Document:

Exhibit 4.2

EXECUTION VERSION

 

 

 

SERVICING AGREEMENT

Dated as of March 16, 2007

among

IHOP FRANCHISING, LLC, as Issuer,

IHOP IP, LLC, as Co-Issuer,

IHOP PROPERTY LEASING, LLC,

IHOP PROPERTIES, LLC,

IHOP REAL ESTATE, LLC,

INTERNATIONAL HOUSE OF PANCAKES, INC.,
as Servicer,

IHOP CORP., as Guarantor

and

WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Indenture Trustee

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  I

  

  DEFINITIONS

  	
   

  
	
  Section 1.1

  	
   

  	
  Certain
  Definitions

  	
   

  	
   

  	
   

  
	
  Section
  1.2

  	
   

  	
  Other Defined Terms

  	
   

  	
   

  	
   

  
	
  Section
  1.3

  	
   

  	
  Other Terms

  	
   

  	
   

  	
   

  
	
  Section
  1.4

  	
   

  	
  Computation of Time
  Periods

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  

  ADMINISTRATION AND SERVICING OF SERVICED ASSETS

  	
   

  
	
  Section 2.1

  	
   

  	
  IHOP Inc. to act
  as Servicer

  	
   

  	
   

  	
   

  
	
  Section
  2.2

  	
   

  	
  Trust Accounts

  	
   

  	
   

  	
   

  
	
  Section
  2.3

  	
   

  	
  Records

  	
   

  	
   

  	
   

  
	
  Section
  2.4

  	
   

  	
  Administrative Duties
  of Servicer

  	
   

  	
   

  	
   

  
	
  Section
  2.5

  	
   

  	
  No Offset

  	
   

  	
   

  	
   

  
	
  Section
  2.6

  	
   

  	
  Compensation

  	
   

  	
   

  	
   

  
	
  Section
  2.7

  	
   

  	
  Indemnification

  	
   

  	
   

  	
   

  
	
  Section
  2.8

  	
   

  	
  Nonpetition Covenant

  	
   

  	
   

  	
   

  
	
  Section
  2.9

  	
   

  	
  Issuer Consent

  	
   

  	
   

  	
   

  
	
  Section
  2.10

  	
   

  	
  Appointment of
  Subservicers

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  

  STATEMENTS AND REPORTS

  	
   

  
	
  Section 3.1

  	
   

  	
  Reporting by the
  Servicer

  	
   

  	
   

  	
   

  
	
  Section
  3.2

  	
   

  	
  Appointment of
  Independent Accountant

  	
   

  	
   

  	
   

  
	
  Section
  3.3

  	
   

  	
  Annual Accountants'
  Reports

  	
   

  	
   

  	
   

  
	
  Section
  3.4

  	
   

  	
  Available Information

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  

  THE SERVICER

  	
   

  
	
  Section 4.1

  	
   

  	
  Representations
  and Warranties Concerning the Servicer

  	
   

  	
   

  	
   

  
	
  Section
  4.2

  	
   

  	
  Existence; Status as
  Servicer

  	
   

  	
   

  	
   

  

 

 i
 

 

	
  Section 4.3

  	
   

  	
  Performance of
  Obligations

  	
   

  	
   

  	
   

  
	
  Section
  4.4

  	
   

  	
  Merger; Resignation and
  Assignment

  	
   

  	
   

  	
   

  
	
  Section
  4.5

  	
   

  	
  Notice of Certain
  Events

  	
   

  	
   

  	
   

  
	
  Section
  4.6

  	
   

  	
  Capitalization

  	
   

  	
   

  	
   

  
	
  Section
  4.7

  	
   

  	
  Franchise Law
  Determination

  	
   

  	
   

  	
   

  
	
  Section
  4.8

  	
   

  	
  Maintenance of
  Separateness

  	
   

  	
   

  	
   

  
	
  Section
  4.9

  	
   

  	
  [RESERVED]

  	
   

  	
   

  	
   

  
	
  Section
  4.10

  	
   

  	
  Business Operations

  	
   

  	
   

  	
   

  
	
  Section
  4.11

  	
   

  	
  Amendment of and
  Compliance with Collection Practices

  	
   

  	
   

  	
   

  
	
  Section
  4.12

  	
   

  	
  Protection of Secured
  Parties' Rights and Collectibility of Franchise Payments

  	
   

  	
   

  	
   

  
	
  Section
  4.13

  	
   

  	
  Security Interest

  	
   

  	
   

  	
   

  
	
  Section
  4.14

  	
   

  	
  Notices

  	
   

  	
   

  	
   

  
	
  Section
  4.15

  	
   

  	
  Indebtedness

  	
   

  	
   

  	
   

  
	
  Section
  4.16

  	
   

  	
  Qualification of Issuer

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  

  REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
   

  
	
  Section 5.1

  	
   

  	
  Representations
  and Warranties Made in Respect of New Assets

  	
   

  	
   

  	
   

  
	
  Section
  5.2

  	
   

  	
  Other Transferred
  Assets

  	
   

  	
   

  	
   

  
	
  Section
  5.3

  	
   

  	
  Ownership of IP Assets

  	
   

  	
   

  	
   

  
	
  Section
  5.4

  	
   

  	
  Notice Regarding
  Property Leases

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  

  DEFAULT

  	
   

  
	
  Section 6.1

  	
   

  	
  Servicer
  Termination Events

  	
   

  	
   

  	
   

  
	
  Section
  6.2

  	
   

  	
  Servicer's Transitional
  Role

  	
   

  	
   

  	
   

  
	
  Section
  6.3

  	
   

  	
  Intellectual Property

  	
   

  	
   

  	
   

  
	
  Section
  6.4

  	
   

  	
  Third Party Software

  	
   

  	
   

  	
   

  
	
  Section
  6.5

  	
   

  	
  No Effect on Other
  Parties

  	
   

  	
   

  	
   

  
	
  Section
  6.6

  	
   

  	
  Injunction

  	
   

  	
   

  	
   

  
	
  Section
  6.7

  	
   

  	
  Rights Cumulative

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  

  CONFIDENTIALITY

  	
   

  
	
  Section 7.1

  	
   

  	
  Confidentiality

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  

  GUARANTEE

  	
   

  
	
  Section 8.1

  	
   

  	
  Guarantee

  	
   

  	
   

  	
   

  

 

 ii
 

 

	
  Section 8.2

  	
   

  	
  Liability of Guarantor
  Absolute

  	
   

  	
   

  	
   

  
	
  Section
  8.3

  	
   

  	
  Waivers by the
  Guarantor

  	
   

  	
   

  	
   

  
	
  Section
  8.4

  	
   

  	
  Representations and
  Warranties of the Guarantor

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  

  MISCELLANEOUS PROVISIONS

  	
   

  
	
  Section 9.1

  	
   

  	
  Termination of
  Agreement

  	
   

  	
   

  	
   

  
	
  Section
  9.2

  	
   

  	
  Survival

  	
   

  	
   

  	
   

  
	
  Section
  9.3

  	
   

  	
  Amendment

  	
   

  	
   

  	
   

  
	
  Section
  9.4

  	
   

  	
  Governing Law

  	
   

  	
   

  	
   

  
	
  Section
  9.5

  	
   

  	
  Notices

  	
   

  	
   

  	
   

  
	
  Section
  9.6

  	
   

  	
  Severability of
  Provisions

  	
   

  	
   

  	
   

  
	
  Section
  9.7

  	
   

  	
  Delivery Dates

  	
   

  	
   

  	
   

  
	
  Section
  9.8

  	
   

  	
  Limited Recourse

  	
   

  	
   

  	
   

  
	
  Section
  9.9

  	
   

  	
  Binding Effect;
  Assignment; Third Party Beneficiaries

  	
   

  	
   

  	
   

  
	
  Section
  9.10

  	
   

  	
  Article and Section
  Headings

  	
   

  	
   

  	
   

  
	
  Section
  9.11

  	
   

  	
  Concerning the
  Indenture Trustee

  	
   

  	
   

  	
   

  
	
  Section
  9.12

  	
   

  	
  Counterparts

  	
   

  	
   

  	
   

  
	
  Section
  9.13

  	
   

  	
  Entire Agreement

  	
   

  	
   

  	
   

  
	
  Section
  9.14

  	
   

  	
  Jurisdiction; Consent
  to Service of Process

  	
   

  	
   

  	
   

  
	
  Section
  9.15

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
   

  	
   

  
	
  EXHIBIT A –
  MANAGEMENT ASSERTION

  	
   

  	
   

  	
   

  
	
  EXHIBIT B –
  POWER OF ATTORNEY

  	
   

  	
   

  	
   

  
	
  EXHIBIT C – FORM
  OF MONTHLY NOTEHOLDERS' STATEMENT

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  
	
  EXHIBIT E – FORM
  OF WEEKLY SERVICER'S REPORT

  	
   

  	
   

  	
   

  
	
  Schedule A –
  Competitive Business

  	
   

  	
   

  	
   

  
	
  Schedule 2.1(f)
  – Franchisee Insurance Not Providing Affiliate Coverage

  	
   

  	
   

  	
   

  
	
  Schedule 2.1(g)
  – Servicer Insurance

  	
   

  	
   

  	
   

  
	
  Schedule 2.10 –
  Subservicing Arrangements with Affiliates and Third Parties

  	
   

  	
   

  	
   

  
	
  Schedule 4.11 –
  Collections Practices

  	
   

  	
   

  	
   

  
	
  Schedule 4.15 – Debt

  	
   

  	
   

  	
   

  

 

 iii

SERVICING AGREEMENT

This SERVICING AGREEMENT, dated as of March 16, 2007 (this “Agreement”), is entered into by and among IHOP Franchising,
LLC, a Delaware limited liability company (the “Issuer”), IHOP
IP, LLC (the “IP
Company” or “Co-Issuer”), IHOP Property Leasing, LLC, a Delaware limited
liability company (“IHOP
Property Leasing”), IHOP
Properties, LLC, a Delaware limited liability company (“IHOP Properties”), IHOP Real Estate, LLC, a Delaware limited
liability company (“IHOP
Real Estate”), International House
of Pancakes, Inc., a Delaware corporation, (“IHOP Inc..”),
IHOP Corp., a Delaware corporation (“Guarantor”),
and Wells Fargo Bank, National Association, as indenture trustee (the “Indenture Trustee”).  For all
purposes of this Agreement, capitalized terms used herein but not otherwise
defined herein shall have the meanings ascribed thereto in Annex A to the
Indenture (as defined below).

RECITALS

WHEREAS, the Issuer and the Co-Issuer have entered into a Base
Indenture, dated as of the date hereof, with the Indenture Trustee (together
with any Series Supplement, as may be amended or supplemented, the “Indenture”), pursuant to which the Issuer and the Co-Issuer
may issue one or more series of notes (collectively, the “Notes”) from time to time, on the terms described
therein;

WHEREAS, pursuant to the Indenture, as security for the indebtedness
represented by the Notes and the other Secured Obligations, the Issuer and the
Co-Issuer and the other Securitization Entities are and will be granting to the
Indenture Trustee on behalf of the Secured Parties, a security interest in the
Collateral;

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

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

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

WHEREAS, each of the Securitization Entities desires to have the
Servicer enter into certain agreements and acquire certain assets from time to
time on its behalf, in each case in accordance with the Servicing Standard;

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

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

WHEREAS, each of the Issuer, the Co-Issuer, and the other
Securitization Entities desires to enter into this Agreement to provide for,
among other things, the servicing of the respective rights, powers, duties and
obligations of the Issuer, Co-Issuer and the other Securitization Entities, as
applicable, under or in connection with the Asset Transfer Agreements, the
Franchise Assets (as defined below), the IP Assets,  and the Issuer’s equity interests in the IP
Company, IHOP Properties, IHOP Property Leasing, and IHOP Real Estate, and any
other assets acquired by or transferred to the Issuer (including such assets
relating to Type 3 IHOP Restaurants if and when acquired by the relevant
Securitization Entity) or any of its Subsidiaries (the “Serviced Assets”) by the Servicer, all in accordance with the
Servicing Standard.

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

ARTICLE
I

DEFINITIONS

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

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

“Additional Securitization Entity” means any entity that becomes a direct or indirect
wholly owned Subsidiary of the Issuer or any other Securitization Entity after
the Closing Date in accordance with and as permitted under the Related
Documents.

“Advertising Funds Account” has the meaning set forth in Section 2.1(k)
hereof.

“Advertising Funds”
has the meaning set forth in Section 2.1(k) hereof.

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

“Advertising Fees”
has the meaning specified in the Indenture.

“After Acquired IP Assets” means (a) any variations on, and applications and
registrations for, the IHOP Brand not in existence as of the Closing Date and
(b) any Intellectual Property, throughout the world, that is created, developed
or acquired by the Issuer, IHOP Corp., the Servicer, IHOP Holdings, any other
Securitization Entity or any Affiliate of the foregoing after the date hereof
and during the term of the IP License Agreement 
that (i) relates to any business, products or services offered under the
IHOP Brand or (ii)  is based on or
derivative of the IP Assets (which will be assigned to the Co-Issuer pursuant
to the Transaction Documents).

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

 2
 

“Area License Agreements” means the existing area license agreements entered
into by the Servicer or any Affiliate thereof and Area Licensees and all future
area license agreements to be entered into by the Issuer and Area Licensees,
excluding the area license agreement covering British Columbia, Canada.

“Area Licensee”
means an area licensee under any Area License Agreement.

“Asset Transfer Agreements” means, collectively, (i) the Parent Asset Sale
Agreement, dated as of the date hereof, between the IHOP Inc. and IHOP
Holdings, (ii) the Holdings Asset Sale Agreement, dated as of the date hereof,
between IHOP Holdings and the Issuer, (iii) the Owned Real Property Asset Sale
Agreement, dated as of the date hereof, between IHOP Holdings and IHOP Real
Estate, (iv) the Type 1 Property Leases Asset Sale Agreement, dated as of the
date hereof, among IHOP Properties, IHOP Realty, Corp. and IHOP Property
Leasing, and (v) the Intellectual Property Asset Contribution Agreement, dated
as of the date hereof, between the Issuer and the IP Company.

“Back-Up Servicer”
means FTI Consulting Inc., in its capacity as back up servicer pursuant to the
Back-Up Servicer Agreement, and any successor Back-Up Servicer.

“Back-Up Servicer Proposal” has the meaning set forth in Section 6.1(c) hereof.

“Back-Up Services”
has the meaning set forth in Section 6.1(b) hereof.

“Business”
means the business conducted by IHOP Corp. and its Affiliates immediately prior
to the Closing Date primarily relating to the operation of restaurants in the “family dining” category that primarily target the “breakfast daypart” (as such term is commonly used in the restaurant
industry) segment.

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

“Collection Practices”
has the meaning set forth in Section 4.11(a) hereto.

“Competitive Business”
means any business conducted under the IHOP Brand or any business identified on
Schedule A hereto.

“Confidential Information” means trade secrets and other information
(including know how, ideas, techniques, 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 hereto (the “Discloser”)
to another party hereto (the “Recipient”) in writing or other tangible form and
designated as confidential, or, if disclosed orally, is identified as
confidential and is confirmed in writing thereafter.

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

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

 3
 

“Current Practice”
means, in respect of any action or inaction, the performance standards of IHOP
Corp. and its Subsidiaries (including, without limitation, the Former
Franchisor) immediately prior to the Closing Date.

“Debt” as
applied to any Person, means, 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 and (f) all contingent obligations of such Person in
respect of the foregoing. 
Notwithstanding the foregoing, Debt shall not include any liability for
federal, state, local or other Taxes owed or owing to any governmental entity.

“Defective Asset Damages Amount” means, with respect to any New Franchise Document
that is a Defective New Asset, an amount equal to the product of (i) the
quotient obtained by dividing (a) the sum of all Franchise Payments under such
New Franchise Document received for (1) the 12 months immediately preceding the
date such New Franchise Document became a Defective New Asset or (2) the period
commencing on the applicable New Asset Addition Date and ending on the date
such New Franchise Document became a Defective New Asset, whichever is shorter
(the “Measurement
Period”), by (b) the aggregate
amount of all revenues received under all Franchise Documents during the
Measurement Period and (ii) the Aggregate Outstanding Principal Amount plus any
accrued and unpaid interest on such Aggregate Outstanding Principal Amount, determined
as of the date such New Franchise Document became a Defective New Asset.

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

“Defective Non-Conforming New Franchise Document” means each Non-Conforming New Franchise Document
in excess of (i) 20 during any successive 12 month period following the Closing
Date or (ii) 60 in the aggregate at any time; provided, however,
that each New Franchise Document that was at one time a Non-Conforming New
Franchise Document but is subsequently modified such that the conditions under
the definition of Non-Conforming New Franchise Document are no longer
applicable shall be deducted from the foregoing calculations of Non-Conforming
New Franchise Documents as of the time of such modification.

“Discloser” has
the meaning set forth in the definition of “Confidential Information.”

“Disentanglement”
has the meaning set forth in Section 6.2(a) hereof.

 4
 

“Disentanglement Period” has the meaning set forth in Section 6.2(c)
hereof.

“Disentanglement Services” has the meaning set forth in Section 6.2(a)
hereof.

“EFT” has the
meaning set forth in Section 5.1(a)(v) hereof.

“Existing Franchise Document” means any Franchise Document entered into by IHOP
Inc. or any Affiliate prior to the Closing Date.

“Foreign/Type 3 IP License Agreement”
means the Intellectual Property License Agreement (Foreign/Type 3), dated as of
the date hereof, between IHOP Inc., as licensee, and the IP Company, as
licensor, and any and all amendments and supplements thereto.

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

“Franchise Arrangement”
means any Franchise Document or any other contract, agreement or arrangement
between the Issuer or any of its Affiliates and any franchisee.

“Franchise Assets”
has the meaning set forth in the Indenture.

“Franchise Documents”
means Franchise Agreements, Area License Agreements, Development Agreements,
Franchise Notes, Equipment Leases, Property Leases, Franchisee Leases,
Franchisee Subleases, Product Sourcing Agreements and other agreements to which
the Former Franchisor or its Affiliates, the Issuer and/or a Franchisee or Area
Licensee is a party in connection with the franchise system, together with any
modifications, amendments, extensions or replacements of the foregoing.

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

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

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

“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.

 5
 

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

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

“IHOP Brand”
means the name and mark “IHOP” or “International House of
Pancakes”, alone or in combination
with other words or symbols, any variations or derivative thereof, and any
names or marks confusingly similar thereto.

“IHOP Corp. IP License Agreement” means the IHOP Corp. IP License Agreement, dated
as of the date hereof, between IHOP Corp., as licensee, and the IP Company, as
licensor, and any and all amendments and supplements thereto.

“IHOP Operated Restaurant Sub-license Agreement” means the sublicense agreement, dated as of the
date hereof, between IHOP Corp. and the Issuer, as amended, modified or
supplemented from time to time.

