiary thereof), unincorporated association
or government or any agency or political subdivision thereof.

 

“Physical Note”:  A
certificated note in definitive, fully registered form without interest coupons
with the applicable legends set forth in exhibits to the applicable Series Supplement,
respectively added to the form of such securities.

 

“Placement Agent”:  The
placement agent (or placement agents), if any, with respect to any Additional
Notes.

 

“Plan”:  Any “employee
benefit pension plan,” as such term is defined in ERISA, which is subject to
Title IV of ERISA and to which any company in the same Controlled Group as
either of the Co-Issuers has liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of
ERISA for any time within the preceding five years or by reason of being deemed
to be a contributing sponsor under Section 4069 of ERISA.

 

“Policy Exposure”:  As of
any date of determination with respect to each Insurer, the insured amount with
respect to the principal due on the Notes of the related Insurance Policy or
Insurance Policies issued by such Insurer on such date.

 

“POS System”:  The suite
of software programs heretofore known as “AppleOne POS” and “Apple-One Cards”
which handles, among other functions, retail transaction collection, control,
and management, the set up of menu items, pricing, taxing and employee
information, customer order processing, basic timekeeping, and payment
processing, control and reporting for credit and stored value transactions,
with integration to the kitchen display system and back of house products, and
all new versions, updates, and other modifications of such software programs.

 

“Post-ARD Contingent Additional Interest Amount”:  With respect to the (i) Series 2007-1
Notes, the Series 2007-1 Post-ARD Contingent Additional Interest, if any,
and with respect to (ii) each other Series of Notes, the meaning
specified in the related Series Supplement.

 

“Post-Closing Lease Consent Restaurants”:  Company-Owned U.S. Restaurants for which
Applebee’s International is unable to obtain the landlord consent necessary (i) for
the assets to be transferred to the applicable Restaurant Holder on the Closing
Date or (ii) due to the change in control of Applebee’s International or
any of its Subsidiaries (which landlord consent will be necessary solely for
those Company-Owned U.S. Restaurants situated on real property leased from a
third party pursuant to a Company Lease).

 

A-46

 

“Post-Closing Liquor License Restaurants”:  Company-Owned U.S. Restaurants for which
Applebee’s International is unable to arrange the temporary or permanent liquor
licenses (or other alternative arrangements) necessary for the applicable
Restaurant Holder to serve alcoholic beverages in such Company-Owned U.S.
Restaurants on and after the Closing Date.

 

“Post-Closing U.S. Restaurant Purchase Agreement”:  The purchase agreement, dated as of the
Closing Date, by and among the Master Issuer, the applicable Predecessor
Restaurant Holders and the applicable Restaurant Holders.

 

“Post-Closing U.S. Restaurants”: 
Collectively, the Post-Closing Lease Consent Restaurants and the
Post-Closing Liquor License Restaurants.

 

“Potential Rapid Amortization Event”:  Any occurrence or event which, with the
giving of notice, the passage of time or both, would constitute a Rapid
Amortization Event.

 

“Predecessor Liquor License Holders”:  The meaning specified in the definition of “Excluded
Property” in this Appendix A.

 

“Predecessor Restaurant Holders”:  The direct and indirect Subsidiaries of
Applebee’s International which owned and operated Applebee’s Restaurants as of
the Business Day immediately prior to the Closing Date.

 

“Preference Claim”:  The
meaning specified in Section 2.13(e) of the Base Indenture.

 

“Principal Payment Accounts”: 
An account for the deposit of the amounts allocable to the payment of
principal of the Subordinated Notes (the “Subordinated Notes Principal Payment
Account” and, together with the Senior Notes Principal Payment Accounts).

 

“Principal Terms”:  The
meaning specified in Section 2.3(d)(xviii) of the Base Indenture.

 

“Priority of Payments”: 
The meaning specified in Section 10.12 of the Base
Indenture.

 

“Proceeding”:  Any suit in
equity, action at law or other judicial or administrative proceeding.

 

“Protected Purchaser”: 
The meaning specified in Section 8-303 of the UCC.

 

“PTO”:  The U.S. Patent
and Trademark Office and any successor U.S. Federal office.

 

“QIB”:  A “qualified
institutional buyer” as defined in Rule 144A.

 

“QP”:  A “qualified
purchaser” as defined in Section 2(a)(51) of the Investment Company Act.

 

A-47

 

“Qualified Institution” means a depository institution organized
under the laws of the United States of America or any state thereof or incorporated
under the laws of a foreign jurisdiction with a branch or agency located in the
United States of America or any state thereof and subject to supervision and
examination by federal or state banking authorities which at all times has the
Required Rating and, in the case of any such institution organized under the
laws of the United States of America, whose deposits are insured by the FDIC.

 

“Qualified Trust Institution” means an institution organized
under the laws of the United States of America or any state thereof or
incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States of America or any state thereof and subject to
supervision and examination by Federal or state banking authorities which at all
times (i) is authorized under such laws to act as a trustee or in any
other fiduciary capacity, (ii) has capital, surplus and undivided profits
of not less than $250,000,000 as set forth in its most recent published annual
report of condition and (iii) has a long term deposits rating of not less
than “A2” by Moody’s and “A” by S&P.

 

“Rapid Amortization Cure Right”: 
With respect to (i) the Series 2007-1 Notes, the Series 2007-1
Rapid Amortization Cure Right (as defined in the Series 2007-1 Supplement)
and (ii) any additional Series of Notes, the meaning specified in the
related Series Supplement.

 

“Rapid Amortization Event”: 
The meaning specified in Section 5.1(a) of the Base
Indenture.

 

“Rate Determination Date”: 
With respect to each Series of Notes, the date or dates as of which
the interest rate applicable thereto will be determined, as specified in the
applicable Series Supplement.

 

“Rating Agencies”: 
S&P and any successor or successors thereto, Moody’s and any
successor or successors thereto and Fitch and any successor or successors
thereto.  In the event that at any time
the rating agencies rating the Notes do not include S&P, Moody’s or Fitch,
references to rating categories of S&P, Moody’s or Fitch in this Indenture
shall be deemed instead to be references to the equivalent categories of such
other rating agency as then is rating the Notes as of the most recent date on
which such other rating agency and S&P, Moody’s or Fitch published ratings
for the type of security in respect of which such alternative rating agency is
used.  If the applicable Series Supplement
specifies an additional rating agency, then “Rating Agency” as used herein also
refers to such additional rating agency.

 

“Rating Agency Condition”: 
With respect to any prospective action or occurrence, a condition that
shall be satisfied if each Rating Agency then rating any Outstanding Notes (or,
if so specified, the relevant Rating Agency) notifies the Indenture Trustee
(and, with respect to any Series of Notes that is insured by an Insurer,
such Insurer) in writing that such action or occurrence, as the case may be,
will not result in a withdrawal or reduction of the ratings specified in the
Base Indenture or the applicable Series Supplement, without giving effect
to any Insurance Policy, by S&P, Moody’s or Fitch, respectively, below
certain specified thresholds.

 

A-48

 

“Rating Agency Notification”: 
With respect to any prospective action or occurrence, a written
notification to the Rating Agencies setting forth in reasonable detail such
action or occurrence.

 

“Reacquired U.S. Restaurants”: 
An Applebee’s Restaurant for which an Indemnification Amount, together
with any other amount payable pursuant to a related Transaction Document, has
been paid.

 

“Real Estate Assets”: 
Collectively, (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.

 

“Recipient”:  The meaning
specified in Section 16.9 of the Base Indenture.

 

“Record Date”:  With
respect to any Payment Date for the Offered Notes the day that is (i) one
Business Day prior to the applicable Payment Date or (ii) in the case of a
Holder of a Physical Note, fifteen days (without regard to whether such day is
a Business Day) prior to the applicable Payment Date.

 

“Refranchised Restaurant Leases”:  Leases entered into between Restaurant
Holders, as lessors, and Franchisees, as lessees, in connection with the
conversion of Company-Owned U.S. Restaurants to Franchised U.S. Restaurants
prior to the sale of the related Company-Owned Real Property to third parties
in sale-leaseback transactions.

 

“Refranchising Asset Disposition”:  The disposition of Collateral in connection
with refranchising activities pursuant to which Company-Owned U.S. Restaurants
will be converted to Franchised U.S. Restaurants.

 

“Regulation S”: 
Regulation S under the Securities Act, as such regulation may be
amended, supplemented, replaced or otherwise modified from time to time.

 

“Regulation S Global Notes”: 
Notes that are sold outside the United States to QP’s who are non-U.S.
Persons, in offshore transactions in reliance on Regulation S, and that are
issued in book-entry form and represented by one or more global notes in
definitive, fully registered form without interest coupons.

 

“Reimbursements”:  With
respect to any Series of Notes, reimbursement (including any interest
thereon) payable to the Insurer relating to such Series of Notes, with
respect to any payment made by such Insurer under the applicable Insurance
Policy, pursuant to the terms of the applicable Insurance Agreement.

 

“Reinvested Amounts”:  Any
net after-tax cash proceeds received from Asset Dispositions that are not deposited
to the Collection Account for application to pay principal of the Notes and
that are reinvested, within 180 days following receipt of such proceeds, in any
of the following:  (a) the New U.S.
Restaurant Business, (b) property on which the New U.S. Restaurant
Business is proposed to be developed, and (c) improvements and equipment
relating to the Existing U.S. Restaurant Business, including the restoration of
property relating to the Existing U.S. Restaurant Business.

 

A-49

 

“Released Indenture Collateral Asset”:  The meaning specified in Section 14.1(a) of
the Base Indenture.

 

“Reorganization”:  With
respect to any Multiemployer Plan, the condition that such plan is in
reorganization within the meaning of Section 4241 of ERISA.

 

“Replacement Residual Certificate”:  A certificate, issued by an Affiliate of IHOP
Franchising, LLC pursuant to its Charter Documents, evidencing the right to
receive all or a portion of the residual amount, if any, remaining in the
applicable account (or accounts) maintained pursuant to an indenture, guaranty
or other similar document to which such Affiliate is party, pursuant to which
such Affiliate is an issuer or guarantor of indebtedness issued to refinance
indebtedness previously outstanding under the IHOP Indenture, after giving
effect to all other amounts payable from such account (or accounts) pursuant to
the weekly or monthly priority of payments under such indenture, guaranty or
other similar document; provided that no
such certificate will constitute a “Replacement Residual Certificate”
unless such certificate (or such certificate together with similar certificates
issued by other Affiliates participating in such refinancing) is reasonably
expected to receive cash flow during the immediately succeeding 12-month period
that will be economically equivalent in all material respects to the cash flow,
if any, that the IHOP Residual Certificate would have received during such
12-month period, based on financial projections reasonably acceptable to the
Aggregate Controlling Party.

 

“Reportable Event”:  Any “reportable
event,” as defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived).

 

“Required Ratings”:  The
meaning specified in Section 13.3 of the Base Indenture.

 

“Requirements of Law”: 
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, 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).

 

“Residual Amount”:  The
meaning specified in Section 10.12(xxiv) of the Base Indenture.

 

“Residual Threshold Amount”: 
(i) With respect to the Series 2007-1 Notes, the Series 2007-1
Residual Threshold Amount (as defined in the Series 2007-1 Supplement),
and (ii) with respect to any other Series of Notes, as specified in
the applicable Series Supplement.

 

“Restaurant”:  All
Franchised U.S. Restaurants and Company-Owned U.S. Restaurants.

 

“Restaurant Accounts”: 
The accounts established at local banks in the name of the Master Issuer
in connection with the collection of money by the Restaurant Holders.

 

A-50

 

“Restaurant Holder Assets”: 
The meaning specified in Section 3.2(d) of the Base
Indenture.

 

“Restaurant Holder Profits”: 
With respect to each Monthly Collection Period, the amount (not less
than zero) equal to:

 

(a)           all cash
revenues and credit card proceeds generated by the Company-Owned U.S.
Restaurants and Post-Closing U.S. Restaurants over such period (excluding the
proceeds from the sale of ACMC Gift Cards at such restaurants that are
withdrawn from the Concentration Account for deposit to the Gift Card Reserve
Account but including the amounts described in subclauses (A), (B) and
(C) of clause (ii) of the definition of “Collections”);
minus

 

(b)           all operating
expenses paid in cash out of funds in deposit in the Concentration Account in
connection with the operation of the Company-Owned U.S. Restaurants and
Post-Closing U.S. Restaurants over such period.

 

“Restaurant Holders”: 
Applebee’s Restaurants North LLC, a Delaware limited liability company,
Applebee’s Restaurants Mid-Atlantic LLC, a Delaware limited liability company,
Applebee’s Restaurants West LLC, a Delaware limited liability company, Applebee’s
Restaurants Vermont, Inc., a Vermont corporation, Applebee’s Restaurants
Texas LLC, a Texas limited liability company, Applebee’s Restaurants Inc., a
Kansas corporation and Applebee’s Restaurants Kansas LLC, a Kansas limited
liability company, together with any additional legal entity that becomes a
party to the Indenture as a “Restaurant Holder” pursuant to a joinder to the
Indenture in the form attached as an exhibit to the Indenture, each a “Restaurant
Holder.”

 

“Retained Collections”: 
With respect to any specified period of time, the amount equal to (i) the
Collections received over such period minus (ii) the Excluded
Amounts included in the Collections over such period minus (iii) all
operating expenses paid in cash out of funds in deposit in the Concentration
Account in connection with the operation of the Company-Owned U.S. Restaurants
and Post-Closing U.S. Restaurants over such period.

 

“Retained Collections Contribution”:  The equity contributions made to the Master
Issuer over a Monthly Collection Period in an amount not to exceed $30 million
that the Servicer on behalf of the Master Issuer may designate to include in
the Net Cash Flow for purposes of calculating the Three-Month DSCR, Three-Month
Adjusted DSCR, One-Year DSCR, and One-Year Adjusted DSCR, during up to five
Monthly Collection Periods between the Closing Date and the Series 2007-1
Legal Final Maturity Date, but not during more than two Monthly Collection
Periods that occur during any calendar year, beginning with the calendar year
commencing on the Closing Date.

 

“Retained U.S. Restaurants”: 
As of any date of determination, any (i) Excluded U.S. Restaurant, (ii) Post-Closing
U.S. Restaurant for which the related assets have not been transferred to the
applicable Restaurant Holder pursuant to the Post-Closing U.S. Restaurant
Purchase Agreement and (iii) Reacquired U.S. Restaurant.

 

“Rule”:  The FTC’s
franchise rule, “Disclosure Requirements and Prohibitions Concerning
Franchising and Business Opportunity Ventures” (16 CFR 436).

 

A-51

 

“Rule 144A”:  Rule 144A
promulgated under the Securities Act.

 

“Rule 144A Global Notes”: 
The Offered Notes sold to Persons that are both Qualified Institutional
Buyers and Qualified Purchasers in reliance on Rule 144A under the
Securities Act will be represented by one or more Notes in registered, global
form, deposited with the Indenture Trustee as custodian for, and registered in
the name of a nominee of, DTC.

 

“S&P”:  Standard &
Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.,
and its successors in interest.

 

“Sale-Leaseback Lease”: 
Any lease entered into between a third party, as lessor, and a
Restaurant Holder, as lessee, relating to any Company-Owned Real Property sold by
the Restaurant Holder to the third party in a sale-leaseback transaction.

 

“Sales Tax Account”:  The
meaning specified in Section 10.2(g) of the Base Indenture.

 

“Second-Tier Asset Contribution Agreement”:  The asset contribution agreement, dated as of
the Closing Date, between Applebee’s Holdings, as the contributor, and the
Master Issuer, as the contributee.

 

“Secured Obligations”: 
The (a) principal of and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Notes, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (b) all
other monetary obligations, including fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of any Co-Issuer to the Secured
Parties under the Indenture, any Insurance Agreement and the other Transaction
Documents to which any of the Co-Issuers is or is to be a party, and (c) all
amounts due and payable by any Co-Issuer and not previously paid in respect of Series Hedge
Agreements, including upon the termination of such Series Hedge
Agreements.

 

“Secured Parties”:  The
meaning specified in the “Preliminary Statement” of the Base Indenture.

 

“Securities Act”:  The
United States Securities Act of 1933, as amended.

 

“Securities Intermediary”: 
The meaning specified in Section 10.9(a) of the Base
Indenture.

 

“Securitization Entities”: 
Each of the Master Issuer, the Franchise Holder, the IP Holder, the
Restaurant Holders, and Applebee’s Holdings and any Additional Securitization
Entities.

 

“Securitization Transaction”: 
The transactions contemplated by the Transaction Documents including,
without limitation, the contribution to the applicable Securitization

 

A-52

 

Entities of all of the assets of Applebee’s
International and its Subsidiaries in existence as of the Closing Date (other
than the Excluded Property) and the proceeds thereof in the manner provided in
the applicable Transaction Documents.

 

“Senior ABS Leverage Ratio”: 
As of any date of determination, the ratio of:

 

(i)            the
Aggregate Outstanding Principal Amount of all Senior Notes Outstanding
(assuming the Series 2007-1 Class A-1 Notes and all other variable
funding notes of the Co-Issuers are fully drawn); over

 

(ii)           EBITDA
attributable to Applebee’s International and its consolidated Subsidiaries,
including the Securitization Entities, but excluding (A) EBITDA
attributable to IHOP Corp. and its Affiliates (other than Applebee’s
International and its consolidated Subsidiaries) and (B) the IHOP Residual
Amount (if and for so long as the IHOP Residual Amount would otherwise be
included in calculating the EBITDA attributable to Applebee’s International and
its consolidated Subsidiaries).

 

“Senior Notes”:  The
meaning specified in Section 11.5(b)(vi) of the Base
Indenture.

 

“Senior Notes Available Reserve Account Amount”:  As of any date of determination, the amount
equal to the sum of the amount on deposit in the Senior Notes Interest Reserve
Account and the Cash Trap Reserve Account excluding in each case the Investment
Income on such amounts.

 

“Senior Notes Excess Adjusted Interest Account”:  The meaning specified in Section 10.8(a)(ix) of
the Base Indenture.

 

“Senior Notes Interest Payment Account”:  The meaning specified in Section 10.8(a)(i) of
the Base Indenture.

 

“Senior Notes Interest Reserve Account”:  The meaning specified in Section 10.3(a) of
the Base Indenture.

 

“Senior Notes Interest Reserve Deficit Amount”:  As of any date of determination, (i) with
respect to the Series 2007-1 Notes, the Series 2007-1 Senior Notes
Interest Reserve Deficit Amount (as defined in the Series 2007-1
Supplement), and (ii) with respect to each other Series of Notes
outstanding, the meaning specified in the related Series Supplement.

 

“Senior Notes Interest Reserve Step-Down Date”:  As of any date of determination, (i) with
respect to the Series 2007-1 Notes, the Series 2007-1 Senior Notes
Interest Reserve Step-Down Date (as defined in the Series 2007-1
Supplement), and (ii) with respect to each other Series of Notes
outstanding, the meaning specified in the related Series Supplement.

 

“Senior Notes Interest Reserve Step-Down Release Amount”:  As of any date of determination, (i) with
respect to the Series 2007-1 Notes, the Series 2007-1 Senior Notes
Interest Reserve Step-Down Release Amount (as defined in the Series 2007-1
Supplement), and

 

A-53

 

(ii) with respect to each other Series of
Notes outstanding, the meaning specified in the related Series Supplement.

 

“Senior Notes Monthly Contingent Additional Interest Account”:  The meaning specified in Section 10.8(a)(vii) of
the Base Indenture.

 

“Senior Notes Monthly Contingent Additional Interest Amount”
means (i) with respect to the Series 2007-1 Notes, the Series 2007-1
Class A-1 Extension Contingent Additional Interest (as defined in the Series 2007-1
Supplement), if any, the Series 2007-1 Class A-1 Post-ARD Monthly
Contingent Additional Interest (as defined in the Series 2007-1
Supplement), if any, the Series 2007-1 Class A-1 Contingent
Additional L/C Fees (as defined in the Series 2007-1 Supplement), if any,
the Series 2007-1 Class A-2-II Contingent Additional Interest (as
defined in the Series 2007-1 Supplement), if any, and the Series 2007-1
Class A-2 Post-ARD Contingent Additional Interest (as defined in the Series 2007-1
Supplement), if any, and (ii) with respect to the Senior Notes of each
other Series of Notes, the meaning specified in the applicable Series Supplement.

 

“Senior Notes Monthly Excess Adjusted Interest Amount”:  With respect to the (i) Series 2007-1
Notes, the Series 2007-1 Class A-2-I Note Excess Adjusted Interest
Amount (as defined in the Series 2007-1 Supplement), if any, and (ii) with
respect to each other Series of Notes Outstanding, the meaning specified
in the related Series Supplement.

 

“Senior Notes Monthly Interest Amount”:  With respect to each Payment Date, (a) the
aggregate amount of interest due and payable, with respect to such Interest
Accrual Period, on such Senior Notes that is identified as “Senior Notes
Monthly Interest Amount” in the applicable Series Supplement (other than
the Additional Interest Amount, if any), plus (b) to the extent not
otherwise included in clause (a), with respect to any variable funding
Senior Notes Outstanding, the aggregate amount of any letter of credit fees
(including fronting fees) due and payable on issued but undrawn letters of
credit, with respect to such Interest Accrual Period, on such Senior Notes
pursuant to the related note purchase agreement; provided, that if, on
any Payment Date or other date of determination, the actual amount of any such
interest or letter of credit fees cannot be ascertained, an estimate of such
interest or letter of credit fees will be used to calculate the Senior Notes
Monthly Interest Amount for such Payment Date or other date of determination in
accordance with the terms and provisions of the applicable Series Supplement;
provided, further, that any amount identified as “Senior Notes
Monthly Contingent Additional Interest Amount,” “Class A-1 Note
Administrative Expenses,” or “Class A-1 Commitment Fees Amount” in any Series Supplement
shall under no circumstances be deemed to constitute part of the “Senior Notes
Monthly Interest Amount.”

 

“Senior Notes Principal Payment Account”:  The meaning specified in Section 10.8(a)(iv) of
the Base Indenture.

 

“Series 2007-1 Additional Interest Amount”:  Collectively, the Series 2007-1
Contingent Additional Interest, if any, the Series 2007-1 Post-ARD
Contingent Additional Interest, if any, the Series 2007-1 Class A-2-I
Note Excess Adjusted Interest Amount (as defined in the Series 2007-1
Supplement), if any, and the Series 2007-1 Class A-1 Excess Interest
Amount, if any.

 

A-54

 

“Series 2007-1 Adjusted Repayment
Date”:  Shall be (i) unless and
until the Series 2007-1 Extension Election is effective, the Series 2007-1
Anticipated Repayment Date and (ii) from and after the date that the Series 2007-1
Extension Election becomes effective, the Payment Date occurring in June 2013.

 

“Series 2007-1 Anticipated Life”
means the period of time from and including the Series 2007-1 Make-Whole
Amount Calculation Date to but excluding the Series 2007-1 Adjusted
Repayment Date.

 

“Series 2007-1 Anticipated Repayment
Date”:  With respect to the Series 2007-1
Class A-2-I Notes, (i) the Payment Date occurring in June 2008
(the “Series 2007-1 Class A-2-I Initial Anticipated Repayment Date”);
or (ii) if the Aggregate Outstanding Principal Amount of the Series 2007-1
Class A-2-I Notes is not paid in full on or prior to the Series 2007-1
Class A-2-I Initial Anticipated Repayment Date, the Payment Date occurring
in December 2012 (the “Series 2007-1 Class A-2-I Extended
Anticipated Repayment Date”); and with respect to each other Class of Series 2007-1
Notes, the Payment Date occurring in December 2012.

 

“Series 2007-1 Class A Insurer”:  Assured Guaranty, or any successor thereto.

 

“Series 2007-1 Class A-1
Commitment Fee Amount”:  With respect
to the Series 2007-1 Class A-1 Notes for each Monthly Collection
Period, the Class A-1 Commitment Fees Amount for the Series 2007-1 Class A-1
Notes for such Monthly Collection Period.

 

“Series 2007-1 Class A-1 Excess
Interest Amount”:  The meaning set
forth in the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-1 Notes”:  The meaning set forth in “Designation” in the
Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2 Notes”:  The meaning set forth in “Designation” in the
Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2-I
Anticipated Life”:  The period of
time from and including the Series 2007-1 Make-Whole Amount Calculation
Date to but excluding the Series 2007-1 Class A-2-I Initial
Anticipated Repayment Date.

 

“Series 2007-1 Class A-2-I
Extended Anticipated Repayment Date”: 
The Payment Date occurring in December 2012.

 

“Series 2007-1 Class A-2-I
Initial Anticipated Repayment Date”: 
The Payment Date occurring in June 2008.

 

“Series 2007-1 Class A-2-I Notes”:  The meaning set forth in “Designation” in the
Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2-II
Contingent Additional Interest”: 
With respect to the Series 2007-1 Notes, the meaning specified in
the Series 2007-1 Supplement.

 

A-55

 

“Series 2007-1 Class A-2-II-A
Notes”:  The meaning set forth in “Designation”
in the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2-II-X
Notes”:  The meaning set forth in “Designation”
in the Series 2007-1 Supplement.

 

“Series 2007-1 Class M-1
Contingent Additional Interest”: 
With respect to the Series 2007-1 Notes, the meaning specified in
the Series 2007-1 Supplement.

 

“Series 2007-1 Class M-1
Post-ARD Contingent Additional Interest”: 
With respect to the Series 2007-1 Notes, the meaning specified in
the Series 2007-1 Supplement.

 

“Series 2007-1 Contingent Additional
Interest”:  Series 2007-1 Class A-2-II
Contingent Additional Interest or Series 2007-1 Class M-1 Contingent
Additional Interest, as the context may require.

 

“Series 2007-1 Extension Election”:  The right of the Co-Issuers, acting in their
sole discretion and subject to the conditions set forth in Section 4.7(b) of
the Series 2007-1 Supplement, to elect to extend the Series 2007-1
Anticipated Repayment Date applicable to each Class of Series 2007-1
Notes (other than the Series 2007-1 Class A-2-I Notes) for a six
month period from the Series 2007-1 Anticipated Repayment Date to the Series 2007-1
Adjusted Repayment Date (such period, the “Series 2007-1 Extension
Period”) by written notice to the Indenture Trustee on or prior to the date
that is three months prior to the Series 2007-1 Anticipated Repayment Date
occurring in December 2012 in accordance with the meaning specified in the
Series 2007-1 Supplement.

 

“Series 2007-1 Extension Period”:  The meaning specified in the definition of “Series 2007-1
Extension Election” in this Appendix A.

 

“Series 2007-1 Make-Whole Amount”:  (a)  With respect to the Series 2007-1
Class A-2-I Notes on any date of determination prior to the Series 2007-1
Class A-2-I Initial Anticipated Repayment Date, the amount (not less than
zero) equal to (i) the discounted present value as of the related Series 2007-1
Make-Whole Amount Calculation Date of all future installments of interest on
and principal of the Series 2007-1 Class A-2-I Notes that the
Co-Issuers would otherwise be required to pay on the Series 2007-1 Class A-2-I
Notes (or such portion thereof to be prepaid) from the date of such prepayment
to and including the Series 2007-1 Class A-2-I Initial Anticipated
Repayment Date assuming the entire unpaid principal amount (or such portion
thereof to be prepaid) is required to be paid on such Payment Date, determined
at a discount rate equal to the EDSF Rate with a tenor equal to the remaining Series 2007-1
Class A-2-I Anticipated Life as of the related Series 2007-1
Make-Whole Amount Calculation Date), such discount rate to be converted to a
monthly equivalent rate; minus (ii) the aggregate amount of the
principal being so prepaid;

 

(b)           with
respect to (i) the Series 2007-1 Class A-2-I Notes on any date
of determination following the Series 2007-1 Class A-2-I Initial
Anticipated Repayment Date (if the Series 2007-1 Class A-2-I Notes
are not paid in full on such date) and (ii) the Series 2007-1 Class A-2-II
Notes on any date of determination, the amount (not less than zero) equal to (x) the
discounted present value as of the related Series 2007-1 Make-Whole Amount
Calculation Date

 

A-56

 

of all future installments of interest on and
principal of such Series 2007-1 Class A-2 Notes (which with respect
to the Series 2007-1 Class A-2-I Notes will include the Series 2007-1
Class A-2-I Note Excess Adjusted Interest Amount, if any) that the
Co-Issuers would otherwise be required to pay on such Series 2007-1 Class A-2
Notes (or such portion thereof to be prepaid) from the date of such prepayment
to and including the Series 2007-1 Adjusted Repayment Date assuming the
entire unpaid principal amount (or such portion thereof to be prepaid) is
required to be paid on such Payment Date, determined at a discount rate equal
to the Swap Rate with a tenor that is equal to the remaining Series 2007-1
Anticipated Life as of the related Series 2007-1 Make-Whole Amount
Calculation Date (or, if such tenor is less than two years, the EDSF Rate),
such discount rate to be converted to a monthly equivalent rate; minus (y) the
aggregate amount of the principal being so prepaid; and

 

(c)           with
respect to the Series 2007-1 Class M-1 Notes on any date of
determination, the amount (not less than zero) equal to (i) the discounted
present value as of the related Series 2007-1 Make-Whole Amount
Calculation Date of all future installments of interest on and principal of
such Series 2007-1 Class M-1 Notes that the Co-Issuers would otherwise
be required to pay on such Series 2007-1 Class M-1 Notes (or such
portion thereof to be prepaid) from the date of such prepayment to and
including the Series 2007-1 Anticipated Repayment Date assuming the entire
unpaid principal amount (or such portion thereof to be prepaid) is required to
be paid on such Payment Date, determined at a discount rate equal to the Swap
Rate with a tenor that is equal to the remaining Series 2007-1 Anticipated
Life as of the related Series 2007-1 Make-Whole Amount Calculation Date
(or, if such tenor is less than two years, the EDSF Rate), such discount rate
to be converted to a monthly equivalent rate; minus (ii) the
aggregate amount of the principal being so prepaid; provided, that for
purposes of calculating the Series 2007-1 Make-Whole Amount in the manner
described above, (i) any reference to the Swap Rate or the EDSF Rate, as
applicable, will be determined, if necessary, by interpolating linearly between
yields reported for such other maturities that are less than and longer than
the remaining period until the Series 2007-1 Adjusted Repayment Date if no
maturity corresponds to the remaining period until the Series 2007-1
Anticipated Repayment Date; and (ii) the Series 2007-1 Anticipated
Repayment Date will be based on the period of time between such Make-Whole
Amount Calculation Date and the Payment Date occurring three months prior to
such date.

 

“Series 2007-1 Make-Whole Amount
Calculation Date”:  The date as of
which the Series 2007-1 Make-Whole Amount, if any, payable in connection
with a prepayment of principal of the Offered Notes is calculated, which will
be a Business Day selected by the Indenture Trustee that is no more than five (5) Business
Days prior to the Payment Date on which the prepayment of principal is made.

 

“Series 2007-1 Notes”:  Collectively, the Series 2007-1 Senior
Notes and the Series 2007-1 Subordinated Notes.

 

“Series 2007-1 Post-ARD Contingent
Additional Interest”:  Series 2007-1
Class A-2 Post-ARD Contingent Additional Interest (as defined in the Series 2007-1
Supplement) or Series 2007-1 Class M-1 Post-ARD Contingent Additional
Interest (as defined in the Series 2007-1 Supplement), as the context may
require.

 

A-57

 

“Series 2007-1 Rapid Amortization
Events”:  With respect to the Series 2007-1
Notes:

 

(a)           the
failure to maintain a Three-Month Adjusted DSCR of at least 1.50x as of any
Payment Date; or

 

(b)           the
twelve-month U.S. system-wide sales of Applebee’s Restaurants as of the last
day of the immediately preceding twelve-month period ending on the last day of
each fiscal month having dropped to below $3.75 billion.

 

“Series 2007-1 Senior Notes”:  Collectively, the Series 2007-1 Class A-1
Notes and the Series 2007-1 Class A-2 Notes.

 

“Series 2007-1 Senior Notes Interest
Reserve Amount”:  With respect to the
Series 2007-1 Notes, the meaning specified in the Series 2007-1
Supplement.

 

“Series 2007-1 Subordinated Notes”:  With respect to the Series 2007-1 Notes,
the meaning specified in “Designation” in the Series 2007-1 Supplement.

 

“Series 2007-1 Supplement”:  The Series 2007-1 Supplement, dated as
of the Closing Date by and among the Co-Issuers and the Indenture Trustee, as
amended, supplemented or otherwise modified from time to time.

 

“Series 2007-1 Term Note Purchase
Agreement”:  The Purchase Agreement,
dated as of the Closing Date, among the Co-Issuers, the Guarantors, CHLC Corp.,
IHOP Corp., Applebee’s Holdings II Corp., Applebee’s Services, Inc.,
Applebee’s International, Inc. and Lehman Brothers, Inc, as initial
purchaser.

 

“Series” or “Series of Notes”:  The Notes issued pursuant to a particular Series Supplement.

 

“Series Account”:  With respect to any Series of Notes, the
series accounts, if any, established in accordance with the provisions of the
applicable Series Supplement by the Indenture Trustee, subject to the
provisions of Section 10.10 of the Base Indenture.

 

“Series Anticipated Repayment Date”:  With respect to any Series of Notes or,
within such Series of Notes, with respect to each Class of Notes, as
specified in the applicable Series Supplement.

 

“Series Contingent Additional
Interest Amount”:  With respect to
any Series of Notes or, within such Series of Notes, with respect to
each Class of Notes, as specified in the applicable Series Supplement.

 

“Series Controlling Party”:  With respect to any Series of Notes
Outstanding, the Majority Insurers, if any, with respect to such Series of
Notes unless such Series of Notes is uninsured or an Insurer Event of
Default has occurred and is continuing with respect to all of the Insurers of
such Series, in which event the Series Controlling Party will be a
Majority of the Senior Notes or, if the Senior Notes of such Series are
paid in full, a Majority of the

 

A-58

 

Subordinated Notes; provided, that for
the Series 2007-1 Class A-1 Notes and any other variable funding Series of
Notes, the Aggregate Outstanding Principal Amount, for purposes of the
definitions of Series Controlling Party and Aggregate Controlling Party,
will include the maximum possible Aggregate Outstanding Principal Amount under
such variable funding series of notes; provided, further, that so
long as any Series 2007-1 Class A-1-A Notes or any Series 2007-1
Class A-2-II-A Notes remain Outstanding, Assured Guaranty shall be deemed
to be the Series Controlling Party with respect to the Series 2007-1
Notes (except in circumstances in which an Insurer Event of Default has
occurred and is continuing in respect of Assured Guaranty, in which case the “Series Controlling
Party” for the Series 2007-1 Notes shall be determined as otherwise set
forth in this definition).

 

“Series Distribution Account”:  With respect to any Series of Notes or
any Class of any Series of Notes, an account established to receive
distributions to be paid to the Noteholders of such Class or such Series of
Notes pursuant to the applicable Series Supplement

 

“Series Event of Default”:  With respect to any Series of Notes, an
event of default specified in the applicable Series Supplement, if any.

 

“Series Hedge Agreement”:  With respect to any Series of Notes, the
hedge agreement, if any, described in the applicable Series Supplement.

 

“Series Hedge Counterparty”:  With respect to any Series of Notes, the
Person specified in the applicable Series Supplement, if any.

 

“Series Hedge Payment Amount”:  All amounts payable by the Master Issuer
under a Series Hedge Agreement including any termination payment payable
by the Master Issuer.

 

“Series Hedge Receipt”:  All amounts received by the Master Issuer
under a Series Hedge Agreement.

 

“Series Insurer Premiums”:  With respect to any Series of Notes, the
amount specified in the applicable Series Supplement, if any.

 

“Series Interest Payment Amount”:  With respect to each Series of Notes,
the amount specified in the applicable Series Supplement, if any.

 

“Series Legal Final Maturity Date”:  With respect to (i) the Series 2007-1
Notes, the Series 2007-1 Legal Final Maturity Date (as defined in the Series 2007-1
Supplement) and (ii) any additional Series of Notes, the meaning
specified in the related Series Supplement.

 

“Series Make Whole Amount”:  With respect to each Series of Notes and
each Class of Notes, the amount specified in the applicable Series Supplement,
if any.

 

“Series Note Interest Rate”:  With respect to each Series of Notes,
the rate of interest per annum (or as otherwise specified in the applicable Series Supplement)
applicable to such Series of Notes as indicated in or determined pursuant
to the applicable Series Supplement.

 

A-59

 

“Series Noteholders”:  The Holders of the Notes of any particular Series of
Notes.

 

“Series Notes”:  With respect to each Series of Notes,
any Notes issued under the Series Supplement relating to such Series of
Notes.

 

“Series of Notes” or “Series”:  Notes issued pursuant to a particular Series Supplement.

 

“Series Outstanding Principal Amount”:  With respect to any Series of Notes, the
Outstanding principal amount of such Series of Notes.

 

“Series Rapid Amortization Event”:  With respect to (i) the Series 2007-1
Notes, the Series 2007-1 Rapid Amortization Events, and (ii) any
additional Series of Notes, the meaning, if any, specified in the related Series Supplement.

 

“Series Supplement”:  A supplemental indenture to the Base
Indenture, with respect to each Series of Notes.

 

“Servicer”:  Applebee’s Services, Inc. (formerly
known as AII Services, Inc.), a Kansas corporation and a wholly-owned
subsidiary of Applebee’s International, unless a successor Person shall have
become the Servicer pursuant to the applicable provisions of the Indenture and
the Servicing Agreement, and thereafter “Servicer” shall mean such
successor Person.

 

“Servicer Certificate”:  The meaning specified in the Servicing Agreement.

 

“Servicer-Developed IP”:  All of the following created, developed,
authored or acquired by the Servicer:  (i) U.S.
Intellectual Property Rights in:  (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, and (ii) worldwide Intellectual Property
rights in new versions, updates or other modifications to the POS System.

 

“Servicer Order”:  A written order or request, as the case may
be, dated and signed in the name of the Servicer by an Authorized Officer of
the Servicer.

 

“Servicer Termination Event”:  Any Servicer Termination Event specified in
the Servicing Agreement.

 

“Servicing Accounts”:  Collectively, the Advertising Fees Account,
the Capital Expenditure Reserve Account, the Franchisor Holding Account, the
Gift Card Reserve Account, the Insurance Proceeds Account, the Lease Payment
Account, the Sales Tax Account, the SPE Operating Expense Account and the Third
Party Licensing Fee Account and such other accounts as may be established by
the Servicer from time to time pursuant to the Servicing Agreement that the
Servicer designates as a “Servicing Account” for purposes of the Servicing
Agreement.

 

“Servicing Agreement”:  The Servicing Agreement, dated as of the
Closing Date, by and among Applebee’s International, as guarantor, the
Servicer, the Securitization Entities (other than Applebee’s Holdings), the Series 2007-1
Class A Insurer and the Indenture Trustee.

 

A-60

 

“Servicing Standard”:  The meaning set forth in the Servicing
Agreement.

 

“Single Employer Plan”:  Any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.

 

“Software”:  The meaning specified in the definition of “Intellectual
Property” in this Appendix A.

 

“SPE Operating Expenses”:  All expenses incurred by the Securitization
Entities and payable to third parties in connection with the maintenance and
operation of the Securitization Entities and the transactions contemplated by
the Transaction Documents to which they are a party, including (i) accrued
and unpaid government taxes (other than federal, state and local income taxes),
filing fees and registration fees payable by the Securitization Entities to any
federal, state or local government entities; (ii) the fees and expenses
payable to (A) the Indenture Trustee, Wells Fargo Bank, National
Association in any other capacity under the Indenture or the other Transaction
Documents to which it is a party, (B) the Back-Up Manager, (C) the
Irish Listing Agent, (D) the Irish Paying Agent, (E) the Irish Stock
Exchange, (F) any other stock exchange on which the Offered Notes may be
listed in lieu of the Irish Stock Exchange, (G) the Rating Agencies and (H) any
independent certified public accountants or external legal counsel, (iii) the
liquor license fees payable by the Restaurant Holders and Liquor License
Holders, (iv) Securitization Indemnities, (v) Mortgage Recordation
Fees, and (vi) fees incurred by the Co-Issuers in connection with the
replacement of the Servicer following any resignation or removal of the
Servicer.

 

“SPE Operating Expense Account”:  The account established and specified as such
pursuant to Section 10.2(e) of the Base Indenture.

 

“Specified Person”:  The meaning specified in Section 2.6
of the Base Indenture.

 

“STAMP”:  The meaning specified in Section 2.5(a) of
the Base Indenture.

 

“Subordinated Notes”:  The meaning as specified in Section 11.5(b)(vi) of  the Base Indenture.

 

“Subordinated Notes Interest”:  For any Interest Accrual Period,  with respect to any Class of
Subordinated Notes Outstanding, the aggregate amount of interest due and
payable, with respect to such Interest Accrual Period, on such Class of
Subordinated Notes that is identified as “Subordinated Notes Interest”
in the applicable Series Supplement; provided, that if, on any
Monthly Allocation Date or other date of determination, the actual amount of
any such interest, fees or expenses cannot be ascertained, an estimate of such
interest, fees or expenses shall be used to calculate the Subordinated Notes
Monthly Interest for such Weekly Allocation Date or other date of determination
in accordance with the terms and provisions of the applicable Series Supplement;
provided, further, that any amount identified as “Subordinated
Notes Contingent Additional Interest” in any Series Supplement shall under
no circumstances be deemed to constitute “Subordinated Notes Interest.”

 

“Subordinated Notes Interest Payment Account”:  The meaning specified in Section 10.8(a)(v) of
the Base Indenture.

 

A-61

 

“Subordinated Notes Monthly Interest
Amount”:  With respect to each
Payment Date, the aggregate amount of interest due and payable, with respect to
such Interest Accrual Period, on the Subordinated Notes Outstanding (other than
the Additional Interest Amount, if any).

 

“Subordinated Notes Monthly Contingent
Additional Interest Amount”:  With
respect to (i) the Series 2007-1 Notes, the Series 2007-1 Class M-I
Contingent Additional Interest (as defined in the Series 2007-1
Supplement), if any, and the Series 2007-1 Class M-I Post-ARD
Contingent Additional Interest (as defined in the Series 2007-1
Supplement), if any, and (ii) with respect to the Subordinated Notes of
each other Series of Notes, the meaning specified in the related Series Supplement.

 

“Subordinated Notes Outstanding”:  With respect to any Subordinated Series of
Notes, the Aggregate Outstanding Principal Amount.

 

“Subordinated Notes Principal Amortization
Amount”:  The meaning given thereto
in clause (xxiv) of the Priority of Payments.

 

“Subordinated Notes Principal Payment
Account”:  The meaning specified in Section 10.8(a)(vi) of
the Base Indenture.

 

“Subsidiary”:  With respect to any Person (herein referred
to as the “parent”), any corporation, partnership, limited liability
company, association or other business entity (a) of which securities or
other ownership interests representing more than 50% of the equity or more than
50% of the ordinary voting power or more than 50% of the general partnership
interests are, at the time any determination is being made, owned, controlled
or held by the parent or (b) that is, at the time any determination is
being made, otherwise controlled, by the parent or one or more Subsidiaries of
the parent or by the parent and one or more Subsidiaries of the parent.

 

“Successor Servicer”:  The meaning specified in the Servicing
Agreement.

 

“Supplemental Grant of Security Interest
in Copyrights”:  A duly-executed
instrument substantially in the form of Exhibit H to the Base
Indenture, granting a lien in the Copyrights included in the After-Acquired IP
Assets owned by the Master Issuer or any Co-Issuer.

 

“Supplemental Grant of Security Interest in
Patents”:  A duly-executed instrument
substantially in the form of Exhibit H to the Base Indenture,
granting a lien in the Patents included in the After-Acquired IP Assets owned
by the Master Issuer or any Co-Issuer.

 

“Supplemental Grant of Security Interest
in Trademarks”:  A duly-executed
instrument substantially in the form of Exhibit H to the Base
Indenture, granting a lien in the Trademarks included in the After-Acquired IP
Assets owned by the Master Issuer or any Co-Issuer.

 

“Supplemental Servicing Fee”:  The meaning specified in the Servicing
Agreement.

 

A-62

 

“Swap Rate”:  When used with respect to any Business Day
for any tenor, the mid-market swap rate for such tenor appearing on page 19901
of the Telerate Service (or any successor service or, if such service or
successor service is not available, a substitute rate, which will be the median
of three quoted rates determined by the Indenture Trustee requesting at the
expense of the Co-Issuers substitute rate quotes from three broker dealers of
nationally recognized standing) on such Business Day, adjusted for monthly
compounding.

 

“Tax”: 
Any federal, state, local or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium,
environmental, custom duties, capital stock, profits, documentary, property,
franchise, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value added,
alternative or add on minimum, or other tax of any kind whatsoever, including
any interest, penalty, fine, assessment or addition thereto.

 

“Third Party Licensing Fee Account”:  The meaning specified in Section 10.2(c) of
the Base Indenture.

 

“Third Party Licensing Fees”:  The royalties, licensing fees or other
similar amounts payable to third parties in connection with the sale and use of
their products in Franchised U.S. Restaurants, Company-Owned U.S. Restaurants
and Post-Closing U.S. Restaurants.

 

“Third-Tier Asset Contribution Agreement”:  The various contribution agreements, dated as
of the closing Date between the Master Issuer, as the contributor, and each of
the other Securitization Entities (other than Applebee’s Holdings), as the
contributees, pursuant to which the Master Issuer will contribute to such other
Securitization Entities the assets to be owned by such other Securitization
Entities as described below

 

“Three-Month Adjusted DSCR”:  The Three-Month DSCR recalculated to add to
the numerator thereof the IHOP Residual Amount, if any, received by the Master
Issuer or the Servicer on behalf of the Master Issuer over the three
immediately preceding Monthly Collection Periods.  For the avoidance of doubt, Three-Month
Adjusted DSCR shall not be calculated for any purpose under the Indenture
during the first three (3) Monthly Collection Periods.

 

“Three-Month DSCR”:  With respect to each Payment Date, the ratio
calculated by dividing (i) the Net Cash Flow received over the three
immediately preceding Monthly Collection Periods by (ii) the Debt Service
due on such Payment Date and on the immediately preceding two (2) Payment
Dates.  For the avoidance of doubt,
Three-Month DSCR shall not be calculated for any purpose under the Indenture
during the first three (3) Monthly Collection Periods.

 

“Total Redemption Amount”:  An amount equal to the sum (without
duplication) of (a) the aggregate amount of accrued and unpaid interest
and the Aggregate Outstanding Principal Amount of all Series of Notes Outstanding
plus (b) the amounts set forth in clauses (i), (iii) through
(vii), (ix), (xiii) through (xvi) and (xix) through (xxiii) of the Priority of
Payments.

 

“Trademarks”:  All trademarks, service marks, trade names,
trade dress, Internet Domain Names, logos, slogans, and other similar source
identifiers (whether registered or

 

A-63

 

unregistered), together with all
registrations and applications for any of the foregoing and the goodwill of any
business connected with the use of and symbolized by the foregoing.

 

“Transaction Documents”:  The Indenture, the Notes, each Account
Control Agreement, the Guaranty and Collateral Agreements, the Servicing
Agreement, the Back-Up Manager Agreement, the Post-Closing U.S. Restaurant
Purchase Agreements, the IHOP Corp. Servicing Guaranty, any Series Hedge
Agreement, any Insurance Policy, any Insurance Agreement, any Insurer Premium
Letter, the Asset Contribution Agreements, any Note Purchase Agreement, the IP
License Agreements, the Non-U.S. IP Rights Agreement, the Sale/Leaseback
Leases, if any, the Franchisee Sub-Leases, if any, the Refranchised Restaurant
Leases, if any, the Participation Agreements entered into between Applebee’s
International and the Restaurant Holders and any additional document identified
as a “Transaction Document” in the Series Supplement for any Series of
Notes Outstanding.

 

“Transfer Agent”:  The Person or Persons, which may be the
Issuer, authorized by the Issuer to exchange or register the transfer of Notes.

 

“Trigger Event”:  Either of the following events:  (i) the Three-Month Adjusted DSCR is
less than 1.85x as of any Payment Date; or (ii) the occurrence of a Rapid
Amortization Event or a Potential Rapid Amortization Event.

 

“Trust Estate”:  The Collateral and all rights of the
Indenture Trustee under any Insurance Policy, and including all other money,
instruments, and other property and rights subject or intended to be subject to
the Lien of the Indenture for the benefit of all or any of the Secured Parties
as of any particular time, including all proceeds thereof.

 

“Trust Officer”:  When used with respect to the Indenture
Trustee, any officer within the Corporate Trust Office (or any successor group
of the Indenture Trustee) including any vice president, assistant vice
president or officer of the Indenture Trustee customarily performing functions
similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred at the
Corporate Trust Office because of his knowledge of and familiarity with the
particular subject.

 

“UCC”: 
The Uniform Commercial Code as in effect from time to time in the State
of New York or, when the context requires, the Uniform Commercial Code as in
effect from time to time in any other applicable jurisdiction.

 

“Unhedged Floating Rate Note Principal
Limit”:  With respect to (i) the
Series 2007-1 Notes, $150,000,000 and (ii) each other Series of
Notes Outstanding, the meaning set forth in the related Series Supplement.

 

“United States” or “U.S.”:  The 50 states of the United States and the
District of Columbia.

 

“U.S. Dollar”:  The symbol “$” mean the lawful currency of
the United States.

 

“U.S. Intellectual Property Rights”:  (i) Intellectual Property rights that
are established under the laws of the United States (including U.S. Federal law
and the laws of any

 

A-64

 

state or political subdivision thereof) and (ii) rights
in Internet Domain Names except for those including a ccTLD that designates a
country or region other than the United States.

 

“U.S. Person”:  A “U.S. person” as such term is defined in
Regulation S under the Securities Act.

 

“U.S. Restaurant Business”:  Collectively, the Existing U.S. Restaurant
Business and the New U.S. Restaurant Business.

 

“U.S. Resident”:  The meaning specified in the Investment
Company Act.

 

“U.S. Territories”:  Any and all territories, possessions,
protectorates, commonwealths (including Guam, the U.S. Virgin Islands, and
Puerto Rico) and U.S. military bases, in each case which are located outside
the United States, to the extent that U.S. Federal intellectual property laws
apply thereto.

 

“U.S. Territories Business”:  The ownership, franchising and operation of
Applebee’s Branded restaurants, and the ownership, operation, manufacturing,
distribution, sale, offering to sell, marketing, promoting, licensing and/or
franchising of any and all other businesses, products, or services, in the U.S.
Territories.

 

“Weekly Allocation Date”:  The meaning specified in Section 10.1(b)(iii) of
the Base Indenture.

 

“Weekly Collections Allocation Period”:  The weekly period commencing on 12:00 a.m.
(New York time) on each Monday and ending on 11:59 p.m. (New York time) on
each Sunday except that the first such period will be from and including the
Cut-Off Date to and including December 9, 2007.

 

“Weekly Collections Allocation Priority”:  The meaning specified in Section 10.1(b)(iii) of
the Base Indenture.

 

“Weekly Debt Service Allocation Amount”:  (i) With respect to each Weekly
Allocation Date during the first five (5) Weekly Collections Allocation
Periods following the Closing Date, a prorated amount obtained by dividing the
Debt Service with respect to the Payment Date occurring in January 2008
divided by five and (ii) with respect to each Weekly Allocation Date
during the sixth and seventh Weekly Collection Allocation Periods following the
Closing Date the Debt Service with respect to the Payment Date in February 2008
divided by four.

 

“Weekly Residual Amount”:  With respect to each Weekly Allocation Date
during the first seven (7) Weekly Collections Allocation Periods, an
amount equal to $1,000,000.

 

“Weekly Servicer’s Report”:  The meaning specified in Section 12.1(a) of
the Base Indenture.

 

“Weekly Servicing Fee”:  The meaning specified in the Servicing
Agreement.

 

A-65

 

“Weight Watchers Agreement”:  The meaning specified in the definition of “Excluded
Property” in this Appendix A.

 

“Weight Watchers Fees”:  The meaning specified in Section 10.2(c) of
the Base Indenture.

 

A-66

 

SCHEDULE 7.12(d)

 

LITIGATION

 

1.                                       Gerald
A. Fast, Talisha Cheshire and Brady Gehrling, on behalf of themselves and as
class representative for all other similarly situated, Plaintiffs v. Applebee’s
International, Inc. d/b/a Applebee’s Neighborhood Grill & Bar,
Defendant (Case No. 06-4146-CV-C-NKL).

 

2.                                       New
Jersey Building Laborers Pension and Annuity Funds, Plaintiff v. Applebee’s
International, Inc., Lloyd L. Hill, Erline Belton, Gina R. Boswell,
Richard C. Breeden, Douglas R. Conant, D. Patrick Curran, David L. Goebel, Eric
L. Hansen, Laurence E. Harris, Jack P. Helms, Steven K. Lumpkin, Rogelio
Rebolledo, Burton M. Sack, Michael A. Volkema and IHOP Corp., Defendants (Case No. 3124-CC).

 

1

 

SCHEDULE 7.12(u)

 

INDEBTEDNESS

 

 

Capital Leases for Stores
As of September 2007

 

	
  Store #

  	
   

  	
  Store Name & State

  	
   

  	
  Principal

  	
   

  
	
  5214

  	
   

  	
  St. Charles, MO

  	
   

  	
  287,554

  	
   

  
	
  5217

  	
   

  	
  Crestwood, MO

  	
   

  	
  598,048

  	
   

  
	
  5221

  	
   

  	
  Mt. Vernon, IL

  	
   

  	
  845,846

  	
   

  
	
  5222

  	
   

  	
  N. Lindberg, MO

  	
   

  	
  998,964

  	
   

  
	
  5223

  	
   

  	
  Ballwin, MO

  	
   

  	
  1,050,637

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  3,781,048

  	
   

  

 

1

 

SCHEDULE 7.12(v)

 

INSURANCE COVERAGE

 

	
  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,

  

 

1

 

	
  Coverage

  	
   

  	
  Insurance Carrier

  	
   

  	
  Policy Term

  	
   

  	
  Comment

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  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

  	
   

  	
   

  

 

2

 

SCHEDULE 7.12(x)

 

INTELLECTUAL
PROPERTY REGISTRATIONS AND APPLICATIONS

 

(i)                                     The IP Holder owns
the following Trademark registrations and applications in the United States:

 

	
  Mark

  	
   

  	
  Serial No.

  	
   

  	
  Reg. No.

  
	
  “A” IS FOR APPLEBEE’S

  	
   

  	
  78/684,004

  	
   

  	
  3,186,126

  
	
  ALL YOU CAN
  EAT NIGHTS and Design*

  

  	
   

  	
  78/215,701

  	
   

  	
  2,860,138

  
	
  AMERICA’S FAVORITE NEIGHBOR*

  	
   

  	
  73/833,532

  	
   

  	
  1,601,596

  
	
  APPLEBEE BURGER*

  	
   

  	
  75/308,681

  	
   

  	
  2,167,623

  
	
  APPLEBEE’S

  	
   

  	
  75/204,357

  	
   

  	
  2,174,392

  
	
  APPLEBEE’S

  	
   

  	
  78/776,156

  	
   

  	
  3,126,987

  
	
  APPLEBEE’S

  	
   

  	
  74/488,449

  	
   

  	
  1,927,107

  
	
  APPLEBEE’S and Design

  

  	
   

  	
  74/155,247

  	
   

  	
  1,695,071

  
	
  APPLEBEE’S and Design (Apple)

  

  	
   

  	
  77/287,079

  	
   

  	
   

  
	
  APPLEBEE’S ANYWHERE

  	
   

  	
  78/661,607

  	
   

  	
  3,116,854

  
	
  APPLEBEE’S CORE NEWS

  	
   

  	
  78/219,267

  	
   

  	
  2,924,966

  
	
  APPLEBEE’S GRILL

  	
   

  	
  78/776,167

  	
   

  	
  3,126,988

  
	
  APPLEBEE’S LEADERSHIP INSTITUTE

  	
   

  	
  78/691,618

  	
   

  	
  3,126,430

  
	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR

  	
   

  	
  73/576,958

  	
   

  	
  1,477,153

  

 

* Registrations that are subsisting, but potentially abandoned.

 

1

 

	
  Mark

  	
   

  	
  Serial No.

  	
   

  	
  Reg. No.

  
	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design (with
  Balloon)

  

  	
   

  	
  73/576,708

  	
   

  	
  1,480,107

  
	
  APPLEBEE’S NEIGHBORHOOD GRILL and Design

  

  	
   

  	
  74/387,188

  	
   

  	
  1,926,020

  
	
  APPLEBEE’S RIBLETS ORIGINAL and Design*

  

  	
   

  	
  78/501,630

  	
   

  	
  3,028,404

  
	
  APPLEBEE’S TOGETHER IS GOOD [Class 35]

  	
   

  	
  77/297,395

  	
   

  	
   

  
	
  APPLEBEE’S TOGETHER IS GOOD [Class 43]

  	
   

  	
  77/975,176

  	
   

  	
   

  
	
  APPLEBEE’S TOGETHER IS GOOD and Design [Class 35]

  

  	
   

  	
  77/287,137

  	
   

  	
   

  
	
  APPLEBEE’S TOGETHER IS GOOD and Design [Class 43]

  

  	
   

  	
  77/975,177

  	
   

  	
   

  
	
  BIG FUN TRIP

  	
   

  	
  78/691,628

  	
   

  	
  3,123,514

  
	
  BREWTUS

  	
   

  	
  74/255,218

  	
   

  	
  1,783,594

  
							

 

2

 

	
  Mark

  	
   

  	
  Serial No.

  	
   

  	
  Reg. No.

  
	
  CARSIDE TO GO and Design

  

  	
   

  	
  78/272,304

  	
   

  	
  2,969,882

  
	
  CARSIDE TO GO and Design (Cart Logo)

  

  	
   

  	
  78/636,155

  	
   

  	
  3,116,745

  
	
  CHICKEN TANGLERS

  	
   

  	
  78/319,841

  	
   

  	
  2,893,600

  
	
  EATIN’ GOOD IN THE NEIGHBORHOOD

  	
   

  	
  76/229,557

  	
   

  	
  2,510,402

  
	
  FIESTA LIME CHICKEN

  	
   

  	
  76/419,001

  	
   

  	
  3,188,439

  
	
  FIRE GRILLED FAVORITES*

  	
   

  	
  78/654,021

  	
   

  	
  3,188,875

  
	
  HONEY OF A DEAL and Design*

  

  	
   

  	
  76/369,432

  	
   

  	
  2,720,794

  
	
  IRRESIST-A-BOWLS

  	
   

  	
  78/684,016

  	
   

  	
  3,138,570

  
	
  IT’S GOT TO BE APPLEBEE’S*

  	
   

  	
  76/343,652

  	
   

  	
  2,690,341

  
	
  IT’S NOT FAST FOOD - IT’S APPLEBEE’S FOOD FAST

  	
   

  	
  78/225,314

  	
   

  	
  2,840,241

  
	
  MAIN STREET RITA

  	
   

  	
  78/739,169

  	
   

  	
  3,148,559

  
	
  Miscellaneous Design (Apple)

  

  	
   

  	
  76/261,734

  	
   

  	
  2,552,524

  
	
  Miscellaneous Design (New Apple)

  

  	
   

  	
  77/289,412

  	
   

  	
   

  

 

3

 

	
  Mark

  	
   

  	
  Serial No.

  	
   

  	
  Reg. No.

  
	
  MUCHO BLUE SKIES and Design*

  

  	
   

  	
  76/312,000

  	
   

  	
  2,588,337

  
	
  MUCHO CRANRITA

  	
   

  	
  76/148,302

  	
   

  	
  2,729,844

  
	
  MUCHO MAMA and Design

  

  	
   

  	
  76/311,973

  	
   

  	
  2,588,336

  
	
  MUCHO MARGARITA

  	
   

  	
  75/802,937

  	
   

  	
  2,379,470

  
	
  MUCHO MUDSLIDE and Design

  

  	
   

  	
  76/312,222

  	
   

  	
  2,662,409

  
	
  NEIGHBORHOOD NIGHTS and Design

  

  	
   

  	
  76/487,531

  	
   

  	
  2,794,399

  
	
  SALAD DAYS OF SUMMER and Design*

  

  	
   

  	
  75/733,194

  	
   

  	
  2,538,912

  
	
  SIMPLY IRRESISTI-BOWL*

  	
   

  	
  76/166,414

  	
   

  	
  2,538,010

  
	
  SKILLET SENSATIONS

  	
   

  	
  75/751,396

  	
   

  	
  3,069,596

  
	
  SKILLET SSSENSATIONS! (Stylized)*

  

  	
   

  	
  75/308,648

  	
   

  	
  3,047,168

  

 

* Registrations that are subsisting, but potentially abandoned.

 

4

 

	
  Mark

  	
   

  	
  Serial No.

  	
   

  	
  Reg. No.

  
	
  SUMMER SQUEEZE

  	
   

  	
  75/121,295

  	
   

  	
  2,073,776

  
	
  T. J. APPLEBEE’S RX FOR EDIBLES & ELIXIRS and Design*

  

  	
   

  	
  73/292,397

  	
   

  	
  1,223,740

  
	
  THEY KNOW ME AT APPLEBEE’S (Stylized)*

  

  	
   

  	
  73/576,706

  	
   

  	
  1,481,120

  
	
  TO GO and Design (Apple Logo)

  

  	
   

  	
  76/414,888

  	
   

  	
  2,695,523

  
	
  TO GO and Design (Cart Logo)

  

  	
   

  	
  78/262,287

  	
   

  	
  2,984,968

  
	
  TOGETHER IS GOOD [Class 35]

  	
   

  	
  77/287,257

  	
   

  	
   

  
	
  TOGETHER IS GOOD [Class 43]

  	
   

  	
  77/975,156

  	
   

  	
   

  
	
  TRIPLE CHOCOLATE MELTDOWN

  	
   

  	
  78/225,340

  	
   

  	
  3,119,040

  
	
  YOU BELONG AT APPLEBEE’S (Stylized)* 

  	
   

  	
  75/267,604

  	
   

  	
  2,142,752

  
	
  YOU CALL IT IN. WE BRING IT OUT.

  	
   

  	
  78/319,845

  	
   

  	
  2,895,850

  

 

5

 

U.S. State and
Territory Trademark Applications and Registrations

 

	
  Jurisdiction

  	
   

  	
  Mark

  	
   

  	
  Reg. No.

  
	
  Arizona

  	
   

  	
  APPLEBEE’S and Design

  	
   

  	
  30334

  
	
  Arizona

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  30335

  
	
  Arizona

  	
   

  	
  T. J. APPLEBEE’S RX FOR EDIBLES & ELIXIRS and Design*

  	
   

  	
  30336

  
	
  California

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  052975

  
	
  Colorado

  	
   

  	
  APPLEBEE’S and Design

  	
   

  	
  19931056557

  
	
  Colorado

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  19931056555

  
	
  Colorado

  	
   

  	
  T. J. APPLEBEE’S RX FOR EDIBLES & ELIXIRS and Design*

  	
   

  	
  19931056562

  
	
  Delaware

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  200017462

  
	
  Georgia

  	
   

  	
  T. J. APPLEBEE’S EDIBLES AND ELIXERS and Design*

  	
   

  	
  S-3410

  
	
  Idaho

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  16595

  
	
  Maine

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  20000226M

  
	
  Maryland

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  2000/00915

  
	
  Massachusetts

  	
   

  	
  APPLEBEE’S

  	
   

  	
  46443

  
	
  Massachusetts

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  46444

  
	
  Massachusetts

  	
   

  	
  T.J. APPLEBEE’S RX FOR EDIBLES & ELIXIRS and Design*

  	
   

  	
  46445

  
	
  Michigan

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  MO2-417

  
	
  Montana

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR

  	
   

  	
  T020749-194-18

  
	
  Nebraska

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  10010748

  
	
  Nevada

  	
   

  	
  APPLEBEE’S

  	
   

  	
  27163

  
	
  Nevada

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR

  	
   

  	
  27164

  
	
  Nevada

  	
   

  	
  T.J. APPLEBEE’S RX FOR EDIBLES & ELIXIRS*

  	
   

  	
  27165

  
	
  New Hampshire

  	
   

  	
  APPLEBEE’S

  	
   

  	
  85145

  
	
  New Hampshire

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design*

  	
   

  	
  85143

  
	
  New Hampshire

  	
   

  	
  T.J. APPLEBEE’S RX FOR EDIBLES & ELIXIRS*

  	
   

  	
  85144

  

 

* Registrations that are subsisting, but potentially abandoned.

 

6

 

	
  Jurisdiction

  	
   

  	
  Mark

  	
   

  	
  Reg. No.

  
	
  New Mexico

  	
   

  	
  APPLEBEE’S and Design

  	
   

  	
  TK92042007

  
	
  New Mexico

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  TK92042009

  
	
  New Mexico

  	
   

  	
  T.J. APPLEBEE’S RX FOR EDIBLES & ELIXIRS and Design*

  	
   

  	
  TK92042008

  
	
  New York

  	
   

  	
  APPLEBEE’S

  	
   

  	
  12956

  
	
  New York

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR

  	
   

  	
  12957

  
	
  New York

  	
   

  	
  T.J. APPLEBEE’S RX FOR EDIBLES & ELIXIRS*

  	
   

  	
  12958

  
	
  North Carolina

  	
   

  	
  APPLEBEE’S

  	
   

  	
  T-10,634

  
	
  North Carolina

  	
   

  	
  APPLEBEE’S and Design

  	
   

  	
  T-10,636

  
	
  North Carolina

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR

  	
   

  	
  T-10,635

  
	
  North Dakota

  	
   

  	
  APPLEBEE’S

  	
   

  	
  7797000

  
	
  North Dakota

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  007797600

  
	
  North Dakota

  	
   

  	
  T.J. APPLEBEE’S RX FOR EDIBLES & ELIXIRS*

  	
   

  	
  007797500

  
	
  Ohio

  	
   

  	
  APPLEBEE’S

  	
   

  	
  67467

  
	
  Ohio

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR

  	
   

  	
  67634

  
	
  Ohio

  	
   

  	
  T.J. APPLEBEE’S RX FOR EDIBLES & ELIXIRS*

  	
   

  	
  67468

  
	
  Oklahoma

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  30720

  
	
  Rhode Island

  	
   

  	
  APPLEBEE’S

  	
   

  	
  920113

  
	
  Rhode Island

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR

  	
   

  	
  920111

  
	
  Rhode Island

  	
   

  	
  T.J. APPLEBEE’S RX FOR EDIBLES & ELIXIRS*

  	
   

  	
  920112

  
	
  South Dakota

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  SD005113

  
	
  Utah

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  4765126

  
	
  West Virginia

  	
   

  	
  APPLEBEE’S NEIGHBORHOOD GRILL & BAR and Design

  	
   

  	
  1006448

  
	
  Puerto Rico

  	
   

  	
  APPLEBEE’S and Design

  	
   

  	
  8362

  
	
  Virgin Islands

  	
   

  	
  APPLEBEE’S and Design

  	
   

  	
  6885

  

 

(ii)           The
IP Holder owns no Copyright registrations or applications in the United States.

 

(iii)          The
IP Holder owns no Patents or Patent applications in the United States.

 

* Registrations that are subsisting, but potentially abandoned.

 

7

 

SCHEDULE 7.12(y)

 

INTELLECTUAL PROPERTY PROCEEDINGS

 

None.

 

1

 

SCHEDULE 7.12(z)

 

TAXES

None.

 

1

 

SCHEDULE 7.17

 

LIENS

None.

 

1

 

EXHIBIT A

 

FORM OF SERIES SUPPLEMENT

 

[Attached]

 

1

 

EXHIBIT B

 

FORM OF
TRANSFER/EXCHANGE CERTIFICATE

FOR TRANSFER/EXCHANGE FROM REGULATION S GLOBAL

NOTE TO RULE 144A GLOBAL NOTE

 

(Transfers and
exchanges pursuant to § 2.5(d)(ii) of the Base Indenture)

[Transferor Certificate]

 

[·]

 

Attn:  Corporate Trust
Services/Asset Backed Administration

 

Re:          Series 20[   ]-[   ]
Notes due [      ] of

[·] (the “Notes”)

 

Reference is hereby made to the Base Indenture, dated as of November 29,
2007 (the “Base Indenture”), among Applebee’s Enterprises LLC,
Applebee’s IP LLC and the entities referred to therein as the “Restaurant
Holders” (the “Co-Issuers”) and Wells Fargo Bank, National
Association, as indenture trustee (the “Indenture Trustee”),
supplemented by the Series 20[ 
]-[  ] Series Supplement (the
“Series Supplement” and, together with the Base Indenture, the “Indenture”).  Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

 

This certificate relates to US$                
principal amount of Notes which are evidenced by one or more Regulation S
Global Notes (CUSIP No. [                               ])
and held with DTC, the beneficial interest of which is held by [insert name of
transferor/exchanger] (the “Transferor”).  The Transferor has requested a transfer or
exchange of such beneficial interest in the Notes to a person that will take
delivery thereof (the “Transferee”) in the form of an equal principal
amount of Notes evidenced by one or more Rule 144A Global Notes (CUSIP No. [                         ]).

 

In the case of a transfer, the Transferor hereby certifies that it
reasonably believes that the Transferee acquiring such interest in the Rule 144A
Global Note is a QIB (who is also a QP) and is obtaining such beneficial
interest in a transaction meeting the requirements of Rule 144A and in
accordance with any applicable securities laws of any state of the United
States or any other relevant jurisdiction.

 

In case of an exchange, the transferor hereby certifies that it’s a QIB
(who is also a QP).

 

This certificate and the statements contained herein are made for your
benefit and the benefit of the Co-Issuers and the Initial Purchaser of the
Notes being transferred or exchanged.

 

[Insert Name of Transferor]

By:

Name:

Title:

Dated:

cc:           Applebee’s
Enterprises LLC

 

1

 

EXHIBIT C

 

FORM OF
TRANSFER/EXCHANGE CERTIFICATE

FOR
TRANSFER/EXCHANGE FROM RULE 144A GLOBAL

NOTE TO REGULATION S
GLOBAL NOTE

 

(Transfers and
exchanges pursuant to § 2.5(d)(iii) of the Base Indenture)

[Transferor Certificate]

 

[·]

 

Attn:  Corporate Trust Services/Asset
Backed Administration

 

Re:          Series 20[   ]-[   ]
Notes due [       ] of

[·] (the “Notes”)

 

Reference is hereby made to the Base Indenture, dated as of November 29,
2007 (the “Base Indenture”), among Applebee’s Enterprises LLC, Applebee’s
IP LLC and the entities referred to therein as the “Restaurant Holders”
(the “Co-Issuers”) and Wells Fargo Bank, National Association, as
indenture trustee (the “Indenture Trustee”), supplemented by the Series 20[  ]-[  ] Series Supplement
(the “Series Supplement” and, together with the Base Indenture, the
“Indenture”).  Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.

 

This certificate relates to US$                  
principal amount of Notes which are evidenced by one or more Rule 144A
Global Notes (CUSIP No. [                                  ])
and held with DTC, the beneficial interest of which is held by [insert name of
transferor/exchanger] (the “Transferor”).  The Transferor has requested a transfer or
exchange of such beneficial interest in the Notes to a person that will take
delivery thereof (the “Transferee”) in the form of an equal principal
amount of Notes evidenced by one or more Regulation S Global Notes (CUSIP No. [                                  ]).

 

In connection with such request and in respect of such Notes, the
Transferor does hereby certify that in the case of a transfer or an exchange,
the transfer or exchange of such interest has been made in compliance with the
transfer restrictions applicable to the Global Notes, including in accordance
with Rule 903 or 904 of Regulation S under the Securities Act of 1933, as
amended (the “Securities Act”) and accordingly the Transferor does
hereby certify that:

 

(1)       the offer of the Notes was not made to a
person in the United States;

 

(2)       either:

 

(A)      at the time the buy order was originated,
the transferee or exchangee was outside the United States or the Transferor and
any person acting on its behalf

 

1

 

reasonably
believed that the transferee or exchangee was outside the United States, or

 

(B)       the transaction was executed in, on or
through the facilities of a designated offshore securities market and neither
the Transferor nor any person acting on its behalf knows that the transaction
was prearranged with a buyer in the United States;

 

(3)       no directed selling efforts have been
made in contravention of the requirements of Rule 903(b) or 904(b) or
Regulation S, as applicable;

 

(4)       the transaction is not part of a plan or
scheme to evade the registration requirements of the Securities Act; and

 

(5)       upon completion of the transaction, the
beneficial interest being transferred as described above is to be held with the
Depositary and may be held through Euroclear or Clearstream or both.

 

In addition, the Transferor hereby certifies that it reasonably
believes that the Transferee acquiring such interest in the Note is a QP.

 

This certificate and the statements contained herein are made for your
benefit and the benefit of the Co-Issuers and the Initial Purchaser of the
Notes being transferred or exchanged.

 

	
  [Insert Name of Transferor]

  
	
  By:

  
	
  Name:

  
	
  Title:

  
	
  Dated:

  	
   

  	
   

  

 

cc:         Applebee’s
Enterprises LLC

 

2

 

EXHIBIT D

 

FORM OF
TRANSFER/EXCHANGE CERTIFICATE

FOR TRANSFER/EXCHANGE FROM DEFINITIVE

NOTE TO REGULATION S GLOBAL NOTE

 

(Transfers and
exchanges pursuant to § 2.5(e)(i) of the Base Indenture)

[Transferee Certificate]

 

[·]

 

Attn:  Corporate Trust
Services/Asset Backed Administration

 

Re:          Series 20[   ]-[   ]
Notes due [        ] of

[·] (the “Notes”)

 

Reference is hereby made to the Base Indenture, dated as of November 29,
2007 (the “Base Indenture”), among Applebee’s Enterprises LLC, Applebee’s
IP LLC and the entities referred to therein as the “Restaurant Holders”
(the “Co-Issuers”) and Wells Fargo Bank, National Association, as
indenture trustee (the “Indenture Trustee”), supplemented by the Series 20[  ]-[  ] Series Supplement
(the “Series Supplement” and, together with the Base Indenture, the
“Indenture”).  Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.

 

This certificate relates to US$                 
principal amount of Notes which are evidenced by one or more Definitive Notes
(CUSIP No. [                                            ])
and held with DTC, the beneficial interest of which is held by [insert name of
transferor/exchanger] (the “Transferor”).  The Transferor has requested a transfer or
exchange of such beneficial interest in the Notes to a person (the “Transferee”)
who will take delivery thereof in the form of an equal principal amount of
Notes evidenced by one or more Regulation S Global Notes (CUSIP No. [                                  ])
which amount, immediately after such transfer, is to be held with the
Depositary.

 

In connection with such request and in respect of such Notes, the
Transferee does hereby certify that in the case of an exchange or transfer,
that the exchange or transfer of such interest has been made in compliance with
the transfer restrictions applicable to the Regulation S Global Notes and
pursuant to Rule 903 or 904 of Regulation S, including that the Transferee
is neither a U.S. Person nor a U.S. Resident. 
In addition, the Transferee hereby certifies that it is a QP.

 

The Transferee hereby agrees that any future resale, pledge, transfer
or exchange of such Notes may be made only (i) to a person who the seller
reasonably believes is a QIB (who is also a QP) in a transaction meeting the
requirements of Rule 144A, or (ii) in an offshore transaction
complying with Rule 903 or Rule 904 (as applicable) of Regulation S
under the Securities Act.  The Transferee
will notify any purchaser of Notes from it of the resale restrictions referred
to above, if then applicable.

 

1

 

This certificate and the statements contained herein are made for your
benefit and the benefit of the Co-Issuers and the Initial Purchaser of the
initial offering of such Notes being transferred or exchanged.  Terms used in this certificate and not
otherwise defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.

 

	
  [Insert Name of Transferee]

  
	
  By:

  
	
  Name:

  
	
  Title:

  
	
  Dated:

  	
   

  	
   

  

 

cc:         Applebee’s
Enterprises LLC

 

2

 

EXHIBIT E

 

FORM OF
TRANSFER/EXCHANGE CERTIFICATE

FOR TRANSFER/EXCHANGE FROM DEFINITIVE

NOTE TO DEFINITIVE NOTE OTHER THAN A CLASS A-1 NOTE

 

(Transfers and
exchanges pursuant to §  2.5(e)(ii) of
the Base Indenture)

[Transferee Certificate]

 

[·]

 

Attn:  Corporate Trust
Services/Asset Backed Administration

 

Re:          Series 20[  ]-[  ]
Notes due [      ] of

[·] (the “Notes”)

 

Reference is hereby made to the Base Indenture, dated as of November 29,
2007 (the “Base Indenture”), among Applebee’s Enterprises LLC, Applebee’s
IP LLC and the entities referred to therein as the “Restaurant Holders”
(the “Co-Issuers”) and Wells Fargo Bank, National Association, as
indenture trustee (the “Indenture Trustee”), supplemented by the Series 20[  ]-[  ] Series Supplement
(the “Series Supplement” and, together with the Base Indenture, the
“Indenture”).  Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.

 

This certificate relates to US$                
principal amount of Notes which are evidenced by one or more Definitive Notes
(CUSIP No. [                ]),
the beneficial interest of which is held by [insert name of
transferor/exchanger] (the “Transferor”).  The Transferor has requested a transfer or
exchange of such beneficial interest in the Notes to a person (the “Transferee”)
who will take delivery thereof in the form of an equal principal amount of
Notes evidenced by one or more Definitive Notes (CUSIP No. [                      ]).

 

In connection with such request and in respect of such Notes, the
Transferee does hereby certify that it is purchasing the Notes for its own
account, or for one or more accounts with respect to which the Transferee
exercises sole investment discretion, and (a) if such Note is being offered,
sold or delivered within the United States, or to, or for the benefit of, a
U.S. Person, the Transferee and each account is a QIB and a QP or (b) if
such Note is being offered or sold in reliance on Regulation S, such transferee
and each account is a QP that is not a U.S. Person or a U.S. Resident and is
located outside of the United States.

 

The Transferee hereby agrees that any future resale, pledge, transfer
or exchange of such Notes may be made only (i) to a person who the seller
reasonably believes is a QIB (who is also a QP) in a transaction meeting the
requirements of Rule 144A, or (ii) in an offshore transaction
complying with Rule 903 or Rule 904 (as applicable) of Regulation S
under the Securities Act.  The Transferee
will notify any purchaser of Notes from it of the resale restrictions referred
to above, if then applicable.

 

1

 

This certificate and the statements contained herein are made for your
benefit and the benefit of the Co-Issuers and the Initial Purchaser of the
initial offering of such Notes being transferred or exchanged.  Terms used in this certificate and not
otherwise defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.

 

	
  [Insert Name of Transferee]

  
	
  By:

  
	
  Name:

  
	
  Title:

  
	
  Dated:

  	
   

  	
   

  

 

cc:         Applebee’s
Enterprises LLC

 

2

 

EXHIBIT F

 

FORM OF
TRANSFER/EXCHANGE CERTIFICATE FOR TRANSFERS

OF SERIES 2007-1 CLASS A-1 NOTES(1)

 

Wells Fargo
Bank, National Association

as Indenture
Trustee

Sixth & Marquette

MAC N9311-161

Minneapolis, MN 55479

Attention:  Corporate Trust Services /Asset Backed
Administration

 

Re:                               Applebee’s
Enterprise LLC; Applebee’s IP LLC; Applebee’s Restaurants North LLC; Applebee’s
Restaurants Mid-Atlantic LLC; Applebee’s Restaurants West LLC; Applebee’s
Restaurants Vermont, Inc.; Applebee’s Restaurants Texas LLC; Applebee’s
Restaurants Inc.; Applebee’s Restaurants Kansas LLC; Series 2007-1
Variable Funding Senior Notes, Class A-1 Sub-Class:  Series 207-1 Class A-1 [Advance]
[Swingline] [L/C] Notes (the “Notes”)

 

Reference is hereby made to (i) the Base Indenture, dated as of November 29,
2007 (the “Base Indenture”), among Applebee’s Enterprises LLC, Applebee’s
IP LLC and the entities referred to therein as the “Restaurant Holders”
(the “Co-Issuers”) and Wells Fargo Bank, National Association, as
indenture trustee (the “Indenture Trustee”), and (ii) the Series 2007-1
Supplement to the Base Indenture, dated as of November 29, 2007 (the “Series Supplement”
and, together with the Base Indenture, the “Indenture”).  Capitalized terms used but not defined herein
shall have the meanings assigned to such terms in the Indenture or the Series 2007-1
Class A-1 Note Purchase Agreement, as applicable.

 

This certificate relates to U.S. $                        
aggregate principal amount of Notes registered in the name of                         
[name of transferor] (the “Transferor”), who wishes to effect the
transfer of such Notes in exchange for an equivalent principal amount of Notes
of the same Sub-Class in the name of                         
[name of transferee] (the “Transferee”).

 

In connection with such request, and in respect of such Notes, the
Transferee does hereby certify that such Notes are being transferred (i) in
accordance with the transfer restrictions set forth in the Indenture and the Series 2007-1
Class A-1 Note Purchase Agreement and (ii) pursuant to an exemption
from registration under the Securities Act of 1933, as amended (the “Securities
Act”), and in accordance with any applicable securities laws of any state
of the United States or any other jurisdiction.

 

(1)       With
respect to the Class A-1 Notes of any Series other than the Series 2007-1
Notes, the specific references in this exhibit to the Series 2007-1 Notes
and related transaction documents will be revised accordingly.

 

1

 

In addition, the Transferee hereby represents, warrants and covenants
for the benefit of the Co-Issuers and the Indenture Trustee that:

 

1.             it has had an opportunity to
discuss the Co-Issuers’ and the Servicer’s business, management and financial
affairs, and the terms and conditions of the proposed purchase, with the
Co-Issuers and the Servicer and their respective representatives;

 

2.             it is an “accredited investor”
within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act and a “qualified purchaser” within the
meaning of Section 2(a)(51) of the Investment Company Act and has sufficient
knowledge and experience in financial and business matters to be capable of
evaluating the merits and risks of investing in, and is able and prepared to
bear the economic risk of investing in, the Series 2007-1 Class A-1
Notes;

 

3.             it is purchasing the Series 2007-1
Class A-1 Notes for its own account, or for the account of one or more “accredited
investors” within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act and “qualified purchasers” within the
meaning of Section 2(a)(51) of the Investment Company Act that meet the
criteria described in paragraph (2) above and for which it is acting with
complete investment discretion, for investment purposes only and not with a
view to distribution, subject, nevertheless, to the understanding that the
disposition of its property shall at all times be and remain within its
control, and neither it nor its Affiliates has engaged in any general
solicitation or general advertising within the meaning of the Securities Act with
respect to the Series 2007-1 Class A-1 Notes;

 

4.             it understands that (i) the Series 2007-1
Class A-1 Notes have not been and will not be registered or qualified
under the Securities Act or any applicable state securities laws or the
securities laws of any other jurisdiction and are being offered only in a
transaction not involving any public offering within the meaning of the
Securities Act and may not be resold or otherwise transferred unless so
registered or qualified or unless an exemption from registration or
qualification is available, (ii) the Co-Issuers are not required to
register the Series 2007-1 Class A-1 Notes, (iii) any transferee
must be a “qualified purchaser” within the meaning of Section 2(a)(51) of
the Investment Company Act and (iv) any transfer must comply with the
provisions of Section 2.5 of the Base Indenture and Section 9.03
or 9.17, as applicable, of the Series 2007-1 Class A-1 Note
Purchase Agreement;

 

5.             it will comply with the
requirements of paragraph (4) above in connection with any transfer by it
of the Series 2007-1 Class A-1 Notes;

 

6.             it understands that the Series 2007-1
Class A-1 Notes will bear the legend set out in the applicable form of Series 2007-1
Class A-1 Notes attached to the Series 2007-1 Supplement and be
subject to the restrictions on transfer described in such legend;

 

7.             it will obtain for the benefit of
the Co-Issuers from any purchaser of the Series 2007-1 Class A-1
Notes substantially the same representations and warranties contained in the
foregoing paragraphs;

 

2

 

8.              (i) it is not acquiring or
holding the Notes (or any interest therein) for or on behalf of, or with the
assets of, any Plan, account or other arrangement that is subject to Title IV
of ERISA, Section 4975 of the Code or provisions under any Similar Law or (ii) its
purchase and holding of the Notes (or any interest therein) will not constitute
a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975
of the Code or, in the case of a governmental or other plan, a non-exempt
violation of any applicable Similar Law; and

 

9.             it is:

 

o
(check if applicable) a “United States Person” within the meaning of Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended (the “Code”) and a
properly completed and signed Internal Revenue Service (“IRS”) Form W-9
(or applicable successor form) is attached hereto; or

 

o
(check if applicable) not a “United States Person” within the meaning of Section 7701(a)(30)
of the Code and a properly completed and signed IRS Form W-8 (or
applicable successor form) is attached hereto.

