Exhibit 10.3

Execution Copy

ASSET PURCHASE AGREEMENT

APPLEBEE’S NEIGHBORHOOD GRILL & BAR RESTAURANTS

LOCATED IN THE MINNEAPOLIS AND DULUTH MARKETS

July 23, 2010

TABLE OF CONTENTS

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ASSET PURCHASE AGREEMENT

APPLEBEE’S NEIGHBORHOOD GRILL & BAR RESTAURANTS

THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of July 23, 2010, is made by and among Seller and Buyer identified below.  The Franchisor identified below has executed this Agreement for the sole purpose of acknowledging the transactions contemplated herein.  Applebee’s Services, Inc., a Kansas corporation (“ASI”), has executed this Agreement for certain limited purposes stated herein.

INTRODUCTION

A.            The entities collectively described in this Agreement as the “Seller” are the owners and operators of the Applebee’s Neighborhood Grill & Bar restaurants identified on Schedule 1 to this Agreement (collectively, the “Restaurants”).

B.            Buyer desires to acquire certain assets used in the operation of the Restaurants from Seller and to operate the Restaurants pursuant to the Applebee’s Neighborhood Grill & Bar Franchise Agreements with Franchisor.

C.            To accomplish the foregoing, Seller desires to sell, and Buyer desires to purchase, the Assets, including the Restaurants, on the terms, conditions, exclusions and limitations set forth in this Agreement.

AGREEMENT

ARTICLE I
BASIC INFORMATION

The following Basic Information identifies the parties to this Agreement and defines certain terms used in this Agreement.

“Effective Date”        July 23, 2010

“Seller”                  Collectively, the following entities that own and operate the Restaurants:

To the extent Seller is making any representations, warranties or covenants in this Agreement related to a particular Restaurant or Asset, only the entity that owns the applicable Restaurant or Asset will be deemed to make the applicable representation, warranty or covenant relating to such Restaurant or Asset.

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ARTICLE II
ADDITIONAL DEFINITIONS

“Affiliates” means with respect to a specified person or entity, a person or entity that directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the person or entity specified.

“Applebee’s Development Agreement” means the Applebee’s Neighborhood Grill & Bar Development Agreement to be entered into between Franchisor and Buyer as of the Closing Date in substantially the form entered into between Franchisor and Buyer in connection with the acquisition of 15 Applebee’s Neighborhood Grill & Bar restaurants located in California and Nevada by Apple Nevada, LLC from Franchisor’s Affiliates on October 9, 2008 (the “Nevada Restaurants”), subject to the changes identified in Exhibit A and such other changes as may be mutually agreed upon by Franchisor and Buyer.

“Applebee’s Franchise Agreements” means the Applebee’s Neighborhood Grill & Bar Franchise Agreements to be entered into between Franchisor and Buyer as of the Closing Date in substantially the form entered into between Franchisor and Buyer in connection with Buyer’s acquisition of the Nevada Restaurants, subject to the changes identified in Exhibit B and such other changes as may be mutually agreed upon by Franchisor and Buyer.

“Applebee’s Lease” or “Applebee’s Leases” means the lease(s) between Buyer and Seller for each of the Fee Properties (defined below) in substantially the form set forth on Exhibit C.

“Assets” means all assets (except the Excluded Assets) used in the operation of the Restaurants, including the Improvements, Real Property Leases, FF&E, Intangible Property, Food and Beverage Inventory, deposits and prepaid expenses and books and records (including complete lease files for the Real Property Leases except for attorney-client privileged communications) solely related to the Restaurants, and Miscellaneous Personal Property.

“Assignment of Intangible Property” means an assignment of Seller’s interest in the Intangible Property in the form of Exhibit D.

“Assignment and Assumption of Assumed Contracts” means an assignment of Seller’s interest in the Assumed Contracts (other than the Real Property Leases) in the form of Exhibit E.

“Assumed Contracts” means (a) the Real Property Leases, (b) the contracts, whether written or oral, listed on Schedule 2A of this Agreement and (c) the agreements or other arrangements described on Schedule 2B of this Agreement relating to the System Agreements.

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“Assumed Liabilities” means the following liabilities arising on or after the Closing Date:  (a) liabilities and obligations under the Assumed Contracts only to the extent such liabilities or obligations arise as a result of acts or omissions occurring on or after the Closing Date, (b) trade payables relating to (i) Miscellaneous Personal Property and (ii) Food and Beverage Inventory ordered for the Restaurants in the ordinary course of business that are not delivered until on or after the Closing Date (excluding any Food and Beverage Inventory accounted for in the physical count as of the Closing Date), (c) upon the consent of Buyer and only to the extent set forth on Schedule 2E, obligations of Seller to purchase inventory at the distribution center(s) serving the Restaurants in such amounts as customarily maintained by Seller for such Restaurants; and (d) any obligations relating to the “Hometown Hero” or similar artifacts in the Restaurants on loan from third parties, including the obligation to maintain such artifacts in good condition and to return such artifacts to the third party owner promptly upon request by the third party owner.

“Bill of Sale” means a bill of sale conveying title to the FF&E, the Miscellaneous Personal Property and the Food and Beverage Inventory to Buyer, free and clear of any and all liens and encumbrances, substantially in the form of Exhibit F.

“Carved-Out Claims” means any and all causes of action, claims, losses, liabilities, liens, damages, costs, expenses, demands and obligations (including reasonable attorneys’ fees) asserted against, suffered or incurred by (a) a Buyer Indemnitee arising or resulting from or relating to (i) the Excluded Liabilities, Excluded Assets, fraud or Taxes, (ii) the Seller representations and warranties contained in Sections 5.1(m) (taxes), 5.1(n) (employee benefits) and 5.1(o) (environmental or, (iii) the breach of Seller’s covenant in Section 9.3; or (b) by a Seller Indemnitee arising or resulting from or relating to (i) the Assumed Liabilities or (ii) the Buyer covenants contained in Sections 3.6, 6.4(d) and 9.3.

“Conveyance Documents” means this Agreement, the Bill of Sale, the Assignment of Intangible Property, the Lease Assignment and Assumption, the Applebee’s Lease(s), the New Master SLB Lease (to the extent applicable) and the Assignment and Assumption of Assumed Contracts.

“Contract Period” means the period from the Effective Date of this Agreement through the Closing Date or earlier termination of this Agreement in accordance with Section 9.2 below or as otherwise permitted by this Agreement.

“Covered Products and Services” means lift stations, pest elimination, scheduled landscape services, snow removal services, small wares (other than paper, equipment, food and small appliances), beer systems services, office supplies, yellow grease, hygiene products, cleaning services and window cleaning.

“Disclosure Schedule” means the schedule of information attached hereto that is provided by Seller in connection with the representations and warranties set forth in Section 5.1 of this Agreement.  The Disclosure Schedule is qualified in its entirety by reference to specific provisions of this Agreement. Information included in the Disclosure Schedule will be deemed exceptions to the representations and warranties set forth in Section 5.1 of this Agreement without regard to whether the applicable representation or warranty references the Disclosure Schedule.  Inclusion of information in the Disclosure Schedule shall not be construed as an admission that such information is material to the business, assets, financial condition or operations of the Restaurants, or otherwise be construed to broaden the scope of any representation or warranty of Seller or ASI set forth in this Agreement.  Any information disclosed in one section or subsection of the Disclosure Schedule shall be deemed to apply to and qualify the Section or subsection of this Agreement to which it corresponds in number and each other Section or subsection of this Agreement to the extent that it is reasonably apparent on its face that such information is relevant to such other Section or subsection.

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“Excluded Assets” means (a) existing franchise agreements between Seller and Applebee’s Enterprises LLC, successor-in-interest to Applebee’s International, Inc.; (b) the System Agreements; (c) the Fee Properties (defined below), including any improvements located thereon, (d) any tangible real or personal property, including business records, used in support of the Restaurants that is not located at the Restaurants, including computers, printers, cell phones, Blackberrys or similar wireless handheld devices or personal digital assistants (PDAs) for off-site employees, whether or not Restaurant Employees (except computers, printers, cell phones, Blackberrys or similar wireless handheld devices or PDAs (to the extent transferable) used by Restaurant Employees hired by Buyer at the Closing and any and all office or restaurant fixtures, furniture and equipment located in storage within the development territories subject to the Applebee’s Development Agreement, all of which are included in the Assets); (e) insurance policies and proceeds therefrom; (f) all claims against third parties relating to periods prior to the Closing Date, including rebates, refunds or other payment obligations, whether due through direct payment, offset, or other method and whether or not included in the terms of an Assumed Contract, including any refund due in connection with liquor licenses for the time period, if any, under which Buyer is operating under Seller’s license pursuant to an Interim Management Agreement; (g) the certificate of incorporation, minute books, tax returns, books of account or other records having to do with the organization of any Seller; (h) the rights which will accrue to any Seller under this Agreement; (i) any bank accounts or lock boxes of any Seller; (j) any cash or cash equivalents held by any Seller (other than cash on hand in the Restaurants on the Closing Date of up to $2,000 per Restaurant and deposits); (k) any contracts that are not Assumed Contracts; (l) any intellectual property rights of Seller, Franchisor, Applebee’s IP LLC or any other Affiliates of Seller, including trade names and trademarks of Seller or Franchisor, proprietary marks, logos, recipes, operating methods or manuals relating thereto or information stored on the hard drives of laptop computers used by Restaurant Employees that are not located at the Restaurants; (m) any personnel files or similar information for Restaurant Employees; provided, however, Buyer will be entitled to receive copies of Management Personnel Data for Restaurant Employees to the extent Buyer has hired such persons; (n) incident logs or other similar records relating to the operations of the Restaurants; (o) the Beer Distributor Advances for which Seller is not compensated pursuant to Section 3.3(a)(5) herein; and (p) any other assets on which the parties mutually agree and are set forth on Schedule 2C of this Agreement.

“Excluded Liabilities” means any and all liabilities of Seller other than the Assumed Liabilities, including, but not limited to, (a) liabilities related to the Excluded Assets, (b) liabilities for unredeemed gift cards or gift certificates; (c) any liabilities arising out of or resulting from events or circumstances occurring prior to Closing, including claims or demands by employees or former employees of Seller for actions and circumstances occurring prior to Closing, including the termination by Seller of any such employees and including any claims set forth on Section 5.1(j) of the Disclosure Schedule; and (d) the Employee Pay Out Obligations.

“Existing Agreements” means any and all Applebee’s Neighborhood Grill & Bar Development Agreements and Applebee’s Neighborhood Grill & Bar Franchise Agreements to which any of Franchisor and its predecessors and Affiliates, on the one hand, and any of Buyer and its predecessors and Affiliates, on the other hand, are a party as of the Effective Date or entered into after the Effective Date to the extent such agreements are related to Other Territories or Applebee’s Neighborhood Grill & Bar restaurants located in any Other Territory or Applebee’s Neighborhood Grill & Bar restaurants opened after the Effective Date in Other Territories or in any location outside of the territories to be described in the Applebee’s Development Agreement.

“Fee Properties” means the real property owned by Seller on which the following Restaurants are located: Diamond Lake Road (#061059), Cloquet (#061066) and Baxter (#061048).

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“FF&E” means all of Seller’s interest in appliances; apparatus; machinery; fixtures; furnishings; equipment; signs; POS systems; computer hardware; computers; printers; cell phones, Blackberrys or similar wireless handheld devices or PDAs used by Restaurant Employees hired by Buyer at the Closing (to the extent transferable); and other tangible personal property (excluding Food and Beverage Inventory and Miscellaneous Personal Property), in each case, located at the Restaurants.

“Food and Beverage Inventory” means Seller’s interest as of the Closing Date in the inventory of foodstuffs and beverages, including the Liquor Inventory, for use in the operation of the Restaurants and which are useable for the Applebee’s menu (as of the Closing Date), not expired and not spoiled.

“Governmental Authority” means any nation or government, foreign or domestic, any state or other political subdivision thereof, and any agency or other entity exercising executive, legislative, regulatory or administrative functions of government, including all taxing authorities.

“Improvements” means all of Seller’s interest in the improvements owned by Seller constructed on the real property subject to the Real Property Leases, including the applicable Restaurant’s facility, parking lot and landscaping.

“Intangible Property” means Seller’s interest in the property (other than the FF&E, Miscellaneous Personal Property, Food and Beverage Inventory and the Improvements), which is used solely in connection with the Restaurants, or the business conducted solely in connection with the Restaurants, including the Assumed Contracts, all goodwill related to the location of the Restaurants, any and all governmental licenses, Permits, and approvals held by Seller relating to the occupancy or use of the Restaurants which are transferable to Buyer, any and all existing warranties held by Seller and given by third parties with respect to the Restaurants which are assignable to Buyer and existing telephone numbers, fax numbers, keys and security system codes.  Intangible Property will not include any intellectual property rights of Seller, Franchisor, Applebee’s IP LLC or any of Seller’s Affiliates, including trade names and trademarks, proprietary marks, logos, recipes, operating methods or manuals relating thereto.  Buyer will have rights to use such intellectual property to the extent granted by Franchisor pursuant to the Applebee’s Franchise Agreements.

“Knowledge” means (i) with respect to Seller, the actual knowledge of the Director of Operations (currently Katy Sienko and Randy Carmody) and Regional Vice President (currently, Mark Killeen) for the Restaurants and the President (currently, Mike Archer), Senior Vice President, Finance (currently, Bev Elving) or Brand Counsel (currently, Rebecca Tilden) of ASI and (ii) with respect to Buyer, the actual knowledge of its chief executive officer and chief financial officer.

“Landlords” means the lessors under the Real Property Leases, as identified in Schedule 2D.

“Lease Assignment and Assumption” means the lease assignment and assumption substantially in the form of Exhibit G or as otherwise required by the applicable Real Property Lease.

“Liquor Inventory” means Seller’s interest in the inventory of beer, wine and liquor at all of the Restaurants, as determined on the applicable date.

“Liquor License Agency Approval” means (a) approval by all applicable state, local or other governmental authorities of permanent or temporary licenses for Buyer (or its Affiliates), the transfer of existing licenses for the Restaurants to Buyer (or its Affiliates) or other alternative arrangements that in each case permit Buyer to serve alcohol at each of the Restaurants on and after the Closing Date consistent with the current service hours and days permitted by such existing licenses or (b) except as provided in Section 7.8(e) with respect to Mandatory Licensed Restaurants, the execution of Interim

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Management Agreements in substantially the form attached as Exhibit J between Seller and Buyer that will be in effect on and after the Closing Date pending an approval described in provision (a) of this definition.

“Management Personnel Data” means the following information regarding the employment of the Restaurant Employees, in each case, to the extent maintained: (i) employment history (dates worked and positions); (ii) compensation history (salary and bonus); (iii) vacation accruals; and (iv) benefits utilization/participation (i.e., enrollment in medical plans or other benefit plans).  The Management Personnel Data in provisions (i)-(iii) of the preceding sentence will be identifiable by Restaurant Employee, but the information identified in provision (iv) of the preceding sentence will not be presented in a format that could result in its identification with a Restaurant Employee, as determined in Seller’s discretion.

“Mandatory Licensed Restaurant(s)” means the following Restaurants:  New Ulm, MN (#61056), Eden Prairie, MN (#61009), Minnetonka, MN (Ridgedale, #61003) and Minneapolis, MN (Block E, #61052; U of M, #61053).

“Material Adverse Change” means any change that is materially adverse to the business, financial condition or results of operations of the Restaurants, taken as a whole.

“Miscellaneous Personal Property” means Seller’s interest as of the Closing Date in the miscellaneous personal property used in the operation of the Restaurants, including the supplies of paper products, disposable and non-disposable tableware, flatware, and cups, kitchenware, smallwares, uniforms, cleaning supplies, advertising and promotional materials, office and maintenance supplies, construction plans and surveys, and in-store petty cash (up to $2,000 per Restaurant).

“Other Territories” means the geographic areas in which Franchisor or its predecessor-in-interest has granted Buyer or its Affiliates the right to develop Applebee’s Neighborhood Grill & Bar restaurants, excluding the territories to be described in the Applebee’s Development Agreement.

“Outside Date” means November 15, 2010.

“Principal Shareholders” has the meaning set forth in the Existing Agreements.

“Real Property Leases” means the leases identified on Schedule 2D.

“Required Underlying Consents” means receipt of consents required to be provided as a closing condition in Section 4.1(s) below to the extent required from (a) underlying fee owners and/or (b) the underlying lender(s) with respect to the SLB Landlord.

“Restaurant Employees” means the employees of Seller or its Affiliates that are (a) assigned to work at the Restaurants or (b) an Area Director or Director of Operations with supervisory responsibility over the Restaurants.

“System Agreements” means certain contracts, the scope of which includes the Restaurants and other Applebee’s Neighborhood Grill & Bar restaurants owned by Seller or its Affiliates or franchisees of Franchisor or Applebee’s Enterprises LLC.  Buyer and Seller agree to cooperate in good faith to determine alternative arrangements for System Agreements identified on Schedule 2B that permit the benefits and obligations associated with the System Agreements to continue to apply to the Restaurants after the Closing.

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“Tax” or “Taxes” means any income, gross receipts, excise, business and occupation, franchise, real and personal property, ad valorem, transfer, sales and use, value added, alternative or add-on minimum, withholding, social security, unemployment, disability, and other taxes or governmental fees or charges or other assessments (whether imposed directly or through withholding), including any interest or penalties that may become payable in respect thereof, imposed by any Governmental Authority, including any obligation to indemnify or otherwise assume or succeed to the Tax liability of any other person.

In addition to the foregoing, the following defined terms shall have the meaning set forth in the relevant section of the Agreement:

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ARTICLE III
PURCHASE AND SALE

Section 3.1             Purchase and Sale.  Seller agrees to grant, sell, convey, assign, transfer and deliver its right, title and interest in the Assets at the Closing to Buyer, free and clear of all liens upon the terms, covenants, and conditions set forth in this Agreement.  In addition, Buyer shall assume at the Closing and agree to pay, discharge or perform, as appropriate, the Assumed Liabilities upon the terms, covenants, and conditions set forth in this Agreement.  Notwithstanding anything to the contrary contained herein, the Liquor Inventory as of the Closing Date will not be transferred to Buyer except for the Liquor Inventory located at Restaurants which are not subject to an Interim Management Agreement at Closing.  Liquor Inventory not transferred to Buyer at Closing will be transferred to Buyer pursuant to the terms of Section 7.8 herein.

