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


 


	
  ARTICLE I BASIC INFORMATION

  	
  5

  
	
   

  	
   

  
	
  ARTICLE II ADDITIONAL DEFINITIONS

  	
  7

  
	
   

  	
   

  
	
  ARTICLE III PURCHASE AND
  SALE

  	
  15

  
	
  Section 3.1

  	
  Purchase and Sale

  	
  15

  
	
  Section 3.2

  	
  Purchase Price and Escrowed Funds.

  	
  15

  
	
  Section 3.3

  	
  Closing Prorations, Deposits And Post-Closing Adjustments

  	
  16

  
	
  Section 3.4

  	
  Allocation of Purchase Price

  	
  17

  
	
  Section 3.5

  	
  Employees at Restaurants

  	
  18

  
	
  Section 3.6

  	
  Buyer’s Access Rights

  	
  18

  
	
  Section 3.7

  	
  Updating Seller’s Representations

  	
  19

  
	
  Section 3.8

  	
  Sale and Leaseback Lease

  	
  20

  
	
  Section 3.9

  	
  Sale of Fee Properties

  	
  21

  
	
  Section 3.10

  	
  Ridgedale Mall (# 61003)

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV CONDITIONS PRECEDENT

  	
  21

  
	
  Section 4.1

  	
  Buyer’s Conditions

  	
  21

  
	
  Section 4.2

  	
  Failure or Waiver of Buyer’s Conditions

  	
  23

  
	
  Section 4.3

  	
  Seller’s Conditions

  	
  24

  
	
  Section 4.4

  	
  Failure or Waiver of Seller’s Conditions

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE V REPRESENTATIONS AND WARRANTIES

  	
  25

  
	
  Section 5.1

  	
  Seller’s Representations and Warranties

  	
  25

  
	
  Section 5.2

  	
  Buyer’s Representations and Warranties

  	
  30

  
	
  Section 5.3

  	
  ASI’s Representations and Warranties

  	
  30

  
	
  Section 5.4

  	
  No Implied Representations or Warranties

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI INDEMNIFICATION

  	
  32

  
	
  Section 6.1

  	
  Limitations on Representations, Warranties and Covenants

  	
  32

  
	
  Section 6.2

  	
  Indemnification by Seller

  	
  32

  
	
  Section 6.3

  	
  Indemnification by ASI

  	
  32

  
	
  Section 6.4

  	
  Indemnification by Buyer

  	
  33

  
	
  Section 6.5

  	
  Exclusive Remedy

  	
  33

  
	
  Section 6.6

  	
  Indemnification Procedures

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII COVENANTS, DEVELOPMENT AGREEMENT AND
  FRANCHISE AGREEMENTS

  	
  35

  
	
  Section 7.1

  	
  Seller’s Covenants

  	
  35

  
	
  Section 7.2

  	
  Buyer’s Covenants

  	
  38

  
	
  Section 7.3

  	
  Franchisor’s Approval

  	
  39

  
	
  Section 7.4

  	
  Release of Guarantees

  	
  39

  
	
  Section 7.5

  	
  Insurance

  	
  39

  
	
  Section 7.6

  	
  Environmental Assessment

  	
  39

  
	
  Section 7.7

  	
  Title Review and Survey

  	
  39

  
	
  Section 7.8

  	
  Liquor License Consent Process

  	
  40

  



 

















 


	
  Section 7.9

  	
  Liquor License Refunds and Credits

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII CLOSING

  	
  42

  
	
  Section 8.1

  	
  Closing Procedure

  	
  42

  
	
  Section 8.2

  	
  Costs and Expenses

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX MISCELLANEOUS

  	
  42

  
	
  Section 9.1

  	
  Casualty or Condemnation

  	
  42

  
	
  Section 9.2

  	
  Termination

  	
  43

  
	
  Section 9.3

  	
  Broker’s and Finder’s Fees

  	
  44

  
	
  Section 9.4

  	
  Successors and Assigns

  	
  44

  
	
  Section 9.5

  	
  Notices

  	
  44

  
	
  Section 9.6

  	
  Possession; Records Retention

  	
  45

  
	
  Section 9.7

  	
  Incorporation by Reference; Entire Agreement

  	
  45

  
	
  Section 9.8

  	
  Attorneys’ Fees

  	
  45

  
	
  Section 9.9

  	
  Construction

  	
  45

  
	
  Section 9.10

  	
  Governing Law; Dispute Resolution

  	
  45

  
	
  Section 9.11

  	
  Confidentiality

  	
  45

  
	
  Section 9.12

  	
  Public Announcements

  	
  45

  
	
  Section 9.13

  	
  Plain Meaning

  	
  45

  
	
  Section 9.14

  	
  No Other Beneficiaries

  	
  46

  
	
  Section 9.15

  	
  No Waiver; Amendments

  	
  46

  
	
  Section 9.16

  	
  Counterparts

  	
  46

  
	
  Section 9.17

  	
  Severability

  	
  46

  
	
  Section 9.18

  	
  Further Assurances

  	
  46

  
				



 


	
  Exhibit A

  	
  Applebee’s
  Development Agreement Provisions

  	
   

  
	
  Exhibit B

  	
  Applebee’s
  Franchise Agreement Provisions

  	
   

  
	
  Exhibit C

  	
  Applebee’s
  Lease

  	
   

  
	
  Exhibit D

  	
  Assignment
  of Intangible Property

  	
   

  
	
  Exhibit E

  	
  Assignment
  and Assumption of Assumed Contracts

  	
   

  
	
  Exhibit F

  	
  Bill
  of Sale

  	
   

  
	
  Exhibit G

  	
  Lease
  Assignment and Assumption

  	
   

  
	
  Exhibit H

  	
  Escrow
  Agreement

  	
   

  
	
  Exhibit I

  	
  Estoppel
  Certificate

  	
   

  
	
  Exhibit J

  	
  Interim
  Management Agreements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedules to Asset Purchase Agreement

  	
   

  
	
   

  	
   

  
	
  Schedule 1

  	
   

  	
  Restaurants

  	
   

  
	
  Schedule 2A

  	
   

  	
  Assumed
  Contracts

  	
   

  
	
  Schedule 2B

  	
   

  	
  Assumed
  Contracts – System Agreements

  	
   

  
	
  Schedule 2C

  	
   

  	
  Excluded
  Assets - Other

  	
   

  
	
  Schedule 2D

  	
   

  	
  Landlords
  and Real Property Leases

  	
   

  
	
  Schedule 2E

  	
   

  	
  Assumed
  Liabilities – Distribution Centers

  	
   

  
	
  Schedule 3.4

  	
   

  	
  Purchase
  Price Allocation

  	
   

  
	
  Schedule 3.8

  	
   

  	
  Sale
  Leaseback Restaurants

  	
   

  
	
  Schedule 4.1(c)

  	
  In-Line
  Leases

  	
   

  
						



 


3

















 


	
  Schedule 4.1(d)

  	
  Real
  Property Leases Requiring Consent

  	
   

  
	
  Schedule 4.1(f)

  	
  Buyer’s
  Lender’s Underwriting Requirements

  	
   

  
	
  Schedule 4.1(k)

  	
  Assumed
  Contracts – Required Consents

  	
   

  
	
  Schedule 4.1(r)

  	
  Personal
  Rights

  	
   

  
	
  Schedule 4.1(v)

  	
  Facility
  Repairs

  	
   

  
	
  Schedule 4.1(w)

  	
  Server
  Replacement Status

  	
   

  
	
  Schedule 7.1(q)

  	
  Apache
  Mall Letter of Intent Parameters

  	
   

  
	
  Schedule 7.2(b)

  	
  Real
  Property Lease Assignment Requirements

  	
   

  
	
  Schedule 7.4

  	
  Release
  of Guarantee Requirements

  	
   

  
	
  Schedule 7.8

  	
  Liquor
  Licenses

  	
   

  
	
   

  	
   

  	
   

  
	
  Disclosure Schedule

  	
   

  



 


4

















 


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:


 


	
   

  	
   

  	
  1.                                       Applebee’s
  Restaurants, Inc., a Kansas corporation (“ARI”);
  and

  
	
   

  	
   

  	
  2.                                       Applebee’s
  Restaurants North LLC, a Delaware limited liability company (“ARN”)

  



 


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.


 


	
  Seller’s
  address for notices

  	
   

  	
  Applebee’s
  Restaurants North LLC

  
	
   

  	
   

  	
  Applebee’s
  Restaurants, Inc.

  
	
   

  	
   

  	
  c/o
  Applebee’s Services, Inc.

  
	
   

  	
   

  	
  11201
  Renner Blvd

  
	
   

  	
   

  	
  Lenexa,
  Kansas 66219

  
	
   

  	
   

  	
  Tel:
  (913) 890-0100

  



 


5

















 


	
   

  	
   

  	
  Fax: (913) 890-9100

  
	
   

  	
   

  	
  E-mail: Rebecca.Tilden@applebees.com

  
	
   

  	
   

  	
  Attn:
  Vice President, Brand Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With
  a copy to:

  
	
   

  	
   

  	
  Seigfreid,
  Bingham, Levy, Selzer & Gee, P.C.

  
	
   

  	
   

  	
  911
  Main Street

  
	
   

  	
   

  	
  Suite 2800

  
	
   

  	
   

  	
  Kansas
  City, Missouri 64105

  
	
   

  	
   

  	
  Tel: (816) 421-4460

  
	
   

  	
   

  	
  Fax: (816) 474-3447

  
	
   

  	
   

  	
  E-mail: lancef@sblsg.com

  
	
   

  	
   

  	
  Attn:
  Lance Formwalt

  
	
   

  	
   

  	
   

  
	
  “Buyer”

  	
   

  	
  Apple
  American Group LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
  Buyer’s
  address for notices

  	
   

  	
  Apple
  American Group LLC

  
	
   

  	
   

  	
  225
  Bush Street, Suite 1470

  
	
   

  	
   

  	
  San
  Francisco, California 94104

  
	
   

  	
   

  	
  Tel: (415) 835-0227

  
	
   

  	
   

  	
  Fax: (415) 835-0223

  
	
   

  	
   

  	
  E-mail: gflynn@flynnholdings.com

  
	
   

  	
   

  	
  Attn:
  Gregory G. Flynn

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With
  a copy to:

  
	
   

  	
   

  	
  Davis
  Wright Tremaine LLP

  
	
   

  	
   

  	
  Suite 2200

  
	
   

  	
   

  	
  1201
  Third Avenue

  
	
   

  	
   

  	
  Seattle,
  Washington 98101-3045

  
	
   

  	
   

  	
  Tel:
  (206) 622-3150

  
	
   

  	
   

  	
  Fax: (206) 757-7100

  
	
   

  	
   

  	
  E-mail: SarahTune@dwt.com

  
	
   

  	
   

  	
  Attn:
  Sarah Tune

  
	
   

  	
   

  	
   

  
	
  “Franchisor”

  	
   

  	
  Applebee’s
  Franchising LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
  Franchisor’s
  address for notices

  	
   

  	
  Applebee’s
  Franchising LLC

  
	
   

  	
   

  	
  c/o Applebee’s Services, Inc.

  
	
   

  	
   

  	
  11201
  Renner Blvd.

  
	
   

  	
   

  	
  Lenexa, Kansas 66219

  
	
   

  	
   

  	
  Tel: (913) 890-0100

  
	
   

  	
   

  	
  Fax: (913) 890-9100

  
	
   

  	
   

  	
  E-mail: Rebecca.Tilden@applebees.com

  
	
   

  	
   

  	
  Attn:
  Vice President, Brand Counsel

  
	
   

  	
   

  	
   

  
	
  “Purchase Price”

  	
   

  	
  The
  Purchase Price is the aggregate consideration to be paid by Buyer for the
  Assets, which shall be the amount paid pursuant to
  Section 3.2(a) and (b), subject to adjustment pursuant to Section 3.3. The Purchase Price
  reflects the sum of the Escrowed Funds, the fair market value of the consideration
  paid by Buyer to purchase the Notes (as defined below)

  



 


6

















 


	
   

  	
   

  	
  delivered
  to Seller at Closing, if any, plus amounts paid by Buyer in cash or via wire
  transfer of immediately available funds in addition to the Escrowed Funds.
  The Purchase Price does not include the Franchise Fees payable under each
  Applebee’s Franchise Agreement.

  
	
   

  	
   

  	
   

  
	
  “Escrowed Funds”

  	
   

  	
  The
  “Deposit Escrow Amount” of $350,000.

  
	
   

  	
   

  	
   

  
	
  “Debt Reduction Amount”

  	
   

  	
  $28,295,000

  
	
   

  	
   

  	
   

  
	
  “Closing Date”

  	
   

  	
  Within
  ten (10) business days following the satisfaction or waiver of the
  conditions precedent set forth in Article IV of this Agreement, but in
  no event later than the Outside Date (as defined below).

  



 


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.


 


7

















 


“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.


 


8

















 


“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).


 


9

















 


“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


 


10
















 


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.


 


11

















 


“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:


 


 


	
  Defined Term

  	
   

  	
  Section of Agreement

  
	
   

  	
   

  	
   

  
	
  1060 Regulations

  	
   

  	
  3.4

  
	
   

  	
   

  	
   

  
	
  ABC

  	
   

  	
  7.8(a)

  
	
   

  	
   

  	
   

  
	
  Agreement

  	
   

  	
  Introduction

  
	
   

  	
   

  	
   

  
	
  Apache Mall Extension

  	
   

  	
  7.1(q)(i)

  
	
   

  	
   

  	
   

  
	
  Apache Mall License Agreement

  	
   

  	
  7.1(p)

  
	
   

  	
   

  	
   

  
	
  Apache Mall Loss

  	
   

  	
  7.1(q)(iii)

  
	
   

  	
   

  	
   

  
	
  Apache Mall Restaurant

  	
   

  	
  7.1(q)(i)

  
	
   

  	
   

  	
   

  
	
  ARI

  	
   

  	
  Article I

  
	
   

  	
   

  	
   

  
	
  ARN

  	
   

  	
  Article I

  
	
   

  	
   

  	
   

  
	
  ASI

  	
   

  	
  Introduction

  
	
   

  	
   

  	
   

  
	
  ASI Cap

  	
   

  	
  6.3

  
	
   

  	
   

  	
   

  
	
  ASI  Excluded  Liabilities

  	
   

  	
  6.3

  
	
   

  	
   

  	
   

  
	
  Basket

  	
   

  	
  6.1

  
	
   

  	
   

  	
   

  
	
  Beer Distributor Advances

  	
   

  	
  3.3(a)(5)

  
	
   

  	
   

  	
   

  
	
  Benefit Plans

  	
   

  	
  5.1(n)

  
	
   

  	
   

  	
   

  
	
  Buyer Indemnitee

  	
   

  	
  6.2

  
	
   

  	
   

  	
   

  
	
  Cap

  	
   

  	
  6.1

  
	
   

  	
   

  	
   

  
	
  Casualty

  	
   

  	
  9.1(a)

  
	
   

  	
   

  	
   

  
	
  Claim

  	
   

  	
  6.6(a)

  



 


12

















 


	
  Closing

  	
   

  	
  8.1

  
	
   

  	
   

  	
   

  
	
  Condemnation

  	
   

  	
  9.1(a)

  
	
   

  	
   

  	
   

  
	
  CTI

  	
   

  	
  3.2(a)

  
	
   

  	
   

  	
   

  
	
  Employee Pay Out Obligations

  	
   

  	
  3.5(b)

  
	
   

  	
   

  	
   

  
	
  Environmental Claims

  	
   

  	
  5.1(o)

  
	
   

  	
   

  	
   

  
	
  Environmental Deficiency Notice

  	
   

  	
  7.6

  
	
   

  	
   

  	
   

  
	
  Environmental Laws

  	
   

  	
  5.1(o)

  
	
   

  	
   

  	
   

  
	
  Environmental Notice Period

  	
   

  	
  7.6

  
	
   

  	
   

  	
   

  
	
  ERISA

  	
   

  	
  5.1(n)

  
	
   

  	
   

  	
   

  
	
  Escrow Agreement

  	
   

  	
  3.2(a)

  
	
   

  	
   

  	
   

  
	
  Excluded Liabilities

  	
   

  	
  7.4

  
	
   

  	
   

  	
   

  
	
  Existing Sign

  	
   

  	
  7.1(r)

  
	
   

  	
   

  	
   

  
	
  Expiration Date

  	
   

  	
  3.7(b)

  
	
   

  	
   

  	
   

  
	
  Fee Property Buyer

  	
   

  	
  3.9

  
	
   

  	
   

  	
   

  
	
  Financial Statements

  	
   

  	
  5.1(h)

  
	
   

  	
   

  	
   

  
	
  Financing Plan

  	
   

  	
  7.3

  
	
   

  	
   

  	
   

  
	
  Former SLB Leases

  	
   

  	
  3.8

  
	
   

  	
   

  	
   

  
	
  Franchisor Consent Letter

  	
   

  	
  7.3

  
	
   

  	
   

  	
   

  
	
  Hazardous Materials

  	
   

  	
  5.1(o)

  
	
   

  	
   

  	
   

  
	
  “in-line” leases

  	
   

  	
  4.1(c)

  
	
   

  	
   

  	
   

  
	
  Independent Accounting Firm

  	
   

  	
  3.3(c)

  
	
   

  	
   

  	
   

  
	
  Interim Management Agreement

  	
   

  	
  7.8(e)

  
	
   

  	
   

  	
   

  
	
  Licensor

  	
   

  	
  7.1(p)

  
	
   

  	
   

  	
   

  
	
  Limitation Period

  	
   

  	
  6.1

  
	
   

  	
   

  	
   

  
	
  Liquor Licenses

  	
   

  	
  7.8(a)

  



 


13

















 


	
  Master SLB Lease

  	
   

  	
  3.8

  
	
   

  	
   

  	
   

  
	
  Material Damage

  	
   

  	
  9.1(c)(1)

  
	
   

  	
   

  	
   

  
	
  Nevada Restaurants

  	
   

  	
  Definition of Applebee’s Development Agreement

  
	
   

  	
   

  	
   

  
	
  New Master SLB Lease

  	
   

  	
  3.8

  
	
   

  	
   

  	
   

  
	
  Notes

  	
   

  	
  3.2(b)

  
	
   

  	
   

  	
   

  
	
  Other Requirements

  	
   

  	
  7.8(f)

  
	
   

  	
   

  	
   

  
	
  Permits

  	
   

  	
  5.1(g)

  
	
   

  	
   

  	
   

  
	
  Related Party

  	
   

  	
  5.1(n)

  
	
   

  	
   

  	
   

  
	
  Release

  	
   

  	
  5.1(o)

  
	
   

  	
   

  	
   

  
	
  Restaurants

  	
   

  	
  Introduction

  
	
   

  	
   

  	
   

  
	
  Returns

  	
   

  	
  5.1(m)

  
	
   

  	
   

  	
   

  
	
  Ridgedale Mall Termination Notice

  	
   

  	
  3.10

  
	
   

  	
   

  	
   

  
	
  Ridgedale Mall Termination Right

  	
   

  	
  3.10

  
	
   

  	
   

  	
   

  
	
  SLB Guaranty

  	
   

  	
  3.8

  
	
   

  	
   

  	
   

  
	
  Seller Indemnitee

  	
   

  	
  6.4

  
	
   

  	
   

  	
   

  
	
  Sign Relocation

  	
   

  	
  7.1(r)

  
	
   

  	
   

  	
   

  
	
  SLB Landlord

  	
   

  	
  3.8

  
	
   

  	
   

  	
   

  
	
  SLB Restaurant

  	
   

  	
  3.8

  
	
   

  	
   

  	
   

  
	
  Termination Threshold

  	
   

  	
  9.1(c)(2)

  
	
   

  	
   

  	
   

  
	
  Title Deficiency Notice

  	
   

  	
  7.7

  
	
   

  	
   

  	
   

  
	
  Title Notice Period

  	
   

  	
  7.7

  
	
   

  	
   

  	
   

  
	
  True-up Period

  	
   

  	
  3.3(c)

  
	
   

  	
   

  	
   

  
	
  WARN Act

  	
   

  	
  3.5(a)

  



 


14

















 


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.


 


15

















 


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);


 


16

















 


(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


 


17

















 


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


 


18
















 


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.


 


19

















 


(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.


 


20

















 


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


 


21

















 


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


 


22

















 


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.


 


23

















 


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


 


24

















 


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


 


25

















 


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.


 


26

















 


(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


 


27

















 


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,


 


28
















 


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,


 


29

















 


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,


 


30

















 


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


 


32

















 


respect
to ASI, the Limitation Period for the ASI Excluded Liabilities will be four and
one-half (4 1⁄2) 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.


 


33

















 


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.


 


35

















 


(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


 


36

















 


“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


 


37

















 


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.”


 


38
















 


(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)


 


39

















 


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;


 


40

















 


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).


 


41

















 


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.


 


42

















 


(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


 


43

















 


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


 


44

















 


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.


 


45

















 


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]


 


46

















 


	
  SELLER:

  	
   

  	
  BUYER:

  
	
   

  	
   

  	
   

  
	
  Applebee’s Restaurants North
  LLC,

  	
   

  	
  Apple
  American Group LLC,

  
	
  A Delaware limited liability
  company

  	
   

  	
  A Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
  By: Applebee’s
  Services, Inc., as Servicer and

  	
   

  	
   

  
	
  attorney-in-fact

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
  Applebee’s
  Restaurants, Inc.,

  	
   

  	
   

  
	
  A
  Kansas corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:
  Applebee’s Services, Inc., as Servicer and attorney-in-fact

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Applebee’s
  Services, Inc., a Kansas Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acknowledged:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FRANCHISOR:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Applebee’s Franchising, LLC,

  	
   

  	
   

  
	
  A Delaware limited liability company

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: Applebee’s
  Services, Inc., as Servicer and

  	
   

  	
   

  
	
  attorney-in-fact

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  



 


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.


 


	
  SELLER:

  	
   

  	
  BUYER:

  
	
   

  	
   

  	
   

  
	
  Applebee’s Restaurants North
  LLC,

  	
   

  	
  Apple
  American Group LLC,

  
	
  A Delaware limited liability
  company

  	
   

  	
  A Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
  By: Applebee’s
  Services, Inc., as Servicer and

  	
   

  	
   

  
	
  attorney-in-fact

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name: Philip R.
  Crimmins, Sr.

  	
   

  	
  Name:

  	
   

  
	
  Title: Senior Vice President, International

  	
   

  	
  Title:

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
  Applebee’s
  Restaurants, Inc.,

  	
   

  	
   

  
	
  A
  Kansas corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:
  Applebee’s Services, Inc., as Servicer and attorney-in-fact

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name: Philip R.
  Crimmins, Sr.

  	
   

  	
   

  
	
  Title: Senior Vice
  President, International

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Applebee’s
  Services, Inc., a Kansas Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name: Philip R.
  Crimmins, Sr.

  	
   

  	
   

  
	
  Title: Senior Vice
  President, International

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  



 

















 


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)


 


1

















 


(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:


 


2

















 


“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.


 


	
  Store

  	
   

  	
   

  	
   

  	
   

  
	
  Number

  	
   

  	
  Store Name

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  61013

  	
   

  	
  Apache Mall

  	
   

  	
  320 Apache Mall, Rochester MN

  
	
  61015

  	
   

  	
  Duluth

  	
   

  	
  1600 Miller Trunk Highway, Duluth MN

  



 


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


 


3

















 


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


 


4

















 


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


 


5

















 


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]


 


6

















 


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


 


 


	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  Applebee’s Restaurants North
  LLC,

  
	
   

  	
  A Delaware limited liability
  company

  
	
   

  	
   

  
	
   

  	
  By: Applebee’s
  Services, Inc., as Servicer and attorney-in-fact

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Philip R.
  Crimmins, Sr.

  
	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Applebee’s
  Restaurants, Inc.,

  
	
   

  	
  A
  Kansas corporation

  
	
   

  	
   

  
	
   

  	
  By:
  Applebee’s Services, Inc., as Servicer and attorney-in-fact

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Philip R.
  Crimmins, Sr.

  
	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Applebee’s
  Services, Inc., a Kansas Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Philip R.
  Crimmins, Sr.

  
	
   

  	
  Title: Senior Vice
  President

  



 


7

















 


	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  Apple
  American Group LLC,

  
	
   

  	
  A Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:
  Ron Igarashi

  
	
   

  	
  Title:
  Secretary

  



 


8

















 


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


 


	
   

  
	
  Dated: July 23, 2010

  
	
   

  



 


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.


 


2

















 


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.


 


3

















 


EXHIBIT C


 


APPLEBEE’S LEASE


 


See Attached Agreement.


 


4

















 


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.


 


5

















 


	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  NORTH LLC, a

  
	
   

  	
  Delaware limited liability
  company

  
	
   

  	
   

  
	
   

  	
  By: Applebee’s
  Services, Inc., as Servicer and

  
	
   

  	
  attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Philip R.
  Crimmins, Sr.

  
	
   

  	
  Its: Senior Vice
  President, Development

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS, INC., a

  
	
   

  	
  Kansas corporation

  
	
   

  	
   

  
	
   

  	
  By: Applebee’s
  Services, Inc., as Servicer and

  
	
   

  	
  attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Philip R.
  Crimmins, Sr.

  
	
   

  	
  Its: Senior Vice
  President, Development

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
                                            ,
  a                           

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  
				



 


6

















 


Schedule 1


 


Restaurant Ownership


 


Applebee’s
Restaurants North LLC:


 


	
  Restaurant #

  	
   

  	
  Name

  
	
  061002

  	
   

  	
  Bloomington

  
	
  061003

  	
   

  	
  Ridgedale

  
	
  061004

  	
   

  	
  Burnsville

  
	
  061005

  	
   

  	
  New Hope

  
	
  061009

  	
   

  	
  Eden Prairie

  
	
  061012

  	
   

  	
  Woodbury

  
	
  061013

  	
   

  	
  Apache Mall

  
	
  061014

  	
   

  	
  Eagan

  
	
  061015

  	
   

  	
  Duluth

  
	
  061016

  	
   

  	
  Mankato

  
	
  061017

  	
   

  	
  Whitebear

  
	
  061018

  	
   

  	
  St. Cloud

  
	
  061019

  	
   

  	
  Coon Rapids

  
	
  061020

  	
   

  	
  Oak Park Heights

  
	
  061021

  	
   

  	
  Maple Grove

  
	
  061022

  	
   

  	
  Owatonna

  
	
  061023

  	
   

  	
  St. Louis Park

  
	
  061024

  	
   

  	
  Hastings

  
	
  061025

  	
   

  	
  Chanhassen

  
	
  061026

  	
   

  	
  Rosedale

  
	
  061027

  	
   

  	
  Elk River

  
	
  061028

  	
   

  	
  Inver Grove

  
	
  061029

  	
   

  	
  Lyndale

  



 


7

















 


	
  061031

  	
   

  	
  Plymouth

  
	
  061032

  	
   

  	
  Austin

  
	
  061033

  	
   

  	
  S-Hutchinson

  
	
  061034

  	
   

  	
  Apple Valley

  
	
  061035

  	
   

  	
  S-Marshall

  
	
  061036

  	
   

  	
  Brookdale

  
	
  061037

  	
   

  	
  S-Willmar

  
	
  061038

  	
   

  	
  S-Buffalo

  
	
  061039

  	
   

  	
  Shakopee

  
	
  061043

  	
   

  	
  Marketplace

  
	
  061044

  	
   

  	
  Forest Lake

  
	
  061045

  	
   

  	
  S-Albert Lea

  
	
  061046

  	
   

  	
  Blaine

  
	
  061047

  	
   

  	
  S-Bemidji

  
	
  061048

  	
   

  	
  Baxter

  
	
  061049

  	
   

  	
  S-Northfield

  
	
  061050

  	
   

  	
  Cottage Grove

  
	
  061051

  	
   

  	
  S-Pokegama

  
	
  061052

  	
   

  	
  Block E

  
	
  061053

  	
   

  	
  U of M

  
	
  061054

  	
   

  	
  Red Wing

  
	
  061055

  	
   

  	
  Lakeville

  
	
  061056

  	
   

  	
  S-New Ulm

  
	
  061057

  	
   

  	
  Savage

  
	
  061058

  	
   

  	
  S-Cambridge

  
	
  061059

  	
   

  	
  Diamond Lake Rd.

  
	
  061061

  	
   

  	
  Rosemount

  



 


8

















 


	
  061062

  	
   

  	
  Fridley

  
	
  061063

  	
   

  	
  W. St. Paul

  
	
  061064

  	
   

  	
  Silver Lake

  
	
  061065

  	
   

  	
  Woodbury II

  
	
  061066

  	
   

  	
  Cloquet

  
	
  061067

  	
   

  	
  S-Delano

  
	
  061068

  	
   

  	
  Monticello

  
	
  061069

  	
   

  	
  Northtown

  
	
  063001

  	
   

  	
  Superior

  
	
  063002

  	
   

  	
  S-Menomonie

  
	
  063003

  	
   

  	
  Carmichael

  
	
  071001

  	
   

  	
  S-Rice Lake

  



 


Applebee’s
Restaurants, Inc.:


 


	
  Restaurant #

  	
   

  	
  Name

  
	
  061011

  	
   

  	
  Brooklyn Park

  



 


9
















 


EXHIBIT E


 


ASSIGNMENT AND ASSUMPTION OF ASSUMED CONTRACTS


(Excluding Real Property Leases)


 


ASSIGNMENT AND ASSUMPTION AGREEMENT


 


THIS ASSIGNMENT AND
ASSUMPTION AGREEMENT (this “Assignment and
Assumption”) is entered into as of
                                    ,
2010, by and between
                                        ,
a
                                          
(“Assignee”), 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”),
pursuant to that certain Asset Purchase Agreement (the “Purchase Agreement”) dated as of
                                  ,
2010, 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, pursuant to which Assignor
agreed to assign certain Assumed Contracts, as defined in the Purchase
Agreement, to Assignee.


 


Subject to closing under the
Purchase Agreement (“Closing”),
Assignor and Assignee hereby agree as follows:


 


Section 1.  Assignment.  Assignor does hereby assign, grant, transfer
and set over unto the Assignee all of Assignor’s rights, benefits, privileges,
causes of action and remedies arising from and after the Closing with respect
to those certain agreements listed in Exhibit A hereto (the “Agreements”), with such other rights,
causes of action and remedies as may arise by operation of law, in law or
equity, in connection with the Agreements following the Closing.  For purposes of clarification, the assignment
contemplated herein does not include rights to claims included in the
definition of Excluded Assets, as defined in the Purchase Agreement, and any
causes of action or remedies related thereto. 
Additionally, ARN and ARI shall be deemed Assignor only with respect to
Assets, as that term is defined in the Purchase Agreement, used in the
operation of the Restaurants owned by each respective entity as identified on Exhibit B
hereto.


 


Section 2.  Assumption.  Assignee hereby accepts the assignment in Section 1
hereof and, from and after the date hereof, will assume, perform, and discharge
all liabilities and obligations of Assignor under the Agreements that accrue
after the Closing.


 


Section 3.  No Amendment.  This Assignment and Assumption shall not
alter, modify or amend the terms of the Agreements in any respect, nor shall it
subject Assignee to any greater liabilities, obligations or duties in
connection therewith than would have been enforceable against Assignor.


 


Section 4.  Binding Effect.  This Assignment and Assumption shall be
binding upon and shall inure to the benefit of the parties thereto and their
respective successors and assigns.


 


Section 5.  Governing Law.  This Assignment and Assumption shall be
governed by and interpreted in accordance with the laws of the State of Kansas.


 


10

















 


The parties hereto have
executed this Assignment and Assumption as of the date first written above.


 


	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS
  NORTH LLC, a

  
	
   

  	
  Delaware limited liability
  company

  
	
   

  	
   

  
	
   

  	
  By: Applebee’s
  Services, Inc., as Servicer and

  
	
   

  	
  attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Philip R.
  Crimmins, Sr.

  
	
   

  	
  Its: Senior Vice
  President, Development

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS, INC., a

  
	
   

  	
  Kansas corporation

  
	
   

  	
   

  
	
   

  	
  By: Applebee’s
  Services, Inc., as Servicer and

  
	
   

  	
  attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Philip R.
  Crimmins, Sr.

  
	
   

  	
  Its: Senior Vice
  President, Development

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
                                           ,
  a                        

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  
				



 


11

















 


Exhibit A to Assignment and Assumption Agreement


 


List of Agreements


 


[Insert
Schedules 2A and 2B]


 


12

















 


Exhibit B to Assignment and Assumption Agreement


 


Restaurant Ownership


 


Applebee’s
Restaurants North LLC:


 


	
  Restaurant #

  	
   

  	
  Name

  
	
  061002

  	
   

  	
  Bloomington

  
	
  061003

  	
   

  	
  Ridgedale

  
	
  061004

  	
   

  	
  Burnsville

  
	
  061005

  	
   

  	
  New Hope

  
	
  061009

  	
   

  	
  Eden Prairie

  
	
  061012

  	
   

  	
  Woodbury

  
	
  061013

  	
   

  	
  Apache Mall

  
	
  061014

  	
   

  	
  Eagan

  
	
  061015

  	
   

  	
  Duluth

  
	
  061016

  	
   

  	
  Mankato

  
	
  061017

  	
   

  	
  Whitebear

  
	
  061018

  	
   

  	
  St. Cloud

  
	
  061019

  	
   

  	
  Coon Rapids

  
	
  061020

  	
   

  	
  Oak Park Heights

  
	
  061021

  	
   

  	
  Maple Grove

  
	
  061022

  	
   

  	
  Owatonna

  
	
  061023

  	
   

  	
  St. Louis Park

  
	
  061024

  	
   

  	
  Hastings

  
	
  061025

  	
   

  	
  Chanhassen

  
	
  061026

  	
   

  	
  Rosedale

  
	
  061027

  	
   

  	
  Elk River

  
	
  061028

  	
   

  	
  Inver Grove

  
	
  061029

  	
   

  	
  Lyndale

  



 


13

















 


	
  061031

  	
   

  	
  Plymouth

  
	
  061032

  	
   

  	
  Austin

  
	
  061033

  	
   

  	
  S-Hutchinson

  
	
  061034

  	
   

  	
  Apple Valley

  
	
  061035

  	
   

  	
  S-Marshall

  
	
  061036

  	
   

  	
  Brookdale

  
	
  061037

  	
   

  	
  S-Willmar

  
	
  061038

  	
   

  	
  S-Buffalo

  
	
  061039

  	
   

  	
  Shakopee

  
	
  061043

  	
   

  	
  Marketplace

  
	
  061044

  	
   

  	
  Forest Lake

  
	
  061045

  	
   

  	
  S-Albert Lea

  
	
  061046

  	
   

  	
  Blaine

  
	
  061047

  	
   

  	
  S-Bemidji

  
	
  061048

  	
   

  	
  Baxter

  
	
  061049

  	
   

  	
  S-Northfield

  
	
  061050

  	
   

  	
  Cottage Grove

  
	
  061051

  	
   

  	
  S-Pokegama

  
	
  061052

  	
   

  	
  Block E

  
	
  061053

  	
   

  	
  U of M

  
	
  061054

  	
   

  	
  Red Wing

  
	
  061055

  	
   

  	
  Lakeville

  
	
  061056

  	
   

  	
  S-New Ulm

  
	
  061057

  	
   

  	
  Savage

  
	
  061058

  	
   

  	
  S-Cambridge

  
	
  061059

  	
   

  	
  Diamond Lake Rd.

  
	
  061061

  	
   

  	
  Rosemount

  



 


14

















 


	
  061062

  	
   

  	
  Fridley

  
	
  061063

  	
   

  	
  W. St. Paul

  
	
  061064

  	
   

  	
  Silver Lake

  
	
  061065

  	
   

  	
  Woodbury II

  
	
  061066

  	
   

  	
  Cloquet

  
	
  061067

  	
   

  	
  S-Delano

  
	
  061068

  	
   

  	
  Monticello

  
	
  061069

  	
   

  	
  Northtown

  
	
  063001

  	
   

  	
  Superior

  
	
  063002

  	
   

  	
  S-Menomonie

  
	
  063003

  	
   

  	
  Carmichael

  
	
  071001

  	
   

  	
  S-Rice Lake

  



 


Applebee’s
Restaurants, Inc.:


 


	
  Restaurant #

  	
   

  	
  Name

  
	
  061011

  	
   

  	
  Brooklyn Park

  



 


15

















 


EXHIBIT F


 


BILL OF SALE


 


Applebee’s
Restaurants North LLC, a Delaware limited liability company (“ARN”), and Applebee’s Restaurants, Inc., a Kansas corporation (“ARI” and together with ARN, “Seller”), for good and valuable
consideration, receipt of which is hereby acknowledged, hereby sell, transfer,
assign, convey, and deliver to                                         ,
a
                                        
(“Buyer”), all of Seller’s right,
title, and interest in and to the FF&E, the Food and Beverage Inventory,
and the Miscellaneous Personal Property (collectively, the “Personal Property”), as such terms are
defined 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 Buyer, and Seller, dated as of
                                          ,
2010 (the “Asset Purchase Agreement”).  Notwithstanding the foregoing, for purposes
of this Bill of Sale, the term Food and Beverage Inventory will not include
Liquor Inventory except for the Liquor Inventory located in the Restaurants
listed on Schedule 1 attached hereto. [Note — any Restaurant that will
be operating under a liquor license in Buyer’s name at closing will be listed.]


 


Subject to the
representations and warranties of Seller set forth in the Asset Purchase
Agreement, the Personal Property is being sold in “AS-IS, WHERE-IS” condition.


 


This Bill of Sale will inure
to the benefit of the successors and assigns of Buyer and be binding upon the
successors and assigns of Seller.


 


To the extent there is a
conflict between the terms and provisions of this Bill of Sale and the Asset
Purchase Agreement, the terms and provisions of the Asset Purchase Agreement
will govern.


 


For purposes of
clarification, ARN and ARI shall be deemed Seller 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 2
hereto.


 


Effective as of
                                      ,
2010.


 

















 


	
   

  	
  APPLEBEE’S RESTAURANTS
  NORTH LLC, a

  
	
   

  	
  Delaware limited liability
  company

  
	
   

  	
   

  
	
   

  	
  By: Applebee’s
  Services, Inc., as Servicer and

  
	
   

  	
  attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Philip R.
  Crimmins, Sr.

  
	
   

  	
  Its: Senior Vice
  President, Development

  
	
   

  	
   

  
	
   

  	
  APPLEBEE’S
  RESTAURANTS, INC., a

  
	
   

  	
  Kansas corporation

  
	
   

  	
   

  
	
   

  	
  By: Applebee’s
  Services, Inc., as Servicer and

  
	
   

  	
  attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Philip R.
  Crimmins, Sr.

  
	
   

  	
  Its: Senior Vice
  President, Development

  



 

















 


Schedule 1


 


Restaurants Operating Under a Liquor License in Buyer’s
Name


 


[To be completed immediately prior to Closing.]


 
















 


Schedule 2


 


Restaurant Ownership


 


Applebee’s
Restaurants North LLC:


 


	
  Restaurant #

  	
   

  	
  Name

  
	
  061002

  	
   

  	
  Bloomington

  
	
  061003

  	
   

  	
  Ridgedale

  
	
  061004

  	
   

  	
  Burnsville

  
	
  061005

  	
   

  	
  New Hope

  
	
  061009

  	
   

  	
  Eden Prairie

  
	
  061012

  	
   

  	
  Woodbury

  
	
  061013

  	
   

  	
  Apache Mall

  
	
  061014

  	
   

  	
  Eagan

  
	
  061015

  	
   

  	
  Duluth

  
	
  061016

  	
   

  	
  Mankato

  
	
  061017

  	
   

  	
  Whitebear

  
	
  061018

  	
   

  	
  St. Cloud

  
	
  061019

  	
   

  	
  Coon Rapids

  
	
  061020

  	
   

  	
  Oak Park Heights

  
	
  061021

  	
   

  	
  Maple Grove

  
	
  061022

  	
   

  	
  Owatonna

  
	
  061023

  	
   

  	
  St. Louis Park

  
	
  061024

  	
   

  	
  Hastings

  
	
  061025

  	
   

  	
  Chanhassen

  
	
  061026

  	
   

  	
  Rosedale

  
	
  061027

  	
   

  	
  Elk River

  
	
  061028

  	
   

  	
  Inver Grove

  
	
  061029

  	
   

  	
  Lyndale

  



 

















 


	
  061031

  	
   

  	
  Plymouth

  
	
  061032

  	
   

  	
  Austin

  
	
  061033

  	
   

  	
  S-Hutchinson

  
	
  061034

  	
   

  	
  Apple Valley

  
	
  061035

  	
   

  	
  S-Marshall

  
	
  061036

  	
   

  	
  Brookdale

  
	
  061037

  	
   

  	
  S-Willmar

  
	
  061038

  	
   

  	
  S-Buffalo

  
	
  061039

  	
   

  	
  Shakopee

  
	
  061043

  	
   

  	
  Marketplace

  
	
  061044

  	
   

  	
  Forest Lake

  
	
  061045

  	
   

  	
  S-Albert Lea

  
	
  061046

  	
   

  	
  Blaine

  
	
  061047

  	
   

  	
  S-Bemidji

  
	
  061048

  	
   

  	
  Baxter

  
	
  061049

  	
   

  	
  S-Northfield

  
	
  061050

  	
   

  	
  Cottage Grove

  
	
  061051

  	
   

  	
  S-Pokegama

  
	
  061052

  	
   

  	
  Block E

  
	
  061053

  	
   

  	
  U of M

  
	
  061054

  	
   

  	
  Red Wing

  
	
  061055

  	
   

  	
  Lakeville

  
	
  061056

  	
   

  	
  S-New Ulm

  
	
  061057

  	
   

  	
  Savage

  
	
  061058

  	
   

  	
  S-Cambridge

  
	
  061059

  	
   

  	
  Diamond Lake Rd.

  
	
  061061

  	
   

  	
  Rosemount

  
	
  061062

  	
   

  	
  Fridley

  



 

















 


	
  061063

  	
   

  	
  W. St. Paul

  
	
  061064

  	
   

  	
  Silver Lake

  
	
  061065

  	
   

  	
  Woodbury II

  
	
  061066

  	
   

  	
  Cloquet

  
	
  061067

  	
   

  	
  S-Delano

  
	
  061068

  	
   

  	
  Monticello

  
	
  061069

  	
   

  	
  Northtown

  
	
  063001

  	
   

  	
  Superior

  
	
  063002

  	
   

  	
  S-Menomonie

  
	
  063003

  	
   

  	
  Carmichael

  
	
  071001

  	
   

  	
  S-Rice Lake

  



 


Applebee’s
Restaurants, Inc.:


 


	
  Restaurant #

  	
   

  	
  Name

  
	
  061011

  	
   

  	
  Brooklyn Park

  



 

















 


EXHIBIT G


 


LEASE ASSIGNMENT AND ASSUMPTION AGREEMENT


 


LEASE ASSIGNMENT AND ASSUMPTION AGREEMENT


 


THIS LEASE ASSIGNMENT AND
ASSUMPTION AGREEMENT (this “Agreement”)
is made by and among [APPLEBEE’S RESTAURANTS
NORTH LLC, a Delaware limited liability company] [APPLEBEE’S RESTAURANTS INC., a Kansas corporation] (“Assignor”), and APPLE
                    ,
LLC, a Delaware limited liability company (“Assignee”)
as of this
             day of
                      ,
2010, with an “Effective Date” as set forth below.


 


W I T N E S S E T H:


 


WHEREAS, Assignor is
the tenant under those certain lease agreements described on Schedule I
attached hereto and incorporated by reference herein (collectively, as amended,
modified and/or assigned from time to time, the “Leases”)
regarding the premises identified on Schedule I (the “Premises”); and


 


WHEREAS, Assignor
desires to assign its interest in the Leases to Assignee, and Assignee desires
to accept such assignment and to assume and agree to perform and fulfill all of
the terms, obligations and conditions imposed on Assignor by the Leases,
subject to the terms hereof.


 


NOW, THEREFORE, in
consideration of the mutual promises hereinafter contained and for other good
and valuable consideration, receipt of which is hereby acknowledged, the
parties agree as follows:


 


1.             Assignment
and Term.  Assignor hereby assigns,
transfers and conveys to Assignee all of Assignor’s rights, title, and interest
in and to the Leases and the Premises as of the Effective Date (defined below),
for the balance of the respective term (including any extensions and renewals
thereof) of the Leases, including but not limited to all rights related to
options to purchase and options to terminate, renew or extend the term.


 


2.             Possession
and Effective Date.  Assignee shall
take possession of the Premises and this Agreement shall be and become
effective as of
                          
      , 2010 (the “Effective
Date”).


 


3.             Assumption.  Assignee hereby accepts said assignment,
transfer and conveyance and assumes all obligations of Assignor under the
Leases arising on or after the Effective Date of this Agreement, including but
not limited to payment of all rent and other sums due by Assignor under the
Leases and performance of all obligations, duties and responsibilities of
Assignor under the Leases.  Assignee
hereby covenants and agrees for the benefit of Assignor and each landlord under
the Leases that Assignee will keep, perform and be bound by all of the terms,
covenants and conditions required to be performed by Assignor under the Leases
from and after the Effective Date.


 

















 


4.             Notices.  Assignee covenants and agrees to notify each
landlord that the tenant’s notice address under the lease shall include a
duplicate copy to Assignor unless and until the Assignor has been released from
liability under such Lease.  All notices
to either party shall be deemed given when sent by hand delivery, certified
mail (return receipt requested), or overnight delivery service, confirmed, to
the appropriate party at the addresses set forth below, or to such other
address as may be designated in writing, from time to time, by the party.


 


5.             Governing
Law.  As to each Lease set forth on
Schedule I, this Agreement shall be governed by and construed in accordance
with the laws of the State which is the applicable governing law pursuant to
the terms of such Lease, without giving any effect to choice of law rules thereof.


 


6.             Binding
on Successors and Assigns.  This
Agreement shall be binding upon, and shall inure to the benefit of, the
respective successors and assigns of the parties hereto, subject to all
restrictions contained in the Leases with respect to assignment, subletting or other
transfer.


 


7.             Entire
Agreement; No Amendments.  The
agreements contained herein constitute the entire understanding between the
parties with respect to the subject matter hereof.  No amendment or modification of this Agreement
will be effective unless in writing, executed by all of the parties hereto.


 


8.             Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed
to be an original and all of which counterparts taken together shall constitute
but one and the same instrument.


 


[Signatures on Following Page]


 

















 


IN WITNESS WHEREOF, the parties
have executed this Agreement as of the date first above written, effective as
of the Effective Date.


 


 


	
   

  	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  	
   

  
	
  [WITNESS OR ATTEST:

  	
   

  	
  APPLEBEE’S
  RESTAURANTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title: 

  	
   

  	
  ]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [APPLEBEE’S RESTAURANTS NORTH
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  ]

  



 


Address for Notices to
Assignor:


 


c/o Applebee’s
Services, Inc.


11201 Renner Boulevard


Lenexa, Kansas 66219


Attention:
                                



 

















 


	
  Address for Notices to
  Assignee:

  	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLE
                        ,
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  Attention: 
                                

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 

















 


SCHEDULE
I


 


Leases
and Premises


 

















 


LEASE ASSIGNMENT AND ASSUMPTION AGREEMENT


 


                      ,
      
(#            )


 


THIS LEASE ASSIGNMENT AND
ASSUMPTION AGREEMENT (this “Agreement”)
is made by and among APPLEBEE’S RESTAURANTS
TEXAS LLC, a Texas limited liability company, APPLEBEE’S
RESTAURANTS KANSAS LLC, a Kansas limited liability company, APPLEBEE’S RESTAURANTS MID-ATLANTIC LLC, a Delaware limited
liability company, APPLEBEE’S RESTAURANTS
NORTH LLC, a Delaware limited liability company, and APPLEBEE’S RESTAURANTS WEST LLC, a Delaware limited
liability company,  (collectively, “Assignor”), and APPLE
                    ,
LLC, a Delaware limited liability company (“Assignee”)
as of this
             day of
                      ,
2010, with an “Effective Date” as set forth below.