 

The Transferee understands that the Co-Issuers, the Indenture Trustee
and their respective counsel will rely upon the accuracy and truth of the
foregoing representations, and are irrevocably authorized to produce this
certificate or a copy thereof to any interested party in any administrative or
legal proceeding or official inquiry with respect to the matters covered
hereby, and the Transferee hereby consents to such reliance and authorization.

 

 

	
   

  	
  [Name of
  Transferee]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
     Name:

  
	
   

  	
   

  	
     Title:

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
					

 

3

 

	
  Taxpayer
  Identification Number:

  	
   

  	
  Address for
  Notices:

  
	
  Wire
  Instructions for Payments:

  	
   

  	
   

  
	
  Bank:

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  
	
  Bank ABA #:

  	
   

  	
   

  	
  Tel:

  	
   

  	
   

  
	
  Account No.:

  	
   

  	
   

  	
  Fax:

  	
   

  	
   

  
	
  FAO:

  	
   

  	
   

  	
  Attn.:

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  	
   

  
														

 

 

Registered Name (if Nominee):

 

cc:           Applebee’s Enterprise
LLC;

Applebee’s IP
LLC;

Applebee’s
Restaurants North LLC;

Applebee’s
Restaurants Mid-Atlantic LLC;

Applebee’s
Restaurants West LLC;

Applebee’s
Restaurants Vermont, Inc.;

Applebee’s
Restaurants Texas LLC;

Applebee’s
Restaurants Inc.;

Applebee’s
Restaurants Kansas LLC

 

4

 

EXHIBIT G

 

[CLEARING
AGENCY]

 

IMPORTANT

 

 

	
  B#:

  	
   

  	
  [number]

  
	
   

  	
   

  	
   

  
	
  DATE:

  	
   

  	
  [date]

  
	
   

  	
   

  	
   

  
	
  TO:

  	
   

  	
  ALL
  PARTICIPANTS

  
	
   

  	
   

  	
   

  
	
  FROM:

  	
   

  	
  [name],
  [title], Underwriting Department

  
	
   

  	
   

  	
   

  
	
  ATTENTION:

  	
   

  	
  [Managing
  Partner/Officer; Cashier, Operations, Data Processing and Underwriting
  Managers]

  
	
   

  	
   

  	
   

  
	
  SUBJECT:

  	
   

  	
  Section 3(c)(7) restrictions
  for Applebee’s Enterprises LLC, Applebee’s IP LLC and the Restaurant Holders
  (as defined in the Base Indenture, dated as of November 29, 2007, each
  as Co-Issuer [$350,000,000 7.2836% Fixed Rate Series 2007-1 Senior
  Notes, Class A-2-I] [$675,000,000 6.4267% Fixed Rate Series 2007-1
  Senior Notes, Class A-2-II-A] [$650,000,000 7.0588% Fixed Rate
  Series 2007-1 Senior Notes, Class A-2-II-X] [$119,000,000 8.4044%
  Fixed Rate Series 2007-1 Subordinated Notes, Class M-1]

  
	
   

  	
   

  	
   

  
	
  (A)CUSIP
  Numbers:

  	
   

  	
  Fixed Rate
  Series 2007-1 Senior Notes, Class A-2-I

  CUSIP (144A): 037898 AA1

  ISIN (144A): US037898AA13

  CUSIP (Reg S): U00540 AA9

  ISIN (Reg S): USU00540AA99

   

  Fixed Rate
  Series 2007-1 Senior Notes, Class A-2-II-A

  CUSIP (144A): 037898 AB9

  ISIN (144A): US037898AB95

  CUSIP (Reg S): U00540 AB7

  ISIN (Reg S): USU00540AB72

   

  Fixed Rate
  Series 2007-1 Senior Notes, Class A-2-II-X

  CUSIP (144A): 037898 AD5

  ISIN (144A): US037898AD51

  CUSIP (Reg S): U00540 AD3

  ISIN (Reg S): USU00540AD39

   

  Fixed Rate
  Series 2007-1 Senior Notes, Class M-1

  CUSIP (144A): 037898 AC7

  ISIN (144A): US037898AC78

  CUSIP (Reg S): U00540 AC5

  ISIN (Reg S): USU00540AC55

  
	
   

  	
   

  	
   

  

 

1

 

	
  (B)Security 

  Description:

  	
   

  	
  Applebee’s
  Enterprises LLC, Applebee’s IP LLC and the Restaurant Holders (as defined in
  the Base Indenture, dated as of November 29, 2007, each as Co-Issuer
  [$350,000,000 7.2836% Fixed Rate Series 2007-1 Senior Notes,
  Class A-2-I] [$675,000,000 6.4267% Fixed Rate Series 2007-1 Senior
  Notes, Class A-2-II-A] [$650,000,000 7.0588% Fixed Rate
  Series 2007-1 Senior Notes, Class A-2-II-X] [$119,000,000 8.4044%
  Fixed Rate Series 2007-1 Subordinated Notes, Class M-1]

  
	
   

  	
   

  	
   

  
	
  (C)Offer 

  Amount:

  	
   

  	
  [$350,000,000]
  [$675,000,000] [$650,000,000] [$119,000,000]

  
	
   

  	
   

  	
   

  
	
  (D)Managing 

  Underwriter

  	
   

  	
  Lehman
  Brothers Inc.

  
	
   

  	
   

  	
   

  
	
  (E)Paying 

  Agent:

  	
   

  	
  [name of
  paying agent]

  
	
   

  	
   

  	
   

  
	
  (F)Closing 

  Date:

  	
   

  	
  November 29,
  2007

  

 

Special Instructions:

 

See Attached
Important Instructions from the Co-Issuers.

[CO-ISSUERS
LETTERHEAD]

 

[$350,000,000 7.2836% Fixed Rate Series 2007-1 Senior Notes, Class A-2-I]
[$675,000,000 6.4267% Fixed Rate Series 2007-1 Senior Notes, Class A-2-II-A]
[$650,000,000 7.0588% Fixed Rate Series 2007-1 Senior Notes, Class A-2-II-X]
[$119,000,000 8.4044% Fixed Rate Series 2007-1 Subordinated Notes, Class M-1]]

 

[CUSIP No. of Security]

 

The Co-Issuers and the Initial Purchaser are putting Participants on
notice that they are required to follow these purchase and transfer
restrictions with regard to the above-referenced security.

 

In order to qualify for the exemption provided by Section 3(c)(7) under
the Investment Company Act of 1940, as amended (the “Investment Company Act”),
and the exemption provided by Rule 144A under the Securities Act of 1933,
as amended (the “Securities Act”), offers, sales and resales of the
[$350,000,000 7.2836% Fixed Rate Series 2007-1 Senior Notes, Class A-2-I]
[$675,000,000 6.4267% Fixed Rate Series 2007-1 Senior Notes, Class A-2-II-A]
[$650,000,000 7.0588% Fixed Rate Series 2007-1 Senior Notes, Class A-2-II-X]
[$119,000,000 8.4044% Fixed Rate Series 2007-1 Subordinated Notes, Class M-1]
(the “Securities”) may only be made in minimum denominations of $200,000
to “qualified institutional buyers” (“QIBs”) within the meaning of Rule 144A
that are also “qualified purchasers” (“QPs”) within the meaning of Section 2(a)(51)(A) of
the Investment Company Act. Each purchaser of Securities (1) represents to
and agrees with the Co-Issuers and the Initial

 

2

 

Purchaser that (i) the purchaser is a
QIB who is a QP (a “QIB/QP”); (ii) the purchaser is not a
broker-dealer who owns and invests on a discretionary basis less than $25
million in securities of unaffiliated issuers; (iii) the purchaser is not
a participant-directed employee plan, such as a 401(k) plan; (iv) the
QIB/QP is acting for its own account, or the account of another QIB/QP; (v) the
purchaser is not formed for the purpose of investing in the Co-Issuers; (vi) the
purchaser, and each account for which it is purchasing, will hold and transfer
at least the minimum denomination of Securities; (vii) the purchaser
understands that the Co-Issuers may receive a list of participants holding
positions in its securities from one or more book-entry depositaries; (viii) the
purchaser will provide notice of the transfer restrictions to any subsequent
transferees; and (ix) the purchaser is not a Competitor and (2) acknowledges
that the Co-Issuers have not been registered under Investment Company Act and
the Securities have not been registered under the Securities Act and represents
to and agrees with the Co-Issuers and the Initial Purchaser that, for so long
as securities are outstanding, it will not offer, resell, pledge or otherwise
transfer the Securities except to a QIB that is also a QP in a transaction
meeting the requirements of Rule 144A. Each purchaser further understands
that the Securities will bear a legend with respect to such transfer
restrictions.

 

The charter, bylaws, organizational documents or securities issuance
documents of the Co-Issuers provide that the Co-Issuers will have the right to (i) require
any holder of Securities who is determined not to be both a QIB and a QP to
sell the Securities to a QIB that is also a QP or (ii) redeem any
Securities held by such a holder on specified terms. In addition, the
Co-Issuers have the right to refuse to register or otherwise honor a transfer
of Securities to a proposed transferee that is not both a QIB and a QP.

 

The restrictions on transfer required by the Co-Issuers (outlined
above) will be reflected [under the notation “3c7” in DTC’s User Manuals and
DTC’s Reference Directory] [Annex 3(c)(7) of Euroclear’s New Issues
Acceptance Guide] [Chapter 7 (“Custody Business Operations – New Issues”), Section 7.3
(“General Procedure for the admission and distribution of new issues of
syndicated international instruments”) in Clearstream Banking’s Directory].

 

Any questions or comments regarding this subject may be directed to
[Co-Issuers contact person] (       )         -         .

 

3

 

EXHIBIT H

 

FORM OF
TRANSFER/EXCHANGE CERTIFICATE

FOR TRANSFER/EXCHANGE FROM GLOBAL NOTE

NOTE TO BENEFICIAL HOLDER

 

(Transfers and
exchanges pursuant to §  [           ]
of the Base Indenture)

[Transferee Certificate]

 

[·]

 

Attn:  Corporate Trust
Services/Asset Backed Administration

 

Re:          Series 20[   ]-[   ]
Notes due [          ] of

[·] (the “Notes”)

 

Reference is hereby made to the Base Indenture, dated as of November 29,
2007 (the “Base Indenture”), among Applebee’s Enterprises LLC, Applebee’s
IP LLC and the entities referred to therein as the “Restaurant Holders”
(the “Co-Issuers”) and Wells Fargo Bank, National Association, as
indenture trustee (the “Indenture Trustee”), supplemented by the Series 20[  ]-[  ] Series Supplement
(the “Series Supplement” and, together with the Base Indenture, the
“Indenture”).  Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.

 

This certificate relates to US$                         
principal amount of Notes which are evidenced by one or more [Regulation S] [Rule 144A]
Global Notes (CUSIP No. [                         ])
and held with DTC, the beneficial interest of which is held by [insert name of
transferor/exchanger] (the “Transferor”).  The Transferor has requested a transfer or
exchange of such beneficial interest in the Notes to a person (the “Transferee”)
who will take delivery thereof in the form of an equal principal amount of
Notes evidenced by one or more Definitive Notes (CUSIP No. [                         ])
which amount, immediately after such transfer, is to be held with the
Transferee.

 

In connection with such request and in respect of such Notes, the
Transferee does hereby certify that it is purchasing the Notes for its own
account, or for one or more accounts with respect to which the Transferee
exercises sole investment discretion, and the Transferee and each such account
is either (a) if such Note is being offered, sold or delivered within the
United States, or to, or for the benefit of, a U.S. Person, the Transferee and
each account is a QIB and a QP or (b) if such Note is being offered or
sold in reliance on Regulation S, such transferee and each account is a QP that
is not a U.S. Person or a U.S. Resident and is located outside of the United
States

 

The Transferee hereby agrees that any future resale, pledge, transfer
or exchange of such Notes may be made only (i) to a person who the seller
reasonably believes is a QIB (who is also a QP) in a transaction meeting the
requirements of Rule 144A, or (ii) in an offshore transaction
complying with Rule 903 or Rule 904 (as applicable) of Regulation S
under the

 

1

 

Securities Act.  The Transferee will notify any purchaser of
Notes from it of the resale restrictions referred to above, if then applicable.

 

This certificate and the statements contained herein are made for your
benefit and the benefit of the Co-Issuers and the Initial Purchaser of the
initial offering of such Notes being transferred or exchanged.  Terms used in this certificate and not
otherwise defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.

 

	
  [Insert Name of Transferee]

  
	
  By:

  
	
  Name:

  
	
  Title:

  
	
  Dated:

  	
   

  	
   

  

 

cc:         Applebee’s
Enterprises LLC

 

2

 

EXHIBIT I

 

FORM OF IP SECURITY AGREEMENTS

 

Form of Notice of Grant of
Security Interest in Trademarks

 

NOTICE OF GRANT OF SECURITY INTEREST IN TRADEMARKS
(the “Notice”), dated as of                   ,
20    , made by Applebee’s IP LLC (the “Grantor”) in
favor of Wells Fargo Bank, National Association, as trustee (the “Trustee”),
pursuant to the Indenture (as defined hereafter).

 

WHEREAS, Grantor owns the trademarks and service
marks set forth on Schedule 1 attached hereto, including the associated
registrations and applications for registration set forth in Schedule 1
attached hereto (collectively, the “Trademarks”) and all goodwill of any
business connected with the use of and symbolized thereby;

 

WHEREAS, Grantor is party to the Base Indenture,
dated as of November 29, 2007 (as amended, amended and restated or
otherwise modified from time to time, the “Indenture”) in favor of the
Trustee pursuant to which the Grantor is required to execute and deliver this
Notice.  Capitalized terms used in this
Notice but not defined shall have the meanings set forth in Appendix A to the
Indenture;

 

WHEREAS, pursuant to the Indenture, Grantor Granted
to the Trustee, for its own benefit and security and for the benefit and
security of the other Secured Parties, certain intellectual property owned or
hereafter acquired by the Grantor, including the Trademarks and the goodwill of
the business connected with the use of and 
symbolized  by the Trademarks, the
right to bring an action at law or in equity for any infringement, misappropriation,
dilution, or violations thereof occurring prior to, on or after the Closing
Date, and to collect all damages, settlements, and proceeds relating thereto,
and all payments, proceeds, and accrued or future rights to payment with
respect to the foregoing, but in any event excluding any Excepted IP Assets
(collectively, the “Trademark Collateral”); and

 

WHEREAS, pursuant to the Indenture, Grantor agreed
to execute and deliver to the Trustee this Notice for purposes of filing the
same with the United States Patent and Trademark Office (the “PTO”) to
confirm, evidence and perfect the security interest in the Trademark Collateral
granted pursuant to the Indenture.

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and subject to
the terms and conditions of the Indenture, the Grantor hereby Grants to the
Trustee, for its own benefit and security and for the benefit and security of
the other Secured Parties, a security interest in, and lien on, the Trademark
Collateral, whether now owned or existing or hereafter acquired or arising  (but excluding any Non-U.S. Intellectual
Property Rights (except Non-U.S. IP Rights in the POS System) therein and any application
for registration of a Trademark that would be invalidated, canceled, voided or
abandoned due to the grant and/or enforcement of an assignment or security
interest, including intent-to-use applications filed with the PTO pursuant to
15 U.S.C. Section 1051(b) prior to the filing of a statement of use
or amendment to allege use pursuant to 15 U.S.C.

 

1

 

1051(c) or (d); provided,
that at such time as the grant and/or enforcement of the assignment or security
interest would not cause such application to be invalidated, canceled, voided
or abandoned, then such grant and/or enforcement of the assignment or security
interest shall be deemed effective under this Grant).

 

The Grantor hereby requests the PTO to file and
record the same together with the annexed Schedule 1.

 

The Grantor and the Trustee hereby acknowledge and
agree that the security interest in the Trademark Collateral may only be
terminated in accordance with the terms of the Indenture.

 

THIS NOTICE 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)

 

IN WITNESS WHEREOF, the undersigned has caused this
Notice of Grant of Security Interest in Trademarks to be duly executed and
delivered as of the date first above written.

 

 

	
   

  	
  APPLEBEE’S IP LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

2

 

	
  STATE OF

  	
  )

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF

  	
  )

  

 

On this          
day of                         ,
20    , before me personally came                                           ,
to me known to be the person who signed the foregoing instrument and who being
duly sworn by me did depose and state that he/she is the                                        
of                                       ;
he/she signed the instrument in the name of                                                    ;
and he/she had the authority to sign the instrument on behalf of                                                   .

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

3

 

Schedule 1 to Notice of Grant of
Security Interest in Trademarks

 

U.S. FEDERAL TRADEMARK
APPLICATIONS AND REGISTRATIONS

 

	
  Mark

  	
   

  	
  Serial
  No.

  	
   

  	
  Reg. No.

  
	
  “A”
  IS FOR APPLEBEE’S

  	
   

  	
  78/684,004

  	
   

  	
  3,186,126

  
	
  ALL
  YOU CAN EAT NIGHTS and Design

  	
   

  	
  78/215,701

  	
   

  	
  2,860,138

  
	
  AMERICA’S
  FAVORITE NEIGHBOR

  	
   

  	
  73/833,532

  	
   

  	
  1,601,596

  
	
  APPLEBEE
  BURGER

  	
   

  	
  75/308,681

  	
   

  	
  2,167,623

  
	
  APPLEBEE’S

  	
   

  	
  75/204,357

  	
   

  	
  2,174,392

  
	
  APPLEBEE’S

  	
   

  	
  78/776,156

  	
   

  	
  3,126,987

  
	
  APPLEBEE’S

  	
   

  	
  74/488,449

  	
   

  	
  1,927,107

  
	
  APPLEBEE’S
  and Design

  	
   

  	
  74/155,247

  	
   

  	
  1,695,071

  
	
  APPLEBEE’S
  and Design (Apple)

  	
   

  	
  77/287,079

  	
   

  	
   

  
	
  APPLEBEE’S
  ANYWHERE

  	
   

  	
  78/661,607

  	
   

  	
  3,116,854

  
	
  APPLEBEE’S
  CORE NEWS

  	
   

  	
  78/219,267

  	
   

  	
  2,924,966

  
	
  APPLEBEE’S
  GRILL

  	
   

  	
  78/776,167

  	
   

  	
  3,126,988

  
	
  APPLEBEE’S
  LEADERSHIP INSTITUTE

  	
   

  	
  78/691,618

  	
   

  	
  3,126,430

  
	
  APPLEBEE’S
  NEIGHBORHOOD GRILL & BAR

  	
   

  	
  73/576,958

  	
   

  	
  1,477,153

  
	
  APPLEBEE’S
  NEIGHBORHOOD GRILL & BAR and Design (with Balloon)

  	
   

  	
  73/576,708

  	
   

  	
  1,480,107

  
	
  APPLEBEE’S
  NEIGHBORHOOD GRILL and Design

  	
   

  	
  74/387,188

  	
   

  	
  1,926,020

  
	
  APPLEBEE’S
  RIBLETS ORIGINAL and Design

  	
   

  	
  78/501,630

  	
   

  	
  3,028,404

  
	
  APPLEBEE’S
  TOGETHER IS GOOD [Class 35]

  	
   

  	
  77/297,395

  	
   

  	
   

  
	
  APPLEBEE’S
  TOGETHER IS GOOD [Class 43]

  	
   

  	
  77/975,176

  	
   

  	
   

  
	
  APPLEBEE’S
  TOGETHER IS GOOD and Design [Class 35]

  	
   

  	
  77/287,137

  	
   

  	
   

  
	
  APPLEBEE’S
  TOGETHER IS GOOD and Design [Class 43]

  	
   

  	
  77/975,177

  	
   

  	
   

  
	
  BIG
  FUN TRIP

  	
   

  	
  78/691,628

  	
   

  	
  3,123,514

  
	
  BREWTUS

  	
   

  	
  74/255,218

  	
   

  	
  1,783,594

  
	
  CARSIDE
  TO GO and Design

  	
   

  	
  78/272,304

  	
   

  	
  2,969,882

  
	
  CARSIDE
  TO GO and Design (Cart Logo)

  	
   

  	
  78/636,155

  	
   

  	
  3,116,745

  
	
  CHICKEN
  TANGLERS

  	
   

  	
  78/319,841

  	
   

  	
  2,893,600

  
	
  EATIN’
  GOOD IN THE NEIGHBORHOOD

  	
   

  	
  76/229,557

  	
   

  	
  2,510,402

  
	
  FIESTA
  LIME CHICKEN

  	
   

  	
  76/419,001

  	
   

  	
  3,188,439

  
	
  FIRE
  GRILLED FAVORITES

  	
   

  	
  78/654,021

  	
   

  	
  3,188,875

  
	
  HONEY
  OF A DEAL and Design

  	
   

  	
  76/369,432

  	
   

  	
  2,720,794

  
	
  IRRESIST-A-BOWLS

  	
   

  	
  78/684,016

  	
   

  	
  3,138,570

  
	
  IT’S
  GOT TO BE APPLEBEE’S

  	
   

  	
  76/343,652

  	
   

  	
  2,690,341

  
	
  IT’S
  NOT FAST FOOD - IT’S APPLEBEE’S FOOD FAST

  	
   

  	
  78/225,314

  	
   

  	
  2,840,241

  
	
  MAIN
  STREET RITA

  	
   

  	
  78/739,169

  	
   

  	
  3,148,559

  
	
  Miscellaneous
  Design (Apple)

  	
   

  	
  76/261,734

  	
   

  	
  2,552,524

  
	
  Miscellaneous
  Design (New Apple)

  	
   

  	
  77/289,412

  	
   

  	
   

  
	
  MUCHO
  BLUE SKIES and Design

  	
   

  	
  76/312,000

  	
   

  	
  2,588,337

  

 

4

 

	
  Mark

  	
   

  	
  Serial
  No.

  	
   

  	
  Reg. No.

  
	
  MUCHO
  CRANRITA

  	
   

  	
  76/148,302

  	
   

  	
  2,729,844

  
	
  MUCHO
  MAMA and Design

  	
   

  	
  76/311,973

  	
   

  	
  2,588,336

  
	
  MUCHO
  MARGARITA

  	
   

  	
  75/802,937

  	
   

  	
  2,379,470

  
	
  MUCHO
  MUDSLIDE and Design

  	
   

  	
  76/312,222

  	
   

  	
  2,662,409

  
	
  NEIGHBORHOOD
  NIGHTS and Design

  	
   

  	
  76/487,531

  	
   

  	
  2,794,399

  
	
  SALAD
  DAYS OF SUMMER and Design

  	
   

  	
  75/733,194

  	
   

  	
  2,538,912

  
	
  SIMPLY
  IRRESISTI-BOWL

  	
   

  	
  76/166,414

  	
   

  	
  2,538,010

  
	
  SKILLET
  SENSATIONS

  	
   

  	
  75/751,396

  	
   

  	
  3,069,596

  
	
  SKILLET
  SSSENSATIONS! (Stylized)

  	
   

  	
  75/308,648

  	
   

  	
  3,047,168

  
	
  SUMMER
  SQUEEZE

  	
   

  	
  75/121,295

  	
   

  	
  2,073,776

  
	
  T.
  J. APPLEBEE’S RX FOR EDIBLES & ELIXIRS and Design

  	
   

  	
  73/292,397

  	
   

  	
  1,223,740

  
	
  THEY
  KNOW ME AT APPLEBEE’S (Stylized)

  	
   

  	
  73/576,706

  	
   

  	
  1,481,120

  
	
  TO
  GO and Design (Apple Logo)

  	
   

  	
  76/414,888

  	
   

  	
  2,695,523

  
	
  TO
  GO and Design (Cart Logo)

  	
   

  	
  78/262,287

  	
   

  	
  2,984,968

  
	
  TOGETHER
  IS GOOD [Class 35]

  	
   

  	
  77/287,257

  	
   

  	
   

  
	
  TOGETHER
  IS GOOD [Class 43]

  	
   

  	
  77/975,156

  	
   

  	
   

  
	
  TRIPLE
  CHOCOLATE MELTDOWN

  	
   

  	
  78/225,340

  	
   

  	
  3,119,040

  
	
  YOU
  BELONG AT APPLEBEE’S (Stylized)

  	
   

  	
  75/267,604

  	
   

  	
  2,142,752

  
	
  YOU
  CALL IT IN. WE BRING IT OUT.

  	
   

  	
  78/319,845

  	
   

  	
  2,895,850

  

 

5

 

Form of Grant of Security
Interest in Patents

 

GRANT OF SECURITY INTEREST IN PATENTS (the “Grant”),
dated as of              ,
20    , made by Applebee’s IP LLC (the “Grantor”) in
favor of Wells Fargo Bank, National Association, as trustee (the “Trustee”),
pursuant to the Indenture (as defined hereafter).

 

WHEREAS, Grantor owns the issued patents and patent
applications set forth on Schedule 1 attached hereto (collectively, the “Patents”);

 

WHEREAS, Grantor is party to the Base Indenture,
dated as of November 29, 2007 (as amended, amended and restated or
otherwise modified from time to time, the “Indenture”) in favor of the
Trustee pursuant to which the Grantor is required to execute and deliver this
Grant.  Capitalized terms used in this
Grant but not defined shall have the meanings set forth in Appendix A to the
Indenture;

 

WHEREAS, pursuant to the Indenture, Grantor Granted
to the Trustee, for its own benefit and security and for the benefit and
security of the other Secured Parties, certain intellectual property owned or
hereafter acquired by the Grantor, including the Patents, the right to bring an
action at law or in equity for any infringement, misappropriation, dilution, or
violations thereof occurring prior to, on or after the Closing Date, and to
collect all damages, settlements, and proceeds relating thereto, and all
payments, proceeds, and accrued or future rights to payment with respect to the
foregoing, but in any event excluding any Excepted IP Assets (collectively, the
“Patent Collateral”); and

 

WHEREAS, pursuant to the Indenture, Grantor agreed
to execute and deliver to the Trustee this Grant for purposes of filing the
same with the United States Patent and Trademark Office (the “PTO”) to
confirm, evidence and perfect the security interest in the Patent Collateral
granted pursuant to the Indenture.

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and subject to
the terms and conditions of the Indenture, the Grantor hereby Grants to the
Trustee, for its own benefit and security and for the benefit and security of
the other Secured Parties, a security interest in, and lien on, the Patent
Collateral, whether now owned or existing or hereafter acquired or arising (but
excluding any Non-U.S. Intellectual Property Rights (except Non-U.S. IP Rights
in the POS System) therein).

 

The Grantor hereby requests the PTO to file and
record the same together with the annexed Schedule 1.

 

The Grantor and the Trustee hereby acknowledge and
agree that the security interest in the Patent Collateral may only be
terminated in accordance with the terms of the Indenture.

 

THIS NOTICE 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)

 

6

 

IN WITNESS WHEREOF, the undersigned has caused this
Grant of Security Interest in Patents to be duly executed and delivered as of
the date first above written.

 

 

	
   

  	
  APPLEBEE’S IP LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

7

 

	
  STATE OF

  	
  )

  
	
   

  	
  )  ss.:

  
	
  COUNTY OF

  	
  )

  

 

On this          
day of                   ,
20     , before me personally came                                              ,
to me known to be the person who signed the foregoing instrument and who being
duly sworn by me did depose and state that he/she is the                                     
of                                              ;
he/she signed the instrument in the name of                                     ;
and he/she had the authority to sign the instrument on behalf of                                                       .

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

8

 

Schedule
1 to Grant of Security Interest in Patents

 

9

 

Form of Notice of Grant of
Security Interest in Copyrights

 

NOTICE OF GRANT OF SECURITY INTEREST IN COPYRIGHTS
(the “Notice”), dated as of                  ,
20      , made by Applebee’s IP LLC (the “Grantor”)
in favor of Wells Fargo Bank, National Association, as trustee (the “Trustee”),
pursuant to the Indenture (as defined hereafter).

 

WHEREAS, Grantor owns the copyrights set forth on Schedule
1 attached hereto, including the associated registrations and applications
for registration set forth on Schedule 1 attached hereto (collectively,
the “Copyrights”);

 

WHEREAS, Grantor is party to the Base Indenture,
dated as of November 29, 2007 (as amended, amended and restated or
otherwise modified from time to time, the “Indenture”) in favor of the
Trustee pursuant to which the Grantor is required to execute and deliver this
Notice.  Capitalized terms used in this
Notice but not defined shall have the meanings set forth in Appendix A to the
Indenture;

 

WHEREAS, pursuant to the Indenture, Grantor Granted
to the Trustee, for its own benefit and security and for the benefit and
security of the other Secured Parties, certain intellectual property owned or
hereafter acquired by the Grantor, including the Copyrights, the right to bring
an action at law or in equity for any infringement, misappropriation, dilution,
or violations thereof occurring prior to, on or after the Closing Date, and to
collect all damages, settlements, and proceeds relating thereto, and all
payments, proceeds, and accrued or future rights to payment with respect to the
foregoing, but in any event excluding any Excepted IP Assets (collectively, the
“Copyright Collateral”); and

 

WHEREAS, pursuant to the Indenture, Grantor agreed
to execute and deliver to the Trustee this Notice for purposes of filing the
same with the United States Copyright Office (the “Copyright Office”) to
confirm, evidence and perfect the security interest in the Copyright Collateral
granted pursuant to the Indenture.

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and subject to
the terms and conditions of the Indenture, the Grantor hereby Grants to the
Trustee, for its own benefit and security and for the benefit and security of
the other Secured Parties, a security interest in, and lien on, the Copyright
Collateral, whether now owned or existing or hereafter acquired or arising  (but excluding any Non-U.S. Intellectual
Property Rights (except Non-U.S. IP Rights in the POS System) therein).

 

The Grantor hereby requests the Copyright Office to
file and record the same together with the annexed Schedule 1.

 

The Grantor and the Trustee hereby acknowledge and
agree that the security interest in the Copyright Collateral may only be
terminated in accordance with the terms of the Indenture.

 

THIS NOTICE SHALL BE GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO CHOICE OF LAW RULES (OTHER

 

10

 

THAN SECTIONS 5-1401 AND
5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW)

 

IN WITNESS WHEREOF, the undersigned has caused this
Notice of Grant of Security Interest in Copyrights to be duly executed and
delivered as of the date first above written.

 

 

	
   

  	
  APPLEBEE’S IP LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
     Name:

  
	
   

  	
   

  	
     Title:

  

 

11

 

	
  STATE OF

  	
  )

  
	
   

  	
  )     ss.:

  
	
  COUNTY OF

  	
  )

  

 

On this         
day of                 ,
20    , before me personally came                         ,
to me known to be the person who signed the foregoing instrument and who being
duly sworn by me did depose and state that he/she is the                                             
of                                 ;
he/she signed the instrument in the name of                                                 ;
and he/she had the authority to sign the instrument on behalf of                                                 .

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

12

 

Schedule
1 to Notice of Grant of Security Interest in Copyrights

 

13

 

EXHIBIT J

 

FORM OF WEEKLY SERVICER’S
REPORT

 

14

 

EXHIBIT K

 

FORM OF MONTHLY SERVICER’S
CERTIFICATE

[DATE]

 

Series 20[  ]-[  ]
Notes

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

Payment
Date:  [MM/DD/YY]

 

Reference is hereby made to the Base Indenture,
dated as of November 29, 2007 (the “Base Indenture”), among
Applebee’s Enterprises LLC, Applebee’s IP LLC and the entities referred to
therein as the “Restaurant Holders” (the “Co-Issuers”) and Wells
Fargo Bank, National Association, as indenture trustee (the “Indenture
Trustee”), supplemented by the Series 20[  ]-[  ] Series Supplement
(the “Series Supplement” and, together with the Base Indenture, the
“Indenture”) and the Servicing Agreement, dated as of [·], 2007, among [·] (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 Base 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 three (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.

 

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[ATTACH MONTHLY SERVICER’S
REPORT]

 

1

 

EXHIBIT L

 

FORM OF MONTHLY SERVICER’S
REPORT

 

1

 

EXHIBIT M

 

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 hereby made to the Base Indenture,
dated as of November 29, 2007 (the “Base Indenture”), among
Applebee’s Enterprises LLC, Applebee’s IP LLC and the entities referred to
therein as the “Restaurant Holders” (the “Co-Issuers”) and Wells
Fargo Bank, National Association, as indenture trustee (the “Indenture
Trustee”), supplemented by the Series 20[  ]-[  ] Series Supplement
(the “Series Supplement” and, together with the Base Indenture, the
“Indenture”) and the Servicing Agreement, dated as of November 29, 2007,
among the Co-Issuers,  Applebee’s
Franchising LLC, Applebee’s Services, Inc., Applebee’s International, Inc.,
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 Base 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.

 

	
  By:

  
	
  Name:

  
	
  Title:

  

 

[ATTACH MONTHLY SERVICER’S
REPORT]

 

1Exhibit
4.22

 

EXECUTION
COPY

 

APPLEBEE’S ENTERPRISES LLC,

THE ENTITIES REFERRED TO
HEREIN AS THE “RESTAURANT HOLDERS” and

APPLEBEE’S IP LLC 

each as a Co-Issuer

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Indenture Trustee and a Series 2007-1 Securities Intermediary

 

SERIES 2007-1 SUPPLEMENT

dated as of November 29, 2007

to

BASE INDENTURE

dated as of November 29, 2007

 

$30,000,000 Series 2007-1 Advance Notes, Class A-1-A

$70,000,000 Series 2007-1 Advance Notes, Class A-1-X

$7,500,000 Series 2007-1 Swingline Notes, Class A-1-A

$17,500,000 Series 2007-1 Swingline Notes, Class A-1-X

$15,000,000 Series 2007-1 Class L/C Notes, Class A-1-A

$35,000,000 Series 2007-1 Class L/C Notes, Class A-1-X

 

$350,000,000 Series 2007-1
7.2836% Fixed Rate Term Senior Notes, Class A-2-I-X

$675,000,000 Series 2007-1
6.4267% Fixed Rate Term Senior Notes, Class A-2-II-A

$650,000,000 Series 2007-1
7.0588% Fixed Rate Term Senior Notes, Class A-2-II-X

$119,000,000 Series 2007-1
8.4044% Fixed Rate Term Subordinated Notes, Class M-1

 

 

Table of Contents

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  PRELIMINARY STATEMENT

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  DESIGNATION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II SERIES 2007-1 RAPID
  AMORTIZATION EVENTS AND REMEDIES; SUBORDINATED NOTES SCHEDULED PRINCIPAL
  AMORTIZATION; SERIES EVENT OF DEFAULT

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Series 2007-1 Rapid Amortization Event

  	
   

  	
  3

  
	
  Section 2.2

  	
  Series 2007-1 Rapid Amortization Cure Right

  	
   

  	
  3

  
	
  Section 2.3

  	
  Waiver of Rapid Amortization Events

  	
   

  	
  4

  
	
  Section 2.4

  	
  Subordinated Notes Scheduled Principal Amortization

  	
   

  	
  4

  
	
  Section 2.5

  	
  Series Event of Default

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III INITIAL ISSUANCE, INCREASES AND DECREASES OF
  SERIES 2007-1 CLASS A-1 OUTSTANDING PRINCIPAL AMOUNT 5

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Procedures for Issuing and Increasing the Series 2007-1
  Class A-1 Outstanding Principal Amount

  	
   

  	
  5

  
	
  Section 3.2

  	
  Procedures for Decreasing the Series 2007-1 Class A-1
  Outstanding Principal Amount

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV SERIES 2007-1 ALLOCATIONS; PAYMENTS

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Allocations with Respect to the Series 2007-1 Notes

  	
   

  	
  8

  
	
  Section 4.2

  	
  Application of Monthly Collections on Payment Dates to the
  Series 2007-1 Notes; Payment Date Applications

  	
   

  	
  8

  
	
  Section 4.3

  	
  Certain Distributions from Series 2007-1 Distribution Accounts

  	
   

  	
  13

  
	
  Section 4.4

  	
  Series 2007-1 Class A-1 Interest and Certain Fees

  	
   

  	
  14

  
	
  Section 4.5

  	
  Series 2007-1 Class A-2 Interest

  	
   

  	
  16

  
	
  Section 4.6

  	
  Series 2007-1 Class M-1 Interest

  	
   

  	
  19

  
	
  Section 4.7

  	
  Payment of Series 2007-1 Note Principal

  	
   

  	
  21

  
	
  Section 4.8

  	
  Series 2007-1 Class A-1 Distribution Account

  	
   

  	
  32

  
	
  Section 4.9

  	
  Series 2007-1 Class A-2 Distribution Accounts

  	
   

  	
  33

  
	
  Section 4.10

  	
  Series 2007-1 Class M-1 Distribution Account

  	
   

  	
  35

  
	
  Section 4.11

  	
  Indenture Trustee as Securities Intermediary

  	
   

  	
  36

  
	
  Section 4.12

  	
  Servicer

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V FORM OF SERIES 2007-1 NOTES

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Form of the Series 2007-1 Class [A-1-A] [A-1-X] Notes

  	
   

  	
  38

  

 

 

	
  Section 5.2

  	
  Form of the Series 2007-1 Class [A-2-I-X], [A-2-II-A]
  and [A-2-II-X] Notes

  	
   

  	
  39

  
	
  Section 5.3

  	
  Form of the Series 2007-1 Class M-1 Notes

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI CONDITIONS TO ISSUANCE

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Conditions to Issuance

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII GENERAL

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Information

  	
   

  	
  48

  
	
  Section 7.2

  	
  Exhibits

  	
   

  	
  49

  
	
  Section 7.3

  	
  Ratification of Base Indenture

  	
   

  	
  49

  
	
  Section 7.4

  	
  Certain Notices to the Series 2007-1 Class A Insurer and
  Rating Agencies

  	
   

  	
  49

  
	
  Section 7.5

  	
  Third-Party Beneficiary

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.6

  	
  Prior Notice by Indenture Trustee to Series 2007-1 Class A
  Insurer

  	
   

  	
  49

  
	
  Section 7.7

  	
  Subrogation

  	
   

  	
  50

  
	
  Section 7.8

  	
  Counterparts

  	
   

  	
  50

  
	
  Section 7.9

  	
  Governing Law

  	
   

  	
  50

  
	
  Section 7.10

  	
  Amendments

  	
   

  	
  50

  
	
  Section 7.11

  	
  Termination of Series 2007-1 Supplement

  	
   

  	
  50

  
	
  Section 7.12

  	
  Discharge of Indenture

  	
   

  	
  51

  
	
  Section 7.13

  	
  Effect of Payment by the Series 2007-1 Class A-1 Insurer

  	
   

  	
  51

  
	
  Section 7.14

  	
  Fiscal Year End

  	
   

  	
  53

  
	
  Section 7.15

  	
  Notices

  	
   

  	
  53

  
	
  Section 7.16

  	
  Legal Holidays

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  ANNEXES

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Annex A

  	
  Series 2007-1 Supplemental Definitions List

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A-1-1-1:

  	
  Form of
  Series 2007-1 Class A-1-A Advance Note

  	
   

  	
   

  
	
  Exhibit A-1-1-2:

  	
  Form of
  Series 2007-1 Class A-1-X Advance Note

  	
   

  	
   

  
	
  Exhibit A-1-2-1:

  	
  Form of
  Series 2007-1 Class A-1-A Swingline Note

  	
   

  	
   

  
	
  Exhibit A-1-2-2:

  	
  Form of
  Series 2007-1 Class A-1-X Swingline Note

  	
   

  	
   

  
	
  Exhibit A-1-3-1:

  	
  Form of
  Series 2007-1 Class A-1-A L/C Note

  	
   

  	
   

  
	
  Exhibit A-1-3-2:

  	
  Form of
  Series 2007-1 Class A-1-X L/C Note

  	
   

  	
   

  
	
  Exhibit A-2-I-1:

  	
  Form of
  Rule 144A Series 2007-1 Class A-2-I-X Global Note

  	
   

  	
   

  
	
  Exhibit A-2-I-2:

  	
  Form of Regulation
  S Series 2007-1 Class A-2-I-X Global Note

  	
   

  	
   

  
	
  Exhibit A-2-II-1:

  	
  Form of
  Rule 144A Series 2007-1 Class A-2-II-A Global Note

  	
   

  	
   

  
	
  Exhibit A-2-II-2:

  	
  Form of Regulation
  S Series 2007-1 Class A-2-II-A Global Note

  	
   

  	
   

  
	
  Exhibit A-2-II-3:

  	
  Form of
  Rule 144A Series 2007-1 Class A-2-II-X Global Note

  	
   

  	
   

  
	
  Exhibit A-2-II-4:

  	
  Form of Regulation
  S Series 2007-1 Class A-2-II-X Global Note

  	
   

  	
   

  
	
  Exhibit M-1-1:

  	
  Form of Rule 144A
  Series 2007-1 Class M-1 Global Note

  	
   

  	
   

  

 

 

	
  Exhibit M-1-2:

  	
  Form of Regulation
  S Series 2007-1 Class M-1 Global Note

  	
   

  	
   

  
	
  Exhibit C:

  	
  Form of Monthly
  Noteholders’ Report

  	
   

  	
   

  

 

 

SERIES 2007-1 SUPPLEMENT, dated as of November 29,
2007 (this “Series 2007-1 Supplement”), by and among APPLEBEE’S
ENTERPRISES LLC, a Delaware limited liability company (the “Master Issuer”),
each of the entities appearing in the definition of “RESTAURANT HOLDERS” in Appendix A
to the Base Indenture (together with any additional Restaurant Holders that
become a party to the Indenture (as defined herein) following the date hereof
in the manner provided in Section 7.14 of the Base Indenture, 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,
collectively, the “Co-Issuers” and each, a “Co-Issuer”), each as
a Co-Issuer, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as indenture trustee (in such capacity, the “Indenture Trustee”)
and as Series 2007-1 Securities Intermediary (as defined herein), to the
Base Indenture, dated as of the date hereof, by and among the Co-Issuers and
the Indenture Trustee (as amended, modified or supplemented from time to time,
exclusive of Series Supplements (as defined in Appendix A thereto),
the “Base Indenture” and together with this Series 2007-1
Supplement and any other Series Supplements, the “Indenture”).

 

PRELIMINARY STATEMENT

 

WHEREAS, Sections 2.1, 2.3 and 3.3 of the
Base Indenture provide, among other things, that the Co-Issuers and the
Indenture Trustee may at any time and from time to time enter into a Series Supplement
to the Base Indenture for the purpose of authorizing the issuance of one or
more Series of Notes (as defined in Annex A of the Base Indenture)
upon satisfaction of the conditions set forth therein; and

 

WHEREAS, all such conditions have been met for the
issuance of the Series of Notes authorized hereunder.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

DESIGNATION

 

There is hereby created a
Series of Notes to be issued pursuant to the Base Indenture and this Series 2007-1
Supplement, and such Series of Notes shall be designated as Series 2007-1
Notes.  On the Series 2007-1 Closing
Date, the following four Classes of Notes of such Series shall be issued:

 

(a)           Series 2007-1
Variable Funding Senior Notes, Class A-1 (as referred to herein, the “Series 2007-1
Class A-1 Notes”) which shall be issued in six sub-classes (each, a “Series 2007-1
Class A-1 Sub-Class”):  (i) two
sub-classes representing Advances (each, an “Advance Sub-Class”) which
shall be designated as follows:  (x) Series 2007-1
Class A-1-A Advance Notes and (y) Series 2007-1 Class A-1-X
Advance Notes (as collectively referred to herein, the “Series 2007-1 Class A-1
Advance Notes”); (ii) two sub-classes representing Swingline Loans
(each, a “Swingline Sub-Class”) which shall be designated as
follows:  (x) Series 2007-1 Class A-1-A
Swingline Notes and (y) Series 2007-1 Class A-1-X Swingline
Notes (as collectively referred to herein, the “Series 2007-1 Class A-1
Swingline Notes”); and (iii) two sub-classes

 

 

representing L/C Obligations (each, an “L/C
Sub-Class”) which shall be designated as follows: (x) Series 2007-1
Class A-1-A L/C Notes and (y) Series 2007-1 Class A-1-X L/C
Notes (as collectively referred to herein, the “Series 2007-1 Class A-1
L/C Notes”);

 

(b)           Series 2007-1
7.2836% Fixed Rate Term Senior Notes, Class A-2-I-X (as referred to
herein, the “Series 2007-1 Class A-2-I Notes”);

 

(c)           Series 2007-1
Fixed Rate Term Senior Notes, Class A-2-II (as referred to herein, the “Series 2007-1
Class A-2-II Notes,” and together with the Series 2007-1 Class A-2-I
Notes, the “Series 2007-1 Class A-2 Notes”) which shall be
issued in two sub-classes (each a “Series Class A-2-II Sub-Class”):  (i) Series 2007-1 6.4267% Fixed
Rate Term Senior Notes, Class A-2-II-A (the “Series 2007-1 Class A-2-II-A
Notes”) and (ii) Series 2007-1 7.0588% Fixed Rate Term Senior
Notes, Class A-2-II-X (the “Series 2007-1 Class A-2-II-X
Notes”);

 

(d)           Series 2007-1
8.4044% Fixed Rate Term Subordinated Notes, Class M-1 (as referred to
herein, the “Series 2007-1 Class M-1 Notes”) and together with
the Series 2007-1 Class A-2 Notes, (the “Series 2007-1 Fixed
Rate Notes”).  For purposes of the
Indenture, the Series 2007-1 Class A-1 Notes and the Series 2007-1
Class A-2 Notes shall be deemed to be “Senior Notes” or “Series 2007-1
Senior Notes” and the Series 2007-1 Class M-1 Notes shall be deemed
to be “Subordinated Notes” or “Series 2007-1 Subordinated Notes.”

 

ARTICLE I

DEFINITIONS

 

All capitalized terms used herein (including in the
preamble and the recitals hereto) shall have the meanings assigned to such
terms or incorporated by reference in the Series 2007-1 Supplemental
Definitions List attached hereto as Annex A (the “Series 2007-1
Supplemental Definitions List”) as such Series 2007-1 Supplemental
Definitions List may be amended, supplemented or otherwise modified from time
to time in accordance with the terms hereof. 
All capitalized
terms not otherwise defined therein shall have the meanings assigned thereto
or incorporated by reference in the Base Indenture Definitions List attached to
the Base Indenture as Appendix A thereto, as such Base Indenture
Definitions List may be amended, supplemented or otherwise modified from time
to time in accordance with the terms of the Base Indenture.  Unless otherwise specified herein, all
Article, Exhibit, Section or Subsection references herein shall refer to
Articles, Exhibits, Sections or Subsections of the Base Indenture or this Series 2007-1
Supplement (as indicated herein).  Unless
otherwise stated herein, as the context otherwise requires or if such term is
otherwise defined in the Base Indenture, each capitalized term used or defined
herein shall relate only to the Series 2007-1 Notes and not to any other Series of
Notes issued by the Co-Issuers.

 

2

 

ARTICLE II

 

SERIES 2007-1 RAPID AMORTIZATION EVENTS
AND REMEDIES; SUBORDINATED NOTES SCHEDULED PRINCIPAL AMORTIZATION; SERIES EVENT
OF DEFAULT

 

Section 2.1             Series 2007-1 Rapid
Amortization Event.  Upon the
occurrence of any one of the following events (whatever the reason for such
event and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

 

(a)           the
failure to maintain a Three-Month Adjusted DSCR of at least 1.50x as of any
Payment Date; or

 

(b)           the
twelve-month U.S. system-wide sales of Applebee’s Restaurants as of the last
day of the immediately preceding twelve-month period ending on the last day of
each fiscal month is less than $3.75 billion;

 

a “Series 2007-1 Rapid Amortization Event”
shall be deemed to have occurred, but without the giving of further notice or
any other action on the part of the Indenture Trustee or any Holder of Notes.

 

Section 2.2             Series 2007-1 Rapid
Amortization Cure Right.

 

The Co-Issuers may cure the occurrence of a Series 2007-1
Rapid Amortization Event described in Section 2.1(a) above on
a one-time basis (the “Series 2007-1
Rapid Amortization Cure Right”).  In order for the Co-Issuers to exercise the Series 2007-1
Rapid Amortization Cure Right, the Co-Issuers must maintain a Three-Month
Adjusted DSCR of at least 1.50x as of any three consecutive Payment Dates
following the Payment Date on which such Series 2007-1 Rapid Amortization
Event occurred, in which case such Series 2007-1 Rapid Amortization Event
shall be automatically deemed to be cured as of the third such Payment
Date.  In connection therewith, if a Series 2007-1
Rapid Amortization Event occurs because the Three-Month Adjusted DSCR is
reduced to below 1.50x on any Payment Date, the Indenture Trustee shall, the
first time such event occurs, establish a segregated trust account under the
Base Indenture and shall deposit to such trust account the amount that
otherwise would be applied, in accordance with the Priority of Payments, to the
applicable Principal Payment Accounts to pay principal of the Series 2007-1
Notes on such Payment Date solely as a result of such Series 2007-1 Rapid
Amortization Event.  So long as the Three
Month-Adjusted DSCR is at least 1.50x on each of the next two Payment Dates
succeeding the Payment Date on which such Series 2007-1 Rapid Amortization
Event first occurred, the Indenture Trustee shall make the same deposit to the
trust account on each such succeeding Payment Date, and if the Three-Month
Adjusted DSCR is at least 1.50x on the third succeeding Payment Date after the
Payment Date on which such Series 2007-1 Rapid Amortization Event first
occurred, such Series 2007-1 Rapid Amortization Event shall be deemed to
be cured for such three Payment Dates and the Indenture Trustee shall 

 

3

 

release the amounts deposited to such trust account on
the three preceding Payment Dates for deposit to the Collection Account for
application in accordance with the Priority of Payments.  If the Three-Month Adjusted DSCR is below
1.50x on the first, second or third consecutive Payment Date following the Series 2007-1
Rapid Amortization Event, the amount previously deposited to such trust account
shall be released for deposit to the applicable Principal Payment Accounts to
pay principal of the Series 2007-1 Notes in accordance with the Priority
of Payments.

 

If the Co-Issuers fail to cure the occurrence of a Series 2007-1
Rapid Amortization Event described in Section 2.1(a) above
within the first three months following such Series 2007-1 Rapid
Amortization Event (which failure shall not prevent the Co-Issuers from
thereafter exercising the Series 2007-1 Rapid Amortization Cure Right on a
one-time basis), the Indenture Trustee (in accordance with the provisions of Articles X
and XI of the Base Indenture) shall apply funds in the Collection Account
to pay the principal of the Series 2007-1 Notes in accordance with the
Priority of Payments, unless and until (i) such Series 2007-1 Rapid
Amortization Event has been cured or (ii) either the Series 2007-1
Controlling Party or the Aggregate Controlling Party, as applicable, waives the
occurrence of such Series 2007-1 Rapid Amortization Event in the manner
described in Section 2.3 below.

 

Section 2.3             Waiver
of Rapid Amortization Events.

 

The Series 2007-1 Controlling Party shall be
entitled to waive (i) a Rapid Amortization Event resulting from the
occurrence of an event described in Section 5.1(a)(i) of the
Base Indenture, to the extent such Rapid Amortization Event is triggered with
respect to the Series 2007-1 Notes, and (ii) a Series 2007-1
Rapid Amortization Event with respect to the Series 2007-1 Notes (but not
with respect to any other Series of Notes with respect to which the same Series Rapid
Amortization Event has occurred pursuant to the related Series Supplement)
in which case such Rapid Amortization triggered by the Series Rapid
Amortization shall cease; provided, that a waiver of any Rapid
Amortization Event set forth in Section 5.1(a)(i) of the Base
Indenture with respect to the Series 2007-1 Notes will also require the
written consent of the Holders of 100% of the Aggregate Outstanding Principal
Amount of the Series 2007-1 Notes. 
The Aggregate Controlling Party will be entitled to waive for purposes
of all Series of Notes Outstanding (x) any Rapid Amortization Event
described in Sections 5.1(a)(iii) and 5.1(a)(iv) of the Base
Indenture and (y) any Series 2007-1 Rapid Amortization Event.

 

Section 2.4             Subordinated
Notes Scheduled Principal Amortization. 
On each Payment Date following the Series 2007-1 Closing Date to
but excluding the Payment Date occurring in January 2013, the Indenture
Trustee shall apply an amount equal to the lesser of (i) the applicable Series 2007-1
Monthly Subordinated Notes Amortization Amount, if any (together with any
accrued but unpaid Series 2007-1 Monthly Subordinated Notes Amortization
Amount), and (ii) the amount, if any, by which the remaining amount of
funds on deposit in the Collection Account after giving effect to clause
(xxiii) of the Priority of Payments exceeds the Series 2007-1 Residual
Threshold Amount (such lesser amount, the “Series 2007-1 Subordinated
Notes Principal

 

4

 

Amortization Amount”),
to the Subordinated Notes Principal Payment Account, in accordance with the
Priority of Payments.

 

Section 2.5             Series Event
of Default.  Pursuant to Section 5.3(a)(viii) of
the Base Indenture, if, as of any Payment Date, the Three-Month Adjusted DSCR
is less than 1.2x, an Event of Default with respect to the Series 2007-1
Notes shall be deemed to have occurred.

 

ARTICLE III

 

INITIAL ISSUANCE,
INCREASES AND DECREASES OF

SERIES 2007-1 CLASS A-1 OUTSTANDING
PRINCIPAL AMOUNT

 

Section 3.1             Procedures
for Issuing and Increasing the Series 2007-1 Class A-1 Outstanding
Principal Amount.

 

(a)           Subject
to satisfaction of the conditions precedent to the making of Series 2007-1
Class A-1 Advances set forth in the Series 2007-1 Class A-1 Note
Purchase Agreement, (i) on the Series 2007-1 Closing Date, the
Co-Issuers may cause the Series 2007-1 Class A-1 Initial Advance
Principal Amount to become outstanding by drawing ratably, at par, the initial
principal amounts of the Series 2007-1 Class A-1 Advance Notes
corresponding to the aggregate amount of the Series 2007-1 Class A-1
Advances made on the Series 2007-1 Closing Date (the “Series 2007-1
Class A-1 Initial Advance”) and (ii) on any Business Day during
the Series 2007-1 Class A-1 Commitment Term, the Co-Issuers may increase
the aggregate amount of the Series 2007-1 Class A-1 Outstanding
Principal Amount (such aggregate increase referred to as an “Increase”),
by drawing ratably, at par, additional principal amounts on the Series 2007-1
Class A-1 Advance Notes corresponding to the aggregate amount of the Series 2007-1
Class A-1 Advances made on such Business Day; provided, that at no
time may the Series 2007-1 Class A-1 Outstanding Principal Amount
exceed the Series 2007-1 Class A-1 Maximum Principal Amount.  The Series 2007-1 Class A-1 Initial
Advance and each Increase shall be made in accordance with the provisions of Sections 2.02
and 2.03 of the Series 2007-1 Class A-1 Note Purchase
Agreement and shall be ratably allocated among the Series 2007-1 Class A-1
Noteholders (other than the Series 2007-1 Class A-1 Subfacility
Noteholders in their capacity as such) as provided therein.  Proceeds from the Series 2007-1 Class A-1
Initial Advance and each Increase shall be paid as directed by the Co-Issuers
in the applicable Series 2007-1 Class A-1 Advance Request or as
otherwise set forth in the Series 2007-1 Class A-1 Note Purchase
Agreement.  Upon receipt of written
notice from the Co-Issuers or the Series 2007-1 Class A-1
Administrative Agent of the Series 2007-1 Class A-1 Initial Advance
and any Increase, the Indenture Trustee shall indicate in its books and records
the amount of the Series 2007-1 Class A-1 Initial Advance or such
Increase, as applicable.

 

(b)           Subject
to satisfaction of the applicable conditions precedent set forth in the Series 2007-1
Class A-1 Note Purchase Agreement, on the Series 2007-1 Closing Date,
the Co-Issuers may cause (i) the Series 2007-1 Class A-1 Initial
Swingline Principal Amount to become outstanding by drawing, ratably at par,
the initial principal

 

5

 

amounts of the Series 2007-1 Class A-1 Swingline Notes
corresponding to the aggregate amount of the Series 2007-1 Class A-1
Swingline Loans made on the Series 2007-1 Closing Date pursuant to Section 2.06
of the Series 2007-1 Class A-1 Note Purchase Agreement (the “Series 2007-1
Class A-1 Initial Swingline Loan”) and (ii) the Series 2007-1
Class A-1 Initial Aggregate Undrawn L/C Face Amount to become outstanding
by drawing, ratably at par, the initial principal amounts of the Series 2007-1
Class A-1 L/C Notes corresponding to the aggregate Undrawn L/C Face Amount
of the Letters of Credit issued on the Series 2007-1 Closing Date pursuant
to Section 2.07 of the Series 2007-1 Class A-1 Note
Purchase Agreement; provided, that at no time may the Series 2007-1
Class A-1 Outstanding Principal Amount exceed the Series 2007-1 Class A-1
Maximum Principal Amount.  The procedures
relating to increases in the Series 2007-1 Class A-1 Outstanding
Subfacility Amount (each such increase referred to as a “Subfacility
Increase”) through borrowings of Series 2007-1 Class A-1
Swingline Loans and issuance or incurrence of Series 2007-1 Class A-1
L/C Obligations are set forth in the Series 2007-1 Class A-1 Note
Purchase Agreement.  Upon receipt of
written notice from the Co-Issuers or the Series 2007-1 Class A-1
Administrative Agent of the issuance of the Series 2007-1 Class A-1
Initial Swingline Principal Amount and the Series 2007-1 Class A-1
Initial Aggregate Undrawn L/C Face Amount and any Subfacility Increase, the
Indenture Trustee shall indicate in its books and records the amount of each
such issuance and Subfacility Increase.

 

Section 3.2             Procedures for Decreasing the Series 2007-1
Class A-1 Outstanding Principal Amount.

 

(a)           Mandatory
Decrease.  Whenever a Series 2007-1
Class A-1 Excess Principal Event shall have occurred, then, on or before
the third Business Day immediately following written notice from the Indenture
Trustee or the Series 2007-1 Class A-1  Administrative Agent to the Servicer or
discovery by a Responsible Officer of the Servicer of such Series 2007-1 Class A-1
Excess Principal Event, the Co-Issuers shall, and the Servicer shall cause the
Co-Issuers to, deposit in the Series 2007-1 Class A-1 Distribution
Account the amount of funds referred to in the next sentence and direct the
Indenture Trustee in writing to distribute such funds in accordance with Section 4.02
of the Series 2007-1 Class A-1 Note Purchase Agreement.  Such written direction shall include a report
that will provide for the distribution of (i) funds sufficient to decrease
the Series 2007-1 Class A-1 Outstanding Principal Amount by the
lesser of (x) the amount necessary, so that after giving effect to such
decrease of the Series 2007-1 Class A-1 Outstanding Principal Amount
on such date, no such Series 2007-1 Class A-1 Excess Principal Event
shall exist and (y) the amount that would decrease the Series 2007-1 Class A-1
Outstanding Principal Amount to zero (each decrease of the Series 2007-1 Class A-1
Outstanding Principal Amount pursuant to this Section 3.2(a), or any
other required payment of principal in respect of the Series 2007-1 Class A-1
Notes pursuant to Section 4.7 of this Series 2007-1 Supplement, a “Mandatory
Decrease”), plus (ii) any associated Series 2007-1 Class A-1
Breakage Amounts incurred as a result of such decrease (calculated in
accordance with the Series 2007-1 Class A-1 Note Purchase
Agreement).  Such Mandatory Decrease
shall be allocated among the Series 2007-1 Class A-1 Noteholders in
accordance with the order of distribution of principal payments set forth in Section 4.02
of the Series 2007-1 Class A-1 Note Purchase Agreement.  Upon

 

6

 

discovery of such a Series 2007-1 Class A-1 Excess Principal
Event, the Co-Issuers promptly, but in any event within one (1) Business
Day, shall deliver written notice (by facsimile with original to follow by
mail) of the need for any such Mandatory Decreases to the Indenture Trustee,
the Series 2007-1 Class A Insurer and the Series 2007-1 Class A-1
Administrative Agent.

 

(b)           Voluntary
Decrease.  On any Business Day, upon
at least three (3) Business Day’s prior written notice in the form of a
Voluntary Decrease Request to the Series 2007-1 Class A-1
Administrative Agent (for notice by the Series 2007-1 Class A-1
Administrative Agent to each Series 2007-1 Class A-1 Investor), the
Indenture Trustee and the Series 2007-1 Class A Insurer, the
Co-Issuers may decrease the Series 2007-1 Class A-1 Outstanding
Principal Amount (each such decrease of the Series 2007-1 Class A-1
Outstanding Principal Amount pursuant to this Section 3.2(b), a “Voluntary
Decrease”) by depositing in the Series 2007-1 Class A-1
Distribution Account on the Business Day preceding the date specified as the
decrease date in the prior written notice referred to above and providing a
written report to the Indenture Trustee directing the Indenture Trustee to
distribute in accordance with the order of distribution of principal payments
set forth in Section 4.02 of the Series 2007-1 Class A-1
Note Purchase Agreement (i) an amount (subject to the last sentence of
this Section 3.2(b)) up to the Series 2007-1 Class A-1
Outstanding Principal Amount equal to the amount of such Voluntary Decrease, plus
(ii) any associated Series 2007-1 Class A-1 Breakage Amounts
incurred as a result of such decrease (calculated in accordance with the Series 2007-1
Class A-1 Note Purchase Agreement). 
Each such Voluntary Decrease shall be in a minimum principal amount as
provided in the Series 2007-1 Class A-1 Note Purchase Agreement.

 

(c)           Upon
distribution to the Series 2007-1 Class A-1 Noteholders of principal
of the Series 2007-1 Class A-1 Advance Notes in connection with each
Decrease, the Indenture Trustee shall indicate in its books and records such
Decrease.

 

(d)           The
Series 2007-1 Class A-1 Note Purchase Agreement sets forth additional
procedures relating to decreases in the Series 2007-1 Class A-1
Outstanding Subfacility Amount (each such decrease, together with any Voluntary
Decrease or Mandatory Decrease allocated to the Series 2007-1 Class A-1
Subfacility Noteholders, referred to as a “Subfacility Decrease”)
through (i) borrowings of Series 2007-1 Class A-1 Advances to
repay, on a ratable basis among the various sub-classes of the applicable Series 2007-1
Class A-1 Notes, Series 2007-1 Class A-1 Swingline Loans and Series 2007-1
Class A-1 L/C Obligations or (ii) optional prepayments, on a ratable
basis among the various sub-classes of the applicable Series 2007-1 Class A-1
Notes, of Series 2007-1 Class A-1 Swingline Loans on same day
notice.  Upon receipt of written notice
from the Co-Issuers or the Series 2007-1 Class A-1 Administrative
Agent of any Subfacility Decrease, the Indenture Trustee shall indicate in its
books and records the amount of such Subfacility Decrease.

 

7

 

ARTICLE IV

 

SERIES 2007-1 ALLOCATIONS; PAYMENTS

 

With respect to the Series 2007-1
Notes only, the following shall apply:

 

Section 4.1             Allocations
with Respect to the Series 2007-1 Notes.  On the Series 2007-1 Closing Date,

 

(a)           $2,800,000
of the net proceeds from the initial sale of the Series 2007-1 Notes will
be deposited into the Concentration Account;

 

(b)           $4,000,000
of the net proceeds from the initial sale of the Series 2007-1 Notes will
be deposited into the Advertising Fees Account;

 

(c)           $6,100,000
of the net proceeds from the initial sale of the Series 2007-1 Notes will
be deposited into the Gift Card Reserve Account;

 

(d)           $400,000
of the net proceeds from the initial sale of the Series 2007-1 Notes will
be deposited into the Third Party Licensing Fee Account;

 

(e)           $5,800,000
of the net proceeds from the initial sale of the Series 2007-1 Notes will
be deposited into the Sales Tax Account;

 

(f)            $31,942,506.25
of the net proceeds from the initial sale of the Series 2007-1 Notes will
be deposited into the Senior Notes Interest Reserve Account (the “Series 2007-1
Initial Senior Notes Interest Reserve Deposit”);

 

and the remainder of the net proceeds from the sale of
the Series 2007-1 Notes will be paid to, or at the direction of, the
Master Issuer; provided that the Co-Issuers will also be permitted to
fund each of the accounts mentioned in clauses (a) through (f) above
with funds available to the Co-Issuers from sources other than from the net
proceeds from the initial sale of the Series 2007-1 Notes.

 

Section 4.2             Application
of Monthly Collections on Payment Dates to the Series 2007-1 Notes;
Payment Date Applications.  On each
Payment Date, the Indenture Trustee shall upon receipt of a Servicer Order and
based solely on the information contained in the Monthly Servicer’s Report
(subject to the Indenture) withdraw any and all funds on deposit in the
Collection Account in respect of the preceding Monthly Collection Period for
allocation or payment of all amounts relating to the Series 2007-1 Notes
and the Series 2007-1 Class A Policy pursuant to, and to the extent
that funds are available therefor in accordance with the provisions of, the
Priority of Payments, including the following:

 

(a)           Series 2007-1
Senior Notes Monthly Interest.  On
each Payment Date, upon receipt of a Servicer Order as described in the Base
Indenture, the Indenture Trustee shall allocate from the Collection Account the
Series 2007-1 Class A-1 Senior Interest Amount and the Series 2007-1
Class A-2 Senior Interest Amount (which is 

 

8

 

deemed to be part of the “Senior Notes Monthly Interest Amounts” for
the purposes of the Base Indenture) pursuant to, and to the extent that funds
are available therefor in accordance with the provisions of, the Priority of
Payments.

 

(b)           Series 2007-1
Insurer Premiums.  On each Payment
Date, upon receipt of a Servicer Order as described in the Base Indenture, the
Indenture Trustee shall allocate from the Collection Account the Series 2007-1
Accrued Insurer Premium Amount (which is deemed to be part of the “Accrued
Insurer Premium Amounts” for the purposes of the Base Indenture) pursuant to,
and to the extent that funds are available therefor in accordance with the
provisions of, the Priority of Payments.

 

(c)           Series 2007-1
Class A-1 Monthly Commitment Fees. 
On each Payment Date, upon receipt of a Servicer Order as described in
the Base Indenture, the Indenture Trustee shall allocate from the Collection
Account the Series 2007-1 Class A-1 Commitment Fees Amount  (which is deemed to be part of the “Class A-1
Commitment Fees Amounts” for the purposes of the Base Indenture) pursuant to,
and to the extent that funds are available therefor in accordance with the
provisions of, the Priority of Payments.

 

(d)           Series 2007-1
Insurer Expenses.  On each Payment
Date, upon receipt of a Servicer Order as described in the Base Indenture, the
Indenture Trustee shall pay to the Series 2007-1 Class A Insurer from
the Collection Account the Series 2007-1 Insurer Expense Amounts owed to
the Series 2007-1 Class A Insurer (which are deemed to be “Insurer
Expense Amounts” for purposes of the Base Indenture) pursuant to, and to the
extent that funds are available therefor in accordance with the provisions of,
the Priority of Payments.

 

(e)           Series 2007-1
Insurer Reimbursements.  On each
Payment Date, upon receipt of a Servicer Order as described in the Base
Indenture, the Indenture Trustee shall pay to the Series 2007-1 Class A
Insurer from the Collection Account the Series 2007-1 Insurer
Reimbursement Amounts owed to the Series 2007-1 Class A Insurer
(which are deemed to be “Insurer Reimbursement Amounts” for purposes of the Base
Indenture) pursuant to, and to the extent that funds are available therefor in
accordance with the provisions of, the Priority of Payments.

 

(f)            Series 2007-1
Class A-1 Administrative Expenses. 
On each Payment Date, upon receipt of a Servicer Order as described in
the Base Indenture, the Indenture Trustee shall pay to the Series 2007-1 Class A-1
Administrative Agent from the Collection Account the Series 2007-1 Class A-1
Note Administrative Expenses (which are deemed to be part of the “Class A-1
Note Administrative Expenses” for purposes of the Base Indenture) pursuant to,
and to the extent that funds are available therefor in accordance with the
provisions of, the Priority of Payments.

 

(g)           Series 2007-1 Senior Notes
Interest Reserve Amount.

 

(i)            The Co-Issuers shall maintain an
amount on deposit in the Senior Note Interest Reserve Account equal to (x) so
long as no 

 

9

 

other Series of
Notes is outstanding, the Series 2007-1 Senior Notes Interest Reserve Amount
and (y) if any other Series of Notes is outstanding, the aggregate of
the Senior Notes Interest Reserve Amounts for all Series then outstanding.

 

(ii)           If on any Payment Date there is a Series 2007-1
Senior Notes Interest Reserve Shortfall, upon receipt of a Servicer Order as
described in the Base Indenture, the Indenture Trustee shall deposit into the
Senior Note Interest Reserve Account an amount equal to the Series 2007-1
Senior Note Interest Reserve Deficit Amount (which is deemed to be a “Senior Note
Interest Reserve Deficit Amount” for purposes of the Base Indenture) pursuant
to, and to the extent that funds are available therefor in accordance with the
provisions of, the Priority of Payments.

 

(iii)          On each Accounting Date preceding any
Payment Date that is a Series 2007-1 Senior Notes Interest Reserve
Step-Down Date, upon receipt of a Servicer Order as described in the Base
Indenture, the Indenture Trustee shall withdraw the Series 2007-1 Senior
Notes Interest Reserve Step-Down Release Amount from the Senior Notes Interest
Reserve Account in accordance with Section 11.1(l)(i) of the
Base Indenture.

 

(h)           Series 2007-1
Partial Amortization Amounts.  On any
Payment Date following the occurrence and continuation of a Series 2007-1
Partial Amortization Event, upon receipt of a Servicer Order as described in
the Base Indenture, the Indenture Trustee shall allocate from the Collection
Account for payment of principal on the Series 2007-1 Senior Notes the Series 2007-1
Partial Amortization Amount (which is deemed to be a “Partial Amortization
Amount” for purposes of the Base Indenture) pursuant to, and to the extent that
funds are available therefor in accordance with the provisions of, the Priority
of Payments.

 

(i)            Series 2007-1 Cash Trap
Reserve Amount.

 

(i)            During a Cash Trap Reserve Event,
upon receipt of a Servicer Order as described in the Indenture, the Indenture
Trustee shall allocate to the Cash Trap Reserve Account an amount equal to the Series 2007-1
Cash Trap Reserve Amount (which is deemed to be a “Cash Trap Reserve Amount”
for purposes of the Base Indenture) pursuant to, and to the extent that funds
are available therefor in accordance with the provisions of, the Priority of
Payments.

 

(ii)           On each Accounting Date preceding any
Payment Date on which a Series 2007-1 Cash Trap Reserve Cure Date will
occur, upon receipt of a Servicer Order as described in the Base Indenture, the
Indenture Trustee will withdraw on such Payment Date any amounts then on
deposit in the Cash Trap Reserve Account and deposit such funds into 

 

10

 

the Collection Account in
accordance with Section 11.1(m) of the Base Indenture; provided,
that such Payment Date constitutes a Series 2007-1 Cash Trap Reserve Cure
Date.

 

(j)            Series 2007-1
Senior Notes Rapid Amortization Amounts. 
If on such Payment Date a Rapid Amortization Event has occurred and is
continuing (other than a Rapid Amortization Event that has been waived or cured
pursuant to a Series 2007-1 Rapid Amortization Cure Right), upon receipt
of a Servicer Order as described in the Indenture, the Indenture Trustee shall
allocate from the Collection Account for payment of principal on the Series 2007-1
Senior Notes the amounts contemplated by the Priority of Payments.

 

(k)           Series 2007-1
Class A-1 Other Amounts.  On
each Payment Date, upon receipt of a Servicer Order as described in the Base
Indenture, the Indenture Trustee shall allocate from the Collection Account the
accrued and unpaid amounts due under the related Class A-1 Note Purchase
Agreement pursuant to, and to the extent that funds are available therefor in
accordance with the provisions of, the Priority of Payments.

 

(l)            Series 2007-1
Class M-1 Monthly Interest.  On
each Payment Date, upon receipt of a Servicer Order as described in the Base
Indenture, the Indenture Trustee shall allocate from the Collection Account the
Series 2007-1 Class M-1 Monthly Interest Amount (which is deemed to
be a “Subordinated Notes Monthly Interest Amount” for purposes of the Base
Indenture) pursuant to, and to the extent that funds are available therefor in
accordance with the provisions of, the Priority of Payments.

 

(m)          Series 2007-1
Subordinated Partial Amortization Amounts. 
If on any Payment Date a Series 2007-1 Partial Amortization Event
has occurred and is continuing, upon receipt of a Servicer Order as described
in the Base Indenture, the Indenture Trustee shall allocate from the Collection
Account for payment of principal on the Series 2007-1 Class M-1 Notes
the Series 2007-1 Partial Amortization Amount (after giving effect to any deposit of the Series 2007-1
Partial Amortization Amount pursuant to clause (h) above)  pursuant to, and to the extent that funds are
available therefor in accordance with the provisions of, the Priority of
Payments.

 

(n)           Series 2007-1
Class M-1 Rapid Amortization Amounts. 
If on any Payment Date a Rapid Amortization Event has occurred and is
continuing (other than a Rapid Amortization Event that has been waived or cured
pursuant to a Series 2007-1 Rapid Amortization Cure Right), upon receipt
of a Servicer Order as described in the Base Indenture, the Indenture Trustee
shall allocate from the Collection Account for payment of principal on the Series 2007-1
Class M-1 Notes the amounts contemplated by the Priority of Payments.

 

(o)           Series 2007-1
Class A-1 Excess Interest Amount. 
On each Payment Date, upon receipt of a Servicer Order as described in
the Base Indenture, the Indenture Trustee shall allocate from the Collection
Account the Series 2007-1 Class A-1 Excess Interest Amount (which is
deemed to be a “Class A-1 Excess Interest Amount”

 

11

 

for purposes of the Base Indenture) pursuant to, and to the extent that
funds are available therefor in accordance with the provisions of, the Priority
of Payments.

 

(p)           Series 2007-1
Class A-2-I Excess Adjusted Interest Amount.  On each Payment Date, upon receipt of a
Servicer Order as described in the Base Indenture, the Indenture Trustee shall
allocate from the Collection Account the Series 2007-1 Class A-2-I
Excess Adjusted Interest Amount (which is deemed to be a “Senior Notes Monthly
Excess Adjusted Interest Amount” for purposes of the Base Indenture) pursuant
to, and to the extent that funds are available therefor in accordance with the
provisions of, the Priority of Payments.

 

(q)           Series 2007-1
Senior Notes Monthly Contingent Additional Interest Amount.  On each Payment Date, upon receipt of a
Servicer Order as described in the Base Indenture, the Indenture Trustee shall
allocate from the Collection Account (i) the Series 2007-1 Class A-1
Extension Contingent Additional Interest, (ii) the Series 2007-1 Class A-1
Post-ARD Monthly Contingent Additional Interest, (iii) the Series 2007-1
Class A-2-II Contingent Additional Interest, and (iv) the Series 2007-1
Class A-2 Post-ARD Contingent Additional Interest (each of which are
deemed to be “Senior Notes Monthly Contingent Additional Interest Amounts” for
purposes of the Base Indenture) pursuant to, and to the extent that funds are
available therefor in accordance with the provisions of, the Priority of
Payments.

 

(r)            Series 2007-1
Class A-1 Contingent Additional L/C Fees.  On each Payment Date, upon receipt of a
Servicer Order as described in the Base Indenture, the Indenture Trustee shall
allocate from the Collection Account the Series 2007-1 Class A-1
Contingent Additional L/C Fees (which is deemed to be “Senior Notes Monthly
Contingent Additional Interest Amounts” for purposes of the Base Indenture)
pursuant to, and to the extent that funds are available therefor in accordance
with the provisions of, the Priority of Payments.

 

(s)           Series 2007-1
Subordinated Notes Monthly Contingent Additional Interest Amount.  On each Payment Date, upon receipt of a
Servicer Order as described in the Base Indenture, the Indenture Trustee shall
allocate from the Collection Account the Series 2007-1 Class M-1
Contingent Additional Interest and the Series 2007-1 Class M-1
Post-ARD Contingent Additional Interest (each of which are deemed to be “Subordinated
Notes Monthly Contingent Additional Interest Amounts” for purposes of the Base
Indenture) pursuant to, and to the extent that funds are available therefor in
accordance with the provisions of, the Priority of Payments.

 

(t)            Series 2007-1
Monthly Aggregate Extension Prepayment Amount.  Series 2007-1 Monthly Aggregate
Extension Prepayment Amount.  If such
Payment Date occurs during a Series 2007-1 Extension Period, upon receipt
of a Servicer Order as described in the Base Indenture, the Indenture Trustee
shall allocate from the Collection Account the Series 2007-1 Monthly
Aggregate Extension Prepayment Amounts (which are deemed to be “Monthly
Aggregate Extension Prepayment Amounts” for purposes of the Base Indenture)
pursuant to, and to the extent that funds are available therefor in accordance
with the provisions of, the Priority of Payments.

 

12

 

(u)           Series 2007-1
Subordinated Notes Principal Amortization Amount.  On each Payment Date following the Series 2007-1
Closing Date to but excluding the Payment Date occurring in January 2013,
upon receipt of a Servicer Order as described in the Base Indenture, the
Indenture Trustee shall allocate from the Collection Account the Series 2007-1
Subordinated Notes Principal Amortization Amounts (which are deemed to be “Subordinated
Notes Principal Amortization Amounts” for purposes of the Base Indenture) pursuant
to, and to the extent that funds are available therefor in accordance with the
provisions of, the Priority of Payments.

 

(v)           Application
Instructions.  The Series Controlling
Party is hereby authorized (but shall not be obligated) to deliver any instruction
contemplated in this Section 4.2 that is not timely delivered by
the Servicer on behalf of the Master Issuer.

 

Section 4.3             Certain
Distributions from Series 2007-1 Distribution Accounts.

 

(a)           On
each Payment Date, based solely upon the most recent Monthly Servicer’s Report,
the Indenture Trustee shall, in accordance with Section 11.5 of the
Base Indenture remit (i) to the Series 2007-1 Class A-1
Noteholders from the Series 2007-1 Class A-1 Distribution Account the
amount deposited in the Series 2007-1 Class A-1 Distribution Account
for the payment of interest and fees and, to the extent applicable, principal, (ii) to
the Series 2007-1 Class A-2-I Noteholders from the Series 2007-1
Class A-2-I Distribution Account the amount deposited in the Series 2007-1
Class A-2-I Distribution Account for the payment of interest and, to the
extent applicable, principal, (iii) to the Series 2007-1 Class A-2-II
Noteholders from the applicable Series 2007-1 Class A-2-II
Distribution Account the amount deposited in the Series 2007-1 Class A-2-II
Distribution Account for the payment of interest and, to the extent applicable,
principal and (iv) to the Series 2007-1 Class M-1 Noteholders
from the Series 2007-1 Class M-1 Distribution Account the amount
deposited in the Series 2007-1 Class M-1 Distribution Account for the
payment of interest and, to the extent applicable, principal.

 

(b)           Insured Amounts
Distributions.

 

(i)            Promptly upon deposit
of each payment of an Insured Amount paid pursuant to the Series 2007-1 Class A
Policy in respect of the Series 2007-1 Class A-1-A Notes into the Series 2007-1
Class A-1 Distribution Account (pursuant to the application of funds set
forth in Section 5.6 and Articles X and XI of the
Base Indenture), the Indenture Trustee shall, based upon the records of the
Indenture Trustee, wire transfer the amount so deposited to (x) in the
case of Deficiency Amounts, the Series 2007-1 Class A-1-A Noteholders
to which such Deficiency Amounts are owed on a pro  rata basis, in
the case of interest, on a pro  rata basis based on entitlement
or, in the case of principal, in accordance with the order of distribution of
principal payments set forth in Section 4.02 of the Series 2007-1
Class A-1 Note Purchase Agreement, as the case may be, and (y) in the
case of Preference Amounts, the

 

13

 

Series 2007-1 Class A-1-A
Noteholders to which such Preference Amounts are owed.

 

(ii)           Promptly upon deposit
of each payment of an Insured Amount paid pursuant to the Series 2007-1 Class A
Policy in respect of the Series 2007-1 Class A-2-II-A Notes into the Series 2007-1
Class

A-2-II Distribution Account (pursuant to the application of funds set forth in Section 5.6
and Articles X and XI of the Base Indenture), the Indenture Trustee
shall, based upon the records of the Indenture Trustee, wire transfer the
amount so deposited (x) in the case of Deficiency Amounts, to the Series 2007-1
Class A-2-II-A Noteholders to which such Deficiency Amounts are owed on a pro
rata basis, in the case of interest, based upon the amount of interest
owed to each such Noteholder or, in the case of principal, based on their
respective portion of the Series 2007-1 Class A-2-II-A Outstanding
Principal Amount, as the case may be, and (y) in the case of Preference
Amounts, to the Series 2007-1 Class A-2-II-A Noteholders to which
such Preference Amounts are owed.

 

Section 4.4             Series 2007-1 Class A-1
Interest and Certain Fees.

 

(a)           Series 2007-1
Class A-1 Note Interest Rate and L/C Fees.  From and after the Series 2007-1 Closing
Date, the applicable portions of the Series 2007-1 Class A-1
Outstanding Principal Amount will accrue (i) interest at the Series 2007-1
Class A-1 Note Interest Rate and (ii) Series 2007-1 Class A-1
L/C Fees at the applicable rates provided therefor in the Series 2007-1 Class A-1
Note Purchase Agreement.  Such accrued
interest and fees will be due and payable in arrears on each Payment Date,
commencing on the Payment Date occurring in January 2008; provided, that any such interest
and/or fees not constituting Series 

2007-1 Class A-1 Senior Interest Amount will not be insured by the Series 2007-1
Class A Policy and will be due and payable solely to the extent of
available funds therefor in accordance with the Priority of Payments and any Series 2007-1
Class A-1 Senior Interest Amount owing with respect to any Series 2007-1
Class A-1-X Notes will not be insured by the Series 2007-1 Class A
Policy); provided, further, that in any event all accrued but
unpaid interest and fees shall be paid in full (i) on the Series 2007-1
Legal Final Maturity Date, (ii) on any Series 2007-1 Prepayment Date
with respect to a prepayment in full of the Series 2007-1 Class A-1
Notes, or (iii) subject to the terms of the Priority of Payments, on any
day when the Commitments are terminated in full or on any other day on which
all of the Series 2007-1 Class A-1 Outstanding Principal Amount is
required to be paid in full.  To the
extent any such amount is not paid when due, such unpaid amount will accrue
interest at the Series 2007-1 Class A-1 Note Interest Rate (and any
such additional interest owed on the Series 2007-1 Class A-1-A Notes
will not be insured pursuant to the Series 2007-1 Class A-1 Insurance
Policy).

 

(b)           Undrawn
Commitment Fees.  From and after the Series 2007-1
Closing Date, Undrawn Commitment Fees will accrue as provided in the Series 2007-1
Class A-1 Note Purchase Agreement. 
Such accrued fees will be due and payable in arrears on each Payment
Date, commencing on the Payment Date occurring in January 2008.

 

14

 

To the extent any such amount is not paid when due, such unpaid amount
will accrue interest at the Series 2007-1 Class A-1 Note Interest
Rate.

 

(c)           Series 2007-1
Class A-1 Extension and Post-ARD Contingent Additional Interest.  During the Series

2007-1 Extension Period, contingent additional interest (the “Series 2007-1
Class A-1 Extension Contingent Additional Interest”) will accrue on
the Series 2007-1 Class A-1 Outstanding Principal Amount (excluding
any Undrawn L/C Face Amounts included therein) at an annual rate equal to 0.50%
for such Series 2007-1 Extension Period (the “Series 2007-1 Class A-1
Extension Contingent Additional Rate”). 
From and after the applicable Series 2007-1 Adjusted Repayment
Date, if the Series 2007-1 Final Payment has not been made, contingent
additional interest (the “Series 2007-1 Class A-1 Post-ARD Monthly
Contingent Additional Interest”) will accrue on the Series 2007-1 Class A-1
Outstanding Principal Amount (excluding any Undrawn L/C Face Amounts included
therein) at an annual rate equal to 1.00% (the “Series 2007-1 Class A-1
Post-ARD Monthly Contingent Additional Rate”).  Any Series 2007-1 Class A-1
Contingent Additional Interest will be due and payable on any Payment Date on a
subordinated basis only to the extent that funds are available for such purpose
in accordance with the Priority of Payments. 
The failure to pay Series 2007-1 Class A-1 Contingent
Additional Interest on any Payment Date will not be an Event of Default; provided,
that to the extent that such interest is not paid when due, such unpaid amount
will accrue interest to the extent legally permissible at the Series 2007-1
Class A-1 Extension Contingent Additional Rate or Series 2007-1 Class A-1
Post-ARD Monthly Contingent Additional Rate, as applicable (but any such
additional interest owed on the Series 2007-1 Class A-1 Notes will
not be insured pursuant to the Series 2007-1 Class A Policy); provided,
further, that in any event all accrued but unpaid Series 2007-1 Class A-1
Contingent Additional Interest shall be paid in full (i) on the Series 2007-1
Legal Final Maturity Date, (ii) on any Series 2007-1 Prepayment Date
with respect to a prepayment in full of the Series 2007-1 Class A-1
Notes, or (iii) subject to the terms of the Priority of Payments, on any
day when the Commitments are terminated in full or on any other day on which
all of the Series 2007-1 Class A-1 Outstanding Principal Amount is
required to be paid in full.