Section 3.2             Purchase Price and Escrowed Funds.

(a)           Upon the signing of this Agreement, Buyer shall remit the Escrowed Funds to Chicago Title Insurance Company (“CTI”) pursuant to the terms of an Escrow Agreement in the form attached as Exhibit H to this Agreement (the “Escrow Agreement”).  At Closing, CTI shall disburse the Escrowed Funds to Seller according to the written instructions provided by Seller.

(b)           At Closing, the Purchase Price (excluding any consideration due in addition to the amounts provided for in Sections 3.2(a)-(b)) less an amount equal to the Escrowed Funds is payable by Buyer to Seller by any combination of (i) delivery to, or at the direction of, Seller of interests in the Series 2007-1 Class A-2-II Fixed Rate Term Senior Notes (the “Notes”) issued by Applebee’s Enterprises LLC and the other Co-Issuers identified in the Base Indenture referred to below and/or (ii) cash or wire transfer of immediately available funds; provided, however, the aggregate principal amount outstanding on the Notes delivered to Seller plus the amount of funds paid by cash or wire transfer, including the Escrowed Funds, must equal the Debt Reduction Amount.  Buyer will transfer (or cause a third party to transfer) the Notes and/or execute (or cause a third party to execute) such instruments and other documents as Seller may reasonably require to reflect the assignment of the Notes contemplated in this Agreement and as are required by the Base Indenture dated November 29, 2007, among Applebee’s Enterprises, LLC, Applebee’s IP, LLC and the other Co-Issuers (including Sellers) identified therein, and Wells Fargo Bank, National Association, as Trustee, as amended and supplemented.  The Purchase Price is not contingent on Buyer receiving any discount from par value of the Notes in connection with its acquisition costs relating to any Notes delivered at the Closing and Buyer’s inability to obtain or deliver the Notes, whether due to lack of availability, restrictions of Buyer’s financing sources or other reason, will not relieve Buyer of its obligations to deliver the Purchase Price at the Closing.

(c)           Any amounts due to Seller from Buyer at Closing in excess of the consideration to be delivered pursuant to Sections 3.2(a) and (b), including any adjustments made pursuant to Sections 3.3(a) — (b), will be paid to Seller at Closing by any combination of (i) delivery to, or at the direction of, Seller of Notes (with an aggregate principal amount outstanding equal to the dollar value of the amount due pursuant to this Section 3.2(c) intended to be paid by delivery of the Notes) together with the instruments and other documents required in connection with the delivery of the Notes described in Section 3.2(b) and/or (ii) cash or wire transfer of immediately available funds to an account or accounts designated by Seller.

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Section 3.3             Closing Prorations, Deposits And Post-Closing Adjustments.

(a)           Adjustments to Amount Due From Buyer to Seller.  The following items will be adjustments to the amount due from Buyer to Seller at the Closing and will be reflected as of 12:01 a.m. on the Closing Date:

(1)           the amount due will be increased by the net present value (using a ten percent (10%) annual discount rate) of any refundable deposits or bonds held by any utility, governmental agency, Landlord or service contractor (excluding the Beer Distributor Advances covered in subsection (5) below) with respect to the Restaurants and transferred or credited to Buyer.

(2)           the amount due will be increased by the amount of petty cash on hand at the Restaurants as of the Closing Date in an amount not to exceed $2,000 per Restaurant or $126,000 in the aggregate.

(3)           the amount due will be increased by the dollar value of the Food and Beverage Inventory, pursuant to this subsection (3).  Representatives of Buyer and Seller will perform a physical count of the inventory as of 12:01 a.m. on the Closing Date to determine the Food and Beverage Inventory and the cash on hand at the Restaurants as of such time, consistent with the past practices of Seller.  The Food and Beverage Inventory shall be valued at actual landed “first in, first out” cost basis (i.e., actual purchase cost, including all third-party shipping and handling charges, but adjusted for all discounts and rebates actually received or receivable), as determined by records of the Restaurants; provided, however, that in no event shall the value of the Food and Beverage Inventory exceed an amount equal to $1,260,000.00 in the aggregate.

(4)           the amount due will be decreased by the value of any Assumed Liabilities incurred prior to the Closing Date not otherwise accounted for in this Section 3.3 and that Buyer expressly agrees to assume; provided, that there will be no adjustment to Purchase Price for the liabilities described in provisions (b)(ii) — (d) of the definition of “Assumed Liabilities” set forth herein.

(5)           the amount due will be increased by an amount equal to the amount of funds paid by Seller or its Affiliates in advance to vendors that sell beer for re-sale in the Restaurants (collectively, the “Beer Distributor Advances”) to the extent (A) such funds have not been applied by the applicable vendor toward the purchase price for beer delivered to one or more of the Restaurants before the Closing and (B) either (i) Buyer has elected to take assignment of, and the applicable vendor has acknowledged the assignment of, Seller’s rights in and to such funds with respect to the applicable Restaurant to Buyer as of the Closing or (ii) the purchase and sale of alcoholic beverages immediately after the Closing at the applicable Restaurant will be subject to an Interim Management Agreement.  For purposes of clarification, Seller will not be obligated to maintain any Beer Distributor Advances (and may cause the termination of any arrangements relating thereto) during the Contract Period.

(b)           Additional Adjustments and Prorations.  At Closing, Buyer and Seller shall reimburse each other, as appropriate, for the following expenses allocable to the operation of the Business, all of which shall be prorated such that all such items attributable to the period prior to the Closing Date will be allocable to Seller and all such items attributable to the period on and after the Closing Date will be allocable to Buyer:

(1)           all prepaid items (excluding (A) prepaid items under contracts that are not Assumed Contracts unless otherwise approved by Buyer and (B) amounts paid pursuant to Section 3.3(a)(5) above), including without limitation any Liquor License application or renewal fees or similar costs for the current (or future) term or period of such Liquor License(s);

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(2)           all real estate taxes and assessments, including taxes for the calendar year of Closing that are not due and payable until the following calendar year;

(3)           all personal property and other taxes;

(4)           utility expenses, using the most recent utility bills applicable to the Restaurants for purposes of determining such proration;

(5)           rent payments and any common area charges or other similarly pro-rated charges due under the Real Property Leases (including percentage rent on an annualized basis, as may be adjusted for recaptured landlord allowances), using, with respect to prorating common area charges or other similarly pro-rated charges due under the Real Property Leases, the amount of estimated payments for such charges then in effect under the Real Property Leases for purposes of determining such proration; and

(6)           any other ordinary and customary items of income and expenses related to the operation of the Restaurants customarily prorated, as mutually agreed upon by the parties.

(c)           Process. The adjustments to the amounts due to Seller pursuant to Section 3.3(a) and the additional adjustments and prorations pursuant to Section 3.3(b) will be calculated pursuant to the provisions set forth above, and based upon a fair and reasonable estimated accounting performed and agreed to by representatives of Seller and Buyer at the Closing.  As soon as practicable after the Closing Date, and in any event within one hundred twenty (120) days after the Closing Date, Buyer and Seller shall agree upon any final adjustments and prorations using the same methodology used for the estimates at Closing (the “True-up Period”).  If the parties are unable to agree upon the final adjustments and prorations within the True-up Period, then either party upon notice to the other party may submit the specific matters in dispute to KPMG International (the “Independent Accounting Firm”).  If for any reason the Independent Accounting Firm is unavailable to resolve such dispute between Buyer and Seller and if Buyer and Seller are unable to mutually agree upon the designation of a replacement nationally recognized public accounting firm within five (5) days after the Independent Accounting Firm has notified Buyer and Seller that it is unavailable to resolve such dispute, any party hereto may thereafter request that the American Arbitration Association make such designation. The Independent Accounting Firm will determine the resolution of the specific matters in dispute, which determination shall be final and binding on the parties.  Any payments required to be made pursuant to this Section 3.3(c) shall be paid in cash within five (5) days of the date of mutual agreement by the parties or determination by the Independent Accounting Firm (or American Arbitration Association).  The non-prevailing party will pay 100% of the fees and expenses associated with the services performed by the Independent Accounting Firm and the American Arbitration Association pursuant to this paragraph.  Notwithstanding the foregoing, with respect to any prorations for taxes, if the amount of a tax due for the current tax year is not determinable (A) it will be prorated on the basis of the tax for the immediately preceding tax year and (B) after the amount of tax for the current tax year becomes determinable, (i) either party, at its option, may give the other party written notice of the correct amount of tax (accompanied by documentation substantiating such amount) and any necessary adjustment to the prorations and (ii) the party from whom additional payment is required will pay the applicable amount within ten (10) days after such notice.

Section 3.4             Allocation of Purchase Price.  Buyer and Seller acknowledge and agree that the Purchase Price shall be allocated to the Assets in accordance with Schedule 3.4, which schedule will be completed as mutually agreed to by the parties on or before the Closing Date.  Such allocation shall be binding on Buyer and Seller for all purposes relating to tax matters, including the reporting of gain or loss and determination of basis for income tax purposes, and each of the parties hereto agrees that it or they will file a statement setting forth such allocation with its or their federal income tax returns and will also file

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such further information or take such further actions as may be necessary to comply with the Treasury Regulations that have been promulgated pursuant to Section 1060 of the Internal Revenue Code of 1986, as amended (the “1060 Regulations”).  Neither Buyer nor Seller shall take any position for tax purposes (whether in audits, on tax returns, or otherwise) that is inconsistent with such allocation unless required to do so by applicable law.  If any state or federal taxing authority challenges such allocation, Buyer and Seller shall cooperate in good faith in responding to such challenge.  Each party shall give prompt written notice to the other party of any such challenge.  If Buyer pays all or part of the Purchase Price to Seller by delivery of the Notes in the manner required by Sections 3.2(b) and (c), Seller acknowledges that, upon cancellation of the Notes following the Closing it will be solely responsible for any income taxes imposed upon Seller under applicable law that is attributable to the excess of the principal amount outstanding under the Notes and the fair market value of the consideration paid by Buyer for the Notes delivered to Seller at Closing.

Section 3.5             Employees at Restaurants.

(a)           At Closing, Seller or their Affiliates will terminate the employment of the Restaurant Employees, including any Restaurant Employee who is on any type of leave of absence, including medical, disability, workers’ compensation, FMLA or the applicable state or federal leave laws or personal leave.  Buyer will have the right, but not the obligation, to hire such Restaurant Employees on Buyer’s terms; provided, however, Buyer shall make offers to hire a sufficient number of such Restaurant Employees to avoid triggering any liabilities or obligations of Seller or its Affiliates under the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar state or local laws with respect to mass layoffs, plant closures or similar events (the “WARN Act”).  Buyer agrees that if the Closing does not occur, neither Buyer nor its Affiliates will directly or indirectly, solicit or hire any of the Restaurant Employees with titles of manager, assistant general manager, general manager or above for a period of two (2) years after the termination of this Agreement.  To the extent there is any conflict between the immediately preceding sentence and the terms of any Existing Agreement, the terms of the applicable Existing Agreement will prevail.

(b)           Payment of Vacation Pay.  On or before Closing, in connection with the termination of the Restaurant Employees, Seller or its Affiliates will pay Restaurant Employees for the value of such Restaurant Employee’s accrued but unused vacation hours and accrued but unused sick days to be converted to pay upon termination, if any, pursuant to the policy of Seller and its Affiliates in effect and as made available to Buyer via Seller’s electronic data site as of June 11, 2010 (except as otherwise required by law, as determined by Seller, in which case Seller’s payment will be made in accordance with applicable law) (the “Employee Pay Out Obligations”).  Buyer acknowledges that the policies of Seller and its Affiliates may not require any payments to Restaurant Employees with respect to accrued but unused sick days.

(c)           Buyer acknowledges that Seller may provide a notice to some or all of the Restaurant Employees designed to comply with the WARN Act, and Seller will provide copies of all such notices to Buyer at the same time provided to the Restaurant Employees.

Section 3.6             Buyer’s Access Rights.

(a)           During normal business hours throughout the Contract Period, Buyer will be permitted commercially reasonable access to (1) the Restaurants for inspections, surveys, investigations, including but not limited to the right to conduct Phase I environmental site assessments; (2) Seller’s and its Affiliates’ Director of Operations, Regional Vice President, Area Directors and General Managers with supervisory responsibility for the Restaurants; and (3) all documents and information related to the Assets in Seller’s possession which Buyer reasonably deems material to the purchase of the Assets, are

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reasonably available to Seller and, as determined by Seller, may be disclosed without liability, including the Management Personnel Data for the Restaurant Employees and updates of the same reasonably requested by Buyer.  Seller will cooperate with Buyer in connection with all rights of access but is not obligated to incur any related expense.  In all cases, Buyer shall schedule the time and scope of each exercise of such rights of access with Seller and such exercise shall be under such supervision as Seller may require in its reasonable discretion; and in a manner that does not disrupt or interfere with the operation of the Restaurants.  The timing and scope of any meetings between Buyer and the supervisory employees described in this Section must be approved in advance by an authorized representative of Seller, which approval shall not be unreasonably withheld or delayed.  Any requests for documents and information by Buyer pursuant to this Section 3.6 shall be made via telephone or e-mail to Phil Crimmins (913-890-0263; phil.crimmins@applebees.com); Ronniann Silver (913-890-0222); ronniann.silver@applebees.com); Dan Rieger (913-890-0145; daniel.rieger@applebees.com); Mindy Jack (913-890-0181; mindy.jack@applebees.com); Neil Sprague (913-890-0673; neil.sprague@applebees.com); or Lance Formwalt at (816-265-4106; lancef@sblsg.com).  Except as provided in the two immediately preceding sentences, neither Buyer, nor anyone on behalf of Buyer, may contact, communicate with, or request information from, any employees of Seller or its Affiliates without the prior written consent of Seller, which written consent shall not be unreasonably withheld or delayed.  Buyer will use reasonable efforts to conduct physical inspections and on-site activities at the Restaurants in a manner which will not unreasonably interfere with the business being conducted at the Restaurants or with any other business being conducted in a shopping center within which a Restaurant is located.  Buyer will repair all damage arising out of or due to its entry onto the Restaurant properties and conducting Buyer’s on-site inspections and on-site activities.  Buyer will indemnify and defend Seller against, and hold Seller harmless from, any and all loss, cost, liability, and expense (including reasonable attorneys’ fees) arising out of Buyer’s inspections or on-site activities at the Restaurants from June 11, 2010 through the Closing.

(b)           Buyer shall not conduct any physically intrusive testing or other destructive or invasive sampling, testing or other inspections, such as a Phase II environmental inspection, unless (i) such testing, sampling or inspection is recommended in writing by a third party consultant, engineer or similar professional with applicable expertise, such as a recommendation for a Phase II that appears in a Phase I environmental site assessment report or similar report, and (ii) Buyer requests prior approval from Seller by submitting a written request, together with a copy of the foregoing recommendation, within a reasonable period (not less than forty-eight (48) hours) prior to such testing, sampling or inspection and Seller provides its written consent.  Seller reserves the right to require Buyer to enter into a mutually acceptable access agreement prior to granting its approval.  Upon Seller’s request, Buyer will (i) provide Seller copies of the results of any environmental investigation or other inspection conducted with respect to the Restaurants within five (5) business days of Buyer’s receipt thereof and (ii) with respect to environmental investigations, obtain reliance letters from the environmental engineering firm or other investigator permitting Seller to rely on the applicable results of the environmental investigation.

Section 3.7             Updating Seller’s Representations.

(a)           If Seller becomes aware during the Contract Period of any matters which make any of the representations and warranties of Seller set forth in Section 5.1 below untrue, Seller will promptly disclose such matters to Buyer and if Buyer otherwise becomes aware during the Contract Period of any matters which make any of the representations and warranties of Seller untrue, then Buyer will immediately notify Seller of such matters.  In either event, Seller will update the Disclosure Schedule to reflect any such matters.  For purposes of this Section 3.7, Schedule 2D will be deemed to be included in the Disclosure Schedule.

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(b)           Subject to Section 3.7(c), to the extent an updated disclosure is made after the Effective Date and relates to a matter occurring or arising prior to the Effective Date, such updated disclosure shall be disregarded for purposes of determining satisfaction of the condition precedent set forth in Section 4.1(l) (solely for purposes of giving Buyer time to exercise its rights as provided in this paragraph) and Buyer shall be entitled to propose a reduction in the Purchase Price based on the net present value of the reasonably anticipated damages arising due to the additional disclosure by delivery of a written notice to Seller within five (5) business days of the applicable disclosure, which notice must include an explanation of the basis for Buyer’s proposed reduction.  If the parties are unable to agree upon an adjustment amount within five (5) business days following Seller’s receipt of Buyer’s written notice of proposed adjustment to the Purchase Price (the “Expiration Date”), Buyer will have the right to either (i) terminate this Agreement by written notice to Seller within two (2) business days after the Expiration Date or (ii) proceed with the Closing with the right to seek indemnification only for (a) claims asserted by a third party or (b) out-of-pocket costs incurred by Buyer to comply with applicable Law and, in the case of either provision (a) or (b) of this Section 3.7(b), only to the extent arising or resulting from the applicable additional disclosure.

(c)           To the extent that an updated disclosure to the Disclosure Schedule made after the Effective Date constitutes a Material Adverse Change, Buyer will have the option of terminating this Agreement by written notice of such election to Seller on or before the Closing Date.

(d)           Notwithstanding (a-c) above, (i) if any updated disclosure, whenever made, relates to exceptions disclosed in either a title commitment or a Title Deficiency Notice, the procedures outlined in Section 7.7 shall govern, (ii) if any updated disclosure, whenever made, relates to exceptions or conditions disclosed in an Environmental Deficiency Notice or as a result of Buyer’s environmental site assessment, the procedures outlined in Section 7.6 shall govern and (iii) with respect to an updated disclosure made after the Effective Date, Buyer shall not have any rights to terminate or seek a purchase price adjustment or indemnification for a breach of a representation and warranty in Section 5.1 (c)(iii), Section 5.1(e) or Section 5.1(f) to the extent the updated disclosure relates to a contract that is not an Assumed Contract unless the updated disclosure relating to such contract constitutes a Material Adverse Change or otherwise imposes a liability on Buyer following the Closing.  If Buyer elects to terminate this Agreement pursuant to this Section 3.7, the Parties will execute joint written instructions to instruct the Escrow Agent to deliver the Escrowed Funds to Buyer.  Notwithstanding the foregoing, if Buyer elects to proceed with Closing despite any such disclosures, Buyer shall be deemed to have waived any right to indemnification due to the breach of the applicable representation or warranty except to the extent that a claim is asserted by a third party or for out-of-pocket costs incurred by Buyer to comply with applicable Law.