 


W I T N E S S E T H:


 


WHEREAS, Assignor is
the tenant under that certain lease agreement described on Schedule I
attached hereto and incorporated by reference herein (as amended, modified
and/or assigned from time to time, the “Lease”)
regarding the premises identified on Schedule I (the “Premises”); and


 


WHEREAS, Assignor
desires to assign its interest in the Lease to Assignee, and Assignee desires
to accept such assignment and to assume and agree to perform and fulfill all of
the terms, obligations and conditions imposed on Assignor by the Lease, subject
to the terms hereof.


 


NOW, THEREFORE, in
consideration of the mutual promises hereinafter contained and for other good
and valuable consideration, receipt of which is hereby acknowledged, the
parties agree as follows:


 


1.             Assignment and Term.  Assignor hereby assigns, transfers and
conveys to Assignee all of Assignor’s rights, title, and interest in and to the
Lease and the Premises as of the Effective Date (defined below), for the
balance of the term (including any extensions and renewals thereof) of the
Lease, including but not limited to all rights related to options to purchase
and options to terminate, renew or extend the term.


 


2.             Possession and Effective Date.  Assignee shall take possession of the
Premises and this Agreement shall be and become effective as of
                          
      , 2010 (the “Effective
Date”).


 


3.             Assumption; Use of the Premises.  Assignee hereby accepts said assignment,
transfer and conveyance and assumes all obligations of Assignor under the Lease
arising on or after the Effective Date of this Agreement, including but not
limited to payment of all rent and other sums due by Assignor under the Lease
and performance of all obligations, duties and responsibilities of Assignor
under the Lease.  Assignee hereby
covenants and agrees for the benefit of Assignor and landlord under the Lease
that Assignee will keep, perform and be bound by all of the terms, covenants
and conditions required to be performed by Assignor under the Lease from and
after the Effective Date.  Assignee
agrees that it will use the Premises for a “Permitted Use” under the terms of
the Lease.


 

















 


4.             Notices.  Assignee covenants and agrees to notify landlord
that the tenant’s notice address under the lease shall include a duplicate copy
to Assignor unless and until the Assignor has been released from liability
under such lease.  All notices to either
party shall be deemed given when sent by hand delivery, certified mail (return
receipt requested), or overnight delivery service, confirmed, to the
appropriate party at the addresses set forth below, or to such other address as
may be designated in writing, from time to time, by the party.


 


5.             Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State which is the governing law
pursuant to the terms of the Lease, without giving any effect to choice of law
rules thereof.


 


6.             Binding on Successors and
Assigns.  This Agreement shall be
binding upon, and shall inure to the benefit of, the respective successors and
assigns of the parties hereto, subject to all restrictions contained in the
Lease with respect to assignment, subletting or other transfer.


 


7.             Entire Agreement; No Amendments.  The agreements contained herein constitute
the entire understanding between the parties with respect to the subject matter
hereof.  No amendment or modification of
this Agreement will be effective unless in writing, executed by all of the
parties hereto.


 


8.             Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed
to be an original and all of which counterparts taken together shall constitute
but one and the same instrument.


 


[Signatures on Following Page]


 
















 


IN WITNESS WHEREOF, the parties
have executed this Agreement as of the date first above written, effective as
of the Effective Date.


 


 


	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS TEXAS
  LLC

  
	
  Address for Notices to
  Assignor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  c/o Applebee’s
  Services, Inc.

  	
   

  	
   

  
	
  11201 Renner Boulevard

  	
  By:

  	
   

  
	
  Lenexa, Kansas 66219

  	
  Name:

  	
   

  
	
  Attention:
                                  

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS NORTH
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS WEST LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  APPLEBEE’S ENTERPRISES
  LLC,

  
	
   

  	
   

  	
  Its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


	
   

  	
  APPLEBEE’S RESTAURANTS
  MID-ATLANTIC LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPLEBEE’S RESTAURANTS KANSAS
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
  Address for Notices to
  Assignee:

  	
  APPLE
                        ,
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
  Attention:

  	
   

  	
   

  



 

















 


SCHEDULE
I


 


Lease
and Premises


 

















 


EXHIBIT H


 


ESCROW AGREEMENT


 


THIS
ESCROW AGREEMENT (this “Agreement”),
dated as of July 23, 2010, is made 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 Chicago
Title Insurance Company (“Escrow
Agent”).


 


A.                                    Seller and Buyer have entered into that certain Asset Purchase
Agreement dated July 23, 2010 (the “Underlying Agreement”).  Capitalized terms used in this Agreement
without definition shall have the respective meanings given to them in the
Underlying Agreement.


 


B.                                    The parties wish to enter into this Escrow Agreement pursuant to Section 3.2(a) of the
Underlying Agreement to provide for the holding, safeguarding and disbursement
of the Escrowed Funds.


 


NOW,
THEREFORE, for good and valuable consideration the receipt of which is mutually
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:


 


1.                                      ESTABLISHMENT OF ESCROW FUND


 


(a)         Concurrently
with the execution and delivery of the Underlying Agreement by Seller and
Buyer, Buyer shall deposit with Escrow Agent an amount equal to three hundred
fifty thousand dollars ($350,000) in immediately available funds (as increased
by any earnings thereon and as reduced by any disbursements, amounts withdrawn
under Section 5(j) herein, or
losses on investments, the “Escrow Fund”).


 


(b)         Escrow
Agent hereby agrees to act as escrow agent and to hold, safeguard and disburse
the Escrow Fund pursuant to the terms and conditions of this Agreement.


 


2.                                      INVESTMENT OF FUNDS


 


Except
as Buyer and Seller may from time to time jointly instruct Escrow Agent in
writing, the Escrow Fund shall be invested in an interest bearing money market
deposit account with Escrow Agent until disbursement of the entire Escrow
Fund.  Interest shall be added to the
Escrow Fund.  Escrow Agent is authorized
to liquidate in accordance with its customary procedures any portion of the
Escrow Fund consisting of investments necessary to provide for payments
required to be made under this Agreement.


 


3.                                      CLAIMS/DISBURSEMENTS OF FUNDS


 


(a)                                 Escrow Agent shall disburse the Escrow Fund only in accordance
with (i) joint written instructions from Seller (or its counsel) and Buyer
(or its counsel); or (ii) a non-appealable order of a court of competent
jurisdiction. Any court order shall be accompanied by an opinion of counsel for
the presenting party to the effect that the order is final and non-


 

















 


appealable.


 


(b)                                 Upon Escrow Agent’s receipt of joint, written instructions from
Buyer and Seller, Escrow Agent will take one of the following actions as
specified in the instructions:


 


(i)                                     disburse the Escrow Fund to Seller as partial payment of the
Purchase Price;


 


(ii)                                  disburse the escrow Fund to Seller upon termination of the
Underlying Agreement; or


 


(iiii)                            disburse the Escrow Fund to Buyer upon termination of the
Underlying Agreement.


 


4.                                      TERMINATION OF ESCROW


 


This
Agreement will terminate upon disbursement of the Escrow Fund in accordance
with Section 3 above.


 


5.                                      DUTIES OF ESCROW AGENT


 


(a)                                 Escrow Agent shall not be under any duty to give the Escrow Fund
held by it hereunder any greater degree of care than it gives its own similar
property and shall not be required to invest any funds held hereunder except as
directed in this Agreement.  Uninvested
funds held hereunder shall not earn or accrue interest.


 


(b)                                 Escrow Agent will disburse the Escrow Fund to the applicable party
within two (2) business days (or such later date as specified by Buyer
and/or Seller, as applicable) after its obligation to pay the Escrow Fund has
been established pursuant to Section 3
herein; provided, however, that if the instructions for disbursement are
received by the Escrow Agent after 12:00 pm Central time, Escrow Agent will
disburse the Escrow Fund to the applicable party within three (3) business
days (or such later date as specified by Buyer and/or Seller, as applicable)
after receipt of such instructions. 
Payment will be made by wire transfer pursuant to instructions set forth
in the joint written instructions or provided to the Escrow Agent pursuant to Section 3 or as otherwise
directed by the Seller and/or Buyer.


 


(c)                                  Escrow Agent shall not be liable for actions or omissions
hereunder, except for its own gross negligence or willful misconduct and,
except with respect to claims based upon such gross negligence or willful
misconduct that are successfully asserted against Escrow Agent, the other
parties hereto shall jointly and severally indemnify and hold harmless Escrow
Agent (and any successor Escrow Agent) from and against any and all losses,
liabilities, claims, actions, damages and expenses, including reasonable
attorneys’ fees and disbursements, arising out of and in connection with this
Agreement.  Without limiting the
foregoing, Escrow Agent shall in no event be liable in connection with its
investment or reinvestment of any cash held by it hereunder in good faith, in
accordance with the terms hereof, including, without limitation, any liability
for any delays (not resulting from its gross negligence or willful misconduct)
in the investment or reinvestment of the Escrow Fund or any loss of interest
incident to any such delays.


 

















 


(d)                                 Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof.  Escrow Agent may act in
reliance upon any instrument or signature believed by it to be genuine and may
assume that the person purporting to give receipt or advice or make any
statement or execute any document in connection with the provisions hereof has
been duly authorized to do so.  Escrow Agent
may conclusively presume that the undersigned representative of any party
hereto which is an entity other than a natural person has full power and
authority to instruct Escrow Agent on behalf of that party unless written
notice to the contrary is delivered to Escrow Agent.


 


(e)                                  Escrow Agent may act pursuant to the advice of counsel with
respect to any matter relating to this Agreement and shall not be liable for
any action taken or omitted by it in good faith in accordance with such advice.


 


(f)                                   Escrow Agent does not have any interest in the Escrow Fund
deposited hereunder but is serving as escrow holder only and has only
possession thereof.  Any payments of
income from the Escrow Fund shall be subject to withholding regulations then in
force with respect to United States taxes. 
The parties hereto will provide Escrow Agent with appropriate Internal
Revenue Service Forms W-9 for tax identification number certification, or
nonresident alien certifications.  This Section 5(f) and
Section 5(c) shall
survive notwithstanding any termination of this Agreement or the resignation of
Escrow Agent.


 


(g)                                  Escrow Agent makes no representation as to the validity, value,
genuineness or collectability of any security or other document or instrument
held by or delivered to it.


 


(h)                                 Escrow Agent shall not be called upon to advise any party as to
the wisdom in selling or retaining or taking or refraining from any action with
respect to any securities or other property deposited hereunder.


 


(i)                                     Escrow Agent (and any successor Escrow Agent) may at any time
resign as such by delivering the Escrow Fund to any successor Escrow Agent
jointly designated by the other parties hereto in writing, or to any court of
competent jurisdiction, whereupon Escrow Agent shall be discharged of and from
any and all further obligations arising in connection with this Agreement.  The resignation of Escrow Agent will take
effect on the earlier of (i) the appointment of a successor (including a
court of competent jurisdiction) or (ii) the day which is thirty (30) days
after the date of delivery of its written notice of resignation to the other
parties hereto.  If, at that time, Escrow
Agent has not received a designation of a successor Escrow Agent, Escrow Agent’s
sole responsibility after that time shall be to retain and safeguard the Escrow
Fund until receipt of (i) a designation of successor Escrow Agent, (ii) joint
written instructions by the other parties hereto, or (iii) a final,
nonappealable order of a court of competent jurisdiction.


 


(j)                                    Buyer and Seller agree to reimburse Escrow Agent for all
reasonable expenses, disbursements and advances incurred or made by Escrow
Agent in performance of its duties hereunder (including reasonable fees,
expenses and disbursements of its counsel). 
Any such compensation and reimbursement to which Escrow Agent is
entitled shall be borne fifty percent 


 

















 


(50%)
by Buyer and fifty percent (50%) by Seller. 
Any fees or expenses of Escrow Agent or its counsel that are not paid as
provided for herein may be taken from any property held by Escrow Agent hereunder.


 


(k)                                 No printed or other matter in any language (including, without
limitation, prospectuses, notices, reports and promotional material) that
mentions Escrow Agent’s name or the rights, powers or duties of Escrow Agent
shall be issued by the other parties hereto or on such parties’ behalf unless
Escrow Agent shall first have given its specific written consent thereto.


 


(l)                                     The other parties hereto authorize Escrow Agent, for any
securities held hereunder, to use the services of any United States central
securities depository it reasonably deems appropriate, including, without
limitation, the Depository Trust Company and the Federal Reserve Book Entry
System.


 


6.                                      LIMITED RESPONSIBILITY


 


This
Agreement expressly sets forth all the duties of Escrow Agent with respect to
any and all matters pertinent hereto.  No
implied duties or obligations shall be read into this Agreement against Escrow
Agent.  Escrow Agent shall not be bound by
the provisions of any agreement among the other parties hereto except this Agreement.


 


7.                                      OWNERSHIP FOR TAX PURPOSES


 


Buyer
agrees that, for purposes of federal and other taxes based on income, Buyer
will be treated as the owner of the Escrow Fund and that Buyer will report all
income, if any, that is earned on, or derived from, the Escrow Fund as its
income in the taxable year or years in which such income is properly includible
and pay any taxes attributable thereto. 
However, if Seller is the recipient of the Escrow Fund, to the extent any
income is earned on, or derived from, the Escrow Fund, Seller shall be treated
as the owner of such income.


 


8.                                      NOTICES


 


All
notices, consents, waivers and other communications required or permitted under
this Agreement shall be in writing and shall be deemed given to a party when (a) delivered
to the appropriate address by hand or by a nationally recognized overnight
courier service (costs prepaid); (b) sent by facsimile or e-mail (with
confirmation by the transmitting equipment); or (c) received by the
addressee, if sent by certified mail, return receipt requested, in each case to
the following addresses and facsimile numbers and marked to the attention of
the person (by name or title) designated below (or to such other address,
facsimile number or person as a party may designate by notice to the other
parties):


 


Seller:


Applebee’s
Restaurants North LLC


Applebee’s
Restaurants, Inc.


c/o
Applebee’s Services, Inc.


Attention:
Vice President, Brand Counsel


Facsimile
No.: (913) 890-9100


E-Mail
address: Rebecca.Tilden@applebees.com


 

















 


with a mandatory copy to: Seigfreid,
Bingham, Levy, Selzer & Gee, P.C.


Attention:
Lance Formwalt


Facsimile
No.: (816) 474-3447


E-Mail
address: lancef@sblsg.com


 


Buyer:


Apple
American Group LLC


Attention:
Gregory G. Flynn


Facsimile
No.: (415) 835-0223


E-Mail
address: gflynn@flynnholdings.com


 


with
a mandatory copy to: Davis Wright Tremaine LLP


Attention: Sarah Tune


Facsimile No.: (206) 757-7100


E-Mail
address: SarahTune@dwt.com


 


Escrow
Agent:


Chicago
Title Insurance Company


Attention:
Tammy Hartmann


Facsimile
No.: (612) 339-6743


Address:                 222
S. 9th Street, #3060


Minneapolis, MN 55402


 


with
a mandatory copy to: Chicago Title Insurance Company


Attention:
Fran Iverson


Facsimile
No.: (952) 826-3050


Address:                 7701
France Ave, #120


Edina, MN 55435


 


9.                                      JURISDICTION; SERVICE OF PROCESS


 


Any
proceeding arising out of or relating to this Agreement may be brought in the
courts of the State of Kansas, County of Johnson, or, if it has or can acquire
jurisdiction, in the United States District Court serving such Johnson County,
and each of the parties irrevocably submits to the exclusive jurisdiction of
each such court in any such proceeding and waives any objection it may now or
hereafter have to venue or to convenience of forum, agrees that all claims in
respect of the proceeding shall be heard and determined only in any such court
and agrees not to bring any proceeding arising out of or relating to this
Agreement in any other court.  Process in
any proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.


 


10.                               EXECUTION OF AGREEMENT


 


This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.  The exchange of copies of this Agreement and
of signature pages by facsimile or email transmission shall constitute
effective execution and 


 

















 


delivery
of this Agreement as to the parties and may be used in lieu of the original
Agreement for all purposes.  Signatures
of the parties transmitted by facsimile or email shall be deemed to be their
original signatures for any purposes whatsoever.


 


11.                               SECTION HEADINGS, CONSTRUCTION


 


The
headings of sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation.


 


12.                               WAIVER


 


The
rights and remedies of the parties to this Agreement are cumulative and not
alternative.  Neither the failure nor any
delay by any party in exercising any right, power or privilege under this
Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power or privilege, and no single or partial exercise of
any such right, power or privilege will preclude any other or further exercise
of such right, power or privilege or the exercise of any other right, power or
privilege.  To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be discharged by
one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may
be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be
deemed to be a waiver of any obligation of such party or of the right of the
party giving such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred to in this
Agreement.


 


13.                               ENTIRE AGREEMENT AND MODIFICATION


 


This
Agreement supersedes all prior agreements among the parties with respect to its
subject matter and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter.  This Agreement may not be amended except by
written agreement executed by Buyer, Seller and Escrow Agent.


 


14.                               SUCCESSORS AND ASSIGNS


 


This
Agreement will be binding on the successors and permitted assigns of Buyer and
Seller as permitted under the Underlying Agreement.


 


15.                               GOVERNING LAW


 


This
Agreement shall be governed by the laws of the State of Kansas without regard
to conflicts of law principles that would require the application of any other
Law.


 


[Signature page follows]


 

















 


IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first written above.


 


 


	
  SELLER:

  	
   

  	
  BUYER:

  
	
   

  	
   

  	
   

  
	
  Applebee’s Restaurants North LLC,

  	
   

  	
  Apple American Group LLC,

  
	
  A Delaware limited liability company

  	
   

  	
  A
  Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
  By: Applebee’s Services, Inc.,

  	
   

  	
   

  
	
  as Servicer and attorney-in-fact

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Applebee’s Restaurants, Inc.,

  	
   

  	
   

  
	
  A Kansas corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: Applebee’s Services, Inc.,

  	
   

  	
   

  
	
  as Servicer and attorney-in-fact

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ESCROW AGENT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Chicago Title Insurance Company

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  



 






 












 


EXHIBIT I


 


ESTOPPEL CERTIFICATE


 


To:                             [Name
of Assignee]


Apple American Group LLC and
its affiliates (collectively, the “Companies”)


Bank of America, N.A., as
Agent


 


Re:                             Applebee’s
Restaurant at                                           
[insert address]  (the
“Premises”) and that certain Lease dated
                          
between                                 
(“Tenant”) and
                      
[insert description of chain of title if Landlord’s
interest has been assigned since the Lease was signed] (as amended
and assigned from time to time by the documents listed on Schedule A
attached hereto, the “Lease”)


 


We understand that Tenant has entered into an agreement with [Name of Assignee] (“Assignee”) to
sell the location described above and to assign its interest in the Lease to
Assignee (the “Transfer”) and that Bank of
America, N.A. or another lender (as agent for itself and certain lenders, “Lender”) has or will make a loan to the Assignee and certain
of its affiliates which will in part be secured by an assignment of Assignee’s
rights under the Lease.  The undersigned
(“Landlord”) in its capacity as landlord
under the Lease hereby certifies to the Companies and to Lender and each of
their affiliates, successors and assigns, the following:


 


1.                                      The Lease is in
full force and effect and has not been modified, amended or assigned except as
described on Schedule A and if modifications are listed, the Lease, as
so modified, is in full force and effect; and all conditions to the
commencement of the term of the Lease have been satisfied except:
                                                                                                
(Note: If this space is left blank, the word “None”
shall be deemed to have been inserted.). 
The Lease constitutes the entire agreement between Landlord and Tenant
with respect to the Premises and there are no oral or other agreements between
Tenant and Landlord affecting or related to the Lease or the Premises.


 


2.                                      The initial
term of the Lease commenced on
                              
and will expire on
                                
and following the Transfer, Assignee will have the right to exercise the
remaining
            
(      ) options to extend the term of the Lease
for             
(    ) years each;


 


3.                                      Rent has been
paid through
                        ,
2010, and the following schedule correctly sets forth the amount of Rent and
the dates of any future rental increases:


 


[Insert schedule with amounts of
rent and dates of rent increases]


 


4.                                      SELECT
APPLICABLE ALTERNATE: 
Landlord does not hold a security deposit under the Lease.  [OR] Landlord
holds a security deposit in the amount of
                                
($            ) and
no portion of the deposit has been applied prior to the date hereof.


 


5.                                      Landlord has
received no notice from any insurance company or any other party of any 


 

















 


defects
or inadequacies of the Premises nor any written notice that the Premises is in
violation of any applicable law or encumbrance.


 


6.                                      No default has
occurred under the Lease, nor are there any events or conditions (including the
Transfer), which, by the passage of time or giving of notice or both, would
constitute a default thereunder by Tenant, except:                     


(Note:
If this space is left blank, the word “None” shall be
deemed to have been inserted) and Landlord does not assert, and is not aware
of, any claim against Tenant or any defense to the enforcement of the Lease by
Tenant.


 


7.                                      Landlord has
not received any written notice of any pending eminent domain proceedings or
other governmental or judicial actions that could adversely affect the
Premises.


 


8.                                      The undersigned
Landlord is the current record owner of the Premises and has not sold, assigned
or conveyed any interest in the Premises (other than the granting of a mortgage
lien to the lender of record, if any) or in the Lease to any other person or
party and Landlord’s address for notices under the Lease is as set forth below
its signature.


 


The
representations and agreements herein contained shall be binding upon Landlord
and its affiliates, successors and assigns and shall inure to the benefit of
the Companies, Lender and each of their successors and assigns.  Landlord executes this certificate knowing that
the truth of this certificate will be relied by the Companies and Lender.


 


Dated:        , 2010.


 


	
   

  	
  [INSERT LANDLORD NAME]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices
  to Landlord:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 

















 


Schedule
A to Estoppel Certificate


 


List
of Lease Documents


 

















 


EXHIBIT J


 


INTERIM MANAGEMENT AGREEMENT


 


INTERIM
BEVERAGE MANAGEMENT AGREEMENT


 


THIS
INTERIM BEVERAGE MANAGEMENT AGREEMENT (this “Agreement”) is made and entered
into as of the          day of
                      ,
2010, by and between                             ,
a
                        
[Insert name of applicable Seller] (“Licensee”), and
                              ,
a                               
Corporation [Insert name of Buyer] (“Management Company”).


 


WITNESSETH:


 


WHEREAS,
Licensee is the holder of various state and/or local liquor licenses
(collectively, the “Licenses”)
necessary to sell alcoholic beverages at the Applebee’s Neighborhood Grill &
Bar restaurants described in Exhibit A attached hereto (each referred to
herein as a “Restaurant”); and


 


WHEREAS,
Management Company shall provide management services to Licensee during the
term of this Agreement; and


 


WHEREAS,
Licensee desires that Management Company provide, to Licensee and on its
behalf, certain services with respect to operating the Restaurants, including alcoholic
beverage sales and service within the Restaurants under the Licenses (“Beverage Operations”); and


 


WHEREAS,
the parties to this Agreement desire to cooperate in making certain that the
management of the Restaurants continues in a professional and orderly fashion
during the transition and acquisition of state and/or local liquor licenses
necessary to conduct the Beverage Operations at the Restaurants by Management
Company and/or its designee in its own name, such licenses to be acquired by
Management Company and/or its designee shall hereinafter be referred to as the “New Licenses”;


 


NOW
THEREFORE, in consideration of the mutual promises and covenants herein
contained, Licensee and Management Company agree as follows:


 


ARTICLE I


ROLE
OF MANAGEMENT COMPANY


 


1.1                                Appointment.  Licensee hereby appoints Management Company,
and Management Company hereby accepts the appointment, as the sole and
exclusive interim manager of the Beverage Operations at the Restaurants.


 


1.2                               Inventory and
Supplies.  Management Company,
at its expense, shall provide or arrange for during the Term (as defined below)
hereof all operating equipment and supplies (including glassware and other
supplies, “Operating Supplies”) and an
inventory of beer, wine and liquor (the “Liquor Inventory”)
necessary for Management Company to manage the Beverage Operations at each
Restaurant in a manner consistent with its obligations under the applicable
franchise agreement between Management Company and Applebee’s Franchising LLC
(the “Franchise Agreement”).  Management Company shall have the right to
use the Operating Supplies and Liquor Inventory in the conduct of providing its
services under this Agreement, in its discretion. Management Company shall bear
all risk of loss with respect to Operating Supplies and the Liquor
Inventory.  Management Company will
purchase 


 

















 


the Liquor Inventory with
its own funds, but is authorized to use Licensee’s account number in connection
with the ordering and purchase of the Liquor Inventory.  Licensee will retain title to the Liquor
Inventory during the Term.  At the end of
the Term with respect to a Restaurant, Licensee will execute a Bill of Sale in
the form attached as Exhibit A
to convey the Liquor Inventory to Management Company for nominal consideration.


 


1.3                               Fixtures and
Equipment; Maintenance; Surrender.  Management Company shall own all fixtures,
equipment, furnishings, furniture and any other asset necessary for managing
the Restaurants.


 


1.4                               Pursuit of New
Licenses.  Management
Company agrees to use its commercially reasonable efforts to obtain the New
Licenses in an expeditious manner.


 


1.5                               Term. Unless
terminated sooner under another provision of this Agreement, the term of this
Agreement (the “Term”) shall commence on the date
hereof and terminate immediately upon the earlier of (a) the date on which
the applicable licensing authority approves the issuance of the New Licenses
for all of the Restaurants to Management Company and/or its designee, or (b) three-hundred
sixty-five (365) days after the date hereof. The Term may be extended for
additional periods of thirty (30) days each upon written consent of Licensee,
which consent shall not be unreasonably withheld provided that Management
Company and/or its designee has filed and is diligently pursuing its/their
license applications for the New Licenses. 
Management Company agrees to notify Licensee of the name, address,
telephone number and appropriate contact person of any such designee.  Notwithstanding anything to the contrary
herein, the Term of this Agreement will be deemed to terminate with respect to
a Restaurant upon the issuance of the New Licenses to Management Company or its
designee necessary to conduct the Beverage Operations in the name of Management
Company or its designee at the Restaurant.


 


ARTICLE 2


REVENUE
AND EXPENSES


 


2.1                                 Revenues and
Expenses.  All gross
revenue and receipts derived from the conduct of the Beverage Operations at the
Restaurant(s) (the “Gross Revenues and
Receipts”) are the exclusive property of Licensee, however during
the Term hereof, Management Company shall collect and retain the Gross Revenues
and Receipts to pay expenses under Section 2.2 and Management Company’s
management fee, which shall be equal to the Gross Revenues and Receipts minus
the expenses under Section 2.2.


 


2.2                               Licensee
Expenses.  Licensee
shall not be responsible for any expenses arising from or relating to the
operation of the Restaurants from and after the date hereof.  Management Company shall, as a part of its
services, timely pay all expenses incurred in operating the Restaurants and may
apply the Gross Revenues and Receipts to pay all such expenses.  Notwithstanding anything to the contrary
contained herein, Management Company will only be entitled to a management fee
to the extent any Gross Revenues and Receipts are left over after payment of
the expenses described in this Section 2.2 and Management Company agrees
that it will have no recourse against Licensee or any of the funds of Licensee
to pay a management fee.


 

















 


ARTICLE 3


OPERATIONS


 


3. 1                             Authority and
Duties.


 


(a)                                    Management
Company will, on behalf of Licensee, perform or cause to be performed, all
duties required or desirable in the management and conduct of the Beverage
Operations at the Restaurants to maintain the Restaurants in compliance with
all applicable laws and regulations, which duties shall include, but not be
limited to, the employment, at Management Company’s expense, of a sufficient
number of adequately trained staff. 
Licensee grants Management Company the authority, subject to the terms
herein, to make all purchases necessary for the operation of the Restaurants,
except that all liquor, wine and beer purchases must and shall be made under
Licensee’s Licenses.


 


(b)                                    During the Term
of this Agreement, Management Company agrees that Licensee shall have the right
to supervise all activities of Management Company with respect to the conduct
of the Beverage Operations at the Restaurants.


 


(c)                                     Management
Company agrees that the operation of the Restaurants shall be in a lawful manner
in compliance with all applicable laws and regulations.


 


3.2                                Employees.  Management Company shall arrange for the
employment, direction, control and discharge, as the case may be and in each
case, in its own name, of all personnel employed in the operation of the
Restaurants. Management Company will not knowingly employ or arrange for the
employment of any person who is disqualified from being employed on an
alcoholic beverage licensed premises.


 


3.3                                Records.   During the Term, Management Company shall arrange
for the keeping of full and adequate books of account and other records
reflecting the Beverage Operations, which it shall make available to Licensee
for inspection at the request of Licensee.


 


3.4                               Licenses.  Management Company shall exercise all commercially
reasonable efforts to keep the Licenses in full force and effect throughout the
Term of this Agreement, and Licensee shall cooperate with Management Company
and exercise all commercially reasonable efforts in that regard.  Licensee shall also exercise commercially
reasonable efforts to cooperate with Management Company in its efforts to
obtain the New Licenses for the Restaurants. 
Licensee shall cooperate in, but shall not be responsible for, filing
all required renewal forms and the obtaining of any required tax clearances
needed to ensure that there is no cessation of operation pending issuance of
the New Licenses to Management Company and/or its designee.  Subject to Licensee promptly forwarding any
notices of renewals and signing any required documentation for renewal filings,
Management Company, at its expense, will be responsible for timely filing all
documents and paying all fees necessary to retain or renew the Licenses during
the Term, including all applicable renewal filings.  Management Company, at its expense, will be
responsible for the collection and payment of all sales or other taxes due in
connection with the conduct of the Beverage Operations.  Licensee will not be obligated to incur any
expense in connection with its cooperation or other obligations set forth in
this paragraph.


 


3.5                                Notices of
Enforced Actions.  Management
Company will notify Licensee within five (5) business days of (i) receipt
from 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 Licenses.


 

















 


ARTICLE 4


INSURANCE


 


4.1                                Maintenance of
Insurance.  During the
Term of this Agreement, Management Company, at its cost and expense, shall
maintain, commercially reasonable insurance, including a policy of general
liability that includes liquor liability coverage, on an occurrence basis, that
names the Licensee (including its affiliates, officers, and employees) as
additional insureds, including coverage for damages arising out of the acts or
negligence of Licensee (including its affiliates, officers, members and
employees), and that provides that such policy is primary insurance and not
excess over or contributory with any other valid, existing and applicable
insurance in force for or on behalf of Licensee.  Certificates evidencing the coverages
described herein shall be delivered to Licensee prior to the commencement of
the Term.  During the Term, the policies
of insurance maintained by Management Company shall only be cancelable
following at least thirty (30) days written notice to Licensee and Applebee’s
Franchising LLC. The parties agree that commercially reasonable insurance is no
greater than the levels required under the applicable Franchise Agreements.


 


4.2                                Waiver of
Subrogation.  Management
Company shall cause all policies of insurance maintained pursuant to the terms
hereof to provide that the insurance company will have no right to subrogation
against Licensee or any of Licensee’s agents or employees or affiliates.


 


4.3                                Indemnity. Management
Company shall indemnify, defend, and hold Licensee and its agents, officers,
directors, shareholders, Members, employees, subsidiaries, parents and affiliates
harmless from any and all liabilities, damages, or claims, costs, penalties,
citations, enforcement actions, losses, or expenses (including reasonable
attorneys’ fees) incurred by Licensee as a result of or arising from (a) the
operation of the Restaurants by Management Company during the Term or (b) any
breach by Management Company of the terms of this Agreement.


 


ARTICLE 5


EVENTS
OF DEFAULT, TERMINATION


 


5.1                                Events of
Default.  Each of the following shall
constitute an “Event of Default” under this Agreement:


 


(a)                                    The failure of
Management Company to pay when due any amount payable to Licensee by it under
this Agreement; or


 


(b)                                    Management
Company or Licensee fails to remedy any other breach of its obligations under
this Agreement within fifteen (15) days after receipt of written notice from
the other party specifying such breach; or


 


(c)                                     Any franchise
agreement or lease with respect to a Restaurant is terminated.


 


In
the event that this Agreement is terminated prior to issuance of New Licenses
to Management Company or its designee, Licensee shall have the right to
surrender or cancel any permits and take any other such further actions to
shield Licensee from liability arising from operations at the Restaurants.


 


5.2                                Remedies.  Upon the occurrence and during the
continuation of an Event of Default, in addition to and cumulative of any and
all rights and remedies available to the non-defaulting party under 


 

















 


this Agreement, at law or in
equity, the non-defaulting party may terminate this Agreement upon written
notice to the other party and except as to liabilities or claims which shall
have accrued or arisen prior to or on account of such termination, and except
as otherwise provided in Section 6.2 hereof, all obligations hereunder
shall cease. In any judicial proceeding in which the validity of termination is
at issue, neither party will be limited to the reasons for default set forth in
any notice sent pursuant to this Agreement.


 


ARTICLE 6


MISCELLANEOUS


 


6.1                               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 below or evidence of delivery at the
facsimile numbers or email addresses set forth below, 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 page from the sender’s fax machine will be
deemed evidence of delivery for notices sent by e-mail or fax, as applicable.


 


	
  Licensee’s address for
  notices:

  	
           [Insert
  name of applicable Seller]

  
	
   

  	
  c/o Applebee’s
  Services, Inc.

  
	
   

  	
  11201 Renner Blvd

  
	
   

  	
  Lenexa, Kansas 66219

  
	
   

  	
  Tel:

  	
  (913) 890-0100

  
	
   

  	
  Fax:

  	
  (913) 890-9100

  
	
   

  	
  E-mail:

  	
  Rebecca.Tilden@applebees.com

  
	
   

  	
  Attn:

  	
  Vice President, Brand
  Counsel

  
	
   

  	
   

  
	
  With
  a copy to:

  	
  Seigfreid, Bingham, Levy,
  Selzer & Gee, P.C.

  
	
   

  	
  911 Main Street

  
	
   

  	
  Suite 2800

  
	
   

  	
  Kansas City, Missouri
  64105

  
	
   

  	
  Tel:

  	
  (816) 421-4460

  
	
   

  	
  Fax:

  	
  (816) 474-3447

  
	
   

  	
  E-mail:

  	
  lancef@sblsg.com

  
	
   

  	
  Attn:

  	
  Lance Formwalt

  
	
   

  	
   

  
	
  Management Company’s

  	
   

  
	
  address for notices:

  	
  Apple American Group LLC

  



 

















 


	
   

  	
  225 Bush Street,
  Suite 1470

  
	
   

  	
  San
  Francisco, California 94104

  
	
   

  	
  Tel:
  (415) 835-0227

  
	
   

  	
  Fax:
  (415) 835-0223

  
	
   

  	
  E-mail:
  gflynn@flynnholdings.com

  
	
   

  	
  Attn: Gregory G. Flynn

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
  Davis Wright Tremaine LLP

  
	
   

  	
  Suite 2200

  
	
   

  	
  1201 Third Avenue

  
	
   

  	
  Seattle, Washington
  98101-3045

  
	
   

  	
  Tel: (206) 622-3150

  
	
   

  	
  Fax:
  (206) 757-7100

  
	
   

  	
  E-mail:
  SarahTune@dwt.com

  
	
   

  	
  Attn: Sarah Tune

  



 


6.2                                Survival.  Unless expressly stated to the contrary, all
obligations for any payment or reimbursement by one party to the other shall
survive the end of the Term. The provisions of Article 2 and Sections 4.2
and 4.3 of this Agreement shall survive the end of the Term.


 


6.3                                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.


 


6.4                                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.


 


6.5                                Governing Law. This
Agreement shall be governed by, interpreted under, construed and enforced in
accordance with the laws of the State of Minnesota and the courts of the State
of Minnesota shall have jurisdiction over any matters arising hereunder.
Management Company agrees to comply with all Laws and regulations of the State
of Minnesota.


 


6.6                                 Assignment.  Except as otherwise provided in this
Agreement, no party hereto may assign or transfer any of its rights or delegate
any of its obligations under this Agreement to any other person, firm or
company without the written consent of the others. Any such consent may be
withheld in a party’s sole and absolute discretion.


 


6.7                                No Joint
Venture. Nothing in this Agreement creates a joint venture or partnership and,
except as may be expressly set forth herein, no party is given the authority to
bind or obligate any other party.


 


6.8                                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.


 


6.9                                Entire
Agreement. This Agreement contains the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes any
discussions, offers, proposals, agreements or promises with respect thereto.


 


IN WITNESS WHEREOF, Licensee
and Management Company have duly executed this Agreement as of the day and year
first written above.


 


	
   

  	
  LICENSEE:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MANAGEMENT COMPANY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


Exhibit A


 






 












 




 





LEASE


 


BETWEEN


 


APPLEBEE’S
RESTAURANTS NORTH LLC


 


as
Landlord,


 


and
APPLE
                      
LLC, a Delaware limited liability company


 


as
Tenant


 


Dated
as of
                
      , 2010




 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  BASIC PROVISIONS

  	
  1

  
	
  2.

  	
  LEASING AGREEMENT; TERM

  	
  2

  
	
  3.

  	
  RENT

  	
  3

  
	
  4.

  	
  TAXES

  	
  4

  
	
  5.

  	
  ENVIRONMENTAL MATTERS

  	
  6

  
	
  6.

  	
  COMPLIANCE WITH REQUIREMENTS

  	
  9

  
	
  7.

  	
  COVENANT AGAINST LIENS

  	
  10

  
	
  8.

  	
  USE AND ENJOYMENT

  	
  10

  
	
  9.

  	
  TENANT’S PROPERTY; LIEN WAIVER

  	
  13

  
	
  10.

  	
  ALTERATIONS; MAINTENANCE AND REPAIR

  	
  14

  
	
  11.

  	
  CONDEMNATION AND CASUALTY DAMAGE

  	
  15

  
	
  12.

  	
  INSURANCE

  	
  17

  
	
  13.

  	
  ASSIGNMENT AND SUBLETTING

  	
  19

  
	
  14.

  	
  INDEMNIFICATION

  	
  21

  
	
  15.

  	
  DEFAULT; REMEDIES

  	
  22

  
	
  16.

  	
  SURRENDER OF PREMISES

  	
  26

  
	
  17.

  	
  SUBORDINATION AND ATTORNMENT

  	
  27

  
	
  18.

  	
  ESTOPPEL CERTIFICATES

  	
  28

  
	
  19.

  	
  NOTICES

  	
  28

  
	
  20.

  	
  LEASEHOLD FINANCING

  	
  29

  
	
  21.

  	
  RIGHT OF FIRST REFUSAL TO PURCHASE

  	
  30

  
	
  22.

  	
  MISCELLANEOUS

  	
  31

  



 


i

















 


LEASE


 


THIS LEASE (“Lease”) dated
                
      , 2010, is made and entered into by and
between APPLEBEE’S RESTAURANTS NORTH LLC (Landlord”),
and APPLE
                    LLC, a Delaware limited liability company (“Tenant”).


 


1.                                      BASIC
PROVISIONS


 


	
  1.1. 

  	
  Premises
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.2. 

  	
  Landlord
  Name and Address:

  	
   

  	
  Applebee’s Restaurants
  North LLC

  c/o Applebee’s
  Services, Inc.

  11201 Renner Blvd

  Lenexa, Kansas 66219

  
	
   

  	
   

  	
   

  	
   

  
	
  1.3. 

  	
  Tenant
  Name and Address:

  	
   

  	
  Apple
                
  LLC

  6200 Oak Tree Boulevard, Suite 250

  Independence, OH 44131

  Attn: Chief Financial
  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
  1.4. 

  	
  Lease
  Date:

  	
   

  	
                         ,
  2010

  
	
   

  	
   

  	
   

  	
   

  
	
  1.5. 

  	
  Term:

  	
   

  	
  Twenty (20) Lease Years

  
	
   

  	
   

  	
   

  	
   

  
	
  1.6. 

  	
  Options
  to Extend:

  	
   

  	
  Two (2) periods of
  five (5) Lease Years each and one (1) period of four (4) Lease
  Years and eleven (11) months

  
	
   

  	
   

  	
   

  	
   

  
	
  1.7. 

  	
  Exhibits:

  	
   

  	
  Exhibit A - Land
  Legal Description

  Exhibit A-1 – Site
  Plan

  Exhibit B - Landlord
  Agreement

  Exhibit C -
  Memorandum of Lease

  Exhibit D –
  Subordination, Non-disturbance and Attornment Agreement

  Exhibit E -
  Franchisee Lease Rider

   

  



 

















 


2.                                      LEASING
AGREEMENT; TERM


 


2.1.                            Leasing Agreement. 
Landlord leases to Tenant and Tenant leases from Landlord upon and
subject to the terms and conditions set forth in this Lease a restaurant
containing approximately                         
square feet and other related improvements (“Improvements”)
now or hereafter located on certain real estate consisting of approximately
                          
square feet of land, as legally described in attached Exhibit  A,
together with all easements, rights and appurtenances thereto (including, but
not limited to all of Landlord’s rights, if any, to use any common areas,
parking, access drives and sidewalks in any center of which the Improvements
may be a part) commonly known as
                                  ,
                        
(“City”),
              
County,
                          
(the “Premises”).  The Premises are shown on the site plan
attached hereto as Exhibit A-1. 
The Premises are leased subject to all restrictions, covenants,
encumbrances and other matters of record on the date of this Lease. [Include
specific reference to easements if Premises does not have direct access to
public roadway]


 


2.2.                            Term.  The term of
this Lease (“Term”) shall commence
(“Commencement Date”) on the later
of the dates set forth opposite the signatures of the parties on the signature page of
this Lease and, unless extended or earlier terminated as provided herein, shall
expire (“Expiration Date”) at
midnight on the last day of the twentieth (20th) “Lease Year” thereafter.  “Lease Year”
shall mean and refer to that period of twelve (12) full consecutive calendar
months beginning with the first full calendar month of the Term and each
subsequent period of twelve (12) consecutive calendar months during the Term,
provided that if the Term commences on other than the first day of a calendar
month, then the initial fractional month of the Term plus the next succeeding
twelve (12) full calendar months shall constitute the first Lease Year of the
Term and provided, further, that if this Lease is terminated
prior to the Expiration Date, the last Lease Year may contain less than twelve
(12) full calendar months.


 


2.3.                            Extension of the Term.  Provided that this Lease is in full force and
effect and no Event of Default has occurred and is continuing, Tenant shall
have the option to extend the Term for up to two (2) successive periods of
five (5) Lease Years each and one (1) period of four (4) Lease
Years and eleven (11) months upon all of the provisions of this Lease, which
extension options shall automatically be deemed exercised one hundred eighty
(180) days prior to the then current Expiration Date without the requirement
for any further notice; provided, however, that Tenant shall have
the right to terminate this Lease (and void any such automatic extension and
all remaining extension options) effective as of any then current Expiration
Date by giving written notice thereof to Landlord not less than one hundred
eighty (180) days before such then current Expiration Date; and provided,
further, that this Lease shall not be automatically extended (and Tenant shall
be deemed to have given written notice of non-renewal) if on the date which is
one hundred eighty (180) days prior to the then current Expiration Date an
Event of Default has occurred and is continuing, and in such event this Lease
shall terminate on the then current Expiration Date.  If and each time this Lease is so extended,
the word “Term” shall be deemed to
include each extension period with respect to which the option has been
exercised and the term “Expiration Date”
shall mean the last day of such extension period.


 


2

















 


3.                                      RENT


 


3.1.                            Base Rent.  Tenant shall pay to Landlord
as annual base rent (“Base Rent”)
the amount set forth in column (b) below for the corresponding Lease Years
set forth in column (a) below:


 


[For Diamond Lake Road, Minnesota
(#61059)


 


	
  (a) Lease Year

  	
   

  	
  (b) Annual Base Rent

  	
   

  	
  (c) Monthly Base Rent

  	
   

  
	
  1-5

  	
   

  	
  $

  	
  109,239

  	
   

  	
  $

  	
  9,103

  	
   

  
	
  6-10

  	
   

  	
  $

  	
  117,432

  	
   

  	
  $

  	
  9,786

  	
   

  
	
  11-15

  	
   

  	
  $

  	
  126,239

  	
   

  	
  $

  	
  10,520

  	
   

  
	
  16-20

  	
   

  	
  $

  	
  135,707

  	
   

  	
  $

  	
  11,309

  	
   

  
	
  21-25*

  	
   

  	
  $

  	
  145,885

  	
   

  	
  $

  	
  12,157

  	
   

  
	
  26-30**

  	
   

  	
  $

  	
  156,827

  	
   

  	
  $

  	
  13,069

  	
   

  
	
  31-35***

  	
   

  	
  $

  	
  168,589

  	
   

  	
  $

  	
  14,049

  	
  ]

  



 


[For Baxter, Minnesota (#61048)


 


	
  (a) Lease Year

  	
   

  	
  (b) Annual Base Rent

  	
   

  	
  (c) Monthly Base Rent

  	
   

  
	
  1-5

  	
   

  	
  $

  	
  196,555

  	
   

  	
  $

  	
  16,380

  	
   

  
	
  6-10

  	
   

  	
  $

  	
  211,297

  	
   

  	
  $

  	
  17,608

  	
   

  
	
  11-15

  	
   

  	
  $

  	
  227,144

  	
   

  	
  $

  	
  18,929

  	
   

  
	
  16-20

  	
   

  	
  $

  	
  244,180

  	
   

  	
  $

  	
  20,348

  	
   

  
	
  21-25*

  	
   

  	
  $

  	
  262,493

  	
   

  	
  $

  	
  21,874

  	
   

  
	
  26-30**

  	
   

  	
  $

  	
  282,180

  	
   

  	
  $

  	
  23,515

  	
   

  
	
  31-35***

  	
   

  	
  $

  	
  303,344

  	
   

  	
  $

  	
  25,279

  	
  ]

  



 


[For Cloquet, Minnesota (#61066)


 


	
  (a) Lease Year

  	
   

  	
  (b) Annual Base Rent

  	
   

  	
  (c) Monthly Base Rent

  	
   

  
	
  1-5

  	
   

  	
  $

  	
  143,260

  	
   

  	
  $

  	
  11,938

  	
   

  
	
  6-10

  	
   

  	
  $

  	
  154,004

  	
   

  	
  $

  	
  12,834

  	
   

  
	
  11-15

  	
   

  	
  $

  	
  165,555

  	
   

  	
  $

  	
  13,796

  	
   

  
	
  16-20

  	
   

  	
  $

  	
  177,971

  	
   

  	
  $

  	
  14,831

  	
   

  
	
  21-25*

  	
   

  	
  $

  	
  191,319

  	
   

  	
  $

  	
  15,943

  	
   

  
	
  26-30**

  	
   

  	
  $

  	
  205,668

  	
   

  	
  $

  	
  17,139

  	
   

  
	
  31-35***

  	
   

  	
  $

  	
  221,093

  	
   

  	
  $

  	
  18,424

  	
  ]

  



 


[an asterisk (*) indicates
an extension period; the number of asterisks corresponds to the respective extension period.]


 


3

















 


Base Rent shall be paid  to Landlord
in monthly installments (“Monthly Base Rent”)
in the respective amounts set forth in column (c) above in advance on the
first day of each month for which the same is due during the Term.  Rent for any partial month shall be prorated
on a per diem basis with the daily rent calculated based upon the actual number
of days in such month.


 


3.2.                            Payment.  All charges
and costs payable by Tenant to Landlord  or any other third party  pursuant to this Lease in addition to Base Rent shall be
considered “Additional Rent”.  Base Rent and Additional Rent are sometimes
referred to collectively as “Rent.”  Except as otherwise specifically provided in
this Lease, all Rent shall be paid by Tenant to Landlord without notice, demand, offset, abatement, reduction or
deduction by check payable to Landlord and sent to Landlord at the address
indicated in Section 1.2 or to such other person, entity or place
as Landlord may from time to time designate by not less than ten (10) business
days prior notice to Tenant.  Monthly
Base Rent for the period from and including the Commencement Date through and
including the last day of the first full calendar month of the Term shall be
paid in advance on the Commencement Date.