 

(d)           Series 2007-1
Class A-1 Contingent Additional L/C Fees.  During the Series 2007-1 Extension
Period, contingent additional fees will accrue on any Undrawn L/C Face Amounts
at an annual rate equal to the Series 2007-1 Class A -1 Extension
Contingent Additional Rate.  Any Series 2007-1
Class A-1 Contingent Additional L/C Fees will be due and payable as and
when amounts are made available for payment thereof in accordance with Sections 10.12
and 11.1 of the Base Indenture in the amount so made available. Failure
to pay any Series 2007-1 Class A-1 Contingent Additional L/C Fees
will not be an Event of Default and interest will not accrue on any unpaid
portion thereof; provided, that in any event all accrued but unpaid Series 2007-1
Class A-1 Contingent Additional L/C Fees shall be paid in full (i) on
the Series 2007-1 Legal Final Maturity Date, (ii) on any Series 2007-1
Prepayment Date with respect to a prepayment in full of the Series 2007-1 Class A-1
Notes, or (iii) subject to the terms of the Priority of Payments, on any
day when the Commitments are terminated in full or on any other day on which
all of the Series 2007-1

Class A-1 Outstanding Principal Amount is required to be paid in full.

 

15

 

(e)           Series 2007-1
Class A-1 Initial Interest Accrual Period.  The initial Interest Accrual Period for the Series 2007-1
Class A-1 Notes shall commence on the Series 2007-1 Closing Date and
end on January 14, 2008.

 

(f)            Series 2007-1
Class A-1 Coverage under the Series 2007-1 Class A Policy.  No accrued and unpaid interest, fees or other
amounts owed with respect to the Series 2007-1 Class A-1-X Notes will
be insured by the Series 2007-1 Class A Policy, and interest, fees or
other amounts owed with respect to the Series 2007-1 Class A-1-A
Notes will be insured under the Series 2007-1 Class A Policy only to
the extent such amounts are included in the calculation of the Series 2007-1
Class A-1 Senior Interest Amount.

 

Section 4.5             Series 2007-1 Class A-2
Interest.

 

(a)           Series 2007-1 Class A-2-I
Note Interest Rate.  The Series 2007-1  Class A-2-I Outstanding Principal
Amount, as of the first day of each Interest Accrual Period, shall accrue
interest at a fixed rate equal to:

 

(i)            7.2836% per annum (the
“Series 2007-1 Class A-2-I Note Initial Interest Rate”), from
and after the Series 2007-1 Closing Date to but excluding the Series 2007-1
Class A-2-I Initial Anticipated Repayment Date; and

 

(ii)           if the Series 2007-1
Class A-2-I Notes remain Outstanding following the Series 2007-1 Class A-2-I
Initial Anticipated Repayment Date, the greater of (i) the Series 2007-1
Class A-2-I Note Initial Interest Rate and (ii) a fixed rate per
annum equal to the sum of the then current Swap Rate for a tenor of 4.50 years
(determined two (2) Business Days prior to the Series 2007-1 Class A-2-I
Initial Anticipated Repayment Date) plus  2.855%
per annum (the “Series 2007-1 Class A-2-I Initial Spread”) plus 0.50% per annum (the “Series 2007-1 Class A-2-I
Extension Spread”) (such rate being referred to herein as the “Series 2007-1
Class A-2-I Note Adjusted Interest Rate” and, together with the Series 2007-1
Class A-2-I Note Initial Interest Rate, the “Series 2007-1 Class A-2-I
Note Interest Rate”) on and after the Series 2007-1 Class A-2-I
Initial Anticipated Repayment Date.

 

Such accrued interest shall
be due and payable in arrears on each Payment Date, commencing on the Payment
Date occurring in January 2008. 
No such accrued and unpaid interest will be insured by the Series 2007-1
Class A Policy.  To the extent that
such interest is not paid when due, such unpaid amount shall accrue interest to
the extent legally permissible at the Series 2007-1 Class A-2-I Note
Interest Rate; provided, that in any event all accrued but unpaid
interest shall be paid in full on the Series 2007-1 Legal Final Maturity
Date, on any Series 2007-1 Prepayment Date with respect to a prepayment in
full of the Series 2007-1 Class A-2-I Notes or on any other day on
which all of the Series 2007-1 Class A-2-I Outstanding Principal
Amount is required to be paid in full.

 

16

 

All computations of
interest at the Series 2007-1 Class A-2-I Note Interest Rate shall be
made on the basis of a year of 360 days and twelve 30-day months.

 

The accrued and unpaid
interest on the Series 2007-1 Class A-2-I Notes that is attributable
to the excess, if any, of the Series 2007-1 Class A-2-I Note Adjusted
Interest Rate over the Series 2007-1 Class A-2-II-X Note Initial
Interest Rate (such excess being referred to herein as the “Series 2007-1
Class A-2-I Note Excess Adjusted Interest Amount”) will be payable on
a subordinated basis to the extent of available funds for such purpose in
accordance with the Priority of Payments on each Payment Date.  To the extent that the accrued and unpaid Series 2007-1
Class A-2-I Note Excess Adjusted Interest Amount is not paid when due,
such unpaid amount will accrue interest to the extent legally permissible at
the Series 2007-1 Class A-2-I Adjusted Interest Rate.

 

(b)           Series 2007-1
Class A-2-II Note Interest Rate. 
From and after the Series 2007-1 Closing Date, (i) the Series 2007-1
Class A-2-II-A Outstanding Principal Amount, as of the first day of each
Interest Accrual Period, will accrue interest at a fixed rate equal to 6.4267%
per annum (the “Series 2007-1 Class A-2-II-A Note Initial Interest
Rate”) and (ii) the Series 2007-1 Class A-2-II-X Outstanding
Principal Amount, as of the first day of each Interest Accrual Period, will
accrue interest at a fixed rate equal to 7.0588% per annum (the “Series 2007-1
Class A-2-II-X Note Initial Interest Rate,” and together with the Series 2007-1
Class A-2-II-A Note Initial Interest Rate, the “Series 2007-1 Class A-2-II
Note Initial Interest Rates”) for such Interest Accrual Period (the applicable
Series 2007-1 Class A-2-II Note Initial Interest Rates and the Series 2007-1
Class A-2-I Note Interest Rate shall each be referred to as a “Series 2007-1
Class A-2 Note Interest Rate”). 
Such accrued interest will be due and payable in arrears on each Payment
Date, commencing on the Payment Date occurring in January 2008.  To the extent that such interest is not paid
when due, such unpaid amount will accrue interest to the extent legally
permissible at the applicable Series 2007-1 Class A-2-II Note Initial
Interest Rate (but any such additional interest owed on the Series 2007-1 Class A-2-II-A
Notes will not be insured pursuant to the Series 2007-1 Class A
Policy); provided, that in any event all accrued but unpaid interest
shall be paid in full on the Series 2007-1 Legal Final Maturity Date, on
any Series 2007-1 Prepayment Date with respect to a prepayment in full of
the Series 2007-1 Class A-2-II Notes or on any other day on which all
of the Series 2007-1 Class A-2-II Outstanding Principal Amount is
required to be paid in full.  All
computations of interest at the applicable Series 2007-1 Class A-2
Note Interest Rate shall be made on the basis of a year of 360 days and twelve
30-day months.

 

(c)           Series 2007-1 Class A-2-II
Contingent Additional Interest.

 

(i)            Extension Period Contingent
Additional Interest.  If on the Series 2007-1
Anticipated Repayment Date, the Aggregate Outstanding Principal Amount of the Series 2007-1
Class A-2-II Notes is not paid in full and if the Series 2007-1
Extension Election has been made and becomes effective, then contingent
additional interest (the “Series 2007-1 Class A-2-II Contingent
Additional Interest”) may accrue on the Aggregate Outstanding Principal
Amount of the Series 2007-1 Class A-2-II Notes during each Interest
Accrual Period from such date to

 

17

 

and including the Series 2007-1
Adjusted Repayment Date at an annual interest rate equal to the Series 2007-1
Class A-2-II Contingent Additional Interest Rate (such contingent
additional interest, the “Series 2007-1 Class A-2-II Contingent
Additional Interest Amount”).  The “Series 2007-1
Class A-2-II Contingent Additional Interest Rate,” means the excess,
if any, of (A) the amount equal to (I) One Month LIBOR, plus (II) 2.205%
per annum, with respect to the Series 2007-1 Class A-2-II-A Notes,
and 2.855% per annum, with respect to the Series 2007-1 Class A-2-II-X
Notes (each, a “Series 2007-1 Class A-2-II Original Spread”), plus
(III) 0.50% per annum (the “Series 2007-1 Class A-2-II
Extension Spread”) (such aggregate amount in this clause (A), the “Series 2007-1
Class A-2-II Extension Period Stepped Up Interest Rate”) over (B) the
applicable Series 2007-1 Class A-2-II Note Initial Interest Rate;

 

Any Series 2007-1 Class A-2-II Contingent Additional Interest
will be calculated on the basis of a 360 day year and the actual number of days
elapsed and will be due and payable on a subordinated basis in accordance with
the Priority of Payments on any Payment Date and any such
Contingent Additional Interest with respect to the Series 2007-1 Class A-2-II-A
Notes will not be insured pursuant to any Series 2007-1 Class A
Policy. The failure to pay any Series 2007-1 Class A-2-II Contingent
Additional Interest on any Payment Date will not be an Event of Default under
the Base Indenture. All accrued but unpaid Series 2007-1 Class A-2-II
Contingent Additional Interest will be payable in full on the Series 2007-1
Legal Final Maturity Date or on any other date on which the Series 2007-1 Class A-2-II
Notes are required to be paid in full.

 

To the extent that any Series 2007-1 Class A-2-II Contingent
Additional Interest Amount is not paid when due, such unpaid amount will accrue
interest to the extent legally permissible at the Series 2007-1 Class A-2-II
Extension Period Stepped-Up Interest Rate. 
Any such additional interest with respect to the Series 2007-1 Class A-2-II-A
Notes will not be insured pursuant to the Series 2007-1 Class A
Policy.  If the Series 2007-1 Class A-2-II
Notes are not paid in full on the Series 2007-1 Adjusted Repayment
Date, the Series 2007-1 Class A-2-II Notes will cease to accrue Series 2007-1
Class A-2-II Contingent Additional Interest, if any, but may accrue Series 2007-1
Class A-2 Post-ARD Contingent Additional Interest as described in Section 4.5(c)(ii) below.

 

(ii)           Post-ARD
Contingent Additional Interest.  If
by the Series 2007-1 Adjusted Repayment Date, the Aggregate Outstanding
Principal Amount of the Series 2007-1 Class A-2 Notes is not paid in
full, then contingent additional interest (such contingent additional interest,
the “Series 2007-1 Class A-2 Post-ARD Contingent Additional
Interest”) will accrue on the Aggregate Outstanding Principal Amount of the
Series 2007-1 Class A-2 Notes during each such Interest Accrual
Period from and after such date at an annual interest rate equal to the excess,
if

 

18

 

any,
of (A) the sum of (I) One Month LIBOR, plus (II) (x)
in the case of the Series 2007-1 Class A-2-I Notes, the sum of (1) the Series
2007-1 Class A-2-I Initial Spread plus (2) the
Series 2007-1 Class A-2-I Extension Spread and (y) in the case of the Series
2007-1 Class A-2-II Notes, the Series 2007-1 Class A-2-II Original Spread, plus (III) 100 basis points (the “Series 2007-1 Class A-2
Post-ARD Spread”) (such aggregate amount in this clause (A), the “Series
2007-1 Class A-2 Post-ARD Stepped-Up Interest Rate”) over
(B) the applicable Series 2007-1 Class A-2 Note Interest Rate (such excess, if
any, as converted to a monthly equivalent rate, the “Series 2007-1 Class A-2
Post-ARD Contingent Additional Interest Rate”).

 

Any Series 2007-1 Class A-2
Post-ARD Contingent Additional Interest will be calculated on the basis of a
360 day year and the actual number of days elapsed and will be due and payable
in arrears on any Payment Date on a subordinated basis
in accordance with the Priority of Payments. The failure to pay any Series 2007-1
Class A-2 Post-ARD Contingent Additional Interest on any Payment Date will
not be an Event of Default. Interest will accrue on such unpaid Series 2007-1
Class A-2 Post-ARD Contingent Additional Interest to the extent legally
permissible at the Series 2007-1 Class A-2 Post-ARD Stepped-Up
Interest Rate. All accrued but unpaid Series 2007-1 Class A-2
Post-ARD Contingent Additional Interest will be payable in full on the Series 2007-1
Legal Final Maturity Date or on any other date on which the Series 2007-1 Class A-2
Notes are required to be paid in full. The Series 2007-1 Class A-2
Post-ARD Contingent Additional Interest will not be insured by the Series 2007-1
Class A Insurer or by any other Person.

 

(d)           Series 2007-1
Class A-2 Initial Interest Accrual Period.  The initial Interest Accrual Period for the Series 2007-1
Class A-2 Notes will be the period from and including the Series 2007-1
Closing Date to but excluding the Payment Date occurring in January 2008
(which pursuant to Section 7.16 shall be January 22, 2008).

 

Section 4.6             Series 2007-1 Class M-1
Interest.

 

(a)           Series 2007-1
Class M-1 Interest Rate.  From
and after the Series 2007-1 Closing Date, the Outstanding Principal Amount
of the Series 2007-1 Class M-1 Notes, as of the first day of each
Interest Accrual Period, will accrue interest at a fixed rate equal to 8.4044%
per annum (the “Series 2007-1 Class M-1 Note Initial Interest Rate”)
for such Interest Accrual Period.  Such
accrued interest will be due and payable in arrears in accordance with the
Priority of Payments on each Payment Date, commencing on the Payment
Date occurring in January 2008; provided, that in any event
all accrued but unpaid interest shall be paid in full on the Series 2007-1
Legal Final Maturity Date, on any Series 2007-1 Prepayment Date with
respect to a prepayment in full of the related Class of the Series 2007-1
Class M-1 Notes or on any other day on which the Outstanding Principal
Amount of the Series 2007-1 Class M-1 Notes is required to be paid in
full; provided, further, that to the extent that any such amount
is not paid when due on any such date, such unpaid amount will accrue interest
to the extent legally permissible at the Series 2007-1 Class M-1 Note
Initial Interest Rate, but failure

 

19

 

to pay such accrued interest on any Payment Date shall not be an Event
of Default.  The accrued and unpaid
interest on the Series 2007-1 Class M-1 Notes will not be insured by the
Series 2007-1 Class A Policy. 
All computations of interest at the Series 2007-1 Class M-1
Note Initial Interest Rate applicable to the related Class of Series 2007-1
Class M-1 Notes shall be made on the basis of a year of 360 days and
twelve 30-day months.

 

(b)           Series 2007-1 Class M-1
Contingent Additional Interest.

 

(i)            Extension Period
Contingent Additional Interest.  If
on the Series 2007-1 Anticipated Repayment Date, the Aggregate Outstanding
Principal Amount of the Series 2007-1 Class M-1 Notes is not paid in
full and if the Series 2007-1 Extension Election has been made and becomes
effective, then contingent additional interest (the “Series 2007-1 Class M-1
Contingent Additional Interest”) may accrue on the Aggregate Outstanding
Principal Amount of the Series 2007-1 Class M-1 Notes during each
Interest Accrual Period from such date to and including the Series 2007-1
Adjusted Repayment Date at an annual interest rate equal to the Series 2007
Class M-1 Contingent Additional Interest Rate (such contingent additional
interest, the “Series 2007-1 Class M-1 Contingent Additional
Interest Amount”).  The “Series 2007-1
Class M-1 Contingent Additional Interest Rate,” means the excess, if
any, of (A) the amount equal to (I) One-Month LIBOR, plus (II) 4.40%
per annum (the “Series 2007-1 Class M-1 Original Spread”), plus
(III) 1.50% per annum (the “Series 2007-1 Class M-1 Extension
Spread”) (such aggregate amount in this clause (A), the “Series 2007-1
Class M-1  Extension Period Stepped
Up Interest Rate”) over (B) the Series 2007-1 Class M-1 Note
Initial Interest Rate;

 

Any Series 2007-1 Class M-1 Contingent Additional Interest
will be calculated on the basis of a 360 day year and the actual number of days
elapsed and will be due and payable on a subordinated basis in accordance with
the Priority of Payments on any Payment Date and will not be
insured pursuant to the Series 2007-1 Class A Policy. The failure to
pay any Series 2007-1 Class M-1 Contingent Additional Interest on any
Payment Date will not be an Event of Default under the Base Indenture. All
accrued but unpaid Series 2007-1 Class M-1 Contingent Additional
Interest will be payable in full on the Series 2007-1 Legal Final Maturity
Date or on any other date on which the Series 2007-1 Class M-1 Notes
are required to be paid in full.

 

To the extent that any Series 2007-1 Class M-1 Contingent
Additional Interest Amount is not paid when due, such unpaid amount will accrue
interest to the extent legally permissible at the Series 2007-1 Class M-1
Extension Period Stepped-Up Interest Rate. 
Such additional interest will not be insured pursuant to the Series 2007-1
Class A Policy.  If the Series 2007-1
Class M-1 Notes are not paid in full on the Series 2007-1

 

20

 

Adjusted Repayment Date, the Series 2007-1 Class M-1 Notes
will cease to accrue Series 2007-1 Class M-1 Contingent Additional
Interest, if any, but may accrue Series 2007-1 Class M-1 Post-ARD
Contingent Additional Interest as described in Section 4.6(b)(ii) below.

 

(ii)           Post-ARD Contingent
Additional Interest.  If by the Series 2007-1
Adjusted Repayment Date the Aggregate Outstanding Principal Amount of the Series 2007-1
Class M-1 Notes is not paid in full, then contingent additional interest
(such contingent additional interest, the “Series 2007-1 Class M-1
Post-ARD Contingent Additional Interest”) will accrue on the Aggregate
Outstanding Principal Amount of the  Series 2007-1
Class M-1 Notes from and after such date at the Series 2007-1 Class M-1
Post-ARD Contingent Additional Interest Rate. 
The “Series 2007-1 Class M-1 Post-ARD Contingent Additional
Interest Rate” will mean the interest rate equal to the excess, if any, of (A) the
sum of (I) One-Month LIBOR, plus (II) the Series 2007-1 Class M-1
Original Spread, plus (III) 300 basis points (such aggregate amount
in this clause (A), the “Series 2007-1 Class M-1 Post-ARD
Stepped-Up Interest Rate”) over (B) the
Series 2007-1 Class M-1 Note Initial Interest Rate.

 

Any Series 2007-1 Class M-1
Post-ARD Contingent Additional Interest will be calculated on the basis of a
360 day year and the actual number of days elapsed and will be due and payable
in arrears on any Payment Date on a subordinated basis
in accordance with the Priority of Payments. The failure to pay any Series 2007-1
Class M-1 Post-ARD Contingent Additional Interest on any Payment Date will
not be an Event of Default. Interest will accrue on such unpaid Series 2007-1
Class M-1 Post-ARD Contingent Additional Interest to the extent legally
permissible at the Series 2007-1 Class M-1 Post-ARD Stepped-Up
Interest Rate. All accrued but unpaid Series 2007-1 Class M-1
Post-ARD Contingent Additional Interest will be payable in full on the Series 2007-1
Legal Final Maturity Date or on any other date on which the Series 2007-1 Class M-1
Notes are required to be paid in full. The Series 2007-1 Class M-1
Post-ARD Contingent Additional Interest will not be insured by the Series 2007-1
Class A Insurer or by any other Person.

 

(c)           Series 2007-1
Class M-1 Initial Interest Accrual Period.  The initial Interest Accrual Period
applicable to the related Class of Series 2007-1 Class M-1 Notes
will be the period from and including the Series 2007-1 Closing Date to
but excluding the Payment Date occurring in January 2008 (which pursuant
to Section 7.16 shall be January 22, 2008).

 

Section 4.7             Payment of Series 2007-1
Note Principal.

 

(a)           Series 2007-1
Notes Principal Payment at Legal Maturity. 
The Series 2007-1 Outstanding Principal Amount shall be due and
payable on the Series 2007-1 Legal Final Maturity Date.  The Series 2007-1 Outstanding Principal
Amount is not prepayable, in whole or in part, except as set forth in this Section 4.7
and,

 

21

 

in respect of the Series 2007-1 Class A-1 Outstanding
Principal Amount, Section 3.2 of this Series 2007-1
Supplement.

 

(b)           Series 2007-1
Anticipated Repayment.  The “Series 2007-1
Anticipated Repayment Date” will mean: (A) with respect to the Series 2007-1
Class A-2-I Notes, (i) the Payment Date occurring in June 2008
(the “Series 2007-1 Class A-2-I Initial Anticipated Repayment Date”)
or (ii) if the Aggregate Outstanding Principal Amount of the Series 2007-1
Class A-2-I Notes is not paid in full on the Series 2007-1 Class A-2-I
Initial Anticipated Repayment Date, the Payment Date occurring in December 2012
(the “Series 2007-1 Class A-2-I Extended Anticipated Repayment
Date”); and (B) with respect to the Series 2007-1 Class A-2-II
Notes, the Series 2007-1 Class M-1 Notes, and the Series 2007-1 Class A-1
Notes, the Payment Date occurring in December 2012.

 

The initial Series 2007-1
Adjusted Repayment Date will be the Series 2007-1 Anticipated Repayment
Date, unless extended as provided below in this Section 4.7(b).

 

If the interest on and
principal of the Series 2007-1 Class A-2-I Notes are not paid in full
on the Series 2007-1 Class A-2-I Initial Anticipated Repayment Date,
the Adjusted Repayment Date of the Series 2007-1 Class A-2-I Notes
will be automatically extended to the Series 2007-1 Class A-2-I
Extended Anticipated Repayment Date.

 

The Co-Issuers may elect
to deposit any amount allocable to the mandatory prepayment of principal of the
Series 2007-1 Class A-2-I Notes to a segregated account established
and maintained by the Indenture Trustee pursuant to the Indenture until the Series 2007-1
Class A-2-I Initial Anticipated Repayment Date.

 

The failure to pay the Series 2007-1
Class A-2-I Notes in full by the Series 2007-1 Class A-2-I
Extended Anticipated Repayment Date will be a Rapid Amortization Event but not
an Event of Default.  The failure to pay
each of the remaining Classes of the Series 2007-1 Notes in full by the Series 2007-1
Adjusted Repayment Date will be a Rapid Amortization Event but not an Event of
Default.

 

(i)            Extension Election.  Subject to the conditions set forth in Section 4.7(b)(ii) of
this Series 2007-1 Supplement, the Co-Issuers, acting in their sole
discretion, shall have the option on or before September 20, 2012 to elect
(the “Series 2007-1 Extension Election”) to extend the Series 2007-1
Adjusted Repayment Date applicable to each Class of Series 2007-1
Notes (other than the Series 2007-1 Class A-2-I Notes) to June 20,
2013 by delivering written notice to the Indenture Trustee, the Series 2007-1
Class A-1 Administrative Agent, the Noteholders and the Series 2007-1
Class A Insurer; provided, that upon such extension, June 20,
2013 shall become the Series 2007-1 Adjusted Repayment Date. 

 

22

 

Any exercise of the Series 2007-1
Extension Election will be required to be made with respect to each Class of
Series 2007-1 Notes simultaneously (other than the Series 2007-1 Class A-2-I
Notes because the Series 2007-1 Class A-2-I Outstanding Principal
Amount must be paid in full for the Series 2007-1 Extension Election to be
effective).

 

(ii)           Conditions Precedent
to Extension Elections.  It shall be
a condition to the effectiveness of the Series 2007-1 Extension Election
that as of the Payment Date occurring in December 2012 (a) the Series 2007-1
Class A-2-I Outstanding Principal Amount is paid in full on or before such
date, (b) the One-Year DSCR is greater than or equal to 2.80x as of such
date, (c) unless the One-Year DSCR is equal to or greater than 3.00x as of
the Series 2007-1 Anticipated Repayment Date, the Indenture Trustee has
received the written consent of the Series Controlling Party to the Series 2007-1
Extension Election on or prior to such date, (d) no Default, Event of
Default, Potential Rapid Amortization Event or Rapid Amortization Event has
occurred and is continuing as of such date or would be a direct and immediate
consequence of the Series 2007-1 Extension Election.  Any notice given pursuant to Section 4.7(b)(i) of
this Series 2007-1 Supplement shall be irrevocable; provided, that
if the conditions set forth in this Section 4.7(b)(ii) are not
met as of the applicable extension date, the election set forth in such notice
shall automatically be deemed ineffective.

 

(c)           Series 2007-1
Notes Mandatory Payments of Principal.

 

(i)            If a Change of Control
to which the Series 2007-1 Class A Insurer and, if different, the Series 2007-1
Controlling Party, has not provided its prior written consent occurs, the Co-Issuers
shall prepay all the Series 2007-1 Notes in full by (A) depositing on
the date such Change of Control occurs an amount equal to the Series 2007-1
Outstanding Principal Amount and all other amounts that are or will be due and
payable with respect to the Series 2007-1 Notes under the Indenture and
under the Series 2007-1 Class A-1 Note Purchase Agreement as of the
applicable Series 2007-1 Prepayment Date referred to in clause (B) below
(including all interest and fees accrued to such date, any Series 2007-1
Make-Whole Amount required to be paid in connection therewith pursuant to Section 4.7(d) of
this Series 2007-1 Supplement and any associated Series 2007-1 Class A-1
Breakage Amounts incurred as a result of such prepayment (calculated in
accordance with the Series 2007-1 Class A-1 Note Purchase Agreement))
in the applicable Series 2007-1 Distribution Account and (B) directing
the Indenture Trustee to distribute such amounts to the applicable Series 2007-1
Noteholders on the date of the consummation of such Change of Control.  The Co-Issuers’ failure to make the payments
specified in the previous sentence on the date of the consummation of such
Change of Control shall constitute an “Event of Default” under the Base
Indenture.

 

23

 

(ii)           Any Series 2007-1
Monthly Aggregate Extension Prepayment Amount allocated to the Senior Notes
Principal Payment Account (or, if no Senior Notes are then Outstanding, to the
Subordinated Notes Principal Payment Account) pursuant to the Priority of
Payments shall be deposited in the applicable Series 2007-1 Distribution
Account (and any other applicable Series Distribution Accounts) in
accordance with Sections 11.1(e) or (g), as applicable,
of the Base Indenture and used to prepay principal on the applicable Classes of
Series 2007-1 Notes (and of any other applicable Series of Notes with
respect to which any Extension Election is in effect) in the order of priority
described in Section 4.7(k) hereto on the related Payment
Date.

 

(iii)          Any Asset Disposition
Prepayment Amount allocated to the Senior Notes Principal Payment Account (or,
if no Senior Notes are then Outstanding, to the Subordinated Notes Principal
Payment Account) pursuant to the Priority of Payments shall be deposited in the
applicable Series 2007-1 Distribution Account (and any other applicable Series Distribution
Accounts) in accordance with Sections 11.1(e) or (g),
as applicable, of the Base Indenture and used to prepay principal on the
applicable Classes of Series 2007-1 Notes (and of any other applicable Series of
Notes) (or cash collateralize outstanding Letters of Credit as required under
the Class A-1 Note Purchase Agreement) in the order of priority described
in Section 4.7(k) hereto on the related Payment Date.

 

(iv)          Any Insurance Proceeds
Amount allocated to the Senior Notes Principal Payment Account (or, if no
Senior Notes are then Outstanding, to the Subordinated Notes Principal Payment
Account) pursuant to the Priority of Payments shall be deposited in the
applicable Series 2007-1 Distribution Account (and any other applicable Series Distribution
Accounts) in accordance with Sections 11.1(e) or (g),
as applicable, of the Base Indenture and used to prepay principal on the
applicable Classes of Series 2007-1 Notes (and of any other applicable Series of
Notes) in the order of priority described in Section 4.7(k) hereto
on the related Payment Date.

 

(v)           Any Series 2007-1
Partial Amortization Amount allocated to the Senior Notes Principal Payment
Account or to the Subordinated Notes Principal Payment Account, as applicable,
pursuant to the Priority of Payments shall be deposited in the applicable Series 2007-1
Distribution Account (and any other applicable Series Distribution
Accounts) in accordance with Sections 11.1(e) or (g),
as applicable, of the Base Indenture and used to prepay principal on the
applicable Classes of Series 2007-1 Notes (and of any other applicable Series of
Notes) (or cash collateralize outstanding Letters of Credit as required under
the Class A-1 Note Purchase Agreement) in the order of priority described
in Section 4.7(k) hereto on the related Payment Date.

 

24

 

(vi)          In accordance with Sections 11.1(e) or
(g), as applicable, of the Base Indenture, in connection with the
occurrence of a Rapid Amortization Event, any amounts (x) allocated to the
Senior Notes Principal Payment Account or to the Subordinated Notes Principal
Payment Account, as applicable, pursuant to clauses (xii) and (xviii),
respectively, of the Priority of Payments, or (y) on deposit in the Cash
Trap Reserve Account, shall be deposited in the applicable Series 2007-1
Distribution Account (and any other applicable Series Distribution
Accounts) and used to prepay principal on the applicable Classes of Series 2007-1
Notes (and of any other applicable Series of Notes) (or cash collateralize
outstanding Letters of Credit as required under the Class A-1 Note
Purchase Agreement) in the order of priority described in Section 4.7(k) hereto
on the related Payment Date.

 

(vii)         Any Indemnification
Amounts allocated to the Senior Notes Principal Payments Account (or, if no
Senior Notes are then Outstanding, to the Subordinated Notes Principal Payments
Account) pursuant to the Priority of Payments shall be deposited in the
applicable Series 2007-1 Distribution Account (and any other applicable Series Distribution
Accounts) in accordance with Sections 11.1(e) or (g),
as applicable, of the Base Indenture and used to prepay principal on the
applicable Classes of Series 2007-1 Notes (and of any other applicable Series of
Notes) in the order of priority described in Section 4.7(k) hereto
on the related Payment Date.

 

(viii)        Any Series 2007-1
Subordinated Notes Principal Amortization Amounts allocated to the Subordinated
Notes Principal Payments pursuant to the Priority of Payments shall be
deposited in the applicable Series 2007-1 Distribution Account (and any
other applicable Series Distribution Accounts) in accordance with Section 11.1(g) of
the Base Indenture and used to prepay principal on the Series 2007-1 Class M-1
Notes in the order of priority described in Section 4.7(k) hereto
on the related Payment Date.

 

(d)           Series 2007-1
Make-Whole Amount.  The Co-Issuers
shall pay, on any applicable Series 2007-1 Prepayment Date, the relevant Series 2007-1
Make-Whole Amount applicable to the relevant Class of Series 2007-1
Notes on any payment of principal of such Series 2007-1 Notes prior to the
Series 2007-1 Anticipated Repayment Date occurring in December 2012; provided,
that the Series 2007-1 Make-Whole Amount will not be payable in each of
the following circumstances: (i) the payment of principal of the Series 2007-1
Class A-2-I Notes on the Series 2007-1 Class A-2-I Initial
Anticipated Repayment Date; (ii) the payment of up to 35% of the initial
Aggregate Outstanding Principal Amount of the Series 2007-1 Class A-2-II
Notes on any date prior to and including the three-year anniversary of the Series 2007-1
Closing Date; (iii) the prepayment of principal of the Series 2007-1
Notes pursuant to a Series 2007-1 Rapid Amortization Event, or (iv) the
prepayment of principal of the Series 2007-1 Class M-1 

 

25

 

Notes in connection with the payment of the Series 2007-1
Subordinated Notes Principal Amortization Amount.

 

(e)           Optional Prepayment
of the Series 2007-1 Notes.  The
Co-Issuers, acting in their sole discretion, shall have the option to prepay
all or part of the Aggregate Outstanding Principal Amount of one or more
Classes of the Series 2007-1 Notes (an “Optional Prepayment”) on
any Payment Date at the accrued and unpaid interest on and portion of the
Aggregate Outstanding Principal Amount of the Class or Classes of Series 2007-1
Notes to be repaid; provided, that any partial prepayment of the Series 2007-1 Notes
that would cause Assured Guaranty to cease to be the Aggregate Controlling
Party shall require the prior written consent of Assured Guaranty.

 

In order to effect an Optional
Prepayment in whole or in part of one or more Classes of the Series 2007-1
Notes:  (i) the Co-Issuers must give
notice of their election to prepay to the Indenture Trustee, the affected
Noteholders, the Rating Agencies, the Series 2007-1 Class A Insurer
and the Servicer, in accordance with the prepayment notice provisions set forth
in Section 4.7(f) hereof; (ii) the amount on deposit in
the related Principal Payment Account that is allocable to the Series 2007-1
Notes to be prepaid must be sufficient to pay the principal amount of the Series 2007-1
Notes to be prepaid and the Series 2007-1 Make-Whole Amount, if
applicable; (iii) the amounts on deposit in the related Interest Payment
Accounts that is allocable to the Series 2007-1 Notes to be prepaid must
be sufficient to pay the accrued and unpaid interest on the Series 2007-1 Notes
to be prepaid (other than the Series 2007-1 Contingent Additional
Interest, if any, and the Series 2007-1 Post-ARD Contingent Additional
Interest, if any); (iv) the Accrued Insurer Premium Amount, the Insurer
Expense Amount, the Insurer Reimbursement Amount and the Insurer Make-Whole
Premium, if any, must be paid in full pursuant to the Priority of Payments, in
each case on the related Optional Prepayment Date; and (v) if the
Co-Issuers elect to optionally prepay all or part of the Aggregate Outstanding
Principal Amount of the Series 2007-1 Class M-1 Notes (or the
Subordinated Notes of any other Series of Notes Outstanding) without the
payment in full of the Series 2007-1 Senior Notes and all other Senior
Notes Outstanding, the following conditions are satisfied, as certified to the
Indenture Trustee in an Officer’s Certificate of each of the Co-Issuers:  (i) the Optional Prepayment Date occurs
not later than the first Payment Date following the fourth anniversary of the Series 2007-1
Closing Date, (ii) no Rapid Amortization Event or Potential Rapid
Amortization Event has occurred and is continuing and (iii) the
Three-Month DSCR (without giving effect to any equity contributions otherwise
included in the calculation of Net Cash Flow) is at least equal to the
Three-Month DSCR as of the Series 2007-1 Closing Date (after giving effect
to the issuance of the Series 2007-1 Notes on the Series 2007-1
Closing Date).

 

For so long as any Class of
Series 2007-1 Notes is listed on the Irish Stock Exchange and the rules of
the Irish Stock Exchange so require, the Indenture Trustee shall deliver
written notice of an Optional Prepayment of such Class of Series 2007-1
Notes to the Irish Paying Agent (for notification to the Irish Stock Exchange)
at least ten (10) days prior to the Optional Prepayment Date.

 

26

 

(f)            Notices
of Prepayments and Series 2007-1 Monthly Extension Principal Prepayment.  The Co-Issuers shall give prior written
notice (each, a “Prepayment Notice”) at least fifteen (15) Business Days
but not more than twenty (20) Business Days prior to any prepayment pursuant to
Section 4.7(c)(i) or 4.7(e) of this Series 2007-1
Supplement to each Series 2007-1 Noteholder affected by such prepayment,
the Series 2007-1 Class A Insurer, each of the Rating Agencies and
the Indenture Trustee; provided, that at the request of the Co-Issuers,
such notice to the affected Series 2007-1 Noteholders shall be given by
the Indenture Trustee in the name and at the expense of the Co-Issuers.  In connection with any such Prepayment
Notice, the Co-Issuers shall provide a written report to the Indenture Trustee
(with a copy to the Series 2007-1 Class A Insurer) directing the
Indenture Trustee to distribute such prepayment in accordance with the
applicable provisions of Section 4.7(h) of this Series 2007-1
Supplement.  With respect to each such
prepayment, the related Prepayment Notice shall, in each case, specify (A) the
date on which such prepayment will be made, which in all cases shall be a
Business Day and, in the case of a mandatory prepayment upon a Change of
Control, shall be no later than on the date of the occurrence of such event,
and, in the case of an optional prepayment, shall be the next Payment Date
following the related Prepayment Notice, (B) the aggregate principal
amount of the applicable Class of Notes to be prepaid on such date and (C) the
relevant Series 2007-1 Make-Whole Amount Calculation Date.  The Co-Issuers shall have the option, by
written notice to the Indenture Trustee, the Series 2007-1 Class A
Insurer, the Rating Agencies and the affected Noteholders, to withdraw, or
amend the date on which such prepayment will be made as set forth in, (x) any
Prepayment Notice relating to an optional prepayment at any time up to the
fifth (5th) Business Day before the prepayment date set forth in such
Prepayment Notice and (y) subject to the requirements of the preceding
sentence, any Prepayment Notice relating to mandatory prepayment upon a Change
of Control at any time up to the earlier of (I) the occurrence of such
event and (II) the fifth (5th) Business Day before the prepayment
date set forth in such Prepayment Notice; provided, that in no event
shall any prepayment date be amended to a date earlier than the
fifth (5th) Business Day after such amended notice is given.  Any Prepayment Notice shall become irrevocable
on the day on which it can no longer be withdrawn in accordance with the
preceding sentence.  With respect to
payments of principal to be made pursuant to Section 4.7(c)(ii) of
this Series 2007-1 Supplement, the Co-Issuers shall give prior written
notice at least ten (10) Business Days prior to the first payment of
principal to be made pursuant to Section 4.7(c)(ii) of this Series 2007-1
Supplement with respect to the Series 2007-1 Extension Period (each, a “Monthly
Extension Prepayment Notice”) to each Series 2007-1 Noteholder
affected by such payment of principal on the Series 2007-1 Notes, the Series 2007-1
Class A Insurer, each of the Rating Agencies and the Indenture Trustee; provided,
that at the request of the Co-Issuers, such notice to the affected Series 2007-1
Noteholders shall be given by the Indenture Trustee in the name and at the
expense of the Co-Issuers.  Such Monthly
Extension Prepayment Notices shall, in each case, specify (A) that
payments of principal on the Series 2007-1 Notes will be made on each
Payment Date during the Series 2007-1 Extension Period and (B) the Series 2007-1
Monthly Aggregate Extension Prepayment Amount to be paid with respect to each
Payment Date during the Monthly Collection Period to which each such Payment
Date relates.  All Prepayment Notices and
Monthly Extension Prepayment Notices shall 

 

27

 

be (i) transmitted by facsimile or email to (A) each affected
Series 2007-1 Noteholder to the extent such Series 2007-1 Noteholder
has provided a facsimile number or email address to the Indenture Trustee and (B) to
the Series 2007-1 Class A Insurer, each of the Rating Agencies and
the Indenture Trustee and (ii) sent by registered mail to each affected Series 2007-1
Noteholder.  For the avoidance of doubt,
a Voluntary Decrease in respect of the Series 2007-1 Class A-1 Notes
is governed by Section 3.2 of this Series 2007-1 Supplement
and not by this Section 4.7.

 

(g)           Series 2007-1
Prepayments.  Subject to the
exceptions set forth in Section 4.7(d), on any date on which a
payment of principal of the Series 2007-1 Notes will be made prior to the Series 2007-1
Anticipated Repayment Date occurring in December 2012 (each such date, a “Series 2007-1
Prepayment Date”), including, without limitation, with respect to any
prepayment pursuant to Sections 4.7(c)(i), 4.7(c)(ii), 4.7(c)(iii),
4.7(c)(iv), 4.7(c)(v), 4.7(c)(vii), or 4.7(e) (each, a “Series 2007-1
Prepayment”), (i) the aggregate principal amount of the applicable Class of
Series 2007-1 Notes to be prepaid on such date (such amount, together with
all accrued and unpaid interest thereon to such date, a “Series 2007-1
Prepayment Amount”), (ii) the applicable Series 2007-1 Make-Whole
Amounts, if any, and (iii) any associated Series 2007-1 Class A-1
Breakage Amounts applicable to such Series 2007-1 Prepayment, shall be due
and payable.  The
Co-Issuers shall pay the Series 2007-1 Prepayment Amount together with the
applicable Series 2007-1 Make-Whole Amounts, if any, with respect to such Series 2007-1
Prepayment Amount, by, to the extent not already deposited therein pursuant to Section 4.7(c) or
Section 4.7(e) of this Series 2007-1 Supplement,
depositing such amounts in the applicable Series 2007-1 Distribution
Account on or prior to the related Series 2007-1 Prepayment Date to be
distributed in accordance with Section 4.7(h) of this Series 2007-1
Supplement.

 

(h)           Series 2007-1 Prepayment
Distributions.

 

(i)            On the Series 2007-1 Prepayment
Date for each Series 2007-1 Prepayment to be made pursuant to this Section 4.7
in respect of the Series 2007-1 Class A-1 Notes, the Indenture
Trustee shall, in accordance with Section 11.5 of the Base
Indenture, wire transfer to the Series 2007-1 Class A-1 Noteholders
of record on the applicable Prepayment Record Date, in accordance with the
order of distribution of principal payments set forth in Section 4.02
of the Series 2007-1 Class A-1 Note Purchase Agreement, the amount
deposited in the Series 2007-1 Class A-1 Distribution Account
pursuant to this Section 4.7, if any, in order to repay the
applicable portion of the Series 2007-1 Class A-1 Outstanding
Principal Amount and pay all accrued and unpaid interest thereon up to such Series 2007-1
Prepayment Date and any associated Series 2007-1 Class A-1 Breakage
Amounts incurred as a result of such prepayment.

 

(ii)           On the Series 2007-1 Prepayment
Date for each Series 2007-1 Prepayment to be made pursuant to this Section 4.7
in respect of the Series 2007-1 Class A-2-I Notes, the Indenture
Trustee 

 

28

 

shall, in accordance with
Section 11.5 of the Base Indenture, wire transfer to the Series 2007-1
Class A-2-I Noteholders of record on the preceding Prepayment Record Date
on a pro  rata basis, based on their respective portion of the Series 2007-1
Class A-2-I Outstanding Principal Amount, the amount deposited in the Series 2007-1
Class A-2-I Distribution Account pursuant to this Section 4.7,
if any, in order to repay the applicable portion of the Series 2007-1 Class A-2-I
Outstanding Principal Amount and pay all accrued and unpaid interest thereon up
to such Series 2007-1 Prepayment Date and any Series 2007-1
Make-Whole Amount due to Series 2007-1 Class A-2-I Noteholders
payable on such date.

 

(iii)          On the Series 2007-1 Prepayment
Date for each Series 2007-1 Prepayment to be made pursuant to this Section 4.7
in respect of the Series 2007-1 Class A-2-II Notes, the Indenture
Trustee shall, in accordance with Section 11.5 of the Base
Indenture, wire transfer to the Series 2007-1 Class A-2-II
Noteholders of record on the preceding Prepayment Record Date on a pro  rata
basis, based on their respective portion of the Series 2007-1 Class A-2-II
Outstanding Principal Amount, the amount deposited in the Series 2007-1 Class A-2-II
Distribution Account pursuant to this Section 4.7, if any, in order
to repay the applicable portion of the Series 2007-1 Class A-2-II
Outstanding Principal Amount and pay all accrued and unpaid interest thereon up
to such Series 2007-1 Prepayment Date and any Series 2007-1
Make-Whole Amount due to Series 2007-1 Class A-2-II Noteholders
payable on such date.

 

(iv)          On the Series 2007-1 Prepayment
Date for each Series 2007-1 Prepayment to be made pursuant to this Section 4.7
in respect of the Series 2007-1 Class M-1 Notes, the Indenture
Trustee shall, in accordance with Section 11.5 of the Base
Indenture, wire transfer to the Series 2007-1 Class M-1 Noteholders
of record on the preceding Prepayment Record Date on a pro  rata
basis, based on their respective portion of the Series 2007-1 Class M-1
Outstanding Principal Amount, the amount deposited in the Series 2007-1 Class M-1
Distribution Account pursuant to this Section 4.7, if any, in order
to repay the applicable portion of the Series 2007-1 Class M-1 Outstanding
Principal Amount and pay all accrued and unpaid interest thereon up to such Series 2007-1
Prepayment Date and any Series 2007-1 Class M-1 Make-Whole Amount due
to Series 2007-1 Class M-1 Noteholders payable on such date.

 

(i)            Series 2007-1
Notices of Final Payment.  The
Co-Issuers shall notify the Indenture Trustee, the Series 2007-1 Class A
Insurer and each of the Rating Agencies fifteen (15) Business Days preceding
any Payment Date that will be the Series 2007-1 Final Payment Date; provided,
however, that with respect to any Series 2007-1 Final Payment that
is made in connection with any mandatory or optional prepayment in full, the
Co-Issuers shall not be obligated to provide any additional notice 

 

29

 

to the Indenture Trustee, the Series 2007-1 Class A Insurer
or the Rating Agencies of such Series 2007-1 Final Payment beyond the
notice required to be given in connection with such prepayment pursuant to Section 4.7(f) of
this Series 2007-1 Supplement.  In
addition, the Indenture Trustee shall provide any written notice required under
this Section 4.7(i) to each Person in whose name a Series 2007-1
Note is registered at the close of business on the Record Date with respect to
the Payment Date that will be the Series 2007-1 Final Payment Date.  Such written notice to be sent to the Series 2007-1
Noteholders shall be made at the expense of the Co-Issuers and shall be mailed
by the Indenture Trustee within five (5) Business Days of receipt of
notice from the Co-Issuers indicating that the Series 2007-1 Final Payment
will be made and shall specify that such Series 2007-1 Final Payment will
be payable only upon presentation and surrender of the Series 2007-1 Notes
and shall specify the place where the Series 2007-1 Notes may be presented
and surrendered for such Series 2007-1 Final Payment.

 

(j)            Prepayment Fees Payable Under Series 2007-1
Class A Premium Fee Letters. 
Concurrently with prepayment of any Series 2007-1 Senior Notes, the
Co-Issuers shall pay or cause to be paid, directly to the Series 2007-1 Class A
Insurer, the Series 2007-1 Accrued Insurer Premium Amount, the Series 2007-1
Insurer Expense Amount, the Series 2007-1 Insurer Reimbursement Amount and
the Series 2007-1 Insurer Make-Whole Premium, if any, payable to the Series 2007-1
Class A Insurer under the Series 2007-1 Class A Premium Fee
Letter.

 

(k)           Priority
of Payments in Respect of Prepayments.

 

On each Payment Date, the Co-Issuers will make
mandatory prepayments of principal, if any, in connection with Series 2007-1
Monthly Aggregate Extension Prepayment Amounts, any Indemnification Amount, any
Asset Disposition Prepayment Amount, any Insurance Proceeds Amount, a Rapid
Amortization Event or a Partial Amortization Event in the following order of
priority:

 

(i)            if no Rapid Amortization Event and
no Partial Amortization Event has occurred, (i) first,
on the Class A-2-I Notes of all Series of Notes Outstanding until
paid in full, (ii) second, on the Class A-2-II
Notes of all Series of Notes Outstanding until paid in full, (iii) third, on the Class A-1 Notes of all Series of
Notes Outstanding until paid in full; provided, that any payment of
principal of any Class A-1 L/C Notes of any Series of Notes under
this paragraph shall require the deposit of the Cash Collateral with the
applicable L/C Provider in connection with the Collateralized Letters of
Credit, all in accordance with the terms set forth in the final two provisos of
Section 11.1(e) of the Base Indenture, and (iv) fourth, on each Class of Subordinated Notes of each Series of
Notes Outstanding sequentially in alphanumerical order;

 

(ii)           if either a Rapid Amortization Event
that is potentially subject to the one-time Series 2007-1 Rapid
Amortization Cure Right or a Partial Amortization Event has occurred, (i) first, on the Class A-2 Notes of all Series of
Notes Outstanding until paid in full, (ii) second,

 

30

 

on the Class A-1
Notes of all Series of Notes Outstanding until paid in full; provided,
that any payment of principal of any Class A-1 L/C Notes of any Series of
Notes under this paragraph shall require the deposit of the Cash Collateral
with the applicable L/C Provider in connection with the Collateralized Letters
of Credit, all in accordance with the terms set forth in the final two provisos
of Section 11.1(e) of the Base Indenture, and (iii) third, on each Class of Subordinated Notes of each Series of
Notes Outstanding sequentially in alphanumerical order; provided, that
principal to be paid pursuant to a series specific Partial Amortization Event
will be allocable only to the relevant Series;

 

(iii)          if a Rapid Amortization Event that is
not subject to the one-time Series 2007-1 Rapid Amortization Cure Right
has occurred, (i) first, on the Class A-1
Notes of all Series of Notes Outstanding until paid in full; provided,
that any payment of principal of any Class A-1 L/C Notes of any Series of
Notes under this paragraph shall require the deposit of the Cash Collateral
with the applicable L/C Provider in connection with the Collateralized Letters
of Credit, all in accordance with the terms set forth in the final two provisos
of Section 11.1(e) of the Base Indenture, (ii) second, on
the Class A-2 Notes of all Series of Notes Outstanding until paid in
full and (iii) third, on each Class of
Subordinated Notes of each Series of Notes Outstanding sequentially in
alphanumerical order; and

 

(iv)          if the Aggregate Controlling Party has
directed the Indenture Trustee to liquidate the Collateral following the
occurrence of an Event of Default and an acceleration of the Notes, (i) first, to all Classes of Senior Notes of all Series of
Notes Outstanding pro rata based on the Aggregate Outstanding Principal Amount
until paid in full; provided, that any payment
of principal of any Class A-1 L/C Notes of any Series of Notes under
this paragraph shall require the deposit of the Cash Collateral with the
applicable L/C Provider in connection with the Collateralized Letters of
Credit, all in accordance with the terms set forth in the final two provisos of
Section 11.1(e) of the Base Indenture, and (ii) second
to each Class of Subordinated Notes of all Series of Notes
Outstanding sequentially in alphanumerical order.

 

Payments of principal on each Class of Notes of
all Series of Notes Outstanding at each priority level described in this Section 4.7(k) will
be paid pro rata according to the Aggregate Outstanding Principal Amount of
each Class of Notes Outstanding.

 

Notwithstanding the foregoing, the Co-Issuers may
apply an equity contribution made by Applebee’s International to Applebee’s
Holdings for contribution to the Master Issuer to optionally prepay in whole or
in part one or more Classes of Notes without regard to the alphanumerical
designation of such Class or Classes of Notes in an Optional Prepayment on
any Optional Prepayment Date; provided, that any Optional 

 

31

 

Prepayment of Subordinated Notes prior to the payment
in full of Senior Notes will
require satisfaction of the applicable conditions described in Section 4.7(e) above.

 

Section 4.8             Series 2007-1 Class A-1
Distribution Account.

 

(a)           Establishment
of Series 2007-1 Class A-1 Distribution Account.  The Indenture Trustee shall establish and
maintain in the name of the Indenture Trustee for the benefit of the Series 2007-1
Class A-1 Noteholders an account (the “Series 2007-1 Class A-1
Distribution Account”), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series 2007-1 Class A-1
Noteholders.  The Series 2007-1 Class A-1
Distribution Account shall be an Eligible Account.  If the Series 2007-1 Class A-1
Distribution Account is at any time no longer an Eligible Account, the Master
Issuer shall, within five (5) Business Days of obtaining knowledge that
the Series 2007-1 Class A-1 Distribution Account is no longer an
Eligible Account, establish a new Series 2007-1 Class A-1
Distribution Account that is an Eligible Account.  If a new Series 2007-1 Class A-1
Distribution Account is established, the Master Issuer shall instruct the
Indenture Trustee in writing to transfer all cash and investments from the
non-qualifying Series 2007-1 Class A-1 Distribution Account into the
new Series 2007-1 Class A-1 Distribution Account.  Initially, the Series 2007-1 Class A-1
Distribution Account will be established with the Indenture Trustee.

 

(b)           Administration
of the Series 2007-1 Class A-1 Distribution Account.  All amounts held in the Series 2007-1 Class A-1
Distribution Account shall be invested in Eligible Investments at the written
direction of the Master Issuer; provided, however, that any such
investment in the Series 2007-1 Class A-1 Distribution Account shall
mature not later than the Business Day prior to the first Payment Date
following the date on which such funds were received or such other date on
which such funds are scheduled to be paid to the Series 2007-1 Class A-1
Noteholders.  In the absence of written
investment instructions hereunder, funds on deposit in the Series 2007-1 Class A-1
Distribution Account shall remain uninvested. 
The Master Issuer shall not direct (or permit) the disposal of any Eligible
Investments prior to the maturity thereof to the extent such disposal would
result in a loss of the initial purchase price of such Permitted Investment.

 

(c)           Earnings
from Series 2007-1 Class A-1 Distribution Account.  All interest and earnings (net of losses and
investment expenses) paid on funds on deposit in the Series 2007-1 Class A-1
Distribution Account shall be deemed to be available and on deposit for
distribution to the Series 2007-1 Class A-1 Noteholders.

 

(d)           Series 2007-1
Class A-1 Distribution Account Constitutes Additional Collateral for Series 2007-1
Class A-1 Notes.  In order to
secure and provide for the repayment and payment of the Obligations with
respect to the Series 2007-1 Class A-1 Notes, the Co-Issuers hereby
grant a security interest in and assign, pledge, grant, transfer and set over
to the Indenture Trustee, for the benefit of the Series 2007-1 Class A-1
Noteholders, all of the Co-Issuers’ right, title and interest in and to the
following (whether now or hereafter existing or acquired): (i) the Series 2007-1
Class A-1 Distribution Account, including any security entitlement with
respect thereto; 

 

32

 

(ii) all funds and other property (including, without limitation,
Financial Assets) on deposit therein from time to time; (iii) all
certificates and instruments, if any, representing or evidencing any or all of
the Series 2007-1 Class A-1 Distribution Account or the funds on
deposit therein from time to time; (iv) all investments made at any time
and from time to time with monies in the Series 2007-1 Class A-1
Distribution Account, whether constituting securities, instruments, general
intangibles, investment property, financial assets or other property; (v) all
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
the Series 2007-1 Class A-1 Distribution Account, the funds on
deposit therein from time to time or the investments made with such funds; and (vi) all
proceeds of any and all of the foregoing, including, without limitation, cash
(the items in the foregoing clauses (i) through (vi) are
referred to, collectively, as the “Series 2007-1 Class A-1
Distribution Account Collateral”).

 

(e)           Termination
of Series 2007-1 Class A-1 Distribution Account.  On or after the date on which the Series 2007-1
Final Payment has been made, the Indenture Trustee, acting in accordance with
the written instructions of the Master Issuer and the consent of the Series 2007-1
Class A Insurer if the Series 2007-1 Class A Policy is then in
effect or amounts constituting Series 2007-1 Insurer Reimbursements, Series 2007-1
Insurer Premiums, Series 2007-1 Insurer Make-Whole Premiums or Series 2007-1
Insurer Expense Amounts are unpaid under the Indenture or the Series 2007-1
Class A Insurance Agreement after taking into account the application of
amounts on deposit in the Senior Notes Interest Reserve Account and the Cash
Trap Reserve Account to pay such amounts in accordance with Section 11.1
of the Base Indenture, shall withdraw from the Series 2007-1 Class A-1
Distribution Account all amounts on deposit therein for payment to the Co-Issuers.

 

Section 4.9             Series 2007-1 Class A-2
Distribution Accounts.

 

(a)           Establishment
of Series 2007-1 Class A-2 Distribution Accounts.  The Indenture Trustee shall establish and
maintain in the name of the Indenture Trustee for the benefit of each of the Series 2007-1
Class A-2-I Noteholders and the Series 2007-1 Class A-2-II
Noteholders a separate account (the “Series 2007-1 Class A-2-I
Distribution Account” and the “Series 2007-1 Class A-2-II Distribution
Account,” respectively, and collectively, the “Series 2007-1 Class A-2
Distribution Accounts”), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series 2007-1 Class A-2-I
Noteholders and the Series 2007-1 Class A-2-II Noteholders, as
applicable.  Each Series 2007-1 Class A-2
Distribution Account shall be an Eligible Account.  If any Series 2007-1 Class A-2
Distribution Account is at any time no longer an Eligible Account, the Master
Issuer shall, within five (5) Business Days of obtaining knowledge that
such Series 2007-1 Class A-2 Distribution Account is no longer an
Eligible Account, establish a new applicable Series 2007-1 Class A-2
Distribution Account that is an Eligible Account.  If a new Series 2007-1 Class A-2
Distribution Account is established, the Master Issuer shall instruct the
Indenture Trustee in writing to transfer all cash and investments from the
non-qualifying Series 2007-1 Class A-2 Distribution Account into the
new Series 2007-1 Class A-2 Distribution Account.  

 

33

 

Initially, the Series 2007-1 Class A-2 Distribution Accounts
will be established with the Indenture Trustee.

 

(b)           Administration
of the Series 2007-1 Class A-2 Distribution Accounts.  All amounts held in the Series 2007-1 Class A-2
Distribution Accounts shall be invested in the Eligible Investments at the
written direction of the Master Issuer; provided, however, that
any such investment in the Series 2007-1 Class A-2 Distribution
Accounts shall mature not later than the Business Day prior to the first
Payment Date following the date on which such funds were received or such other
date on which such funds are scheduled to be paid to the applicable Series 2007-1
Class A-2 Noteholders.  In the
absence of written investment instructions hereunder, funds on deposit in the Series 2007-1
Class A-2 Distribution Accounts shall remain uninvested.  The Master Issuer shall not direct (or
permit) the disposal of any Eligible Investments prior to the maturity thereof
to the extent such disposal would result in a loss of the initial purchase
price of such Permitted Investment.

 

(c)           Earnings
from Series 2007-1 Class A-2 Distribution Account.  All interest and earnings (net of losses and
investment expenses) paid on funds on deposit in the Series 2007-1 Class A-2
Distribution Accounts shall be deemed to be available and on deposit for
distribution to the applicable Series 2007-1 Class A-2 Noteholders.

 

(d)           Series 2007-1
Class A-2 Distribution Accounts Constitutes Additional Collateral for Series 2007-1
Class A-2 Notes.  In order to
secure and provide for the repayment and payment of the Obligations with
respect to the Series 2007-1 Class A-2 Notes, the Co-Issuers hereby
grant a security interest in and assign, pledge, grant, transfer and set over
to the Indenture Trustee, for the benefit of the applicable Series 2007-1 Class A-2
Noteholders, all of the Co-Issuers’ right, title and interest in and to the
following (whether now or hereafter existing or acquired): (i) the
applicable Series 2007-1 Class A-2 Distribution Account, including
any security entitlement with respect thereto; (ii) all funds and other
property (including, without limitation, Financial Assets) on deposit therein
from time to time; (iii) all certificates and instruments, if any,
representing or evidencing any or all of the applicable Series 2007-1 Class A-2
Distribution Account or the funds on deposit therein from time to time; (iv) all
investments made at any time and from time to time with monies in the
applicable Series 2007-1 Class A-2 Distribution Account, whether
constituting securities, instruments, general intangibles, investment property,
financial assets or other property; (v) all interest, dividends, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for each Series 2007-1 Class A-2
Distribution Account, the funds on deposit therein from time to time or the
investments made with such funds; and (vi) all proceeds of any and all of
the foregoing, including, without limitation, cash (the items in the foregoing clauses (i) through
(vi) are referred to, collectively, in connection with each Series 2007-1
Class A-2 Distribution Account, as the “Series 2007-1 Class A-2
Distribution Account Collateral”).

 

(e)           Termination
of Series 2007-1 Class A-2 Distribution Accounts.  On or after the date on which the Series 2007-1
Final Payment has been made, the 

 

34

 

Indenture Trustee, acting in accordance with the written instructions
of the Master Issuer and the consent of the Series 2007-1 Class A
Insurer if the Series 2007-1 Class A Policy is then in effect or
amounts constituting Series 2007-1 Insurer Reimbursements, Series 2007-1
Insurer Premiums, Series 2007-1 Insurer Make-Whole Premiums or Series 2007-1
Insurer Expense Amounts are unpaid under the Indenture or the Series 2007-1
Class A Insurance Agreement after taking into account the application of amounts
on deposit in the Senior Notes Interest Reserve Account and the Cash Trap
Reserve Account to pay such amounts in accordance with Section 11.1
of the Base Indenture, shall withdraw from the Series 2007-1 Class A-2
Distribution Account all amounts on deposit therein for payment to the Co-Issuers.

 

Section 4.10           Series 2007-1 Class M-1
Distribution Account.

 

(a)           Establishment
of Series 2007-1 Class M-1 Distribution Account.  The Indenture Trustee shall establish and
maintain in the name of the Indenture Trustee for the benefit of the Series 2007-1
Class M-1 Noteholders an account (the “Series 2007-1 Class M-1
Distribution Account”), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series 2007-1 Class M-1
Noteholders.  The Series 2007-1 Class M-1
Distribution Account shall be an Eligible Account.  If the Series 2007-1 Class M-1
Distribution Account is at any time no longer an Eligible Account, the Master
Issuer shall, within five (5) Business Days of obtaining knowledge that
the Series 2007-1 Class M-1 Distribution Account is no longer an
Eligible Account, establish a new Series 2007-1 Class M-1
Distribution Account that is an Eligible Account.  If a new Series 2007-1 Class M-1
Distribution Account is established, the Master Issuer shall instruct the
Indenture Trustee in writing to transfer all cash and investments from the
non-qualifying Series 2007-1 Class M-1 Distribution Account into the
new Series 2007-1 Class M-1 Distribution Account.  Initially, the Series 2007-1 Class M-1
Distribution Account will be established with the Indenture Trustee.

 

(b)           Administration
of the Series 2007-1 Class M-1 Distribution Account.  All amounts held in the Series 2007-1 Class M-1
Distribution Account shall be invested in Eligible Investments at the written
direction of the Master Issuer; provided, however, that any such
investment in the Series 2007-1 Class M-1 Distribution Account shall
mature not later than the Business Day prior to the first Payment Date
following the date on which such funds were received or such other date on
which such funds are scheduled to be paid to the Series 2007-1 Class M-1
Noteholders.  In the absence of written
investment instructions hereunder, funds on deposit in the Series 2007-1 Class M-1
Distribution Account shall remain uninvested. 
The Master Issuer shall not direct (or permit) the disposal of any Eligible
Investments prior to the maturity thereof to the extent such disposal would
result in a loss of the initial purchase price of such Permitted Investment.

 

(c)           Earnings
from Series 2007-1 Class M-1 Distribution Account.  All interest and earnings (net of losses and
investment expenses) paid on funds on deposit in the Series 2007-1 Class M-1
Distribution Account shall be deemed to be available and on deposit for
distribution.

 

35

 

(d)           Series 2007-1
Class M-1 Distribution Account Constitutes Additional Collateral for Series 2007-1
Class M-1 Notes.  In order to
secure and provide for the repayment and payment of the Obligations with
respect to the Series 2007-1 Class M-1 Notes, the Co-Issuers hereby
grant a security interest in and assign, pledge, grant, transfer and set over
to the Indenture Trustee, for the benefit of the Series 2007-1 Class M-1
Noteholders, all of the Co-Issuers’ right, title and interest in and to the
following (whether now or hereafter existing or acquired): (i) the Series 2007-1
Class M-1 Distribution Account, including any security entitlement with
respect thereto; (ii) all funds and other property (including, without
limitation, Financial Assets) on deposit therein from time to time; (iii) all
certificates and instruments, if any, representing or evidencing any or all of
the Series 2007-1 Class M-1 Distribution Account or the funds on
deposit therein from time to time; (iv) all investments made at any time
and from time to time with monies in the Series 2007-1 Class M-1
Distribution Account, whether constituting securities, instruments, general
intangibles, investment property, financial assets or other property; (v) all
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
the Series 2007-1 Class M-1 Distribution Account, the funds on
deposit therein from time to time or the investments made with such funds; and (vi) all
proceeds of any and all of the foregoing, including, without limitation, cash
(the items in the foregoing clauses (i) through (vi) are
referred to, collectively, as the “Series 2007-1 Class M-1
Distribution Account Collateral”).

 

(e)           Termination
of Series 2007-1 Class M-1 Distribution Account.  On or after the date on which the Series 2007-1
Final Payment has been made, the Indenture Trustee, acting in accordance with
the written instructions of the Master Issuer and the consent of the Series 2007-1
Class A Insurer if the Series 2007-1 Class A Policy is then in
effect or amounts constituting Series 2007-1 Insurer Reimbursements, Series 2007-1
Insurer Premiums, Series 2007-1 Insurer Make-Whole Premiums or Series 2007-1
Insurer Expense Amounts are unpaid under the Indenture or the Series 2007-1
Class A Insurance Agreement after taking into account the application of
amounts on deposit in the Cash Trap Reserve Account to pay such amounts in
accordance with Section 11.1 of the Base Indenture, shall withdraw
from the Series 2007-1 Class M-1 Distribution Account all amounts on
deposit therein for payment to the Co-Issuers.

 

Section 4.11           Indenture
Trustee as Securities Intermediary.

 

(a)           The
Indenture Trustee or other Person holding the Series 2007-1 Distribution
Accounts shall be the “Series 2007-1 Securities Intermediary.”  If the Series 2007-1 Securities
Intermediary in respect of any Series 2007-1 Distribution Account is not
the Indenture Trustee, the Master Issuer shall obtain the express agreement of
such other Person to the obligations of the Series 2007-1 Securities
Intermediary set forth in this Section 4.11.

 

(b)           The Series 2007-1 Securities
Intermediary agrees that:

 

(i)            The Series 2007-1 Distribution
Accounts are accounts to which Financial Assets will or may be credited;

 

36

 

(ii)           The
Series 2007-1 Distribution Accounts are “securities accounts” within the
meaning of Section 8-501 of the New York UCC and the Series 2007-1
Securities Intermediary qualifies as a “securities intermediary” under Section 8-102(a) of
the New York UCC;

 

(iii)          All
securities or other property (other than cash) underlying any Financial Assets
credited to any Series 2007-1 Distribution Account shall be registered in
the name of the Series 2007-1 Securities Intermediary, indorsed to the Series 2007-1
Securities Intermediary or in blank or credited to another securities account
maintained in the name of the Series 2007-1 Securities Intermediary, and
in no case will any Financial Asset credited to any Series 2007-1
Distribution Account be registered in the name of the Master Issuer, payable to
the order of the Master Issuer or specially indorsed to the Master Issuer;

 

(iv)          All
property delivered to the Series 2007-1 Securities Intermediary pursuant
to this Series 2007-1 Supplement will be promptly credited to the
appropriate Series 2007-1 Distribution Account;

 

(v)           Each
item of property (whether investment property, security, instrument or cash)
credited to any Series 2007-1 Distribution Account shall be treated as a
Financial Asset;

 

(vi)          If
at any time the Series 2007-1 Securities Intermediary shall receive any
entitlement order from the Indenture Trustee directing transfer or redemption
of any Financial Asset relating to the Series 2007-1 Distribution
Accounts, the Series 2007-1 Securities Intermediary shall comply with such
entitlement order without further consent by the Master Issuer or any other
Person;

 

(vii)         The
Series 2007-1 Distribution Accounts shall be governed by the laws of the
State of New York, regardless of any provision of any other
agreement.  For purposes of the UCC, as
in effect in any applicable jurisdiction, the State of New York shall be
deemed to the Series 2007-1 Securities Intermediary’s jurisdiction and the
Series 2007-1 Distribution Accounts (as well as the “security entitlements”
(as defined in Section 8-102(a)(17) of the New York UCC)
related thereto) shall be governed by the laws of the State of New York;

 

(viii)        The
Series 2007-1 Securities Intermediary has not entered into, and until
termination of this Series 2007-1 Supplement, will not enter into, any
agreement with any other Person relating to the Series 2007-1 Distribution
Accounts and/or any Financial Assets credited thereto pursuant to which it has
agreed to comply with “entitlement orders” (as defined in Section 8-102(a)(8) of
the New York UCC) of such other Person, and the Series 2007-1
Securities Intermediary has not entered into, and until the termination of this
Series 2007-1 Supplement 

 

37

 

will not enter into, any
agreement with the Master Issuer purporting to limit or condition the
obligation of the Securities Intermediary to comply with entitlement orders as
set forth in Section 4.11(b)(vi) of this Series 2007-1
Supplement; and

 

(ix)           Except for the claims and interest of
the Indenture Trustee, the Secured Parties and the Master Issuer in the Series 2007-1
Distribution Accounts, neither the Series 2007-1 Securities Intermediary
nor, in the case of the Indenture Trustee, any Trust Officer knows of any claim
to, or interest in, any Series 2007-1 Distribution Account or any
Financial Asset credited thereto.  If the
Series 2007-1 Securities Intermediary or, in the case of the Indenture
Trustee, a Trust Officer has actual knowledge of the assertion by any other
person of any Lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process)
against any Series 2007-1 Distribution Account or any Financial Asset
carried therein, the Series 2007-1 Securities Intermediary will promptly
notify the Indenture Trustee, the Control Party and the Master Issuer thereof.

 

(c)           The
Indenture Trustee shall possess all right, title and interest in all funds on
deposit from time to time in the Series 2007-1 Distribution Accounts and
in all proceeds thereof, and shall (acting at the direction of the Control
Party) be the only Person authorized to originate entitlement orders in respect
of the Series 2007-1 Distribution Accounts.

 

Section 4.12           Servicer.  Pursuant to the Servicing Agreement and the
Base Indenture, the Servicer has agreed to provide certain reports, notices,
instructions and other services on behalf of the Master Issuer and the other
Co-Issuers.  The Series 2007-1
Noteholders by their acceptance of the Series 2007-1 Notes consent to the
provision of such reports and notices to the Indenture Trustee by the Servicer
in lieu of the Master Issuer or any other Co-Issuer.  Any such reports and notices that are
required to be delivered to the Series 2007-1 Noteholders hereunder will
be made available on the Indenture Trustee’s website in the manner set forth in
Section 12.4 of the Base Indenture.

 

ARTICLE V

 

FORM OF SERIES 2007-1 NOTES

 

Section 5.1             Form of
the Series 2007-1 Class [A-1-A] [A-1-X] Notes.

 

The form of the Series 2007-1 Class [A-1-A]
[A-1-X] Notes, including the Certificate of Authentication, shall be substantially
as set forth as Exhibits A-1-1, A-1-2 and A-1-3 to
this Series 2007-1 Supplement, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
the Base Indenture or this Series 2007-1 Supplement, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may be consistent 

 

38

 

herewith, determined by the Authorized Officers of the
Co-Issuers executing such Notes as evidenced by their execution of such Notes.

 

The Certificates evidencing the Series 2007-1 Class [A-1-A]
[A-1-X] Notes will bear legends to the following effect unless the Co-Issuers
determine otherwise in compliance of applicable law.  All Series 2007-1 Class A-1 Notes
shall be issued in definitive form as provided in Section 2.2(c) of
the Base Indenture.

 

THIS SERIES 2007-1 VARIABLE FUNDING SENIOR NOTE, CLASS A-1
(THIS “NOTE”), [WHICH IS A SERIES 2007-1 CLASS [A-1-A] [A-1-X] ADVANCE
NOTE] [WHICH IS A SERIES 2007-1 CLASS [A-1-A] [A-1-X] SWINGLINE NOTE]
[WHICH IS A SERIES 2007-1 CLASS [A-1-A] [A-1-X] L/C NOTE] HAS NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF
ANY STATE OR OTHER RELEVANT JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES
LLC, APPLEBEE’S IP LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S
RESTAURANTS WEST LLC, APPLEBEE’S RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS
INC., APPLEBEE’S RESTAURANTS KANSAS LLC, APPLEBEE’S RESTAURANTS MID-ATLANTIC
LLC OR APPLEBEE’S RESTAURANTS VERMONT, INC. (THE “CO-ISSUERS”)
HAS BEEN REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT
COMPANY ACT”).  THIS NOTE AND ANY
INTEREST HEREIN MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF THE CLASS A-1
NOTE PURCHASE AGREEMENT, DATED AS OF NOVEMBER 29, 2007 BY AND AMONG THE
CO-ISSUERS, APPLEBEE’S SERVICES INC., AS THE SERVICER, THE CONDUIT INVESTORS, THE COMMITTED NOTE PURCHASERS AND THE FUNDING
AGENTS NAMED THEREIN, THE L/C PROVIDER NAMED THEREIN, LEHMAN COMMERCIAL PAPER
INC., AS SWINGLINE LENDER AND AS CLASS A-1 ADMINISTRATIVE AGENT.

 

Section 5.2             Form of
the Series 2007-1 Class [A-2-I-X], [A-2-II-A] and [A-2-II-X] Notes.

 

The form of the Series 2007-1 Class [A-2-I-X],
[A-2-II-A] and [A-2-II-X] Notes, including the Certificate of Authentication,
shall be substantially as set forth as Exhibits A-2-I-1, A-2-I-2,
A-2-II-1, A-2-II-2, A-2-II-3 and A-2-II-4 to this Series 2007-1
Supplement, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by the Base Indenture or this Series 2007-1
Supplement, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon, as may be consistent herewith,
determined by the Authorized Officers of the Co-Issuers executing such Notes as
evidenced by their execution of such Notes.

 

39

 

The certificates evidencing the Series 2007-1 Class A-2
Notes will bear legends substantially to the following effect unless the Co-Issuers
determine otherwise in compliance with applicable law.

 

THIS SERIES 2007-1 FIXED RATE TERM SENIOR NOTE, CLASS [A-2-I-X]
[A-2-II-A] [A-2-II-X] DUE 2037 (THIS “NOTE”) HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER RELEVANT
JURISDICTION, AND NEITHER APPLEBEE’S ENTERPRISES LLC, APPLEBEE’S IP LLC,
APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S RESTAURANTS WEST LLC, APPLEBEE’S
RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS INC., APPLEBEE’S RESTAURANTS
MID-ATLANTIC LLC, APPLEBEE’S RESTAURANTS VERMONT, INC. AND APPLEBEE’S
RESTAURANTS KANSAS LLC, (THE “CO-ISSUERS”)
HAVE BEEN REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).  THIS NOTE OR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO EITHER THE INITIAL PURCHASER OR A SUBSEQUENT TRANSFEREE WHO IS BOTH A
“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT (“RULE 144A”)
AND A “QUALIFIED PURCHASER” (WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT),
ACTING FOR ITS OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH RESPECT TO WHICH THE
INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE EXERCISES SOLE INVESTMENT
DISCRETION, EACH OF WHICH IS BOTH A QUALIFIED INSTITUTIONAL BUYER AND A
QUALIFIED PURCHASER, AND NONE OF WHICH ARE (1) A DEALER OF THE TYPE
DESCRIBED IN PARAGRAPH (a)(1)(ii) OF RULE 144A UNLESS IT OWNS AND INVESTS
ON A DISCRETIONARY BASIS NOT LESS THAN $25,000,000 IN SECURITIES OF ISSUERS
THAT ARE NOT AFFILIATED TO IT, (2) A PARTICIPANT-DIRECTED EMPLOYEE PLAN,
SUCH AS A 401(k) PLAN, OR ANY OTHER TYPE OF PLAN REFERRED TO IN PARAGRAPH
(a)(1)(i)(D) OR (a)(1)(i)(E) OF RULE 144A, OR A TRUST FUND REFERRED
TO IN PARAGRAPH (a)(1)(i)(F) OF RULE 144A THAT HOLDS THE ASSETS OF SUCH A
PLAN, UNLESS INVESTMENT DECISIONS WITH
RESPECT TO THE PLAN ARE MADE SOLELY BY THE FIDUCIARY, TRUSTEE OR SPONSOR OF
SUCH PLAN, (3) FORMED OR
CAPITALIZED FOR THE SPECIFIC PURPOSE OF INVESTING IN THE CO-ISSUERS (EXCEPT
WHERE EACH BENEFICIAL OWNER IS A QUALIFIED PURCHASER), (4) A CORPORATION,
PARTNERSHIP, COMMON TRUST FUND, SPECIAL TRUST, PENSION FUND OR RETIREMENT PLAN
IN WHICH THE SHAREHOLDERS, EQUITY OWNERS, PARTNERS, BENEFICIARIES, BENEFICIAL
OWNERS OR PARTICIPANTS, AS APPLICABLE, MAY DESIGNATE THE PARTICULAR
INVESTMENTS TO BE MADE, (5) IF FORMED ON OR BEFORE APRIL 30, 1996, AN
INVESTMENT COMPANY THAT RELIES ON THE EXCLUSION FROM THE DEFINITION OF “INVESTMENT
COMPANY” PROVIDED BY SECTION 3(c)(7) OF THE 

 

40

 

INVESTMENT COMPANY ACT (OR A
FOREIGN INVESTMENT COMPANY UNDER SECTION 7(d) THEREOF RELYING ON SECTION 3(c)(7) WITH
RESPECT TO THOSE OF ITS HOLDERS THAT ARE U.S. PERSONS), UNLESS, WITH RESPECT TO
ITS TREATMENT AS A QUALIFIED PURCHASER, IT HAS, IN THE MANNER REQUIRED BY SECTION 2(a)(51)(C) OF
THE INVESTMENT COMPANY ACT AND THE RULES AND REGULATIONS THEREUNDER, RECEIVED
THE CONSENT OF ITS BENEFICIAL OWNERS THAT ACQUIRED THEIR INTERESTS ON OR BEFORE
APRIL 30, 1996 OR (6) AN ENTITY THAT, IMMEDIATELY SUBSEQUENT TO ITS
PURCHASE OR OTHER ACQUISITION OF A BENEFICIAL INTEREST IN THIS NOTE, WILL HAVE
INVESTED MORE THAN 40% OF ITS ASSETS IN BENEFICIAL INTERESTS IN THIS NOTE AND/OR
IN OTHER SECURITIES OF THE ISSUER (UNLESS ALL OF THE BENEFICIAL OWNERS OF SUCH
ENTITY’S SECURITIES ARE QUALIFIED PURCHASERS) TO WHOM NOTICE IS GIVEN THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON THE EXEMPTION
FROM SECURITIES ACT REGISTRATION PROVIDED BY RULE 144A (B) OUTSIDE THE
UNITED STATES TO THE INITIAL PURCHASER OR A SUBSEQUENT TRANSFEREE WHO IS A
QUALIFIED PURCHASER AND NEITHER A “U.S. PERSON” AS DEFINED IN REGULATION S
UNDER THE SECURITIES ACT (“REGULATION
S”) NOR A “U.S. RESIDENT” AS DEFINED FOR PURPOSES OF THE
INVESTMENT COMPANY ACT, ACTING FOR ITS OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH
RESPECT TO WHICH SUCH INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE EXERCISES SOLE
INVESTMENT DISCRETION, EACH OF WHICH IS A QUALIFIED PURCHASER, AND NONE OF
WHICH ARE A U.S. PERSON OR A U.S. RESIDENT, IN OFFSHORE TRANSACTIONS IN
RELIANCE ON REGULATION S, AND, IN EACH CASE, IN COMPLIANCE WITH THE
CERTIFICATIONS AND OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO
HEREIN AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR THE UNITED STATES AND
ANY OTHER RELEVANT JURISDICTION.  THE
INITIAL PURCHASER AND EACH SUBSEQUENT TRANSFEREE TAKING DELIVERY OF THIS NOTE
OR AN INTEREST IN THIS NOTE WILL BE DEEMED TO HAVE MADE THE APPLICABLE
REPRESENTATIONS AND AGREEMENTS REFERRED TO IN THE INDENTURE.  EACH INITIAL PURCHASER AND EACH SUBSEQUENT
TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN INTEREST IN THIS NOTE IN THE FORM OF
AN INTEREST IN A REGULATION S GLOBAL NOTE OR RULE 144A GLOBAL NOTE WILL BE
REQUIRED TO DELIVER A TRANSFER CERTIFICATE IN THE FORM REQUIRED BY THE
INDENTURE AND WILL BE DEEMED OR REQUIRED TO MAKE THE APPLICABLE REPRESENTATIONS
AND AGREEMENTS REFERRED TO IN THE INDENTURE.

 

ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING WILL BE OF NO FORCE AND EFFECT AND WILL BE VOID AB INITIO AND WILL
NOT OPERATE TO TRANSFER ANY RIGHTS TO THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE, NOTWITHSTANDING 

 

41

 

ANY INSTRUCTIONS TO THE CONTRARY TO THE CO-ISSUERS,
THE INDENTURE TRUSTEE OR ANY INTERMEDIARY.

 

THE CO-ISSUERS MAY REQUIRE
ANY HOLDER OF THIS NOTE WHO IS DETERMINED NOT TO HAVE BEEN (I) IF THIS NOTE IS ACQUIRED
IN THE UNITED STATES, BOTH A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED
PURCHASER OR (II) IF THIS NOTE WAS ACQUIRED OUTSIDE OF THE UNITED STATES,
BOTH A QUALIFIED PURCHASER AND NEITHER A U.S. PERSON NOR A U.S. RESIDENT AT THE
TIME OF ACQUISITION OF THIS NOTE TO SELL THIS NOTE TO A PERSON WHO IS (I) BOTH
A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A OR (II) A QUALIFIED PURCHASER AND NEITHER A
U.S. PERSON NOR A U.S. RESIDENT IN A TRANSACTION MEETING THE REQUIREMENTS OF
REGULATION S.

 

THE OFFERED NOTES MAY NOT BE SOLD TO ANY
RESIDENT OF THE REPUBLIC OF IRELAND.

 

To the extent required by
Section 1275(c)(A) of the Code and Treasury Regulation Section 1.1275-3(b)(1),
each Note issued at a discount to its stated redemption price at maturity shall
bear a legend in substantially the following form (with any necessary amendments
thereto to reflect any amendments occurring after the applicable Issuance Date
to the applicable sections):

 

THIS NOTE HAS BEEN ISSUED
WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME
TAX PURPOSES.  THE ISSUE PRICE, AMOUNT OF
OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED BY
WRITING TO THE SERVICER AT ITS ADDRESS SET FORTH IN THE INDENTURE.

 

The certificates evidencing the Series 2007-1 Class [A-2-I-X],
[A-2-II-A] and [A-2-II-X] Notes that are Regulation S Global Notes will
also bear legends substantially to the following effect unless the Co-Issuers
determine otherwise in compliance with applicable law:

 

UNTIL 40 DAYS AFTER THE
INITIAL PURCHASER NOTIFIES THE CO-ISSUERS THAT THE RESALE OF THE OFFERED NOTES
HAS BEEN COMPLETED (THE “RESTRICTED
PERIOD”) IN CONNECTION WITH THE OFFERING OF THE NOTES IN THE
UNITED STATES FROM OUTSIDE OF THE UNITED STATES, THE SALE, PLEDGE OR TRANSFER
OF THIS NOTE IS SUBJECT TO CERTAIN CONDITIONS AND RESTRICTIONS.  THE HOLDER HEREOF, BY PURCHASING OR OTHERWISE
ACQUIRING THIS NOTE, ACKNOWLEDGES THAT SUCH HOLDER IS A QUALIFIED PURCHASER,
AND THAT THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND AGREES
FOR THE BENEFIT OF THE CO-ISSUERS THAT THIS NOTE MAY BE TRANSFERRED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY TO A QUALIFIED PURCHASER AND IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER 

 

42

 

APPLICABLE LAWS OF THE STATES, TERRITORIES AND
POSSESSIONS OF THE UNITED STATES GOVERNING THE OFFER AND SALE OF SECURITIES,
AND PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD, ONLY (I) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT
OR (II) PURSUANT TO AND IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES
ACT.

 

Each Series 2007-1 Class [A-2-I-X],
[A-2-II-A] and [A-2-II-X] Note in global form will bear a legend substantially
to the following effect unless the Co-Issuers determine otherwise in compliance
with applicable law:

 

THIS NOTE IS A GLOBAL
NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”), A NEW YORK
CORPORATION, 55 WATER STREET, NEW YORK, NEW YORK 10004, OR A NOMINEE
THEREOF.  THIS NOTE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
APPLEBEE’S ENTERPRISES LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S
RESTAURANTS WEST LLC, APPLEBEE’S RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS
INC., APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, APPLEBEE’S RESTAURANTS VERMONT,
INC., APPLEBEE’S RESTAURANTS KANSAS LLC OR APPLEBEE’S IP LLC, (THE “CO-ISSUERS”) OR THE
REGISTRAR, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC,
AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE
REGISTERED OWNER, CEDE & CO., HAS AN INTEREST HEREIN.