Section 3.8             Sale and Leaseback Lease.  As of June 13, 2008, the land and Improvements located thereon with respect to the Restaurants listed on Schedule 3.8 (individually, an “SLB Restaurant” and collectively, the “SLB Restaurants”) were sold to DBAPPLEF LLC (“SLB Landlord”) pursuant to a sale and leaseback transaction in which SLB Landlord, Seller and certain of Seller’s affiliates entered into a Master Land and Building Lease, dated June 13, 2008 and pursuant to which the SLB Restaurants were leased to Seller (the “Master SLB Lease”).  Buyer agrees that it will obtain its leasehold interest in and to the SLB Restaurants (to the extent subject to the Master SLB Lease at Closing) as required by the terms of the Master SLB Lease, which Buyer acknowledges may include the execution of a new master lease with the SLB Landlord in a form provided in the Master SLB Lease (the “New Master SLB Lease”).

Notwithstanding the foregoing, the New Master SLB Lease shall be signed by Apple Minnesota LLC and Buyer shall not be required to guaranty the New Master SLB Lease or any individual site lease when a site is sold by the SLB Landlord.

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Seller shall use commercially reasonable efforts to cause the New Master SLB Lease and the form of the individual site lease to be signed when a site is sold by the SLB Landlord not to include Section 16.01(h) of the Master SLB Lease.

If any guaranty by Seller or its Affiliates (the “SLB Guaranty”) may remain in effect following Closing with respect to the New Master SLB Lease or any of the Real Property Leases for the Restaurants previously covered by the Master SLB Lease (the “Former SLB Leases”), at Closing, Seller shall deliver to Buyer a stand alone indemnification (without the inclusion of the limitations in Section 6.1) from a Seller Affiliate permitted under Seller’s Base Indenture and reasonably satisfactory to Buyer, with respect to (A) any default under any of the Former SLB Leases caused by a default under the SLB Guaranty, and (B) if Section 16.01(h) is included in the New Master SLB Lease, any default under the New Master SLB Lease caused by a default under the SLB Guaranty.

Section 3.9             Sale of Fee Properties.  Seller may sell or otherwise transfer one or more of the Fee Properties to third party(ies) (each, a “Fee Property Buyer”) on or before the Closing; provided, that, concurrently with the closing of any such transfer (a) Seller, as tenant, will enter into the Applebee’s Lease for such Fee Property with the Fee Property Buyer, as landlord, and such lease will be deemed to be a Real Property Lease for all purposes herein; (b) Seller will obtain any documents or consents from the Fee Property Buyer that will be required to be delivered to Buyer at Closing pursuant to the terms of this Agreement; and (c) in no event shall such transfer delay the Closing of the transactions contemplated by this Agreement.

Section 3.10           Ridgedale Mall (# 61003).  Prior to Closing, Seller may, at its sole option, terminate this Agreement with respect to Ridgedale Mall (# 61003) (the “Ridgedale Mall Termination Right”) by providing Buyer with five (5) days written notice of Seller’s election to exercise the Ridgedale Mall Termination Right (the “Ridgedale Mall Termination Notice”).  If Seller exercises the Ridgedale Mall Termination Right, Seller shall retain title to the Ridgedale Mall Restaurant and to any Asset that is an Asset solely because it is used in connection with the operation of the Ridgedale Mall Restaurant.  If Seller exercises the Ridgedale Mall Termination Right, the parties agree that any reference to the Ridgedale Mall (# 61003) appearing elsewhere in this Agreement or on any Exhibit or Schedule to this Agreement will be deemed to have been deleted from such Exhibit and/or Schedule, as applicable, as of the date of the Ridgedale Mall Termination Notice and that the Applebee’s Franchise Agreements and/or Applebee’s Development Agreement, as applicable, will be amended to permit Seller to continue to operate Ridgedale Mall (#61003) at such location without causing Franchisor to be in breach of its obligations under the Applebee’s Franchise Agreements and/or Applebee’s Development Agreement.  For purposes of clarification, if Seller exercises the Ridgedale Mall Termination Right, there will not be any adjustment to the Purchase Price.

ARTICLE IV
CONDITIONS PRECEDENT

Section 4.1             Buyer’s Conditions.  Notwithstanding anything in this Agreement to the contrary, Buyer’s obligation to purchase the Assets will be subject to the satisfaction or waiver of the following conditions:

(a)           “Intentionally Omitted”;

(b)           execution and delivery by Seller of the Conveyance Documents;

(c)           receipt of extended coverage leasehold title policies on each Restaurant (excluding the Restaurants subject to “in-line” leases, which Restaurants will be identified on Schedule

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4.1(c) to this Agreement), all with owner’s comprehensive endorsements and with insurance coverage amounts of $500,000  per Restaurant;

(d)           receipt of consent to the Lease Assignment and Assumption from the Landlord for each of the Real Property Leases listed on Schedule 4.1(d);

(e)           an estoppel certificate from the Landlord for each of the Real Property Leases in substantially the form attached hereto as Exhibit I or in such other form as Buyer may accept;

(f)            to the extent the Assets will be pledged as collateral, satisfaction of Buyer’s lenders’ underwriting requirements for the pledge of new collateral, each of which is identified on Schedule 4.1(f), pursuant to that certain Third Amended and Restated Credit Agreement, dated January 29, 2010, by and among Buyer’s Affiliates, Bank of America, N.A. and certain other parties;

(g)           Buyer having obtained, at its cost, Liquor License Agency Approval;

(h)           no Material Adverse Change during the Contract Period;

(i)            Buyer and Seller and its Affiliates must have agreed to Schedule 2A, Schedule 2B and Schedule 4.1(k) provided, however, Buyer and Seller will be deemed to have agreed to such schedules to the extent such schedules are partially complete as of the Effective Date, in which case, Buyer and Seller and its Affiliates must have agreed to any additions thereto proposed by either Buyer or Seller for contracts not disclosed to Buyer prior to the Effective Date;

(j)            subject to the conditions to Franchisor’s consent set forth in Section 7.3 and/or the Franchisor Consent Letter being satisfied, the execution and delivery of the Applebee’s Development Agreement and Applebee’s Franchise Agreements by Franchisor;

(k)           receipt of consent of each third party required for the assignment of the Assumed Contracts set forth on Schedule 4.1(k), in each case, as required by the terms of such Assumed Contract; provided, however, this closing condition will not apply to Real Property Leases;

(l)            Seller shall have delivered to Buyer certificates of an officer of each of the Seller entities dated as of the Closing Date certifying that Seller has (i) performed and complied in all material respects with all of Seller’s covenants and obligations under this Agreement which are to be performed or complied with by Seller prior to or on the Closing Date; and (ii) all representations and warranties of Seller in this Agreement shall be true on and as of the Closing Date in all material respects;

(m)          no applicable law or injunction enacted, entered or issued by any governmental body or other legal restraint preventing the consummation of the transactions contemplated hereby shall be in effect;

(n)           receipt of copies of the resolutions of the board of managers and members of the Seller entities that are limited liability companies authorizing the execution, delivery and performance of this Agreement and the transactions contemplated herein or other proof of such authorization by such Seller reasonably acceptable to Buyer, certified, in either case, as of the Closing Date by an authorized officer of that certain Seller entity;

(o)            receipt of copies of the resolutions of the board of directors or stockholders of the Seller entities that are corporations authorizing the execution, delivery and performance of this Agreement and the transactions contemplated herein or other proof of such authorization by such Seller

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reasonably acceptable to Buyer, certified, in either case, as of the Closing Date by an authorized officer of that certain Seller entity;

(p)            receipt of an affidavit from each of the Seller entities stating such Seller entity’s U.S. taxpayer identification number and that such Seller entity is a “United States person”, as defined by the Internal Revenue Code Section 1445(f)(3) and Section 7701(b) in form reasonably satisfactory to Buyer;

(q)           Buyer and Seller and its Affiliates must have agreed to any additions to Schedule 2C after the Effective Date; provided, that, the parties hereby agree that an item located at a Restaurant(s) will be added to Schedule 2C without further approval by Buyer if it is owned by a vendor and the item would be permitted to remain in the Restaurant(s) after the Closing if Buyer continued the applicable relationship with such vendor after the Closing (whether or not Buyer actually continues such vendor relationship);

(r)            receipt in writing of confirmation from the applicable Landlord that the personal rights described on Schedule 4.1(r) with respect to the Real Property Leases described on such schedule will be to the benefit of Buyer, in form and substance reasonably satisfactory to Buyer;

(s)           receipt of consents from underlying fee owners and/or the underlying lenders for each of the Real Property Leases and the Applebee’s Leases, in each case, solely to the extent such agreement is necessary for Seller to assign its interest in each of the Real Property Leases or execute the Applebee’s Leases, as applicable, without breaching any direct contractual obligations of Seller to Landlords or other third parties;

(t)            the execution by Franchisor and delivery to Buyer of an amendment to that certain Principal Agreement dated as of February 3, 2005, as amended by that certain 2008 Amendment to the Principal Agreement, dated as of June 30, 2008, and that certain Second Amendment to the Principal Agreement, dated as of November 7, 2008, which amendment will effectively delete Section 2.2 of the Principal Agreement in its entirety;

(u)           Buyer and Seller and its Affiliates must have agreed to Schedule 2E;

(v)            Seller must have repaired, at Seller’s sole cost, the deferred maintenance items identified under the columns on Schedule 4.1(v) of this Agreement titled “A.S.I. Operations to address” and “A.S.I. Facilities to address”; provided, however, for purposes of clarification, Seller shall have no responsibility to repair any other deferred maintenance items appearing on Schedule 4.1(v), including, without limitation, those items appearing under the column titled “Items that will not be addressed”, which items will be accepted by Buyer “as is”; and

(w)           Seller, at Seller’s sole cost, must have replaced as part of the server replacement process that was started with respect to the Restaurants on or about June 10, 2010, the Gx260 or Gx270 server, as applicable, located at each of the Restaurants identified on Schedule 4.1(w) with a Gx960 or comparable server.

Section 4.2             Failure or Waiver of Buyer’s Conditions.  Buyer may, at its election, at any time or times on or before the date specified for the satisfaction of the condition, waive in writing the benefit of any of its conditions set forth in Section 4.1 above.  Failure to notify Seller in writing of the failure of any of the conditions set forth above by the date for satisfaction of such condition will constitute a waiver of such condition.  In any event, Buyer’s consent to the close on the sale and purchase of the Assets pursuant to this Agreement will waive any remaining unfulfilled conditions.

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Section 4.3             Seller’s Conditions.  Notwithstanding anything in this Agreement to the contrary, Seller’s obligation to sell the Assets will be subject to the satisfaction or waiver of the following conditions:

(a)           receipt of a consent to the Lease Assignment and Assumption from the Landlord for each of the Real Property Leases identified on Schedule 4.1(d) of this Agreement;

(b)           execution and delivery of the Applebee’s Development Agreement and Applebee’s Franchise Agreements by Buyer and Franchisor and Franchisor’s confirmation of receipt of all payments due from Buyer thereunder, including $2,205,000 in franchise fees; provided, however, Franchisor’s execution of the Applebee’s Development Agreement and Applebee’s Franchise Agreements will only be a condition of Seller if the conditions to Franchisor’s consent set forth in Section 7.3 of this Agreement or the Franchisor Consent Letter have not been satisfied;

(c)           execution and delivery of the Conveyance Documents by Buyer;

(d)           receipt of the Purchase Price in accordance with Section 3.2 and Section 3.3 and the prorations pursuant to Section 3.3 of this Agreement on the Closing Date;

(e)           the aggregate amount past due from Buyer and its Affiliates to Franchisor must not exceed $10,000;

(f)            Buyer and Seller and its Affiliates must have agreed to Schedule 2A, Schedule 2B and Schedule 4.1(k), provided, however, Buyer and Seller will be deemed to have agreed to such schedules to the extent such schedules are partially complete as of the Effective Date, in which case, Buyer and Seller and its Affiliates must have agreed to any additions thereto proposed by either Buyer or Seller for contracts not disclosed to Buyer prior to the Effective Date;

(g)           receipt of consent of each third party required for the assignment of the Assumed Contracts set forth on Schedule 4.1(k), in each case, as required by the terms of such Assumed Contract; provided, however, this closing condition will not apply to the Real Property Leases;

(h)           Buyer shall have delivered to Seller a certificate of an officer of Buyer dated as of the Closing Date certifying that Buyer has (i) performed and complied in all material respects with all of Buyer’s covenants and obligations under this Agreement which are to be performed or complied with by Buyer prior to or on the Closing Date; and (ii) all representations and warranties of Buyer in this Agreement shall be true on and as of the Closing Date in all material respects;

(i)            no applicable law or injunction enacted, entered or issued by any governmental body or other legal restraint preventing the consummation of the transactions contemplated hereby shall be in effect;

(j)            Buyer and Seller and its Affiliates must have agreed to any additions to Schedule 2C after the Effective Date; provided, that, the parties hereby agree that an item located at a Restaurant(s) will be added to Schedule 2C without further approval by Buyer if it is owned by a vendor and the item would be permitted to remain in the Restaurant(s) after the Closing if Buyer continued the applicable relationship with such vendor after the Closing (whether or not Buyer actually continues such vendor relationship);

(k)           receipt of copies of the resolutions of the board of managers and members of Buyer authorizing the execution, delivery and performance of this Agreement and the transactions

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contemplated herein or other proof of such authorization by Buyer reasonably acceptable to Seller, certified, in either case as of the Closing Date by an authorized officer of Buyer;

(l)            Buyer and Seller and its Affiliates must have agreed to Schedule 2E; and

(m)          receipt of consents from underlying fee owners and/or the underlying lenders for each of the Real Property Leases and the Applebee’s Leases, in each case, solely to the extent such agreement is necessary for Seller to assign its interest in each of the Real Property Leases or execute the Applebee’s Leases, as applicable, without breaching any direct contractual obligations of Seller to Landlords or other third parties.

Section 4.4             Failure or Waiver of Seller’s Conditions.  Seller may, at its election, at any time or times on or before the date specified for the satisfaction of the condition, waive in writing the benefit of any of its conditions set forth in Section 4.3 above.  Failure to notify Buyer in writing of the failure of any of the conditions set forth above by the date for satisfaction of such condition will constitute a waiver of such condition. In any event, Seller’s consent to the close on the sale and purchase of the Assets pursuant to this Agreement will waive any remaining unfulfilled conditions.

ARTICLE V
REPRESENTATIONS AND WARRANTIES

Section 5.1             Seller’s Representations and Warranties.  Subject to any exceptions in the Disclosure Schedule, ASI, jointly and severally with the applicable Seller, hereby makes the representations and warranties set forth in Section 5.1(l) and Section 5.1(n) below.  Subject to the exceptions in the Disclosure Schedule and the immediately preceding sentence, Seller, severally only with respect to itself and the Restaurants owned or operated by it, and not jointly, represents and warrants to Buyer as follows:

(a)           Seller is duly organized, validly existing, and in good standing under the laws of its state of formation and has all requisite authority to own, lease and operate its properties and assets and to conduct its business (including without limitation business related to the Restaurants) as it is now being conducted.  Seller is duly qualified to do business as a foreign entity and is in good standing in all jurisdictions where its activities make such qualification necessary.

(b)           Seller has corporate power and lawful authority to enter into and carry out the terms and provisions of this Agreement and to execute and deliver all documents which are contemplated by this Agreement and all actions of Seller necessary to confer such power and authority upon the persons executing this Agreement and all documents which are contemplated by this Agreement on behalf of Seller have been taken.  This Agreement has been duly and validly executed and delivered by Seller and, assuming the due authorization, execution and delivery by Buyer and ASI, constitutes a legal, valid and binding obligation of Seller enforceable against it in accordance with its terms, subject to the effects of bankruptcy, insolvency, reorganization or similar laws of general application in effect relating to or affecting the rights of creditors, generally and to general rules of equity.

(c)           The execution, delivery and performance of this Agreement will not (i) violate or result in a breach of any term of Seller’s organizational documents, (ii) result in a breach of or constitute a default under any term in any Assumed Contracts, (iii) result in a material breach of or constitute a material default under any term in any agreement, instrument, note, bond, mortgage, indenture, lease, permit, concession or license to which Seller is a party or by which the Restaurants or the Assets are bound and which, in each case, is not an Assumed Contract, (iv) violate any law, order, rule or regulation, in each case applicable to Seller or the Restaurants, of any court or of any governmental authority having jurisdiction over Seller or its properties or the Restaurants, or (v) result in the creation or imposition of

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any lien or encumbrance upon any of the Assets.  Except for Liquor License Agency Approval, no filing or registration with, or authorization, consent or approval of, any governmental authority is required by or with respect to the Seller in connection with the execution and delivery of this Agreement by the Seller, or is necessary for the consummation of any of the transactions contemplated by this Agreement.

(d)           Except for any encumbrances which will be released upon payment of the Purchase Price, Seller has good title to or the right to use pursuant to written agreements all of the Assets.  Each Restaurant contains the FF&E, Miscellaneous Personal Property and Food and Beverage Inventory generally necessary to operate the Restaurant in accordance with Seller’s historical practices.  Schedule 2D includes a complete and accurate list of all the Restaurants and a complete and accurate list of all the Landlords and Real Property Leases for the Restaurants.  Each Real Property Lease is in full force and effect and the terms contained in the Real Property Leases have not been modified or amended in any respect except as disclosed in Schedule 2D.  Each Real Property Lease is legal, valid and binding, in full force and effect, and free from default by Seller and, to Seller’s Knowledge, any other parties thereto.  To Seller’s Knowledge, there does not exist any event or condition that, with or without lapse of time or the giving of notice, would become such a breach or default or would cause the acceleration of any obligation thereunder.  Seller has not waived any of its rights under any Real Property Lease.  No party to any Real Property Lease has given written notice to Seller of its intention to cancel, terminate or fail to renew such Real Property Lease.

(e)           A complete and accurate list of all loan agreements, indentures, mortgages, pledges, security agreements, guarantees, leases other than Real Property Leases or lease purchase agreements to which Seller is a party and to which any of the Restaurants are subject as of the Effective Date is set forth in Section 5.1(e) of the Disclosure Schedule.