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

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

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

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

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

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

“Intellectual Property”
means all (i) Trademarks; (ii) patents and industrial designs (including any
continuations, divisionals, continuations in part, renewals, reissues, and
applications for any of the foregoing (“Patents”);
(iii) rights in computer programs, documentation and databases, including
copyrights therein (“Software”); (iv) copyrights (including any registrations and
applications for copyright registrations) and copyrights in unpublished and
published works (“Copyrights”); (v) trade secrets and other confidential
information; and (vi) any registration, applications for registration or
issuance, recordings, renewals and extensions relating to any of the foregoing.

“IP Assets”
means the IHOP Brand and all (i) Intellectual Property relating to the IHOP
Brand owned by the Co-Issuer as of the date hereof including, but not limited
to, the Intellectual Property transferred to the IP Company pursuant to the
applicable Asset Transfer Agreements and (ii) any After Acquired IP Assets.

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

 6
 

“IP License Agreement”
means the Intellectual Property License Agreement, dated as of the date hereof,
between the Issuer and the IP Company, and any and all amendments and
supplements thereto.

“IP Licensee Services”
means performing the Issuer’s obligations as licensee under the IP License
Agreement and exercising the Issuer’s rights as licensee under the IP License
Agreement on behalf of the Issuer.

“IP Management Services” means performing the IP Company’s obligations as
licensor under the IP License Agreement, the Foreign/Type 3 IP License
Agreement, the IHOP Corp. IP License Agreement (and under any other agreements
pursuant to which the IP Company licenses the use of any IP Assets), exercising
the IP Company’s rights as licensor under the IP License Agreement, the
Foreign/Type 3 IP License Agreement, IHOP Corp. IP License Agreement (and under
any other agreements pursuant to which the IP Company licenses the use of any
IP Assets), exercising the Issuer’s rights on behalf of the Issuer and
performing the Issuer’s obligations as sublicensor under the IHOP Operated
Restaurant Sublicense Agreement (or other sublicense agreement issued under the
IP License Agreement) and to maintain, enforce, and defend the IP Company’s
rights in and to the IP Assets, on behalf of the IP Company, including by way
of example, without limitation, the following activities:

(a)           searching, screening and clearing
After Acquired IP Assets to avoid potential infringement;

(b)           filing, prosecuting, and maintaining
applications and registrations for the Trademark Assets, anywhere in the world,
in the IP Company’s name, including, timely filing of evidence of use,
applications for renewal and affidavits of use and/or incontestability,
including the timely payment of all registration and maintenance fees,
responding to third party oppositions of trademark applications or
registrations, responding to any office action or other examiner requests;

(c)           monitoring third party use and
registration of trademarks and servicemarks and taking appropriate actions to
oppose or contest any infringing or potentially infringing trademarks, service
marks, trade dress, designs, logos, or other indicia of origin, and any
applications to register the same;

(d)           enforcing the IP Company’s legal
title in and to the IP Assets, including, obtaining written assignments of IP
Assets to the IP Company, and recording transfers of title in the appropriate
Intellectual Property registry;

(e)           exercising the IP Company’s rights,
and performing the IP Company’s obligations, under the IP License Agreement,
the Foreign/Type 3 IP License Agreement, the IHOP Corp. IP License Agreement
and any Transaction Documents or other agreements to which the IP Company is a
party, licensing the use of any Intellectual Property, including monitoring the
licensee’s use of the Licensed IP Assets and the quality of its goods and
services offered in connection with any licensed Trademark Assets, rendering
approvals (or disapprovals) that are required under the applicable license
agreement(s), and the ensuring that any use of the IP Assets satisfies the
quality control standards and usage provisions of such license agreement 

 7
 

and is
in compliance with all applicable laws and the requirements of each of the
Transaction Documents;

(f)            filing, prosecuting, and maintaining
applications and registrations for patents anywhere in the world, in the IP
Company’s name, (including divisionals, continuation in parts, provisionals,
and reissues); maintaining the registrations for any patents, including, timely
payment of maintenance and registration fees, responding to office actions, requests
for reexamination, interferences, and any other patent office requests or
requirements;

(g)           filing, prosecuting and maintaining
applications and registrations for copyrights and other Intellectual Property,
anywhere in the world, in the IP Company’s name, including timely payment of
maintenance and registrations fees, as applicable, responding to office
actions, and other copyright office (or other Intellectual Property office)
requests or requirements;

(h)           to protect, police, and, in the event
that the Servicer becomes aware of any unlicensed copying, imitation,
infringement, dilution, misappropriation and/or unauthorized use of the IP
Assets, or any portion thereof, enforcing such IP Assets, including, without
limitation, (i) preparing and responding to and further prosecuting cease and
desist, demand and notice letters, and requests for a license; and (ii)
commencing, prosecuting and/or resolving a claim or suit against imitation,
infringement, dilution, misappropriation and/or the unauthorized use of the IP
Assets, and seeking all appropriate monetary and equitable remedies in
connection therewith; provided that the IP Company agrees to join as a party to
any such suits to the extent necessary to maintain standing;

(i)            performing such functions and duties,
and preparing and filing such documents, as are required under the Indenture or
any other Transaction Document to be performed, prepared and/or filed by the IP
Company, including (i) executing and recording such financing statements
(including continuation statements) or amendments thereof or supplements
thereto or such other instruments as the Indenture Trustee and Co-Issuer
together or any Insurer (so long as it is a Series Controlling Party) may from
time to time reasonably request in connection with the security interests in
the IP Assets granted by the IP Company to the Indenture Trustee under the
Indenture and (ii) preparing, executing and delivering grants of security
interests or any similar instruments as the Indenture Trustee and the Co-Issuer
together or any Insurer (so long as it is a Series Controlling Party) may from
time to time reasonably request that are intended to evidence such security
interests in the IP Assets and recording such grants or other instruments with
the relevant authority including the U.S. Patent and Trademark Office, the U.S.
Copyright Office, or any applicable foreign intellectual property office;

(j)            taking such actions as the Issuer
may reasonably request that are required by the terms, provisions and purposes
of the IP License Agreement, the Foreign/Type 3 IP License Agreement, the IHOP
Corp. IP License Agreement (and any other license agreement under which the IP
Company is licensor) or any other Transaction Document to be taken by the IP
Company; and preparing (or causing to be prepared) for execution by the IP
Company all documents, certificates and other filings as the IP Company shall
be required to prepare and/or file under the terms of such Intellectual
Property license agreements;

 8
 

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

(l)            licensing the IP Assets to any
Securitization Entity, including any Additional Securitization Entity, from
time to time, in each case in accordance with the terms of the Transaction
Documents;

(m)          with respect to trade secrets, and
other Confidential Information of the IP Company, taking all necessary or
desirable measures to maintain confidentiality and to prevent any non
confidential disclosure.

“IP Services”
means, collectively, the IP Licensee Services and the IP Management Services.

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

“Lease Amounts Payable”
means with respect to any Property Lease, any amounts payable by any
Securitization Entity to any third party landlord or otherwise pursuant to the
terms of such Property Lease including, without limitation, rent, management
fees, brokerage fees, insurance fees, utilities costs and insurance proceeds
required to be reinvested in the related Leased Property.

“Leased Property”
has the meaning set forth in the Holdings Asset Sale Agreement.

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

“Measurement Period”
has the meaning set forth in the definition of “Defective Asset Damages Amount”.

“Mystery Shop Program”
means the quality control program implemented by the Former Franchisor and
maintained by the Servicer, pursuant to which an independent third party
conducts unannounced and anonymous visits to Restaurants during each quarter to
evaluate the food quality, cleanliness, service and other aspects of the guest
experience at such Restaurants.

“Negative Lease”
means, with respect to any month, a New Franchisee Lease that is reasonably
expected to yield negative Net Rental Revenue during that month.

“Net Rental Revenue”
means, with respect to any New Franchisee Lease and New Franchisee Sublease and
any month the difference between (a) all Franchisee Lease Payments that are
reasonably expected to be received from the franchisee on such New Franchisee
Lease and New Franchisee Sublease during that month minus (b) all Lease Amounts
Payable, if any, that are reasonably expected to be made to the applicable
prime lessor during that month.

 9
 

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

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

“New Franchise Document” means any Franchise Document entered into by any
of the Securitization Entities (including any amendment, modification, renewal,
waiver or adjustment, in writing or otherwise, in respect of a Franchise
Document entered into prior to or on the Closing Date other than such Franchise
Document constituting a Non-Conforming Existing Franchise Document) after the
Closing Date.

“New Leased Real Property” means any real property leased by IHOP Property
Leasing or IHOP Properties, as applicable, from a third-party Property Lessor
in respect of which the lease was entered into after the Closing Date.

“New Owned Real Property” means any real property owned by IHOP Real Estate
and acquired after the Closing Date.

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

“Non-Conforming Existing Franchise Document” has the meaning specified under the Parent Asset
Sale Agreement.

“Non-Conforming New Franchise Document” means any New Franchise Document as to which (i)
in the case of a Franchise Agreement with respect to any date of determination,
the effective weekly royalty rate will be lower than 1.0% as of that date or
(ii) in the case of a Property Lease and the related Franchisee Sublease for
any month, the Net Rental Revenue yield for the applicable leases during such
month is negative.

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

“Offering Circular”
means the final base offering circular and supplemental Offering Circular
relating to a Series of Notes that is offered pursuant to such document.

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

 10

“Permitted Liens”
has the meaning set forth in the Indenture.

“Post Closing Assets”
has the meaning set forth in Section 5.1(a) hereof.

“Post Opening Services”
means the services required to be performed under the Franchise Agreements or
otherwise in connection with the Franchise Arrangements by the Franchisor,
including without limitation, (a) the maintenance of a continuing advisory
relationship with Franchisees, including consultation in the areas of
marketing, merchandising and general business operations; (b) the provision to
each Franchisee of the standards established or approved by the IP Company for
use of the IHOP Brand and other Trademark Assets; (c) the establishment of
standards of quality, cleanliness, appearance and service at all Restaurants;
(d) the dissemination of the standards described in subsection (c) above
to potential suppliers of products at the written request of any Franchisee,
(e) the administration of the advertising funds described in the applicable
Franchise Agreements and the direction of the development of all advertising
and promotional programs for the IHOP Brand; (f) the inspection of the Stores
operated by each Franchisee; and (g) such other post opening services as are
required to be performed under the Franchise Agreements or otherwise in
connection with the Franchise Arrangements by the Franchisor.

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

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

“Pre-Opening Services”
means, the services required to be performed under the Franchise Agreements or
otherwise in connection with the Franchise Arrangements by the Franchisor,
including without limitation, (a) the provision to each Franchisee of standards
for the design, construction, equipping and operation of the Restaurant and the
approval of locations meeting such standards; (b) the provision to individuals
designated by the Franchisee of the then current initial training program to be
conducted at one or more training centers or other locations designated by the
Servicer; (c) the provision to each Franchisee of operating procedures to
assist each Franchisee in complying with the standard methods of record
keeping, controls, staffing, quality control and training requirements and
production methods; (d) the provision to each Franchisee of operating
procedures to assist each Franchisee in developing approved sources of supply;
and (e) the provision to each Franchisee of such other assistance in the pre
opening, opening and initial operation of the franchise as are required to be
provided under the Franchise Agreements or otherwise in connection with the Franchise
Arrangements by the Franchisor.

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

 11
 

“Product Sourcing Agreements” means any agreement relating to the manufacture or
distribution of products for sale to a Securitization Entity for resale to
Franchisees.

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

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

“Real Estate Services”
means:

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

(b)           the management of the Realty Assets,
including without limitation (i) the enforcement of the Property Leases, the
Franchisee Leases and the Franchisee Subleases, (ii) the payment, extension,
renewal, modification adjustment, prosecution, defense, compromise or
submission to arbitration or mediation of any obligation, suit, liability,
cause of action or claim, including taxes, and (iii) the collection of any
amounts payable to any Securitization Entity, including without limitation
rent;

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

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

(e)           obtaining and renewing appropriate
levels of title insurance for the Owned Real Property;

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

(g)           the employment of agents, managers,
brokers or other persons necessary or appropriate to acquire, dispose of,
maintain, own, lease, manage and operate the Realty Assets;

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

(i)            negotiations with Franchisees or
Area Licensees with respect to properties owned by Franchisees or Area
Licensees or leased by Franchisees or Area Licensees from a third party
landlord and entering any documentation with respect to the same; and

 12
 

(j)            all other actions or decisions
relating to the acquisition, disposition, maintenance, ownership, leasing,
management and operation of the Realty Assets, all in accordance with the
Servicing Standard.

“Real Estate Subs”
means IHOP Properties, IHOP Property Leasing, and IHOP Real Estate.

“Realty Assets”
means, collectively, (i) the Owned Real Property, (ii) the Leased Property,
(iii) the Property Leases, (iv) the Franchisee Leases and (v) the Franchisee
Subleases.

“Recipient” has
the meaning ascribed to such term in the definition of “Confidential Information”.

“Requirements of Law”
means with respect to any Person or any of its property, the certificate of
incorporation or articles of association and by laws, limited liability company
agreement, partnership agreement or other organizational or governing documents
of such Person or any of its property, and any law, treaty, rule or regulation,
or determination of any arbitrator or Governmental Authority, 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, without limitation, usury laws, the Federal Truth in
Lending Act and retail installment sales acts).

“Restaurant”
means a restaurant now or hereafter operated under the IHOP Brand.

“Serviced Affiliate”
has the meaning set forth in Section 4.10 hereto.

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

“Serviced Document”
means any contract, agreement, arrangement or understanding relating to any of
the Serviced Assets, including, without limitation, the Asset Transfer
Agreements, Credit Agreements, Franchise Documents, IP License Agreement, the
Foreign/Type 3 IP License Agreement and the IHOP Operated Restaurant
Sub-license Agreement.

“Servicer”
means IHOP Inc. in its capacity as Servicer hereunder.

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

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

(a)           calculating and compiling information
required in connection with any report to be delivered pursuant to this
Agreement or the Indenture;

 13
 

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

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

(d)           performing the duties and obligations
of the Securitization Entities pursuant to the Transaction Documents;

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

(f)            performing the duties and obligations
of the Issuer required pursuant to the Franchise Agreements, Area License
Agreements and Development Agreements, including, without limitation, causing
payments (other than Advertising Fees) to be deposited to the Lock-Box Account,
providing a Franchisee with operations and management assistance, access to
advertising and marketing materials, information and program updates and
ongoing training programs for such Franchisee and its employees in accordance
with the terms thereunder and in accordance with the Servicing Standard;

(g)           on behalf of the Issuer, selecting
and approving the new Franchisee and providing personnel to manage the
selection and approval process;

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

(i)            on behalf of the Issuer, preparing
and filing franchise offering circulars to comply in all material respects with
applicable federal, state and foreign laws;

(j)            on behalf of the Issuer, complying
with franchise industry specific government regulation and applicable laws;

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

(l)            arranging for legal services with
respect to the Serviced Assets, including with respect to the enforcement of
the Existing Franchise Documents, other current and future agreements with
Franchisees;

(m)          providing accounting and financial
reporting services;

(n)           establishing and/or providing quality
control services and standards with respect to the promulgation and maintenance
of standards for food, equipment, suppliers and distributors and monitoring
compliance with such standards;

 14
 

(o)           monitoring industry conditions and
adapting accordingly to meeting changing consumer needs;

(p)           developing new products to be offered
in connection with the IHOP Brand and supporting the development of programs
for increasing awareness of the IHOP Brand;

(q)           developing and disseminating (i)
specifications for restaurant operations, (ii) the IHOP operating manual, (iii)
new menu items;

(r)            evaluating and approving, on behalf
of the Issuer, assignments of Franchise Agreements and other Franchise
Documents by Franchisees to third party franchisee candidates;

(s)           operating the IHOP Operated
Restaurants;

(t)            performing the Pre-Opening Services;

(u)           performing the Post Opening Services;

(v)           performing the Real Estate Services;

(w)          performing the IP Management Services;

(x)            performing the IP Licensee Services;

(y)           performing the Administrative
Services; and

(z)            performing any and all activities
that the Servicer deems necessary or convenient in connection with the
foregoing.

“Servicing Standard”
means standards that are (i) at least equal to the higher (as determined in the
Servicer’s reasonable business judgment) of (A) Current Practice or (B)
performance standards which the Servicer would adopt if the Serviced Assets
were owned by the Servicer and the Servicer was not engaged in any business
other than on behalf of the Issuer, and which shall be adjusted to the extent
of changed circumstances (including, without limitation, changed practices,
technologies, strategies and implementation methods) in the Servicer’s
reasonable business judgment, (ii) applied in good faith in a manner which (A)
is at least equal to the procedures which the Servicer would apply in
accordance with the Current Practices if the Serviced Assets were owned by the
Servicer and the Servicer was not engaged in any business other than on behalf
of the Issuer, as adjusted to the extent of changed circumstances (including,
without limitation, changed practices, technologies, strategies and
implementation methods) in the Servicer’s reasonable business judgment and (B)
would enable the Servicer to comply in all material respects with all of the
duties and obligations of the Securitization Entities under the Transaction
Documents and each Franchise Document and (iii) in compliance with all
Requirements of Law; provided that, with respect to IP Management Services, the
Servicer’s activities shall also be subject to the approval and oversight by
the IP Company contemplated under Section 4.3(c) of this Agreement and,
with respect to the IP Licensee Services, the 

 15
 

Servicer’s activities shall be subject to the
approval, oversight, and other requirements of the IP Company contemplated
under the IP License Agreement.

“Subfranchisor”
has the meaning set forth in Section 4.7 hereof.

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

“Subsidiary”
means 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”
means any successor to the Servicer performing the obligations of the Servicer
hereunder, as appointed to act as the Servicer pursuant the Back-Up Servicer
Proposal and approved by the Aggregate Controlling Party.

“Supplemental Servicing Fee” means an amount not to exceed
$1,000,000 during each 12 month period following the Closing Date, which may be
drawn by the Servicer in whole or in part on any Weekly Allocation Date in
accordance with Section 10.9 of the Indenture; provided that such amount may be
increased for any 12 month period with the consent of the Aggregate Controlling
Party.

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

“Trademark”
means all trademarks, service marks, trade names, trade dress, designs, logos
or other indications of origin, slogans, and general intangibles of like
nature, whether registered or unregistered, together with all registrations and
applications therefor and all goodwill of any business connected with the use
thereof and symbolized thereby.

“Trademark Assets”
means any Trademarks included in the IP Assets.

“Type 3 Franchisee”
has the meaning set forth in the Parent Asset Sale Agreement.

“Type 3 IHOP Restaurant” means any Restaurant that has been listed on a
schedule to the Parent Asset Sale Agreement as a Type 3 IHOP Restaurant. These
consist of restaurants that IHOP Inc. has identified as being potentially
affected by certain misstatements, subsequently corrected, regarding
registration of trademarks in Uniform Franchise Offering Circulars previously
delivered to the affected Franchises.

“UFOC” has the
meaning set forth in Section 5.1(a)(ix)(1) hereof.