 

Section 5.3             Form of
the Series 2007-1 Class M-1 Notes.

 

The form of the Series 2007-1
Class M-1 Notes, including the Certificate of Authentication, shall be
substantially as set forth as Exhibits M-1-1 and M-1-2 to this Series 2007-1
Supplement, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by the Base Indenture or this Series 2007-1
Supplement, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon, as may be consistent herewith,
determined by the Authorized Officers of the Co-Issuers executing such Notes as
evidenced by their execution of such Notes.

 

43

 

 

The certificates
evidencing the Series 2007-1 Class M-1 Notes will bear legends
substantially to the following effect unless the Co-Issuers determine otherwise
in compliance with applicable law.

 

THIS SERIES 2007-1 FIXED
RATE TERM SUBORDINATED NOTES, CLASS M-1 DUE 2037 (THIS “NOTE”) HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”),
OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER RELEVANT
JURISDICTION, AND NEITHER APPLEBEE’S ENTERPRISES LLC, APPLEBEE’S RESTAURANTS
NORTH LLC, APPLEBEE’S RESTAURANTS WEST LLC, APPLEBEE’S RESTAURANTS TEXAS LLC,
APPLEBEE’S RESTAURANTS INC., APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, APPLEBEE’S
RESTAURANTS VERMONT, INC., APPLEBEE’S RESTAURANTS KANSAS LLC OR APPLEBEE’S IP
LLC, (THE “CO-ISSUERS”)
HAVE BEEN REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).  THIS NOTE OR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO EITHER THE INITIAL PURCHASER OR A SUBSEQUENT TRANSFEREE WHO IS BOTH A
“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT (“RULE 144A”)
AND A “QUALIFIED PURCHASER” (WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT),
ACTING FOR ITS OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH RESPECT TO WHICH THE
INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE EXERCISES SOLE INVESTMENT
DISCRETION, EACH OF WHICH IS BOTH A QUALIFIED INSTITUTIONAL BUYER AND A
QUALIFIED PURCHASER, AND NONE OF WHICH ARE (1) A DEALER OF THE TYPE
DESCRIBED IN PARAGRAPH (a)(1)(ii) OF RULE 144A UNLESS IT OWNS AND INVESTS
ON A DISCRETIONARY BASIS NOT LESS THAN $25,000,000 IN SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED TO IT, (2) A
PARTICIPANT-DIRECTED EMPLOYEE PLAN, SUCH AS A 401(k) PLAN, OR ANY OTHER
TYPE OF PLAN REFERRED TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF
RULE 144A, OR A TRUST FUND REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE
144A THAT HOLDS THE ASSETS OF SUCH A PLAN, UNLESS INVESTMENT DECISIONS WITH
RESPECT TO THE PLAN ARE MADE SOLELY BY THE FIDUCIARY, TRUSTEE OR SPONSOR OF
SUCH PLAN, (3) FORMED OR CAPITALIZED FOR THE SPECIFIC PURPOSE OF INVESTING
IN THE CO-ISSUERS (EXCEPT WHERE EACH BENEFICIAL OWNER IS A QUALIFIED
PURCHASER), (4) A CORPORATION, PARTNERSHIP, COMMON TRUST FUND, SPECIAL
TRUST, PENSION FUND OR RETIREMENT PLAN IN WHICH THE SHAREHOLDERS, EQUITY
OWNERS, PARTNERS, BENEFICIARIES, BENEFICIAL OWNERS OR PARTICIPANTS, AS
APPLICABLE, MAY DESIGNATE THE PARTICULAR INVESTMENTS TO BE MADE, (5) IF
FORMED ON OR BEFORE APRIL 30, 1996, AN INVESTMENT COMPANY THAT RELIES ON THE
EXCLUSION FROM THE DEFINITION OF “INVESTMENT COMPANY” PROVIDED BY SECTION 3(c)(7) OF
THE INVESTMENT COMPANY 

 

44

 

ACT
(OR A FOREIGN INVESTMENT COMPANY UNDER SECTION 7(d) THEREOF RELYING ON SECTION
3(c)(7) WITH RESPECT TO THOSE OF ITS HOLDERS THAT ARE U.S. PERSONS), UNLESS,
WITH RESPECT TO ITS TREATMENT AS A QUALIFIED PURCHASER, IT HAS, IN THE MANNER
REQUIRED BY SECTION 2(a)(51)(C) OF THE INVESTMENT COMPANY ACT AND THE RULES AND
REGULATIONS THEREUNDER, RECEIVED THE CONSENT OF ITS BENEFICIAL OWNERS THAT
ACQUIRED THEIR INTERESTS ON OR BEFORE APRIL 30, 1996 OR (6) AN ENTITY THAT,
IMMEDIATELY SUBSEQUENT TO ITS PURCHASE OR OTHER ACQUISITION OF A BENEFICIAL
INTEREST IN THIS NOTE, WILL HAVE INVESTED MORE THAN 40% OF ITS ASSETS IN
BENEFICIAL INTERESTS IN THIS NOTE AND/OR IN OTHER SECURITIES OF THE ISSUER
(UNLESS ALL OF THE BENEFICIAL OWNERS OF SUCH ENTITY’S SECURITIES ARE QUALIFIED
PURCHASERS) TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON THE EXEMPTION FROM SECURITIES ACT REGISTRATION
PROVIDED BY RULE 144A (B) OUTSIDE THE UNITED STATES TO THE INITIAL PURCHASER OR
A SUBSEQUENT TRANSFEREE WHO IS A QUALIFIED PURCHASER AND NEITHER A “U.S.
PERSON” AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT (“REGULATION S”)
NOR A “U.S. RESIDENT” AS DEFINED FOR PURPOSES OF THE INVESTMENT COMPANY ACT,
ACTING FOR ITS OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH RESPECT TO WHICH SUCH
INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE EXERCISES SOLE INVESTMENT
DISCRETION, EACH OF WHICH IS A QUALIFIED PURCHASER, AND NONE OF WHICH ARE A
U.S. PERSON OR A U.S. RESIDENT, IN OFFSHORE TRANSACTIONS IN RELIANCE ON
REGULATION S, AND, IN EACH CASE, IN COMPLIANCE WITH THE CERTIFICATIONS AND
OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO HEREIN AND ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OR THE UNITED STATES AND ANY OTHER
RELEVANT JURISDICTION.  THE INITIAL
PURCHASER AND EACH SUBSEQUENT TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN
INTEREST IN THIS NOTE WILL BE DEEMED TO HAVE MADE THE APPLICABLE
REPRESENTATIONS AND AGREEMENTS REFERRED TO IN THE INDENTURE.  EACH INITIAL PURCHASER AND EACH SUBSEQUENT
TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN INTEREST IN THIS NOTE IN THE FORM
OF AN INTEREST IN A REGULATION S GLOBAL NOTE OR RULE 144A GLOBAL NOTE WILL BE
REQUIRED TO DELIVER A TRANSFER CERTIFICATE IN THE FORM REQUIRED BY THE
INDENTURE AND WILL BE DEEMED OR REQUIRED TO MAKE THE APPLICABLE REPRESENTATIONS
AND AGREEMENTS REFERRED TO IN THE INDENTURE.

 

ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND
EFFECT AND WILL BE VOID AB INITIO AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS
TO THE INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE, NOTWITHSTANDING 

 

45

 

ANY INSTRUCTIONS TO THE
CONTRARY TO THE CO-ISSUERS, THE TRUSTEE OR ANY INTERMEDIARY.

 

THE CO-ISSUERS MAY REQUIRE
ANY HOLDER OF THIS NOTE WHO IS DETERMINED NOT TO HAVE BEEN (I) IF THIS NOTE IS ACQUIRED IN THE
UNITED STATES, BOTH A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED
PURCHASER OR (II) IF THIS NOTE WAS
ACQUIRED OUTSIDE OF THE UNITED STATES, BOTH A QUALIFIED PURCHASER AND NEITHER A
U.S. PERSON NOR A U.S. RESIDENT AT THE TIME OF ACQUISITION OF THIS NOTE
TO SELL THIS NOTE TO A PERSON WHO IS (I) BOTH A QUALIFIED INSTITUTIONAL
BUYER AND A QUALIFIED PURCHASER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A OR (II) A QUALIFIED PURCHASER AND NEITHER A U.S. PERSON NOR A
U.S. RESIDENT IN A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S.

 

THE OFFERED NOTES MAY NOT BE SOLD TO ANY
RESIDENT OF THE REPUBLIC OF IRELAND.

 

To the extent required by
Section 1275(c)(A) of the Code and Treasury Regulation Section 1.1275-3(b)(1),
each Note issued at a discount to its stated redemption price at maturity shall
bear a legend in substantially the following form (with any necessary
amendments thereto to reflect any amendments occurring after the applicable
Issuance Date to the applicable sections):

 

THIS NOTE HAS BEEN ISSUED
WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME
TAX PURPOSES.  THE ISSUE PRICE, AMOUNT OF
OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED BY
WRITING TO THE SERVICER AT ITS ADDRESS SET FORTH IN THE INDENTURE.

 

The certificates evidencing the Series 2007-1 Class M-1
Notes that are Regulation S Global Notes will also bear legends substantially
to the following effect unless the Co-Issuers determine otherwise in compliance
with applicable law:

 

UNTIL 40 DAYS AFTER THE
INITIAL PURCHASER NOTIFIES THE CO-ISSUERS THAT THE RESALE OF THE OFFERED NOTES
HAS BEEN COMPLETED (THE “RESTRICTED
PERIOD”) IN CONNECTION WITH THE OFFERING OF THE NOTES IN THE
UNITED STATES FROM OUTSIDE OF THE UNITED STATES, THE SALE, PLEDGE OR TRANSFER
OF THIS NOTE IS SUBJECT TO CERTAIN CONDITIONS AND RESTRICTIONS.  THE HOLDER HEREOF, BY PURCHASING OR OTHERWISE
ACQUIRING THIS NOTE, ACKNOWLEDGES THAT SUCH HOLDER IS A QUALIFIED PURCHASER,
AND THAT THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND AGREES
FOR THE BENEFIT OF THE CO-ISSUERS THAT THIS NOTE MAY BE TRANSFERRED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY TO A QUALIFIED PURCHASER AND IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OF THE STATES,
TERRITORIES AND POSSESSIONS OF 

 

46

 

THE UNITED STATES GOVERNING THE OFFER AND SALE OF
SECURITIES, AND PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD, ONLY (I) IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT OR (II) PURSUANT TO AND IN ACCORDANCE WITH RULE 144A UNDER THE
SECURITIES ACT.

 

Each Series 2007-1 Class M-1 Note in global
form will bear a legend substantially to the following effect unless the
Co-Issuers determine otherwise in compliance with applicable law:

 

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (“DTC”),
A NEW YORK CORPORATION, 55 WATER STREET, NEW YORK, NEW YORK 10004, OR A NOMINEE
THEREOF.  THIS NOTE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
THE CO-ISSUERS OR THE REGISTRAR, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL BECAUSE THE REGISTERED OWNER, CEDE & CO., HAS AN INTEREST
HEREIN.

 

ARTICLE VI

 

CONDITIONS TO ISSUANCE

 

Section 6.1             Conditions to Issuance.  The Series 2007-1 Notes issued pursuant
to the Indenture shall be issued only upon (i) the satisfaction of the
conditions precedent in the Base Indenture (including but not limited to those
set forth in Section 2.3 and Article III thereof) and (ii) receipt
by the Indenture Trustee of the following:

 

(a)           counterparts
of this Series Supplement executed and delivered by the Co-Issuers and the
Indenture Trustee;

 

(b)           a
Company Order authorizing and directing the authentication and delivery of the Series 2007-1
Notes by the Indenture Trustee on the terms contained in this Series 2007-1
Supplement on the date specified in such Company Order;

 

(c)           the
Insurance Policy and the Insurance Agreement relating to the Series 2007-1
Class A-1-A Notes and the Series 2007-1 Class A-2-II-A Notes;

 

47

 

(d)           written
confirmation (a) that the Series 2007-1 Class A-1-A Notes will
be rated “Aaa” by Moody’s, “AAA” by S&P and “AAA” by Fitch upon issuance, (b) that
the Series 2007-1 Class A-1-X Notes will be rated “Baa3” by Moody’s, “BBB-”
by S&P and “BBB-” by Fitch upon issuance, (c) that the Series 2007-1
Class A-2-I-X Notes will be rated “Baa3” by Moody’s, “BBB-” by S&P and
“BBB-” by Fitch upon issuance, (d) that the Series 2007-1 Class A-2-II-A
Notes will be rated “Aaa” by Moody’s, “AAA” by S&P and “AAA”  by Fitch upon issuance, (e) that the Series 2007-1
Class A-2-II-X Notes will be rated “Baa3” by Moody’s, “BBB-” by S&P
and “BBB-” by Fitch upon issuance, and (f) that the Series 2007-1 Class M-1
Notes will be rated “BB” by S&P and “BB” by Fitch upon issuance; and

 

(e)           written
confirmation (i) that the Series 2007- 1 Class A-1-A Notes will
receive a shadow rating (exclusive of the effect of any Insurance Policy) of at
least “Baa3” by Moody’s, at least “BBB-” by S&P and at least “BBB-” by
Fitch upon issuance, and (ii) that the Series 2007-1 Class A-2-II-A
Notes will receive a shadow rating (exclusive of the effect of any Insurance
Policy) of at least “Baa3” by Moody ‘s, at least “BBB-” by S&P and at least
“BBB-” by Fitch upon issuance.

 

ARTICLE VII

 

GENERAL

 

Section 7.1             Information.  Pursuant to Section 12.1(c) of
the Base Indenture, on or before 10:00 a.m. (New York City time) on the
second Business Day prior to each Payment Date, the Co-Issuers (or the Servicer
on the Co-Issuers’ behalf) shall furnish a Monthly Noteholders’ Report with
respect to the Series 2007-1 Notes to the Indenture Trustee, the Rating
Agencies, the Back-Up Manager and the Series 2007-1 Class A Insurer,
substantially in the form of Exhibit C hereto, setting forth, inter
alia, the following information with respect to the next Payment Date:

 

(i)            the total amount available to be
distributed to Series 2007-1 Noteholders on such Payment Date;

 

(ii)           the amount of such distribution
allocable to the payment of principal of each Class of the Series 2007-1
Notes;

 

(iii)          the amount of such distribution
allocable to the payment of interest on each Class of the Series 2007-1
Notes;

 

(iv)          the amount of such distribution
allocable to the payment of any Series 2007-1 Make-Whole Amount, if any,
on the Series 2007-1 Class A-2 Notes or Series 2007-1
Subordinated Notes, as applicable;

 

(v)           the amount of such distribution
allocable to the payment of any fees or other amounts due to the Series 2007-1
Class A-1 Noteholders;

 

48

 

(vi)          whether, to the knowledge of the Co-Issuers,
any Potential Series 2007-1 Rapid Amortization Event, Series 2007-1
Rapid Amortization Event, Default, Event of Default or Servicer Termination
Event has occurred as of such Accounting Date;

 

(vii)         the Debt Service Coverage Ratios for
such Payment Date;

 

(viii)        the twelve-month U.S. system-wide sales
of Applebee’s Restaurants as of the last day of the immediately preceding
twelve-month period ending on the last day of each calendar month;

 

(ix)           the Senior Notes Available Reserve
Account Amount, if any, as of the close of business on the last Business Day of
the preceding Monthly Collection Period.

 

Any Series 2007-1
Noteholder may obtain copies of each Monthly Noteholders’ Report in accordance
with the procedures set forth in Section 12.4 of the Base
Indenture.

 

Section 7.2             Exhibits.  The annexes, exhibits and schedules attached
hereto and listed on the table of contents hereto supplement the annexes,
exhibits and schedules included in the Base Indenture.

 

Section 7.3             Ratification of Base Indenture.  As supplemented by this Series 2007-1
Supplement, the Base Indenture is in all respects ratified and confirmed and
the Base Indenture as so supplemented by this Series 2007-1 Supplement
shall be read, taken and construed as one and the same instrument.

 

Section 7.4             Certain Notices to the Series 2007-1
Class A Insurer and Rating Agencies. 
The Co-Issuers shall provide to the Series 2007-1 Class A
Insurer and each Rating Agency a copy of each Opinion of Counsel and Officer’s
Certificate delivered to the Indenture Trustee pursuant to this Series 2007-1
Supplement or any other Related Document. 
Each such Opinion of Counsel to be delivered to the Indenture Trustee
while the Series 2007-1 Class A Policy is in effect shall also be
addressed to the Series 2007-1 Class A Insurer, shall be from counsel
reasonably acceptable to the Series 2007-1 Class A Insurer and shall
be in form and substance reasonably acceptable to the Series 2007-1 Class A
Insurer.

 

Section 7.5             Third-Party Beneficiary.  The Series 2007-1 Class A Insurer
is an express third-party beneficiary of (i) the Base Indenture to the
extent of provisions relating to the Series 2007-1 Class A Insurer
(in any capacity) specifically and (ii) this Series 2007-1 Supplement
to the extent of provisions relating to the Series 2007-1 Class A
Insurer (in any capacity) specifically or that otherwise inure to its benefit.

 

Section 7.6             Prior Notice by Indenture
Trustee to Series 2007-1 Class A Insurer.  Subject to Section 6.1 of the
Base Indenture, except for any period during which 

 

49

 

an Insurer Event of
Default is continuing with respect to the Series 2007-1 Class A
Insurer, the Indenture Trustee agrees that it shall not exercise any rights or
remedies available to it as a result of the occurrence of a Rapid Amortization
Event or an Event of Default until after the Indenture Trustee has given prior
written notice thereof to the Series 2007-1 Class A Insurer and
obtained the direction of the Series 2007-1 Class A Insurer, so long
as the Series 2007-1 Class A Insurer is the Series Controlling Party
and the Senior Notes are Outstanding.  For
the avoidance of doubt, the allocation of funds to pay principal during a Rapid
Amortization Event in accordance with Section 10.12 of the Base
Indenture shall not be deemed to be an exercise of rights or remedies for
purposes of the immediately preceding sentence. 
The Indenture Trustee agrees to notify the Series 2007-1 Class A
Insurer promptly following any exercise of rights or remedies available to it
as a result of the occurrence of a Rapid Amortization Event or Event of
Default.

 

Section 7.7             Subrogation.  In furtherance of and not in limitation of
the Series 2007-1 Class A Insurer’s equitable rights of subrogation,
each of the Indenture Trustee, the Co-Issuers and, by its acceptance of Insured
Senior Notes, each Series 2007-1 Senior Noteholder acknowledges that, to
the extent of any payment made by the Series 2007-1 Class A Insurer
under its Series 2007-1 Class A Policy with respect to interest or
letter of credit fees on or principal of the Insured Senior Notes, the Series 2007-1
Class A Insurer is to be fully subrogated to the extent of such payment
and any additional interest due on any late payment to the rights of the applicable
Series 2007-1 Senior Noteholders under the Indenture and the Series 2007-1
Class A-1 Note Purchase Agreement. 
Each of the Co-Issuers, the Indenture Trustee and the Series 2007-1
Senior Noteholders agrees to such subrogation and each of the Noteholders
holding any Series 2007-1 Class A-1-A Notes or any Series 2007-1
Class A-2-II-A Notes, further agrees to take such actions as the Series 2007-1
Class A Insurer may reasonably request to evidence such subrogation.

 

Section 7.8             Counterparts.  This Series 2007-1 Supplement may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all of such counterparts shall together
constitute but one and the same instrument.

 

Section 7.9             Governing Law.  THIS SERIES SUPPLEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED 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 OF
NEW YORK).

 

Section 7.10           Amendments.  This Series 2007-1 Supplement may not be
modified or amended except in accordance with the terms of the Base Indenture.

 

Section 7.11           Termination of Series 2007-1
Supplement.  This Series 2007-1
Supplement shall cease to be of further effect when (i) all Outstanding Series 2007-1
Notes theretofore authenticated and issued have been delivered (other than 

 

50

 

destroyed, lost, or
stolen Series 2007-1 Notes which have been replaced or paid) to the
Indenture Trustee for cancellation and all Letters of Credit have expired or
been cash collateralized in full pursuant to the terms of the Series 2007-1
Class A-1 Note Purchase Agreement, (ii) all fees and expenses and
other amounts under the Series 2007-1 Class A-1 Note Purchase
Agreement have been paid in full and all Series 2007-1 Class A-1
Commitments have been terminated, (iii) the Co-Issuers have paid all sums
payable hereunder and (iv)  the Series 2007-1 Class A Insurer has
been paid all Series 2007-1 Insurer Premiums, all Series 2007-1  Insurer Expenses, all Series 2007-1
Insurer Reimbursements and any Series 2007-1 Insurer Make-Whole Premium due
to it under the Indenture or the Series 2007-1 Class A Insurance
Agreement.  Each Class A-1
Noteholder will be deemed to have acknowledged concurrently with such
termination, that it will look solely to the cash collateral posted for any
Letters of Credit in order to satisfy any amounts drawn thereunder and that the
Series 2007-1 Class A Insurer shall have no liability under the Series 2007-1
Class A Policy for the insufficiency of such cash collateral to pay any
such draws or continuing L/C Obligations, L/C Other Reimbursement Costs and/or
L/C Monthly Fees.

 

Section 7.12           Discharge of Indenture.  Notwithstanding anything to the contrary
contained in the Base Indenture and without limiting any rights of the Series 2007-1
Class A Insurer, so long as this Series 2007-1 Supplement shall be in
effect in accordance with Section 7.11 of this Series 2007-1
Supplement, no discharge of the Indenture or any Guaranty and Collateral
Agreement pursuant to Section 4.1 of the Base Indenture shall be
effective as to the Series 2007-1 Notes without the written consent of the
Series 2007-1 Noteholders holding more than 50% of the sum of (i) the
Series 2007-1 Outstanding Principal Amount and (ii) the portion, if
any, of the Series 2007-1 Class A-1 Commitments that has not been
drawn to make Series 2007-1 Class A-1 Advances (excluding any Series 2007-1
Outstanding Principal Amount or Series 2007-1 Class A-1 Commitments
or Notes held by any Securitization Entity or any Affiliate of any
Securitization Entity).

 

Section 7.13           Effect of Payment by the Series 2007-1
Class A-1 Insurer.

 

(a)           Anything
in this Series 2007-1 Supplement to the contrary notwithstanding, any
payments of principal of or interest or letter of credit fees on the Series 2007-1
Senior Notes that is made with monies received pursuant to the terms of the Series 2007-1
Class A Policy shall not be considered payment of the Series 2007-1
Senior Notes by the Co-Issuers.  The
Indenture Trustee acknowledges that, without the need for any further action on
the part of the Series 2007-1 Class A Insurer, (i) to the extent
the Series 2007-1 Class A Insurer makes payments, directly or
indirectly, on account of principal of, or interest or letter of credit fees
on, the Series 2007-1 Senior Notes to the Indenture Trustee for the
benefit of the applicable Series 2007-1 Senior Noteholders or to the Series 2007-1
Senior Noteholders (including any Preference Amounts), the Series 2007-1 Class A
Insurer will in accordance with Sections 2.13 and 2.14 of the Base
Indenture, be fully subrogated to the rights of such Series 2007-1 Senior
Noteholders to receive such principal and interest and such other amounts and
will be deemed to the extent of the payments so made to be a Series 2007-1
Senior Noteholder 

 

51

 

and (ii) the Series 2007-1 Class A Insurer shall be paid
principal and interest and/or letter of credit fees in its capacity as a Series 2007-1
Senior Noteholder until all such payments by the Series 2007-1 Class A
Insurer have been fully reimbursed, but only from the sources and in the manner
provided in the Indenture for payment of such principal and interest and such
other amounts.  The foregoing is without
prejudice to the separate and independent rights of the Series 2007-1 Class A
Insurer to be reimbursed, without duplication, for payments made under the Series 2007-1
Class A Policy pursuant to the Series 2007-1 Class A Insurance
Agreement.

 

(b)           Each
Series 2007-1 Noteholder agrees (i) that with respect to the payment
of any Preference Amount by the Series 2007-1 Class A Insurer to the
Indenture Trustee, on behalf of the applicable Series 2007-1 Noteholders,
under the Series 2007-1 Class A Policy, the applicable Series 2007-1
Noteholders will assign irrevocably to the Series 2007-1 Class A
Insurer all of its rights and claims relating to or arising under the Insured
Obligations against the debtor which made or benefited from the related
preference payment or otherwise with respect to the related preference payment
and (ii) to appoint the Series 2007-1 Class A Insurer as its
agent and attorney-in-fact in any legal proceeding related to such preference
payment. In addition, each Series 2007-1 Noteholder hereby grants to the Series 2007-1
Class A Insurer an absolute power of attorney to execute all appropriate
instruments related to any items required to be delivered in connection with
any preference payment referred to in this Section 7.13(b), and to
direct all matters relating to any litigation with respect to such preference
payment, including, without limitation, (i) the direction of any appeal of
any order relating to any Preference Amount and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal.  In addition, and without limitation of the
foregoing, the Series 2007-1 Class A Insurer shall be subrogated to
the rights of the Indenture Trustee and the Series 2007-1 Noteholders, in
the conduct of any such litigation, including without limitation, all rights of
any party to an adversary proceeding action with respect to any order issued in
connection with any such preference.

 

(c)           In
addition to the rights of assignment set forth in the immediately preceding
paragraph, subject to the provisions of Section 8.2 of the Base
Indenture, each Series 2007-1 Noteholder, by its purchase of a Series 2007-1
Note, shall have been deemed to give to the Series Controlling Party the
right of prior approval of amendments or supplements to the Transaction
Documents and of the exercise of any option, vote, right, power or the like
available to the Series 2007-1 Noteholders hereunder or thereunder.

 

(d)           By
acceptance of a Series 2007-1 Class A Note, each Series 2007-1
Senior Noteholder holding a Class A-1-A Note or Class A-2-II-A Note agrees
to be bound by the terms of the Series 2007-1 Class A Policy relating
to such Notes, including, without limitation, the method and timing of payment
and the Series 2007-1 Class A Insurer’s right of subrogation and
rights to reimbursement in respect of any payments made under the Series 2007-1
Class A Policy, as set forth herein and in Section 2.13 and 2.14
of the Base Indenture.

 

52

 

(e)           Notwithstanding
the foregoing, in the event that payments on the Series 2007-1 Senior
Notes are accelerated, such accelerated payments will not be covered by the Series 2007-1
Class A Insurer under the Series 2007-1 Class A Policy, unless the
Series 2007-1 Class A Insurer shall have elected to make such
accelerated payments in accordance with and subject to the terms of such Series 2007-1
Class A Policy.

 

(f)            The
Indenture Trustee shall be entitled to enforce on behalf of the Series 2007-1
Senior Noteholders the obligations of the Series 2007-1 Class A
Insurer under its Series 2007-1 Class A Policy.  Notwithstanding any other provision of the
Indenture or any Transaction Document, the Series 2007-1 Senior
Noteholders are not entitled to make any claims under the Series 2007-1 Class A
Insurance Policy or institute proceedings directly against the Series 2007-1
Class A Insurer.

 

(g)           The
Series 2007-1 Class A Policy is solely for the benefit of the holders
of the Series 2007-1 Class A-1-A Notes and the Series 2007-1 Class A-2-II-A
Notes and no other Series 2007-1 Noteholders shall be entitled to any
benefits thereunder.

 

Section 7.14           Fiscal Year End.  The Co-Issuers shall not change their fiscal
year end from the Sunday on or nearest to December 31 to any other date,
unless such change is done in order to conform with the fiscal year of IHOP
Corp., a Delaware corporation, and its affiliates.

 

Section 7.15           Notices.

 

(a)           Any
notice or communication by the Co-Issuers, the Servicer, the Series 2007-1
Class A Insurer or the Indenture Trustee to any other party hereto shall
be in writing and delivered in person or mailed by first-class mail (registered
or certified, return receipt requested), facsimile or overnight air courier
guaranteeing next day delivery, to such other party’s address:

 

	
   

  	
  If to the Master Issuer:

  
	
   

  	
   

  
	
   

  	
  Applebee’s Enterprises LLC

  
	
   

  	
  c/o Applebee’s Services, Inc.

  
	
   

  	
  11201 Renner Blvd.

  
	
   

  	
  Lenexa, Kansas 66219

  
	
   

  	
  Attn: Deputy General Counsel

  
	
   

  	
  Facsimile: (913) 890-9100

  

 

53

 

	
   

  	
  If to the IP Holder:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Applebee’s IP LLC

  	
   

  
	
   

  	
  c/o Applebee’s Services, Inc.

  	
   

  
	
   

  	
  11201 Renner Blvd.

  	
   

  
	
   

  	
  Lenexa, Kansas 66219

  	
   

  
	
   

  	
  Attn: Deputy General Counsel

  	
   

  
	
   

  	
  Facsimile: (913) 890-9100

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the Franchise Holder:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Applebee’s Franchising LLC

  	
   

  
	
   

  	
  c/o Applebee’s Services, Inc.

  	
   

  
	
   

  	
  11201 Renner Blvd.

  	
   

  
	
   

  	
  Lenexa, Kansas 66219

  	
   

  
	
   

  	
  Attn: Deputy General Counsel

  	
   

  
	
   

  	
  Facsimile: (913) 890-9100

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  If to any Restaurant Holder:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Applicable Restaurant Holder]

  	
   

  
	
   

  	
  c/o Applebee’s Services, Inc.

  	
   

  
	
   

  	
  11201 Renner Blvd.

  	
   

  
	
   

  	
  Lenexa, Kansas 66219

  	
   

  
	
   

  	
  Attn: Deputy General Counsel

  	
   

  
	
   

  	
  Facsimile: (913) 890-9100

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the Servicer:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Applebee’s Services, Inc.

  	
   

  
	
   

  	
  11201 Renner Blvd.

  	
   

  
	
   

  	
  Lenexa, Kansas 66219

  	
   

  
	
   

  	
  Attn: Deputy General Counsel

  	
   

  
	
   

  	
  Facsimile: (913) 890-9100

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  If to any Co-Issuer with a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  International House of Pancakes, Inc.

  	
   

  
	
   

  	
  450 North Brand Boulevard

  	
   

  
	
   

  	
  Glendale, California 91203-2306

  	
   

  
	
   

  	
  Attn: General Counsel

  	
   

  
	
   

  	
  Facsimile: (818) 637-5361

  	
   

  

 

54

 

	
   

  	
   

  	
   

  
	
   

  	
  If to the 2007-1 Class A Insurer:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Assured Guaranty Corp.

  	
   

  
	
   

  	
  1325 Avenue of the Americas

  	
   

  
	
   

  	
  New York, NY 10019

  	
   

  
	
   

  	
  Attention:

  	
  Risk Management Dept.

  	
   

  
	
   

  	
   

  	
  Re: Applebee’s Series 2007-1 Notes

  	
   

  
	
   

  	
   

  	
  Policy No. D-2007-151

  	
   

  
	
   

  	
  Facsimile:

  	
  (212) 581-3268

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Sidley Austin LLP

  	
   

  
	
   

  	
  One South Dearborn Street

  	
   

  
	
   

  	
  Chicago, Illinois 60603

  	
   

  
	
   

  	
  Attention:

  	
  Kevin Hochberg

  	
   

  
	
   

  	
  Facsimile:

  	
  (312) 853-7036

  	
   

  
	
   

  	
   

  
	
   

  	
  (in each case in which notice or other communication
  to the Series 2007-1 Class A Insurer refers to an “Insurance
  Agreement Event of Default,” a claim on its Policy or any other event with
  respect to which failure on the part of such Insurer to respond shall be
  deemed to constitute consent or acceptance, then a copy of such notice or
  other communication should also be sent to the attention of the General
  Counsel and shall be marked to indicate “URGENT MATERIAL ENCLOSED.”)

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the Indenture Trustee:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Wells Fargo Bank, National Association

  	
   

  
	
   

  	
  6th & Marquette MAC N9311-161

  	
   

  
	
   

  	
  Minneapolis, MN 55479

  	
   

  
	
   

  	
  Attention:

  	
  Corporate Trust Services / Asset Backed Administration

  	
   

  
	
   

  	
  Facsimile:

  	
  (612) 667-3464

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Fitch:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Fitch Ratings

  	
   

  
	
   

  	
  70 W. Madison
  Street

  	
   

  
	
   

  	
  Chicago,
  Illinois 60602

  	
   

  
	
   

  	
  Attn: ABS
  Monitoring Group-Whole Business

  	
   

  
	
   

  	
  Facsimile: (312)
  368-2069

  	
   

  
					

 

55

 

	
   

  	
  If to Moody’s:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Moody’s
  Investors Service, Inc.

  	
   

  
	
   

  	
  7 World Trade
  Center at 250 Greenwich Street

  	
   

  
	
   

  	
  New York,
  NY 10007

  	
   

  
	
   

  	
  Attention:

  	
  ABS Monitoring
  Department

  	
   

  
	
   

  	
  Facsimile:

  	
  (212) 553-0573

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy of
  all notices pertaining to other indebtedness:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Moody’s
  Investors Services, Inc.

  	
   

  
	
   

  	
  7 World Trade
  Center at 250 Greenwich Street

  	
   

  
	
   

  	
  New York,
  NY 10007

  	
   

  
	
   

  	
  Attention:

  	
  Asset Finance
  Group – Team Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Standard & Poor’s:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Standard & Poor’s Rating Services

  	
   

  
	
   

  	
  55 Water Street, 42nd Floor

  	
   

  
	
   

  	
  New York, NY 10041-0003

  	
   

  
	
   

  	
  Attention:

  	
  ABS Surveillance Group – New Assets

  	
   

  
	
   

  	
  E mail:

  	
  Servicer_reports@sandp.com

  	
   

  

 

Section 7.16   Legal Holidays.

 

In the event that the
date of any Payment Date or Series 2007-1 Prepayment Date shall not be a
Business Day, then, notwithstanding any other provision of the Notes or this Series 2007-1
Supplement, payment need not be made on such date, but may be made on the next
Business Day with the same force and effect as if made on the nominal date of
any such Payment Date or Series 2007-1 Prepayment Date, as the case may
be.  With respect to the Notes, interest
shall accrue on any such payment for the period from and after any such nominal
date at the rate applicable to each Series of Notes.

 

[Signature Pages Follow]

 

56

 

IN WITNESS WHEREOF, each
of the Co-Issuers and the Indenture Trustee have caused this Series 2007-1
Supplement to be duly executed by its respective duly authorized officer as of
the day and year first written above.

 

	
   

  	
  APPLEBEE’S ENTERPRISES
  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
  WEST 

  
	
   

  	
   

  	
  LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Beverly Elving

  
	
   

  	
   

  	
  Name:  Beverly Elving

  
	
   

  	
   

  	
  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

  

 

Signature Page to the Supplement to the Base Indenture

 

 

	
   

  	
  APPLEBEE’S RESTAURANTS
  MID-

  
	
   

  	
   

  	
  ATLANTIC 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 RESTAURANTS
  KANSAS 

  
	
   

  	
   

  	
  LLC, as Co-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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK,
  NATIONAL 

  
	
   

  	
   

  	
  ASSOCIATION,

  
	
   

  	
   

  	
  in its capacity as
  Indenture Trustee and 

  as Securities Intermediary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Melissa Philibert

  
	
   

  	
   

  	
  Name:  Melissa Philibert

  
	
   

  	
   

  	
  Title:    Vice President

  

 

Signature Page to the
Supplement to the Base Indenture

 

 

ANNEX A

 

SERIES 2007-1 SUPPLEMENTAL DEFINITIONS LIST

 

“Acquiring Committed
Note Purchaser” has the meaning set forth in Section 9.17(a) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Acquiring Investor
Group” has the meaning set forth in Section 9.17(d) of the
Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Advance” has the
meaning set forth in the recitals to the Series 2007-1 Class A-1 Note
Purchase Agreement.

 

“Advance Request”
has the meaning set forth in Section 7.03(d) of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Advance Sub-Class”
has the meaning set forth in “Designation” in the Series 2007-1
Supplement.

 

“Affected Person”
has the meaning set forth in Section 3.05 of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Agent Indemnified
Liabilities” has the meaning set forth in Section 9.05(c)(i) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Agent Indemnified
Parties” has the meaning set forth in Section 9.05(c)(i) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Aggregate Unpaids”
has the meaning set forth in Section 5.01 of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Applicable Agent
Indemnified Parties” has the meaning set forth in Section 9.05(c)(ii) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Applicable Sub-Class Percentage”
means, (i) for any Series 2007-1 Class A-1 Advance Sub-Class whose
designation includes the alphanumeric label “A-1-A”, 30%; and (ii) for any
Series 2007-1 Class A-1 Advance Sub-Class whose designation
includes the alphanumeric label “A-1-X”, 70%.

 

“Applicable Swingline
Loan has the meaning set forth in Section 2.06(e) of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Application”
means an application, in such form as the applicable L/C Issuing Bank may
specify from time to time, requesting such L/C Issuing Bank to open a Letter of
Credit.

 

1

 

“Assignment and
Assumption Agreement” has the meaning set forth in Section 9.17(a) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Assured Guaranty”
means Assured Guaranty Corp., a Maryland-domiciled insurance company, and any
successors thereto.

 

“Base Rate” means,
on any day, a rate per annum equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Rate in effect on such day. Any
change in the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective as of the opening of business on the effective day of
such change in the Prime Rate or the Federal Funds Rate, respectively. Changes
in any rate of interest calculated by reference to the Base Rate will take
effect simultaneously with each change in the Base Rate.

 

“Base Rate Advance”
means an Advance (including, without limitation, a Swingline Loan, an
Unreimbursed L/C Drawing or any Seasoned Base Rate Advance) which bears
interest at a rate of interest determined by reference to the Base Rate during
such time as it bears interest at such rate, as provided in the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Borrowing” has
the meaning set forth in Section 2.02(d) of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Breakage Amount”
has the meaning set forth in Section 3.06 of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Change in Law”
means (a) any law, rule or regulation or any change therein or in the
interpretation or application thereof (whether or not having the force of law),
in each case, adopted, issued or occurring after the Series 2007-1 Closing
Date or (b) any request, guideline or directive (whether or not having the
force of law) from any government or political subdivision or agency,
authority, bureau, central bank, commission, department or instrumentality
thereof, or any court, tribunal, grand jury or arbitrator, or any accounting
board or authority (whether or not a Governmental Authority) which is
responsible for the establishment or interpretation of national or
international accounting principles, in each case, whether foreign or domestic
(each, an “Official Body”) charged with the administration, interpretation
or application thereof, or the compliance with any request or directive of any
Official Body (whether or not having the force of law) made, issued or
occurring after the Series 2007-1 Closing Date.

 

“Class A-1
Administrative Agent” has the meaning set forth in the preamble to the Series 2007-1
Class A-1 Note Purchase Agreement. For purposes of the Indenture, the “Administrative
Agent” shall be deemed to be a “Class A-1 Administrative Agent.”

 

“Class A-1
Administrative Agent Fees” has the meaning set forth in the definition of “Administrative
Agent Fees” in the Series 2007-1 Class A-1 VFN Fee Letter.

 

2

 

“Class A-1
Amendment Expenses” means all amounts payable pursuant to clause (a)(ii) of
Section 9.05 of the Series 2007-1 Class A-1 Note Purchase
Agreement.

 

“Class A-1
Indemnities” means all amounts payable pursuant to Sections 9.05(b) and
(c) of the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Class A-1 Taxes”
has the meaning set forth in Section 3.08 of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Class A-1-A
Investor Group” means (i) for each Conduit Investor listed on the “Class A-1-A”
portion of Schedule I to the Series 2007-1 Class A-1 Note
Purchase Agreement, collectively, such Conduit Investor, the related Committed
Note Purchaser(s) set forth opposite the name of such Conduit Investor on Schedule
I-Class A-1-A to the Series 2007-1 Class A-1 Note Purchase
Agreement (or, if applicable, set forth for such Conduit Investor in the Assignment
and Assumption Agreement or Investor Group Supplement pursuant to which such
Conduit Investor or Committed Note Purchaser becomes a party thereto), any
related Program Support Provider(s) and the related Funding Agent (and
such Funding Agent or its designee shall constitute the Series 2007-1 Class A-1-A
Noteholder for such Investor Group) and (ii) for each other Committed Note
Purchaser that is listed on the “Class A-1-A” portion of Schedule I
to the Series 2007-1 Class A-1 Note Purchase Agreement and that is
not related to a Conduit Investor, collectively, such Committed Note Purchaser,
any related Program Support Provider(s) and the related Funding Agent (and
such Funding Agent or its designee shall constitute the Series 2007-1 Class A-1-A
Noteholder for such Investor Group).

 

“Class A-1-X
Investor Group” means (i) for each Conduit Investor listed on the “Class A-1-X”
portion of Schedule I to the Series 2007-1 Class A-1 Note
Purchase Agreement, collectively, such Conduit Investor, the related Committed
Note Purchaser(s) set forth opposite the name of such Conduit Investor on Schedule
I-Class A-1-X to the Series 2007-1 Class A-1 Note Purchase
Agreement (or, if applicable, set forth for such Conduit Investor in the
Assignment and Assumption Agreement or Investor Group Supplement pursuant to
which such Conduit Investor or Committed Note Purchaser becomes a party
thereto), any related Program Support Provider(s) and the related Funding
Agent (and such Funding Agent or its designee shall constitute the Series 2007-1
Class A-1-X Noteholder for such Investor Group) and (ii) for each
other Committed Note Purchaser that is listed on the “Class A-1-X” portion
of Schedule I to the Series 2007-1 Class A-1 Note Purchase
Agreement and that is not related to a Conduit Investor, collectively, such
Committed Note Purchaser, any related Program Support Provider(s) and the
related Funding Agent (and such Funding Agent or its designee shall constitute
the Series 2007-1 Class A-1-X Noteholder for such Investor Group).

 

“Commercial Paper”
means, with respect to any Conduit Investor, the promissory notes issued in the
commercial paper market by or for the benefit of such Conduit Investor.

 

“Committed Note
Purchaser” has the meaning set forth in the preamble to the Series 2007-1
Class A-1 Note Purchase Agreement.

 

3

 

“Committed Note
Purchaser Percentage” means, on any date of determination, with respect to
any Committed Note Purchaser in any Investor Group, the ratio, expressed as a percentage,
which the Commitment Amount of such Committed Note Purchaser bears to such
Investor Group’s Maximum Investor Group Principal Amount on such date.

 

“Commitment Amount”
means, as to each Committed Note Purchaser with respect to any Advance Sub-class,
the amount set forth on the portion of Schedule I to the Series 2007-1
Class A-1 Note Purchase Agreement relating to such Advance Sub-class
opposite such Committed Note Purchaser’s name as its Commitment Amount or, in
the case of a Committed Note Purchaser that becomes a party to the Series 2007-1
Class A-1 Note Purchase Agreement pursuant to an Assignment and Assumption
Agreement or Investor Group Supplement, the amount set forth therein as such
Committed Note Purchaser’s Commitment Amount, in each case, as such amount may
be (i) reduced pursuant to Section 2.05 of the Series 2007-1
Class A-1 Note Purchase Agreement or (ii) increased or reduced by any
Assignment and Assumption Agreement or Investor Group Supplement entered into
by such Committed Note Purchaser in accordance with the terms of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Commitment Percentage”
means, on any date of determination, with respect to any Investor Group, the
ratio, expressed as a percentage, which such Investor Group’s Maximum Investor
Group Principal Amount bears to the Series 2007-1 Class A-1 Maximum
Principal Amount on such date.

 

“Commitment Term”
means the period from and including the Series 2007-1 Closing Date to but
excluding the earlier of (a) the Commitment Termination Date and (b) the
date on which the Commitments are terminated or reduced to zero in accordance
with the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Commitment
Termination Date” means the Series 2007-1 Adjusted Repayment Date.

 

“Commitments”
means the obligation of each Committed Note Purchaser included in each Investor
Group with respect to any Advance Sub-class to fund Advances pursuant to Section 2.02(a) of
the Series 2007-1 Class A-1 Note Purchase Agreement and to
participate in Swingline Loans and Letters of Credit pursuant to Sections 2.06
and 2.07 of the Series 2007-1 Class A-1 Note Purchase
Agreement in an aggregate stated amount up to its Commitment Amount with
respect to such Advance Sub-class.

 

“Conduit Assignee”
means, with respect to
any Conduit Investor or any Committed Note Purchaser, any assignee designated by the related
Funding Agent to accept an assignment from such Conduit Investor or such
Committed Note Purchaser, as applicable, of
the Investor Group Principal Amount or a portion thereof with respect to such
Conduit Investor or such Committed Note Purchaser pursuant to Section 9.17(b) and
Section 9.17(c), respectively, of the Series 2007-1 Class A-1 Note Purchase Agreement,
provided that, as of the effective date of the assignment, such assignee either
meets the 

 

4

 

criteria set forth in the
following clauses (i) and (ii) or has otherwise been consented to by
the Co-Issuers (such consent not to be unreasonably withheld):

 

(i)                                   such assignee is, or is a Subsidiary of, a
commercial paper conduit whose Commercial Paper is rated by at least two of the
Specified Rating Agencies and is rated at least “A-1” from Standard &
Poor’s, “P1” from Moody’s and/or “F1” from Fitch, as applicable, and

 

(ii)                                  either (x) such assignee is administered
by such Funding Agent or any Affiliate of such Funding Agent or (y) the
Program Support Provider for such Conduit Investor with respect to the Investor
Group Principal Amount being assigned is the Program Support Provider for such
assignee with respect to such Investor Group Principal Amount.

 

“Conduit Investors”
has the meaning set forth in the preamble to the Series 2007-1 Class A-1
Note Purchase Agreement.

 

“Confidential
Information” for purposes of the Series 2007-1 Class A-1 Note
Purchase Agreement, has the meaning set forth in Section 9.11 of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“CP Advance” means
an Advance that bears interest at a rate of interest determined by reference to
the CP Rate during such time as it bears interest at such rate, as provided in
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“CP Funding Rate” means, with respect to each Conduit Investor,
for any day during any Interest Accrual Period, for any portion of the Advances
funded or maintained through the issuance of Commercial Paper, the per annum
rate equivalent to the weighted average cost (as determined
by the related Funding Agent, and which shall include (without duplication) the
fees and commissions of placement agents and dealers, incremental carrying
costs incurred with respect to Commercial Paper maturing on dates other than
those on which corresponding funds are received by such Conduit Investor, other
borrowings by such Conduit Investor and any other costs associated with the
issuance of Commercial Paper) of or related to the issuance of Commercial Paper
that are allocated, in whole or in part, by such Conduit Investor or its
related Funding Agent to fund or maintain such Advances for such Interest Accrual
Period (and which may also be allocated in part to the funding of other assets
of the Conduit Investor);  provided,
however, that if any component of any such rate is a discount rate, in
calculating the “CP Funding Rate” for such Advances for such Interest
Accrual Period, the related Funding Agent shall for such component use the rate
resulting from converting such discount rate to an interest bearing equivalent
rate per annum.

 

“CP Rate” means (a) with respect to the Series 2007-1
Class A-1-A Notes, on any day during any Interest Accrual Period, an
interest rate per annum equal to the sum of (i) the CP Funding Rate for
such Interest Accrual Period plus (ii) 220.5 basis points and (b) with
respect to the Series 2007-1 Class A-1-X Notes, on any day during 

 

5

 

any Interest Accrual
Period, an interest rate per annum equal to the sum of (i) the CP Funding
Rate for such Interest Accrual Period plus (ii) 285.5 basis points.

 

“Daily Class A-1
Insurer Premiums Amount” means for each day during any Interest Accrual
Period (x) the sum of (a) the product of (i) the Used Premium
Rate, multiplied by (ii) the Series 2007-1 Class A-1
Outstanding Principal Amount on such day, plus (b) the product of (i) the
Unused Premium Rate, multiplied by (ii) the excess of the Series 2007-1
Class A-1 Maximum Principal Amount over the Series 2007-1 Class A-1
Outstanding Principal Amount on such day divided by (y) 360.

 

“Daily Commitment Fee
Amount” means, for any day during any Interest Accrual Period, the Undrawn
Commitment Fees that accrue for such day.

 

“Daily Excess A-1
Interest Amount” means, (a) for any CP Advance outstanding on any day
during any Interest Accrual Period, the excess, if any, of (i) the result
of (x) the product of (A) the CP Rate in effect for such Advance for
such Interest Accrual Period and (B) the principal amount of such Advance
outstanding as of the close of business on such day divided by (y) 360,
over (ii) the portion of the Daily Senior Interest Amount for such day
that is attributable to such Advance, and (b) for any Seasoned Base Rate
Advance outstanding on any day during any Interest Accrual Period, the excess
if any, of (i) the result of the product of (A) the Base Rate in
effect for such Advance for such day and (B) the principal amount of such
Advance outstanding as of the close of business on such day, divided by (y) 365
or 366, as applicable, over (ii) the portion of the Daily Senior Interest
Amount for such day that is attributable to such Advance.

 

“Daily Extension
Contingent Additional Interest Amount” means, for any day during any
Interest Accrual Period occurring during any Series 2007-1 Extension
Period, the sum of (a) the result of (i) the product of (x) the Series 2007-1
Class A-1 Extension Contingent Additional Rate multiplied by (y) the
Series 2007-1 Class A-1 Outstanding Principal Amount (excluding any
Base Rate Advances and Undrawn L/C Face Amounts included therein) as of the
close of business on such day divided by (ii) 360 and (b) the
result of (i) the product of (x) the Series 2007-1 Class A-1
Extension Contingent Additional Rate and (y) any Base Rate Advances
included in the Series 2007-1 Class A-1 Outstanding Principal Amount
as of the close of business on such day divided by (ii) 365 or 366, as
applicable.

 

“Daily Extension
Contingent Additional L/C Fees Amount” means, for any day during any
Interest Accrual Period occurring during the Series 2007-1 Extension
Period, the result of (a) the product of (i) the Series 2007-1 Class A-1
Extension Contingent Additional Rate multiplied by (ii) any Undrawn
L/C Face Amounts as of the close of business on such day divided by (b) 360.

 

“Daily Insured Interest Amount” shall mean the portion of the Daily Senior
Interest Amount attributable to the Series 2007-1 Class A-1-A Notes.

 

“Daily Post-ARD
Contingent Additional Interest Amount” means, for any 

 

6

 

day during any Interest
Accrual Period commencing on or after the Series 2007-1 Adjusted Repayment
Date, the sum of (a) the result of (i) the product of (x) the Series 2007-1
Class A-1 Post-ARD Monthly Contingent Additional Rate and (y) the Series 2007-1
Class A-1 Outstanding Principal Amount (excluding any Base Rate Advances
and Undrawn L/C Face Amounts included therein) as of the close of business on
such day divided by (ii) 360 and (b) the result of (i) the
product of (x) the Series 2007-1 Class A-1 Post-ARD Monthly
Contingent Additional Rate and (y) any Base Rate Advances included in the Series 2007-1
Class A-1 Outstanding Principal Amount as of the close of business on such
day divided by (ii) 365 or 366, as applicable.

 

“Daily Senior Interest
Amount” means, for any day during any Interest Accrual Period, the sum of
the following amounts:

 

(a)                                  with
respect to any Eurodollar Advance outstanding on such day, the result of (i) the
product of (x) the Eurodollar Rate in effect for such Interest Accrual
Period and (y) the principal amount of such Advance outstanding as of the
close of business on such day divided by (ii) 360; plus

 

(b)                                 with
respect to any Base Rate Advance that is not a Seasoned Base Rate Advance
outstanding on such day, the result of (i) the product of (x) the
Base Rate in effect for such day and (y) the principal amount of such
Advance outstanding as of the close of business on such day divided by (ii) 365
or 366, as applicable; plus

 

(c)                                  with
respect to any Seasoned Base Rate Advance outstanding on such day, the result
of (i) the product of (x) the lesser of (A) the Base Rate in
effect for such day and (B) the Eurodollar Rate that would be in effect
for such Interest Accrual Period if such Seasoned Base Rate Advance were a
Eurodollar Advance and (y) the principal amount of such Seasoned Base Rate
Advance outstanding as of the close of business on such day divided by (ii) if
the lesser of (A) and (B) above is (A), 365 or 366, as
applicable, and if the lesser of (A) and (B) above is (B),
360; plus

 

(d)                                 with
respect to any CP Advance outstanding on such day, the result of (i) the
product of (x) the lesser of (A) the CP Rate in effect for such
Interest Accrual Period and (B) the Eurodollar Rate that would be in
effect for such Interest Accrual Period if such Advance were a Eurodollar
Advance and (y) the principal amount of such Advance outstanding as of the
close of business on such day divided by (ii) 360; plus

 

(e)                                  with
respect to any Swingline Loans or Unreimbursed L/C Drawings outstanding on such
day, the result of (i) the product of (x) the Base Rate in effect for
such day and (y) the principal amount of such Class A-1 Swingline
Loans and Unreimbursed L/C Drawings outstanding as of the close of business on
such day divided by (ii) 365 or 366, as applicable (provided that
for the purposes of this definition of “Daily Senior Interest Amount” and the definition
of “Daily Excess A-1 Interest Amount,” as well as any use of either definition
in any of the Related Documents, any Swingline Loan or Unreimbursed L/C Drawing
that has been outstanding for more than two Business Days shall, for each day
any such Swingline Loan or Unreimbursed L/C Drawing is outstanding after such
two Business Day period, be deemed to be a “Seasoned 

 

7

 

Base Rate Advance” and
shall be governed by clause (c) above and by clause (b) of
the definition of “Daily Excess A-1 Interest Amount” and not this clause (e));
plus

 

(f)                                    with
respect to any Undrawn L/C Face Amounts outstanding on such day, the L/C
Monthly Fees and L/C Fronting Fees that accrue thereon for such day.

 

“Debt
Service Coverage Ratios” refers to the following debt service coverage
ratios: (i) the Three-Month DSCR, (ii) the Three-Month Adjusted DSCR,
(iii) One-Year DSCR, and (iv) the One-Year Adjusted DSCR, in each
case as such terms are defined in the Base Indenture.

 

“Decrease” means a
Mandatory Decrease or a Voluntary Decrease, as applicable.

 

“Deficiency Amount”
has, with respect to the Series 2007-1 Class A Insurer, the meaning
set forth in the Series 2007-1 Class A Policy.

 

“DTC” means The
Depository Trust Company, and any successor thereto.

 

“EDSF Rate” means,
when used with respect to any Business Day, the rate derived from the Eurodollar
Synthetic Forward Curve appearing on Bloomberg (or any successor service or,
if such service or successor service is not available, a substitute rate, which
will be the median of three quoted rates determined by the Indenture Trustee
requesting at the expense of the Co-Issuers substitute rate quotes from three
broker dealers of nationally recognized standing), adjusted for 30/360 day count convention expressed as a number of
basis points per annum.

 

“Eligible
Conduit Investor” means, at any time, any Conduit Investor whose Commercial
Paper at such time is rated by at least two of the Specified Rating
Agencies and is rated at least “A-1” from Standard & Poor’s, “P-1”
from Moody’s and/or “F-1” from Fitch, as applicable.

 

“Eurodollar Advance”
means an Advance that bears interest at a rate of interest determined by
reference to the Eurodollar Rate during such time as it bears interest at such
rate, as provided in the Series 2007-1 Class A-1 Note Purchase
Agreement.

 

“Eurodollar Business
Day” means any Business Day on which dealings are also carried on in the
London interbank market and banks are open for business in London.

 

“Eurodollar Funding
Rate” means, for any Eurodollar Interest Period, the rate per annum
determined by the

Class A-1 Administrative Agent at approximately 11:00 a.m. (London
time) on the date that is two Eurodollar Business Days prior to the beginning
of such Eurodollar Interest Period by reference to the British Bankers’
Association Interest Settlement Rates for deposits in Dollars (appearing on page 3750
of the Telerate Service or any successor to or substitute for such service
selected by the 

 

8

 

Class A-1
Administrative Agent and which has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
such rates) for a period equal to such Eurodollar Interest Period; provided
that, to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the “Eurodollar Funding Rate” shall be
the rate (rounded upward, if necessary, to the nearest one hundred-thousandth
of a percentage point), determined by the Class A-1 Administrative Agent
to be the average of the offered rates for deposits in Dollars in the amount of
$1,000,000 for a period of time comparable to such Eurodollar Interest Period
which are offered by three leading banks in the London interbank market at
approximately 11:00 a.m. (London time) on the date that is two Eurodollar
Business Days prior to the beginning of such Eurodollar Interest Period as
selected by the Class A-1 Administrative Agent (unless the Class A-1
Administrative Agent is unable to obtain such rates from such banks, it will be
deemed that a Eurodollar Funding Rate cannot be ascertained for purposes of Section 3.04
of the Series 2007-1 Class A-1 Note Purchase Agreement). In
respect of any Eurodollar Interest Period that is less than one month in
duration and if no Eurodollar Funding Rate is otherwise determinable with
respect thereto in accordance with the preceding sentence of this definition,
the Eurodollar Funding Rate shall be determined through the use of
straight-line interpolation by reference to two rates calculated in accordance
with the preceding sentence, one of which shall be determined as if the
maturity of the Dollar deposits referred to therein were the period of time for
which rates are available next shorter than the Eurodollar Interest Period and
the other of which shall be determined as if such maturity were the period of
time for which rates are available next longer than the Eurodollar Interest
Period.

 

“Eurodollar Funding
Rate (Reserve Adjusted)” means, for any Eurodollar Interest Period, an
interest rate per annum (rounded upward to the nearest 1/100th of 1%)
determined pursuant to the following formula:

 

	
  Eurodollar Funding Rate

  	
  =

  	
  Eurodollar Funding Rate

  
	
  (Reserve Adjusted)

  	
   

  	
  [1.00] – Eurodollar Reserve Percentage

  

 

The Eurodollar Funding
Rate (Reserve Adjusted) for any Eurodollar Interest Period will be determined
by the Class A-1 Administrative Agent on the basis of the Eurodollar
Reserve Percentage in effect two Eurodollar Business Days before the first day
of such Eurodollar Interest Period.

 

“Eurodollar Interest
Period” means, (a) with respect to any Eurodollar Advance, (x) initially,
the period commencing on and including the Eurodollar Business Day such Advance
first becomes a Eurodollar Advance in accordance with Section 3.01
of the Series 2007-1 Class A-1 Note Purchase Agreement and ending on
but excluding the second
Business Day before the next Accounting Date and (y) each period commencing on the second Business
Day before each Accounting Date while such Advance is outstanding as a
Eurodollar Advance and ending on but excluding the second Business Day before
the next succeeding Accounting Date;  provided, however,
that

 

9

 

(i)                                   no
Eurodollar Interest Period may end subsequent to the second Business Day before the Accounting Date occurring
immediately prior to the then-current Series 2007-1 Adjusted Repayment
Date; and

 

(ii)                                upon
the occurrence and during the continuation of any Rapid Amortization Period or
any Event of Default, any Eurodollar Interest Period with respect to the
Eurodollar Advances of all Investor Groups may be terminated at the end of the
then-current Eurodollar Interest Period (or, if the Class A-1 Notes have
been accelerated in accordance with Section 9.2 of the Base
Indenture, immediately), at the election of the Class A-1 Administrative
Agent or Investor Groups holding in the aggregate more than 50% of the
Eurodollar Tranche, by notice to the Co-Issuers, the Servicer, the Series 2007-1
Class A Insurer and the Funding Agents, and upon such election the
Eurodollar Advances in respect of which interest was calculated by reference to
such terminated Eurodollar Interest Period shall be converted to Base Rate
Advances; and

 

(b) for purposes of
the definition of Interest Reserve Daily Calculation Rate, each Reference
Eurodollar Interest Period.

 

“Eurodollar Rate”
means (a) with respect to the Series 2007-1 Class A-1-A Notes,
on any day during any Eurodollar Interest Period, an interest rate per annum
equal to the sum of (i) the Eurodollar Funding Rate (Reserve Adjusted) for
such Eurodollar Interest Period plus (ii) 220.5 basis points and (b) with
respect to the Series 2007-1 Class A-1-X Notes, on any day during any
Eurodollar Interest Period, an interest rate per annum equal to the sum of (i) the
Eurodollar Funding Rate (Reserve Adjusted) for such Eurodollar Interest Period
plus (ii) 285.5 basis points.

 

“Eurodollar Reserve
Percentage” means, for any Eurodollar Interest Period, the reserve
percentage (expressed as a decimal) equal to the maximum aggregate reserve
requirements (including all basic, emergency, supplemental, marginal and other
reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements) specified under regulations issued
from time to time by the F.R.S. Board and then applicable to liabilities or
assets constituting “Eurocurrency Liabilities,” as currently defined in
Regulation D of the F.R.S. Board, having a term approximately equal or
comparable to such Eurodollar Interest Period.

 

“Eurodollar Tranche”
means any portion of the Series 2007-1 Class A-1 Outstanding
Principal Amount funded or maintained with Eurodollar Advances.

 

“Existing Letters of
Credit” has the meaning set forth in Section 2.10 of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Federal Funds Rate”
means, for any period, a fluctuating interest rate per annum equal for each day
during such period to the weighted average of the overnight federal funds rates
as published in Federal Reserve Board Statistical Release H.15(519) or any
successor or substitute publication selected by the Class A-1
Administrative Agent 

 

10

 

(or, if such day is not a
Business Day, for the next preceding Business Day), or if, for any reason, such
rate is not available on any day, the rate determined, in the reasonable
opinion of the Class A-1 Administrative Agent, to be the rate at which
overnight federal funds are being offered in the national federal funds market
at 9:00 a.m. (New York time).

 

“Fitch” means
Fitch, Inc., doing business as Fitch Ratings, or any successor thereto.

 

“Foreign Affected
Person” has the meaning set forth in Section 3.08(a) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“F.R.S. Board”
means the Board of Governors of the Federal Reserve System.

 

“Funding Agent”
has the meaning set forth in the preamble to the Series 2007-1 Class A-1
Note Purchase Agreement.

 

“Funding Agent
Indemnified Parties” has the meaning set forth in Section 9.05(c)(ii) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Increase” has the
meaning set forth in Section 3.1(a) of the Series 2007-1
Supplement.

 

“Increased Capital
Costs” has the meaning set forth in Section 3.07 of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Increased Costs”
has the meaning set forth in Section 3.05 of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Increased Tax Costs”
has the meaning set forth in Section 3.08 of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Indemnified
Liabilities” has the meaning set forth in Section 9.05(b) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Indemnified Parties”
has the meaning set forth in Section 9.05(b) of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Initial Purchaser”
means Lehman Brothers Inc.

 

“Insured Amounts”
has, with respect to the Series 2007-1 Class A Insurer, the meaning
set forth in the Series 2007-1 Class A Policy.

 

“Insured Obligations”
has, with respect to the Series 2007-1 Class A Insurer, the meaning
set forth in the Series 2007-1 Class A Policy.

 

11

 

“Insured Senior Notes”:  As of any date of determination, the Series 2007-1
Class A-1-A Notes and the Series 2007-1 Class A-2-II-A Notes,
the payments on which are insured by an Insurance Policy in effect on such
date.

 

“Insured Senior Notes
Percentage”:  As of any date of
determination, the percentage obtained by dividing (i) the
Aggregate Outstanding Principal Amount of all Insured Senior Notes on such date
by (ii) the Aggregate Outstanding Principal Amount of all Series 2007-1
Class A-1 Notes and Series 2007-1 Class A-2 Notes on such date,
assuming for purposes of both clause (i) and clause (ii) that the
commitments (including any issued by undrawn letters of credit) with respect to
any Senior Notes designated as Class A-1 are fully drawn on such date.

 

“Insurer
Make-Whole Premium” means (i) with respect to the Series 2007-1
Notes, the Series 2007-1 Insurer Make-Whole Premium, and (ii) with
respect to any other Series of Notes, as specified in the applicable Series Supplement.

 

“Interest Reserve
Daily Calculation Rate” means, (a) for any Collection Period that ends
on or prior to December 31, 2007, 7.7275% and (b) for any Collection
Period thereafter, the average of the Eurodollar Rates for each of the
Reference Eurodollar Interest Periods for such Collection Period; provided,
however, that, in the case of this clause (b), if the Reference
Base Rate Percentage for such Collection Period exceeds 25%, then the Interest
Reserve Daily Calculation Rate for such Collection Period shall be the sum of (i) the
product of (x) such Reference Base Rate Percentage and (y) the
average of the Base Rates in effect on the first Business Day of each week in
the related Reference Quarter and (ii) the product of (x) 100% minus
such Reference Base Rate Percentage and (y) the average of the Eurodollar
Rates for each of the related Reference Eurodollar Interest Periods.

 

“Investor” means
any one of the Conduit Investors and the Committed Note Purchasers and “Investors”
means the Conduit Investors and the Committed Note Purchasers collectively.

 

“Investor Group”
means any Class A-1-A Investor Group or any Class A-1-X Investor
Group, as the context may require. For the avoidance of doubt, when used in
relation to any particular Advance Sub-class, the term “Investor Group” means
each Investor Group listed on the portion of Schedule I to the Series 2007-1
Class A-1 Note Purchase Agreement relating to such Advance Sub-class.

 

“Investor Group
Increase Amount” means, with respect to any Investor Group, for any
Business Day, such Investor Group’s Commitment Percentage of the Increase, if
any, on such Business Day.

 

“Investor Group Principal
Amount” means, with respect to any Investor Group, (a) when used with
respect to the Series 2007-1 Closing Date, an amount equal to (i) such
Investor Group’s Commitment Percentage of the Series 2007-1 Class A-1
Initial Advance Principal Amount plus (ii) such Investor Group’s
Commitment Percentage of the Series 2007-1 Class A-1 Outstanding
Subfacility Amount outstanding on the Series 

 

12

 

2007-1 Closing Date, and (b) when
used with respect to any other date, an amount equal to (i) the Investor
Group Principal Amount with respect to such Investor Group on the immediately
preceding Business Day (excluding any Series 2007-1 Class A-1
Outstanding Subfacility Amount included therein) plus (ii) the Investor
Group Increase Amount with respect to such Investor Group on such date minus (iii) the
amount of principal payments made to such Investor Group on the Series 2007-1
Class A-1 Advance Notes on such date plus (iv) such Investor Group’s
Commitment Percentage of the Series 2007-1 Class A-1 Outstanding
Subfacility Amount outstanding on such date.

 

“Investor Group
Supplement” has the meaning set forth in Section 9.17(d) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“L/C Additional
Charges” has the meaning set forth in Section 2.07(e) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“L/C Commitment”
means the obligation of the L/C Provider to provide Letters of Credit pursuant
to Section 2.07 of the Series 2007-1 Class A-1 Note
Purchase Agreement, in an aggregate Undrawn L/C Face Amount, together with any
Unreimbursed L/C Drawings, at any one time outstanding not to exceed
$50,000,000, as such amount may be reduced or increased pursuant to Section 2.07(g) of
the Series 2007-1 Class A-1 Note Purchase Agreement or reduced
pursuant to Section 2.05(b) of the Series 2007-1 Class A-1
Note Purchase Agreement.

 

“L/C Fronting Fees”
has the meaning set forth in Section 2.07(e) of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“L/C Fronting Fees
Rate” has the meaning set forth in the Series 2007-1 Class A-1
VFN Fee Letter, not to exceed one percent (1.00%) per annum.

 

“L/C Issuing Bank”
has the meaning set forth in Section 2.07(h) of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“L/C Monthly Fees”
has the meaning set forth in Section 2.07(d) of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“L/C Monthly Fees Rate”
has the meaning set forth in the Series 2007-1 Class A-1 VFN Fee
Letter, not to exceed (i) with respect to the portion of the Undrawn L/C
Face Amounts allocable to the Series 2007-1 Class A-1-A Notes, a per
annum rate equal to 220.5 basis points per annum (2.205%) and (ii) with
respect to the portion of the Undrawn L/C Face Amounts allocable to the Series 2007-1
Class A-1-X Notes, a per annum rate equal to 285.5 basis points (2.855%).

 

“L/C Obligations”
means, at any time, an amount equal to the sum of (i) any Undrawn L/C Face
Amounts outstanding at such time and (ii) any Unreimbursed L/C Drawings
outstanding at such time.

 

13

 

“L/C Other
Reimbursement Costs” has the meaning set forth in Section 2.08(a)(ii) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“L/C Provider” has
the meaning set forth in the preamble to the Series 2007-1 Class A-1
Note Purchase Agreement.

 

“L/C Reimbursement
Amount” has the meaning set forth in Section 2.08(a) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“L/C Sub-Class”
has the meaning set forth in “Designation” in the Series 2007-1
Supplement.

 

“Lender Party”
means any Investor, the Swingline Lender or the L/C Provider and “Lender
Parties” means the Investors, the Swingline Lender and the L/C Provider,
collectively.

 

“Letter of Credit”
has the meaning set forth in Section 2.07(a) of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Mandatory Decrease”
has the meaning set forth in Section 3.2(a) of the Series 2007-1
Supplement.

 

“Margin Stock”
means “margin stock” as defined in Regulation U of the F.R.S. Board, as amended
from time to time.

 

“Maximum Investor
Group Principal Amount” means, as to each Investor Group existing on the Series 2007-1
Closing Date, the amount set forth on Schedule I to the Series 2007-1
Class A-1 Note Purchase Agreement as such Investor Group’s Maximum
Investor Group Principal Amount or, in the case of any other Investor Group,
the amount set forth as such Investor Group’s Maximum Investor Group Principal
Amount in the Assignment and Assumption Agreement or Investor Group Supplement
by which the members of such Investor Group become parties to the Series 2007-1
Class A-1 Note Purchase Agreement, in each case, as such amount may be (i) reduced
pursuant to Section 2.05 of the Series 2007-1 Class A-1
Note Purchase Agreement or (ii) increased or reduced by any Assignment and
Assumption Agreement or Investor Group Supplement entered into by the members
of such Investor Group in accordance with the terms of the Series 2007-1 Class A-1
Note Purchase Agreement.

 

“Monthly Extension
Prepayment Notice” has the meaning set forth in Section 4.7(f) of
the Series 2007-1 Supplement.

 

“Non-Excluded Taxes”
has the meaning set forth in Section 3.08 of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Offering Memorandum”
means the Offering Memorandum for the offering of the Series 2007-1 Class A-2
Notes and the Series 2007-1 Class M-1 Notes to 

 

14

 

be prepared by the
Co-Issuers pursuant to Section 4(e) of the Series 2007-1
Term Note Purchase Agreement.

 

“Official Body”
has the meaning set forth in the definition of “Change in Law.”

 

“One-Month LIBOR”
means, for any Interest Accrual Period, the London interbank offered rate for
Eurodollar deposits for one month which appears on the display designated as page 3750 on the Telerate
Service (or such other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks, or
if such service is no longer offered, such other service for displaying LIBOR
or comparable rates as may be selected by the Indenture Trustee) as of 11:00 a.m.,
London time, on the second Eurodollar Business Day prior to the first day of
such Interest Accrual Period. If such rate does not appear on such page of
any such service, the rate will be determined on the basis of the rates at
which deposits in U.S. Dollars are offered by the reference banks (which will
be three major banks that are engaged in transactions in the London interbank
market, selected by the Indenture Trustee) as of 11:00 a.m., London time,
on the second Eurodollar Business Day prior to the first day of such Interest
Accrual Period to prime banks in the
London interbank market for a period of one month in amounts approximately
equal to the principal amount of the relevant Class of Notes then
outstanding. The Indenture Trustee will request the principal London office of
each of the reference banks to provide a quotation of its rate. If at least two
such quotations are provided, the rate will be the arithmetic mean of the
quotations. If on such date fewer than two quotations are provided as
requested, the rate will be the arithmetic mean of the rates quoted by two or
more major banks in New York City, selected by the Indenture Trustee, as of
11:00 a.m., New York City time, on such date for loans in U.S. Dollars to
leading European banks for a period of one month in amounts approximately equal
to the principal amount of the relevant Class of Notes then outstanding.
If no such quotations can be obtained, the rate will be the One-Month LIBOR for
the prior Interest Accrual Period.

 

“Other Class A-1
Transaction Expenses” means all amounts payable pursuant to Section 9.05
of the Series 2007-1 Class A-1 Note Purchase Agreement other than Class A-1
Amendment Expenses.

 

“Outstanding Series 2007-1
Class A-1 Notes” means with respect to the Series 2007-1 Class A-1
Notes, all Series 2007-1 Class A-1 Notes theretofore authenticated
and delivered under the Indenture, except (a) Series 2007-1 Class A-1
Notes theretofore cancelled or delivered to the Registrar for cancellation, (b) Series 2007-1
Class A-1 Notes that have not been presented for payment but funds for the
payment in full of which are on deposit in the Series 2007-1 Class A-1
Distribution Account and are available for payment of such Series 2007-1 Class A-1
Notes and the Commitments with respect to which have terminated and (c) Series 2007-1
Class A-1 Notes in exchange for or in lieu of other Series 2007-1 Class A-1
Notes that have been authenticated and delivered pursuant to the Indenture
unless proof satisfactory to the Indenture Trustee is presented that any such Series 2007-1
Class A-1 Notes are held by a purchaser for value.

 

15

 

“Outstanding Series 2007-1
Class A-2 Notes” means with respect to the Series 2007-1 Class A-2
Notes, all Series 2007-1 Class A-2 Notes theretofore authenticated
and delivered under the Indenture, except (a) Series 2007-1 Class A-2
Notes theretofore cancelled or delivered to the Registrar for cancellation, (b) Series 2007-1
Class A-2 Notes that have not been presented for payment but funds for the
payment in full of which are on deposit in the Series 2007-1 Class A-2  Distribution Account and are available for
payment of such Series 2007-1 Class A-2  Notes and (c) Series 2007-1 Class A-2  Notes in exchange for or in lieu of other Series 2007-1
Class A-2 Notes that have been authenticated and delivered pursuant to the
Indenture unless proof satisfactory to the Indenture Trustee is presented that
any such Series 2007-1 Class A-2 
Notes are held by a purchaser for value.

 

“Outstanding Series 2007-1
Class M-1 Notes” means with respect to the Series 2007-1 Class M-1
Notes, all Series 2007-1 Class M-1 Notes theretofore authenticated
and delivered under the Indenture, except (a) Series 2007-1 Class M-1
Notes theretofore cancelled or delivered to the Registrar for cancellation, (b) Series 2007-1
Class M-1 Notes that have not been presented for payment in full but funds
for the payment of which are on deposit in the Series 2007-1 Class M-1
Distribution Account and are available for payment of such Series 2007-1 Class M-1
Notes and (c) Series 2007-1 Class M-1 Notes in exchange for or
in lieu of other Series 2007-1 Class M-1 Notes that have been
authenticated and delivered pursuant to the Indenture unless proof satisfactory
to the Indenture Trustee is presented that any such Series 2007-1 Class M-1
Notes are held by a purchaser for value.

 

“Outstanding Series 2007-1
Notes” means, collectively, all Outstanding Series 2007-1 Class A-1
Notes, all Outstanding Series 2007-1 Class A-2 Notes and all
Outstanding Series 2007-1 Class M-1 Notes.

 

“Potential Series 2007-1
Rapid Amortization Event” means any occurrence or event which, with the
giving of notice, the passage of time or both, would constitute a Series 2007-1
Rapid Amortization Event.

 

“Preference Amount”
has, with respect to the Series 2007-1 Class A Insurer, the meaning
set forth in the Series 2007-1 Class A Policy.

 

“Prepayment Notice”
has the meaning set forth in Section 4.7(f) of the Series 2007-1
Supplement.

 

“Prepayment Record
Date” means, with respect to the date of any Series 2007-1 Prepayment,
the last day of the calendar month immediately preceding the date of such Series 2007-1
Prepayment unless such last day is less than ten (10) Business Days prior
to the date of such Series 2007-1 Prepayment, in which case the “Prepayment
Record Date” will be the last day of the second calendar month immediately
preceding the date of such Series 2007-1 Prepayment.

 

“Pricing Disclosure
Package” has the meaning set forth in the Series 2007-1 Class A-2/M-1/Note
Purchase Agreement.

 

16

 

“Prime Rate” means
the rate announced by Citibank N.A. or any successor thereto from time to time
as its prime rate in the United States, such rate to change as and when such
designated rate changes. The Prime Rate is not intended to be the lowest rate
of interest charged by such Person in connection with extensions of credit to
debtors.

 

“Program Support
Agreement” means, with respect to any Investor, any agreement entered into
by any Program Support Provider in respect of any Commercial Paper and/or Series 2007-1
Class A-1 Note of such Investor providing for the issuance of one or more
letters of credit for the account of such Investor, the issuance of one or more
insurance policies for which such Investor is obligated to reimburse the
applicable Program Support Provider for any drawings thereunder, the sale by
such Investor to any Program Support Provider of the Series 2007-1 Class A-1
Notes (or portions thereof or interests therein) and/or the making of loans
and/or other extensions of credit to such Investor in connection with such
Investor’s securitization program, together with any letter of credit,
insurance policy or other instrument issued thereunder or guaranty thereof (but
excluding any discretionary advance facility provided by a Committed Note
Purchaser).

 

“Program Support
Provider” means, with respect to any Investor, any financial institutions
and any other or additional Person now or hereafter extending credit or having
a commitment to extend credit to or for the account of, and/or agreeing to make
purchases from, such Investor in respect of such Investor’s Commercial Paper
and/or Series 2007-1 Class A-1 Note, and/or agreeing to issue a
letter of credit or insurance policy or other instrument to support any
obligations arising under or in connection with such Investor’s securitization
program as it relates to any Commercial Paper issued by such Investor, and/or
holding equity interests in such Investor, in each case pursuant to a Program
Support Agreement, and any guarantor of any such Person.

 

“Rating Agencies”
means, with respect to each Class of Series 2007-1 Senior Notes,
S&P, Moody’s, Fitch and any other nationally recognized rating agency then
rating any such Class of Series 2007-1 Senior Notes at the request of
the Co-Issuers and, with respect to the Series 2007-1 Subordinated Notes,
S&P, Fitch and any other nationally recognized rating agency then rating
such Series 2007-1 Subordinated Notes at the request of the Co-Issuers.

 

“Rating Agency
Condition” means, with
respect to any prospective action or occurrence, a condition that will be
satisfied if each Rating Agency (or, if so specified, the relevant Rating
Agency) notifies the Indenture Trustee (and, with respect to any Series of
Notes that is insured by an Insurer, such Insurer) in writing that such action
or occurrence, as the case may be, will not result in a withdrawal or reduction
of the ratings specified in the Base Indenture or the applicable Series Supplement,
without giving effect to any Insurance Policy, by S&P, Moody’s or Fitch,
respectively, below certain specified thresholds.

 

“Reference Base Rate
Percentage” means, for any Collection Period, the percentage of (a) the
average daily outstanding principal or face amount of all Base Rate Advances,
Swingline Loans and Unreimbursed L/C Drawings during the Reference 

 

17

 

Quarter for such
Collection Period to (b) the average daily outstanding principal or face
amount of all Advances, Swingline Loans and Unreimbursed L/C Drawings during
such Reference Quarter.

 

“Reference Eurodollar
Interest Period” means, for any Collection Period, the one-month period
that commences on the first Business Day of such Collection Period.

 

“Refunded Swingline
Loans” has the meaning set forth in Section 2.06(d) of the
Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Refunding Date”
has the meaning set forth in Section 2.06(e) of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Reimbursement
Obligation” means the obligation of the Co-Issuers to reimburse the L/C
Provider pursuant to Section 2.08 of the Series 2007-1 Class A-1
Note Purchase Agreement for amounts drawn under Letters of Credit.

 

“Restricted Period”
means, with respect to any Series 2007-1 Class A-2 Notes or Series 2007-1
Subordinated Notes issued on the Series 2007-1 Closing Date and sold
pursuant to Regulation S, the period commencing on such Series 2007-1
Closing Date and ending on the 40th day after the Series 2007-1 Closing
Date.

 

“Seasoned Base Rate
Advance” means any Base Rate Advance that has been outstanding for more
than two (2) Business Days.

 

“Series 2007-1
Accrued Insurer Premium Amount” means, with respect to each Payment Date,
the aggregate amount of the Insurer Premiums for all Classes of Insured Senior
Notes for the Interest Accrual Period ending on the related Payment Date plus any Carryover Accrued Insurer Premium Amount for such
Payment Date.

 

“Series 2007-1
Adjusted Repayment Date” means the date established as the Series 2007-1
Adjusted Repayment Date in accordance with Section 4.7(b) of
the Series 2007-1 Supplement.

 

“Series 2007-1
Anticipated Life” means the period of time from and including the Series
2007-1 Make-Whole Amount Calculation Date to but excluding the Series 2007-1
Adjusted Repayment Date.

 

“Series 2007-1
Anticipated Repayment Date” has the meaning set forth in Section 4.7(b) of
the Series 2007-1 Supplement.

 

“Series 2007-1
Cash Trap Reserve Amount” means the “Cash Trap Reserve Amount,” as defined
in the Base Indenture.

 

Series 2007-1 Cash
Trap Reserve Cure Date” means the “Cash Trap Reserve Cure
Date,” as defined in the Base Indenture.

 

18

 

“Series 2007-1 Class A
Insurance Agreement” means that certain Insurance and Indemnity Agreement,
dated as of the Series 2007-1 Closing Date, by and among the Series 2007-1
Class A Insurer, Applebee’s International, IHOP Corp., Applebee’s Services
Inc., the Franchise Holder, the SPV Pledgor, the Co-Issuers and the Indenture
Trustee, pursuant to which the Series 2007-1 Class A Policy shall be
issued, as the same may be amended, supplemented or otherwise modified from
time to time pursuant to the terms thereof.

 

“Series 2007-1 Class A
Insurer” means, Assured Guaranty.

 

“Series 2007-1 Class A
Policy” means the financial guaranty insurance policy no. D-2007-151,
together with all endorsements thereto, delivered by Assured Guaranty to the
Indenture Trustee for the benefit of the applicable Series 2007-1 Senior
Noteholders pursuant to Series 2007-1 Class A Insurance Agreement, as
amended, supplemented or otherwise modified from time to time.

 

“Series 2007-1 Class A
Premium Letter”  means, that
certain Premium Letter, dated November 29, 2007 among the Co-Issuers and
Assured Guaranty relating to the Insurer Premium payable to Assured Guaranty
with respect to the Series 2007-1 Class A Policy issued by it and
certain expenses payable by the Co-Issuers to or on behalf of Assured Guaranty.

 

“Series 2007-1 Class A-1
Administrative Agent” has the meaning set forth under “Class A-1
Administrative Agent” in this Annex A.

 

“Series 2007-1 Class A-1
Administrative Expenses” means, for any Payment Date, the aggregate amount
of any Class A-1 Administrative Agent Fees, Class A-1 Amendment
Expenses and L/C Additional Charges then due and payable and not previously
paid. For purposes of the Indenture, the “Series 2007-1 Class A-1
Administrative Expenses” shall be deemed to be “Class A-1 Note
Administrative Expenses.”

 

“Series 2007-1 Class A-1
Advance” has the meaning set forth under “Advance” in this Annex A.

 

“Series 2007-1 Class A-1
Advance Notes” has the meaning set forth in “Designation” in the Series 2007-1
Supplement.

 

“Series 2007-1 Class A-1
Advance Request” has the meaning set forth under “Advance Request” in this
Annex A.

 

“Series 2007-1 Class A-1
Advance Sub-class” has the meaning set forth under “Advance Sub-class” in
this Annex A.

 

“Series 2007-1 Class A-1
Allocated Payment Reduction Amount” has the meaning set forth in Section 2.05(b)(iv) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

19

 

“Series 2007-1 Class A-1
Breakage Amount” has the same meaning as “Breakage Amount” in this
Annex A.

 

“Series 2007-1 Class A-1
Commitment Fees Amount” means, as of any date of determination for any
Interest Accrual Period, an amount equal to the aggregate of the Daily
Commitment Fee Amounts for each day in such Interest Accrual Period. For
purposes of the Indenture, the “Series 2007-1 Class A-1 Commitment
Fees Amount” shall be deemed to be “Class A-1 Commitment Fees Amount.”

 

“Series 2007-1 Class A-1
Commitment Term” has the same meaning as “Commitment Term” in this
Annex A.

 

“Series 2007-1 Class A-1
Commitments” has the same meaning as “Commitments” in this Annex A.