(f)            Except for the Real Property Leases, the contracts set forth in Section 5.1(f) of the Disclosure Schedule and those contracts relating to the Restaurants which are in the normal course of business and are terminable by Seller without liability within thirty (30) days’ or less prior written notice, there are no oral or written leases, contracts, commitments or agreements, including System Agreements, which are necessary to operate the Restaurants in accordance with Seller’s historical practices to which Seller is a party or by which Seller is bound.  No Assumed Contracts require prior written notice or consent of a third party for the execution of this Agreement or the consummation of the transactions contemplated herein, except as set forth on Section 5.1(f) of the Disclosure Schedule and excluding the Real Property Leases.  Except for the Real Property Leases (which are the subject of Section 5.1(d)), (i) each Assumed Contract is legal, valid and binding, in full force and effect, and free from material default by Seller and to Seller’s Knowledge after inquiry of the Area Directors, any other parties thereto; (ii) to Seller’s Knowledge after inquiry of the Area Directors, there does not exist any event or condition that, with or without lapse of time or the giving of notice, would become such a breach or default or would cause the acceleration of any obligation thereunder; (iii) Seller has not waived any of its rights under any Assumed Contract; and (iv) no party to any Assumed Contract has given written notice to Seller of its intention to cancel, terminate or fail to renew such Assumed Contract.

(g)           Except as set forth in Section 5.1(g) of the Disclosure Schedule, Seller has all material approvals, authorizations, consents, licenses, franchises, orders, certifications and other permits issued by any Government Authority which are necessary for the ownership of the Assets or operation of the Restaurants (the “Permits”) and is in material compliance with all requirements and limitations set forth in such Permits.  Within forty-five (45) days following the Effective Date, Seller will update Section 5.1(g) of the Disclosure Schedule to list all Permits held by Seller for the Restaurants as of the date such disclosure is provided.

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(h)           Seller has provided to Buyer the following financial information: the unaudited statement of operations for each Restaurant for each of the three (3) fiscal years ending December 30, 2007, December 28, 2008 and January 3, 2010 (collectively, the “Financial Statements”).  The Financial Statements were prepared by each Seller from its books and records on a basis consistent with such Seller’s internal accounting practices and generally in accordance with GAAP.  During the time period covered by the Financial Statements, no Seller has made any material changes to its accounting policies. The Financial Statements are consolidated with the audited financial statements of each Seller’s parent without any material adjustments.  The data set forth in such Financial Statements presents fairly in all material respects the financial condition and the results of operations of the Restaurants and Seller for the periods to which each relates.  Except as set forth on Section 5.1(h) of the Disclosure Schedule, with respect to the Restaurants, no Seller has any material liability of any nature (mature or unmatured, fixed or contingent) which was not (i) provided for or disclosed in the Financial Statements, if required or (ii) incurred in the ordinary course of business, consistent with past practice.  The comparable sales reports provided by any Seller to Buyer are the same comparable sales reports that such Seller uses in the ordinary course of business to manage the operations of the Restaurants operated by it.  No Seller has any outstanding gift certificates or gift cards it has issued.  Since December 31, 2002, no gift certificates have been issued for use at the Restaurants by any Seller or its Affiliates.  The only gift cards issued for use at the Restaurants are issued by ACM Cards, Inc. (f/k/a ACMC, Inc.) or third party franchisees of either Applebee’s Enterprises or Franchisor.

(i)            Seller has neither received written notice from any Governmental Authority that, nor has Knowledge of, eminent domain proceedings for the condemnation of the Restaurant facilities, or that would materially and adversely impact any of the Restaurants, are pending or threatened as of the Effective Date.

(j)            Except as set forth on Section 5.1(j) of the Disclosure Schedule, there is no claim, suit, arbitration, action or proceeding now pending, or, to Seller’s Knowledge, threatened in writing, at law or in equity, or before any court, arbitrator, administrative or regulatory body, quasi-judicial agency or any governmental agency, relating to the Restaurants to which Seller or an Affiliate of Seller is (or would be in the case of threatened actions) a party.

(k)           Seller has received no written notice from any Governmental Authority that, and has no Knowledge after inquiry of the Area Directors, that, it is in violation of any applicable building codes, or that Seller’s use of the Restaurants is presently in violation of any applicable zoning, land use, or other law, order, ordinance, rule, or regulation affecting the operation of the Restaurants (including, but not limited to, Americans with Disabilities Act requirements), except for any violations cited on the most recent health inspection report disclosed to Buyer.  Seller shall promptly provide Buyer with copies of any such written notices received by any Seller entity during the Contract Period.

(l)            Seller is not a party to any written employment contracts or collective bargaining agreements with respect to the Restaurants for which Buyer will be liable.  No employees of the Restaurants are on strike, nor are any such employees threatening to strike, and there is no strike in progress in any collective bargaining unit of any union to which Seller’s employees belong.  Seller is not aware of any union organizing activity occurring with regard to any of the Restaurants during the past five (5) years. Section 5.1(l) of the Disclosure Schedule sets forth a true and complete list as of July 1, 2010, of each person employed in connection with the operation of the Restaurants, including the full name, job title or duty, date of hire, pay rate, year-to-date hours worked, wages, salary or bonus paid, vacation awarded, used and year to date accrual, and estimated bonus for each such person.  Seller has received no written notice from a Governmental Authority that it is in violation of any applicable law relating to the hiring, employment or discharge of any of the Restaurant Employees, and, to Seller’s Knowledge after inquiry of the Area Directors, no such violation exists.  There are no employment or

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workplace-related claims, complaints or investigations pending or, to Seller’s Knowledge after inquiry of the Area Directors, threatened by any current or former Restaurant Employee or independent contractor (if retained to perform services at one or more of the Restaurants) or by any Governmental Authority (to the extent related to the Restaurants or the Restaurant Employees).  Seller is not subject to any consent agreements or settlement agreements in any employment-related matter relating to the employees and/or employment practices at the Restaurants that impose any continuing obligations on Seller.  Except as set forth on Schedule 5.1(l) of the Disclosure Schedule, Seller is and has been throughout the past four (4) years, in material compliance with all applicable employment and workplace laws including applicable wage and hour and anti-discrimination laws, in each case relating to the employees and/or employment practices at the Restaurants.  Schedule 5.1(l) of the Disclosure Schedule sets forth a list of all concluded or settled litigation, claims, arbitrations or proceedings of Seller relating to the employees and employment practices at the Restaurants occurring within the four (4) years prior to the Effective Date.

(m)          Seller has timely filed (or will timely file after giving effect to any applicable extensions) all federal, state, local and other tax returns, reports, declarations and applications related to Taxes (“Returns”) required to be filed by Seller for all periods up to and including the Closing Date.  All Returns are, or if not yet filed will be, true, accurate, and complete in all material respects and reflect all Taxes payable by Seller.  Seller’s Returns have not been audited by any Governmental Authority within the six (6) years prior to the Effective Date. Seller has paid (or will timely pay) all Taxes which are due and payable (or which relate to any period prior to the Closing Date) or for which assessments have been received prior to the Closing Date.  There are no audits, suits, actions, claims, investigations, inquiries, or proceedings pending or to Seller’s knowledge, threatened, against Seller with respect to Taxes, nor has any deficiency or claim for any Taxes been imposed or assessed.  There are no outstanding notices of deficiencies, adjustments, or changes in assessments with respect to any Taxes.  Seller has not waived any statute of limitations with respect to any taxable year.  There is no agreement, waiver, or consent providing for an extension of time with respect to the assessment of any Taxes against Seller.  All amounts required to be withheld or collected by Seller for Taxes with respect to any other person have been so withheld or collected and paid to the appropriate Governmental Authority and all Forms W-2 and 1099 required with respect thereto have been properly completed and timely filed.

(n)           The Disclosure Schedule contains a true and complete list of each pension, profit sharing, other deferred compensation, bonus, incentive compensation, stock purchase, stock option, supplemental retirement, severance or termination pay, medical, hospitalization, life insurance, dental, disability, salary continuation, vacation, supplemental unemployment benefits plan, program, arrangement or contract, and each other employee benefit plan, program, arrangement or contract, currently maintained, contributed to, or required to be contributed to, by Seller or any Related Party (hereinafter defined) for the benefit of any Restaurant Employee, whether or not any of the foregoing is funded, whether formal or informal, whether or not subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and whether legally binding or not (collectively, the “Benefit Plans”).  Seller has delivered to Buyer, with respect to each applicable Benefit Plan (1) true and complete copies of all documents embodying or relating to each Benefit Plan including, without limitation, the plan and trust or other funding arrangement relating thereto, summary plan descriptions, employee handbooks or personnel manuals and all amendments and supplements thereto; (2) the most recent annual report (Series 5500 and all schedules thereto), if any, required by ERISA; and (3) the most recent determination letter received from the Internal Revenue Service, if any.  “Related Party” means any member of a controlled group of corporations, a group of trades or businesses under common control or an affiliated service group, within the meaning of Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended, of Seller.  With respect to each of the Benefit Plans:  (a) the Benefit Plan is, and at all times since its inception, has been, maintained, administered, operated and funded in all material respects in accordance with its terms and in material compliance with all applicable requirements of all applicable laws, including, but not limited to, ERISA and the Internal Revenue Code; (b) all reports, tax returns,

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information returns and other information regarding the Benefit Plan that are required by law to be filed have been accurately, timely and properly filed; (c) no transaction or event has occurred or, to Seller’s Knowledge, is threatened or about to occur (including, without limitation, any of the transaction contemplated by this Agreement) that constitutes or could constitute a nonexempt prohibited transaction under Section 406 or 407 of ERISA or under Section 4975 of the Code.  With respect to any Restaurant Employee, neither the Seller nor any Related Party has ever maintained or contributed to (or been obligated to contribute to) any multiemployer plan as defined in Section 3(37) or Section 4001(a)(3) of ERISA or Section 414(f) of the Code, any multiple employer plan within the meaning of Section 4063 or 4064 of ERISA or Section 413(c) of the Code, any employee benefit plan, fund, program, contract or arrangement that is subject to Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA or any multiple employer welfare arrangement as defined in Section 3(40) of ERISA.

(o)           Except as disclosed in Section 5.1(o) of the Disclosure Schedule, (1) Seller is in compliance with all applicable Environmental Laws in connection with the Restaurants and has not received any written communication alleging that Seller or any Affiliate of Seller is in violation of, or has any liability under, any Environmental Laws in connection with the Restaurants, (2) Seller validly possesses and has been in compliance with all Permits required under Environmental Laws to conduct its business at the Restaurants as currently conducted, and all such Permits are valid and in good standing, (3) there are no Environmental Claims relating to the Restaurants pending or, to the Knowledge of Seller, threatened against Seller or any Affiliate of Seller,  (4) Neither Seller nor any Affiliate of Seller has Released, nor to Seller’s Knowledge has any other Person released, any Hazardous Materials at, on, under or from any of the Restaurants in a manner that would reasonably be expected to result in an Environmental Claim against the Seller or any Affiliate of Seller and (5) except as otherwise disclosed in any environmental site assessments or other reports related to the Restaurants provided by Seller to Buyer or obtained by Buyer prior to Closing, to Seller’s Knowledge, there are no, and there never have been any, underground storage tanks located on any of the real properties governed by the Real Property Leases or on the Fee Properties.  Seller has provided Buyer with copies of all existing environmental investigations, studies, audits, tests, reviews or other analyses pertaining to the Restaurants in Seller’s possession or control.  The term “Environmental Claims” means any administrative or judicial actions, suits, orders, claims, proceedings or written or oral notices of noncompliance by or from any person alleging liability arising out of the Release of or exposure to any Hazardous Material or the failure to comply with any Environmental Law.  For the purpose of this Agreement, the term “Hazardous Materials” means any substance defined as “hazardous substances,” “hazardous air pollutant,” “pollutants,” “contaminants,” “hazardous materials,” “hazardous wastes,” “toxic chemicals,” “petroleum or petroleum products,” “toxics,” “hazardous chemicals,” “extremely hazardous substances,” “pesticides” or related materials, including but not limited to radon and asbestos, as now, in the past, or hereafter defined in any applicable federal, state or local law, regulation, ordinance, policy or directive, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. § 9601 et. seq.; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 1101 et. seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et. seq.; the Hazardous Materials Transportation Act of 1974, 49 U.S.C. § 1801 et. seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et. seq.; the Clean Air Act, 42 U.S.C. § 4701 et. seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et. seq.; the Safe Drinking Water Act, 42 U.S.C. § 3001 et. seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et. seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et. seq.; and any laws regulating the use of biological agents or substances including medical or infectious wastes and the corresponding State laws, regulations and local ordinances, etc. which may be applicable, (“Environmental Laws”) as any such acts may be amended, provided that in all cases Environmental Laws shall not include general health code requirements and related health and safety laws, rules and regulations referenced in Section 5.1(k) above.  The term “Release” means any release, spill, emission,

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leaking, pumping, emitting, discharging, injecting, escaping, leaching, dumping, disposing or passive migration into or through the environment.

(p)           Except as set forth in Section 5.1(p) of the Disclosure Schedule, since January 3, 2010, there has not been:

(i)            any material increase in the rate of compensation or any material increase in the benefits payable or to become payable to any of the Restaurant Employees, or any other material change in the terms of employment of the Restaurant Employees, other than compensation or benefits increases in the ordinary course of business consistent with past practice; or

(ii)           any material change in any accounting policies, procedures or practices with respect to the Restaurants.

Section 5.2             Buyer’s Representations and Warranties.  Buyer represents and warrants to Seller that:

(a)           Buyer is duly organized, validly existing, and in good standing under the laws of its state of formation and is qualified to do business and in good standing in all jurisdictions where its activities so require.

(b)           Buyer has corporate power and lawful authority to enter into and carry out the terms and provisions of this Agreement and to execute and deliver all documents which are contemplated by this Agreement and all actions of Buyer necessary to confer such power and authority upon the persons executing this Agreement and all documents which are contemplated by this Agreement on behalf of Buyer have been taken.  This Agreement has been duly and validly executed and delivered by Buyer and, assuming the due authorization, execution and delivery by Seller and ASI, constitutes a legal, valid and binding obligation of Buyer enforceable against it in accordance with its terms, subject to the effects of bankruptcy, insolvency, reorganization or similar laws of general application in effect relating to or affecting the rights of creditors, generally and to general rules of equity.

(c)            The execution, delivery and performance of this Agreement will not (i) violate or result in a breach of any term of Buyer’s organizational documents, (ii) result in a breach of or constitute a default under any term in any agreement or other instrument to which Buyer is a party, such default having not been previously waived by the other party to such agreements, (iii) violate any law or any order rule or regulation applicable to Buyer, of any court or of any governmental authority having jurisdiction over Buyer or its properties, or (iv) result in the creation or imposition of any lien or encumbrance upon any of the Assets.

Section 5.3             ASI’s Representations and Warranties.  ASI represents to Buyer:

(a)           ASI is duly organized, validly existing, and in good standing under the laws of its state of formation and has all requisite authority to own, lease and operate its properties and assets and to conduct its business (including without limitation business related to the Restaurants) as it is now being conducted.  ASI is duly qualified to do business as a foreign entity and is in good standing in all jurisdictions where its activities make such qualification necessary.

(b)           ASI has corporate power and lawful authority to enter into and carry out the terms and provisions of this Agreement and to execute and deliver all documents which are contemplated by this Agreement and all actions of ASI necessary to confer such power and authority upon the persons executing this Agreement and all documents which are contemplated by this Agreement on behalf of ASI have been taken.  This Agreement has been duly and validly executed and delivered by ASI and,

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assuming the due authorization, execution and delivery by Buyer and Seller, constitutes a legal, valid and binding obligation of ASI enforceable against it in accordance with its terms, subject to the effects of bankruptcy, insolvency, reorganization or similar laws of general application in effect relating to or affecting the rights of creditors, generally and to general rules of equity.

Section 5.4             No Implied Representations or Warranties.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 5.1 OF THIS AGREEMENT OR IN ANY CONVEYANCE DOCUMENTS EXECUTED AND DELIVERED BY SELLER, SELLER, ON BEHALF OF IT AND ITS AFFILIATES, DISCLAIMS THE MAKING OF ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE ASSETS OR MATTERS AFFECTING THE ASSETS, INCLUDING THE BOUNDARIES OF THE LAND, THE FINANCIAL OR OTHER PERFORMANCE AT THE RESTAURANTS AFTER THE CLOSING, THE PHYSICAL CONDITION OF THE ASSETS OR THE RESTAURANTS (INCLUDING THE CONDITION OF THE BUILDING STRUCTURE, THE ROOF, THE ELECTRICAL, PLUMBING, AND HVAC SYSTEMS, OR THE FURNISHINGS, FIXTURES AND EQUIPMENT), PEST CONTROL MATTERS, SOIL CONDITION, HAZARDOUS WASTE, TOXIC SUBSTANCE, OR OTHER ENVIRONMENTAL MATTERS, COMPLIANCE WITH BUILDING, HEALTH, SAFETY, LAND USE, AND ZONING LAWS, REGULATIONS AND ORDERS, STRUCTURAL AND OTHER ENGINEERING CHARACTERISTICS, TRAFFIC PATTERNS, ECONOMIC PROJECTIONS, FINANCIAL DATA, EMPLOYMENT PRACTICES, AND ALL OTHER INFORMATION PERTAINING TO THE ASSETS. BUYER, MOREOVER, ACKNOWLEDGES (1) THAT BUYER HAS ENTERED INTO THIS AGREEMENT WITH THE INTENTION OF MAKING AND RELYING UPON ITS OWN INVESTIGATION OF THE PHYSICAL, ENVIRONMENTAL, ECONOMIC, AND LEGAL CONDITION OF THE ASSETS AND (2) THAT BUYER IS NOT RELYING UPON ANY STATEMENTS, INFORMATION, REPORTS, REPRESENTATIONS, OR WARRANTIES (OTHER THAN THOSE SPECIFICALLY SET FORTH IN SECTION 5.1 OF THIS AGREEMENT OR IN ANY CONVEYANCE DOCUMENTS EXECUTED AND DELIVERED BY SELLER) MADE BY SELLER, FRANCHISOR, ASI OR ANYONE ACTING OR CLAIMING TO ACT ON BEHALF OF SELLER, FRANCHISOR OR ASI CONCERNING THE ASSETS, INCLUDING THE RESTAURANT EMPLOYEES OR CONTAINED IN ANY COPIES OF MANAGEMENT PERSONNEL DATA PROVIDED TO BUYER WITH RESPECT TO THE RESTAURANT EMPLOYEES.  BUYER FURTHER ACKNOWLEDGES THAT IT HAS NOT RECEIVED FROM SELLER OR ITS AFFILIATES ANY ACCOUNTING, TAX, LEGAL, ARCHITECTURAL, ENGINEERING, PROPERTY MANAGEMENT, OR OTHER ADVICE WITH RESPECT TO THIS TRANSACTION AND IS RELYING SOLELY UPON THE ADVICE OF ITS OWN ACCOUNTING, TAX, LEGAL, ARCHITECTURAL, ENGINEERING, PROPERTY MANAGEMENT, AND OTHER ADVISORS. SUBJECT TO THE PROVISIONS OF SECTIONS 5.1 AND 8.1 OF THIS AGREEMENT AND ANY CONVEYANCE DOCUMENT EXECUTED AND DELIVERED BY SELLER, BUYER WILL PURCHASE THE ASSETS IN THEIR “AS IS”, “WHERE-IS” AND “WITH-ALL FAULTS” CONDITION ON THE CLOSING DATE WITHOUT ANY WARRANTIES, WHETHER EXPRESS OR IMPLIED (INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) AND ASSUMES THE RISK THAT ADVERSE PHYSICAL, ENVIRONMENTAL, ECONOMIC, OR LEGAL CONDITIONS MAY NOT HAVE BEEN REVEALED BY ITS INVESTIGATION.