 


3.3.                            Late Payments.  If Tenant
shall fail to make payment of any installment of Base Rent or Additional Rent
payable to Landlord (rather than a third party) within ten (10) days after
the date when such payment is due, Tenant shall pay a late charge (“Late Charge”) equal to five percent (5%)
of such overdue installment of Base Rent or Additional Rent.  If any installment of Rent is not paid within
fifteen (15) days after the date when due, Tenant also shall pay interest at
the “Default Rate” (defined in Section 23.6) on the amount unpaid
computed from the date such payment of Base Rent or Additional Rent was due to
and including the date of payment thereof (but only with respect to amounts
payable directly to Landlord or that are not otherwise subject to an interest
or similar charge that will be treated as Base Rent or Additional Rent
hereunder).


 


3.4.                            Net
Lease.  It is
understood and agreed by Tenant that this Lease is a triple net Lease
and that Base Rent, Additional Rent and, except as otherwise expressly set
forth herein, all other sums payable hereunder by Tenant shall be absolutely
net to Landlord and paid without defense (other than defense of prior payment),
notice, demand, setoff, counterclaim, recoupment, abatement, suspension,
deferment, diminution, deduction or reduction. 
During the Term of this Lease, Tenant shall be obligated to pay and
shall be liable for all costs and expenses associated with or arising from the
use, operation, maintenance, repair or improvements of the Premises (regardless
of whether such costs and expenses are charged or imposed against Landlord or
Tenant), including without limitation, Premises Taxes (as defined below),
utility charges, liens, insurance, maintenance, repair and replacement costs.


 


4.                                      TAXES


 


4.1.                            As used in this
Lease, the term “Premises Taxes”
shall mean all real estate taxes and assessments, general and special, and all
other governmental charges levied, assessed or imposed on or with respect to
the Premises.  Premises Taxes shall not
include (i) any taxes or assessments imposed on or with respect to Tenant’s
trade fixtures, inventory, or other items of Tenant’s Property (as defined in Section 9.1),
or (ii) any income, gift, estate, franchise or other 


 


4

















 


taxes imposed on Landlord or
measured by Rent or Landlord’s income or profit from the Premises (including
business and occupation tax if it is hereafter applied to rental income),
except as provided below.  If at any time
during the Term, the method of taxation shall be changed such that a new tax,
assessment, levy, or other governmental charge shall be imposed (y) in
full or partial substitution of any Premises Tax, or (z) on or measured by
the Rent payable to Landlord by Tenant (other than an income or franchise tax),
then such tax, assessment, levy or charge shall be included as part of Premises
Tax.


 


4.2.                            Payment.


 


(a)                                  Tenant shall
pay all taxes and assessments on Tenant’s Property before delinquency.


 


(b)                                 Tenant shall
pay Premises Taxes to the appropriate governmental authority before delinquency
and before any interest, penalties or fines may be charged with respect thereto
and shall deliver a copy of all paid tax bills to Landlord promptly upon
request.


 


(c)                                  If any Premises
Taxes relate to a fiscal period which is partly within and partly outside of
the period for which Tenant is responsible, the amount thereof shall be
prorated so that Tenant will be responsible for that portion which relates to
the period after the Commencement Date and through the Expiration Date and
Landlord will be responsible for the portion which relates to the period prior
to the Commencement Date and after the Expiration Date.


 


(d)                                 Any refunds
(including any accrued interest) of Premises Taxes applicable to the Term shall
be the property of Tenant and to the extent received by Landlord shall be paid
over to Tenant promptly after receipt thereof. 
Any such refund of Premises Taxes shall be deemed a reduction of
Additional Rent hereunder.  Any refunds
(including any accrued interest) of Premises Taxes applicable to the period of
time prior to the Commencement Date or following the Expiration Date shall be
the property of Landlord and to the extent received by Tenant shall be paid
over to Landlord promptly after receipt thereof.


 


4.3.                            Contest.  Subject to
the provisions hereof, Tenant, at its own expense, may contest Premises Taxes
in any manner permitted by law, in Tenant’s name, and, whenever necessary, in
Landlord’s name and Landlord will cooperate at Tenant’s sole cost and expense
with Tenant and execute any documents reasonably required for such
purpose.  Any such contest shall be
conducted by Tenant in good faith and at its sole cost and expense, by appropriate
proceedings which shall operate during the pendency thereof to prevent
(i) the collection of, or other realization upon, the Premises Taxes so
contested, (ii) the sale, forfeiture or loss of the Premises, any Base
Rent or any Additional Rent to satisfy the same, (iii) any interference
with 


 


5

















 


the use or occupancy of any
of the Premises, and (iv) any interference with the payment of any Base
Rent or the portion of any Additional Rent that does not represent the Premises
Taxes being contested under this Section 4.3.  In no event shall Tenant pursue any contest
with respect to any Premises Taxes in any manner that exposes Landlord to
(a) criminal liability, penalty or sanction, (b) any civil liability,
penalty or sanction for which Tenant has not made provisions acceptable to
Landlord, or (c) defeasance of its interest in the Premises.  Tenant agrees that each such contest shall be
diligently prosecuted to a final conclusion. 
Tenant shall pay, indemnify and save Landlord harmless from and against
any and all losses, judgments, decrees and costs (including, without
limitation, attorneys’ fees and expenses) in connection with any such contest
and shall,  promptly after the final determination
of such contest, fully pay and discharge the amounts which shall be levied,
assessed, charged or imposed or be determined to be payable therein or in connection therewith, together
with all penalties, fines, interest, costs and expenses thereof or in
connection therewith, and Tenant’s obligation under this sentence shall survive
the expiration or termination of this Lease.


 


5.                                      ENVIRONMENTAL
MATTERS


 


5.1.                            Definitions.  For
purposes of this Lease the following terms shall have the following meanings:


 


(a)                                  “Environmental Laws” - all present and future laws, statutes,
rules, regulations, orders and other requirements of any federal, state, local
or other governmental authority relating to the environment, environmental
protection or regulation, the emission, disposal or discharge or the actual or
threatened release into the environment of pollutants or contaminants or to any
Hazardous Substance or HS Activity. 
Without limitation of the foregoing, Environmental Laws include each of
the following, as enacted as of the date hereof or as hereafter amended:  the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. § 9601, et seq.;
the Resource Conversation and Recovery Act of 1976, 42 U.S.C.
§ 6901, et seq.; the Toxic
Substance Control Act, 15 U.S.C. § 2601, et
seq.; the Water Pollution Control Act (also knows as the Clean Water
Act), 33 U.S.C. § 1251, et seq.;
the Clean Air Act, 42 U.S.C. § 7401, et
seq.; and the Hazardous Materials Transportation Act, 49 U.S.C.
§ 5101, et seq., and any
similar state laws.


 


(b)                                 “Hazardous Substance” - any substance defined or classified
in any Environmental Laws as a toxic or hazardous chemical, waste, material or
substance, or as a pollutant or contaminant (including, without limitation,
petroleum or any by-product or fractions thereof, lead, asbestos and asbestos
containing materials, polychlorinated biphenals and radioactive or explosive
materials); and any substance which if present requires investigation or
remediation under any Environmental Law or results in liability thereunder for
exposure thereto or discharge thereof.


 


6

















 


(c)                                  “HS Activity” - the generation, manufacture, handling,
transportation, usage, treatment, release, discharge, removal, storage,
disposal or presence of any Hazardous Substance.


 


5.2.                            Tenant Obligations.


 


(a)                                  On or after the
Commencement Date, Tenant (i) shall not conduct or knowingly permit any HS
Activity in, on or from the Premises or knowingly allow any Hazardous
Substances on the Premises, in each case, in violation of any Environmental
Laws, and (ii) shall comply or cause compliance with all Environmental
Laws applicable to Tenant’s use or occupancy of the Premises, and shall cause
the Premises to comply with all Environmental Laws; in each case except to the
extent that a violation results from, or compliance is required as a result of,
any act or omission of any “Landlord Indemnitees” (defined below) or any person
or entity other than Tenant and its members, managers, affiliates, officers,
directors, employees, contractors, representatives, agents or subtenants
(collectively, “Tenant Parties”) or relates to any condition existing as
of the Commencement Date (the obligations of Tenant under the preceding clauses (i) and
(ii) are called “Tenant’s Compliance Obligation”).  Tenant shall promptly give notice to Landlord
if Tenant becomes aware of any action, claim, suit or proceeding relating to a
violation or alleged violation of any Environmental Laws filed or threatened
against the Premises or Tenant with respect to Tenant’s use or occupancy of the
Premises.  If, at any time during the
Term, Hazardous Substances shall exist in or on the Premises to which Tenant’s
Compliance Obligation applies, then Tenant shall, or shall cause responsible third
parties to, promptly commence and diligently implement all investigation, site
monitoring, containment, cleanup, removal, restoration or other remedial work
of any kind or nature (collectively, “Remedial
Work”) to the extent required by Environmental Laws, and in
compliance with all Environmental Laws, all at Tenant’s sole cost and expense.


 


(b)                                 Tenant agrees
to indemnify, defend and hold harmless Landlord, any Landlord Lender and their
respective managers, partners, members, officers, directors, shareholders,
employees and agents (“Landlord Indemnitees”)
from and against any and all claims, demands, actions, liabilities, damages,
assessments, losses, fines, penalties, costs and expenses, including
remediation, clean-up and detoxification costs and reasonable attorneys’ fees,
arising from or related to any breach or violation by Tenant of its obligations
set forth in Section 5.2(a). 
The provisions of Section 5.2 shall survive the expiration
or termination of this Lease.


 


(c)                                  Upon Landlord’s
request, at any time after the occurrence and during the continuance of an
Event of Default or at such other time as Landlord has reasonable grounds to
believe that Tenant is in violation of Tenant’s Compliance Obligation, Tenant
shall cause an inspection or audit of the Premises by an environmental engineer
or other appropriate consultant reasonably approved by Landlord to determine
the presence or absence of Hazardous Substances on the Premises.  If Tenant fails to effectuate the 


 


7

















 


commencement of such inspection or audit within thirty (30) days after
such request or fails to deliver a written report of such inspection or audit
to Landlord within sixty (60) days after such request, Landlord may order the
same, and Tenant hereby grants to Landlord and its respective employees,
contractors and agents access to the Premises upon prior reasonable notice to
undertake such inspection or audit, provided that such inspection or audit does
not interfere with the conduct of Tenant’s business on the Premises, Landlord
provides Tenant certificates of insurance naming Tenant as an additional
insured and containing such types of insurance and limits as Tenant reasonably
requires, Landlord promptly repairs any damage caused by such testing and
restores the Premises to the condition in which it existed immediately prior to
such damage at Landlord’s sole cost and expense, and Landlord shall indemnify
Tenant if and to the extent required under Section 14.2 hereof for
all loss, cost, damage, liens, claims, liabilities or expenses (including, but
not limited to, reasonable attorneys’ fees, court costs and disbursements, but
excluding the cost of Remedial Work) incurred by Tenant arising from or by
reason of such inspection or audit.  The
cost of such inspection or audit shall be paid (i) by Tenant if such
inspection or audit shall confirm a violation of Tenant’s Compliance Obligation
or (ii) by Landlord if such inspection or audit does not confirm a
violation of Tenant’s Compliance Obligation.


 


(d)                                 Landlord and
Tenant expressly agree that, notwithstanding anything to the contrary set forth
in this Lease (including, but not limited to, the provisions of Section 14.1
hereof), except in the case of Tenant’s obligations expressly set forth under Sections
5.2(a), (b) and (c) hereof, Tenant shall have no
obligation under this Lease (i) to defend, indemnify or hold harmless
Landlord or Landlord Indemnitees with respect to any Hazardous Substance,
Environmental Laws or HS Activity, (ii) to engage any environmental
engineer or appropriate consultant with respect to any Hazardous Substance,
Environmental Laws or HS Activity, (iii) to conduct any audit or
inspection of the Premises with respect to any Hazardous Substance,
Environmental Laws or HS Activity, (iv) to comply or cause compliance with
any Environmental Laws, or (v) to perform or cause performance of any
Remedial Work with respect to any Hazardous Substance, Environmental Laws or HS
Activity.


 


5.3.                            Landlord Obligations.


 


(a)                                  Landlord
represents and warrants to Tenant as follows: 
(i) that no portion of the Premises has been used by Landlord, or,
to the best knowledge of Landlord, by any other person or entity for any HS
Activity in violation of Environmental Laws; (ii) that to the best
knowledge of Landlord, no Hazardous Substance is now or ever has been on or
under any portion of the Premises in violation of law; and (iii) that
there is no action, claim, suit or proceeding relating to a violation or
alleged violation of any Environmental Laws pending against Landlord or any
portion of the Premises and, to the best knowledge of Landlord, none is
threatened.


 


8






 












 


(b)                                 Landlord
covenants and agrees with Tenant that except for Tenant’s responsibility with
respect to the Premises set forth in Section 5.2(a) above, (i) Landlord
shall comply with all Environmental Laws applicable to the Premises for which
Landlord is responsible, (ii) Landlord shall not conduct or knowingly
permit any HS Activity on or about the Premises, and (iii) Landlord shall
promptly give notice to Tenant if Landlord becomes aware of any action, claim,
suit or proceeding relating to a violation or alleged violation of any
Environmental Laws filed or threatened against Landlord or the Premises or if
Landlord has received notice or has actual knowledge of any HS Activity on the
Premises caused by a person other than Tenant or any Tenant Party.


 


(c)                                  Landlord agrees
to indemnify, defend and hold harmless Tenant, any TE Lender, Tenant Lender and
its and their respective managers, partners, members, officers, directors,
shareholders, employees and agents (“Tenant Indemnitees”)
from and against any and all claims, demands, actions, liabilities, damages,
losses, fines, penalties, costs and expenses, including remediation, clean-up
and detoxification costs and reasonable attorneys’ fees, arising from or
related to any breach or violation by Landlord of its warranties,
representations or obligations set forth in Section 5.3(a) and (b) above.  The provisions of Section 5.3
shall survive the expiration or earlier termination of this Lease.


 


6.                                      COMPLIANCE
WITH REQUIREMENTS


 


6.1.                            Compliance With Law.  During the Term,
Tenant shall comply and shall cause the Premises to comply, in all material
respects with and shall correct any violation of any laws, statutes, ordinances
and other legal and insurance requirements, whether now or hereafter in force,
applicable to the Premises or Tenant’s use or occupancy of the Premises,
including without limitation, the Occupational Safety and Health Act, as
amended (“OSHA”), the Americans
with Disabilities Act of 1990, as
amended (“ADA”), and, subject to Article 5, all Environmental Laws,
except to the extent that such compliance is required or such violation exists
as a result of any act or omission of any Landlord Indemnitees, relates to any
condition existing as of the Commencement Date or relates to or is caused by
the activity of any third party who is not a Tenant Party.  Tenant shall procure, maintain and comply,
and shall cause the Premises to comply, with any and all permits, approvals,
licenses and other governmental authorizations required for the lawful use,
operation, maintenance and any “Alteration” (hereinafter defined) of the
Premises.  Notwithstanding the foregoing,
Tenant shall be required to comply with any change or amendment to the ADA
which is made or adopted after the Commencement Date and is applicable to the
Premises or Tenant’s use of the Premises.


 


6.2.                            Compliance With Permitted Encumbrances. 
Tenant agrees that with respect to all easements, conditions,
covenants, restrictions, encumbrances or agreements now affecting the Premises
or which are hereafter created by or consented to by Tenant (collectively, the “Permitted Encumbrances”), Tenant shall
observe, perform and comply with, and cause the Premises to comply with, and
carry out and perform all of the obligations therein which are to be observed
and performed by the owner or any occupant of the Premises thereunder, and
shall pay 


 


9

















 


all assessments, fees, costs
and expenses required to be paid by the owner or any occupant of the Premises
thereunder.


 


7.                                      COVENANT AGAINST LIENS


 


7.1.                            Liens.  Tenant shall
not cause, suffer or permit any mechanic’s, materialmen’s, judgment or other
lien (“Lien”) to be filed against the Premises
(other than any Lien arising due to any act or omission of Landlord or its
agents); provided that nothing herein shall be deemed to limit the
rights of Tenant Lender under Section 20.2 hereof.  If any Lien shall be filed against all or any
portion of the Premises (other than any Lien arising due to any act or omission
of Landlord or its agents), (i) Tenant shall give notice thereof to
Landlord within ten (10) business days after the date on which Tenant
first becomes aware of the filing of any such Lien, and (ii) within
forty-five (45) days after first becoming aware of such filing, (but in any
event before any enforcement action to foreclose is taken with respect to such
Lien), Tenant, at its sole cost and expense, shall cause the Lien to be
discharged of record or bonded over by any statutory bonding procedure
sufficient to prevent foreclosure or other enforcement of such Lien, and shall
deliver notice thereof to Landlord, failing which Landlord shall have the
right, but shall not be obligated, to discharge the Lien without investigating
the validity or amount thereof.  Tenant
shall reimburse Landlord on demand for any reasonable amounts so paid or
incurred by Landlord, including reasonable expenses and attorneys’ fees
incurred in connection therewith, and Tenant’s obligation under this sentence
shall survive expiration or termination of this Lease.


 


8.                                      USE
AND ENJOYMENT


 


8.1.                            Use.


 


(a)                                  The Premises
may be used for the operation of a restaurant (including an Applebee’s
restaurant) including, without limitation, ancillary carry out food service and
the sale of beer, wine and other alcoholic beverages, and for such other use as
approved by Landlord, which approval shall not be unreasonably withheld.  The Premises shall be attractive in
appearance and Tenant shall conduct its business in a lawful and reputable
manner.  Tenant shall not commit waste on
the Premises and shall not occupy or use the Premises or permit the same to be
used or occupied for any purpose or in any manner that violates any applicable
legal or governmental requirement.


 


(b)                                 All garbage,
trash and refuse generated from the operation of the business conducted on the
Premises shall be placed in appropriate garbage receptacles and, at Tenant’s
sole cost and expense, removed from the Premises with sufficient frequency so
as to avoid any accumulation thereof outside of such receptacles.


 


8.2.                            Exterior Signs, Awnings and Canopies.  Tenant, at its sole cost and expense, may at
any time and from time to time during the Term install, alter, and/or replace
any and all exterior signs, awnings and/or canopies as Tenant may determine, so
long as they are in 


 


10

















 


compliance with all
applicable laws and all Permitted Encumbrances. 
Tenant, at its sole cost and expense, shall obtain all necessary permits
for all signs, awnings and canopies on the Premises and shall maintain the same
in good condition and repair.


 


8.3.                            Utilities.  Tenant
shall arrange and contract, in its name, for and pay when due all charges for
water, gas, electricity, cable and satellite TV, telephone, trash removal,
scavenger service and other utility services required by law or used or
consumed on the Premises by Tenant or its agents during the Term, all of which
shall be separately metered and billed to Tenant.


 


8.4.                            Quiet Enjoyment. 
Landlord covenants with Tenant that Tenant, upon paying Rent to Landlord
and performing Tenant’s other covenants in this Lease, shall and may peaceably
and quietly have, hold, occupy, possess and enjoy the Premises during the Term
without any interference from Landlord or anyone claiming by, through or under
Landlord.


 


8.5.                            Signage Rights, Parking, Access, Easements.  Landlord covenants with
Tenant that Landlord shall not engage in any action, or grant any rights which
affect parking at the Premises, access to the Premises, means of ingress and
egress to and from the Premises, visibility to or from the Premises, Tenant’s
signage at the Premises or rights to the roof of the Premises, any
telecommunications equipment or utilities which service the Premises, Tenant’s
air rights and any other rights to which Tenant may be entitled pursuant to any
easement agreements or similar agreements affecting the Premises without Tenant’s
prior written consent, which may be granted or withheld in Tenant’s sole
discretion, but shall not be unreasonably withheld if such action will not
materially adversely affect the conduct of Tenant’s business at the
Premises.  Landlord agrees to deliver to
Tenant copies of any notices Landlord receives with respect to the
aforementioned rights.  Landlord agrees that so long as no Event of
Default shall have occurred and be continuing, upon request by Tenant (and only
after all documentation reasonably required to consummate the relevant
transaction shall have been provided to Landlord), Landlord shall
(i) enter into, modify or grant such easements, covenants, waivers,
approvals or restrictions for utilities, parking or other matters as Tenant may
desire for the operation of the Premises (including, without limitation,
consenting to site and common area changes affecting access, parking, tenant
mix and the like and approving uses or users of the other properties in the
vicinity of the Premises which Tenant reasonably believes will have a positive
impact on its business at the Premises) (collectively, “Easements”), or
(ii) dedicate or transfer, minor non-essential unimproved portions of the
Premises for road, highway or other public purposes to the extent such
dedications or transfers are consistent with commercially reasonable
development or operation of the Premises or, in Tenant’s reasonable judgment,
will have a positive impact on its business at the Premises (the “Dedications”);
provided, that Landlord shall be obligated to take such action only if
(A) any such Easements or Dedications do not adversely affect the value of
the Premises (other than to a de minimus
extent), do not unreasonably render the use of the Premises dependent upon any
other property or unreasonably condition the use of the Premises upon the use
of any other property, and do not adversely affect (other than to a de minimis extent) the use, or visibility
of, or access to, the Premises, (B) any such Easements or Dedications do
not conflict with or violate any Permitted Encumbrances, (C)Tenant advises
Landlord of the amount of the consideration, if any, being paid for such
Easements or 


 


11

















 


Dedications
and that Tenant considers such consideration, if any, to be fair under the
circumstance and that such consideration, if any, shall be paid to Landlord,
(D) Tenant acknowledges in writing that for so long as this Lease is in
effect, Tenant will perform all obligations, if any, of Landlord under the
applicable instrument and Tenant will remain obligated under this Lease in
accordance with its terms, and (E) Tenant pays all out-of-pocket costs and
expenses incurred by Landlord in connection with said Easements or Dedications
including, without limitation reasonable attorneys’ fees.  Subject to the foregoing clauses (A) through
(E), Landlord shall cooperate with Tenant’s efforts to enter into any
Dedications or Easements.


 


If Tenant shall submit a
request to Landlord for Landlord’s cooperation, together with all documentation
required above, in connection with any such Easement or Dedication which
requires Landlord’s approval or execution of any document, Landlord shall
(x) approve such Easement or Dedication, and execute and deliver to Tenant
all documents required in connection therewith, within ten (10) days of
receiving Tenant’s request for approval, or (y) disapprove Tenant’s request
in a written notice with a detailed explanation of its objections delivered to
Tenant within ten (10) days of receiving Tenant’s request for
approval.  If Landlord fails to respond
within such ten (10) day period, Tenant’s request with respect to such
Easement or Dedication shall be deemed to be approved by Landlord hereunder and
Tenant is hereby authorized and empowered to execute and deliver on behalf of
Landlord, as Landlord’s attorney-in-fact, all instruments and documents
required in connection therewith.


 


If Landlord timely
disapproves of a Tenant request under this Section 8.5, then Tenant
may elect, by delivering written notice to Landlord, to resolve the matter by
expedited arbitration in accordance with this paragraph.  Landlord and Tenant shall mutually select a
single arbitrator within ten (10) days after delivery of Tenant’s notice
of arbitration hereunder.  If the parties
cannot agree upon an arbitrator within such period, then either party may
request that a qualified arbitrator be appointed by the office of the American
Arbitration Association located nearest to the Premises.  Following selection or appointment, the
arbitrator shall meet jointly with representatives of Landlord and Tenant
within twenty (20) days to consider the parties’ positions on the disputed
issue and the arbitrator shall render a written decision within two (2) business
days following such meeting.  The
decision of the arbitrator shall be final, binding on the parties and
nonappealable.  The arbitration shall
otherwise be conducted in accordance with the American Arbitration Association’s
rules for expedited dispute resolution in effect at the time.  The non-prevailing party in any such
arbitration shall pay the arbitrator’s fee and expenses; each party will bear
their own attorney’s fees and expenses, if any.


 


8.6.                            Warranties, Guaranties and Indemnities.  Landlord assigns to Tenant, without recourse
or warranty whatsoever, all warranties, guaranties and indemnities, express or
implied, and similar rights which Landlord may have against any manufacturer,
seller, engineer, contractor or builder with respect to the Premises,
including, but not limited to, any rights and remedies existing under contract
or pursuant to the Uniform Commercial Code (collectively, the “guaranties”).  Such assignment shall remain in effect during
the Term. Landlord hereby agrees to execute and deliver at Tenant’s expense
such further documents, including powers of attorney (which shall contain
indemnity agreements from Tenant to Landlord which shall be in form reasonably
satisfactory to Landlord), as Tenant may reasonably request in order that
Tenant may have the full benefit of the assignment of guaranties effected or
intended to be effected by this 


 


12

















 


Section 8.6.  Upon the expiration or occurrence of a
termination of this Lease, the guaranties shall automatically revert to
Landlord.


 


9.                                      TENANT’S
PROPERTY; LIEN WAIVER


 


9.1.                            Tenant’s Property. 
Landlord agrees that all (i) fixtures, furniture, furnishings,
equipment (other than floor and wall coverings, fixtures which are “built-ins”
or constitute an integral part of the Building, any walk-in cooler, heat, air
conditioning and ventilation systems, electrical, mechanical and plumbing
systems, all of which are owned by and are the property of Landlord), Kitchen
Equipment (as hereinafter defined), inventory, merchandise, goods, chattels,
trade fixtures, signage, appliances, display cases, supplies, tools, machinery,
security systems, computer software or other personal property of Tenant
(including, without limitation, trade fixtures in, on, around or affixed to the
Premises),  (ii)  fixtures, furniture,
furnishings, equipment, supplies, tools, machinery, security systems, computer
software, signage and other personal property (including, without limitation,
trade fixtures in, on, around or affixed to the Premises) which display the
name, trade name, trademark, service mark, logo, insignia, slogan, emblem or
symbol of Applebee’s Franchising LLC (“Franchisor”)  or of Tenant (“Distinctive Property”), and (iii) all licenses, permits,
approvals and authorizations, if any, which are required in connection with the
operation of Tenant’s business, including, without limitation, all liquor
licenses, at any time located on the Premises (collectively, “Tenant’s Property”), shall be and at all
times remain the property of Tenant regardless of whether the same (x) is
affixed to the Improvements on the Land or the manner in which the same is
affixed (unless permanently affixed) or (y) may now or hereafter be
regarded as a fixture or as property of Landlord by operation of law or
otherwise, unless, however, such fixtures and equipment cannot be removed
without substantial damage to any Improvements which cannot be easily
repaired.  As used herein the term “Kitchen
Equipment” shall include, without limitation, kitchen fixtures (except for
sanitary plumbing fixtures), counters, stainless steel equipment, ranges,
ovens, display cases and refrigeration equipment (excluding the walk-in
cooler).  Tenant shall have the right at
any time and from time to time during the Term and the obligation, subject to
the provisions of Section 16.2 below, within fifteen (15) days
after the end of the Term to remove any Tenant’s Property from the Premises.


 


9.2.                            Waiver of Landlord’s Lien.  Tenant contemplates financing from time to
time some or all of Tenant’s Property with a lender or vendor (“TE Lender”) who will require a security
interest therein (those items of Tenant’s Property which are subject to such
security interest being referred to collectively as “Financed Personalty”). 
Landlord hereby disclaims and waives any and all liens or right which
Landlord may have to claim a lien against the Tenant’s Property for nonpayment
of Rent or otherwise and agrees to execute and deliver promptly upon request a
waiver with respect thereto in form reasonably acceptable to Landlord.


 


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10.                               ALTERATIONS;
MAINTENANCE AND REPAIR


 


10.1.                     Alterations.


 


(a)                                  Alterations.  For
purposes of this Lease, any physical improvement, addition, enhancement or
change with respect to all or any portion of the Premises is referred to as an “Alteration.”  Tenant or Franchisor shall have the right at
any time and from time to time during the Term to make or cause to be made any
Alteration in or to the Premises (i) without Landlord’s consent, if such
Alteration consists of the demolition of the Building and reconstruction of a
new prototypical building so long as the new building is constructed in
compliance with applicable codes and Permitted Exceptions and Tenant continues
to pay Rent; (ii) without Landlord’s consent, if such Alteration is
performed in order to comply with any of Tenant’s agreements with Franchisor or
to maintain the building as set forth in Section 10.2 and such
Alteration does not adversely affect any structural component of the Building,
and (iii) in the case of any Alteration other than those permitted under clauses
(i) and (ii) above, with Landlord’s prior consent, which
consent shall not be unreasonably withheld provided that such Alteration does
not (A) diminish the value of the Premises (including, by way of example
only, but without limitation, by diminishing the utility of the Improvements or
diminishing the useful life of the Improvements), except to a de minimis
extent, or (B) adversely affect any structural component of the
Building.  Every Alteration shall be made
in accordance with all applicable laws, legal requirements and the Permitted
Encumbrances.  If Tenant shall submit a
request to Landlord for Landlord’s approval of an Alteration which requires
Landlord’s approval, Landlord shall (x) approve such Alteration proposed
by Tenant within fourteen (14) days of receiving Tenant’s proposal and request
for approval or (y) disapprove Tenant’s proposal in writing with a
detailed explanation of its objections within fourteen (14) days of receiving
Tenant’s proposal and request for approval. 
If Tenant submits a proposal to Landlord and Landlord disapproves such
proposal within the fourteen (14) day time period, Tenant may submit another
proposal with modifications thereto made in response to Landlord’s objections
and Landlord shall so approve or disapprove same within seven (7) days
after submission of such modified proposal. 
If Landlord does not approve or disapprove any proposal or modified
proposal in writing with a detailed explanation of its objections within the
applicable seven (7) or fourteen (14) day period, Tenant may submit to
Landlord a reminder notice, which shall state that Landlord’s failure to
disapprove the applicable proposal within five (5) days after receipt of
such reminder notice shall be deemed to constitute Landlord’s approval
thereof.  If Landlord does not disapprove
such proposal or modified proposal in writing with a detailed explanation of
Landlord’s objections to Tenant’s modifications within five (5) days after
receipt of Tenant’s reminder notice, Landlord shall be deemed to have approved
the Alterations proposed by Tenant.


 


(b)                                 In connection
with any Alteration:  (i) the
Alterations to be made will be constructed using materials of a quality and
workmanship at least as good as the original work; (ii) all such
Alterations shall be performed in a good and workmanlike manner, and shall be
performed diligently in a commercially reasonable time period subject to Force
Majeure in compliance with all laws, legal requirements and the terms of all
Permitted 


 


14

















 


Encumbrances; (iii) all work done in connection with any such
Alteration shall comply in all material respects with all requirements of any
insurance policies in effect with respect to the Premises (the “Insurance Requirements”); (iv) Tenant shall pay when
due all costs and expenses of any such Alteration, and shall discharge all
liens filed against any of the Premises arising out of the same;
(v) Tenant shall procure and pay for all permits and licenses required in
connection with any such Alteration; (vi) all such Alterations shall be
the property of Landlord and shall be subject to this Lease (except for any
Alteration which constitutes Tenant’s Property); and (vii) all Alterations
shall be made under the supervision of an architect or engineer selected by
Tenant and in accordance with plans and specifications which shall be submitted
to Landlord prior to the commencement of the Alterations; provided, however,
Landlord shall have no right to approve such architect, engineer, plans or
specifications, except as expressly set forth in Section 10.1(a).


 


10.2.                     Maintenance and Repair.  During the Term, Tenant at its sole cost and
expense, agrees to make all necessary repairs and replacements to the
Improvements as often as required to keep and maintain the Premises in good and
safe condition and repair. 
Notwithstanding any provision to the contrary, Tenant’s obligations
under this Section shall not include making any repair or improvement
necessitated by the act of Landlord, its agents, employees or servants.  If Tenant shall default in its obligations
under this Section 10.2, Landlord may, after thirty (30) days
written notice to Tenant and failure by Tenant to perform any necessary repairs
and replacements to the Improvements within such thirty (30) day period, enter
the Premises to commence such repairs or replacement.  All reasonable sums incurred by Landlord in
connection with any such repair or replacement shall constitute Additional Rent
payable by Tenant under this Lease and shall be paid by Tenant to Landlord
within ten (10) days of Tenant’s receipt of a detailed invoice for such
charges.


 


11.                               CONDEMNATION
AND CASUALTY DAMAGE


 


11.1.                     Substantial Taking.  If
all or substantially all of the Premises is taken or appropriated for any
public or quasi-public use or purpose by any lawful power or authority by the
exercise of the right of eminent domain or by virtue of condemnation or other
similar proceedings, including a deed given in lieu thereof (“Taking”), other than a temporary Taking for
a period of one (1) year or less, this Lease shall terminate as of the
date possession is required by the condemning authority and Rent and all other
charges and costs payable hereunder shall be adjusted and paid to the effective
date of termination.


 


11.2.                     Other Taking.


 


(a)                                  If there shall
be a Taking, other than a temporary Taking for a period of one (1) year or
less, of (i) a portion of the Building, (ii) twenty percent (20%) or
more of the parking area of the Premises, (iii) any material part of a
driveway or roadway necessary for access to the Premises, or (iv) a
material part of Tenant’s signage, and in Tenant’s reasonable judgment such
Taking under clauses (i), (ii), (iii) or (iv) would



 


15

















 


render the Premises (or the remainder thereof) unsuitable for the
conduct of Tenant’s business, Tenant shall have the right to terminate this
Lease as of the date possession is required by the condemning authority by
giving notice to that effect to Landlord within sixty (60) days after notice to
Tenant of the date such possession is required. 
In such event, Rent and all other charges and costs payable hereunder
shall be adjusted and paid to the effective date of termination.


 


(b)                                 If only a
portion of the Premises is subject to a Taking and Tenant is not entitled to or
shall not exercise its right to terminate this Lease pursuant to Section 11.2(a),
this Lease shall continue in full force and effect, and there shall be no abatement or reduction of Rent payable hereunder
except that Rent shall be equitably reduced for the remainder of the Term so
that Tenant shall pay only such portion of Rent as the rental value of the part
remaining after such Taking bears to the rental value of the entire Premises
immediately prior to such Taking.  Tenant
shall make any and all repairs and restorations to the remainder of the
Premises to the extent necessary to render the same a complete architectural
unit suitable for Tenant’s use.


 


11.3.                     Compensation.  In the
event that all or any portion of the Premises is subject to a Taking, Landlord
and Tenant shall cooperate to maximize the amount of the recovery from the
condemning authority. If the recovery from the condemning authority is paid
into a common fund or paid only to Landlord, such recovery shall be allocated
as follows and in the following priority: 
(i) so long as no Event of Default shall have occurred and be
continuing, to Tenant for the cost of any repairs required pursuant to Section 11.2(b);
(ii) to Landlord, that portion allocable to Land which is taken; (iii) to
Landlord, that portion allocable to Improvements which are taken; (iv) to
Tenant, that portion allocable to Tenant’s Property or Tenant’s relocation and
moving expenses; and (v) to Landlord, the balance.  Notwithstanding the foregoing, all proceeds
from a temporary Taking shall be (A) paid to Tenant if this Lease is not
terminated and (B) equitably allocated between Landlord and Tenant as of
the date of termination if this Lease is terminated.  The provisions of this Section shall
survive any termination of this Lease pursuant to Sections 11.1 or 11.2(a).


 


11.4.                     Casualty Damage.


 


(a)                                  If the
Improvements or any portion thereof are damaged or destroyed by fire or other
casualty (“Casualty”), and this
Lease is not terminated pursuant to Section 11.4(b) below,
Tenant shall, at its sole cost and expense, promptly and diligently repair such
damage and restore the Improvements as nearly as possible to the condition
which existed prior to the occurrence of such Casualty or to any comparable or
improved condition consistent with Tenant’s or Franchisor’s then-current store
design and this Lease shall remain in full force and effect and Tenant shall
continue to pay Rent.  Tenant promptly
shall commence and diligently pursue to completion the repair, restoration and 


 


16

















 


replacement of the damaged or destroyed Improvements, due allowance
being made for time needed to obtain permits, adjust insurance and for delay on
account of events of Force Majeure.  Such
repair, restoration and replacement shall be performed in accordance with the
requirements set out in Section 10.1(b) and in compliance with all
applicable laws, legal requirements and Permitted Encumbrances.  Tenant shall be responsible for the repair or
replacement of any Tenant’s Property damaged by such Casualty.  As used in this Lease the word “destroyed” shall mean completely destroyed
above the foundation, or so substantially damaged as to require demolition to
the foundation, or such other severity of damage as may be established or
imposed by applicable governmental law or ordinance which, if suffered, would
constitute total destruction or require demolition before repair or
reconstruction may commence.


 


(b)                                 If the Improvements or any portion thereof is damaged or
destroyed (i) during the last five (5) Lease Years of the Term (or
the Term as then extended) to the extent of twenty-five percent (25%) or more
of the replacement value thereof (exclusive of the foundation) immediately
prior to such Casualty; or (ii) by a cause or peril which is not covered
by the property insurance required to be carried pursuant to Section 12.1(b),
then Tenant shall have the right to terminate this Lease by giving notice to
that effect (“Termination Notice”)
to Landlord within sixty (60) days after the occurrence of the Casualty, in
which event termination shall be effective as of the date of such Casualty if
the Building is destroyed and otherwise as of the date Tenant vacates the
Premises following such Casualty.


 


(c)                                  If this Lease
is terminated pursuant to this Section 11.4, Rent and all other
charges and costs payable hereunder shall be adjusted and paid to the effective
date of termination, and all proceeds of any property insurance
with respect to the Premises (exclusive of Tenant’s Property, which shall be
paid to Tenant) shall be paid to Landlord.


 


12.                               INSURANCE


 


12.1.                     By Tenant.  Tenant, at
its sole cost and expense, shall obtain and maintain (or cause to be obtained
and maintained, as the case may be) the following insurance during the Term:


 


(a)                                  Commercial
general public liability insurance with limits of not less than Five Million and No/100 Dollars
($5,000,000.00) per occurrence, with a commercially reasonable
deductible.


 


(b)                                 All-risk property insurance covering all Improvements constituting part
of the Premises, including the Building, all Alterations and other improvements
(excluding Tenant’s Property), in an amount not less than one hundred percent
(100%) of the replacement cost thereof, including (i) ordinance or law
coverage including any amounts necessary to replace the undamaged portion of
the Building, to cover cost increases 


 


17

















 


arising from changes in building codes or
other ordinances or laws and to cover costs of debris removal, and (ii) boiler
and machinery coverage, with a commercially reasonable deductible;


 


(c)                                  Property
insurance covering Tenant’s Property in such amounts as Tenant deems necessary
or desirable;


 


(d)                                 A liquor liability policy with limits of not less than Five Million and
No/100 Dollars ($5,000,000.00) per occurrence and Five Million and No/100
Dollars ($5,000,000.00) in the aggregate, with a commercially
reasonable deductible;


 


(e)                                  Workers’
compensation and employer’s liability insurance as required by applicable law;


 


(f)                                    Insurance
against loss or damage from explosion of any steam or pressure boilers or
similar apparatus located in or about the Improvements in an amount not less
than the actual replacement cost of the Improvements and equipment located
within the Improvements;


 


(g)                                 If any portion
of the improvements is located in an area designated by the Federal Emergency
Management Association as having special flood and mud slide hazards, flood
insurance in the maximum available amount; and


 


(h)                                 Business interruption
insurance which includes amounts sufficient to pay all Base Rent, Additional
Rent and other amounts payable hereunder for a period of not less than twelve
(12) months.


 


12.2.                     General Requirements.  All insurance (and renewals thereof) required
by this Article shall be issued by responsible insurance carriers
authorized to do business in the State in which the Premises is located and
having a claims paying ability rating of not less than “A-” by Standard &
Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc.  Each policy (and any renewal thereof) shall
expressly provide that it shall not be cancelled or changed without at least
thirty (30) days’ prior written notice to all parties insured or named
therein.  The insurance described in Sections 12.1(a) and
(d) shall include Landlord and Landlord’s Lender, if any, as
additional insureds.  The insurance
provided under Sections 12.1(b), (f) and (g) shall
name Landlord and each Landlord Lender as a loss payee with respect to any
losses, and any proceeds paid to Landlord thereunder shall be held and
disbursed by Landlord to fund the repairs performed by Tenant in accordance
with the terms of Section 11.4. In the event of any Tenant
financing, the interest of Landlord and Landlord’s Lender, if any, under the
property insurance described in Sections 12.1(b), (f) and
(g) shall be senior to the interest of any Tenant Lender.  Tenant and Tenant’s Lender are entitled to
receive the property insurance proceeds allocable to


 


18






 












 


Tenant’s Property. All of
the insurance required by this Article shall be primary and
noncontributing with any insurance which may be carried by the Landlord, shall
afford coverage for all claims based on any act, omission, event or condition
which occurs or arises during the policy period, and may be obtained by
endorsement on blanket policy(ies) of insurance carried and maintained by
Tenant.  Upon issuance and each renewal
thereof, Tenant shall deliver to Landlord a certificate thereof and reasonable
evidence of paid premium, failing which Landlord shall have the right from time
to time after no less than ten (10) days’ notice (except that if any
insurance required under Section 12.1 has lapsed, no prior notice
shall be necessary) to effect such insurance for no more than one (1) year
and all premiums paid by Landlord shall be reimbursed by Tenant upon written
demand.  Landlord shall have no interest
in any insurance proceeds Tenant receives for Tenant’s Property and Landlord
shall sign all documents which are necessary or appropriate in connection with
the settlement of any claim or loss by Tenant  with respect to Tenant’s Property.


 


12.3.       Mutual
Waiver of Subrogation. 
Tenant agrees to have all policies of fire and extended coverage
insurance now or hereafter carried by it with respect to the Improvements
endorsed with a clause substantially as follows:  “This insurance shall not be invalidated
should the insured waive in writing prior to a loss any or all rights of
recovery against any party for loss occurring to the property described herein.”  The obligation to obtain such an endorsement
shall be subject to the availability thereof at commercially reasonable
rates.  Landlord and Tenant hereby waive
all claims for recovery from each other for any loss or damage to it or any of
its property insured under valid and collectible insurance policies to the
extent of the proceeds collected under such insurance policies.


 


13.          ASSIGNMENT AND
SUBLETTING


 


13.1.       Consent
Required.  Except as
provided in Section 13.2 below and Tenant financing pursuant to Article 20
below, Tenant shall not sell, encumber, assign or transfer this Lease or any
interest herein, whether directly or by operation of law, nor sublet all or any
part of the Premises without the prior written consent of Landlord which shall
not be unreasonably withheld, conditioned or delayed so long as, in Landlord’s
reasonable determination, such proposed assignee or subtenant is a capable
operator of a restaurant facility similar in quality to the Premises and has a
financial condition and creditworthiness sufficient to meet the financial
obligations of Tenant under this Lease. 
With respect to an assignment or subletting for which Landlord’s consent
is required, the following provisions shall apply:


 


(i)               there
shall be submitted to Landlord current financial information and information
regarding the business reputation and experience regarding the proposed
assignee/sublessee;


 


(ii)              the
business reputation and experience of the proposed assignee or sublessee (or the
principals or owners thereof) shall meet or exceed generally acceptable
commercial standards for like properties;


 


19

















 


(iii)             in
the case of an assignment, the proposed assignee shall agree in writing to
assume and abide by all terms and provisions of this Lease from and after the
date of such assignment; and


 


(iv)            no
Event of Default shall have occurred and be continuing.


 


Landlord agrees to respond
within twenty (20) days after receipt of Tenant’s written request for Landlord’s
consent (together with the information specified above and other information
reasonably requested by Landlord) to a proposed assignment or sublet and
submission of the financial information and business qualifications of the
proposed assignee/sublessee pursuant to clauses (i) and (ii) above.  Any disapproval shall be explained in
writing.  If Landlord fails to respond or
responds with a disapproval without an explanation by the expiration of said
twenty (20) day period, Tenant may give to Landlord a reminder notice stating
that Landlord’s failure to respond within five (5) days after receipt of
such reminder notice shall be deemed to constitute Landlord’s approval of the
transaction in question, and if Landlord shall fail to respond or explain its
disapproval within five (5) days after receipt of such reminder notice,
the transaction which is the subject of Tenant’s notice to Landlord shall be
deemed approved.  Consent by Landlord to
any assignment or subletting shall not waive the necessity for consent to any
subsequent assignment or subletting for which Landlord’s consent is required by
this Section.


 


13.2.       Permitted
Transfer.  Tenant
shall have the right, without any cost, fee or payment to Landlord (other than
as set forth in Section 13.4 below), to sublet any portion of the
Premises, or to transfer and assign Tenant’s right, title and interest in this
Lease, without Landlord’s prior written consent, to the following persons and entities  in
the following events (each, a “Permitted Transfer”):  (i) to Franchisor or Franchisor’s
affiliate; (ii) a person or entity who is an approved franchisee of
Franchisor; (iii) to a parent,
subsidiary, affiliate or division of Tenant, Apple American Group LLC (“AAG”) or their
respective investors; (iv) to any entity that acquires, by merger,
consolidation or otherwise, all or substantially all of the ownership interests
in and control of, Tenant or AAG (provided
that no Event of Default shall have occurred and be continuing) or of
Franchisor; or (v) to any entity that acquires all or substantially
all of Tenant’s assets (excluding the Distinctive Property) or AAG’s assets (provided that no Event of Default shall have
occurred and be continuing).  A
direct or indirect transfer of all or any interest in AAG shall not be deemed a
sale, encumbrance, assignment or transfer of this Lease or any interest
herein.  A direct or indirect transfer by
AAG of all or any interest in Tenant shall not be deemed a sale, encumbrance,
assignment or transfer of this Lease or any interest therein.  For purposes of this Section 13.2,
references to Tenant, Franchisor and AAG shall be deemed to include their
respective successors and assigns.


 


13.3.       General
Provisions.  In the case
of any sublease or assignment of this Lease, Tenant shall submit an executed
copy of the sublease or assignment instrument to Landlord.  Notwithstanding anything to the contrary
which may be provided in this Lease, (a) the Tenant making any assignment
shall be released from any and all liability under this Lease as of the effective date of any assignment made
pursuant to Section 13.1, and (b) the Tenant making any 


 


20

















 


assignment (and any
predecessor Tenant that has not theretofore been released) shall be released as
of the effective date of any assignment described in subsections (i), (ii),
(iv) and (v) of Section 13.2, provided
that the assignee of an assignment or transfer described in subsections (i),
(ii) and (v) of Section 13.2 assumes, in
writing, all obligations under this Lease from and after the effective date of
such assignment.  Landlord shall not be
entitled to any monetary consideration in connection with any assignment or
sublet, except for reimbursement of reasonable attorneys’ fees and disbursements
if and as provided in Section 13.4 below.


 


13.4.       Costs and
Fees.  Tenant
shall not be obligated to reimburse Landlord for any cost, fee or payment
incurred by Landlord or Landlord’s Lender in connection with any requests for
approval of an assignment of this Lease or any sublease of the Premises other
than reasonable costs and expenses incurred by Landlord and Landlord Lender
(including, without limitation, reasonable attorneys’ fees and disbursements); provided,
however, that if the assigning Tenant is Franchisor, a Franchisor affiliate
or an authorized franchisee of Franchisor (other than the originally named
Tenant hereunder), no such cost, fee or payment shall be due or payable by such
entity.


 


14.          INDEMNIFICATION


 


14.1.       Indemnification
of Landlord.


 


(a)           Tenant
agrees to indemnify, defend and hold Landlord Indemnitees harmless from and
against any and all claims, demands, actions, liabilities, damages, losses,
penalties, fines, costs and expenses, excluding lost profits and consequential
damages, but including reasonable attorneys’ fees and disbursements, for any
injury to person, or damage to, loss or theft of property on the Premises, or
which relates to the use or occupancy thereof by Tenant, or arising from or due
to the negligent acts or omissions, willful misconduct, or fraudulent conduct
of any Tenant Indemnitees, except if and to the extent due to the negligent act
or omission or willful misconduct of any Landlord Indemnitees.


 


(b)           The
obligations of Tenant under this Section 14.1 shall survive the
termination or expiration of this Lease.


 


14.2.       Indemnification
of Tenant.


 


(a)           Landlord
agrees to indemnify, defend and hold Tenant Indemnitees harmless from and
against any and all claims, demands, actions, liabilities, damages, losses,
penalties, fines, costs and expenses, excluding lost profits and consequential
damages, but including reasonable attorneys’ fees and disbursements, for any
injury to person or damage to, loss or theft of property arising from or due to
the negligent acts or omissions, willful misconduct, or fraudulent conduct of
any Landlord Indemnitees, 


 


21

















 


except if and to the extent due to the negligent act or omission or
willful misconduct of any Tenant Indemmitees.