 

“Series 2007-1 Class A-1
Contingent Additional Interest” means, as of any date of determination for
any Interest Accrual Period occurring during any Series 2007-1 Extension
Period, the sum of the aggregate of the Daily Extension Contingent Additional
Interest Amounts for each day in such Interest Accrual Period.

 

“Series 2007-1 Class A-1
Contingent Additional L/C Fees” means, as of any date of determination for
any Interest Accrual Period occurring during any Series 2007-1 Extension
Period, the sum of the aggregate of the Daily Extension Contingent Additional
L/C Fees Amounts for each day in such Interest Accrual Period.

 

“Series 2007-1 Class A-1
Distribution Account” has the meaning set forth in Section 4.8(a) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-1
Distribution Account Collateral” has the meaning set forth in Section 4.8(d) of
the Series 2007-1 Supplement.

 

“Series 2007-1
Class A-1 Excess Interest Amount” means with respect to any Series 2007-1
Class A-1 Notes for each Interest Accrual Period, an amount equal to the
sum of (a) the aggregate of the Daily Excess A-1 Interest Amounts, if any,
for the immediately preceding Interest Accrual Period and (b) all
previously unpaid amounts described in clause (a) with respect to
prior Interest Accrual Periods. For purposes of the Base Indenture, any Series 2007-1
Class A-1 Excess Interest Amount shall be deemed to be part of the “Class A-1
Excess Interest Amounts”.

 

“Series 2007-1 Class A-1
Excess Principal Event” shall be deemed to have occurred if, on any date, (i) the
Series 2007-1 Class A-1 Outstanding Principal Amount exceeds the Series 2007-1
Class A-1 Maximum Principal Amount, (ii) the Series 2007-1 Class A-1-A
Outstanding Principal Amount exceeds the Series 2007-1 Class A-1-A
Maximum Principal Amount or (iii) the Series 2007-1 Class A-1-X
Outstanding Principal Amount exceeds the Series 2007-1 Class A-1-X
Maximum Amount. For the avoidance of doubt, with respect to the Series 2007-1
Class A-1-A Notes, the Series 2007-1 Class A 

 

20

 

Policy relating to such
Notes does not cover any principal in excess of the Series 2007-1 Class A-1-A
Maximum Principal Amount or any interest on any such excess principal.

 

“Series 2007-1 Class A-1
Extension Contingent Additional Rate” has the meaning set forth in Section 4.4(c) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-1
Initial Advance” has the meaning set forth in Section 3.1(a) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-1
Initial Advance Principal Amount” means the aggregate initial outstanding
principal amount of the Series 2007-1 Class A-1 Advance Notes
corresponding to the aggregate amount of the Series 2007-1 Class A-1
Advances made on the Series 2007-1 Closing Date pursuant to Section 3.1(a) of
the Series 2007-1 Supplement, which is $75,000,000.

 

“Series 2007-1 Class A-1
Initial Aggregate Undrawn L/C Face Amount” means the aggregate initial
outstanding principal amount of the Series 2007-1 Class A-1 L/C Notes
of the L/C Provider corresponding to the aggregate Undrawn L/C Face Amounts of
the Letters of Credit issued on the Series 2007-1 Closing Date pursuant to
Section 2.07 of the Series 2007-1 Class A-1 Note Purchase
Agreement, which is $0.

 

“Series 2007-1 Class A-1
Initial Swingline Loan” has the meaning set forth in Section 3.1(b) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-1
Initial Swingline Principal Amount” means the aggregate initial outstanding
principal amount of the Series 2007-1 Class A-1 Swingline Notes
corresponding to the aggregate amount of the Swingline Loans made on the Series 2007-1
Closing Date pursuant to Section 2.06 of the Series 2007-1 Class A-1
Note Purchase Agreement, which is $0.

 

“Series 2007-1 Class A-1
Interest Reserve Daily Calculation Amount” means, for any Collection
Period, an amount equal to the result of (a) the product of (i) the Series 2007-1
Class A-1 Interest Reserve Daily Calculation Rate for such Collection
Period multiplied by (ii) the Series 2007-1 Class A-1 Maximum
Principal Amount on the first day of such Collection Period divided by (b) 360.

 

“Series 2007-1 Class A-1
Interest Reserve Daily Calculation Rate” has the meaning set forth under “Interest
Reserve Daily Calculation Rate” in this Annex A.

 

“Series 2007-1 Class A-1
Investor” has the meaning set forth under “Investor” in this Annex A.

 

“Series 2007-1 Class A-1
Investor Group Supplement” has the meaning set forth under “Investor Group
Supplement” in this Annex A.

 

“Series 2007-1 Class A-1
L/C Notes” has the meaning set forth in “Designation” in the Series 2007-1
Supplement.

 

21

 

“Series 2007-1 Class A-1
L/C Fees” means the L/C Monthly Fees and the L/C Fronting Fees. For
purposes of the Indenture, the Series 2007-1 Class A-1 L/C Fees shall
be deemed to be “Senior Notes Monthly Interest Amounts.”

 

“Series 2007-1 Class A-1
L/C Obligations” has the meaning set forth under “L/C Obligations” in this
Annex A.

 

“Series 2007-1 Class A-1
Maximum Principal Amount” means $100,000,000, as such amount may be reduced
pursuant to Section 2.05 of the Series 2007-1 Class A-1
Note Purchase Agreement.

 

“Series 2007-1 Class A-1
Note Interest Rate” means, for any day, (a) with respect to that
portion of the Series 2007-1 Class A-1 Outstanding Principal Amount
resulting from Advances that bear interest on such day at the CP Rate in
accordance with Section 3.01 of the Series 2007-1 Class A-1
Note Purchase Agreement, the CP Rate in effect for such day; (b) with respect
to that portion of the Series 2007-1 Class A-1 Outstanding Principal
Amount resulting from Advances that bear interest on such day at the Eurodollar
Rate in accordance with Section 3.01 of the Series 2007-1 Class A-1
Note Purchase Agreement, the Eurodollar Rate in effect for the Eurodollar
Interest Period that includes such day; (c) with respect to that portion
of the Series 2007-1 Class A-1 Outstanding Principal Amount resulting
from Advances that bear interest on such day at the Base Rate in accordance
with Section 3.01 of the Series 2007-1 Class A-1 Note
Purchase Agreement, the Base Rate in effect for such day; (d) with respect
to that portion of the Series 2007-1 Class A-1 Outstanding Principal
Amount consisting of Swingline Loans or Unreimbursed L/C Drawings outstanding
on such day, the Base Rate in effect for such day; and (e) with respect to
any other amounts that any Related Document provides is to bear interest by
reference to the Series 2007-1 Class A-1 Note Interest Rate, the Base
Rate in effect for such day; in each case, computed on the basis of a year of
360 (or, in the case of the Base Rate, 365 or 366, as applicable) days and the
actual number of days elapsed; provided, however, that the Series 2007-1
Class A-1 Note Interest Rate will in no event be higher than the maximum
rate permitted by applicable law. For the avoidance of doubt, each sub-class of
Series 2007-1 Notes shall bear interest at the corresponding rate for each
sub-class specified under the Eurodollar Rate and CP Rate.

 

“Series 2007-1 Class A-1
Note Purchase Agreement” means the Class A-1 Note Purchase Agreement,
dated as of the Series 2007-1 Closing Date, by and among the Co-Issuers,
the Servicer, the Series 2007-1 Class A-1 Investors, Funding Agents
and Lehman Commercial Paper Inc., as administrative agent and Swingline Lender
thereunder, pursuant to which the Series 2007-1 Class A-1 Noteholders
have agreed to purchase the Series 2007-1 Class A-1 Notes from the
Co-Issuers, subject to the terms and conditions set forth therein, as amended,
supplemented or otherwise modified from time to time. For purposes of the
Indenture, the “Series 2007-1 Class A-1 Note Purchase Agreement”
shall be deemed to be a “Class A-1 Note Purchase Agreement.”

 

“Series 2007-1 Class A-1
Noteholder” means the Person in whose name a Series 2007-1 Class A-1
Note is registered in the Note Register.

 

22

 

“Series 2007-1 Class A-1
Notes” has the meaning set forth in “Designation” in the Series 2007-1
Supplement.

 

“Series 2007-1 Class A-1
Other Amounts” means, for any Monthly Allocation Date, the aggregate amount
of any Breakage Amount, Class A-1 Indemnities, Increased Capital Costs,
Increased Costs, Increased Tax Costs, Indemnified Liabilities, L/C Other
Reimbursement Costs and Other Class A-1 Transaction Expenses then due and
payable and not previously paid. For purposes of the Indenture, the “Series 2007-1
Class A-1 Other Amounts” shall be deemed to be “Class A-1 Senior
Notes Other Amounts.”

 

“Series 2007-1 Class A-1
Outstanding Principal Amount” means, when used with respect to any date, an
amount equal to (a) the Series 2007-1 Class A-1 Initial Advance
Principal Amount, if any, minus (b) the amount of principal
payments (whether pursuant to a Decrease, a prepayment, a redemption or
otherwise) made on the Series 2007-1 Class A-1 Advance Notes on or
prior to such date plus (c) any Increases in the Series 2007-1
Class A-1 Outstanding Principal Amount pursuant to Section 3.1
of the Series 2007-1 Supplement resulting from Series 2007-1 Class A-1
Advances made on or prior to such date and after the Series 2007-1 Closing
Date plus (d) any Series 2007-1 Class A-1 Outstanding
Subfacility Amount on such date; provided that, at no time may the Series 2007-1
Class A-1 Outstanding Principal Amount exceed the Series 2007-1 Class A-1
Maximum Principal Amount. For purposes of the Indenture, the “Series 2007-1
Class A-1 Outstanding Principal Amount” shall be deemed to be an “Outstanding
Principal Amount.”

 

“Series 2007-1 Class A-1
Outstanding Subfacility Amount” means, when used with respect to any date,
the aggregate principal amount of any Series 2007-1 Class A-1
Swingline Notes and Series 2007-1 Class A-1 L/C Notes outstanding on
such date (after giving effect to Subfacility Increases or Subfacility
Decreases therein to occur on such date pursuant to the terms of the Series 2007-1
Class A-1 Note Purchase Agreement or the Series 2007-1 Supplement).

 

“Series 2007-1 Class A-1
Post-ARD Monthly Contingent Additional Interest” means, for any Interest
Accrual Period commencing on or after the Series 2007-1 Adjusted Repayment
Date, an amount equal to the sum of (a) the aggregate of the Daily
Post-ARD Contingent Additional Interest Amounts for each day in such Interest
Accrual Period and (b) in the case of the first such Interest Accrual
Period, an amount equal to the Series 2007-1 Class A-1 Extension
Contingent Additional Interest Adjustment Amount for the immediately preceding
Interest Accrual Period.

 

“Series 2007-1 Class A-1
Post-ARD Monthly Contingent Additional L/C Fees” means, for the Interest
Accrual Period commencing on the Series 2007-1 Adjusted Repayment Date, an
amount equal to the Series 2007-1 Class A-1 Extension Contingent
Additional L/C Fees Adjustment Amount for the immediately preceding Interest
Accrual Period.

 

23

 

“Series 2007-1 Class A-1
Post-ARD Monthly Contingent Additional Rate” has the meaning set forth in Section 4.4(c) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-1
Senior Interest Amount” means with respect to any Series 2007-1 Class A-1
Notes for each Interest Accrual Period, an amount equal to the sum of (a) the
aggregate of the Daily Senior Interest Amounts for each day during such
Interest Accrual Period and (b) all previously unpaid amounts described in
clause (a) with respect to prior Interest Accrual Periods. For purposes of
the Base Indenture, Series 2007-1 Class A-1 Senior Interest Amount
shall be deemed to be part of the “Senior Notes Monthly Interest Amounts.”

 

“Series 2007-1 Class A-1
Sub-class” has the meaning set forth in “Designation” of the Series 2007-1
Supplement.

 

“Series 2007-1 Class A-1
Subfacility Noteholder” means the Person in whose name a Series 2007-1
Class A-1 Swingline Note or Series 2007-1 Class A-1 L/C Note is
registered in the Note Register. For purposes of the Indenture, the “Series 2007-1
Class A-1 Subfacility Noteholders” shall be deemed to be “Class A-1
Subfacility Noteholders.”

 

“Series 2007-1 Class A-1
Swingline Loan” has the meaning set forth under “Swingline Loan” in this
Annex A.

 

“Series 2007-1 Class A-1
Swingline Notes” has the meaning set forth in “Designation” of the Series 2007-1
Supplement.

 

“Series 2007-1 Class A-1
Unreimbursed L/C Drawings” has the meaning set forth under “Unreimbursed
L/C Drawings” in this Annex A.

 

“Series 2007-1 Class A-1
VFN Fee Letter” means the Fee Letter, dated as of the Series 2007-1
Closing Date, by and among the Co-Issuers, the Conduit Investors, Committed
Note Purchasers and Funding Agents named therein, the L/C Provider and
Swingline Lender named therein, Applebee’s Services, Inc., as Servicer,
and Lehman Commercial Paper Inc., as Series 2007-1 Class A-1
Administrative Agent, as the same may be amended, supplemented or otherwise
modified from time to time pursuant to the terms thereof. For purposes of the
Indenture, the “Series 2007-1 Class A-1 VFN Fee Letter” shall be
deemed to be a “VFN Fee Letter.”

 

“Series 2007-1 Class A-1-A
Initial Advance Principal Amount” means the aggregate initial outstanding
principal amount of the Series 2007-1 Class A-1-A Advance Notes
corresponding to their ratable portion of the aggregate amount of the Series 2007-1
Class A-1 Initial Advances made on the Series 2007-1 Closing Date
pursuant to Section 3.1(a) of the Series 2007-1
Supplement, which is $22,500,000.

 

“Series 2007-1 Class A-1-A
Maximum Principal Amount” means $30,000,000 as such amount may be reduced
pursuant to Section 2.05 of the Series 2007-1 Class A-1
Note Purchase Agreement.

 

24

 

“Series 2007-1 Class A-1-A
Notes” refers collectively to (i) the Series 2007-1 Class A-1-A
Advance Notes, (ii) the Series 2007-1 Class A-1-A Swingline
Notes and (iii) the Series 2007-1 Class A-1-A L/C Notes.

 

“Series 2007-1 Class A-1-A
Outstanding Principal Amount” means, when used with respect to any date, an
amount equal to (a) the Series 2007-1 Class A-1-A Initial
Advance Principal Amount, if any, minus (b) the amount of principal
payments (whether pursuant to a Decrease, a prepayment, a redemption or
otherwise) made on the Series 2007-1 Class A-1-A Advance Notes on or
prior to such date plus (c) the allocable portion of any Increases
in the Series 2007-1 Class A-1 Outstanding Principal Amount pursuant
to Section 3.1 of the Series 2007-1 Supplement resulting from Series 2007-1
Class A-1-A Advances made on or prior to such date and after the Series 2007-1
Closing Date plus (d) any Series 2007-1 Class A-1-A
Outstanding Subfacility Amount on such date; provided that, at no time
may the Series 2007-1 Class A-1-A Outstanding Principal Amount exceed
the Series 2007-1 Class A-1-A Maximum Principal Amount. For purposes
of the Indenture, the “Series 2007-1 Class A-1-A Outstanding
Principal Amount” shall be deemed to be an “Outstanding Principal Amount.”

 

“Series 2007-1 Class A-1-A
Outstanding Subfacility Amount” means, when used with respect to any date,
the aggregate principal amount of any Series 2007-1 Class A-1-A
Swingline Notes and Series 2007-1 Class A-1-A L/C Notes outstanding
on such date (after giving effect to Subfacility Increases or Subfacility
Decreases therein to occur on such date pursuant to the terms of the Series 2007-1
Class A-1 Note Purchase Agreement or the Series 2007-1 Supplement).

 

“Series 2007-1 Class A-1-X
Initial Advance Principal Amount” means the aggregate initial outstanding
principal amount of the Series 2007-1 Class A-1-X Advance Notes
corresponding to their ratable portion of the aggregate amount of the Series 2007-1
Class A-1 Initial Advances made on the Series 2007-1 Closing Date
pursuant to Section 3.1(a) of the Series 2007-1
Supplement, which is $52,500,000.

 

“Series 2007-1 Class A-1-X
Maximum Principal Amount” means $70,000,000 as such amount may be reduced
pursuant to Section 2.05 of the Series 2007-1 Class A-1
Note Purchase Agreement.

 

“Series 2007-1 Class A-1-X
Notes” refers collectively to (i) the Series 2007-1 Class A-1-X
Advance Notes, (ii) the Series 2007-1 Class A-1-X Swingline
Notes and (iii) the Series 2007-1 Class A-1-X L/C Notes.

 

“Series 2007-1 Class A-1-X
Outstanding Principal Amount” means, when used with respect to any date, an
amount equal to (a) the Series 2007-1 Class A-1-X Initial
Advance Principal Amount, if any, minus (b) the amount of principal
payments (whether pursuant to a Decrease, a prepayment, a redemption or
otherwise) made on the Series 2007-1 Class A-1-X Advance Notes on or
prior to such date plus (c) the allocable portion of any Increases
in the Series 2007-1 Class A-1 Outstanding Principal Amount pursuant
to Section 3.1 of the Series 2007-1 Supplement resulting from Series 2007-1
Class A-1-X Advances made on or prior to such date and after the Series 2007-1
Closing 

 

25

 

Date plus (d) any
Series 2007-1 Class A-1-X Outstanding Subfacility Amount on such
date; provided that, at no time may the Series 2007-1 Class A-1-X
Outstanding Principal Amount exceed the Series 2007-1 Class A-1-X
Maximum Principal Amount. For purposes of the Indenture, the “Series 2007-1
Class A-1-X Outstanding Principal Amount” shall be deemed to be an “Outstanding
Principal Amount.”

 

“Series 2007-1 Class A-1-X
Outstanding Subfacility Amount” means, when used with respect to any date,
the aggregate principal amount of any Series 2007-1 Class A-1-X
Swingline Notes and Series 2007-1 Class A-1-X L/C Notes outstanding
on such date (after giving effect to Subfacility Increases or Subfacility
Decreases therein to occur on such date pursuant to the terms of the Series 2007-1
Class A-1 Note Purchase Agreement or the Series 2007-1 Supplement).

 

“Series 2007-1 Class A-2
Distribution Account” has the meaning set forth in Section 4.9(a) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2
Distribution Account Collateral” has the meaning set forth in Section 4.9(d) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2
Initial Principal Amount” means the aggregate initial outstanding principal
amount of the Series 2007-1 Class A-2 Notes, which is $1,675,000,000.

 

“Series 2007-1 Class A-2
Notes” refers to (i) the Series 2007-1 Class A-2-I Notes, (ii) the
Series 2007-1 Class A-2-II-A Notes, and (iii) the Series 2007-1
Class A-2-II-X Notes.

 

“Series 2007-1 Class A-2
Post-ARD Contingent Additional Interest” has the meaning set forth in Section 4.5(c)(ii) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2
Post-ARD Contingent Additional Interest Rate” has the meaning set forth in Section 4.5(c)(ii) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2
Post-ARD Spread” has the meaning set forth in Section 4.5(c)(ii) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2
Post-ARD Stepped-Up Interest Rate has the meaning set forth in Section 4.5(c)(ii) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2
Senior Interest Amount” means for each Interest Accrual Period an amount
equal to the sum of (a) (i) the accrued and unpaid interest on the Series 2007-1
Class A-2-I Notes for such Interest Accrual Period at the Series 2007-1
Class A-2-I Note Interest Rate; provided, that with respect to the Series 2007-1
Class A-2-I Note Adjusted Interest Rate, such adjusted rate shall not
exceed the Series 2007-1 Class A-2-II-X Note Initial Interest Rate,
and any excess shall be treated as Class A-2-I Note Excess Adjusted
Interest Amounts, (ii) the accrued and unpaid interest on the Series 2007-1
Class A-2-II-A Notes for such Interest Accrual Period at the Series 2007-1
Class 

 

26

 

A-2-II-A Note Initial
Interest Rate, and (iii) the accrued and unpaid interest on the Series 2007-1
Class A-2-II-X Notes for such Interest Accrual Period at the Series 2007-1
Class A-2-II-X Note Initial Interest Rate, and (b) all previously
unpaid amounts described in clause (a) with respect to prior Interest
Accrual Periods. For purposes of the Base Indenture, the Series 2007-1 Class A-2
Senior Interest Amount shall be deemed to be part of the “Senior Notes Monthly
Interest Amounts.”

 

“Series 2007-1
Class A-2-I Distribution Account” has the meaning set forth in Section 4.9(a) of the Series 2007-1
Supplement.

 

“Series 2007-1 Class A-2-I
Extended Anticipated Repayment Date” has the meaning set forth in Section 4.7(b) of
the Series 2007-1 Series Supplement.

 

“Series 2007-1 Class A-2-I
Extension Spread” has the meaning specified in Section 4.5(a)(ii) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2-I
Initial Anticipated Repayment Date” has the meaning specified in Section 4.7(b) of
the Series 2007-1 Supplement.

 

“Series 2007-1
Class A-2-I Initial Principal Amount” means the aggregate initial outstanding
principal amount of the Series 2007-1 Class A-2-I Notes, which is
$350,000,000.

 

“Series 2007-1 Class A-2-I
Initial Spread” has the meaning set forth in Section 4.5(a)(ii) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2-I
Note Adjusted Interest Rate” has the meaning specified in Section 4.5(a)(ii) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2-I
Note Excess Adjusted Interest Amount” has the meaning specified in Section 4.5(a) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2-I
Note Initial Interest Rate” has the meaning specified in Section 4.5(a)(i) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2-I
Note Interest Rate” has the meaning specified in Section 4.5(a)(ii) of
the Series 2007-1 Series Supplement.

 

“Series 2007-1 Class A-2-I
Noteholder” means the Person in whose name a Series 2007-1 Class A-2-I
Note is registered in the Note Register.

 

“Series 2007-1 Class A-2-I
Notes” has the meaning specified in “Designation” of the Series 2007-1
Supplement.

 

“Series 2007-1 Class A-2-I
Outstanding Principal Amount” means, when used with respect to any date, an
amount equal to (a) the Series 2007-1 Class A-2-I Initial
Principal Amount, minus (b) the aggregate amount of principal
payments (whether pursuant to a prepayment, a redemption or otherwise) made to Series 2007-1
Class A-2-I 

 

27

 

Noteholders with respect
to Series 2007-1 Class A-2-I Notes on or prior to such date. For
purposes of the Indenture, the “Series 2007-1 Class A-2-I Outstanding
Principal Amount” shall be deemed to be an “Outstanding Principal Amount.”

 

“Series 2007-1 Class A-2-I
Sub-Class” has the meaning specified in “Designation” of the Series 2007-1
Supplement.

 

“Series 2007-1
Class A-2-II-A Initial Principal Amount” means the aggregate initial
outstanding principal amount of the Series 2007-1 Class A-2-II-A
Notes, which is $675,000,000.

 

“Series 2007-1 Class A-2-II-A
Notes” has the meaning specified in “Designation” of the Series 2007-1
Supplement.

 

“Series 2007-1
Class A-2-II-A Outstanding Principal Amount” means, when used with
respect to any date, an amount equal to (a) the Series 2007-1 Class A-2-II-A
Initial Principal Amount, minus (b) the aggregate amount of
principal payments (whether pursuant to a prepayment, a redemption or
otherwise) made to Series 2007-1 Class A-2-II-A Noteholders with
respect to Series 2007-1 Class A-2-II-A Notes on or prior to such
date. For purposes of the Indenture, the “Series 2007-1 Class A-2-II-A
Outstanding Principal Amount” shall be deemed to be an “Outstanding
Principal Amount .”

 

“Series 2007-1 Class A-2-II-X
Initial Principal Amount” means the aggregate initial outstanding principal
amount of the Series 2007-1 Class A-2-II-X Notes, which is
$650,000,000.

 

“Series 2007-1 Class A-2-II-X
Notes” has the meaning specified in “Designation” of the Series 2007-1
Supplement.

 

“Series 2007-1
Class A-2-II-X Outstanding Principal Amount” means, when used with
respect to any date, an amount equal to (a) the Series 2007-1 Class A-
2-II-X Initial Principal Amount, minus (b) the aggregate amount of
principal payments (whether pursuant to a prepayment, a redemption or
otherwise) made to Series 2007-1 Class A-2-II-X Noteholders with
respect to Series 2007-1 Class A-2-II-X Notes on or prior to such
date. For purposes of the Indenture, the “Series 2007-1 Class A-2-II-X
Outstanding Principal Amount” shall be deemed to be an “Outstanding
Principal Amount.”

 

“Series 2007-1 Class A-2-II
Contingent Additional Interest” has the meaning specified in Section 4.5(c)(i) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2-II
Contingent Additional Interest Amount” has the meaning specified in Section 4.5(c)(i) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2-II
Contingent Additional Interest Rate” has the meaning specified in Section 4.5(c)(i) of
the Series 2007-1 Supplement.

 

28

 

“Series 2007-1
Class A-2-II Distribution Account” has the meaning set forth in Section 4.9(a) of the Series 2007-1
Supplement.

 

“Series 2007-1 Class A-2-II
Extension Period Stepped-Up Interest Rate” has the meaning specified in Section 4.5(c)(i) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2-II
Extension Spread” has the meaning specified in Section 4.5(c)(i) of
the Series 2007-1 Supplement.

 

“Series 2007-1
Class A-2-II Initial Principal Amount” means the aggregate initial
outstanding principal amount of the Series 2007-1 Class A-2-II Notes,
which is $1,325,000,000.

 

“Series 2007-1 Class A-2-II
Noteholder” means the Person in whose name a Series 2007-1 Class A-2-II
Note is registered in the Note Register.

 

“Series 2007-1 Class A-2-II
Notes” has the meaning specified in “Designation” of the Series 2007-1
Supplement.

 

“Series 2007-1 Class A-2-II-X
Notes” has the meaning specified in “Designation” of the Series 2007-1
Supplement.

 

“Series 2007-1 Class A-2-II
Original Spread” has the meaning specified in Section 4.5(c) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2-II
Outstanding Principal Amount” means, when used with respect to any date, an
amount equal to (a) the Series 2007-1 Class A-2-II Initial
Principal Amount, minus (b) the aggregate amount of principal
payments (whether pursuant to a prepayment, a redemption or otherwise) made to Series 2007-1
Class A-2-II Noteholders with respect to Series 2007-1 Class A-2-II
Notes on or prior to such date. For purposes of the Indenture, the “Series 2007-1
Class A-2-II Outstanding Principal Amount” shall be deemed to be an “Outstanding
Principal Amount.”

 

“Series 2007-1 Class A-2-II
Sub-Class” has the meaning specified in “Designation” of the Series 2007-1
Supplement.

 

“Series 2007-1 Class A-2-II-A
Note Initial Interest Rate” has the meaning specified in Section 4.5(b) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2-II-X
Note Initial Interest Rate” has the meaning specified in Section 4.5(b) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class A-2/M-1 Note
Purchase Agreement” means
the Purchase Agreement, dated as of November 29, 2007, by and among, the
Initial Purchaser and the Co-Issuers, as amended, supplemented or otherwise
modified from time to time.

 

29

 

“Series 2007-1 Class M-1
Contingent Additional Interest” has the meaning set forth in Section 4.6(b)(i) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class M-1
Contingent Additional Interest Amount” has the meaning set forth in Section 4.6
(b)(i) of the Series 2007-1 Supplement.

 

“Series 2007-1 Class M-1
Contingent Additional Interest Rate” has the meaning set forth in Section 4.6(b)(i) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class M-1
Distribution Account” has the meaning set forth in Section 4.10(a) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class M-1
Distribution Account Collateral” has the meaning set forth in Section 4.10(d) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class M-1
Extension Spread” has the meaning set forth in Section 4.6(b)(i) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class M-1
Extension Period Stepped-Up Interest Rate” has the meaning set forth in Section 4.6(b)(i) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class M-1
Initial Principal Amount” means the aggregate initial outstanding principal
amount of the Series 2007-1 Class M-1 Notes, which is $119,000,000.

 

“Series 2007-1 Class M-1
Monthly Interest” means,
with respect to any Interest Accrual Period, an amount equal to the sum of (a) the
accrued interest at the Series 2007-1 Class M-1 Note Interest Rate on
the Series 2007-1 Class M-1 Outstanding Principal Amount (on the
first day of such Interest Accrual Period after giving effect to all payments
of principal made to holders of such Class of Notes on such day) during
such Interest Accrual Period, calculated based on a 360-day year of twelve 30-day
months, and (b) the amount of any Subordinated Notes Interest
Shortfall Amount with respect to the Series 2007-1 Class M-1 Notes
(as determined pursuant to Section 11.1(h) of the Base
Indenture), for the immediately preceding Interest Accrual Period (together
with Additional Class M-1 Shortfall Interest (as determined pursuant to Section 11.1(h) of
the Base Indenture) on such Class M-1 Notes Interest Shortfall Amount. For
purposes of the Indenture, “Series 2007-1 Class M-1 Monthly Interest”
shall be deemed to be “Class M-1 Notes Monthly Interest.”

 

“Series 2007-1 Class M-1
Noteholder” means the Person in whose name a Series 2007-1 Class M-1
Note is registered in the Note Register.

 

“Series 2007-1 Class M-1
Note Initial Interest Rate” has the meaning specified in Section 4.6(a) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class M-1
Notes” has the meaning specified in “Designation” in the Series 2007-1
Supplement.

 

30

 

“Series 2007-1 Class M-1
Original Spread” has the meaning set forth in Section 4.6(b)(i) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class M-1
Outstanding Principal Amount” means, when used with respect to any date, an
amount equal to (a) the Series 2007-1 Class M-1 Initial
Principal Amount, minus (b) the aggregate amount of principal
payments (whether pursuant to a prepayment, a redemption or otherwise) made to Series 2007-1
Class M-1 Noteholders with respect to Series 2007-1 Class M-1
Notes on or prior to such date.  For
purposes of the Indenture, the “Series 2007-1 Class M-1 Outstanding
Principal Amount” shall be deemed to be an “Outstanding Principal Amount.”

 

“Series 2007-1 Class M-1
Post-ARD Contingent Additional Interest” has the meaning set forth in Section 4.6(b)(ii) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class M-1
Post-ARD Contingent Additional Interest Rate” has the meaning set forth in Section 4.6(b)(ii) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Class M-1
Post-ARD Stepped-Up Interest Rate” has the meaning set forth in Section 4.6(b) of
the Series 2007-1 Supplement.

 

“Series 2007-1
Closing Date” means November 29, 2007.

 

“Series 2007-1
Controlling Party” means the Series Controlling Party with respect to
the Series 2007-1 Notes, which as of the Series 2007-1 Closing Date
is Assured Guaranty.

 

“Series 2007-1
Distribution Accounts” means, collectively, the Series 2007-1 Class A-1
Distribution Account, the Series 2007-1 Class A-2 Distribution
Accounts and the Series 2007-1 Class M-1 Distribution Account.

 

“Series 2007-1
Extension Election” has the meaning set forth in Section 4.7(b)(i) of
the Series 2007-1 Supplement.

 

“Series 2007-1
Extension Period” means, if the Series 2007-1 Extension Election has
been made and become effective, the period from the Series 2007-1
Anticipated Repayment Date to the Series 2007-1 Adjusted Repayment Date.

 

“Series 2007-1
Fixed Rate Notes” has the meaning set forth in “Designation” in the Series 2007-1
Supplement.

 

“Series 2007-1
Final Payment” means the payment of all accrued and unpaid interest on and
principal of all Outstanding Series 2007-1 Notes, the payment of all
accrued and unpaid Series 2007-1 Accrued Insurer Premium Amount, Series 2007-1
Insurer Reimbursement Amounts and Series 2007-1 Insurer Expense Amounts,
the expiration or cash collateralization in accordance with the terms of the Series 2007-1
Class A-1 Note Purchase Agreement of all Undrawn L/C Face Amounts, the
payment of all fees and expenses and other amounts then due and payable under
the Series 2007-1 

 

31

 

Class A-1 Note
Purchase Agreement and the termination in full of all Series 2007-1 Class A-1
Commitments.  For the avoidance of doubt,
occurrence of the Series 2007-1 Final Payment shall not prejudice the
rights of the Series 2007-1 Class A Insurer under the Indenture or
the Series 2007-1 Class A Insurance Agreement with respect to any
amounts owed to the Series 2007-1 Class A Insurer constituting Series 2007-1
Accrued Insurer Premium Amount, Series 2007-1 Insurer Reimbursement
Amounts and Series 2007-1 Insurer Expense Amounts that remain unpaid.

 

“Series 2007-1
Final Payment Date” means the date on which the Series 2007-1 Final
Payment is made.

 

“Series 2007-1
Initial Senior Notes Interest Reserve Deposit” has the meaning set forth in
Section 4.1(f) of the Series 2007-1 Supplement.

 

“Series 2007-1
Insurer Expense Amounts” means Insurer Expense Amounts owing to the Series 2007-1
Class A Insurer pursuant to the terms of the Series 2007-1 Class A
Insurance Agreement.  For purposes of the
Indenture, the “Series 2007-1 Insurer Expense Amounts” shall be deemed to
be “Insurer Expense Amounts.”

 

“Series 2007-1
Insurer Make-Whole Premium” has the meaning set forth in the Series 2007-1
Class A Insurance Agreement.

 

“Series 2007-1
Insurer Reimbursement Amounts” means “Insurer Reimbursement Amounts” as
such term is defined in the Series 2007-1 Class A Insurance
Agreement.  For purposes of the
Indenture, the “Series 2007-1 Insurer Reimbursement Amounts” shall be
deemed to be “Insurer Reimbursement Amounts.”

 

“Series 2007-1
Legal Final Maturity Date” means December 21, 2037.  For purposes of the Indenture, the “Series 2007-1
Legal Final Maturity Date” shall be deemed to be a “Series Legal Final Maturity
Date.”

 

“Series 2007-1 Make-Whole Amount” means:

 

with respect to
the Series 2007-1 Class A-2-I Notes on any date of determination
prior to the Series 2007-1 Class A-2-I Initial Anticipated Repayment
Date, the amount (not less than zero) equal to (i) the discounted present
value as of the related Series 2007-1 Make-Whole Amount Calculation Date
of all future installments of interest on and principal of the Series 2007-1
Class A-2-I Notes that the Co-Issuers would otherwise be required to pay
on the Series 2007-1 Class A-2-I Notes (or such portion thereof to be
prepaid) from the date of such prepayment to and including the Series 2007-1
Class A-2-I Initial Anticipated Repayment Date assuming the entire unpaid
principal amount (or such portion thereof to be prepaid) is required to be paid
on such Payment Date, determined at a discount rate equal to the EDSF Rate with
a tenor equal to the remaining Series 2007-1 Anticipated Life as of the
related Series 2007-1 Make-Whole Amount Calculation Date), such discount
rate to be converted to a monthly equivalent rate; minus
(ii) the aggregate amount of the principal being so prepaid;

 

32

 

with respect to (i) the
Series 2007-1 Class A-2-I Notes on any date of determination
following the Series 2007-1 Class A-2-I Initial Anticipated Repayment
Date (if the Series 2007-1 Class A-2-I Notes are not paid in full on
such date) and (ii) the Series 2007-1 Class A-2-II Notes on any
date of determination, the amount (not less than zero) equal to (x) the
discounted present value as of the related Series 2007-1 Make-Whole Amount
Calculation Date of all future installments of interest on and principal of
such Series 2007-1 Class A-2 Notes (which with respect to the Series 2007-1
Class A-2-I Notes will include the Series 2007-1 Class A-2-I
Excess Adjusted Interest Amount, if any) that the Co-Issuers would otherwise be
required to pay on such Series 2007-1 Class A-2 Notes (or such
portion thereof to be prepaid) from the date of such prepayment to and
including the Series 2007-1 Adjusted Repayment Date assuming the entire
unpaid principal amount (or such portion thereof to be prepaid) is required to
be paid on such Payment Date, determined at a discount rate equal to the Swap
Rate with a tenor that is equal to the remaining Series 2007-1 Anticipated
Life as of the related Series 2007-1 Make-Whole Amount Calculation Date
(or, if such tenor is less than two years, the EDSF Rate), such discount rate
to be converted to a monthly equivalent rate; minus
(y) the aggregate amount of the principal being so prepaid; and

 

with respect to
the Series 2007-1 Class M-1 Notes on any date of determination, the
amount (not less than zero) equal to (i) the discounted present value as
of the related Series 2007-1 Make-Whole Amount Calculation Date of all
future installments of interest on and principal of such Series 2007-1 Class M-1
Notes that the Co-Issuers would otherwise be required to pay on such Series 2007-1
Class M-1 Notes (or such portion thereof to be prepaid) from the date of
such prepayment to and including the Series 2007-1 Anticipated Repayment
Date assuming the entire unpaid principal amount (or such portion thereof to be
prepaid) is required to be paid on such Payment Date, determined at a discount
rate equal to the Swap Rate with a tenor that is equal to the remaining Series 2007-1
Anticipated Life as of the related Series 2007-1 Make-Whole Amount
Calculation Date (or, if such tenor is less than two years, the EDSF Rate),
such discount rate to be converted to a monthly equivalent rate; minus (ii) the aggregate amount of the principal being
so prepaid.

 

“Series 2007-1
Make-Whole Amount Calculation Date” means the date as of which the
applicable Series 2007-1 Make-Whole Amount, if any, payable in connection
with a prepayment of the Series 2007-1 Notes is calculated, which will be
a Business Day selected by the Indenture Trustee that is no more than five (5) Business
Days prior to the Payment Date on which the prepayment of principal is made.

 

“Series 2007-1 Monthly
Aggregate Extension Prepayment Amount” means, on any Payment Date that
occurs during the Series 2007-1 Extension Period, 37.5% of the amounts, if any,
remaining in the Collection Account after giving effect to clauses first through twenty-first of
the Priority of Payments.

 

“Series 2007-1 Monthly Subordinated Notes
Amortization Amount”: With respect to any Payment Date following the
Series 2007-1 Closing Date to but excluding the Payment Date occurring in January 2013,
means the amount set forth in the table below:

 

33

 

	
  Payment Date

  	
   

  	
  Monthly Subordinated 

  Notes Amortization Amount

  	
   

  
	
  With respect to
  any Payment Date occurring during the 2008 calendar year:

  	
   

  	
  $0

  	
   

  
	
  With respect to
  any Payment Date occurring during the 2009 calendar year:

  	
   

  	
  $1.25 million

  	
   

  
	
  With respect to
  any Payment Date occurring during the 2010 calendar year:

  	
   

  	
  $2.10 million

  	
   

  
	
  With respect to
  any Payment Date occurring during the 2011 calendar year:

  	
   

  	
  $2.10 million

  	
   

  
	
  With respect to
  any Payment Date occurring during the 2012 calendar year:

  	
   

  	
  $2.10 million

  	
   

  

 

“Series 2007-1
Noteholders” means, collectively, the Series 2007-1 Senior Noteholders
and the Series 2007-1 Subordinated Noteholders.

 

“Series 2007-1
Notes” means, collectively, the Series 2007-1 Senior Notes and the Series 2007-1
Subordinated Notes.

 

“Series 2007-1
Outstanding Principal Amount” means, with respect to any date, the sum of
the Series 2007-1 Class A-1 Outstanding Principal Amount, plus
the Series 2007-1 Class A-2 Outstanding Principal Amount, plus
the Series 2007-1 Class M-1 Outstanding Principal Amount.

 

“Series 2007-1 Partial
Amortization Amount” means, (a) with respect to any Payment Date that
occurs during a Series 2007-1 Partial Amortization Period, an amount equal to
the lesser of (i) the amount equal to the sum of (A) $5,583,000 plus (B) the Series 2007-1 Partial Amortization Shortfall
Amount, if any, with respect to such Payment Date, and (ii) the Aggregate
Outstanding Principal Amount of the Series 2007-1 Notes after giving effect to
all other amounts allocable to the payment of principal of the Series 2007-1
Notes on such Payment Date and (b) with respect to any subsequent Payment Date,
the Series 2007-1 Partial Amortization Shortfall Amount, if any, with respect
to the preceding Payment Date.

 

“Series 2007-1 Partial
Amortization Event” means an event that will occur with respect to any
fiscal quarter set forth in the table below to but excluding the Payment Date
occurring in January 2013 if the One-Year Adjusted DSCR as of the first Payment
Date in the fiscal quarter in which such Payment Date occurs is lower than the
applicable trigger (a “Series 2007-1 Partial Amortization Trigger”) set
forth below:

 

34

 

	
  Fiscal Quarter 

  Commencing in:

  	
   

  	
  Series 2007-1 Partial 

  Amortization Trigger

  	
   

  
	
  January 2010

  	
   

  	
  2.20

  	
  x

  
	
  April 2010

  	
   

  	
  2.25

  	
  x

  
	
  July 2010

  	
   

  	
  2.30

  	
  x

  
	
  October 2010

  	
   

  	
  2.35

  	
  x

  
	
  January 2011

  	
   

  	
  2.40

  	
  x

  
	
  April 2011

  	
   

  	
  2.45

  	
  x

  
	
  July 2011

  	
   

  	
  2.50

  	
  x

  
	
  October 2011

  	
   

  	
  2.55

  	
  x

  
	
  January 2012

  	
   

  	
  2.60

  	
  x

  
	
  April 2012

  	
   

  	
  2.65

  	
  x

  
	
  July 2012

  	
   

  	
  2.70

  	
  x

  
	
  October 2012

  	
   

  	
  2.75

  	
  x

  

 

“Series 2007-1
Partial Amortization Shortfall Amount” means, with respect to any Payment
Date, the amount, if any, by which (i) the Series 2007-1 Partial
Amortization Amount for the preceding Payment Date exceeded (ii) the
dollar amount deposited into the applicable Principal Payment Account on such
preceding Payment Date under Sections 10.12(x) and 10.12(xvii)
of the Base Indenture on account of such Series 2007-1 Partial
Amortization Amount.

 

“Series 2007-1 Partial Amortization
Period” means any fiscal quarter during which a Series 2007-1
Partial Amortization Event has occurred and is continuing.

 

“Series 2007-1
Partial Amortization Trigger” has the meaning set forth under “Series 2007-1
Partial Amortization Event” in this Annex A.

 

“Series 2007-1
Prepayment” has the meaning set forth in Section 4.7(g) of
the Series 2007-1 Supplement.

 

“Series 2007-1 Prepayment Amount”
has the meaning set forth in Section 4.7(g) of the Series 2007-1
Supplement.

 

“Series 2007-1 Prepayment Date”
has the meaning set forth in Section 4.7(g) of the Series 2007-1
Supplement.

 

“Series 2007-1
Rapid Amortization Cure Right” has the meaning set forth in Section 2.2
of the Series 2007-1 Supplement.

 

“Series 2007-1
Rapid Amortization Event” has the meaning set forth in Section 2.1
of the Series 2007-1 Supplement.

 

“Series 2007-1 Residual Threshold Amount”
means $6,700,000.

 

35

 

“Series 2007-1
Securities Intermediary” has the meaning set forth in Section 4.11(a) of
the Series 2007-1 Supplement.

 

“Series 2007-1
Senior Debt Service” with respect to any Payment Date, is an amount equal
to the sum of (i) the Senior Notes Monthly Interest Amount for the Series 2007-1
Senior Notes on such Payment Date assuming for such purpose that the Series 2007-1
Class A-1 Commitments (including any issued but undrawn letters of credit)
are fully drawn over the related Interest Accrual Period, and (ii) the Series 2007-1
Accrued Insurer Premium Amount payable with respect to the related Interest
Accrual Period.

 

“Series 2007-1
Senior Noteholders” means, collectively, the Series 2007-1 Class A-1
Noteholders and the Series 2007-1 Class A-2 Noteholders.

 

“Series 2007-1
Senior Notes” means, collectively, the Series 2007-1 Class A-1
Notes and the Series 2007-1 Class A-2 Notes.

 

“Series 2007-1
Senior Notes Interest Reserve Amount” with respect to any Payment Date,
equals the Series 2007-1 Senior Debt Service due on the next three Payment
Dates; provided, that

 

with respect to
the first Interest Accrual Period following the Closing Date, the Series 2007-1
Senior Notes Interest Reserve Amount will be an amount equal to the Series 2007-1
Initial Senior Notes Interest Reserve Deposit;

 

during the period
from a Series 2007-1 Senior Notes Interest Reserve Step Down Date to but
excluding a Series 2007-1 Senior Notes Interest Reserve Step Up Date, the Series 2007-1
Senior Notes Interest Reserve Amount will be the sum of (a) an
amount equal to the Insured Senior Notes Percentage multiplied by the Series 2007-1
Senior Debt Service due on the next Payment Date plus (b) an amount
equal to the Uninsured Senior Notes Percentage multiplied by the Series 2007-1
Senior Debt Service due on the next three Payment Dates;

 

if a Rapid
Amortization Event has occurred (other than a Rapid Amortization Event that has
been waived or cured pursuant to a Rapid Amortization Cure Right), the Series 2007-1
Senior Notes Interest Reserve Amount will be the sum of (a) an
amount equal to the Insured Senior Notes Percentage of the Series 2007-1
Debt Service due on the next three Payment Dates plus (b) the
lesser of (x) the portion of the amount on deposit in the Senior Notes
Interest Reserve Account at the occurrence of such Rapid Amortization Event
that is allocable to the Uninsured Senior Notes and (y) an amount equal to
the Uninsured Senior Notes Percentage of the Series 2007-1 Senior Debt
Service due on the next six Payment Dates; provided, however,
that notwithstanding the foregoing in this clause (iii), the Series 2007-1
Senior Notes Interest Reserve Amount may not, by application of this clause
(iii), be reduced to an amount 

 

36

 

below the lesser of (X) the amount on deposit in the Senior Notes
Interest Reserve Account at the occurrence of such Rapid Amortization Event and
(Y) $10 million.

 

“Series 2007-1
Senior Notes Interest Reserve Deficit Amount” means, with respect to each
Payment Date, the amount, if any, by which (a) the Series 2007-1 Senior
Notes Interest Reserve Amount plus the sum of the Senior Notes Interest
Reserve Amounts for all other Series outstanding on such date exceeds
(b) the amount on deposit in the Senior Notes Interest Reserve Account on
such date (after giving effect to any withdrawals therefrom on such Payment
Date); provided, that with respect to any Payment Date that occurs
during the Monthly Collection Period immediately preceding the Series 2007-1
Legal Final Maturity Date, the Series 2007-1 Senior Notes Interest Reserve
Account Deficit Amount shall be zero.

 

“Series 2007-1
Senior Notes Interest Reserve Shortfall” means, when used with respect to
any date, that on such date the Series 2007-1 Senior Notes Interest
Reserve Amount plus the sum of the Senior Notes Interest Reserve Amounts
for all other Series outstanding on such date exceeds the amount on
deposit in the Senior Notes Interest Reserve Account.

 

“Series 2007-1
Senior Notes Interest Reserve Step-Down Date” means any Payment Date on
which the Three-Month DSCR (without giving effect to any equity contributions
made to the Master Issuer following the Series 2007-1 Closing Date) for
the past two Payment Dates (including such Payment Date) is equal to or greater
than 3.0x and on which no Rapid Amortization Event has occurred and is
continuing.

 

“Series 2007-1
Senior Notes Interest Reserve Step-Down Release Amount” means, with respect
to any Payment Date, the amount, if any, by which (a) the amount on
deposit in the Senior Notes Interest Reserve Account on such date (after giving
effect to any withdrawals therefrom on such Payment Date), exceeds (b) the
aggregate of the Senior Notes Interest Reserve Amounts for all Series then
outstanding.

 

“Series 2007-1
Senior Notes Interest Reserve Step Up Date” means any Payment Date,
following a Series 2007-1 Senior Notes Interest Reserve Step Down Date,
with respect to which (i) the Three-Month DSCR (without giving effect to
any equity contributions made to the Master Issuer following the Series 2007-1
Closing Date) on such Payment Date is less than 3.0x, or (ii) a Rapid
Amortization Event occurs on or prior to such Payment Date.

 

“Series 2007-1
Subordinated Notes Principal Amortization Amount”: has the meaning set
forth in Section 2.4 of the Series 2007-1 Supplement.

 

“Series 2007-1
Supplement” means the Series 2007-1 Supplement, dated as of the Series 2007-1
Closing Date by and among the Co-Issuers and the Indenture Trustee, as amended,
supplemented or otherwise modified from time to time.

 

“Series 2007-1
Supplemental Definitions List” has the meaning set forth in Article I
of the Series 2007-1 Supplement.

 

37

 

“Similar Law”
means any federal, state, local, non-U.S. or other laws or regulations
governing the investment of governmental plans, certain church plans, and
foreign plans, not subject to ERISA or the provisions of Section 4975
of the Code, and the conduct of the fiduciaries of such plans.

 

“Specified Rating
Agencies” means any of Standard & Poor’s, Moody’s or Fitch, as
applicable.

 

“Sub-class Commitment
Percentage” means, on any date of determination, (i) with respect to
any Class A-1-A Investor Group, the ratio, expressed as a percentage,
which such Class A-1-A Investor Group’s Maximum Investor Group Principal
Amount bears to the Series 2007-1 Class A-1-A Maximum Principal
Amount on such date; and (ii) with respect to any Class A-1-X
Investor Group, the ratio, expressed as a percentage, which such Class A-1-X
Investor Group’s Maximum Investor Group Principal Amount bears to the Series 2007-1
Class A-1-X Maximum Principal Amount on such date.

 

“Subfacility Decrease”
has the meaning set forth in Section 3.2(d) of the Series 2007-1
Supplement.

 

“Subfacility Increase”
has the meaning set forth in Section 3.1(b) of the Series 2007-1
Supplement.

 

“Subordinated Notes
Monthly Contingent Additional Interest Amount” means the Series 2007-1
Class M-I Contingent Additional Interest, if any, and the Series 2007-1
Class M-I Post-ARD Contingent Additional Interest, if any.

 

“Swap Rate” means,
when used with respect to any Business Day for any tenor, the mid-market swap rate for such tenor
appearing on page 19901 of the Telerate Service (or any successor service
or, if such service or successor service is not available, a substitute rate,
which will be the median of three quoted rates determined by the Indenture
Trustee requesting at the expense of the Co-Issuers substitute rate quotes from
three broker dealers of nationally recognized standing) on such Business Day, adjusted for monthly compounding.

 

“Swingline Commitment”
means the obligation of the Swingline Lender to make Swingline Loans pursuant
to Section 2.06 of the Series 2007-1 Class A-1 Note
Purchase Agreement in an aggregate principal amount at any one time outstanding
not to exceed $25,000,000, as such amount may be reduced or increased pursuant
to Section 2.06(h) of the Series 2007-1 Class A-1
Note Purchase Agreement or reduced pursuant to Section 2.05(b) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Swingline Lender”
means Lehman Commercial Paper Inc., in its capacity as maker of Swingline
Loans, and its permitted successors and assigns in such capacity.

 

“Swingline Loan
Request” has the meaning set forth in Section 2.06(a) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

38

 

“Swingline Loans”
has the meaning set forth in Section 2.06(a) of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Swingline
Participation Amount” has the meaning set forth in Section 2.06(e) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Swingline Sub-Class”
has the meaning set forth in “Designation” in the Series 2007-1
Supplement.

 

“Undrawn Commitment
Fees” has the meaning set forth in Section 3.02(b) of the Series 2007-1
Class A-1 Note Purchase Agreement.

 

“Undrawn Commitment
Fees Rate” has the meaning set forth in the Series 2007-1 Class A-1
VFN Fee Letter.

 

“Undrawn L/C Face
Amounts” means, at any time, the aggregate then undrawn and unexpired face
amount of any Letters of Credit outstanding at such time.

 

“Uninsured Senior
Notes”:  As of any date of
determination, all Series 2007-1 Senior Notes other than the Insured
Senior Notes.

 

“Uninsured Senior
Notes Percentage”:  As of any date of
determination, the percentage obtained by dividing (i) the
Aggregate Outstanding Principal Amount of all Uninsured Senior Notes on such
date by (ii) the Aggregate Outstanding Principal Amount of all the Series 2007-1
Class A-1 Notes and Series 2007-1 Class A-2 Notes on such date,
assuming for purposes of both clause (i) and clause (ii) that the
commitments (including any issued by undrawn letters of credit) with respect to
any Senior Notes designated as Class A-1 are fully drawn on such date.

 

“Unreimbursed L/C
Drawings” means, at any time, the aggregate amount of any L/C Reimbursement
Amounts that have not then been reimbursed pursuant to Section 2.08
of the Series 2007-1 Class A-1 Note Purchase Agreement.

 

“Unused Premium”
has the meaning set forth in the Series 2007-1 Class A Insurance
Agreement.

 

“Unused Premium Rate”
has the meaning set forth in the Series 2007-1 Class A Insurance
Agreement.

 

“Used Premium” has
the meaning set forth in the Series 2007-1 Class A Insurance
Agreement.

 

“Used Premium Rate”
has the meaning set forth in the Series 2007-1 Class A Insurance
Agreement.

 

“U.S. Person” has
the meaning set forth in Section 5.2 of the Series 2007-1
Supplement.

 

39

 

“U.S. Resident”
has the meaning set forth in Section 5.2 of the Series 2007-1
Supplement.

 

“Voluntary Decrease”
has the meaning set forth in Section 3.2(b) of the Series 2007-1
Supplement.

 

“Voluntary Decrease
Request” has the meaning set forth in Section 2.02(e) of
the Series 2007-1 Class A-1 Note Purchase Agreement.

 

40

 

EXHIBIT A-1-1-1

 

FORM OF SERIES 2007-1 CLASS A-1-A
ADVANCE NOTE

 

THIS
SERIES 2007-1 VARIABLE FUNDING SENIOR NOTE, CLASS A-1 (THIS “NOTE”), WHICH
IS A SERIES 2007-1 CLASS A-1-A ADVANCE NOTE, HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER
RELEVANT JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES LLC, APPLEBEE’S IP
LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S RESTAURANTS WEST LLC,
APPLEBEE’S RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS INC., APPLEBEE’S
RESTAURANTS KANSAS LLC, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC OR APPLEBEE’S
RESTAURANTS VERMONT, INC. (THE “CO-ISSUERS”) HAS BEEN REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).  THIS NOTE AND ANY INTEREST HEREIN MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF THE CLASS A-1 NOTE PURCHASE AGREEMENT, DATED AS OF NOVEMBER
29, 2007 BY AND AMONG THE CO-ISSUERS, APPLEBEE’S SERVICES, INC., AS SERVICER,
THE CONDUIT INVESTORS, THE COMMITTED NOTE PURCHASERS AND THE FUNDING AGENTS
NAMED THEREIN, THE L/C PROVIDER NAMED THEREIN, LEHMAN COMMERCIAL PAPER, INC.,
AS SWINGLINE LENDER AND AS CLASS A-1 ADMINISTRATIVE AGENT.

 

 

THE
PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN AND SUBJECT TO INCREASES
AND DECREASES AS SET FORTH HEREIN. 
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. 
ANY PERSON ACQUIRING THIS NOTE MAY ASCERTAIN ITS CURRENT PRINCIPAL
AMOUNT BY INQUIRY OF THE INDENTURE TRUSTEE.

 

REGISTERED

 

	
  No. [    ]

  	
  up to $[                    ]

  

 

SEE REVERSE FOR CERTAIN CONDITIONS

 

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 VERMONT, INC.,

APPLEBEE’S RESTAURANTS TEXAS LLC

APPLEBEE’S RESTAURANTS INC. and

APPLEBEE’S RESTAURANTS KANSAS LLC,

 

SERIES 2007-1 VARIABLE FUNDING SENIOR NOTE, CLASS A-1 

SUB-CLASS:  SERIES 2007-1 CLASS A-1-A
ADVANCE NOTE

 

APPLEBEE’S ENTERPRISES LLC, a limited liability
company formed under the laws of the State of Delaware, APPLEBEE’S IP LLC, a
limited liability company formed under the laws of the State of Delaware,
APPLEBEE’S RESTAURANTS NORTH LLC, a limited liability company formed under the
laws of the State of Delaware, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, a
limited liability company formed under the laws of the State of Delaware,
APPLEBEE’S RESTAURANTS WEST LLC, a limited liability company formed under the
laws of the State of Delaware, APPLEBEE’S RESTAURANTS VERMONT, INC., a
corporation formed under the laws of the state of Vermont, APPLEBEE’S
RESTAURANTS TEXAS LLC, a limited liability company formed under the laws of the
State of Texas, APPLEBEE’S RESTAURANTS INC., a corporation formed under the
laws of the State of Kansas and APPLEBEE’S RESTAURANTS KANSAS LLC, a limited
liability company formed under the laws of the State of Kansas (herein referred
to, collectively, as the “Co-Issuers”), for value received, hereby
jointly and severally promise to pay to Lehman Brothers Bank, FSB, as Funding Agent, or registered
assigns, up to the principal sum of [                            ]
($[              ])

 

 

or such lesser amount as shall equal the portion of
the Series 2007-1 Class A-1 Outstanding Principal Amount evidenced by
this Note as provided in the Indenture and the Series 2007-1 Class A-1
Note Purchase Agreement.  Payments of
principal shall be payable in the amounts and at the times set forth in the
Indenture described herein; provided, however, that the entire
unpaid principal amount of this Note shall be due on December 21, 2037
(the “Series 2007-1 Legal Final Maturity Date”).  Pursuant to the Series 2007-1 Class A-1
Note Purchase Agreement and the Series 2007-1 Supplement, the principal
amount of this Note may be subject to Increases or Decreases on any Business
Day during the Commitment Term, and principal with respect to the Series 2007-1
Class A-1 Notes may be paid earlier than the Series 2007-1 Legal
Final Maturity Date as described in the Indenture.  The Co-Issuers will pay interest on this Series 2007-1
Class A-1-A Advance Note (this “Note”) at the Series 2007-1 Class A-1
Note Interest Rate for each Interest Accrual Period in accordance with the
terms of the Indenture.  Such amounts due on this Note will be payable in
arrears on each Payment Date, which will be on the 20th day (or, if such 20th
day is not a Business Day, the next succeeding Business Day) of each January,
February, March, April, May, June, July, August, September, October, November and
December commencing January 20, 2008 (each, a “Payment Date”).
 Such amounts due on this Note will
accrue for each Payment Date with respect to (i) initially, the period
from and including November 29, 2007 to but excluding the day that is two (2) Business Days
prior to the first Accounting Date and (ii) thereafter,
any period commencing on and including the day that is two (2) Business
Days prior to an Accounting Date and ending on but excluding the day that is
two (2) Business Days prior to the next succeeding Accounting Date (each, an “Interest Accrual Period”).  Such amounts due on this Note with respect to the Note (and interest
on any defaulted payments of amounts due
on this Note at the same rate) will be computed in accordance with the
Indenture.  In addition, under the
circumstances set forth in the Indenture, the Co-Issuers shall also pay
contingent additional interest on this Note at the Series 2007-1 Class A-1
Extension Contingent Additional Rate or the Series 2007-1 Class A-1
Post-ARD Monthly Contingent Additional Rate, as applicable, and such contingent
additional interest shall be computed and shall be payable in the amounts and
at the times set forth in the Indenture. 
In addition to and not in limitation of the foregoing and the provisions
of the Indenture and the Series 2007-1 Class A-1 Note Purchase Agreement,
the Co-Issuers further jointly and severally agree to pay to the holder of this
Note such holder’s portion of the Undrawn Commitment Fees and other fees, costs
and expense reimbursements, indemnification amounts and other amounts due and
payable in accordance with the Indenture and the Series 2007-1 Class A-1
Note Purchase Agreement.

 

The
holder of this Note is authorized to endorse on the schedules annexed hereto
and made a part hereof or on a continuation thereof which shall be attached
hereto and made a part hereof the date and amount of each Increase and Decrease
with respect thereto and the Series 2007-1 Class A-1 Note Interest
Rate applicable thereto.  Each such
endorsement shall constitute prima  facie evidence of the accuracy
of the information endorsed.  The failure
to make any such endorsement or any error in any such endorsement shall not
affect the obligations of the Co-Issuers in respect of the Series 2007-1 Class A-1
Outstanding Principal Amount.

 

The
amounts due on this Note are payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts. All payments made by the Co-Issuers with respect to
this Note shall be applied as provided in the Indenture.

 

 

This
Note is subject to mandatory and optional prepayment and mandatory liquidation
(referred to in the Indenture as the “Auction Call Redemption”), as set
forth in the Indenture.

 

Reference
is made to the further provisions of this Note set forth on the reverse hereof,
which shall have the same effect as though fully set forth on the face of this
Note. Although a summary of certain provisions of the Indenture is set forth
below and on the reverse hereof and made a part hereof, this Note does not
purport to summarize the Indenture and reference is made to the Indenture for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Co-Issuers and the Indenture Trustee. A copy of the Indenture may be
requested from the Indenture Trustee by writing to the Indenture Trustee at:
Wells Fargo Bank, National Association, Sixth Street and Marquette Avenue, MAC
N9311-161 Minneapolis, MN 55479, Attention: Corporate Trust Services / Asset
Backed Administration. To the extent not defined herein, the capitalized terms
used herein have the meanings ascribed to them in the Indenture (as defined on
the reverse hereof).

 

Subject
to the next following paragraph, the Co-Issuers hereby certify and declare that
all acts, conditions and things required to be done and performed and to have
happened prior to the creation of this Note and to constitute it as the valid
obligation of the Co-Issuers enforceable in accordance with its terms, have been
done and performed and have happened in due compliance with all applicable laws
and in accordance with the terms of the Indenture.

 

Unless
the certificate of authentication hereon has been executed by the Indenture
Trustee whose name appears below by manual or facsimile signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

 

[Remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, each
of the Co-Issuers has caused this instrument to be signed, manually or in
facsimile, by its Authorized Officer.

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S ENTERPRISES
  LLC, as Co- Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S IP LLC, as
  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS NORTH LLC, as

  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS MID-ATLANTIC

  LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS WEST LLC, as

  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
						

 

 

	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS VERMONT,

  INC., as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS TEXAS LLC, as

  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS
  INC., as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS KANSAS LLC, as

  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

CERTIFICATE OF
AUTHENTICATION

 

This is one of the Series 2007-1
Class A-1-A Advance Notes issued under the within-mentioned Indenture.

 

	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

 

[REVERSE OF NOTE]

 

This Note is one of a
duly authorized issue of Series 2007-1 Class A-1 Notes of the
Co-Issuers designated as their Series 2007-1 Variable Funding Senior
Notes, Class A-1 (herein called the “Series 2007-1 Class A-1
Notes”), and is one of the Sub-Classes thereof designated as the Series 2007-1
Class A-1-A Advance Notes (herein called the “Series 2007-1 Class A-1-A
Advance Notes”), all issued under (i) the Base Indenture, dated as of November 29,
2007 (such Base Indenture, as amended, supplemented or modified, is herein
called the “Base Indenture”), among the Co-Issuers and Wells Fargo Bank,
National Association., as indenture trustee (the “Indenture  Trustee”,
which term includes any successor Indenture Trustee under the Base Indenture),
and (ii) the Series 2007-1 Supplement to the Base Indenture, dated as
of November 29, 2007 (the “Series 2007-1 Supplement”), among
the Co-Issuers and the Indenture Trustee. The Base Indenture and the Series 2007-1
Supplement are referred to herein as the “Indenture”. The Series 2007-1
Class A-1-A Advance Notes are subject to all terms of the Indenture. All
terms used in this Note that are defined in the Indenture, as supplemented,
modified or amended, shall have the meanings assigned to them in or pursuant to
the Indenture, as so supplemented, modified or amended.

 

The Series 2007-1 Class A-1-A
Advance Notes are and will be secured by the Collateral pledged as security
therefor as provided in the Indenture.

 

As provided for in the
Indenture, the Series 2007-1 Class A-1-A Advance Notes may be
prepaid, in whole or in part, at the option of the Co-Issuers.  In addition, the Series 2007-1 Class A-1-A
Advance Notes are subject to mandatory prepayment as provided for in the
Indenture.  As described above, the
entire unpaid principal amount of this Note shall be due and payable on the Series 2007-1
Legal Final Maturity Date. All payments of principal of the Series 2007-1 Class A-1-A Advance Notes will be made pro  rata to
the holders of Series 2007-1 Class A-1-A Advance Notes entitled
thereto.

 

Amounts due on this Note
which are payable on a Payment Date or on any date on which payments are
permitted to be made as provided for in the Indenture shall be paid to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on the applicable Record Date or Prepayment Record
Date, as the case may be.

 

Interest and fees and
contingent additional interest, if any, will each accrue on the Series 2007-1
Class A-1-A Advance Notes at the rates set forth in the Indenture.  Such amounts will be computed on the basis
set forth in the Indenture. Amounts payable on the Series 2007-1 Class A-1-A
Advance Notes on each Payment Date will be calculated as set forth in the
Indenture.

 

Payments of amounts due
on this Note are subordinated to the payment of certain other amounts in
accordance with the Priority of Payments.

 

If an Event of Default
shall occur and be continuing, this Note may become or be declared due and
payable in the manner and with the effect provided in the Indenture.

 

 

Amounts
payable in respect of this Note shall be made by wire transfer of immediately
available funds to a Dollar account maintained by the Noteholder or its
nominee, subject to the terms set forth in the Indenture.

 

As provided in the
Indenture and subject to certain limitations set forth therein, the transfer of
this Note may be registered on the Note Register upon surrender of this Note
for registration of transfer at the office or agency designated by the
Co-Issuers pursuant to the Indenture, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by, the Series 2007-1 Class A-1-A Noteholder hereof or
his attorney duly authorized in writing, with such signature guaranteed by an
“eligible guarantor institution” meeting the requirements of the Note
Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”) or such other
“signature guarantee program” as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and accompanied by such other
documents as the Indenture Trustee and the Note Registrar may require and as
may be required by the Indenture, and thereupon one or more new Series 2007-1
Class A-1-A Advance Notes of authorized denominations in the same
aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of transfer
or exchange of this Note, but the transferor may be required to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any such registration of transfer or exchange.

 

Each Series 2007-1 Class A-1-A
Noteholder, by acceptance of a Series 2007-1 Class A-1-A Note,
covenants and agrees that by accepting the benefits of the Indenture that prior
to the date that is one year and one day after the payment in full of the
latest maturing note issued under the Indenture, such Series 2007-1 Class A-1-A
Noteholder will not institute against, or join with any other Person in
instituting against, any Securitization Entity any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any federal or state bankruptcy or similar law; provided, however,
that nothing herein shall constitute a waiver of any right to indemnification,
reimbursement or other payment from the Securitization Entities pursuant to the
Indenture or any other Transaction Document.

 

It is the intent of the
Co-Issuers and each Series 2007-1 Class A-1-A Noteholder that, for
federal, state and local income and franchise tax purposes only, the Series 2007-1
Class A-1-A Notes will evidence indebtedness of the Co-Issuers secured by
the Indenture Collateral.  Each Series 2007-1
Class A-1-A Noteholder, by the acceptance of this Note, agrees to treat
this Note (or beneficial interests herein) for purposes of federal, state and
local income or franchise taxes and any other tax imposed on or measured by
income, as indebtedness of the Co-Issuers or, if any Co-Issuer is treated as a
division of another entity, such other entity.

 

The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Co-Issuers and the rights of
the Series 2007-1 Class A-1-A Noteholders under the Indenture at any
time by the Co-Issuers with the consent of the Aggregate Controlling Party or each
Series Controlling Party (as applicable) and without the consent of any Series 2007-1
Class A-1-A Noteholders.  The
Indenture also contains provisions permitting the Aggregate Controlling Party
or each Series 

 

 

Controlling Party (as
applicable) to waive compliance by the Co-Issuers with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences without the consent of any Series 2007-1 Class A-1-A
Noteholders. Any such consent or waiver of this Note (or any
one or more predecessor Notes) shall be conclusive and binding upon such Series 2007-1
Class A-1-A Noteholders and upon all future Series 2007-1 Class A-1-A
Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.

 

The term “Co-Issuer” as
used in this Note includes any successor to the Co-Issuers and any Additional
Co-Issuers under the Indenture.

 

The Series 2007-1 Class A-1-A
Notes are issuable only in registered form in denominations as provided in the
Indenture, subject to certain limitations set forth therein.

 

THIS NOTE AND THE INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED 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 OF NEW YORK).

 

No reference herein to
the Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Co-Issuers, which is absolute and unconditional,
to pay the amounts due on this Note at the times, place and rate, and in the
coin or currency herein prescribed.

 

[Remainder of page intentionally
left blank]

 

 

ASSIGNMENT

 

	
  Social Security or
  taxpayer I.D. or other identifying number of assignee:

  	
   

  

 

FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto

 

 

	
   

  
	
  (name and address of
  assignee)

  

 

the within  Note and all rights thereunder, and hereby
irrevocably constitutes and appoints
                                        ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  	
  (1)

  

 

 

	
   

  	
   

  	
  Signature Guaranteed:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
				

 

 

(1)                                  NOTE:  The signature to this assignment must
correspond with the name of the registered owner as it appears on the face of
the within Note, without alteration, enlargement or any change whatsoever.

 

 

INCREASES AND DECREASES

 

	
  Date

  	
   

  	
  Unpaid

  Principal

  Amount

  	
   

  	
  Increase

  	
   

  	
  Decrease

  	
   

  	
  Total

  	
   

  	
  Series

  2007-1

  Class A-1

  Note

  Interest

  Rate

  	
   

  	
  Interest

  Accrual Period

  (if applicable)

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT A-1-1-2

 

FORM OF SERIES 2007-1 CLASS A-1-X
ADVANCE NOTE

 

THIS SERIES 2007-1
VARIABLE FUNDING SENIOR NOTE, CLASS A-1 (THIS “NOTE”), WHICH IS A SERIES
2007-1 CLASS A-1-X ADVANCE NOTE, HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER
RELEVANT JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES LLC, APPLEBEE’S IP
LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S RESTAURANTS WEST LLC, APPLEBEE’S
RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS INC., APPLEBEE’S RESTAURANTS
KANSAS LLC, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC OR APPLEBEE’S RESTAURANTS
VERMONT, INC. (THE “CO-ISSUERS”) HAS BEEN REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).  THIS NOTE AND ANY INTEREST HEREIN MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF THE CLASS A-1 NOTE PURCHASE AGREEMENT, DATED AS OF NOVEMBER
29, 2007 BY AND AMONG THE CO-ISSUERS, APPLEBEE’S SERVICES, INC., AS SERVICER,
THE CONDUIT INVESTORS, 
THE COMMITTED NOTE PURCHASERS AND THE FUNDING AGENTS NAMED
THEREIN, THE L/C PROVIDER NAMED THEREIN, LEHMAN COMMERCIAL PAPER, INC., AS
SWINGLINE LENDER AND AS CLASS A-1 ADMINISTRATIVE AGENT.

 

 

THE PRINCIPAL OF THIS
NOTE IS PAYABLE AS SET FORTH HEREIN AND SUBJECT TO INCREASES AND DECREASES AS
SET FORTH HEREIN.  ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.  ANY
PERSON ACQUIRING THIS NOTE MAY ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY
INQUIRY OF THE INDENTURE TRUSTEE.

 

REGISTERED

 

No. [    ]                                                                                                                                                                 up
to
$[                  ]

 

SEE REVERSE FOR
CERTAIN CONDITIONS

 

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 VERMONT, INC.,

APPLEBEE’S
RESTAURANTS TEXAS LLC

APPLEBEE’S
RESTAURANTS INC. and

APPLEBEE’S
RESTAURANTS KANSAS LLC,

 

SERIES 2007-1
VARIABLE FUNDING SENIOR NOTE, CLASS A-1

SUB-CLASS:  SERIES 2007-1 CLASS A-1-X ADVANCE NOTE

 

APPLEBEE’S ENTERPRISES LLC, a limited liability
company formed under the laws of the State of Delaware, APPLEBEE’S IP LLC, a
limited liability company formed under the laws of the State of Delaware,
APPLEBEE’S RESTAURANTS NORTH LLC, a limited liability company formed under the
laws of the State of Delaware, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, a
limited liability company formed under the laws of the State of Delaware,
APPLEBEE’S RESTAURANTS WEST LLC, a limited liability company formed under the
laws of the State of Delaware APPLEBEE’S RESTAURANTS VERMONT, INC., a
corporation formed under the laws of the state of Vermont, APPLEBEE’S
RESTAURANTS TEXAS LLC, a limited liability company formed under the laws of the
State of Texas, APPLEBEE’S RESTAURANTS INC., a corporation formed under the
laws of the State of Kansas and APPLEBEE’S RESTAURANTS KANSAS LLC, a limited
liability company formed under the laws of the State of Kansas (herein referred
to, collectively, as the “Co-Issuers”), for value received, hereby
jointly and severally promise to pay to Lehman Brothers Bank, FSB, as Funding
Agent, or registered assigns, up to the principal sum of
[                          ]
($[              ])

 

 

or such lesser amount as shall
equal the portion of the Series 2007-1 Class A-1 Outstanding
Principal Amount evidenced by this Note as provided in the Indenture and the Series 2007-1
Class A-1 Note Purchase Agreement. 
Payments of principal shall be payable in the amounts and at the times
set forth in the Indenture described herein; provided, however,
that the entire unpaid principal amount of this Note shall be due on December 21,
2037 (the “Series 2007-1 Legal Final Maturity Date”).  Pursuant to the Series 2007-1 Class A-1
Note Purchase Agreement and the Series 2007-1 Supplement, the principal
amount of this Note may be subject to Increases or Decreases on any Business
Day during the Commitment Term, and principal with respect to the Series 2007-1
Class A-1 Notes may be paid earlier than the Series 2007-1 Legal
Final Maturity Date as described in the Indenture.  The Co-Issuers will pay interest on this Series 2007-1
Class A-1-X Advance Note (this “Note”) at the Series 2007-1 Class A-1
Note Interest Rate for each Interest Accrual Period in accordance with the
terms of the Indenture.  Such amounts due on this Note will be payable in
arrears on each Payment Date, which will be on the 20th day (or, if such 20th
day is not a Business Day, the next succeeding Business Day) of each January,
February, March, April, May, June, July, August, September, October, November,
and December commencing January 20, 2008 (each, a “Payment Date”).  Such amounts due on this Note will accrue for
each Payment Date with respect to (i) initially, the period from and
including November 29, 2007
to but excluding the day that is two (2) Business Days prior to the
first Accounting Date and (ii) thereafter,
any period commencing on and including the day that is two (2) Business
Days prior to an Accounting Date and ending on but excluding the day that is
two (2) Business Days prior to the next succeeding Accounting Date (each, an “Interest Accrual Period”).  Such amounts due on this Note with respect to the Note (and interest
on any defaulted payments of amounts due
on this Note at the same rate) will be computed in accordance with the
Indenture.  In addition, under the
circumstances set forth in the Indenture, the Co-Issuers shall also pay
contingent additional interest on this Note at the Series 2007-1 Class A-1
Extension Contingent Additional Rate or the Series 2007-1 Class A-1
Post-ARD Monthly Contingent Additional Rate, as applicable, and such contingent
additional interest shall be computed and shall be payable in the amounts and
at the times set forth in the Indenture. 
In addition to and not in limitation of the foregoing and the provisions
of the Indenture  and
the Series 2007-1 Class A-1 Note Purchase Agreement, the Co-Issuers
further jointly and severally agree to pay to the holder of this Note such
holder’s portion of the Undrawn Commitment Fees and other fees, costs and
expense reimbursements, indemnification amounts and other amounts due and
payable in accordance with the Indenture and the Series 2007-1 Class A-1
Note Purchase Agreement.

 

The holder of this Note
is authorized to endorse on the schedules annexed hereto and made a part hereof
or on a continuation thereof which shall be attached hereto and made a part
hereof the date and amount of each Increase and Decrease with respect thereto
and the Series 2007-1 Class A-1 Note Interest Rate applicable
thereto.  Each such endorsement shall
constitute prima  facie evidence of the accuracy of the
information endorsed.  The failure to
make any such endorsement or any error in any such endorsement shall not affect
the obligations of the Co-Issuers in respect of the Series 2007-1 Class A-1
Outstanding Principal Amount.

 

The amounts due on this
Note are payable in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
All payments made by the Co-Issuers with respect to this Note shall be applied
as provided in the Indenture.

 

 

This Note is subject to
mandatory and optional prepayment and mandatory liquidation (referred to in the
Indenture as the “Auction Call Redemption”), as set forth in the
Indenture.

 

Reference is made to the
further provisions of this Note set forth on the reverse hereof, which shall
have the same effect as though fully set forth on the face of this Note.
Although a summary of certain provisions of the Indenture is set forth below
and on the reverse hereof and made a part hereof, this Note does not purport to
summarize the Indenture and reference is made to the Indenture for information
with respect to the interests, rights, benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the
Co-Issuers and the Indenture Trustee. A copy of the Indenture may be requested
from the Indenture Trustee by writing to the Indenture Trustee at: Wells Fargo
Bank, National Association, Sixth Street and Marquette Avenue, MAC N9311-161
Minneapolis, MN 55479, Attention: Corporate Trust Services / Asset Backed
Administration. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Indenture (as defined on the
reverse hereof).

 

Subject to the next
following paragraph, the Co-Issuers hereby certify and declare that all acts,
conditions and things required to be done and performed and to have happened
prior to the creation of this Note and to constitute it as the valid obligation
of the Co-Issuers enforceable in accordance with its terms, have been done and
performed and have happened in due compliance with all applicable laws and in
accordance with the terms of the Indenture.

 

Unless the certificate of
authentication hereon has been executed by the Indenture Trustee whose name
appears below by manual or facsimile signature, this Note shall not be entitled
to any benefit under the Indenture referred to on the reverse hereof, or be
valid or obligatory for any purpose.

 

[Remainder of page intentionally
left blank]

 

 

IN WITNESS WHEREOF, each
of the Co-Issuers has caused this instrument to be signed, manually or in
facsimile, by its Authorized Officer.

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S ENTERPRISES
  LLC, as Co- Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S IP LLC, as
  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS NORTH LLC, as

  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS MID-ATLANTIC

  LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS WEST LLC, as

  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS VERMONT,

  INC., as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS TEXAS LLC, as

  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS
  INC., as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS KANSAS LLC, as

  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

CERTIFICATE OF
AUTHENTICATION

 

This is one of the Series 2007-1
Class A-1-X Advance Notes issued under the within-mentioned Indenture.

 

	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

 

[REVERSE OF NOTE]

 

This Note is one of a
duly authorized issue of Series 2007-1 Class A-1 Notes of the
Co-Issuers designated as their Series 2007-1 Variable Funding Senior
Notes, Class A-1 (herein called the “Series 2007-1 Class A-1
Notes”), and is one of the Sub-Classes thereof designated as the Series 2007-1
Class A-1-X Advance Notes (herein called the “Series 2007-1 Class A-1-X
Advance Notes”), all issued under (i) the Base Indenture, dated as of November 29,
2007 (such Base Indenture, as amended, supplemented or modified, is herein
called the “Base Indenture”), among the Co-Issuers and Wells Fargo Bank,
National Association, as indenture trustee (the “Indenture  Trustee”,
which term includes any successor Indenture Trustee under the Base Indenture),
and (ii) the Series 2007-1 Supplement to the Base Indenture, dated as
of November 29, 2007 (the “Series 2007-1 Supplement”), among
the Co-Issuers and the Indenture Trustee. The Base Indenture and the Series 2007-1
Supplement are referred to herein as the “Indenture”. The Series 2007-1
Class A-1-X Advance Notes are subject to all terms of the Indenture. All
terms used in this Note that are defined in the Indenture, as supplemented,
modified or amended, shall have the meanings assigned to them in or pursuant to
the Indenture, as so supplemented, modified or amended.

 

The Series 2007-1 Class A-1-X
Advance Notes are and will be secured by the Collateral pledged as security
therefor as provided in the Indenture.

 

As provided for in the
Indenture, the Series 2007-1 Class A-1-X Advance Notes may be
prepaid, in whole or in part, at the option of the Co-Issuers.  In addition, the Series 2007-1 Class A-1-X
Advance Notes are subject to mandatory prepayment as provided for in the
Indenture.  As described above, the
entire unpaid principal amount of this Note shall be due and payable on the Series 2007-1
Legal Final Maturity Date. All payments of principal of the Series 2007-1 Class A-1-X
Advance Notes will be made pro  rata to the holders of Series 2007-1
Class A-1-X Advance Notes entitled thereto.

 

Amounts due on this Note
which are payable on a Payment Date or on any date on which payments are
permitted to be made as provided for in the Indenture shall be paid to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on the applicable Record Date or Prepayment Record
Date, as the case may be.

 

Interest and fees and
contingent additional interest, if any, will each accrue on the Series 2007-1
Class A-1-X Advance Notes at the rates set forth in the Indenture.  Such amounts will be computed on the basis
set forth in the Indenture. Amounts payable on the Series 2007-1 Class A-1-X
Advance Notes on each Payment Date will be calculated as set forth in the
Indenture.

 

Payments of amounts due
on this Note are subordinated to the payment of certain other amounts in
accordance with the Priority of Payments.

 

If an Event of Default
shall occur and be continuing, this Note may become or be declared due and
payable in the manner and with the effect provided in the Indenture.

 

 

Amounts payable in respect of this Note shall be
made by wire transfer of immediately available funds to a Dollar account
maintained by the Noteholder or its nominee, subject to the terms set forth in
the Indenture.

 

As
provided in the Indenture and subject to certain limitations set forth therein,
the transfer of this Note may be registered on the Note Register upon surrender
of this Note for registration of transfer at the office or agency designated by
the Co-Issuers pursuant to the Indenture, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by, the Series 2007-1 Class A-1-A Noteholder hereof or
his attorney duly authorized in writing, with such signature guaranteed by an “eligible
guarantor institution” meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Security Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program”
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and accompanied by such other documents as the Indenture Trustee and
the Note Registrar may require and as may be required by the Indenture, and
thereupon one or more new Series 2007-1 Class A-1-A Advance Notes of
authorized denominations in the same aggregate principal amount will be issued
to the designated transferee or transferees. No service charge will be charged
for any registration of transfer or exchange of this Note, but the transferor
may be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.

 

Each Series 2007-1
Class A-1-A Noteholder, by acceptance of a Series 2007-1 Class A-1-A
Note, covenants and agrees that by accepting the benefits of the Indenture that
prior to the date that is one year and one day after the payment in full of the
latest maturing note issued under the Indenture, such Series 2007-1 Class A-1-A
Noteholder will not institute against, or join with any other Person in
instituting against, any Securitization Entity any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any federal or state bankruptcy or similar law; provided, however,
that nothing herein shall constitute a waiver of any right to indemnification,
reimbursement or other payment from the Securitization Entities pursuant to the
Indenture or any other Transaction Document.

 

It is
the intent of the Co-Issuers and each Series 2007-1 Class A-1-A
Noteholder that, for federal, state and local income and franchise tax purposes
only, the Series 2007-1 Class A-1-A Notes will evidence indebtedness
of the Co-Issuers secured by the Indenture Collateral. Each Series 2007-1 Class A-1-A
Noteholder, by the acceptance of this Note, agrees to treat this Note (or
beneficial interests herein) for purposes of federal, state and local income or
franchise taxes and any other tax imposed on or measured by income, as
indebtedness of the Co-Issuers or, if any Co-Issuer is treated as a division of
another entity, such other entity.

 

The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Co-Issuers
and the rights of the Series 2007-1 Class A-1-A Noteholders under the
Indenture at any time by the Co-Issuers with the consent of the Aggregate
Controlling Party or each Series Controlling Party (as applicable) and
without the consent of any Series 2007-1 Class A-1-A Noteholders. The
Indenture also contains provisions permitting the Aggregate Controlling Party
or each Series 

 

 

Controlling Party (as
applicable) to waive compliance by the Co-Issuers with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences without the consent of any Series 2007-1 Class A-1-A
Noteholders. Any such consent or waiver of this Note (or any one or more
predecessor Notes) shall be conclusive and binding upon such Series 2007-1
Class A-1-A Noteholders and upon all future Series 2007-1 Class A-1-A
Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.

 

The
term “Co-Issuer” as used in this Note includes any successor to the Co-Issuers
and any Additional Co-Issuers under the Indenture.

 

The Series 2007-1
Class A-1-A Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations set forth therein.

 

THIS NOTE AND THE
INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED 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 OF
NEW YORK).

 

No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Co-Issuers, which is
absolute and unconditional, to pay the amounts due on this Note at the times,
place and rate, and in the coin or currency herein prescribed.