 16
 

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

“Weekly Servicing Fee” means, with respect to each Weekly
Allocation Date, an amount equal to the quotient of (a)
$27,000,000 (subject to an increase as of each anniversary of the Closing Date
by a percentage equal to the lesser of (i)
the unadjusted 12-months change in the consumer price index released by the
U.S. Department of Labor as of such time (if greater than zero) and (ii) 3%)
and (b) 52.

“Welfare Plan”
means a “welfare
plan,” as such term is defined in
Section 3(1) of ERISA (other than a multi employer plan as defined in Section
4001(a)(3) of ERISA).

Section 1.2             Other Defined Terms.

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

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

(c)           Any reference herein to “knowledge”
or “actual knowledge” of any party hereto with respect to an event shall
mean the actual knowledge of (i) the Chief Executive Officer, Chief Financial
Officer, Treasurer, Controller, Director of Finance or General Counsel of the
Servicer, (ii) any manager or director (as applicable) of any Securitization
Entity who is also a director or an officer of the Servicer and/or IHOP Corp.
or (iii) any Authorized Officer of the Servicer directly responsible for
managing the servicing of the relevant Franchise Asset or for administering the
transactions relevant to such event.

Section
1.3             Other Terms.  All accounting terms not specifically defined
herein shall be construed in accordance with GAAP.  All terms used in Article 9 of the UCC in the
State of New York, and not specifically defined herein, are used herein as
defined in such Article 9.

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

ARTICLE
II

ADMINISTRATION AND SERVICING OF SERVICED ASSETS

Section 2.1             IHOP Inc. to act as Servicer.  (a) 
Engagement of the Servicer.  The
Servicer is hereby authorized by each applicable Securitization Entity, and
hereby agrees, to perform the Services subject to and in accordance with the
terms of this Agreement and the other 

 17
 

Transaction Documents, except with respect to IP
Services, the Servicing Standard.  With
respect to the IP Services, the Servicer shall perform such IP Services in
accordance with the Servicing Standard except that if the IP Company
determines, in its sole discretion, that additional action is necessary or
desirable in furtherance of the protection of the IP Assets then the Servicer
shall take such additional action.  The
Servicer shall have full power and authority, acting alone and subject only to
the specific requirements and prohibitions of this Agreement and in accordance
with the Servicing Standard, the Indenture and the other Transaction Documents,
to do and take any and all actions, or to refrain from taking any such actions,
and to do any and all things in connection with performing the Services which
the Servicer determines are necessary or desirable and, for such purpose, is
hereby granted a non-exclusive, royalty free license during the term of this
Agreement, to use the IP Assets solely in connection with the performance of
the Services under this Agreement. 
Without limiting the generality of the foregoing, but subject to the
provisions of this Agreement, the Indenture and the other Transaction
Documents, including, without limitation, Section 2.8, the Servicer, in
connection with performing the Services, is hereby authorized and empowered to
execute and deliver, in the Servicer’s own name (in its capacity as agent for
the applicable Securitization Entity ) or in the name of any Securitization
Entity (pursuant to the Power of Attorney), on behalf of any Securitization
Entity or the Indenture Trustee, as the case may be, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Serviced Assets,
including, without limitation, consents to sales, transfers or encumbrances of
a franchise by any Franchisee or consents to assignments and assumptions of the
Franchise Agreements by any Franchisee in accordance with the terms
thereof.  For the avoidance of doubt, the
parties hereto acknowledge and agree that (i) 
the Servicer is providing Services directly to each applicable
Securitization Entity party hereto and (ii) the Issuer is not providing, and is
under no obligation to provide, any Services to any of its Subsidiaries which
are parties hereto.  Nothing in this
Agreement shall preclude the Securitization Entities from performing the
Services on their own behalf at any time, and from time to time.

(b)           Actions to Perfect Security
Interests.  Subject to the terms of
the Indenture and any applicable Series Supplement, the Servicer shall take
those actions that are required under the Transaction Documents and applicable
law to maintain continuous perfection and priority (subject to Permitted Liens)
of any Securitization Entity’s and the Indenture Trustee’s respective interests
in the Collateral.  Without limiting the
foregoing, the Servicer shall file or cause to be filed with the appropriate
government office the financing statements on Form UCC 1, and assignments of
financing statements on Form UCC 3, and other filings requested by the Issuer,
Co-Issuer, the Aggregate Controlling Party or the Indenture Trustee,  to be filed in connection with each Asset
Transfer Agreement, the IP License Agreement, the Foreign/Type 3 IP License
Agreement, the IHOP Corp. IP License Agreement, the IP Assets, the Indenture,
the other Transaction Documents and the transactions contemplated thereby.

(c)           Ownership of IP Assets.  The Servicer acknowledges and agrees that all
IP Assets (other than any immaterial IP Assets and, to the extent permitted
under Section 7.8(a)(xvi) of the Indenture, any IP Assets which have been
disposed of) shall be owned by and inure exclusively to the benefit of, the IP
Company.  The Servicer shall irrevocably
assign and transfer, and hereby does irrevocably assign and transfer, to the IP
Company any and all of the Servicer’s right, title and interest, throughout the
world, including in any goodwill connected with the use of and symbolized by
any Trademarks, in, to and under any 
Intellectual Property that the 

 18
 

Servicer
may, on behalf of and for the benefit of the IP Company, acquire, develop, or
create during the Term of this Agreement, 
which constitutes After Acquired IP Assets.  The IP Company and Servicer expressly agree
that, to the fullest extent allowed by law, any copyrightable material contained
in the After Acquired IP Assets shall be considered a “work made for hire,” as that term is defined in Section 101 of the
United States Copyright Act, as amended, but, if, as a matter of law, such
works cannot be considered “works made for hire”, then they are deemed
automatically covered by the assignment provisions set forth in this subsection
(c).

(d)           Further Assurances with Respect to
After Acquired IP Assets.  To the
extent that the assignment and transfer of After Acquired IP Assets
contemplated in subsection (c) above are not effective to effectuate the
transfer to IP Company of the After Acquired IP Assets, Servicer agrees to take
all necessary and appropriate measures, at Servicer’s sole cost, to execute any
documents and take any actions to confirm, file, and record in any appropriate
Intellectual Property registry, the IP Company’s legal title in and to After
Acquired IP Assets and will, at the reasonable request of the IP Company or any
Insurer (so long as it is a Series Controlling Party) promptly confirm or
execute any of the same.

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

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

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

(h)           Collection of Payments;
Remittances; Collection Account.  The
Servicer shall cause the collection of all amounts owing under the terms and
provisions of each Serviced 

 19
 

Document
in accordance with the Servicing Standard and subject to and in accordance with
the Transaction Documents.

(i)            Collections.  The Servicer shall cause all funds (other
than Advertising Fees) due and to become due to any Securitization Entity to be
deposited into the Lock-Box Account for further credit to the Collection
Account in accordance with Section 10.2(a) of the Indenture.

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

(k)           Advertising Funds.  All Advertising Fees collected from the
Franchisees and Area Licensees (the “Advertising Funds”)
after the Cut-Off Date shall be deposited directly into a segregated account
(the “Advertising
Funds Account”) maintained by the
Issuer and serviced by the Servicer, which shall not be subject to the Lien of
the Indenture Trustee pursuant to the Transaction Documents; provided, however,
that, Advertising Fees incorrectly deposited into the Lock-Box Account or a
Collection Account shall be released therefrom pursuant to paragraph (j)
above.  Servicer shall cause all
Advertising Funds on deposit as of the Cut-Off Date in any of its bank accounts
to be remitted to the Advertising Funds Account (including by transferring the
title to such account to the Issuer and/or causing such account to become the
Advertising Funds Account) on the Closing Date. 
The Servicer shall not make or permit or cause any other person to make
or permit any borrowings to be made or liens to be levied against the
Advertising Funds.  The Advertising Funds
shall be used solely for activities permitted in accordance with the Franchise
Agreements and Area License Agreements. 
All interest and earnings (net of losses and investment expenses) paid
on funds on deposit in the Advertising Funds Account shall be for the sole
benefit of the Issuer and the Co-Issuer. 
All amounts from time to time on deposit in the Advertising Funds
Account shall be invested in Eligible Investments.

(l)            Pre-Closing Date Net Collections
Payment.    The Servicer shall remit
all Pre-Closing Date Net Collections Payments to the Lock-Box Account
(including by transferring

 

 20

the
title to its lock-box account to the Issuer and/or causing such account to
become the Lock-Box Account) on the Closing Date.

Section
2.2             Trust Accounts.  The Indenture Trustee shall maintain the
Collection Accounts, the Franchisee Insurance Proceeds Account and any other
accounts in accordance with the Indenture.

Section 2.3             Records.

(a)           The Servicer shall retain all data
(including, without limitation, computerized records) relating directly to, or
maintained in connection with, the servicing of the Serviced Assets at its
address indicated in Section 9.5 (or at an off site storage facility
reasonably acceptable to the Issuer, each Insurer and the Back-Up Servicer) or,
upon thirty (30) days’ notice to the Issuer, the IP Company, the Rating
Agencies, each Insurer, the Back-Up Servicer and the Indenture Trustee, at such
other place where the servicing office of the Servicer is located, and shall
give the Indenture Trustee, each Insurer and the Back-Up Servicer access to all
such data in accordance with the terms and conditions of the Transaction
Documents; provided, however, that the Indenture Trustee shall not be obligated
to verify, recalculate or review any such data. As between the parties, the
Issuer shall own the Intellectual Property rights in the data.

(b)           If the rights of the Servicer shall
have been terminated in accordance with Section 9.5 or if this Agreement shall
have been terminated pursuant to Section 9.1, the Servicer shall, upon
demand of the Indenture Trustee (based upon the written direction of the
Aggregate Controlling Party), in the case of a termination pursuant to Section
6.1, or upon the demand of the Issuer, in the case of a termination
pursuant to Section 9.1, deliver to the Back-Up Servicer or the
Successor Servicer all data in its possession or under its control (including,
without limitation, computerized records) necessary or desirable for the
servicing of the Serviced Assets; provided, however, that the
Servicer may retain a single set of copies of any books and records that the Servicer
reasonably believes will be required by it for the purpose of performing any of
the Servicer’s accounting, public reporting or other administrative functions
that are performed in the ordinary course of the Servicer’s business; and provided,
further, that the Servicer shall have access, during normal business
hours and upon reasonable notice, to all books and records that the Servicer
reasonably believes would be necessary or desirable for the Servicer in
connection with the preparation of any tax or other governmental reports and
filings and other uses; and provided, further, that if the Issuer
or the Indenture Trustee shall desire to dispose of any of such books and
records at any time within five years of the Servicer’s termination, the Issuer
shall, prior to such disposition, give the Servicer a reasonable opportunity,
at the Servicer’s expense, to segregate and remove such books and records as
the Servicer may select.  The provisions
of this Section 2.3 shall be deemed to require the Servicer to transfer
any proprietary material or customized computer programs that are necessary or
desirable for uninterrupted use of the data in the same manner as the Servicer
has used it during the Term of this Agreement.

 21
 

Section 2.4             Administrative Duties of Servicer.

(a)           Duties
with Respect to the Transaction Documents. 
The Servicer shall perform the duties of the applicable Securitization
Entities under the Transaction Documents. 
The Servicer shall prepare for execution by the Securitization Entities
or shall cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Securitization Entities to prepare, file or deliver pursuant
to the Transaction Documents.

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

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

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

Section
2.6             Compensation.  As compensation for the performance of its
obligations under this Agreement, the Servicer shall be entitled to receive the
Weekly Servicing Fee and, if necessary, the Supplemental Servicing Fee, on the
Weekly Allocation Date, subject to and in accordance with Article 10 of the
Indenture.

Section 2.7             Indemnification.  (a) 
The Servicer agrees to indemnify and hold the Issuer, the Co-Issuer, the
other Securitization Entities, each Insurer and the Indenture Trustee and their
respective officers, directors, employees and agents (each, an “Indemnitee”) harmless against all claims, losses, penalties,
fines, forfeitures, legal fees, liabilities, obligations, damages, actions,
suits and related costs and judgments and other costs, fees and reasonable
expenses that any of them may incur as a result of (i) the failure of the
Servicer to perform or observe its obligations under this Agreement, (ii) the
breach by the Servicer of any representation, warranty or covenant under this
Agreement or (iii) the Servicer’s negligence, bad faith or willful 

 22
 

misconduct; provided, however, that
there shall be no indemnification under this Section 2.7(a) for a breach of any
representation, warranty or covenant relating to any New Asset provided in ARTICLE
V hereof so long as the Servicer has complied with Section 2.7(b)
and Section 2.7(c) hereunder.

(b)           In the event of a breach of any
representation, warranty or covenant relating to any New Asset provided in ARTICLE
V hereof, the Servicer shall promptly notify the Indenture Trustee and each
Insurer and shall pay to the Issuer liquidated damages in an amount equal to
the Defective Asset Damages Amount, which payment shall be deposited directly
to the Lock-Box Account.  Upon payment by
the Servicer of the Defective Asset Damages Amount to the Issuer with respect
to any Defective New Asset in accordance with the preceding sentence and all
amounts, if any, owing at such time under Section 2.7(c) below, the
Issuer, the Co-Issuer or the applicable Securitization Entity shall, to the
extent permitted by applicable law, assign such Defective New Asset to the
Servicer (together with a master franchise or license agreement permitting the
Servicer and its Affiliates the right to sub franchise such Defective New
Asset, as applicable) and the Servicer shall accept assignment of such
Defective New Asset from the relevant Securitization Entity.  Such Securitization Entity shall, in such
event, make all assignments of such Defective New Asset necessary to effect
such assignment, as applicable.  Any such
assignment by the Issuer shall be without recourse to, or representation or
warranty by, Issuer.  All costs and
expenses associated with the foregoing shall be paid by the Servicer on demand
to or at the direction of the Issuer.

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

(d)           Any Indemnitee that proposes to
assert the right to be indemnified under Section 2.7 will promptly,
after receipt of notice of the commencement of any action, suit or proceeding
against such party in respect of which a claim is to be made against the
Servicer under such sections, notify the Servicer of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served.  In the event that any action, suit or
proceeding shall be brought against any Indemnitee (other than the Indenture
Trustee and its officers, directors, employees and agents), such Indemnitee
shall notify the Servicer of the commencement thereof and the Servicer shall be
entitled to participate in, and to the extent that it shall wish, to assume the
defense thereof, with its counsel reasonably satisfactory to such Indemnitee
(which, in the case of a Securitization Entity, shall be reasonably
satisfactory to the Aggregate Controlling Party, as well), and after notice
from the Servicer to such Indemnitee of its election to assume the defense
thereof, the Servicer shall not be liable to such Indemnitee for any legal
expenses subsequently incurred by such Indemnitee in connection with the
defense thereof; provided that the Servicer shall not enter into any
settlement with respect to any claim or proceeding unless such settlement
includes an unconditional release of such Indemnitee from all liability on
claims that are the subject matter of such settlement and fully discharges with
prejudice against the plaintiff the claim or action against such Indemnitee and
does not include a statement as to, or an admission of, fault, culpability or
failure to act by or on behalf of such Indemnitee; and provided, 

 23
 

further, that the Indemnitee shall have the
right to employ its own counsel in any such action the defense of which is
assumed by the Servicer in accordance with this Section 2.7(d), but the
fees and expenses of such counsel shall be at the expense of such Indemnitee
unless (i) the employment of counsel by such Indemnitee has been specifically
authorized by the Servicer, or (ii) the Servicer shall have failed within a
reasonable period of time to assume the defense of such action or proceeding
and employ counsel reasonably satisfactory to the Indemnitee in any such action
or proceeding or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both the Indemnitee and the Servicer,
and the Indemnitee shall have been advised by counsel that there may be one or
more legal defenses available to it which are different from or additional to
those available to the Servicer (in which case, the Indemnitee notifies the
Servicer in writing that it elects to employ separate counsel at the expense of
the Servicer, the reasonable fees and expenses of such Indemnitee’s counsel
will be borne by the Servicer and the Servicer shall not have the right to
assume the defense of such action or proceeding on behalf of such Indemnitee,
it being understood, however, that the Servicer shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys at any time for the Indemnitees, which
firm shall be designated in writing by such Indemnitee).  In the event that any action, suit or
proceeding shall be brought against any Indenture Trustee or any of its
officers, directors, employees or agents (each, a “Indenture Trustee Indemnitee”), it shall notify the Servicer of the commencement
thereof and the Indenture Trustee Indemnitee shall have the right to employ its
own counsel in any such action at the expense of the Servicer.  No Indemnitee shall settle or compromise any
claim covered pursuant to this Section 2.7 without the prior written consent of
the Servicer, which shall not be unreasonably withheld or delayed.  The provisions of this Section 2.7
shall survive the termination of this Agreement or the earlier resignation or
removal of any party hereto; provided, however, that no Successor
Servicer shall be liable under this Section 2.7 with respect to any
Defective New Asset or any other matter occurring prior to its succession
hereunder.

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

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

 24
 

Section 2.10           Appointment of Subservicers.  The Servicer may enter into Subservicing
Arrangements; provided that, other than with respect to any existing
Subservicing Arrangement set forth in Schedule 2.10, no Subservicing
Arrangement shall be effective unless and until (i) such subservicer executes
and delivers an agreement to perform and observe, or in the case of an
assignment, an assumption by such successor entity of the due and punctual
performance and observance of, the applicable covenants and conditions to be
performed or observed by the Servicer under this Agreement; provided
that such Subservicing Arrangement (including any Subservicing Arrangements
between the Servicer and an Affiliate of the Servicer) shall be terminable by
the Aggregate Controlling Party upon a Servicer Termination Event and shall
contain transitional servicing provisions substantially similar to those
provided in Section 6.2 herein; and (ii) a written notice has been
provided to the Aggregate Controlling Party. 
Any such Subservicing Arrangement entered into after the date hereof
shall be reported to the Back-Up Servicer quarterly in accordance with the
Back-Up Servicer Agreement. 
Notwithstanding anything to the contrary herein or in any Subservicing
Arrangement, the Servicer shall remain primarily and directly liable for its
obligations hereunder and in connection with any Subservicing Arrangement.

ARTICLE
III

STATEMENTS AND REPORTS

Section 3.1             Reporting by the Servicer.

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

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

 25
 

(c)           Monthly Servicer’s Certificate.  The Servicer shall furnish, or cause to be
furnished, to the Issuer, the Co-Issuer, the applicable Securitization Entity,
the Indenture Trustee, each Insurer and the Paying Agent three (3) Business
Days prior to each Payment Date, a certificate substantially in the form of Exhibit
D (each, a “Monthly
Servicer’s Certificate”) with a
monthly servicer report substantially in the form of Exhibit D hereto,
including a certification to the effect that, except as otherwise provided in
any other notice hereunder, no Servicer Termination Event, Event of Default or
Default has occurred or is continuing (each, a “Monthly Servicer’s Report”). A copy of the Monthly Servicer’s Certificate
provided under this Section 3.1(c) shall simultaneously be provided to
the Rating Agencies.