 


(b)           The
obligations of Landlord under this Section 14.2 shall survive the
termination or expiration of this Lease.


 


15.          DEFAULT; REMEDIES


 


15.1.       Default By
Tenant.  Each of the following shall
constitute an Event of Default  (herein so called)
by Tenant under this Lease:


 


(i)               Tenant
fails to pay any installment of Rent in full under this Lease within ten (10) days
after notice from Landlord that such payment was not received when due;


 


(ii)              Tenant fails to  observe
or perform any other provision of this Lease required to be observed or
performed by Tenant and does not cure such failure within thirty (30) days
after notice thereof from Landlord; provided, that if such default is not
capable of being cured within thirty (30) days and Tenant promptly commences
such cure, said thirty  (30)  day period shall be extended so long as Tenant diligently
and continuously pursues such cure;


 


(iii)             Tenant
makes a general assignment for the benefit of creditors;


 


(iv)            A
receiver or trustee of Tenant or any of
their respective assets is appointed by entry of an order by a court of
competent jurisdiction and the same is not vacated, discharged or dismissed
within sixty (60) days thereafter;


 


(v)             A
petition for relief is filed by Tenant
under any bankruptcy or insolvency law seeking a plan of reorganization or
arrangement under any law relating to bankruptcy, or any such petition is filed
against Tenant and same is not dismissed, discharged or vacated within
sixty (60) days thereafter; or


 


(vi)            The
interest of Tenant in the Premises is sold under execution or other legal
process;


 


22

















 


15.2.       Landlord’s
Remedies.


 


(a)           Upon
the occurrence of an Event of Default under Section 15.1, Landlord
shall have the following rights and remedies, subject to the rights of
Franchisor or Tenant Lender under the provisions of Section 15.3
and Section 20.2:


 


(i)               To
terminate this Lease and Tenant’s right of possession of the Premises by giving
notice of such election to Tenant, in which event, on the date specified in
such notice (which shall be not less than three (3) days after the giving
of such notice), Tenant’s right to possession shall terminate and this Lease
shall terminate.  Upon such termination,
in addition to any other rights and remedies to which Landlord may be entitled
under applicable law, Landlord may recover from Tenant:  (a) the worth at the time of award of
the unpaid Rent which had been earned after termination until the time of such
termination; plus (b) the worth at the time of award of the amount by
which the unpaid Rent which would have been earned after termination until the
time of award exceeds the amount of such Rent loss that Tenant proves could
have been reasonably avoided; plus (c) the worth at the time of award of
the amount by which the unpaid Rent for the balance of the Term after the time
of award exceeds the amount of such Rent loss that Tenant proves could be
reasonably avoided; plus (d) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant’s failure to
perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom; plus (e) such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time
by applicable law.  The “worth at the
time of award” of the amounts referred to in clauses (a) and (b) above
shall be computed by allowing interest at the prime rate (as defined in Section 23.6).  The “worth at the time of award” of the
amount referred to in clause (c) above shall be computed by discounting
such amount at a rate equal to the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percentage point;


 


(ii)              To
terminate Tenant’s right of possession of the Premises without terminating this
Lease by giving notice of such election to Tenant, in which event
(A) Tenant shall immediately surrender possession thereof to Landlord,
failing which Landlord may expel or remove Tenant and any other occupant(s) thereof
in accordance with applicable law (“Reentry”),
and (B) Landlord shall have the right to occupy the Premises for and on
account of Tenant and to collect any unpaid rentals and other charges which
have or may thereafter become due and payable;


 


(iii)             To
exercise the rights described in clause (ii) above and
thereafter elect to terminate this Lease and all of Tenant’s rights in or to
the Premises by giving notice of such election to Tenant; or


 


23

















 


(iv)            To
exercise any other right or remedy now or hereafter existing by law or in
equity.


 


(b)           If
Landlord reenters the Premises under subsection (a)(ii) above, such
reentry or any action, in unlawful detainer or otherwise, to obtain possession
of the Premises shall not be deemed to be an election by Landlord to terminate
this Lease, or Tenant’s liability to pay Rent or other charges thereafter
accruing, or Tenant’s liability for damages under any provisions hereof, unless
Landlord elects to terminate this Lease by written notice to that effect given to Tenant.  Tenant covenants that the service by Landlord
of any notice pursuant to the unlawful detainer statutes of the State in which
the Premises is located and the surrender of possession pursuant to such notice
shall not be deemed to be a termination of this Lease, unless Landlord elects
to the contrary by written notice
to that effect given to Tenant at the time of or after the service of any such
statutory notice.  If Landlord reenters
or takes possession of the Premises as aforesaid, Landlord shall have the
right, subject to the provisions of this Lease, including without limitation,
the provisions of Section 16.2, to remove therefrom all or any part
of the personal property located therein and may dispose of or place the same
in storage at a public warehouse at the expense and risk of Tenant; provided,
however, that Landlord shall not be obligated to remove and/or dispose
of any such personal property.


 


(c)           If
Landlord elects to reenter the Premises under subsection (a)(ii) above
and takes possession of the Premises, Landlord shall use commercially
reasonable efforts to mitigate Landlord’s damages and to relet the Premises for
a term, rate and upon such other provisions as Landlord deems appropriate.  If Landlord so reenters and takes possession
of the Premises, Landlord may decorate, repair and alter the Premises to the
extent Landlord deems appropriate for purposes of such reletting.  If Landlord is unable to so relet the
Premises, then Tenant shall pay to Landlord monthly on the first day of each
month during the period that Tenant’s right to possession is terminated, a sum
equal to the Rent due under this Lease for that month.  If the Premises are relet, Landlord shall
apply the rents therefrom first to payment of Landlord’s expenses incurred by
reason of Tenant’s default, second, to payment of Landlord’s expenses of
reletting, including without limitation, brokerage fees and reasonable
attorneys’ fees, and third, to payment of Rent due from Tenant under this
Lease.  All sums expended and concessions
granted to any new tenant shall be amortized on a straight -line
basis over the term of the new lease and Tenant’s liability therefor shall be
limited to that portion attributable to the unexpired term of this Lease.  If the sums received from such reletting are
insufficient to satisfy the payment of Rent due from Tenant under this Lease
for any month, Tenant shall remain liable for the deficiency.  If the sums received from such reletting
exceed the Rent otherwise due from Tenant for any month, Tenant shall have no
rights thereto except that such excess amounts shall be applied against Rent
subsequently due under this Lease.  No
such reletting by Landlord shall be considered to be (A) for Landlord’s
own account unless and until Landlord notifies Tenant that this Lease has been
terminated, and (B) an acceptance of Tenant’s surrender of the Premises
unless and until Landlord so notifies Tenant.


 


24

















 


(d)           At
any time after such termination of this Lease pursuant to Section 15.2(a)(i) or
pursuant to law, whether or not Landlord shall have recovered any amounts under
Section 15.2(a)(i) or 15.2(c), Landlord, at its option,
shall be entitled to recover from Tenant and Tenant shall pay to Landlord, on demand,
all reasonable legal fees and other costs and expenses incurred by Landlord as
a result of Tenant’s default under this Lease and the exercise of any rights
and remedies hereunder.


 


(e)           Mention
in this Lease of any particular remedy shall not preclude Landlord from any
other remedy at law or in equity.  No
right or remedy conferred upon or reserved to Landlord in this Lease is
intended to be exclusive of any other right or remedy; and each and every right
and remedy shall be cumulative and in addition to any other right or remedy
contained in this Lease.  No delay or
failure by Landlord or Tenant to enforce its rights under this Lease shall be
construed as a waiver, modification or relinquishment thereof.  Tenant waives any rights of redemption
granted by any laws if Tenant is evicted or dispossessed, or if Landlord
obtains possession of the Premises by reason of the violation by Tenant of any
of the terms of this Lease.


 


15.3.       Franchisor
Rights.


 


(a)           Landlord
agrees to send a copy of any notice of default required or permitted to be
given to Tenant under this Lease simultaneously to Franchisor at the last
address for Franchisor furnished to Landlord by Franchisor in writing; provided,
that the failure to send such notice shall not limit Tenant’s default or
Landlord’s remedies with respect thereto, or make Landlord liable for any
damages. If Franchisor has received timely notice of such default, (provided,
that the failure to send such notice shall not limit Tenant’s default or
Landlord’s remedies with respect thereto or impose any liability upon Landlord
therefor), Landlord agrees and consents to the curing of any default of Tenant
hereunder by Franchisor, provided that such cure is made by Franchisor
within the time set forth in Section 15.1 for Tenant’s cure (provided,
that Franchisor shall have an additional fifteen (15) days to cure a default
under Sections 15.1(i)), so long as Franchisor notifies Landlord
within the cure periods set forth in such Sections that Franchisor will cure
such defaults).  If Franchisor elects to
cure any Tenant default hereunder, Franchisor shall give notice to that effect
to Landlord and Tenant simultaneously with such cure.


 


(b)           Notwithstanding
anything to the contrary stated herein, if an Event of Default has occurred (including the expiration of any
applicable cure period) and Landlord intends to terminate the Lease on account
thereof, Landlord agrees to give notice thereof to Franchisor (“Termination Notice”), in which event
Landlord agrees not to terminate the Lease (as otherwise permitted hereunder)
for a period of thirty (30) days, during which time Franchisor shall have the
right to lease the Premises upon the same terms and conditions as this Lease,
such election to be made by notice to that effect (“Franchisor Notice”) from Franchisor to Landlord prior to the
end of said 30-day period.  If Franchisor
exercises such right by giving the Franchisor Notice to Landlord by 


 


25

















 


the time and in the manner set forth in the immediately preceding
sentence, then (i) Franchisor and Landlord shall promptly execute and
deliver a written instrument to that effect; (ii) Franchisor shall become
the tenant under this Lease with all of the rights and obligations of tenant
commencing upon, first accruing and effective only from and after the date of
the Franchisor Notice; provided, that Tenant shall not dispute such action by
Franchisor and shall acknowledge its approval of such action by Franchisor;
(iii) Franchisor shall have no liability, responsibility or obligation to
pay or otherwise cure any default of Tenant existing prior the effective date
of exercise by Franchisor of its rights in this subsection; provided, that if
Franchisor has received notice from Landlord of any Event of Default of Tenant
under Sections 15.1(i) Franchisor shall pay any Rent due and
payable by Tenant first accruing only after the date Franchisor receives notice
of any such Event of Default; and (iv) nothing contained herein shall
restrict, limit, terminate, waive or otherwise affect Landlord’s rights against
Tenant on account of Tenant’s default. 
If Franchisor fails to exercise such right on or before the expiration
of said thirty (30) day period, Landlord may pursue any rights and remedies
that it may have against Tenant on account of Tenant’s Event of Default
hereunder.  Nothing contained in this Section shall
be deemed to obligate Franchisor to assume this Lease, to become the tenant
hereunder or to take possession of the Premises.


 


(c)           In
the event that Franchisor becomes the tenant under this Lease pursuant to the
provisions of subsection (b) or an assignment under Section 13.2
above, Franchisor shall have the right at any time thereafter upon prior notice
to, but without the prior consent of Landlord, to assign this Lease and all of
its right, title and interest as Tenant hereunder to an authorized  franchisee of Franchisor. 
In the event of such an assignment, Franchisor shall be released from
all liabilities and obligations of Tenant first accruing from and after the
effective date of said assignment provided that such assignee franchisee
assumes in writing the obligations of Tenant under this Lease and a copy
thereof is furnished to Landlord.


 


16.          SURRENDER OF
PREMISES


 


16.1.       Condition.  Upon the expiration or earlier termination of
this Lease or the termination of Tenant’s right of possession of the Premises
only, Tenant shall surrender the Premises to Landlord in a clean, safe, good and tenantable condition, free
of debris  and with all “grease traps” and similar devices cleaned and in good
working condition, ordinary wear and tear and, if this Lease is terminated
pursuant to Section 11.4(b), damage by Casualty excepted.  All building apparatus and equipment (other
than Tenant’s Property) then located on the Premises and all Alterations and
other improvements to the Premises made during the Term, whether by Tenant or
others, shall remain on the Premises and shall be considered part of the
Premises.  Tenant shall deliver all keys
therefor to Landlord at the place then fixed for the payment of Rent and shall
make known to Landlord the combination for all locks on safes, cabinets and
vaults in the Premises.


 


26

















 


16.2.       Removal of
Tenant’s Property.  Upon the
expiration or earlier termination of this Lease or the termination of Tenant’s
right of possession of the Premises only, Tenant shall, at its sole cost and
expense, for a period of fifteen (15) days thereafter to remove Tenant’s
Property, Distinctive Property and the Financed Personalty, respectively, from
the Premises, provided that Tenant shall pay to Landlord Rent due under Article 3
hereof for the actual number of days which elapse during such fifteen (15) day
period until the Tenant’s Property, Distinctive Property and the Financed
Personalty, as applicable, are removed from the Premises.  If and to the extent that Tenant fails to
remove any of such property by the expiration of said fifteen (15) day period,
Landlord agrees that Tenant Lender, TE Lender and Franchisor each shall have
the right for a period of thirty (30) days thereafter to remove the same from
the Premises, provided, that Tenant shall pay to Landlord Rent due
hereunder for the actual number of days which elapse until Tenant Lender, TE
Lender or Franchisor remove the same from the Premises during such thirty (30)
day period.  If and to the extent that
any such property remains on the Premises on the forty-fifth (45th) day after
such termination, the same shall be deemed abandoned, and at Landlord’s option  shall become the property of Landlord and may be sold or
disposed of as Landlord may determine; provided, however, that
Landlord shall not use, suffer or permit the use of any Distinctive Property
unless the attributes or features thereof associated with Tenant or Franchisor
are removed or obliterated.  Any and all
damage to the Building caused by or resulting from the removal of Tenant’s
Property, Distinctive Property or Financed Personalty shall promptly be
repaired at no cost or expense to Landlord and Tenant shall be liable for such
cost and expense unless such repairs are made by Tenant, Franchisor or TE
Lender, as the case may be.


 


17.          SUBORDINATION AND
ATTORNMENT


 


17.1.       Subordination.  This Lease and the rights of Tenant hereunder
are expressly subject and subordinate to the lien of any mortgage or deed of
trust constituting a lien on Landlord’s fee interest in the Premises (“Landlord Mortgage”) and any renewals,
extensions, modifications, consolidations and replacements thereof, which now
or hereafter affect all or any portion of the Premises (except to the extent that any such instrument expressly
provides that this Lease is superior to it); provided that the holder of the
Landlord Mortgage (“Landlord Lender”)
agrees in writing not to disturb Tenant, Tenant’s right to possession and use
of the Premises and Tenant’s rights under this Lease so long as there shall be
no Event of Default on behalf of Tenant hereunder.  Tenant agrees to execute and deliver to
Landlord and any Landlord Lender at any time and from time to time all such documents reasonably requested by
Landlord or Landlord’s Lender, which are reasonably acceptable to Tenant and
Tenant’s Lender, to confirm or effect such subordination, including, without
limitation, an SNDA substantially in the form attached as Exhibit D
or in such other form as reasonably requested by Landlord or Landlord’s Lender;
provided that such Landlord Lender agrees to recognize this Lease and the
rights of Tenant set forth herein for so long as there shall be no Event of
Default on behalf of Tenant hereunder. 
Notwithstanding any foreclosure or sale under any Landlord Mortgage (or
transfer by deed in lieu thereof), this Lease shall remain in full force and
effect in accordance with its terms. 
Landlord and any Landlord Lender shall execute within ten (10) days
after request any documentation reasonably required by any TE Lender or Tenant
Lender, which are reasonably acceptable to Landlord and any Landlord Lender, to
confirm the priority of such lender’s interests.  Notwithstanding the provisions of this Section 17.1,
the holder of any Landlord Mortgage to which this Lease is subject and
subordinate shall have the right, at its sole option, at any time, to


 


27
















 


subordinate
and subject the Landlord Mortgage, in whole or in part, to this Lease by
recording a unilateral declaration to such effect.  Tenant hereby agrees that any Landlord Lender
shall not be bound to the terms of any material modification or amendment of
this Lease entered into after the date of such Landlord Mortgage, unless such
Landlord Lender has consented to such material modification or amendment.  Tenant hereby agrees that after the date of
such Landlord Mortgage, Tenant shall not pay to Landlord any installment of
Base Rent more than one (1) month in advance of the due date thereof,
unless Landlord Lender shall consent to such prepayment.


 


17.2.       Attornment.  In the event of the foreclosure of any
Landlord Mortgage by voluntary agreement or otherwise, or the commencement of
any judicial action seeking such foreclosure, Tenant will become the tenant of
and attorn to and recognize such Landlord Lender or purchaser in foreclosure as
Tenant’s landlord under this Lease without change in the provisions of this
Lease.  Upon request by such successor in
interest, Tenant will execute and deliver an instrument confirming such
attornment, which will recognize this Lease and the rights of Tenant set forth
herein and shall provide that such successor in interest will not disturb
Tenant in its use of the Premises in accordance with this Lease unless there is
an Event of Default continuing hereunder and such successor in interest would
be entitled to exercise such remedy under Section 15.2 hereof.


 


18.          ESTOPPEL CERTIFICATES


 


18.1.       Estoppel
Certificates.  Within
fifteen (15) days after written request from Landlord or Tenant to the other,
such other party shall execute and deliver an estoppel certificate signed by an
officer of such party and certifying: the Commencement Date and expiration date
of the Term; the date to which Rent has been paid; the amount of Rent then
being paid; that this Lease is in full force and effect and has not been
modified, amended or assigned (or, if modified, stating the nature of such modification
and certifying that this Lease, as so modified, is in full force and effect);
that to such party’s knowledge there are no defaults by the other party under
this Lease, nor to such party’s knowledge any existing condition upon which the
giving of notice or lapse of time or both would constitute a default (or, if
such exist, stating the nature thereof); that such party has received no notice
from any insurance company of any defects or inadequacies of the Premises; that
such party has no options or rights other than as set forth in this Lease; and
such other factual matters as the requesting party may reasonably request.  Failure to deliver such statement within said
fifteen (15) day period shall be
conclusive upon the party to whom the request was directed that this Lease is
in full force and effect, without modification except as may be represented by
the requesting party in the draft estoppel presented, that to such party’s
knowledge there are no uncured defaults in the requesting party’s performance,
and that all other statements required to be made in the estoppel letter are
conclusively made.


 


19.          NOTICES


 


19.1.       Notices.  All notices required or permitted to be given
under this Lease shall be in writing, may be given by a party or its attorney and
shall be deemed given on the date when 


 


28

















 


personally delivered or, if
earlier, the next business day if sent by recognized overnight air courier, or
two (2) business days (or, if earlier, when actually received) after being
deposited in the United States Mail, postage prepaid, properly addressed,
certified mail, return receipt requested, as follows:


 


	
  TO LANDLORD:

  	
  At the address set forth
  in Section 1.2,

  
	
   

  	
   

  
	
  With
  a copy to:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone:
  (      )       -

  
	
   

  	
  Telefax:
  (      )       -

  
	
   

  	
   

  
	
  TO TENANT

  	
  At the address set forth
  in Section 1.3,

  
	
   

  	
  Attention: Chief Financial
  Officer

  
	
   

  	
   

  
	
  With a copy to:

  	
  Peter B.
  Loughman, Esq.

  
	
   

  	
  155 North Michigan Avenue,
  Suite 636

  
	
   

  	
  Chicago, Illinois
  60601

  
	
   

  	
   

  
	
  TO FRANCHISOR:

  	
  [Applebee’s
  Services, Inc.

  
	
   

  	
  11201 Renner Boulevard

  
	
   

  	
  Lenexa, Kansas 66219

  
	
   

  	
  Attention: General
  Counsel]

  



 


Each entity or person
entitled to receive notice or a copy thereof pursuant to this Lease (“Addressee”) at any time and from time to
time may change its address for notice purposes by giving notice of such change
to all other Addressees in any manner specified above at least fifteen (15)
days before such change of address is to become effective.


 


20.          LEASEHOLD
FINANCING


 


20.1.       Leasehold
Financing.  Tenant
shall have the right at any time and from time to time during the Term with
notice to, but without the consent or approval of Landlord, to grant a mortgage
or other security interest (“Leasehold
Mortgage”) in Tenant’s interest in this Lease (the leasehold estate
created hereby), and all of Tenant’s Property, all upon the condition that all rights
acquired under any such Leasehold Mortgage shall be subject to each and all of
the covenants, conditions, terms and restrictions set forth in this Lease. Tenant
Lender’s foreclosure on the Leasehold Mortgage shall not terminate this Lease
or affect any of the covenants, conditions, terms and restrictions set forth in
this Lease as obligations of Tenant.


 


29

















 


20.2.       Tenant
Lender.  If Landlord is provided
written notice of a Leasehold Mortgage and the name and address for notice of
the holder of a Leasehold Mortgage (the “Tenant
Lender”), then the rights of such Tenant Lender shall include the
following, which shall be binding on Landlord (and any Landlord Lender).  Upon recordation of the Leasehold Mortgage
and for so long thereafter as the Leasehold Mortgage remains unsatisfied:  (i) Landlord agrees to deliver a copy of
any notice of default given to Tenant under this Lease simultaneously to Tenant
Lender at its last address furnished to Landlord in writing; (ii) Landlord
agrees that Tenant Lender shall have the right, but shall not be obligated, to
cure any default of Tenant hereunder, provided that such cure is made by Tenant
Lender within the time provided to Tenant pursuant to Section 15.1
(provided, that such Tenant Lender shall have an additional fifteen (15)
days to cure a default under Sections 15.1(i), so long as Tenant
Lender notifies Landlord within the cure periods set forth in such Sections
that it will cure such defaults); (iii) if Tenant Lender elects to cure
any default of Tenant hereunder, (A) Tenant Lender shall give notice to
that effect to Landlord and Tenant simultaneously with such cure, and (B) Landlord
consents to and shall accept such cure with the same force and effect as if
made by Tenant; (iv) Landlord and Tenant each agree not to cancel or
surrender this Lease (other than due to a default by a party which was not
cured within the applicable cure period after notice was given to Tenant and
Tenant Lender) or materially amend the provisions of this Lease without the
prior written consent of Tenant Lender, which consent shall not be unreasonably
withheld or delayed; and (v) if Landlord terminates the Lease due to an
Event of Default which Tenant Lender is unable to cure (e.g., Tenant bankruptcy), and Tenant
Lender elects by written notice to Landlord within forty-five (45) days
thereafter to continue this Lease, Landlord agrees to enter into a new lease
with Tenant Lender on the same terms and conditions as set forth in this Lease
for the balance of the original Term, including any remaining extension
options, provided, that the Tenant Lender shall pay to Landlord at the time of
the execution and delivery of the new lease all sums which would at the time of
the execution and delivery of the new lease be due pursuant to this Lease but
for such termination, and shall agree in writing to cure and shall cure all
other defaults of Tenant capable of being cured by Tenant Lender then existing
under this Lease within a reasonable period of time after entering into such
new Lease.  Landlord agrees promptly to
execute and deliver such documents as Tenant Lender reasonably may request
which are reasonably acceptable to Landlord and any Landlord Lender to evidence
the provisions of this Section 20.2, including the Landlord
Agreement substantially in the form attached hereto as Exhibit B.


 


[Insert
Restrictive Covenant if Landlord owns additional property surrounding Premises]


 


21.          RIGHT OF FIRST
REFUSAL TO PURCHASE


 


If
at any time during the Term, Landlord shall receive a bona fide written offer
to purchase the Premises or any portion thereof or interest therein from a
third party which is not affiliated with Landlord, which offer Landlord is
willing to accept (“Outside Contract”),
Landlord shall give written notice (“Sale
Notice”) thereof, together with a copy  of
such Outside Contract, to Tenant.  Tenant
shall have a right of first refusal (“Refusal
Right”) to purchase the Premises or portion thereof or interest
therein that is the subject of the Outside Contract in accordance with the
terms and provisions thereof.  If Tenant
desires to exercise the Refusal Right, Tenant shall deliver written notice to
that effect to Landlord within five (5) business days after receipt of the
Sale Notice (“Refusal Period”).  If Tenant exercises the Refusal Right by the 


 


30

















 


time
and in the manner set forth in this subsection, Landlord and Tenant shall
promptly execute a contract which includes the same material terms and conditions as the Outside Contract (“Sale Contract”) and Tenant shall deposit when due any earnest money deposit required
thereunder.  If Tenant does not execute a
Sale Contract within fifteen (15) days after Tenant’s receipt of such Sale
Contract from Landlord, signed on behalf of Landlord, or if Tenant defaults in
its obligations under such Sale Contract, then Landlord shall be free to
consummate the sale pursuant to the Outside Contract (or another contract on
substantially similar terms and conditions).


 


If
Tenant does not exercise the Refusal Right by the time and in the manner set
forth in subsection (a) above, then (i) the Refusal Right
shall remain in full force and effect, but not with respect to the proposed
sale pursuant to the Outside Contract, and (ii) Landlord shall be free to
consummate the sale pursuant to the Outside Contract.  If within one hundred eighty (180) days after
the expiration of the Refusal Period Landlord does not consummate the sale
pursuant to the Outside Contract, the Refusal Right shall again be applicable,
and Landlord shall not thereafter sell the Premises pursuant to the Outside
Contract without first offering Tenant the Refusal Right pursuant to this Section 21.


 


The
rights granted to Tenant under this Section 21 shall not survive
the expiration or termination of this Lease.


 


The
provisions of this Section 21 shall not apply and Tenant shall not
have any Refusal Right (i) with respect to the sale, conveyance,
assignment or other transfer (A) to any person controlling, controlled by,
or under common control with Landlord or any of its direct or indirect owners,
(B) by gift, descent or devise, or (C) to any sale (or conveyance in
lieu thereof) by foreclosure or enforcement of a lien or security interest, or
(ii) at any time that an Event of Default has occurred and is
continuing.  Any conveyance of the
Premises to Tenant pursuant to this Section 21 shall be “as-is”
with respect to the physical condition of the Premises.


 


22.          BOOKS AND RECORDS;
FINANCIAL INFORMATION


 


Tenant
shall keep accurate books and records of account of the Premises sufficient to
permit the preparation of financial statements in accordance with generally
accepted accounting principles as in effect in the United States of America
from time to time (“GAAP”), or if Tenant’s books are not kept in accordance
with GAAP in accordance with sound accounting principles consistently
applied.  Tenant shall provide, or cause
to be provided, to Landlord, in addition to any other financial statements
required under this Lease, the following financial statements and information:


 


(a)           At
the request of Landlord, Tenant will provide internally prepared annual
financial statements,  including a
balance sheet and statement of profits and losses, expenses and retained
earnings, changes in financial position and cash flows for such calendar year,
which statements shall be duly certified by an officer of Tenant to fairly
represent the financial condition of Tenant, as of the date thereof, prepared
by Tenant, which are in general conformity with GAAP, or in accordance with
sound accounting principles consistently applied.


 


31

















 


(b)           At
the request of Landlord and no more than twice per year, Tenant shall provide
total sales figures in respect of the Premises for the trailing twelve (12)
month period compiled on a monthly basis, certified by an officer of Tenant to
be true, correct and complete in all material respects; and


 


(c)           such
other information with respect to the Premises or Tenant that may be reasonably
requested from time to time by Landlord, within a reasonable time after the
applicable request, provided that such information is readily available in
Tenant’s normal course of business.


 


23.          MISCELLANEOUS


 


23.1.       Landlord’s
Interests.


 


(a)           The
term “Landlord” as used herein
shall mean only the owner or owners, at the time in question, of the fee title
to the Premises.  In the event of an
assignment or transfer of this Lease by Landlord for other than security
purposes, Landlord shall cause its assignee or transferee to assume the
provisions of this Lease and Landlord shall deliver notice of such assignment
or transfer and a copy of the effective instrument of transfer to Tenant.  Tenant shall be entitled to continue to pay
Rent and give all notices to Landlord until Tenant has received the foregoing
from Landlord.  From and after a sale of
the Premises, Landlord shall be released from all liability toward Tenant
arising from this Lease because of any act, occurrence or omission of Landlord’s
successors occurring after the transfer of Landlord’s interest in this Lease,
provided Landlord’s purchaser or assignee expressly assumes Landlord’s duties
and covenants under this Lease.  Nothing
herein shall be deemed to relieve Landlord of any liability for its acts,
omissions or obligations occurring or accruing up to and including the date of
such transfer.


 


(b)           Anything
contained herein to the contrary notwithstanding, any claim based on or in
respect of any liability of Landlord under this Lease shall be enforced only
against Landlord’s interest in the Premises and shall not be enforced against
Landlord individually or personally.


 


(c)           Landlord
shall have the right to sell, assign or transfer its interest in the Premises
without any prior notice to or consent of Tenant, subject to compliance with
the provisions of Section 21 of this Lease, if applicable.


 


23.2.       Severability.  If any provision of this Lease or the
application thereof to any person or circumstance shall be invalid or
unenforceable under applicable law, such event shall not affect, impair or
render invalid or unenforceable the remainder or any other provision of this 


 


32

















 


Lease, nor shall it affect
the application of any provision of this Lease to other persons or
circumstances.


 


23.3.       Entire
Agreement.  This Lease
and the Exhibits attached hereto set forth the entire agreement between
Landlord and Tenant concerning the Premises and there is no other agreement,
oral or written, between them other than this Lease.  This Lease supersedes and revokes all
previous negotiations, arrangements, letters of intent, offers to lease, lease
proposals and information conveyed, whether orally or in writing, between the
parties or their respective representatives.


 


23.4.       Time.  Time is of the essence of this Lease and the
performance of all obligations under this Lease.


 


23.5.       Binding
Effect.  This Lease shall be binding
upon and inure to the benefit of Landlord, Tenant and their respective
successors and assigns.


 


23.6.       Default
Rate.  All amounts owing to one party
from the other party under this Lease for which a date of payment is not
expressly fixed shall be paid within ten (10) days after the date the
party to whom such amount is payable delivers to the other party appropriate
statements of account.  As used in this
Lease, the words “Default Rate”
shall mean interest at the rate of four
percent (4%) per annum in excess of the “prime rate” from time to time
announced in The  Wall
Street Journal or if such publication ceases to publish a prime rate
then as announced by a comparable publication. 
The Default Rate of interest shall be computed from the date on which
any payment is due from either party to the other through and including the
date paid.


 


23.7.       Force
Majeure.  Neither Landlord nor Tenant
shall be considered in default of any of the terms, covenants and conditions of
this Lease on its part to be performed, if it fails to timely perform same and
such failure is due in whole or in part to any strike, lockout, labor trouble
(whether legal or illegal), civil disorder, restrictive governmental laws and
regulations, riots, insurrections, war, accidents, casualties, acts of God,
acts caused directly or indirectly by the other party hereto (or such party’s
agent, employees or invitees) or any other cause beyond its control.  A party shall be entitled to an extension of
time equal to one (1) day for each day of delay due to force majeure.  The foregoing shall not apply to, excuse or
be invoked to justify any delay in the payment of Rent or any other sum of
money due from one party payable to the other party.


 


23.8.       No Waiver.  No provision of this Lease shall be deemed to
have been waived by either party unless such waiver is in writing signed by
such party.


 


33

















 


23.9.       Captions.  The captions and headings in this Lease are
inserted only as a matter of convenience and do not define, limit, expand or
describe the scope or intent of such provisions.


 


23.10.     Survival.  The following obligations of Landlord and
Tenant shall survive the expiration or earlier termination of this Lease:  (a) any obligation permitted in this
Lease to be performed after the end of the Term; (b) any obligation not
reasonably susceptible of performance prior to the end of the Term; and
(c) any other obligation expressly stated to survive termination.


 


23.11.     Applicable
Law.  This Lease and the rights and
obligations of Landlord and Tenant hereunder shall be governed by and construed
in accordance with the laws and judicial decisions in effect in the State in
which the Premises are located.


 


23.12.     Amendment.  No amendment to the provisions of this Lease
shall be effective or enforceable unless made in writing and signed by Landlord
and Tenant.


 


23.13.     Approvals;
Consents.  Every
approval and consent provided for in this Lease shall be made in writing.


 


23.14.     Rights and
Remedies.  All rights
and remedies granted or referred to in this Lease shall be distinct, separate
and cumulative and none shall exclude any other right or remedy of either party
set forth in this Lease or available at law or in equity.


 


23.15.     Holdover.  If Tenant retains possession of the Premises
after the expiration of the Term with or without the express written consent of
Landlord, Tenant shall be deemed to be occupying the Premises on a
month-to-month basis and the monthly Base Rent payable by Tenant for each month
of the period of such holding over shall be an amount equal to one hundred fifty percent (150%) of the
monthly Base Rent in effect immediately preceding such holdover period; provided,
however, that no payment of such increased monthly Rent by Tenant shall
be deemed to extend or renew the Term. 
In the event that Landlord gives written consent to Tenant to remain in
occupancy beyond the expiration of the Term, such occupancy shall be construed
to be a renewal of this Lease for a month-to-month tenancy upon all of the
terms and conditions set forth in this Lease, except that, unless otherwise
provided in Landlord’s consent, monthly Base Rent payable by Tenant for any
such period of holdover tenancy shall be at the rate equal to one hundred seven
and one-half percent (107.5%) of the monthly Base Rent in effect immediately
preceding such holdover period.


 


23.16.     Memorandum.  Landlord and Tenant agree to complete,
execute, deliver and record in the county in which the Premises are located a
short form memorandum of this Lease 


 


34

















 


substantially in the form
and substance attached hereto as Exhibit C (“Memorandum”).  Tenant shall pay all fees, taxes,
costs and expenses to record the Memorandum.


 


23.17.     No
Third-Party Rights.  The terms and
provisions of this Lease shall not be deemed to confer any rights upon, nor
obligate Landlord or Tenant to, any person or entity other than the parties
hereto, except for any Landlord Lender, Tenant Lender, TE Lender and Franchisor
if and to the extent specifically provided herein.


 


23.18.     Landlord
and Franchisor Access.  Upon
not less than twenty-four (24) hours’ prior
notice (except in the case of an emergency), Landlord may enter upon the
Premises during Tenant’s non-peak
business hours for purposes of inspection and showing the Premises to
prospective purchasers or lenders.  When
entering the Premises, Landlord, its agents, employees and/or contractors
(a) shall identify themselves to Tenant’s personnel immediately upon
entering the Premises, and (b) shall not, in any way, materially or
unreasonably affect, interrupt or interfere with Tenant’s use, business or
operations on the Premises or obstruct the visibility of or access to the
Premises.  Landlord and Tenant (i) acknowledge
that Franchisor, its personnel and agents have the right to enter upon the
Premises for certain purposes under the Franchise Agreement, and (ii) agree
not to interfere with or prevent such entry by Franchisor, its personnel and
agents.


 


23.19.     Due
Authority.


 


(a)           Landlord
represents and warrants to Tenant as follows: 
(i) that Landlord is a limited liability company created, validly
existing and in good standing under Delaware law; (ii) that Landlord has
full right, power and authority to enter into and to perform its obligations
under this Lease and that no consent or approval of any third parties is
necessary in order to do so or that all such consents and approvals have been
obtained; and (iii) that this Lease, when signed by Landlord, is a legal,
valid and binding obligation of Landlord enforceable in accordance with its
terms.


 


(b)           Tenant
represents and warrants to Landlord as follows: 
(i) that Tenant is a limited liability company created, validly
existing and in good standing under Delaware law; (ii) that Tenant has
full right, power and authority to enter into and to perform its obligations
under this Lease and that, except as otherwise specifically provided herein, no
consent or approval of any third parties is necessary in order to do so; and
(iii) that this Lease, when signed by Tenant, is a legal, valid and
binding obligation of Tenant enforceable in accordance with its terms.


 


23.20.     Relationship
of Parties.  Nothing
contained in this Lease shall be deemed to constitute a partnership or joint
venture between Landlord and Tenant.  The
relationship of Landlord and Tenant shall only be deemed to be one of landlord
and tenant.


 


35

















 


23.21.     Preparation
and Signing of Lease.  This Lease
has been negotiated and reviewed by Landlord, Tenant and their respective
attorneys and/or professional advisors, all of whom intend and believe this
Lease to be the product of all of their joint efforts, that it contains the
entire agreement between Landlord and Tenant and as such should not and shall
not be interpreted or construed in favor of or against either Landlord or
Tenant merely because of the efforts of one party or the other in preparing
this Lease.  The submission of this Lease
for review or execution does not constitute a reservation of or option for the
rights conferred herein.  This Lease
shall become effective only if and when executed and delivered by both Landlord
and Tenant.


 


23.22.     Broker.  Landlord and Tenant each warrant and
represent to the other that it has not dealt with any real estate broker,
salesperson or finder in connection with this Lease.  Landlord and Tenant each agree to indemnify,
defend and hold the other party harmless from and against any and all
liabilities and claims for commissions and fees arising out of a breach of its
representation and warranty set forth herein. 
The terms of this Section 23.22 shall survive the expiration or
termination of this Lease.


 


23.23.     Separability.  Each and every covenant and agreement of
Tenant contained in this Lease is, and shall be construed to be, a separate and
independent covenant and agreement, and the breach of any covenant or agreement
by Landlord shall not discharge or relieve Tenant from its obligation to
perform the same.


 


23.24.     Multiple Counterparts.  To facilitate execution, this Lease may be
executed in as many counterparts as may be convenient or required.  It shall not be necessary that the signature
or acknowledgment of, or on behalf of, each party, or that the signature of all
persons required to bind any party, or the acknowledgment of such party, appear
on each counterpart.  All counterparts
shall collectively constitute a single instrument.  It shall not be necessary in making proof of
this Lease to produce or account for more than a single counterpart containing
the respective signatures of, or on behalf of, and the respective
acknowledgments of, each of the parties hereto. 
Any signature or acknowledgment page to any counterpart may be
detached from such counterpart without impairing the legal effect of the signatures
or acknowledgments thereon and thereafter attached to another counterpart
identical thereto except having attached to it additional signature or
acknowledgment pages.


 


23.25.     Business Days.  All references to “business days” contained
herein are references to normal working business days, i.e., Monday through Friday of each
calendar week, exclusive of federal and national bank holidays.  In the event that any event hereunder is to
occur, or a time period is to expire, on a date which is not a business day,
such event shall occur or such time period shall expire on the next succeeding
business day.


 


23.26.     Interpretation.  When the context in which words are used in
this Lease indicates that such is the intent, words in the singular number
shall include the plural and vice versa, and words in the masculine gender
shall include the feminine and neuter genders and vice versa.  


 


36

















 


Further, references to “person”
or “persons” in this Lease shall mean and include any natural person and any
corporation, partnership, joint venture, limited liability company, trust or
other entity whatsoever.  As used herein,
the term “including” shall mean “including, but not limited to”.


 


23.27.     No Merger of Title.  There shall be no merger of this Lease nor of
the leasehold estate created by this Lease with the fee estate in or ownership
of any of the Premises by reason of the fact that the same person, corporation,
firm or other entity may acquire or hold or own, directly or indirectly,
(a) this Lease or the leasehold estate created by this Lease or any
interest in this Lease or in such leasehold estate and (b) the fee estate
or ownership of any of the Premises or any interest in such fee estate or
ownership.  No such merger shall occur
unless and until all persons, corporations, firms and other entities having any
interest in (i) this Lease or the leasehold estate created by this Lease
and (ii) the fee estate in or ownership of the Premises or any part
thereof sought to be merged shall join in a written instrument effecting such
merger and shall duly record the same.


 


23.28      Multiple Persons or Entities.  In the event that either party shall consist of more than one person or
entity, (i) the obligations of such multiple persons or entities shall be
joint and several, and (ii) the first notice with respect to a particular
matter received by the other party from any one of the multiple persons or
entities shall be final and binding on both parties, unless the party with
multiple persons or entities previously has designated one among them as the
representative of all, in which event only a notice from such representative
shall be final and binding on both parties.


 


23.28.     Franchisee Lease Rider.   The parties agree to comply with, and be
bound by, the terms and provisions of the Franchisee Lease Rider attached
hereto as Exhibit E, which terms and provisions are hereby incorporated
into this Lease and made a part hereof.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


37
















 


IN WITNESS WHEREOF, Landlord
and Tenant have executed this Lease as of the day and year first above written.


 


	
  LANDLORD:

  	
  APPLEBEE’S RESTAURANTS
  NORTH LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
              
          , 2010

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TENANT:

  	
  APPLE
                  
  LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
              
          , 2010

  	
  By:

  	
   

  
	
   

  	
   

  	
  Lorin M. Cortina,

  
	
   

  	
   

  	
  Executive Vice President

  



 


38

















 


	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


On this
       day of
          , 2010, before me,
the undersigned, a Notary Public in and for said State, personally appeared
                        ,
known or identified to me to be the
                          
of Applebee’s Restaurants North LLC, a Delaware limited liability company (“Company”), the Company that executed the
within and foregoing instrument, and acknowledged the said instrument to be the
free and voluntary act and deed of said Company for the uses and purposes
therein mentioned, and on oath stated that Jeff Greene is authorized to
executed said instrument.


 


IN WITNESS WHEREOF, I
have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.


 


 


	
   

  	
   

  
	
   

  	
  Notary Public in and for
  said State

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  My Commission Expires:

  	
   

  
				



 


	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


I,
                                          ,
a Notary Public in and for said County, in the State aforesaid, DO HEREBY
CERTIFY, that Lorin M. Cortina, personally known to me to be the Executive Vice
President of Apple
                
LLC, a Delaware limited liability company (“Company”),
and personally known to me to be the same person whose name is subscribed to
the foregoing instrument as such Executive Vice President, appeared before me
this day in person and acknowledged that he signed and delivered the said
instrument as his own free and voluntary act, and as the free and voluntary act
and deed of said Company, for the uses and purposes therein set forth.


 


GIVEN under my hand and
Notarial Seal this          day of
                    ,
2010.


 


 


	
   

  	
   

  
	
   

  	
  Notary Public

  



 


39

















 


EXHIBIT A


 


Land Legal Description


 


Tax
Parcel #:


 


                           Street


                  County


 


A-1

















 


EXHIBIT A-1


 


PREMISES
SITE PLAN


 


A-2

















 


EXHIBIT B


 


LANDLORD AGREEMENT


 


To:                            Bank of
America, N.A., as Agent


Agency
Management


Mail
Code NC1-001-15-14


101
N. Tryon Street


Charlotte,
NC 28255


Attention:  Randy
Pino


 


                                                    ,
a
                                        
(the “Tenant”), is the tenant under that certain lease dated
                    ,
            , as
amended from time to time (“Lease”), with
                                              ,
a
                                        
(the “Landlord”), covering certain premises (the “Premises”), as legally
described on attached Exhibit A . 
The Landlord is the sole owner of the fee simple interest in the
Premises.  The Tenant has certain of its
assets located on the Premises.


 


The Tenant and certain of
its affiliates (collectively, the “Borrowers”) have entered into certain
financing arrangements with Bank of America, N.A., in its capacity as Agent (in
such capacity and together with any successor acting in such capacity under the
Credit Agreement, the “Agent”), and the lenders (the “Lenders”) party to the
Second Amended and Restated Loan and Security Agreement among the Borrowers,
the Agent and the Lenders (as from time to time amended, revised, modified,
supplemented or amended and restated, the “Credit Agreement”).  As a condition to the Lenders’ agreeing to
make loans and other financial accommodations and extensions of credit to the
Borrowers, the Agent, acting on behalf of the Lenders, requires, among other
things, first priority liens on all of the Tenant’s personal property located
on the Premises (collectively, the “Collateral”) and that the Tenant grant [a leasehold mortgage]  [a leasehold deed of trust]
[an assignment of tenant’s interest in
the Lease] to the Agent for the benefit of the
Lenders and other parties (the “Secured Parties”) covering the leasehold estate
created by and under the Lease and Tenant’s interest in the Lease.


 


In order to induce the Agent
and the Lenders (together with their successors and assigns) to enter into said
financing arrangements and to make the loans under the Credit Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:


 


1.             The Landlord hereby consents to the
execution, delivery, performance and recordation of [an
assignment of lessee’s interest in lease (as the same may be amended,
supplemented or otherwise modified from time to time, the “Assignment of Lessee’s
Interest”)]  [a leasehold
mortgage]  [a leasehold
deed of trust] conveying the leasehold estate
created by and under the Lease [(as the same
may be amended, supplemented or otherwise modified from time to time, the “Leasehold
Mortgage”)], and Landlord agrees that the
execution, delivery, 


 


B-1

















 


performance
and recordation of [the Assignment
of Lessee’s Interest]  [the Leasehold Mortgage] will not
constitute a breach of or default under the Lease;


 


2.             The Landlord agrees that the Lease
represents the full and complete agreement between the Tenant and the Landlord
concerning the Premises and the Landlord hereby agrees not to (i) modify
or amend the Lease, (ii) terminate the Lease, or (iii) tender or
accept surrender of the Lease, in each case without the prior written consent
of Agent;


 


3.             The Landlord hereby
certifies and agrees that:


 


(a)           The Lease is in full force and
effect, all conditions to the commencement of the term of the Lease have been
satisfied, and, except as set forth on Exhibit A, there are no
amendments, modifications, or supplements, whether oral or written, thereto;


 


(b)           The Tenant is not in default under
the Lease, nor are there any events or conditions which, by the passage of time
or giving of notice or both, would constitute a default thereunder by the
Tenant;


 


(c)           The Landlord is not aware of any
dispute, action, suit, condemnation proceeding, claim or right of setoff pending
or threatened with respect to the Lease or the Premises;


 


(d)           None
of the Collateral shall be deemed to be fixtures;


 


(e)           The Landlord will not assert against
any of the Collateral any statutory or possessory liens, including, without
limitation, rights of levy or distraint for rent, all of which the Landlord
hereby waives.  Without limiting the
foregoing, any liens or claims against the Collateral that the Agent or any of
the Secured Parties have or may hereafter have pursuant to the Loan Documents
are and shall remain superior to any liens or security interests on or claims
against the Collateral which the Landlord now has or may hereafter have by
virtue of any statute, agreement or otherwise, all of which liens, interests
and claims of the Landlord are hereby unconditionally subordinated to the
rights of the Agent or any of the Secured Parties with respect to the
Collateral (regardless of the existence of or time of filing of any financing
statements);


 


(f)            The Landlord will notify the Agent
if the Tenant defaults on its Lease obligations to the Landlord and allow the
Agent on behalf of the Secured Parties thirty (30) days from its receipt of
notice in which to cure or cause the Tenant to cure any such default under the
Lease.  Landlord agrees that in the event
such default is of a nature as cannot be cured by Agent within the cure period
described above, so long as all delinquent rents have been paid and current
rents continue to be paid, Agent shall have an additional period of time as is
reasonably necessary to (i) effect the cure of the default, or (ii) exercise
its rights and remedies pursuant to [the Assignment
of Lessee’s Interest]  [the Leasehold Mortgage] and/or to
foreclose the security interests in the Lease and the leasehold estates created
under the Lease.  Cure of the default by
the Agent shall be at Agent’s option and shall have the same effect as if made
or performed by Tenant, shall preclude Landlord’s right to terminate the Lease
or seek any other remedial action available thereto, pursuant to the Lease or
applicable law, and shall keep the 


 


B-2

















 


Lease
in full force and effect.  Any
non-curable default, including without limitation a default arising as a result
of the bankruptcy or insolvency of the Tenant [or
a breach of the continuous operation covenant, if any, contained in the Lease], shall be cured by Agent exercising its
rights to acquire the Tenant’s interest in the Lease pursuant to [the Assignment of Tenant’s Interest]  [the
Leasehold Mortgage] and assumption
of Tenant’s obligations under the Lease. 
Furthermore, if the Lease terminates before the natural expiration of
its term (including any renewal periods exercised by Tenant or Agent), so long
as delinquent rents have been paid and current rents continue to be paid, the
Landlord shall enter into a new lease of the Premises with the Agent or a
Permitted Assignee (as defined in Subsection (l) below) for the unexpired
term, including options to renew, on the same terms and conditions set forth in
the Lease;


 


(g)           If, for any reason whatsoever, the
Landlord deems itself entitled either to terminate or cancel the Lease or to
redeem or take possession of the Premises during the term of the Lease, the
Landlord will notify the Agent at least thirty (30) days before taking any such
action;


 


(h)           If the Agent, on behalf of the
Secured Parties, undertakes to enforce its security interest in the Collateral
and/or to enforce its rights in the Lease and/or to foreclose on the Tenant’s
leasehold estate pursuant to [the Assignment
of Lessee’s Interest]  [the Leasehold Mortgage], the Agent,
on behalf of the Secured Parties, may, at its option and by written notice to
the Landlord, (i) lease the Premises from the Landlord on the same terms
as set forth in the Lease and exercise the other rights as lessee thereunder as
described therein, and/or (ii) assign its interests in the Lease to, or
enter into a sublease with, a Permitted Assignee (and the Agent and the Secured
Parties shall be released from all obligations under the Lease upon assignment
to a Permitted Assignee, other than for liabilities incurred by Agent or the
Secured Parties during any period the Agent was the tenant); and the Landlord
shall cooperate with any such enforcement action or foreclosure and shall
consent to the assumption of the Lease, the sublet of the Premises and/or the
foreclosure sale of the leasehold estate to a Permitted Assignee;


 


(i)            If any of the Borrowers default on
any of their obligations to the Agent or the Secured Parties (including but not
limited to a default under the Lease) and the Agent, on behalf of the Secured
Parties, undertakes to enforce its security interest in the Collateral, but
chooses not to exercise its rights under clause (h) above, the Landlord
will cooperate with the Agent in its efforts to assemble all of the Collateral
located on the Premises, will permit the Agent to remain on the Premises for
ninety (90) days after the Agent declares the default and/or, at the Agent’s
option, will permit the Agent to remove the Collateral from the Premises within
a reasonable time, not to exceed ninety (90) days after the Agent on behalf of
the Secured Parties declares the default, and Landlord will not hinder the
Agent’s actions in enforcing its liens on the Collateral provided that in the event Agent chooses to
exercise its rights under this Section 3(i), Agent agrees to pay base rent
(to the extent not paid by Tenant) until the last day of the month in which
Agent completes the removal of Collateral from the Premises;


 


(j)            In the event that the Tenant shall
become a debtor under the Federal Bankruptcy Code and, in connection therewith,
the Tenant shall reject the Lease as an executory contract, then upon the
request by the Agent, on behalf of the Secured Parties, made within thirty (30)
days following such rejection, the Landlord shall enter into a new lease of the
Premises with the Agent or a Permitted Assignee, which new lease shall be for
the remaining 


 


B-3

















 


term
of the Lease and shall be on substantially the same terms and conditions as the
Lease (including any provisions for renewal or extension of the term of the
Lease);


 


(k)           The Agent, on behalf of the Secured
Parties, shall be entitled to payment of insurance proceeds arising from a
casualty up to the value of the leasehold improvements in the event the
Premises are not restored or the Lease is terminated prior to the scheduled
expiration date of the Lease; and


 


(l)            For purposes of this Agreement, a “Permitted
Assignee” is defined to be one of the following:


 


(i)            a
third party purchaser assignee approved by Landlord, such approval not to be
unreasonably withheld, delayed or conditioned;


 


(ii)           a
person or entity permitted under
Section        of the Lease without the necessity
of Landlord’s approval; or


 


(iii)          a
franchisor or franchisee of a nationally recognized casual dining restaurant
concept similar to Applebee’s, without the necessity of Landlord’s approval [examples of such restaurant concepts being
TGI Fridays, Chili’s, Olive Garden, Macaroni Grill, Ruby Tuesday and O’Charleys].