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ARTICLE VI
INDEMNIFICATION

Section 6.1             Limitations on Representations, Warranties and Covenants.  No claim based on a breach of representation, warranty or covenant contained in this Agreement or in any document executed by the parties pursuant to this Agreement may be made against the other party on or after the fifteenth (15th) month anniversary of the Closing Date, except for the Carved-Out Claims, which may not be made on or after the applicable statute of limitations period (as applicable, the “Limitation Period”).  The liability of each of Buyer and Seller (including ASI) under this Agreement shall be limited to 5% of the sum of the Purchase Price paid pursuant to this Agreement (the “Cap”) and will not accrue unless or until the aggregate amount of liability under this Agreement exceeds $250,000 and then, only to the extent such claims exceed $250,000 (the “Basket”), with the exception of the Carved-Out Claims which shall not be subject to the Cap or the Basket.  The Limitation Period will apply to known as well as unknown breaches of representations, warranties and covenants.

Section 6.2             Indemnification by Seller.  Subject to the Closing having occurred and Section 6.1 above, which limitations, including the Limitation Period, the Basket and the Cap will apply to any indemnification claim under this Section 6.2 (with the exception of Carved-Out Claims as to the Basket and the Cap), Seller, severally, only with respect to itself and the Restaurants owned or operated by it (whether as of the Effective Date or hereafter acquired) and not jointly, agrees to protect, defend, indemnify, and hold Buyer, its successors and assigns and their respective officers, directors, shareholders, members, managers and employees (each, a “Buyer Indemnitee”), harmless from and against any and all causes of action, claims, losses, liabilities, liens, damages, costs, expenses, demands and obligations (including reasonable attorneys’ fees) asserted against, suffered or incurred by a Buyer Indemnitee arising or resulting from:

(a)           Any misrepresentation, breach of representation or warranty or nonfulfillment of any covenant made by Seller in connection with this Agreement;

(b)           Ownership and operation of the Assets, including the Restaurants, prior to the Closing Date, but excluding any Assumed Liabilities; and

(c)           The Excluded Liabilities.

Section 6.3             Indemnification by ASI.  Subject to the Closing having occurred and Section 6.1 above, which limitations, including the Limitation Period, the Basket and the Cap will apply to any indemnification claim under this Section 6.3 (with the exception of Carved-Out Claims as to the Basket and the Cap), ASI, jointly and severally with the applicable Seller, agrees to protect, defend, indemnify, and hold Buyer Indemnitees harmless from and against any and all causes of action, claims, losses, liabilities, liens, damages, costs, expenses, demands and obligations (including reasonable attorneys’ fees) asserted against, suffered or incurred by a Buyer Indemnitee arising or resulting from:  (a) claims or demands by Restaurant Employees or former employees (if such former employees would have been considered Restaurant Employees at anytime during the course of their employment by ASI) resulting from employment by Seller, ASI or their respective Affiliates prior to the Closing Date (the “ASI Excluded Liabilities”), (b) any misrepresentation, breach of representation or warranty or nonfulfillment of the representations and warranties set forth in Section 5.1(l), Section 5.1(n) and Section 5.3 above.  Notwithstanding anything to the contrary contained in this Agreement (and without removing from ASI the benefit of the Basket or the Cap in the case of non-Carved-Out Claims), ASI’s maximum aggregate liability to Buyer Indemnitees under this Agreement for ASI Excluded Liabilities is $5,000,000 (the “ASI Cap” for the ASI Excluded Liabilities) and notwithstanding Section 6.1 of this Agreement, solely with

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respect to ASI, the Limitation Period for the ASI Excluded Liabilities will be four and one-half (4 ½) years from the Closing.

In no case shall any Seller or ASI have any indemnification obligations to a Buyer Indemnitee who is a Restaurant Employee to the extent that such employee would not otherwise have been entitled to indemnification from Seller as a matter of law, or to the extent that such employee engaged in conduct in violation of the policies of Seller or its Affiliates that resulted in the occurrence of the action, claim, loss, liability, lien, damage, cost , expense, demand or obligation.  For purposes of clarification, the foregoing limitation will not affect any indemnification obligations of Seller or ASI to other Buyer Indemnitees.

Section 6.4             Indemnification by Buyer.  Buyer agrees to protect, defend, indemnify, and hold Seller, its successors and assigns, and their respective officers, directors, shareholders, members, managers and employees (each, a “Seller Indemnitee”), harmless from and against any and all causes of action, claims, losses, liabilities, liens, damages, costs, expenses, demands and obligations (including reasonable attorneys’ fees) asserted against, suffered or incurred by a Seller Indemnitee arising or resulting from:

(a)           Any misrepresentation, breach of representation or warranty or nonfulfillment of any covenant made by Buyer in connection with this Agreement;

(b)           Ownership and operation of the Assets, including the Restaurants, from and after the Closing;

(c)                                  Failure to pay or otherwise satisfy the Assumed Liabilities; and

(d)           Use of any software that remains loaded on the computers in the Restaurants after the Closing to the extent such software is an Excluded Asset.

Section 6.5             Exclusive Remedy.  From and after the Closing, none of the parties hereto shall be liable or responsible in any manner whatsoever to the other parties hereto, whether for indemnification or otherwise, except for indemnity as expressly provided in this Article VI, which provides the exclusive remedy and cause of action of the parties hereto with respect to any matter arising out of or in connection with the purchase, sale, ownership or operation of the Assets, including the ownership and operation of the Restaurants; provided however, a party shall be entitled to seek specific performance or injunctive relief with respect to post-closing obligations of the Parties.  Except as provided herein, each of the parties hereby waives, to the fullest extent permitted under applicable law, any and all rights it may have to seek punitive or consequential damages from the other parties hereto (except in the case where a third party has been awarded such damages), and waives, releases and agrees not to make any claim or bring any contribution, cost recovery or other action against the other parties or any of their respective successors or assigns or any controlling person or other affiliate of the other parties, under common law or any federal, state or local law or regulation now existing or hereafter enacted which seeks to allocate liabilities between Buyer and Seller in a different manner than as expressly set forth in this Agreement.  Notwithstanding the foregoing, nothing contained in this Article VI shall effect the relationship between (a) Franchisor or Applebee’s Enterprises LLC, as applicable, and Buyer under the Existing Agreements, Applebee’s Development Agreement and/or the Applebee’s Franchise Agreements and (b) Buyer and Seller under the Applebee’s Leases, including, in each case, any indemnification obligations contained therein.

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Section 6.6             Indemnification Procedures.

(a)           In the event that any claim shall be asserted by any person in respect of which payment may be sought under Section 6.2, Section 6.3 or Section 6.4 hereof (each, a “Claim”), the indemnified party shall reasonably and promptly cause written notice of the assertion of any Claim of which it has knowledge which is covered by this indemnity to be forwarded to the indemnifying party.  In the case of third party actions, the indemnifying party shall have the right, to have sole control at its own expense, to be represented by counsel of its choice, and to defend against, negotiate, settle or otherwise deal with any Claim which relates to any damages indemnified against hereunder; provided, however, that (i) the indemnifying party shall obtain the prior written approval of the indemnified party, which approval shall not be unreasonably withheld, conditioned or delayed, before entering into any settlement, adjustment or compromise of such Claim, or ceasing to defend against such Claim if pursuant thereto or as a result thereof, injunctive or other relief would be imposed upon the indemnified party and (ii) the indemnified party shall cooperate with the reasonable requests of the indemnifying party in connection with such Claim.  If the indemnifying party elects to defend against, negotiate, settle or otherwise deal with any Claim asserted by a third party which relates to any damages indemnified against hereunder, it shall within ten (10) business days (or sooner, if the nature of the Claim so requires) notify the indemnified party of its intent to do so.  If the indemnifying party elects not to defend against any Claim which relates to any Damages indemnified against hereunder, fails to notify the indemnified party of its election as herein provided, the indemnified party may defend against such Claim.  If the indemnified party defends any Claim asserted by a third party and is entitled to indemnity under this Agreement, then the indemnifying party shall reimburse the indemnified party for the expenses and reasonable attorneys fees of defending such Claim upon submission of periodic bills (no less than monthly).  If the indemnifying party shall assume the defense of any Claim asserted by a third party, the indemnified party may participate, at his or its own expense, in the defense of such Claim; provided, however, that such indemnified party shall be entitled to participate in any such defense with separate counsel at the reasonable expense of the indemnifying party (i) if so requested by the indemnifying party to participate or (ii) in the reasonable opinion of counsel to the indemnified party, a conflict or potential conflict exists between the indemnified party and the indemnifying party that would make such separate representation advisable; and provided, further, that the indemnifying party shall not be required to pay for more than one such counsel for all indemnified parties in connection with any Claim and provided further, that to the extent the Claim relates to events or circumstances that existed for periods of time pre-Closing and post-Closing no conflict shall be deemed to exist solely for purposes of this Section 6.6(a).  The Parties hereto agree to cooperate fully with each other in connection with the defense, negotiation, or settlement of any such Claim.  The indemnifying party shall not be liable under this Article VI for any settlement, adjustment or compromise of any third party Claim effected by the indemnified party without the indemnifying party’s consent, which consent shall not be unreasonably withheld, conditioned or delayed.

(b)           After any final judgment or award shall have been rendered by a court, arbitration board or administrative agency of competent jurisdiction and the expiration of the time in which to appeal therefrom, or a settlement shall have been consummated, or the indemnified party and the indemnifying party shall have arrived at a mutually binding agreement with respect to a Claim hereunder, the indemnified party shall forward to the indemnifying party notice of any sums due and owing by the indemnifying party pursuant to this Agreement with respect to such matter.

(c)           The failure of the indemnified party to give reasonably prompt notice of any Claim shall not release, waive or otherwise affect the indemnifying party’s obligations with respect thereto except to the extent that the indemnifying party can demonstrate actual loss and prejudice as a result of such failure.

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(d)           The failure of the indemnifying party to timely give notice of its intent to defend a Claim under subsection (a) shall not release, waive or otherwise affect the indemnifying party’s rights with respect thereto except to the extent that the indemnified party can demonstrate actual loss and prejudice as a result of such failure.

ARTICLE VII
COVENANTS, DEVELOPMENT AGREEMENT AND FRANCHISE AGREEMENTS

Section 7.1             Seller’s Covenants.  Without the prior written consent of Buyer, during the Contract Period, Seller covenants only with respect to itself and the Restaurants owned or operated by it, as follows:

(a)           Seller will operate and maintain the Restaurants in the ordinary and usual manner, consistent with past practices of Seller or its Affiliates.

(b)           Seller will not solicit or negotiate any other offers involving the sale of all or any of the Restaurants.

(c)           Seller will, at no cost to Seller or its Affiliates, use reasonable best efforts and cooperate in assisting Buyer with the assumption, transfer or reissuance of any Permits required for the operation of the Restaurants.

(d)           Seller will cooperate with Buyer’s lenders’ request for information and execute and deliver commercially reasonable documents as may be requested by Buyer’s lenders for the Closing; provided, that such documents are not inconsistent with and do not change Seller’s rights, obligations or remedies set forth in this Agreement or any other document executed in connection with the transactions contemplated herein.

(e)           Seller will cooperate in obtaining commercially reasonable documents from the Landlords, as may be requested by Buyer’s lenders; provided, that, subject to Section 4.1(f), receipt of such documents from the Landlords will not be a condition to Buyer’s obligation to close the transactions contemplated herein.

(f)            Seller will continue its current local store market advertising program in the development territories for the Applebee’s Development Agreement prior to the Closing Date in accordance with the marketing plan and budget that has been provided to Buyer, subject only to (i) changes or adjustments that are made to such plan and budget by Applebee’s Services, Inc. consistent with past practices and not due to the fact that the Restaurants are subject to sale pursuant to this Agreement or (ii) expenditures in excess of the marketing plan and budget.

(g)           Seller will not sell, lease, license, surrender, relinquish, dispose of, or transfer any of the Assets material to the operation of the Restaurants, except for the sale of Food and Beverage Inventory, use of the Miscellaneous Personal Property (including disposable Miscellaneous Personal Property), repair and replacement of FF&E and borrowing under Seller’s existing credit facilities, all in the ordinary course of business and consistent with past practices; provided, however, Seller may pledge, mortgage, grant a security interest in, or otherwise encumber any or all of the Assets as security for any indebtedness or other obligation (direct, contingent or otherwise) of Seller or its Affiliates, whether now or hereafter arising.

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(h)           Seller will not amend, cancel, waive, compromise or surrender any material rights under or with respect to any of the Assets (excluding Assumed Contracts) material to the operation of the Restaurants, other than in the ordinary course of business;

(i)            Except as provided in Section 3.10 and Section 7.1(q), Seller will not amend, terminate, waive any rights under, or surrender any of the Assumed Contracts; provided that such restriction does not apply to (i) the System Agreements or (ii) Assumed Contracts relating to any of the Covered Products and Services, to the extent that such action, in the case of each of provisions (i) and (ii) of this sentence, does not materially and adversely affect Buyer’s rights or obligations as of the Closing Date, including any material increase in either the costs of the products or services subject to such Assumed Contracts or the length of notice required to terminate such Assumed Contracts;

(j)            Seller will not hire (except to fill existing vacancies) or terminate without cause, any Restaurant Employees that are general managers, area directors or the director of operations or increase or promise to increase, in writing or otherwise, the existing compensation level of Restaurant Employees, except for customary wage increases and bonuses given in the ordinary course of business;

(k)           Seller will use its best efforts to preserve and protect the goodwill and advantageous relationships of the Restaurants with its customers, suppliers and all other persons having business dealings with the Seller relating to the Restaurants;

(l)            Seller will not remodel or make any material alteration to any of the Restaurants;

(m)          Subject to Buyer’s compliance with the requirements of Section 7.2(b), Seller will satisfy all of the terms and conditions necessary to assign the Real Property Leases (excluding Real Property Leases listed on Schedule 4.1(d)) to Buyer without the consent of the respective Landlords;

(n)           At least three (3) days prior to Closing, Seller will deliver to Buyer an updated list of Restaurant Employees referenced in Section 5.1(l), updated as of a date within 5 days of the delivery date to Buyer;

(o)           Seller will give Buyer written notice at least ten (10) business days prior to giving notice of termination of any written contract meeting the following criteria: (i) Seller is a party to or bound by such contract, (ii) the contract is necessary to operate the Restaurants in accordance with Seller’s historical practices and (iii) the contract is not an Assumed Contract;

(p)           At no cost to Seller, Seller will use its commercially reasonable efforts to obtain the consent of Apache Mall, LLC (“Licensor”) to transfer to Buyer that certain License Agreement between Licensor and ARN, executed October 6, 2009, for 3 (three) “TO GO” parking stalls at the Apache Mall Restaurant (#61013) (the “Apache Mall License Agreement”) or, in the alternative, to assist Buyer in obtaining a replacement license agreement with Licensor on substantially similar terms as the terms of the Apache Mall License Agreement; and

(q)

(i)           Seller will use its commercially reasonable efforts to obtain on or before the Closing, either a letter of intent (which may be non-binding) or an amendment to the Real Property Lease to be executed by Buyer at Closing, or such other indication of Landlord’s intent to sign an amendment as reasonably acceptable to Buyer, in each case, relating to the Apache Mall Restaurant (#61013) (the “Apache Mall Restaurant”), signed by the Landlord thereof and providing for an extension of the Real Property Lease on terms within the parameters set forth on Schedule 7.1(q) (the

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“Apache Mall Extension”).  Seller shall obtain Buyer’s approval of all written offers and counteroffers made to the Landlord to the extent the terms of such offers/counteroffers exceed any parameter set forth on Schedule 7.1(q).  Buyer agrees that Seller will be deemed to be using its commercially reasonable efforts so long as it negotiates the Apache Mall Extension within the parameters in Schedule 7.1(q) even if it does not obtain the maximum term of twenty (20) years in order to decrease its potential liability to Buyer under Paragraphs 3 and 4 of Schedule 7.1(q).  Without Buyer’s prior written approval, which may be withheld in its sole discretion, Seller shall not sign the Apache Mall Extension prior to Closing.  If Buyer is provided the Apache Mall Extension and fails to execute the same or Buyer refuses to give consent to Seller to execute the Apache Mall Extension, Seller will have no liability to Buyer with respect to an Apache Mall Loss (as defined below).

(ii)          To the extent that the base rent increase negotiated by Seller prior to Closing in the Apache Mall Extension falls within the Pre-Closing Parameter set forth in Schedule 7.1(q) but exceeds the Post-Closing Parameter set forth therein, Seller shall pay to Buyer the present value of such excess amount (utilizing an 8% discount rate) at the time of Closing.  To the extent that the percentage rent formula negotiated by Seller prior to Closing in the Apache Mall Extension falls within the Pre-Closing Parameter set forth in Schedule 7.1(q) but exceeds the formula set out in the existing lease, Seller shall pay to Buyer the amount of excess percentage rent required to be paid by Buyer to the Landlord within thirty (30) days following Buyer’s annual calculation of same.