 

[Remainder of page intentionally left blank]

 

 

ASSIGNMENT

 

Social Security or
taxpayer I.D. or other identifying number of assignee:                     

 

FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto

 

 

(name
and address of assignee)

 

the within Note and all
rights thereunder, and hereby irrevocably constitutes and appoints                         ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  	
  (1)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature Guaranteed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

 

(1)           NOTE:  The signature to this assignment must
correspond with the name of the registered owner as it appears on the face of
the within Note, without alteration, enlargement or any change whatsoever.

 

 

INCREASES AND DECREASES

 

	
  Date

  	
   

  	
  Unpaid

  Principal

  Amount

  	
   

  	
  Increase

  	
   

  	
  Decrease

  	
   

  	
  Total

  	
   

  	
  Series

  2007-1

  Class A-1

  Note

  Interest

  Rate

  	
   

  	
  Interest

  Accrual Period

  (if applicable)

  	
   

  	
  Notation

  Made By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

EXHIBIT A-1-2-1

 

FORM OF SERIES 2007-1 CLASS A-1-A
SWINGLINE NOTE

 

THIS
SERIES 2007-1 VARIABLE FUNDING SENIOR NOTE, CLASS A-1 (THIS “NOTE”), WHICH
IS A SERIES 2007-1 CLASS A-1-A SWINGLINE NOTE, HAS NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER
RELEVANT JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES LLC, APPLEBEE’S IP
LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S RESTAURANTS WEST LLC,
APPLEBEE’S RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS INC., APPLEBEE’S
RESTAURANTS KANSAS LLC, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC OR APPLEBEE’S
RESTAURANTS VERMONT, INC. (THE “CO-ISSUERS”) HAS BEEN REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”). THIS
NOTE AND ANY INTEREST HEREIN MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF THE CLASS A-1 NOTE
PURCHASE AGREEMENT, DATED AS OF NOVEMBER 29, 2007 BY AND AMONG THE CO-ISSUERS,
APPLEBEE’S SERVICES, INC., AS SERVICER, THE CONDUIT INVESTORS,  THE COMMITTED NOTE PURCHASERS AND THE FUNDING
AGENTS NAMED THEREIN, THE L/C PROVIDER NAMED THEREIN, LEHMAN COMMERCIAL PAPER,
INC., AS SWINGLINE LENDER AND AS CLASS A-1 ADMINISTRATIVE AGENT.

 

 

THE
PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN AND SUBJECT TO INCREASES
AND DECREASES AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE
FACE HEREOF. ANY PERSON ACQUIRING THIS NOTE MAY ASCERTAIN ITS CURRENT
PRINCIPAL AMOUNT BY INQUIRY OF THE INDENTURE TRUSTEE.

 

REGISTERED

 

	
  No. [       ]

  	
   

  	
  up to $[           ]

  

 

SEE REVERSE FOR CERTAIN CONDITIONS

 

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 VERMONT, INC.,

APPLEBEE’S RESTAURANTS TEXAS LLC

APPLEBEE’S RESTAURANTS INC. and

APPLEBEE’S RESTAURANTS KANSAS LLC,

 

SERIES 2007-1 VARIABLE FUNDING SENIOR NOTE, CLASS A-1 

SUBCLASS:  SERIES 2007-1 CLASS A-1-A
SWINGLINE NOTE

 

APPLEBEE’S ENTERPRISES
LLC, a limited liability company formed under the laws of the State of
Delaware, APPLEBEE’S IP LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS NORTH LLC, a limited liability
company formed under the laws of the State of Delaware, APPLEBEE’S RESTAURANTS
MID-ATLANTIC LLC, a limited liability company formed under the laws of the
State of Delaware, APPLEBEE’S RESTAURANTS WEST LLC, a limited liability company
formed under the laws of the State of Delaware APPLEBEE’S RESTAURANTS VERMONT,
INC., a corporation formed under the laws of the state of Vermont, APPLEBEE’S
RESTAURANTS TEXAS LLC, a limited liability company formed under the laws of the
State of Texas, APPLEBEE’S RESTAURANTS INC., a corporation formed under the
laws of the State of Kansas and APPLEBEE’S RESTAURANTS KANSAS LLC, a limited
liability company formed under the laws of the State of Kansas (herein referred
to, collectively, as the “Co-Issuers”), for value received, hereby
jointly and severally promise to pay to Lehman 

 

 

COMMERCIAL PAPER INC. or registered assigns, up to the
principal sum of [                 ]
($[                 ])
 or such lesser amount as shall equal the
portion of the Series 2007-1 Class A-1 Outstanding Principal Amount
evidenced by this Note as provided in the Indenture and the Series 2007-1 Class A-1
Note Purchase Agreement. Payments of principal shall be payable in the amounts
and at the times set forth in the Indenture described herein; provided, however,
that the entire unpaid principal amount of this Note shall be due on December 21,
2037 (the “Series 2007-1 Legal Final Maturity Date”). Pursuant to
the Series 2007-1 Class A-1 Note Purchase Agreement and the Series 2007-1
Supplement, the principal amount of this Note may be subject to Increases or
Decreases on any Business Day during the Commitment Term, and principal with
respect to the Series 2007-1 Class A-1 Notes may be paid earlier than
the Series 2007-1 Legal Final Maturity Date as described in the Indenture.
The Co-Issuers will pay interest on this Series 2007-1 Class A-1-X
Advance Note (this “Note”) at the Series 2007-1 Class A-1 Note
Interest Rate for each Interest Accrual Period in accordance with the terms of
the Indenture. Such amounts
due on this Note will be payable in arrears on each Payment Date, which will be
on the 20th day (or, if such 20th day is not a Business Day, the next
succeeding Business Day) of each January, February, March, April, May, June,
July, August, September, October, November, and December commencing January 20,
2008 (each, a “Payment Date”). Such amounts due on this Note will accrue
for each Payment Date with respect to (i) initially, the period from and
including November 29, 2007
to but excluding the day that is two (2) Business Days prior to the
first Accounting Date and (ii) thereafter,
any period commencing on and including the day that is two (2) Business
Days prior to an Accounting Date and ending on but excluding the day that is
two (2) Business Days prior to the next succeeding Accounting Date (each, an “Interest Accrual Period”). Such
amounts due on this Note with
respect to the Note (and interest on any defaulted payments of amounts due on this Note at the same
rate) will be computed in accordance with the Indenture. In addition, under the
circumstances set forth in the Indenture, the Co-Issuers shall also pay
contingent additional interest on this Note at the Series 2007-1 Class A-1
Extension Contingent Additional Rate or the Series 2007-1 Class A-1
Post-ARD Monthly Contingent Additional Rate, as applicable, and such contingent
additional interest shall be computed and shall be payable in the amounts and
at the times set forth in the Indenture. In addition to and not in limitation
of the foregoing and the provisions of the Indenture  and the Series 2007-1 Class A-1
Note Purchase Agreement, the Co-Issuers further jointly and severally agree to
pay to the holder of this Note such holder’s portion of the Undrawn Commitment
Fees and other fees, costs and expense reimbursements, indemnification amounts
and other amounts due and payable in accordance with the Indenture and the Series 2007-1
Class A-1 Note Purchase Agreement.

 

The
holder of this Note is authorized to endorse on the schedules annexed hereto
and made a part hereof or on a continuation thereof which shall be attached
hereto and made a part hereof the date and amount of each Increase and Decrease
with respect thereto and the Series 2007-1 Class A-1 Note Interest
Rate applicable thereto. Each such endorsement shall constitute prima  facie
evidence of the accuracy of the information endorsed. The failure to make any
such endorsement or any error in any such endorsement shall not affect the
obligations of the Co-Issuers in respect of the Series 2007-1 Class A-1
Outstanding Principal Amount.

 

The
amounts due on this Note are payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private

 

 

debts. All payments made
by the Co-Issuers with respect to this Note shall be applied as provided in the
Indenture.

 

This
Note is subject to mandatory and optional prepayment and mandatory liquidation
(referred to in the Indenture as the “Auction Call Redemption”), as set
forth in the Indenture.

 

Reference
is made to the further provisions of this Note set forth on the reverse hereof,
which shall have the same effect as though fully set forth on the face of this
Note. Although a summary of certain provisions of the Indenture is set forth
below and on the reverse hereof and made a part hereof, this Note does not
purport to summarize the Indenture and reference is made to the Indenture for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Co-Issuers and the Indenture Trustee. A copy of the Indenture may be
requested from the Indenture Trustee by writing to the Indenture Trustee at:
Wells Fargo Bank, National Association, Sixth Street and Marquette Avenue, MAC
N9311-161 Minneapolis, MN 55479, Attention: Corporate Trust Services / Asset
Backed Administration. To the extent not defined herein, the capitalized terms
used herein have the meanings ascribed to them in the Indenture (as defined on
the reverse hereof).

 

Subject
to the next following paragraph, the Co-Issuers hereby certify and declare that
all acts, conditions and things required to be done and performed and to have
happened prior to the creation of this Note and to constitute it as the valid
obligation of the Co-Issuers enforceable in accordance with its terms, have
been done and performed and have happened in due compliance with all applicable
laws and in accordance with the terms of the Indenture.

 

Unless
the certificate of authentication hereon has been executed by the Indenture
Trustee whose name appears below by manual or facsimile signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

 

[Remainder of page intentionally left blank]

 

 

IN
WITNESS WHEREOF, each of the Co-Issuers has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.

 

	
  Date: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S ENTERPRISES
  LLC, as Co- Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S IP LLC, as
  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS
  NORTH LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, as
  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS
  WEST LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
							

 

 

	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS
  VERMONT, INC., as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS
  TEXAS LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS
  INC., as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLEBEE’S RESTAURANTS
  KANSAS LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

CERTIFICATE OF AUTHENTICATION

 

This
is one of the Series 2007-1 Class A-1-A Swingline issued under the
within-mentioned Indenture.

 

	
   

  	
   

  	
  WELLS FARGO
  BANK, NATIONAL

  ASSOCIATION, as Indenture Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

 

[REVERSE OF NOTE]

 

This
Note is one of a duly authorized issue of Series 2007-1 Class A-1
Notes of the Co-Issuers designated as their Series 2007-1 Variable Funding
Senior Notes, Class A-1 (herein called the “Series 2007-1 Class A-1
Notes”), and is one of the Sub-Classes thereof designated as the Series 2007-1
Class A-1-A Swingline Notes (herein called the “Series 2007-1 Class A-1-A
Swingline Notes”), all issued under (i) the Base Indenture, dated
as of November 29, 2007 (such Base Indenture, as amended, supplemented or
modified, is herein called the “Base Indenture”), among the Co-Issuers
and Wells Fargo Bank, National Association, as indenture trustee (the “Indenture
Trustee”, which term includes any successor Indenture Trustee under the
Base Indenture), and (ii) the Series 2007-1 Supplement to the Base
Indenture, dated as of November 29, 2007 (the “Series 2007-1
Supplement”), among the Co-Issuers and the Indenture Trustee. The Base
Indenture and the Series 2007-1 Supplement are referred to herein as the “Indenture”.
The Series 2007-1 Class A-1-A Swingline Notes are subject to all
terms of the Indenture. All terms used in this Note that are defined in the
Indenture, as supplemented, modified or amended, shall have the meanings
assigned to them in or pursuant to the Indenture, as so supplemented, modified
or amended.

 

The Series 2007-1
Class A-1-A Swingline Notes are and will be secured by the Collateral
pledged as security therefor as provided in the Indenture.

 

As
provided for in the Indenture, the Series 2007-1 Class A-1-A
Swingline Notes may be prepaid, in whole or in part, at the option of the
Co-Issuers. In addition, the Series 2007-1 Class A-1-A Swingline
Notes are subject to mandatory prepayment as provided for in the Indenture. As
described above, the entire unpaid principal amount of this Note shall be due
and payable on the Series 2007-1 Legal Final Maturity Date. All payments
of principal of the Series 2007-1 Class A-1-A Swingline Notes will be
made pro  rata to the holders of Series 2007-1 Class A-1-A
Swingline Notes entitled thereto.

 

Amounts
due on this Note which are payable on a Payment Date or on any date on which
payments are permitted to be made as provided for in the Indenture shall be
paid to the Person in whose name this Note (or one or more predecessor Notes)
is registered at the close of business on the applicable Record Date or
Prepayment Record Date, as the case may be.

 

Interest
and fees and contingent additional interest, if any, will each accrue on the Series 2007-1
Class A-1-A Swingline Notes at the rates set forth in the Indenture. Such
amounts will be computed on the basis set forth in the Indenture. Amounts
payable on the Series 2007-1 Class A-1-A Swingline Notes on each
Payment Date will be calculated as set forth in the Indenture.

 

Payments
of amounts due on this Note are subordinated to the payment of certain other
amounts in accordance with the Priority of Payments.

 

If an
Event of Default shall occur and be continuing, this Note may become or be
declared due and payable in the manner and with the effect provided in the
Indenture.

 

 

Amounts
payable in respect of this Note shall be made by wire transfer of immediately
available funds to a Dollar account maintained by the Noteholder or its
nominee, subject to the terms set forth in the Indenture.

 

As
provided in the Indenture and subject to certain limitations set forth therein,
the transfer of this Note may be registered on the Note Register upon surrender
of this Note for registration of transfer at the office or agency designated by
the Co-Issuers pursuant to the Indenture, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by, the Series 2007-1 Class A-1-A Noteholder hereof or
his attorney duly authorized in writing, with such signature guaranteed by an “eligible
guarantor institution” meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Security Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program”
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and accompanied by such other documents as the Indenture Trustee and
the Note Registrar may require and as may be required by the Indenture, and
thereupon one or more new Series 2007-1 Class A-1-A Swingline Notes
of authorized denominations in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such
registration of transfer or exchange.

 

Each Series 2007-1
Class A-1-A Noteholder, by acceptance of a Series 2007-1 Class A-1-A
Note, covenants and agrees that by accepting the benefits of the Indenture that
prior to the date that is one year and one day after the payment in full of the
latest maturing note issued under the Indenture, such Series 2007-1 Class A-1-A
Noteholder will not institute against, or join with any other Person in
instituting against, any Securitization Entity any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any federal or state bankruptcy or similar law; provided, however,
that nothing herein shall constitute a waiver of any right to indemnification,
reimbursement or other payment from the Securitization Entities pursuant to the
Indenture or any other Transaction Document.

 

It is
the intent of the Co-Issuers and each Series 2007-1 Class A-1-A
Noteholder that, for federal, state and local income and franchise tax purposes
only, the Series 2007-1 Class A-1-A Notes will evidence indebtedness
of the Co-Issuers secured by the Indenture Collateral. Each Series 2007-1 Class A-1-A
Noteholder, by the acceptance of this Note, agrees to treat this Note (or
beneficial interests herein) for purposes of federal, state and local income or
franchise taxes and any other tax imposed on or measured by income, as
indebtedness of the Co-Issuers or, if any Co-Issuer is treated as a division of
another entity, such other entity.

 

The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Co-Issuers
and the rights of the Series 2007-1 Class A-1-A Noteholders under the
Indenture at any time by the Co-Issuers with the consent of the Aggregate
Controlling Party or each Series Controlling Party (as applicable) and
without the consent of any Series 2007-1 Class A-1-A Noteholders. The
Indenture also contains provisions permitting the Aggregate Controlling Party
or each Series 

 

 

Controlling Party (as
applicable) to waive compliance by the Co-Issuers with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences without the consent of any Series 2007-1 Class A-1
Noteholders. Any such consent or waiver of this Note (or any one or more
predecessor Notes) shall be conclusive and binding upon such Series 2007-1
Class A-1-A Noteholders and upon all future Series 2007-1 Class A-1-A
Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.

 

The
term “Co-Issuer” as used in this Note includes any successor to the Co-Issuers
and any Additional Co-Issuers under the Indenture.

 

The Series 2007-1
Class A-1-A Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations set forth therein.

 

THIS
NOTE AND THE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED 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 OF NEW YORK).

 

No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Co-Issuers, which is
absolute and unconditional, to pay the amounts due on this Note at the times,
place and rate, and in the coin or currency herein prescribed.

 

[Remainder of page intentionally left blank]

 

 

ASSIGNMENT

 

Social Security or
taxpayer I.D. or other identifying number of assignee:                                

 

FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto

 

 

(name
and address of assignee)

 

the within  Note and all rights thereunder, and hereby
irrevocably constitutes and appoints                                ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  	
  (1)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature Guaranteed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

 

(1)           NOTE: 
The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note, without
alteration, enlargement or any change whatsoever.

 

 

INCREASES AND DECREASES

 

	
  Date

  	
   

  	
  Unpaid

  Principal

  Amount

  	
   

  	
  Subfacility

  Increase

  	
   

  	
  Decrease

  	
   

  	
  Total

  	
   

  	
  Series

   2007-1

  Class A-1

  Note

  Interest

  Rate

  	
   

  	
  Interest

  Accrual Period

  (if applicable)

  	
   

  	
  Notation

  Made By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT
A-1-2-2

FORM OF
SERIES 2007-1 CLASS A-1-X SWINGLINE NOTE

THIS SERIES 2007-1 VARIABLE FUNDING SENIOR NOTE, CLASS
A-1 (THIS “NOTE”), WHICH IS A SERIES 2007-1 CLASS A-1-X SWINGLINE NOTE, HAS NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY
OF ANY STATE OR OTHER RELEVANT JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES
LLC, APPLEBEE’S IP LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S RESTAURANTS
WEST LLC, APPLEBEE’S RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS INC.,
APPLEBEE’S RESTAURANTS KANSAS LLC, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC OR
APPLEBEE’S RESTAURANTS VERMONT, INC. (THE “CO-ISSUERS”) HAS BEEN REGISTERED
UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY
ACT”).  THIS NOTE AND ANY INTEREST HEREIN
MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF THE CLASS A-1 NOTE PURCHASE AGREEMENT, DATED AS OF NOVEMBER 29, 2007
BY AND AMONG THE CO-ISSUERS, APPLEBEE’S SERVICES, INC., AS SERVICER, THE
CONDUIT INVESTORS,  THE COMMITTED NOTE
PURCHASERS AND THE FUNDING AGENTS NAMED THEREIN, THE L/C PROVIDER NAMED
THEREIN, LEHMAN COMMERCIAL PAPER, INC., AS SWINGLINE LENDER AND AS CLASS A-1
ADMINISTRATIVE AGENT.

 

 

THE
PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN AND SUBJECT TO
SUBFACILITY INCREASES AND SUBFACILITY DECREASES AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF. ANY PERSON ACQUIRING THIS NOTE MAY ASCERTAIN
ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE.

 

 

REGISTERED

 

	
  No. [    ]

  	
   

  	
  up to
  $[                ]

  

 

SEE REVERSE FOR CERTAIN CONDITIONS

 

 

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 VERMONT, INC.,

APPLEBEE’S RESTAURANTS TEXAS LLC

APPLEBEE’S RESTAURANTS INC. and

APPLEBEE’S RESTAURANTS KANSAS LLC,

 

SERIES 2007-1 VARIABLE FUNDING SENIOR NOTE, CLASS A-1

SUBCLASS:  SERIES 2007-1 CLASS A-1-X
SWINGLINE NOTE

 

APPLEBEE’S
ENTERPRISES LLC, a limited liability company formed under the laws of the State
of Delaware, APPLEBEE’S IP LLC, a limited liability company formed under the
laws of the State of Delaware, APPLEBEE’S RESTAURANTS NORTH LLC, a limited
liability company formed under the laws of the State of Delaware, APPLEBEE’S
RESTAURANTS MID-ATLANTIC LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS WEST LLC, a limited liability
company formed under the laws of the State of Delaware APPLEBEE’S RESTAURANTS
VERMONT, INC., a corporation formed under the laws of the state of Vermont,
APPLEBEE’S RESTAURANTS TEXAS LLC, a limited liability company formed under the
laws of the State of Texas, APPLEBEE’S RESTAURANTS INC., a corporation formed
under the laws of the State of Kansas and APPLEBEE’S RESTAURANTS KANSAS LLC, a
limited liability company formed under the laws of the State of Kansas (herein
referred to, collectively, as the “Co-Issuers”), for value received,
hereby jointly and severally promise to pay to LEHMAN 

 

 

COMMERCIAL PAPER INC. or registered assigns, up to the principal sum of
[                         ]
($[             ])
or such lesser amount as shall equal the portion of the Series 2007-1 Class A-1
Outstanding Principal Amount evidenced by this Note as provided in the
Indenture and the Series 2007-1 Class A-1 Note Purchase Agreement. Payments
of principal shall be payable in the amounts and at the times set forth in the
Indenture described herein; provided, however, that the entire
unpaid principal amount of this Note shall be due on December 21, 2037
(the “Series 2007-1 Legal Final Maturity Date”). Pursuant to the Series 2007-1
Class A-1 Note Purchase Agreement and the Series 2007-1 Supplement,
the principal amount of this Note may be subject to Subfacility Increases or
Subfacility Decreases on any Business Day during the Commitment Term, and
principal with respect to the Series 2007-1 Class A-1 Notes may be
paid earlier than the Series 2007-1 Legal Final Maturity Date as described
in the Indenture. The Co-Issuers will pay interest on this Series 2007-1 Class A-1
Swingline Note (this “Note”) at the Series 2007-1 Class A-1
Note Interest Rate for each Interest Accrual Period in accordance with the
terms of the Indenture. Such amounts due on this Note will be payable in arrears on each Payment
Date, which will be on the 20th day (or, if such 20th day is not a Business
Day, the next succeeding Business Day) of each January, February, March, April,
May, June, July, August, September, October, November, and December commencing
January 20, 2008 (each, a “Payment Date”). Such amounts due on this
Note will accrue for each Payment Date with respect to (i) initially, the
period from and including November 29, 2007 to but excluding the day that is two (2) Business Days
prior to the first Accounting Date and (ii) thereafter,
any period commencing on and including the day that is two (2) Business
Days prior to an Accounting Date and ending on but excluding the day that is
two (2) Business Days prior to the next succeeding Accounting Date (each, an “Interest Accrual Period”). Such
amounts due with respect to the Note (and interest on any defaulted
payments of amounts due on this Note at the same rate) will be computed in
accordance with the Indenture. In addition, under the circumstances set forth
in the Indenture, the Co-Issuers shall also pay contingent additional interest
on this Note at the Series 2007-1 Class A-1 Extension Contingent
Additional Rate or the Series 2007-1 Class A-1 Post-ARD Monthly
Contingent Additional Rate, as applicable, and such contingent additional
interest shall be computed and shall be payable in the amounts and at the times
set forth in the Indenture. In addition to and not in limitation of the
foregoing and the provisions of the Indenture 
and the Series 2007-1 Class A-1 Note Purchase Agreement, the
Co-Issuers further jointly and severally agree to pay to the holder of this
Note such holder’s portion of the other fees, costs and expense reimbursements,
indemnification amounts and other amounts, if any, due and payable in
accordance with the Indenture and the Series 2007-1 Class A-1 Note
Purchase Agreement.

 

The
holder of this Note is authorized to endorse on the schedules annexed hereto
and made a part hereof or on a continuation thereof which shall be attached
hereto and made a part hereof the date and amount of each Subfacility Increase
and Subfacility Decrease with respect thereto and the Series 2007-1 Class A-1
Note Interest Rate applicable thereto. Each such endorsement shall constitute prima
facie evidence of the accuracy of the information endorsed. The failure
to make any such endorsement or any error in any such endorsement shall not
affect the obligations of the Co-Issuers in respect of the Series 2007-1 Class A-1
Outstanding Principal Amount.

 

The
amounts due on this Note are payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private 

 

 

debts. All payments made by the Co-Issuers with respect to this Note
shall be applied as provided in the Indenture.

 

This
Note is subject to mandatory and optional prepayment and mandatory liquidation
(referred to in the Indenture as the “Auction Call Redemption”), as set
forth in the Indenture.

 

Reference
is made to the further provisions of this Note set forth on the reverse hereof,
which shall have the same effect as though fully set forth on the face of this
Note. Although a summary of certain provisions of the Indenture is set forth
below and on the reverse hereof and made a part hereof, this Note does not
purport to summarize the Indenture and reference is made to the Indenture for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Co-Issuers and the Indenture Trustee. A copy of the Indenture may be
requested from the Indenture Trustee by writing to the Indenture Trustee at:
Wells Fargo Bank, National Association Sixth Street and Marquette Avenue, MAC
N9311-161 Minneapolis, MN 55479, Attention: Corporate Trust Services / Asset
Backed Administration. To the extent not defined herein, the capitalized terms
used herein have the meanings ascribed to them in the Indenture (as defined on
the reverse hereof).

 

Subject
to the next following paragraph, the Co-Issuers hereby certify and declare that
all acts, conditions and things required to be done and performed and to have
happened prior to the creation of this Note and to constitute it as the valid
obligation of the Co-Issuers enforceable in accordance with its terms, have
been done and performed and have happened in due compliance with all applicable
laws and in accordance with the terms of the Indenture.

 

Unless
the certificate of authentication hereon has been executed by the Indenture
Trustee whose name appears below by manual or facsimile signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

 

[Remainder of page intentionally left blank]

 

 

IN
WITNESS WHEREOF, each of the Co-Issuers has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.

 

 

	
  Date:  

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S ENTERPRISES
  LLC, as Co- Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S IP LLC, as
  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  NORTH LLC, as 

  
	
   

  	
   

  	
  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  MID-ATLANTIC 

  
	
   

  	
   

  	
  LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  WEST LLC, as 

  
	
   

  	
   

  	
  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

	
   

  	
  APPLEBEE’S RESTAURANTS
  VERMONT, 

  
	
   

  	
   

  	
  INC., as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  TEXAS LLC, as 

  
	
   

  	
   

  	
  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  INC., as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  KANSAS LLC, as 

  
	
   

  	
   

  	
  Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

CERTIFICATE OF AUTHENTICATION

 

This
is one of the Series 2007-1 Class A-1-A Swingline Notes issued under
the within-mentioned Indenture.

 

 

	
   

  	
  WELLS FARGO
  BANK, NATIONAL

  
	
   

  	
  ASSOCIATION, as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  

 

 

[REVERSE OF NOTE]

 

This
Note is one of a duly authorized issue of Series 2007-1 Class A-1
Notes of the Co-Issuers designated as their Series 2007-1 Variable Funding
Senior Notes, Class A-1 (herein called the “Series 2007-1 Class A-1
Notes”), and is one of the Sub-Class thereof designated as the Series 2007-1
Class A-1-X Swingline Notes (herein called the “Series 2007-1 Class A-1-X
Swingline Notes”), all issued under (i) the Base Indenture, dated as
of November 19, 2007 (such Base Indenture, as amended, supplemented or
modified, is herein called the “Base Indenture”), among the Co-Issuers
and Wells Fargo Bank, National Association, as indenture trustee (the “Indenture
Trustee”, which term includes any successor Indenture Trustee under the
Base Indenture), and (ii) the Series 2007-1 Supplement to the Base
Indenture, dated as of November 29, 2007 (the “Series 2007-1
Supplement”), among the Co-Issuers and the Trustee. The Base Indenture and
the Series 2007-1 Supplement are referred to herein as the “Indenture”.
The Series 2007-1 Class A-1-X Swingline Notes are subject to all
terms of the Indenture. All terms used in this Note that are defined in the
Indenture, as supplemented, modified or amended, shall have the meanings
assigned to them in or pursuant to the Indenture, as so supplemented, modified
or amended.

 

The Series 2007-1
Class A-1-X Swingline Notes are and will be secured by the Collateral
pledged as security therefor as provided in the Indenture.

 

As
provided for in the Indenture, the Series 2007-1 Class A-1-X
Swingline Notes may be prepaid, in whole or in part, at the option of the
Co-Issuers. In addition, the Series 2007-1 Class A-1-X Swingline
Notes are subject to mandatory prepayment as provided for in the Indenture. As
described above, the entire unpaid principal amount of this Note shall be due
and payable on the Series 2007-1 Legal Final Maturity Date. All payments
of principal of the Series 2007-1 Class A-1-A Swingline Notes will be
made pro  rata to the holders of Series 2007-1 Class A-1-X
Swingline Notes entitled thereto.

 

Amounts
due on this Note which are payable on a Payment Date or on any date on which
payments are permitted to be made as provided for in the Indenture shall be
paid to the Person in whose name this Note (or one or more predecessor Notes)
is registered at the close of business on the applicable Record Date or
Prepayment Record Date, as the case may be.

 

Interest
and contingent additional interest, if any, will each accrue on the Series 2007-1
Class A-1-X Swingline Notes at the rates set forth in the Indenture. The
interest and contingent additional interest, if any, will be computed on the
basis set forth in the Indenture. Amounts payable on the Series 2007-1 Class A-1-X
Swingline Notes on each Payment Date will be calculated as set forth in the
Indenture.

 

Payments
of amounts due on this Note are subordinated to the payment of certain other
amounts in accordance with the Priority of Payments.

 

If an
Event of Default shall occur and be continuing, this Note may become or be
declared due and payable in the manner and with the effect provided in the
Indenture.

 

 

Amounts
payable in respect of this Note shall be made by wire transfer of immediately
available funds to a Dollar account maintained by the Noteholder or its
nominee, subject to the terms set forth in the Indenture.

 

As
provided in the Indenture and subject to certain limitations set forth therein,
the transfer of this Note may be registered on the Note Register upon surrender
of this Note for registration of transfer at the office or agency designated by
the Co-Issuers pursuant to the Indenture, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by, the Series 2007-1 Class A-1-X Noteholder hereof or
his attorney duly authorized in writing, with such signature guaranteed by an “eligible
guarantor institution” meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Security Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program”
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and accompanied by such other documents as the Indenture Trustee and
the Note Registrar may require and as may be required by the Indenture, and
thereupon one or more new Series 2007-1 Class A-1-X Swingline Notes
of authorized denominations in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such
registration of transfer or exchange.

 

Each Series 2007-1
Class A-1-X Noteholder, by acceptance of a Series 2007-1 Class A-1-X
Note, covenants and agrees that by accepting the benefits of the Indenture that
prior to the date that is one year and one day after the payment in full of the
latest maturing note issued under the Indenture, such Series 2007-1 Class A-1-X
Noteholder will not institute against, or join with any other Person in
instituting against, any Securitization Entity any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any federal or state bankruptcy or similar law; provided, however,
that nothing herein shall constitute a waiver of any right to indemnification,
reimbursement or other payment from the Securitization Entities pursuant to the
Indenture or any other Transaction Document.

 

It is
the intent of the Co-Issuers and each Series 2007-1 Class A-1-X
Noteholder that, for federal, state and local income and franchise tax purposes
only, the Series 2007-1 Class A-1-X Notes will evidence indebtedness
of the Co-Issuers secured by the Indenture Collateral. Each Series 2007-1 Class A-1-X
Noteholder, by the acceptance of this Note, agrees to treat this Note (or
beneficial interests herein) for purposes of federal, state and local income or
franchise taxes and any other tax imposed on or measured by income, as
indebtedness of the Co-Issuers or, if any Co-Issuer is treated as a division of
another entity, such other entity.

 

The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Co-Issuers
and the rights of the Series 2007-1 Class A-1-X Noteholders under the
Indenture at any time by the Co-Issuers with the consent of the Aggregate
Controlling Party or each Series Controlling Party (as applicable) and
without the consent of any Series 2007-1 Class A-1-X Noteholders. The
Indenture also contains provisions permitting the Aggregate Controlling Party
or each Series 

 

 

Controlling Party (as
applicable) to waive compliance by the Co-Issuers with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences without the consent of any Series 2007-1 Class A-1
Noteholders. Any such consent or waiver of this Note (or any one or more
predecessor Notes) shall be conclusive and binding upon such Series 2007-1
Class A-1-X Noteholder and upon all future Series 2007-1 Class A-1-X
Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.

 

The
term “Co-Issuer” as used in this Note includes any successor to the Co-Issuers
and any Additional Co-Issuers under the Indenture.

 

The Series 2007-1
Class A-1-X Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations set forth therein.

 

THIS
NOTE AND THE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED 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 OF NEW YORK).

 

No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Co-Issuers, which is
absolute and unconditional, to pay the amounts due on this Note at the times,
place and rate, and in the coin or currency herein prescribed.

 

[Remainder of page intentionally left blank]

 

 

ASSIGNMENT

 

Social Security or
taxpayer I.D. or other identifying number of assignee:
                                           

 

 

FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto

 

 

	
   

  
	
  (name
  and address of assignee)

  

 

the within  Note and all rights thereunder, and hereby
irrevocably constitutes and appoints                              ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  	
  (1)

  

 

 

	
   

  	
  Signature Guaranteed:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

(1)                                  NOTE:  The signature to this assignment must
correspond with the name of the registered owner as it appears on the face of
the within Note, without alteration, enlargement or any change whatsoever.

 

 

INCREASES AND DECREASES

 

	
  Date

  	
   

  	
  Unpaid

  Principal

  Amount

  	
   

  	
  Subfacility

  Increase

  	
   

  	
  Subfacility

  Decrease

  	
   

  	
  Total

  	
   

  	
  Series

  2007-1

  Class A-1

  Note

  Interest

  Rate

  	
   

  	
  Interest

  Accrual Period

  (if applicable)

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT
A-1-3-1

FORM OF
SERIES 2007-1 CLASS A-1-A L/C NOTE

THIS SERIES 2007-1 VARIABLE FUNDING SENIOR NOTE, CLASS
A-1 (THIS “NOTE”), WHICH IS A SERIES 2007-1 CLASS A-1-A L/C NOTE, HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF
ANY STATE OR OTHER RELEVANT JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES
LLC, APPLEBEE’S IP LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S
RESTAURANTS WEST LLC, APPLEBEE’S RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS
INC., APPLEBEE’S RESTAURANTS KANSAS LLC, APPLEBEE’S RESTAURANTS MID-ATLANTIC
LLC OR APPLEBEE’S RESTAURANTS VERMONT, INC. (THE “CO-ISSUERS”) HAS BEEN
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT
COMPANY ACT”).  THIS NOTE AND ANY
INTEREST HEREIN MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF THE CLASS A-1 NOTE PURCHASE AGREEMENT, DATED
AS OF NOVEMBER 29, 2007 BY AND AMONG THE CO-ISSUERS, APPLEBEE’S SERVICES, INC.,
AS SERVICER, THE CONDUIT INVESTORS,  THE
COMMITTED NOTE PURCHASERS AND THE FUNDING AGENTS NAMED THEREIN, THE L/C
PROVIDER NAMED THEREIN, LEHMAN COMMERCIAL PAPER, INC., AS SWINGLINE LENDER AND
AS CLASS A-1 ADMINISTRATIVE AGENT.

 

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH
HEREIN AND SUBJECT TO SUBFACILITY INCREASES AND SUBFACILITY DECREASES AS SET
FORTH HEREIN.  ACCORDINGLY, THE SERIES
2007-1 CLASS

A-1-A OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF.  All L/C
Obligations relating to Letters of Credit issued by the holder of this Note
(whether in respect of Undrawn L/C Face Amounts or Unreimbursed L/C Drawings)
shall be deemed to be principal outstanding under this Note for all purposes of
this Agreement, the Indenture and the other Transaction Documents other than,
in the case of Undrawn L/C Face Amounts, for purposes of accrual of interest.  ANY PERSON ACQUIRING THIS NOTE MAY ASCERTAIN
ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE INDENTURE TRUSTEE.

 

REGISTERED

 

	
  No.[     ]

  	
   

  	
  up to
  $[                     ]

  

 

 

SEE REVERSE FOR CERTAIN CONDITIONS

 

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 VERMONT, INC.,

APPLEBEE’S RESTAURANTS TEXAS LLC

APPLEBEE’S RESTAURANTS INC. 

and

APPLEBEE’S RESTAURANTS KANSAS LLC,

 

 

SERIES 2007-1 VARIABLE FUNDING SENIOR NOTE, CLASS A-1

SUBCLASS:  SERIES 2007-1 CLASS A-1-A L/C
NOTE

 

APPLEBEE’S
ENTERPRISES LLC, a limited liability company formed under the laws of the State
of Delaware, APPLEBEE’S IP LLC, a limited liability company formed under the
laws of the State of Delaware, APPLEBEE’S RESTAURANTS NORTH LLC, a limited
liability company formed under the laws of the State of Delaware, APPLEBEE’S
RESTAURANTS MID-ATLANTIC LLC, a limited liability company formed under the laws
of 

 

 

the State of Delaware, APPLEBEE’S RESTAURANTS WEST LLC, a limited
liability company formed under the laws of the State of Delaware, APPLEBEE’S
RESTAURANTS VERMONT, INC., a corporation formed under the laws of the state of
Vermont, APPLEBEE’S RESTAURANTS TEXAS LLC, a limited liability company formed
under the laws of the State of Texas, APPLEBEE’S RESTAURANTS INC., a
corporation formed under the laws of the State of Kansas and APPLEBEE’S
RESTAURANTS KANSAS LLC, a limited liability company formed under the laws of
the State of Kansas (herein referred to, collectively, as the “Co-Issuers”),
for value received, hereby jointly and severally promise to pay to Lehman
Brothers Bank, FSB, as Funding Agent, or registered assigns, up to the
principal sum of
[                              ]
($[                              ])
or such lesser amount as shall equal the portion of the Series 2007-1 Class A-1
Outstanding Principal Amount evidenced by this Note as provided in the
Indenture and the Series 2007-1 Class A-1 Note Purchase Agreement. Payments
of principal shall be payable in the amounts and at the times set forth in the
Indenture described herein; provided, however, that the entire
unpaid principal amount of this Note shall be due on December 21, 2037
(the “Series 2007-1 Legal Final Maturity Date”). Pursuant to the Series 2007-1
Class A-1 Note Purchase Agreement and the Series 2007-1 Supplement,
the principal amount of this Note may be subject to Subfacility Increases or
Subfacility Decreases on any Business Day during the Commitment Term, and
principal with respect to the Series 2007-1 Class A-1 Notes may be
paid earlier than the Series 2007-1 Legal Final Maturity Date as described
in the Indenture. The Co-Issuers will pay interest on this Series 2007-1 Class A-1-A
L/C Note (this “Note”) at the Series 2007-1 Class A-1 Note
Interest Rate and the Series 2007-1 Class A-1-A Monthly L/C Fees, in each case,
for each Interest Accrual Period in accordance with the terms of the Indenture.
Such amounts due on this
Note will be payable in arrears on each Payment Date, which will be on the 20th
day (or, if such 20th day is not a Business Day, the next succeeding Business
Day) of each January, February, March, April, May, June, July, August,
September, October, November, and December commencing January 20,
2008 (each, a “Payment Date”). Such amounts due on this Note will accrue
for each Payment Date with respect to (i) initially, the period from and
including November 29, 2007
to but excluding the day that is two (2), Business Days prior to
the first Accounting Date and (ii) thereafter,
any period commencing on and including the day that is two (2) Business
Days prior to an Accounting Date and ending on but excluding the day that is
two (2) Business Days prior to the next succeeding Accounting Date (each, an “Interest Accrual Period”). Such
amounts due with respect to the Note (and interest on any defaulted
payments of amounts due on this Note at the same rate) will be computed in
accordance with the Indenture. In addition, under the circumstances set forth
in the Indenture, the Co-Issuers shall also pay contingent additional interest
on this Note at the Series 2007-1 Class A-1 Extension Contingent
Additional Rate or the Series 2007-1 Class A-1 Post-ARD Monthly
Contingent Additional Rate, as applicable, and such contingent additional
interest and fees shall be computed and shall be payable in the amounts and at
the times set forth in the Indenture. In addition to and not in limitation of
the foregoing and the provisions of the Indenture  and the Series 2007-1 Class A-1
Note Purchase Agreement, the Co-Issuers further jointly and severally agree to
pay to the holder of this Note such holder’s portion of the other fees, costs
and expense reimbursements, indemnification amounts and other amounts, due and
payable in accordance with the Indenture and the Series 2007-1 Class A-1
Note Purchase Agreement.

 

The
holder of this Note is authorized to endorse on the schedules annexed hereto
and made a part hereof or on a continuation thereof which shall be attached
hereto and made a part hereof the date and amount of each Increase and Decrease
with respect thereto and the

 

 

Series 2007-1 Class A-1
Note Interest Rate applicable thereto. Each such endorsement shall constitute prima
facie evidence of the accuracy of the information endorsed. The failure
to make any such endorsement or any error in any such endorsement shall not
affect the obligations of the Co-Issuers in respect of the Series 2007-1 Class A-1
Outstanding Principal Amount.

 

The
amounts due on this Note are payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts. All payments made by the Co-Issuers with respect to
this Note shall be applied as provided in the Indenture.

 

This
Note is subject to mandatory and optional prepayment and mandatory liquidation
(referred to in the Indenture as the “Auction Call Redemption”), as set
forth in the Indenture.

 

Reference
is made to the further provisions of this Note set forth on the reverse hereof,
which shall have the same effect as though fully set forth on the face of this
Note. Although a summary of certain provisions of the Indenture is set forth
below and on the reverse hereof and made a part hereof, this Note does not
purport to summarize the Indenture and reference is made to the Indenture for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Co-Issuers and the Indenture Trustee. A copy of the Indenture may be
requested from the Indenture Trustee by writing to the Indenture Trustee at:
Wells Fargo Bank, National Association, Sixth Street and Marquette Avenue, MAC
N9311-161 Minneapolis, MN 55479, Attention: Corporate Trust Services / Asset
Backed Administration. To the extent not defined herein, the capitalized terms
used herein have the meanings ascribed to them in the Indenture (as defined on
the reverse hereof).

 

Subject
to the next following paragraph, the Co-Issuers hereby certify and declare that
all acts, conditions and things required to be done and performed and to have
happened prior to the creation of this Note and to constitute it as the valid
obligation of the Co-Issuers enforceable in accordance with its terms, have
been done and performed and have happened in due compliance with all applicable
laws and in accordance with the terms of the Indenture.

 

Unless
the certificate of authentication hereon has been executed by the Indenture
Trustee whose name appears below by manual or facsimile signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

 

[Remainder of page intentionally left blank]

 

 

IN
WITNESS WHEREOF, each of the Co-Issuers has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.

 

	
  Date:        

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S ENTERPRISES
  LLC, as Co- Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S IP LLC, as
  Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  NORTH LLC, as 

  
	
   

  	
   

  	
  Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  MID-ATLANTIC 

  
	
   

  	
   

  	
  LLC, as Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  WEST LLC, as Co-Issuer

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  VERMONT, INC., as 

  
	
   

  	
   

  	
  Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

	
   

  	
  APPLEBEE’S RESTAURANTS
  TEXAS 

  
	
   

  	
   

  	
  LLC, as Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  INC., as 

  
	
   

  	
   

  	
  Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  KANSAS LLC, as 

  
	
   

  	
   

  	
  Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

CERTIFICATE OF AUTHENTICATION

 

This
is one of the Series 2007-1 Class A-1-A L/C Notes issued under the
within-mentioned Indenture.

 

	
   

  	
  WELLS FARGO
  BANK, NATIONAL 

  ASSOCIATION, as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Authorized
  Signatory

  

 

 

[REVERSE OF NOTE]

 

This Note is one of a
duly authorized issue of Series 2007-1 Class A-1 Notes of the Co-Issuers
designated as their Series 2007-1 Variable Funding Senior Notes, Class A-1
(herein called the “Series 2007-1 Class A-1 Notes”), and is one of the
Sub-Classes thereof designated as the Series 2007-1 Class A-1-A L/C Notes
(herein called the “Series 2007-1 Class A-1-A L/C Notes”), all issued
under (i) the Base Indenture, dated as of November 29, 2007 (such Base Indenture,
as amended, supplemented or modified, is herein called the “Base Indenture”),
among the Co-Issuers and Wells Fargo Bank, National Association as indenture
trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Base Indenture), and (ii) the Series 2007-1
Supplement to the Base Indenture, dated as of November 29, 2007 (the “Series
2007-1 Supplement”), among the Co-Issuers and the Indenture Trustee. The
Base Indenture and the Series 2007-1 Supplement are referred to herein as the “Indenture”.
The Series 2007-1 Class A-1-A L/C Notes are subject to all terms of the
Indenture. All terms used in this Note that are defined in the Indenture, as
supplemented, modified or amended, shall have the meanings assigned to them in
or pursuant to the Indenture, as so supplemented, modified or amended.

 

The Series 2007-1 Class
A-1-A L/C Notes are and will be secured by the Collateral pledged as security
therefor as provided in the Indenture.

 

All L/C Obligations
relating to Letters of Credit issued by the holder of this Note (whether in
respect of Undrawn L/C Face Amounts or Unreimbursed L/C Drawings) shall be
deemed to be principal outstanding under this Note for all purposes of this
Agreement, the Indenture and the other Related Documents other than, in the
case of Undrawn L/C Face Amounts, for purposes of accrual of interest. As
provided for in the Indenture, the Series 2007-1 Class A-1-A L/C Notes may be
prepaid, in whole or in part, at the option of the Co-Issuers. In addition, the
Series 2007-1 Class A-1-A L/C Notes are subject to mandatory prepayment as
provided for in the Indenture. As described above, the entire unpaid principal
amount of this Note shall be due and payable on the Series 2007-1 Legal Final
Maturity Date. All payments of principal of the Series 2007-1 Class A-1-A L/C
Notes will be made pro  rata to the holders of Series 2007-1 Class
A-1-A L/C Notes entitled thereto.

 

Amounts due on this Note
which are payable on a Payment Date or on any date on which payments are
permitted to be made as provided for in the Indenture shall be paid to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on the applicable Record Date or Prepayment Record
Date, as the case may be.

 

Interest and fees and
contingent additional interest and fees, if any, will each accrue on the Series
2007-1 Class A-1-A L/C Notes at the rates set forth in the Indenture. Such
amounts will be computed on the basis set forth in the Indenture. Amounts
payable on the Series 2007-1 Class A-1-A L/C Notes on each Payment Date will be
calculated as set forth in the Indenture.

 

Payments of amounts due
on this Note are subordinated to the payment of certain other amounts in
accordance with the Priority of Payments.

 

 

If an Event of Default
shall occur and be continuing, this Note may become or be declared due and
payable in the manner and with the effect provided in the Indenture.

 

Amounts payable in
respect of this Note shall be made by wire transfer of immediately available
funds to a Dollar account maintained by the Noteholder or its nominee, subject
to the terms set forth in the Indenture.

 

As provided in the
Indenture and subject to certain limitations set forth therein, the transfer of
this Note may be registered on the Note Register upon surrender of this Note
for registration of transfer at the office or agency designated by the
Co-Issuers pursuant to the Indenture, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by, the Series 2007-1 Class A-1-A Noteholder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an
“eligible guarantor institution” meeting the requirements of the Note Registrar,
which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee
program” as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended, and accompanied by such other documents as the Indenture
Trustee and the Note Registrar may require and as may be required by the
Indenture, and thereupon one or more new Series 2007-1 Class A-1-A L/C Notes of
authorized denominations in the same aggregate principal amount will be issued
to the designated transferee or transferees. No service charge will be charged
for any registration of transfer or exchange of this Note, but the transferor may
be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.

 

Each Series 2007-1 Class
A-1-A Noteholder, by acceptance of a Series 2007-1 Class A-1-A Note, covenants
and agrees that by accepting the benefits of the Indenture that prior to the
date that is one year and one day after the payment in full of the latest
maturing note issued under the Indenture, such Series 2007-1 Class A-1-A
Noteholder will not institute against, or join with any other Person in
instituting against, any Securitization Entity any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any federal or state bankruptcy or similar law; provided, however,
that nothing herein shall constitute a waiver of any right to indemnification,
reimbursement or other payment from the Securitization Entities pursuant to the
Indenture or any other Transaction Document.

 

It is the intent of the
Co-Issuers and each Series 2007-1 Class A-1-A Noteholder that, for federal,
state and local income and franchise tax purposes only, the Series 2007-1 Class
A-1-A Notes will evidence indebtedness of the Co-Issuers secured by the
Indenture Collateral. Each Series 2007-1 Class A-1-A Noteholder, by the
acceptance of this Note, agrees to treat this Note (or beneficial interests
herein) for purposes of federal, state and local income or franchise taxes and
any other tax imposed on or measured by income, as indebtedness of the
Co-Issuers or, if any Co-Issuer is treated as a division of another entity,
such other entity.

 

The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Co-Issuers and the rights of
the Series 2007-1 Class A-1-A Noteholders under the Indenture at any time by
the Co-Issuers with the consent of the Aggregate Controlling Party or each
Series Controlling Party (as 

 

 

applicable) and without
the consent of any Series 2007-1 Class A-1-A Noteholders. The Indenture also
contains provisions permitting the Aggregate Controlling Party or each Series
Controlling Party (as applicable) to waive compliance by the Co-Issuers with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences without the consent of any Series 2007-1 Class
A-1-A Noteholders. Any such consent or waiver of this Note (or any one or more
predecessor Notes) shall be conclusive and binding upon such Series 2007-1
Class A-1-A Noteholders and upon all future Series 2007-1 Class A-1-A
Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.

 

The term “Co-Issuer” as
used in this Note includes any successor to the Co-Issuers and any Additional
Co-Issuers under the Indenture.

 

The Series 2007-1 Class
A-1-A Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations set forth therein.

 

THIS NOTE AND THE
INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED 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 OF NEW YORK).

 

No reference herein to
the Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Co-Issuers, which is absolute and unconditional,
to pay the amounts due on this Note at the times, place and rate, and in the
coin or currency herein prescribed.

 

[Remainder of page
intentionally left blank]

 

 

ASSIGNMENT

 

Social Security or
taxpayer I.D. or other identifying number of assignee:
                                           

 

FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto

 

 

	
   

  
	
  (name
  and address of assignee)

  

 

the within  Note and all rights thereunder, and hereby
irrevocably constitutes and appoints                              ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  	
  (1)

  

 

	
   

  	
  Signature
  Guaranteed:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

(1)                                  NOTE:  The signature to this assignment must
correspond with the name of the registered owner as it appears on the face of
the within Note, without alteration, enlargement or any change whatsoever.

 

 

INCREASES AND DECREASES

 

	
  Date

  	
   

  	
  Unpaid

  Principal

  Amount

  	
   

  	
  Subfacility

  Increase

  	
   

  	
  Subfacility

  Decrease

  	
   

  	
  Total

  	
   

  	
  Series

  2007-1

  Class A-1

  Note

  Interest

  Rate

  	
   

  	
  Interest

  Accrual Period

  (if applicable)

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT
A-1-3-2

FORM OF
SERIES 2007-1 CLASS A-1-X L/C NOTE

THIS SERIES 2007-1 VARIABLE FUNDING SENIOR NOTE, CLASS
A-1 (THIS “NOTE”), WHICH IS A SERIES 2007-1 CLASS A-1-X L/C NOTE, HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF
ANY STATE OR OTHER RELEVANT JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES
LLC, APPLEBEE’S IP LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S
RESTAURANTS WEST LLC, APPLEBEE’S RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS
INC., APPLEBEE’S RESTAURANTS KANSAS LLC, APPLEBEE’S RESTAURANTS MID-ATLANTIC
LLC OR APPLEBEE’S RESTAURANTS VERMONT, INC. (THE “CO-ISSUERS”) HAS BEEN
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
“INVESTMENT COMPANY ACT”).  THIS NOTE AND
ANY INTEREST HEREIN MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF THE CLASS A-1 NOTE PURCHASE AGREEMENT, DATED
AS OF NOVEMBER 29, 2007 BY AND AMONG THE CO-ISSUERS, APPLEBEE’S SERVICES, INC.,
AS SERVICER, THE CONDUIT INVESTORS,  THE
COMMITTED NOTE PURCHASERS AND THE FUNDING AGENTS NAMED THEREIN, THE L/C
PROVIDER NAMED THEREIN, LEHMAN COMMERCIAL PAPER, INC., AS SWINGLINE LENDER AND
AS CLASS A-1 ADMINISTRATIVE AGENT.

 

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN AND SUBJECT
TO SUBFACILITY INCREASES AND SUBFACILITY DECREASES AS SET FORTH HEREIN.  ACCORDINGLY, THE SERIES 2007-1 CLASS A-1-X
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.  All L/C
Obligations relating to Letters of Credit issued by the holder of this Note
(whether in respect of Undrawn L/C Face Amounts or Unreimbursed L/C Drawings)
shall be deemed to be principal outstanding under this Note for all purposes of
this Agreement, the Indenture and the other Transaction Documents other than,
in the case of Undrawn L/C Face Amounts, for purposes of accrual of interest.  ANY PERSON ACQUIRING THIS NOTE MAY ASCERTAIN
ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE INDENTURE TRUSTEE.

 

REGISTERED

 

 

	
  No. [        ]

  	
   

  	
  up to $[                  ]

  

 

 

SEE REVERSE FOR
CERTAIN CONDITIONS

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
VERMONT, INC.,

APPLEBEE’S RESTAURANTS
TEXAS LLC, 

APPLEBEE’S RESTAURANTS
INC., 

and

APPLEBEE’S RESTAURANTS
KANSAS LLC, 

 

 

 

SERIES 2007-1
VARIABLE FUNDING SENIOR NOTES, CLASS A-1

SUB-CLASS:  SERIES 2007-1 CLASS A-1-X L/C
NOTE

APPLEBEE’S ENTERPRISES LLC, a limited liability
company formed under the laws of the State of Delaware, APPLEBEE’S IP LLC, a
limited liability company formed under the laws of the State of Delaware, APPLEBEE’S
RESTAURANTS NORTH LLC, a limited liability company formed under the laws of the
State of Delaware, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, a limited liability
company formed under the laws of

 

 

the State of Delaware, APPLEBEE’S
RESTAURANTS WEST LLC, a limited liability company formed under the laws of the
State of Delaware, APPLEBEE’S RESTAURANTS VERMONT, INC., corporation formed
under the laws of the state of Vermont, APPLEBEE’S RESTAURANTS TEXAS LLC, a
limited liability company formed under the laws of the State of Texas, APPLEBEE’S
RESTAURANTS INC., corporation formed under the laws of the State of Kansas and APPLEBEE’S
RESTAURANTS KANSAS LLC, a limited liability company formed under the laws of
the State of Kansas (herein referred to, collectively, as the “Co-Issuers”),
for value received, hereby jointly and severally promise to pay to Lehman
Brothers Bank, FSB, as Funding Agent, or registered assigns, up to the
principal sum of [                 ]
($[           ]) or such lesser amount as shall equal the
portion of the Series 2007-1 Class A-1 Outstanding Principal Amount evidenced
by this Note as provided in the Indenture and the Series 2007-1 Class A-1 Note
Purchase Agreement. 
Payments of principal shall be payable in the amounts and at the times
set forth in the Indenture described herein; provided, however,
that the entire unpaid principal amount of this Note shall be due on December
21, 2037 (the “Series 2007-1 Legal Final Maturity Date”).  Pursuant to the Series 2007-1 Class A-1 Note
Purchase Agreement and the Series 2007-1 Supplement, the principal amount of
this Note may be subject to Subfacility Increases or Subfacility Decreases on
any Business Day during the Commitment Term, and principal with respect to the
Series 2007-1 Class A-1 Notes may be paid earlier than the Series 2007-1 Legal
Final Maturity Date as described in the Indenture.  The Co-Issuers will pay interest on this
Series 2007-1 Class A-1-X L/C Note (this “Note”) at the Series 2007-1
Class A-1 Note Interest Rate and the Series 2007-1 Class A-1-X Monthly L/C
Fees, in each case, for each Interest Accrual Period in accordance with the
terms of the Indenture.  Such amounts due on this Note will be payable in
arrears on each Payment Date, which will be on the 20th day (or, if such 20th
day is not a Business Day, the next succeeding Business Day) of each January,
February, March, April, May, June, July, August, September, October, November
and December commencing January 20, 2008 (each, a “Payment Date”).  Such amounts due on this Note will accrue for each Payment Date with
respect to (i) initially, the period from and including November 29, 2007 to
but excluding the day that is two (2), Business Days prior to the first
Accounting Date and (ii) thereafter, any
period commencing on and including the day that is two (2) Business Days
prior to an Accounting Date and ending on but excluding the day that is two (2)
Business Days prior to the next succeeding Accounting Date (each, an “Interest Accrual Period”).  Such amounts due on this Note with respect to the Note (and interest
on any defaulted payments of amounts due on this Note at the same rate) will be computed in accordance with the
Indenture.  In addition, under the
circumstances set forth in the Indenture, the Co-Issuers shall also pay
contingent additional interest and fees on this Note at the Series 2007-1 Class
A-1 Extension Contingent Additional Rate or the Series 2007-1 Class A-1
Post-ARD Monthly Contingent Additional Rate, as applicable, and such contingent
additional interest and fees shall be computed and shall be payable in the
amounts and at the times set forth in the Indenture.  In
addition to and not in limitation of the foregoing and the provisions of the
Indenture and the Series 2007-1 Class A-1 Note Purchase Agreement, the
Co-Issuers further jointly and severally agree to pay to the holder of this
Note such holder’s portion of the other fees, costs and expense reimbursements,
indemnification amounts and other amounts due and payable in accordance with
the Indenture and the Series 2007-1 Class A-1 Note Purchase Agreement.

The holder of
this Note is authorized to endorse on the schedules annexed hereto and made a
part hereof or on a continuation thereof which shall be attached hereto and
made a part hereof the date and amount of each Increase and Decrease with
respect thereto and the

 

 

Series 2007-1 Class A-1 Note Interest Rate
applicable thereto.  Each such
endorsement shall constitute prima  facie evidence of the accuracy
of the information endorsed.  The failure
to make any such endorsement or any error in any such endorsement shall not
affect the obligations of the Co-Issuers in respect of the Series 2007-1 Class
A-1 Outstanding Principal Amount.

The amounts due on this
Note are payable in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
All payments made by the Co-Issuers with respect to this Note shall be applied
as provided in the Indenture.

This Note is subject to
mandatory and optional prepayment and mandatory liquidation (referred to in the
Indenture as the “Auction Call Redemption”) as set forth in the
Indenture.

Reference is made to the
further provisions of this Note set forth on the reverse hereof, which shall
have the same effect as though fully set forth on the face of this Note. Although
a summary of certain provisions of the Indenture is set forth below and on the
reverse hereof and made a part hereof, this Note does not purport to summarize
the Indenture and reference is made to the Indenture for information with
respect to the interests, rights, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Co-Issuers and
the Indenture Trustee. A copy of the Indenture may be requested from the
Indenture Trustee by writing to the Indenture Trustee at: Wells Fargo Bank,
National Association, Sixth Street and Marquette Avenue, MAC N9311-161 Minneapolis,
MN 55479, Attention: Corporate Trust Services / Asset Backed Administration. To
the extent not defined herein, the capitalized terms used herein have the
meanings ascribed to them in the Indenture (as defined on the reverse hereof).

Subject to the next
following paragraph, the Co-Issuers hereby certify and declare that all acts,
conditions and things required to be done and performed and to have happened
prior to the creation of this Note and to constitute it as the valid obligation
of the Co-Issuers enforceable in accordance with its terms, have been done and
performed and have happened in due compliance with all applicable laws and in
accordance with the terms of the Indenture.

Unless the certificate of
authentication hereon has been executed by the Indenture Trustee whose name
appears below by manual or facsimile signature, this Note shall not be entitled
to any benefit under the Indenture referred to on the reverse hereof, or be
valid or obligatory for any purpose.

[Remainder of page
intentionally left blank]

 

 

IN WITNESS WHEREOF, each of the Co-Issuers has caused
this instrument to be signed, manually or in facsimile, by its Authorized
Officer.

 

 

	
  Date:

  	
                          

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S ENTERPRISES
  LLC, as Co- Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S IP LLC, as
  Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  NORTH LLC, as 

  
	
   

  	
   

  	
  Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  MID-ATLANTIC 

  
	
   

  	
   

  	
  LLC, as Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  WEST LLC, as

  
	
   

  	
   

  	
  Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

	
   

  	
  APPLEBEE’S RESTAURANTS
  VERMONT,

  
	
   

  	
   

  	
  INC., as Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  TEXAS LLC, as

  
	
   

  	
   

  	
  Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  INC., as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
					

 

 

CERTIFICATE
OF AUTHENTICATION

This is one of the Series 2007-1 Class A-1-X L/C Notes
issued under the within-mentioned Indenture.

 

 

	
   

  	
  WELLS FARGO BANK, National

  Association, as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
				

 

 

[REVERSE OF NOTE]

 

This Note is one of a
duly authorized issue of Series 2007-1 Class A-1 Notes of the
Co-Issuers designated as their Series 2007-1 Variable Funding Senior
Notes, Class A-1 (herein called the “Series 2007-1 Class A-1
Notes”), and is one of the Sub-Classes thereof designated as the Series 2007-1
Class A-1-X L/C Notes (herein called the “Series 2007-1 Class A-1-X
L/C Notes”), all issued under (i) the Base Indenture, dated as of November 29,
2007 (such Base Indenture, as amended, supplemented or modified, is herein
called the “Base Indenture”), among the Co-Issuers and Wells Fargo Bank,
National Association as indenture trustee (the “Indenture Trustee”,
which term includes any successor Indenture Trustee under the Base Indenture),
and (ii) the Series 2007-1 Supplement to the Base Indenture, dated as
of November 29, 2007 (the “Series 2007-1 Supplement”), among
the Co-Issuers and the Indenture Trustee. The Base Indenture and the Series 2007-1
Supplement are referred to herein as the “Indenture”. The Series 2007-1
Class A-1-X L/C Notes are subject to all terms of the Indenture. All terms
used in this Note that are defined in the Indenture, as supplemented, modified
or amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented, modified or amended.

 

The Series 2007-1 Class A-1-X
L/C Notes are and will be secured by the Collateral pledged as security
therefor as provided in the Indenture.

 

All L/C Obligations
relating to Letters of Credit issued by the holder of this Note (whether in
respect of Undrawn L/C Face Amounts or Unreimbursed L/C Drawings) shall be
deemed to be principal outstanding under this Note for all purposes of this
Agreement, the Indenture and the other Related Documents other than, in the case
of Undrawn L/C Face Amounts, for purposes of accrual of interest.  As provided for in the Indenture, the Series 2007-1
Class A-1-X L/C Notes may be prepaid, in whole or in part, at the option
of the Co-Issuers.  In addition, the Series 2007-1
Class A-1-X L/C Notes are subject to mandatory prepayment as provided for
in the Indenture.  As described above,
the entire unpaid principal amount of this Note shall be due and payable on the
Series 2007-1 Legal Final Maturity Date. All payments of principal of the Series 2007-1
Class A-1-X L/C Notes will be made pro  rata to the holders
of Series 2007-1 Class A-1-X L/C Notes entitled thereto.

 

Amounts due on this Note
which are payable on a Payment Date or on any date on which payments are
permitted to be made as provided for in the Indenture shall be paid to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on the applicable Record Date or Prepayment Record
Date, as the case may be.

 

Interest and fees and
contingent additional interest and fees, if any, will each accrue on the Series 2007-1
Class A-1-X L/C Notes at the rates set forth in the Indenture.  Such amounts will be computed on the basis
set forth in the Indenture.  Amounts
payable on the Series 2007-1 Class A-1-X L/C Notes on each Payment
Date will be calculated as set forth in the Indenture.

 

Payments of amounts due
on this Note are subordinated to the payment of certain other amounts in
accordance with the Priority of Payments.

 

 

If an Event of Default
shall occur and be continuing, this Note may become or be declared due and
payable in the manner and with the effect provided in the Indenture.

 

Amounts payable in
respect of this Note shall be made by wire transfer of immediately available
funds to a Dollar account maintained by the Noteholder or its nominee, subject
to the terms set forth in the Indenture.

 

As provided in the
Indenture and subject to certain limitations set forth therein, the transfer of
this Note may be registered on the Note Register upon surrender of this Note
for registration of transfer at the office or agency designated by the
Co-Issuers pursuant to the Indenture, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Series 2007-1 Class A-1-X Noteholder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an “eligible
guarantor institution” meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Security Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program”
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and accompanied by such other documents as the Indenture Trustee and
the Note Registrar may require and as may be required by the Indenture, and
thereupon one or more new Series 2007-1 Class A-1-X L/C Notes of
authorized denominations in the same aggregate principal amount will be issued
to the designated transferee or transferees. No service charge will be charged
for any registration of transfer or exchange of this Note, but the transferor
may be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.

 

Each Series 2007-1 Class A-1-X
Noteholder, by acceptance of a Series 2007-1 Class A-1-X Note,
covenants and agrees that by accepting the benefits of the Indenture that prior
to the date that is one year and one day after the payment in full of the
latest maturing note issued under the Indenture, such Series 2007-1 Class A-1-X
Noteholder will not institute against, or join with any other Person in
instituting against, any Securitization Entity any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any federal or state bankruptcy or similar law; provided, however,
that nothing herein shall constitute a waiver of any right to indemnification,
reimbursement or other payment from the Securitization Entities pursuant to the
Indenture or any other Transaction Document.

 

It is the intent of the
Co-Issuers and each Series 2007-1 Class A-1-X Noteholder that, for
federal, state and local income and franchise tax purposes only, the Series 2007-1
Class A-1-X Notes will evidence indebtedness of the Co-Issuers secured by
the Indenture Collateral.  Each Series 2007-1
Class A-1-X Noteholder, by the acceptance of this Note, agrees to treat
this Note (or beneficial interests herein) for purposes of federal, state and
local income or franchise taxes and any other tax imposed on or measured by
income, as indebtedness of the Co-Issuers or, if any Co-Issuer is treated as a
division of another entity, such other entity.

 

The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Co-Issuers and the rights of
the Series 2007-1 Class A-1-X Noteholders under the Indenture at any
time by the Co-Issuers with the consent of the Aggregate Controlling Party or
each Series Controlling Party (as 

 

 

applicable) and without the consent of any Series 2007-1 Class A-1-X
Noteholders.  The Indenture also contains
provisions permitting the Aggregate Controlling Party or each Series Controlling
Party (as applicable) to waive compliance by the Co-Issuers with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences without the consent of any Series 2007-1 Class A-1-X
Noteholders. Any such consent or waiver of this Note (or any one or more
predecessor Notes) shall be conclusive and binding upon such Series 2007-1
Class A-1-X Noteholders and upon all future Series 2007-1 Class A-1-X
Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.

 

The term “Co-Issuer” as
used in this Note includes any successor to the Co-Issuers and any Additional
Co-Issuers under the Indenture.

 

The Series 2007-1 Class A-1-X
Notes are issuable only in registered form in denominations as provided in the
Indenture, subject to certain limitations set forth therein.

 

THIS NOTE
AND THE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED 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 OF NEW YORK).

 

No reference herein to
the Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Co-Issuers, which is absolute and unconditional, to
pay the amounts due on this Note at the times, place and rate, and in the coin
or currency herein prescribed.

 

[Remainder of page intentionally
left blank]

 

 

ASSIGNMENT

 

Social Security or
taxpayer I.D. or other identifying number of assignee:                               

 

 

FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto

 

 

	
  (name and
  address of assignee)

  

 

the within  Note and all rights thereunder, and hereby
irrevocably constitutes and appoints                                  ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  	
  (1)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Signature Guaranteed:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
							

 

 

(1)           NOTE:  The signature to this assignment must
correspond with the name of the registered owner as it appears on the face of
the within Note, without alteration, enlargement or any change whatsoever.

 

 

INCREASES AND DECREASES

 

	
  Date

  	
   

  	
  Unpaid

  Principal

  Amount

  	
   

  	
  Subfacility
  Increase

  	
   

  	
  Subfacility
  Decrease

  	
   

  	
  Total

  	
   

  	
  Series

  2007-1

  Class A-1

  Note

  Interest

  Rate

  	
   

  	
  Interest

  Accrual Period

  (if applicable)

  	
   

  	
  Notation

  Made By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT A-2-I-1

 

FORM OF RULE 144A SERIES 2007-1 CLASS A-2-I-X GLOBAL NOTE

 

THIS SERIES 2007-1 FIXED RATE TERM SENIOR NOTE, CLASS A-2-I-X
DUE 2037 (THIS “NOTE”)
HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY
STATE OR OTHER RELEVANT JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES LLC,
APPLEBEE’S IP LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S RESTAURANTS
WEST LLC, APPLEBEE’S RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS INC.,
APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, APPLEBEE’S RESTAURANTS VERMONT, INC.
AND APPLEBEE’S RESTAURANTS KANSAS LLC, (THE “CO-ISSUERS”) HAS BEEN REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).  THIS NOTE OR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO EITHER THE  INITIAL PURCHASER
OR A SUBSEQUENT TRANSFEREE WHO IS BOTH A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) AND A “QUALIFIED PURCHASER” (WITHIN
THE MEANING OF THE INVESTMENT COMPANY ACT), ACTING FOR ITS OWN ACCOUNT OR ONE
OR MORE ACCOUNTS WITH RESPECT TO WHICH THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE EXERCISES SOLE INVESTMENT DISCRETION, EACH OF WHICH IS BOTH A
QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER, AND NONE OF WHICH ARE (1) A
DEALER OF THE TYPE DESCRIBED IN PARAGRAPH (a)(1)(ii) OF RULE 144A UNLESS
IT OWNS AND INVESTS ON A DISCRETIONARY BASIS NOT LESS THAN $25,000,000 IN
SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED TO IT, (2) A
PARTICIPANT-DIRECTED EMPLOYEE PLAN, SUCH AS A 401(k) PLAN, OR ANY OTHER
TYPE OF PLAN REFERRED TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF
RULE 144A, OR A TRUST FUND REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE
144A THAT HOLDS THE ASSETS OF SUCH A PLAN, UNLESS INVESTMENT DECISIONS WITH
RESPECT TO THE PLAN ARE MADE SOLELY BY THE FIDUCIARY, TRUSTEE OR SPONSOR OF
SUCH PLAN, (3) FORMED OR CAPITALIZED FOR THE SPECIFIC PURPOSE OF INVESTING
IN THE CO-ISSUERS (EXCEPT WHERE EACH BENEFICIAL OWNER IS A QUALIFIED
PURCHASER), (4) A CORPORATION, PARTNERSHIP, COMMON TRUST FUND, SPECIAL
TRUST, PENSION FUND OR RETIREMENT PLAN IN WHICH THE SHAREHOLDERS, EQUITY
OWNERS, PARTNERS, BENEFICIARIES, BENEFICIAL OWNERS OR PARTICIPANTS, AS
APPLICABLE, MAY DESIGNATE THE PARTICULAR INVESTMENTS TO BE MADE, (5) IF
FORMED ON OR BEFORE APRIL 30, 1996, AN INVESTMENT COMPANY THAT RELIES ON THE
EXCLUSION FROM THE DEFINITION OF “INVESTMENT 

 

 

COMPANY” PROVIDED BY SECTION 3(c)(7) OF THE
INVESTMENT COMPANY ACT (OR A FOREIGN INVESTMENT COMPANY UNDER SECTION 7(d) THEREOF
RELYING ON SECTION 3(c)(7) WITH RESPECT TO THOSE OF ITS HOLDERS THAT
ARE U.S. PERSONS), UNLESS, WITH RESPECT TO ITS TREATMENT AS A QUALIFIED
PURCHASER, IT HAS, IN THE MANNER REQUIRED BY SECTION 2(a)(51)(C) OF
THE INVESTMENT COMPANY ACT AND THE RULES AND REGULATIONS THEREUNDER, RECEIVED
THE CONSENT OF ITS BENEFICIAL OWNERS THAT ACQUIRED THEIR INTERESTS ON OR BEFORE
APRIL 30, 1996 OR (6) AN ENTITY THAT, IMMEDIATELY SUBSEQUENT TO ITS
PURCHASE OR OTHER ACQUISITION OF A BENEFICIAL INTEREST IN THIS NOTE, WILL HAVE
INVESTED MORE THAN 40% OF ITS ASSETS IN BENEFICIAL INTERESTS IN THIS NOTE
AND/OR IN OTHER SECURITIES OF THE CO-ISSUERS (UNLESS ALL OF THE BENEFICIAL
OWNERS OF SUCH ENTITY’S SECURITIES ARE QUALIFIED PURCHASERS) TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
THE EXEMPTION FROM SECURITIES ACT REGISTRATION PROVIDED BY RULE 144A OR (II) OUTSIDE
THE UNITED STATES TO THE INITIAL PURCHASER OR A SUBSEQUENT TRANSFEREE WHO IS A
QUALIFIED PURCHASER AND NEITHER A “U.S. PERSON” AS DEFINED IN REGULATION S
UNDER THE SECURITIES ACT (“REGULATIONS”)
NOR A “U.S. RESIDENT” AS DEFINED FOR PURPOSES OF THE INVESTMENT COMPANY ACT,
ACTING FOR ITS OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH RESPECT TO WHICH SUCH
INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE EXERCISES SOLE INVESTMENT
DISCRETION, EACH OF WHICH IS A QUALIFIED PURCHASER, AND NONE OF WHICH ARE A
U.S. PERSON OR A U.S. RESIDENT, IN OFFSHORE TRANSACTIONS IN RELIANCE ON
REGULATION S, AND, IN EACH CASE, IN COMPLIANCE WITH THE CERTIFICATIONS AND
OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO HEREIN AND ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OR THE UNITED STATES AND ANY OTHER
RELEVANT JURISDICTION.  THE INITIAL
PURCHASER AND EACH SUBSEQUENT TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN
INTEREST IN THIS NOTE WILL BE DEEMED TO HAVE MADE THE APPLICABLE
REPRESENTATIONS AND AGREEMENTS REFERRED TO IN THE INDENTURE.  EACH INITIAL PURCHASER AND EACH SUBSEQUENT
TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN INTEREST IN THIS NOTE IN THE FORM OF
AN INTEREST IN A REGULATION S GLOBAL NOTE OR A RULE 144A GLOBAL NOTE WILL BE
REQUIRED TO DELIVER A TRANSFER CERTIFICATE IN THE FORM REQUIRED BY THE
INDENTURE AND WILL BE DEEMED OR REQUIRED TO MAKE THE APPLICABLE REPRESENTATIONS
AND AGREEMENTS REFERRED TO IN THE INDENTURE.

 

ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND
EFFECT AND WILL BE VOID AB INITIO AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS
TO THE INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE, NOTWITHSTANDING 

 

 

ANY INSTRUCTIONS TO THE CONTRARY TO THE CO-ISSUERS,
THE INDENTURE TRUSTEE OR ANY INTERMEDIARY.

 

THE CO-ISSUERS MAY REQUIRE
ANY HOLDER OF THIS NOTE WHO IS DETERMINED NOT TO HAVE BEEN (I) IF THIS
NOTE IS ACQUIRED IN THE UNITED STATES, BOTH A QUALIFIED INSTITUTIONAL BUYER AND
A QUALIFIED PURCHASER OR (II) IF THIS NOTE WAS ACQUIRED OUTSIDE OF THE
UNITED STATES, BOTH A QUALIFIED PURCHASER AND NEITHER A U.S. PERSON NOR A U.S.
RESIDENT AT THE TIME OF ACQUISITION OF THIS NOTE TO SELL THIS NOTE TO A PERSON
WHO IS (I) BOTH A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (II) A QUALIFIED
PURCHASER AND NEITHER A U.S. PERSON NOR A U.S. RESIDENT IN A TRANSACTION MEETING
THE REQUIREMENTS OF REGULATIONS.

 

THE OFFERED NOTES MAY NOT
BE SOLD TO ANY RESIDENT OF THE REPUBLIC OF IRELAND.

 

[THIS NOTE HAS BEEN
ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES.  THE ISSUE PRICE,
AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE
OBTAINED BY WRITING TO THE SERVICER AT ITS ADDRESS SET FORTH IN THE
INDENTURE.](7)

 

THIS NOTE IS A GLOBAL
NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”), A NEW YORK
CORPORATION, 55 WATER STREET, NEW YORK, NEW YORK 10004, OR A NOMINEE
THEREOF.  THIS NOTE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
THE CO-ISSUERS
OR THE REGISTRAR, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC, AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE
THE REGISTERED OWNER, CEDE & CO., HAS AN INTEREST HEREIN.

 

(7) Insert as applicable.

 

 

RULE 144A GLOBAL NOTE

SERIES 2007-1 SENIOR NOTE CLASS A-2-I-X

 

	
  No. [    ]

  	
   

  	
  $[              ]

  

 

SEE REVERSE FOR CERTAIN CONDITIONS

 

CUSIP Number: 037898 AA1

ISIN Number: US037898AA13

 

APPLEBEE’S ENTERPRISES LLC

APPLEBEE’S IP LLC

APPLEBEE’S RESTAURANTS NORTH LLC

APPLEBEE’S RESTAURANTS WEST LLC

APPLEBEE’S RESTAURANTS TEXAS LLC

APPLEBEE’S RESTAURANTS INC.

APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC

 APPLEBEE’S RESTAURANTS VERMONT, INC.

APPLEBEE’S RESTAURANTS KANSAS LLC

 

SERIES 2007-1 7.2836% FIXED RATE TERM SENIOR
NOTE, CLASS A-2-I-X

 

APPLEBEE’S
ENTERPRISES LLC, a limited liability company formed under the laws of the State
of Delaware, APPLEBEE’S IP LLC, a limited liability company formed under the
laws of the State of Delaware, APPLEBEE’S RESTAURANTS NORTH LLC, a limited
liability company formed under the laws of the State of Delaware, APPLEBEE’S
RESTAURANTS WEST LLC, a limited liability company formed under the laws of the
State of Delaware, APPLEBEE’S RESTAURANTS TEXAS LLC, a limited liability
company formed under the laws of the State of Texas, APPLEBEE’S RESTAURANTS
INC., a corporation incorporated under the laws of the State of Kansas,
APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, a limited liability company formed
under the laws of the State of Delaware, APPLEBEE’S RESTAURANTS VERMONT, INC.,
a corporation incorporated under the laws of the State of Vermont and APPLEBEE’S
RESTAURANTS KANSAS LLC, a limited liability company formed under the laws of
the State of Kansas (herein referred to, collectively, as the “Co-Issuers”),
for value received, hereby jointly and severally promise to pay to CEDE &
CO. or registered assigns, the principal sum of [                 ]
($[                   ])
as provided below and in the Indenture referred to herein. Payments of
principal shall be payable in the amounts and at the times set forth in the
Indenture described herein; provided, however, that the entire
unpaid principal amount of this Note shall be due on the Payment Date (as
defined below) occurring in December 2037 (the “Series 2007-1
Legal Final Maturity Date”). The Co-Issuers will pay interest on this Series 2007-1
Fixed Rate Term Senior Note, Class A-2-I-X (this “Note”) at the Series 2007-1
Class A-2-I Note Interest Rate, as such rate may be adjusted in accordance
with the terms of the Indenture, for each Interest Accrual Period in accordance
with the terms of the Indenture. Such interest will be payable in arrears on
each Payment Date, which will be on the 20th day (or, if such 20th day is not a
Business 

 

 

Day,
the next succeeding Business Day) of each calendar month (each, a “Payment
Date”), commencing on the Payment Date occurring in January 2008.  Such amounts due on this Note will accrue for
each Payment Date with respect to (i) initially, the period from and
including November 29, 2007 to but excluding the Payment Date occurring in
January 2008 (which pursuant to Section 16.12 of the Base
Indenture and Section 7.16 of the Series 2007-1 Supplement
shall be January 22, 2008) and (ii) thereafter, the period commencing
on and including a Payment Date and ending on but excluding the next succeeding
Payment Date (each, an “Interest Accrual Period”), subject to the terms
set forth in the Indenture. Such amounts due on this Note with respect to the
Note (and interest on any defaulted payments of amounts due on this Note at the
same rate) will be computed in accordance with the Indenture. In addition,
under the circumstances set forth in the Indenture, the Co-Issuers shall also
pay contingent additional interest on this Note in the form of the Series 2007-1
Class A-2 Post-ARD Contingent Additional Interest, as applicable, which
shall be computed and shall be payable in the amounts and at the times set
forth in the Indenture.

 

The principal of and interest on this Note
are payable in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Co-Issuers with respect to this Note shall be applied as
provided in the Indenture.

 

This Note is subject to mandatory and
optional principal prepayments and mandatory liquidation (referred to in the
Indenture as the “Auction Call Redemption”), as set forth in the
Indenture.

 

Interests in this Note are
exchangeable or transferable in whole or in part for interests in a Regulation
S Global Note; provided that such transfer or exchange complies with the
applicable provisions of the Indenture relating to the transfer of the Notes.
Interests in this Note in certain circumstances may also be exchangeable or
transferable in whole but not in part for duly executed and issued registered
Definitive Notes; provided that such transfer or exchange complies with Article II
of the Base Indenture.

 

Reference is made to the further provisions
of this Note set forth on the reverse hereof, which shall have the same effect
as though fully set forth on the face of this Note. Although a summary of
certain provisions of the Indenture is set forth below and on the reverse
hereof and made a part hereof, this Note does not purport to summarize the
Indenture and reference is made to the Indenture for information with respect
to the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and obligations of the Co-Issuers and the
Indenture Trustee. A copy of the Indenture may be requested from the Indenture
Trustee by writing to the Indenture Trustee at: Wells Fargo Bank, National
Association, Sixth Street and Marquette Avenue, MAC N9311-161, Minneapolis, MN
55479, Attn: Corporate Trust
Services/Asset Backed Administration. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Indenture (as defined on the reverse hereof).

 

Subject to the next following paragraph, the
Co-Issuers hereby certify and declare that all acts, conditions and things
required to be done and performed and to have 

 

 

happened prior to the
creation of this Note and to constitute it as the valid obligation of the
Co-Issuers enforceable in accordance with its terms, have been done and
performed and have happened in due compliance with all applicable laws and in
accordance with the terms of the Indenture.

 

Unless the certificate of authentication
hereon has been executed by the Indenture Trustee whose name appears below by
manual or facsimile signature, this Note shall not be entitled to any benefit
under the Indenture referred to on the reverse hereof, or be valid or
obligatory for any purpose.

 

[Remainder of page intentionally left
blank]

 

 

IN
WITNESS WHEREOF, the Co-Issuers have caused this Note to be duly executed.

 

 

	
  Dated:[                  ]

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S ENTERPRISES LLC

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S IP LLC

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS NORTH LLC

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS WEST

  LLC

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS TEXAS LLC

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

 

	
   

  	
  APPLEBEE’S RESTAURANTS INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS MID-

         ATLANTIC LLC

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS VERMONT,

  INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS KANSAS LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

CERTIFICATE OF
AUTHENTICATION

 

This is one of the Series 2007-1 Notes
issued under the within-mentioned Indenture.

 

 

	
   

  	
  WELLS
  FARGO BANK, NATIONAL

  
	
   

  	
         ASSOCIATION,
  as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
            Authorized
  Signatory

  
	
   

  	
   

  

 

 

[REVERSE OF NOTE]

 

This Note is one of a duly
authorized issue of Series 2007-1 Fixed Rate Term Senior Notes, Class A-2-I-X
of the Co-Issuers designated as their Series 2007-1 Fixed Rate Term Senior
Notes, Class A-2-I-X (herein called the “Series 2007-1 Notes”)
all issued under (i) a Base Indenture, dated as of November 29, 2007
(such Base Indenture, as amended, supplemented or modified, is herein called
the “Base Indenture”), among the Co-Issuers and Wells Fargo Bank,
National Association as indenture trustee (the “Indenture Trustee”,
which term includes any successor Indenture Trustee under the Base Indenture),
and (ii) a Series 2007-1 Supplement to the Base Indenture, dated as
of November 29, 2007 (such Series 2007-1 Supplement, as amended,
supplemented or modified from time to time, is herein called the (“Series 2007-1
Supplement”), among the Co-Issuers and the Indenture Trustee. The Base
Indenture, Series 2007-1 Supplement and such other Series Supplement
or Supplemental Indenture as may be executed from time to time are referred to
herein as the “Indenture”. The Series 2007-1 Notes are subject to
all terms of the Indenture. All terms used in this Note that are defined in the
Indenture, as supplemented, modified or amended, shall have the meanings
assigned to them in or pursuant to the Indenture, as so supplemented, modified
or amended.

 

The Series 2007-1 Notes
are and will be secured by the Collateral pledged as security therefor as
provided in the Indenture and in the respective Guaranty and Collateral
Agreements.

 

The Notes will be issued in minimum
denominations of $200,000 and integral multiples of $ 1,000 in excess thereof.

 

As provided for in the Indenture, subject to
certain specified conditions, the Series 2007-1 Notes may be prepaid, in
whole or in part, at the option of the Co-Issuers. In addition, the Series 2007-1
Notes are subject to mandatory principal prepayment provisions as provided for
in the Indenture. With certain exceptions, the Co-Issuers will be obligated to
pay the Make-Whole Amount relating to the Series 2007-1 Notes on any
prepayment of principal of any Series 2007-1 Notes prior to the Series 2007-1
Anticipated Prepayment Date as described in the Indenture. As described above,
the entire unpaid principal amount of this Note shall be due and payable on the
Series 2007-1 Legal Final Maturity Date. All payments of principal
relating to any Class of Series 2007-1 Notes will be made pro  rata
to the Holders of such Class of Series 2007-1 Notes.