 


4.             The Landlord hereby represents and
warrants that it has obtained all necessary consents to the execution,
delivery, performance and recordation of this agreement.


 


Any notice(s) required
or desired to be given hereunder shall be directed to the party to be notified
at the address stated herein.


 


The agreements contained
herein shall continue in force until the date on which all of the Borrowers’
obligations and liabilities to the Agent and the Secured Parties are paid and
satisfied in full and all financing arrangements between the Agent, the Secured
Parties and the Borrowers have been terminated.


 


The Landlord will notify all
successor owners, transferees, purchasers and mortgagees of the existence of
this agreement.  This agreement may not
be modified or terminated orally and shall be binding upon the successors,
assigns and personal representatives of the Landlord, upon any successor owner
or transferee of the Premises, and upon any purchasers, including any
mortgagee, from the Landlord.  The
Landlord consents to the recordation of this Agreement.


 


THE LANDLORD AGREES THAT
NOTHING CONTAINED IN THIS AGREEMENT SHALL BE CONSTRUED AS AN ASSUMPTION BY THE
AGENT OR THE SECURED PARTIES OF ANY OBLIGATIONS OF THE TENANT CONTAINED IN THE
LEASE.


 


B-4

















 


IF, AT ANY TIME, THERE IS A
CONFLICT BETWEEN ANY PROVISION OF THIS AGREEMENT AND ANY PROVISION OR
PROVISIONS OF THE LEASE, THEN SUCH PROVISION OF THIS AGREEMENT SHALL CONTROL
AND GOVERN.


 


THIS AGREEMENT SHALL NOT
IMPAIR OR OTHERWISE AFFECT THE TENANT’S OBLIGATIONS TO PAY RENT AND ANY OTHER
SUMS PAYABLE BY THE TENANT OR TO OTHERWISE PERFORM ITS OBLIGATIONS TO THE
LANDLORD PURSUANT TO THE TERMS OF THE LEASE.


 


Executed
and delivered this          day of
                            ,
2010.


 


	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
  [insert name of Landlord]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
  [insert name of Tenant]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
				



 


B-5

















 


	
   

  	
  AGENT:

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as
  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
  Bank of America, N.A., as
  Agent

  
	
   

  	
   

  	
  Agency Management

  
	
   

  	
   

  	
  Mail Code NC1-001-15-14

  
	
   

  	
   

  	
  101 N. Tryon Street

  
	
   

  	
   

  	
  Charlotte, NC 28255

  
	
   

  	
   

  	
  Attention: Randy Pino

  
				



 


B-6
















 


ACKNOWLEDGMENT


 


	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


On this
           day of
                              ,
2010, before me, a Notary Public in and for said County and State, personally
appeared                                ,
known to me to be the                              of                                    the                                           that
executed the within instrument and known to me (or proved to me on the basis of
satisfactory evidence) to be the person who executed the within Instrument on
behalf of the trust therein named.


 


IN TESTIMONY WHEREOF, I
have hereunto sent my hand and affixed by official seal in the County and State
aforesaid, the day and year first above written.


 


 


	
   

  	
   

  
	
   

  	
  Notary Public, State of

  
	
   

  	
  My Commission expires:

  



 


	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


On this
           day of
                              ,
2010, before me, a Notary Public in and for said County and State, personally
appeared                                ,
known to me to be the                                of                                the                                          that
executed the within instrument and known to me (or proved to me on the basis of
satisfactory evidence) to be the person who executed the within Instrument on behalf
of the
                  
therein named.


 


IN TESTIMONY WHEREOF, I
have hereunto sent my hand and affixed by official seal in the County and State
aforesaid, the day and year first above written.


 


 


	
   

  	
   

  
	
   

  	
  Notary Public, State of

  
	
   

  	
  My Commission expires:

  



 


B-7

















 


	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


On this
           day of
                              ,
2010, before me, a Notary Public in and for said County and State, personally
appeared
                              ,
known to me to be a
                                 of
BANK OF AMERICA, N.A., the
                              that
executed the within instrument and known to me (or proved to me on the basis of
satisfactory evidence) to be the person who executed the within Instrument on
behalf of the trust therein named.


 


IN TESTIMONY WHEREOF, I
have hereunto sent my hand and affixed by official seal in the County and State
aforesaid, the day and year first above written.


 


 


	
   

  	
   

  
	
   

  	
  Notary Public, State of

  
	
   

  	
  My Commission expires:

  



 


B-8

















 


Exhibit A


Premises Legal Description


 


B-9

















 


EXHIBIT C


 


Memorandum of Lease


 


THIS
MEMORANDUM OF LEASE dated
                                ,
2010 is made by and between
                                    ,
a
                                        
(“Landlord”), and APPLE
                
LLC, a Delaware limited liability company (“Tenant”).


 


Recitals:


 


A.  Landlord entered into a certain lease dated
                  ,
2010 (the “Lease”) with Tenant covering certain premises located in
                      ,
              
County,        as legally described in attached Exhibit A
(“Premises”), for the term and upon and subject to the provisions and
conditions set forth therein, including options to extend the term, a right of
first refusal to purchase the Premises in certain circumstances.


 


B.  Landlord and Tenant desire to give notice of
the Lease and of the terms, conditions and provisions thereof, including the
options to extend the term and right of first refusal to purchase.


 


NOW, THEREFORE, in consideration of the sum
of Ten Dollars ($10.00) and other good and valuable considerations, the receipt
and sufficiency of which are hereby acknowledged, and pursuant to the
provisions of Section 23.16 of the Lease, Landlord and Tenant agree as
follows:


 


1.  Lease Agreement..  Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord the Premises, together with certain rights and
appurtenances thereto, upon and subject to the terms and provisions set forth
in the Lease.


 


2.  Term.  The Term of the Lease commenced
                                  ,
2010 and, unless sooner terminated or extended pursuant to the provisions
thereof, expires on
                                  ,
2030.


 


3.  Extension
Options.  The Lease
grants to Tenant the right and option, subject to certain conditions, to extend
the initial Term for two additional periods of five (5) Lease Years each
and one additional period of four (4) Lease Years and eleven (11) months.


 


4.  Right of First
Refusal to Purchase.  The
Lease grants to Tenant the right of first refusal to purchase the Premises
under certain terms and conditions as more fully set forth therein.


 


[Include
express reference to any easements if Premises does not have direct access to
public street]


 


5. 
Notice.  The purpose
of this Memorandum is to give notice of the Lease and of all the provisions
thereof, including the extension options and rights to purchase the premises,
to the 


 


C-1

















 


same
extent as if fully set forth herein.  If
and to the extent of any conflict between the provisions of the Lease and those
set forth in this Memorandum, the provisions of the Lease shall control.


 


IN WITNESS WHEREOF, Landlord and Tenant have
executed and delivered this instrument as of the day and year first above
written.


 


 


	
  LANDLORD:

  	
  ,

  	
   

  
	
   

  	
  a

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TENANT:

  	
  APPLE
                
  LLC,

  	
   

  
	
   

  	
  a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Lorin M. Cortina

  	
   

  
	
   

  	
   

  	
  Executive Vice President

  	
   

  
					



 


C-2

















 


ACKNOWLEDGMENTS


 


	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


On this
       day of
                          ,
2010, before me, the undersigned, a Notary Public in and for said State,
personally appeared
                          ,
known or identified to me to be the
                                    
of
                                    ,
a                                                 
(“Company”), the Company that
executed the within and foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said Company for the
uses and purposes therein mentioned, and on oath stated that
                                
is authorized to executed said instrument.


 


IN WITNESS WHEREOF, I
have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.


 


 


	
   

  	
   

  
	
   

  	
  Notary Public in and for
  said State

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
  My Commission Expires:

  



 


	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


I,
                                        ,
a Notary Public in and for said County, in the State aforesaid, DO HEREBY
CERTIFY, that Lorin M. Cortina, personally known to me to be the Executive Vice
President of Apple
              
LLC, a Delaware limited liability company (“Company”), and personally known to
me to be the same person whose name is subscribed to the foregoing instrument
as such Executive Vice President, appeared before me this day in person and
acknowledged that he signed and delivered the said instrument as his own free
and voluntary act and as the free and voluntary act and deed of said Company,
for the uses and purposes therein set forth.


 


GIVEN
under my hand and Notarial Seal this
         day of
                          ,
2010.


 


 


	
   

  	
   

  
	
   

  	
  Notary Public

  



 


C-3

















 


EXHIBIT A


Premises
Legal Description


 


C-4

















 


EXHIBIT D


 


Subordination, Non-disturbance and


Attornment Agreement


 


THIS
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”), is
made as of
                                ,
200 , by and among APPLE
                              
LLC, a Delaware limited liability company (“Tenant”),
                                          
(“Landlord”),
                                            ,
a
                                        
(“Lender”) and BANK OF AMERICA, N.A., a national banking association, acting in
its capacity as agent as described below (in such agency capacity, together
with its successors, the “Agent”).


 


PRELIMINARY STATEMENT


 


Landlord
(or Landlord’s predecessor-in-interest) and Tenant are parties to a Lease,
dated as of                                 ,
2010 (as the same has been or hereafter may be amended from time to time, the “Lease”),
pursuant to which Tenant leases from Landlord certain real property legally
described on the attached Exhibit A and certain improvements located
thereon (the “Premises”).  The Premises
are or will be encumbered by that certain Mortgage, Assignment of Rents and
Leases, Security Agreement and Fixture Filing from Landlord in favor of Lender
(the “Mortgage”) securing that certain Promissory Note dated on or about the
date of this Agreement payable to the order of Lender with respect to the
Premises (the “Note”) evidencing the loan by Lender to Landlord (the “Loan”).  Tenant has agreed to recognize the rights of
Lender in accordance with the terms and provisions of this Agreement.  Agent is the agent on behalf of certain
lenders with respect to financing to be provided by such lenders to Tenant and
its affiliates (the “Leasehold Loans”).


 


AGREEMENT


 


In
consideration of the mutual covenants and provisions of this Agreement, the
parties agree as follows:


 


1.             Subordination.  The Lease and the leasehold estate created
thereby are hereby declared to be, and hereafter shall continue at all times to
be, junior, subject and subordinate, in each and every respect, to the
Mortgage, including, without limitation, (i) any and all increases,
renewals, modifications, extensions, substitutions, replacements and or
consolidations of the Note or the Mortgage and (ii) any future mortgage or
encumbrance affecting the Premises held by or made for the benefit of Lender
and/or its successors and assigns.  The
foregoing subordination is effective and self-operative without the necessity
for execution of any further instruments. 
At any time at the election of Lender, Lender shall have the right to
declare the Lease superior to the lien, provisions, operation and effect of the
Mortgage.


 


D-1

















 


2.             Attornment; Nondisturbance.  (a) Notwithstanding the foregoing
subordination, if the interest of Landlord under the Lease shall be transferred
by reason of foreclosure or other proceedings (judicial or non-judicial) for
enforcement of the Mortgage or by reason of a deed in lieu of foreclosure,
Tenant shall be bound to the transferee and its successors and assigns (the “Purchaser”)
acquiring said interests pursuant to all of the terms, covenants and conditions
of the Lease for the balance of the term of the Lease then remaining and any
extensions or renewals thereof which may be effected in accordance with any
option therefor in the Lease, with the same force and effect as if the
Purchaser were the original landlord under the Lease, and Tenant does hereby
attorn to and agree to attorn to the Purchaser, as its landlord, said
attornment to be effective and self-operative without the necessity for
execution of any further instruments, upon Purchaser succeeding to the interest
of the Landlord under the Lease.


 


(b) 
Notwithstanding the provisions of Section 1 and provided that no “Event
of Default” under the Lease (“Lease Event of Default”) by Tenant has occurred
and is continuing, Purchaser shall be bound to Tenant and its successors and
assigns pursuant to all of the terms, covenants and conditions of the Lease for
the balance of the term of the Lease then remaining and any extensions or
renewals thereof which may be effected in accordance with any option set forth
in the Lease, with the same force and effect as if Purchaser were the original
landlord under the Lease, and provided that no Lease Event of Default has
occurred and is continuing, the Lease shall not be terminated, nor shall Tenant’s
use, possession or enjoyment of the Premises be interfered with, nor shall the
leasehold estate granted by the Lease be affected in any other manner, in any
foreclosure or any action or proceeding instituted under or in connection with
the Mortgage.


 


3.             Further Acts.  Notwithstanding any provisions contained in Sections
1 and 2 above which state that the attornment and subordination by
Tenant to Purchaser are effective and self-operative without the execution of
any further instrument, Tenant agrees that, upon reasonable request of Lender
and/or Purchaser, it will execute such written agreement as is necessary to
evidence and affirm any and all of Tenant’s obligations under this Agreement,
and further, Tenant agrees that it will execute from time to time such further
assurances and estoppel certificates as may reasonably be requested by Lender
and Purchaser, provided that such assurances and estoppel certificates are
consistent with the Lease and do not modify or amend the Lease.  Without limiting the generality of the
foregoing, if and to the extent that Landlord rejects the Lease in any federal
or state proceeding, Tenant will, upon the request of Lender or Purchaser,
immediately enter into a new lease directly with the Purchaser on the same
terms as the Lease, provided execution of such new lease does not violate any
bankruptcy law or related court order.


 


4.             Limitation.  Neither Lender nor any Purchaser shall be: (a) liable
for any act or omission of Landlord or any prior landlord (including the loss
or misappropriation of any rental payments or security deposits) except that if
such act or omission results in a breach or default of Landlord’s obligations
under the Lease that is still outstanding at the time Lender or Purchaser
succeeds to title and Lender or Purchaser have received notice of such breach
or default, then Lender or Purchaser shall be liable only for such breach or
default occurring during the period in which Lender or Purchaser is in title or
possession of the Property; (b) subject to 


 


D-2

















 


any credits, claims,
setoffs, offsets or defenses which Tenant may have against Landlord or any
prior landlord except as permitted under the Lease and provided Lender or
Purchaser has received notice of such credit, claim, setoff, claim, offset or
defense; (c) bound by (or responsible for) any advance payment of rent or
any other monetary obligations under the Lease to Landlord in excess of one
month’s prepayment thereof in the case of rent, or in excess of one periodic
payment in advance in the case of any other monetary obligations under the
Lease except to the extent that Tenant is required to prepay such sums under
the terms of the Lease; (d) bound or liable for any indemnity obligation
set forth in the Lease to the extent arising prior to the time Lender or
Purchaser succeeds to title; (e) bound by any material amendment or
modification of the Lease to which Lender or Purchaser has not consented in
writing (which consent shall not be unreasonably withheld, delayed or
conditioned), and any attempted material amendment or modification of the Lease
without said consent shall be null and void and of no force and effect as
between Lender (or Purchaser) and Tenant, and Tenant shall not surrender the
Premises without the consent of Lender or Purchaser in writing, and any
attempted surrender of the Premises without said consent shall be null and void
and of no force and effect; (f) liable for latent and/or patent defects in
the construction of the Premises; (g) liable for any breach of any
warranty in the Lease by Landlord or a prior landlord; (h) bound by any
obligation to repair, replace, rebuild or restore the Premises, or any part
thereof, in the event of damage by fire or other casualty, or in the event of
partial condemnation, beyond such repair, replacement, rebuilding or
restoration except as may be required of the landlord under the Lease; (i) required
to remove any person occupying the Premises or any part thereof; or (j) bound
by the right of first refusal set forth in the Lease solely in connection with
any foreclosure or enforcement of a lien or security interest.  Neither Lender nor any Purchaser shall be
liable for any reason for amounts in excess of the value of its interest in the
Premises, or for consequential or punitive damages of any kind.


 


5.             Notice; Cure; Waivers.  Tenant agrees to give prompt written notice
to Lender (and to any successor in interest to Lender of which Tenant has been
notified) of any default of the Landlord under the Lease if such default is of
such a nature as to give Tenant a right to terminate the Lease, reduce rent or
to credit or offset any amounts against future rents.  If, within thirty (30) days after receipt of
such written notice from Tenant, Lender, at Lender’s sole option, commences to
cure a default of Landlord under the Lease that is capable of being cured by
Lender, or commences to pursue any other of its remedies under the Mortgage
which  is deemed by Lender to be a
condition precedent to Lender’s ability to cure such default, and thereafter
diligently pursues such cure or enforcement of its remedies under the Mortgage
as aforesaid to completion, Tenant agrees not to terminate the Lease, reduce
rent, credit or offset against future rents, for a period of thirty (30) days
or such additional period of time as is reasonably necessary for Lender or
Purchaser to cure the default to completion. 
As against Lender and its successors in interest, Tenant hereby waives
any default by Landlord which is not capable of being cured by Lender.


 


6.             Payments of Rent to Lender.  Landlord absolutely assigns to Lender all
payments of rent as the same are due under the Lease (the “Rent”) and Tenant
agrees that, from and after receipt of thirty (30) days prior written notice
from Lender (which notice shall not be given unless an Event of Default has and
is continuing under the Note or Mortgage), Tenant will


 


D-3
















 


pay
the Rent directly to Lender until such time as Tenant receives a contrary
notice from Lender or, if earlier, until the obligations under the Note have
been fully satisfied by Landlord.  All
such rental payments received by Lender shall be credited against Landlord’s
obligations to Lender.  Landlord, by its
execution hereof, agrees that this Agreement does not constitute a waiver by
Lender of any of Lender’s rights under the Mortgage and any assignment of
leases or rents contained therein, or in a separate instrument or in any way
release the Landlord from any of the terms, conditions, obligations, covenants
and agreements of the Mortgage.


 


7.             Certification.  Tenant hereby certifies to and agrees with
Lender as follows, with the understanding that Lender is relying on such
certifications and agreements in the making of the loan evidenced by the Note
and secured by the Mortgage: (a) the Lease is in full force and effect; (b) to
the current, actual knowledge of the undersigned, all requirements for the commencement
and validity of the Lease have been satisfied; (c) to the current, actual
knowledge of the undersigned, Tenant is not in default under the Lease; to the
best of Tenant’s knowledge, information and belief, the Landlord is not in
default under the Lease; no act, event or condition has occurred, which with
notice or the lapse of time, or both, would constitute a default by Tenant or
Landlord under the Lease; no claim by Tenant of any nature exists against
Landlord under the Lease; and all obligations of Landlord have been fully
performed; (d) to the current, actual knowledge of the undersigned, there
are no defenses, counterclaims or setoffs against rents or charges due or which
may become due under the Lease; (e) none of the rent which Tenant is required
to pay under the Lease has been prepaid, or will in the future be prepaid, more
than one month in advance except as required by the terms of the Lease;
(f) except as set forth in Section 21.1 in the Lease, Tenant
has no right or option contained in the Lease or in any other document to
purchase all or any portion of the Premises; and (g) the Lease has not
been terminated, modified or amended.


 


8.             Leasehold Loan Provisions.


 


(a)  Lender hereby consents to the execution, delivery,
performance and recordation by Tenant of a leasehold mortgage conveying a lien
on Tenant’s leasehold interest in the Lease for the benefit of Agent, acting on
behalf of itself and the lenders providing the Leasehold Loans.


 


(b)  Notwithstanding anything to the contrary contained in this
Agreement, in all instances, including, without limitation, in the event of a
Lease Event of Default by Tenant under the terms of the Lease, Lender agrees,
on behalf of itself and its successors and assigns, including, without
limitation, any Purchaser, (i) to be bound by the covenants and agreements
of the Landlord set forth in Article 20 of the Lease and the
Landlord Agreement between Landlord, Tenant and Agent executed and delivered in
relation to the Lease on or about the date hereof, and (ii) to provide
such notices and opportunity to cure as set forth in the Lease, to Agent as
more particularly set forth therein in the event that Lender has commenced to
exercise certain of its rights under the Mortgage, has foreclosed on the
Premises or has otherwise taken possession of the Premises.


 


D-4

















 


(c)  If for any reason Lender takes possession of the Premises
during the term of the Lease, terminates or cancels the Lease, commences a
foreclosure or accepts a deed in lieu of foreclosure, Lender agrees to notify
Agent within fifteen (15) days before taking such action.


 


(d)  Lender further agrees, on behalf of itself and its successors
and assigns (including Purchaser), with the Agent, that if a monetary Lease
Event of Default under the Lease has occurred, as long as the Agent has cured
such monetary Lease Event of Default in accordance with Article 20
of the Lease and the Landlord Agreement, and no monetary Lease Event of Default
is continuing as of the date Lender commences foreclosure proceedings or
accepts a deed in lieu of foreclosure, or at any time thereafter, no “Event of
Default” under the Note or Mortgage, and no proceeding to foreclose the same
will disturb the Tenant’s, Agent’s or subsequent assignee’s possession under
the Lease, and the Lease will not be affected or cut off thereby.  In such event, the Tenant and/or the Agent
(if it has exercised its rights to become the tenant under the Lease), shall
attorn to Lender (or Purchaser) and shall be deemed to have assumed all rights
and obligations of Tenant under the Lease, and the Lease will be recognized as
a direct lease from Lender or Purchaser.


 


(e)  Lender, on behalf of itself and its successors and assigns,
including, without limitation, any Purchaser, hereby waives all rights it may
have in and to the “Tenant’s Property” as defined in the Lease; provided that
this shall not limit Lender’s right or ability to obtain and enforce a judgment
or similar lien against Tenant or any of its other assets.


 


9.             Governing Law.  For purposes of any action or proceeding
arising out of this Agreement, the parties hereto expressly submit to the
jurisdiction of all federal and state courts located in the State of
                  ,
and Landlord, Tenant and Lender consent that they may be served with any
process or paper by registered mail or by personal service at their respective
principal place of business in accordance with applicable law.  Furthermore, Landlord and Tenant waive and
agree not to assert in any such action, suit or proceeding that it is not
personally subject to the jurisdiction of such courts, that the action, suit or
proceeding is brought in an inconvenient forum or that venue of the action,
suit or proceeding is improper.  It is
the intent of the parties hereto that this Agreement, the subordination of the
Lease and the rights and remedies set forth in this Agreement shall be governed
by the laws of the State in which the Premises are located.  Nothing contained in this paragraph shall
limit or restrict the right of any party to commence any proceeding in the
federal or state courts located in the State in which the Premises are located
to the extent such party deems such proceeding necessary or advisable to
exercise remedies available under this Agreement.


 


10.           Notices.  All notices, consents, approvals or other
instruments required or permitted to be given by either party pursuant to this
Agreement shall be in writing and given by (i) hand delivery, (ii) express
overnight delivery service or (iii) certified or registered mail, return
receipt requested, and shall be deemed to have been delivered upon (a) receipt,
if hand delivered, (b) the next business day, if delivered by express
overnight delivery service, or (c) the 


 


D-5

















 


third business day following
the day of deposit of such notice with the United States Postal Service, if
sent by certified or registered mail, return receipt requested.  Notices shall be provided to the parties and
addresses (or facsimile numbers, as applicable) specified below:


 


	
  If
  to Landlord:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Telecopy:

  
	
   

  	
   

  
	
  If
  to Tenant:

  	
  Apple
                                    
  LLC

  
	
   

  	
  6200
  Oak Tree Boulevard, Suite 250

  
	
   

  	
  Independence,
  Ohio 44131

  
	
   

  	
  Attention:

  	
  Chief
  Financial Officer

  
	
   

  	
  Telecopy:

  	
  (216)
  328-1868

  
	
   

  	
   

  
	
  If
  to Lender:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telecopy:

  	
  (      )
        -

  
	
   

  	
   

  
	
  If to Agent:

  	
  Bank of America, N.A.

  
	
   

  	
  Mail Code NC1-001-15-14

  
	
   

  	
  101 N. Tyron Street

  
	
   

  	
  Charlotte, NC 28255

  
	
   

  	
  Attention: Randi Pino

  



 


or to such other address or
such other person as any party may from time to time hereafter specify to the
other parties hereto in a notice delivered in the manner provided above.


 


11.           Waiver and Amendment; Captions;
Severability.  No
provisions of this Agreement shall be deemed waived or amended except by a
written instrument unambiguously setting forth the matter waived or amended and
signed by the party against which enforcement of such waiver or amendment is
sought.  Waiver of any matter shall not
be deemed a waiver of the same or any other matter on any future occasion.  Captions are used throughout this Agreement
for convenience of reference only and shall not be considered in any manner in
the construction or interpretation hereof. 
The provisions of this Agreement shall be deemed severable.  If any part of this Agreement shall be held
unenforceable, the remainder shall remain in full force and effect, and such
unenforceable provision shall be reformed by such court so as to give maximum
legal effect to the intention of the parties as expressed therein.


 


D-6

















 


12.           Waiver of Jury Trial and Punitive,
Consequential, Special and Indirect Damages.  LANDLORD, TENANT, AGENT AND LENDER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE
TO A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY ANY OF THE PARTIES HERETO AGAINST
ANY OTHER PARTY HERETO OR ITS RESPECTIVE SUCCESSORS WITH RESPECT TO ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY DOCUMENT
CONTEMPLATED HEREIN OR RELATED HERETO. 
THIS WAIVER BY THE PARTIES HERETO OF ANY RIGHT TO A TRIAL BY JURY HAS
BEEN NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.  FURTHERMORE, LANDLORD, TENANT, AGENT AND
LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT THEY MAY HAVE
TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM THE OTHERS
OR ANY OF THE OTHER’S AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF
THEIR SUCCESSORS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY ANY OF THE PARTIES AGAINST ANY OF
THE OTHERS OR ANY OF THEIR AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY
OF THEIR SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO.  THE WAIVER BY LANDLORD, TENANT, AGENT AND
LENDER OF ANY RIGHT THEY MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL
AND INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES HERETO AND IS AN
ESSENTIAL ASPECT OF THEIR BARGAIN.


 


13.           Authority; Successors.  Tenant, Landlord, Agent and Lender covenant
and agree that the persons signing on their behalf have full power, authority
and authorization to execute this Agreement, without the necessity of any
consents, authorizations or approvals, or if such consents, authorizations or
approvals are required they have been obtained prior to the execution hereof.  All provisions, covenants and agreements
contained in this Agreement shall bind, inure to the benefit of, and equally
relate to, Tenant, and its successors and assigns, Landlord, and its successors
and assigns, jointly and severally, Agent, its successors and assigns, and
Lender, and its successors and assigns, or other holder or holders of the Note,
including an endorsee, assignee or pledgee of the Note receiving title thereto
by or through Lender, or its successors or assigns.


 


14.           No Other Agreements; Counterparts.  This Agreement represents the final agreement
between the parties hereto with respect to the subject matter hereof and may
not be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties.  There are no
unwritten oral agreements between the parties. 
This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts taken together shall constitute but one and the same
instrument.


 


D-7

















 


15.           Lease Provisions  Notwithstanding anything to the contrary
contained herein, Lender (and any Purchaser) acknowledge and agree that the
provisions of this Agreement are specifically subject to the provisions of Articles
17, 20 and 21 of the Lease and the Landlord Agreement (in the
form attached to the Lease).


 


[SIGNATURES
BEGIN ON FOLLOWING PAGE]


 


D-8

















 


IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date set forth above.


 


	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  APPLE
                  
  LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed Name: Lorin M.
  Cortina

  
	
   

  	
  Title: Executive Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ,

  
	
   

  	
  a

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AGENT:

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A., as Agent, a national banking association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


D-9

















 


EXHIBIT E


 


APPLEBEE’S RESTAURANTS


FRANCHISEE LEASE RIDER


 


This Lease Rider (this “Rider”) is executed as of the
       day of
                    ,
2010, by and between                                               ,
as landlord (“Landlord”) and
                      ,
as tenant (“Franchisee”), as a Rider to that
certain lease for the premises located at
                                                                                                                    
(the “Premises”), dated as of
                            
(“the Lease”).  This Rider is hereby incorporated into, and
made a part of, the Lease.


 


WHEREAS, Franchisee has
executed or intends to execute a Franchise Agreement (the “Franchise Agreement”)
with Applebee’s Franchising LLC, a Delaware limited liability operation of an
Applebee’s restaurant (“Restaurant”) at
the Premises, and as a requirement thereof, the Lease must include the
provisions contained in this Rider; and


 


WHEREAS, Landlord and
Franchisee agree that the terms contained here shall supersede any terms to the
contrary set forth in the Lease;


 


NOW THEREFORE, in
consideration of mutual covenants set forth herein, the execution and delivery
of the Lease, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Landlord and Franchisee hereby
agree as follows:


 


1.             The Premises may be used, in addition to any other uses
permitted under the Lease, for the operation of an Applebee’s Restaurant, with
the sale and service of alcoholic beverages for on premises consumption, and
ancillary carry-out food service. 
Franchisee may operate Applebee’s Restaurants at any other location
without Landlord’s approval.


 


2.             Franchisor, its personnel or agents, for a period of up
to thirty (30) days after the expiration or sooner termination of the Lease or
the Franchise Agreement, may enter the Premises for itself or on behalf of
Franchisee to de-identify the Premises as a Restaurant, which may include the removal
of signs, décor and materials displaying any marks, designs or logos owned by
Franchisor, provided Franchisor shall bear the expense of repairing any and all
damage to the Premises as a result thereof.


 


3.             If Franchisee has an obligation to continuously operate
its business at the Premises, Franchisee may cease operating for up to sixty
(60) days, from time to time, to perform repairs, enchancements or renovations,
as required by the Franchise Agreement.


 


4.             Notwithstanding any provision herein to the contrary,
Franchisee shall have the absolute right, whether or not the Franchisee is in
default under the Lease, upon ten (10) days prior written notice to
Landlord, to sublet, assign or otherwise transfer its interest in the Lease to
Franchisor or Franchisor’s affiliate, to any entity with which Franchisor may
merge or consolidate, or to any person or entity which is an authorized
franchisee or Franchisor operating a minimum of five (5) restaurants
(each, a “Permitted Assignee”), without landlord’s
consent.  Following such an assignment, a
Permitted Assignee also may sublet, assign or otherwise 


 


D-1

















 


transfer its interest in the
Lease to another Permitted Assignee without the consent of Landlord.  There will be no fee or expense charged in
connection with such transfer.


 


Landlord
and Franchisee acknowledge and agree that a Permitted Assignee will assume all
of Franchisee’s obligations under the Lease arising as a result of events, acts
or omissions occurring from and after the date of assignment.  In the event that Franchisee is in default of
its obligations under the Lease as of the effective date of the assignment to a
Permitted Assignee: a) the Permitted Assignee shall be obligated to cure such
default, but only to the extent such default accrued not more than thirty (30)
days prior to the date Franchisor received notice of such default from
Landlord; and b) Landlord may pursue, or continue to pursue, a claim for
damages under the Lease against Franchisee, but will have no rights to
terminate the lease or to disturb the quiet possession of the Leased Premises
by the Permitted Assignee.


 


5.             Landlord hereby agrees to obtain a non-disturbance
agreement for the benefit of Franchisee: a) from the holder of any
mortgage/deed of trust as fo the date of this Lease; and b) as a condition to
Franchisee’s subordination to any mortgage/deed fo trust granted after the date
of the Lease.


 


6.             Copies of all notices required or permitted by the Lease
shall also be sent to Franchisor at 11201 Renner Boulevard, Lenexa, Kansas  66219, Attn: General Counsel, or such other
address as Franchisor may locate its Restaurant Support Center, at the same
time notice is provided to Franchisee. 
Franchisor shall have the right, but not the obligation, upon giving
written notice to Franchisee and Landlord, to cure any breach of the Lease.


 


7.             The parties acknowledge that Franchisor is an intended
third party beneficiary of this Rider and has the right to enforce the terms of
this Rider as if it was a party hereto.


 


8.             In the event of any conflict between this Rider and the
Lease, the terms of this Rider shall control, and the Lease may not be modified
or amended in any manner inconsistent with the terms of this Rider.


 


 


	
  LANDLORD:

  	
   

  	
  FRANCHISEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  



 


D-2


















 





 


LEASE


 


BETWEEN


 


APPLEBEE’S
RESTAURANTS NORTH LLC


 


as
Landlord,


 


and
APPLE                     LLC, a Delaware limited liability company


 


as
Tenant


 


Dated
as of                  , 2010




 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  BASIC PROVISIONS

  	
  1

  
	
  2.

  	
  LEASING AGREEMENT; TERM

  	
  2

  
	
  3.

  	
  RENT

  	
  3

  
	
  4.

  	
  TAXES

  	
  4

  
	
  5.

  	
  ENVIRONMENTAL MATTERS

  	
  6

  
	
  6.

  	
  COMPLIANCE WITH REQUIREMENTS

  	
  9

  
	
  7.

  	
  COVENANT AGAINST LIENS

  	
  10

  
	
  8.

  	
  USE AND ENJOYMENT

  	
  10

  
	
  9.

  	
  TENANT’S PROPERTY; LIEN WAIVER

  	
  13

  
	
  10.

  	
  ALTERATIONS; MAINTENANCE AND REPAIR

  	
  14

  
	
  11.

  	
  CONDEMNATION AND CASUALTY DAMAGE

  	
  15

  
	
  12.

  	
  INSURANCE

  	
  17

  
	
  13.

  	
  ASSIGNMENT AND SUBLETTING

  	
  19

  
	
  14.

  	
  INDEMNIFICATION

  	
  21

  
	
  15.

  	
  DEFAULT; REMEDIES

  	
  22

  
	
  16.

  	
  SURRENDER OF PREMISES

  	
  26

  
	
  17.

  	
  SUBORDINATION AND ATTORNMENT

  	
  27

  
	
  18.

  	
  ESTOPPEL CERTIFICATES

  	
  28

  
	
  19.

  	
  NOTICES

  	
  29

  
	
  20.

  	
  LEASEHOLD FINANCING

  	
  29

  
	
  21.

  	
  RIGHT OF FIRST REFUSAL TO PURCHASE

  	
  30

  
	
  22.

  	
  MISCELLANEOUS

  	
  31

  



 


i

















 


LEASE


 


THIS LEASE (“Lease”) dated                  , 2010, is made and entered
into by and between APPLEBEE’S RESTAURANTS NORTH LLC (Landlord”), and APPLE               LLC, a Delaware limited liability company (“Tenant”).


 


1.                                      BASIC
PROVISIONS


 


	
  1.1.

  	
   

  	
  Premises
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.2.

  	
   

  	
  Landlord
  Name and Address:

  	
   

  	
  Applebee’s Restaurants
  North LLC

  
	
   

  	
   

  	
   

  	
   

  	
  c/o Applebee’s
  Services, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  11201 Renner Blvd

  
	
   

  	
   

  	
   

  	
   

  	
  Lenexa, Kansas 66219

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.3.

  	
   

  	
  Tenant
  Name and Address:

  	
   

  	
  Apple           LLC

  
	
   

  	
   

  	
   

  	
   

  	
  6200 Oak Tree Boulevard, Suite 250

  
	
   

  	
   

  	
   

  	
   

  	
  Independence, OH 44131

  
	
   

  	
   

  	
   

  	
   

  	
  Attn: Chief Financial
  Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.4.

  	
   

  	
  Lease
  Date:

  	
   

  	
                          , 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.5.

  	
   

  	
  Term:

  	
   

  	
  Twenty (20) Lease Years

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.6.

  	
   

  	
  Options
  to Extend:

  	
   

  	
  Two (2) periods of
  five (5) Lease Years each and one (1) period of four (4) Lease
  Years and eleven (11) months

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.7.

  	
   

  	
  Exhibits:

  	
   

  	
  Exhibit A - Land
  Legal Description

  
	
   

  	
   

  	
   

  	
   

  	
  Exhibit A-1 — Site
  Plan

  
	
   

  	
   

  	
   

  	
   

  	
  Exhibit B - Landlord
  Agreement

  
	
   

  	
   

  	
   

  	
   

  	
  Exhibit C -
  Memorandum of Lease

  
	
   

  	
   

  	
   

  	
   

  	
  Exhibit D —
  Subordination, Non-disturbance and Attornment Agreement

  
	
   

  	
   

  	
   

  	
   

  	
  Exhibit E -
  Franchisee Lease Rider

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


2.                                      LEASING
AGREEMENT; TERM


 


2.1.                            Leasing Agreement. 
Landlord leases to Tenant and Tenant leases from Landlord upon and
subject to the terms and conditions set forth in this Lease a restaurant
containing approximately                     square feet and other related improvements (“Improvements”) now or hereafter located on certain real
estate consisting of approximately                  square feet of land, as legally described in
attached Exhibit A, together with all easements, rights and
appurtenances thereto (including, but not limited to all of Landlord’s rights,
if any, to use any common areas, parking, access drives and sidewalks in any
center of which the Improvements may be a part) commonly known as                      ,                      (“City”),                   County,                    (the “Premises”).  The Premises are shown on the site plan
attached hereto as Exhibit A-1. 
The Premises are leased subject to all restrictions, covenants,
encumbrances and other matters of record on the date of this Lease. [Include
specific reference to easements if Premises does not have direct access to
public roadway]


 


2.2.                            Term.  The term of
this Lease (“Term”) shall commence
(“Commencement Date”) on the later
of the dates set forth opposite the signatures of the parties on the signature page of
this Lease and, unless extended or earlier terminated as provided herein, shall
expire (“Expiration Date”) at
midnight on the last day of the twentieth (20th) “Lease Year” thereafter.  “Lease Year”
shall mean and refer to that period of twelve (12) full consecutive calendar
months beginning with the first full calendar month of the Term and each
subsequent period of twelve (12) consecutive calendar months during the Term,
provided that if the Term commences on other than the first day of a calendar
month, then the initial fractional month of the Term plus the next succeeding
twelve (12) full calendar months shall constitute the first Lease Year of the
Term and provided, further, that if this Lease is terminated
prior to the Expiration Date, the last Lease Year may contain less than twelve
(12) full calendar months.


 


2.3.                            Extension of the Term.  Provided that this Lease is in full force and
effect and no Event of Default has occurred and is continuing, Tenant shall
have the option to extend the Term for up to two (2) successive periods of
five (5) Lease Years each and one (1) period of four (4) Lease
Years and eleven (11) months upon all of the provisions of this Lease, which
extension options shall automatically be deemed exercised one hundred eighty
(180) days prior to the then current Expiration Date without the requirement
for any further notice; provided, however, that Tenant shall have
the right to terminate this Lease (and void any such automatic extension and
all remaining extension options) effective as of any then current Expiration
Date by giving written notice thereof to Landlord not less than one hundred
eighty (180) days before such then current Expiration Date; and provided,
further, that this Lease shall not be automatically extended (and Tenant shall
be deemed to have given written notice of non-renewal) if on the date which is
one hundred eighty (180) days prior to the then current Expiration Date an
Event of Default has occurred and is continuing, and in such event this Lease
shall terminate on the then current Expiration Date.  If and each time this Lease is so extended,
the word “Term” shall be deemed to
include each extension period with respect to which the option has been
exercised and the term “Expiration Date”
shall mean the last day of such extension period.


 


2

















 


3.                                      RENT


 


3.1.                            Base Rent.  Tenant
shall pay to Landlord as annual base rent (“Base
Rent”) the amount set forth in column (b) below for the corresponding
Lease Years set forth in column (a) below:


 


[For Rogers, Minnesota (#61059)


 


	
  (a) Lease Year

  	
   

  	
  (b) Annual Base Rent

  	
   

  	
  (c) Monthly Base Rent

  	
   

  
	
  1-5

  	
   

  	
  $

  	
  109,239

  	
   

  	
  $

  	
  9,103

  	
   

  
	
  6-10

  	
   

  	
  $

  	
  117,432

  	
   

  	
  $

  	
  9,786

  	
   

  
	
  11-15

  	
   

  	
  $

  	
  126,239

  	
   

  	
  $

  	
  10,520

  	
   

  
	
  16-20

  	
   

  	
  $

  	
  135,707

  	
   

  	
  $

  	
  11,309

  	
   

  
	
  21-25*

  	
   

  	
  $

  	
  145,885

  	
   

  	
  $

  	
  12,157

  	
   

  
	
  26-30**

  	
   

  	
  $

  	
  156,827

  	
   

  	
  $

  	
  13,069

  	
   

  
	
  31-35***

  	
   

  	
  $

  	
  168,589

  	
   

  	
  $

  	
  14,049

  	
  ]

  



 


[For Albert Lea, Minnesota
(#61048)


 


	
  (a) Lease Year

  	
   

  	
  (b) Annual Base Rent

  	
   

  	
  (c) Monthly Base Rent

  	
   

  
	
  1-5

  	
   

  	
  $

  	
  196,555

  	
   

  	
  $

  	
  16,380

  	
   

  
	
  6-10

  	
   

  	
  $

  	
  211,297

  	
   

  	
  $

  	
  17,608

  	
   

  
	
  11-15

  	
   

  	
  $

  	
  227,144

  	
   

  	
  $

  	
  18,929

  	
   

  
	
  16-20

  	
   

  	
  $

  	
  244,180

  	
   

  	
  $

  	
  20,348

  	
   

  
	
  21-25*

  	
   

  	
  $

  	
  262,493

  	
   

  	
  $

  	
  21,874

  	
   

  
	
  26-30**

  	
   

  	
  $

  	
  282,180

  	
   

  	
  $

  	
  23,515

  	
   

  
	
  31-35***

  	
   

  	
  $

  	
  303,344

  	
   

  	
  $

  	
  25,279

  	
  ]

  



 


[For Cloquet, Minnesota (#61066)


 


	
  (a) Lease Year

  	
   

  	
  (b) Annual Base Rent

  	
   

  	
  (c) Monthly Base Rent

  	
   

  
	
  1-5

  	
   

  	
  $

  	
  143,260

  	
   

  	
  $

  	
  11,938

  	
   

  
	
  6-10

  	
   

  	
  $

  	
  154,004

  	
   

  	
  $

  	
  12,834

  	
   

  
	
  11-15

  	
   

  	
  $

  	
  165,555

  	
   

  	
  $

  	
  13,796

  	
   

  
	
  16-20

  	
   

  	
  $

  	
  177,971

  	
   

  	
  $

  	
  14,831

  	
   

  
	
  21-25*

  	
   

  	
  $

  	
  191,319

  	
   

  	
  $

  	
  15,943

  	
   

  
	
  26-30**

  	
   

  	
  $

  	
  205,668

  	
   

  	
  $

  	
  17,139

  	
   

  
	
  31-35***

  	
   

  	
  $

  	
  221,093

  	
   

  	
  $

  	
  18,424

  	
  ]

  



 


[an asterisk (*) indicates
an extension period; the number of asterisks corresponds to the respective extension period.]


 


3

















 


Base Rent shall be paid  to Landlord
in monthly installments (“Monthly Base Rent”)
in the respective amounts set forth in column (c) above in advance on the
first day of each month for which the same is due during the Term.  Rent for any partial month shall be prorated
on a per diem basis with the daily rent calculated based upon the actual number
of days in such month.


 


3.2.                            Payment.  All charges and costs payable by Tenant to
Landlord  or any other third party  pursuant to
this Lease in addition to Base Rent shall be considered “Additional Rent”.  Base Rent and Additional Rent are sometimes
referred to collectively as “Rent.”  Except as otherwise specifically provided in
this Lease, all Rent shall be paid by Tenant to Landlord without notice, demand, offset, abatement, reduction or
deduction by check payable to Landlord and sent to Landlord at the address
indicated in Section 1.2 or to such other person, entity or place
as Landlord may from time to time designate by not less than ten (10) business
days prior notice to Tenant.  Monthly
Base Rent for the period from and including the Commencement Date through and
including the last day of the first full calendar month of the Term shall be
paid in advance on the Commencement Date.


 


3.3.                            Late
Payments.  If Tenant
shall fail to make payment of any installment of Base Rent or Additional Rent
payable to Landlord (rather than a third party) within ten (10) days after
the date when such payment is due, Tenant shall pay a late charge (“Late Charge”) equal to five percent (5%)
of such overdue installment of Base Rent or Additional Rent.  If any installment of Rent is not paid within
fifteen (15) days after the date when due, Tenant also shall pay interest at
the “Default Rate” (defined in Section 23.6) on the amount unpaid
computed from the date such payment of Base Rent or Additional Rent was due to
and including the date of payment thereof (but only with respect to amounts
payable directly to Landlord or that are not otherwise subject to an interest
or similar charge that will be treated as Base Rent or Additional Rent
hereunder).