(iii)         If Seller does not obtain the Apache Mall Extension as described above and Buyer suffers an Apache Mall Loss, Seller will pay Buyer, within 30 days of the occurrence of the Apache Mall Loss, an amount equal to $41,666.67 multiplied by the difference between sixty (60) and the number of complete calendar months that have passed between the Closing Date and the date of the Apache Mall Loss.  An “Apache Mall Loss” will occur as of the date that Buyer does not have the right to operate the Apache Mall Restaurant between the Closing and fifth (5th) anniversary of the Closing.  Notwithstanding anything to the contrary contained herein, an Apache Mall Loss will not be deemed to occur (and no payment will be due from Seller) if (a) either the Real Property Lease or the Franchise Agreement for the Apache Mall Restaurant has been terminated prior to June 30, 2012 due to Buyer’s default thereof, (b) as of June 30, 2012 Buyer has the right, pursuant to an amendment/extension to the Real Property Lease or a replacement lease, to operate the Apache Mall Restaurant through the fifth (5th) anniversary of the Closing, or (c) if Buyer does not have the right to operate the Apache Mall Restaurant at any time after June 30, 2012 and any of the following facts, events or circumstances shall exist or have occurred: (i)  Buyer does not or has not used commercially reasonable efforts to obtain an amendment/extension of the Real Property Lease through the fifth (5th) anniversary of the Closing (provided, that, the standard for commercially reasonable efforts for the Buyer shall be those efforts substantially similar to those undertaken by Seller prior to Closing); (ii) Buyer refuses or refused to sign an amendment to extend the Real Property Lease that contains terms within the parameters set forth on Schedule 7.1(q) or Buyer determines that it no longer wants to operate the Apache Mall Restaurant; (iii) an uncured breach or default by Buyer or its Affiliate(s) of the Real Property Lease; (iv) Buyer or its Affiliate(s) are operating a business other than an Applebee’s Neighborhood Grill & Bar at such location; (v) an uncured breach or default by Buyer under the Applebee’s Franchise Agreement for the Apache Mall Restaurant; (vi) Buyer has terminated the Real Property Lease (or any replacement lease); or (vii) Buyer’s inability to operate the Restaurant is due to a factor outside of the reasonable control of Buyer or the Landlord (e.g., casualty or condemnation; provided in the event of casualty, only to the extent that Buyer has received the casualty proceeds from the Landlord equal to the payment required to be made by Seller pursuant to this Section 7.1(q)).

(r)            Prior to Closing, the “Existing Sign” at the Apple Valley Restaurant, in each case as identified on the attachments to that certain letter dated March 2, 2010, from WSB & Associates, Inc. to DBAPPLEF, LLC, will be relocated to an area outside the real property that

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is subject to condemnation in connection with the Dakota County Transportation Department Cedar Avenue Transitway project and in compliance with the City of Apple Valley’s current sign ordinance (the “Sign Relocation”); provided, however, the Sign Relocation will not be a condition to Closing. If the Sign Relocation does not occur before the Closing and Buyer subsequently incurs cost to effect the Sign Relocation, Seller will reimburse Buyer for Buyer’s actual and reasonable out-of-pocket costs incurred to effect the Sign Relocation to the extent such costs are not reimbursed by Dakota County, the City of Apple Valley, or their respective third party representatives.  To be eligible for reimbursement, Buyer must submit an itemized statement of such costs and written evidence that Dakota County, the City of Apple Valley, or their respective third party representatives refused to reimburse all or a portion of such costs.  If Seller reimburses Buyer for any costs pursuant to this paragraph, Buyer will be deemed to have assigned to Seller any claims for reimbursement against third parties for such costs.

(s)           On or prior to the Closing, Seller will purchase and deliver ten ice cream coolers, similar to the coolers currently used in some or all of the Restaurants, to those Restaurants as designated by Buyer; provided that Buyer agrees to designate the ten Restaurant locations within thirty days of the Effective Date.

Section 7.2             Buyer’s Covenants.  Buyer covenants as follows:

(a)           At no cost to Buyer, Buyer will cooperate with Seller and use its commercially reasonable efforts to assist Seller in obtaining the landlord consents set forth on Schedule 4.1(d), estoppel certificates, the Apache Mall Extension and the third party consents set forth in Section 5.1(f) of the Disclosure Schedule.

(b)           At or prior to Closing, as applicable, Buyer or its Affiliates will satisfy the requirements set forth on Schedule 7.2(b) of this Agreement.

(c)           If Seller, (or any Affiliate of Seller that has guaranteed Seller’s obligations) has any continuing material financial or other obligation, whether contingent or otherwise, under any Real Property Lease after the Closing Date, neither Buyer nor any of its Affiliates shall renew such Real Property Lease, without the express prior written consent of Seller (or the applicable Affiliate), which consent shall be at Seller’s (or the applicable Affiliate’s) sole and absolute discretion; provided, however, that no such consent shall be required in connection with a renewal of such Real Property Lease (i) where, by the express terms of such renewal, Seller (and any such Affiliate) is not liable with respect to matters arising on or after the commencement date of such renewal period and Buyer provides a copy of such renewal or amendment of the Real Property Lease to Seller, which renewal or amendment shall include a confirmation by Landlord that there are no outstanding defaults under the Real Property Lease or (ii) pursuant to existing options or renewal terms that, in each case, contain either (A) the same terms and conditions as existed in, or contemplated by, such Real Property Lease immediately prior to the Closing or (B) terms and conditions that, neither individually nor in the aggregate, create additional monetary or non-monetary obligations, contingent or otherwise, on Seller or the applicable affiliate. If Buyer so requests Seller’s consent, the request shall be in writing specifying the terms of the renewal; the duration of said desired renewal; the date same is to occur; the exact location of the space affected thereby and the proposed rentals on a square foot basis chargeable thereunder.  Such request for Seller’s consent shall be submitted to Seller at least thirty (30) days in advance of the date on which Buyer desires to make such renewal and the failure of Seller to notify Buyer in writing of Seller’s disapproval of such request within such thirty (30) day period shall be deemed to constitute Seller’s consent thereto; provided, that, Buyer’s request must include the following language in bold-face type:  “Please note that failure to respond to this request within 30 days of the date of this notice will result in automatic approval of our request to renew this lease and may result in your continuing liability for our obligations under this lease as a guarantor.”

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(d)           Buyer and its Affiliates will continue to use the point of sale systems in the Restaurants for a minimum of two weeks after the Closing in substantially the same manner as used prior to the Closing.

(e)           From and after the Closing, Buyer will make commercially reasonable efforts to promptly forward all correspondence or other legal notices addressed to Seller that relate to events prior to the Closing and which do not constitute Assumed Liabilities; provided, that, Buyer shall not be liable to Seller for any damages caused in whole or part by failure of Buyer to promptly forward any correspondence or legal notices addressed to Seller.  For purposes of clarification, the foregoing limitation of liability shall not limit or affect the provisions set forth in Section 6.6(c) and (d) of this Agreement.

Section 7.3             Franchisor’s Approval.  The parties acknowledge and agree that on or before the Effective Date, Franchisor has approved Buyer’s acquisition of the Restaurants pursuant to the terms hereof based upon its review of the Financing Plan and post-closing pro forma financial statements and debt covenant compliance and the condition that the equity or ownership structure of Buyer and its Affiliates will be substantially the same as set forth in the consent letter issued by Franchisor as of the Effective Date (“Franchisor Consent Letter”), subject to such changes as permitted in the Franchisor Consent Letter.  “Financing Plan” means the information attached to the Franchisor Consent Letter regarding the debt and equity, as applicable, to be used to fund the Purchase Price.

Section 7.4             Release of Guarantees.  If as a condition to a consent for assignment, a Landlord with respect to a Real Property Lease listed on Schedule 4.1(d) requires Buyer to assume any or all obligations of Seller under such Real Property Lease arising as a result of acts or omissions occurring before the Closing as between Buyer and Landlord, Buyer will assume such obligations; which obligations are by definition “Excluded Liabilities” and, for which, Seller shall be solely responsible for these liabilities as between Seller and Buyer.  In addition, at or prior to Closing, Buyer agrees to satisfy the requirements set forth on Schedule 7.4 to release Seller or its Affiliates from obligations under the Real Property Leases after the Closing Date.

Section 7.5             Insurance.  Seller’s existing insurance policies, as it affects the Restaurants, will be canceled as of the Closing Date, and Seller will receive any premium refund due.

Section 7.6             Environmental Assessment. On or before the thirtieth (30th) day following the Effective Date, Buyer shall notify Seller, in writing, of any material conditions or exceptions that do not reasonably satisfy Buyer or its lenders as a result of Buyer’s environmental site assessment of the Restaurants (“Environmental Deficiency Notice”).  After receipt of an Environmental Deficiency Notice from Buyer, Seller may then elect, by written notice given within ten (10) days following such notice (“Environmental Notice Period”) that Seller agrees to repair or otherwise cure such conditions prior to the Closing Date.  If Seller does not elect to repair or cure the conditions by written notification within the Environmental Notice Period, Buyer shall have the right to terminate this Agreement pursuant to Section 9.2(e) by notifying Seller, in writing, within ten (10) days following the Environmental Notice Period.  If Buyer does not terminate this Agreement, Buyer shall be deemed to waive the condition or exception.  If Seller elects to repair or otherwise cure such conditions identified in the Environmental Deficiency Notice, any such repair or cure shall be conducted pursuant to a plan approved by Buyer and which approval shall not be unreasonably withheld or delayed.  If Seller elects to repair or otherwise cure such conditions identified in the Environmental Deficiency Notice and does not repair or otherwise cure within a commercially reasonable period, Buyer shall have the right to terminate this Agreement pursuant to Section 9.2(e) by notifying Seller in writing.

Section 7.7             Title Review and Survey.  Within thirty (30) days following the Effective Date, Seller will deliver to Buyer commitments for the title policies required to be delivered pursuant to Section 4.1(c)

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of this Agreement; provided, however, Seller will not be deemed to have breached or failed to perform this obligation so long as Seller has ordered commitments for such title policies from CTI on or before the Effective Date.  On or before the 30th day following such delivery, Buyer shall notify Seller, in writing, of any material conditions or exceptions that do not reasonably satisfy Buyer or its lenders following review of the title commitments and surveys for the Restaurants (to the extent that Buyer elects or is required to obtain surveys) (“Title Deficiency Notice”).  After receipt of a Title Deficiency Notice from Buyer, Seller may then elect, by written notice given within twenty (20) days (“Title Notice Period”) following such notice that Seller agrees to cure such exception(s) prior to the Closing Date.  If Seller does not elect to cure such or any exception by written notification within the Title Notice Period, Buyer shall have the right to terminate this Agreement pursuant to Section 9.2(e) by notifying Seller, in writing, within ten (10) days following the Title Notice Period.  If Buyer does not terminate this Agreement, Buyer shall be deemed to waive the condition or exception.  If Seller elects to cure such exceptions identified in the Title Deficiency Notice and does not cure within a commercially reasonable period, Buyer shall have the right to terminate this Agreement pursuant to Section 9.2(e) by notifying Seller in writing.

Section 7.8             Liquor License Consent Process.  Buyer agrees to use its commercially reasonable efforts to obtain Liquor License Agency Approval in an expeditious manner.  Specifically, Buyer agrees to the following:

(a)           In accordance with the requirements of applicable law and practice, Buyer agrees to either: (1) apply for new liquor licenses in its name or that of its subsidiary(ies) or affiliate(s) or (2) transfer Seller’s existing liquor licenses identified on Schedule 7.8 (the “Liquor Licenses”) currently issued by various state and local liquor licensing authorities (collectively, the “ABC” and each individually an “ABC”) to Buyer.  Buyer, at its sole cost and expense, shall be responsible for preparing and filing any and all liquor license applications.  Seller shall cooperate with Buyer in the transfer of the Liquor Licenses and the acquisition of new liquor licenses, as applicable.  Seller’s out-of-pocket expenses associated with such cooperation of Seller shall be reimbursed by the Buyer at Closing or promptly following termination of this Agreement, as applicable. Schedule 7.8 shall also include those existing liquor licenses which must remain in effect so that Buyer may obtain temporary liquor licenses and/or continue to operate the liquor operations until such time as Buyer’s liquor licenses are issued.

(b)           Within forty-five (45) days after the Effective Date, but in no event later than sixty (60) days prior to the Closing Date, Buyer will have completed and filed all initial applications required to transfer the Liquor Licenses from Seller to Buyer or to acquire new liquor licenses for the Restaurants, as applicable, which applications are substantially complete in all material respects.  Buyer will promptly provide copies of the applications to Seller upon Seller’s request.  Buyer may redact sensitive personal information of officers, directors and principals from the applications before they are provided to Seller.  Seller shall reasonably cooperate in a timely manner with Buyer regarding the exchange of information relating to Seller’s premises and its operations as is necessary to facilitate the completion of Buyer’s applications for the liquor licenses.  Seller and Buyer acknowledge that the alcoholic beverage control authorities having jurisdiction over the Restaurants, as part of the routine processing of applications, may request additional information and amendments after accepting initial applications, and such requests shall not be construed to mean that the initial applications were not substantially complete prior to the expiration of the time periods set forth above.

(c)           During the Contract Period, Seller shall notify Buyer within five (5) business days of (i) the receipt from the ABC or any applicable enforcement agency of any complaint or notification of violation or (ii) any event of suspended operations occurring at any of the Restaurants, which in the case of either provision (i) or (ii), are related to the liquor license.  Seller’s notice obligations under the immediately preceding sentence will continue after the Closing with respect to a Restaurant to the extent an Interim Management Agreement is in effect at Closing and has not been terminated;

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provided, that such notice obligation will only continue with respect to the events specified in provision (i) of the immediately preceding sentence.

(d)           Buyer shall use its commercially reasonably efforts to pursue approval of the transfer of the Liquor Licenses or the acquisition of new liquor licenses in the name of Buyer, as applicable.  Upon request by Seller, Buyer will forward copies of any notices of approval of any temporary or permanent license or transfer of a Liquor License.

(e)           If the Liquor Licenses cannot be transferred to Buyer by Seller or new liquor licenses cannot be obtained by Buyer upon the Closing Date, Seller and Buyer will execute interim management agreements at the Closing in substantially the form attached hereto as Exhibit J (each, an “Interim Management Agreement”); provided, that, Buyer will not be required to enter into an Interim Management Agreement with respect to any Restaurant for which, in the reasonable opinion of Madigan, Dahl & Harlan P.A. (which opinion will be in writing and explain the basis for such determination in reasonable detail), there is sufficient evidence to conclude that it is more likely than not that a liquor license (with the same terms and conditions as the existing liquor licenses) will not be awarded to Buyer.  Notwithstanding the foregoing, unless a change in law or practice permits the use of Interim Management Agreements in the applicable jurisdiction, Buyer and Seller will not be required to execute Interim Management Agreements for the Mandatory Licensed Restaurants.

(f)            In jurisdictions where non-liquor permits and/or licenses, hearings, tax clearances, inspections, notice advertising and/or other prerequisites are required prior to (i) filing applications for the transfer or acquisition of the liquor licenses, (ii) the approval of such applications or (iii) the operation of the Restaurants after the Closing Date (collectively, “Other Requirements”), Buyer will file any and all applications or requests in a timely manner and shall diligently pursue and use commercially reasonable efforts to satisfy the Other Requirements and Seller will use commercially reasonable efforts to cooperate in assisting Buyer with Other Requirements as needed, subject to reimbursement of Seller’s out-of-pocket expenses as provided above.

(g)           If the parties execute one or more Interim Management Agreements at the Closing, the Liquor Inventory located within the Restaurants subject to such Interim Management Agreement(s) will not be transferred to Buyer at the Closing and will be transferred to Buyer only in accordance with the terms of the applicable Interim Management Agreement.  Upon the termination of the Interim Management Agreement with respect to a Restaurant, Seller will either, at the option of Buyer, (i) assign its interest in any applicable Beer Distributor Advance with respect to such Restaurant to Buyer and obtain an acknowledgement of such assignment from the applicable beer vendor(s) or (ii) terminate the applicable Beer Distributor Advance(s) with respect to such Restaurant and, subject to such beer vendor withholding any amounts due to such vendor for Liquor Inventory delivered after the Closing to the Restaurants, direct the applicable beer vendor to pay any remaining balance of the Beer Distributor Advance to Buyer.

Section 7.9             Liquor License Refunds and Credits.  Buyer and Seller shall cooperate in good faith to seek the maximum refunds or credits on Seller-paid liquor license fees with respect to the Restaurants, including renewal fees paid by Seller.  To the extent any such refunds or credits are received by Buyer, such amounts will be allocated to the benefit of Seller in the true-up process as set forth in Section 3.3(b) and (c).

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ARTICLE VIII
CLOSING

Section 8.1             Closing Procedure.  The closing of the transactions contemplated by this Agreement (“Closing”) will take place at the offices of Seller at 11201 Renner Blvd., Lenexa, Kansas 66219 or at another location mutually agreeable to Buyer and Seller following the satisfaction or waiver of the conditions precedent set forth in Article IV of this Agreement, provided that the Closing will take place no later than the Outside Date.

Section 8.2             Costs and Expenses.  Whether or not the Closing takes place, except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the party incurring such expense.  Seller will pay any and all governmental, documentary, transfer, sales, use, or transaction taxes or filing fees due on the transfer of the Restaurants from Seller to Buyer, and any recording costs for this transaction, except those taxes, filing fees or recording costs incurred in connection with, or as a result of, Buyer’s financing, which taxes, filing fees or recording costs will be paid by Buyer.  Buyer waives compliance by Seller with the provision of any applicable bulk sales laws.  Buyer will be responsible for obtaining any Permits required to operate the Restaurants and will bear the costs associated with obtaining such Permits (including costs of transfer relating to liquor licenses, if applicable, or otherwise obtaining Liquor License Agency Approval) and its due diligence activities relating to the contemplated transaction (including any costs relating to the conduct of inspections and investigations). Notwithstanding, Seller will provide to Buyer copies of all existing surveys and Phase I environmental assessments for the Restaurants and Buyer will use its commercially reasonable efforts to ensure that such surveys and assessments are acceptable to its lender. To the extent Seller does not provide to Buyer a Phase I environmental assessment that has been completed since January 1, 2008 with respect to a Restaurant(s),  Seller and Buyer shall share equally in the cost of any Phase I environmental assessment conducted by Buyer for such Restaurant(s); provided, that Seller will not share in the cost of any Phase I environmental assessment conducted with respect to a Restaurant listed on Schedule 4.1(c).  Buyer will bear the cost of any surveys.  Buyer and Seller will share equally the costs associated with engaging CTI for the escrow arrangement contemplated in Section 3.2 above. Seller shall bear all costs related to obtaining estoppel certificates from the Landlords and Landlord consents to the assignment of the Real Property Leases to Buyer. Subject to the terms of this paragraph, Seller shall pay for standard coverage leasehold title policies on each leasehold Restaurant (other than any “in-line” leases) and Buyer shall pay for extended coverage, if desired, and any lender policies.