(d)           Weekly Servicer’s Report.  The Servicer shall furnish, or cause to be
furnished, to the Issuer, the Co-Issuer, the applicable Securitization Entity,
the Indenture Trustee and each Insurer on the day prior to each Weekly
Allocation Date, by no later than 12:00p.m. (noon) EST, a weekly servicer
report (the “Weekly
Servicer’s Report”) substantially
in the form of Exhibit E hereto setting forth the information described
therein with respect to each Serviced Asset of the Issuer, the IP Company or
the other Securitization Entities, as applicable, for the one week commencing
on the Sunday and ending on the Saturday immediately preceding such date. Such
Weekly Servicer’s Report shall also include all information that the Indenture
Trustee requires to make such payments and allocations in Section 10.9 of the
Base Indenture, including (but not limited to) the Series Debt Service Coverage
Ratio and whether a Series DSCR Mandatory Redemption Event has occurred.

(e)           Delivery of Financial Statements.  The Servicer shall provide to the Indenture
Trustee and each Insurer (so long as it is a Series Controlling Party) within
90 days after the end of each fiscal year of the Issuer, a copy of the audited
consolidated balance sheet of the Issuer and its consolidated subsidiaries as
at the end of such year and the related audited consolidated statements of
income and retained earnings and of cash flows for such year, setting forth in
each case in comparative form the figures for the previous year, reported on by
the Independent Accountants of the Issuer.

(f)            Termination Notices.  The Servicer shall send the Indenture Trustee
and each Insurer (so long as it is a Series Controlling Party) a copy of any
notices of termination sent by the Servicer to any Franchisee.

(g)           Additional Information; Access to
Books and Records.  The Servicer will
furnish from time to time such additional information regarding the Collateral
or compliance with the covenants and other agreements of IHOP Inc., IHOP Corp.
and any Securitization Entity and/or any Affiliate or Subsidiary under the
Transaction Documents as the Indenture Trustee, the Rating Agencies or any
Series Controlling Party may reasonably request, subject at all times to
compliance with the Exchange Act, the Securities Act and any other applicable
law by IHOP Corp., IHOP Inc., and any Affiliate or Subsidiary thereof, the
Servicer, IHOP Holdings and any Securitization Entity.  Once during each successive annual period
commencing on the Closing Date, the Servicer, IHOP Inc., IHOP Corp. and each
Securitization Entity and/or any Affiliate or Subsidiary shall allow the
Indenture Trustee, each Series Controlling Party (that is not an Aggregate
Controlling Party) and any Person appointed by any of them (in each case, at
the expense of the Servicer; provided, however, that in the case
of a Series Controlling Party or its appointee, such expense shall not exceed a
reasonable amount to be agreed upon between the 

 26
 

Servicer
and the relevant Series Controlling Party prior thereto), access to its books
of account (as well as those pertaining to the Securitization Entities) and
records upon reasonable notice, and permit the Indenture Trustee, each Series
Controlling Party (that is not an Aggregate Controlling Party) and any Person
appointed by any of them to discuss its affairs, finances and accounts with any
of its officers, directors and other representatives, to discuss its affairs,
finances and accounts with its independent public accountants and to inspect
the Serviced Assets and all records related thereto (and to make extracts and
copies thereof); provided, further, that each Series Controlling
Party shall be allowed additional access upon reasonable notice at the expense
of such Series Controlling Party, or at the expense of the Servicer upon the
occurrence of a Default, Event of Default or Servicer Termination Event.

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

Section 3.3             Annual Accountants’ Reports.  On or before 180 days after the end of the
fiscal year ending on or about December 31, 2006, and on or before 120 days
after the end of each subsequent fiscal year of the Servicer, the Servicer
shall deliver to the Issuer, the Indenture Trustee, each Insurer that is a
Series Controlling Party and the Rating Agencies a separate report (the “Accountants’ Report”), concerning the fiscal year just ended (or such
other first period since the date of this Agreement), prepared by the
Independent Accountants, to the effect that: 
(A) such firm has examined the management assertion, prepared
substantially in the form of Exhibit A hereto, delivered by the
Servicer; (B) such examination was made in accordance with the generally
accepted auditing standards established by the American Institute of Certified
Public Accountants and accordingly included examining, on a test basis,
evidence about management’s compliance, as Servicer, with the minimum servicing
criteria as set forth in the Securities and Exchange Commission’s Regulation AB
(the “Criteria”), to the extent such Criteria are applicable to
the servicing obligations set forth in the Agreement; (C) management of the
Servicer has asserted to such firm that the Servicer has complied with the
minimum servicing standards identified in the Criteria, as of the end of and
for the preceding fiscal year, to the extent that such standards are applicable
to the servicing obligations set forth in this Agreement;  and, (D) except as described in the report,
management’s assertion is fairly stated in 

 27
 

all material
respects.  The report will also indicate
that the firm is independent of the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants.  In the event such
independent public accountants require the Indenture Trustee to agree to the
procedures to be performed by such firm in any of the reports required to be
prepared pursuant to this Section 3.3, the Servicer shall direct the
Indenture Trustee in writing to so agree; it being understood and agreed that
the Indenture Trustee will deliver such letter of agreement in conclusive
reliance upon the direction of the Servicer, and the Indenture Trustee has not
made any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures.

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

ARTICLE
IV

THE SERVICER

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

(a)           Organization and Good Standing.  The Servicer (i) is a corporation, duly
formed and organized, validly existing and in good standing under the laws of
the State of Delaware, (ii) is duly qualified to do business as a foreign
corporation and in good standing under the laws of each jurisdiction where the
character of its property, the nature of its business or the performance of its
obligations under the Transaction Documents make such qualification necessary
and (iii) has the power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is currently
conducted and to perform its obligations under this Agreement.

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

 28
 

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

(c)           Consents.  Except for registrations as a franchise
broker or franchise sales agent as may be required under state franchise
statutes and regulations, the Servicer is not required to obtain the consent of
any other party or the consent, license, approval or authorization of, or
registration or declaration with, any Governmental Authority in connection with
the execution, delivery or performance by the Servicer of this Agreement, or
the validity or enforceability of this Agreement against the Servicer, except
to the extent that a state or foreign franchise law requires filing and other
compliance actions by virtue of considering the Servicer as a “subfranchisor”.

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

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

(f)            Due Qualification.  Except for registrations as a franchise
broker or franchise sales agent as required under state or foreign franchise
statutes and regulations, the filings as to which shall have been made on or
prior to the date hereof, and except to the extent that a state or foreign
franchise law requires filing and other compliance actions by virtue of
considering the Servicer as a “subfranchisor”, the Servicer has obtained or
made all material licenses, registrations, consents, approvals, waivers and
notifications of creditors, lessors and other Persons, in each case, in
connection with the execution and delivery of this Agreement by the Servicer,
and the consummation by the Servicer of all the transactions herein
contemplated to be consummated by the Servicer and the performance of its
obligations hereunder.

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

(h)           Taxes.  The Servicer has filed or caused to be filed
and shall file or cause to be filed all federal tax returns and all state and
other tax returns that are required to be filed.  

 29
 

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

(i)            Accuracy of Information.  As of the date thereof, the information
contained in the applicable Offering Circular relating to the issuance or a
Series of Notes (if any) does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Servicer hereby covenants that all information (as amended, supplemented
and superseded) to be provided to the Back-Up Servicer pursuant to this
Agreement shall be true and accurate in all material respects as of the date
delivered to the Back-Up Servicer; provided, however, that, no
amendment, supplement or superseding document shall be effective to cure
previously nonconforming information if the Back-Up Servicer or any Insurer has
relied upon such information to its detriment..

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

(k)           No Material Adverse Change.  Since September 30, 2006, there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.

(l)            ERISA.  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 Servicer, a Multiemployer Plan or a multiemployer
welfare plan maintained pursuant to a collective bargaining agreement) has
complied in all respects with the applicable provisions of ERISA, the Code and
the constituent documents of such Plan, except for instances of non-compliance
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect except as  could
reasonably be expected to have a Material Adverse Effect.  No termination of a Single Employer Plan has
occurred during such six-year period or is reasonably expected to occur (other
than a termination described in Section 4041(b) of ERISA), and no Lien in favor
of the PBGC or a Plan has arisen during such six-year period or is reasonably
expected to arise.  Except to the extent
that any such excess could not reasonably be expected to have a Material
Adverse Effect, the present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund

 

 30

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

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

(i)            The
Servicer:  (A) is, and within the period
of all applicable statutes of limitation has been, in compliance with all
applicable Environmental Laws, (B) holds all Environmental Permits (each of
which is in full force and effect) required for any of its current or intended
operations or for any property owned, leased or otherwise operated by it and
(C) is, and within the period of all applicable statutes of limitation has
been, in compliance with all of its Environmental Permits.

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

(iii)          There
is no judicial, administrative or arbitral proceeding or action (including,
without limitation, any notice of violation or alleged violation) under or
relating to any Environmental Law to which the Servicer is, or, to the
knowledge of the

 31
 

Servicer, will be, named as a party that is pending or, to
the knowledge of the Servicer, threatened.

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

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

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

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

(o)           Location of Records.  The offices at which the Servicer keeps its
records concerning the Serviced Assets are located at the addresses set forth
herein.

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

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

Section 4.3             Performance of Obligations.

(a)           Punctual Performance.  The Servicer shall punctually perform and
observe all of its obligations and agreements contained in this Agreement in
accordance with the terms hereof and as contemplated by the Servicing Standard.

 32
 

(b)           Limitations of Responsibility of
the Servicer.  The Servicer will have
no responsibility under this Agreement other than to render the services called
for hereunder in good faith and consistent with the Servicing Standard.

(c)           Special Provisions as to IP Assets.  Servicer acknowledges and agrees that the IP
Company has the right and duty to control the quality of the goods and services
offered under the Trademark Assets and the manner in which the Trademark Assets
are used in order to maintain the validity, enforceability and its ownership of
the Trademark Assets.  Servicer shall
consult with, and obtain the prior approval of the IP Company with respect to
the (i) promulgation of standards with respect to the operation of Restaurants,
including quality of food, cleanliness, appearance, and level of service (or
the making of material changes to the existing standards), (ii) the
promulgation of standards with respect to new businesses, products and services
which the IP Company approves for inclusion in the license granted under the IP
License Agreement (or other license agreement or sublicense agreement for which
the Servicer is performing IP Management Services), (iii) the nature of the
Quality Control Programs and other means of monitoring and controlling
adherence to the standards, (iv) the terms of any Franchise Agreements or other
Sublicense agreements that relate to the quality standards which licensees must
follow with respect to businesses, goods and services offered under the
Trademark Assets and the usage of the Trademark Assets, (v) the commencement of
enforcement actions with respect to the Trademark Assets and the terms of any
settlements thereof that implicate the use or the IP Company’s ownership
thereof, (vi) the adoption of any variations on the IHOP Brand which are not in
use on the date hereof, or other new marks to be included in the Trademark
Assets,  and the abandonment of any IP
Assets; and (vi) any uses of the Trademark Assets that are not part of Current
Practices.  The IP Company shall have the
right to monitor the Servicer’s compliance with the foregoing and its
performance of the IP Management Services and, in furtherance thereof, Servicer
shall provide IP Company, at IP Company’s request from time to time, with
copies of Franchise Arrangements and other Sublicenses, samples of materials
bearing the Trademark Assets used by licensees and sublicensees, and the
results of Quality Control Programs. 
Nothing herein shall limit the IP Company’ rights, and the
Securitization Entities’ obligations, under the IP License Agreement, the
Foreign/Type 3 IP License Agreement or any other license agreement which is
subject to the IP Management Services.

(d)           Right to Receive Instructions.  Without limiting the Servicer’s obligations
under Section 4.3(c) above, in the event that the Servicer is unable to
decide between alternative courses of action, or is unsure as to the
application of any provision of this Agreement or any Related Document, or any
such provision is, in the good faith judgment of the Servicer, ambiguous as to
its application, or is, or appears to be, in conflict with any other applicable
provision, or in the event that this Agreement or any Related Document permits
any determination by the Servicer or is silent or is incomplete as to the
course of action which the Servicer is required to take with respect to a
particular set of facts, the Servicer may give notice (in such form as shall be
appropriate under the circumstances) to each Series Controlling Party and the
Indenture Trustee requesting written instructions in accordance with the
Indenture and the other Transaction Documents and, to the extent that the
Servicer shall have acted or refrained from acting in good faith in accordance
with any such instructions received from the Aggregate Controlling Party, the
Servicer shall not be liable on account of such action or inaction to any
Person.  Subject to the Servicing
Standard, if the Servicer shall not have received appropriate instructions from
the Aggregate Controlling Party within fifteen (15) days of such notice, the

 33
 

Servicer
(i) shall promptly notify each Series Controlling Party of the absence of any
such instructions and (ii) until such later time, if any, as the Servicer
receives appropriate instructions from the Aggregate Controlling Party, may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Transaction Documents, as the Servicer
shall reasonably deem to be in the best interests of the Aggregate Controlling
Party; provided, however, that if an Insurer is not the Series
Controlling Party for a Series of Notes, the Servicer shall also prepare and
provide to the Indenture Trustee all notices, forms and consent solicitations
to be delivered to the related Noteholders in connection with such notice and
request for instructions; and provided, further, that if no
Insurer is a Series Controlling Party for a Series of Notes and if the Servicer
shall not have received appropriate instructions from the Aggregate Controlling
Party within twenty (20) days of such notice, the Servicer may, but shall be
under no duty to, take or refrain from taking such action, not inconsistent
with this Agreement or the Transaction Documents, as the Servicer shall deem to
be in the best interests of the Aggregate Controlling Party and the
Securitization Entities.  The Servicer
shall have no liability to any Person for such action or inaction taken in
reliance on the preceding sentence except for the Servicer’s own willful
misconduct or negligence.

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

(f)            No Action Except Under Specified
Documents or Instructions.  The Servicer
shall not manage, control, use, sell, reinvest, dispose of or otherwise deal
with any part of the Collateral except in accordance with the powers granted
to, and the authority conferred upon, the Servicer pursuant to this Agreement.

(g)           Limitations on the Servicer’s
Liability.  Except for any loss,
liability, expense, damage, action, suit or injury arising out of, or resulting
from, (i) any breach or default by the Servicer in the observance or
performance of any of its agreements contained in this Agreement, (ii) the
breach by the Servicer of any representation or warranty made by it herein or
(iii) acts or omissions constituting the Servicer’s own willful misconduct, bad
faith or negligence in the performance of its duties hereunder or otherwise, neither
the Servicer nor any of its Affiliates (other than any other Securitization
Entity), managers, officers, members or employees shall be liable to any
Securitization Entity, each Insurer, the Noteholders or any other Person under
any circumstances, including, without limitation:

 34
 

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

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

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

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

(h)           No Financial Liability.  No provision of this Agreement (other than
the last sentence of paragraph (e) above) shall require the Servicer to expend
or risk its funds or otherwise incur any financial liability in the performance
of any of its rights or powers hereunder, if the Servicer shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured or provided to
it.  Notwithstanding the foregoing, the
Servicer shall be obligated to perform its obligations hereunder, consistent
with the Servicing Standard, unless the Servicer determines that it is more
likely than not that it will not be reimbursed for all of its expenses incurred
in connection with its obligations hereunder for reasons other than as a result
of any limit on amounts payable pursuant to the definitions of Weekly Servicing
Fee, Supplemental Servicing Fee and the Weekly Collections Account Allocation
Priority.

(i)            Reliance.  The Servicer may, reasonably and in good
faith, conclusively rely on, and shall be protected in acting or refraining
from acting when doing so, in each case in accordance with any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper reasonably believed by it to be
genuine and believed by it to be signed by the proper party or parties other
than its Affiliates.  The Servicer may
reasonably accept a certified copy of a resolution of the board of directors or
other governing body of any corporate party other than its Affiliates as
conclusive evidence that such resolution has been duly adopted by such body and
that the same is in full force and effect. 
As to any fact or matter the manner or ascertainment of which is not
specifically prescribed herein, the Servicer may in good faith for all purposes
hereof reasonably rely on a certificate, signed by any Authorized Officer of
the relevant party, as to such fact or matter, and such certificate reasonably
relied upon in good faith shall constitute full protection to the Servicer for
any action taken or omitted to be taken by it in good faith in reliance
thereon.

 35
 

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

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

Section 4.4             Merger; Resignation and
Assignment.

(a)           Preservation of Existence.  The Servicer shall not merge into any other
Person or convey, transfer or lease substantially all of its assets; provided,
however, that nothing contained in this Agreement shall be deemed,
absent an Event of Default, Servicer Termination Event, or any event which,
with the passage of time or giving of notice or both, would become one or more
of the same that has occurred and is continuing or would occur giving effect to
such action, to prevent (i) the merger into the Servicer of another Person,
(ii) the consolidation of the Servicer and another Person, (iii) the merger of
the Servicer into another Person or (iv) the sale of substantially all of the
property or assets of the Servicer to another Person, so long as (A) the
surviving Person of the merger or consolidation or the purchaser of the assets
of the Servicer shall continue to be engaged in the same line of business as
the Servicer and shall have the capacity to perform its obligations hereunder
with at least the same degree of care, skill and diligence as measured by
customary practices with which the Servicer is required to perform such
obligations hereunder, (B) in the case of a merger, consolidation or sale, the
surviving Person of the merger or the purchaser of the assets of the Servicer
shall expressly assume the obligations of the Servicer under this Agreement and
expressly agree to be bound by all other provisions applicable to the Servicer
under this Agreement in a supplement to this Agreement in form and substance
reasonably satisfactory to the Indenture Trustee and the Aggregate Controlling
Party and (C) with respect to such event, in and of itself, the Rating Agency
Condition has been met and the written consent of the Aggregate Controlling
Party has been obtained.  Notwithstanding
anything to the contrary contained in this Section 4.4(a), the Servicer

 36
 

shall be permitted to reorganize into a Delaware
limited liability company, the sole member of which is IHOP Corp., without
having to satisfy any of the requirements of the preceding sentence.

(b)           Resignation.  The Servicer shall not resign from the
rights, powers, obligations and duties hereby imposed on it except (i) upon
determination that (A) the performance of its duties hereunder is no longer
permissible under applicable law and (B) there is no reasonable action which
the Servicer could take to make the performance of its duties hereunder
permissible under applicable law or (ii) if the Servicer is terminated as the
Servicer pursuant to Section 6.1(b). 
As to clause (i)(A) above, any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Indenture Trustee and each Insurer that is a Series
Controlling Party.  No such resignation
shall become effective until a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
6.1(b).  The Indenture Trustee, the
Issuer, each Insurer that is a Series Controlling Party and the Rating Agencies
shall be notified of such resignation in writing by the Servicer.  From and after such effectiveness, the
Successor Servicer shall be, to the extent of the assignment, the “Servicer”
hereunder.  Except as provided above in
this Section 4.4(a) the Servicer may not assign this Agreement or any of
its rights, powers, duties or obligations hereunder.