 

Principal of and interest on this Note which
is payable on a Payment Date or on any date on which payments are permitted to
be made as provided for in the Indenture shall be paid to the Person in whose
name this Note (or one or more predecessor Notes) is registered at the close of
business on the applicable Record Date.

 

Interest and contingent
additional interest, if any, will each accrue on the Series 2007-1 Notes
at the rates set forth in the Indenture. The interest and contingent additional
interest, if any, will be computed on the basis set forth in the Indenture. The
amount of interest payable on the Series 2007-1 Notes on each Payment Date
will be calculated as set forth in the Indenture.

 

 

Payments of principal of and
interest on this Note are subordinated to the payment of certain other amounts
in accordance with the Priority of Payments in the Indenture.

 

If an Event of Default shall
occur and be continuing, this Note may become or be declared due and payable in
the manner and with the effect provided in the Indenture.

 

Amounts payable in respect
of this Note shall be made by wire transfer of immediately available funds to a
Dollar account maintained by the Noteholder or its nominee, subject to the
terms set forth in the Indenture.

 

As provided in the Indenture
and subject to certain limitations set forth therein, the transfer of this Note
may be registered on the Note Register upon surrender of this Note for
registration of transfer at the office or agency designated by the Co-Issuers
pursuant to the Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Series 2007-1 Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an “eligible guarantor
institution” meeting the requirements of the Note Registrar, which requirements
include membership or participation in the Security Transfer Agent Medallion
Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended, and
accompanied by such other documents as the Indenture Trustee and the Note
Registrar may require and as may be required by the Indenture, and thereupon
one or more new Series 2007-1 Notes of authorized denominations in the
same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of transfer
or exchange of this Note, but the transferor may be required to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any such registration of transfer or exchange.

 

Each Holder of Series 2007-1 Notes, by
acceptance of a Series 2007-1 Note, covenants and agrees that by accepting
the benefits of the Indenture that prior to the date that is one year and one
day after the payment in full of the latest maturing note issued under the
Indenture, such Series 2007-1 Noteholder will not institute against, or
join with any other Person in instituting against, any Securitization Entity
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings, under any federal Insolvency Law; provided,
however, that nothing herein shall constitute a waiver of any right to
indemnification, reimbursement or other payment from the Securitization
Entities pursuant to the Indenture or any other Transaction Document

 

It is the intent of the
Co-Issuers and each Holder of Series 2007-1 Notes that, for federal, state
and local income and franchise tax purposes only, the Series 2007-1 Notes
will evidence indebtedness of the Co-Issuers secured by the Collateral. Each
Holder of Series 2007-1 Notes, by the acceptance of this Note, agrees to
treat this Note (or beneficial interests herein) for purposes of federal, state
and local income or franchise taxes and any other tax imposed on or measured by
income, as indebtedness of the Co-Issuers or, if any Co-Issuer is treated as a
division of another entity, such other entity.

 

 

The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Co-Issuers and the rights of the Holders of Series 2007-1
Notes under the Indenture at any time by the Co-Issuers with the consent of the
Aggregate Controlling Party or each Series Controlling Party (as
applicable) and without the consent of any Holders of Series 2007-1 Notes.
The Indenture also contains provisions permitting the Aggregate Controlling
Party or each Series Controlling Party (as applicable) to waive compliance
by the Co-Issuers with certain provisions of the Indenture without the consent
of any Holders of Series 2007-1 Notes. Any such consent or waiver of this
Note (or any one or more predecessor Notes) shall be conclusive and binding
upon the Holder of this Note and all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note.

 

The term “Co-Issuer” as used
in this Note includes any successor to the Co-Issuers under the Indenture.

 

The Series 2007-1 Notes
are issuable only in registered form in denominations as provided in the
Indenture, subject to certain limitations set forth therein.

 

THIS NOTE
AND THE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED 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 OF NEW YORK).

 

No reference herein to the
Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Co-Issuers, which is absolute and unconditional,
to pay the principal of and interest on this Note at the times, place and rate,
and in the coin or currency herein prescribed.

 

 

ASSIGNMENT

 

Social Security or taxpayer
I.D. or other identifying number of assignee:                   

 

FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto

 

 

	
  (name and address of assignee)

  

 

The within Note and all
rights thereunder, and hereby irrevocably constitutes and appoints                      ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

 

	
  Dated: ___________________

  	
  By:

  	
   

  	
  (8)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Signature Guaranteed:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

 

(8) NOTE: The signature
to this assignment must correspond with the name of the registered owner as it
appears on the face of the withinNote, without alteration, enlargement or any
change whatsoever.

 

 

SCHEDULE OF EXCHANGES IN
RULE 144A GLOBAL NOTE

 

The
initial principal balance of this Rule 144A Global Note is $[                ].
The following exchanges of an interest in this Rule 144A Global Note for
an interest in a corresponding Regulation S Global Note have been made:

 

	
  Date

  	
   

  	
  Amount
  of Increase

  (or Decrease) in the

  Principal Amount of

  this Rule 144A

  Global Note

  	
   

  	
  Remaining
  Principal

  Amount of this Rule

  144A Global Note

  following the Increase

  or Decrease

  	
   

  	
  Signature
  of

  Authorized Officer

  of Indenture

  Trustee of Note

  Registrar

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT A-2-I-2

 

FORM OF REGULATION
S SERIES 2007-1 CLASS A-2-I-X GLOBAL NOTE

 

THIS SERIES 2007-1 FIXED RATE TERM SENIOR NOTE, CLASS A-2-I-X
DUE 2037 (THIS “NOTE”)
HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY
STATE OR OTHER RELEVANT JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES LLC,
APPLEBEE’S IP LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S RESTAURANTS
WEST LLC, APPLEBEE’S RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS INC.,
APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, APPLEBEE’S RESTAURANTS VERMONT, INC.
AND APPLEBEE’S RESTAURANTS KANSAS LLC, (THE “CO-ISSUERS”) HAS BEEN REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).  THIS NOTE OR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO EITHER THE  INITIAL PURCHASER
OR A SUBSEQUENT TRANSFEREE WHO IS BOTH A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) AND A “QUALIFIED PURCHASER” (WITHIN
THE MEANING OF THE INVESTMENT COMPANY ACT), ACTING FOR ITS OWN ACCOUNT OR ONE
OR MORE ACCOUNTS WITH RESPECT TO WHICH THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE EXERCISES SOLE INVESTMENT DISCRETION, EACH OF WHICH IS BOTH A
QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER, AND NONE OF WHICH ARE (1) A
DEALER OF THE TYPE DESCRIBED IN PARAGRAPH (a)(1)(ii) OF RULE 144A UNLESS
IT OWNS AND INVESTS ON A DISCRETIONARY BASIS NOT LESS THAN $25,000,000 IN
SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED TO IT, (2) A
PARTICIPANT-DIRECTED EMPLOYEE PLAN, SUCH AS A 401(k) PLAN, OR ANY OTHER
TYPE OF PLAN REFERRED TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF
RULE 144A, OR A TRUST FUND REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE
144A THAT HOLDS THE ASSETS OF SUCH A PLAN, UNLESS INVESTMENT DECISIONS WITH
RESPECT TO THE PLAN ARE MADE SOLELY BY THE FIDUCIARY, TRUSTEE OR SPONSOR OF
SUCH PLAN, (3) FORMED OR CAPITALIZED FOR THE SPECIFIC PURPOSE OF INVESTING
IN THE CO-ISSUERS (EXCEPT WHERE EACH BENEFICIAL OWNER IS A QUALIFIED
PURCHASER), (4) A CORPORATION, PARTNERSHIP, COMMON TRUST FUND, SPECIAL
TRUST, PENSION FUND OR RETIREMENT PLAN IN WHICH THE SHAREHOLDERS, EQUITY OWNERS,
PARTNERS, BENEFICIARIES, BENEFICIAL OWNERS OR PARTICIPANTS, AS APPLICABLE, MAY DESIGNATE
THE PARTICULAR INVESTMENTS TO BE MADE, (5) IF FORMED ON OR BEFORE APRIL
30, 1996, AN INVESTMENT COMPANY THAT RELIES ON THE EXCLUSION FROM THE
DEFINITION OF “INVESTMENT 

 

 

COMPANY” PROVIDED BY SECTION 3(c)(7) OF THE
INVESTMENT COMPANY ACT (OR A FOREIGN INVESTMENT COMPANY UNDER SECTION 7(d) THEREOF
RELYING ON SECTION 3(c)(7) WITH RESPECT TO THOSE OF ITS HOLDERS THAT
ARE U.S. PERSONS), UNLESS, WITH RESPECT TO ITS TREATMENT AS A QUALIFIED
PURCHASER, IT HAS, IN THE MANNER REQUIRED BY SECTION 2(a)(51)(C) OF
THE INVESTMENT COMPANY ACT AND THE RULES AND REGULATIONS THEREUNDER, RECEIVED
THE CONSENT OF ITS BENEFICIAL OWNERS THAT ACQUIRED THEIR INTERESTS ON OR BEFORE
APRIL 30, 1996 OR (6) AN ENTITY THAT, IMMEDIATELY SUBSEQUENT TO ITS
PURCHASE OR OTHER ACQUISITION OF A BENEFICIAL INTEREST IN THIS NOTE, WILL HAVE
INVESTED MORE THAN 40% OF ITS ASSETS IN BENEFICIAL INTERESTS IN THIS NOTE
AND/OR IN OTHER SECURITIES OF THE CO-ISSUERS (UNLESS ALL OF THE BENEFICIAL
OWNERS OF SUCH ENTITY’S SECURITIES ARE QUALIFIED PURCHASERS) TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
THE EXEMPTION FROM SECURITIES ACT REGISTRATION PROVIDED BY RULE 144A OR (II) OUTSIDE
THE UNITED STATES TO THE INITIAL PURCHASER OR A SUBSEQUENT TRANSFEREE WHO IS A
QUALIFIED PURCHASER AND NEITHER A “U.S. PERSON” AS DEFINED IN REGULATION S
UNDER THE SECURITIES ACT (“REGULATIONS”)
NOR A “U.S. RESIDENT” AS DEFINED FOR PURPOSES OF THE INVESTMENT COMPANY ACT,
ACTING FOR ITS OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH RESPECT TO WHICH SUCH
INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE EXERCISES SOLE INVESTMENT
DISCRETION, EACH OF WHICH IS A QUALIFIED PURCHASER, AND NONE OF WHICH ARE A
U.S. PERSON OR A U.S. RESIDENT, IN OFFSHORE TRANSACTIONS IN RELIANCE ON
REGULATION S, AND, IN EACH CASE, IN COMPLIANCE WITH THE CERTIFICATIONS AND
OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO HEREIN AND ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OR THE UNITED STATES AND ANY OTHER
RELEVANT JURISDICTION.  THE INITIAL
PURCHASER AND EACH SUBSEQUENT TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN
INTEREST IN THIS NOTE WILL BE DEEMED TO HAVE MADE THE APPLICABLE
REPRESENTATIONS AND AGREEMENTS REFERRED TO IN THE INDENTURE.  EACH INITIAL PURCHASER AND EACH SUBSEQUENT
TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN INTEREST IN THIS NOTE IN THE FORM OF
AN INTEREST IN A REGULATION S GLOBAL NOTE OR A RULE 144A GLOBAL NOTE WILL BE
REQUIRED TO DELIVER A TRANSFER CERTIFICATE IN THE FORM REQUIRED BY THE
INDENTURE AND WILL BE DEEMED OR REQUIRED TO MAKE THE APPLICABLE REPRESENTATIONS
AND AGREEMENTS REFERRED TO IN THE INDENTURE.

 

ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING WILL BE OF NO FORCE AND EFFECT AND WILL BE VOID AB INITIO AND WILL
NOT OPERATE TO TRANSFER ANY RIGHTS TO THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE, NOTWITHSTANDING 

 

 

ANY INSTRUCTIONS TO THE CONTRARY TO THE CO-ISSUERS,
THE INDENTURE TRUSTEE OR ANY INTERMEDIARY.

 

THE CO-ISSUERS MAY REQUIRE
ANY HOLDER OF THIS NOTE WHO IS DETERMINED NOT TO HAVE BEEN (I) IF THIS
NOTE IS ACQUIRED IN THE UNITED STATES, BOTH A QUALIFIED INSTITUTIONAL BUYER AND
A QUALIFIED PURCHASER OR (II) IF THIS NOTE WAS ACQUIRED OUTSIDE OF THE
UNITED STATES, BOTH A QUALIFIED PURCHASER AND NEITHER A U.S. PERSON NOR A U.S.
RESIDENT AT THE TIME OF ACQUISITION OF THIS NOTE TO SELL THIS NOTE TO A PERSON
WHO IS (I) BOTH A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (II) A QUALIFIED
PURCHASER AND NEITHER A U.S. PERSON NOR A U.S. RESIDENT IN A TRANSACTION
MEETING THE REQUIREMENTS OF REGULATIONS.

 

THE OFFERED NOTES MAY NOT
BE SOLD TO ANY RESIDENT OF THE REPUBLIC OF IRELAND.

 

[THIS NOTE HAS BEEN
ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES.  THE ISSUE PRICE,
AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE
OBTAINED BY WRITING TO THE SERVICER AT ITS ADDRESS SET FORTH IN THE
INDENTURE.](9)

 

UNTIL 40 DAYS AFTER THE
INITIAL PURCHASER NOTIFIES THE CO-ISSUERS THAT THE RESALE OF THE OFFERED NOTES
HAS BEEN COMPLETED (THE “RESTRICTED
PERIOD”) IN CONNECTION WITH THE OFFERING OF THE NOTES IN THE
UNITED STATES FROM OUTSIDE OF THE UNITED STATES, THE SALE, PLEDGE OR TRANSFER
OF THIS NOTE IS SUBJECT TO CERTAIN CONDITIONS AND RESTRICTIONS.  THE HOLDER HEREOF, BY PURCHASING OR OTHERWISE
ACQUIRING THIS NOTE, ACKNOWLEDGES THAT SUCH HOLDER IS A QUALIFIED PURCHASER,
AND THAT THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND AGREES
FOR THE BENEFIT OF THE CO-ISSUERS THAT THIS NOTE MAY BE TRANSFERRED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY TO A QUALIFIED PURCHASER AND IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OF THE STATES,
TERRITORIES AND POSSESSIONS OF THE UNITED STATES GOVERNING THE OFFER AND SALE
OF SECURITIES, AND PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD, ONLY (I) IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT OR (II) PURSUANT TO AND IN ACCORDANCE WITH RULE 144A UNDER THE
SECURITIES ACT.

 

(9) Insert as applicable.

 

 

THIS NOTE IS A GLOBAL
NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”), A NEW YORK CORPORATION,
55 WATER STREET, NEW YORK, NEW YORK 10004, OR A NOMINEE THEREOF.  THIS NOTE MAY NOT BE EXCHANGED IN WHOLE
OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS NOTE IN
WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN
DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.  UNLESS THIS NOTE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE CO-ISSUERS OR THE REGISTRAR, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER, CEDE &
CO., HAS AN INTEREST HEREIN.

 

 

REGULATION S GLOBAL
NOTE

SERIES 2007-1 SENIOR
NOTE CLASS A-2-I-X

 

 

	
  No. [    ]

  	
   

  	
  $[              ]

  

 

SEE REVERSE FOR CERTAIN
CONDITIONS

 

CUSIP
Number: U00540 AA9

ISIN
Number: USU00540AA99

 

APPLEBEE’S ENTERPRISES
LLC

APPLEBEE’S IP LLC

APPLEBEE’S RESTAURANTS NORTH LLC

APPLEBEE’S RESTAURANTS WEST LLC

APPLEBEE’S RESTAURANTS TEXAS LLC

APPLEBEE’S RESTAURANTS INC.

APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC

 APPLEBEE’S
RESTAURANTS VERMONT, INC.

APPLEBEE’S RESTAURANTS KANSAS LLC

 

SERIES 2007-1 7.2836% FIXED RATE TERM SENIOR NOTE, CLASS A-2-I-X

 

APPLEBEE’S ENTERPRISES LLC, a limited liability
company formed under the laws of the State of Delaware, APPLEBEE’S IP LLC, a limited liability
company formed under the laws of the State of Delaware, APPLEBEE’S RESTAURANTS NORTH LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS WEST LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS TEXAS LLC, a limited liability company formed under the laws
of the State of Texas, APPLEBEE’S RESTAURANTS INC., a corporation incorporated under the laws of the
State of Kansas, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS VERMONT, INC., a corporation incorporated under the laws of the
State of Vermont and APPLEBEE’S RESTAURANTS KANSAS LLC, a limited liability company formed under the laws
of the State of Kansas (herein
referred to, collectively, as the “Co-Issuers”), for value received, hereby
jointly and severally promise to pay to CEDE & CO. or registered
assigns, the principal sum of
[                 ]
($[                 ])
as provided below and in the
Indenture referred to herein. Payments of principal shall be payable in the amounts and at the times set forth in the
Indenture described herein; provided, however, that the entire
unpaid principal amount of this Note shall be due on the Payment Date (as
defined below) occurring in December 2037 (the “Series 2007-1 Legal Final Maturity Date”). The
Co-Issuers will pay interest on this Series 2007-1 Fixed Rate Term
Senior Note, Class A-2-I-X (this “Note”) at the Series 2007-1 Class A-2-I
Note Interest Rate, as such rate may be adjusted in accordance with the terms
of the Indenture, for each Interest Accrual Period in accordance with the terms
of the Indenture. Such interest will be payable in arrears on each Payment
Date, which will be on the 20th day (or, if such
20th day is not a Business 

 

 

Day, the next succeeding Business Day) of each calendar
month (each, a “Payment
Date”), commencing on the Payment
Date occurring in January 2008. 
Such amounts due on this Note will accrue for each Payment Date with respect to (i) initially,
the period from and including November 29, 2007 to but excluding the Payment Date occurring in January 2008
(which pursuant to Section 16.12 of the Base Indenture and Section 7.16
of the Series 2007-1 Supplement shall be January 22, 2008) and (ii) thereafter,
the period commencing on and including a Payment Date and ending on but excluding the next succeeding
Payment Date (each, an “Interest Accrual Period”), subject
to the terms set forth in the Indenture. Such amounts due on this Note with
respect to the Note (and interest on any defaulted
payments of amounts due on this Note at the same rate) will be computed in accordance
with the Indenture. In addition, under the circumstances set forth in the
Indenture, the Co-Issuers shall also pay
contingent additional interest on this Note in the form of the Series 2007-1 Class A-2 Post-ARD Contingent
Additional Interest, as applicable, which shall be computed and shall be payable in the amounts and
at the times set forth in the Indenture.

 

The principal of and
interest on this Note are payable in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Co-Issuers with respect to this Note
shall be applied as provided in the Indenture.

 

This Note is subject to
mandatory and optional principal prepayments and mandatory liquidation
(referred to in the Indenture as the “Auction Call Redemption”), as set
forth in the Indenture.

 

Interests
in this Note are exchangeable or transferable in whole or in part for interests in a
Regulation S Global Note; provided that such transfer or exchange
complies with the applicable provisions of the Indenture relating to the transfer of
the Notes. Interests in this Note in certain circumstances may also be exchangeable or
transferable in whole but not in part for duly executed and issued registered
Definitive Notes; provided that such transfer or exchange complies with Article II
of the Base Indenture.

 

Reference is made to
the further provisions of this Note set forth on the reverse hereof, which shall have
the same effect as though fully set forth on the face of this Note. Although a summary of
certain provisions of the Indenture is set forth below and on the reverse hereof and made a part
hereof, this Note does not purport to summarize the Indenture and reference is made to
the Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Co-Issuers and the Indenture Trustee. A copy of the Indenture may be
requested from the Indenture Trustee by writing to the Indenture Trustee at: Wells Fargo
Bank, National Association, Sixth Street and Marquette Avenue, MAC N9311-161,
Minneapolis, MN 55479, Attn:
Corporate Trust Services/Asset Backed Administration. To the extent not defined
herein, the
capitalized terms used herein have the meanings ascribed to them in the
Indenture (as defined on the reverse hereof).

 

Subject to the next
following paragraph, the Co-Issuers hereby certify and declare that all acts,
conditions and things required to be done and performed and to have 

 

 

happened
prior to the creation of
this Note and to constitute it as the valid obligation of the Co-Issuers enforceable in accordance with its terms, have
been done and performed and have happened in due compliance with all applicable laws and in accordance with the terms
of the Indenture.

 

Unless the certificate
of authentication hereon has been executed by the Indenture Trustee whose name
appears below by manual or facsimile signature, this Note shall not be entitled
to any benefit under the Indenture referred to on the reverse hereof, or be
valid or obligatory for any  purpose.

 

[Remainder of page intentionally
left blank]

 

 

IN WITNESS WHEREOF, the Co-Issuers have caused this Note
to be duly executed.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S ENTERPRISES LLC

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S IP LLC

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS NORTH LLC

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS WEST

  LLC

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS TEXAS LLC

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  APPLEBEE’S RESTAURANTS INC.

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS MID-

          ATLANTIC LLC

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS VERMONT,

  INC.

  
	
   

  	
   

  
	
   

  	
   By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS KANSAS LLC

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

CERTIFICATE OF
AUTHENTICATION

 

This is one of the Series 2007-1 Notes
issued under the within-mentioned Indenture.

 

 

	
   

  	
  WELLS
  FARGO BANK, NATIONAL 

  
	
   

  	
         ASSOCIATION,
  as Indenture Trustee 

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
          Authorized
  Signatory

  

 

 

[REVERSE OF NOTE]

 

This
Note is one of a duly authorized issue of Series 2007-1 Fixed Rate Term
Senior Notes, Class A-2-I-X of the Co-Issuers designated as their Series 2007-1
Fixed Rate Term Senior Notes, Class A-2-I-X (herein called the “Series 2007-1
Notes”) all issued under (i) a Base Indenture, dated as of November 29,
2007 (such
Base Indenture, as amended, supplemented or modified, is herein called the “Base
Indenture”), among the Co-Issuers
and Wells Fargo Bank, National Association as indenture trustee (the “Indenture
Trustee”, which term includes any successor Indenture Trustee under the
Base Indenture), and (ii) a Series 2007-1 Supplement to the Base Indenture, dated as of November 29,
2007 (such Series 2007-1 Supplement, as amended, supplemented or modified from
time to time, is herein called the (“Series 2007-1 Supplement”), among the Co-Issuers and the
Indenture Trustee. The Base Indenture, Series 2007-1
Supplement and such other Series Supplement or Supplemental Indenture as
may be executed from time to time are
referred to herein as the “Indenture”. The Series 2007-1 Notes are
subject to all terms of the Indenture.
All terms used in this Note that are defined in the Indenture, as supplemented,
modified or amended, shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented, modified or amended.

 

The Series 2007-1
Notes are and will be secured by the Collateral pledged as security therefor as
provided in the Indenture and in the respective Guaranty and Collateral
Agreements.

 

The Notes will be
issued in minimum denominations of $200,000 and integral multiples of $ 1,000 in
excess thereof.

 

As provided for in the
Indenture, subject to certain specified conditions, the Series 2007-1
Notes may be prepaid, in whole or in part, at the option of the Co-Issuers. In
addition, the Series 2007-1 Notes are subject to mandatory principal
prepayment provisions as provided for in the Indenture. With certain
exceptions, the Co-Issuers will be obligated to pay the Make-Whole Amount relating to the Series 2007-1
Notes on any prepayment of principal of any Series 2007-1 Notes prior to
the Series 2007-1 Anticipated Prepayment Date as described in the
Indenture. As described above, the entire unpaid principal amount of this Note
shall be due and payable on the Series 2007-1 Legal Final Maturity Date. All payments of
principal relating to any Class of Series 2007-1 Notes will be made pro
rata to the Holders of such Class of Series 2007-1 Notes.

 

Principal of and
interest on this Note which is payable on a Payment Date or on any date on
which payments are permitted to be made as provided for in the Indenture shall
be paid
to the Person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the applicable Record Date.

 

Interest
and contingent additional interest, if any, will each accrue on the Series 2007-1 Notes at the
rates set forth in the Indenture. The interest and contingent additional interest, if any, will
be computed on the basis set forth in the Indenture. The amount of interest
payable on the Series 2007-1 Notes on each Payment Date will be calculated
as set forth in the Indenture.

 

 

Payments
of principal of and interest on this Note are subordinated to the payment of certain other amounts
in accordance with the Priority of Payments in the Indenture.

 

If an
Event of Default shall occur and be continuing, this Note may become or be
declared due and payable in the manner and with the effect provided in the
Indenture.

 

Amounts
payable in respect of this Note shall be made by wire transfer of immediately available
funds to a Dollar account maintained by the Noteholder or its nominee, subject
to the terms set forth in the Indenture.

 

As
provided in the Indenture and subject to certain limitations set forth therein,
the transfer of this Note may be registered on the Note Register upon surrender
of this Note for registration of transfer at the office or agency designated by
the Co-Issuers pursuant to the Indenture, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Series 2007-1 Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an “eligible guarantor
institution”
meeting the requirements of the Note Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”)
or such
other “signature guarantee program” as may be determined by the Note Registrar
in addition
to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended, and accompanied by such other documents as the
Indenture Trustee and the Note Registrar may require and as may be required by the
Indenture, and thereupon one or more new Series 2007-1 Notes of authorized
denominations in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.

 

Each Holder of Series 2007-1
Notes, by acceptance of a Series 2007-1 Note, covenants and agrees
that by accepting the benefits of the Indenture that prior to the date that is one year and one day
after the payment in full of the latest maturing note issued under the Indenture, such Series 2007-1
Noteholder will not institute against, or join with any other Person in instituting against,
any Securitization Entity any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or
other proceedings, under any federal Insolvency Law; provided, however, that nothing herein shall constitute
a waiver of any right to
indemnification, reimbursement or other payment from the Securitization
Entities pursuant to the Indenture
or any other Transaction Document

 

It is
the intent of the Co-Issuers and each Holder of Series 2007-1 Notes that,
for federal,
state and local income and franchise tax purposes only, the Series 2007-1
Notes will evidence
indebtedness of the Co-Issuers secured by the Collateral. Each Holder of Series 2007-1
Notes, by the acceptance of this Note, agrees to treat this Note (or beneficial
interests herein) for purposes of federal, state and local income or franchise taxes and any
other tax imposed on or measured by income, as indebtedness of the Co-Issuers or,
if any Co-Issuer is treated as a division of another entity, such other entity.

 

 

The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Co-Issuers and the rights of the Holders of
Series 2007-1 Notes under the Indenture at any time by the Co-Issuers with the consent of the
Aggregate Controlling Party or each Series Controlling Party (as applicable) and without
the consent of any Holders of Series 2007-1 Notes. The Indenture also contains provisions
permitting the Aggregate Controlling Party or each Series Controlling
Party (as applicable) to waive compliance by the Co-Issuers with certain
provisions of the Indenture without the consent of any Holders of Series 2007-1
Notes. Any such consent or waiver of this Note (or any one or more predecessor Notes) shall
be conclusive and binding upon the Holder of this Note and all future Holders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Note.

 

The
term “Co-Issuer” as used in this Note includes any successor to the Co-Issuers under the
Indenture.

 

The Series 2007-1
Notes are issuable only in registered form in denominations as provided in the
Indenture, subject to certain limitations set forth therein.

 

THIS NOTE AND THE INDENTURE SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED 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 OF
NEW YORK).

 

No
reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the
obligation of the Co-Issuers, which is absolute and unconditional, to pay the principal of and interest on this Note at the
times, place and rate, and in the coin or currency herein prescribed.

 

 

ASSIGNMENT

 

Social
Security or taxpayer I.D. or other identifying number of assignee:                          

 

FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

 

	
  (name and address of assignee)

  

 

The
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints                    ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

 

	
  Dated: ___________________

  	
  By:

  	
   

  	
  (10)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
             Signature
  Guaranteed:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
					

 

(10)         NOTE: The signature to this assignment
must correspond with the name of the registered owner as it appears on the face
of the within Note, without alteration, enlargement or any change whatsoever.

 

 

SCHEDULE OF EXCHANGES IN
REGULATION S GLOBAL NOTE

 

The
initial principal balance of this Regulation S Global Note is
$[              ].
The following exchanges of an interest in this Regulation S Global Note for an
interest in a corresponding Rule 144A Global Note have been made:

 

	
  Date

  	
   

  	
  Amount
  of Increase

  (or Decrease) in the

  Principal Amount of

  this Regulation S

  Global Note

  	
   

  	
  Remaining
  Principal

  Amount of this

  Regulation S Global

  Note following the

  Increase or Decrease

  	
   

  	
  Signature
  of

  Authorized Officer

  of Indenture

  Trustee of Note

  Registrar

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT A-2-II-1

 

FORM OF RULE 144A
SERIES 2007-1 CLASS A-2-II-A GLOBAL NOTE

 

                THIS
SERIES 2007-1 FIXED RATE TERM SENIOR NOTE, CLASS A-2-II-A DUE 2037
(THIS “NOTE”)
HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY
STATE OR OTHER RELEVANT JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES LLC,
APPLEBEE’S IP LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S RESTAURANTS
WEST LLC, APPLEBEE’S RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS INC.,
APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, APPLEBEE’S RESTAURANTS VERMONT, INC.
AND APPLEBEE’S RESTAURANTS KANSAS LLC, (THE “CO-ISSUERS”) HAS BEEN REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).  THIS NOTE OR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO EITHER THE  INITIAL PURCHASER
OR A SUBSEQUENT TRANSFEREE WHO IS BOTH A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) AND A “QUALIFIED PURCHASER” (WITHIN
THE MEANING OF THE INVESTMENT COMPANY ACT), ACTING FOR ITS OWN ACCOUNT OR ONE
OR MORE ACCOUNTS WITH RESPECT TO WHICH THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE EXERCISES SOLE INVESTMENT DISCRETION, EACH OF WHICH IS BOTH A
QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER, AND NONE OF WHICH ARE (1) A
DEALER OF THE TYPE DESCRIBED IN PARAGRAPH (a)(1)(ii) OF RULE 144A UNLESS
IT OWNS AND INVESTS ON A DISCRETIONARY BASIS NOT LESS THAN $25,000,000 IN
SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED TO IT, (2) A
PARTICIPANT-DIRECTED EMPLOYEE PLAN, SUCH AS A 401(k) PLAN, OR ANY OTHER
TYPE OF PLAN REFERRED TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF
RULE 144A, OR A TRUST FUND REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE
144A THAT HOLDS THE ASSETS OF SUCH A PLAN, UNLESS INVESTMENT DECISIONS WITH
RESPECT TO THE PLAN ARE MADE SOLELY BY THE FIDUCIARY, TRUSTEE OR SPONSOR OF
SUCH PLAN, (3) FORMED OR CAPITALIZED FOR THE SPECIFIC PURPOSE OF INVESTING
IN THE CO-ISSUERS (EXCEPT WHERE EACH BENEFICIAL OWNER IS A QUALIFIED
PURCHASER), (4) A CORPORATION, PARTNERSHIP, COMMON TRUST FUND, SPECIAL
TRUST, PENSION FUND OR RETIREMENT PLAN IN WHICH THE SHAREHOLDERS, EQUITY OWNERS,
PARTNERS, BENEFICIARIES, BENEFICIAL OWNERS OR PARTICIPANTS, AS APPLICABLE, MAY DESIGNATE
THE PARTICULAR INVESTMENTS TO BE MADE, (5) IF FORMED ON OR BEFORE APRIL
30, 1996, AN INVESTMENT COMPANY THAT RELIES ON THE EXCLUSION FROM THE
DEFINITION OF “INVESTMENT 

 

 

COMPANY” PROVIDED BY SECTION 3(c)(7) OF THE
INVESTMENT COMPANY ACT (OR A FOREIGN INVESTMENT COMPANY UNDER SECTION 7(d) THEREOF
RELYING ON SECTION 3(c)(7) WITH RESPECT TO THOSE OF ITS HOLDERS THAT
ARE U.S. PERSONS), UNLESS, WITH RESPECT TO ITS TREATMENT AS A QUALIFIED
PURCHASER, IT HAS, IN THE MANNER REQUIRED BY SECTION 2(a)(51)(C) OF
THE INVESTMENT COMPANY ACT AND THE RULES AND REGULATIONS THEREUNDER, RECEIVED
THE CONSENT OF ITS BENEFICIAL OWNERS THAT ACQUIRED THEIR INTERESTS ON OR BEFORE
APRIL 30, 1996 OR (6) AN ENTITY THAT, IMMEDIATELY SUBSEQUENT TO ITS
PURCHASE OR OTHER ACQUISITION OF A BENEFICIAL INTEREST IN THIS NOTE, WILL HAVE
INVESTED MORE THAN 40% OF ITS ASSETS IN BENEFICIAL INTERESTS IN THIS NOTE
AND/OR IN OTHER SECURITIES OF THE CO-ISSUERS (UNLESS ALL OF THE BENEFICIAL
OWNERS OF SUCH ENTITY’S SECURITIES ARE QUALIFIED PURCHASERS) TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
THE EXEMPTION FROM SECURITIES ACT REGISTRATION PROVIDED BY RULE 144A OR (II) OUTSIDE
THE UNITED STATES TO THE INITIAL PURCHASER OR A SUBSEQUENT TRANSFEREE WHO IS A
QUALIFIED PURCHASER AND NEITHER A “U.S. PERSON” AS DEFINED IN REGULATION S
UNDER THE SECURITIES ACT (“REGULATION
S”) NOR A “U.S. RESIDENT” AS DEFINED FOR PURPOSES OF THE
INVESTMENT COMPANY ACT, ACTING FOR ITS OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH
RESPECT TO WHICH SUCH INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE EXERCISES SOLE
INVESTMENT DISCRETION, EACH OF WHICH IS A QUALIFIED PURCHASER, AND NONE OF
WHICH ARE A U.S. PERSON OR A U.S. RESIDENT, IN OFFSHORE TRANSACTIONS IN
RELIANCE ON REGULATION S, AND, IN EACH CASE, IN COMPLIANCE WITH THE
CERTIFICATIONS AND OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO
HEREIN AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR THE UNITED STATES AND
ANY OTHER RELEVANT JURISDICTION.  THE
INITIAL PURCHASER AND EACH SUBSEQUENT TRANSFEREE TAKING DELIVERY OF THIS NOTE
OR AN INTEREST IN THIS NOTE WILL BE DEEMED TO HAVE MADE THE APPLICABLE
REPRESENTATIONS AND AGREEMENTS REFERRED TO IN THE INDENTURE.  EACH INITIAL PURCHASER AND EACH SUBSEQUENT
TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN INTEREST IN THIS NOTE IN THE FORM OF
AN INTEREST IN A REGULATION S GLOBAL NOTE OR A RULE 144A GLOBAL NOTE WILL BE
REQUIRED TO DELIVER A TRANSFER CERTIFICATE IN THE FORM REQUIRED BY THE
INDENTURE AND WILL BE DEEMED OR REQUIRED TO MAKE THE APPLICABLE REPRESENTATIONS
AND AGREEMENTS REFERRED TO IN THE INDENTURE.

 

ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING WILL BE OF NO FORCE AND EFFECT AND WILL BE VOID AB INITIO AND WILL
NOT OPERATE TO TRANSFER ANY RIGHTS TO THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE, NOTWITHSTANDING 

 

 

ANY INSTRUCTIONS TO THE CONTRARY TO THE CO-ISSUERS,
THE INDENTURE TRUSTEE OR ANY INTERMEDIARY.

 

THE CO-ISSUERS MAY REQUIRE
ANY HOLDER OF THIS NOTE WHO IS DETERMINED NOT TO HAVE BEEN (I) IF THIS
NOTE IS ACQUIRED IN THE UNITED STATES, BOTH A QUALIFIED INSTITUTIONAL BUYER AND
A QUALIFIED PURCHASER OR (II) IF THIS NOTE WAS ACQUIRED OUTSIDE OF THE
UNITED STATES, BOTH A QUALIFIED PURCHASER AND NEITHER A U.S. PERSON NOR A U.S.
RESIDENT AT THE TIME OF ACQUISITION OF THIS NOTE TO SELL THIS NOTE TO A PERSON
WHO IS (I) BOTH A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (II) A QUALIFIED
PURCHASER AND NEITHER A U.S. PERSON NOR A U.S. RESIDENT IN A TRANSACTION
MEETING THE REQUIREMENTS OF REGULATION S.

 

THE OFFERED NOTES MAY NOT
BE SOLD TO ANY RESIDENT OF THE REPUBLIC OF IRELAND.

 

[THIS NOTE HAS BEEN
ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES.  THE ISSUE PRICE,
AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE
OBTAINED BY WRITING TO THE SERVICER AT ITS ADDRESS SET FORTH IN THE
INDENTURE.](11)

 

THIS NOTE IS A GLOBAL
NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”), A NEW YORK
CORPORATION, 55 WATER STREET, NEW YORK, NEW YORK 10004, OR A NOMINEE
THEREOF.  THIS NOTE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
THE CO-ISSUERS
OR THE REGISTRAR, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC, AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE
THE REGISTERED OWNER, CEDE & CO., HAS AN INTEREST HEREIN.

 

(11) Insert as applicable.

 

 

RULE 144A GLOBAL NOTE

SERIES 2007-1 SENIOR
NOTE CLASS A-2-II-A

 

	
  No. [       ]

  	
   

  	
  $[                    ]

  

 

SEE REVERSE FOR CERTAIN
CONDITIONS

 

CUSIP
Number: 037898 AB9

ISIN
Number: US037898AB95

 

APPLEBEE’S ENTERPRISES
LLC

APPLEBEE’S IP LLC

APPLEBEE’S RESTAURANTS NORTH LLC

APPLEBEE’S RESTAURANTS WEST LLC

APPLEBEE’S RESTAURANTS TEXAS LLC

APPLEBEE’S RESTAURANTS INC.

APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC

 APPLEBEE’S RESTAURANTS VERMONT, INC.

APPLEBEE’S RESTAURANTS KANSAS LLC

 

SERIES 2007-1 6.4267% FIXED RATE TERM SENIOR NOTE, CLASS A-2-II-A

 

                APPLEBEE’S
ENTERPRISES LLC, a limited liability company formed under the laws of the State of
Delaware, APPLEBEE’S
IP LLC, a
limited liability company formed under the laws of the State of Delaware, APPLEBEE’S RESTAURANTS NORTH LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS WEST LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS TEXAS LLC, a limited liability company formed under the laws
of the State of Texas, APPLEBEE’S RESTAURANTS INC., a corporation incorporated under the laws of the
State of Kansas, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS VERMONT, INC., a corporation incorporated under the laws of the
State of Vermont and APPLEBEE’S RESTAURANTS KANSAS LLC, a limited liability company formed under the laws
of the State of Kansas (herein
referred to, collectively, as the “Co-Issuers”), for value received, hereby
jointly and severally promise to pay to CEDE & CO. or registered
assigns, the principal sum of [                              ]
($[                    ])
as provided below and in the
Indenture referred to herein. Payments of principal shall be payable in the amounts and at the times set forth in the
Indenture described herein; provided, however, that the entire
unpaid principal amount of this Note shall be due on the Payment Date (as
defined below) occurring in December 2037 (the “Series 2007-1 Legal Final Maturity Date”). The
Co-Issuers will pay interest on this Series 2007-1 Fixed Rate Term
Senior Note, Class A-2-II-A (this “Note”) at the Series 2007-1
Class A-2-II-A Note Initial Interest Rate, as such rate may be adjusted in
accordance with the terms of the Indenture, for each Interest Accrual Period in
accordance with the terms of the Indenture. Such interest will be payable in
arrears on each Payment Date, which will be on the 20th day (or, if such 20th day is not a Business 

 

 

Day, the next succeeding Business Day) of each calendar
month (each, a “Payment
Date”), commencing on the Payment
Date occurring in January 2008. 
Such amounts due on this Note will accrue for each Payment Date with respect to (i) initially,
the period from and including November 29, 2007 to but excluding the Payment Date occurring in January 2008
(which pursuant to Section 16.12 of the Base Indenture and Section 7.16
of the Series 2007-1 Supplement shall be January 22, 2008) and (ii) thereafter,
the period commencing on and including a Payment Date and ending on but excluding the next succeeding
Payment Date (each, an “Interest Accrual Period”), subject
to the terms set forth in the Indenture. Such amounts due on this Note with
respect to the Note (and interest on any defaulted
payments of amounts due on this Note at the same rate) will be computed in accordance
with the Indenture. In addition, under the circumstances set forth in the Indenture,
the Co-Issuers shall also pay contingent
additional interest on this Note in the form of the Series 2007-1 Class A-2-II
Contingent Additional Interest or the Series 2007-1 Class A-2 Post-ARD Contingent
Additional Interest, as applicable, which shall be computed and shall be payable in the amounts and
at the times set forth in the Indenture.

 

The principal of and
interest on this Note are payable in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Co-Issuers with respect to this Note
shall be applied as provided in the Indenture.

 

This Note is subject to
mandatory and optional principal prepayments and mandatory liquidation
(referred to in the Indenture as the “Auction Call Redemption”), as set
forth in the Indenture.

 

Interests
in this Note are exchangeable or transferable in whole or in part for interests in a
Regulation S Global Note; provided that such transfer or exchange
complies with the applicable provisions of the Indenture relating to the transfer of
the Notes. Interests in this Note in certain circumstances may also be exchangeable or
transferable in whole but not in part for duly executed and issued registered
Definitive Notes; provided that such transfer or exchange complies with Article II
of the Base Indenture.

 

Reference is made to
the further provisions of this Note set forth on the reverse hereof, which shall have
the same effect as though fully set forth on the face of this Note. Although a summary of
certain provisions of the Indenture is set forth below and on the reverse hereof and made a part
hereof, this Note does not purport to summarize the Indenture and reference is made to
the Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Co-Issuers and the Indenture Trustee. A copy of the Indenture may be
requested from the Indenture Trustee by writing to the Indenture Trustee at: Wells Fargo
Bank, National Association, Sixth Street and Marquette Avenue, MAC N9311-161,
Minneapolis, MN 55479, Attn:
Corporate Trust Services/Asset Backed Administration. To the extent not defined
herein, the
capitalized terms used herein have the meanings ascribed to them in the
Indenture (as defined on the reverse hereof).

 

 

Subject to the next
following paragraph, the Co-Issuers hereby certify and declare that all acts,
conditions and things required to be done and performed and to have happened
prior to the creation of
this Note and to constitute it as the valid obligation of the Co-Issuers enforceable in accordance with its terms, have
been done and performed and have happened in due compliance with all applicable laws and in accordance with the terms
of the Indenture.

 

Unless the certificate
of authentication hereon has been executed by the Indenture Trustee whose name
appears below by manual or facsimile signature, this Note shall not be entitled
to any benefit under the Indenture referred to on the reverse hereof, or be
valid or obligatory for any purpose.

 

[Remainder of page intentionally
left blank]

 

 

                IN WITNESS WHEREOF, the Co-Issuers have caused this Note to be duly
executed.

 

 

Dated:       [                ]

 

	
   

  	
   

  
	
   

  	
  APPLEBEE’S ENTERPRISES LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S IP LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS NORTH LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS WEST 

  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS TEXAS LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
				

 

 

	
   

  	
  APPLEBEE’S
  RESTAURANTS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS MID-

      ATLANTIC LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS VERMONT,

  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS KANSAS LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
				

 

 

CERTIFICATE OF
AUTHENTICATION

 

This is one of the Series 2007-1 Notes
issued under the within-mentioned Indenture.

 

 

	
   

  	
  WELLS FARGO BANK, NATIONAL 

     ASSOCIATION, as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Authorized
  Signatory

  
				

 

 

[REVERSE OF NOTE]

 

This
Note is one of a duly authorized issue of Series 2007-1 Fixed Rate Term
Senior Notes, Class A-2-II-A of the Co-Issuers designated as their Series 2007-1
Fixed Rate Term Senior Notes, Class A-2-II-A (herein called the “Series 2007-1
Notes”) all issued under (i) a Base Indenture, dated as of November 29,
2007 (such
Base Indenture, as amended, supplemented or modified, is herein called the “Base
Indenture”), among the Co-Issuers
and Wells Fargo Bank, National Association as indenture trustee (the “Indenture
Trustee”, which term includes any successor Indenture Trustee under the
Base Indenture), and (ii) a Series 2007-1 Supplement to the Base Indenture, dated as of November 29,
2007 (such Series 2007-1 Supplement, as amended, supplemented or modified from
time to time, is herein called the (“Series 2007-1 Supplement”), among the Co-Issuers and the
Indenture Trustee. The Base Indenture, Series 2007-1
Supplement and such other Series Supplement or Supplemental Indenture as
may be executed from time to time are
referred to herein as the “Indenture”. The Series 2007-1 Notes are
subject to all terms of the Indenture.
All terms used in this Note that are defined in the Indenture, as supplemented,
modified or amended, shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented, modified or amended.

 

The Series 2007-1
Notes are and will be secured by the Collateral pledged as security therefor as
provided in the Indenture and in the respective Guaranty and Collateral
Agreements.

 

The Notes will be
issued in minimum denominations of $200,000 and integral multiples of $ 1,000 in
excess thereof.

 

As provided for in the
Indenture, subject to certain specified conditions, the Series 2007-1
Notes may be prepaid, in whole or in part, at the option of the Co-Issuers. In
addition, the Series 2007-1 Notes are subject to mandatory principal
prepayment provisions as provided for in the Indenture. With certain
exceptions, the Co-Issuers will be obligated to pay the Make-Whole Amount relating to the Series 2007-1
Notes on any prepayment of principal of any Series 2007-1 Notes prior to
the Series 2007-1 Anticipated Prepayment Date as described in the
Indenture. As described above, the entire unpaid principal amount of this Note
shall be due and payable on the Series 2007-1 Legal Final Maturity Date. All payments of
principal relating to any Class of Series 2007-1 Notes will be made pro
rata to the Holders of such Class of Series 2007-1 Notes.

 

Principal of and
interest on this Note which is payable on a Payment Date or on any date on
which payments are permitted to be made as provided for in the Indenture shall
be paid
to the Person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the applicable Record Date.

 

Interest
and contingent additional interest, if any, will each accrue on the Series 2007-1 Notes at the
rates set forth in the Indenture. The interest and contingent additional interest, if any, will
be computed on the basis set forth in the Indenture. The amount of interest
payable on the Series 2007-1 Notes on each Payment Date will be calculated
as set forth in the Indenture.

 

 

Payments
of principal of and interest on this Note are subordinated to the payment of certain other amounts
in accordance with the Priority of Payments in the Indenture.

 

If an
Event of Default shall occur and be continuing, this Note may become or be
declared due and payable in the manner and with the effect provided in the
Indenture.

 

Amounts
payable in respect of this Note shall be made by wire transfer of immediately available funds
to a Dollar account maintained by the Noteholder or its nominee, subject to the
terms set forth in the Indenture.

 

As
provided in the Indenture and subject to certain limitations set forth therein,
the transfer of this Note may be registered on the Note Register upon surrender
of this Note for registration of transfer at the office or agency designated by
the Co-Issuers pursuant to the Indenture, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Series 2007-1 Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an “eligible guarantor
institution”
meeting the requirements of the Note Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”)
or such
other “signature guarantee program” as may be determined by the Note Registrar
in addition
to, or in substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934,
as amended, and accompanied by such other documents as the Indenture Trustee
and the Note
Registrar may require and as may be required by the Indenture, and thereupon
one or more new
Series 2007-1 Notes of authorized denominations in the same aggregate
principal amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.

 

Each Holder of Series 2007-1
Notes, by acceptance of a Series 2007-1 Note, covenants and agrees
that by accepting the benefits of the Indenture that prior to the date that is one year and one day
after the payment in full of the latest maturing note issued under the Indenture, such Series 2007-1
Noteholder will not institute against, or join with any other Person in instituting against,
any Securitization Entity any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or
other proceedings, under any federal Insolvency Law; provided, however, that nothing herein shall constitute
a waiver of any right to indemnification,
reimbursement or other payment from the Securitization Entities pursuant to the Indenture or any other
Transaction Document

 

It is
the intent of the Co-Issuers and each Holder of Series 2007-1 Notes that,
for federal,
state and local income and franchise tax purposes only, the Series 2007-1
Notes will evidence
indebtedness of the Co-Issuers secured by the Collateral. Each Holder of Series 2007-1
Notes, by the acceptance of this Note, agrees to treat this Note (or beneficial
interests herein) for purposes of federal, state and local income or franchise taxes and any
other tax imposed on or measured by income, as indebtedness of the Co-Issuers or,
if any Co-Issuer is treated as a division of another entity, such other entity.

 

 

The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Co-Issuers and the rights of the Holders of
Series 2007-1 Notes under the Indenture at any time by the Co-Issuers with the consent of the
Aggregate Controlling Party or each Series Controlling Party (as applicable) and without
the consent of any Holders of Series 2007-1 Notes. The Indenture also contains provisions
permitting the Aggregate Controlling Party or each Series Controlling
Party (as applicable) to waive compliance by the Co-Issuers with certain
provisions of the Indenture without the consent of any Holders of Series 2007-1
Notes. Any such consent or waiver of this Note (or any one or more predecessor Notes) shall
be conclusive and binding upon the Holder of this Note and all future Holders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this Note.

 

The
term “Co-Issuer” as used in this Note includes any successor to the Co-Issuers under the
Indenture.

 

The Series 2007-1
Notes are issuable only in registered form in denominations as provided in the
Indenture, subject to certain limitations set forth therein.

 

THIS NOTE
AND THE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED 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 OF NEW YORK).

 

No
reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the
obligation of the Co-Issuers, which is absolute and unconditional, to pay the principal of and interest on this Note at the
times, place and rate, and in the coin or currency herein prescribed.

 

 

ASSIGNMENT

 

Social
Security or taxpayer I.D. or other identifying number of assignee:                                            

 

 

FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

 

 

	
   

  
	
  (name and address of assignee)

  

 

 

The
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints                               ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
  (12)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
       Signature
  Guaranteed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

 

	
  (12) NOTE: The signature to this assignment must
  correspond with the name of the registered owner as it appears on the face of
  the  

  
	
     within Note,
  without alteration, enlargement or any change whatsoever.

  

 

 

SCHEDULE
OF EXCHANGES IN RULE 144A GLOBAL NOTE

 

                The initial principal balance of
this Rule 144A Global Note is $[                  ].
The following exchanges of an interest in this Rule 144A Global Note for
an interest in a corresponding Regulation S Global Note have been made:

 

 

	
  Date

  	
   

  	
  Amount of Increase

  (or Decrease) in the

  Principal Amount of

  this Rule 144A

  Global Note

  	
   

  	
  Remaining Principal

  Amount of this Rule

  144A Global Note

  following the Increase

  or Decrease

  	
   

  	
  Signature of

  Authorized Officer

  of Indenture

  Trustee of Note

  Registrar

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT A-2-II-2

 

FORM OF REGULATION
S SERIES 2007-1 CLASS A-2-II-A GLOBAL NOTE

 

                THIS
SERIES 2007-1 FIXED RATE TERM SENIOR NOTE, CLASS A-2-II-A DUE 2037
(THIS “NOTE”)
HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY
STATE OR OTHER RELEVANT JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES LLC,
APPLEBEE’S IP LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S RESTAURANTS
WEST LLC, APPLEBEE’S RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS INC.,
APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, APPLEBEE’S RESTAURANTS VERMONT, INC.
AND APPLEBEE’S RESTAURANTS KANSAS LLC, (THE “CO-ISSUERS”) HAS BEEN REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).  THIS NOTE OR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO EITHER THE  INITIAL PURCHASER
OR A SUBSEQUENT TRANSFEREE WHO IS BOTH A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) AND A “QUALIFIED PURCHASER” (WITHIN
THE MEANING OF THE INVESTMENT COMPANY ACT), ACTING FOR ITS OWN ACCOUNT OR ONE
OR MORE ACCOUNTS WITH RESPECT TO WHICH THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE EXERCISES SOLE INVESTMENT DISCRETION, EACH OF WHICH IS BOTH A
QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER, AND NONE OF WHICH ARE (1) A
DEALER OF THE TYPE DESCRIBED IN PARAGRAPH (a)(1)(ii) OF RULE 144A UNLESS
IT OWNS AND INVESTS ON A DISCRETIONARY BASIS NOT LESS THAN $25,000,000 IN
SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED TO IT, (2) A
PARTICIPANT-DIRECTED EMPLOYEE PLAN, SUCH AS A 401(k) PLAN, OR ANY OTHER
TYPE OF PLAN REFERRED TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF
RULE 144A, OR A TRUST FUND REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE
144A THAT HOLDS THE ASSETS OF SUCH A PLAN, UNLESS INVESTMENT DECISIONS WITH
RESPECT TO THE PLAN ARE MADE SOLELY BY THE FIDUCIARY, TRUSTEE OR SPONSOR OF
SUCH PLAN, (3) FORMED OR CAPITALIZED FOR THE SPECIFIC PURPOSE OF INVESTING
IN THE CO-ISSUERS (EXCEPT WHERE EACH BENEFICIAL OWNER IS A QUALIFIED
PURCHASER), (4) A CORPORATION, PARTNERSHIP, COMMON TRUST FUND, SPECIAL
TRUST, PENSION FUND OR RETIREMENT PLAN IN WHICH THE SHAREHOLDERS, EQUITY
OWNERS, PARTNERS, BENEFICIARIES, BENEFICIAL OWNERS OR PARTICIPANTS, AS
APPLICABLE, MAY DESIGNATE THE PARTICULAR INVESTMENTS TO BE MADE, (5) IF
FORMED ON OR BEFORE APRIL 30, 1996, AN INVESTMENT COMPANY THAT RELIES ON THE
EXCLUSION FROM THE DEFINITION OF “INVESTMENT 

 

 

COMPANY” PROVIDED BY SECTION 3(c)(7) OF THE
INVESTMENT COMPANY ACT (OR A FOREIGN INVESTMENT COMPANY UNDER SECTION 7(d) THEREOF
RELYING ON SECTION 3(c)(7) WITH RESPECT TO THOSE OF ITS HOLDERS THAT
ARE U.S. PERSONS), UNLESS, WITH RESPECT TO ITS TREATMENT AS A QUALIFIED
PURCHASER, IT HAS, IN THE MANNER REQUIRED BY SECTION 2(a)(51)(C) OF
THE INVESTMENT COMPANY ACT AND THE RULES AND REGULATIONS THEREUNDER, RECEIVED
THE CONSENT OF ITS BENEFICIAL OWNERS THAT ACQUIRED THEIR INTERESTS ON OR BEFORE
APRIL 30, 1996 OR (6) AN ENTITY THAT, IMMEDIATELY SUBSEQUENT TO ITS
PURCHASE OR OTHER ACQUISITION OF A BENEFICIAL INTEREST IN THIS NOTE, WILL HAVE
INVESTED MORE THAN 40% OF ITS ASSETS IN BENEFICIAL INTERESTS IN THIS NOTE
AND/OR IN OTHER SECURITIES OF THE CO-ISSUERS (UNLESS ALL OF THE BENEFICIAL
OWNERS OF SUCH ENTITY’S SECURITIES ARE QUALIFIED PURCHASERS) TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
THE EXEMPTION FROM SECURITIES ACT REGISTRATION PROVIDED BY RULE 144A OR (II) OUTSIDE
THE UNITED STATES TO THE INITIAL PURCHASER OR A SUBSEQUENT TRANSFEREE WHO IS A
QUALIFIED PURCHASER AND NEITHER A “U.S. PERSON” AS DEFINED IN REGULATION S
UNDER THE SECURITIES ACT (“REGULATION
S”) NOR A “U.S. RESIDENT” AS DEFINED FOR PURPOSES OF THE
INVESTMENT COMPANY ACT, ACTING FOR ITS OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH
RESPECT TO WHICH SUCH INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE EXERCISES SOLE
INVESTMENT DISCRETION, EACH OF WHICH IS A QUALIFIED PURCHASER, AND NONE OF WHICH
ARE A U.S. PERSON OR A U.S. RESIDENT, IN OFFSHORE TRANSACTIONS IN RELIANCE ON
REGULATION S, AND, IN EACH CASE, IN COMPLIANCE WITH THE CERTIFICATIONS AND
OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO HEREIN AND ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OR THE UNITED STATES AND ANY OTHER
RELEVANT JURISDICTION.  THE INITIAL
PURCHASER AND EACH SUBSEQUENT TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN
INTEREST IN THIS NOTE WILL BE DEEMED TO HAVE MADE THE APPLICABLE
REPRESENTATIONS AND AGREEMENTS REFERRED TO IN THE INDENTURE.  EACH INITIAL PURCHASER AND EACH SUBSEQUENT
TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN INTEREST IN THIS NOTE IN THE FORM OF
AN INTEREST IN A REGULATION S GLOBAL NOTE OR A RULE 144A GLOBAL NOTE WILL BE
REQUIRED TO DELIVER A TRANSFER CERTIFICATE IN THE FORM REQUIRED BY THE
INDENTURE AND WILL BE DEEMED OR REQUIRED TO MAKE THE APPLICABLE REPRESENTATIONS
AND AGREEMENTS REFERRED TO IN THE INDENTURE.

 

ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING WILL BE OF NO FORCE AND EFFECT AND WILL BE VOID AB INITIO AND WILL
NOT OPERATE TO TRANSFER ANY RIGHTS TO THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE, NOTWITHSTANDING

 

 

ANY INSTRUCTIONS TO THE CONTRARY TO THE CO-ISSUERS,
THE INDENTURE TRUSTEE OR ANY INTERMEDIARY.

 

THE CO-ISSUERS MAY REQUIRE
ANY HOLDER OF THIS NOTE WHO IS DETERMINED NOT TO HAVE BEEN (I) IF THIS
NOTE IS ACQUIRED IN THE UNITED STATES, BOTH A QUALIFIED INSTITUTIONAL BUYER AND
A QUALIFIED PURCHASER OR (II) IF THIS NOTE WAS ACQUIRED OUTSIDE OF THE
UNITED STATES, BOTH A QUALIFIED PURCHASER AND NEITHER A U.S. PERSON NOR A U.S.
RESIDENT AT THE TIME OF ACQUISITION OF THIS NOTE TO SELL THIS NOTE TO A PERSON
WHO IS (I) BOTH A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (II) A QUALIFIED
PURCHASER AND NEITHER A U.S. PERSON NOR A U.S. RESIDENT IN A TRANSACTION
MEETING THE REQUIREMENTS OF REGULATIONS.

 

THE OFFERED NOTES MAY NOT
BE SOLD TO ANY RESIDENT OF THE REPUBLIC OF IRELAND.

 

[THIS NOTE HAS BEEN
ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES.  THE ISSUE PRICE,
AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE
OBTAINED BY WRITING TO THE SERVICER AT ITS ADDRESS SET FORTH IN THE
INDENTURE.](13)

 

UNTIL 40 DAYS AFTER THE
INITIAL PURCHASER NOTIFIES THE CO-ISSUERS THAT THE RESALE OF THE OFFERED NOTES
HAS BEEN COMPLETED (THE “RESTRICTED
PERIOD”) IN CONNECTION WITH THE OFFERING OF THE NOTES IN THE
UNITED STATES FROM OUTSIDE OF THE UNITED STATES, THE SALE, PLEDGE OR TRANSFER
OF THIS NOTE IS SUBJECT TO CERTAIN CONDITIONS AND RESTRICTIONS.  THE HOLDER HEREOF, BY PURCHASING OR OTHERWISE
ACQUIRING THIS NOTE, ACKNOWLEDGES THAT SUCH HOLDER IS A QUALIFIED PURCHASER,
AND THAT THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND AGREES
FOR THE BENEFIT OF THE CO-ISSUERS THAT THIS NOTE MAY BE TRANSFERRED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY TO A QUALIFIED PURCHASER AND IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OF THE STATES,
TERRITORIES AND POSSESSIONS OF THE UNITED STATES GOVERNING THE OFFER AND SALE
OF SECURITIES, AND PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD, ONLY (I) IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT OR (II) PURSUANT TO AND IN ACCORDANCE WITH RULE 144A UNDER THE
SECURITIES ACT.

 

(13) Insert as applicable.

 

 

THIS NOTE IS A GLOBAL
NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”), A NEW YORK
CORPORATION, 55 WATER STREET, NEW YORK, NEW YORK 10004, OR A NOMINEE
THEREOF.  THIS NOTE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
THE CO-ISSUERS
OR THE REGISTRAR, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC, AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE
THE REGISTERED OWNER, CEDE & CO., HAS AN INTEREST HEREIN.

 

 

REGULATION S GLOBAL
NOTE

SERIES 2007-1 SENIOR
NOTE CLASS A-2-II-A

 

	
  No. [       ]

  	
   

  	
  $[                    ]

  

 

SEE REVERSE FOR CERTAIN
CONDITIONS

 

CUSIP
Number: U00540 AB7

ISIN
Number: USU00540AB72

 

APPLEBEE’S ENTERPRISES
LLC

APPLEBEE’S IP LLC

APPLEBEE’S RESTAURANTS NORTH LLC

APPLEBEE’S RESTAURANTS WEST LLC

APPLEBEE’S RESTAURANTS TEXAS LLC

APPLEBEE’S RESTAURANTS INC.

APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC

 APPLEBEE’S RESTAURANTS VERMONT, INC.

APPLEBEE’S RESTAURANTS KANSAS LLC

 

SERIES 2007-1 6.4267% FIXED RATE TERM SENIOR NOTE, CLASS A-2-II-A

 

                APPLEBEE’S
ENTERPRISES LLC, a limited liability company formed under the laws of the State of
Delaware, APPLEBEE’S
IP LLC, a
limited liability company formed under the laws of the State of Delaware, APPLEBEE’S RESTAURANTS NORTH LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS WEST LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS TEXAS LLC, a limited liability company formed under the laws
of the State of Texas, APPLEBEE’S RESTAURANTS INC., a corporation incorporated under the laws of the
State of Kansas, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS VERMONT, INC., a corporation incorporated under the laws of the
State of Vermont and APPLEBEE’S RESTAURANTS KANSAS LLC, a limited liability company formed under the laws
of the State of Kansas (herein
referred to, collectively, as the “Co-Issuers”), for value received, hereby
jointly and severally promise to pay to CEDE & CO. or registered
assigns, the principal sum of [                              ]
($[                    ])
as provided below and in the
Indenture referred to herein. Payments of principal shall be payable in the amounts and at the times set forth in the
Indenture described herein; provided, however, that the entire
unpaid principal amount of this Note shall be due on the Payment Date (as
defined below) occurring in December 2037 (the “Series 2007-1 Legal Final Maturity Date”).  The Co-Issuers will pay interest on this
Series 2007-1 Fixed Rate Term Senior Note, Class A-2-II-A (this “Note”)
at the Series 2007-1 Class A-2-II-A Note Initial Interest Rate, as
such rate may be adjusted in accordance with the terms of the Indenture, for
each Interest Accrual Period in accordance with the terms of the Indenture.  Such interest will be payable in arrears on 

 

 

each
Payment Date, which will be on the 20th day (or, if such 20th day is not a Business Day, the next succeeding Business Day)
of each calendar month (each, a “Payment Date”), commencing on the Payment Date occurring
in January 2008.  Such amounts due
on this Note will accrue for each Payment
Date with respect to (i) initially, the period from and including November 29, 2007 to but excluding the Payment Date
occurring in January 2008 (which pursuant to Section 16.12 of
the Base Indenture and Section 7.16 of the Series 2007-1
Supplement shall be January 22, 2008) and (ii) thereafter, the period
commencing on and including a Payment Date and ending on but excluding the next succeeding Payment Date (each, an “Interest
Accrual Period”), subject to the terms set forth in the
Indenture. Such amounts due on this Note with respect to the Note (and interest
on any defaulted payments of amounts due on
this Note at the same rate) will be computed in accordance with the
Indenture. In addition, under the circumstances set forth in the Indenture, the Co-Issuers shall also pay contingent
additional interest on this Note in the form of the Series 2007-1 Class A-2-II
Contingent Additional Interest or the Series 2007-1 Class A-2 Post-ARD Contingent
Additional Interest, as applicable, which shall be computed and shall be payable in the amounts and
at the times set forth in the Indenture.

 

The principal of and
interest on this Note are payable in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Co-Issuers with respect to this Note
shall be applied as provided in the Indenture.

 

This Note is subject to
mandatory and optional principal prepayments and mandatory liquidation
(referred to in the Indenture as the “Auction Call Redemption”), as set
forth in the Indenture.

 

Interests
in this Note are exchangeable or transferable in whole or in part for interests in a Regulation
S Global Note; provided that such transfer or exchange complies with the applicable
provisions of the Indenture relating to the transfer of the Notes. Interests in
this Note
in certain circumstances may also be exchangeable or transferable in whole but
not in part for
duly executed and issued registered Definitive Notes; provided that such
transfer or exchange complies with Article II of the Base Indenture.

 

Reference is made to
the further provisions of this Note set forth on the reverse hereof, which shall have
the same effect as though fully set forth on the face of this Note. Although a summary of
certain provisions of the Indenture is set forth below and on the reverse hereof and made a part
hereof, this Note does not purport to summarize the Indenture and reference is made to
the Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Co-Issuers and the Indenture Trustee. A copy of the Indenture may be
requested from the Indenture Trustee by writing to the Indenture Trustee at: Wells Fargo
Bank, National Association, Sixth Street and Marquette Avenue, MAC N9311-161,
Minneapolis, MN 55479, Attn:
Corporate Trust Services/Asset Backed Administration. To the extent not defined
herein, the
capitalized terms used herein have the meanings ascribed to them in the
Indenture (as defined on the reverse hereof).

 

 

Subject to the next
following paragraph, the Co-Issuers hereby certify and declare that all acts,
conditions and things required to be done and performed and to have happened
prior to the creation of
this Note and to constitute it as the valid obligation of the Co-Issuers enforceable in accordance with its terms, have
been done and performed and have happened in due compliance with all applicable laws and in accordance with the terms
of the Indenture.

 

Unless the certificate
of authentication hereon has been executed by the Indenture Trustee whose name
appears below by manual or facsimile signature, this Note shall not be entitled
to any benefit under the Indenture referred to on the reverse hereof, or be
valid or obligatory for any purpose.

 

[Remainder of page intentionally
left blank]

 

 

                IN WITNESS WHEREOF, the Co-Issuers have caused this Note to be duly
executed.

 

 

Dated:      [                    ]

 

 

	
   

  	
  APPLEBEE’S ENTERPRISES LLC 

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
         Name: 

  	
   

  
	
         Title:

  	
   

  
				

 

 

	
   

  	
  APPLEBEE’S IP LLC

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
         Name: 

  	
   

  
	
         Title:

  	
   

  
				

 

 

	
   

  	
  APPLEBEE’S
  RESTAURANTS NORTH LLC

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
         Name: 

  	
   

  
	
         Title:

  	
   

  
				

 

 

	
   

  	
  APPLEBEE’S
  RESTAURANTS WEST 

  LLC

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
         Name: 

  	
   

  
	
         Title:

  	
   

  
				

 

 

	
   

  	
  APPLEBEE’S
  RESTAURANTS TEXAS LLC

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
         Name: 

  	
   

  
	
         Title:

  	
   

  
				

 

 

	
   

  	
  APPLEBEE’S
  RESTAURANTS INC.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
         Name: 

  	
   

  
	
         Title:

  	
   

  
				

 

 

	
   

  	
  APPLEBEE’S RESTAURANTS MID-

     ATLANTIC LLC

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
         Name: 

  	
   

  
	
         Title:

  	
   

  
				

 

 

	
   

  	
  APPLEBEE’S
  RESTAURANTS VERMONT, 

  INC.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
         Name: 

  	
   

  
	
         Title:

  	
   

  
				

 

 

	
   

  	
  APPLEBEE’S
  RESTAURANTS KANSAS LLC

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
         Name: 

  	
   

  
	
         Title:

  	
   

  
				

 

 

CERTIFICATE OF
AUTHENTICATION

 

This is one of the Series 2007-1 Notes
issued under the within-mentioned Indenture.

 

 

	
   

  	
  WELLS FARGO BANK, NATIONAL 

     ASSOCIATION, as Indenture Trustee

  
	
   

  	
   

  
	 
	
  By:

  	
   

  	
   

  	 

	 
	
         Authorized
  Signatory 

  	
   

  	 

					

 

 

 [REVERSE OF NOTE]

 

This
Note is one of a duly authorized issue of Series 2007-1 Fixed Rate Term
Senior Notes, Class A-2-II-A of the Co-Issuers designated as their Series 2007-1
Fixed Rate Term Senior Notes, Class A-2-II-A (herein called the “Series 2007-1
Notes”) all issued under (i) a Base Indenture, dated as of November 29,
2007 (such
Base Indenture, as amended, supplemented or modified, is herein called the “Base
Indenture”), among the Co-Issuers
and Wells Fargo Bank, National Association as indenture trustee (the “Indenture
Trustee”, which term includes any successor Indenture Trustee under the
Base Indenture), and (ii) a Series 2007-1 Supplement to the Base Indenture, dated as of November 29,
2007 (such Series 2007-1 Supplement, as amended, supplemented or modified from time
to time, is herein called the (“Series 2007-1
Supplement”), among the Co-Issuers and the Indenture Trustee. The Base Indenture, Series 2007-1
Supplement and such other Series Supplement or Supplemental Indenture as
may be executed from time to time are
referred to herein as the “Indenture”. The Series 2007-1 Notes are
subject to all terms of the Indenture.
All terms used in this Note that are defined in the Indenture, as supplemented,
modified or amended, shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented, modified or amended.

 

The Series 2007-1
Notes are and will be secured by the Collateral pledged as security therefor as
provided in the Indenture and in the respective Guaranty and Collateral
Agreements.

 

The Notes will be
issued in minimum denominations of $200,000 and integral multiples of $ 1,000 in
excess thereof.

 

As provided for in the
Indenture, subject to certain specified conditions, the Series 2007-1
Notes may be prepaid, in whole or in part, at the option of the Co-Issuers. In
addition, the Series 2007-1 Notes are subject to mandatory principal
prepayment provisions as provided for in the Indenture. With certain
exceptions, the Co-Issuers will be obligated to pay the Make-Whole Amount relating to the Series 2007-1
Notes on any prepayment of principal of any Series 2007-1 Notes prior to
the Series 2007-1 Anticipated Prepayment Date as described in the
Indenture. As described above, the entire unpaid principal amount of this Note
shall be due and payable on the Series 2007-1 Legal Final Maturity Date. All payments of
principal relating to any Class of Series 2007-1 Notes will be made pro
rata to the Holders of such Class of Series 2007-1 Notes.

 

Principal of and
interest on this Note which is payable on a Payment Date or on any date on
which payments are permitted to be made as provided for in the Indenture shall
be paid
to the Person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the applicable Record Date.

 

Interest
and contingent additional interest, if any, will each accrue on the Series 2007-1 Notes at the
rates set forth in the Indenture. The interest and contingent additional interest, if any, will
be computed on the basis set forth in the Indenture. The amount of interest
payable on the Series 2007-1 Notes on each Payment Date will be calculated
as set forth in the Indenture.

 

 

Payments
of principal of and interest on this Note are subordinated to the payment of certain other amounts
in accordance with the Priority of Payments in the Indenture.

 

If an
Event of Default shall occur and be continuing, this Note may become or be
declared due and payable in the manner and with the effect provided in the
Indenture.

 

Amounts
payable in respect of this Note shall be made by wire transfer of immediately available
funds to a Dollar account maintained by the Noteholder or its nominee, subject
to the terms set forth in the Indenture.

 

As
provided in the Indenture and subject to certain limitations set forth therein,
the transfer of this Note may be registered on the Note Register upon surrender
of this Note for registration of transfer at the office or agency designated by
the Co-Issuers pursuant to the Indenture, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Series 2007-1 Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an “eligible guarantor
institution”
meeting the requirements of the Note Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”)
or such
other “signature guarantee program” as may be determined by the Note Registrar
in addition
to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended, and accompanied by such other documents as the
Indenture Trustee and the Note Registrar may require and as may be required by the
Indenture, and thereupon one or more new Series 2007-1 Notes of authorized
denominations in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.

 

Each Holder of Series 2007-1
Notes, by acceptance of a Series 2007-1 Note, covenants and agrees
that by accepting the benefits of the Indenture that prior to the date that is one year and one day
after the payment in full of the latest maturing note issued under the Indenture, such Series 2007-1
Noteholder will not institute against, or join with any other Person in instituting against,
any Securitization Entity any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or
other proceedings, under any federal Insolvency Law; provided, however, that nothing herein shall constitute
a waiver of any right to
indemnification, reimbursement or other payment from the Securitization
Entities pursuant to the Indenture
or any other Transaction Document

 

It is
the intent of the Co-Issuers and each Holder of Series 2007-1 Notes that,
for federal,
state and local income and franchise tax purposes only, the Series 2007-1
Notes will evidence
indebtedness of the Co-Issuers secured by the Collateral. Each Holder of Series 2007-1
Notes, by the acceptance of this Note, agrees to treat this Note (or beneficial
interests herein) for purposes of federal, state and local income or franchise taxes and any
other tax imposed on or measured by income, as indebtedness of the Co-Issuers or,
if any Co-Issuer is treated as a division of another entity, such other entity.

 

 

The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Co-Issuers and the rights of the Holders of
Series 2007-1 Notes under the Indenture at any time by the Co-Issuers with the consent of the
Aggregate Controlling Party or each Series Controlling Party (as applicable) and without
the consent of any Holders of Series 2007-1 Notes. The Indenture also contains provisions
permitting the Aggregate Controlling Party or each Series Controlling
Party (as applicable) to waive compliance by the Co-Issuers with certain
provisions of the Indenture without the consent of any Holders of Series 2007-1
Notes. Any such consent or waiver of this Note (or any one or more predecessor Notes) shall
be conclusive and binding upon the Holder of this Note and all future Holders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Note.

 

The
term “Co-Issuer” as used in this Note includes any successor to the Co-Issuers under the
Indenture.

 

The Series 2007-1
Notes are issuable only in registered form in denominations as provided in the
Indenture, subject to certain limitations set forth therein.

 

THIS NOTE
AND THE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED 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 OF NEW YORK).

 

No
reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the
obligation of the Co-Issuers, which is absolute and unconditional, to pay the principal of and interest on this Note at the
times, place and rate, and in the coin or currency herein prescribed.

 

 

ASSIGNMENT

 

Social
Security or taxpayer I.D. or other identifying number of assignee:                           

 

 

FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

 

 

	
   

  
	
  (name and address of assignee)

  

 

 

The
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints                               ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
  (14)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
                     Signature
  Guaranteed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
								

 

	
  (14) NOTE: The signature to this assignment must
  correspond with the name of the registered owner as it appears on the face of
  the  

  
	
    
  within Note, without alteration, enlargement or any change whatsoever.

  

 

 

SCHEDULE OF EXCHANGES IN
REGULATION S GLOBAL NOTE

 

                The initial principal balance of
this Regulation S Global Note is $[                  ].
The following exchanges of an interest in this Regulation S Global Note for an
interest in a corresponding Rule 144A Global Note have been made:

 

	
  Date

  	
   

  	
  Amount of Increase

  (or Decrease) in the

  Principal Amount of

  this Regulation S

  Global Note

  	
   

  	
  Remaining Principal

  Amount of this

  Regulation S Global

  Note following the

  Increase or Decrease

  	
   

  	
  Signature of

  Authorized Officer

  of Indenture

  Trustee of Note

  Registrar

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT A-2-II-3

 

FORM OF RULE 144A
SERIES 2007-1 CLASS A-2-II-X GLOBAL NOTE

 

THIS SERIES 2007-1 FIXED RATE TERM SENIOR NOTE, CLASS A-2-II-X
DUE 2037 (THIS “NOTE”)
HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY
STATE OR OTHER RELEVANT JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES LLC,
APPLEBEE’S IP LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S RESTAURANTS
WEST LLC, APPLEBEE’S RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS INC.,
APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, APPLEBEE’S RESTAURANTS VERMONT, INC.
AND APPLEBEE’S RESTAURANTS KANSAS LLC, (THE “CO-ISSUERS”) HAS BEEN REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).  THIS NOTE OR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO EITHER THE  INITIAL PURCHASER
OR A SUBSEQUENT TRANSFEREE WHO IS BOTH A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) AND A “QUALIFIED PURCHASER” (WITHIN
THE MEANING OF THE INVESTMENT COMPANY ACT), ACTING FOR ITS OWN ACCOUNT OR ONE
OR MORE ACCOUNTS WITH RESPECT TO WHICH THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE EXERCISES SOLE INVESTMENT DISCRETION, EACH OF WHICH IS BOTH A
QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER, AND NONE OF WHICH ARE (1) A
DEALER OF THE TYPE DESCRIBED IN PARAGRAPH (a)(1)(ii) OF RULE 144A UNLESS
IT OWNS AND INVESTS ON A DISCRETIONARY BASIS NOT LESS THAN $25,000,000 IN
SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED TO IT, (2) A
PARTICIPANT-DIRECTED EMPLOYEE PLAN, SUCH AS A 401(k) PLAN, OR ANY OTHER
TYPE OF PLAN REFERRED TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF
RULE 144A, OR A TRUST FUND REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE
144A THAT HOLDS THE ASSETS OF SUCH A PLAN, UNLESS INVESTMENT DECISIONS WITH
RESPECT TO THE PLAN ARE MADE SOLELY BY THE FIDUCIARY, TRUSTEE OR SPONSOR OF
SUCH PLAN, (3) FORMED OR CAPITALIZED FOR THE SPECIFIC PURPOSE OF INVESTING
IN THE CO-ISSUERS (EXCEPT WHERE EACH BENEFICIAL OWNER IS A QUALIFIED
PURCHASER), (4) A CORPORATION, PARTNERSHIP, COMMON TRUST FUND, SPECIAL
TRUST, PENSION FUND OR RETIREMENT PLAN IN WHICH THE SHAREHOLDERS, EQUITY OWNERS,
PARTNERS, BENEFICIARIES, BENEFICIAL OWNERS OR PARTICIPANTS, AS APPLICABLE, MAY DESIGNATE
THE PARTICULAR INVESTMENTS TO BE MADE, (5) IF FORMED ON OR BEFORE APRIL
30, 1996, AN INVESTMENT COMPANY THAT RELIES ON THE EXCLUSION FROM THE
DEFINITION OF “INVESTMENT

 

 

COMPANY” PROVIDED BY SECTION 3(c)(7) OF THE
INVESTMENT COMPANY ACT (OR A FOREIGN INVESTMENT COMPANY UNDER SECTION 7(d) THEREOF
RELYING ON SECTION 3(c)(7) WITH RESPECT TO THOSE OF ITS HOLDERS THAT
ARE U.S. PERSONS), UNLESS, WITH RESPECT TO ITS TREATMENT AS A QUALIFIED
PURCHASER, IT HAS, IN THE MANNER REQUIRED BY SECTION 2(a)(51)(C) OF
THE INVESTMENT COMPANY ACT AND THE RULES AND REGULATIONS THEREUNDER, RECEIVED
THE CONSENT OF ITS BENEFICIAL OWNERS THAT ACQUIRED THEIR INTERESTS ON OR BEFORE
APRIL 30, 1996 OR (6) AN ENTITY THAT, IMMEDIATELY SUBSEQUENT TO ITS
PURCHASE OR OTHER ACQUISITION OF A BENEFICIAL INTEREST IN THIS NOTE, WILL HAVE
INVESTED MORE THAN 40% OF ITS ASSETS IN BENEFICIAL INTERESTS IN THIS NOTE
AND/OR IN OTHER SECURITIES OF THE CO-ISSUERS (UNLESS ALL OF THE BENEFICIAL
OWNERS OF SUCH ENTITY’S SECURITIES ARE QUALIFIED PURCHASERS) TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
THE EXEMPTION FROM SECURITIES ACT REGISTRATION PROVIDED BY RULE 144A OR (II) OUTSIDE
THE UNITED STATES TO THE INITIAL PURCHASER OR A SUBSEQUENT TRANSFEREE WHO IS A
QUALIFIED PURCHASER AND NEITHER A “U.S. PERSON” AS DEFINED IN REGULATION S
UNDER THE SECURITIES ACT (“REGULATION
S”) NOR A “U.S. RESIDENT” AS DEFINED FOR PURPOSES OF THE
INVESTMENT COMPANY ACT, ACTING FOR ITS OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH
RESPECT TO WHICH SUCH INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE EXERCISES SOLE
INVESTMENT DISCRETION, EACH OF WHICH IS A QUALIFIED PURCHASER, AND NONE OF
WHICH ARE A U.S. PERSON OR A U.S. RESIDENT, IN OFFSHORE TRANSACTIONS IN
RELIANCE ON REGULATION S, AND, IN EACH CASE, IN COMPLIANCE WITH THE
CERTIFICATIONS AND OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO
HEREIN AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR THE UNITED STATES AND
ANY OTHER RELEVANT JURISDICTION.  THE
INITIAL PURCHASER AND EACH SUBSEQUENT TRANSFEREE TAKING DELIVERY OF THIS NOTE
OR AN INTEREST IN THIS NOTE WILL BE DEEMED TO HAVE MADE THE APPLICABLE
REPRESENTATIONS AND AGREEMENTS REFERRED TO IN THE INDENTURE.  EACH INITIAL PURCHASER AND EACH SUBSEQUENT
TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN INTEREST IN THIS NOTE IN THE FORM OF
AN INTEREST IN A REGULATION S GLOBAL NOTE OR A RULE 144A GLOBAL NOTE WILL BE
REQUIRED TO DELIVER A TRANSFER CERTIFICATE IN THE FORM REQUIRED BY THE
INDENTURE AND WILL BE DEEMED OR REQUIRED TO MAKE THE APPLICABLE REPRESENTATIONS
AND AGREEMENTS REFERRED TO IN THE INDENTURE.

 

ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING WILL BE OF NO FORCE AND EFFECT AND WILL BE VOID AB INITIO AND WILL
NOT OPERATE TO TRANSFER ANY RIGHTS TO THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE, NOTWITHSTANDING 

 

 

ANY INSTRUCTIONS TO THE CONTRARY TO THE CO-ISSUERS,
THE INDENTURE TRUSTEE OR ANY INTERMEDIARY.

 

THE CO-ISSUERS MAY REQUIRE
ANY HOLDER OF THIS NOTE WHO IS DETERMINED NOT TO HAVE BEEN (I) IF THIS
NOTE IS ACQUIRED IN THE UNITED STATES, BOTH A QUALIFIED INSTITUTIONAL BUYER AND
A QUALIFIED PURCHASER OR (II) IF THIS NOTE WAS ACQUIRED OUTSIDE OF THE
UNITED STATES, BOTH A QUALIFIED PURCHASER AND NEITHER A U.S. PERSON NOR A U.S.
RESIDENT AT THE TIME OF ACQUISITION OF THIS NOTE TO SELL THIS NOTE TO A PERSON
WHO IS (I) BOTH A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (II) A QUALIFIED
PURCHASER AND NEITHER A U.S. PERSON NOR A U.S. RESIDENT IN A TRANSACTION
MEETING THE REQUIREMENTS OF REGULATION S.

 

THE OFFERED NOTES MAY NOT
BE SOLD TO ANY RESIDENT OF THE REPUBLIC OF IRELAND.

 

[THIS NOTE HAS BEEN
ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES.  THE ISSUE PRICE,
AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE
OBTAINED BY WRITING TO THE SERVICER AT ITS ADDRESS SET FORTH IN THE
INDENTURE.](15)

 

THIS NOTE IS A GLOBAL
NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”), A NEW YORK
CORPORATION, 55 WATER STREET, NEW YORK, NEW YORK 10004, OR A NOMINEE
THEREOF.  THIS NOTE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
THE CO-ISSUERS
OR THE REGISTRAR, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC, AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE
THE REGISTERED OWNER, CEDE & CO., HAS AN INTEREST HEREIN.

 

(15) Insert as applicable.

 

 

RULE 144A GLOBAL NOTE

SERIES 2007-1 SENIOR
NOTE CLASS A-2-II-X

 

	
  No. [

  	
  $[                    ]

  

 

SEE REVERSE FOR CERTAIN
CONDITIONS

 

CUSIP
Number: 037898 AD5

ISIN
Number: US037898AD51

 

APPLEBEE’S ENTERPRISES
LLC

APPLEBEE’S IP LLC

APPLEBEE’S RESTAURANTS NORTH LLC

APPLEBEE’S RESTAURANTS WEST LLC

APPLEBEE’S RESTAURANTS TEXAS LLC

APPLEBEE’S RESTAURANTS INC.

APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC

 APPLEBEE’S RESTAURANTS VERMONT, INC.

APPLEBEE’S RESTAURANTS KANSAS LLC

 

SERIES 2007-1 7.0588% FIXED RATE TERM SENIOR NOTE, CLASS A-2-II-X

 

APPLEBEE’S ENTERPRISES LLC, a limited liability
company formed under the laws of the State of Delaware, APPLEBEE’S IP LLC, a limited liability
company formed under the laws of the State of Delaware, APPLEBEE’S RESTAURANTS NORTH LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS WEST LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS TEXAS LLC, a limited liability company formed under the laws
of the State of Texas, APPLEBEE’S RESTAURANTS INC., a corporation incorporated under the laws of the
State of Kansas, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS VERMONT, INC., a corporation incorporated under the laws of the
State of Vermont and APPLEBEE’S RESTAURANTS KANSAS LLC, a limited liability company formed under the laws
of the State of Kansas (herein
referred to, collectively, as the “Co-Issuers”), for value received, hereby
jointly and severally promise to pay to CEDE & CO. or registered
assigns, the principal sum of [                              ]
($[                ])
as provided below and in the
Indenture referred to herein. Payments of principal shall be payable in the amounts and at the times set forth in the
Indenture described herein; provided, however, that the entire
unpaid principal amount of this Note shall be due on the Payment Date (as
defined below) occurring in December 2037 (the “Series 2007-1 Legal Final Maturity Date”). The
Co-Issuers will pay interest on this Series 2007-1 Fixed Rate Term
Senior Note, Class A-2-II-X (this “Note”) at the Series 2007-1
Class A-2-II-X Note Initial Interest Rate, as such rate may be adjusted in
accordance with the terms of the Indenture, for each Interest Accrual Period in
accordance with the terms of the Indenture. Such interest will be payable in
arrears on each Payment Date, which will be on the 20th day (or, if such 20th day is not a Business 

 

 

Day, the next succeeding Business Day) of each calendar
month (each, a “Payment
Date”), commencing on the Payment
Date occurring in January 2008. 
Such amounts due on this Note will accrue for each Payment Date with respect to (i) initially,
the period from and including November 29, 2007 to but excluding the Payment Date occurring in January 2008
(which pursuant to Section 16.12 of the Base Indenture and Section 7.16
of the Series 2007-1 Supplement shall be January 22, 2008) and (ii) thereafter,
the period commencing on and including a Payment Date and ending on but excluding the next succeeding
Payment Date (each, an “Interest Accrual Period”), subject
to the terms set forth in the Indenture. Such amounts due on this Note with
respect to the Note (and interest on any defaulted
payments of amounts due on this Note at the same rate) will be computed in accordance
with the Indenture. In addition, under the circumstances set forth in the
Indenture, the Co-Issuers shall also pay
contingent additional interest on this Note in the form of the Series 2007-1
Class A-2-II Contingent Additional Interest or the Series 2007-1 Class A-2 Post-ARD Contingent
Additional Interest, as applicable, which shall be computed and shall be payable in the amounts and
at the times set forth in the Indenture.

 

The
principal of and interest on this Note are payable in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Co-Issuers with respect to this Note
shall be applied as provided in the Indenture.

 

This Note is subject to
mandatory and optional principal prepayments and mandatory liquidation
(referred to in the Indenture as the “Auction Call Redemption”), as set
forth in the Indenture.

 

Interests in this Note are
exchangeable or transferable in whole or in part for interests in a
Regulation S Global Note; provided that such transfer or exchange
complies with the applicable provisions of the Indenture relating to the transfer of
the Notes. Interests in this Note in certain circumstances may also be exchangeable or
transferable in whole but not in part for duly executed and issued registered
Definitive Notes; provided that such transfer or exchange complies with Article II
of the Base Indenture.

 

Reference
is made to the further provisions of this Note set forth on the reverse hereof, which shall have
the same effect as though fully set forth on the face of this Note. Although a summary of
certain provisions of the Indenture is set forth below and on the reverse hereof and made a part
hereof, this Note does not purport to summarize the Indenture and reference is made to
the Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Co-Issuers and the Indenture Trustee. A copy of the Indenture may be
requested from the Indenture Trustee by writing to the Indenture Trustee at: Wells Fargo
Bank, National Association, Sixth Street and Marquette Avenue, MAC N9311-161,
Minneapolis, MN 55479, Attn:
Corporate Trust Services/Asset Backed Administration. To the extent not defined
herein, the
capitalized terms used herein have the meanings ascribed to them in the
Indenture (as defined on the reverse hereof).

 

 

Subject to the next
following paragraph, the Co-Issuers hereby certify and declare that all acts,
conditions and things required to be done and performed and to have happened
prior to the creation of
this Note and to constitute it as the valid obligation of the Co-Issuers enforceable in accordance with its terms, have
been done and performed and have happened in due compliance with all applicable laws and in accordance with the terms
of the Indenture.

 

Unless the certificate
of authentication hereon has been executed by the Indenture Trustee whose name
appears below by manual or facsimile signature, this Note shall not be entitled
to any benefit under the Indenture referred to on the reverse hereof, or be
valid or obligatory for any purpose.

 

[Remainder of page intentionally
left blank]

 

 

IN WITNESS WHEREOF, the Co-Issuers have caused
this Note to be duly executed.

 

 

Dated:      [                     ]

 

 

	
   

  	
  APPLEBEE’S ENTERPRISES LLC

  
	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S IP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS NORTH LLC

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS WEST

  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS TEXAS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  APPLEBEE’S
  RESTAURANTS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS MID-

  
	
   

  	
   

  	
  ATLANTIC
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS VERMONT,

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS KANSAS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

 

CERTIFICATE OF
AUTHENTICATION

 

This is one of the Series 2007-1 Notes
issued under the within-mentioned Indenture.

 

 

	
   

  	
  WELLS
  FARGO BANK, NATIONAL

  
	
   

  	
   

  	
  ASSOCIATION, as Indenture Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
				

 

 

[REVERSE OF NOTE]

 

This
Note is one of a duly authorized issue of Series 2007-1 Fixed Rate Term
Senior Notes, Class A-2-II-X of the Co-Issuers designated as their Series 2007-1
Fixed Rate Term Senior Notes, Class A-2-II-X (herein called the “Series 2007-1
Notes”) all issued under (i) a Base Indenture, dated as of November 29,
2007 (such
Base Indenture, as amended, supplemented or modified, is herein called the “Base
Indenture”), among the Co-Issuers
and Wells Fargo Bank, National Association as indenture trustee (the “Indenture
Trustee”, which term includes any successor Indenture Trustee under the
Base Indenture), and (ii) a Series 2007-1 Supplement to the Base Indenture, dated as of November 29,
2007 (such Series 2007-1 Supplement, as amended, supplemented or modified from
time to time, is herein called the (“Series 2007-1 Supplement”), among the Co-Issuers and the
Indenture Trustee. The Base Indenture, Series 2007-1
Supplement and such other Series Supplement or Supplemental Indenture as
may be executed from time to time are
referred to herein as the “Indenture”. The Series 2007-1 Notes are
subject to all terms of the Indenture.
All terms used in this Note that are defined in the Indenture, as supplemented,
modified or amended, shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented, modified or amended.

 

The Series 2007-1
Notes are and will be secured by the Collateral pledged as security therefor as
provided in the Indenture and in the respective Guaranty and Collateral
Agreements.

 

The
Notes will be issued in minimum denominations of $200,000 and integral multiples of $ 1,000 in
excess thereof.

As
provided for in the Indenture, subject to certain specified conditions, the Series 2007-1
Notes may be prepaid, in whole or in part, at the option of the Co-Issuers. In
addition, the Series 2007-1 Notes are subject to mandatory principal
prepayment provisions as provided for in the Indenture. With certain
exceptions, the Co-Issuers will be obligated to pay the Make-Whole Amount relating to the Series 2007-1
Notes on any prepayment of principal of any Series 2007-1 Notes prior to
the Series 2007-1 Anticipated Prepayment Date as described in the
Indenture. As described above, the entire unpaid principal amount of this Note
shall be due and payable on the Series 2007-1 Legal Final Maturity Date. All payments of
principal relating to any Class of Series 2007-1 Notes will be made pro
rata to the Holders of such Class of Series 2007-1 Notes.

 

Principal of and
interest on this Note which is payable on a Payment Date or on any date on
which payments are permitted to be made as provided for in the Indenture shall
be paid
to the Person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the applicable Record Date.

 

Interest
and contingent additional interest, if any, will each accrue on the Series 2007-1 Notes at the
rates set forth in the Indenture. The interest and contingent additional interest, if any, will
be computed on the basis set forth in the Indenture. The amount of interest
payable on the Series 2007-1 Notes on each Payment Date will be calculated
as set forth in the Indenture.

 

 

Payments of principal of and
interest on this Note are subordinated to the payment of certain other amounts
in accordance with the Priority of Payments in the Indenture.

 

If an
Event of Default shall occur and be continuing, this Note may become or be
declared due and payable in the manner and with the effect provided in the
Indenture.

 

Amounts
payable in respect of this Note shall be made by wire transfer of immediately available
funds to a Dollar account maintained by the Noteholder or its nominee, subject
to the terms set forth in the Indenture.

 

As provided in the Indenture
and subject to certain limitations set forth therein, the transfer of this Note
may be registered on the Note Register upon surrender of this Note for
registration of transfer at the office or agency designated by the Co-Issuers
pursuant to the Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly executed by,
the Series 2007-1 Noteholder hereof or his attorney duly authorized in writing, with
such signature guaranteed by an “eligible guarantor institution” meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”)
or such
other “signature guarantee program” as may be determined by the Note Registrar
in addition
to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended, and accompanied by such other documents as the
Indenture Trustee and the Note Registrar may require and as may be required by the
Indenture, and thereupon one or more new Series 2007-1 Notes of authorized
denominations in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.

 

Each
Holder of Series 2007-1 Notes, by acceptance of a Series 2007-1 Note,
covenants
and agrees that by accepting the benefits of the Indenture that prior to the
date that is one
year and one day after the payment in full of the latest maturing note issued
under the Indenture,
such Series 2007-1 Noteholder will not institute against, or join with any
other Person in
instituting against, any Securitization Entity any bankruptcy, reorganization,
arrangement, insolvency or liquidation
proceedings, or other proceedings, under any federal Insolvency Law; provided, however, that nothing
herein shall constitute a waiver of any
right to indemnification, reimbursement or other payment from the
Securitization Entities pursuant to
the Indenture or any other Transaction Document

 

It is
the intent of the Co-Issuers and each Holder of Series 2007-1 Notes that,
for federal,
state and local income and franchise tax purposes only, the Series 2007-1
Notes will evidence
indebtedness of the Co-Issuers secured by the Collateral. Each Holder of Series 2007-1
Notes, by the acceptance of this Note, agrees to treat this Note (or beneficial
interests herein) for purposes of federal, state and local income or franchise taxes and any
other tax imposed on or measured by income, as indebtedness of the Co-Issuers or,
if any Co-Issuer is treated as a division of another entity, such other entity.

 

 

The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Co-Issuers and the rights of the Holders of
Series 2007-1 Notes under the Indenture at any time by the Co-Issuers with the consent of the
Aggregate Controlling Party or each Series Controlling Party (as applicable) and without
the consent of any Holders of Series 2007-1 Notes. The Indenture also contains provisions
permitting the Aggregate Controlling Party or each Series Controlling
Party (as applicable) to waive compliance by the Co-Issuers with certain
provisions of the Indenture without the consent of any Holders of Series 2007-1
Notes. Any such consent or waiver of this Note (or any one or more predecessor Notes) shall
be conclusive and binding upon the Holder of this Note and all future Holders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Note.

 

The
term “Co-Issuer” as used in this Note includes any successor to the Co-Issuers under the
Indenture.

 

The Series 2007-1
Notes are issuable only in registered form in denominations as provided in the
Indenture, subject to certain limitations set forth therein.

 

THIS NOTE AND THE INDENTURE SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED 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 OF
NEW YORK).

 

No
reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the
obligation of the Co-Issuers, which is absolute and unconditional, to pay the principal of and interest on this Note at the
times, place and rate, and in the coin or currency herein prescribed.

 

 

ASSIGNMENT

 

	
  Social Security or taxpayer I.D. or other
  identifying number of assignee:

  	
   

  

 

 

	
  FOR VALUE RECEIVED, the undersigned hereby
  sells, assigns and transfers unto

  
	
   

  
	
   

  
	
   

  
	
  (name and address of assignee)

  

 

 

The within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints                   ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  (16)

  
	
   

  	
   

  
	
   

  	
  Signature
  Guaranteed:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
							

 

(16)
NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note, without
alteration, enlargement or any change whatsoever.

 

 

 

SCHEDULE OF EXCHANGES IN
RULE 144A GLOBAL NOTE

 

The initial principal balance of this Rule 144A Global Note is $[                  ].
The following exchanges of an interest in this Rule 144A Global Note for
an interest in a corresponding Regulation S Global Note have been made:

 

	
  Date

  	
   

  	
  Amount
  of Increase

  (or Decrease) in the

  Principal Amount of

  this Rule 144A

  Global Note

  	
   

  	
  Remaining
  Principal

  Amount of this Rule

  144A Global Note

  following the Increase

  or Decrease

  	
   

  	
  Signature
  of

  Authorized Officer

  of Indenture

  Trustee of Note

  Registrar

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT
A-2-II-4

 

FORM OF
REGULATION S SERIES 2007-1 CLASS A-2-II-X GLOBAL NOTE

 

THIS SERIES 2007-1 FIXED RATE TERM SENIOR NOTE, CLASS A-2-II-X
DUE 2037 (THIS “NOTE”)
HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY
STATE OR OTHER RELEVANT JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES LLC,
APPLEBEE’S IP LLC, APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S RESTAURANTS
WEST LLC, APPLEBEE’S RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS INC.,
APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, APPLEBEE’S RESTAURANTS VERMONT, INC.
AND APPLEBEE’S RESTAURANTS KANSAS LLC, (THE “CO-ISSUERS”) HAS BEEN REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).  THIS NOTE OR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO EITHER THE  INITIAL PURCHASER
OR A SUBSEQUENT TRANSFEREE WHO IS BOTH A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) AND A “QUALIFIED PURCHASER” (WITHIN
THE MEANING OF THE INVESTMENT COMPANY ACT), ACTING FOR ITS OWN ACCOUNT OR ONE
OR MORE ACCOUNTS WITH RESPECT TO WHICH THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE EXERCISES SOLE INVESTMENT DISCRETION, EACH OF WHICH IS BOTH A
QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER, AND NONE OF WHICH ARE (1) A
DEALER OF THE TYPE DESCRIBED IN PARAGRAPH (a)(1)(ii) OF RULE 144A UNLESS
IT OWNS AND INVESTS ON A DISCRETIONARY BASIS NOT LESS THAN $25,000,000 IN
SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED TO IT, (2) A
PARTICIPANT-DIRECTED EMPLOYEE PLAN, SUCH AS A 401(k) PLAN, OR ANY OTHER
TYPE OF PLAN REFERRED TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF
RULE 144A, OR A TRUST FUND REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE
144A THAT HOLDS THE ASSETS OF SUCH A PLAN, UNLESS INVESTMENT DECISIONS WITH
RESPECT TO THE PLAN ARE MADE SOLELY BY THE FIDUCIARY, TRUSTEE OR SPONSOR OF
SUCH PLAN, (3) FORMED OR CAPITALIZED FOR THE SPECIFIC PURPOSE OF INVESTING
IN THE CO-ISSUERS (EXCEPT WHERE EACH BENEFICIAL OWNER IS A QUALIFIED
PURCHASER), (4) A CORPORATION, PARTNERSHIP, COMMON TRUST FUND, SPECIAL
TRUST, PENSION FUND OR RETIREMENT PLAN IN WHICH THE SHAREHOLDERS, EQUITY
OWNERS, PARTNERS, BENEFICIARIES, BENEFICIAL OWNERS OR PARTICIPANTS, AS
APPLICABLE, MAY DESIGNATE THE PARTICULAR INVESTMENTS TO BE MADE, (5) IF
FORMED ON OR BEFORE APRIL 30, 1996, AN INVESTMENT COMPANY THAT RELIES ON THE
EXCLUSION FROM THE DEFINITION OF “INVESTMENT 

 

 

COMPANY” PROVIDED BY SECTION 3(c)(7) OF THE
INVESTMENT COMPANY ACT (OR A FOREIGN INVESTMENT COMPANY UNDER SECTION 7(d) THEREOF
RELYING ON SECTION 3(c)(7) WITH RESPECT TO THOSE OF ITS HOLDERS THAT
ARE U.S. PERSONS), UNLESS, WITH RESPECT TO ITS TREATMENT AS A QUALIFIED
PURCHASER, IT HAS, IN THE MANNER REQUIRED BY SECTION 2(a)(51)(C) OF
THE INVESTMENT COMPANY ACT AND THE RULES AND REGULATIONS THEREUNDER, RECEIVED
THE CONSENT OF ITS BENEFICIAL OWNERS THAT ACQUIRED THEIR INTERESTS ON OR BEFORE
APRIL 30, 1996 OR (6) AN ENTITY THAT, IMMEDIATELY SUBSEQUENT TO ITS
PURCHASE OR OTHER ACQUISITION OF A BENEFICIAL INTEREST IN THIS NOTE, WILL HAVE
INVESTED MORE THAN 40% OF ITS ASSETS IN BENEFICIAL INTERESTS IN THIS NOTE
AND/OR IN OTHER SECURITIES OF THE CO-ISSUERS (UNLESS ALL OF THE BENEFICIAL
OWNERS OF SUCH ENTITY’S SECURITIES ARE QUALIFIED PURCHASERS) TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
THE EXEMPTION FROM SECURITIES ACT REGISTRATION PROVIDED BY RULE 144A OR (II) OUTSIDE
THE UNITED STATES TO THE INITIAL PURCHASER OR A SUBSEQUENT TRANSFEREE WHO IS A
QUALIFIED PURCHASER AND NEITHER A “U.S. PERSON” AS DEFINED IN REGULATION S
UNDER THE SECURITIES ACT (“REGULATION
S”) NOR A “U.S. RESIDENT” AS DEFINED FOR PURPOSES OF THE
INVESTMENT COMPANY ACT, ACTING FOR ITS OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH
RESPECT TO WHICH SUCH INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE EXERCISES SOLE
INVESTMENT DISCRETION, EACH OF WHICH IS A QUALIFIED PURCHASER, AND NONE OF WHICH
ARE A U.S. PERSON OR A U.S. RESIDENT, IN OFFSHORE TRANSACTIONS IN RELIANCE ON
REGULATION S, AND, IN EACH CASE, IN COMPLIANCE WITH THE CERTIFICATIONS AND
OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO HEREIN AND ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OR THE UNITED STATES AND ANY OTHER
RELEVANT JURISDICTION.  THE INITIAL
PURCHASER AND EACH SUBSEQUENT TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN
INTEREST IN THIS NOTE WILL BE DEEMED TO HAVE MADE THE APPLICABLE
REPRESENTATIONS AND AGREEMENTS REFERRED TO IN THE INDENTURE.  EACH INITIAL PURCHASER AND EACH SUBSEQUENT
TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN INTEREST IN THIS NOTE IN THE FORM OF
AN INTEREST IN A REGULATION S GLOBAL NOTE OR A RULE 144A GLOBAL NOTE WILL BE
REQUIRED TO DELIVER A TRANSFER CERTIFICATE IN THE FORM REQUIRED BY THE
INDENTURE AND WILL BE DEEMED OR REQUIRED TO MAKE THE APPLICABLE REPRESENTATIONS
AND AGREEMENTS REFERRED TO IN THE INDENTURE.

 

ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING WILL BE OF NO FORCE AND EFFECT AND WILL BE VOID AB INITIO AND WILL
NOT OPERATE TO TRANSFER ANY RIGHTS TO THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE, NOTWITHSTANDING 

 

 

ANY INSTRUCTIONS TO THE CONTRARY TO THE CO-ISSUERS,
THE INDENTURE TRUSTEE OR ANY INTERMEDIARY.

 

THE CO-ISSUERS MAY REQUIRE
ANY HOLDER OF THIS NOTE WHO IS DETERMINED NOT TO HAVE BEEN (I) IF THIS
NOTE IS ACQUIRED IN THE UNITED STATES, BOTH A QUALIFIED INSTITUTIONAL BUYER AND
A QUALIFIED PURCHASER OR (II) IF THIS NOTE WAS ACQUIRED OUTSIDE OF THE
UNITED STATES, BOTH A QUALIFIED PURCHASER AND NEITHER A U.S. PERSON NOR A U.S.
RESIDENT AT THE TIME OF ACQUISITION OF THIS NOTE TO SELL THIS NOTE TO A PERSON
WHO IS (I) BOTH A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (II) A QUALIFIED
PURCHASER AND NEITHER A U.S. PERSON NOR A U.S. RESIDENT IN A TRANSACTION
MEETING THE REQUIREMENTS OF REGULATION S.

 

THE OFFERED NOTES MAY NOT
BE SOLD TO ANY RESIDENT OF THE REPUBLIC OF IRELAND.

 

[THIS NOTE HAS BEEN
ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES.  THE ISSUE PRICE,
AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE
OBTAINED BY WRITING TO THE SERVICER AT ITS ADDRESS SET FORTH IN THE
INDENTURE.](17)

 

UNTIL 40 DAYS AFTER THE
INITIAL PURCHASER NOTIFIES THE CO-ISSUERS THAT THE RESALE OF THE OFFERED NOTES
HAS BEEN COMPLETED (THE “RESTRICTED
PERIOD”) IN CONNECTION WITH THE OFFERING OF THE NOTES IN THE
UNITED STATES FROM OUTSIDE OF THE UNITED STATES, THE SALE, PLEDGE OR TRANSFER
OF THIS NOTE IS SUBJECT TO CERTAIN CONDITIONS AND RESTRICTIONS.  THE HOLDER HEREOF, BY PURCHASING OR OTHERWISE
ACQUIRING THIS NOTE, ACKNOWLEDGES THAT SUCH HOLDER IS A QUALIFIED PURCHASER,
AND THAT THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND AGREES
FOR THE BENEFIT OF THE CO-ISSUERS THAT THIS NOTE MAY BE TRANSFERRED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY TO A QUALIFIED PURCHASER AND IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OF THE STATES,
TERRITORIES AND POSSESSIONS OF THE UNITED STATES GOVERNING THE OFFER AND SALE
OF SECURITIES, AND PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD, ONLY (I) IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT OR (II) PURSUANT TO AND IN ACCORDANCE WITH RULE 144A UNDER THE
SECURITIES ACT.

 

(17) Insert as applicable.

 

 

THIS NOTE IS A GLOBAL
NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”), A NEW YORK
CORPORATION, 55 WATER STREET, NEW YORK, NEW YORK 10004, OR A NOMINEE
THEREOF.  THIS NOTE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
THE CO-ISSUERS
OR THE REGISTRAR, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC, AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE
THE REGISTERED OWNER, CEDE & CO., HAS AN INTEREST HEREIN.

 

 

REGULATION S GLOBAL
NOTE

SERIES 2007-1 SENIOR
NOTE CLASS A-2-II-X

 

	
  No. [   ]

  	
  $[                    ]

  

 

SEE REVERSE FOR CERTAIN
CONDITIONS

 

CUSIP
Number: U00540 AD3

ISIN
Number: USU00540AD39

 

APPLEBEE’S ENTERPRISES
LLC

APPLEBEE’S IP LLC

APPLEBEE’S RESTAURANTS NORTH LLC

APPLEBEE’S RESTAURANTS WEST LLC

APPLEBEE’S RESTAURANTS TEXAS LLC

APPLEBEE’S RESTAURANTS INC.

APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC

 APPLEBEE’S RESTAURANTS VERMONT, INC.

APPLEBEE’S RESTAURANTS KANSAS LLC

 

SERIES 2007-1 7.0588% FIXED RATE TERM SENIOR NOTE, CLASS A-2-II-X

 

APPLEBEE’S ENTERPRISES LLC, a limited liability
company formed under the laws of the State of Delaware, APPLEBEE’S IP LLC, a limited liability
company formed under the laws of the State of Delaware, APPLEBEE’S RESTAURANTS NORTH LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS WEST LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS TEXAS LLC, a limited liability company formed under the laws
of the State of Texas, APPLEBEE’S RESTAURANTS INC., a corporation incorporated under the laws of the
State of Kansas, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, a limited liability company formed under the laws
of the State of Delaware, APPLEBEE’S RESTAURANTS VERMONT, INC., a corporation incorporated under the laws of the
State of Vermont and APPLEBEE’S RESTAURANTS KANSAS LLC, a limited liability company formed under the laws
of the State of Kansas (herein
referred to, collectively, as the “Co-Issuers”), for value received, hereby
jointly and severally promise to pay to CEDE & CO. or registered
assigns, the principal sum of [                              ]
($[                ])
as provided below and in the
Indenture referred to herein. Payments of principal shall be payable in the amounts and at the times set forth in the
Indenture described herein; provided, however, that the entire
unpaid principal amount of this Note shall be due on the Payment Date (as
defined below) occurring in December 2037 (the “Series 2007-1 Legal Final Maturity Date”).  The Co-Issuers will pay interest on this
Series 2007-1 Fixed Rate Term Senior Note, Class A-2-II-X (this “Note”)
at the Series 2007-1 Class A-2-II-X Note Initial Interest Rate, as
such rate may be adjusted in accordance with the terms of the Indenture, for
each Interest Accrual Period in accordance with the terms of the Indenture.
Such interest will be payable in arrears on 

 

 

each
Payment Date, which will be on the 20th day (or, if such 20th day is not a Business Day, the next succeeding Business Day)
of each calendar month (each, a “Payment Date”), commencing on the Payment Date occurring
in January 2008.  Such amounts due
on this Note will accrue for each Payment
Date with respect to (i) initially, the period from and including November 29, 2007 to but excluding the Payment Date
occurring in January 2008 (which pursuant to Section 16.12 of
the Base Indenture and Section 7.16 of the Series 2007-1
Supplement shall be January 22, 2008) and (ii) thereafter, the period
commencing on and including a Payment Date and ending on but excluding the next succeeding Payment Date (each, an “Interest
Accrual Period”), subject to the terms set forth in the
Indenture. Such amounts due on this Note with respect to the Note (and interest
on any defaulted payments of amounts due on
this Note at the same rate) will be computed in accordance with the
Indenture. In addition, under the circumstances set forth in the Indenture, the Co-Issuers shall also pay contingent
additional interest on this Note in the form of the Series 2007-1 Class A-2-II
Contingent Additional Interest or the Series 2007-1 Class A-2 Post-ARD Contingent
Additional Interest, as applicable, which shall be computed and shall be payable in the amounts and
at the times set forth in the Indenture.

 

The
principal of and interest on this Note are payable in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Co-Issuers with respect to this Note
shall be applied as provided in the Indenture.

 

This Note is subject to
mandatory and optional principal prepayments and mandatory liquidation
(referred to in the Indenture as the “Auction Call Redemption”), as set
forth in the Indenture.

 

Interests in this Note are
exchangeable or transferable in whole or in part for interests in a
Regulation S Global Note; provided that such transfer or exchange
complies with the applicable provisions of the Indenture relating to the transfer of
the Notes. Interests in this Note in certain circumstances may also be exchangeable or
transferable in whole but not in part for duly executed and issued registered
Definitive Notes; provided that such transfer or exchange complies with Article II
of the Base Indenture.

 

Reference
is made to the further provisions of this Note set forth on the reverse hereof, which shall have
the same effect as though fully set forth on the face of this Note. Although a summary of
certain provisions of the Indenture is set forth below and on the reverse hereof and made a part
hereof, this Note does not purport to summarize the Indenture and reference is made to
the Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Co-Issuers and the Indenture Trustee. A copy of the Indenture may be
requested from the Indenture Trustee by writing to the Indenture Trustee at: Wells Fargo
Bank, National Association, Sixth Street and Marquette Avenue, MAC N9311-161,
Minneapolis, MN 55479, Attn:
Corporate Trust Services/Asset Backed Administration. To the extent not defined
herein, the
capitalized terms used herein have the meanings ascribed to them in the
Indenture (as defined on the reverse hereof).

 

 

Subject
to the next following paragraph, the Co-Issuers hereby certify and declare that
all acts, conditions and things required to be done and performed and to have
happened prior to the
creation of this Note and to constitute it as the valid obligation of the
Co-Issuers enforceable in accordance with
its terms, have been done and performed and have happened in due compliance with all applicable laws and in
accordance with the terms of the Indenture.

 

Unless
the certificate of authentication hereon has been executed by the Indenture Trustee whose name
appears below by manual or facsimile signature, this Note shall not be entitled
to any benefit under the Indenture referred to on the reverse hereof, or be
valid or obligatory for any purpose.

 

[Remainder of page intentionally
left blank]

 

 

IN WITNESS WHEREOF, the Co-Issuers have caused
this Note to be duly executed.

 

 

Dated:      [                    ]

 

 

	
   

  	
  APPLEBEE’S ENTERPRISES LLC

  
	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S IP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS NORTH LLC

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS WEST

  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS TEXAS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  APPLEBEE’S
  RESTAURANTS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS MID-

  
	
   

  	
   

  	
  ATLANTIC
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS VERMONT,

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS KANSAS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

 

CERTIFICATE OF
AUTHENTICATION

 

This is one of the Series 2007-1 Notes
issued under the within-mentioned Indenture.

 

 

	
   

  	
  WELLS
  FARGO BANK, NATIONAL

  
	
   

  	
   

  	
  ASSOCIATION,
  as Indenture Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
				

 

 

[REVERSE OF NOTE]

 

This
Note is one of a duly authorized issue of Series 2007-1 Fixed Rate Term
Senior Notes, Class A-2-II-X of the Co-Issuers designated as their Series 2007-1
Fixed Rate Term Senior Notes, Class A-2-II-X (herein called the “Series 2007-1
Notes”) all issued under (i) a Base Indenture, dated as of November 29,
2007 (such
Base Indenture, as amended, supplemented or modified, is herein called the “Base
Indenture”), among the Co-Issuers
and Wells Fargo Bank, National Association as indenture trustee (the “Indenture
Trustee”, which term includes any successor Indenture Trustee under the
Base Indenture), and (ii) a Series 2007-1 Supplement to the Base Indenture, dated as of November 29,
2007 (such Series 2007-1 Supplement, as amended, supplemented or modified from
time to time, is herein called the (“Series 2007-1 Supplement”), among the Co-Issuers and the
Indenture Trustee. The Base Indenture, Series 2007-1
Supplement and such other Series Supplement or Supplemental Indenture as
may be executed from time to time are
referred to herein as the “Indenture”. The Series 2007-1 Notes are
subject to all terms of the Indenture.
All terms used in this Note that are defined in the Indenture, as supplemented,
modified or amended, shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented, modified or amended.

 

The Series 2007-1
Notes are and will be secured by the Collateral pledged as security therefor as
provided in the Indenture and in the respective Guaranty and Collateral
Agreements.

 

The Notes will be
issued in minimum denominations of $200,000 and integral multiples of $ 1,000 in
excess thereof.

 

As provided for in the
Indenture, subject to certain specified conditions, the Series 2007-1
Notes may be prepaid, in whole or in part, at the option of the Co-Issuers. In
addition, the Series 2007-1 Notes are subject to mandatory principal
prepayment provisions as provided for in the Indenture. With certain
exceptions, the Co-Issuers will be obligated to pay the Make-Whole Amount relating to the Series 2007-1
Notes on any prepayment of principal of any Series 2007-1 Notes prior to
the Series 2007-1 Anticipated Prepayment Date as described in the
Indenture. As described above, the entire unpaid principal amount of this Note
shall be due and payable on the Series 2007-1 Legal Final Maturity Date. All payments of
principal relating to any Class of Series 2007-1 Notes will be made pro
rata to the Holders of such Class of Series 2007-1 Notes.

 

Principal of and
interest on this Note which is payable on a Payment Date or on any date on
which payments are permitted to be made as provided for in the Indenture shall
be paid
to the Person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the applicable Record Date.

 

Interest
and contingent additional interest, if any, will each accrue on the Series 2007-1 Notes at the
rates set forth in the Indenture. The interest and contingent additional interest, if any, will
be computed on the basis set forth in the Indenture. The amount of interest
payable on the Series 2007-1 Notes on each Payment Date will be calculated
as set forth in the Indenture.

 

 

Payments
of principal of and interest on this Note are subordinated to the payment of certain other amounts
in accordance with the Priority of Payments in the Indenture.

 

If an
Event of Default shall occur and be continuing, this Note may become or be
declared due and payable in the manner and with the effect provided in the
Indenture.

 

Amounts
payable in respect of this Note shall be made by wire transfer of immediately available
funds to a Dollar account maintained by the Noteholder or its nominee, subject
to the terms set forth in the Indenture.

 

As
provided in the Indenture and subject to certain limitations set forth therein,
the transfer of this Note may be registered on the Note Register upon surrender
of this Note for registration of transfer at the office or agency designated by
the Co-Issuers pursuant to the Indenture, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Series 2007-1 Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an “eligible guarantor
institution”
meeting the requirements of the Note Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and
accompanied by such other documents as the Indenture Trustee and the Note Registrar may
require and as may be required by the Indenture, and thereupon one or more new Series 2007-1
Notes of authorized denominations in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.

 

Each Holder of Series 2007-1
Notes, by acceptance of a Series 2007-1 Note, covenants and agrees
that by accepting the benefits of the Indenture that prior to the date that is one year and one day
after the payment in full of the latest maturing note issued under the Indenture, such Series 2007-1
Noteholder will not institute against, or join with any other Person in instituting against,
any Securitization Entity any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or
other proceedings, under any federal Insolvency Law; provided, however, that nothing herein shall constitute
a waiver of any right to
indemnification, reimbursement or other payment from the Securitization
Entities pursuant to the Indenture
or any other Transaction Document

 

It is
the intent of the Co-Issuers and each Holder of Series 2007-1 Notes that,
for federal,
state and local income and franchise tax purposes only, the Series 2007-1
Notes will evidence
indebtedness of the Co-Issuers secured by the Collateral. Each Holder of Series 2007-1
Notes, by the acceptance of this Note, agrees to treat this Note (or beneficial
interests herein) for purposes of federal, state and local income or franchise taxes and any
other tax imposed on or measured by income, as indebtedness of the Co-Issuers or,
if any Co-Issuer is treated as a division of another entity, such other entity.

 

 

The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Co-Issuers and the rights of the Holders of
Series 2007-1 Notes under the Indenture at any time by the Co-Issuers with the consent of the Aggregate
Controlling Party or each Series Controlling Party (as applicable) and without
the consent of any Holders of Series 2007-1 Notes. The Indenture also contains provisions
permitting the Aggregate Controlling Party or each Series Controlling
Party (as applicable) to waive compliance by the Co-Issuers with certain
provisions of the Indenture without the consent of any Holders of Series 2007-1
Notes. Any such consent or waiver of this Note (or any one or more predecessor Notes) shall
be conclusive and binding upon the Holder of this Note and all future Holders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Note.

 

The term
“Co-Issuer” as used in this Note includes any successor to the Co-Issuers under the
Indenture.

 

The Series 2007-1
Notes are issuable only in registered form in denominations as provided in the
Indenture, subject to certain limitations set forth therein.

 

THIS NOTE
AND THE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED 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 OF NEW YORK).

 

No
reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the
obligation of the Co-Issuers, which is absolute and unconditional, to pay the principal of and interest on this Note at the
times, place and rate, and in the coin or currency herein prescribed.

 

 

ASSIGNMENT

 

	
  Social Security or taxpayer I.D. or other
  identifying number of assignee:

  	
   

  

 

 

	
  FOR VALUE RECEIVED, the undersigned hereby
  sells, assigns and transfers unto

  
	
   

  
	
   

  
	
   

  
	
  (name and address of assignee)

  

 

 

The
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints                       ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  (18)

  
	
   

  	
   

  
	
   

  	
  Signature
  Guaranteed:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
							

 

(18)
NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note, without
alteration, enlargement or any change whatsoever.

 

 

SCHEDULE OF EXCHANGES IN REGULATION S GLOBAL
NOTE

 

The initial principal balance of this Regulation S Global Note is
$[_________]. The following exchanges of an interest in this Regulation S
Global Note for an interest in a corresponding Rule 144A Global Note have
been made:

 

	
  Date

  	
   

  	
  Amount
  of Increase

  (or Decrease) in the

  Principal Amount of

  this Regulation S

  Global Note

  	
   

  	
  Remaining
  Principal

  Amount of this

  Regulation S Global

  Note following the

  Increase or Decrease

  	
   

  	
  Signature
  of

  Authorized Officer

  of Indenture

  Trustee of Note

  Registrar

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT M-1-1

 

FORM OF RULE 144A SERIES 2007-1 CLASS M-1 GLOBAL NOTE

 

THIS Series 2007-1
Fixed Rate TERM SUBORDINATED Note, CLASS M-1 DUE 2037 (THIS “NOTE”) HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”),
OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER RELEVANT
JURISDICTION, AND NONE OF APPLEBEE’S ENTERPRISES LLC, APPLEBEE’S IP LLC,
APPLEBEE’S RESTAURANTS NORTH LLC, APPLEBEE’S RESTAURANTS WEST LLC, APPLEBEE’S
RESTAURANTS TEXAS LLC, APPLEBEE’S RESTAURANTS INC., APPLEBEE’S RESTAURANTS
MID-ATLANTIC LLC, APPLEBEE’S RESTAURANTS VERMONT, INC. AND APPLEBEE’S
RESTAURANTS KANSAS LLC, (THE “CO-ISSUERS”)
HAS BEEN REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).  THIS NOTE OR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO EITHER THE  INITIAL PURCHASER
OR A SUBSEQUENT TRANSFEREE WHO IS BOTH A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) AND A “QUALIFIED PURCHASER” (WITHIN
THE MEANING OF THE INVESTMENT COMPANY ACT), ACTING FOR ITS OWN ACCOUNT OR ONE
OR MORE ACCOUNTS WITH RESPECT TO WHICH THE INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE
EXERCISES SOLE INVESTMENT DISCRETION, EACH OF WHICH IS BOTH A QUALIFIED
INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER, AND NONE OF WHICH ARE (1) A
DEALER OF THE TYPE DESCRIBED IN PARAGRAPH (a)(1)(ii) OF RULE 144A UNLESS
IT OWNS AND INVESTS ON A DISCRETIONARY BASIS NOT LESS THAN $25,000,000 IN
SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED TO IT, (2) A
PARTICIPANT-DIRECTED EMPLOYEE PLAN, SUCH AS A 401(k) PLAN, OR ANY OTHER TYPE OF
PLAN REFERRED TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF RULE 144A, OR A
TRUST FUND REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE 144A THAT HOLDS THE
ASSETS OF SUCH A PLAN, UNLESS INVESTMENT DECISIONS WITH RESPECT TO THE PLAN ARE
MADE SOLELY BY THE FIDUCIARY, TRUSTEE OR SPONSOR OF SUCH PLAN, (3) FORMED OR
CAPITALIZED FOR THE SPECIFIC PURPOSE OF INVESTING IN THE CO-ISSUERS (EXCEPT
WHERE EACH BENEFICIAL OWNER IS A QUALIFIED PURCHASER), (4) A CORPORATION,
PARTNERSHIP, COMMON TRUST FUND, SPECIAL TRUST, PENSION FUND OR RETIREMENT PLAN
IN WHICH THE SHAREHOLDERS, EQUITY OWNERS, PARTNERS, BENEFICIARIES, BENEFICIAL
OWNERS OR PARTICIPANTS, AS APPLICABLE, MAY DESIGNATE THE PARTICULAR INVESTMENTS
TO BE MADE, (5) IF FORMED ON OR BEFORE APRIL 30, 1996, AN INVESTMENT COMPANY
THAT RELIES ON THE EXCLUSION FROM THE DEFINITION OF “INVESTMENT

 

 

COMPANY” PROVIDED BY SECTION 3(c)(7) OF THE INVESTMENT COMPANY ACT (OR
A FOREIGN INVESTMENT COMPANY UNDER SECTION 7(d) THEREOF RELYING ON SECTION
3(c)(7) WITH RESPECT TO THOSE OF ITS HOLDERS THAT ARE U.S. PERSONS), UNLESS,
WITH RESPECT TO ITS TREATMENT AS A QUALIFIED PURCHASER, IT HAS, IN THE MANNER
REQUIRED BY SECTION 2(a)(51)(C) OF THE INVESTMENT COMPANY ACT AND THE RULES AND
REGULATIONS THEREUNDER, RECEIVED THE CONSENT OF ITS BENEFICIAL OWNERS THAT
ACQUIRED THEIR INTERESTS ON OR BEFORE APRIL 30, 1996 OR (6) AN ENTITY THAT,
IMMEDIATELY SUBSEQUENT TO ITS PURCHASE OR OTHER ACQUISITION OF A BENEFICIAL
INTEREST IN THIS NOTE, WILL HAVE INVESTED MORE THAN 40% OF ITS ASSETS IN
BENEFICIAL INTERESTS IN THIS NOTE AND/OR IN OTHER SECURITIES OF THE CO-ISSUERS
(UNLESS ALL OF THE BENEFICIAL OWNERS OF SUCH ENTITY’S SECURITIES ARE QUALIFIED
PURCHASERS) TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON THE EXEMPTION FROM SECURITIES ACT REGISTRATION
PROVIDED BY RULE 144A OR (II) OUTSIDE THE UNITED STATES TO THE INITIAL
PURCHASER OR A SUBSEQUENT TRANSFEREE WHO IS A QUALIFIED PURCHASER AND NEITHER A
“U.S. PERSON” AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT (“REGULATION S”) NOR A “U.S.
RESIDENT” AS DEFINED FOR PURPOSES OF THE INVESTMENT COMPANY ACT, ACTING FOR ITS
OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH RESPECT TO WHICH SUCH INITIAL
PURCHASER OR SUBSEQUENT TRANSFEREE EXERCISES SOLE INVESTMENT DISCRETION, EACH
OF WHICH IS A QUALIFIED PURCHASER, AND NONE OF WHICH ARE A U.S. PERSON OR A
U.S. RESIDENT, IN OFFSHORE TRANSACTIONS IN RELIANCE ON REGULATION S, AND, IN
EACH CASE, IN COMPLIANCE WITH THE CERTIFICATIONS AND OTHER REQUIREMENTS
SPECIFIED IN THE INDENTURE REFERRED TO HEREIN AND ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OR THE UNITED STATES AND ANY OTHER RELEVANT
JURISDICTION.  THE INITIAL PURCHASER AND
EACH SUBSEQUENT TRANSFEREE TAKING DELIVERY OF THIS NOTE OR AN INTEREST IN THIS
NOTE WILL BE DEEMED TO HAVE MADE THE APPLICABLE REPRESENTATIONS AND AGREEMENTS
REFERRED TO IN THE INDENTURE.  EACH
INITIAL PURCHASER AND EACH SUBSEQUENT TRANSFEREE TAKING DELIVERY OF THIS NOTE
OR AN INTEREST IN THIS NOTE IN THE FORM OF AN INTEREST IN A REGULATION S GLOBAL
NOTE OR A RULE 144A GLOBAL NOTE WILL BE REQUIRED TO DELIVER A TRANSFER CERTIFICATE
IN THE FORM REQUIRED BY THE INDENTURE AND WILL BE DEEMED OR REQUIRED TO MAKE
THE APPLICABLE REPRESENTATIONS AND AGREEMENTS REFERRED TO IN THE INDENTURE.

 

ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING WILL BE OF NO FORCE AND EFFECT AND WILL BE VOID AB INITIO AND WILL
NOT OPERATE TO TRANSFER ANY RIGHTS TO THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE, NOTWITHSTANDING 

 

 

ANY INSTRUCTIONS TO THE CONTRARY TO THE CO-ISSUERS, THE INDENTURE
TRUSTEE OR ANY INTERMEDIARY.

 

THE CO-ISSUERS MAY REQUIRE ANY HOLDER OF THIS NOTE WHO
IS DETERMINED NOT TO HAVE BEEN (I) IF THIS NOTE IS ACQUIRED IN THE UNITED
STATES, BOTH A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER OR (II)
IF THIS NOTE WAS ACQUIRED OUTSIDE OF THE UNITED STATES, BOTH A QUALIFIED
PURCHASER AND NEITHER A U.S. PERSON NOR A U.S. RESIDENT AT THE TIME OF
ACQUISITION OF THIS NOTE TO SELL THIS NOTE TO A PERSON WHO IS (I) BOTH A
QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A OR (II) A QUALIFIED PURCHASER AND
NEITHER A U.S. PERSON NOR A U.S. RESIDENT IN A TRANSACTION MEETING THE
REQUIREMENTS OF REGULATION S.

 

THE OFFERED NOTES MAY NOT BE SOLD TO ANY RESIDENT OF
THE REPUBLIC OF IRELAND.

 

[THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE
DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES.  THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE
AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED BY WRITING TO THE SERVICER
AT ITS ADDRESS SET FORTH IN THE INDENTURE.](19)

 

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (“DTC”),
A NEW YORK CORPORATION, 55 WATER STREET, NEW YORK, NEW YORK 10004, OR A NOMINEE
THEREOF.  THIS NOTE MAY NOT BE EXCHANGED
IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS NOTE IN
WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN DTC OR
A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.  UNLESS THIS NOTE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE CO-ISSUERS OR THE REGISTRAR, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER, CEDE
& CO., HAS AN INTEREST HEREIN.

 

(19) Insert as applicable.

 

 

RULE 144A GLOBAL
NOTE

SERIES 2007-1 SUBORDINATED NOTE

CLASS M-1

 

	
  No. [    ]

  	
   

  	
  $[                      ]

  

 

SEE REVERSE FOR CERTAIN CONDITIONS

 

CUSIP Number: 037898 AC7

ISIN Number: US037898AC78

 

APPLEBEE’S ENTERPRISES LLC

APPLEBEE’S IP LLC

APPLEBEE’S RESTAURANTS NORTH LLC

APPLEBEE’S RESTAURANTS WEST LLC

APPLEBEE’S RESTAURANTS TEXAS LLC

APPLEBEE’S RESTAURANTS INC.

APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC

 APPLEBEE’S RESTAURANTS VERMONT,
INC.

APPLEBEE’S RESTAURANTS KANSAS LLC

 

SERIES 2007-1 8.4044% FIXED RATE TERM SUBORDINATED NOTE, CLASS M-1

 

APPLEBEE’S
ENTERPRISES LLC, a limited liability company formed under the laws of the State
of Delaware, APPLEBEE’S IP LLC, a limited liability company formed under the
laws of the State of Delaware, APPLEBEE’S RESTAURANTS NORTH LLC, a limited
liability company formed under the laws of the State of Delaware, APPLEBEE’S
RESTAURANTS WEST LLC, a limited liability company formed under the laws of the
State of Delaware, APPLEBEE’S RESTAURANTS TEXAS LLC, a limited liability
company formed under the laws of the State of Texas, APPLEBEE’S RESTAURANTS
INC., a corporation incorporated under the laws of the State of Kansas,
APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, a limited liability company formed
under the laws of the State of Delaware, APPLEBEE’S RESTAURANTS VERMONT, INC.,
a corporation incorporated under the laws of the State of Vermont and
APPLEBEE’S RESTAURANTS KANSAS LLC, a limited liability company formed under the
laws of the State of Kansas (herein referred to, collectively, as the “Co-Issuers”),
for value received, hereby jointly and severally promise to pay to
CEDE & CO. or registered assigns, the principal sum of
[                              ]
($[                  ])
as provided below and in the Indenture referred to herein. Payments of
principal shall be payable in the amounts and at the times set forth in the
Indenture described herein; provided, however, that the entire
unpaid principal amount of this Note shall be due on the Payment Date (as
defined below) occurring in December 2037 (the “Series 2007-1
Legal Final Maturity Date”).  The
Co-Issuers will pay interest on this Series 2007-1 Fixed Rate Term
Subordinated Note, Class M-1 (this “Note”) at the
Series 2007-1 Class M-1 Note Initial Interest Rate, as such rate may
be adjusted in accordance with the terms of the Indenture, for each Interest
Accrual Period in accordance with the terms of the Indenture.  Such interest will be payable in arrears on 

 

 

each Payment Date, which
will be on the 20th day (or, if such 20th day is not a Business Day, the next
succeeding Business Day) of each calendar month (each, a “Payment Date”),
commencing on the Payment Date occurring in January 2008.  Such amounts due on this Note will accrue for
each Payment Date with respect to (i) initially, the period from and
including November 29, 2007 to but excluding the Payment Date occurring in
January 2008 (which pursuant to Section 16.12 of the Base
Indenture and Section 7.16 of the Series 2007-1 Supplement shall
be January 22, 2008) and (ii) thereafter, the period commencing on
and including a Payment Date and ending on but excluding the next succeeding
Payment Date (each, an “Interest Accrual Period”), subject to the terms
set forth in the Indenture. Such amounts due on this Note with respect to the
Note (and interest on any defaulted payments of amounts due on this Note at the
same rate) will be computed in accordance with the Indenture. In addition,
under the circumstances set forth in the Indenture, the Co-Issuers shall also
pay contingent additional interest on this Note in the form of the
Series 2007-1 Class M-1 Contingent Additional Interest or the
Series 2007-1 Class M-1 Post-ARD Contingent Additional Interest, as
applicable, which shall be computed and shall be payable in the amounts and at
the times set forth in the Indenture.

 

The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Co-Issuers with respect to this Note shall be applied as provided in the
Indenture.

 

This Note is subject to mandatory and optional principal prepayments
and mandatory liquidation (referred to in the Indenture as the “Auction Call
Redemption”), as set forth in the Indenture.

 

Interests in this Note are exchangeable or
transferable in whole or in part for interests in a Regulation S Global Note; provided
that such transfer or exchange complies with the applicable provisions of the
Indenture relating to the transfer of the Notes. Interests in this Note in
certain circumstances may also be exchangeable or transferable in whole but not
in part for duly executed and issued registered Definitive Notes; provided
that such transfer or exchange complies with Article II of the Base
Indenture.

 

Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note. Although a summary of certain provisions of the
Indenture is set forth below and on the reverse hereof and made a part hereof,
this Note does not purport to summarize the Indenture and reference is made to
the Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Co-Issuers and the Indenture Trustee. A copy of the
Indenture may be requested from the Indenture Trustee by writing to the
Indenture Trustee at: Wells Fargo Bank, National Association, Sixth Street and
Marquette Avenue, MAC N9311-161, Minneapolis, MN 55479, Attn: Corporate Trust Services/Asset
Backed Administration. To the extent not defined herein, the capitalized terms
used herein have the meanings ascribed to them in the Indenture (as defined on
the reverse hereof).

 

 

Subject to the next following paragraph, the Co-Issuers hereby certify
and declare that all acts, conditions and things required to be done and
performed and to have happened prior to the creation of this Note and to
constitute it as the valid obligation of the Co-Issuers enforceable in
accordance with its terms, have been done and performed and have happened in
due compliance with all applicable laws and in accordance with the terms of the
Indenture.

 

Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual or facsimile
signature, this Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

[Remainder of
page intentionally left blank]

 

 

IN WITNESS WHEREOF, the Co-Issuers have caused this Note to be duly
executed.

 

 

Dated:         [              ]

 

 

	
   

  	
  APPLEBEE’S
  ENTERPRISES LLC

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  IP LLC

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS NORTH LLC

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS WEST 

  
	
   

  	
  LLC

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS TEXAS LLC

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  APPLEBEE’S
  RESTAURANTS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS MID-

  
	
   

  	
   

  	
  ATLANTIC
  LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS VERMONT, 

  
	
   

  	
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS KANSAS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

 

CERTIFICATE OF
AUTHENTICATION

 

This is one of the Series 2007-1 Notes issued under the
within-mentioned Indenture.

 

 

	
   

  	
  WELLS FARGO BANK, NATIONAL 

  ASSOCIATION, as Indenture Trustee 

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  

 

 

[REVERSE OF NOTE]

 

This Note is one of a duly authorized issue of Series 2007-1 Fixed
Rate Term Senior Notes, Class A-2-I-X of the Co-Issuers designated as
their Series 2007-1 Fixed Rate Term Senior Notes, Class A-2-I-X
(herein called the “Series 2007-1 Notes”) all issued under (i) a
Base Indenture, dated as of November 29, 2007 (such Base Indenture, as
amended, supplemented or modified, is herein called the “Base Indenture”),
among the Co-Issuers and Wells Fargo Bank, National Association as indenture
trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Base Indenture), and (ii) a Series 2007-1
Supplement to the Base Indenture, dated as of November 29, 2007 (such Series 2007-1
Supplement, as amended, supplemented or modified from time to time, is herein
called the (“Series 2007-1 Supplement”), among the Co-Issuers and
the Indenture Trustee. The Base Indenture, Series 2007-1 Supplement and
such other Series Supplement or Supplemental Indenture as may be executed
from time to time are referred to herein as the “Indenture”. The Series 2007-1
Notes are subject to all terms of the Indenture. All terms used in this Note
that are defined in the Indenture, as supplemented, modified or amended, shall
have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented, modified or amended.

 

The Series 2007-1 Notes are and will be secured by the Collateral
pledged as security therefor as provided in the Indenture and in the respective
Guaranty and Collateral Agreements.

 

The Notes will be issued in minimum denominations of $200,000 and
integral multiples of $ 1,000 in excess thereof.

 

As provided for in the Indenture, subject to certain specified
conditions, the Series 2007-1 Notes may be prepaid, in whole or in part,
at the option of the Co-Issuers. In addition, the Series 2007-1 Notes are
subject to mandatory principal prepayment provisions as provided for in the
Indenture. With certain exceptions, the Co-Issuers will be obligated to pay the
Make-Whole Amount relating to the Series 2007-1 Notes on any prepayment of
principal of any Series 2007-1 Notes prior to the Series 2007-1
Anticipated Prepayment Date as described in the Indenture. As described above,
the entire unpaid principal amount of this Note shall be due and payable on the
Series 2007-1 Legal Final Maturity Date. All payments of principal
relating to any Class of Series 2007-1 Notes will be made pro  rata
to the Holders of such Class of Series 2007-1 Notes.

 

Principal of and interest on this Note which is payable on a Payment
Date or on any date on which payments are permitted to be made as provided for
in the Indenture shall be paid to the Person in whose name this Note (or one or
more predecessor Notes) is registered at the close of business on the
applicable Record Date.

 

Interest and contingent additional interest, if any, will each accrue
on the Series 2007-1 Notes at the rates set forth in the Indenture. The
interest and contingent additional interest, if any, will be computed on the
basis set forth in the Indenture. The amount of interest payable on the Series 2007-1
Notes on each Payment Date will be calculated as set forth in the Indenture.

 

 

Payments of principal of and interest on this Note are subordinated to
the payment of certain other amounts in accordance with the Priority of
Payments in the Indenture.

 

If an Event of Default shall occur and be continuing, this Note may
become or be declared due and payable in the manner and with the effect
provided in the Indenture.

 

Amounts payable in respect of this Note shall be made by wire transfer
of immediately available funds to a Dollar account maintained by the Noteholder
or its nominee, subject to the terms set forth in the Indenture.

 

As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or
agency designated by the Co-Issuers pursuant to the Indenture, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Indenture Trustee duly executed by, the Series 2007-1 Noteholder
hereof or his attorney duly authorized in writing, with such signature
guaranteed by an “eligible guarantor institution” meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the Note Registrar in addition to,
or in substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended, and accompanied by such other documents as the
Indenture Trustee and the Note Registrar may require and as may be required by
the Indenture, and thereupon one or more new Series 2007-1 Notes of
authorized denominations in the same aggregate principal amount will be issued
to the designated transferee or transferees. No service charge will be charged
for any registration of transfer or exchange of this Note, but the transferor
may be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.

 

Each Holder of Series 2007-1 Notes, by acceptance of a Series 2007-1
Note, covenants and agrees that by accepting the benefits of the Indenture that
prior to the date that is one year and one day after the payment in full of the
latest maturing note issued under the Indenture, such Series 2007-1
Noteholder will not institute against, or join with any other Person in
instituting against, any Securitization Entity any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any federal Insolvency Law; provided, however, that nothing
herein shall constitute a waiver of any right to indemnification, reimbursement
or other payment from the Securitization Entities pursuant to the Indenture or
any other Transaction Document

 

It is the intent of the Co-Issuers and each Holder of Series 2007-1
Notes that, for federal, state and local income and franchise tax purposes
only, the Series 2007-1 Notes will evidence indebtedness of the Co-Issuers
secured by the Collateral. Each Holder of Series 2007-1 Notes, by the
acceptance of this Note, agrees to treat this Note (or beneficial interests
herein) for purposes of federal, state and local income or franchise taxes and
any other tax imposed on or measured by income, as indebtedness of the
Co-Issuers or, if any Co-Issuer is treated as a division of another entity,
such other entity.

 

 

The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Co-Issuers and the rights of the Holders of Series 2007-1 Notes under the
Indenture at any time by the Co-Issuers with the consent of the Aggregate
Controlling Party or each Series Controlling Party (as applicable) and
without the consent of any Holders of Series 2007-1 Notes. The Indenture
also contains provisions permitting the Aggregate Controlling Party or each Series Controlling
Party (as applicable) to waive compliance by the Co-Issuers with certain
provisions of the Indenture without the consent of any Holders of Series 2007-1
Notes. Any such consent or waiver of this Note (or any one or more predecessor
Notes) shall be conclusive and binding upon the Holder of this Note and all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.

 

The term “Co-Issuer” as used in this Note includes any successor to the
Co-Issuers under the Indenture.

 

The Series 2007-1 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations set
forth therein.

 

THIS NOTE AND THE INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED 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 OF NEW YORK).

 

No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Co-Issuers, which
is absolute and unconditional, to pay the principal of and interest on this
Note at the times, place and rate, and in the coin or currency herein
prescribed.

 

 

ASSIGNMENT

 

Social Security or taxpayer
I.D. or other identifying number of assignee:                      

 

FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto

 

 

 

	
  (name and address of assignee)

  

 

 

The within Note and all
rights thereunder, and hereby irrevocably constitutes and appoints                            
, attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

 

	
  Dated:
  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
   

  	
  (20)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature
  Guaranteed:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
							

 

(20) NOTE: The
signature to this assignment must correspond with the name of the registered
owner as it appears on the face of the within Note, without alteration,
enlargement or any change whatsoever.

 

 

SCHEDULE OF EXCHANGES IN
RULE 144A GLOBAL NOTE

 

The initial principal balance of this Rule 144A Global Note is $[                  ].
The following exchanges of an interest in this Rule 144A Global Note for
an interest in a corresponding Regulation S Global Note have been made:

 

	
  Date

  	
   

  	
  Amount of Increase 

  (or Decrease) in the 

  Principal Amount of

  this Rule 144A 

  Global Note

  	
   

  	
  Remaining Principal 

  Amount of this Rule

  144A Global Note

  following the Increase 

  or Decrease

  	
   

  	
  Signature of 

  Authorized Officer

  of Indenture 

  Trustee of Note 

  Registrar

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT M-1-2

 

FORM OF REGULATION S SERIES 2007-1 CLASS M-1 GLOBAL NOTE

 

THIS Series 2007-1
Fixed Rate TERM SUBORDINATED Note, CLASS M-1 DUE 2037 (THIS “NOTE”) HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”),
OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER RELEVANT
JURISDICTION, AND NONE OF APPLEBEE'S ENTERPRISES LLC, APPLEBEE'S IP LLC,
APPLEBEE'S RESTAURANTS NORTH LLC, APPLEBEE'S RESTAURANTS WEST LLC, APPLEBEE'S
RESTAURANTS TEXAS LLC, APPLEBEE'S RESTAURANTS INC., APPLEBEE'S RESTAURANTS
MID-ATLANTIC LLC, APPLEBEE'S RESTAURANTS VERMONT, INC. AND APPLEBEE'S
RESTAURANTS KANSAS LLC, (THE “CO-ISSUERS”)
HAS BEEN REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).  THIS NOTE OR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO EITHER THE  INITIAL PURCHASER
OR A SUBSEQUENT TRANSFEREE WHO IS BOTH A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) AND A “QUALIFIED PURCHASER” (WITHIN
THE MEANING OF THE INVESTMENT COMPANY ACT), ACTING FOR ITS OWN ACCOUNT OR ONE
OR MORE ACCOUNTS WITH RESPECT TO WHICH THE INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE
EXERCISES SOLE INVESTMENT DISCRETION, EACH OF WHICH IS BOTH A QUALIFIED
INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER, AND NONE OF WHICH ARE (1) A
DEALER OF THE TYPE DESCRIBED IN PARAGRAPH (a)(1)(ii) OF RULE 144A UNLESS
IT OWNS AND INVESTS ON A DISCRETIONARY BASIS NOT LESS THAN $25,000,000 IN
SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED TO IT, (2) A
PARTICIPANT-DIRECTED EMPLOYEE PLAN, SUCH AS A 401(k) PLAN, OR ANY OTHER TYPE OF
PLAN REFERRED TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF RULE 144A, OR A
TRUST FUND REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE 144A THAT HOLDS THE
ASSETS OF SUCH A PLAN, UNLESS INVESTMENT DECISIONS WITH RESPECT TO THE PLAN ARE
MADE SOLELY BY THE FIDUCIARY, TRUSTEE OR SPONSOR OF SUCH PLAN, (3) FORMED OR
CAPITALIZED FOR THE SPECIFIC PURPOSE OF INVESTING IN THE CO-ISSUERS (EXCEPT
WHERE EACH BENEFICIAL OWNER IS A QUALIFIED PURCHASER), (4) A CORPORATION,
PARTNERSHIP, COMMON TRUST FUND, SPECIAL TRUST, PENSION FUND OR RETIREMENT PLAN
IN WHICH THE SHAREHOLDERS, EQUITY OWNERS, PARTNERS, BENEFICIARIES, BENEFICIAL
OWNERS OR PARTICIPANTS, AS APPLICABLE, MAY DESIGNATE THE PARTICULAR INVESTMENTS
TO BE MADE, (5) IF FORMED ON OR BEFORE APRIL 30, 1996, AN INVESTMENT COMPANY
THAT RELIES ON THE EXCLUSION FROM THE DEFINITION OF “INVESTMENT 

 

 

COMPANY” PROVIDED BY SECTION 3(c)(7) OF THE
INVESTMENT COMPANY ACT (OR A FOREIGN INVESTMENT COMPANY UNDER SECTION 7(d) THEREOF
RELYING ON SECTION 3(c)(7) WITH RESPECT TO THOSE OF ITS HOLDERS THAT
ARE U.S. PERSONS), UNLESS, WITH RESPECT TO ITS TREATMENT AS A QUALIFIED
PURCHASER, IT HAS, IN THE MANNER REQUIRED BY SECTION 2(a)(51)(C) OF
THE INVESTMENT COMPANY ACT AND THE RULES AND REGULATIONS THEREUNDER, RECEIVED
THE CONSENT OF ITS BENEFICIAL OWNERS THAT ACQUIRED THEIR INTERESTS ON OR BEFORE
APRIL 30, 1996 OR (6) AN ENTITY THAT, IMMEDIATELY SUBSEQUENT TO ITS
PURCHASE OR OTHER ACQUISITION OF A BENEFICIAL INTEREST IN THIS NOTE, WILL HAVE
INVESTED MORE THAN 40% OF ITS ASSETS IN BENEFICIAL INTERESTS IN THIS NOTE
AND/OR IN OTHER SECURITIES OF THE CO-ISSUERS (UNLESS ALL OF THE BENEFICIAL
OWNERS OF SUCH ENTITY’S SECURITIES ARE QUALIFIED PURCHASERS) TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
THE EXEMPTION FROM SECURITIES ACT REGISTRATION PROVIDED BY RULE 144A OR (II) OUTSIDE
THE UNITED STATES TO THE INITIAL PURCHASER OR A SUBSEQUENT TRANSFEREE WHO IS A
QUALIFIED PURCHASER AND NEITHER A “U.S. PERSON” AS DEFINED IN REGULATION S
UNDER THE SECURITIES ACT (“REGULATION
S”) NOR A “U.S. RESIDENT” AS DEFINED FOR PURPOSES OF THE
INVESTMENT COMPANY ACT, ACTING FOR ITS OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH
RESPECT TO WHICH SUCH INITIAL PURCHASER OR SUBSEQUENT TRANSFEREE EXERCISES SOLE
INVESTMENT DISCRETION, EACH OF WHICH IS A QUALIFIED PURCHASER, AND NONE OF
WHICH ARE A U.S. PERSON OR A U.S. RESIDENT, IN OFFSHORE TRANSACTIONS IN
RELIANCE ON REGULATION S, AND, IN EACH CASE, IN COMPLIANCE WITH THE
CERTIFICATIONS AND OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO
HEREIN AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR THE UNITED STATES AND
ANY OTHER RELEVANT JURISDICTION.  THE
INITIAL PURCHASER AND EACH SUBSEQUENT TRANSFEREE TAKING DELIVERY OF THIS NOTE
OR AN INTEREST IN THIS NOTE WILL BE DEEMED TO HAVE MADE THE APPLICABLE REPRESENTATIONS
AND AGREEMENTS REFERRED TO IN THE INDENTURE. 
EACH INITIAL PURCHASER AND EACH SUBSEQUENT TRANSFEREE TAKING DELIVERY OF
THIS NOTE OR AN INTEREST IN THIS NOTE IN THE FORM OF AN INTEREST IN A
REGULATION S GLOBAL NOTE OR A RULE 144A GLOBAL NOTE WILL BE REQUIRED TO DELIVER
A TRANSFER CERTIFICATE IN THE FORM REQUIRED BY THE INDENTURE AND WILL BE
DEEMED OR REQUIRED TO MAKE THE APPLICABLE REPRESENTATIONS AND AGREEMENTS
REFERRED TO IN THE INDENTURE.

 

ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING WILL BE OF NO FORCE AND EFFECT AND WILL BE VOID AB INITIO AND WILL
NOT OPERATE TO TRANSFER ANY RIGHTS TO THE INITIAL PURCHASER OR SUBSEQUENT
TRANSFEREE, NOTWITHSTANDING 

 

 

ANY INSTRUCTIONS TO THE CONTRARY TO THE CO-ISSUERS,
THE INDENTURE TRUSTEE OR ANY INTERMEDIARY.

 

THE CO-ISSUERS MAY REQUIRE
ANY HOLDER OF THIS NOTE WHO IS DETERMINED NOT TO HAVE BEEN (I) IF THIS
NOTE IS ACQUIRED IN THE UNITED STATES, BOTH A QUALIFIED INSTITUTIONAL BUYER AND
A QUALIFIED PURCHASER OR (II) IF THIS NOTE WAS ACQUIRED OUTSIDE OF THE
UNITED STATES, BOTH A QUALIFIED PURCHASER AND NEITHER A U.S. PERSON NOR A U.S.
RESIDENT AT THE TIME OF ACQUISITION OF THIS NOTE TO SELL THIS NOTE TO A PERSON
WHO IS (I) BOTH A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (II) A QUALIFIED
PURCHASER AND NEITHER A U.S. PERSON NOR A U.S. RESIDENT IN A TRANSACTION
MEETING THE REQUIREMENTS OF REGULATION S.

 

THE OFFERED NOTES MAY NOT
BE SOLD TO ANY RESIDENT OF THE REPUBLIC OF IRELAND.

 

[THIS NOTE HAS BEEN
ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES.  THE ISSUE PRICE,
AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE
OBTAINED BY WRITING TO THE SERVICER AT ITS ADDRESS SET FORTH IN THE INDENTURE.](21)

 

UNTIL 40 DAYS AFTER THE
INITIAL PURCHASER NOTIFIES THE CO-ISSUERS THAT THE RESALE OF THE OFFERED NOTES
HAS BEEN COMPLETED (THE “RESTRICTED
PERIOD”) IN CONNECTION WITH THE OFFERING OF THE NOTES IN THE
UNITED STATES FROM OUTSIDE OF THE UNITED STATES, THE SALE, PLEDGE OR TRANSFER
OF THIS NOTE IS SUBJECT TO CERTAIN CONDITIONS AND RESTRICTIONS.  THE HOLDER HEREOF, BY PURCHASING OR OTHERWISE
ACQUIRING THIS NOTE, ACKNOWLEDGES THAT SUCH HOLDER IS A QUALIFIED PURCHASER,
AND THAT THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND AGREES
FOR THE BENEFIT OF THE CO-ISSUERS THAT THIS NOTE MAY BE TRANSFERRED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY TO A QUALIFIED PURCHASER AND IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OF THE STATES,
TERRITORIES AND POSSESSIONS OF THE UNITED STATES GOVERNING THE OFFER AND SALE
OF SECURITIES, AND PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD, ONLY (I) IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT OR (II) PURSUANT TO AND IN ACCORDANCE WITH RULE 144A UNDER THE
SECURITIES ACT.

 

(21) Insert as applicable

 

 

THIS NOTE IS A GLOBAL
NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”), A NEW YORK CORPORATION,
55 WATER STREET, NEW YORK, NEW YORK 10004, OR A NOMINEE THEREOF.  THIS NOTE MAY NOT BE EXCHANGED IN WHOLE
OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS NOTE IN
WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN
DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.  UNLESS THIS NOTE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE CO-ISSUERS OR THE REGISTRAR, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER, CEDE &
CO., HAS AN INTEREST HEREIN.

 

 

REGULATION S GLOBAL NOTE

SERIES 2007-1 SUBORDINATED NOTE

CLASS M-1

 

	
  No. [       ]

  	
   

  	
  $[                    ]

  

 

SEE REVERSE FOR CERTAIN CONDITIONS

 

CUSIP Number: U00540 AC5

ISIN Number: USU00540AC55

 

APPLEBEE’S ENTERPRISES LLC

APPLEBEE’S IP LLC

APPLEBEE’S RESTAURANTS NORTH LLC

APPLEBEE’S RESTAURANTS WEST LLC

APPLEBEE’S RESTAURANTS TEXAS LLC

APPLEBEE’S RESTAURANTS INC.

APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC

 APPLEBEE’S RESTAURANTS VERMONT, INC.

APPLEBEE’S RESTAURANTS KANSAS LLC

 

SERIES 2007-1 8.4044% FIXED RATE TERM
SUBORDINATED NOTE, CLASS M-1

 

APPLEBEE’S ENTERPRISES LLC, a limited liability company formed under
the laws of the State of Delaware, APPLEBEE’S IP LLC, a limited liability
company formed under the laws of the State of Delaware, APPLEBEE’S RESTAURANTS
NORTH LLC, a limited liability company formed under the laws of the State of
Delaware, APPLEBEE’S RESTAURANTS WEST LLC, a limited liability company formed
under the laws of the State of Delaware, APPLEBEE’S RESTAURANTS TEXAS LLC, a
limited liability company formed under the laws of the State of Texas, APPLEBEE’S
RESTAURANTS INC., a corporation incorporated under the laws of the State of
Kansas, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, a limited liability company
formed under the laws of the State of Delaware, APPLEBEE’S RESTAURANTS VERMONT,
INC., a corporation incorporated under the laws of the State of Vermont and
APPLEBEE’S RESTAURANTS KANSAS LLC, a limited liability company formed under the
laws of the State of Kansas (herein referred to, collectively, as the “Co-Issuers”),
for value received, hereby jointly and severally promise to pay to CEDE &
CO. or registered assigns, the principal sum of [                              ]
($[                    ])
as provided below and in the Indenture referred to herein. Payments of
principal shall be payable in the amounts and at the times set forth in the
Indenture described herein; provided, however, that the entire
unpaid principal amount of this Note shall be due on the Payment Date (as
defined below) occurring in December 2037 (the “Series 2007-1
Legal Final Maturity Date”). The Co-Issuers will pay interest on this Series 2007-1
Fixed Rate Term Subordinated Note, Class M-1 (this “Note”) at the Series 2007-1
Class M-1 Note Initial Interest Rate, as such rate may be adjusted in
accordance with the terms of the Indenture, for each Interest Accrual Period in
accordance with the terms of the Indenture. Such interest will be payable in
arrears on 

 

 

each
Payment Date, which will be on the 20th day (or, if such 20th day is not a
Business Day, the next succeeding Business Day) of each calendar month (each, a
“Payment Date”), commencing on the Payment Date occurring in January 2008.  Such amounts due on this Note will accrue for
each Payment Date with respect to (i) initially, the period from and
including November 29, 2007 to but excluding the Payment Date occurring in
January 2008 (which pursuant to Section 16.12 of the Base
Indenture and Section 7.16 of the Series 2007-1 Supplement
shall be January 22, 2008) and (ii) thereafter, the period commencing
on and including a Payment Date and ending on but excluding the next succeeding
Payment Date (each, an “Interest Accrual Period”), subject to the terms
set forth in the Indenture. Such amounts due on this Note with respect to the
Note (and interest on any defaulted payments of amounts due on this Note at the
same rate) will be computed in accordance with the Indenture. In addition,
under the circumstances set forth in the Indenture, the Co-Issuers shall also
pay contingent additional interest on this Note in the form of the Series 2007-1
Class M-1 Contingent Additional Interest or the Series 2007-1 Class M-1
Post-ARD Contingent Additional Interest, as applicable, which shall be computed
and shall be payable in the amounts and at the times set forth in the
Indenture.

 

The principal of and interest on this Note
are payable in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Co-Issuers with respect to this Note shall be applied as
provided in the Indenture.

 

This Note is subject to mandatory and
optional principal prepayments and mandatory liquidation (referred to in the
Indenture as the “Auction Call Redemption”), as set forth in the
Indenture.

 

Interests in this Note are
exchangeable or transferable in whole or in part for interests in a Regulation
S Global Note; provided that such transfer or exchange complies with the
applicable provisions of the Indenture relating to the transfer of the Notes.
Interests in this Note in certain circumstances may also be exchangeable or
transferable in whole but not in part for duly executed and issued registered
Definitive Notes; provided that such transfer or exchange complies with Article II
of the Base Indenture.

 

Reference is made to the further provisions
of this Note set forth on the reverse hereof, which shall have the same effect
as though fully set forth on the face of this Note. Although a summary of
certain provisions of the Indenture is set forth below and on the reverse
hereof and made a part hereof, this Note does not purport to summarize the
Indenture and reference is made to the Indenture for information with respect
to the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and obligations of the Co-Issuers and the
Indenture Trustee. A copy of the Indenture may be requested from the Indenture
Trustee by writing to the Indenture Trustee at: Wells Fargo Bank, National
Association, Sixth Street and Marquette Avenue, MAC N9311-161, Minneapolis, MN
55479, Attn: Corporate Trust
Services/Asset Backed Administration. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Indenture (as defined on the reverse hereof).

 

 

Subject to the next following paragraph, the
Co-Issuers hereby certify and declare that all acts, conditions and things
required to be done and performed and to have happened prior to the creation of
this Note and to constitute it as the valid obligation of the Co-Issuers
enforceable in accordance with its terms, have been done and performed and have
happened in due compliance with all applicable laws and in accordance with the
terms of the Indenture.

 

Unless the certificate of authentication
hereon has been executed by the Indenture Trustee whose name appears below by
manual or facsimile signature, this Note shall not be entitled to any benefit
under the Indenture referred to on the reverse hereof, or be valid or
obligatory for any purpose.

[Remainder of page intentionally left
blank]

 

 

IN WITNESS WHEREOF, the Co-Issuers have caused this Note to be duly
executed.

 

 

Dated:      [                  ]

 

	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  ENTERPRISES LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  IP LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS NORTH LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS WEST 

  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS TEXAS LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
				

 

 

	
   

  	
  APPLEBEE’S
  RESTAURANTS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS MID-

      ATLANTIC LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS VERMONT,

  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS KANSAS LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Name:

  
	
   

  	
         Title:

  
				

 

 

CERTIFICATE OF
AUTHENTICATION

 

This is one of the Series 2007-1 Notes
issued under the within-mentioned Indenture.

 

 

	
   

  	
  WELLS FARGO BANK, NATIONAL 

     ASSOCIATION, as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
         Authorized
  Signatory

  
				

 

 

[REVERSE OF NOTE]

 

This Note is one of a duly
authorized issue of Series 2007-1 Fixed Rate Term Subordinated Notes, Class M-1
of the Co-Issuers designated as their Series 2007-1 Fixed Rate Term
Subordinated Notes, Class M-1 (herein called the “Series 2007-1
Notes”) all issued under (i) a Base Indenture, dated as of November 29,
2007 (such Base Indenture, as amended, supplemented or modified, is herein
called the “Base Indenture”), among the Co-Issuers and Wells Fargo Bank,
National Association as indenture trustee (the “Indenture Trustee”,
which term includes any successor Indenture Trustee under the Base Indenture),
and (ii) a Series 2007-1 Supplement to the Base Indenture, dated as
of November 29, 2007 (such Series 2007-1 Supplement, as amended,
supplemented or modified from time to time, is herein called the (“Series 2007-1
Supplement”), among the Co-Issuers and the Indenture Trustee. The Base
Indenture, Series 2007-1 Supplement and such other Series Supplement
or Supplemental Indenture as may be executed from time to time are referred to
herein as the “Indenture”. The Series 2007-1 Notes are subject to
all terms of the Indenture. All terms used in this Note that are defined in the
Indenture, as supplemented, modified or amended, shall have the meanings
assigned to them in or pursuant to the Indenture, as so supplemented, modified
or amended.

 

The Series 2007-1 Notes
are and will be secured by the Collateral pledged as security therefor as
provided in the Indenture and in the respective Guaranty and Collateral
Agreements.

 

The Notes will be issued in minimum
denominations of $200,000 and integral multiples of $ 1,000 in excess thereof.

 

As provided for in the Indenture, subject to
certain specified conditions, the Series 2007-1 Notes may be prepaid, in
whole or in part, at the option of the Co-Issuers. In addition, the Series 2007-1
Notes are subject to mandatory principal prepayment provisions as provided for
in the Indenture. With certain exceptions, the Co-Issuers will be obligated to
pay the Make-Whole Amount relating to the Series 2007-1 Notes on any
prepayment of principal of any Series 2007-1 Notes prior to the Series 2007-1
Anticipated Prepayment Date as described in the Indenture. As described above,
the entire unpaid principal amount of this Note shall be due and payable on the
Series 2007-1 Legal Final Maturity Date. All payments of principal
relating to any Class of Series 2007-1 Notes will be made pro  rata
to the Holders of such Class of Series 2007-1 Notes.

 

Principal of and interest on this Note which
is payable on a Payment Date or on any date on which payments are permitted to
be made as provided for in the Indenture shall be paid to the Person in whose
name this Note (or one or more predecessor Notes) is registered at the close of
business on the applicable Record Date.

 

Interest and contingent
additional interest, if any, will each accrue on the Series 2007-1 Notes
at the rates set forth in the Indenture. The interest and contingent additional
interest, if any, will be computed on the basis set forth in the Indenture. The
amount of interest payable on the Series 2007-1 Notes on each Payment Date
will be calculated as set forth in the Indenture.

 

 

Payments of principal of and
interest on this Note are subordinated to the payment of certain other amounts
in accordance with the Priority of Payments in the Indenture.

 

If an Event of Default shall
occur and be continuing, this Note may become or be declared due and payable in
the manner and with the effect provided in the Indenture.

 

Amounts payable in respect
of this Note shall be made by wire transfer of immediately available funds to a
Dollar account maintained by the Noteholder or its nominee, subject to the
terms set forth in the Indenture.

 

As provided in the Indenture
and subject to certain limitations set forth therein, the transfer of this Note
may be registered on the Note Register upon surrender of this Note for
registration of transfer at the office or agency designated by the Co-Issuers
pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by, the
Series 2007-1 Noteholder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an “eligible guarantor institution”
meeting the requirements of the Note Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program (“STAMP”)
or such other “signature guarantee program” as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended, and accompanied by such other
documents as the Indenture Trustee and the Note Registrar may require and as
may be required by the Indenture, and thereupon one or more new Series 2007-1
Notes of authorized denominations in the same aggregate principal amount will
be issued to the designated transferee or transferees. No service charge will
be charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such
registration of transfer or exchange.

 

Each Holder of Series 2007-1 Notes, by
acceptance of a Series 2007-1 Note, covenants and agrees that by accepting
the benefits of the Indenture that prior to the date that is one year and one
day after the payment in full of the latest maturing note issued under the
Indenture, such Series 2007-1 Noteholder will not institute against, or
join with any other Person in instituting against, any Securitization Entity
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings, under any federal Insolvency Law; provided,
however, that nothing herein shall constitute a waiver of any right to
indemnification, reimbursement or other payment from the Securitization
Entities pursuant to the Indenture or any other Transaction Document

 

It is the intent of the
Co-Issuers and each Holder of Series 2007-1 Notes that, for federal, state
and local income and franchise tax purposes only, the Series 2007-1 Notes
will evidence indebtedness of the Co-Issuers secured by the Collateral. Each
Holder of Series 2007-1 Notes, by the acceptance of this Note, agrees to
treat this Note (or beneficial interests herein) for purposes of federal, state
and local income or franchise taxes and any other tax imposed on or measured by
income, as indebtedness of the Co-Issuers or, if any Co-Issuer is treated as a
division of another entity, such other entity.

 

 

The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Co-Issuers and the rights of the Holders of Series 2007-1
Notes under the Indenture at any time by the Co-Issuers with the consent of the
Aggregate Controlling Party or each Series Controlling Party (as
applicable) and without the consent of any Holders of Series 2007-1 Notes.
The Indenture also contains provisions permitting the Aggregate Controlling
Party or each Series Controlling Party (as applicable) to waive compliance
by the Co-Issuers with certain provisions of the Indenture without the consent
of any Holders of Series 2007-1 Notes. Any such consent or waiver of this Note
(or any one or more predecessor Notes) shall be conclusive and binding upon the
Holder of this Note and all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Note.

 

The term “Co-Issuer” as used
in this Note includes any successor to the Co-Issuers under the Indenture.

 

The Series 2007-1 Notes
are issuable only in registered form in denominations as provided in the
Indenture, subject to certain limitations set forth therein.

 

THIS NOTE AND THE INDENTURE SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED 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 OF
NEW YORK).

 

No reference herein to the
Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Co-Issuers, which is absolute and unconditional,
to pay the principal of and interest on this Note at the times, place and rate,
and in the coin or currency herein prescribed.

 

 

ASSIGNMENT

 

Social Security or taxpayer
I.D. or other identifying number of assignee:                                          

 

 

FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto

 

 

	
   

  
	
  (name and address of assignee)

  

 

The within Note and all rights thereunder, and hereby
irrevocably constitutes and appoints
                     ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
  (22)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
                     Signature
  Guaranteed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

	
  (22)
  NOTE: The signature to this assignment must correspond with the name of the
  registered owner as it appears on the face of the  

  
	
     within Note, without alteration,
  enlargement or any change whatsoever.

  

 

 

SCHEDULE OF EXCHANGES IN
REGULATION S GLOBAL NOTE

 

The initial principal balance of this Regulation S Global Note is $[                  ].
The following exchanges of an interest in this Regulation S Global Note for an
interest in a corresponding Rule 144A Global Note have been made:

 

	
  Date

  	
   

  	
  Amount of Increase

  (or Decrease) in the

  Principal Amount of

  this Regulation S

  Global Note

  	
   

  	
  Remaining Principal

  Amount of this

  Regulation S Global

  Note following the

  Increase or Decrease

  	
   

  	
  Signature of

  Authorized Officer

  of Indenture

  Trustee of Note

  Registrar

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT C

 

FORM OF
MONTHLY NOTEsHOLDERS’ REPORT[DATE]

Series 2007-1 Notes

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

Payment Date:  [MM/DD/YY]

 

Reference is hereby made
to the Base Indenture, dated as of November 29, 2007 (the “Base
Indenture”), among Applebee’s Enterprises LLC, Applebee’s IP LLC and the
entities referred to therein as the “Restaurant Holders” (the “Co-Issuers”)
and Wells Fargo Bank, National Association, as indenture trustee (the “Indenture
Trustee”), supplemented by the Series 2007-1 Series Supplement
(the “Series Supplement” and, together with the Base Indenture, the
“Indenture”) and the Servicing Agreement, dated as of November 29,
2007, among the Co-Issuers,  Applebee’s
Franchising LLC, Applebee’s Services, Inc., Applebee’s International, Inc.,
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 Base
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.

 

 

	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

[ATTACH MONTHLY SERVICER’S REPORT]

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