ARTICLE IX
MISCELLANEOUS

Section 9.1             Casualty or Condemnation.  During the Contract Period:

(a)           Seller shall provide Buyer with prompt written notice of any fire or other casualty (“Casualty”) that causes Material Damage or the commencement of condemnation or eminent domain proceedings (“Condemnation”) which are reasonably expected to cause Material Damage with respect to any Restaurant.  If one or more Casualties or Condemnations shall occur with respect to any Restaurant or Restaurants which meet the Termination Threshold, then Buyer may, at its election exercised by written notice to Seller within ten (10) days after Buyer’s receipt of notice of any Material Damage that causes the Termination Threshold to be satisfied, either: (i) terminate this Agreement (in which event, the Escrowed Funds shall be refunded to Buyer as provided in this Article IX) and neither party shall thereafter have any further obligations to the other hereunder; or (ii) proceed with the Closing.

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(b)           In the event any Casualty shall occur or Condemnation proceedings shall commence for which Buyer is not entitled to elect, or fails to timely so elect, to terminate this Agreement as provided in subsection (a) above, Buyer shall proceed with the Closing.

(c)           For purposes hereof:

(1)           “Material Damage” shall mean: (i) in case of a Casualty, any damage, as reasonably estimated by Buyer, that would cost for each affected Restaurant more than Three Hundred Thousand Dollars ($300,000) or take longer than ninety (90) days to fully repair; and (ii) in the case of a Condemnation proceeding, is reasonably likely to result in an award to the Seller in an amount in excess of Three Hundred Thousand Dollars ($300,000).

(2)           “Termination Threshold” shall mean that Material Damage has occurred for Restaurants that, in the aggregate, represent twenty-five percent (25%) or more of the total sales volume of all of the Restaurants (based on the twelve (12) month period immediately preceding the Effective Date); provided, however, if repair or reconstruction of a Restaurant is materially underway in accordance with subsection (d) below, then the Material Damage from such Restaurant will not be included for purposes of determining if the Termination Threshold has been reached.

(d) In the event of a Casualty which prevents a Restaurant from operating in the ordinary course of business as of the Closing Date, this Agreement will terminate with respect to such Restaurant, Seller will retain the title thereto, and the portion of the Purchase Price allocable to such Restaurant will be deducted from the Purchase Price at Closing.

(e) In the event of a Condemnation proceeding which prevents a Restaurant from operating in the ordinary course of business generally consistent with historical levels or from opening for Business as anticipated as of the Closing Date, this Agreement shall terminate with respect to such Restaurant, Seller shall retain title thereto, and the portion of the Purchase Price allocable to such Restaurant shall be deducted from the Purchase Price at Closing.

(f)  In no event will either party have the right to extend the Closing beyond the Outside Date as a result of the provisions of this Section 9.1.

Section 9.2             Termination.  Anything herein or elsewhere to the contrary notwithstanding, this Agreement may be terminated by written notice of termination at any time before the Closing Date only as follows:

(a)           by mutual written consent of Buyer and Seller;

(b)           by Buyer or Seller if the Closing shall not have occurred by the Outside Date; provided, however, that the right to terminate this Agreement under this Section 9.2 shall not be available to any party whose failure to perform any obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date;

(c)           by Buyer or Seller, if any court of competent jurisdiction or Governmental Authority shall have issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the payment of the Purchase Price and such order, decree, ruling or other action shall have become final and non-appealable;

(d)           by either Buyer or Seller if the other party is in material breach of this Agreement and such breach is not cured by the breaching party within thirty (30) days after receiving written notice

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thereof from the non-breaching party, or, if such breach cannot be reasonably cured within such thirty (30) day period, then an additional reasonable time period, but in no event longer than ninety (90) days, so long as such cure has been commenced within such thirty (30) day period and is being diligently pursued; or;

(e)           by Buyer, pursuant to Sections 3.7, 7.6, 7.7 and 9.1 above.

In the event of termination of this Agreement and abandonment of the transactions contemplated hereby pursuant to this Section 9.2, the parties acknowledge and agree that neither party shall have any liability nor further obligation to any other party, except as provided in Section 3.6 (relating to indemnification arising from Buyer’s exercise of its access rights) and this Section 9.2.  If this Agreement is terminated due to Seller’s failure to obtain and deliver to Buyer on the Closing Date all Landlord consents required to assign the Real Property Leases listed on Schedule 4.1(d), Seller will pay Buyer $250,000 as liquidated damages and such payment will represent Buyer’s sole remedy against Seller.  If this Agreement is terminated due to Seller’s failure to obtain and deliver to Buyer on the Closing Date the Required Underlying Consents and Seller is not otherwise obligated to pay liquidated damages to Buyer pursuant to the immediately preceding sentence, Seller will pay Buyer $50,000 as liquidated damages and such payment will represent Buyer’s sole remedy against Seller.  Except as set forth in the next sentence, upon termination of this Agreement and abandonment of the transactions contemplated hereby pursuant to this Section 9.2, the Escrowed Funds shall be returned to the Buyer.  The Escrowed Funds will be paid to Seller upon Seller’s termination of this Agreement due to (i) Buyer’s material breach pursuant to Section 9.2(d) or (ii) Buyer’s failure to close on the Closing Date even though all of Buyer’s conditions set forth in Section 4.1 have been satisfied.

Section 9.3             Broker’s and Finder’s Fees.  Each party to this Agreement warrants to the other that no person or entity can properly claim a right to a broker’s or finder’s fee, based upon the acts of that party with respect to the transaction contemplated by this Agreement.  Each party will indemnify and defend the other against and hold the other harmless from any and all loss, cost, liability, or expense (including reasonable attorneys’ fees and returned commissions) resulting from any such claim by any person or entity based upon such acts.

Section 9.4             Successors and Assigns.  Except as provided below, Buyer may not assign any of Buyer’s rights or duties under this Agreement without the prior, written consent of Seller. Buyer may assign its rights or duties under this Agreement to Apple Minnesota LLC, a wholly-owned subsidiary of Buyer, or subject to Sections 7.2(b) and 7.4 of this Agreement, to one or more other direct or indirect wholly-owned subsidiaries or other affiliate controlled by Buyer as permitted pursuant to the terms of the Franchisor Consent Letter; provided, that Buyer and the Principal Shareholders will remain the parties directly liable under the Applebee’s Development Agreement and Applebee’s Franchise Agreements and any permitted assignment will not relieve Buyer of its obligations under this Agreement.  This Agreement will inure to the benefit of and be binding upon the parties to this Agreement and permitted successors and assigns.

Section 9.5             Notices.  All notices required or permitted under this Agreement will be in writing and will be (i) personally delivered, (ii) sent by certified mail with return-receipt requested, (iii) sent by facsimile, (iv) sent by email or (v) sent by other means which affords the sender evidence of delivery, attempted delivery, or rejected delivery, to the respective parties at the street addresses set forth in the Basic Information or evidence of delivery at the facsimile numbers or email addresses set forth in the Basic Information, unless and until a different street address, fax number or email address is designated by notice to the other party.  Any notice by means which affords the sender evidence of delivery, attempted delivery, or rejected delivery will be deemed to have been given and received at the date and time of receipt, attempted delivery, or rejected delivery; provided, however, any notice by fax or email must have evidence of delivery.  A “read-receipt” received for an e-mail delivery and a fax confirmation

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page from the sender’s fax machine will be deemed evidence of delivery for notices sent by e-mail or fax, as applicable.

Section 9.6             Possession; Records Retention.  Possession of the Restaurants will be delivered to Buyer on the Closing Date.  Seller may retain copies of any records included in the Assets.

Section 9.7             Incorporation by Reference; Entire Agreement.  All of the exhibits and schedules referred in this Agreement are incorporated in and made a part of this Agreement.  This Agreement contains the entire understanding of the parties and supersedes all other written or oral understandings.  For purposes of clarification, executed versions of any exhibits to this Agreement will be considered “exhibits” for purposes of this paragraph.

Section 9.8             Attorneys’ Fees.  In the event any dispute between Buyer and Seller should result in litigation, the prevailing party will be reimbursed for all reasonable costs incurred in connection with such litigation, including reasonable attorneys’ fees and costs on appeal.

Section 9.9             Construction.  The parties acknowledge that each party and its counsel have reviewed this Agreement and agree that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this Agreement.  Captions or titles contained in this Agreement are inserted only as a matter of convenience and for reference only, and in no way limit, define, or extend the provisions of this Agreement.

Section 9.10           Governing Law; Dispute Resolution.  This Agreement will be construed and interpreted in accordance with, and will be governed and enforced in all respects according to, the law of the State of Kansas.  THE PARTIES AGREE THAT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PERFORMANCE THEREOF WHICH CANNOT BE AMICABLY SETTLED, EXCEPT AS OTHERWISE PROVIDED HEREIN WILL BE RESOLVED BY A PROCEEDING IN A COURT IN JOHNSON COUNTY, KANSAS, AND SELLER, BUYER, FRANCHISOR AND ASI EACH IRREVOCABLY ACCEPT THE JURISDICTION OF THE COURTS OF THE STATE OF KANSAS AND THE FEDERAL COURTS SERVING JOHNSON COUNTY, KANSAS FOR SUCH CLAIMS, CONTROVERSIES OR DISPUTES.  EACH PARTY WAIVES ITS RIGHT TO A JURY TRIAL IN ANY COURT ACTION ARISING AMONG THE PARTIES UNDER THIS AGREEMENT OR OTHERWISE RELATED TO THIS AGREEMENT, WHETHER MADE BY CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR OTHERWISE.

Section 9.11           Confidentiality.  Each party agrees that the terms of the Confidentiality Agreement, dated October 5, 2007, between Applebee’s International, Inc. and Buyer remains in full force and effect and Buyer expressly acknowledges that it is bound by the terms of such agreement regardless of whether it was the entity that executed such agreement and its terms shall be incorporated herein by reference.

Section 9.12           Public Announcements.  Buyer and Seller will jointly approve the timing of release and the content of all public disclosures regarding this Agreement and related transaction.  Notwithstanding the foregoing, Seller and its Affiliates may (a) make any disclosure that it or they deem necessary, in their sole discretion, to comply with any applicable law or regulation, including securities and franchise laws or (b) disclose the execution of this Agreement or the closing of the transactions contemplated herein and, in each case, such disclosure may include the name of the Buyer, the Restaurants, the Purchase Price and the Closing Date or anticipated Closing Date.

Section 9.13           Plain Meaning.  Unless defined otherwise, the words used in this Agreement will be construed according to their plain meaning in the English language.  The word “will” is used as a command.  The word “including” is used in a nonexclusive sense.

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Section 9.14           No Other Beneficiaries.  Buyer and Seller acknowledge that this Agreement is solely for their own benefit, and, subject to the rights afforded Franchisor herein and that of their successors and assigns in Section 9.4.

Section 9.15           No Waiver; Amendments.  No waiver by any party of any provisions of this Agreement (i) shall be effective unless waived in writing by the party against which enforcement of such waiver is sought, (ii) shall be deemed to be or shall constitute a waiver of any other provision hereof (whether or not similar) or (iii) shall constitute a continuing waiver unless otherwise expressly provided.  This Agreement may be amended, modified and supplemented only by written agreement of all parties hereto.

Section 9.16           Counterparts.  This Agreement may be executed in one or more counterparts and each counterpart with a hand-written signature, whether an original or an electronic data text (including facsimile, electronic data interchange and electronic mail) is considered an original and all counterparts constitute one and the same instrument.

Section 9.17           Severability.  Nothing in this Agreement will be construed as requiring the commission of any act contrary to law.  If there is any conflict between any provision of this Agreement and any present or future law, such provision will be limited only to the extent necessary to bring it within the requirement of the law.  If any part of this Agreement is held to be indefinite, invalid, or otherwise unenforceable, the balance of this Agreement will continue in full force and effect.

Section 9.18           Further Assurances.  The parties hereto agree to execute and deliver such documents, and to take such other actions, as may be necessary to carry out the intent and purposes of this Agreement.

[COMPLETED AND EXECUTED ON THE FOLLOWING PAGE]

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Signature Page to Asset Purchase Agreement

AMENDMENT TO ASSET PURCHASE AGREEMENT

THIS AMENDMENT TO ASSET PURCHASE AGREEMENT (this “Amendment”) is entered into as of this 4th day of September, 2010, by and among Applebee’s Restaurants North LLC, a Delaware limited liability company (“ARN”), Applebee’s Restaurants, Inc., a Kansas corporation (“ARI” and together with ARN, “Seller”), Apple American Group LLC, a Delaware limited liability company (“Buyer”), and Applebee’s Services, Inc., a Kansas corporation (“ASI”).

WHEREAS, Seller, Buyer and ASI entered into that certain Asset Purchase Agreement, dated July 23, 2010, pursuant to which Seller agreed to sell to Buyer 63 Applebee’s Neighborhood Grill & Bar restaurants located in Minneapolis and Wisconsin (the “Purchase Agreement”); and

WHEREAS, the parties desire to amend certain terms of the Purchase Agreement.

NOW, THEREFORE, the parties hereto agree as follows:

1.               Capitalized Terms.  Capitalized terms used herein that are not defined herein will be ascribed the meaning given to such terms in the Purchase Agreement.

2.               Title Deficiency Notice Extension.  The parties acknowledge that the Title Deficiency Notice was due on or before September 4, 2010 and was timely delivered by Buyer except with respect to the Delayed Restaurants.  Notwithstanding the foregoing, and solely with respect to the Delayed Restaurants (defined below), Seller agrees that a Title Deficiency Notice limited to the Delayed Restaurants will be deemed to be timely delivered by Buyer if it is delivered on or before September 14, 2010 and accompanied by any landlord agreement required by Buyer’s lender and any SNDA required by Buyer (the “Delayed Restaurant Title Deficiency Notice”).  The parties agree that the Title Notice Period will be deemed to end on the 20th day following Seller’s receipt of the Delayed Restaurant Title Deficiency Notice.  “Delayed Restaurants” mean the following Restaurants:  St. Cloud (#61018), Brookdale (#61036), S-Pokegama (#61051), Red Wing (#61054), S-New Ulm (#61056) and Woodbury II (#61065).

3.               Amendment to Applebee’s Lease.  Seller desires to add certain tenant financial reporting requirements to the Applebee’s Lease(s).  Accordingly, the parties agree that Exhibit C of the Purchase Agreement is hereby replaced in its entirety with the Lease in the form attached hereto as Exhibit A.

4.               Assumed Contracts.  The parties agree that Schedules 2A and 2B of the Purchase Agreement are hereby replaced by Schedules 2A and 2B attached to this Amendment.  Without limiting any rights to make future updates to the Disclosure Schedule as provided in Section 3.7 of the Purchase Agreement, Section 5.1(f) of the Disclosure Schedule is updated as of the date hereof to reflect the items blacklined in Section 5.1(f) of the Disclosure Schedule attached hereto.

5.               Amendment to Schedule 4.1(c).  The parties agree that Schedule 4.1(c) of the Purchase Agreement is hereby replaced by Schedule 4.1(c) attached to this Amendment.

6.               Miscellaneous.  Each of the terms and provisions of this Amendment is deemed incorporated by reference into the Purchase Agreement. When a conflict exists between this Amendment and the Purchase Agreement, this Amendment will control. Except for the provisions of this Amendment, no amendment of the Purchase Agreement will be binding unless it is in writing and signed by all of the parties hereto.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date and year first above written.

Exhibit A

Applebee’s Lease

See Attached.

Schedule 2A

See Attached.

Schedule 2B

See Attached.

Section 5.1(f) of Disclosure Schedule

See Attached.

Schedule 4.1(c)

See Attached.

AMENDMENT TO ASSET PURCHASE AGREEMENT

THIS AMENDMENT TO ASSET PURCHASE AGREEMENT (this “Amendment”) is entered into as of this 21st day of October, 2010, by and among Applebee’s Restaurants North LLC, a Delaware limited liability company (“ARN”), Applebee’s Restaurants, Inc., a Kansas corporation (“ARI” and together with ARN, “Seller”), Apple American Group LLC, a Delaware limited liability company, and Applebee’s Services, Inc., a Kansas corporation (“ASI”).

WHEREAS, Seller, Buyer and ASI entered into that certain Asset Purchase Agreement, dated July 23, 2010, as amended by that certain Amendment to Asset Purchase Agreement, dated September 4, 2010 (the “Purchase Agreement”), pursuant to which Seller agreed to sell to Buyer 63 Applebee’s Neighborhood Grill & Bar restaurants located in Minneapolis and Wisconsin (the “Transaction”); and

WHEREAS, the parties desire to amend certain terms of the Purchase Agreement.

NOW, THEREFORE, the parties hereto agree as follows:

1.               Capitalized Terms.  Capitalized terms used herein that are not defined herein will be ascribed the meaning given to such terms in the Purchase Agreement.

2.               Multiple Closings.  The parties agree that the Closing Date will be October 21, 2010 with respect to the Assets associated with all of the Restaurants except for the Carved Out Restaurants.  “Carved Out Restaurants” means the following Restaurants:  Duluth (#61015) (the “Duluth Restaurant”) and the Apache Mall Restaurant.  The Closing Date for each of the Carved Out Restaurants will occur within five (5) business days of satisfaction of the closing conditions set forth below for such Carved Out Restaurant (each such date, a “Delayed Closing Date” and each such closing, the “Delayed Closing”); provided, that in no event will a Delayed Closing Date occur after the Outside Date.  Notwithstanding the foregoing, to the extent the closing conditions for the Duluth Restaurant are not satisfied before the Outside Date, either Buyer or Seller will be entitled to extend the Outside Date until December 31, 2010 by giving written notice to the other party prior to November 15, 2010.