(c)           Term of Servicer’s Obligations.  Except as provided in Section 4.3(a)
and Section 4.3(b), the duties and obligations of the Servicer under
this Agreement shall commence on the date hereof and continue until this
Agreement shall have been terminated as provided in Section 6.1(b) or Section
9.1 and shall survive the exercise by the Issuer, each Insurer or the
Indenture Trustee of any right or remedy under this Agreement (other than the
right of termination pursuant to Section 6.1(b)), or the enforcement by
the Issuer, each Insurer, the Indenture Trustee or any Noteholder, or any
subrogee of same, of any provision of the Indenture, the other Transaction
Documents, the Notes or this Agreement.

Section 4.5             Notice of Certain Events.  Upon the occurrence of any of the following
events:  (a) the Co-Issuers or any
Affiliate thereof shall engage in any “prohibited transaction” (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (b) any “accumulated
funding deficiency” (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan, or any Lien in favor of the PBGC
or a Plan shall arise on the assets of either Co-Issuer or any Affiliate
thereof, (c) a Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the reasonable
opinion of the Aggregate Controlling Party, likely to result in the termination
of such Plan for purposes of Title IV of ERISA, (d) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (e) the Co-Issuers or any
Affiliate thereof incur, or in the reasonable opinion of the Aggregate
Controlling Party are likely to incur, any liability in connection with a
complete or partial withdrawal from, or the Insolvency, Reorganization or
termination of, a Multiemployer Plan; (f) any other event or condition shall
occur or exist with respect to a Plan (in each case in clauses (a) through (f)
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); (g) a
Servicer Termination Event, an Event of Default or any event which would, with
the passage of

 37
 

time or giving of notice or both, would become one or
more of the same; or (h) any action, suit, investigation or proceeding pending
or, to the knowledge of the Servicer, threatened against or affecting the
Servicer, before or by any court, administrative agency, arbitrator or
governmental body having jurisdiction over the Servicer or any of its
properties either asserting the illegality, invalidity or unenforceability of
any of the Transaction Documents, seeking any determination or ruling that
would affect the legality, binding effect, validity or enforceability of any of
the Transaction Documents or which could reasonably be expected to have a
Material Adverse Effect, the Servicer shall provide written notice to the
Indenture Trustee, each Insurer and the Rating Agencies of the same promptly
and in any event within 3 (three) Business Days of obtaining knowledge of same.

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

Section 4.7             Franchise Law Determination.  On or prior to the date hereof, the Servicer
shall file such documents as are necessary to register as a franchise broker or
franchise sales agent as required by applicable state franchising
authorities.  Upon final determination by
any state franchising authority that the Servicer is considered by such state
franchising authority to be a “subfranchisor”, the Servicer within 120 days of
such determination shall file such documents and take such other compliance
actions as are required by such state franchising authority or under such state’s
franchise laws.

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

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

(b)           all financial statements of the
Servicer that are consolidated to include any Securitization Entity and that
are distributed to any party will contain detailed notes clearly stating that
(i) all of such Securitization Entity’s assets are owned by such Securitization
Entity, and (ii) such Securitization Entity is a separate entity and, as may be
applicable, has creditors who have received interests in the Securitization
Entity’s assets;

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

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

(e)           the Servicer will (and shall cause
each of its Affiliates that is not a Securitization Entity to) maintain arm’s
length relationships with each Securitization Entity and

 38
 

each of the Servicer and its Affiliates that are not
Securitization Entities will be compensated at market rates for any services it
renders or otherwise furnishes to such Securitization Entity;

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

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

Section 4.9             [RESERVED]

Section 4.10           Business Operations.  The Servicer shall not engage in any
Competitive Business or any business other than (a) the performance of its
obligations under this Agreement, (b) the ownership of IHOP Holdings LLC and
(c) the performance of services for future and existing Affiliates (each, a “Serviced
Affiliate”), pursuant to a written servicing or management services
agreement, on an arm’s length basis reasonably customary in the restaurant
industry; provided that (i) the costs to the Servicer in providing such
services, including without limitation, overhead, administrative and employee
related expenses, shall be fairly and reasonably borne by and allocated among
all such Serviced Affiliates, (ii) such rendering of services not related to
the IHOP Brand will not result in a Material Adverse Effect; (iii) the Servicer
shall cause to be prepared and validated separate financial statements for the
provision of services pursuant to this Agreement and the other Transaction
Documents, (iv) the Servicer shall at all times maintain adequate offices,
equipment and employees necessary to perform its obligations under this
Agreement and the other Transaction Documents and (v) neither the Servicer nor
any of its Affiliates shall engage in a Competitive Business other than as
provided herein and in the other Transaction Documents.

Section 4.11           Amendment of and Compliance with
Collection Practices.

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

(b)           The Servicer shall perform its
obligations hereunder in accordance with and comply in all material respects
with the Collection Practices.

 39
 

Section 4.12           Protection of Secured Parties’
Rights and Collectibility of Franchise Payments.  The Servicer hereby agrees that it shall take
no action, nor omit to take any action, which could reasonably be expected to
(a) materially adversely impair the rights, remedies or interests of the
Noteholders or the other Secured Parties under the Transaction Documents in
respect of the Franchise Assets or the IP Assets or (b) materially impair the
collectibility or timing of the Franchise Payments of the Franchise Assets or
the IP Assets.

Section 4.13           Security Interest.  The Servicer hereby covenants and agrees that
it shall promptly take all actions required (including but not limited to all
filings and other acts necessary or reasonably requested by the Indenture
Trustee or any Insurer (so long as it is a Series Controlling Party) as being
advisable under the UCC or other applicable law) in order to continue the
valid, perfected and enforceable security interest of the Indenture Trustee in
all Serviced Assets now owned or hereafter created or acquired (to the extent
that a security interest may be perfected therein under the UCC or other
applicable law).

Section 4.14           Notices.  The Servicer shall give written notice to the
Issuer, the Co-Issuer, the Indenture Trustee and each Insurer, promptly (but in
any event within 3 Business Days) upon becoming aware of the occurrence of (a)
any Event of Default or Servicer Termination Event or any event which, with the
passage of time or giving of notice or both, would become one or more of the
same, or (b) the occurrence of any other development or event that has had or
could reasonably be expected to have a Material Adverse Effect.

Section 4.15           Indebtedness.  Neither the Servicer nor any of its
Affiliates (other than the Securitization Entities as and to the extent
permitted by the Transaction Documents) shall incur Debt (including, but not
limited to, guaranties or pledges of its property) other than (a) trade debt
incurred in the ordinary course of business, (b) debt and contingent
liabilities, in existence on the date hereof, as set forth in Schedule 4.15
hereto, (c) additional debt for working capital or capital improvements, in all
cases not in excess of $25,000,000 in the aggregate outstanding at any time,
and (d) debt incurred in connection with any indemnification obligations of the
Servicer.

Section 4.16           Qualification of Issuer.  As of the Closing Date, the Issuer will be
duly qualified under applicable law in each jurisdiction in which it carries on
the Business to act as a franchisor with respect to the Franchise Assets.  As of each New Asset Addition Date, the
Issuer will be duly qualified under applicable law in each jurisdiction in
which it carries on the Business to act as a franchisor with respect to the New
Assets.

ARTICLE
V

REPRESENTATIONS, WARRANTIES AND COVENANTS

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

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

 40

 

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

(ii)           Such
New Franchise Document complies in all material respects with all requirements
of applicable Requirements of Law whether in the United States or Mexico or any
other foreign country; provided, that, in case of any foreign country other
than Mexico, the Servicer shall have obtained the prior written consent of the
Aggregate Controlling Party with respect to the entry into such foreign
country, which consent shall not be unreasonably withheld or delayed;

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

(iv)         
Continuing Franchise Fees and similar fees payable pursuant to such New
Franchise Document are payable at least weekly; provided, however, that the
Servicer may cause the Issuer to enter into or acquire a New Franchise Document
that provides for Continuing Franchise Fees and similar fees to be payable less
frequently than weekly if the aggregate fees payable under all New Franchise
Agreements that provide for payment of Continuing Franchise Fees and similar
fees less frequently than weekly are not reasonably anticipated to exceed 5% of
total Collections in the twelve month period immediately following the
commencement or addition of any such New Franchise Document.  The parties hereby acknowledge and agree that
any agreement between the Issuer and an Area Licensee shall not be subject to
the foregoing restriction;

(v)           Following
the implementation of a system of electronic funds transfer (“EFT”) with respect to substantially all of the
Franchisees, the Issuer shall have the right to require payment of Continuing
Franchise Fees by EFT, other than with respect to Franchisees who are parties
to Existing Franchise Documents as to whom the application of EFT has been
waived by the Servicer;

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

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

(viii)        Such New Franchise Document does not contain terms and
conditions that are reasonably expected to result in (A) a material decrease in
the amount of Collections, taken as a whole, (B) a material adverse change in
the nature, quality or timing of Collections, taken as a whole, or (C) a
material adverse change in the general assets categories generating
Collections, taken as a whole, in each case when compared to the amount,
nature, quality or general categories generating Collections that could have
been 

 41
 

reasonably expected to
result had such New Franchise Document been entered into in accordance with the
Prior Terms.

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

(1)           If
such New Franchise Document is a New Franchise Agreement, such New Franchise
Agreement does not materially deviate from (a) the standard form Franchise
Agreement attached to the Uniform Franchise Offering Circular of IHOP Inc. as
of November 12, 2006 (the “UFOC”) or such
other form previously approved by each Insurer or (b) the prevailing royalty
rates adopted by the Servicer for its franchise system as applicable as of the
date of this Agreement, payment arrangements implemented in accordance with the
Servicing Standard, or any other rates as previously approved by each
Insurer.  In addition, as of the New
Asset Addition Date, the Franchisee under any New Franchise Agreement (i) has
capital resources commensurate with the proposed development plan submitted by
the Franchisee, supported by proper documentation, except under circumstances
in which such capital requirement may be waived by Servicer in the good faith
exercise of its reasonable business judgment and consistent with the Servicing
Standard, (ii) is committed to employ trained restaurant management and to
maintain proper staffing levels, (iii) if also a Franchisee under any other
Franchise Agreement, is in compliance with, or otherwise not deemed by the
Servicer in accordance with the Servicing Standard to be in default of, such
Franchise Agreement, and (iv) shall have a credit rating that satisfies the
Servicer’s standards in accordance with the Servicing Standard.

(2)           If
such New Franchise Document is a New Franchisee Lease or Franchisee Sublease,
such New Franchisee Lease, or Franchisee Sublease does not materially deviate
from the prevailing forms adopted by the Servicer for its franchise system as
of the date of this Agreement, or any other forms as previously approved by
each Insurer and if such New Franchise Document is a New Franchisee Lease or
New Franchisee Sublease, such New Franchisee Lease or New Franchisee Sublease
is on such terms regarding rent and other expenses payable by such tenant as
shall reasonably be expected to return an aggregate net 

 42
 

profit (on a gross basis) to such Securitization Entity at
all times, after taking into account acquisition expense, in the case of
properties owned in fee or rent and other amounts payable by such
Securitization Entity to a prime landlord with respect to such property.

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

(i)            The
Servicer has conducted or caused to be conducted a Phase I environmental study
on such Property prior to its acquisition, and has taken or caused to be taken
all prudent and appropriate action, remediation, follow up study or clean up
measures on such Property as indicated by such Phase I environmental study;

(ii)           The
Servicer has obtained, on behalf of the applicable Securitization Entity, an
appropriate level of title insurance and property insurance as necessary in the
good faith reasonable judgment of the Servicer in accordance with the Servicing
Standard and, to the knowledge of the Servicer, neither the Servicer nor any
Securitization Entity, has received written notice from any insurance company
or rating organization to the effect that the physical condition of such New
Owned Real Property would prevent obtaining new insurance policies at
reasonable rates;

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

(iv)          To
the knowledge of the Servicer after due inquiry, there are no claims that have
been filed for payment for work, labor or materials affecting such New Owned
Real Property which are or may become a Lien upon the interest of the
applicable Securitization Entity in such New Owned Real Property except for (x)
liens arising from work, labor or materials that is not performed at the
request of such Securitization Entity, and (y) Permitted Liens;

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

(vi)          The
Securitization Entity holding such New Owned Real Property and each applicable
Property and the use thereof complies in all material respects with all
applicable legal requirements, including, without limitation, building and
zoning 

 43
 

ordinances and codes. 
Neither the Securitization Entity holding such New Owned Real Property,
nor, to the knowledge of the Servicer, any Franchisee leasing or subleasing
such Property from a Securitization Entity, is in material default or violation
of any order, writ, injunction, decree or demand of any Governmental Authority
in respect of such Property.  There has
not been committed by the Securitization Entity holding such New Owned Real
Property or, to the knowledge of the Servicer, any Franchisee in occupancy of
or involved with the operation or use of such Property any act or omission affording
any Governmental Authority the right of forfeiture as against such Property or
any material part thereof;

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

(viii)        Such New Owned Real Property is comprised of one (1) or more
parcels which constitute a separate tax lot or lots and does not constitute a
portion of any other tax lot not a part of such New Owned Real Property, other
than New Owned Real Property with respect to which the Servicer is taking
appropriate action on behalf of the applicable Securitization Entity to obtain
separate tax lot classification;

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

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

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

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

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

 44
 

required to be paid by any Person under applicable
Requirements of Law currently in effect in connection with the acquisition of
such New Owned Real Property have been paid in full.

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

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

(ii)           With
respect to such New Leased Real Property other than New Leased Real Property
described in subsection (i) above, the Servicer has conducted or caused
to be conducted a “desk top” Phase I environmental study on such Property and
has taken or caused to be taken appropriate remediation or follow up study
measures on such Property, consistent with the Servicing Standard;

(iii)          Such
New Leased Real Property is not reasonably expected to be a Negative Lease; provided,
however, that any New Leased Real Property subject to a Non-Conforming
New Franchise Document shall not be construed as being a Negative Lease;

(iv)          With
respect to New Leased Real Property, the Securitization Entity party to such
Property Lease and related Franchisee Sublease has good and marketable
leasehold title to such Property Lease and related Franchisee Sublease free and
clear of all Liens (other than Permitted Liens);

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

(vi)          No
condemnation or similar proceeding has been commenced nor, to the knowledge of
the Servicer, is threatened with respect to all or any material portion of 

 45
 

such New Leased Real Property or for the relocation of
roadways providing access to such New Leased Real Property that, in either
case, was not considered in the leasing of such New Leased Real Property;

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

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

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

(x)            The
Servicer has paid, caused to be paid, or confirmed that all transfer taxes,
deed stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid by any Person under applicable Requirements of Law
currently in effect in connection with the entering into of the Property Lease
and the related Franchisee Sublease for such New Leased Real Property have been
paid in full.

Section 5.2             Other
Transferred Assets.  (a)  The
Servicer (i) shall transfer to the Issuer or its applicable Subsidiary, or
otherwise cause the Issuer or its applicable Subsidiary (such as the IP
Company) to enter into or acquire, (A) all Franchise Arrangements relating to
the IHOP Brand, (B) all Intellectual Property that should be owned by the IP
Company pursuant to the terms of the IP License Agreement and any After
Acquired IP Assets pursuant to Section 2.1(c), (C) any New Owned Real
Property or New Leased Real Property relating to the IHOP Brand, (D) any
Product Sourcing Agreements relating to the IHOP Brand and (E) all other assets
now or hereafter relating to the IHOP Brand and (ii) subject to the prior
satisfaction of the Rating Agency Condition and the prior written consent of
the Aggregate Controlling Party, may, but 

 46
 

shall not be
obligated to, contribute to the Issuer or its applicable Subsidiary, or
otherwise cause the Issuer or its applicable Subsidiary to enter into, develop
or acquire, any other asset or liability. 
The Aggregate Controlling Party shall have the right to approve the
Securitization Entities that shall hold any of the assets obtained after the
Closing Date described in this Section 5.2(a) and entered into,
developed or acquired by the Issuer or a Subsidiary thereof (the “Post Closing Assets”), including the right to direct that any Post
Closing Assets be held by one or more newly formed Securitization Entities if
the Aggregate Controlling Party reasonably believes that such Post Closing
Assets could impair the Collateral; provided that IP Assets which constitute
the IHOP Brand or are exclusively related thereto, shall be held by the IP
Company.

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

Section 5.3             Ownership
of IP Assets.  All IP
Assets (other than any immaterial IP Assets and, to the extent permitted under
Section 7.8(a)(xvi) of the Indenture, any IP Assets which have been disposed
of) shall be, after giving effect to the Transaction Documents, owned
exclusively by the IP Company and shall not be assigned or transferred by the
IP Company to any other entity.

Section 5.4             Notice
Regarding Property Leases. 
In the event that IHOP Property Leasing or IHOP Properties, or the
Servicer on behalf of IHOP Property Leasing or IHOP Properties, respectively, receives
any notice from a Property Lessor of the lack of payment or alleging any
breach, violation or default under the applicable Property Lease or otherwise
requesting payment of rent thereunder or action be taken to remedy a breach,
violation or default, the Servicer shall notify the Indenture Trustee and each
Series Controlling Party.

Section 5.5             Other
Covenants. With regard to payments received from Franchisees
operating one or more Type 3 IHOP Restaurants, together with one or more IHOP
Restaurants other than Type 3 IHOP Restaurants, and to the extent such payments
represent both Franchise Payments and other amounts that do not constitute
Collections or Excluded Amounts and payments in respect of the Type 3 IHOP
Restaurants, the Servicer agrees to cause the Lock-Box Bank to forward such
payments (prior to the deposit thereof to the Lock-Box Account) to the
Servicer.  Further, the Servicer
covenants to deposit the portion of such payments constituting Collections to
the Lock-Box Account within 2 Business Days of receipt thereof from the
Lock-Box Bank.  On each Weekly Allocation
Date, the Servicer will provide to the Series Controlling Party and the
Aggregate Controlling Party reconciliation data in respect of the foregoing
payments and deposits.

 47
 

 

ARTICLE
VI

DEFAULT

Section 6.1             Servicer
Termination Events.

(a)           Servicer Termination Events.  Any of the following acts or occurrences
shall constitute a Servicer Termination Event under this Agreement, the
assertion as to the occurrence of which may be made, and notice of which may be
given, by either the Issuer or the Indenture Trustee:

(i)            any
failure (x) by the Servicer to remit to the Lock-Box Account within two (2)
Business Days of its actual knowledge of its receipt thereof, any payments
required to be deposited into the Lock-Box Account received by it in respect of
the Serviced Assets, (y) of the Servicer to make any payment due under the
Servicing Agreement within two (2) Business Days of when such payment was
required to be made hereunder or (z) by IHOP Inc. (for so long as it is the
Servicer) to make any payment due under any Transaction Document to which it is
a party within two (2) Business Days of when such payment was required to be
made by it thereunder;

(ii)           the
default by the Servicer in delivering the Monthly Noteholders’ Statement
pursuant to Section 3.1(b) or any report pursuant to Section 3.1
and Section 3.2 on its due date and the continuation of such default
uncured for a period of five (5) days after it has been notified by the Issuer
or an Insurer, or otherwise obtained knowledge of such default;

(iii)          the
Cumulative Debt Service Coverage Ratio falls below the greatest of the STE
Series DSCR Thresholds applicable to each Outstanding Series of Notes (as set
forth in the relevant Series Supplements);

(iv)          the
default by (x) the Servicer in the due performance or observance of any
provision or covenant under this Agreement, or (y) IHOP Inc. (for so long as it
is the Servicer) in the due performance or observance of any provision or
covenant under any Transaction Document to which it is a party but, in the case
of any such default by IHOP Inc., only to the extent that such default could
reasonably be expected to have a Material Adverse Effect, and any such default
remains uncured for a period of fifteen (15) days after it has been notified by
the Issuer, any Series Controlling Party, the Indenture Trustee or any Insurer
or otherwise obtained knowledge of such default; provided, however,
that as long as the Servicer or IHOP Inc., as applicable, is diligently
attempting to cure such default (only to the extent it is curable), such cure
period shall be extended by an additional period as may be required to cure
such default, but in no event by more than an additional fifteen (15) days; and
provided, further, that any default related to the transfer of a
defective asset pursuant to the terms of this Agreement or an Asset Transfer
Agreement shall be deemed cured for purposes hereof upon payment in full by the
applicable transferor of the liquidated damages amount and other amounts
specified in and in accordance with this Agreement or such Asset Transfer
Agreement;

 48
 

(v)           any
representation, warranty or statement of the Servicer made in this Agreement or
by the Servicer in any certificate, report or other writing delivered pursuant
hereto or thereto that is not qualified by materiality or a Material Adverse
Effect proves to be incorrect in any material respect, or any such
representation, warranty or statement that is qualified by materiality or
Material Adverse Effect proves to be incorrect, in each case as of the time
when the same was made or deemed to have been made or as of any other date
specified in this Agreement; provided that if any such breach is capable
of being remedied within fifteen (15) days of the Servicer’s receipt of notice
thereof, then a Servicer Termination Event shall only occur under this clause
(v) as a result of such breach if it is not cured by the end of such
fifteen (15) day period;

(vi)          for
so long as it is the Servicer (a) any representation, warranty or statement of
IHOP Inc. made in any Transaction Document or in any certificate, report or
other writing delivered pursuant thereto that is not qualified by materiality
or a Material Adverse Effect proves to be incorrect in any material respect, or
(b) any such representation, warranty or statement that is qualified by
materiality or Material Adverse Effect proves to be incorrect, in each case as
of the time when the same was made or deemed to have been made or as of any
other date specified in such document or agreement and such event could
reasonably be expected to have a Material Adverse Effect; provided that
if any such breach is capable of being remedied within fifteen (15) days of
IHOP Inc.’s knowledge of such breach or receipt of notice thereof and the
Servicer diligently attempts to remedy such breach during such 15 day period,
then a Servicer Termination Event shall only occur under this clause (vi)
as a result of such breach if it is not cured in all material respects by the
end of such 15 day period;

(vii)         an
Event of Bankruptcy with respect to the Servicer shall have occurred;

(viii)        an Event of Default under the Indenture has occurred and is
continuing;

(ix)           a
final non appealable judgment for an amount, which when aggregated with the
amount of other such judgments, exceeds $10,000,000 (exclusive of any portion
thereof which is insured) is rendered against the Servicer by a court of
competent jurisdiction and is not paid or discharged within 30 days;

(x)            (A)
any Person other than IHOP Corp. shall become the owner of more than fifty
percent (50%) of the voting stock in IHOP Inc. or (B) IHOP Corp. merges with
another entity unaffiliated with IHOP Corp. and IHOP Corp. is not the surviving
entity unless (1) such surviving entity has executed an assumption agreement
pursuant to which it agrees to assume all of the obligations of IHOP Corp.
under the Transaction Documents and (2) the Rating Agency Condition is
satisfied with respect to any then Outstanding Series of Notes;

(xi)           an
event of default or default occurs with respect to any Debt of the Servicer or
any affiliate thereof, other than any Securitization Entity or IHOP Holdings,
in an aggregate principal amount greater than $50,000,000 and such default or
event of default is not cured within 60 days of notice or knowledge, or the
payment of any Debt of any of the Servicer or any Affiliate thereof, other than
any Securitization Entity or IHOP 

 49
 

Holdings, of an aggregate principal amount greater than
$50,000,000 is accelerated following a default or event of default under the
terms of such Debt; or

(xii)          the
failure of IHOP Corp. (on a consolidated basis) to maintain an IHOP Corp.
Consolidated Leverage Ratio of equal to or less than the least of the Series
IHOP Corp. Consolidated Ratio Thresholds applicable with respect to any
Outstanding Notes.

Any Servicer Termination
Event shall be deemed to continue until such time as the Aggregate Controlling
Party has consented to cease such continuation; provided, however,
that such consent by the Aggregate Controlling Party shall not be construed to
negate or supersede each Series Controlling Party’s rights, if any, to dissent
or otherwise determine individually with respect to any other matters under the
Transaction Documents.

(b)           Back-Up Servicer.

(i)            Within
two (2) days of obtaining knowledge of (i) the occurrence and continuance of
any Servicer Termination Event or (ii) the resignation of the Servicer pursuant
to Section 4.4(b), the Issuer and the Indenture Trustee shall notify the
Back-Up Servicer, the Lock-Box Bank, the Aggregate Controlling Party, the
Rating Agencies and each Series Controlling Party in writing of such
occurrence.  Upon receipt of such notice,
the Back-Up Servicer shall immediately commence performance of its services in
accordance with the Back-Up Servicer Agreement and shall, within 15 days after
receipt of such notice, have taken all steps necessary to enable itself to
provide the Back-Up Services (as defined below).

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

(iii)          Upon
the occurrence of a Servicer Termination Event, the rights, powers, duties,
obligations and responsibilities of the Servicer under this Agreement, whether
with respect to the Serviced Assets, the Indenture Trust Accounts, Advertising
Funds Account, Lease and Reimbursement Payment Account, the Residual Account or
otherwise shall vest in and be assumed by the Back-Up Servicer; provided,
however, that the Back-Up Servicer shall act only in consultation with
and at the direction of, the Aggregate Controlling Party (and the IP Holder, as
required hereunder).  The Servicer

 

 50

 

hereby agrees to cooperate with the Back-Up Servicer, the
Issuer, the other Securitization Entities and the Aggregate Controlling Party
in connection with the conduct of the Back-Up Services and the development of
the Back-Up Servicer Proposal.   In accordance
with the Account Control Agreement (Other Accounts) and the Back-Up Servicer
Agreement, the Indenture Trustee shall provide a written notice to the Lock-Box
Bank (copying the Back-Up Servicer, the Aggregate Controlling Party and each
Insurer that is a Series Controlling Party) upon the occurrence of a Servicer
Termination Event, which notice shall inform the Lock-Box Bank of such
occurrence and instruct it to deny any access to the Advertising Funds Account
and the Lease and Reimbursement Payment Account (and any funds on deposit
therein) by the Issuer or the Servicer. 
Thereafter, the Indenture Trustee, at the direction of the Back-Up
Servicer, shall provide instructions to the Lock-Box Bank required by the Transaction
Documents relating to the Advertising Funds Account, the Lease and
Reimbursement Payment Account and the Residual Account (and any funds on
deposit therein).

(iv)          At
the time that such rights, powers, duties, obligations and responsibilities of
the Servicer vest in the Back-Up Servicer, the Servicer shall be deemed to have
become a subservicer for the Back-Up Servicer, and in such capacity shall
perform such duties, obligations and responsibilities of the Back-Up Servicer
under this Agreement and the other Transaction Documents and the Serviced
Documents as the Back-Up Servicer shall direct. The Back-Up Servicer shall
compensate the Servicer as a subservicer from the Weekly Servicing Fee after
payment of amounts due to the Back-Up Servicer and if such fee is insufficient
shall apply the Supplemental Servicing Fee first to amounts due the Back-Up
Servicer and then to the Servicer as subservicer.  If the amount of the Supplemental Servicing
Fee then payable is insufficient, the Back-Up Servicer shall request an
increase thereof from the Aggregate Controlling Party (though, for the
avoidance of doubt, the Aggregate Controlling Party shall have no obligation to
agree thereto).

(v)           The
“Back-Up Services” shall include all duties, obligations and
responsibilities that would have been required of the Servicer if no Servicer
Termination Event had occurred.  In
connection therewith, the Back-Up Servicer shall have all rights and powers
that the Servicer would have had had such Servicer Termination Event not occurred;
provided that the Back-Up Servicer shall only exercise such rights and
powers and dispatch such duties, obligations and responsibilities in
consultation with, and at the direction of, the Aggregate Controlling Party
(and the IP Holder, as required hereunder). In addition, as part of the Back-Up
Services, the Back-Up Servicer shall exercise commercially reasonable efforts
to  develop and deliver to the Aggregate
Controlling Party a comprehensive proposal (the “Back-Up Servicer Proposal”) within 90 days from the occurrence of the
relevant Servicer Termination Event setting forth, among other things, a
recommendation in respect of the Successor Servicer or the Servicer, which may
include but is not limited to the reorganization and/or re-engagement of the
Servicer. In preparing such proposal, the Back-Up Servicer shall seek to
efficiently maximize the value of the Serviced Assets subject to the rights of
the Secured Parties and also taking into account the exigencies of current
circumstances. The Back-Up Servicer shall consult and cooperate with the
Aggregate Controlling Party in developing the Back-Up Servicer Proposal.  Notwithstanding anything contained herein or
in the Back-Up Servicer 

 51
 

Agreement, the occurrence of any Servicer Termination Event
shall not prevent the Securitization Entities from performing any one or more
of the Services on their own behalf in the interim.

(c)           Back-Up Servicer Proposal;
Approvals.

(i)            The
Back-Up Servicer shall first submit the Back-Up Servicer Proposal to the
Aggregate Controlling Party for its approval, and to the extent such approval
is not granted, both the Back-Up Servicer and the Aggregate Controlling Party
shall continue to work in good faith to achieve such approval.

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

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

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

Section 6.2             Servicer’s
Transitional Role

(a)           Disentanglement.  Upon the termination of the Servicer pursuant
to Section 6.1(c)(ii) above, the Servicer shall (i) continue to
cooperate with the Back-Up Servicer in the conduct of the Back-Up Services and
the implementation of the Back-Up Servicer Proposal until a Successor Servicer
is identified and (ii) accomplish a complete transition to the Successor
Servicer, without interruption or adverse impact on the provision of Services
(the “Disentanglement”). 
Thereafter, the Servicer shall cooperate fully with the Successor
Servicer and otherwise promptly take all actions required to assist in
effecting a complete 

 52
 

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

(b)           Fees and Charges for the Back-Up
and Transitional Services.  During
the Disentanglement Period (as defined below), the Servicer shall continue to
be entitled to payment of fees under Section 6.1(b)(iv). Upon the Successor
Servicer’s assumption of the obligation to perform all Services hereunder, the
Servicer shall be entitled to reimbursement of its actual costs for the
provision of any Disentanglement Services.

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

(d)           Subservicing Arrangements;
Authorizations.

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

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

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

(ii)           If
the Aggregate Controlling Party elects to terminate such Subservicing
Arrangement in accordance with Section 2.10 hereof, the Servicer will
take all reasonable actions necessary to accomplish a complete transition of
the Services performed by such subservicer to the Successor Servicer, or to any
alternate service provider designated by 

 53
 

the Aggregate Controlling Party, without interruption or
adverse impact on the provision of Services.

Section 6.3             Intellectual
Property.  Within thirty
(30) days of termination of this Agreement for any reason, Servicer shall
deliver and surrender up to the IP Company (with a copy to the Back-Up
Servicer) any and all products, materials, or other physical objects containing
the Trademark Assets or Confidential Information of the IP Company and any
copies of copyrighted works included in IP Assets in the Servicer’s possession
or control, and shall terminate all use of all IP Assets, including trade
secrets.

Section 6.4             Third
Party Software.  The
Servicer will assist and fully cooperate with the Successor Servicer or its
designated alternate service provider in obtaining any necessary licenses or
consents to any third party software then being used by the Servicer or any
Subservicer.  The Servicer will assign
any such license or sublicense directly to the Successor Servicer or its
designated alternate service provider to the extent the Servicer has the
necessary rights to assign such agreements to the Successor Servicer without
incurring any additional cost.

Section 6.5             No
Effect on Other Parties. 
Upon any termination of the rights and powers of the Servicer from time
to time pursuant to Section 6.1 or upon any appointment of a Successor
Servicer, all the rights, powers, duties, obligations, and responsibilities of
the Securitization Entities or the Indenture Trustee under this Agreement, the
Indenture and the other Transactions Documents shall remain unaffected by such
termination or appointment and shall remain in full force and effect
thereafter, except as otherwise expressly provided in this Agreement or in the
Indenture.

Section 6.6             Injunction.  The Servicer agrees that a breach or
violation of Section 4.3 or 4.10 or ARTICLE VI, VII
or VIII of this Agreement is likely to result in immediate and irreparable
injury and harm to the other parties.  In
such event, the non breaching party shall have, in addition to any and all
available remedies, the right to an injunction, specific performance or other
equitable relief to prevent the violation of obligations under this Agreement.

Section 6.7             Rights
Cumulative.  All rights
and remedies from time to time conferred upon or reserved to the Securitization
Entities, the Indenture Trustee, each Insurer or the Noteholders or to any or
all of the foregoing are cumulative, and none is intended to be exclusive of
another or any other right or remedy which they may have at law or in
equity.  Except as otherwise expressly
provided herein, no delay or omission in insisting upon the strict observance
or performance of any provision of this Agreement, or in exercising any right
or remedy, shall be construed as a waiver or relinquishment of such provision,
nor shall it impair such right or remedy. 
Every right and remedy may be exercised from time to time and as often
as deemed expedient.

ARTICLE
VII

CONFIDENTIALITY

Section 7.1             Confidentiality.  Each of the parties hereto acknowledges that
during the Term of this Agreement such party may receive Confidential
Information from 

 54
 

another party
hereto.  Each such party agrees to maintain
the Confidential Information in the strictest of confidence and will not,
except as otherwise contemplated herein, at any time, use, disseminate or
disclose any Confidential Information to any person or entity other than those
of its employees or representatives who have a “need to know”, who have been
apprised of this restriction.  Recipient
shall be liable for any breach of this ARTICLE VIII 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 Agreement, 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 applicable law,
statute, rule, regulation, subpoena, court order or legal process; provided
that the Recipient shall promptly inform the Discloser of any such requirement
and cooperate with any attempt by the Discloser to obtain a protective order or
other similar treatment.  It shall be the
obligation of Recipient to prove that such an exception to the definition of Confidential
Information exists.

ARTICLE
VIII

GUARANTEE

Section 8.1             Guarantee.  The Guarantor hereby unconditionally and
irrevocably guarantees the performance of all the obligations of the Servicer
set forth in this Agreement (the “Guarantee”).  This Guarantee shall be a continuing and
irrevocable guarantee of payment of all amounts due and performance of all
obligations of IHOP, Inc. hereunder, and the Guarantor shall remain liable on
its obligations hereunder until the payment in full of all amounts due
hereunder; provided, that, the Guarantee shall not apply to any
obligations of a Successor Servicer hereunder that is not an Affiliate of the
Servicer.  The Guarantor hereby
represents that it has all requisite corporate power and authority to undertake
its obligations set forth in this Section 8.1 and to guarantee the full
and prompt payment of any amounts due hereunder.

Section 8.2             Liability
of Guarantor Absolute.  The
Guarantor agrees that its obligations hereunder are irrevocable, absolute,
independent and unconditional and shall not be affected by any circumstance
that constitutes a legal or equitable discharge of a guarantor or surety.  In furtherance of the foregoing and without
limiting the generality thereof, the Guarantor agrees as follows:  (a) 
the obligations of the Guarantor hereunder are independent of the
obligations of the Servicer hereunder or under the other Transaction Documents;
(b) the obligations of the Guarantor hereunder shall be valid and enforceable
and shall not be subject to any reduction, limitation, impairment, discharge or
termination for any reason, including without limitation, the occurrence of any
of the following, whether or not the Guarantor shall have had notice or
knowledge of any of them:  (i) any
failure or omission to assert or enforce or agreement or election not to assert
or enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right,
power or 

 55
 

remedy
(whether arising at law, in equity or otherwise) with respect to any failure of
the Servicer hereunder or under any of the other Transaction Documents; (ii)
any rescission, waiver, amendment or modification of, or any consent to
departure from any of the terms or provisions (including, without limitation,
provisions relating to events of default) of the Servicing Agreement, any of
the other Transaction Documents or any of the Serviced Documents, the Franchise
Documents or the Franchise Arrangements; (iii) the Servicer’s consent to the
addition, change, reorganization or termination of any of the Securitization
Entities or to any amendment to the documents governing the formation or
organization and operation of the Securitization Entities; (iv) any other act
or thing or omission, or delay to do any other act or thing, which may or might
in any manner or to any extent vary the risk of the Guarantor as an obligor in
respect of the Servicer’s obligations under the Servicing  Agreement.

Section 8.3             Waivers
by the Guarantor.  The
Guarantor agrees not to assert, and hereby waives, all rights (whether by
counterclaim, set-off or otherwise) and defenses (including, without
limitation, the defense of fraud), whether acquired by subrogation, assignment
or otherwise, to the extent that such rights and defenses may be used by the Guarantor
to avoid performance hereunder, including but not limited to:  (a) 
any defense arising by reason of the incapacity, lack of authority or
any disability or other defense of the Servicer including, without limitation,
any defense based on or arising out of the lack of validity or the
unenforceability of this Agreement or by cessation of liability of the Servicer
for any cause other than the full performance of all obligations of the
Servicer set forth in this Agreement and payment in full of all amounts due
hereunder; (b) any defense based on the Servicer’s errors or omissions in the
performance of its obligations or payment of amounts due under the Servicing
Agreement or under the other Transaction Documents;  (c) any defenses or benefits that may be
derived from or afforded by law that would limit the liability of or exonerate
the Guarantor, (d) any legal or equitable discharge of the Guarantor’s
obligations hereunder; (e) the benefit of any statute of limitations affecting
the Guarantor’s liability hereunder or the enforcement hereof;  (f) notices, demands, presentments, protests,
notices of protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guarantee, notices of default under the Servicing
Agreement, any of the other Transaction Documents, the Serviced Documents or
the Franchise Arrangements; (g) any rights to set-offs, recoupments and
counterclaims.

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

(a)           Organization and Good Standing.  The Guarantor (i) is a corporation, duly
formed and organized, validly existing and in good standing under the laws of
the State of Delaware, (ii) is duly qualified to do business as a foreign
corporation and in good standing under the laws of each jurisdiction where the
character of its property, the nature of its business or the performance of its
obligations hereunder make such qualification necessary and (iii) has the power
and authority to own its properties and to conduct its business as such
properties are currently owned and such business is currently conducted and to
perform its obligations under this Agreement and any other Transaction Document
to which it is a party or in connection with which it acts as Guarantor.

(b)           Power and Authority; No Conflicts.  The execution and delivery by the Guarantor
of this Agreement and any other Transaction Document to which it is a party and
its 

 56
 

performance
of, and compliance with, the terms hereof and any other Transaction Document to
which it is a party or in connection with which it acts as Guarantor are within
the power of the Guarantor and have been duly authorized by all necessary
corporate action on the part of the Guarantor. 
Neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated to be consummated by the
Guarantor, nor compliance with the provisions hereof, will conflict with or
result in a breach of, or constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a breach or default) under, any of
the provisions of any law, governmental rule, regulation, judgment, decree or
order binding on the Guarantor or its properties, or the charter or bylaws or
other organizational documents and agreements of the Guarantor, or any of the
provisions of any indenture, mortgage, lease, contract or other instrument to
which the Guarantor is a party or by which it or its property is bound or
result in the creation or imposition of any lien, charge or encumbrance upon
any of its property pursuant to the terms of any such indenture, mortgage,
leases, contract or other instrument.

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

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

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

ARTICLE
IX

MISCELLANEOUS PROVISIONS

Section 9.1             Termination
of Agreement.  The
respective duties and obligations of the Servicer and the Securitization
Entities created by this Agreement shall commence on the date hereof and shall,
unless earlier terminated pursuant to Section 6.1(b) terminate upon the
latest to occur of (x) the final payment or other liquidation of the last
outstanding Serviced Asset included in the Collateral and (y) the satisfaction
and discharge of the Indenture pursuant to Article Eleven of the Indenture (the
“Term”).  Upon termination of this
Agreement pursuant to 

 57
 

this Section
9.1, the Servicer shall pay over to the applicable Securitization Entity or any
other Person entitled thereto all proceeds of the Serviced Assets held by the
Servicer.

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

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

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

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

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

Section 9.4             Governing
Law.  THIS AGREEMENT
SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO CHOICE OF LAW RULES (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).

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

Section 9.6             Severability
of Provisions.  If one
or more of the provisions of this Agreement shall be for any reason whatever
held invalid or unenforceable, such provisions shall 

 58
 

be deemed
severable from the remaining covenants, agreements and provisions of this
Agreement and such invalidity or unenforceability shall in no way affect the
validity or enforceability of such remaining provisions, or the rights of any
parties hereto.  To the extent permitted
by law, the parties hereto waive any provision of law which renders any
provision of this Agreement invalid or unenforceable in any respect.

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

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

Section
9.9             Binding Effect;
Assignment; Third Party Beneficiaries  The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
parties hereto.  Any assignment of this
Agreement without the written consent of each Series Controlling Party shall be
null and void.  Each Insurer shall be an
express third party beneficiary of this Agreement, entitled to enforce the
provisions hereof as if a party hereto. 
Except as provided in the this Section 9.9, nothing in this
Agreement expressed or implied, shall be construed to give any Person other
than the parties hereto and the parties indicated in the preceding sentence any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any covenants, agreements, representations or provisions contained herein.

Section 9.10           Article
and Section Headings.  The Article and Section headings herein are
for convenience of reference only, and shall not limit or otherwise affect the
meaning hereof.

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

Section 9.12           Counterparts.
 This Agreement may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

Section 9.13           Entire
Agreement.  This
Agreement and the other Transaction Documents constitute the entire contract
between the parties related to the subject matter hereof.  Any previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement and the
other Transaction Documents.

 59
 

Section 9.14           Jurisdiction;
Consent to Service of Process.  (a) 
Each of the parties hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other
Transaction Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State court or, to the extent permitted by law, in
such Federal court.  Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.

(b)           Each of the parties hereto hereby
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or the other Transaction Documents in any New York State or
Federal court.  Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

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

Section 9.15           Waiver
of Jury Trial.  EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER
TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS Section 9.15.

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

 

 60

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

	
   

  	
  INTERNATIONAL HOUSE OF

  	
   

  
	
   

  	
   

  	
   

  	
  PANCAKES, INC., as Servicer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ THOMAS G. CONFORTI

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Thomas G. Conforti

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IHOP IP, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ THOMAS G. CONFORTI

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Thomas G. Conforti

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IHOP FRANCHISING, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ MARK D. WEISBERGER

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Mark D. Weisberger

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IHOP PROPERTY LEASING, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ MARK D. WEISBERGER

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Mark D. Weisberger

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IHOP PROPERTIES, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ MARK D. WEISBERGER

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Mark D. Weisberger

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  

  	
  IHOP REAL ESTATE, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ MARK D. WEISBERGER

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Mark D. Weisberger

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IHOP CORP., as Guarantor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ MARK D. WEISBERGER

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Mark D. Weisberger

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Wells Fargo Bank, National Association, as

  	
   

  
	
   

  	
   

  	
   

  	
  Indenture Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ BENJAMIN J. KRUEGER

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Benjamin J. Krueger

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  	
   

  

 

EXHIBIT A

MANAGEMENT ASSERTION

Re: Annual
Accountant’s Report

Reference is made
to the Servicing Agreement, dated as of March 16, 2007 (the “Servicing
Agreement”) among IHOP Franchising, LLC, IHOP IP, LLC, IHOP Property Leasing,
LLC, IHOP Properties, LLC, IHOP Real Estate, LLC, International House of
Pancakes, Inc. (the “Servicer”), IHOP Corp. and Wells Fargo Bank, National
Association. Capitalized terms otherwise not defined herein shall have the
meanings set forth in the Servicing Agreement.

Pursuant to Section
3.3 of the Servicing Agreement, I, [NAME], the [TITLE] of International
House of Pancakes, Inc., hereby certify that:

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

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

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

By:
_____________________________

Name:

Title

Date:

 

 A-1

EXHIBIT B

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that IHOP IP, LLC, a Delaware limited
liability company (the “IP Company”),
hereby appoints INTERNATIONAL HOUSE OF PANCAKES, INC., a Delaware corporation (“IHOP Inc.”), and any and all officers thereof as its true
and lawful attorney in fact, with full power of substitution, in connection
with the IP Management Services described below being performed with respect to
the IP Assets (as such term is defined in the Servicing Agreement, dated as of
the date hereof, among the IP Company, IHOP FRANCHISING, LLC, IHOP Inc., IHOP
Property Leasing, LLC, IHOP Properties, LLC, IHOP Real Estate, LLC, IHOP Corp.
and Wells Fargo Bank, National Association, as indenture trustee (the “Servicing Agreement”), with full irrevocable power and authority in the
place of the IP Company and in the name of the IP Company or in its own name as
agent of the IP Company, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the foregoing, subject to the Servicing Agreement, including,
without limitation, the full power to:

(i)            sign
its name upon all filings and to do all things necessary to apply for,
prosecute, register, and maintain the Trademark Assets with the United States
Patent and Trademark Office (the “PTO”), any
state trademark registry and/or any applicable foreign intellectual property
office;

(ii)           sign
its name upon all filings and to do all things necessary to apply for,
prosecute and maintain patents included in the IP Assets with the PTO and with
any applicable foreign intellectual property office;

(iii)          sign
its name upon all filings and to do all things necessary to apply for,
prosecute, register, maintain and renew the copyrights and any other
Intellectual Property included in the IP Assets with the United States
Copyright Office and with any applicable foreign intellectual property office;

(iv)          sign
its name upon all filings and to do all things necessary to maintain, register and
renew domain names included in the IP Assets;

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

 B-1
 

including the U.S. Patent and Trademark Office, the U.S.
Copyright Office or any applicable foreign intellectual property office;

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

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

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

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

Dated:                    This [•], 2007

	
  

  	
  IHOP IP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
  By:

  	
   

  
	
   

  	
   

  	
          Name:

  
	
   

  	
   

  	
          Title:

  
	
   

  	
   

  	
   

  

 

 B-2
 

 

	
  STATE OF NEW YORK

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
  ss.: 

  	
   

  
	
  COUNTY OF NEW YORK

  	
  )

  	
   

  	
   

  

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

	
  

  	
   

  	
   

  
	
   

  	
   

  	
  Notary Public

  

 

 B-3

EXHIBIT C

FORM OF MONTHLY NOTEHOLDERS’ STATEMENT

[DATE]

Series 20[ 
]-[  ] Notes

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

Payment Date: [MM/DD/YY]

Reference is made to the
Base Indenture, dated as of March 16, 2007, among IHOP Property Leasing, LLC,
IHOP IP, LLC and Wells Fargo Bank, National Association (as amended,
supplemented and otherwise modified from time to time, the “Indenture”)
and the Servicing Agreement, dated as of March 16, 2007, among IHOP
Franchising, LLC, IHOP IP, LLC, IHOP Property Leasing, LLC, IHOP Properties,
LLC, IHOP Real Estate, LLC, International House of Pancakes, Inc., IHOP Corp.,
and Wells Fargo Bank, National Association (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’
Statement is delivered pursuant to Section 12.1(c) of the Indenture and Section
3.1(b) of the Servicing Agreement. The undersigned, on behalf of the Servicer
and the 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’ Statement.

	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

[ATTACH MONTHLY
SERVICER’S REPORT]

 

 C-1

EXHIBIT D

FORM OF MONTHLY
SERVICER’S CERTIFICATE & REPORT

[DATE]

Series 20[ 
]-[  ] Notes

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

Payment Date: [MM/DD/YY]

Reference is made to the
Base Indenture, dated as of March 16, 2007, among IHOP Property Leasing, LLC,
IHOP IP, LLC and Wells Fargo Bank, National Association (as amended,
supplemented and otherwise modified from time to time, the “Indenture”)
and the Servicing Agreement, dated as of March 16, 2007, among IHOP
Franchising, LLC, IHOP IP, LLC, IHOP Property Leasing, LLC, IHOP Properties,
LLC, IHOP Real Estate, LLC, International House of Pancakes, Inc., IHOP Corp.,
and Wells Fargo Bank, National Association (the “Servicing Agreement”).  Capitalized terms otherwise not defined
herein shall have the meaning assigned to them in the Indenture or the
Servicing Agreement.

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

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

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

	
  

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

[ATTACH MONTHLY SERVICER’S REPORT]

 

 D-1

EXHIBIT E

FORM OF WEEKLY SERVICER’S REPORT

 

 E-1

SCHEDULE A

COMPETITIVE BUSINESS

Any transaction involving a business identified to the
Aggregate Controlling Party on the Closing Date by separate letter.

 SCA-1

 

SCHEDULE 2.1(f)

FRANCHISEE INSURANCE NOT PROVIDING AFFILIATE COVERAGE

None

 

 SC2.1(f)-1

 

SCHEDULE 2.1(g)

SERVICER INSURANCE

 

 SC2.1(g)-1

 

SCHEDULE 2.10

SUBSERVICING ARRANGEMENTS

Agreement dated as of December 15, 2005 by and between
b-50.com, LLC and International House of Pancakes, Inc., relating to the
preparation and delivery of management reports by b-50.com, LLC based on data
provided by IHOP Inc. and point-of-sale information with respect to the
Franchisees.

Agreement dated as of January 1, 2007 by and between
Shop’n Chek, Inc. and International House of Pancakes, Inc., relating to the
provision of services relating to the Mystery Shop Program.

 

 SC2.10-1

 

SCHEDULE 2.10

COLLECTIONS PRACTICE

 

 SC4.11-1

SCHEDULE 4.15

DEBT

	
   

  	
   

  	
  (in thousands)

  	
   

  
	
  Senior Notes due
  November 2008, payable in in equal annual installments commencing November
  2000, at a fixed interest rate of 7.42%

  	
   

  	
  7,778

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Senior Notes Series A
  due October 2012, at a fixed interest rate of 5.88%

  	
   

  	
  5,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Senior Notes Series A
  due October 2012, at a fixed interest rate of 5.20%

  	
   

  	
  81,428

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Leasehold mortgage term
  loans and other

  	
   

  	
  19,633

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Capital Lease
  Obligations

  	
   

  	
  174,635

  	
  *

  
	
   

  	
   

  	
   

  	
   

  
	
  Total debt

  	
   

  	
  $

  	
  288,474

  	
  **

  
					

 

CONTINGENT LIABILITIES

 

	
  Store #0911 (El Toro,
  CA)

  	
   

  	
  100,000

  	
   

  
	
  Capozzoli vs. IHOP

  	
   

  	
  45,000

  	
   

  
	
  Total contingent liability

  	
   

  	
  $

  	
  145,000

  	
   

  
					

*                     Capital
lease obligations will not be repaid and will remain outstanding after the
Closing Date.

**           Proceeds from the issuance of Notes will be applied to
repay in full the Debt (other than capital lease obligations) on the Closing
Date and all liens and covenants relating thereto will be cancelled as of the
Closing Date.

 

 SC4.15-1Exhibit
4.3

International
House of Pancakes, Inc.

450 North Brand Blvd.

Glendale, CA 91203-2306

March 16, 2007

IHOP Holdings, LLC

c/o International House of Pancakes, Inc., 
     as servicer

450 North Brand Blvd.

Glendale, CA 91203-2306

Re:                                                     Parent
Asset Sale Agreement

Dear Sir or Madam:

The purpose of
this letter agreement (this “Terms Supplement”)
is to set forth the parties’ agreement and intention to purchase and sell
certain assets.  Reference is made to the
Standard Terms of Asset Sale Agreements (the “Standard
Terms”) attached hereto as Annex A.  This Terms Supplement is governed by the
Standard Terms, and the parties hereto agree to be bound by all of the
provisions of the Standard Terms, except as expressly modified by this Terms
Supplement.  All of the provisions of the
Standard Terms (including the Schedules and Appendices thereto) are hereby
incorporated by reference into this Terms Supplement.  This letter agreement constitutes a “Terms
Supplement” as referred to in the Standard Terms.  The Standard Terms, as modified and
supplemented by this Terms Supplement, is referred to as this “Parent Asset Sale Agreement” or this
“Agreement.”

Capitalized terms
used but not defined in this Terms Supplement are defined in (or incorporated
by reference into) the Standard Terms (including Appendix
A, Appendix B
or Appendix C to the Standard
Terms).  Appendix
A to the Standard Terms also contains rules as to usage
applicable to this Terms Supplement.  In
the event of any inconsistency between this Terms Supplement (other than Annex A hereto) and the Standard
Terms (including the Appendices thereto), this Terms Supplement shall govern.

The terms of the
Agreement are as follows:

1.             General
Terms:

	
  Seller:

  	
   

  	
  International House of Pancakes, Inc.

  
	
   

  	
   

  	
   

  
	
  Purchaser:

  	
   

  	
  IHOP Holdings, LLC.

  
	
   

  	
   

  	
   

  
	
  Guarantee:

  	
   

  	
  A Guarantee of IHOP, Corp. in substantially the form
  set forth as Annex B
  hereto.

  
	
   

  	
   

  	
   

  
	
  IP Assets:

  	
   

  	
  Applicable.

  

 

  
 
 

 

2.             Initial Sales:

	
  Initial
  Sales:

  	
   

  	
  Applicable.

  
	
   

  	
   

  	
   

  
	
  Additional Seller Conditions:

  	
   

  	
  (1) The Guarantee has been executed and delivered by
  the Guarantor; 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2) All of the representations and warranties of the
  Guarantor as set forth in the Guarantee shall be true and correct in all
  material respects as of the Closing Date; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)The Seller shall deliver to the Purchaser the
  Real Property Deeds relating to the Existing Owned Real Property for filing
  in the applicable jurisdictions on or prior to the Closing Date.

  
	
   

  	
   

  	
   

  
	
  Sold Assets:

  	
   

  	
  (i) All Existing Franchise Agreements, (ii) all
  Existing Area License Agreements, (iii) all Existing Development Agreements,
  (iv) all Existing Franchisee Notes, (v) all Existing Equipment Leases, the
  residual interests, if any, in the related equipment and the security
  interests in such equipment, (vi) all IP Assets and the right to receive any
  After-Acquired IP Assets, (vii) the right to bring an action at law or in
  equity for any infringement, dilution or violation IP Assets occurring prior
  to, on or after the Closing Date and to collect all damages, settlement and
  proceeds relating thereto, (viii) all Existing Product Sourcing Agreements,
  (ix) all Existing Owned Real Property, Existing Franchisee Leases and
  Existing Intercompany Real Property Leases, (x) all of the IHOP Property
  Leasing Interests, (xi) all Books and Records relating to the property and
  assets described in clauses (i) through (x) of this definition and (xii) all
  Related Rights with respect to the foregoing; provided, however,
  that Sold Assets do not include any Transfer Excluded Assets.

  
	
   

  	
   

  	
   

  
	
  Cash Amount:

  	
   

  	
  As set forth in the books and records of the
  applicable Companies.

  

 

 2
 

 

	
  Seller Secured Amount Interest Rate:

  	
   

  	
  10% per annum.

  

 

3.     Closing Date Transfer of LLC Interests:

	
  Transfer of LLC Interests:

  	
   

  	
  Applicable.

  
	
   

  	
   

  	
   

  
	
  Applicable LLC Agreement(s):

  	
   

  	
  IHOP Property Leasing LLC Agreement.

  
	
   

  	
   

  	
   

  
	
  Applicable Interests:

  	
   

  	
  The IHOP Property Leasing Interests.

  

 

4.     Subsequent Sales:

	
  Subsequent Sales:

  	
   

  	
  Applicable.

  
	
   

  	
   

  	
   

  
	
  Notice of Additional Sale:

  	
   

  	
  A notice by the Seller to the Purchaser in
  substantially the form set forth as  Annex C
  to this Terms Supplement. The Seller also shall provide copies of each Notice
  of Additional Sale to IHOP Holdings, IHOP Properties, IHOP Property Leasing,
  IHOP Property Leasing II, IHOP Real Estate and the Issuer.

  
	
   

  	
   

  	
   

  
	
  Additional Transfer Date:

  	
   

  	
  Any Business Day occurring after the Closing Date
  that the Seller has designated (pursuant to a Notice of Additional Sale
  delivered on or prior to such date) as a date as of which the Type 3 Contract
  Rights and Type 3 Real Estate Assets relating to one or more Converted Type 3
  IHOP Restaurants will be sold pursuant to this Agreement.

  
	
   

  	
   

  	
   

  
	
  Subsequent Assignment:

  	
   

  	
  An Assignment and Assumption in substantially the
  form set forth as  Annex B
  to this Terms Supplement.

  
	
   

  	
   

  	
   

  
	
  Additional Sold Assets:

  	
   

  	
  With respect to any Additional Transfer Date, (i)
  all Type 3 Contract Rights and Type 3 Real Estate Assets relating to the
  Converted Type 3 IHOP Restaurants identified in the related Notice of
  Additional Sale, (ii) all Books and Records relating to the property and
  assets described in clause (i) of this definition and (iii) all Related
  Rights with respect to the foregoing; provided, however, that
  Additional Sold Assets do not include any Transfer Excluded Assets.

  
	
   

  	
   

  	
   

  
	
  Additional Conditions Precedent to Subsequent Sales:

  	
   

  	
  All of the representations and warranties of the
  Guarantor as set forth in the Guarantee shall be true and correct in all
  material respects as of the Closing Date.

  

 

 3
 

 

5.             Additional
Provisions:

a)              IP Assignment and Grant of Security Interest; Notice.  On or prior to the Closing Date, the Seller
shall execute and deliver an assignment and security agreement, substantially
in the form of Annex D to
this Terms Supplement (the “IP Assignment and Security Agreement”), that
has been duly executed, or other similar instruments or documents, as may be
reasonably necessary or, in the Purchaser’s opinion, desirable to evidence,
perfect, protect and record in the appropriate Intellectual Property registry
office, the Purchaser’s ownership interest and/or security interest granted
under this Agreement in all IP Assets in the United States (together with the
IP Assignment and Security Agreement, the “IP Filings”). Upon the
Purchaser’s request or upon the Aggregate Controlling Party’s request, the
Seller shall execute and deliver such other instruments or documents as may be
necessary or, in the Purchaser’s reasonable opinion or in the Aggregate
Controlling Party’s reasonable opinion, desirable under the laws of any
jurisdiction outside the United States in which registrations for IP Assets
owned by the Seller are issued or pending, to evidence, perfect, record, or
protect the Purchaser’s ownership interest granted under this Agreement in the
IP Assets (the “Foreign IP Filings”).

b)             Obligations Regarding Type 3 Assets.  The Seller shall use commercially reasonable
efforts to cause, as soon as reasonably practicable, the Type 3 Contract Rights
and the Type 3 Real Estate Assets to satisfy the conditions for sale set forth
in this Agreement, and to be sold to the Purchaser on a Subsequent Transfer
Date pursuant to this Agreement or other applicable Transaction Document.  The Seller may, in taking actions to comply
with its obligations under this Part 5.b,
and in determining the timing of such actions, take into account any factors
that it reasonably considers relevant with respect to its own businesses and
assets, and the businesses and assets of the Securitization Entities.

c)              Representations and Warranties of the Seller as to
Certain Related Entities as of the Closing Date.  The Seller hereby makes the following
representations and warranties as of the Closing Date, on which the Purchaser
is relying in acquiring the  Sold Assets.

i.                  Legal
Capacity to Enter into Leases.  Each
of IHOP Properties and IHOP Realty had, at the relevant time, the legal
capacity to enter into and deliver each Existing Type 1 Property Lease and the
Existing Type 1 Franchisee Sublease to which it was or is a party and all such
leases are in full force and effect.

ii.               Organization,
Etc.  Each of the Securitization Entities
is  (and, immediately prior to the
Preliminary Reorganization Transaction, each of the Securitization Entities
was) duly formed, incorporated and/or organized, as applicable, validly
existing and in good standing under the laws of its state of its organization,
and has (or had at all relevant times as applicable) power and authority to own
its properties and to conduct its business as such properties are (or were, as
applicable) currently owned and such business is (or was, as applicable)
presently conducted.

iii.            No Event of
Bankruptcy.  No Event of Bankruptcy
has occurred or, to the knowledge of the Seller, is threatened with respect to
any Securitization Entity.

iv.           Solvency.  The Seller. 
IHOP Inc. and each Securitization Entity is, and after giving effect to
the transactions contemplated to occur on the Closing Date will be, solvent and
able to pay its debts as they come due, and has and will have adequate capital
to carry out its business as now conducted or proposed to be conducted.

v.              Entitlement to
Dividends.  The Seller is entitled to
receive dividends and other distributions as and to the extent provided under
the organizational documents of IHOP Property Leasing

 4
 

 

                        (subject to Applicable Law)
payable from time to time and such right and entitlement is not subject to any
prior Lien (other than Permitted Liens).

vi.           LLC Interests.  Immediately prior to the sale of the Sold
Assets to the Purchaser hereunder, all of the Limited Liability Company
Interests (A) had been duly and validly issued, fully paid and, if applicable,
non assessable, (B) were not subject to any options, warrants, convertible
securities, or voting trusts, stockholder agreements, proxies or other
agreements or understandings in effect with respect to the voting or transfer
thereof and (C) constituted all of the authorized and outstanding limited
liability company interests of each Securitization Entity and were owned of
record and beneficially by the Seller, the Purchaser or the Issuer, as the case
may be, free and clear of all Liens (other than Permitted Liens).

d)             Representations and Warranties of the Seller as to Its
Assets and Certain Assets of Related Entities as of the Closing Date.  The Seller hereby makes the following
representations and warranties as of the Closing Date, immediately after giving
effect to the Preliminary Reorganization Transactions, on which the Purchaser
is relying in acquiring the  Sold
Assets.  Such representations and warranties
shall survive the sale, transfer, and assignment of the  Sold Assets by the Seller to Purchaser and
any subsequent transferee.

i.                  The Existing
Franchise Agreements, taken together with the Type 3 Franchise Agreements,
constitute all of the Franchise Agreements to which the Seller or any Affiliate
thereof is a party.

ii.               The Existing Area
License Agreements, taken together with the Type 3 Area License Agreements,
constitute all of the Area License Agreements to which the Seller or any
Affiliate thereof is a party.

iii.            The Existing Single
Store Development Agreements constitute all of the Single Store Development
Agreements to which the Seller or any Affiliate thereof is a party.

iv.           The Existing
Multi-Store Development Agreements constitute all of the Multi-Store
Development Agreements to which the Seller or any Affiliate thereof is a party.

v.              The Existing Product
Sourcing Agreements constitute all of the Product Sourcing Agreements to which
the Seller or any Affiliate thereof is a party.

vi.           The Existing Franchisee
Notes, when taken together with the Type 3 Franchisee Notes, constitute all of
the Franchisee Notes to which the Seller or any Affiliate thereof is a party.

vii.        The Existing Franchisee
Leases, when taken together with the Type 3 Franchisee Leases, constitute all
of the Franchisee Leases to which the Seller or any Affiliate thereof is a
party.

viii.     The Existing Equipment
Leases, when taken together with the Type 3 Franchisee Equipment Leases,
constitute all of the Equipment Leases to which the Seller or any Affiliate
thereof is a party.

ix.             The IP Assets include
all Intellectual Property of any kind throughout the world, owned, used or held
for use by the Seller or any Affiliate thereof, which is or is used in
connection with the IHOP Brand or with products and services offered under the
IHOP Brand.

x.                The Existing Owned
Real Property, when taken together with the Type 3 Owned Real Property,
constitutes all of the real property owned by the Seller on which a Restaurant
is located or which otherwise services a Restaurant (i.e., a parking lot).

 5
 

 

xi.             The Seller is the
lessor under all of the Existing Franchisee Leases.

xii.          Immediately following
the Preliminary Reorganization Transactions, IHOP Property Leasing, LLC was (i)
the lessee under each Existing Type 1 Property Lease and (ii) the sub-lessor
under each Existing Type 1 Franchisee Sublease.

xiii.       Immediately prior to the
sale of the Sold Assets to the Purchaser hereunder, and the other transactions
contemplated to occur in connection with the Restructuring, in each case on the
Closing Date, (A) the IHOP Property Leasing Interests constituted all of the
authorized and outstanding equity interests of IHOP Property Leasing and were
owned of record and beneficially by the Seller, free and clear of all Liens
(other than Permitted Liens), (B) the IHOP Real Estate Interests constituted
all of the authorized and outstanding limited liability company interests in
IHOP Real Estate and were owned of record and beneficially by the Seller, free
and clear of all Liens (other than Permitted Liens), and (C) the IHOP
Properties Interests constituted all of the authorized and outstanding
membership interests of IHOP Properties and were owned of record and
beneficially by the Seller, free and clear of all Liens (other than Permitted
Liens).

e)              Waiver of Right to Assert Claims.  IHOP, Inc. hereby agrees not to assert, and
hereby waives, any claims asserting any continuing rights in the Sold Assets or
Additional Sold Assets transferred from time to time under this Agreement, or
in the property or assets sold, contributed or otherwise transferred under any
of the other Asset Transfer Agreements (except to any such Sold Assets or
Additional Sold Assets as may be re-assigned to it in connection with a breach
of a representation, warranty or covenant hereunder or thereunder).

6.             Notices:

For purposes
of Section 9.8 of the
Standard Terms, the Notice Addresses of the parties are as follows:

Purchaser:

IHOP Holdings, LLC

c/o International House of Pancakes, Inc.,
    as Servicer

450 North Brand Blvd.

Glendale, CA 91203-2306

Attention: General Counsel

Seller:

International House of Pancakes, Inc.,
    as Servicer

450 North Brand Blvd.

Glendale, CA 91203-2306

Attention: General Counsel

 6

This Terms
Supplement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

	
  

  	
  Yours sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INTERNATIONAL
  HOUSE OF PANCAKES, INC.,

  as Seller

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARK D. WEISBERGER

  
	
   

  	
   

  	
  Name: Mark D. Weisberger

  
	
   

  	
   

  	
  Title:   Vice
  President

  

 

 

The Purchaser, acting through its duly authorized
signatory, hereby agrees to, accepts and confirms the terms of the foregoing as
of the date first written above:

	
  

  	
  IHOP HOLDINGS, LLC,

  	
   

  
	
   

  	
  as Purchaser

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARK D. WEISBERGER

  	
   

  
	
   

  	
   

  	
  Name: Mark D. Weisberger

  	
   

  
	
   

  	
   

  	
  Title:   Vice President

  	
   

  
					

 

 

 

 

[Signature Page to
Parent Asset Sale Agreement Terms Supplement]

ANNEX A

Standard
Terms of Asset Sale Agreements

(See Tab [       ])

 A-1

ANNEX B

Form of Subsequent Assignment

Assignment
and Assumption

Dated as of [  
], [          ]

For value received, in
accordance with Section 3.1
of the Standard Terms of Asset Sale Agreements (as, amended, supplemented or
otherwise modified and in effect from time to time, the “Standard
Terms”) attached as Annex A to
the letter agreement, dated as of March 16, 2007 (the Standard Terms, as
modified and supplemented by such letter agreement, and as otherwise amended,
supplemented or otherwise modified and in effect from time to time, the “Asset Sale Agreement”), between
International House of Pancakes, Inc. (the “Assignor”)
and IHOP Holdings, LLC (the “Assignee”),
as of the date of this Assignment and Assumption (the “Additional
Transfer  Date”), the
Assignor does hereby sell, assign, transfer and otherwise convey unto the
Assignee, and its successors and assigns, without recourse (except as set forth
in Section 6.4 of the Standard Terms),
all right, title and interest of the Assignor, whether now owned or hereafter
acquired, in, to or under the assets listed in clauses (i) through (viii) below
(collectively, but subject to the exclusion set forth below, the “Additional Sold Assets”).  Capitalized terms used but not otherwise
defined herein shall have the meanings set forth in the Asset Sale Agreement.

(i)            the equipment leases identified on Schedule A-1 hereto;

(ii)           the franchise agreements identified
on Schedule A-2 hereto;

(iii)          the franchisee notes identified on Schedule A-3 hereto;

(iv)          the area license agreements identified
on Schedule A-4 hereto;

(v)           the real property identified on Schedule A-5 hereto;

(vi)          the franchisee leases identified on Schedule A-6 hereto;

(vii)         the Books and Records relating to the
property and assets described in clauses (i) through (vi) above; and

(viii)        all Related Rights with respect to the
foregoing;

but excluding, however,
any Transfer Excluded Assets as may be included in the foregoing.

The Assignee hereby
assumes from the Assignor and agrees to perform all obligations (then existing
or thereafter arising) of the Assignor under all contracts, agreements and
other obligations included as part of, or otherwise relating to, the Additional
Sold Assets.

If a Recharacterization
Event occurs, the Assignor shall be deemed to have Granted, and the Assignor
does hereby Grant, to the Assignee a security interest in, to and under all
Additional Sold Assets (as determined without giving effect to any exclusion of
Transfer Excluded Assets from the definition thereof), but excluding, however,
any Pledge Excluded Assets, to secure the Assignor’s 

 B-1
 

obligation to pay the
Seller Secured Amount to the Assignee upon the occurrence of a
Recharacterization Event.

The Assignor agrees to
pay to the Assignee an amount equal to the Seller Secured Amount (as defined in
Section 3.6 of the Standard Terms)
with respect to such Additional Transfer Date, on demand, on or after any date
on which a Recharacterization Event, if any, has occurred.  If, after demand by the Assignee, the
Assignor fails to pay to the Assignee an amount equal to such Seller Secured
Amount, (i) the Assignee and any subsequent assignees or pledgees of the
Additional Sold Assets or any portion thereof (including, without limitation,
the Indenture Trustee, if applicable), in each case subject to the terms of the
Indenture, will have all of the rights and remedies of a secured party under
the UCC (including the rights of a secured party obtaining a lien under Section
9-608 of the UCC) and (ii) the Assignor will have all the rights of a debtor granting
a lien under the UCC (including the rights of a debtor granting a lien under
Section 9-623).

The Schedule
of Exceptions to this Assignment and Assumption lists (i) each
Non-Conforming IHOP Restaurant as to which any of the related Type 3 Contract Rights
are included in the Additional Sold Assets, (ii) each IHOP Restaurant as to
which any of the related Type 3 Contract Rights are included in the Additional
Sold Assets that is a Delinquent Franchisee or (to the knowledge of the
Assignor) the subject of a bankruptcy proceeding, in each case as determined as
of the date hereof, and (iii) each real property included in the Additional
Sold Assets (or which is subject to a lease or sublease included in the
Additional Sold Assets) as to which any condemnation or similar proceeding has
been commenced or, to the knowledge of the Assignor, threatened with respect to
all or any material portion of such property or for the relocation of roadways
providing access to such property that, in either case, was not considered in
the acquisition of such property, in each case as determined as of the date
hereof.

This Assignment and
Assumption shall be construed in accordance with the laws of the State of New
York and the obligations of the undersigned under this Assignment and
Assumption shall be determined in accordance with such laws.

[SIGNATURE PAGE FOLLOWS]

 B-2
 

IN WITNESS WHEREOF, the undersigned has caused
this Assignment and Assumption to be duly executed as of the day and year first
set forth above.

	
  

  	
  INTERNATIONAL HOUSE OF PANCAKES, INC.,

  
	
   

  	
   

  	
  as Assignor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acknowledged and
  Agreed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  IHOP
  HOLDINGS, LLC, as Assignee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 B-3

Schedule A-1 to 

Subsequent Assignment

Equipment Leases

 Schedule A-1 to Annex B
 

Schedule A-2 to 

Subsequent Assignment

Franchise Agreements

 Schedule A-2 to Annex B
 

Schedule A-3 to 

Subsequent Assignment

Franchisee Notes

 Schedule A-3 to Annex B
 

Schedule A-4 to

Subsequent Assignment

Area License Agreements

 Schedule A-4 to Annex B
 

Schedule A-5 to

Subsequent Assignment

Owned Real Property

 Schedule A-5 to Annex B
 

Schedule A-6 to 

Subsequent Assignment

Franchisee Leases

 Schedule A-6 to Annex B

Schedule of Exceptions to

Subsequent Assignment

1.             Non-Conforming IHOP
Restaurants

2.             Delinquent Franchisees and
Franchisees Subject to Bankruptcy Proceedings

3.             Condemnation Proceedings

 Schedule of Exceptions to Annex B

ANNEX C

Form of Notice of Additional Sale

Notice of Additional Sale

This Notice of Additional
Sale, dated as of [          ],
200[ ], is delivered to IHOP Holdings, LLC (the “Purchaser”) pursuant to the Asset Sale Agreement, dated as of
March 16, 2007 (as amended, supplemented or otherwise modified and in effect
from time to time, the “Parent Asset Sale Agreement”), between International House of Pancakes, Inc.,
as the seller (the “Seller”),
and the Purchaser.  The Parent Asset Sale
Agreement incorporates the Standard Terms of Asset Sale Agreements (the “Standard Terms”) attached as Annex A thereto.  Capitalized terms not otherwise defined
herein shall have the meanings set forth in, or incorporated by reference into,
the Parent Asset Sale Agreement (including the Standard Terms and the
appendices thereto).

The Seller hereby gives
notice to the Purchaser that the Seller has designated as “Converted Type 3
IHOP Restaurants” each of the IHOP Restaurants listed on Schedule
A-1 annexed hereto (with respect to the date hereof, the “Relevant Converted Type 3 Restaurants”),
and, accordingly, has designated for sale by the Seller to the Purchaser all of
the Seller’s right, title and interest in the assets identified on Schedule A-2 through Schedule A-7 annexed hereto, on [          ],
200[ ] (the “Additional Transfer Date”) pursuant to the Parent Asset Sale Agreement and
pursuant to a Subsequent Assignment dated as of the Additional Transfer Date; provided,
however, that such sale is subject to the satisfaction of the conditions
set forth in Section 4.2 and other terms
and conditions of the Standard Terms.

Pursuant to Section 3.4 of the Standard Terms,
the Seller has determined the Additional Sold Asset Purchase Price to be $[                           ].

In addition, the Seller
has identified the property leases, the franchisee subleases and the
intercompany leases listed on Schedule A-8  annexed
hereto as additional assets that relate to the Relevant Converted Type 3
Restaurants, but which are not being sold pursuant to the Parent Asset Sale
Agreement.

A copy of this Notice of
Additional Sale also will be provided to IHOP Holdings, LLC, IHOP Properties,
LLC, IHOP Property Leasing, LLC, IHOP Property Leasing II, LLC, IHOP Real
Estate, LLC and IHOP Franchising, LLC.

IN WITNESS WHEREOF, the
Seller has caused this Notice of Additional Sale to be duly executed and
delivered by its duly authorized officer as of the date hereof.

	
  

  	
  INTERNATIONAL HOUSE OF PANCAKES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 C-1

Schedule A-1

to Notice of Additional Sale

Relevant Converted Type 3 IHOP Restaurants

 

 

 Schedule A-1 to Annex C
 

Schedule A-2

to Notice of Additional Sale

Equipment Leases

 

 

 Schedule A-2 to Annex C
 

Schedule A-3

to Notice of Additional Sale

Franchise Agreements

 

 

 Schedule A-3 to Annex C
 

Schedule A-4

to Notice of Additional Sale

Franchisee Notes

 

 

 Schedule A-4 to Annex C
 

Schedule A-5

to Notice of Additional Sale

Area License Agreements

 

 

 Schedule A-5 to Annex C
 

Schedule A-6 to

Notice of Additional Sale

Owned Real Property

 

 

 Schedule A-6 to Annex C
 

Schedule A-7 to 

Notice of Additional Sale

Franchisee Leases

 

 

 Schedule A-7 to Annex C
 

Schedule A-8 to

Notice of Additional Sale

Property Leases, Franchisee Subleases

and Intercompany Leases

 

 Schedule A-8 to Annex C

 

ANNEX D

Form of
IP Assignment and Security Agreement

(See Tab [  ])

 D-1

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