 


3.4.                            Net
Lease.  It is
understood and agreed by Tenant that this Lease is a triple net Lease
and that Base Rent, Additional Rent and, except as otherwise expressly set
forth herein, all other sums payable hereunder by Tenant shall be absolutely
net to Landlord and paid without defense (other than defense of prior payment),
notice, demand, setoff, counterclaim, recoupment, abatement, suspension,
deferment, diminution, deduction or reduction. 
During the Term of this Lease, Tenant shall be obligated to pay and
shall be liable for all costs and expenses associated with or arising from the
use, operation, maintenance, repair or improvements of the Premises (regardless
of whether such costs and expenses are charged or imposed against Landlord or
Tenant), including without limitation, Premises Taxes (as defined below),
utility charges, liens, insurance, maintenance, repair and replacement costs.


 


4.                                      TAXES


 


4.1.                            As used in this
Lease, the term “Premises Taxes”
shall mean all real estate taxes and assessments, general and special, and all
other governmental charges levied, assessed or imposed on or with respect to
the Premises.  Premises Taxes shall not
include (i) any taxes or assessments imposed on or with respect to Tenant’s
trade fixtures, inventory, or other items of Tenant’s Property (as defined in Section 9.1),
or (ii) any income, gift, estate, franchise or other 


 


4

















 


taxes imposed on Landlord or
measured by Rent or Landlord’s income or profit from the Premises (including
business and occupation tax if it is hereafter applied to rental income), except
as provided below.  If at any time during
the Term, the method of taxation shall be changed such that a new tax,
assessment, levy, or other governmental charge shall be imposed (y) in
full or partial substitution of any Premises Tax, or (z) on or measured by
the Rent payable to Landlord by Tenant (other than an income or franchise tax),
then such tax, assessment, levy or charge shall be included as part of Premises
Tax.


 


4.2.                            Payment.


 


(a)                                  Tenant shall pay all taxes
and assessments on Tenant’s Property before delinquency.


 


(b)                                 Tenant shall pay Premises
Taxes to the appropriate governmental authority before delinquency and before
any interest, penalties or fines may be charged with respect thereto and shall
deliver a copy of all paid tax bills to Landlord promptly upon request.


 


(c)                                  If any Premises Taxes relate
to a fiscal period which is partly within and partly outside of the period for
which Tenant is responsible, the amount thereof shall be prorated so that
Tenant will be responsible for that portion which relates to the period after
the Commencement Date and through the Expiration Date and Landlord will be
responsible for the portion which relates to the period prior to the
Commencement Date and after the Expiration Date.


 


(d)                                 Any refunds (including any
accrued interest) of Premises Taxes applicable to the Term shall be the
property of Tenant and to the extent received by Landlord shall be paid over to
Tenant promptly after receipt thereof. 
Any such refund of Premises Taxes shall be deemed a reduction of
Additional Rent hereunder.  Any refunds
(including any accrued interest) of Premises Taxes applicable to the period of
time prior to the Commencement Date or following the Expiration Date shall be
the property of Landlord and to the extent received by Tenant shall be paid
over to Landlord promptly after receipt thereof.


 


4.3.                            Contest.  Subject to the provisions hereof, Tenant, at
its own expense, may contest Premises Taxes in any manner permitted by law, in
Tenant’s name, and, whenever necessary, in Landlord’s name and Landlord will
cooperate at Tenant’s sole cost and expense with Tenant and execute any
documents reasonably required for such purpose. 
Any such contest shall be conducted by Tenant in good faith and at its
sole cost and expense, by appropriate proceedings which shall operate during
the pendency thereof to prevent (i) the collection of, or other
realization upon, the Premises Taxes so contested, (ii) the sale,
forfeiture or loss of the Premises, any Base Rent or any Additional Rent to
satisfy the same, (iii) any interference with 


 


5

















 


the use or occupancy of any
of the Premises, and (iv) any interference with the payment of any Base
Rent or the portion of any Additional Rent that does not represent the Premises
Taxes being contested under this Section 4.3.  In no event shall Tenant pursue any contest
with respect to any Premises Taxes in any manner that exposes Landlord to
(a) criminal liability, penalty or sanction, (b) any civil liability,
penalty or sanction for which Tenant has not made provisions acceptable to
Landlord, or (c) defeasance of its interest in the Premises.  Tenant agrees that each such contest shall be
diligently prosecuted to a final conclusion. 
Tenant shall pay, indemnify and save Landlord harmless from and against
any and all losses, judgments, decrees and costs (including, without
limitation, attorneys’ fees and expenses) in connection with any such contest
and shall,  promptly after the final determination
of such contest, fully pay and discharge the amounts which shall be levied,
assessed, charged or imposed or be determined to be payable therein or in connection therewith, together
with all penalties, fines, interest, costs and expenses thereof or in
connection therewith, and Tenant’s obligation under this sentence shall survive
the expiration or termination of this Lease.


 


5.                                      ENVIRONMENTAL
MATTERS


 


5.1.                            Definitions.  For
purposes of this Lease the following terms shall have the following meanings:


 


(a)                                  “Environmental Laws” - all present and future laws, statutes,
rules, regulations, orders and other requirements of any federal, state, local
or other governmental authority relating to the environment, environmental
protection or regulation, the emission, disposal or discharge or the actual or
threatened release into the environment of pollutants or contaminants or to any
Hazardous Substance or HS Activity. 
Without limitation of the foregoing, Environmental Laws include each of
the following, as enacted as of the date hereof or as hereafter amended:  the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. § 9601, et seq.;
the Resource Conversation and Recovery Act of 1976, 42 U.S.C.
§ 6901, et seq.; the Toxic
Substance Control Act, 15 U.S.C. § 2601, et
seq.; the Water Pollution Control Act (also knows as the Clean Water
Act), 33 U.S.C. § 1251, et seq.;
the Clean Air Act, 42 U.S.C. § 7401, et
seq.; and the Hazardous Materials Transportation Act, 49 U.S.C.
§ 5101, et seq., and any
similar state laws.


 


(b)                                 “Hazardous
Substance” - any substance defined or classified in any
Environmental Laws as a toxic or hazardous chemical, waste, material or
substance, or as a pollutant or contaminant (including, without limitation,
petroleum or any by-product or fractions thereof, lead, asbestos and asbestos
containing materials, polychlorinated biphenals and radioactive or explosive
materials); and any substance which if present requires investigation or
remediation under any Environmental Law or results in liability thereunder for
exposure thereto or discharge thereof.


 


6

















 


(c)                                  “HS Activity”
- the generation, manufacture, handling, transportation, usage, treatment,
release, discharge, removal, storage, disposal or presence of any Hazardous
Substance.


 


5.2.                            Tenant Obligations.


 


(a)                                  On or after the Commencement
Date, Tenant (i) shall not conduct or knowingly permit any HS Activity in,
on or from the Premises or knowingly allow any Hazardous Substances on the
Premises, in each case, in violation of any Environmental Laws, and
(ii) shall comply or cause compliance with all Environmental Laws
applicable to Tenant’s use or occupancy of the Premises, and shall cause the
Premises to comply with all Environmental Laws; in each case except to the
extent that a violation results from, or compliance is required as a result of,
any act or omission of any “Landlord Indemnitees” (defined below) or any person
or entity other than Tenant and its members, managers, affiliates, officers,
directors, employees, contractors, representatives, agents or subtenants
(collectively, “Tenant Parties”) or relates to any condition existing as
of the Commencement Date (the obligations of Tenant under the preceding clauses (i) and
(ii) are called “Tenant’s Compliance Obligation”).  Tenant shall promptly give notice to Landlord
if Tenant becomes aware of any action, claim, suit or proceeding relating to a
violation or alleged violation of any Environmental Laws filed or threatened
against the Premises or Tenant with respect to Tenant’s use or occupancy of the
Premises.  If, at any time during the
Term, Hazardous Substances shall exist in or on the Premises to which Tenant’s
Compliance Obligation applies, then Tenant shall, or shall cause responsible
third parties to, promptly commence and diligently implement all investigation,
site monitoring, containment, cleanup, removal, restoration or other remedial
work of any kind or nature (collectively, “Remedial
Work”) to the extent required by Environmental Laws, and in
compliance with all Environmental Laws, all at Tenant’s sole cost and expense.


 


(b)                                 Tenant agrees to indemnify,
defend and hold harmless Landlord, any Landlord Lender and their respective
managers, partners, members, officers, directors, shareholders, employees and
agents (“Landlord Indemnitees”) from and against
any and all claims, demands, actions, liabilities, damages, assessments,
losses, fines, penalties, costs and expenses, including remediation, clean-up
and detoxification costs and reasonable attorneys’ fees, arising from or
related to any breach or violation by Tenant of its obligations set forth in Section 5.2(a).  The provisions of Section 5.2
shall survive the expiration or termination of this Lease.


 


(c)                                  Upon Landlord’s request, at
any time after the occurrence and during the continuance of an Event of Default
or at such other time as Landlord has reasonable grounds to believe that Tenant
is in violation of Tenant’s Compliance Obligation, Tenant shall cause an
inspection or audit of the Premises by an environmental engineer or other
appropriate consultant reasonably approved by Landlord to determine the
presence or 


 


7

















 


absence of Hazardous Substances on the Premises.  If Tenant fails to effectuate the
commencement of such inspection or audit within thirty (30) days after such
request or fails to deliver a written report of such inspection or audit to
Landlord within sixty (60) days after such request, Landlord may order the
same, and Tenant hereby grants to Landlord and its respective employees,
contractors and agents access to the Premises upon prior reasonable notice to
undertake such inspection or audit, provided that such inspection or audit does
not interfere with the conduct of Tenant’s business on the Premises, Landlord
provides Tenant certificates of insurance naming Tenant as an additional
insured and containing such types of insurance and limits as Tenant reasonably
requires, Landlord promptly repairs any damage caused by such testing and
restores the Premises to the condition in which it existed immediately prior to
such damage at Landlord’s sole cost and expense, and Landlord shall indemnify
Tenant if and to the extent required under Section 14.2 hereof for
all loss, cost, damage, liens, claims, liabilities or expenses (including, but
not limited to, reasonable attorneys’ fees, court costs and disbursements, but
excluding the cost of Remedial Work) incurred by Tenant arising from or by
reason of such inspection or audit.  The
cost of such inspection or audit shall be paid (i) by Tenant if such
inspection or audit shall confirm a violation of Tenant’s Compliance Obligation
or (ii) by Landlord if such inspection or audit does not confirm a
violation of Tenant’s Compliance Obligation.


 


(d)                                 Landlord and Tenant
expressly agree that, notwithstanding anything to the contrary set forth in
this Lease (including, but not limited to, the provisions of Section 14.1
hereof), except in the case of Tenant’s obligations expressly set forth under Sections
5.2(a), (b) and (c) hereof, Tenant shall have no
obligation under this Lease (i) to defend, indemnify or hold harmless
Landlord or Landlord Indemnitees with respect to any Hazardous Substance,
Environmental Laws or HS Activity, (ii) to engage any environmental
engineer or appropriate consultant with respect to any Hazardous Substance,
Environmental Laws or HS Activity, (iii) to conduct any audit or
inspection of the Premises with respect to any Hazardous Substance,
Environmental Laws or HS Activity, (iv) to comply or cause compliance with
any Environmental Laws, or (v) to perform or cause performance of any
Remedial Work with respect to any Hazardous Substance, Environmental Laws or HS
Activity.


 


5.3.                            Landlord Obligations.


 


(a)                                  Landlord represents and warrants
to Tenant as follows:  (i) that no
portion of the Premises has been used by Landlord, or, to the best knowledge of
Landlord, by any other person or entity for any HS Activity in violation of
Environmental Laws; (ii) that to the best knowledge of Landlord, no
Hazardous Substance is now or ever has been on or under any portion of the
Premises in violation of law; and (iii) that there is no action, claim,
suit or proceeding relating to a violation or alleged violation of any
Environmental Laws pending against Landlord or any portion of the Premises and,
to the best knowledge of Landlord, none is threatened.


 


8
















 


(b)                                 Landlord covenants and
agrees with Tenant that except for Tenant’s responsibility with respect to the
Premises set forth in Section 5.2(a) above, (i) Landlord
shall comply with all Environmental Laws applicable to the Premises for which
Landlord is responsible, (ii) Landlord shall not conduct or knowingly
permit any HS Activity on or about the Premises, and (iii) Landlord shall
promptly give notice to Tenant if Landlord becomes aware of any action, claim,
suit or proceeding relating to a violation or alleged violation of any
Environmental Laws filed or threatened against Landlord or the Premises or if
Landlord has received notice or has actual knowledge of any HS Activity on the
Premises caused by a person other than Tenant or any Tenant Party.


 


(c)                                  Landlord agrees to
indemnify, defend and hold harmless Tenant, any TE Lender, Tenant Lender and
its and their respective managers, partners, members, officers, directors,
shareholders, employees and agents (“Tenant Indemnitees”)
from and against any and all claims, demands, actions, liabilities, damages,
losses, fines, penalties, costs and expenses, including remediation, clean-up
and detoxification costs and reasonable attorneys’ fees, arising from or
related to any breach or violation by Landlord of its warranties,
representations or obligations set forth in Section 5.3(a) and (b) above.  The provisions of Section 5.3
shall survive the expiration or earlier termination of this Lease.


 


6.                                      COMPLIANCE
WITH REQUIREMENTS


 


6.1.                            Compliance With Law.  During the Term,
Tenant shall comply and shall cause the Premises to comply, in all material
respects with and shall correct any violation of any laws, statutes, ordinances
and other legal and insurance requirements, whether now or hereafter in force,
applicable to the Premises or Tenant’s use or occupancy of the Premises,
including without limitation, the Occupational Safety and Health Act, as
amended (“OSHA”), the Americans
with Disabilities Act of 1990, as
amended (“ADA”), and, subject to Article 5, all Environmental Laws,
except to the extent that such compliance is required or such violation exists
as a result of any act or omission of any Landlord Indemnitees, relates to any
condition existing as of the Commencement Date or relates to or is caused by
the activity of any third party who is not a Tenant Party.  Tenant shall procure, maintain and comply,
and shall cause the Premises to comply, with any and all permits, approvals,
licenses and other governmental authorizations required for the lawful use,
operation, maintenance and any “Alteration” (hereinafter defined) of the
Premises.  Notwithstanding the foregoing,
Tenant shall be required to comply with any change or amendment to the ADA
which is made or adopted after the Commencement Date and is applicable to the
Premises or Tenant’s use of the Premises.


 


6.2.                            Compliance With Permitted Encumbrances. 
Tenant agrees that with respect to all easements, conditions,
covenants, restrictions, encumbrances or agreements now affecting the Premises
or which are hereafter created by or consented to by Tenant (collectively, the “Permitted Encumbrances”), Tenant shall
observe, perform and comply with, and cause the Premises to comply with, and
carry out and perform all of the obligations therein which are to be observed
and performed by the owner or any occupant of the Premises thereunder, and
shall pay 


 


9

















 


all assessments, fees, costs
and expenses required to be paid by the owner or any occupant of the Premises
thereunder.


 


7.                                      COVENANT
AGAINST LIENS


 


7.1.                            Liens.  Tenant shall not cause, suffer or permit any
mechanic’s, materialmen’s, judgment or other lien (“Lien”)
to be filed against the Premises (other than any Lien arising due to any act or
omission of Landlord or its agents); provided that nothing herein shall
be deemed to limit the rights of Tenant Lender under Section 20.2
hereof.  If any Lien shall be filed
against all or any portion of the Premises (other than any Lien arising due to
any act or omission of Landlord or its agents), (i) Tenant shall give
notice thereof to Landlord within ten (10) business days after the date on
which Tenant first becomes aware of the filing of any such Lien, and
(ii) within forty-five (45) days after first becoming aware of such
filing, (but in any event before any enforcement action to foreclose is taken
with respect to such Lien), Tenant, at its sole cost and expense, shall cause
the Lien to be discharged of record or bonded over by any statutory bonding
procedure sufficient to prevent foreclosure or other enforcement of such Lien,
and shall deliver notice thereof to Landlord, failing which Landlord shall have
the right, but shall not be obligated, to discharge the Lien without
investigating the validity or amount thereof. 
Tenant shall reimburse Landlord on demand for any reasonable amounts so
paid or incurred by Landlord, including reasonable expenses and attorneys’ fees
incurred in connection therewith, and Tenant’s obligation under this sentence
shall survive expiration or termination of this Lease.


 


8.                                      USE
AND ENJOYMENT


 


8.1.                            Use.


 


(a)                                  The Premises may be used for
the operation of a restaurant (including an Applebee’s restaurant) including,
without limitation, ancillary carry out food service and the sale of beer, wine
and other alcoholic beverages, and for such other use as approved by Landlord,
which approval shall not be unreasonably withheld.  The Premises shall be attractive in
appearance and Tenant shall conduct its business in a lawful and reputable
manner.  Tenant shall not commit waste on
the Premises and shall not occupy or use the Premises or permit the same to be
used or occupied for any purpose or in any manner that violates any applicable
legal or governmental requirement.


 


(b)                                 All garbage, trash and
refuse generated from the operation of the business conducted on the Premises
shall be placed in appropriate garbage receptacles and, at Tenant’s sole cost
and expense, removed from the Premises with sufficient frequency so as to avoid
any accumulation thereof outside of such receptacles.


 


8.2.                            Exterior Signs, Awnings and Canopies.  Tenant, at its sole cost and expense, may at
any time and from time to time during the Term install, alter, and/or replace
any and all exterior signs, awnings and/or canopies as Tenant may determine, so
long as they are in 


 


10

















 


compliance with all
applicable laws and all Permitted Encumbrances. 
Tenant, at its sole cost and expense, shall obtain all necessary permits
for all signs, awnings and canopies on the Premises and shall maintain the same
in good condition and repair.


 


8.3.                            Utilities.  Tenant
shall arrange and contract, in its name, for and pay when due all charges for
water, gas, electricity, cable and satellite TV, telephone, trash removal,
scavenger service and other utility services required by law or used or
consumed on the Premises by Tenant or its agents during the Term, all of which
shall be separately metered and billed to Tenant.


 


8.4.                            Quiet Enjoyment. 
Landlord covenants with Tenant that Tenant, upon paying Rent to Landlord
and performing Tenant’s other covenants in this Lease, shall and may peaceably
and quietly have, hold, occupy, possess and enjoy the Premises during the Term
without any interference from Landlord or anyone claiming by, through or under
Landlord.


 


8.5.                            Signage Rights, Parking, Access, Easements.  Landlord covenants with
Tenant that Landlord shall not engage in any action, or grant any rights which
affect parking at the Premises, access to the Premises, means of ingress and
egress to and from the Premises, visibility to or from the Premises, Tenant’s
signage at the Premises or rights to the roof of the Premises, any
telecommunications equipment or utilities which service the Premises, Tenant’s
air rights and any other rights to which Tenant may be entitled pursuant to any
easement agreements or similar agreements affecting the Premises without Tenant’s
prior written consent, which may be granted or withheld in Tenant’s sole
discretion, but shall not be unreasonably withheld if such action will not
materially adversely affect the conduct of Tenant’s business at the
Premises.  Landlord agrees to deliver to
Tenant copies of any notices Landlord receives with respect to the
aforementioned rights.  Landlord agrees that so long as no Event of
Default shall have occurred and be continuing, upon request by Tenant (and only
after all documentation reasonably required to consummate the relevant
transaction shall have been provided to Landlord), Landlord shall
(i) enter into, modify or grant such easements, covenants, waivers,
approvals or restrictions for utilities, parking or other matters as Tenant may
desire for the operation of the Premises (including, without limitation,
consenting to site and common area changes affecting access, parking, tenant
mix and the like and approving uses or users of the other properties in the
vicinity of the Premises which Tenant reasonably believes will have a positive
impact on its business at the Premises) (collectively, “Easements”), or
(ii) dedicate or transfer, minor non-essential unimproved portions of the
Premises for road, highway or other public purposes to the extent such
dedications or transfers are consistent with commercially reasonable
development or operation of the Premises or, in Tenant’s reasonable judgment,
will have a positive impact on its business at the Premises (the “Dedications”);
provided, that Landlord shall be obligated to take such action only if
(A) any such Easements or Dedications do not adversely affect the value of
the Premises (other than to a de minimus
extent), do not unreasonably render the use of the Premises dependent upon any
other property or unreasonably condition the use of the Premises upon the use
of any other property, and do not adversely affect (other than to a de minimis extent) the use, or visibility
of, or access to, the Premises, (B) any such Easements or Dedications do
not conflict with or violate any Permitted Encumbrances, (C)Tenant advises
Landlord of the amount of the consideration, if any, being paid for such
Easements or 


 


11

















 


Dedications
and that Tenant considers such consideration, if any, to be fair under the
circumstance and that such consideration, if any, shall be paid to Landlord,
(D) Tenant acknowledges in writing that for so long as this Lease is in
effect, Tenant will perform all obligations, if any, of Landlord under the
applicable instrument and Tenant will remain obligated under this Lease in
accordance with its terms, and (E) Tenant pays all out-of-pocket costs and
expenses incurred by Landlord in connection with said Easements or Dedications
including, without limitation reasonable attorneys’ fees.  Subject to the foregoing clauses (A) through
(E), Landlord shall cooperate with Tenant’s efforts to enter into any
Dedications or Easements.


 


If Tenant shall submit a
request to Landlord for Landlord’s cooperation, together with all documentation
required above, in connection with any such Easement or Dedication which
requires Landlord’s approval or execution of any document, Landlord shall
(x) approve such Easement or Dedication, and execute and deliver to Tenant
all documents required in connection therewith, within ten (10) days of
receiving Tenant’s request for approval, or (y) disapprove Tenant’s request
in a written notice with a detailed explanation of its objections delivered to
Tenant within ten (10) days of receiving Tenant’s request for
approval.  If Landlord fails to respond
within such ten (10) day period, Tenant’s request with respect to such
Easement or Dedication shall be deemed to be approved by Landlord hereunder and
Tenant is hereby authorized and empowered to execute and deliver on behalf of
Landlord, as Landlord’s attorney-in-fact, all instruments and documents
required in connection therewith.


 


If Landlord timely
disapproves of a Tenant request under this Section 8.5, then Tenant
may elect, by delivering written notice to Landlord, to resolve the matter by
expedited arbitration in accordance with this paragraph.  Landlord and Tenant shall mutually select a
single arbitrator within ten (10) days after delivery of Tenant’s notice
of arbitration hereunder.  If the parties
cannot agree upon an arbitrator within such period, then either party may
request that a qualified arbitrator be appointed by the office of the American
Arbitration Association located nearest to the Premises.  Following selection or appointment, the
arbitrator shall meet jointly with representatives of Landlord and Tenant
within twenty (20) days to consider the parties’ positions on the disputed
issue and the arbitrator shall render a written decision within two (2) business
days following such meeting.  The
decision of the arbitrator shall be final, binding on the parties and
nonappealable.  The arbitration shall
otherwise be conducted in accordance with the American Arbitration Association’s
rules for expedited dispute resolution in effect at the time.  The non-prevailing party in any such
arbitration shall pay the arbitrator’s fee and expenses; each party will bear
their own attorney’s fees and expenses, if any.


 


8.6.                            Warranties, Guaranties and Indemnities.  Landlord assigns to Tenant, without recourse
or warranty whatsoever, all warranties, guaranties and indemnities, express or
implied, and similar rights which Landlord may have against any manufacturer,
seller, engineer, contractor or builder with respect to the Premises,
including, but not limited to, any rights and remedies existing under contract
or pursuant to the Uniform Commercial Code (collectively, the “guaranties”).  Such assignment shall remain in effect during
the Term. Landlord hereby agrees to execute and deliver at Tenant’s expense
such further documents, including powers of attorney (which shall contain
indemnity agreements from Tenant to Landlord which shall be in form reasonably
satisfactory to Landlord), as Tenant may reasonably request in order that
Tenant may have the full benefit of the assignment of guaranties effected or
intended to be effected by this 


 


12

















 


Section 8.6.  Upon the expiration or occurrence of a
termination of this Lease, the guaranties shall automatically revert to
Landlord.


 


9.                                      TENANT’S
PROPERTY; LIEN WAIVER


 


9.1.                            Tenant’s Property. 
Landlord agrees that all (i) fixtures, furniture, furnishings,
equipment (other than floor and wall coverings, fixtures which are “built-ins”
or constitute an integral part of the Building, any walk-in cooler, heat, air
conditioning and ventilation systems, electrical, mechanical and plumbing
systems, all of which are owned by and are the property of Landlord), Kitchen
Equipment (as hereinafter defined), inventory, merchandise, goods, chattels,
trade fixtures, signage, appliances, display cases, supplies, tools, machinery,
security systems, computer software or other personal property of Tenant
(including, without limitation, trade fixtures in, on, around or affixed to the
Premises),  (ii)  fixtures, furniture,
furnishings, equipment, supplies, tools, machinery, security systems, computer
software, signage and other personal property (including, without limitation,
trade fixtures in, on, around or affixed to the Premises) which display the
name, trade name, trademark, service mark, logo, insignia, slogan, emblem or
symbol of Applebee’s Franchising LLC (“Franchisor”)  or of Tenant (“Distinctive Property”), and (iii) all licenses, permits,
approvals and authorizations, if any, which are required in connection with the
operation of Tenant’s business, including, without limitation, all liquor
licenses, at any time located on the Premises (collectively, “Tenant’s Property”), shall be and at all
times remain the property of Tenant regardless of whether the same (x) is
affixed to the Improvements on the Land or the manner in which the same is
affixed (unless permanently affixed) or (y) may now or hereafter be
regarded as a fixture or as property of Landlord by operation of law or
otherwise, unless, however, such fixtures and equipment cannot be removed
without substantial damage to any Improvements which cannot be easily
repaired.  As used herein the term “Kitchen
Equipment” shall include, without limitation, kitchen fixtures (except for
sanitary plumbing fixtures), counters, stainless steel equipment, ranges,
ovens, display cases and refrigeration equipment (excluding the walk-in
cooler).  Tenant shall have the right at
any time and from time to time during the Term and the obligation, subject to
the provisions of Section 16.2 below, within fifteen (15) days
after the end of the Term to remove any Tenant’s Property from the Premises.


 


9.2.                            Waiver of Landlord’s Lien.  Tenant contemplates financing from time to
time some or all of Tenant’s Property with a lender or vendor (“TE Lender”) who will require a security
interest therein (those items of Tenant’s Property which are subject to such
security interest being referred to collectively as “Financed Personalty”). 
Landlord hereby disclaims and waives any and all liens or right which
Landlord may have to claim a lien against the Tenant’s Property for nonpayment
of Rent or otherwise and agrees to execute and deliver promptly upon request a
waiver with respect thereto in form reasonably acceptable to Landlord.


 


13

















 


10.                               ALTERATIONS;
MAINTENANCE AND REPAIR


 


10.1.                     Alterations.


 


(a)                                  Alterations.  For purposes of this Lease, any physical
improvement, addition, enhancement or change with respect to all or any portion
of the Premises is referred to as an “Alteration.”  Tenant or Franchisor shall have the right at
any time and from time to time during the Term to make or cause to be made any
Alteration in or to the Premises (i) without Landlord’s consent, if such
Alteration consists of the demolition of the Building and reconstruction of a
new prototypical building so long as the new building is constructed in
compliance with applicable codes and Permitted Exceptions and Tenant continues
to pay Rent; (ii) without Landlord’s consent, if such Alteration is
performed in order to comply with any of Tenant’s agreements with Franchisor or
to maintain the building as set forth in Section 10.2 and such
Alteration does not adversely affect any structural component of the Building,
and (iii) in the case of any Alteration other than those permitted under clauses
(i) and (ii) above, with Landlord’s prior consent, which
consent shall not be unreasonably withheld provided that such Alteration does
not (A) diminish the value of the Premises (including, by way of example
only, but without limitation, by diminishing the utility of the Improvements or
diminishing the useful life of the Improvements), except to a de minimis
extent, or (B) adversely affect any structural component of the
Building.  Every Alteration shall be made
in accordance with all applicable laws, legal requirements and the Permitted
Encumbrances.  If Tenant shall submit a
request to Landlord for Landlord’s approval of an Alteration which requires
Landlord’s approval, Landlord shall (x) approve such Alteration proposed
by Tenant within fourteen (14) days of receiving Tenant’s proposal and request
for approval or (y) disapprove Tenant’s proposal in writing with a detailed
explanation of its objections within fourteen (14) days of receiving Tenant’s
proposal and request for approval.  If
Tenant submits a proposal to Landlord and Landlord disapproves such proposal
within the fourteen (14) day time period, Tenant may submit another proposal
with modifications thereto made in response to Landlord’s objections and
Landlord shall so approve or disapprove same within seven (7) days after
submission of such modified proposal.  If
Landlord does not approve or disapprove any proposal or modified proposal in
writing with a detailed explanation of its objections within the applicable
seven (7) or fourteen (14) day period, Tenant may submit to Landlord a
reminder notice, which shall state that Landlord’s failure to disapprove the
applicable proposal within five (5) days after receipt of such reminder notice
shall be deemed to constitute Landlord’s approval thereof.  If Landlord does not disapprove such proposal
or modified proposal in writing with a detailed explanation of Landlord’s
objections to Tenant’s modifications within five (5) days after receipt of
Tenant’s reminder notice, Landlord shall be deemed to have approved the
Alterations proposed by Tenant.


 


(b)                                 In connection with any
Alteration:  (i) the Alterations to
be made will be constructed using materials of a quality and workmanship at
least as good as the original work; (ii) all such Alterations shall be performed
in a good and workmanlike manner, and shall be performed diligently in a
commercially reasonable time period subject to Force Majeure in compliance with
all laws, legal requirements and the terms of all Permitted 


 


14

















 


Encumbrances; (iii) all work done in connection with any such
Alteration shall comply in all material respects with all requirements of any
insurance policies in effect with respect to the Premises (the “Insurance Requirements”); (iv) Tenant shall pay when
due all costs and expenses of any such Alteration, and shall discharge all
liens filed against any of the Premises arising out of the same;
(v) Tenant shall procure and pay for all permits and licenses required in
connection with any such Alteration; (vi) all such Alterations shall be
the property of Landlord and shall be subject to this Lease (except for any
Alteration which constitutes Tenant’s Property); and (vii) all Alterations
shall be made under the supervision of an architect or engineer selected by
Tenant and in accordance with plans and specifications which shall be submitted
to Landlord prior to the commencement of the Alterations; provided, however,
Landlord shall have no right to approve such architect, engineer, plans or
specifications, except as expressly set forth in Section 10.1(a).


 


10.2.                     Maintenance and Repair.  During the Term, Tenant at its sole cost and
expense, agrees to make all necessary repairs and replacements to the
Improvements as often as required to keep and maintain the Premises in good and
safe condition and repair. 
Notwithstanding any provision to the contrary, Tenant’s obligations
under this Section shall not include making any repair or improvement
necessitated by the act of Landlord, its agents, employees or servants.  If Tenant shall default in its obligations
under this Section 10.2, Landlord may, after thirty (30) days
written notice to Tenant and failure by Tenant to perform any necessary repairs
and replacements to the Improvements within such thirty (30) day period, enter
the Premises to commence such repairs or replacement.  All reasonable sums incurred by Landlord in
connection with any such repair or replacement shall constitute Additional Rent
payable by Tenant under this Lease and shall be paid by Tenant to Landlord
within ten (10) days of Tenant’s receipt of a detailed invoice for such
charges.


 


11.                               CONDEMNATION
AND CASUALTY DAMAGE


 


11.1.                     Substantial Taking.  If
all or substantially all of the Premises is taken or appropriated for any
public or quasi-public use or purpose by any lawful power or authority by the
exercise of the right of eminent domain or by virtue of condemnation or other
similar proceedings, including a deed given in lieu thereof (“Taking”), other than a temporary Taking for
a period of one (1) year or less, this Lease shall terminate as of the
date possession is required by the condemning authority and Rent and all other
charges and costs payable hereunder shall be adjusted and paid to the effective
date of termination.


 


11.2.                     Other Taking.


 


(a)                                  If there shall be a Taking,
other than a temporary Taking for a period of one (1) year or less, of
(i) a portion of the Building, (ii) twenty percent (20%) or more of
the parking area of the Premises, (iii) any material part of a driveway or
roadway necessary for access to the Premises, or (iv) a material part of
Tenant’s signage, and in Tenant’s reasonable judgment such Taking under clauses (i),
(ii), (iii) or (iv) would 


 


15

















 


render the Premises (or the remainder thereof) unsuitable for the
conduct of Tenant’s business, Tenant shall have the right to terminate this
Lease as of the date possession is required by the condemning authority by
giving notice to that effect to Landlord within sixty (60) days after notice to
Tenant of the date such possession is required. 
In such event, Rent and all other charges and costs payable hereunder
shall be adjusted and paid to the effective date of termination.


 


(b)                                 If only a portion of the
Premises is subject to a Taking and Tenant is not entitled to or shall not
exercise its right to terminate this Lease pursuant to Section 11.2(a),
this Lease shall continue in full force and effect, and there shall be no abatement or reduction of Rent payable hereunder
except that Rent shall be equitably reduced for the remainder of the Term so
that Tenant shall pay only such portion of Rent as the rental value of the part
remaining after such Taking bears to the rental value of the entire Premises
immediately prior to such Taking.  Tenant
shall make any and all repairs and restorations to the remainder of the
Premises to the extent necessary to render the same a complete architectural
unit suitable for Tenant’s use.


 


11.3.                     Compensation.  In the
event that all or any portion of the Premises is subject to a Taking, Landlord
and Tenant shall cooperate to maximize the amount of the recovery from the
condemning authority. If the recovery from the condemning authority is paid
into a common fund or paid only to Landlord, such recovery shall be allocated
as follows and in the following priority: 
(i) so long as no Event of Default shall have occurred and be
continuing, to Tenant for the cost of any repairs required pursuant to Section
11.2(b); (ii) to Landlord, that portion allocable to Land which is
taken; (iii) to Landlord, that portion allocable to Improvements which are
taken; (iv) to Tenant, that portion allocable to Tenant’s Property or
Tenant’s relocation and moving expenses; and (v) to Landlord, the
balance.  Notwithstanding the foregoing,
all proceeds from a temporary Taking shall be (A) paid to Tenant if this
Lease is not terminated and (B) equitably allocated between Landlord and
Tenant as of the date of termination if this Lease is terminated.  The provisions of this Section shall
survive any termination of this Lease pursuant to Sections 11.1 or 11.2(a).


 


11.4.                     Casualty Damage.


 


(a)                                  If the
Improvements or any portion thereof are damaged or destroyed by fire or other
casualty (“Casualty”), and this
Lease is not terminated pursuant to Section 11.4(b) below,
Tenant shall, at its sole cost and expense, promptly and diligently repair such
damage and restore the Improvements as nearly as possible to the condition
which existed prior to the occurrence of such Casualty or to any comparable or
improved condition consistent with Tenant’s or Franchisor’s then-current store
design and this Lease shall remain in full force and effect and Tenant shall
continue to pay Rent.  Tenant promptly
shall commence and diligently pursue to completion the repair, restoration and replacement
of the damaged or destroyed Improvements, due allowance being made for time
needed to obtain permits, adjust insurance and for delay on account of events
of Force Majeure.  Such repair,
restoration and 


 


16

















 


replacement shall be performed in accordance with the requirements set
out in Section 10.1(b) and in compliance with all applicable laws,
legal requirements and Permitted Encumbrances. 
Tenant shall be responsible for the repair or replacement of any Tenant’s
Property damaged by such Casualty.  As
used in this Lease the word “destroyed”
shall mean completely destroyed above the foundation, or so substantially
damaged as to require demolition to the foundation, or such other severity of
damage as may be established or imposed by applicable governmental law or
ordinance which, if suffered, would constitute total destruction or require
demolition before repair or reconstruction may commence.


 


(b)                                 If
the Improvements or any portion thereof is damaged or destroyed (i) during
the last five (5) Lease Years of the Term (or the Term as then extended)
to the extent of twenty-five percent (25%) or more of the replacement value
thereof (exclusive of the foundation) immediately prior to such Casualty; or (ii) by
a cause or peril which is not covered by the property insurance required to be
carried pursuant to Section 12.1(b), then Tenant shall have the
right to terminate this Lease by giving notice to that effect (“Termination Notice”) to Landlord within
sixty (60) days after the occurrence of the Casualty, in which event
termination shall be effective as of the date of such Casualty if the Building
is destroyed and otherwise as of the date Tenant vacates the Premises following
such Casualty.


 


(c)                                  If this Lease
is terminated pursuant to this Section 11.4, Rent and all other
charges and costs payable hereunder shall be adjusted and paid to the effective
date of termination, and all proceeds of any property insurance
with respect to the Premises (exclusive of Tenant’s Property, which shall be
paid to Tenant) shall be paid to Landlord.


 


12.                               INSURANCE


 


12.1.                     By Tenant.  Tenant, at
its sole cost and expense, shall obtain and maintain (or cause to be obtained
and maintained, as the case may be) the following insurance during the Term:


 


(a)                                  Commercial general public
liability insurance with limits of not less than Five Million and No/100 Dollars ($5,000,000.00) per occurrence,
with a commercially reasonable deductible.


 


(b)                                 All-risk property insurance covering all Improvements constituting part
of the Premises, including the Building, all Alterations and other improvements
(excluding Tenant’s Property), in an amount not less than one hundred percent
(100%) of the replacement cost thereof, including (i) ordinance or law
coverage including any amounts necessary to replace the undamaged portion of
the Building, to cover cost increases 


 


17

















 


arising from changes in building codes or
other ordinances or laws and to cover costs of debris removal, and (ii) boiler
and machinery coverage, with a commercially reasonable deductible;


 


(c)                                  Property insurance covering
Tenant’s Property in such amounts as Tenant deems necessary or desirable;


 


(d)                                 A liquor liability policy with limits of not less than Five Million and
No/100 Dollars ($5,000,000.00) per occurrence and Five Million and No/100
Dollars ($5,000,000.00) in the aggregate, with a commercially
reasonable deductible;


 


(e)                                  Workers’ compensation and
employer’s liability insurance as required by applicable law;


 


(f)                                    Insurance against loss or
damage from explosion of any steam or pressure boilers or similar apparatus
located in or about the Improvements in an amount not less than the actual
replacement cost of the Improvements and equipment located within the
Improvements;


 


(g)                                 If any portion of the
improvements is located in an area designated by the Federal Emergency
Management Association as having special flood and mud slide hazards, flood
insurance in the maximum available amount; and


 


(h)                                 Business interruption
insurance which includes amounts sufficient to pay all Base Rent, Additional
Rent and other amounts payable hereunder for a period of not less than twelve
(12) months.


 


12.2.                     General Requirements.  All insurance (and renewals thereof) required
by this Article shall be issued by responsible insurance carriers
authorized to do business in the State in which the Premises is located and
having a claims paying ability rating of not less than “A-” by Standard &
Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc.  Each policy (and any renewal thereof) shall
expressly provide that it shall not be cancelled or changed without at least
thirty (30) days’ prior written notice to all parties insured or named
therein.  The insurance described in Sections 12.1(a) and
(d) shall include Landlord and Landlord’s Lender, if any, as
additional insureds.  The insurance
provided under Sections 12.1(b), (f) and (g) shall
name Landlord and each Landlord Lender as a loss payee with respect to any
losses, and any proceeds paid to Landlord thereunder shall be held and
disbursed by Landlord to fund the repairs performed by Tenant in accordance
with the terms of Section 11.4. In the event of any Tenant
financing, the interest of Landlord and Landlord’s Lender, if any, under the
property insurance described in Sections 12.1(b), (f) and
(g) shall be senior to the interest of any Tenant Lender.  Tenant and Tenant’s Lender are entitled to
receive the property insurance proceeds allocable to


 


18
















 


Tenant’s Property. All of
the insurance required by this Article shall be primary and
noncontributing with any insurance which may be carried by the Landlord, shall
afford coverage for all claims based on any act, omission, event or condition
which occurs or arises during the policy period, and may be obtained by
endorsement on blanket policy(ies) of insurance carried and maintained by
Tenant.  Upon issuance and each renewal
thereof, Tenant shall deliver to Landlord a certificate thereof and reasonable
evidence of paid premium, failing which Landlord shall have the right from time
to time after no less than ten (10) days’ notice (except that if any
insurance required under Section 12.1 has lapsed, no prior notice
shall be necessary) to effect such insurance for no more than one (1) year and
all premiums paid by Landlord shall be reimbursed by Tenant upon written
demand.  Landlord shall have no interest
in any insurance proceeds Tenant receives for Tenant’s Property and Landlord
shall sign all documents which are necessary or appropriate in connection with
the settlement of any claim or loss by Tenant  with respect to Tenant’s Property.


 


12.3.                     Mutual Waiver of Subrogation.  Tenant agrees to have all policies of fire
and extended coverage insurance now or hereafter carried by it with respect to
the Improvements endorsed with a clause substantially as follows:  “This insurance shall not be invalidated
should the insured waive in writing prior to a loss any or all rights of
recovery against any party for loss occurring to the property described herein.”  The obligation to obtain such an endorsement
shall be subject to the availability thereof at commercially reasonable
rates.  Landlord and Tenant hereby waive
all claims for recovery from each other for any loss or damage to it or any of
its property insured under valid and collectible insurance policies to the
extent of the proceeds collected under such insurance policies.


 


13.                               ASSIGNMENT
AND SUBLETTING


 


13.1.                     Consent Required. 
Except as provided in Section 13.2 below and Tenant
financing pursuant to Article 20 below, Tenant shall not sell,
encumber, assign or transfer this Lease or any interest herein, whether
directly or by operation of law, nor sublet all or any part of the Premises
without the prior written consent of Landlord which shall not be unreasonably
withheld, conditioned or delayed so long as, in Landlord’s reasonable
determination, such proposed assignee or subtenant is a capable operator of a
restaurant facility similar in quality to the Premises and has a financial
condition and creditworthiness sufficient to meet the financial obligations of
Tenant under this Lease.  With respect to
an assignment or subletting for which Landlord’s consent is required, the
following provisions shall apply:


 


(i)                                            there shall be
submitted to Landlord current financial information and information regarding
the business reputation and experience regarding the proposed
assignee/sublessee;


 


(ii)                                         the business reputation and
experience of the proposed assignee or sublessee (or the principals or owners
thereof) shall meet or exceed generally acceptable commercial standards for
like properties;


 


19

















 


(iii)                                      in the case of an
assignment, the proposed assignee shall agree in writing to assume and abide by
all terms and provisions of this Lease from and after the date of such
assignment; and


 


(iv)                                     no Event of Default shall
have occurred and be continuing.


 


Landlord agrees to respond
within twenty (20) days after receipt of Tenant’s written request for Landlord’s
consent (together with the information specified above and other information
reasonably requested by Landlord) to a proposed assignment or sublet and
submission of the financial information and business qualifications of the
proposed assignee/sublessee pursuant to clauses (i) and (ii)
above.  Any disapproval shall be
explained in writing.  If Landlord fails
to respond or responds with a disapproval without an explanation by the
expiration of said twenty (20) day period, Tenant may give to Landlord a
reminder notice stating that Landlord’s failure to respond within five (5) days
after receipt of such reminder notice shall be deemed to constitute Landlord’s
approval of the transaction in question, and if Landlord shall fail to respond
or explain its disapproval within five (5) days after receipt of such
reminder notice, the transaction which is the subject of Tenant’s notice to
Landlord shall be deemed approved. 
Consent by Landlord to any assignment or subletting shall not waive the
necessity for consent to any subsequent assignment or subletting for which
Landlord’s consent is required by this Section.


 


13.2.                     Permitted Transfer. 
Tenant shall have the right, without any cost, fee or payment to
Landlord (other than as set forth in Section 13.4 below), to sublet
any portion of the Premises, or to transfer and assign Tenant’s right, title
and interest in this Lease, without Landlord’s prior written consent, to the following persons and entities  in the following events (each, a “Permitted Transfer”):  (i) to Franchisor or Franchisor’s
affiliate; (ii) a person or entity who is an approved franchisee of
Franchisor; (iii) to a parent,
subsidiary, affiliate or division of Tenant, Apple American Group LLC (“AAG”) or their
respective investors; (iv) to any entity that acquires, by merger,
consolidation or otherwise, all or substantially all of the ownership interests
in and control of, Tenant or AAG (provided
that no Event of Default shall have occurred and be continuing) or of
Franchisor; or (v) to any entity that acquires all or substantially
all of Tenant’s assets (excluding the Distinctive Property) or AAG’s assets (provided that no Event of Default shall have
occurred and be continuing).  A
direct or indirect transfer of all or any interest in AAG shall not be deemed a
sale, encumbrance, assignment or transfer of this Lease or any interest
herein.  A direct or indirect transfer by
AAG of all or any interest in Tenant shall not be deemed a sale, encumbrance,
assignment or transfer of this Lease or any interest therein.  For purposes of this Section 13.2,
references to Tenant, Franchisor and AAG shall be deemed to include their
respective successors and assigns.


 


13.3.                     General Provisions.  In
the case of any sublease or assignment of this Lease, Tenant shall submit an
executed copy of the sublease or assignment instrument to Landlord.  Notwithstanding anything to the contrary
which may be provided in this Lease, (a) the Tenant making any assignment
shall be released from any and all liability under this Lease as of the 


 


20

















 


effective
date of any assignment made pursuant to Section 13.1, and
(b) the Tenant making any assignment (and any predecessor Tenant that has
not theretofore been released) shall be released as of the effective date of
any assignment described in subsections (i), (ii), (iv) and
(v) of Section 13.2, provided that the assignee
of an assignment or transfer described in subsections (i),  (ii) and
(v) of Section 13.2 assumes, in writing, all
obligations under this Lease from and after the effective date of such
assignment.  Landlord shall not be
entitled to any monetary consideration in connection with any assignment or
sublet, except for reimbursement of reasonable attorneys’ fees and disbursements
if and as provided in Section 13.4 below.


 


13.4.                     Costs and Fees.  Tenant
shall not be obligated to reimburse Landlord for any cost, fee or payment
incurred by Landlord or Landlord’s Lender in connection with any requests for
approval of an assignment of this Lease or any sublease of the Premises other
than reasonable costs and expenses incurred by Landlord and Landlord Lender
(including, without limitation, reasonable attorneys’ fees and disbursements); provided,
however, that if the assigning Tenant is Franchisor, a Franchisor affiliate
or an authorized franchisee of Franchisor (other than the originally named
Tenant hereunder), no such cost, fee or payment shall be due or payable by such
entity.


 


14.                               INDEMNIFICATION


 


14.1.                     Indemnification of Landlord.


 


(a)                                  Tenant agrees to indemnify,
defend and hold Landlord Indemnitees harmless from and against any and all
claims, demands, actions, liabilities, damages, losses, penalties, fines, costs
and expenses, excluding lost profits and consequential damages, but including
reasonable attorneys’ fees and disbursements, for any injury to person, or
damage to, loss or theft of property on the Premises, or which relates to the
use or occupancy thereof by Tenant, or arising from or due to the negligent
acts or omissions, willful misconduct, or fraudulent conduct of any Tenant
Indemnitees, except if and to the extent due to the negligent act or omission
or willful misconduct of any Landlord Indemnitees.


 


(b)                                 The obligations of Tenant
under this Section 14.1 shall survive the termination or expiration
of this Lease.


 


14.2.                     Indemnification of Tenant.


 


(a)                                  Landlord agrees to
indemnify, defend and hold Tenant Indemnitees harmless from and against any and
all claims, demands, actions, liabilities, damages, losses, penalties, fines,
costs and expenses, excluding lost profits and consequential damages, but
including reasonable attorneys’ fees and disbursements, for any injury to
person or damage to, loss or theft of property arising from or due to the
negligent acts or 


 


21

















 


omissions, willful misconduct, or fraudulent conduct of any Landlord
Indemnitees, except if and to the extent due to the negligent act or omission
or willful misconduct of any Tenant Indemmitees.


 


(b)                                 The obligations of Landlord
under this Section 14.2 shall survive the termination or expiration
of this Lease.


 


15.                               DEFAULT;
REMEDIES


 


15.1.                     Default By Tenant.  Each
of the following shall constitute an Event
of Default  (herein so called) by Tenant under this Lease:


 


(i)                                            Tenant fails to
pay any installment of Rent in full under this Lease within ten (10) days
after notice from Landlord that such payment was not received when due;


 


(ii)                                         Tenant
fails to  observe or perform any other provision of this Lease
required to be observed or performed by Tenant and does not cure such failure
within thirty (30) days after notice thereof from Landlord; provided, that if
such default is not capable of being cured within thirty (30) days and Tenant
promptly commences such cure, said thirty  (30)  day period shall be extended so long as Tenant diligently
and continuously pursues such cure;


 


(iii)                                      Tenant makes a general
assignment for the benefit of creditors;


 


(iv)                                     A receiver or trustee of
Tenant or any of their respective
assets is appointed by entry of an order by a court of competent jurisdiction
and the same is not vacated, discharged or dismissed within sixty (60) days
thereafter;


 


(v)                                        A petition for relief is filed by Tenant under any
bankruptcy or insolvency law seeking a plan of reorganization or arrangement
under any law relating to bankruptcy, or any such petition is filed against
Tenant and same is not dismissed, discharged or vacated within sixty
(60) days thereafter; or


 


(vi)                                     The interest of Tenant in
the Premises is sold under execution or other legal process;


 


22

















 


15.2.                     Landlord’s Remedies.


 


(a)                                  Upon the occurrence of an
Event of Default under Section 15.1, Landlord shall have the
following rights and remedies, subject to the rights of Franchisor or Tenant
Lender under the provisions of Section 15.3 and Section 20.2:


 


(i)                                            To terminate
this Lease and Tenant’s right of possession of the Premises by giving notice of
such election to Tenant, in which event, on the date specified in such notice
(which shall be not less than three (3) days after the giving of such
notice), Tenant’s right to possession shall terminate and this Lease shall
terminate.  Upon such termination, in
addition to any other rights and remedies to which Landlord may be entitled
under applicable law, Landlord may recover from Tenant:  (a) the worth at the time of award of
the unpaid Rent which had been earned after termination until the time of such
termination; plus (b) the worth at the time of award of the amount by
which the unpaid Rent which would have been earned after termination until the
time of award exceeds the amount of such Rent loss that Tenant proves could
have been reasonably avoided; plus (c) the worth at the time of award of
the amount by which the unpaid Rent for the balance of the Term after the time
of award exceeds the amount of such Rent loss that Tenant proves could be
reasonably avoided; plus (d) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant’s failure to
perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom; plus (e) such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time
by applicable law.  The “worth at the
time of award” of the amounts referred to in clauses (a) and (b) above
shall be computed by allowing interest at the prime rate (as defined in Section 23.6).  The “worth at the time of award” of the
amount referred to in clause (c) above shall be computed by discounting
such amount at a rate equal to the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percentage point;


 


(ii)                                         To terminate Tenant’s right
of possession of the Premises without terminating this Lease by giving notice
of such election to Tenant, in which event (A) Tenant shall immediately
surrender possession thereof to Landlord, failing which Landlord may expel or
remove Tenant and any other occupant(s) thereof in accordance with
applicable law (“Reentry”), and
(B) Landlord shall have the right to occupy the Premises for and on
account of Tenant and to collect any unpaid rentals and other charges which
have or may thereafter become due and payable;


 


(iii)                                      To exercise the rights
described in clause (ii) above and thereafter elect to
terminate this Lease and all of Tenant’s rights in or to the Premises by giving
notice of such election to Tenant; or


 


23

















 


(iv)                                     To exercise any other right
or remedy now or hereafter existing by law or in equity.


 


(b)                                 If Landlord reenters the
Premises under subsection (a)(ii) above, such reentry or any
action, in unlawful detainer or otherwise, to obtain possession of the Premises
shall not be deemed to be an election by Landlord to terminate this Lease, or
Tenant’s liability to pay Rent or other charges thereafter accruing, or Tenant’s
liability for damages under any provisions hereof, unless Landlord elects to
terminate this Lease by written notice
to that effect given to Tenant.  Tenant
covenants that the service by Landlord of any notice pursuant to the unlawful
detainer statutes of the State in which the Premises is located and the
surrender of possession pursuant to such notice shall not be deemed to be a
termination of this Lease, unless Landlord elects to the contrary by written notice to that effect given to
Tenant at the time of or after the service of any such statutory notice.  If Landlord reenters or takes possession of
the Premises as aforesaid, Landlord shall have the right, subject to the
provisions of this Lease, including without limitation, the provisions of Section 16.2,
to remove therefrom all or any part of the personal property located therein
and may dispose of or place the same in storage at a public warehouse at the
expense and risk of Tenant; provided, however, that Landlord
shall not be obligated to remove and/or dispose of any such personal property.


 


(c)                                  If Landlord elects to
reenter the Premises under subsection (a)(ii) above and takes
possession of the Premises, Landlord shall use commercially reasonable efforts
to mitigate Landlord’s damages and to relet the Premises for a term, rate and
upon such other provisions as Landlord deems appropriate.  If Landlord so reenters and takes possession
of the Premises, Landlord may decorate, repair and alter the Premises to the
extent Landlord deems appropriate for purposes of such reletting.  If Landlord is unable to so relet the
Premises, then Tenant shall pay to Landlord monthly on the first day of each
month during the period that Tenant’s right to possession is terminated, a sum
equal to the Rent due under this Lease for that month.  If the Premises are relet, Landlord shall
apply the rents therefrom first to payment of Landlord’s expenses incurred by
reason of Tenant’s default, second, to payment of Landlord’s expenses of
reletting, including without limitation, brokerage fees and reasonable
attorneys’ fees, and third, to payment of Rent due from Tenant under this
Lease.  All sums expended and concessions
granted to any new tenant shall be amortized on a straight -line
basis over the term of the new lease and Tenant’s liability therefor shall be
limited to that portion attributable to the unexpired term of this Lease.  If the sums received from such reletting are
insufficient to satisfy the payment of Rent due from Tenant under this Lease
for any month, Tenant shall remain liable for the deficiency.  If the sums received from such reletting
exceed the Rent otherwise due from Tenant for any month, Tenant shall have no
rights thereto except that such excess amounts shall be applied against Rent
subsequently due under this Lease.  No
such reletting by Landlord shall be considered to be (A) for Landlord’s
own account unless and until Landlord notifies Tenant that this Lease has been
terminated, and (B) an acceptance of Tenant’s surrender of the Premises
unless and until Landlord so notifies Tenant.


 


24

















 


(d)                                 At any time after such
termination of this Lease pursuant to Section 15.2(a)(i) or
pursuant to law, whether or not Landlord shall have recovered any amounts under
Section 15.2(a)(i) or 15.2(c), Landlord, at its option,
shall be entitled to recover from Tenant and Tenant shall pay to Landlord, on demand,
all reasonable legal fees and other costs and expenses incurred by Landlord as
a result of Tenant’s default under this Lease and the exercise of any rights
and remedies hereunder.


 


(e)                                  Mention in this Lease of any
particular remedy shall not preclude Landlord from any other remedy at law or
in equity.  No right or remedy conferred
upon or reserved to Landlord in this Lease is intended to be exclusive of any
other right or remedy; and each and every right and remedy shall be cumulative
and in addition to any other right or remedy contained in this Lease.  No delay or failure by Landlord or Tenant to
enforce its rights under this Lease shall be construed as a waiver,
modification or relinquishment thereof. 
Tenant waives any rights of redemption granted by any laws if Tenant is
evicted or dispossessed, or if Landlord obtains possession of the Premises by
reason of the violation by Tenant of any of the terms of this Lease.


 


15.3.                     Franchisor Rights.


 


(a)                                  Landlord agrees to send a
copy of any notice of default required or permitted to be given to Tenant under
this Lease simultaneously to Franchisor at the last address for Franchisor
furnished to Landlord by Franchisor in writing; provided, that the
failure to send such notice shall not limit Tenant’s default or Landlord’s
remedies with respect thereto, or make Landlord liable for any damages. If
Franchisor has received timely notice of such default, (provided, that
the failure to send such notice shall not limit Tenant’s default or Landlord’s
remedies with respect thereto or impose any liability upon Landlord therefor),
Landlord agrees and consents to the curing of any default of Tenant hereunder
by Franchisor, provided that such cure is made by Franchisor within the
time set forth in Section 15.1 for Tenant’s cure (provided,
that Franchisor shall have an additional fifteen (15) days to cure a default
under Sections 15.1(i)), so long as Franchisor notifies Landlord
within the cure periods set forth in such Sections that Franchisor will cure
such defaults).  If Franchisor elects to
cure any Tenant default hereunder, Franchisor shall give notice to that effect
to Landlord and Tenant simultaneously with such cure.


 


(b)                                 Notwithstanding anything to
the contrary stated herein, if an Event
of Default has occurred (including the expiration of any applicable cure
period) and Landlord intends to terminate the Lease on account thereof,
Landlord agrees to give notice thereof to Franchisor (“Termination Notice”), in which event
Landlord agrees not to terminate the Lease (as otherwise permitted hereunder)
for a period of thirty (30) days, during which time Franchisor shall have the
right to lease the Premises upon the same terms and conditions as this Lease,
such election to be made by notice to that effect (“Franchisor Notice”) from Franchisor to Landlord prior to the
end of said 30-day 


 


25

















 


period.  If Franchisor exercises
such right by giving the Franchisor Notice to Landlord by the time and in the
manner set forth in the immediately preceding sentence, then
(i) Franchisor and Landlord shall promptly execute and deliver a written
instrument to that effect; (ii) Franchisor shall become the tenant under
this Lease with all of the rights and obligations of tenant commencing upon, first
accruing and effective only from and after the date of the Franchisor Notice;
provided, that Tenant shall not dispute such action by Franchisor and shall
acknowledge its approval of such action by Franchisor; (iii) Franchisor shall
have no liability, responsibility or obligation to pay or otherwise cure any
default of Tenant existing prior the effective date of exercise by Franchisor
of its rights in this subsection; provided, that if Franchisor has received
notice from Landlord of any Event of Default of Tenant under Sections 15.1(i) Franchisor
shall pay any Rent due and payable by Tenant first accruing only after the date
Franchisor receives notice of any such Event of Default; and (iv) nothing
contained herein shall restrict, limit, terminate, waive or otherwise affect
Landlord’s rights against Tenant on account of Tenant’s default.  If Franchisor fails to exercise such right on
or before the expiration of said thirty (30) day period, Landlord may pursue
any rights and remedies that it may have against Tenant on account of Tenant’s
Event of Default hereunder.  Nothing
contained in this Section shall be deemed to obligate Franchisor to assume
this Lease, to become the tenant hereunder or to take possession of the
Premises.


 


(c)                                  In the event that Franchisor
becomes the tenant under this Lease pursuant to the provisions of subsection
(b) or an assignment under Section 13.2 above, Franchisor shall
have the right at any time thereafter upon prior notice to, but without the
prior consent of Landlord, to assign this Lease and all of its right, title and
interest as Tenant hereunder to an authorized  franchisee
of Franchisor.  In the event of such an
assignment, Franchisor shall be released from all liabilities and obligations
of Tenant first accruing from and after the effective date of said assignment
provided that such assignee franchisee assumes in writing the obligations of
Tenant under this Lease and a copy thereof is furnished to Landlord.


 


16.                               SURRENDER
OF PREMISES


 


16.1.                     Condition.  Upon the
expiration or earlier termination of this Lease or the termination of Tenant’s
right of possession of the Premises only, Tenant shall surrender the Premises
to Landlord in a clean, safe, good and
tenantable condition, free of debris  and with all “grease traps” and similar
devices cleaned and in good working condition, ordinary wear and tear and, if
this Lease is terminated pursuant to Section 11.4(b), damage by
Casualty excepted.  All building
apparatus and equipment (other than Tenant’s Property) then located on the Premises
and all Alterations and other improvements to the Premises made during the
Term, whether by Tenant or others, shall remain on the Premises and shall be
considered part of the Premises.  Tenant
shall deliver all keys therefor to Landlord at the place then fixed for the
payment of Rent and shall make known to Landlord the combination for all locks
on safes, cabinets and vaults in the Premises.


 


26

















 


16.2.                     Removal of Tenant’s Property.  Upon the expiration or earlier termination of
this Lease or the termination of Tenant’s right of possession of the Premises
only, Tenant shall, at its sole cost and expense, for a period of fifteen (15)
days thereafter to remove Tenant’s Property, Distinctive Property and the
Financed Personalty, respectively, from the Premises, provided that Tenant
shall pay to Landlord Rent due under Article 3 hereof for the
actual number of days which elapse during such fifteen (15) day period until
the Tenant’s Property, Distinctive Property and the Financed Personalty, as
applicable, are removed from the Premises. 
If and to the extent that Tenant fails to remove any of such property by
the expiration of said fifteen (15) day period, Landlord agrees that Tenant
Lender, TE Lender and Franchisor each shall have the right for a period of
thirty (30) days thereafter to remove the same from the Premises, provided,
that Tenant shall pay to Landlord Rent due hereunder for the actual number of
days which elapse until Tenant Lender, TE Lender or Franchisor remove the same
from the Premises during such thirty (30) day period.  If and to the extent that any such property
remains on the Premises on the forty-fifth (45th) day after such termination,
the same shall be deemed abandoned, and at Landlord’s option  shall become the property of Landlord and may be sold or
disposed of as Landlord may determine; provided, however, that
Landlord shall not use, suffer or permit the use of any Distinctive Property
unless the attributes or features thereof associated with Tenant or Franchisor
are removed or obliterated.  Any and all
damage to the Building caused by or resulting from the removal of Tenant’s
Property, Distinctive Property or Financed Personalty shall promptly be
repaired at no cost or expense to Landlord and Tenant shall be liable for such
cost and expense unless such repairs are made by Tenant, Franchisor or TE
Lender, as the case may be.


 


17.                               SUBORDINATION
AND ATTORNMENT


 


17.1.                     Subordination.  This Lease
and the rights of Tenant hereunder are expressly subject and subordinate to the
lien of any mortgage or deed of trust constituting a lien on Landlord’s fee
interest in the Premises (“Landlord Mortgage”)
and any renewals, extensions, modifications, consolidations and replacements
thereof, which now or hereafter affect all or any portion of the Premises (except to the extent that
any such instrument expressly provides that this Lease is superior to it);
provided that the holder of the Landlord Mortgage (“Landlord Lender”) agrees in writing not to disturb Tenant,
Tenant’s right to possession and use of the Premises and Tenant’s rights under
this Lease so long as there shall be no Event of Default on behalf of Tenant
hereunder.  Tenant agrees to execute and
deliver to Landlord and any Landlord Lender at any time and from time to time all such documents reasonably requested by
Landlord or Landlord’s Lender, which are reasonably acceptable to Tenant and
Tenant’s Lender, to confirm or effect such subordination, including, without
limitation, an SNDA substantially in the form attached as Exhibit D
or in such other form as reasonably requested by Landlord or Landlord’s Lender;
provided that such Landlord Lender agrees to recognize this Lease and the
rights of Tenant set forth herein for so long as there shall be no Event of
Default on behalf of Tenant hereunder. 
Notwithstanding any foreclosure or sale under any Landlord Mortgage (or
transfer by deed in lieu thereof), this Lease shall remain in full force and
effect in accordance with its terms. 
Landlord and any Landlord Lender shall execute within ten (10) days
after request any documentation reasonably required by any TE Lender or Tenant
Lender, which are reasonably acceptable to Landlord and any Landlord Lender, to
confirm the priority of such lender’s interests.  Notwithstanding the provisions of this Section 17.1,
the holder of any Landlord Mortgage to which this Lease is subject and
subordinate shall have the right, at its sole option, at any time, to 


 


27

















 


subordinate
and subject the Landlord Mortgage, in whole or in part, to this Lease by
recording a unilateral declaration to such effect.  Tenant hereby agrees that any Landlord Lender
shall not be bound to the terms of any material modification or amendment of
this Lease entered into after the date of such Landlord Mortgage, unless such
Landlord Lender has consented to such material modification or amendment.  Tenant hereby agrees that after the date of
such Landlord Mortgage, Tenant shall not pay to Landlord any installment of
Base Rent more than one (1) month in advance of the due date thereof,
unless Landlord Lender shall consent to such prepayment.


 


17.2.                     Attornment.  In the
event of the foreclosure of any Landlord Mortgage by voluntary agreement or
otherwise, or the commencement of any judicial action seeking such foreclosure,
Tenant will become the tenant of and attorn to and recognize such Landlord
Lender or purchaser in foreclosure as Tenant’s landlord under this Lease
without change in the provisions of this Lease. 
Upon request by such successor in interest, Tenant will execute and
deliver an instrument confirming such attornment, which will recognize this
Lease and the rights of Tenant set forth herein and shall provide that such
successor in interest will not disturb Tenant in its use of the Premises in
accordance with this Lease unless there is an Event of Default continuing
hereunder and such successor in interest would be entitled to exercise such
remedy under Section 15.2 hereof.


 


18.                               ESTOPPEL
CERTIFICATES


 


18.1.                     Estoppel Certificates.  Within fifteen (15) days after written
request from Landlord or Tenant to the other, such other party shall execute
and deliver an estoppel certificate signed by an officer of such party and
certifying: the Commencement Date and expiration date of the Term; the date to
which Rent has been paid; the amount of Rent then being paid; that this Lease
is in full force and effect and has not been modified, amended or assigned (or,
if modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect); that to such party’s
knowledge there are no defaults by the other party under this Lease, nor to
such party’s knowledge any existing condition upon which the giving of notice or
lapse of time or both would constitute a default (or, if such exist, stating
the nature thereof); that such party has received no notice from any insurance
company of any defects or inadequacies of the Premises; that such party has no
options or rights other than as set forth in this Lease; and such other factual
matters as the requesting party may reasonably request.  Failure to deliver such statement within said
fifteen (15) day period shall be
conclusive upon the party to whom the request was directed that this Lease is
in full force and effect, without modification except as may be represented by
the requesting party in the draft estoppel presented, that to such party’s
knowledge there are no uncured defaults in the requesting party’s performance,
and that all other statements required to be made in the estoppel letter are
conclusively made.


 


28
















 


19.                               NOTICES


 


19.1.                     Notices.  All notices
required or permitted to be given under this Lease shall be in writing, may be
given by a party or its attorney and shall be deemed given on the date when
personally delivered or, if earlier, the next business day if sent by
recognized overnight air courier, or two (2) business days (or, if
earlier, when actually received) after being deposited in the United States
Mail, postage prepaid, properly addressed, certified mail, return receipt
requested, as follows:


 


	
  TO LANDLORD:

  	
   

  	
  At the address set forth
  in Section 1.2,

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
   

   

   

  Telephone: (      )      -     
  

  Telefax: (      )       -     
  

  
	
   

  	
   

  	
   

  
	
  TO TENANT 

  	
   

  	
  At the address set forth in Section 1.3,

  Attention:  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Peter B. Loughman, Esq.

  155 North Michigan Avenue,
  Suite 636

  Chicago, Illinois
  60601

  
	
   

  	
   

  	
   

  
	
  TO FRANCHISOR:

  	
   

  	
  [Applebee’s
  Services, Inc.

  11201 Renner Boulevard

  Lenexa, Kansas 66219

  Attention:  General Counsel]

  



 


Each entity or person
entitled to receive notice or a copy thereof pursuant to this Lease (“Addressee”) at any time and from time to
time may change its address for notice purposes by giving notice of such change
to all other Addressees in any manner specified above at least fifteen (15)
days before such change of address is to become effective.


 


20.                               LEASEHOLD
FINANCING


 


20.1.                     Leasehold Financing. 
Tenant shall have the right at any time and from time to time during the
Term with notice to, but without the consent or approval of Landlord, to grant
a mortgage or other security interest (“Leasehold
Mortgage”) in Tenant’s interest in this Lease (the leasehold estate
created hereby), and all of Tenant’s Property, all upon the condition that all rights
acquired under any such Leasehold Mortgage shall be subject to each and all of
the covenants, conditions, terms and restrictions set forth in this Lease.
Tenant Lender’s foreclosure 


 


29

















 


on
the Leasehold Mortgage shall not terminate this Lease or affect any of the
covenants, conditions, terms and restrictions set forth in this Lease as
obligations of Tenant.


 


20.2.                     Tenant Lender.  If Landlord
is provided written notice of a Leasehold Mortgage and the name and address for
notice of the holder of a Leasehold Mortgage (the “Tenant Lender”), then the rights of such Tenant Lender shall
include the following, which shall be binding on Landlord (and any Landlord
Lender).  Upon recordation of the
Leasehold Mortgage and for so long thereafter as the Leasehold Mortgage remains
unsatisfied:  (i) Landlord agrees to
deliver a copy of any notice of default given to Tenant under this Lease
simultaneously to Tenant Lender at its last address furnished to Landlord in
writing; (ii) Landlord agrees that Tenant Lender shall have the right, but
shall not be obligated, to cure any default of Tenant hereunder, provided that
such cure is made by Tenant Lender within the time provided to Tenant pursuant
to Section 15.1 (provided, that such Tenant Lender shall
have an additional fifteen (15) days to cure a default under Sections 15.1(i),
so long as Tenant Lender notifies Landlord within the cure periods set forth in
such Sections that it will cure such defaults); (iii) if Tenant Lender
elects to cure any default of Tenant hereunder, (A) Tenant Lender shall give
notice to that effect to Landlord and Tenant simultaneously with such cure, and
(B) Landlord consents to and shall accept such cure with the same force
and effect as if made by Tenant; (iv) Landlord and Tenant each agree not
to cancel or surrender this Lease (other than due to a default by a party which
was not cured within the applicable cure period after notice was given to
Tenant and Tenant Lender) or materially amend the provisions of this Lease
without the prior written consent of Tenant Lender, which consent shall not be
unreasonably withheld or delayed; and (v) if Landlord terminates the Lease
due to an Event of Default which Tenant Lender is unable to cure (e.g., Tenant bankruptcy), and Tenant
Lender elects by written notice to Landlord within forty-five (45) days
thereafter to continue this Lease, Landlord agrees to enter into a new lease
with Tenant Lender on the same terms and conditions as set forth in this Lease
for the balance of the original Term, including any remaining extension
options, provided, that the Tenant Lender shall pay to Landlord at the time of
the execution and delivery of the new lease all sums which would at the time of
the execution and delivery of the new lease be due pursuant to this Lease but
for such termination, and shall agree in writing to cure and shall cure all
other defaults of Tenant capable of being cured by Tenant Lender then existing
under this Lease within a reasonable period of time after entering into such
new Lease.  Landlord agrees promptly to
execute and deliver such documents as Tenant Lender reasonably may request
which are reasonably acceptable to Landlord and any Landlord Lender to evidence
the provisions of this Section 20.2, including the Landlord
Agreement substantially in the form attached hereto as Exhibit B.


 


[Insert
Restrictive Covenant if Landlord owns additional property surrounding Premises]


 


21.                               RIGHT
OF FIRST REFUSAL TO PURCHASE


 


If
at any time during the Term, Landlord shall receive a bona fide written offer
to purchase the Premises or any portion thereof or interest therein from a
third party which is not affiliated with Landlord, which offer Landlord is
willing to accept (“Outside Contract”),
Landlord shall give written notice (“Sale
Notice”) thereof, together with a copy  of
such Outside Contract, to Tenant.  Tenant
shall have a right of first refusal (“Refusal
Right”) to purchase the 


 


30

















 


Premises
or portion thereof or interest therein that is the subject of the Outside Contract
in accordance with the terms and provisions thereof.  If Tenant desires to exercise the Refusal
Right, Tenant shall deliver written notice to that effect to Landlord within
five (5) business days after receipt of the Sale Notice (“Refusal Period”).  If Tenant exercises the Refusal Right by the
time and in the manner set forth in this subsection, Landlord and Tenant shall
promptly execute a contract which includes the same material terms and conditions as the Outside Contract (“Sale Contract”) and Tenant shall deposit when due any earnest money deposit required
thereunder.  If Tenant does not execute a
Sale Contract within fifteen (15) days after Tenant’s receipt of such Sale
Contract from Landlord, signed on behalf of Landlord, or if Tenant defaults in
its obligations under such Sale Contract, then Landlord shall be free to
consummate the sale pursuant to the Outside Contract (or another contract on
substantially similar terms and conditions).


 


If
Tenant does not exercise the Refusal Right by the time and in the manner set
forth in subsection (a) above, then (i) the Refusal Right
shall remain in full force and effect, but not with respect to the proposed
sale pursuant to the Outside Contract, and (ii) Landlord shall be free to
consummate the sale pursuant to the Outside Contract.  If within one hundred eighty (180) days after
the expiration of the Refusal Period Landlord does not consummate the sale
pursuant to the Outside Contract, the Refusal Right shall again be applicable,
and Landlord shall not thereafter sell the Premises pursuant to the Outside
Contract without first offering Tenant the Refusal Right pursuant to this Section 21.


 


The
rights granted to Tenant under this Section 21 shall not survive
the expiration or termination of this Lease.


 


The
provisions of this Section 21 shall not apply and Tenant shall not
have any Refusal Right (i) with respect to the sale, conveyance,
assignment or other transfer (A) to any person controlling, controlled by,
or under common control with Landlord or any of its direct or indirect owners,
(B) by gift, descent or devise, or (C) to any sale (or conveyance in
lieu thereof) by foreclosure or enforcement of a lien or security interest, or
(ii) at any time that an Event of Default has occurred and is continuing.  Any conveyance of the Premises to Tenant
pursuant to this Section 21 shall be “as-is” with respect to the
physical condition of the Premises.


 


22.                               INTENTIONALLY
OMITTED


 


23.                               MISCELLANEOUS


 


23.1.                     Landlord’s Interests.


 


(a)                                  The term “Landlord” as used herein shall mean only
the owner or owners, at the time in question, of the fee title to the
Premises.  In the event of an 


 


31

















 


assignment or transfer of this Lease by Landlord for other than
security purposes, Landlord shall cause its assignee or transferee to assume
the provisions of this Lease and Landlord shall deliver notice of such
assignment or transfer and a copy of the effective instrument of transfer to
Tenant.  Tenant shall be entitled to
continue to pay Rent and give all notices to Landlord until Tenant has received
the foregoing from Landlord.  From and
after a sale of the Premises, Landlord shall be released from all liability
toward Tenant arising from this Lease because of any act, occurrence or
omission of Landlord’s successors occurring after the transfer of Landlord’s
interest in this Lease, provided Landlord’s purchaser or assignee expressly
assumes Landlord’s duties and covenants under this Lease.  Nothing herein shall be deemed to relieve
Landlord of any liability for its acts, omissions or obligations occurring or
accruing up to and including the date of such transfer.


 


(b)                                 Anything contained herein to
the contrary notwithstanding, any claim based on or in respect of any liability
of Landlord under this Lease shall be enforced only against Landlord’s interest
in the Premises and shall not be enforced against Landlord individually or
personally.


 


(c)                                  Landlord shall have the
right to sell, assign or transfer its interest in the Premises without any prior
notice to or consent of Tenant, subject to compliance with the provisions of Section 21
of this Lease, if applicable.


 


23.2.                     Severability.  If any
provision of this Lease or the application thereof to any person or
circumstance shall be invalid or unenforceable under applicable law, such event
shall not affect, impair or render invalid or unenforceable the remainder or
any other provision of this Lease, nor shall it affect the application of any
provision of this Lease to other persons or circumstances.


 


23.3.                     Entire Agreement.  This
Lease and the Exhibits attached hereto set forth the entire agreement between
Landlord and Tenant concerning the Premises and there is no other agreement,
oral or written, between them other than this Lease.  This Lease supersedes and revokes all
previous negotiations, arrangements, letters of intent, offers to lease, lease
proposals and information conveyed, whether orally or in writing, between the
parties or their respective representatives.


 


23.4.                     Time.  Time is of
the essence of this Lease and the performance of all obligations under this
Lease.


 


23.5.                     Binding Effect.  This Lease
shall be binding upon and inure to the benefit of Landlord, Tenant and their
respective successors and assigns.


 


32

















 


23.6.                     Default Rate.  All amounts
owing to one party from the other party under this Lease for which a date of
payment is not expressly fixed shall be paid within ten (10) days after
the date the party to whom such amount is payable delivers to the other party
appropriate statements of account.  As
used in this Lease, the words “Default Rate”
shall mean interest at the rate of four
percent (4%) per annum in excess of the “prime rate” from time to time
announced in The  Wall
Street Journal or if such publication ceases to publish a prime rate
then as announced by a comparable publication. 
The Default Rate of interest shall be computed from the date on which
any payment is due from either party to the other through and including the
date paid.


 


23.7.                     Force Majeure.  Neither
Landlord nor Tenant shall be considered in default of any of the terms,
covenants and conditions of this Lease on its part to be performed, if it fails
to timely perform same and such failure is due in whole or in part to any
strike, lockout, labor trouble (whether legal or illegal), civil disorder,
restrictive governmental laws and regulations, riots, insurrections, war,
accidents, casualties, acts of God, acts caused directly or indirectly by the
other party hereto (or such party’s agent, employees or invitees) or any other
cause beyond its control.  A party shall
be entitled to an extension of time equal to one (1) day for each day of
delay due to force majeure.  The
foregoing shall not apply to, excuse or be invoked to justify any delay in the
payment of Rent or any other sum of money due from one party payable to the
other party.


 


23.8.                     No Waiver.  No
provision of this Lease shall be deemed to have been waived by either party
unless such waiver is in writing signed by such party.


 


23.9.                     Captions.  The
captions and headings in this Lease are inserted only as a matter of
convenience and do not define, limit, expand or describe the scope or intent of
such provisions.


 


23.10.              Survival.  The following obligations of Landlord and
Tenant shall survive the expiration or earlier termination of this Lease:  (a) any obligation permitted in this
Lease to be performed after the end of the Term; (b) any obligation not
reasonably susceptible of performance prior to the end of the Term; and
(c) any other obligation expressly stated to survive termination.


 


23.11.              Applicable
Law.  This Lease and the rights and
obligations of Landlord and Tenant hereunder shall be governed by and construed
in accordance with the laws and judicial decisions in effect in the State in
which the Premises are located.


 


23.12.              Amendment.  No amendment to the provisions of this Lease
shall be effective or enforceable unless made in writing and signed by Landlord
and Tenant.


 


33

















 


23.13.              Approvals;
Consents.  Every
approval and consent provided for in this Lease shall be made in writing.


 


23.14.              Rights and
Remedies.  All rights
and remedies granted or referred to in this Lease shall be distinct, separate
and cumulative and none shall exclude any other right or remedy of either party
set forth in this Lease or available at law or in equity.


 


23.15.              Holdover.  If Tenant retains possession of the Premises
after the expiration of the Term with or without the express written consent of
Landlord, Tenant shall be deemed to be occupying the Premises on a
month-to-month basis and the monthly Base Rent payable by Tenant for each month
of the period of such holding over shall be an amount equal to one hundred fifty percent (150%) of the
monthly Base Rent in effect immediately preceding such holdover period; provided,
however, that no payment of such increased monthly Rent by Tenant shall
be deemed to extend or renew the Term. 
In the event that Landlord gives written consent to Tenant to remain in
occupancy beyond the expiration of the Term, such occupancy shall be construed
to be a renewal of this Lease for a month-to-month tenancy upon all of the
terms and conditions set forth in this Lease, except that, unless otherwise
provided in Landlord’s consent, monthly Base Rent payable by Tenant for any
such period of holdover tenancy shall be at the rate equal to one hundred seven
and one-half percent (107.5%) of the monthly Base Rent in effect immediately
preceding such holdover period.


 


23.16.              Memorandum.  Landlord and Tenant agree to complete,
execute, deliver and record in the county in which the Premises are located a
short form memorandum of this Lease substantially in the form and substance
attached hereto as Exhibit C (“Memorandum”).
 Tenant shall pay all fees, taxes, costs and
expenses to record the Memorandum.


 


23.17.              No
Third-Party Rights.  The terms
and provisions of this Lease shall not be deemed to confer any rights upon, nor
obligate Landlord or Tenant to, any person or entity other than the parties
hereto, except for any Landlord Lender, Tenant Lender, TE Lender and Franchisor
if and to the extent specifically provided herein.


 


23.18.              Landlord
and Franchisor Access.  Upon
not less than twenty-four (24) hours’ prior
notice (except in the case of an emergency), Landlord may enter upon the
Premises during Tenant’s non-peak
business hours for purposes of inspection and showing the Premises to
prospective purchasers or lenders.  When
entering the Premises, Landlord, its agents, employees and/or contractors
(a) shall identify themselves to Tenant’s personnel immediately upon
entering the Premises, and (b) shall not, in any way, materially or
unreasonably affect, interrupt or interfere with Tenant’s use, business or
operations on the Premises or obstruct the visibility of or access to the
Premises.  Landlord and Tenant (i) acknowledge
that Franchisor, its personnel and agents have the right to enter upon the
Premises for certain purposes under the Franchise Agreement, and (ii) agree
not to interfere with or prevent such entry by Franchisor, its personnel and
agents.


 


34

















 


23.19.              Due
Authority.


 


(a)                                  Landlord represents and
warrants to Tenant as follows: 
(i) that Landlord is a limited liability company created, validly
existing and in good standing under Delaware law; (ii) that Landlord has
full right, power and authority to enter into and to perform its obligations
under this Lease and that no consent or approval of any third parties is necessary
in order to do so or that all such consents and approvals have been obtained;
and (iii) that this Lease, when signed by Landlord, is a legal, valid and
binding obligation of Landlord enforceable in accordance with its terms.


 


(b)                                 Tenant represents and warrants
to Landlord as follows:  (i) that
Tenant is a limited liability company created, validly existing and in good
standing under Delaware law; (ii) that Tenant has full right, power and
authority to enter into and to perform its obligations under this Lease and
that, except as otherwise specifically provided herein, no consent or approval
of any third parties is necessary in order to do so; and (iii) that this
Lease, when signed by Tenant, is a legal, valid and binding obligation of
Tenant enforceable in accordance with its terms.


 


23.20.              Relationship
of Parties.  Nothing
contained in this Lease shall be deemed to constitute a partnership or joint
venture between Landlord and Tenant.  The
relationship of Landlord and Tenant shall only be deemed to be one of landlord
and tenant.


 


23.21.              Preparation
and Signing of Lease.  This Lease
has been negotiated and reviewed by Landlord, Tenant and their respective
attorneys and/or professional advisors, all of whom intend and believe this
Lease to be the product of all of their joint efforts, that it contains the
entire agreement between Landlord and Tenant and as such should not and shall
not be interpreted or construed in favor of or against either Landlord or
Tenant merely because of the efforts of one party or the other in preparing
this Lease.  The submission of this Lease
for review or execution does not constitute a reservation of or option for the
rights conferred herein.  This Lease shall
become effective only if and when executed and delivered by both Landlord and
Tenant.


 


23.22.              Broker.  Landlord and Tenant each warrant and
represent to the other that it has not dealt with any real estate broker,
salesperson or finder in connection with this Lease.  Landlord and Tenant each agree to indemnify,
defend and hold the other party harmless from and against any and all
liabilities and claims for commissions and fees arising out of a breach of its
representation and warranty set forth herein. 
The terms of this Section 23.22 shall survive the expiration or
termination of this Lease.


 


23.23.              Separability.  Each and every covenant and agreement of
Tenant contained in this Lease is, and shall be construed to be, a separate and
independent covenant and agreement, 


 


35

















 


and the breach of any
covenant or agreement by Landlord shall not discharge or relieve Tenant from
its obligation to perform the same.


 


23.24.              Multiple
Counterparts.  To
facilitate execution, this Lease may be executed in as many counterparts as may
be convenient or required.  It shall not
be necessary that the signature or acknowledgment of, or on behalf of, each
party, or that the signature of all persons required to bind any party, or the
acknowledgment of such party, appear on each counterpart.  All counterparts shall collectively
constitute a single instrument.  It shall
not be necessary in making proof of this Lease to produce or account for more
than a single counterpart containing the respective signatures of, or on behalf
of, and the respective acknowledgments of, each of the parties hereto.  Any signature or acknowledgment page to
any counterpart may be detached from such counterpart without impairing the
legal effect of the signatures or acknowledgments thereon and thereafter
attached to another counterpart identical thereto except having attached to it
additional signature or acknowledgment pages.


 


23.25.              Business
Days.  All references to “business
days” contained herein are references to normal working business days, i.e., Monday
through Friday of each calendar week, exclusive of federal and national bank
holidays.  In the event that any event
hereunder is to occur, or a time period is to expire, on a date which is not a
business day, such event shall occur or such time period shall expire on the
next succeeding business day.


 


23.26.              Interpretation.  When the context in which words are used in
this Lease indicates that such is the intent, words in the singular number
shall include the plural and vice versa, and words in the masculine gender
shall include the feminine and neuter genders and vice versa.  Further, references to “person” or “persons”
in this Lease shall mean and include any natural person and any corporation,
partnership, joint venture, limited liability company, trust or other entity
whatsoever.  As used herein, the term “including”
shall mean “including, but not limited to”.


 


23.27.              No
Merger of Title.  There shall
be no merger of this Lease nor of the leasehold estate created by this Lease
with the fee estate in or ownership of any of the Premises by reason of the
fact that the same person, corporation, firm or other entity may acquire or
hold or own, directly or indirectly, (a) this Lease or the leasehold
estate created by this Lease or any interest in this Lease or in such leasehold
estate and (b) the fee estate or ownership of any of the Premises or any
interest in such fee estate or ownership. 
No such merger shall occur unless and until all persons, corporations,
firms and other entities having any interest in (i) this Lease or the
leasehold estate created by this Lease and (ii) the fee estate in or
ownership of the Premises or any part thereof sought to be merged shall join in
a written instrument effecting such merger and shall duly record the same.


 


23.28                 Multiple Persons or Entities.  In the event that either party shall consist of more than one person or
entity, (i) the obligations of such multiple persons or entities shall be
joint and several, and (ii) the first notice with respect to a particular
matter received by the other party 


 


36

















 


from
any one of the multiple persons or entities shall be final and binding on both
parties, unless the party with multiple persons or entities previously has
designated one among them as the representative of all, in which event only a
notice from such representative shall be final and binding on both parties.


 


23.28.              Franchisee
Lease Rider.   The
parties agree to comply with, and be bound by, the terms and provisions of the
Franchisee Lease Rider attached hereto as Exhibit E, which terms and
provisions are hereby incorporated into this Lease and made a part hereof.


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


37

















 


IN WITNESS WHEREOF, Landlord
and Tenant have executed this Lease as of the day and year first above written.


 


	
   

  	
  LANDLORD:

  	
  APPLEBEE’S RESTAURANTS
  NORTH LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:                 ,
  2010

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  	
  APPLE             LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:                ,
  2010

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Lorin M. Cortina,

  
	
   

  	
   

  	
   

  	
  Executive Vice President

  
					



 


38
















 


	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


On this       day of       ,
2010, before me, the undersigned, a Notary Public in and for said State,
personally appeared             
, known or identified to me to be the                 
of Applebee’s Restaurants North LLC, a Delaware limited liability company (“Company”), the Company that executed the
within and foregoing instrument, and acknowledged the said instrument to be the
free and voluntary act and deed of said Company for the uses and purposes
therein mentioned, and on oath stated that Jeff Greene is authorized to
executed said instrument.


 


IN WITNESS WHEREOF, I have hereunto set my hand
and affixed my official seal the day and year in this certificate first above
written.


 


	
   

  	
   

  
	
   

  	
  Notary Public in and for said State

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  My Commission Expires: 

  



 


	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


I,                     
, a Notary Public in and for said County, in the State aforesaid, DO HEREBY
CERTIFY, that Lorin M. Cortina, personally known to me to be the Executive Vice
President of Apple               
 LLC, a Delaware limited liability
company (“Company”), and
personally known to me to be the same person whose name is subscribed to the
foregoing instrument as such Executive Vice President, appeared before me this
day in person and acknowledged that he signed and delivered the said instrument
as his own free and voluntary act, and as the free and voluntary act and deed
of said Company, for the uses and purposes therein set forth.


 


GIVEN under my hand and Notarial Seal this        
day of            , 2010.


 


	
   

  	
   

  
	
   

  	
  Notary Public

  



 


39

















 


EXHIBIT A


 


Land
Legal Description


 


Tax Parcel #: 


 


                            Street


                   County


 


A-1

















 


EXHIBIT A-1


 


PREMISES
SITE PLAN


 


A-2

















 


EXHIBIT B


 


LANDLORD
AGREEMENT


 


To:                             Bank of America, N.A., as Agent


Agency Management


Mail Code NC1-001-15-14


101 N. Tryon Street


Charlotte, NC 28255


Attention: 
Randy Pino


 


                               ,
a                                      
(the “Tenant”), is the tenant under that certain lease dated                 
,              , as
amended from time to time (“Lease”), with                            
, a                          
 (the “Landlord”), covering certain
premises (the “Premises”), as legally described on attached Exhibit A
..  The Landlord is the sole owner of the
fee simple interest in the Premises.  The
Tenant has certain of its assets located on the Premises.


 


The Tenant and certain of its affiliates
(collectively, the “Borrowers”) have entered into certain financing
arrangements with Bank of America, N.A., in its capacity as Agent (in such
capacity and together with any successor acting in such capacity under the
Credit Agreement, the “Agent”), and the lenders (the “Lenders”) party to the
Second Amended and Restated Loan and Security Agreement among the Borrowers,
the Agent and the Lenders (as from time to time amended, revised, modified,
supplemented or amended and restated, the “Credit Agreement”).  As a condition to the Lenders’ agreeing to
make loans and other financial accommodations and extensions of credit to the
Borrowers, the Agent, acting on behalf of the Lenders, requires, among other
things, first priority liens on all of the Tenant’s personal property located
on the Premises (collectively, the “Collateral”) and that the Tenant grant [a leasehold mortgage]  [a
leasehold deed of trust]  [an assignment of tenant’s interest in the
Lease] to the Agent for the
benefit of the Lenders and other parties (the “Secured Parties”) covering the
leasehold estate created by and under the Lease and Tenant’s interest in the
Lease.


 


In order to induce the Agent and the Lenders (together
with their successors and assigns) to enter into said financing arrangements
and to make the loans under the Credit Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:


 


1.             The
Landlord hereby consents to the execution, delivery, performance and
recordation of [an assignment of
lessee’s interest in lease (as the same may be amended, supplemented or
otherwise modified from time to time, the “Assignment of Lessee’s Interest”)]  [a
leasehold mortgage]  [a leasehold deed of trust] conveying the leasehold estate created by
and under the Lease [(as the same
may be amended, supplemented or otherwise modified from time to time, the
“Leasehold Mortgage”)], and
Landlord agrees that the execution, delivery, 


 


B-1

















 


performance and recordation of [the Assignment of Lessee’s Interest]  [the
Leasehold Mortgage] will not
constitute a breach of or default under the Lease;


 


2.             The
Landlord agrees that the Lease represents the full and complete agreement
between the Tenant and the Landlord concerning the Premises and the Landlord
hereby agrees not to (i) modify or amend the Lease, (ii) terminate
the Lease, or (iii) tender or accept surrender of the Lease, in each case
without the prior written consent of Agent;


 


3.             The Landlord hereby certifies and agrees that:


 


(a)           The
Lease is in full force and effect, all conditions to the commencement of the
term of the Lease have been satisfied, and, except as set forth on Exhibit A,
there are no amendments, modifications, or supplements, whether oral or
written, thereto;


 


(b)           The
Tenant is not in default under the Lease, nor are there any events or
conditions which, by the passage of time or giving of notice or both, would
constitute a default thereunder by the Tenant;


 


(c)           The
Landlord is not aware of any dispute, action, suit, condemnation proceeding,
claim or right of setoff pending or threatened with respect to the Lease or the
Premises;


 


(d)           None of the Collateral shall be
deemed to be fixtures;


 


(e)           The
Landlord will not assert against any of the Collateral any statutory or
possessory liens, including, without limitation, rights of levy or distraint
for rent, all of which the Landlord hereby waives.  Without limiting the foregoing, any liens or
claims against the Collateral that the Agent or any of the Secured Parties have
or may hereafter have pursuant to the Loan Documents are and shall remain
superior to any liens or security interests on or claims against the Collateral
which the Landlord now has or may hereafter have by virtue of any statute,
agreement or otherwise, all of which liens, interests and claims of the
Landlord are hereby unconditionally subordinated to the rights of the Agent or
any of the Secured Parties with respect to the Collateral (regardless of the
existence of or time of filing of any financing statements);


 


(f)            The
Landlord will notify the Agent if the Tenant defaults on its Lease obligations
to the Landlord and allow the Agent on behalf of the Secured Parties thirty
(30) days from its receipt of notice in which to cure or cause the Tenant to
cure any such default under the Lease. 
Landlord agrees that in the event such default is of a nature as cannot
be cured by Agent within the cure period described above, so long as all
delinquent rents have been paid and current rents continue to be paid, Agent
shall have an additional period of time as is reasonably necessary to
(i) effect the cure of the default, or (ii) exercise its rights and
remedies pursuant to [the
Assignment of Lessee’s Interest]  [the Leasehold Mortgage] and/or to foreclose the security
interests in the Lease and the leasehold estates created under the Lease.  Cure of the default by the Agent shall be at
Agent’s option and shall have the same effect as if made or performed by
Tenant, shall preclude Landlord’s right to terminate the Lease or seek any
other 


 


B-2

















 


remedial action available thereto, pursuant to the
Lease or applicable law, and shall keep the Lease in full force and
effect.  Any non-curable default,
including without limitation a default arising as a result of the bankruptcy or
insolvency of the Tenant [or a
breach of the continuous operation covenant, if any, contained in the Lease], shall be cured by Agent exercising its
rights to acquire the Tenant’s interest in the Lease pursuant to [the Assignment of Tenant’s Interest]  [the
Leasehold Mortgage] and assumption
of Tenant’s obligations under the Lease. 
Furthermore, if the Lease terminates before the natural expiration of
its term (including any renewal periods exercised by Tenant or Agent), so long
as delinquent rents have been paid and current rents continue to be paid, the
Landlord shall enter into a new lease of the Premises with the Agent or a
Permitted Assignee (as defined in Subsection (l) below) for the unexpired
term, including options to renew, on the same terms and conditions set forth in
the Lease;


 


(g)           If,
for any reason whatsoever, the Landlord deems itself entitled either to
terminate or cancel the Lease or to redeem or take possession of the Premises
during the term of the Lease, the Landlord will notify the Agent at least
thirty (30) days before taking any such action;


 


(h)           If
the Agent, on behalf of the Secured Parties, undertakes to enforce its security
interest in the Collateral and/or to enforce its rights in the Lease and/or to
foreclose on the Tenant’s leasehold estate pursuant to [the Assignment of Lessee’s Interest]  [the
Leasehold Mortgage], the Agent, on
behalf of the Secured Parties, may, at its option and by written notice to the
Landlord, (i) lease the Premises from the Landlord on the same terms as
set forth in the Lease and exercise the other rights as lessee thereunder as
described therein, and/or (ii) assign its interests in the Lease to, or
enter into a sublease with, a Permitted Assignee (and the Agent and the Secured
Parties shall be released from all obligations under the Lease upon assignment to
a Permitted Assignee, other than for liabilities incurred by Agent or the
Secured Parties during any period the Agent was the tenant); and the Landlord
shall cooperate with any such enforcement action or foreclosure and shall
consent to the assumption of the Lease, the sublet of the Premises and/or the
foreclosure sale of the leasehold estate to a Permitted Assignee;


 


(i)            If
any of the Borrowers default on any of their obligations to the Agent or the
Secured Parties (including but not limited to a default under the Lease) and
the Agent, on behalf of the Secured Parties, undertakes to enforce its security
interest in the Collateral, but chooses not to exercise its rights under clause
(h) above, the Landlord will cooperate with the Agent in its efforts to assemble
all of the Collateral located on the Premises, will permit the Agent to remain
on the Premises for ninety (90) days after the Agent declares the default
and/or, at the Agent’s option, will permit the Agent to remove the Collateral
from the Premises within a reasonable time, not to exceed ninety (90) days
after the Agent on behalf of the Secured Parties declares the default, and
Landlord will not hinder the Agent’s actions in enforcing its liens on the
Collateral provided that in the event Agent chooses to exercise its rights
under this Section 3(i), Agent agrees to pay base rent (to the extent not
paid by Tenant) until the last day of the month in which Agent completes the
removal of Collateral from the Premises;


 


(j)            In
the event that the Tenant shall become a debtor under the Federal Bankruptcy
Code and, in connection therewith, the Tenant shall reject the Lease as an
executory contract, then upon the request by the Agent, on behalf of the
Secured Parties, made within thirty (30) days following such rejection, the
Landlord shall enter into a new lease of the 


 


B-3

















 


Premises with the Agent or a Permitted Assignee, which
new lease shall be for the remaining term of the Lease and shall be on
substantially the same terms and conditions as the Lease (including any
provisions for renewal or extension of the term of the Lease);


 


(k)           The
Agent, on behalf of the Secured Parties, shall be entitled to payment of
insurance proceeds arising from a casualty up to the value of the leasehold
improvements in the event the Premises are not restored or the Lease is
terminated prior to the scheduled expiration date of the Lease; and


 


(l)            For
purposes of this Agreement, a “Permitted Assignee” is defined to be one of the
following:


 


(i)            a third party purchaser assignee
approved by Landlord, such approval not to be unreasonably withheld, delayed or
conditioned;


 


(ii)           a person or entity permitted under
Section       of the Lease without the necessity
of Landlord’s approval; or


 


(iii)          a franchisor or franchisee of a
nationally recognized casual dining restaurant concept similar to Applebee’s,
without the necessity of Landlord’s approval [examples
of such restaurant concepts being TGI Fridays, Chili’s, Olive Garden, Macaroni
Grill, Ruby Tuesday and O’Charleys].


 


4.             The
Landlord hereby represents and warrants that it has obtained all necessary
consents to the execution, delivery, performance and recordation of this
agreement.


 


Any notice(s) required or desired to be given
hereunder shall be directed to the party to be notified at the address stated
herein.


 


The agreements contained herein shall continue in
force until the date on which all of the Borrowers’ obligations and liabilities
to the Agent and the Secured Parties are paid and satisfied in full and all
financing arrangements between the Agent, the Secured Parties and the Borrowers
have been terminated.


 


The Landlord will notify all successor owners,
transferees, purchasers and mortgagees of the existence of this agreement.  This agreement may not be modified or
terminated orally and shall be binding upon the successors, assigns and
personal representatives of the Landlord, upon any successor owner or
transferee of the Premises, and upon any purchasers, including any mortgagee,
from the Landlord.  The Landlord consents
to the recordation of this Agreement.


 


THE LANDLORD AGREES THAT NOTHING CONTAINED IN THIS
AGREEMENT SHALL BE CONSTRUED AS AN ASSUMPTION BY THE AGENT OR THE 


 


B-4

















 


SECURED PARTIES OF ANY OBLIGATIONS OF THE TENANT
CONTAINED IN THE LEASE.


 


IF, AT ANY TIME, THERE IS A CONFLICT BETWEEN ANY
PROVISION OF THIS AGREEMENT AND ANY PROVISION OR PROVISIONS OF THE LEASE, THEN
SUCH PROVISION OF THIS AGREEMENT SHALL CONTROL AND GOVERN.


 


THIS AGREEMENT SHALL NOT IMPAIR OR OTHERWISE AFFECT
THE TENANT’S OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS PAYABLE BY THE TENANT
OR TO OTHERWISE PERFORM ITS OBLIGATIONS TO THE LANDLORD PURSUANT TO THE
TERMS OF THE LEASE.


 


Executed and delivered
this          day of                  
, 2010.


 


	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  [insert name of Landlord]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  [insert name of Tenant]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


B-5

















 


	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  Bank of America, N.A.,
  as Agent

  
	
   

  	
  Agency Management

  
	
   

  	
  Mail Code NC1-001-15-14

  
	
   

  	
  101 N. Tryon Street

  
	
   

  	
  Charlotte, NC 28255

  
	
   

  	
  Attention: Randy Pino

  



 


B-6

















 


ACKNOWLEDGMENT


 


	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


On this             
day of                  
, 2010, before me, a Notary Public in and for said County and State, personally
appeared                  
, known to me to be the                 
of                
 the                 
that executed the within instrument and known to me (or proved to me on the
basis of satisfactory evidence) to be the person who executed the within Instrument
on behalf of the trust therein named.


 


IN TESTIMONY WHEREOF, I have hereunto sent my
hand and affixed by official seal in the County and State aforesaid, the day
and year first above written.


 


	
   

  	
   

  
	
   

  	
  Notary Public, State of

  
	
   

  	
  My Commission expires:

  



 


	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


On this               
day of                     ,
2010, before me, a Notary Public in and for said County and State, personally
appeared                         ,
known to me to be the                         
of                     
the                    
 that executed the within instrument and
known to me (or proved to me on the basis of satisfactory evidence) to be the
person who executed the within Instrument on behalf of the                  
therein named.


 


IN TESTIMONY WHEREOF, I have hereunto sent my
hand and affixed by official seal in the County and State aforesaid, the day
and year first above written.


 


	
   

  	
   

  
	
   

  	
  Notary Public, State of 

  
	
   

  	
  My Commission expires:

  



 


B-7
















 


	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


On this                  
day of                    
, 2010, before me, a Notary Public in and for said County and State, personally
appeared                    
, known to me to be a                
of BANK OF AMERICA, N.A., the                     
that executed the within instrument and known to me (or proved to me on the
basis of satisfactory evidence) to be the person who executed the within
Instrument on behalf of the trust therein named.


 


IN TESTIMONY WHEREOF, I have
hereunto sent my hand and affixed by official seal in the County and State
aforesaid, the day and year first above written.


 


	
   

  	
   

  
	
   

  	
  Notary Public, State of 

  
	
   

  	
  My Commission expires:

  



 


B-8

















 


Exhibit A


Premises Legal Description


 


B-9

















 


EXHIBIT
C


 


Memorandum of Lease


 


THIS
MEMORANDUM OF LEASE dated                      
, 2010 is made by and between                      
, a                   
 (“Landlord”), and APPLE                
LLC, a Delaware limited liability company (“Tenant”).


 


Recitals:


 


A.  Landlord entered into a certain lease dated          ,
2010 (the “Lease”) with Tenant covering certain premises located in            ,
        County,     as
legally described in attached Exhibit A (“Premises”), for the term and upon and
subject to the provisions and conditions set forth therein, including options
to extend the term, a right of first refusal to purchase the Premises in
certain circumstances.


 


B.  Landlord and Tenant desire to give notice of
the Lease and of the terms, conditions and provisions thereof, including the
options to extend the term and right of first refusal to purchase.


 


NOW, THEREFORE, in consideration of the sum
of Ten Dollars ($10.00) and other good and valuable considerations, the receipt
and sufficiency of which are hereby acknowledged, and pursuant to the
provisions of Section 23.16 of the Lease, Landlord and Tenant agree as follows:


 


1.  Lease Agreement..  Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord the Premises, together with certain rights and
appurtenances thereto, upon and subject to the terms and provisions set forth
in the Lease.


 


2.  Term.  The Term of the Lease commenced                  ,
2010 and, unless sooner terminated or extended pursuant to the provisions
thereof, expires on                  ,
2030.


 


3.  Extension
Options.  The Lease
grants to Tenant the right and option, subject to certain conditions, to extend
the initial Term for two additional periods of five (5) Lease Years each and
one additional period of four (4) Lease Years and eleven (11) months.


 


4.  Right of First
Refusal to Purchase.  The
Lease grants to Tenant the right of first refusal to purchase the Premises
under certain terms and conditions as more fully set forth therein.


 


[Include
express reference to any easements if Premises does not have direct access to
public street]


 


5. 
Notice.  The purpose
of this Memorandum is to give notice of the Lease and of all the provisions
thereof, including the extension options and rights to purchase the premises,
to the 


 


C-1

















 


same
extent as if fully set forth herein.  If
and to the extent of any conflict between the provisions of the Lease and those
set forth in this Memorandum, the provisions of the Lease shall control.


 


IN WITNESS WHEREOF, Landlord and Tenant have
executed and delivered this instrument as of the day and year first above
written.


 


 


LANDLORD:                                     ,


a
                                  


 


 


	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  



 


 


	
  TENANT:

  	
  APPLE
             LLC,

  
	
  a Delaware limited
  liability company

  



 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Lorin M. Cortina

  	
   

  
	
   

  	
  Executive Vice President

  	
   

  



 


C-2

















 


ACKNOWLEDGMENTS


 


	
  STATE OF

  	
  )

  
	
   

  	
  ) SS.

  
	
  COUNTY OF

  	
  )

  



 


On this    
day of              ,
2010, before me, the undersigned, a Notary Public in and for said State,
personally appeared              ,
known or identified to me to be the                   
of                   ,
a                         
(“Company”), the Company that
executed the within and foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said Company for the
uses and purposes therein mentioned, and on oath stated that                 
is authorized to executed said instrument.


 


IN WITNESS WHEREOF, I have
hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.


 


	
   

  	
   

  
	
   

  	
  Notary Public in and for
  said State

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
  My Commission Expires:

  



 


	
  STATE OF

  	
  )

  
	
   

  	
  ) SS.

  
	
  COUNTY OF

  	
  )

  



 


I,
                    ,
a Notary Public in and for said County, in the State aforesaid, DO HEREBY
CERTIFY, that Lorin M. Cortina, personally known to me to be the Executive Vice
President of Apple         LLC, a Delaware
limited liability company (“Company”), and personally known to me to be the
same person whose name is subscribed to the foregoing instrument as such
Executive Vice President, appeared before me this day in person and
acknowledged that he signed and delivered the said instrument as his own free
and voluntary act and as the free and voluntary act and deed of said Company,
for the uses and purposes therein set forth.


 


GIVEN
under my hand and Notarial Seal this      day of              ,
2010.


 


	
   

  	
   

  
	
   

  	
  Notary Public

  



 


C-3

















 


EXHIBIT
A


Premises
Legal Description


 


C-4

















 


EXHIBIT D


 


Subordination, Non-disturbance and


Attornment Agreement


 


THIS
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”), is
made as of                 ,
200 , by and among APPLE                
LLC, a Delaware limited liability company (“Tenant”),                      
(“Landlord”),                       ,
a                     
(“Lender”) and BANK OF AMERICA, N.A., a national banking association, acting in
its capacity as agent as described below (in such agency capacity, together
with its successors, the “Agent”).


 


PRELIMINARY STATEMENT


 


Landlord
(or Landlord’s predecessor-in-interest) and Tenant are parties to a Lease,
dated as of                 ,
2010 (as the same has been or hereafter may be amended from time to time, the “Lease”),
pursuant to which Tenant leases from Landlord certain real property legally
described on the attached Exhibit A and certain improvements located
thereon (the “Premises”).  The Premises
are or will be encumbered by that certain Mortgage, Assignment of Rents and
Leases, Security Agreement and Fixture Filing from Landlord in favor of Lender
(the “Mortgage”) securing that certain Promissory Note dated on or about the
date of this Agreement payable to the order of Lender with respect to the
Premises (the “Note”) evidencing the loan by Lender to Landlord (the “Loan”).  Tenant has agreed to recognize the rights of
Lender in accordance with the terms and provisions of this Agreement.  Agent is the agent on behalf of certain
lenders with respect to financing to be provided by such lenders to Tenant and
its affiliates (the “Leasehold Loans”).


 


AGREEMENT


 


In
consideration of the mutual covenants and provisions of this Agreement, the
parties agree as follows:


 


1.             Subordination.  The Lease and the leasehold estate created
thereby are hereby declared to be, and hereafter shall continue at all times to
be, junior, subject and subordinate, in each and every respect, to the
Mortgage, including, without limitation, (i) any and all increases, renewals,
modifications, extensions, substitutions, replacements and or consolidations of
the Note or the Mortgage and (ii) any future mortgage or encumbrance affecting
the Premises held by or made for the benefit of Lender and/or its successors
and assigns.  The foregoing subordination
is effective and self-operative without the necessity for execution of any
further instruments.  At any time at the
election of Lender, Lender shall have the right to declare the Lease superior
to the lien, provisions, operation and effect of the Mortgage.


 


D-1

















 


2.             Attornment; Nondisturbance.  (a) Notwithstanding the foregoing
subordination, if the interest of Landlord under the Lease shall be transferred
by reason of foreclosure or other proceedings (judicial or non-judicial) for
enforcement of the Mortgage or by reason of a deed in lieu of foreclosure,
Tenant shall be bound to the transferee and its successors and assigns (the “Purchaser”)
acquiring said interests pursuant to all of the terms, covenants and conditions
of the Lease for the balance of the term of the Lease then remaining and any
extensions or renewals thereof which may be effected in accordance with any
option therefor in the Lease, with the same force and effect as if the
Purchaser were the original landlord under the Lease, and Tenant does hereby attorn
to and agree to attorn to the Purchaser, as its landlord, said attornment to be
effective and self-operative without the necessity for execution of any further
instruments, upon Purchaser succeeding to the interest of the Landlord under
the Lease.


 


(b)  Notwithstanding the provisions of Section
1 and provided that no “Event of Default” under the Lease (“Lease Event of
Default”) by Tenant has occurred and is continuing, Purchaser shall be bound to
Tenant and its successors and assigns pursuant to all of the terms, covenants
and conditions of the Lease for the balance of the term of the Lease then
remaining and any extensions or renewals thereof which may be effected in
accordance with any option set forth in the Lease, with the same force and
effect as if Purchaser were the original landlord under the Lease, and provided
that no Lease Event of Default has occurred and is continuing, the Lease shall
not be terminated, nor shall Tenant’s use, possession or enjoyment of the
Premises be interfered with, nor shall the leasehold estate granted by the
Lease be affected in any other manner, in any foreclosure or any action or
proceeding instituted under or in connection with the Mortgage.


 


3.             Further Acts.  Notwithstanding any provisions contained in Sections
1 and 2 above which state that the attornment and subordination by
Tenant to Purchaser are effective and self-operative without the execution of
any further instrument, Tenant agrees that, upon reasonable request of Lender
and/or Purchaser, it will execute such written agreement as is necessary to
evidence and affirm any and all of Tenant’s obligations under this Agreement,
and further, Tenant agrees that it will execute from time to time such further
assurances and estoppel certificates as may reasonably be requested by Lender
and Purchaser, provided that such assurances and estoppel certificates are
consistent with the Lease and do not modify or amend the Lease.  Without limiting the generality of the
foregoing, if and to the extent that Landlord rejects the Lease in any federal
or state proceeding, Tenant will, upon the request of Lender or Purchaser,
immediately enter into a new lease directly with the Purchaser on the same
terms as the Lease, provided execution of such new lease does not violate any
bankruptcy law or related court order.


 


4.             Limitation.  Neither Lender nor any Purchaser shall be:
(a) liable for any act or omission of Landlord or any prior landlord (including
the loss or misappropriation of any rental payments or security deposits)
except that if such act or omission results in a breach or default of Landlord’s
obligations under the Lease that is still outstanding at the time Lender or
Purchaser succeeds to title and Lender or Purchaser have received notice of
such breach or default, then Lender or Purchaser shall be liable only for such
breach or default occurring during the period in which Lender or Purchaser is
in title or possession of the Property; (b) subject to 


 


D-2

















 


any credits, claims, setoffs,
offsets or defenses which Tenant may have against Landlord or any prior
landlord except as permitted under the Lease and provided Lender or Purchaser
has received notice of such credit, claim, setoff, claim, offset or defense;
(c) bound by (or responsible for) any advance payment of rent or any other
monetary obligations under the Lease to Landlord in excess of one month’s
prepayment thereof in the case of rent, or in excess of one periodic payment in
advance in the case of any other monetary obligations under the Lease except to
the extent that Tenant is required to prepay such sums under the terms of the
Lease; (d) bound or liable for any indemnity obligation set forth in the
Lease to the extent arising prior to the time Lender or Purchaser succeeds to
title; (e) bound by any material amendment or modification of the Lease to
which Lender or Purchaser has not consented in writing (which consent shall not
be unreasonably withheld, delayed or conditioned), and any attempted material
amendment or modification of the Lease without said consent shall be null and
void and of no force and effect as between Lender (or Purchaser) and Tenant,
and Tenant shall not surrender the Premises without the consent of Lender or
Purchaser in writing, and any attempted surrender of the Premises without said
consent shall be null and void and of no force and effect; (f) liable for
latent and/or patent defects in the construction of the Premises; (g) liable
for any breach of any warranty in the Lease by Landlord or a prior landlord;
(h) bound by any obligation to repair, replace, rebuild or restore the
Premises, or any part thereof, in the event of damage by fire or other
casualty, or in the event of partial condemnation, beyond such repair,
replacement, rebuilding or restoration except as may be required of the
landlord under the Lease; (i) required to remove any person occupying the
Premises or any part thereof; or (j) bound by the right of first refusal set
forth in the Lease solely in connection with any foreclosure or enforcement of
a lien or security interest.  Neither
Lender nor any Purchaser shall be liable for any reason for amounts in excess
of the value of its interest in the Premises, or for consequential or punitive
damages of any kind.


 


5.             Notice; Cure; Waivers.
 Tenant agrees to give prompt written
notice to Lender (and to any successor in interest to Lender of which Tenant
has been notified) of any default of the Landlord under the Lease if such
default is of such a nature as to give Tenant a right to terminate the Lease,
reduce rent or to credit or offset any amounts against future rents.  If, within thirty (30) days after receipt of
such written notice from Tenant, Lender, at Lender’s sole option, commences to
cure a default of Landlord under the Lease that is capable of being cured by
Lender, or commences to pursue any other of its remedies under the Mortgage
which  is deemed by Lender to be a
condition precedent to Lender’s ability to cure such default, and thereafter
diligently pursues such cure or enforcement of its remedies under the Mortgage
as  aforesaid to completion, Tenant
agrees not to terminate the Lease, reduce rent, credit or offset against future
rents, for a period of thirty (30) days or such additional period of time as is
reasonably necessary for Lender or Purchaser to cure the default to
completion.  As against Lender and its
successors in interest, Tenant hereby waives any default by Landlord which is
not capable of being cured by Lender.


 


6.             Payments of Rent to Lender.  Landlord absolutely assigns to Lender all
payments of rent as the same are due under the Lease (the “Rent”) and Tenant
agrees that, from and after receipt of thirty (30) days prior written notice
from Lender (which notice shall not be given unless an Event of Default has and
is continuing under the Note or Mortgage), Tenant will 


 


D-3

















 


pay the Rent directly to
Lender until such time as Tenant receives a contrary notice from Lender or, if
earlier, until the obligations under the Note have been fully satisfied by
Landlord.  All such rental payments
received by Lender shall be credited against Landlord’s obligations to
Lender.  Landlord, by its execution
hereof, agrees that this Agreement does not constitute a waiver by Lender of
any of Lender’s rights under the Mortgage and any assignment of leases or rents
contained therein, or in a separate instrument or in any way release the
Landlord from any of the terms, conditions, obligations, covenants and
agreements of the Mortgage.


 


7.             Certification.  Tenant hereby certifies to and agrees with
Lender as follows, with the understanding that Lender is relying on such
certifications and agreements in the making of the loan evidenced by the Note
and secured by the Mortgage: (a) the Lease is in full force and effect; (b) to
the current, actual knowledge of the undersigned, all requirements for the
commencement and validity of the Lease have been satisfied; (c) to the current,
actual knowledge of the undersigned, Tenant is not in default under the Lease;
to the best of Tenant’s knowledge, information and belief, the Landlord is not
in default under the Lease; no act, event or condition has occurred, which with
notice or the lapse of time, or both, would constitute a default by Tenant or
Landlord under the Lease; no claim by Tenant of any nature exists against
Landlord under the Lease; and all obligations of Landlord have been fully
performed; (d) to the current, actual knowledge of the undersigned, there are
no defenses, counterclaims or setoffs against rents or charges due or which may
become due under the Lease; (e) none of the rent which Tenant is required to
pay under the Lease has been prepaid, or will in the future be prepaid, more
than one month in advance except as required by the terms of the Lease;
(f) except as set forth in Section 21.1 in the Lease, Tenant has no
right or option contained in the Lease or in any other document to purchase all
or any portion of the Premises; and (g) the Lease has not been terminated,
modified or amended.


 


8.             Leasehold Loan Provisions.


 


(a)  Lender hereby consents to the execution,
delivery, performance and recordation by Tenant of a leasehold mortgage
conveying a lien on Tenant’s leasehold interest in the Lease for the benefit of
Agent, acting on behalf of itself and the lenders providing the Leasehold
Loans.


 


(b)  Notwithstanding anything to the contrary
contained in this Agreement, in all instances, including, without limitation,
in the event of a Lease Event of Default by Tenant under the terms of the
Lease, Lender agrees, on behalf of itself and its successors and assigns,
including, without limitation, any Purchaser, (i) to be bound by the covenants
and agreements of the Landlord set forth in Article 20 of the Lease and
the Landlord Agreement between Landlord, Tenant and Agent executed and
delivered in relation to the Lease on or about the date hereof, and (ii) to
provide such notices and opportunity to cure as set forth in the Lease, to
Agent as more particularly set forth therein in the event that Lender has commenced
to exercise certain of its rights under the Mortgage, has foreclosed on the
Premises or has otherwise taken possession of the Premises.


 


D-4
















 


(c)  If for any reason Lender takes
possession of the Premises during the term of the Lease, terminates or cancels
the Lease, commences a foreclosure or accepts a deed in lieu of foreclosure,
Lender agrees to notify Agent within fifteen (15) days before taking such
action.


 


(d)  Lender further agrees, on behalf
of itself and its successors and assigns (including Purchaser), with the Agent,
that if a monetary Lease Event of Default under the Lease has occurred, as long
as the Agent has cured such monetary Lease Event of Default in accordance with Article 20
of the Lease and the Landlord Agreement, and no monetary Lease Event of Default
is continuing as of the date Lender commences foreclosure proceedings or
accepts a deed in lieu of foreclosure, or at any time thereafter, no “Event of
Default” under the Note or Mortgage, and no proceeding to foreclose the same
will disturb the Tenant’s, Agent’s or subsequent assignee’s possession under
the Lease, and the Lease will not be affected or cut off thereby.  In such event, the Tenant and/or the Agent
(if it has exercised its rights to become the tenant under the Lease), shall
attorn to Lender (or Purchaser) and shall be deemed to have assumed all rights
and obligations of Tenant under the Lease, and the Lease will be recognized as
a direct lease from Lender or Purchaser.


 


(e)  Lender, on behalf of itself and
its successors and assigns, including, without limitation, any Purchaser,
hereby waives all rights it may have in and to the “Tenant’s Property” as
defined in the Lease; provided that this shall not limit Lender’s right or
ability to obtain and enforce a judgment or similar lien against Tenant or any
of its other assets.


 


9.             Governing Law.  For purposes of any action or proceeding
arising out of this Agreement, the parties hereto expressly submit to the
jurisdiction of all federal and state courts located in the State of
                  ,
and Landlord, Tenant and Lender consent that they may be served with any
process or paper by registered mail or by personal service at their respective
principal place of business in accordance with applicable law.  Furthermore, Landlord and Tenant waive and
agree not to assert in any such action, suit or proceeding that it is not
personally subject to the jurisdiction of such courts, that the action, suit or
proceeding is brought in an inconvenient forum or that venue of the action,
suit or proceeding is improper.  It is
the intent of the parties hereto that this Agreement, the subordination of the
Lease and the rights and remedies set forth in this Agreement shall be governed
by the laws of the State in which the Premises are located.  Nothing contained in this paragraph shall
limit or restrict the right of any party to commence any proceeding in the
federal or state courts located in the State in which the Premises are located
to the extent such party deems such proceeding necessary or advisable to
exercise remedies available under this Agreement.


 


10.           Notices.  All notices, consents, approvals or other
instruments required or permitted to be given by either party pursuant to this
Agreement shall be in writing and given by (i) hand delivery,
(ii) express overnight delivery service or (iii) certified or
registered mail, return receipt requested, and shall be deemed to have been
delivered upon (a) receipt, if hand delivered, (b) the next business
day, if delivered by express overnight delivery service, or (c) the 


 


D-5

















 


third business day following the day of deposit of
such notice with the United States Postal Service, if sent by certified or
registered mail, return receipt requested. 
Notices shall be provided to the parties and addresses (or facsimile
numbers, as applicable) specified below:


 


	
  If to Landlord:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Telecopy:

  
	
   

  	
   

  
	
   

  	
   

  
	
  If to Tenant: 

  	
  Apple
                                    
  LLC

  
	
   

  	
  6200 Oak Tree
  Boulevard, Suite 250

  
	
   

  	
  Independence, Ohio
  44131

  
	
   

  	
  Attention:   Chief
  Financial Officer

  
	
   

  	
  Telecopy:   (216)
  328-1868

  
	
   

  	
   

  
	
   

  	
   

  
	
  If to Lender:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Telecopy: (      )
        -

  
	
   

  	
   

  
	
   

  	
   

  
	
  If to Agent: 

  	
  Bank of America, N.A.

  
	
   

  	
  Mail Code NC1-001-15-14

  
	
   

  	
  101 N. Tyron Street

  
	
   

  	
  Charlotte, NC 28255

  
	
   

  	
  Attention: Randi Pino

  



 


or
to such other address or such other person as any party may from time to time
hereafter specify to the other parties hereto in a notice delivered in the
manner provided above.


 


11.           Waiver and Amendment; Captions;
Severability.  No
provisions of this Agreement shall be deemed waived or amended except by a
written instrument unambiguously setting forth the matter waived or amended and
signed by the party against which enforcement of such waiver or amendment is
sought.  Waiver of any matter shall not
be deemed a waiver of the same or any other matter on any future occasion.  Captions are used throughout this Agreement
for convenience of reference only and shall not be considered in any manner in
the construction or interpretation hereof. 
The provisions of this Agreement shall be deemed severable.  If any part of this Agreement shall be held
unenforceable, the remainder shall remain in full force and effect, and such
unenforceable provision shall be reformed by such court so as to give maximum
legal effect to the intention of the parties as expressed therein.


 


D-6

















 


12.           Waiver of Jury Trial and Punitive,
Consequential, Special and Indirect Damages.  LANDLORD, TENANT, AGENT AND LENDER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE
TO A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY ANY OF THE PARTIES HERETO AGAINST
ANY OTHER PARTY HERETO OR ITS RESPECTIVE SUCCESSORS WITH RESPECT TO ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY DOCUMENT
CONTEMPLATED HEREIN OR RELATED HERETO. 
THIS WAIVER BY THE PARTIES HERETO OF ANY RIGHT TO A TRIAL BY JURY HAS
BEEN NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.  FURTHERMORE, LANDLORD, TENANT, AGENT AND
LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT THEY
MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES
FROM THE OTHERS OR ANY OF THE OTHER’S AFFILIATES, OFFICERS, DIRECTORS OR
EMPLOYEES OR ANY OF THEIR  SUCCESSORS
WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM
OR COUNTERCLAIM BROUGHT BY ANY OF THE PARTIES AGAINST ANY OF THE OTHERS OR ANY
OF THEIR AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR
SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO.  THE WAIVER BY LANDLORD, TENANT, AGENT AND
LENDER OF ANY RIGHT THEY MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL
AND INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES HERETO AND IS AN
ESSENTIAL ASPECT OF THEIR BARGAIN.


 


13.           Authority; Successors.  Tenant, Landlord, Agent and Lender covenant
and agree that the persons signing on their behalf have full power, authority
and authorization to execute this Agreement, without the necessity of any
consents, authorizations or approvals, or if such consents, authorizations or
approvals are required they have been obtained prior to the execution
hereof.  All provisions, covenants and
agreements contained in this Agreement shall bind, inure to the benefit of, and
equally relate to, Tenant, and its successors and assigns, Landlord, and its
successors and assigns, jointly and severally, Agent, its successors and
assigns, and Lender, and its successors and assigns, or other holder or holders
of the Note, including an endorsee, assignee or pledgee of the Note receiving
title thereto by or through Lender, or its successors or assigns.


 


14.           No Other Agreements; Counterparts.  This Agreement represents the final agreement
between the parties hereto with respect to the subject matter hereof and may
not be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties.  There are no
unwritten oral agreements between the parties. 
This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts taken together shall constitute but one and the same
instrument.


 


D-7

















 


15.           Lease Provisions  Notwithstanding anything to the contrary
contained herein, Lender (and any Purchaser) acknowledge and agree that the
provisions of this Agreement are specifically subject to the provisions of Articles
17, 20 and 21 of the Lease and the Landlord Agreement (in the
form attached to the Lease).


 


[SIGNATURES BEGIN ON
FOLLOWING PAGE]


 


D-8

















 


IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date set forth above.


 


	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  APPLE
                  
  LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed
  Name: Lorin M. Cortina

  
	
   

  	
  Title:
  Executive Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ,

  
	
   

  	
  a

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as Agent, a national
  banking association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


D-9

















 


EXHIBIT E


 


APPLEBEE’S RESTAURANTS


FRANCHISEE LEASE RIDER


 


This
Lease Rider (this “Rider”) is
executed as of the        day of
                    ,
2010, by and between                          
                       ,
as landlord (“Landlord”) and
                      ,
as tenant (“Franchisee”), as a Rider to that
certain lease for the premises located at
              
                 
                            
                                          
                
(the “Premises”), dated as of
                      
        (“the Lease”).  This Rider is hereby incorporated into, and
made a part of, the Lease.


 


WHEREAS,
Franchisee has executed or intends to execute a Franchise Agreement (the “Franchise Agreement”) with Applebee’s Franchising LLC, a
Delaware limited liability operation of an Applebee’s restaurant (“Restaurant”) at the Premises, and as a requirement thereof,
the Lease must include the provisions contained in this Rider; and


 


WHEREAS,
Landlord and Franchisee agree that the terms contained here shall supersede any
terms to the contrary set forth in the Lease;


 


NOW
THEREFORE, in consideration of mutual covenants set forth herein, the execution
and delivery of the Lease, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Landlord and Franchisee
hereby agree as follows:


 


1.             The Premises may be used, in
addition to any other uses permitted under the Lease, for the operation of an
Applebee’s Restaurant, with the sale and service of alcoholic beverages for on
premises consumption, and ancillary carry-out food service.  Franchisee may operate Applebee’s Restaurants
at any other location without Landlord’s approval.


 


2.             Franchisor, its personnel or
agents, for a period of up to thirty (30) days after the expiration or sooner
termination of the Lease or the Franchise Agreement, may enter the Premises for
itself or on behalf of Franchisee to de-identify the Premises as a Restaurant,
which may include the removal of signs, décor and materials displaying any
marks, designs or logos owned by Franchisor, provided Franchisor shall bear the
expense of repairing any and all damage to the Premises as a result thereof.


 


3.             If Franchisee has an obligation to continuously operate
its business at the Premises, Franchisee may cease operating for up to sixty (60)
days, from time to time, to perform repairs, enchancements or renovations, as
required by the Franchise Agreement.  


 


4.             Notwithstanding any provision herein to the contrary,
Franchisee shall have the absolute right, whether or not the Franchisee is in
default under the Lease, upon ten (10) days prior written notice to Landlord,
to sublet, assign or otherwise transfer its interest in the Lease to Franchisor
or Franchisor’s affiliate, to any entity with which Franchisor may merge or
consolidate, or to any person or entity which is an authorized franchisee or
Franchisor operating a minimum of five (5) restaurants (each, a “Permitted
Assignee”), without landlord’s consent. 
Following such an assignment, a Permitted Assignee also may sublet,
assign or otherwise


 


D-1

















 


transfer
its interest in the Lease to another Permitted Assignee without the consent of
Landlord.  There will be no fee or
expense charged in connection with such transfer.


 


Landlord and Franchisee acknowledge and agree that
a Permitted Assignee will assume all of Franchisee’s obligations under the
Lease arising as a result of events, acts or omissions occurring from and after
the date of assignment.  In the event
that Franchisee is in default of its obligations under the Lease as of the
effective date of the assignment to a Permitted Assignee: a) the Permitted
Assignee shall be obligated to cure such default, but only to the extent such
default accrued not more than thirty (30) days prior to the date Franchisor
received notice of such default from Landlord; and b) Landlord may pursue, or
continue to pursue, a claim for damages under the Lease against Franchisee, but
will have no rights to terminate the lease or to disturb the quiet possession
of the Leased Premises by the Permitted Assignee.


 


5.             Landlord hereby agrees to obtain a
non-disturbance agreement for the benefit of Franchisee: a) from the holder of
any mortgage/deed of trust as fo the date of this Lease; and b) as a condition
to Franchisee’s subordination to any mortgage/deed fo trust granted after the
date of the Lease.


 


6.             Copies of all notices required or
permitted by the Lease shall also be sent to Franchisor at 11201 Renner
Boulevard, Lenexa, Kansas  66219, Attn:
General Counsel, or such other address as Franchisor may locate its Restaurant
Support Center, at the same time notice is provided to Franchisee.  Franchisor shall have the right, but not the
obligation, upon giving written notice to Franchisee and Landlord, to cure any
breach of the Lease.


 


7.             The parties acknowledge that
Franchisor is an intended third party beneficiary of this Rider and has the
right to enforce the terms of this Rider as if it was a party hereto.


 


8.             In the event of any conflict
between this Rider and the Lease, the terms of this Rider shall control, and
the Lease may not be modified or amended in any manner inconsistent with the
terms of this Rider.


 


	
  LANDLORD:

  	
   

  	
  FRANCHISEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  



 


D-2
















 


 General Growth Properties, Inc.


 


Lease Renewal Proposal


 


	
  Trade
  Name (DBA):

  	
   

  	
  Applebee’s

  	
   

  	
  Date: 09/17/10

  
	
  Location:

  	
   

  	
  Apache
  Mall

  	
   

  	
   

  
	
   

  	
   

  	
  Rochester,
  MN

  	
   

  	
   

  



 


	
  Submitted to:

  	
   

  	
  Submitted by:

  
	
  Susan
  Archer

  	
   

  	
  Jim
  Majzan

  
	
  11
  heron Circle

  	
   

  	
  110
  N Wacker Drive

  
	
  Mashpee,
  MA 02649

  	
   

  	
  Chicago, IL
  60606

  
	
  (508)539-0738

  	
   

  	
  (312)
  960-5744

  
	
  (508)539-6602

  	
   

  	
  (312)
  960-5466

  
	
   

  	
   

  	
  jim.majzan@generalgrowth.com

  



 


	
  Space Number:

  	
   

  	
  0320

  
	
  Size of space:

  	
   

  	
  5,148 s.f. (approx.)

  
	
  Term:

  	
   

  	
  11 yrs, 0 mths commencing
  January 01, 2011 and ending December 31, 2021

  



 


	
  Base Minimum / 

  Percentage Rent:

  	
   

  	
  Dates:

  	
   

  	
  PSF

  	
   

  	
  Annually

  	
   

  	
  Pct

  	
   

  	
  In excess of

  	
   

  
	
   

  	
   

  	
  01/01/11 through 12/31/11

  	
   

  	
  $

  	
  48.00

  	
   

  	
  $

  	
  247,104.00

  	
   

  	
  5.0

  	
  %

  	
  $

  	
  3,300,000.00

  	
   

  
	
   

  	
   

  	
  01/01/12 through 12/31/12

  	
   

  	
  $

  	
  48.96

  	
   

  	
  $

  	
  252,046.08

  	
   

  	
  5.0

  	
  %

  	
  $

  	
  3,366,000.00

  	
   

  
	
   

  	
   

  	
  01/01/13 through 12/31/13

  	
   

  	
  $

  	
  49.94

  	
   

  	
  $

  	
  257,087.00

  	
   

  	
  5.0

  	
  %

  	
  $

  	
  3,433,320.00

  	
   

  
	
   

  	
   

  	
  01/01/14 through 12/31/14

  	
   

  	
  $

  	
  50.94

  	
   

  	
  $

  	
  262,228.74

  	
   

  	
  5.0

  	
  %

  	
  $

  	
  3,501,986.00

  	
   

  
	
   

  	
   

  	
  01/01/15 through 12/31/15

  	
   

  	
  $

  	
  51.96

  	
   

  	
  $

  	
  267,473.31

  	
   

  	
  5.0

  	
  %

  	
  $

  	
  3,572,025.00

  	
   

  
	
   

  	
   

  	
  01/01/16 through 12/31/16

  	
   

  	
  $

  	
  53.00

  	
   

  	
  $

  	
  272,822.78

  	
   

  	
  5.0

  	
  %

  	
  $

  	
  3,643,465.00

  	
   

  
	
   

  	
   

  	
  01/01/17 through 12/31/17

  	
   

  	
  $

  	
  54.06

  	
   

  	
  $

  	
  278,279.24

  	
   

  	
  5.0

  	
  %

  	
  $

  	
  3,716,334.00

  	
   

  
	
   

  	
   

  	
  01/01/18 through 12/31/18

  	
   

  	
  $

  	
  55.14

  	
   

  	
  $

  	
  283,844.82

  	
   

  	
  5.0

  	
  %

  	
  $

  	
  3,790,660.00

  	
   

  
	
   

  	
   

  	
  01/01/19 through 12/31/19

  	
   

  	
  $

  	
  56.24

  	
   

  	
  $

  	
  289,521.72

  	
   

  	
  5.0

  	
  %

  	
  $

  	
  3,866,473.00

  	
   

  
	
   

  	
   

  	
  01/01/20 through 12/31/20

  	
   

  	
  $

  	
  57.36

  	
   

  	
  $

  	
  295,312.15

  	
   

  	
  5.0

  	
  %

  	
  $

  	
  3,943,802.00

  	
   

  
	
   

  	
   

  	
  01/01/21 through 12/31/21

  	
   

  	
  $

  	
  58.51

  	
   

  	
  $

  	
  301,218.39

  	
   

  	
  5.0

  	
  %

  	
  $

  	
  4,022,678.00

  	
   

  



 


	
  Real Estate Taxes:

  	
   

  	
  Pro-rata share per
  existing lease

  
	
  Utilities - 

  	
  Electric:

  	
   

  	
  Paid by Tenant

  
	
   

  	
  Trash:

  	
   

  	
  Paid by Tenant

  
	
   

  	
  Water:

  	
   

  	
  Paid by Tenant

  
	
   

  	
  HVAC:

  	
   

  	
   

  
	
  Radius Clause:

  	
   

  	
  Per existing lease

  
	
  Permitted Use:

  	
   

  	
  Per existing lease

  
	
  Tenant’s Work:

  	
   

  	
  Tenant provide a major
  remodel to bring the restaurant up to Applebee’s current prototype. Remodel
  to be completed by the end of the third quarter 2012.

  
	
  Term Notes:

  	
   

  	
  Rent for 1/1/2022-6/30/22
  grows by 2% ($59.68/sf); breakpoint grows by 2%, 5% pay lease ending

  
	
  Exclusive / Rent
  Reduction:

  	
   

  	
  per attached provision

  
	
  Kiosk Restrictions:

  	
   

  	
  N/A

  
	
  Other Provisions:

  	
   

  	
  Parking Spaces: Tenant
  will continue to pay $4995 annually for the four (4) parking spots it
  controls for carry out parking.

  
	
   

  	
   

  	
  Assignment: Landlord will
  consent to the assignment of this lease, the license agreement for the 4
  parking spaces, the [ILLEGIBLE] mall lease and the knoilwood mall lease to
  Apple Minnesota LLC if all 63 Minnesota restaurants are sold.

  
	
  Tenant Legal Name:

  	
   

  	
  Applebee’s Restaurants
  north, LLC

  
	
  Tenant Entity Status:

  	
   

  	
  L.L.C.

  
	
  Tenant Entity State:

  	
   

  	
  Delaware

  



 


1

















 


Rent Reduction: Notwithstanding anything contained in this Lease to the
contrary, so long as Tenant is not in default, beyond any applicable notice and
cure period, and is open, operating and engaging in the Exclusive Use (as
defined herein), then if Landlord shall lease space in the Shopping Center to a
Competing Business (defined below) for the Exclusive Use (as defined below)
during the Term, then Tenant’s sole and exclusive remedy shall be the right to
reduce its Fixed Minimum Rent, retroactive to the end of the sixty day period
by twenty=fie percent (25%) for the period of time the Competing Business
engages in the Exclusive Use. In addition, during such time, Percentage Rent
shall continue to be payable in the amount by which five percent (5%) of
Tenant’s Net Sales exceed the applicable Sales Base multiplied by 75%. This
right shall be exercised upon sixty days prior written notice given to Landlord
by Tenant. “Exclusive Use” shall mean a sit- down, family themed restaurant
serving traditional “American” food ( by way of example Bennigan’s, TGI
Fridays, Chili’s)offering a full menu and serves hard liquor. “Competing
Business” shall mean a business not affiliated with Tenant which uses its
premises in the Shopping Center primarily for the Exclusive Use, excluding:


 


(a)          any business occupying its
premises directly or (as an assignee, sublessee, licensee or concessionaire)
indirectly under a lease that was executed prior to the execution of this Lease
but is in effect as of the date of this Lease (a “Prior Lease”), a renewal or
extension of a Prior Lease, or a new lease that is executed by a business which
leased or occupied premises in the Shopping Center directly or indirectly under
a Prior Lease whose lease permits such use without amendment or Landlord’s
consent;


(b)         a formal, or ‘white
tablecloth’ restaurant


(c)          any anchor;


(d)         any business (i) that
occupies less than 1,200 square feet of floor area or is a ‘fast food’ or quick
service restaurant.


(e)          any restaurant concept which
specializes in and primarily serves a single ethnic or regional cuisine such as
Thai, Japanese, Chinese, Italian, German, Spanish, Cuban, Portuguese,
Middle Eastern, Canadian, Mexican, or any restaurant which specializes in
steaks or seafood, or which specializes in ice cream


 


This Reference Provision 1.28 shall automatically become null and void
if:


 


Tenant is in default under this Lease beyond the expiration of any
applicable notice and cure periods; Tenant assigns its rights under this Lease
in whole or in part or sublets all or any portion of the Leased Premises other
than to an assignee permitted without Landlord’s permission pursuant to ARTICLE 21
of this Lease; or the Leased Premises cease to be used primarily for the
Exclusive Use by Tenant.


 

















 


	
  

  	
  ENTERPRISE SERVICE ORDER FORM

  	
   

  
	
  MegaPath Network Connect

  	
  Proposal
  Date: 9/30/2010

  
	
  Applebee’s

  	
  Expiration
  Date: 10/30/2010

  
	
  Minnesota Store Speed Upgrades - Apple American
  Transistions v.2

  	
   

  



 


Contract Term: 24 months


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  NRC

  	
   

  	
  MRC

  	
   

  	
  Totals

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Ethernet

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  VoIP

  	
   

  	
  VPN-DBU-

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Access Solution*

  	
   

  	
  Store # - City, State

  	
   

  	
  Hardware

  	
   

  	
  Qty

  	
   

  	
  Activation

  	
   

  	
  CPE

  	
   

  	
  Pro-Install

  	
   

  	
  Base Fee

  	
   

  	
  CPE Rental

  	
   

  	
  Whitelist

  	
   

  	
  Total NRC

  	
   

  	
  Total MRC

  	
   

  
	
  DDSL Up to 1.5/.768 Mb

  	
   

  	
  #61020 - Oak Park Heights, MN

  	
   

  	
  Netopia
  3346 + (Existing) Netopia 4686XL

  	
   

  	
  1

  	
   

  	
  $

  	
  225.00

  	
   

  	
  $

  	
  199.00

  	
   

  	
  $

  	
  250.00

  	
   

  	
  $

  	
  79.20

  	
   

  	
  n/a

  	
   

  	
  $

  	
  22.00

  	
   

  	
  $

  	
  674.00

  	
   

  	
  $

  	
  101.20

  	
   

  
	
  DDSL Up to 1.5/.768 Mb

  	
   

  	
  #61023 - Saint Luois Park, MN

  	
   

  	
  Netopia
  3346 + (Existing) Netopia 4686XL

  	
   

  	
  1

  	
   

  	
  $

  	
  225.00

  	
   

  	
  $

  	
  199.00

  	
   

  	
  $

  	
  250.00

  	
   

  	
  $

  	
  79.20

  	
   

  	
  n/a

  	
   

  	
  $

  	
  22.00

  	
   

  	
  $

  	
  674.00

  	
   

  	
  $

  	
  101.20

  	
   

  
	
  Business Cable 12.0Mb / 2.0Mb Static

  	
   

  	
  #61003 - Minnetoka, MN

  	
   

  	
  Cable
  modem + (Existing) Netopia 4686XL

  	
   

  	
  1

  	
   

  	
  $

  	
  100.00

  	
   

  	
  n/a

  	
   

  	
  $

  	
  250.00

  	
   

  	
  $

  	
  118.15

  	
   

  	
  Included

  	
   

  	
  $

  	
  22.00

  	
   

  	
  $

  	
  350.00

  	
   

  	
  $

  	
  140.15

  	
   

  
	
  Business Cable 12.0Mb / 2.0Mb Static

  	
   

  	
  #61046 - Blaine, MN

  	
   

  	
  Cable
  modem + 

  (Existing) Netopia 4686XL

  	
   

  	
  1

  	
   

  	
  $

  	
  100.00

  	
   

  	
  n/a

  	
   

  	
  $

  	
  250.00

  	
   

  	
  $

  	
  118.15

  	
   

  	
  Included

  	
   

  	
  $

  	
  22.00

  	
   

  	
  $

  	
  350.00

  	
   

  	
  $

  	
  140.15

  	
   

  
	
  Business Cable 12.0Mb / 2.0Mb Static

  	
   

  	
  #61065 - Woodbury,MN

  	
   

  	
  Cable
  modem + 

  (Existing) Netopia 4686XL

  	
   

  	
  1

  	
   

  	
  $

  	
  100.00

  	
   

  	
  n/a

  	
   

  	
  $

  	
  250.00

  	
   

  	
  $

  	
  118.15

  	
   

  	
  Included

  	
   

  	
  $

  	
  22.00

  	
   

  	
  $

  	
  350.00

  	
   

  	
  $

  	
  140.15

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Grand Totals:

  	
   

  	
  $

  	
  2,398.00

  	
   

  	
  $

  	
  622.85

  	
   

  



 


In the
event of a conflict between the terms of this Service Order Form and the
Master Services Agreement, the terms, conditions or prices of the Master
Service Agreement shall prevail.


 


	
  MegaPath
  Inc

  	
  Applebee’s

  
	
  Jason
  Ricker

  	
  John
  McDermott

  
	
  Title:
  Account Manager

  	
  Director, Information
  Technology and Services

  
	
  Phone:
  (714) 327-2264

  	
  Phone:
  (913) 890-0403

  
	
  Fax: (714) 262-4080

  	
  Fax: (913) 890-9403

  
	
  Email: jason.ricker@megapath. com

  	
  Email: John.McDermott@dineequity. com

  



 


Notes


·                  All hardware costs are taxable.


·                  Quote does not reflect local, state, or federally mandated usage fees
and/or taxes.


·                  An average price is used in the pricing table above for any Clear Channel
T1 or Expanded Service Area 3 Services. Actual price per circuit is listed in
the T1 Charges table attached.


·                  Pre-qualification information contained in this document is based on best
available information and is subject to change. Pre-qualification results do
not guarantee service availability. If the stipulated access technology is not available, another type of
access will be substituted which may result in changes to the quoted MRCs and
NRCs. MegaPath commits to making reasonable efforts to find the least expensive
access available that meets the customer’s requirements. However, if a change
to the access technology results in higher fees, Subscriber understands and
agrees that the additional cost will be invoiced accordingly.


·                  Actual shipping costs may vary and will be assessed at the time of
shipping.


·                  Regarding DUET service: Early Termination Fee (ETF) is equal to the
Monthly Recurring Charge (MRC) times the number of months remaining in the
intial circuit term.


 


BY
ACKNOWLEDGING BELOW, OR USING THE SERVICES, CUSTOMER AGREES TO BE BOUND BY THE
APPLICABLE TERMS AND CONDITIONS GOVERNING THE SERVICES AS DEFINED IN CUSTOMER’S
MASTER SERVICES AGREEMENT.


 




	
   

  	
   

  	
   

  
	
  Customer Signature

  	
   

  	
  MegaPath Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Date

  






 


1