3.               Closing Conditions for Carved Out Restaurants.  The following Buyer closing conditions in the specified sections of the Purchase Agreement must be satisfied or waived on or prior to the applicable Delayed Closing Date for each of the Carved Out Restaurants:  (a)  Section 4.1(b), subject to modification of the Conveyance Documents to apply to the applicable Carved Out Restaurant; (b) Section 4.1(d) (solely with respect to the Duluth Restaurant); (c) Section 4.1(e) (it being understood that this closing condition is satisfied for the Apache Mall Restaurant except to the extent the Apache Mall Landlord revokes the previously provided estoppel certificate); (d) Section 4.1(f); (e) Section 4.1(g); (f) Section 4.1(j) (execution of the Applebee’s Franchise Agreement for such Carved Out Restaurant); (g) Section 4.1(l) (to the extent covenants and representations and warranties apply to such Carved Out Restaurant); and (h) Section 4.1(m).  The following Seller closing conditions in the specified sections of the Purchase Agreement must be satisfied or waived for each of the Carved Out Restaurants:  (a) Section 4.3(a) (solely with respect to the Duluth Restaurant); (b) Section 4.3(b)

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(execution of the Applebee’s Franchise Agreement for such Carved Out Restaurant plus payment of the applicable $35,000 franchise fee); (c) Section 4.3(c), subject to modification of the Conveyance Documents to apply to the applicable Carved Out Restaurant; (d) Section 4.3(d), receipt of the Purchase Price allocable to such Carved Out Restaurant; (e) Section 4.3(e); (f) Section 4.3(h) (to the extent covenants and representations and warranties apply to such Carved Out Restaurant); (g) Section 4.3(i); and (h) solely with respect to the Apache Mall Restaurant, issuance and/or approval of the Apache Mall LOI (defined below) by the Apache Mall Landlord (defined below); provided, however, if the Apache Mall LOI is not issued or approved by the Apache Mall Landlord on or before the Outside Date, this closing condition will be deemed waived.

4.               Purchase Price; Franchise Fees — Carved Out Restaurants.  The Purchase Price allocable to each Carved Out Restaurant will be the amount set forth below plus the amounts due pursuant to Section 3.3 of the Purchase Agreement with respect to such Carved Out Restaurants:

a.               Duluth Restaurant - $1,716,783

b.              Apache Mall Restaurant - $1,668,020

The Purchase Price due on the Closing Date will be reduced by the amounts due with respect to the Carved Out Restaurants.  The Franchise Fees due on the Closing Date will be reduced by $35,000 for each Carved Out Restaurant.  Buyer will pay the applicable franchise fee on the applicable Delayed Closing Date for such Carved Out Restaurant.

5.               Closing Procedures — Carved Out Restaurants.  The parties agree that the following will apply in connection with each Delayed Closing:  (a) to the extent the contracts with the following vendors identified on Schedule 2A apply to the Carved Out Restaurant, such contract will be partially assigned on the Closing Date for all Restaurants but the Carved Out Restaurants and such contract will be partially assigned on the applicable Delayed Closing Date with respect to the applicable Carved Out Restaurant:  Northland Fire & Security, Gartner Refrigeration and Lamar Outdoor (contract dated September 25, 2009); (b) Seller will have the right to update the Disclosure Schedules in accordance with Section 3.7 of the Purchase Agreement to the extent applicable to such Carved Out Restaurant; (c) application of the Seller covenant in Section 7.1(f) of the Purchase Agreement will be waived between the Closing Date and the Delayed Closing Date; (d) Buyer will not have the right to make the election described in the second sentence of Section 9.1(a) of the Purchase Agreement; and (e) Buyer will not disclose to the Landlord for the Duluth Restaurant the terms of the last paragraph of Section 9.2 with respect to liquidated damages or otherwise suggest to such Landlord that a demand or request for payment be made to Seller in consideration for Landlord’s consent to assignment of the Real Property Lease for the Duluth Restaurant.

6.               Development Territory.  As of the Closing Date, the parties agree that the following paragraph shall be deemed to be inserted as the third to last paragraph of Appendix A to the Applebee’s Development Agreement until the Delayed Closing Date has occurred for both of the Carved Out Restaurants, at which time such paragraph will be deemed to be deleted from Appendix A:

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“Except that Developer understands and agrees that Applebee’s Restaurants North LLC, a Delaware limited liability company ( “ARN”) currently holds Franchise Agreements for the operation of Restaurants at the locations indicated below (including any replacement or successor franchise agreements for such Restaurants, whether issued to ARN or other parties, the “ARN Franchise Agreements”), and that (a) this Development Agreement is subject to the rights of the franchisee and obligations of the franchisor under the ARN Franchise Agreements and (b) nothing in this Development Agreement shall grant Developer rights to develop Restaurants in the Territory which would otherwise cause Franchisor, its affiliates or their respective successors or assigns to breach its or their respective obligations under the ARN Franchise Agreements.

The parties agree that if a Carved Out Restaurant(s) is not sold to Buyer, the parties will enter into a formal amendment to the Applebee’s Development Agreement to add the provision set forth in this paragraph 6.

7.               Apache Mall.  Buyer acknowledges and agrees that Seller has complied with Seller’s covenant contained in Section 7.1(q)(i) by submitting the Letter of Intent attached as Exhibit A (the “Apache Mall LOI”) to the Landlord for the Apache Mall Restaurant (the “Apache Mall Landlord”).  If the Apache Mall LOI (including any document substantially similar thereto) is issued and/or approved by the Apache Mall Landlord, whether or not occurring after the Delayed Closing Date for the Apache Mall Restaurant, Buyer agrees that it will either (a) accept the Apache Mall LOI, in which case Seller will have no financial obligation to Buyer pursuant to Section 7.1(q) or Schedule 7.1(q) of the Purchase Agreement (collectively, the “Apache Mall Loss Obligations”) and Seller’s only financial obligation will be as set forth in the next sentence, or (b) reject the Apache Mall LOI (or request revisions thereto), in which case Seller will not be required to pay Buyer the Apache Mall Loss Obligations.  If Buyer accepts the Apache Mall LOI and subsequently enters into either an amendment to the existing Real Property Lease or a new lease, in each case, for the Apache Mall Restaurant (the “Lease Extension”) on terms that do not conflict with the Apache Mall LOI and a copy of which is provided to Seller, then Seller will pay Buyer the following amounts:  (a) $11,000, due within five business days of the execution of the Lease Extension, and (b) within thirty (30) days after the later of (i) each calendar year (starting with the year 2011 and ending as of December 31, 2015) or (ii) proof of payment of all rent for the Apache Mall Restaurant due for the applicable year, an amount equal to 5% of the Sales Gap (defined below) for such year.  The “Sales Gap” shall be calculated as follows: (a) if Buyer’s Gross Sales (as defined in the Real Property Lease) are less than the breakpoint for the applicable year, which breakpoint will equal $3,300,000 in 2011 with 2% increases each year thereafter (the “Breakpoint”) but Buyer’s Gross Sales are more than the Original Breakpoint Proposal (defined below),  the Sales Gap shall be the difference between

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Buyer’s Gross Sales and the Breakpoint and (b) if Buyer’s Gross Sales are (i) greater than the Breakpoint or (ii) less than the Original Breakpoint Proposal, in either case, the Sales Gap shall be zero ($0).  The “Original Breakpoint Proposal” is $2,850,000 for 2011 and shall be increased by 2% each year thereafter.  Notwithstanding anything in the Purchase Agreement or Second Amendment to the contrary, Seller’s obligation to pay the Sales Gap shall only apply if, at the time such obligations are due Buyer: (i) Buyer is operating the Apache Mall Restaurant, (ii) Buyer has not entered into an amendment to the Lease Extension or a replacement lease that, in either case, contains terms conflicting with the Apache Mall LOI unless Seller has consented to the same, (iii) Buyer is not in breach or default of its payment obligations due under the Applebee’s Franchise Agreement for the Apache Mall Restaurant and (iv) Buyer has timely completed the remodel of the Apache Mall Restaurant due pursuant to the terms of the Apache Mall LOI.  Buyer agrees that prior to the issuance of a letter of intent by the Apache Mall Landlord, it will not request or agree to terms from the Apache Mall Landlord that conflict with the terms of the Apache Mall LOI without the consent of Seller.  If the Apache Mall LOI is rejected by the Apache Mall Landlord or substantively modified by the Apache Mall Landlord, then Section 7.1(q) of the Agreement, and not this Section 7 of the Second Amendment, shall control the Parties’ rights and obligations.

8.               Satisfaction and Waiver of Certain Covenants of Seller.  Subject to the receipt on, and in reliance on, the certificate referred to in Section 4.1(l) of the Agreement, Buyer acknowledges and agrees that as of the date hereof, Seller has satisfied all of Seller’s obligations set forth in Sections 7.1(p), 7.1(r) and 7.1(s) of the Purchase Agreement.

9.               Purchase Price Allocation.  The parties agree Schedule 3.4 to the Purchase Agreement will be the document attached as Exhibit B.

10.         Brookdale Mall.  Buyer hereby waives the closing condition contained in Section 4.1(e) of the Agreement with respect to the Real Property Lease for Brookdale (#61036) (“Brookdale Restaurant”).  Buyer and Seller agree that the definition of “Excluded Liabilities” is amended by adding the following to the end of the paragraph: “; and (e) any liabilities arising out of or resulting from Seller’s exercise of its right to abate rent under the Real Property Lease for the Brookdale Restaurant prior to the Closing or an uncured default under such Real Property Lease for the Brookdale Restaurant by Seller prior to the Closing.”

11.         Utility Costs.  Seller acknowledges that certain utilities at the Restaurants were transferred to Buyer’s accounts effective as of October 13, 2010 (the “Converted Utilities”).  Accordingly, Seller agrees to reimburse Buyer for charges (excluding deposits, set-up fees or similar one-time charges) incurred for use of the Converted Utilities at the Restaurants until the applicable Closing Date.

12.         Pre-Closing MegaPath Upgrades.  Buyer agrees to pay for (a) all costs associated with the conversion (including installation costs) of certain services provided by MegaPath Inc. as more specifically described, and at the Restaurants, set forth on the order attached hereto as Exhibit C (the “MegaPath Upgrade”), including reimbursement of Seller for any out of pocket costs incurred by Seller in connection with the MegaPath Upgrade and (b) the

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increased costs incurred as a result of the MegaPath Upgrade, from the date of the MegaPath Upgrade (or each upgrade to the extent the various upgrades take effect at different times) through the earlier of (i) the applicable Closing or (ii) the date of termination of the Purchase Agreement.  For purposes of clarification, the “increased costs” shall be the difference in the cost for the upgraded services minus the cost of the services at each respective Restaurant prior to the date of the MegaPath Upgrade.

13.         Transition of Energy Service Agreement.  The following shall be added as Subsection 4.3(n) of the Purchase Agreement:

“Buyer (or an Affiliate of Buyer) must have entered into a new Energy Service Agreement with CenterPoint Energy Services, Inc. (“CenterPoint”) at Closing with respect to all Restaurants currently receiving services under the Energy Service Agreement, dated July 19, 2002, between CenterPoint f/k/a Reliant Energy Services Retail, Inc. and Applebee’s International, Inc.”

Notwithstanding anything in the Purchase Agreement to the contrary (including Schedule 2A), Seller shall have no obligations under the Purchase Agreement to assign the Energy Service Agreement, dated July 19, 2002, to Buyer at Closing.

14.         Employee Leasing Arrangement.

(a)           As of the Closing Date and until the earlier of (X) the applicable Delayed Closing Date for each Carved Out Restaurant, (Y) the termination of the Agreement with respect to the applicable Carved Out Restaurant or (Z) Seller’s written notice of termination of Consultant’s services due to the failure of Consultant to comply with the policies and procedures of Seller, which notice will identify the breach(es) of Seller’s policies and procedures, Seller hereby leases from Buyer and Buyer leases to Seller the applicable Area Director for such Carved Out Restaurant (each a “Consultant”) to perform the Services (defined herein) as an independent contractor.  For purposes of this Second Amendment, “Services” means the performance of services as an Area Director for the Applicable Carved Out Restaurant substantially similar to those performed by Consultant for the Restaurants prior to Closing as an employee of Seller (or its Affiliate), subject to any limitations that may be imposed by Seller from time to time and at all times in accordance with the then current policies and procedures of Seller.  Notwithstanding the foregoing, “Services” will not include any responsibilities previously performed by Consultant as an employee for Seller (or an Affiliate of Seller) that are not directly related to oversight of the Restaurants.  Consultant will have the authority to supervise the operations of the Carved Out Restaurants in a manner similar to his duties with respect thereof prior to the Closing Date except Consultant may not take any of the following actions:  (i) sign contracts or authorize others to sign contracts; (ii) authorize expenses; (iii) knowingly take, authorize or permit any action that would violate the covenants of the Seller under the Purchase Agreement; (iv) hire employees; (v) give performance reviews; (vi) violate any other restriction communicated to Buyer or Consultant in writing by a Regional Vice President with supervisory authority over the Carved Out Restaurant or other person designated by Seller, with such restriction effective upon receipt of such written notice.  Buyer will maintain, and shall cause Consultant to maintain, at all

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times, during the term of this Agreement and thereafter, the confidentiality of information of Seller and its Affiliates obtained while performing the Services and will use such information only in connection with the Services.

(b)           Consultant will perform services to Seller under this Agreement solely as an independent contractor and not as an employee or agent of Seller or any Affiliate of Seller. Except for the Leasing Fee (as defined herein), Buyer will be solely responsible for all costs and expenses Consultant incurs in connection with the performance of the Services, all taxes or other payments owed to any governmental authority in connection with its employment of Consultant, and all insurance coverage or other benefits for Consultant.  For purpose of this Agreement, the “Leasing Fee” means the per day pro rata portion of such Consultant’s annual salary and cost of benefits paid by Buyer to Consultant with the pro rata portion being determined by the ratio of the number of Carved Out Restaurants managed by such Consultant to the total number of Restaurants managed by such Consultant; provided, however, for purposes of determining the pro rata portion, the total number of Restaurants managed by such Consultant will not be less than five (5).  Buyer agrees to provide Seller with documentation reasonably requested by Seller to verify the calculation of the Leasing Fee.  Seller shall pay the Leasing Fee concurrently with the post-closing true-up pursuant to Section 3.3(c) of the Agreement.

15.         Miscellaneous.  Each of the terms and provisions of this Amendment is deemed incorporated by reference into the Purchase Agreement.  When a conflict exists between this Amendment and the Purchase Agreement, this Amendment will control.  Except for the provisions of this Amendment, no amendment of the Purchase Agreement will be binding unless it is in writing and signed by all of the parties hereto.  This Amendment may be signed in counterparts and each counterpart with a hand-written signature, whether an original or an electronic data text (including telegram, telex, facsimile, electronic data interchange and electronic mail) is considered an original and all counterparts constitute one and the same instrument.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date and year first above written.

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EXHIBIT A

Apache Mall LOI

See Attached.

EXHIBIT B

Purchase Price Allocation

See Attached.

EXHIBIT C

MegaPath Order

See Attached.

ASSET PURCHASE AGREEMENT EXHIBITS

APPLEBEE’S NEIGHBORHOOD GRILL & BAR RESTAURANTS

1

EXHIBIT A

APPLEBEE’S DEVELOPMENT AGREEMENT PROVISIONS

1.     Paragraph 3 of the Second Addendum to Development Agreement entered into by and among Buyer, Franchisor and certain other parties signatory thereto in connection with the acquisition of the Nevada Restaurants will be modified in the form of Second Addendum to Development Agreement to be executed in connection with the Closing of this transaction (the “Form Second Addendum to DA”) as follows:  (a) “5” will be inserted in place of “2” in the first sentence and the date in the first sentence will be changed to November 15, 2013; (b) provision (B) of the first sentence will be deleted; and (c) the last sentence will be deleted.  In addition, Exhibit A to the Form Second Addendum to DA will be the document attached as Exhibit F to the Franchisor Consent Letter.

2.     There will be no franchise fee deposit due from Buyer in connection with Section 4.1 of the Development Agreement.

3.     Buyer shall sign state-specific amendment(s) to the extent required by law in connection with the issuance of the Applebee’s Development Agreement.

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EXHIBIT B

APPLEBEE’S FRANCHISE AGREEMENT PROVISIONS

1.     Buyer will execute a Weight Watchers Rider in substantially the form provided in the then current Applebee’s Neighborhood Grill & Bar Franchise Disclosure Document as of the Closing Date.

2.     The franchise fee due for each Restaurant will be $35,000.

3.     The terms of the franchise agreements will be 20 years; provided, however, with respect to any Restaurant subject to a real property lease that will expire prior to such 20 year period (including all options to extend such lease) Buyer shall have the right to terminate a franchise agreement at the end of such lease term if a lease extension has not been obtained.

4.     Buyer shall sign state-specific amendment(s) to the extent required by law in connection with the issuance of the Applebee’s Franchise Agreement.

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EXHIBIT C

APPLEBEE’S LEASE

See Attached Agreement.

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EXHIBIT D

ASSIGNMENT OF INTANGIBLE PROPERTY

Applebee’s Restaurants North LLC, a Delaware limited liability company (“ARN”) and Applebee’s Restaurants, Inc., a Kansas corporation (“ARI” and together with ARN, “Assignor”), for good and valuable consideration, receipt of which is hereby acknowledged, hereby assign, transfer, and convey to                                             , a                                            (“Assignee”), WITHOUT WARRANTY, EXPRESS OR IMPLIED, all of Assignor’s right, title, and interest in and to the Intangible Property (as defined in the Asset Purchase Agreement) except as set forth in that certain Asset Purchase Agreement of Applebee’s Neighborhood Grill & Bar Restaurants by and among Applebee’s Services, Inc., a Kansas corporation, Apple American Group LLC, a Delaware limited liability company and predecessor-in-interest to Assignee, and Assignor, dated                                         , 2010 (the “Asset Purchase Agreement”).

Assignee hereby assumes the Assumed Liabilities as defined in the Asset Purchase Agreement.

For purposes of clarification, ARN and ARI shall be deemed Assignor only with respect to Assets, as defined in the Asset Purchase Agreement, used in the operation of the Restaurants owned by each respective entity as identified on Schedule 1 hereto.

Effective as of                                   , 2010.

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Schedule 1

Restaurant Ownership

Applebee’s Restaurants North LLC: