Document:

Exhibit 4.10  

Alberta
Securities Commission

British Columbia Securities Commission

Saskatchewan Financial Services Commission—Securities Division

The Manitoba Securities Commission

Ontario Securities Commission

Autorité des marchés financiers

Nova Scotia Securities Commission

Prince Edward Island Securities Office

Securities Commission of Newfoundland and Labrador

New Brunswick Securities Commission

Registrar of Securities, Nunavut

Registrar of Securities, Northwest Territories

Registrar of Securities, Government of the Yukon Territory 

Dear
Sirs/Mesdames: 

 Re:    TransCanada Corporation (the "Corporation")  

        We refer to the short form base shelf prospectus of the above Corporation dated September 21, 2009 relating to the sale and
issue of common shares, preferred shares and subscription receipts of the Corporation. 

        We
consent to the use, through incorporation by reference in the short form base shelf prospectus, of our report dated February 23, 2009 to the shareholders of the Corporation on
the following financial statements: 

Consolidated
balance sheets as at December 31, 2008 and 2007; 

Consolidated
statements of income, comprehensive income, accumulated other comprehensive income, shareholders' equity and cash flows for each of the years in the three-year period ended
December 31, 2008. 

        We
also consent to the use, through incorporation by reference, in the short form base shelf prospectus, of our report dated February 23, 2009 (except Note 1 which is as of
June 12, 2009) to the board of directors of the Corporation on the related supplemental note entitled "Revised Reconciliation to United States GAAP" as at December 31, 2008 and 2007 and
for each of the years in the three-year period ended December 31, 2008. 

        We
report that we have read the short form base shelf prospectus and all information specifically incorporated by reference therein and have no reason to believe that there are any
misrepresentations in the information contained therein that are derived from the consolidated financial statements upon which we have reported or that are within our knowledge as a result of our
audit of such consolidated financial statements. 

        This
letter is provided solely for the purpose of assisting the securities regulatory authorities to which it is addressed in discharging their responsibilities and should not be used
for any other purpose. Any use that a third party makes of this letter, or any reliance or decisions based on it, are the responsibility of such third parties. We accept no responsibility for loss or
damages, if any, suffered by any third party as a result of decisions made or actions taken based on this letter. 

Yours
very truly, 

(Signed)
KPMG LLP 

Chartered
Accountants 

Calgary,
Canada

September 21, 2009Exhibit 4.11  

         

  

			
	 
	 	 

	DELIVERED BY SEDAR	 	September 21, 2009

Alberta
Securities Commission

British Columbia Securities Commission

Saskatchewan Financial Services Commission, Securities Division

The Manitoba Securities Commission

Ontario Securities Commission

Autorité des marchés financiers

Nova Scotia Securities Commission

Securities Office, Prince Edward Island

New Brunswick Securities Commission

Securities Commission of Newfoundland and Labrador

Northwest Territories Securities Registry

Yukon Territory Securities Registry

Nunavut Securities Registry 

Dear
Sirs/Mesdames: 

 Re:    TransCanada Corporation (the "Corporation")  

        We refer to a final short form base shelf prospectus dated September 21, 2009 of the Corporation (the
"Prospectus"), referring to the qualification for distribution of securities of the Corporation. 

        We
hereby consent to the references to our firm name on the cover page of the Prospectus and under the headings "Enforceability of Civil Liabilities", "Legal Matters," "Interest of
Experts" and "Documents Filed as Part of the Registration Statement" and the reference to our firm name and our opinion under the heading "Legal Matters". 

        We
confirm that we have read the Prospectus and have no reason to believe that there are any misrepresentations in the information contained in the Prospectus that is derived from our
opinion referred to above or that is within our knowledge as a result of the services we provided in connection with such opinion. 

        This
letter is solely for the information of the addressees set forth above in connection with the Prospectus and is not to be relied upon by any other party or for any other purpose. 

			
	 
	 	 

	 	 	Yours truly,
	

 	
 	
(signed) "Stikeman Elliott LLP"

CALGARY    VANCOUVER    TORONTO    MONTREAL    OTTAWA    NEW
YORK    LONDON    SYDNEYQuickLinks
 -- Click here to rapidly navigate through this document

 
 

  Exhibit 4.12    
    

			
	 

 

	 
	 	

Mayer Brown LLP

71 South Wacker Drive

Chicago, Illinois 60606-4637

Main Tel (312) 782-0600

Main Fax (312) 701-7711

www.mayerbrown.com
	September 21, 2009	 	 
	 Alberta Securities Commission

British Columbia Securities Commission

Saskatchewan Financial Services Commission, Securities Division

The Manitoba Securities Commission

Ontario Securities Commission

Autorité des marchés financiers

Nova Scotia Securities Commission

Securities Office, Prince Edward Island

New Brunswick Securities Commission

Securities Commission of Newfoundland and Labrador

Northwest Territories Securities Registry

Yukon Territory Securities Registry

Nunavut Securities Registry
	 	 

Re :
TransCanada Corporation (the "Corporation") 

Ladies
and Gentlemen : 

        We
refer to a final short form base shelf prospectus dated September 21, 2009 of the Corporation (the "Prospectus"), referring to the qualification for distribution of securities
of the Corporation. 

        We
hereby consent to the references to our firm name on the cover page of the Prospectus and under the headings "Legal Matters," "Interest of Experts" and "Documents Filed as Part of the
Registration Statement". 

Very
truly yours, 

(Signed)
Mayer Brown LLP 

Mayer
Brown LLP 

Mayer Brown LLP operates in combination with our associated English limited liability partnership

and Hong Kong partnership (and its associated entities in Asia). 

QuickLinks

Exhibit 4.12Exhibit 10.1

 

DEBT CONVERSION AGREEMENT

 

BY AND BETWEEN

 

GRANITE CITY FOOD & BREWERY LTD.

 

AND

 

DHW LEASING, L.L.C.

 

 

DATE:  September 21, 2009

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I.

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II.

  	
   

  	
  PURCHASE AND SALE

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Authorization of Issuance and Sale of Shares

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2

  	
   

  	
  Agreements to Sell and Purchase

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3

  	
   

  	
  Payment and Delivery

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
   

  	
  Certificate for Shares

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
   

  	
  Repurchase Right

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III.

  	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Representations and Warranties of the Company

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.2

  	
   

  	
  Representations and Warranties of DHW

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  	
   

  	
  OTHER AGREEMENTS AND ACKNOWLEDGMENTS OF THE
  PARTIES

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  General

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.2

  	
   

  	
  Deferred and Reduced Rent Payments

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.3

  	
   

  	
  Access

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.4

  	
   

  	
  Litigation

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.5

  	
   

  	
  Notice of Developments

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.6

  	
   

  	
  Waiver of Approval by Company Shareholders

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.7

  	
   

  	
  Alternative Transaction

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.8

  	
   

  	
  Deliveries to be Made at the Closing

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.9

  	
   

  	
  Securities Laws Matters

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.10

  	
   

  	
  Participation Rights

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.11

  	
   

  	
  Board Composition; Board Observers

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.12

  	
   

  	
  Employment Agreement Amendments

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V.

  	
   

  	
   

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Conditions to Obligations of Each Party Under this
  Agreement

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2

  	
   

  	
  Conditions Precedent to the Obligations of DHW

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.3

  	
   

  	
  Conditions Precedent to the Obligations of the
  Company

  	
   

  	
  23

  

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI.

  	
   

  	
  TERMINATION

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Termination of Agreement

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.2

  	
   

  	
  Effect of Termination

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VII.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Fees and Expenses

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.2

  	
   

  	
  Entire Agreement

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.3

  	
   

  	
  Notices

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.4

  	
   

  	
  Amendments; Waivers; No Additional Consideration

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.5

  	
   

  	
  Successors and Assigns

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.6

  	
   

  	
  No Third-Party Beneficiaries

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.7

  	
   

  	
  Governing Law

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.8

  	
   

  	
  Dispute Resolution

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.9

  	
   

  	
  Survival

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.10

  	
   

  	
  Execution

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.11

  	
   

  	
  Severability

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.12

  	
   

  	
  Construction

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.13

  	
   

  	
  Incorporation of Recitals, Exhibits and Schedules

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.14

  	
   

  	
  Specific Performance

  	
   

  	
  29

  

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  A

  	
   

  	
  FORM
  OF AMENDMENT NO. 1 TO MASTER AGREEMENT

  	
   

  	
  A-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  B

  	
   

  	
  FORM OF
  TERMINATION OF EQUIPMENT LEASE AND BILL OF SALE

  	
   

  	
  B-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  C

  	
   

  	
  FORM OF
  REGISTRATION RIGHTS AGREEMENT

  	
   

  	
  C-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  D

  	
   

  	
  RESTAURANT
  LEASES

  	
   

  	
  D-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  E

  	
   

  	
  FORM OF
  AMENDMENT TO EMPLOYMENT AGREEMENT OF STEVEN J. WAGENHEIM

  	
   

  	
  E-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  F

  	
   

  	
  FORM OF
  AMENDMENT TO EMPLOYMENT AGREEMENT OF JAMES G. GILBERTSON

  	
   

  	
  F-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  G

  	
   

  	
  FORM OF
  AMENDMENT TO EMPLOYMENT AGREEMENT OF DARIUS GILANFAR

  	
   

  	
  G-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  H

  	
   

  	
  FORM OF
  WAIVER OF DEFAULT AND CERTAIN COVENANTS FROM HARMONY EQUITY INCOME FUND
  L.L.C. AND HARMONY EQUITY INCOME FUND L.L.C. II DATED
                
      , 2009.

  	
   

  	
  H-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  I

  	
   

  	
  DHW
  THIRD-PARTY CONSENTS AND AGREEMENTS

  	
   

  	
  I-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  J

  	
   

  	
  FORM
  OF MASTER AMENDMENT TO LEASES

  	
   

  	
  J-1

  

 

iii

 

DEBT
CONVERSION AGREEMENT

 

This Debt Conversion
Agreement (this “Agreement”) is dated September 21,
2009, by and between Granite City Food & Brewery Ltd., a Minnesota
corporation (the “Company”), and DHW Leasing,
L.L.C., a South Dakota limited liability company (“DHW”).

 

WHEREAS, subject to the
terms and conditions set forth in this Agreement and pursuant to Section 4(2) of
the Securities Act (as defined below) and Rule 506 promulgated thereunder,
the Company desires to issue and sell to DHW, and DHW desires to acquire from
the Company Common Stock of the Company, as more fully described in this
Agreement.

 

NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and DHW agree as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1           Definitions.  In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms shall
have the meanings indicated in this Section 1.1:

 

“AAA Rules” has the
meaning set forth in Section 7.8(b) below.

 

“Action” means any
action, suit, inquiry, notice of violation, proceeding (including any partial
proceeding such as a deposition) or investigation pending or threatened in
writing against or affecting the Company, any Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental or
administrative agency, regulatory authority (federal, state, county, local or
foreign), stock market, stock exchange or trading facility.

 

“Affiliate” means any
Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person, as such
terms are used in and construed under Rule 144.  For the purposes of Section 2.5 of this
Agreement, “Affiliate” includes Dunham Capital Management, L.L.C. and Dunham
Equity Management, L.L.C. and their respective directors, managers, officers,
employees and equity holders.

 

“Alternative Proposal” has the meaning
set forth in Section 4.7 below.

 

“Amendment to Master Agreement” means the
Amendment to Master Agreement between the Company and Dunham Capital
Management, L.L.C., DHW Leasing, L.L.C., and Dunham Equity Management, L.L.C.
in the form of Exhibit A hereto.

 

“Applicable Law” or “Applicable Laws” means any and all laws (including the
common law), ordinances, constitutions, regulations, statutes, treaties, rules,
codes, licenses, certificates, franchises, Permits, requirements and
injunctions adopted, enacted, implemented, promulgated, issued, entered or
deemed applicable by or under the authority of any Governmental Authority
having jurisdiction over a specified Person or any of such Person’s properties
or assets, including NASDAQ Listing Rules.

 

 

“Business Day” means any day
except Saturday, Sunday and any day which is a federal legal holiday or a day
on which banking institutions in the State of New York are authorized or
required by law or other governmental action to close.

 

“Closing” means the
Closing as defined in Section 2.3.

 

“Closing Conditions” means the
Closing Conditions described in Sections 5.1, 5.2 and 5.3 below.

 

“Closing Date” means the time
and date of the Closing, as defined in Section 2.3.

 

“Commission” means the
United States Securities and Exchange Commission.

 

“Common Stock” means the
Common Stock of the Company, par value $.01 per share, and any shares into
which such Common Stock may hereafter be reclassified, converted or exchanged.

 

“Company Deliverables” has the
meaning set forth in Section 4.8(a).

 

“Confidential Information” means any
information or compilation of information not generally known to the public or
the industry or which the Company or any of its Subsidiaries has not disclosed
to third parties without a written obligation of confidentiality, which is
proprietary to the Company or any of its Subsidiaries, relating to the Company’s
or any of its Subsidiaries’ procedures, techniques, methods, concepts, ideas,
affairs, products, processes and services, including, but not limited to,
information relating to distribution, marketing, merchandising, selling,
research, development, manufacturing, purchasing, accounting, engineering,
financing, costs, pricing and pricing strategies and methods, customers,
suppliers, creditors, employees, contractors, agents, consultants, plans,
billing, needs of customers and products and services used by customers, all
lists of suppliers, distributors and customers and their addresses, prospects,
sales calls, products, services, prices and the like as well as any
specifications, formulas, plans, drawings, accounts or sales records, sales
brochures, catalogs, code books, manuals, trade secrets, knowledge, know-how,
operating costs, sales margins, methods of operations, invoices or statements
and the like; provided, however, that the term “Confidential
Information” shall not be deemed to include (i) information which becomes
generally available to the public without any fault of the Company or any of
its Subsidiaries, (ii) becomes available to the applicable party on a
non-confidential basis and without any breach of an agreement of
confidentiality from a source other than the Company or any of its
Subsidiaries, or (iii) information that is disclosed to a Governmental
Authority pursuant to Applicable Law, and is therefore publicly available.

 

“Consents” means the
consents and other authorization of third parties or governmental authorities
required pursuant to Section 3.1(e).

 

“Disclosure Materials” has the
meaning set forth in Section 3.1(h).

 

“Dunham Landlords” means Dunham
Capital Management, L.L.C., Dunham Equity Management, L.L.C. and their
following affiliated entities: GC Rosedale, LLC — Roseville, MN; GC Lincoln LP —
Lincoln, NE; GC Omaha LP — Omaha, NE; GC Olathe LP — 

 

2

 

Olathe, KS; GC Holdings LP —
Zona Rosa, Kansas City; GC Eagan LP — Eagan, MN; GC Des Moines LP — Des Moines,
IA; GC Cedar Rapids/Davenport — Davenport, IA; GC Wichita LP — Wichita, KS.

 

“Equipment Lease” means,
collectively, that Master Equipment Finance Lease made and entered into September 19,
2006 and that Equipment Lease Commitment dated December 6, 2007, by and
between DHW and the Company, and includes, whether or not referred to therein,
all subsequent leases of and finance agreements for, furniture, fixtures and
equipment leased or financed by, DHW, prior to the Closing, whether or not
referred to in such Master Equipment Finance Lease or Equipment Lease
Commitment and Master Equipment Lease.

 

“Exchange Act” means the
Securities Exchange Act of 1934, as amended.

 

“FF&E” means
furniture, fixtures and equipment leased by DHW to the Company.

 

“Final Order” means an
action or decision of a Governmental Authority as to which (i) no request
for a stay is pending, no order of stay is in effect, and any deadline for
filing such request that may be designated by Applicable Law has passed, (ii) no
petition for rehearing or reconsideration or application for review is pending
and time for filing of such petition or application has passed, (iii) the
Governmental Authority does not have the action or decision under
reconsideration on its own motion and the time within which it may effect such
reconsideration has passed, and (iv) no judicial appeal is pending or in
effect and any deadline for filing any such appeal that may be designated by
statute or rule has passed.

 

“GAAP” means U.S.
generally accepted accounting principles.

 

“Governmental Authority” means any (i) nation,
state, county, city, town, village, district or other jurisdiction of any
nature; (ii) federal, state, local, municipal, foreign or other
government; (iii) governmental or quasi-Governmental Authority of any
nature (including any governmental agency, branch, board, commission,
department, instrumentality, office or other entity, and any court or other
tribunal); and/or (iv) any body exercising, or entitled or purporting to
exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power of any nature.

 

“Indebtedness” means all of
the Company’s indebtedness and financial obligations to DHW through the Closing
Date, whether arising out of the Equipment Lease or otherwise.

 

“Knowledge” means that an
individual will be deemed to have “Knowledge” or “knowledge” of a particular
fact or other matter if such individual is actually (not constructively or
imputably) aware of such fact or other matter; provided, however,
that Knowledge by the Company of a particular fact or other matter shall mean
the actual (and not constructive or imputed) awareness of Steven J. Wagenheim,
James G. Gilbertson and Monica Underwood.

 

“Lien” means any
lien, charge, encumbrance, security interest, right of first refusal or other
restrictions of any kind.

 

3

 

“Master Amendment to Leases” means the
Master Amendment to Leases in the form of Exhibit J hereto.

 

“Material Adverse Effect” means, in
connection with any Person, any event, change or effect that is materially
adverse, individually or in the aggregate, to the condition (financial or
otherwise), properties, assets, liabilities, revenues, income, business,
operations, results of operations of such Person, taken as a whole; provided,
however, the foregoing shall not be deemed to include any event, change
or effect which arises with respect to (i) conditions of change that are
primarily the result of the national economy whereby the effect or change is
generally universal upon businesses as a whole or within an industry as a
whole, or (ii) uniformly applied legislative or judicial Applicable Laws
or Final Orders that have general applicability to business as a whole or an
industry as a whole; and provided, further, the parties agree that,
notwithstanding any Delaware case law to the contrary, this definition shall
apply to short-term as well as long-term effects.

 

“NASDAQ” means The
NASDAQ Stock Market LLC.

 

“Permits” means all
right, title and interest in and to any Permits, licenses, certificates,
filings, authorizations, approvals, or other indicia of authority (and any
pending applications for approval or renewal of a Permit), to own, construct,
operate, sell, inventory, disburse or maintain any asset or conduct any
business as issued by any Governmental Authority.

 

“Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind.

 

“Proceeding” means any
suit, litigation, arbitration, hearing, audit, investigation or other action
(whether civil, criminal, administrative or investigative) commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental
Authority or agency.

 

“Registration Rights Agreement” means the
Registration Rights Agreement, dated as of the date of this Agreement, among
the Company and DHW, in the form of Exhibit B hereto.

 

“Registration Statement” means a
registration statement meeting the requirements set forth in the Registration
Rights Agreement and covering the resale by DHW of the Shares.

 

“Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule.

 

“SEC Reports” has the
meaning set forth in Section 3.1(h).

 

“Securities Act” means the
Securities Act of 1933, as amended.

 

“Shares” means the
shares of Common Stock issued or issuable to DHW pursuant to Section 2.1
of this Agreement.

 

4

 

“Short Sales” has the
meaning set forth in Section 3.2(f).

 

“Subsidiary” means any “significant
subsidiary” as defined in Rule 1-02(w) of the Regulation S-X
promulgated by the Commission under the Exchange Act.

 

“Termination of Equipment Lease
and Bill of Sale” means the Termination of Equipment Lease and Bill
of Sale in the form of Exhibit A hereto.

 

“Transaction” or “Transactions” means the Transactions and actions
contemplated by this Agreement.

 

“Transaction Documents” means this
Agreement, the Exhibits hereto, and any other documents or agreements executed
in connection with the Transactions.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1           Authorization
of Issuance and Sale of Shares.  The Company has authorized the issuance and
sale of twenty-eight million (28,000,000) shares of Common Stock to DHW in
consideration of the cancellation of the Indebtedness and the following
consideration:  (i) DHW will convey to the Company, free and
clear of all Liens, title to all FF&E that is subject to financing lease
arrangements between the Company and DHW; (ii) from July 9, 2009 to
the Closing Date, DHW will cause the Dunham Landlords to agree to a 30-day
deferral of rent in connection with each receipt of rent payments from the
Company under lease agreements between the Company and the Dunham Landlords; (iii) subsequent
to the Closing Date, DHW will cause the Dunham Landlords to accept certain rent
deferrals and reductions; (iv) DHW and the Dunham Landlords will enter
into the Amendment to Master Agreement; and (v) in cooperation with the
Company, DHW and the Dunham Landlords have agreed to use reasonable commercial
efforts to obtain at least Five Hundred Thousand and No/100 Dollars ($500,000)
in annual rent concessions for a period of two years following the Closing Date
on properties leased by the Dunham Landlords to the Company and under ground
leases.

 

2.2           Agreements
to Sell and Purchase. 
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company hereby agrees
to sell to DHW, and DHW agrees to purchase from the Company, the Shares.

 

2.3           Payment and
Delivery.  As payment for
the Shares, DHW will (i) terminate the Equipment Lease; (ii) cancel
and release the Indebtedness; and (iii) convey to the Company good title
to, and possession of, all FF&E that is subject to the Equipment Lease,
free and clear of all claims and Liens. 
DHW shall execute and deliver to the Company such additional agreements
or other documents as may be necessary to cause the cancellation of the
Indebtedness and the transfer of title to the FF&E.  Such cancellation of Indebtedness, transfer
of FF&E and issuance and delivery of Shares is hereafter referred to as (the “Closing”).  The time
and date of the Closing shall be the twelfth (12th) day that is a Business Day
following the Company’s mailing of a letter to its shareholders pursuant to
NASDAQ Listing Rule 5635(f), provided that all conditions to Closing set
forth Section 5.1, 5.2 and 5.3 have been satisfied or waived.  Neither DHW nor the Company shall be
obligated to effect the Closing unless each has given the other at least two (2) Business
Days prior written notice that it has satisfied or is prepared to satisfy the
applicable conditions to Closing set forth in Sections 5.2 and 5.3, as
applicable.  The parties shall 

 

5

 

notify each other in writing on September 28,
2009 and on each Business Day thereafter of the status of their satisfaction or
performance of closing conditions (the “Closing Date”).  The Closing shall take place at the office of
Briggs and Morgan, P.A., 80 South Eighth Street, 22nd Floor, Minneapolis, Minnesota 55402 at 9:00 a.m.
local time on the Closing Date.

 

2.4           Certificate for Shares.  A certificate for the Shares shall be
registered in the name of DHW or if so indicated on the signature page hereto,
in the name of a nominee designated by DHW. 
Upon written request of DHW, a facsimile copy of the certificate
evidencing the Shares shall be delivered to DHW on the Closing Date and the
original certificate evidencing the Shares shall be delivered to DHW by
overnight courier one trading day following the Closing Date, except where
alternative settlement arrangements have been agreed to with DHW, with any
transfer taxes payable in connection with the issuance of the Shares duly paid
by or on behalf of the Company, against cancellation of the Indebtedness.

 

2.5           Repurchase Right. 
As further consideration for the issuance of the Shares by the Company,
DHW agrees that from the date hereof through the first anniversary of the
Closing Date, the Company will have the right to repurchase and redeem certain
of the Shares if the average bid price of the Company’s Common Stock exceeds
$0.714 per share for any period of 20 consecutive trading days (the “Trigger”).  If
and whenever the Trigger is met, the Company may at any time during the first
year following the Closing Date, but within 20 trading days of any given
Trigger, repurchase from DHW, for the consideration of $0.001 per share, up to
a maximum of such number of the Shares as would enable DHW to retain (assuming
no sales of Shares by DHW during the first year following the Closing Date)
Shares having a market value of Twenty Million and No/100 Dollars ($20,000,000)
following such repurchase (calculated using the closing price per share of
Common Stock on the trading day immediately prior to the date of
repurchase).  The one year period
provided in this Section shall be extended for the number of days that the
Company is prevented from exercising its repurchase right due to an automatic
stay or other action by a federal or state court, but only to the extent that
the Company is so prevented.  The
repurchase shall be deemed made effective upon the giving of notice to DHW and
the sole obligation of the Company to DHW thereafter shall be the payment of
the price for repurchased Shares.  The
repurchase price shall be deliverable only to DHW, unless another payee is
designated in writing by DHW.  Upon the
Company’s exercise of the repurchase right and tender of the repurchase price,
the repurchased shares shall, without further action by the Company, DHW or any
other party, cease to be outstanding and shall be deemed cancelled by the
Company. Any sales of Shares by DHW during the first year following Closing
will reduce such $20,000,000 threshold by the gross dollar amount of such
sales.

 

DHW agrees that (i) it will not sell or
dispose of any of the Shares for the period from the Closing Date through January 31,
2010; and (ii) for a period of one year following the Closing Date, it
will not sell, transfer or assign, or contract to sell, transfer or assign, by
operation of law or otherwise, more than 6,500,000 of the Shares.  Although the repurchase right herein may be
triggered multiple times during the one year period following the Closing, the
Company may only exercise its repurchase right once.  Such repurchase right may be exercised by
action of not less than a majority of disinterested directors.  The Shares are subject to the foregoing
repurchase right, which shall be binding upon DHW’s successors and assigns,
including any transferee, assignee or pledgee of the Shares; provided, however,
that upon exercise of the repurchase right herein, all of the Shares remaining
after the repurchase shall cease to be subject to the repurchase right herein,
and the Company will, upon request of DHW, cause the second restrictive legend 

 

6

 

set forth in Section 3.2(h) pertaining
to the repurchase right to be removed from any share certificate; and provided
further, that if any of the Shares shall, following January 31, 2010, be
sold on an exchange or in the over-the-counter market, the Company shall, upon
request of DHW, remove the foregoing legend from certificates for up to
6,500,000 Shares which shall have been sold in the over-the-counter
market.  DHW and each transferee,
assignee and pledgee of the Shares shall at all times provide the Company with
the following:  the full name and current
residence address and business office of such party; the contact person or
persons with respect to such party; the telephone number of such party; and an
acknowledgement from any assignee or pledgee that Shares remain subject to the
repurchase right.  The Shares shall bear
the restrictive legends set forth in Section 3.2(h) and shall be
subject to a stop transfer order on the Company’s stock records and
instructions to the Company’s transfer agent necessary to enforce the forgoing
repurchase right and the representations and warranties set forth in Section 3.2(b).  Upon exercise of the repurchase right
pursuant to this Section 2.5, DHW and any transferee, assignee or pledge
hereby designates the Chief Financial Officer or the Secretary of the Company
or their successors, as their attorneys-in-fact to execute such documents and
instruments, and give such orders and instructions as shall be necessary or
required to effect the transfer and cancellation of repurchased shares on the
stock records of the Company.  The per
share dollar amounts referred to in this Section 2.5, including the
Triggers, shall be proportionately decreased or increased to reflect changes in
the capitalization of the Company resulting from any stock split, combination,
dividend or action having similar effect.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1           Representations and Warranties of the
Company.  Except as set forth in the Disclosure
Schedule delivered to DHW on the date of this Agreement (it being agreed that
disclosure of any item on the Disclosure Schedule shall be deemed disclosure
with respect to any other section or subsection of this Agreement), the Company
represents and warrants to DHW as follows:

 

(a)           Subsidiaries. 
The Company has no direct or indirect Subsidiaries other than as
specified in the SEC Reports.  Except as
disclosed in the SEC Reports, the Company owns, directly or indirectly, all of
the capital stock of each Subsidiary free and clear of any and all Liens, and
all the issued and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and
similar rights.

 

(b)           Organization and Qualification. 
The Company and each Subsidiary are duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted. 
Neither the Company nor any Subsidiary is in violation of any of the
provisions of its respective certificate or articles of incorporation, bylaws
or other organizational or charter documents. 
The Company and each Subsidiary are duly qualified to conduct its
respective businesses and are in good standing as a foreign corporation or
other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.

 

7

 

(c)           Authorization; Enforcement. 
The Company has the requisite corporate power and authority to enter
into and to consummate the Transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
Transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company in connection therewith.  Each
Transaction Document has been (or upon delivery will have been) duly executed
by the Company and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors’ rights and remedies or by other equitable principles of general
application.

 

(d)           No Conflicts. 
The execution, delivery and performance of the Transaction Documents by
the Company and the consummation by the Company of the Transactions
contemplated thereby do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii) except
as provided in Schedule 3.1(d) of the Disclosure Schedule, conflict
with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, license, franchise, lease, Permits
(including, but not limited to, any consents or Permits, approvals or
authorizations of any Governmental Authority), credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or (iii) except
as provided in Schedule 3.1(d) of the Disclosure Schedule, result
in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or Governmental Authority to which the
Company or a Subsidiary is subject (including federal and state securities laws
and regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.

 

(e)           Filings, Consents and Approvals. 
Except as provided in Schedule 3.1(e) of the Disclosure
Schedule, the Company is not required to obtain any Consent, waiver,
authorization, Permit or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
Governmental Authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than (i) the filing with the Commission of one or more Registration
Statements in accordance with the requirements of the Registration Rights
Agreement, (ii) filings required under the Exchange Act or by state
securities laws, (iii) the filing of a Notice of Sale of Securities on Form D
with the Commission under Regulation D of the Securities Act, (iv) the
Company obtaining a waiver from NASDAQ of the shareholder approval requirement
pursuant to NASDAQ Listing Rule 5635(f), (v) the filing of a
Notification of Listing of Additional Shares with NASDAQ, and (vi) those
that have been made or obtained prior to the date of this Agreement, all such
consents, waivers, authorizations, waivers or notices hereinafter referred to “Consents.”

 

8

 

(f)            Issuance of the Shares. 
The Shares shall be duly authorized and, when issued for in accordance
with the Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens.

 

(g)           Capitalization. 
The number of shares and type of all authorized, issued and outstanding
capital stock of the Company, and all shares of Common Stock reserved for
issuance under the Company’s various option and incentive plans, is specified
in the SEC Reports or on Schedule 3.1(g) of the  Disclosure  Schedule.  Except  as  specified  in  the  SEC  Reports  or  on  Schedule 3.1(g) of the Disclosure Schedule, no shares of the Company
are entitled to preemptive or similar rights, and no Person has any right of
first refusal, preemptive right, right of participation, or any similar right
to participate in the Transactions contemplated by the Transaction
Documents.  Except as specified in the
SEC Reports or on Schedule 3.1(g) of the Disclosure Schedule, there
are no outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any
right to subscribe for or acquire, any shares of capital stock of the Company,
or contracts, commitments, understandings or arrangements by which the Company
or any Subsidiary is or may become bound to issue additional shares of capital
stock of the Company, or securities or rights convertible or exchangeable into
shares of capital stock of the Company.

 

(h)           SEC Reports; Financial Statements. 
The Company has filed all reports, forms or other information required
to be filed by it under the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the twelve months preceding the date hereof (or such
shorter period as the Company was required by law to file such reports) (the
foregoing materials being collectively referred to herein as the “SEC Reports” and, together with the Disclosure Schedules,
the “Disclosure Materials”) on a timely
basis or has timely filed a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission promulgated thereunder, and
none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.  The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission
with respect thereto as in effect at the time of filing.  Such financial statements have been prepared
in accordance with GAAP applied on a consistent basis during the periods
involved, except as may be otherwise specified in such financial statements or
the notes thereto, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.

 

(i)            [Reserved.]

 

(j)            Material Changes. 
Except as set forth in Schedule 3.1(j) of the Disclosure
Schedule, and except as incident to this Agreement and the Transactions
contemplated hereby, since the date of the latest audited financial statements
included within the SEC Reports, except as specifically disclosed in the SEC
Reports, (i) there has been no event, occurrence or 

 

9

 

development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade
payables, accrued expenses and other liabilities incurred in the ordinary
course of business consistent with past practice and (B) liabilities (not
to exceed $100,000) not required to be reflected in the Company’s financial
statements pursuant to GAAP or required to be disclosed in filings made with
the Commission, (iii) the Company has not altered its method of accounting
or the identity of its auditors, (iv) the Company has not declared or made
any dividend or distribution of cash or other property to its shareholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock, and (v) the Company has not issued any equity
securities, except pursuant to existing Company stock option and incentive
plans and consistent with past practice.

 

(k)           Litigation.  There is no
Action which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Shares or (ii) except
as specifically disclosed in the SEC Reports, could, if there were an
unfavorable decision, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect.  Neither the Company nor any Subsidiary, nor
any director or officer thereof (in his or her capacity as such), is or has
been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary duty,
except as specifically disclosed in the SEC Reports.  There has not been, and to the Knowledge of
the Company, there is not pending any investigation by the Commission involving
the Company or any current or former director or officer of the Company (in his
or her capacity as such).  The Commission
has not issued any stop order or other order suspending the effectiveness of
any registration statement filed by the Company or any Subsidiary under the
Exchange Act or the Securities Act.

 

(l)            Labor Relations. 
No material labor dispute exists or, to the Knowledge of the Company, is
imminent with respect to any of the employees of the Company.

 

(m)          Compliance.  Except as
specified on Schedule 3.1(m) of the Disclosure Schedule, neither
the Company nor any Subsidiary (i) is in default under or in violation of
(and no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any Subsidiary
under), nor has the Company or any Subsidiary received notice of a claim that
it is in default under or that it is in violation of, any indenture, loan or
credit agreement or instrument to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has been
waived), (ii) is in violation of any order of any court, arbitrator or
governmental body, or (iii) is in violation of any statute, rule or
regulation of any Governmental Authority, including without limitation all
foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and
employment and labor matters, except in each case as could not, individually or
in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect.  To its Knowledge, the
Company is in material compliance with all applicable requirements of the
Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations
thereunder, that are applicable to it, except where such noncompliance could
not have or reasonably be expected to result in a Material Adverse Effect.  Except as provided in Schedule 3.1(m) of
the Disclosure Schedule all defaults under leases to which the Company is a
party have been cured; there are no outstanding notices of default; and the
Company is not in default under any of its leases.

 

10

 

(n)           Regulatory Permits. 
Except as specified on Schedule 3.1(n) of the Disclosure
Schedule, the Company and the Subsidiaries possess all certificates,
authorizations and Permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses
as described in the SEC Reports, except where the failure to possess such
Permits could not, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect, and neither the Company nor
any Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such Permits.

 

(o)           Patents and Trademarks. 
The Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, licenses and other similar rights that are
necessary or material for use in connection with their respective businesses as
described in the SEC Reports and which the failure to so have could,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect (collectively, the “Intellectual
Property Rights”).  Except as
set forth in the SEC Reports, to the Knowledge of the Company, all such
Intellectual Property Rights are enforceable (except for rights subject to
pending patent applications and trademark applications as to which no
representation is made) and there is no existing infringement or claim of
infringement by another Person of any of the Intellectual Property Rights.

 

(p)           Insurance.  The Company
and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries are
engaged.  To the Company’s knowledge, it
will be able to renew its and the Subsidiaries’ existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business on terms consistent with
market for the Company’s and such Subsidiaries’ respective lines of business.

 

(q)           Transactions with Affiliates and
Employees.  Except as set forth in the SEC Reports, none
of the officers or directors of the Company and, to the Knowledge of the
Company, none of the employees of the Company is presently a party to any
material transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
Knowledge of the Company, any entity in which any officer, director, or any
such employee has a substantial interest or is an officer, director, trustee or
partner, of the nature or amount that would require disclosure in the SEC
Reports.

 

(r)            Internal Accounting Controls. 
The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i) Transactions
are executed in accordance with management’s general or specific
authorizations, (ii) Transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.  The Company has established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15(d)-15(e)) for the Company and designed such disclosure controls and
procedures to ensure that material 

 

11

 

information relating to the Company, including its
Subsidiaries, is made known to the certifying officers by others within those
entities, particularly during the period in which the Company’s Form 10-K
or Form 10-Q, as the case may be, is being prepared.  The Company’s certifying officers have
evaluated the effectiveness of the Company’s controls and procedures as of the
last day of the period covered by the Form 10-Q for the Company’s most
recently ended fiscal quarter (such date, the “Evaluation
Date”).  The Company presented
in its most recently filed Form 10-K or Form 10-Q the conclusions of
the certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no
significant changes in the Company’s internal controls (as described in Item
308(c) of Regulation S-K under the Exchange Act) or, to the Company’s
Knowledge in other factors that could significantly and adversely affect the
Company’s internal controls.  The Company’s
auditors have not identified any control deficiency, significant deficiency or
material weakness in the Company’s system of internal controls for the 2007 and
2008 fiscal years.

 

(s)           Certain Fees. 
Except as described in Schedule 3.1(s) of the Disclosure
Schedule, no brokerage or finder’s fees or commissions are or will be payable
by the Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
Transactions contemplated by this Agreement. 
DHW shall have no obligation with respect to any fees or with respect to
any claims (other than such fees or commissions owed by DHW pursuant to written
agreements executed by DHW, which fees or commissions shall be the sole
responsibility of DHW) made by or on behalf of other Persons for fees of a type
contemplated in this Section that may be due in connection with the
Transaction.

 

(t)            Certain Registration Matters. 
Assuming the accuracy of DHW’s representations and warranties set forth
in Section 3.2(b)-(e), no registration under the Securities Act is
required for the offer and sale of the Shares by the Company to DHW under the
Transaction Documents.  As of the date of
this Agreement, the Company is eligible to register the resale of its Common
Stock by DHW on Form S-3 promulgated under the Securities Act.  Except as specified in Schedule 3.1(t) of
the Disclosure Schedule, the Company has not granted or agreed to grant to any
Person any rights (including “piggy-back” registration rights) to have any
securities of the Company registered with the Commission or any other
Governmental Authority that have not been satisfied or exercised.

 

(u)           Listing and Maintenance Requirements. 
Except as specified in Schedule 3.1(u) of the Disclosure
Schedule or in the SEC Reports, the Company has not, in the two years preceding
the date hereof, received notice from any trading market to the effect that the
Company is not in compliance with the listing or maintenance requirements
thereof.  The Company makes no representation
that it will be in compliance with the listing and maintenance requirements for
continued listing of the Common Stock on the trading market on which the Common
Stock is currently listed or quoted. 
Subject to NASDAQ’s approval of an exception to shareholder approval
requirements for the Transaction, and assuming no withdrawal thereof, the
issuance and sale of the Shares under the Transaction Documents at the Closing
does not contravene the NASDAQ Listing Rules.

 

(v)           Investment Company. 
The Company is not, and is not an Affiliate of, and immediately
following the Closing will not have become, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

 

12

 

(w)          Application of Takeover Protections. 
The Company has not adopted any poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the
Company’s Articles of Incorporation (or similar charter documents) or the laws
of its state of incorporation that is or could become applicable to DHW or
shareholders of the Company prior to the Closing Date as a result of DHW and
the Company fulfilling their obligations or exercising their rights under the
Transaction Documents.

 

3.2           Representations and Warranties of DHW. 
DHW hereby, for itself, and on behalf of its members, represents and
warrants to the Company as follows:

 

(a)           Organization; Authority. 
DHW is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with the requisite
corporate or partnership power and authority to enter into and to consummate
the Transactions contemplated by the Transaction Documents and otherwise to
carry out its obligations thereunder. 
The execution, delivery and performance by DHW of the Transactions
contemplated by the Transaction Documents has been duly authorized by all
necessary corporate or, if DHW is not a corporation, such partnership, limited
liability company or other applicable like action, on the part of DHW.  Each of the Transaction Documents has been
duly executed by DHW, and when delivered by DHW in accordance with terms
hereof, will constitute the valid and legally binding obligation of DHW,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

 

(b)           Investment Intent. 
DHW is acquiring the Shares as principal for its own account for
investment purposes only and not with a view to or for distributing or
reselling such Shares or any part thereof, without prejudice, however, to DHW’s
right at all times to sell or otherwise dispose of all or any part of such
Shares in compliance with applicable federal and state securities laws.  Except as provided in Section 2.5,
nothing contained herein shall be deemed a representation or warranty by DHW to
hold the Shares for any period of time. 
DHW does not have any agreement or understanding, directly or
indirectly, with any Person to distribute any of the Shares.

 

(c)           DHW Status.  At the time
DHW was offered the Shares, it was, and at the date hereof it is, an “accredited
investor” as defined in Rule 501(a) under the Securities Act.  Neither DHW nor any of its members is a
registered broker-dealer or agent thereof under Section 15 of the Exchange
Act.

 

(d)           General Solicitation. 
DHW is not purchasing the Shares as a result of any advertisement,
article, notice or other communication regarding the Shares published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.

 

(e)           Access to Information. 
DHW acknowledges that it has reviewed the Disclosure Materials and has
been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the Shares and the
merits and risks of investing in the Shares; (ii) access to information
about the Company and the Subsidiaries and their respective financial 

 

13

 

condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional
information that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to make an informed investment decision
with respect to the investment.

 

(f)            Certain Trading Activities. 
Neither DHW nor any of its members has directly or indirectly, nor has
any Person acting on behalf of or pursuant to any understanding with DHW,
engaged in any trading in any securities of the Company (including, without
limitations, any Short Sales (defined below) involving the Company’s
securities) during the 20 trading days prior to the time that the Transactions
contemplated by this Agreement are to be publicly disclosed by the
Company.  For purposes of this Section, “Short Sales” include, without limitation, all “Short Sales”
under Regulation SHO of the Exchange Act and include all types of direct and
indirect stock pledges, forward sale contracts, options, puts, calls, short
sales, swaps and similar arrangements (including on a total return basis), and
sales and other Transactions through non-US broker dealers or foreign regulated
brokers having the effect of hedging the Shares.  As of the date of this Agreement, neither DHW
nor any of its members or Affiliates has an open short position in the Common
Stock, and covenants that neither it nor any Person acting on its behalf or
pursuant to any understanding with it will engage in any Short Sales prior to
the public disclosure of the material terms of this transaction by the
Company.  For a period of one year
following the date of this Agreement, neither DHW nor any of its Affiliates
shall effect any Short Sale of any security of the Company; provided, however,
that such restriction shall cease following any repurchase by the Company of
its Shares from DHW pursuant to Section 2.5 hereof.

 

(g)           Independent Investment Decision.  DHW
has independently evaluated the merits of its decision to purchase Shares
pursuant to this Agreement, and confirms that it has not relied on the advice
of the Company or any of its advisors.

 

(h)           DHW acknowledges
that the certificates evidencing the Shares  will be
imprinted with a legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the certificates for the
Shares):

 

THESE SECURITIES HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION TO THE COMPANY FROM COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.

 

14

 

CERTAIN OF THESE SECURITIES ARE SUBJECT TO A
RIGHT OF REPURCHASE AND REDEMPTION BY GRANITE CITY FOOD & BREWERY LTD.
AND ITS SUCCESSORS AND ASSIGNS, PURSUANT TO THE TERMS OF A DEBT CONVERSION
AGREEMENT DATED SEPTEMBER 21, 2009 (THE “REPURCHASE RIGHT”).  ANY SALE, TRANSFER OR OTHER DISPOSITION OF
THESE SECURITIES SHALL BE SUBJECT TO SUCH REPURCHASE RIGHT, WHICH SHALL EXPIRE
ON
                        ,
2010, AND ANY PURPORTED SALE, TRANSFER OR OTHER DISPOSITION WHICH DOES NOT
REFERENCE THE REPURCHASE RIGHT SHALL BE NULL AND VOID.  ANY PERSON ACQUIRING ANY PORTION OF THESE
SECURITIES SHALL BE DEEMED TO HAVE ADOPTED AND BE BOUND BY SUCH REPURCHASE
RIGHTS.  A COPY OF THE DEBT CONVERSION
AGREEMENT HAS BEEN FILED BY GRANITE CITY FOOD & BREWERY LTD. WITH THE
SECURITIES AND EXCHANGE COMMISSION AND IS AVAILABLE WITHOUT CHARGE BY
CONTACTING THE CHIEF FINANCIAL OFFICER AND/OR SECRETARY OF THE COMPANY AT ITS
REGISTERED OFFICE IN THE STATE OF MINNESOTA.

 

(i)            DHW understands that nothing in this
Agreement, or any other materials presented to DHW by the Company in connection
with the purchase and sale of Shares constitutes legal, tax, accounting or
investment advice.  DHW has consulted
such legal, tax, accounting and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of Shares.

 

(j)            No representation has been made to DHW
regarding the present or future value of the Shares.

 

(k)           If required by applicable securities
legislation, regulations, rules, policies or orders or by any securities
commission, stock exchange or other regulatory authority, DHW will execute,
deliver, file and otherwise assist the Company in filing, such reports,
undertakings and other documents with respect to the issuance or continued ownership
of the Shares as may be required.

 

(l)            DHW understands and acknowledges that: (i) the
Shares are being offered and sold to it without registration under the
Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act, and (ii) the availability of such
exemption depends in part on, and the Company will rely upon the accuracy and
truthfulness of, the representations, warranties and covenants of such DHW set
forth in this Section 3.2, and such DHW hereby consents to such reliance.

 

ARTICLE IV.

OTHER AGREEMENTS AND
ACKNOWLEDGMENTS

OF THE PARTIES

 

The parties hereto agree as follows with
respect to the period between the execution of this Agreement and the Closing.

 

15

 

4.1           General.  Each of the
parties will use its reasonable commercial efforts to take all action and to do
all things necessary, proper, or advisable in order to consummate and make
effective the Transaction (including satisfaction of their respective Closing
Conditions set forth in Sections 5.2 and 5.3 hereof).

 

4.2           Deferred and Reduced Rent Payments. 
One of the Dunham Landlords is the “Landlord” under each of the leases
as described on Exhibit D (collectively, the “Restaurant
Leases”).

 

(a)           For all rent payments due on and after June 1,
2009 and until the earlier of the Financing Date (defined below), or the first
anniversary of the Closing Date under the Restaurant Leases, the Dunham
Landlords agree to defer each payment of rent once for one month (the “Deferred Rent System”). 
For example, each rent payment due on October 1, 2009 shall be
payable on November 1, 2009.

 

(b)           For all rent payments due on and after June 1,
2009 under the Restaurant Leases, the Dunham Landlords agree to reduce each rent
payment by thirty percent (30%) (the “Reduced Rent System”).  The total amount of rent reductions granted
under this Section 4.2 shall be payable by the Company as described in
subsection (c) below.

 

(c)           The Deferred Rent System and the Reduced
Rent System shall be in effect until the earlier of: (i) the date on which
the Company has obtained aggregate net proceeds of at least $2,000,000, from
any combination of debt or equity financings (the “Financing
Date”) or (ii) the first anniversary of the Closing Date.  At the earlier of the Financing Date or the
first anniversary of the Closing Date, the Company shall (i) pay the
Dunham Landlords the total amount of rent reductions granted in Section 4.2(b) above
in one lump sum, without any accrued interest.

 

4.3           Access.

 

(a)           The Company will permit, and will cause
each of its Subsidiaries to permit, representatives of DHW (including legal
counsel and accountants) to have, upon prior written notice, reasonable access
during normal business hours and under reasonable circumstances, and in a
manner so as not to interfere with the normal business operations of the
Company and its Subsidiaries, to the premises, personnel, books, records
(including tax records), contracts, and documents of or pertaining to the Company
and each of its Subsidiaries.  DHW agrees
that it shall not use or disclose, or permit access to, Confidential
Information of the Company other than for the purposes related to this
Agreement and shall cause its respective representatives and other recipients
of Confidential Information to comply with this Agreement with respect to the
Confidential Information disclosed pursuant to this Section 4.3, which
agreement and obligation will remain in full force and effect until the
Confidential Information has been publicly disclosed by the Company or ceases
to be deemed by the Company to be Confidential Information.  Notwithstanding the foregoing, DHW may share
Confidential Information with its bankers, potential lenders and potential
investors in DHW; provided that such persons are informed by DHW of the
confidential nature of the Confidential Information and DHW believes in good
faith that such persons will maintain the confidentiality of the Confidential
Information.

 

(b)           Notwithstanding anything herein to the
contrary (including in the Confidentiality Agreement), any party to this
Agreement (and each employee, representative, or other agent of such parties)
may disclose to any and all Persons, without limitation of any kind, the U.S. “tax

 

16

 

treatment” or “tax structure” (in each case, within
the meaning of Treasury Regulation section 1.6011-4) of the Transaction
and all materials of any kind (including opinions or other tax analysis) that
are provided to such parties relating to such U.S. “tax treatment” and “tax
structure” (in each case, within the meaning of Treasury Regulation
section 1.6011-4); provided, that such disclosure may not be made (i) until
the earlier of (x) the date of public announcement of discussions relating
to the Transactions, (y) the date of the public announcement of the
Transactions contemplated by this Agreement, or (z) the date of execution
of this Agreement, and (ii) to the extent required to be kept confidential
to comply with any federal or state securities law.  The intent of this provision is that the
Transaction is not treated as having been offered under conditions of
confidentiality for purposes of Treasury Regulation section 1.6011-4(b)(3) and
shall be construed in a manner consistent with such purpose.

 

4.4           Litigation.  From the date
hereof and through the Closing Date, the Company will notify DHW in writing of
any material injunctions, orders or Proceedings that from the time hereafter
are, to the Company’s Knowledge, threatened or commenced against the Company or
any of its Subsidiaries or against any officer, director or employee of the
Company or any of its Subsidiaries relating to the Company, any Subsidiary or
their respective businesses.

 

4.5           Notice of Developments. 
The Company shall promptly notify DHW of any event or occurrence that
has as its basis an event or occurrence (a “Development”)
which would cause a breach at the Closing of any of the representations and
warranties in Section 3.1 above. 
The Company and DHW shall discuss in good faith for a period of five (5) Business
Days whether to amend the material terms and provisions of this Agreement in
light of such a Development.  If no
agreement regarding an amendment is reached after said five (5) Business
Days, DHW shall have the right to give notice of termination of this Agreement
pursuant to Section 6.1(c)(i) below by reason of the Development
(provided that the Development qualifies as grounds for termination pursuant to
Section 6.1(c)(i) and delivers such notice within the period of five (5) Business
Days of the expiration of the discussion period referred to above).  The Company will then have the thirty (30)
day cure period specified in Section 6.1(c)(i).  In the event the Company elects not to cure,
and DHW elects not to terminate this Agreement at the end of said cure period,
the written notice pursuant to this Section 4.5 will be deemed to have
amended the Disclosure Materials, to have qualified the representations and
warranties contained in Article 4 above, and to have cured any
misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the Development.

 

4.6           Waiver of Approval by Company
Shareholders.

 

The Company has filed an application with
NASDAQ for a financial viability exception pursuant to NASDAQ Listing Rule 5635(f) for
a waiver of the requirement that the Company obtain shareholder approval for
the sale of securities in excess of twenty percent (20%) of its outstanding
Common Stock and for the sale of securities which would result in a change of
control of the Company.  The Company was
notified by NASDAQ by letter dated August 3, 2009, that the exception has
been granted.

 

4.7           Alternative Transaction.  From the date
hereof until the termination hereof, the Company and its officers, directors,
employees, investment bankers, consultants and other agents, may take any
action to solicit, initiate, encourage or facilitate the making of any
Alternative Proposal (as defined below) or any inquiry with respect thereto or
engage in 

 

17

 

discussions or negotiations with any Person with
respect thereto, or disclose any nonpublic information relating to the Company
or any of its Subsidiaries or afford access to the properties, books or records
of the Company or any of its Subsidiaries to, any Person that has made any
Alternative Proposal.  The Company will
promptly notify DHW (which notice shall be provided orally and in writing,
shall identify the Person making such Alternative Proposal and shall include a
copy of any written document setting forth the proposed terms of such
Alternative Proposal provided to the Company by such Person) after receipt of
any Alternative Proposal, but in no event more than forty-eight (48) hours after
receipt of an Alternative Proposal, if the Company is prepared to provide such
Person with access to such nonpublic information or properties, books or
records.

 

If the Board of Directors
of the Company shall determine that an Alternative Proposal is a Superior
Proposal (as defined below), (a) the Company shall notify DHW in writing
of such determination (prior to any communication of such fact to the Person
making the Alternative Proposal), and (b) the Company shall provide DHW
with copies of any written nonpublic information about the Company’s business
provided by the Company to the Person making the Alternative Proposal and any
written modifications to the initial Alternative Proposal provided by such
Person to the Company.  If the Board of
Directors of the Company shall determine, after consulting with its legal
counsel and receiving the written opinion of its financial advisor, that the
Alternative Proposal is a Superior Proposal, the Company may terminate this
Agreement as provided in Section 6.1(d).

 

For purposes of this
Agreement, “Alternative Proposal” means any
written offer or proposal for, or any indication of interest in, a merger or
other business combination involving the Company or any of its Subsidiaries or
the acquisition of a majority of the equity in, or all or substantially all of
the assets of, the Company, other than the Transaction.  For purposes of this Agreement, “Superior Proposal” means any bona fide Alternative Proposal
on terms that the Board of Directors of the Company determines in its good
faith judgment (based on the advice of the Company’s financial advisor and
legal counsel, taking into account all the terms and conditions of the
Alternative Proposal, including any break up fees, expense reimbursement
provisions and conditions to consummation) are more favorable to the Company’s
shareholders than this Agreement and the Transaction taken as a whole.

 

4.8           Deliveries to be Made at the Closing.

 

(a)           Company Deliverables.  At the
Closing, the Company shall deliver to DHW the following Company Deliverables:

 

(i)            a certificate of the Company to the
effect that each of the conditions specified in Sections 5.3 are satisfied in
all respects;

 

(ii)           certificates (or copies thereof)
evidencing the Shares, in such denominations as DHW informs the Company at
least forty-eight (48) hours prior to the Closing, registered in the name of
DHW or its nominee;

 

(iii)          certificates of good standing or their
equivalent for the Company and each of its Subsidiaries, issued by the
Secretary of State or similar official of the state of incorporation;

 

18

 

(iv)          a certificate of the Secretary of the
Company that the Company has received a waiver from NASDAQ of the shareholder
approval requirement;

 

(v)           evidence that Steven J. Wagenheim, James
G. Gilbertson and Darius H. Gilanfar have entered into the amendments to their
employment agreements in the form of Exhibits E, F and G, respectively;

 

(vi)          the written consents and approvals set
forth in Schedule 3.1(e);

 

(vii)         a waiver and consent from Harmony Equity
Income Fund and Harmony Equity Income Fund II with respect to certain
covenants, restrictions and provisions set forth in the Company’s Bridge Loan
Agreement dated March 30, 2009;

 

(viii)        a certificate of the Chairman and
Secretary of the Company certifying that: 
(a) two of the Company’s incumbent directors have resigned from the
Company’s Board of Directors effective upon the Closing of the Transaction;
that the Company’s Board of Directors has been increased to seven persons; (b) that
the Board of Directors has resolved to fill the vacancies resulting from such
resignations and additional director positions with the DHW Nominees, as
defined in Section 4.11, contingent upon Closing the Transaction; and (c) that
the Company’s Board of Directors, or a committee thereof, have approved this
Agreement and the execution and delivery thereof;

 

(ix)           Registration Rights Agreement in the form
of Exhibit C hereto;

 

(x)            a certificate of the Chairman and
Secretary of the Company to the effect that the Audit Committee of the Company’s
Board of Directors has approved the Transaction pursuant to Minnesota Business
Corporation Act and NASDAQ Marketplace Rules (if applicable); and

 

(xi)           An amendment to each Restaurant Lease
reflecting the 2009 and 2010 rent concessions and the reduced Initial Term of
each location; and

 

(xii)          Amendment to Master Agreement in the form
attached hereto as Exhibit A.

 

(b)           DHW Deliverables.  At the
Closing, DHW shall deliver to the Company the following:

 

(i)            a certificate of the Company to the
effect that each of the conditions specified in Section 5.2 is satisfied
in all respects;

 

(ii)           Termination of Equipment Lease and Bill
of Sale in the form attached hereto as Exhibit B; and other
instruments of conveyance to the Company, free and clear of all Liens, good
title, ownership to, and possession of, all tangible and intangible property
that is subject to Equipment Lease;

 

(iii)          Registration Rights Agreement in the form
attached hereto as Exhibit C;

 

19

 

(iv)          Amendment to Master Agreement in the form
attached hereto as Exhibit A;

 

(v)           An amendment to each Restaurant Lease
reflecting the 2009 and 2010 rent concessions and the reduced Initial Term of
each location; and

 

(vi)          Master Amendment to Leases in the form
attached hereto as Exhibit J relating to the deferred and reduced
rent payments under the Restaurant Leases and the waiver of any defaults under
the Restaurant Leases.

 

4.9           Securities Laws Matters.

 

(a)           Resale of Shares. 
Subject to the terms of this Agreement, the Shares may be disposed of in
compliance with state and federal securities laws.  In connection with any transfer of the Shares
other than pursuant to an effective registration statement, the Company may
require the transferor thereof, at its expense, to provide to the Company an
opinion of counsel selected by the transferor, the form and substance of which
opinion shall be reasonably satisfactory to the Company, to the effect that
such transfer does not require registration of such transferred Shares under
the Securities Act.

 

(b)           Furnishing of Information. 
As long as DHW owns at least ten percent of the Company’s outstanding
Common Stock, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act.  As long as DHW owns
Shares, if the Company is not required to file reports pursuant to such laws,
it will prepare and furnish to DHW and make publicly available in accordance
with Rule 144(c) such information as is required for DHW to sell the
Shares under Rule 144.  The Company
further covenants that it will take such further action as any holder of Shares
may reasonably request, all to the extent required from time to time to enable
such Person to sell the Shares without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144.

 

4.10         Participation Rights. 
If at any time prior to the two-year anniversary of the Closing Date,
the Company proposes to issue any Common Stock or securities convertible into
or exercisable for Common Stock in a private placement transaction
(collectively, “New Issue Shares”), DHW shall
have a right to purchase, at the time or times of the issuance of any New Issue
Shares, up to that number of New Issue Shares which, when added to the number
of Shares then held by DHW, on a post-issuance basis, shall constitute the same
percentage of the Company’s outstanding shares of voting stock as the
percentage held by DHW prior to the issuance of New Issue Shares  (“DHW’s Proportionate Share”).

 

(a)           The Company shall, on a confidential
basis, give a written notice to DHW (the “Notice”) stating
(i) its intention to issue the New Issue Shares, (ii) the number and
description of the New Issue Shares proposed to be issued and (iii) the
purchase price (calculated as of the proposed issuance date) and (iv) the
other terms and conditions upon which the Company is offering the New Issue
Shares.

 

(b)           For a period of ten (10) Business
Days after receipt of the of the Notice, DHW shall have the option, exercisable
by written notice to the Company, to purchase all or any part of 

 

20

 

DHW’s Proportionate Share of the New Issue Shares, in
accordance with the terms and conditions of the Notice, and subject to the
closing of the sale of the New Issue Shares. 
If two or more types of New Issue Shares are to be issued or New Issue
Shares are to be issued together with other types of securities, including,
without limitation, debt, in a single transaction or related Transactions, the
rights to purchase New Issue Shares granted to DHW under this Section must
be exercised to purchase all types of New Issue Shares and such other
securities in the same proportion as such New Issue Shares and other securities
are to be issued by the Company.

 

(c)           The participation rights contained in
this Section shall not apply to the issuance and sale by the Company of (i) New
Issue Shares to employees, officers, or directors of the Company, as
compensation for their services to the Company or any of its direct or indirect
Subsidiaries pursuant to arrangements approved by the Board of Directors of the
Company and consistent with past practice, (ii) New Issue Shares pursuant
to the Transaction Documents, (iii) New Issue Shares issued as
consideration for the acquisition of another company or business in which the
shareholders of the Company do not have an ownership interest, which
acquisition has been approved by the Board of Directors of the Company, or (iv) or
the issuance of New Issue Shares pursuant to the exercise of conversion or
purchase rights pursuant to issued and outstanding convertible securities,
options or warrants.

 

4.11         Board Composition; Board Observers. 
DHW has designated to the Company’s Corporate Governance and Nominating
Committee (the “Committee”) four persons (the “DHW Nominees”) to serve on the Company’s Board of
Directors, commencing upon the Closing Date. 
No more than one of the DHW Nominees will be affiliated with DHW or its
Affiliates and at least two of the DHW Nominees will be “independent directors”
under NASDAQ Listing Rules.  As a
condition to the Closing, two of the Company’s five incumbent directors shall
resign from the Company’s Board of Directors, to be effective upon the
Closing.  DHW agrees that it may exercise
its nomination right only once, except that if any of the DHW Nominees resign
from the Company’s Board of Directors before the Company’s 2010 annual meeting
of shareholders, the Company agrees that DHW may designate a successor director
for nomination by the Committee and appointment to the Company’s Board of
Directors, and the Company will use reasonable commercial efforts to cause the
Committee to recommend such successor to fill such vacancy and to cause its
Board of Directors to elect such successor, all subject to the exercise of
their fiduciary duties to the Company.

 

It shall be a condition to the obligations of
DHW under this Agreement that the Committee shall approve the nomination of the
DHW Nominees and the Board of Directors shall increase the number of directors
of the Company from five to seven persons; two of the Company’s five incumbent
directors shall have resigned; and subject to the Closing, the Board of
Directors shall have elected the DHW Nominees to fill the vacancies on the
Board of Directors.

 

The Company further agrees
that for as long as DHW owns at least 25% of the Shares, it may designate up to
two representatives of DHW who shall be invited to attend regularly scheduled
Board meetings as observers.  Such
observers may be excluded from all or any portion of a meeting where their presence
could reasonably result in (i) the disclosure of trade secrets or other
Confidential Information to a competitor; or (ii) the loss of the
attorney-client privilege.  All such
observers shall enter into a confidentiality agreement with the Company prior
to exercising their observation rights. 
Subject to the immediately preceding sentence, such 

 

21

 

observers
shall be entitled to receive all materials provided to Board members and shall
be invited to attend all Board training and education sessions.

 

4.12         Employment Agreement Amendments. 
The Company will offer to Stephen J. Wagenheim, James G. Gilbertson and
Darius Gilanfar one-year employment agreements in the form of amendments to
their employment agreements attached hereto as Exhibits C, D and E,
respectively, (the “Employment Agreement Amendments”) and enter into such
agreements effective on the Closing Date.

 

ARTICLE V.

CONDITIONS PRECEDENT TO CLOSING

 

5.1           Conditions to Obligations of Each Party
Under this Agreement.  The respective obligations of each party to
this Agreement to effect the Transaction shall be subject to the satisfaction
at or prior to the Closing Date of the following conditions, any or all of
which may be waived, in whole or in part, to the extent permitted by Applicable
Law.

 

(a)           Approval by NASDAQ. 
NASDAQ shall have approved a financial viability exception under NASDAQ
Listing Rule 5635(f) for the Transaction, which approval shall not
have been revoked, and waived the requirement for shareholder approval of the
Transaction.

 

(b)           Proceedings. 
There shall not be any (i) Proceedings which have been commenced
against any of the parties hereto by any Person involving or affecting in any
way the consummation of the Transaction, or (ii) Applicable Laws, orders
or injunctions restraining or enjoining the consummation of the Transaction.

 

(c)           Consents.  The Company
and DHW shall have received evidence, in form and substance reasonably
satisfactory to DHW and the Company, that all Consents, waivers, releases,
authorizations, approvals, licenses, certificates, Permits and franchises of
all Persons (including each and every applicable Governmental Authority) set
forth in Schedule 3.1(e) have been obtained.  All consents of a Governmental Authority
shall be by Final Order; provided, however, that if the parties
hereto waive the condition of any Governmental Authority consent by Final
Order, the parties shall consider the Governmental Authority consent without
Final Order sufficient to proceed to Closing according to the other terms of
this Agreement.

 

5.2           Conditions Precedent to the Obligations
of DHW.  The obligations of DHW under this Agreement
subject to the satisfaction or waiver by DHW, at or before the Closing, of each
of the following conditions:

 

(a)           Representations and Warranties. 
The representations and warranties of the Company contained herein shall
be true and correct in all material respects as of the date when made and as of
the Closing as though made on and as of such date;

 

(b)           Performance. 
The Company shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by it at or
prior to the Closing;

 

(c)           No Injunction. 
No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or 

 

22

 

Governmental Authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;

 

(d)           Adverse Changes. 
Since the date of execution of this Agreement, no event or series of
events shall have occurred that reasonably could have or result in a Material
Adverse Effect;

 

(e)           No Suspensions of Trading in Common
Stock; Listing.  Trading in the Common Stock shall not have
been suspended by the Commission or any trading market (except for any
suspensions of trading of not more than one trading day solely to permit
dissemination of material information regarding the Company) at any time since
the date of execution of this Agreement, and the Common Stock shall have been
at all times since such date listed for trading on a trading market;

 

(f)            Company Deliverables.  The
Company shall have delivered the Company Deliverables in accordance with Section 4.8(a);

 

(g)           Officer’s Closing Certificate. 
The Company shall have delivered to DHW an officer’s certificate to the
effect that each of the conditions specified in Sections 5.1(a) - 5.1(d) is
satisfied in all respects; and

 

(h)           Third Party
Consents and Agreements.  DHW
shall have obtained the third party consents and agreements set forth in Exhibit
I.

 

5.3           Conditions Precedent to the Obligations
of the Company.  The obligation of the Company under this
Agreement to sell Shares is subject to the satisfaction or waiver by the
Company at or before the Closing, of each of the following conditions:

 

(a)           Representations and Warranties. 
The representations and warranties of DHW contained herein shall be true
and correct in all material respects as of the date when made and as of the
Closing as though made on and as of such date;

 

(b)           Performance. 
DHW shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by DHW at or
prior to the Closing;

 

(c)           No Injunction. 
No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or Governmental Authority of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by the Transaction
Documents;

 

(d)           Fairness Opinion. 
Prior to the execution and delivery of this Agreement, the Company has
received a written opinion of KeyBanc Capital Markets to the effect that as of
the date of its opinion and based upon and subject to the matters set forth
therein, the consideration to be received by the Company pursuant to this
Agreement is fair from a financial point of view to the Company, and such
opinion has not been withdrawn or revoked or otherwise modified in any material
respect. The Company will provide to DHW a copy of the opinion promptly after
the date of this Agreement solely for information purposes.

 

(e)           Cancellation of Indebtedness. 
DHW shall have executed and delivered to the Company the Termination of
Equipment Lease and Assignment and Bill of Sale and such 

 

23

 

additional agreements or other documentation as the
Company may reasonably require to cause the cancellation of the Indebtedness in
accordance with Section 2.3; and

 

(f)            DHW Deliverables. 
DHW shall have delivered the DHW Deliverables in accordance with Section 4.8(b).

 

ARTICLE VI.

TERMINATION

 

6.1           Termination of Agreement. 
The parties may terminate this Agreement as provided below:

 

(a)           DHW and the Company may terminate this
Agreement by mutual written consent at any time prior to the Closing;

 

(b)           DHW or the Company may terminate this
Agreement without liability by giving written notice to the other party prior
to the Closing if (i) the consummation of the Transaction is permanently
prohibited by any Applicable Law, injunction or order; provided that the
party seeking to terminate this Agreement shall not have proximately
contributed to the issuance of such injunction or order by breach of the terms
of this Agreement or by a violation of Applicable Law, or (ii) the Closing
shall not have occurred on or before November 30, 2009; provided, however,
no such right of the terminating party shall exist in the event that the
parties’ failure to consummate the Closing by November 30, 2009 results
primarily from a breach of any representation, warranty or covenant contained
in this Agreement by the terminating party;

 

(c)           DHW may terminate this Agreement by
giving written notice to the Company at any time prior to the Closing in the
event (i) the Company has breached any representation, warranty, or
covenant contained in this Agreement in any material respect, DHW has notified
the Company of the breach, and the breach has continued without cure (such cure
to be to the reasonable satisfaction of DHW) for a period of thirty (30) days
after the notice of breach and results in a Material Adverse Effect on the
Company and its Subsidiaries, taken as a whole, or (ii) the Board of
Directors of the Company shall have received an Alternative Proposal, and such
Board of Directors:  (i) has
determined that such Alternative Proposal is a Superior Proposal in accordance
and in compliance with Section 4.7 of this Agreement; or (ii) has
recommended to the Company’s Shareholders any Superior Proposal; and

 

(d)           The Company may terminate this Agreement
by giving written notice to DHW at any time prior to the Closing in the event (i) DHW
has breached any representation, warranty, or covenant contained in this
Agreement in any material respect, the Company has notified DHW of the breach,
and the breach has continued without cure (such cure to be to the reasonable
satisfaction of the Company) for a period of thirty (30) days after the notice
of breach, or (ii) the Board of Directors of the Company shall have
received an Alternative Proposal which such Board of Directors has determined
is a Superior Proposal in accordance and in compliance with Section 4.7 of
this Agreement; provided, however, that, in the case of (ii) above,
the Company shall have paid the Termination Fee and Termination Expense
payments to DHW required by Section 6.2(b) in order for this
Agreement to be fully and finally terminated.

 

24

 

The party desiring to terminate this
Agreement pursuant to this Article 6 shall give written notice of such
termination to the other party in accordance with Section 7.3 below,
specifying the provision of this Article VI pursuant to which such
termination is effected.

 

6.2           Effect of Termination.

 

(a)            General.  Except as set
forth in Section 6.2(b) below, if any party terminates this Agreement
pursuant to Section 6.1 above, all rights and obligations of the parties
hereunder shall terminate without any liability of any party to any other party
(except for any liability of any party then in willful breach); provided,
however, that the provisions for confidentiality provided in Section 4.3(a) hereof
shall survive termination.

 

(b)            Termination Payment. 
If (i) the Company shall terminate this Agreement pursuant to Section 6.1(d)(ii) of
this Agreement, or (ii) DHW shall terminate this Agreement pursuant to Section 6.1(c)(ii) of
this Agreement, and in either such case DHW at such time is not in material
breach of its representations, warranties or covenants under this Agreement,
the Company shall remit to DHW (A) an amount equal to Fifty Thousand
Dollars ($50,000.00) (the “Termination Fee”)
by wire transfer of immediately available funds not later than five (5) Business
Days after is given or received by the Company, and (B) an amount equal to
the reasonable documented out-of-pocket costs and expenses of DHW in connection
with the Transactions in an amount not to exceed One Hundred Fifty Thousand
Dollars ($150,000.00) (the “Termination Expenses”)
by wire transfer of immediately available funds not later than the later of (x) five
(5) Business Days after termination of this Agreement, or (y) five (5) Business
Days after receipt from DHW of such documented Termination Expenses.  Acceptance by DHW of the payment of the
Termination Fee and the Termination Expenses shall constitute conclusive
evidence that this Agreement has been validly terminated and, upon such
acceptance, the Company shall be deemed fully released and discharged from any
further liability under this Agreement.

 

ARTICLE VII.

MISCELLANEOUS

 

7.1           Fees and Expenses. 
Each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of the Transaction Documents.

 

7.2           Entire Agreement. 
The Transaction Documents, together with the Schedules thereto, contain
the entire understanding of the parties with respect to the subject matter
hereof and supersede all prior agreements, understandings, discussions and
representations, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits and schedules.

 

7.3           Notices.  Any and all
notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (a) the date of transmission, if such notice or communication
is delivered via facsimile (provided the sender receives a machine-generated
confirmation of successful transmission) at the facsimile number specified in
this Section prior to 6:00 p.m. (Minneapolis time) on a Trading Day, (b) the
next Trading Day after the date of transmission, if such notice or 

 

25

 

communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading
Day or later than 6:00 p.m. (Minneapolis time) on any Trading Day, (c) the
Trading Day following the date of mailing, if sent by a U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the
party to whom such notice is required to be given.  The address for such notices and
communications shall be as follows:

 

	
  If to the Company:

  	
  Granite City Food & Brewery Ltd.

  
	
   

  	
  5402 Parkdale Drive, Suite 101

  
	
   

  	
  Minneapolis, MN 55416

  
	
   

  	
  Facsimile: (952) 215-0671

  
	
   

  	
  Attention: Chief Financial Officer

  
	
   

  	
   

  
	
  With a copy to:

  	
  Briggs and Morgan, P.A.

  
	
   

  	
  2200 IDS Center

  
	
   

  	
  80 South Eighth Street

  
	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
  Facsimile: (612) 977-8650

  
	
   

  	
  Attention: Avron L. Gordon, Esq.

  
	
   

  	
   

  
	
  If to DHW:

  	
  Dunham Capital Management, L.L.C.

  
	
   

  	
  The Dunham Company

  
	
   

  	
  230 South Phillips Avenue, Suite 202

  
	
   

  	
  Sioux Falls, SD 57104-6321

  
	
   

  	
  Facsimile: (605) 330-9444

  
	
   

  	
  Attention: Donald A. Dunham, Jr. and Nancy Hughes

  
	
   

  	
   

  
	
  With a copy to:

  	
  Leonard Street and Deinard

  
	
   

  	
  150 South Fifth Street, Suite 2300

  
	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
  Facsimile: (612) 335-1657

  
	
   

  	
  Attention: Mark S. Weitz, Esq.

  
	
   

  	
   

  
	
   

  	
  Hagen, Wilka & Archer, LLP

  
	
   

  	
  600 South Main Avenue, Suite 102

  
	
   

  	
  P.O. Box 964

  
	
   

  	
  Sioux Falls, SD 57104

  
	
   

  	
  Facsimile: (605) 334-4814

  
	
   

  	
  Attention: John F. Archer, Esq.

  

 

7.4           Amendments; Waivers; No Additional
Consideration.  No provision of this Agreement or any other
Transaction Document may be waived or amended, and no consent may be given,
except in a written instrument signed by the Company and DHW.  No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right. 
The Company may rely upon the consent of DHW to any waiver, consent or
amendment to any Transaction Document, even if DHW transfers any of the Shares
to third parties; provided that if 

 

26

 

more than 50% of the Shares shall be transferred by
DHW to third parties, the Company may also rely upon the waiver, consent
or amendment approved by the holder of a majority of the Shares.

 

7.5           Successors and Assigns. 
This Agreement shall be binding upon and inure to the benefit of the
parties and their successors and assigns.

 

7.6           No Third-Party Beneficiaries. 
This Agreement is intended for the benefit of the parties hereto and
their respective successors and permitted assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person.

 

7.7           Governing Law. 
All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Minnesota,
without regard to the principles of conflicts of law thereof.  Each party agrees that all Proceedings
concerning the interpretations, enforcement and defense of the Transactions
contemplated by this Agreement and any other Transaction Documents (whether
brought against a party hereto or its respective Affiliates, employees or
agents) shall be commenced exclusively in the state or federal courts of
Minnesota.  Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the state or federal
courts of Minnesota for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of the any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any
Proceeding, any claim that it is not personally subject to the jurisdiction of
any such Minnesota court, or that such Proceeding has been commenced in an
improper or inconvenient forum.  Each
party hereto hereby irrevocably waives personal service of process and consents
to process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.  If either party
shall commence a Proceeding to enforce any provisions of a Transaction
Document, then the prevailing party in such Proceeding shall be reimbursed by
the other party for its reasonable attorneys’ fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such
Proceeding.

 

7.8           Dispute Resolution.  In the event a dispute arises under this
Agreement, such disputes shall be resolved in the manner set forth in this Section 7.8.

 

(a)            If a dispute arises under this Agreement,
including any question regarding the existence, validity, interpretation or
termination hereof, DHW or the Company may invoke the dispute resolution
procedure set forth below by giving written notice to the other party.  The parties shall enter into discussions
concerning this dispute.

 

(b)            If the dispute is not resolved as a
result of such discussion within ten (10) days after such written notice,
the matter shall be submitted for, subject to and decided by binding
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association currently in effect as of the date of this
Agreement (“AAA Rules”), except to
the extent those rules are inconsistent with this Section 7.8.  Any arbitration must be held in 

 

27

 

Minneapolis, Minnesota by a single arbitrator mutually
selected by the parties hereto or, if the parties hereto cannot agree on the
appointment of such arbitrator within fifteen (15) days following the date
notice of the dispute is given by a party to the adverse party, an arbitrator
selected according to the AAA Rules.  The
arbitrator or the arbitrator’s designee shall have full access to such records
and physical facilities of the parties hereto as may be required by such
arbitrator.  The arbitrator’s award shall
be final, conclusive and binding upon all parties to this Agreement, and
judgment may be entered upon it in accordance with the Federal Arbitration Act
in any court of general jurisdiction or in any United States District Court;
provided, however, that the arbitrator shall have no authority to award
consequential or punitive damages, but only those damages that are natural,
probable and reasonably foreseeable from a breach by a party.  The arbitrator shall be required to provide
in writing to the parties the basis for the award or order of such arbitrator,
and a court reporter shall record all hearings (unless otherwise agreed to by
the parties), with such record constituting the official transcript of such
Proceedings.  DHW and the Company
specifically desire this arbitration clause to be governed by the United States
Federal Arbitration Act, and not by the arbitration laws of any state.

 

(c)            The parties hereto agree and consent that
any legal action, suit or Proceeding seeking to enforce this Section 7.8
or to confirm or contest any arbitration award shall be instituted and
adjudicated solely and exclusively in any court of general jurisdiction in
Minneapolis, Minnesota, or in the United States District Court for the District
of Minnesota, and the parties hereto agree that venue will be proper in such
courts and waive any objection which they may have now or hereafter to the
venue of any such Proceeding in such courts, and irrevocably consent and agree
to the jurisdiction of said courts in any such Proceeding.  Each of the parties hereto further agrees to
accept and acknowledge service of any and all process which may be served in
any such Proceeding in said courts, and also agrees that service of process or
notice upon them shall be deemed in every respect effective service of process
or notice upon them, in any Proceeding or arbitration demand, if given or
made:  (i) according to Applicable
Law, (ii) according to the AAA Rules, (iii) by a Person over the age
of eighteen who personally serves such notice or service of process on the
applicable party(ies) hereto, or (iv) by certified mail, return receipt
requested, mailed to the applicable party(ies) hereto, at their respective
addresses set forth in this Agreement.

 

(d)            In the event of arbitration filed or
instituted between or among the parties pursuant to this Section 7.8, the
prevailing party will be entitled to receive from the adverse party all costs,
damages and expenses, including reasonable attorney’s fees, incurred by the
prevailing party in connection with that action or Proceeding, whether or not
the controversy is reduced to judgment or award.  The prevailing party will be that party who
is determined by the arbitrator to have prevailed on the major disputed issues;
provided, however, that if there shall be no prevailing party in
such arbitration, then such costs and expenses shall be apportioned among the
parties by such arbitrator in accordance with the arbitrator’s determination of
the merits of their respective positions.

 

7.9           Survival.  The
representations, warranties, agreements and covenants contained in this
Agreement shall survive the Closing and the delivery of the Shares for a period
of six (6) months; except that (a) the agreements and covenants in
the following Sections shall survive for a period of twenty-four (24)
months:  4.9, 4.10, 7.7, and 7.8; (b) the
agreements and covenants in Sections 2.5 and 7.14 shall survive for twelve (12)
months; and (c) the agreements and covenants in Section 4.11 shall
only be effective during the period prior to the Company’s next Annual 

 

28

 

Meeting of Shareholders, and Section 4.11 shall
not apply to the Company, its Board of Directors, or any shareholder with
respect to the making of nominations or preparing proxy statements in advance
of such next Meeting.  The
representations, warranties, agreements and covenants contained in any other
Transaction Document shall survive in accordance with their terms.  The termination of any of the foregoing
survival periods shall not prevent a party from enforcing any legal right or
remedy for a breach of a representation, warranty, agreement or covenant,
provided that written notice of a breach thereof was given to the other party
in the manner prescribed by Section 7.3, prior to such termination.

 

7.10         Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.

 

7.11         Severability. 
If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

 

7.12         Construction.  The parties have participated jointly in the
negotiation and drafting of this Agreement. 
In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this
Agreement.  The words “including,” “include”
or “includes” shall mean including without limitation.  The parties intend that each representation,
warranty and covenant contained herein shall have independent
significance.  If any party has breached
any representation, warranty or covenant contained herein in any respect, the
fact that there exists another representation, warranty or covenant relating to
the same subject matter (regardless of the relative levels of specificity)
which the party has not breached shall not detract from or mitigate the fact
that the party is in breach of the first representation, warranty or covenant.

 

7.13         Incorporation of Recitals, Exhibits
and Schedules.  The Recitals,
Exhibits and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.

 

7.14         Specific Performance.  The parties hereto agree that if any of the
provisions of this Agreement or any other document contemplated by this
Agreement were not performed in accordance with their specific terms or were
otherwise breached, irreparable damage would occur, no adequate remedy at law would
exist and damages would be difficult to determine, and, therefore, the parties
shall be entitled to seek specific performance of the terms hereof and thereof,
in addition to any other remedy at law or in equity.

 

29

 

IN WITNESS WHEREOF, the
parties hereto have caused this Debt Conversion Agreement to be duly executed
by their respective authorized signatories as of the date first indicated
above.

 

	
   

  	
  GRANITE
  CITY FOOD & BREWERY LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steven J. Wagenheim

  
	
   

  	
   

  	
  Name: Steven
  J. Wagenheim

  
	
   

  	
   

  	
  Title: President
  of Granite City Food & Brewery, Ltd.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DHW
  LEASING, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Donald A. Dunham, Jr. 

  
	
   

  	
   

  	
  Name:
  Donald A. Dunham, Jr.

  
	
   

  	
   

  	
  Title:  DHW
  Leasing, L.L.C.

             Managing
  Member

  

 

30

 

EXHIBITS

 

	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  Form
  of Amendment No. 1 to Master Agreement

  
	
   

  	
   

  	
   

  
	
  B

  	
   

  	
  Form of
  Termination of Equipment Lease and Bill of Sale

  
	
   

  	
   

  	
   

  
	
  C

  	
   

  	
  Form of
  Registration Rights Agreement

  
	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  Restaurant
  Leases

  
	
   

  	
   

  	
   

  
	
  E

  	
   

  	
  Form of
  Amendment to Employment Agreement of Steven J. Wagenheim

  
	
   

  	
   

  	
   

  
	
  F

  	
   

  	
  Form of
  Amendment to Employment Agreement of James G. Gilbertson

  
	
   

  	
   

  	
   

  
	
  G

  	
   

  	
  Form of
  Amendment to Employment Agreement of Darius Gilanfar

  
	
   

  	
   

  	
   

  
	
  H

  	
   

  	
  Form of
  Waiver of Default and Certain Covenants from Harmony Equity Income Fund
  L.L.C. and Harmony Equity Income Fund L.L.C. II dated
                
      , 2009.

  
	
   

  	
   

  	
   

  
	
  I

  	
   

  	
  DHW
  Third-Party Consents and Agreements

  
	
   

  	
   

  	
   

  
	
  J

  	
   

  	
  Form of Master Amendment to Leases

  

 

31

 

Exhibit A

 

MASTER
AGREEMENT

AMENDMENT NO. 1

 

AMENDMENT
NO. 1 TO MASTER AGREEMENT entered into this
       day of
                                ,
2009, by and between DUNHAM CAPITAL MANAGEMENT,
L.L.C., DHW LEASING, L.L.C.,
and DUNHAM EQUITY MANAGEMENT, L.L.C., all
South Dakota limited liability companies with a business address of 230 South
Phillips Avenue, Suite 202, Sioux Falls, South Dakota 57104 (individually
referred to as “DCM,” “DHW,” and “DEM,” and collectively referred to as the “Dunham
Entities” or “Dunham”); and GRANITE CITY FOOD &
BREWERY LTD, a Minnesota corporation (“Corporation” or “Granite City”).

 

W I T N E S S
E T H:

 

WHEREAS, the Dunham
Entities and the Corporation entered into a Master Agreement on February 7,
2009 (the “Master Agreement”);

 

WHEREAS, the parties
hereto have concurrently entered into a Debt Conversion Agreement and have
agreed in connection therewith to amend this Master Agreement.

 

NOW,
THEREFORE, the parties hereto agree as follows:

 

1.             Aggregate
Rent Reductions.  Section 1
is hereby amended and restated as follows:

 

“The Dunham
Entities hereby (i) agree to provide aggregate rent reductions to the
Corporation in calendar year 2009 in the amounts specified on the attached Exhibit A,
(ii) agree to provide the rent reductions in the calendar year 2010 in the
amounts specified on the attached Exhibit A, and (iii) agree
to use reasonable commercial efforts to obtain additional rent reductions to
achieve a total of $1,700,000 in rent reductions for the calendar year 2010,
including the rent reductions referred to in (ii).” 

 

2.             Effect of
Amendment.  All remaining
terms of the Master Agreement shall remain in full force and effect.

 

A-1

 

IN
WITNESS WHEREOF, the parties have executed this Amendment No. 1
to Master Agreement effective the date first above written.

 

	
   

  	
  DHW
  LEASING, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DUNHAM
  CAPITAL MANAGEMENT, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DUNHAM
  EQUITY MANAGEMENT, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GRANITE
  CITY FOOD & BREWERY LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  

 

A-2

 

EXHIBIT A

 

See Attached.

 

A-3

 

Granite City Food & Brewery

Building/Land Leases

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2009

  	
   

  	
  2009

  	
   

  	
  2010

  	
   

  	
  2010

  	
   

  
	
   

  	
   

  	
  2008

  	
   

  	
  2008

  	
   

  	
  Average

  	
   

  	
  Average

  	
   

  	
  Average

  	
   

  	
  Average

  	
   

  
	
   

  	
   

  	
  Monthly

  	
   

  	
  Yearly

  	
   

  	
  Monthly

  	
   

  	
  Yearly

  	
   

  	
  Monthly

  	
   

  	
  Yearly

  	
   

  
	
   

  	
   

  	
  Payments

  	
   

  	
  Payments

  	
   

  	
  Payments (1)

  	
   

  	
  Payments (1)

  	
   

  	
  Payments (1)

  	
   

  	
  Payments (1)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Non-Dunham Leases

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sioux Falls

  	
   

  	
  $

  	
  25,431.38

  	
   

  	
  $

  	
  305,176.56

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  258,000.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  258,000.00

  	
   

  
	
  St. Louis Park

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  148,625.04

  	
   

  	
  $

  	
  9,885.35

  	
   

  	
  $

  	
  118,624.24

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  148,625.04

  	
   

  
	
  W. Wichita

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  315,000.00

  	
   

  	
  $

  	
  17,250.00

  	
   

  	
  $

  	
  207,000.00

  	
   

  	
  $

  	
  27,500.00

  	
   

  	
  $

  	
  330,000.00

  	
   

  
	
  St. Cloud

  	
   

  	
  $

  	
  21,310.97

  	
   

  	
  $

  	
  255,731.64

  	
   

  	
  $

  	
  19,830.71

  	
   

  	
  $

  	
  237,968.46

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  269,059.56

  	
   

  
	
  Cedar Rapids

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  315,000.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  315,000.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  315,000.00

  	
   

  
	
  E. Peoria

  	
   

  	
  $

  	
  39,025.00

  	
   

  	
  $

  	
  468,300.00

  	
   

  	
  $

  	
  32,229.51

  	
   

  	
  $

  	
  386,754.13

  	
   

  	
  $

  	
  34,814.24

  	
   

  	
  $

  	
  417,770.86

  	
   

  
	
  Fargo

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  72,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  72,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  72,000.00

  	
   

  
	
  Orland Park

  	
   

  	
  $

  	
  45,062.50

  	
   

  	
  $

  	
  540,750.00

  	
   

  	
  $

  	
  29,192.71

  	
   

  	
  $

  	
  350,312.52

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  300,000.00

  	
   

  
	
  Maple Grove

  	
   

  	
  $

  	
  30,625.00

  	
   

  	
  $

  	
  367,500.00

  	
   

  	
  $

  	
  27,708.33

  	
   

  	
  $

  	
  332,500.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  307,500.00

  	
   

  
	
  Legends

  	
   

  	
  $

  	
  33,687.50

  	
   

  	
  $

  	
  404,250.00

  	
   

  	
  $

  	
  26,786.42

  	
   

  	
  $

  	
  321,437.04

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  299,823.84

  	
   

  
	
  Total  

  	
   

  	
  $

  	
  266,027.77

  	
   

  	
  $

  	
  3,192,333.24

  	
   

  	
  $

  	
  216,633.03

  	
   

  	
  $

  	
  2,599,596.39

  	
   

  	
  $

  	
  226,481.61

  	
   

  	
  $

  	
  2,717,779.30

  	
   

  
	
  Savings from 2008

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  592,736.85

  	
   

  	
   

  	
   

  	
  $

  	
  474,553.94

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dunham Leases

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Des Moines

  	
   

  	
  24,500.00

  	
   

  	
  $

  	
  294,000.00

  	
   

  	
  $

  	
  9,483.33

  	
   

  	
  $

  	
  113,800.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  102,000.00

  	
   

  
	
  Davenport

  	
   

  	
  28,437.50

  	
   

  	
  $

  	
  341,250.00

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  197,250.00

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  197,250.00

  	
   

  
	
  Lincoln

  	
   

  	
  26,732.55

  	
   

  	
  $

  	
  320,790.60

  	
   

  	
  $

  	
  20,715.88

  	
   

  	
  $

  	
  248,590.56

  	
   

  	
  $

  	
  19,650.00

  	
   

  	
  $

  	
  235,800.00

  	
   

  
	
  Wichita

  	
   

  	
  28,000.00

  	
   

  	
  $

  	
  336,000.00

  	
   

  	
  $

  	
  16,229.17

  	
   

  	
  $

  	
  194,750.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  186,000.00

  	
   

  
	
  Eagan

  	
   

  	
  33,031.25

  	
   

  	
  $

  	
  396,375.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  321,000.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  321,000.00

  	
   

  
	
  Zona Rosa

  	
   

  	
  37,187.50

  	
   

  	
  $

  	
  446,250.00

  	
   

  	
  $

  	
  19,816.67

  	
   

  	
  $

  	
  237,800.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  228,000.00

  	
   

  
	
  Olathe

  	
   

  	
  34,562.50

  	
   

  	
  $

  	
  414,750.00

  	
   

  	
  $

  	
  24,229.17

  	
   

  	
  $

  	
  290,750.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  288,000.00

  	
   

  
	
  Omaha

  	
   

  	
  26,291.67

  	
   

  	
  $

  	
  315,500.04

  	
   

  	
  $

  	
  19,854.17

  	
   

  	
  $

  	
  238,250.04

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  236,000.04

  	
   

  
	
  Rosedale

  	
   

  	
  33,625.00

  	
   

  	
  $

  	
  403,500.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  403,500.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  403,500.00

  	
   

  
	
  Madison

  	
   

  	
  34,055.59

  	
   

  	
  $

  	
  408,667.08

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  408,667.08

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  408,667.08

  	
   

  
	
  Rockford

  	
   

  	
  36,750.00

  	
   

  	
  $

  	
  441,000.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  441,000.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  441,000.00

  	
   

  
	
  Rogers

  	
   

  	
  33,750.00

  	
   

  	
  $

  	
  405,000.00

  	
   

  	
  $

  	
  34,013.27

  	
   

  	
  $

  	
  408,159.25

  	
   

  	
  $

  	
  31,500.00

  	
   

  	
  $

  	
  378,000.00

  	
   

  
	
  Creve Coeur

  	
   

  	
  26,252.00

  	
   

  	
  $

  	
  315,024.00

  	
   

  	
  $

  	
  25,938.00

  	
   

  	
  $

  	
  311,256.00

  	
   

  	
  $

  	
  26,252.67

  	
   

  	
  $

  	
  315,032.04

  	
   

  
	
  Fort Wayne

  	
   

  	
  32,208.33

  	
   

  	
  $

  	
  386,499.96

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  386,499.96

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  386,499.96

  	
   

  
	
  Toledo

  	
   

  	
  32,083.33

  	
   

  	
  $

  	
  384,999.96

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  384,999.96

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  384,999.96

  	
   

  
	
  South Bend

  	
   

  	
  34,381.85

  	
   

  	
  $

  	
  412,582.20

  	
   

  	
  $

  	
  34,568.55

  	
   

  	
  $

  	
  414,822.64

  	
   

  	
  $

  	
  34,441.85

  	
   

  	
  $

  	
  413,302.20

  	
   

  
	
  Indianapolis

  	
   

  	
  37,901.88

  	
   

  	
  $

  	
  454,822.56

  	
   

  	
  $

  	
  37,901.88

  	
   

  	
  $

  	
  454,822.56

  	
   

  	
  $

  	
  37,901.92

  	
   

  	
  $

  	
  454,823.04

  	
   

  
	
   

  	
   

  	
  $

  	
  539,750.95

  	
   

  	
  $

  	
  6,477,011.40

  	
   

  	
  $

  	
  454,659.84

  	
   

  	
  $

  	
  5,455,918.05

  	
   

  	
  $

  	
  448,322.86

  	
   

  	
  $

  	
  5,379,874.32

  	
   

  
	
  Savings from 2008

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,021,093.35

  	
   

  	
   

  	
   

  	
  $

  	
  1,097,137.08

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All Leases

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  805,778.72

  	
   

  	
  $

  	
  9,669,344.64

  	
   

  	
  $

  	
  671,292.87

  	
   

  	
  $

  	
  8,055,514.44

  	
   

  	
  $

  	
  674,804.47

  	
   

  	
  $

  	
  8,097,653.62

  	
   

  
	
  Savings from 2008

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,613,830.20

  	
   

  	
   

  	
   

  	
  $

  	
  1,571,691.02

  	
   

  

 

(1.) Payments are averaged as concession beginning and
ending dates vary by store in 2009 and 2010

 

A-4

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2009

  	
   

  
	
   

  	
   

  	
  2009
  - Actual and Projected Monthly Rents

  	
   

  	
  2009

  	
   

  	
  Average

  	
   

  
	
   

  	
   

  	
  Jan

  	
   

  	
  Feb

  	
   

  	
  Mar

  	
   

  	
  Apr

  	
   

  	
  May

  	
   

  	
  Jun

  	
   

  	
  Jul

  	
   

  	
  Aug

  	
   

  	
  Sep

  	
   

  	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec

  	
   

  	
  Total

  	
   

  	
  Monthly

  	
   

  
	
  Non-Dunham Leases

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sioux
  Falls

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  258,000.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  
	
  St.
  Louis Park

  	
   

  	
  $

  	
  9,885.32

  	
   

  	
  $

  	
  9,885.32

  	
   

  	
  $

  	
  9,885.32

  	
   

  	
  $

  	
  9,885.32

  	
   

  	
  $

  	
  9,885.32

  	
   

  	
  $

  	
  9,885.32

  	
   

  	
  $

  	
  9,885.32

  	
   

  	
  $

  	
  9,885.32

  	
   

  	
  $

  	
  9,885.42

  	
   

  	
  $

  	
  9,885.42

  	
   

  	
  $

  	
  9,885.42

  	
   

  	
  $

  	
  9,885.42

  	
   

  	
  $

  	
  118,624.24

  	
   

  	
  $

  	
  9,885.35

  	
   

  
	
  W.
  Wichita

  	
   

  	
  $

  	
  18,375.00

  	
   

  	
  $

  	
  18,375.00

  	
   

  	
  $

  	
  18,375.00

  	
   

  	
  $

  	
  18,375.00

  	
   

  	
  $

  	
  18,375.00

  	
   

  	
  $

  	
  18,375.00

  	
   

  	
  $

  	
  18,375.00

  	
   

  	
  $

  	
  18,375.00

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  207,000.00

  	
   

  	
  $

  	
  17,250.00

  	
   

  
	
  St.
  Cloud

  	
   

  	
  $

  	
  17,610.00

  	
   

  	
  $

  	
  17,610.00

  	
   

  	
  $

  	
  17,610.00

  	
   

  	
  $

  	
  17,610.00

  	
   

  	
  $

  	
  17,610.00

  	
   

  	
  $

  	
  17,610.00

  	
   

  	
  $

  	
  21,310.97

  	
   

  	
  $

  	
  21,310.97

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  237,968.46

  	
   

  	
  $

  	
  19,830.71

  	
   

  
	
  Cedar
  Rapids

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  315,000.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  
	
  E.
  Peoria

  	
   

  	
  $

  	
  39,025.00

  	
   

  	
  $

  	
  32,520.83

  	
   

  	
  $

  	
  32,520.83

  	
   

  	
  $

  	
  32,520.83

  	
   

  	
  $

  	
  32,520.83

  	
   

  	
  $

  	
  32,520.83

  	
   

  	
  $

  	
  32,520.83

  	
   

  	
  $

  	
  32,520.83

  	
   

  	
  $

  	
  30,020.83

  	
   

  	
  $

  	
  30,020.83

  	
   

  	
  $

  	
  30,020.83

  	
   

  	
  $

  	
  30,020.83

  	
   

  	
  $

  	
  386,754.13

  	
   

  	
  $

  	
  32,229.51

  	
   

  
	
  Fargo

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  72,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  
	
  Orland
  Park

  	
   

  	
  $

  	
  45,062.50

  	
   

  	
  $

  	
  30,041.67

  	
   

  	
  $

  	
  30,041.67

  	
   

  	
  $

  	
  30,041.67

  	
   

  	
  $

  	
  30,041.67

  	
   

  	
  $

  	
  30,041.67

  	
   

  	
  $

  	
  30,041.67

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  350,312.52

  	
   

  	
  $

  	
  29,192.71

  	
   

  
	
  Maple
  Grove

  	
   

  	
  $

  	
  30,625.00

  	
   

  	
  $

  	
  30,625.00

  	
   

  	
  $

  	
  30,625.00

  	
   

  	
  $

  	
  30,625.00

  	
   

  	
  $

  	
  30,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  332,500.00

  	
   

  	
  $

  	
  27,708.33

  	
   

  
	
  Legends

  	
   

  	
  $

  	
  28,072.92

  	
   

  	
  $

  	
  28,072.92

  	
   

  	
  $

  	
  28,072.92

  	
   

  	
  $

  	
  28,072.92

  	
   

  	
  $

  	
  28,072.92

  	
   

  	
  $

  	
  28,072.92

  	
   

  	
  $

  	
  28,072.92

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  321,437.04

  	
   

  	
  $

  	
  26,786.42

  	
   

  
	
  Total

  	
   

  	
  $

  	
  242,405.74

  	
   

  	
  $

  	
  220,880.74

  	
   

  	
  $

  	
  220,880.74

  	
   

  	
  $

  	
  220,880.74

  	
   

  	
  $

  	
  220,880.74

  	
   

  	
  $

  	
  215,880.74

  	
   

  	
  $

  	
  219,581.71

  	
   

  	
  $

  	
  211,452.44

  	
   

  	
  $

  	
  206,688.20

  	
   

  	
  $

  	
  206,688.20

  	
   

  	
  $

  	
  206,688.20

  	
   

  	
  $

  	
  206,688.20

  	
   

  	
  $

  	
  2,599,596.39

  	
   

  	
  $

  	
  216,633.03

  	
   

  
	
  Savings
  from 2008

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  592,736.85

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2009

  	
   

  
	
   

  	
   

  	
  2009
  - Actual and Projected Monthly Rents

  	
   

  	
  2009

  	
   

  	
  Average

  	
   

  
	
   

  	
   

  	
  Jan

  	
   

  	
  Feb

  	
   

  	
  Mar

  	
   

  	
  Apr

  	
   

  	
  May

  	
   

  	
  Jun

  	
   

  	
  Jul

  	
   

  	
  Aug

  	
   

  	
  Sep

  	
   

  	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec

  	
   

  	
  Total

  	
   

  	
  Monthly

  	
   

  
	
  Dunham Leases

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Des
  Moines

  	
   

  	
  $

  	
  14,400.00

  	
   

  	
  $

  	
  14,400.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  113,800.00

  	
   

  	
  $

  	
  9,483.33

  	
   

  
	
  Davenport

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  197,250.00

  	
   

  	
  $

  	
  16,437.50

  	
   

  
	
  Lincoln

  	
   

  	
  $

  	
  20,715.88

  	
   

  	
  $

  	
  20,715.88

  	
   

  	
  $

  	
  20,715.88

  	
   

  	
  $

  	
  20,715.88

  	
   

  	
  $

  	
  20,715.88

  	
   

  	
  $

  	
  20,715.88

  	
   

  	
  $

  	
  20,715.88

  	
   

  	
  $

  	
  20,715.88

  	
   

  	
  $

  	
  20,715.88

  	
   

  	
  $

  	
  20,715.88

  	
   

  	
  $

  	
  20,715.88

  	
   

  	
  $

  	
  20,715.88

  	
   

  	
  $

  	
  248,590.56

  	
   

  	
  $

  	
  20,715.88

  	
   

  
	
  Wichita

  	
   

  	
  $

  	
  22,750.00

  	
   

  	
  $

  	
  16,250.00

  	
   

  	
  $

  	
  16,250.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  194,750.00

  	
   

  	
  $

  	
  16,229.17

  	
   

  
	
  Eagan

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  321,000.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  
	
  Zona
  Rosa

  	
   

  	
  $

  	
  28,800.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  237,800.00

  	
   

  	
  $

  	
  19,816.67

  	
   

  
	
  Olathe

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  290,750.00

  	
   

  	
  $

  	
  24,229.17

  	
   

  
	
  Omaha

  	
   

  	
  $

  	
  21,916.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  238,250.04

  	
   

  	
  $

  	
  19,854.17

  	
   

  
	
  Rosedale

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  403,500.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  
	
  Madison

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  408,667.08

  	
   

  	
  $

  	
  34,055.59

  	
   

  
	
  Rockford

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  441,000.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  
	
  Rogers

  	
   

  	
  $

  	
  34,381.85

  	
   

  	
  $

  	
  34,381.85

  	
   

  	
  $

  	
  34,381.85

  	
   

  	
  $

  	
  34,381.85

  	
   

  	
  $

  	
  34,381.85

  	
   

  	
  $

  	
  33,750.00

  	
   

  	
  $

  	
  33,750.00

  	
   

  	
  $

  	
  33,750.00

  	
   

  	
  $

  	
  33,750.00

  	
   

  	
  $

  	
  33,750.00

  	
   

  	
  $

  	
  33,750.00

  	
   

  	
  $

  	
  33,750.00

  	
   

  	
  $

  	
  408,159.25

  	
   

  	
  $

  	
  34,013.27

  	
   

  
	
  Creve
  Coeur

  	
   

  	
  $

  	
  33,750.00

  	
   

  	
  $

  	
  33,750.00

  	
   

  	
  $

  	
  33,750.00

  	
   

  	
  $

  	
  33,750.00

  	
   

  	
  $

  	
  33,750.00

  	
   

  	
  $

  	
  20,358.00

  	
   

  	
  $

  	
  20,358.00

  	
   

  	
  $

  	
  20,358.00

  	
   

  	
  $

  	
  20,358.00

  	
   

  	
  $

  	
  20,358.00

  	
   

  	
  $

  	
  20,358.00

  	
   

  	
  $

  	
  20,358.00

  	
   

  	
  $

  	
  311,256.00

  	
   

  	
  $

  	
  25,938.00

  	
   

  
	
  Fort
  Wayne

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  386,499.96

  	
   

  	
  $

  	
  32,208.33

  	
   

  
	
  Toledo

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  384,999.96

  	
   

  	
  $

  	
  32,083.33

  	
   

  
	
  South
  Bend

  	
   

  	
  $

  	
  34,381.85

  	
   

  	
  $

  	
  34,381.85

  	
   

  	
  $

  	
  34,381.85

  	
   

  	
  $

  	
  34,381.85

  	
   

  	
  $

  	
  34,381.85

  	
   

  	
  $

  	
  34,701.91

  	
   

  	
  $

  	
  34,701.91

  	
   

  	
  $

  	
  34,701.91

  	
   

  	
  $

  	
  34,701.91

  	
   

  	
  $

  	
  34,701.91

  	
   

  	
  $

  	
  34,701.91

  	
   

  	
  $

  	
  34,701.91

  	
   

  	
  $

  	
  414,822.64

  	
   

  	
  $

  	
  34,568.55

  	
   

  
	
  Indianapolis

  	
   

  	
  $

  	
  37,901.88

  	
   

  	
  $

  	
  37,901.88

  	
   

  	
  $

  	
  37,901.88

  	
   

  	
  $

  	
  37,901.88

  	
   

  	
  $

  	
  37,901.88

  	
   

  	
  $

  	
  37,901.88

  	
   

  	
  $

  	
  37,901.88

  	
   

  	
  $

  	
  37,901.88

  	
   

  	
  $

  	
  37,901.88

  	
   

  	
  $

  	
  37,901.88

  	
   

  	
  $

  	
  37,901.88

  	
   

  	
  $

  	
  37,901.88

  	
   

  	
  $

  	
  454,822.56

  	
   

  	
  $

  	
  37,901.88

  	
   

  
	
   

  	
   

  	
  $

  	
  487,657.88

  	
   

  	
  $

  	
  466,357.88

  	
   

  	
  $

  	
  460,457.88

  	
   

  	
  $

  	
  459,707.88

  	
   

  	
  $

  	
  459,707.88

  	
   

  	
  $

  	
  446,004.09

  	
   

  	
  $

  	
  446,004.09

  	
   

  	
  $

  	
  446,004.09

  	
   

  	
  $

  	
  446,004.09

  	
   

  	
  $

  	
  446,004.09

  	
   

  	
  $

  	
  446,004.09

  	
   

  	
  $

  	
  446,004.09

  	
   

  	
  $

  	
  5,455,918.05

  	
   

  	
  $

  	
  454,659.84

  	
   

  
	
  Savings
  from 2008

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,021,093.35

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All Leases

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  730,063.62

  	
   

  	
  $

  	
  687,238.62

  	
   

  	
  $

  	
  681,338.62

  	
   

  	
  $

  	
  680,588.62

  	
   

  	
  $

  	
  680,588.62

  	
   

  	
  $

  	
  661,884.83

  	
   

  	
  $

  	
  665,585.80

  	
   

  	
  $

  	
  657,456.53

  	
   

  	
  $

  	
  652,692.29

  	
   

  	
  $

  	
  652,692.29

  	
   

  	
  $

  	
  652,692.29

  	
   

  	
  $

  	
  652,692.29

  	
   

  	
  $

  	
  8,055,514.44

  	
   

  	
  $

  	
  671,292.87

  	
   

  
	
  Savings from 2008

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,613,830.20

  	
   

  	
   

  	
   

  

 

A-5

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2010

  	
   

  
	
   

  	
   

  	
  2010
  - Actual and Projected Monthly Rents

  	
   

  	
  2010

  	
   

  	
  Average

  	
   

  
	
   

  	
   

  	
  Jan

  	
   

  	
  Feb

  	
   

  	
  Mar

  	
   

  	
  Apr

  	
   

  	
  May

  	
   

  	
  Jun

  	
   

  	
  Jul

  	
   

  	
  Aug

  	
   

  	
  Sep

  	
   

  	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec

  	
   

  	
  Total

  	
   

  	
  Monthly

  	
   

  
	
  Non-Dunham Leases

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sioux
  Falls

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  	
  $

  	
  258,000.00

  	
   

  	
  $

  	
  21,500.00

  	
   

  
	
  St.
  Louis Park

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  12,385.42

  	
   

  	
  $

  	
  148,625.04

  	
   

  	
  $

  	
  12,385.42

  	
   

  
	
  W.
  Wichita

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  22,312.50

  	
   

  	
  $

  	
  22,312.50

  	
   

  	
  $

  	
  22,312.50

  	
   

  	
  $

  	
  22,312.50

  	
   

  	
  $

  	
  209,250.00

  	
   

  	
  $

  	
  17,437.50

  	
   

  
	
  St.
  Cloud

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  22,421.63

  	
   

  	
  $

  	
  269,059.56

  	
   

  	
  $

  	
  22,421.63

  	
   

  
	
  Cedar
  Rapids

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  	
  $

  	
  315,000.00

  	
   

  	
  $

  	
  26,250.00

  	
   

  
	
  E.
  Peoria

  	
   

  	
  $

  	
  30,020.83

  	
   

  	
  $

  	
  30,020.83

  	
   

  	
  $

  	
  35,772.92

  	
   

  	
  $

  	
  35,772.92

  	
   

  	
  $

  	
  35,772.92

  	
   

  	
  $

  	
  35,772.92

  	
   

  	
  $

  	
  35,772.92

  	
   

  	
  $

  	
  35,772.92

  	
   

  	
  $

  	
  35,772.92

  	
   

  	
  $

  	
  35,772.92

  	
   

  	
  $

  	
  35,772.92

  	
   

  	
  $

  	
  35,772.92

  	
   

  	
  $

  	
  417,770.86

  	
   

  	
  $

  	
  34,814.24

  	
   

  
	
  Fargo

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
  $

  	
  72,000.00

  	
   

  	
  $

  	
  6,000.00

  	
   

  
	
  Orland
  Park

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  300,000.00

  	
   

  	
  $

  	
  25,000.00

  	
   

  
	
  Maple
  Grove

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  	
  $

  	
  307,500.00

  	
   

  	
  $

  	
  25,625.00

  	
   

  
	
  Legends

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  24,985.32

  	
   

  	
  $

  	
  299,823.84

  	
   

  	
  $

  	
  24,985.32

  	
   

  
	
  Total

  	
   

  	
  $

  	
  209,188.20

  	
   

  	
  $

  	
  209,188.20

  	
   

  	
  $

  	
  214,940.29

  	
   

  	
  $

  	
  214,940.29

  	
   

  	
  $

  	
  214,940.29

  	
   

  	
  $

  	
  214,940.29

  	
   

  	
  $

  	
  214,940.29

  	
   

  	
  $

  	
  214,940.29

  	
   

  	
  $

  	
  229,940.29

  	
   

  	
  $

  	
  244,940.29

  	
   

  	
  $

  	
  259,940.29

  	
   

  	
  $

  	
  274,940.29

  	
   

  	
  $

  	
  2,717,779.30

  	
   

  	
  $

  	
  226,481.61

  	
   

  
	
  Savings
  from 2008

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  474,553.94

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2010

  	
   

  
	
   

  	
   

  	
  2010
  - Actual and Projected Monthly Rents

  	
   

  	
  2010

  	
   

  	
  Average

  	
   

  
	
   

  	
   

  	
  Jan

  	
   

  	
  Feb

  	
   

  	
  Mar

  	
   

  	
  Apr

  	
   

  	
  May

  	
   

  	
  Jun

  	
   

  	
  Jul

  	
   

  	
  Aug

  	
   

  	
  Sep

  	
   

  	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec

  	
   

  	
  Total

  	
   

  	
  Monthly

  	
   

  
	
  Dunham Leases

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Des
  Moines

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  	
  $

  	
  102,000.00

  	
   

  	
  $

  	
  8,500.00

  	
   

  
	
  Davenport

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  16,437.50

  	
   

  	
  $

  	
  197,250.00

  	
   

  	
  $

  	
  16,437.50

  	
   

  
	
  Lincoln

  	
   

  	
  $

  	
  19,650.00

  	
   

  	
  $

  	
  19,650.00

  	
   

  	
  $

  	
  19,650.00

  	
   

  	
  $

  	
  19,650.00

  	
   

  	
  $

  	
  19,650.00

  	
   

  	
  $

  	
  19,650.00

  	
   

  	
  $

  	
  19,650.00

  	
   

  	
  $

  	
  19,650.00

  	
   

  	
  $

  	
  19,650.00

  	
   

  	
  $

  	
  19,650.00

  	
   

  	
  $

  	
  19,650.00

  	
   

  	
  $

  	
  19,650.00

  	
   

  	
  $

  	
  235,800.00

  	
   

  	
  $

  	
  19,650.00

  	
   

  
	
  Wichita

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  	
  $

  	
  186,000.00

  	
   

  	
  $

  	
  15,500.00

  	
   

  
	
  Eagan

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  	
  $

  	
  321,000.00

  	
   

  	
  $

  	
  26,750.00

  	
   

  
	
  Zona
  Rosa

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  	
  $

  	
  228,000.00

  	
   

  	
  $

  	
  19,000.00

  	
   

  
	
  Olathe

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
  $

  	
  288,000.00

  	
   

  	
  $

  	
  24,000.00

  	
   

  
	
  Omaha

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  19,666.67

  	
   

  	
  $

  	
  236,000.04

  	
   

  	
  $

  	
  19,666.67

  	
   

  
	
  Rosedale

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  	
  $

  	
  403,500.00

  	
   

  	
  $

  	
  33,625.00

  	
   

  
	
  Madison

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  34,055.59

  	
   

  	
  $

  	
  408,667.08

  	
   

  	
  $

  	
  34,055.59

  	
   

  
	
  Rockford

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  	
  $

  	
  441,000.00

  	
   

  	
  $

  	
  36,750.00

  	
   

  
	
  Rogers

  	
   

  	
  $

  	
  31,500.00

  	
   

  	
  $

  	
  31,500.00

  	
   

  	
  $

  	
  31,500.00

  	
   

  	
  $

  	
  31,500.00

  	
   

  	
  $

  	
  31,500.00

  	
   

  	
  $

  	
  31,500.00

  	
   

  	
  $

  	
  31,500.00

  	
   

  	
  $

  	
  31,500.00

  	
   

  	
  $

  	
  31,500.00

  	
   

  	
  $

  	
  31,500.00

  	
   

  	
  $

  	
  31,500.00

  	
   

  	
  $

  	
  31,500.00

  	
   

  	
  $

  	
  378,000.00

  	
   

  	
  $

  	
  31,500.00

  	
   

  
	
  Creve
  Coeur

  	
   

  	
  $

  	
  26,252.67

  	
   

  	
  $

  	
  26,252.67

  	
   

  	
  $

  	
  26,252.67

  	
   

  	
  $

  	
  26,252.67

  	
   

  	
  $

  	
  26,252.67

  	
   

  	
  $

  	
  26,252.67

  	
   

  	
  $

  	
  26,252.67

  	
   

  	
  $

  	
  26,252.67

  	
   

  	
  $

  	
  26,252.67

  	
   

  	
  $

  	
  26,252.67

  	
   

  	
  $

  	
  26,252.67

  	
   

  	
  $

  	
  26,252.67

  	
   

  	
  $

  	
  315,032.04

  	
   

  	
  $

  	
  26,252.67

  	
   

  
	
  Fort
  Wayne

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  32,208.33

  	
   

  	
  $

  	
  386,499.96

  	
   

  	
  $

  	
  32,208.33

  	
   

  
	
  Toledo

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  32,083.33

  	
   

  	
  $

  	
  384,999.96

  	
   

  	
  $

  	
  32,083.33

  	
   

  
	
  South
  Bend

  	
   

  	
  $

  	
  34,441.85

  	
   

  	
  $

  	
  34,441.85

  	
   

  	
  $

  	
  34,441.85

  	
   

  	
  $

  	
  34,441.85

  	
   

  	
  $

  	
  34,441.85

  	
   

  	
  $

  	
  34,441.85

  	
   

  	
  $

  	
  34,441.85

  	
   

  	
  $

  	
  34,441.85

  	
   

  	
  $

  	
  34,441.85

  	
   

  	
  $

  	
  34,441.85

  	
   

  	
  $

  	
  34,441.85

  	
   

  	
  $

  	
  34,441.85

  	
   

  	
  $

  	
  413,302.20

  	
   

  	
  $

  	
  34,441.85

  	
   

  
	
  Indianapolis

  	
   

  	
  $

  	
  37,901.92

  	
   

  	
  $

  	
  37,901.92

  	
   

  	
  $

  	
  37,901.92

  	
   

  	
  $

  	
  37,901.92

  	
   

  	
  $

  	
  37,901.92

  	
   

  	
  $

  	
  37,901.92

  	
   

  	
  $

  	
  37,901.92

  	
   

  	
  $

  	
  37,901.92

  	
   

  	
  $

  	
  37,901.92

  	
   

  	
  $

  	
  37,901.92

  	
   

  	
  $

  	
  37,901.92

  	
   

  	
  $

  	
  37,901.92

  	
   

  	
  $

  	
  454,823.04

  	
   

  	
  $

  	
  37,901.92

  	
   

  
	
   

  	
   

  	
  $

  	
  448,322.86

  	
   

  	
  $

  	
  448,322.86

  	
   

  	
  $

  	
  448,322.86

  	
   

  	
  $

  	
  448,322.86

  	
   

  	
  $

  	
  448,322.86

  	
   

  	
  $

  	
  448,322.86

  	
   

  	
  $

  	
  448,322.86

  	
   

  	
  $

  	
  448,322.86

  	
   

  	
  $

  	
  448,322.86

  	
   

  	
  $

  	
  448,322.86

  	
   

  	
  $

  	
  448,322.86

  	
   

  	
  $

  	
  448,322.86

  	
   

  	
  $

  	
  5,379,874.32

  	
   

  	
  $

  	
  448,322.86

  	
   

  
	
  Savings
  from 2008

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,097,137.08

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All Leases

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  657,511.06

  	
   

  	
  $

  	
  657,511.06

  	
   

  	
  $

  	
  663,263.15

  	
   

  	
  $

  	
  663,263.15

  	
   

  	
  $

  	
  663,263.15

  	
   

  	
  $

  	
  663,263.15

  	
   

  	
  $

  	
  663,263.15

  	
   

  	
  $

  	
  663,263.15

  	
   

  	
  $

  	
  678,263.15

  	
   

  	
  $

  	
  693,263.15

  	
   

  	
  $

  	
  708,263.15

  	
   

  	
  $

  	
  723,263.15

  	
   

  	
  $

  	
  8,097,653.62

  	
   

  	
  $

  	
  674,804.47

  	
   

  
	
  Savings from 2008

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,571,691.02

  	
   

  	
   

  	
   

  

 

A-6

 

Exhibit B

 

TERMINATION
OF EQUIPMENT LEASE

AND BILL OF
SALE

 

THIS TERMINATION OF
EQUIPMENT LEASE AND BILL OF SALE (this “Agreement”) is made and entered
into as of
                                  ,
2009 by and between Granite City Food & Brewery, Ltd., a Minnesota
corporation (“Lessee”) and DHW Leasing, L.L.C., a South Dakota limited
liability company (“Lessor”).

 

RECITALS:

 

A.                                   Lessor and Lessee are currently parties to a written Master Equipment
Finance Lease dated September 19, 2006 and an Equipment Lease Commitment
dated December 6, 2007 (collectively, the “Master Lease”) and sixteen
(16) separate leases identified on the attached Exhibit A (each, a “Lease”),
relating to the lease of certain furniture, fixtures, machinery, equipment and
other personal property as described in Exhibit A to each Lease (the “Equipment”).

 

B.                                     Lessor and Lessee have entered into a Debt Conversion Agreement and
Lessor has agreed in connection therewith to (i) terminate the Master
Lease and each Lease effective on the date hereof (the “Termination Date”)
subject to the terms and conditions of this Agreement, and (ii) convey the
Equipment to Lessee.

 

NOW, THEREFORE, in
consideration of the above recitals that by this reference are incorporated
herein, the mutual covenants and conditions contained herein and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Lessor and Lessee agree as follows:

 

1.                                       Termination.  The Master Lease and the Leases shall
automatically terminate, subject to the agreements, representations, warranties
and indemnities contained in this Agreement, effective on the Termination Date,
without further notice or action.

 

2.                                       Release of
Liens.  The parties acknowledge that
all security interests previously filed against the Equipment have been
released.  If any of the security
interests against the Equipment are not released or are reinstated in the
future without the consent of Lessee, Lessor agrees to cause such security
interests to be released and hereby grants to Lessee the authority to terminate
any financing statement filed against the Equipment in favor of Lessor.

 

3.                                       Release of
Lessor.  Effective as of the
Termination Date, but subject to the agreements, representations, warranties
and indemnities contained in this Agreement, which agreements, representations,
warranties and indemnities shall survive the termination of the Master Lease
and the Leases, Lessee forever releases and discharges Lessor from any and all
claims, demands or causes of action whatsoever against Lessor or its successors
and assigns arising out of or in connection with the Equipment, the Master
Lease or the Leases, and forever releases and discharges Lessor from any
obligations to be observed or performed by Lessor under the Master Lease and
the Leases.  Notwithstanding such
release, Lessor shall indemnify Lessee against, and hold Lessee, its officers,
agents, employees, directors and shareholders harmless from, any and all
claims, actions, suits, 

 

B-1

 

 

proceedings, costs, demands,
damages and liabilities of whatever nature, and all costs and expenses,
including Lessee’s reasonable attorneys’ fees and expenses (collectively “Claims”),
relating to or in any way arising out of its breach of this agreement or any
claims against the Equipment made by any party, whether now existing or
hereafter arising out of events or omissions occurring on or before the
Termination Date, other than Claims caused by the acts or omissions of Lessee;
provided, however, that such indemnification obligation shall not apply to
Claims arising out of or resulting from the operation of the Equipment.

 

4.                                       Release of
Lessee.  Effective as of the
Termination Date, and subject to the agreements, representations, warranties
and indemnities contained in this Agreement, which agreements, representations,
warranties and indemnities shall survive the termination of the Master Lease
and the Leases, Lessor forever releases and discharges Lessee from any and all
claims, demands or causes of action whatsoever against Lessee or its successors
and assigns arising out of or in connection with the Equipment, the Master
Lease or the Leases and forever releases and discharges Lessee from any
obligations to be observed or performed by Lessee under the Master Lease and
the Leases.

 

5.                                       Conveyance.  Lessor hereby sells, transfers and assigns to
Lessee, all right, title and interest in and to the Equipment.

 

6.                                       Representations
and Warranties.  Lessor
represents and warrants that (a) Lessor is the owner of the Equipment; (b) Lessor
has the right to enter into and perform under this Agreement and to sell and
convey the Equipment; (c) Lessor has not done or suffered anything to
encumber the Equipment; and (d) the Equipment is free from all claims of
parties.  In addition, Lessor agrees to
warrant and defend the sale, transfer and assignment of the Equipment to Lessee
against any and all persons or entities who claim title to or an interest in
the Equipment.  The Equipment is being
conveyed on an “as is, where is” basis.

 

7.                                       Further
Assurances.  If Lessee
requests, Lessor shall sign, deliver and cause to be filed or recorded as
Lessee shall direct any further instruments, statements, certificates and other
documents as Lessee reasonably may consider necessary or desirable in order to
convey the Equipment free of all liens and claims.  Lessor further agrees to pay to Lessee, upon
demand, all reasonable costs and expenses incurred by Lessee in connection with
the preparation, execution, recording, filing and refiling of any such
documents, including reasonable attorneys’ fees.

 

8.                                       Authority.  Each signatory of this Agreement represents
hereby that he or she has the authority to execute and deliver the same on
behalf of the party hereto for which such signatory is acting. This Agreement
shall be binding upon and inure to the benefit of Lessor and Lessee and their
respective successors, assigns and related entities.

 

9.                                       Miscellaneous.  The parties are also subject to the following
miscellaneous provisions: (a) this Agreement is governed by and shall be
construed in accordance with the laws of the state of Minnesota; (b) captions
used in this Agreement are for convenience only and are not a part of the
agreement; (c) time is of the essence; (d) if any provision of this 

 

B-2

 

Agreement is invalid or
unenforceable to any extent, the remainder of this Agreement shall continue in
effect and be enforceable to the fullest extent permitted by law; (e) this
Agreement contains the entire agreement of the Parties hereto with respect to
the Master Lease, the Leases and the Equipment; (f) this Agreement may be
modified only by a writing executed and delivered by both Parties; and (g) nothing
contained in this Agreement shall be deemed or construed to create a
partnership or joint venture of or between Lessor and Lessee.

 

10.                                 Counterparts.  This Agreement may be executed in any number
of counterparts, all of which together shall constitute one and the same
instrument, and any party or signatory hereto may execute this Agreement by
signing any such counterpart.  Delivery
of a facsimile or digital copy (pdf) of an executed copy of this Agreement
shall be effective to bind the executing party. 
Each party so executing this Agreement shall promptly deliver an
original executed counterpart to the other signatories.

 

11.                                 WITH
RESPECT TO ANY ACTION OR PROCEEDING ARISING IN CONNECTION WITH THIS AGREEMENT,
EACH PARTY HERETO (I) WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY SUCH
ACTION, (II) CONSENTS TO ANY SUCH ACTION BEING VENUED IN ANY FEDERAL COURT
OR MINNESOTA STATE COURT SITTING IN MINNEAPOLIS OR ST. PAUL, MINNESOTA AND
WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT.

 

B-3

 

IN WITNESS WHEREOF, Lessor
and Lessee have executed this Agreement on the day and year first above
written.

 

 

	
   

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
  DHW LEASING, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  

 

 

On this
                
day of
                            
2009, before me the undersigned, a Notary Public in and for said state,
personally appeared
                                                ,
personally known to me, or proved to me on the basis of satisfactory evidence,
to be the person who executed the within instrument as the
                                                
of DHW Leasing, L.L.C., a South Dakota limited liability company, and executed
the within instrument on behalf of such company.

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

B-4

 

	
   

  	
  LESSEE:

  
	
   

  	
   

  
	
   

  	
  GRANITE CITY FOOD & BREWERY, LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  

 

 

On this
                
day of
                            
2009, before me the undersigned, a Notary Public in and for said state,
personally appeared
                                                ,
personally known to me, or proved to me on the basis of satisfactory evidence,
to be the person who executed the within instrument as the
                                                
of Granite City Food & Brewery, Ltd., a Minnesota corporation, and
executed the within instrument on behalf of such corporation.

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

B-5

 

EXHIBIT A

 

List
of Leases

 

	
   

  	
  Description of Schedule (Location)

  
	
   

  	
   

  
	
  1.

  	
  Interim Schedule A (Lease No. 2008-GW06) (Zona Rosa)

  
	
   

  	
   

  
	
  2.

  	
  Final Schedule A (Lease No. 2008-GW01) (Roseville)

  
	
   

  	
   

  
	
  3.

  	
  Schedule A (Lease No. 2008-DB01) (South Bend)

  
	
   

  	
   

  
	
  4.

  	
  Schedule A (Lease No. 2009-GW10) (Sioux Falls)

  
	
   

  	
   

  
	
  5.

  	
  Schedule A (Lease No. 2008-CT04) (Maumee)

  
	
   

  	
   

  
	
  6. 

  	
  Schedule A (Lease No. 2008-GW07) (Wichita) 

  
	
   

  	
   

  
	
  7.

  	
  Interim Schedule A (Lease No. 2007-GW03) (Wichita West)

  
	
   

  	
   

  
	
  8.

  	
  Schedule A (Lease No. 2007-CT02) (Rockford)

  
	
   

  	
   

  
	
  9.

  	
  CORRECTED Schedule A (Lease 2007-CT01) (Creve Couer)

  
	
   

  	
   

  
	
  10.

  	
  Schedule A (Lease No. 2008-GW9) (Maple Grove and Eagan)

  
	
   

  	
   

  
	
  11.

  	
  Schedule A (Lease No. 2007-CT03) (Ft. Wayne)

  
	
   

  	
   

  
	
  12.

  	
  Interim Schedule A (Lease
  No. 2008-GW05) (Legends)

  
	
   

  	
   

  
	
  13. 

  	
  Schedule A (Lease No. 2008-GW06) (Lincoln) 

  
	
   

  	
   

  
	
  14.

  	
  Schedule A (Lease No. 2008-DB02) (Madison)

  
	
   

  	
   

  
	
  15.

  	
  Final Schedule A (Lease No. 2008-GW02) (Omaha)

  
	
   

  	
   

  
	
  16.

  	
  Final Schedule A (Lease No. 2009-GW04) (Carmel)

  

 

 

EXHIBIT
C

Form of Registration Rights Agreement

 

THIS REGISTRATION RIGHTS AGREEMENT (“Agreement”)
is made and entered into as of this        day of
                        ,
2009, by and between Granite City Food & Brewery Ltd., a Minnesota
corporation (the “Company”) and
DHW Leasing L.L.C., a South Dakota limited liability company (“DHW”).

 

WHEREAS, upon the terms and subject to the conditions of the
Debt Conversion Agreement by and between the Company and DHW of even date
herewith (the “Debt Conversion Agreement”), the Company has agreed to sell the
Shares (as defined herein) to DHW; and

 

WHEREAS, to induce DHW to execute and deliver the Debt
Conversion Agreement, the Company has agreed to provide certain registration
rights under the Securities Act (as defined herein) and applicable state
securities laws.

 

NOW, THEREFORE, in consideration of the mutual covenants contained
in this Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and DHW agree as
follows:

 

Section 1.              Definitions.

 

As used in this Agreement, the following terms shall have the meanings
as set forth herein:

 

1.1          “Board” means the Board of Directors
of the Company.

 

1.2          “Closing Date” shall mean the date on which the
closing of the transactions contemplated by the Debt Conversion Agreement
occurs.

 

1.3          “Commission” means the United States
Securities and Exchange Commission, and any successor thereto.

 

1.4          “Common Stock” means the Company’s
common stock, $.01 par value per share.

 

1.5          “DHW” includes any person to whom the rights under
this Agreement have been assigned or transferred (each, a “Holder”).

 

1.6          “Holder” means DHW and the persons defined in Section 1.6.

 

1.7          “Person” means an individual,
partnership, limited partnership, corporation, business trust, limited
liability company, association, joint stock company, trust, unincorporated
organization, joint venture, or other entity of whatever nature.

 

C-1

 

1.8          “Prospectus” means the Prospectus included in a
Registration Statement (including, without limitation, a Prospectus that
includes any information previously omitted from a Prospectus filed as part of
an effective Registration Statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any Prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Registration Statement, and all other
amendments and supplements to the Prospectus, including post effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

 

1.9          “Registrable Shares” means the
shares of Common Stock purchased by DHW pursuant to the Debt Conversion
Agreement; provided, however, that such shares of Common Stock shall no longer
be Registrable Shares (A) when they shall have been effectively registered
under the Securities Act and sold by DHW in accordance with such registration
or sold by DHW pursuant to Section 4(1) of the Securities Act or Rule 144,
(B) when registration under the Securities Act would no longer be required
for the immediate sale of all such shares of Common Stock pursuant to the
provisions of Rule 144, or (C) on or after the date which is three
years after the Closing Date.

 

1.10        “Registration Statement” means a Registration
Statement filed on Form S-3 (or such other form as is then available to
the Company) under the Securities Act to permit the resale of the Registrable
Shares, including the Prospectus, amendments and supplements to each such
Registration Statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such Registration Statement.

 

1.11        “Register,” “registered” and “registration”
refer to a registration effected by preparing and filing a Registration
Statement and the declaration or ordering of the effectiveness of such
Registration Statement.

 

1.12        “Rule 144” promulgated by the
Commission under the Securities Act, as such rule may be amended from time
to time, or any successor rule thereto.

 

1.13        “Securities Act” means the Securities Act of 1933, as
amended, and the rules and regulations promulgated from time to time
thereunder.

 

1.14        “Shares” means the shares of Common Stock issuable
pursuant to the Debt Conversion Agreement.

 

Section 2.              Registration
Rights.

 

2.1          Initial Registration.  The Company shall prepare and file with the
Commission, not later than 90 days after the Closing Date, a Registration
Statement covering 4,666,666 Registrable Shares to be registered under the
Securities Act on a non-underwritten basis.

 

2.2          Additional Registration.  At least six months after the Closing Date,
if DHW has sold all of the Registrable Shares included in the initial
Registration Statement, DHW may request the filing of an additional
Registration Statement covering up to 4,666,666 Registrable Shares (a “Registration
Request”).  Upon receipt of a
Registration Request, the Company shall 

 

C-2

 

use best commercial efforts to, within 45 days of the
Registration Request, prepare and file a Registration Statement covering the
shares which are the subject of the Registration Request and shall use best
commercial efforts to cause such Registration Statement to become effective as
soon as is practicable following its filing. 
Upon the sale of all of the Registrable Shares included in such
Registration Statement, DHW may submit an additional Registration Request
covering up to 4,666,666 Registrable Shares and the Company will follow the
same procedure of preparing, filing and seeking effectiveness of a Registration
Statement covering the shares which are the subject of such Registration
Request.  The procedure set forth in the
immediately preceding sentence will be followed until all of the Registrable
Shares have been sold; provided, however, that this Section 2.2 shall not
obligate the Company to file (a) more than six Registration Statements
(including the initial Registration Statement) in total, (b) Registration
Statements any more frequently than one every six months, nor (c) any
Registration Statement more than three years after the Closing Date.  If for any reason the Commission does not
permit registration of all of the Registrable Securities included in any
Registration Statement filed pursuant this Section 2.2, then the Company’s
obligation to register the affected shares shall cease.

 

2.3          Underwritten
Offering.  If DHW intends to distribute the
Registrable Shares covered by any Registration Statement filed hereunder, DHW
shall so inform the Company in the related Registration Request.  DHW shall select the underwriter with the
written approval of the Company, which approval shall not be unreasonably
withheld.

 

2.4          Abandonment of Registration.  In the event that DHW determines for any
reason not to proceed with a registration at any time before a Registration
Statement has been declared effective by the Commission, and such Registration
Statement, is withdrawn with respect to the Registrable Shares covered thereby,
DHW agrees to bear its own expenses incurred in connection therewith and to
reimburse the Company for the reasonable expenses incurred by it attributable
to the registration of such Registrable Shares, and if DHW in fact so
reimburses the Company, then DHW shall not be deemed to have exercised its
right to require the Company to register Registrable Shares pursuant to Section 2.2.

 

Section 3.              Registration Procedures. 
When the Company is required by the terms of this Agreement to effect
the registration of Registrable Shares under the Securities Act, the Company
will do the following:

 

3.1          Filing. 
Prepare and file with the Commission a Registration Statement with
respect to such securities, and use best commercial efforts to cause such
Registration Statement to become and remain effective for such period as may be
reasonably necessary to effect the sale of such securities; provided, however, such
period shall not exceed the earlier to occur of (i) the completion by the
underwriters of the distribution pursuant to such Registration Statement or (ii) as
set forth in Section 3.2 (the “Effectiveness Period”).

 

(a)           Not less than four trading days prior
to the filing of a Registration Statement or any related Prospectus or any
amendment or supplement thereto, the Company shall furnish to each Holder
copies of the “Selling Stockholders” section of such document, the “Plan of
Distribution” and any risk factor section contained in such document that
addresses 

 

C-3

 

specifically the transactions under the Debt
Conversion Agreement or the selling stockholders, as proposed to be filed.

 

(b)           (i)  Prepare and file with the
Commission such amendments, including post effective amendments, to each
Registration Statement and the Prospectus used in connection therewith as may
be necessary to keep such Registration Statement continuously effective as to
the applicable Registrable Securities for its Effectiveness Period; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably possible to any comments received
from the Commission with respect to each Registration Statement or any
amendment thereto; and (iv) comply in all material respects with the
provisions of the Securities Act with respect to the Registration Statements.

 

(c)           Notify the Holders as promptly as
reasonably possible (and, in the case of (i)(A) below, not less than three
trading days prior to such filing) (i)(A) when a Prospectus or any
Prospectus supplement or post effective amendment to a Registration Statement
is proposed to be filed; (B) when the Commission notifies the Company
whether there will be a “review” of such Registration Statement and whenever
the Commission comments in writing on such Registration Statement; and (C) with
respect to each Registration Statement or any post effective amendment, when
the same has become effective; (ii) of any request by the Commission or
any other Federal or state governmental authority for amendments or supplements
to a Registration Statement or Prospectus or for additional information; (iii) of
the issuance by the Commission of any stop order suspending the effectiveness
of a Registration Statement covering any or all of the Registrable Securities
or the initiation of any Proceedings for that purpose; (iv) of the receipt
by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of
any proceeding for such purpose; and (v) of the occurrence of any event or
passage of time that makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement made in such
Registration Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or the
Prospectus, as the case may be, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.

 

(d)           Use its reasonable commercial efforts
to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any
order suspending the effectiveness of a Registration Statement, or (ii) any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction.

 

(e)           Prior to any public offering of
Registrable Securities, to register or qualify or cooperate with the selling
Holders in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Securities for offer
and sale under the securities or Blue Sky laws a mutually agreeable number of
jurisdictions within the United States, to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness
Period and to do any and all other acts or things necessary or 

 

C-4

 

advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statements except that the Company shall not for any purpose be required to
execute a general consent to service of process or to qualify to do business as
a foreign corporation in any jurisdiction wherein it is not so qualified. .

 

(f)            Upon the occurrence of any event
contemplated by Section 3.1(c)(v), as promptly as reasonably possible,
prepare a supplement or amendment, including a post effective amendment, to the
affected Registration Statements or a supplement to the related Prospectus or
any document incorporated or deemed to be incorporated therein by reference,
and file any other required document so that, as thereafter delivered, no
Registration Statement nor any Prospectus will contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

 

3.2          Period of Effectiveness.  Prepare and file with the Commission such
amendments to such Registration Statement and supplements to the Prospectus
contained therein as may be necessary to keep such Registration Statement
effective for such period as may be reasonably necessary to effect the sale of
such securities, provided, however, such period shall not exceed the earlier to
occur of (i) the completion by the underwriters of the distribution
pursuant to such Registration Statement, (ii) three years after the
Closing Date, or (iii) a reasonable determination by the Company that the
Shares covered by the Registration Statement may be sold in their entirety
under Rule 144.

 

3.3          Copies. 
Furnish to DHW and to the underwriters of the securities being
registered, if any, such reasonable number of copies of the Registration
Statement, preliminary Prospectus, final Prospectus and such other documents as
DHW and such underwriters may reasonably request in order to facilitate the
public offering of such securities.

 

3.4          Holder Sales; Discontinuance and Allowed
Suspension.  Each Holder
covenants and agrees that it will not sell any Registrable Securities under the
Registration Statement until the Company has electronically filed the final
Prospectus as then amended or supplemented as contemplated in Section 3.1
and the Holder has received notice from the Company that such Registration
Statement and any post-effective amendments thereto have become effective.  Each Holder agrees that, upon receipt of a
notice from the Company of the occurrence of any event of the kind described in
Section 3.1(c), such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such Holder’s
receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement contemplated by Section 3.1(f), or until it is
advised in writing (the “Advice”) by the
Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus
or Registration Statement.  If (i) there
is material non-public information regarding the Company which the Company’s
Board determines not to be in the Company’s or the Company’s stockholder’s best
interest to disclose and which the Company is not otherwise required to
disclose, (ii) there is a significant business opportunity (including, but
not limited to, the acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer or
other similar transaction) available to the Company which the Board determines
not to be in the Company’s or the 

 

C-5

 

Company’s stockholders’ best interest to disclose, or (iii) the
Company is required to file a post-effective amendment to a Registration
Statement to incorporate the Company’s quarterly and annual reports and audited
financial statements on Forms 10-Q and 10-K (or such other forms as the Company
may then be eligible to file), then the Company may (x) postpone or
suspend filing of a Registration Statement for a period not to exceed sixty
(60) consecutive days or (y) postpone (or cause suspension) effectiveness
of a Registration Statement for a period not to exceed thirty (30) consecutive
days, and (z) require each holder to cease sales of Registrable Securities
under any such Registration Statement until such material non-public
information has been made public.

 

Section 4.              Expenses. 
Except as provided in Section 2.4 hereof, with respect to the
registration under Section 2.1 or 2.2 hereof, the Company shall bear the
following fees, costs and expenses: all registration, fees, printing expenses,
fees and disbursements of counsel and accountants for the Company, all internal
Company expenses, all legal fees and disbursements and other expenses of
complying with state securities or blue sky laws of any jurisdictions in which
the securities to be offered are to be registered or qualified.  Underwriting discounts and commissions,
insurance and transfer taxes relating to the shares of Registrable Shares
included in the offering (if any) and any other expenses incurred by DHW, shall
be borne by DHW.

 

Section 5.              Indemnification. 
In the event that any Registrable Shares is included in a Registration
Statement under this Agreement:

 

5.1          Indemnification by Company.  To the fullest extent permitted by law, the
Company will indemnify and hold harmless DHW pursuant to the provisions hereof,
its directors and officers, and any underwriter (as defined in the Securities
Act) for DHW and each Person, if any, who controls DHW or such underwriter
within the meaning of the Securities Act, from and against, and will reimburse
the  DHW and each such underwriter and
controlling Person with respect to, any and all loss, damage, liability
(collectively, “Losses”) to which DHW or any such
underwriter or controlling Person may become subject under the Securities Act,
state securities laws or otherwise, and the Company will pay to DHW or each
such underwriter or controlling person any legal or other costs or expenses
reasonably incurred by such person in connection with investigating or
defending any such Loss, insofar as such Losses are caused by any untrue
statement or alleged untrue statement of any material fact contained in such
Registration Statement, any Prospectus contained therein or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading; provided, however, that the Company will
not be liable in any such case to the extent that any such Loss arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by DHW, such
underwriter or such controlling Person in writing specifically for use in the
preparation thereof, provided however, that the indemnity agreement in this Section 5.1
shall not apply to amounts paid in settlement of any such Loss if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld, and that the foregoing indemnity obligation with
respect to any preliminary Prospectus shall not inure to the benefit of any
other holder of Common Stock on account of any Loss whatsoever arising from the
sale of any Registrable Shares by DHW to any person if (A) a copy of the
final Prospectus (as amended or supplemented if such amendments or supplements
shall 

 

C-6

 

have been furnished to DHW prior to the confirmation
of the sale involved) shall not have been sent or given by or on behalf of DHW
to such person, if required by law, with or prior to the written confirmation
of the sale involved, and (B) the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
preliminary Prospectus from which such Loss arose was corrected in the final
Prospectus (as amended or supplemented if such amendments or supplements
thereto shall have been furnished as aforesaid).

 

5.2          Indemnification by DHW.  To the fullest extent permitted by law, DHW
will indemnify and hold harmless the Company, its directors and officers, each
Person, if any, who controls the Company within the meaning of the Securities
Act, (each, an “Indemnitee”) from and against, and
will reimburse any Indemnitee with respect to, any and all Losses to which such
Indemnitee may become subject under the Securities Act, state securities laws
or otherwise, and DHW will pay to the Company and each such controlling person
any legal or other costs or expenses reasonably incurred by such person in
connection with investigating or defending any such Loss, insofar as such
Losses are caused by any untrue or alleged untrue statement of any material
fact contained in such Registration Statement, any Prospectus contained therein
or any amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
conformity with written information furnished by DHW specifically for use in
the preparation thereof, and provided, however, that the indemnity agreement in
this Section 5.2 shall not apply to amounts paid in settlement of any such
Loss if such settlement is effected without the consent of DHW, which consent
shall not be unreasonably withheld.

 

5.3          Indemnification Procedures.  Promptly after receipt by a party entitled to
indemnification pursuant to this Section 5 (each, an “Indemnified
Party”) of notice of the commencement of any action involving the
subject matter of the foregoing indemnity provisions such Indemnified Party
will, if a claim is to be made against the party obligated to provide
indemnification pursuant to this section (each, an “Indemnifying
Party”), promptly notify the Indemnifying Party of the commencement
thereof; but the omission to provide such notice will not relieve the
Indemnifying Party from any liability hereunder, except to the extent that the
delay in giving, or failing to give, such notice has a material adverse effect
upon the ability of the Indemnifying Party to defend against the claim. In case
such action is brought against an Indemnified Party, the Indemnifying Party
shall have the right to participate in and, at the Indemnifying Party’s option,
to assume the defense thereof, singly or jointly with any other Indemnifying
Party similarly notified, with counsel satisfactory to the Indemnified Party;
provided, however, that if the defendants in any action include both the
Indemnified Party and the Indemnifying Party and the Indemnified Party shall
have reasonably concluded based on advice of counsel that there may be legal
defenses available to any Indemnified Party that are different from or
additional to those available to the Indemnifying Party, or if there is a
conflict of interest which would prevent counsel for the Indemnifying Party
from also representing the Indemnified Party, the Indemnified Party shall have
the right to select counsel to participate in the defense of such action on
behalf of such Indemnified Party at the expense of the Indemnified Party;
provided that the Indemnifying Party shall be responsible for the expense of
only one such 

 

C-7

 

special counsel selected jointly by the Indemnified
Parties, if there is more than one Indemnified Party. After notice from an
Indemnifying Party to any Indemnified Party of such Indemnifying Party’s
election to assume the defense of the action, the Indemnifying Party will not
be liable to such Indemnified Party pursuant to this Section 5 for any
legal or other expense subsequently incurred by such Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation, unless (i) the Indemnified Party shall have employed
counsel in accordance with the proviso of the preceding sentence, or (ii) the
Indemnifying Party shall not have employed counsel reasonably satisfactory to
the Indemnified Party to represent the Indemnified Party within a reasonable
time after the notice of the commencement of the action, or (iii) the
Indemnifying Party has authorized the employment of counsel for the Indemnified
Party at the expense of the Indemnifying Party.

 

Section 6.              Cooperation. 
DHW hereby agrees to cooperate with all reasonable requests by the
Company necessary to effectuate the purposes of this Agreement, including by
timely providing the Company with all information necessary to file a
Registration Statement.  DHW and each
Holder agrees upon the Company’s request from time to time to furnish to the
Company a completed Questionnaire in the form attached to this Agreement as Annex
A (a “Selling Holder Questionnaire”). 
The Company shall not be required to include the Registrable Securities
of a Holder in a Registration Statement and shall not be required to pay any
damages to any Holder who fails to furnish to the Company a fully completed and
accurate Selling Holder Questionnaire at least three business days prior to the
filing date of any Registration Statement.

 

Section 7.              Miscellaneous.

 

7.1          Waivers. Amendments and Approvals.  Any term or provision of this Agreement
requiring performance by or binding upon the Company or DHW may be amended, and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only by a
writing signed by the Company and DHW. The waiver by a party of any breach
hereof or default in payment of any amount due hereunder or default in the
performance hereof shall not be deemed to constitute a waiver of any other
default or succeeding breach or default.

 

7.2          Notices.  All notices, requests, consents and other
communications required or permitted hereunder shall be in writing and shall be
delivered, or mailed first-class postage prepaid, registered or certified mail,
as follows:

 

If to the Company:                                                                                Granite City Food & Brewery Ltd.

5402 Parkdale Drive

Suite 101

St. Louis Park, MN 55416

Facsimile:  (952) 215-0671

Attention:  Chief Financial
Officer

 

C-8

 

With a copy to:                                                                                                      Briggs and Morgan, P.A.

80 South 8th Street

2200 IDS Center

Minneapolis, MN 55402

Facsimile:  (612) 977-8650

Attention:  Avron L. Gordon, Esq.

 

If to DHW:                                                                                                                            Dunham Capital Management, L.L.C.

The Dunham Company

230 South Phillips Avenue, Suite 202

Sioux Falls, SD  57104-6321

 

With a copy to:                                                                                                      Leonard Street and Deinard

150 South Fifth Street, Suite 2300

Minneapolis, MN  55402

Facsimile:  (612) 335-1657

Attention:  Mark S. Weitz, Esq.

Hagen, Wilka & Archer, LLP

600 South Main Avenue, Suite 102

P.O. Box 964

Sioux Falls, SD  57104

Facsimile:  (605) 334-4814

Attention:  John F. Archer, Esq.

 

Such
notices and other communications shall for all purposes of this Agreement be
treated as being effective or having been given if delivered personally, or, if
sent by mail, when received. Any party may change its address for such
communications by giving notice thereof to the other parties in conformity with
this Section.

 

7.3          Delays or Omissions.  Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any party under
this Agreement shall impair any such right, power or remedy of such party nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence thereto, or of a similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of any party
hereto of any breach of default under the Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in
such writing.

 

7.4          Attorneys’ Fees.  Should suit
be brought to enforce or interpret any part of this Agreement, the prevailing
party shall be entitled to recover, as an element of the costs of suit and not
as damages, reasonable attorneys’ fees to be fixed by the court (including,
without limitation, costs, expenses and fees on any appeal). The prevailing
party shall be the party entitled to recover its costs of suit, regardless of
whether such suit proceeds to final judgment. A party not entitled to recover
its costs shall not be entitled to recover attorneys’ fees. No sum for
attorneys’

 

C-9

 

fees shall be counted in calculating the amount of a
judgment for purposes of determining if a party is entitled to recover costs or
attorneys’ fees.

 

7.5           Entire Agreement.  This Agreement, the documents referenced
herein and the exhibits thereto, constitute the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof and
thereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect hereto and thereto. The express terms hereof
control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof.

 

7.6           Severability.  Should any one or more of the provisions of this
Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement,
shall be given effect separately from the provision or provisions determined to
be illegal or unenforceable and shall not be affected thereby. The parties
further agree to replace such void or unenforceable provision of this Agreement
with a valid and enforceable provision which will achieve, to the extent
possible, the economic, business and other purposes of the void or
unenforceable provision.

 

7.7           Successors and Assigns.  The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon and be enforceable by the
respective heirs, successors and assigns of the parties hereto; provided,
however, that such assignee or transferee agrees in writing to be bound by all
of the provisions of this Agreement. Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto or
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. Notwithstanding any provision contained elsewhere in this
Agreement, upon the transfer of Shares by any party hereto, no claims or causes
of action arising out of or related to this Agreement existing as of the
transfer date shall be transferred by such party to any respective heir,
successor, assign or permitted transferee, provided that the transfer of Shares
shall not be deemed a waiver by the transferring party of any such claim or
cause of action.

 

7.8           Governing Law.  This Agreement shall be governed by and
construed under the laws of the State of Minnesota, without regard to its
conflicts of laws provisions.

 

7.9           Counterparts.  This Agreement may be executed concurrently
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.

 

(Balance of Page Intentionally Blank; Signature Pages
Follow Next)

 

C-10

 

IN WITNESS WHEREOF, this Agreement is hereby executed
as of the date first written above.

 

	
   

  	
  GRANITE
  CITY FOOD & BREWERY LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  DHW
  LEASING L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

(Signature page to Registration
Rights Agreement)

 

C-11

 

Annex A

 

GRANITE CITY FOOD & BREWERY LTD.

 

Selling
Securityholder Notice and Questionnaire

 

The undersigned beneficial owner of common stock (the “Common Stock”), of Granite City Food & Brewery Ltd. (the
“Company”) understands that the Company
has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a Registration Statement for the registration
and resale of the Registrable Securities, in accordance with the terms of the
Registration Rights Agreement, dated as of [                 ],
2009 (the “Registration Rights Agreement”),
among the Company and the Investors named therein.  A copy of the Registration Rights Agreement
is available from the Company upon request at the address set forth below.  All capitalized terms used and not otherwise
defined herein shall have the meanings ascribed thereto in the Registration
Rights Agreement.

 

The undersigned hereby provides the following
information to the Company and represents and warrants that such information is
accurate:

 

QUESTIONNAIRE

 

1.                                      Name.

 

(a)                                  Full Legal Name of Selling Securityholder

 

 

(b)                                 Full Legal Name of Registered Holder (if
not the same as (a) above) through which Registrable Securities Listed in Item
3 below are held:

 

 

(c)                                  Full Legal Name of Natural Control Person
(which means a natural person who directly you indirectly alone or with others
has power to vote or dispose of the securities covered by the questionnaire):

 

 

2.                                      Address for Notices to Selling
Securityholder:

 

 

	
  Telephone:

  	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  
	
  Contact Person:

  	
   

  	
   

  
	
  Email:

  	
   

  	
   

  
						

 

1

 

3.                                      Beneficial Ownership of Registrable
Securities:

 

(a)                                  Type and Number of Registrable Securities
beneficially owned:

 

 

4.                                      Broker-Dealer Status:

 

(a)                                  Are you a broker-dealer?

 

Yes  o                No  o

 

Note:                   If yes, the Commission’s staff has indicated that you
should be identified as an underwriter in the Registration Statement.

 

(b)                                 Are you an affiliate of a broker-dealer?

 

Yes  o                No  o

 

(c)                                  If you are an affiliate of a
broker-dealer, do you certify that you bought the Registrable Securities in the
ordinary course of business, and at the time of the purchase of the Registrable
Securities to be resold, you had no agreements or understandings, directly or
indirectly, with any person to distribute the Registrable Securities?

 

Yes  o                No  o

 

Note:                   If no, the Commission’s staff has indicated that you
should be identified as an underwriter in the Registration Statement.

 

5.                                      Beneficial Ownership of Other Securities
of the Company Owned by the Selling Securityholder.

 

Except as set forth below in this Item 5, the
undersigned is not the beneficial or registered owner of any securities of the
Company other than the Registrable Securities listed above in Item 3.

 

(a)                                  Type and Amount of Other Securities
beneficially owned by the Selling Securityholder:

 

 

2

 

6.                                      Relationships with the Company:

 

Except as set forth below, neither the undersigned nor
any of its affiliates, officers, directors or principal equity holders (owners
of 5% of more of the equity securities of the undersigned) has held any
position or office or has had any other material relationship with the Company
(or its predecessors or affiliates) during the past three years.

 

State any exceptions here:

 

 

The
undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the
date hereof and prior to the Effective Date for the Registration Statement.

 

By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related Prospectus.  The undersigned understands that such
information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
Prospectus.

 

IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by
its duly authorized agent.

 

	
  Dated:

  	
   

  	
   

  	
  Beneficial
  Owner:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
						

 

PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:

 

[                     ]

 

3

 

EXHIBIT
D

 

RESTAURANT
LEASES

 

List of Restaurant Leases

 

	
   

  	
  Title
  of Lease (Location)

  
	
   

  	
   

  
	
  1.

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated May 17, 2006 (as later amended and assigned).
  (Omaha)

  
	
   

  	
   

  
	
  2.

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated May 31, 2006 (as later amended and assigned).
  (Madison)

  
	
   

  	
   

  
	
  3.

  	
  Sublease
  Agreement by and between GC Rosedale, L.L.C. and Granite City Food &
  Brewery Ltd. dated May 11, 2006 (as later amended and assigned). (Roseville)

  
	
   

  	
   

  
	
  4.

  	
  Sublease
  Agreement by and between Donald A. Dunham, Jr. and Granite City Food &
  Brewery Ltd. dated August 6, 2003 (as later amended and assigned). (Lincoln)

  
	
   

  	
   

  
	
  5.

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated November 9, 2006 (as later amended and
  assigned). (Rockford)

  
	
   

  	
   

  
	
  6.

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated June 19, 2007 (as later amended and assigned).
  (Creve Coeur)

  
	
   

  	
   

  
	
  7.

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated September 12, 2006 (as later amended and assigned).
  (Ft. Wayne)

  
	
   

  	
   

  
	
  8.

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated August 7, 2007 (as later amended and assigned).
  (Maumee)

  
	
   

  	
   

  
	
  9.

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated March 17, 2008 (as later amended and assigned).
  (Mishawaka-South Bend)

  
	
   

  	
   

  
	
  10.

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated March 17, 2008 (as later amended and assigned).
  (Carmel-Indianapolis)

  
	
   

  	
   

  
	
  11.

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated June 7, 2007 (as later amended and assigned).
  (Rogers)

  

 

D-1

 

	
  12.

  	
  Lease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated June 3, 2005 (as later amended and assigned).
  (Olathe)

  
	
   

  	
   

  
	
  13.

  	
  Lease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated June 1, 2005 (as later amended and assigned).
  (Eagan)

  
	
   

  	
   

  
	
  14.

  	
  Lease
  Agreement by and between Donald A. Dunham, Jr. and Granite City Food &
  Brewery Ltd. dated April 3, 2003 (as later amended and assigned). (Davenport)

  
	
   

  	
   

  
	
  15.

  	
  Lease
  Agreement by and between Donald A. Dunham, Jr. and Granite City Food &
  Brewery Ltd. dated February 7, 2003 (as later amended and assigned).
  (Clive-Des Moines)

  
	
   

  	
   

  
	
  16.

  	
  Lease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated March 29, 2005 (as later amended and assigned).
  (Zona Rosa-Kansas City)

  
	
   

  	
   

  
	
  17.

  	
  Lease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated October 22, 2004 (as later amended and
  assigned). (Wichita)

  

 

D-2

Exhibit
E

 

EXECUTIVE
EMPLOYMENT AGREEMENT – AMENDMENT NO. 2

 

THIS EXECUTIVE EMPLOYMENT
AGREEMENT – AMENDMENT NO. 2 (this “Agreement”) is made
and entered into effective                         ,
2009, by and between Granite City Food and Brewery Ltd. (the “Company”) and
Steven J. Wagenheim (“Executive”).

 

RECITALS

 

A.                                   Executive is
employed by the Company pursuant to an employment agreement made and entered
into June 15, 2005 and pursuant to amendments thereto (the “Employment
Agreement”).  Pursuant to such Employment
Agreement, Executive is currently employed on an at-will basis and subject to
additional provision of the Employment Agreement.

 

B.                                     The Company
proposes to enter into a debt conversion transaction (the “Transaction”) with
DHW Leasing L.L.C. (“DHW”) pursuant to which DHW will be issued common stock of
the Company in exchange for the conversion of certain indebtedness, and DHW
will thereupon become the majority shareholder of the Company.

 

C.                                     It is
contemplated that Executive will continue in the employ of the Company
following the Transaction and the Company desires to secure the services of
Executive following the Transaction.

 

D.                                    It is desirable
to amend the Employment Agreement to provide for the term of Executive’s
employment and to confirm certain severance arrangements in connection
therewith.

 

NOW, THEREFORE, in
consideration of the premises, the parties hereto agree as follows:

 

1.             Defined Terms.  All capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Employment Agreement.

 

2.             Article
3 of the Employment Agreement is hereby amended and restated to read as
follows:

 

Term
of Employment

 

3.01         Executive’s employment pursuant to this Agreement shall
continue for a term ending one year following the closing of the debt
conversion transaction (the “Transaction”) by and between the Company and DHW
Leasing L.L.C. (“DHW”) pursuant to which DHW will be issued common stock of the
Company in exchange for the conversion of certain indebtedness, and DHW will
thereupon become the majority shareholder of the Company (the “Termination Date”).  The term of the Executive’s employment shall
automatically be extended for successive one year periods unless the Company or
Executive elects not to extend employment by giving written notice to the other
not less than sixy (60) days prior to the Termination Date or the end of any extension
periods.  If Executive’s employment
continues beyond the Termination Date, it 

 

E-1

 

shall continue on an at-will
basis under the remaining terms and conditions of this Agreement, as amended
hereby, and as the same may be amended from time to time with the consent of
the Company and Executive, except that Section 4.02 shall be inapplicable and incentive
compensation payable to Executive, if any, shall be only as fixed by the
Company’s Compensation Committee (“Committee”). 
Executive’s base compensation under this Agreement shall continue at
Executive’s current monthly base compensation rate for each month worked and
prorated for any partial month during which employment continues.

 

3.             Section 4.04 of the Employment Agreement is hereby
amended and restated to read as follows:

 

4.04         Executive agrees that any and all bonuses or equity
compensation awards paid, awarded or vested after September 21, 2009, shall be
subject to the Board of Director’s Policy on the Recoupment of Bonuses and
Incentive or Equity Based Compensation Related to Certain Financial
Restatements dated September 21, 2009, and that such policy is hereby deemed to
be incorporated by reference into this Agreement.  Executive further agrees that Company may, to
the extent permitted by applicable law, require the Executive to reimburse the
Company for any and all bonuses or equity compensation awards, severance
payments provided for under Article 7 of this Agreement, and base salary
payments provided for under Section 6.05 of this Agreement that are paid,
awarded or vested after September 21, 2009, in the event of a material breach
by Executive of his obligations under Articles 8 or 9 of this Agreement.  In the event Executive fails to make prompt
reimbursement of any such bonuses or equity compensation, severance payments or
base salary payments previously paid, awarded or vested, the Company may, to
the extent permitted by applicable law, deduct the amount required to be
reimbursed from Executive’s compensation otherwise due under this
Agreement.  The obligations contained in
this Section 4.04 shall survive the termination of this Agreement indefinitely.

 

4.             Article
6 of the Employment Agreement is amended to add Section 6.05 as follows:

 

6.05         In the event the employment of Executive is terminated prior
to the Termination Date by the Company without Cause (and other than as
outlined in Sections 6.01 and 6.02) or by the Executive with Good Reason as
defined in Section 7.03, the Company will pay Executive the remainder of
Executive’s Base Salary due through the Termination Date.  Such payments will be made on a monthly basis
commencing with the first month following the Executive’s termination.  Such payments shall be in addition to any
payment which shall be due Executive pursuant to Section 7.01 as amended; shall
not be deemed to be “cash severance-type benefits” under Section 7.01; and
shall not reduce amounts to which Executive is entitled upon a termination
under Section 7.  Notwithstanding the
above, if the Executive terminates employment due to Section 7.03(d), payment
shall be delayed for six (6) months and the delayed payments will be paid in a
lump sum without interest the first month following such six month delay.

 

E-2

 

5.           Section
7.01 of the Employment Agreement is hereby amended and restated to read as
follows:

 

7.01       The Company, its successors or assigns, will pay Executive as
severance pay a lump sum (the “Severance Payment”) amount equal to twelve (12)
months of the Executive’s monthly Base Salary for full-time employment at the
time of Executive’s termination.

 

(a)                                  if (i) there
has been a Change of Control of the Company (as defined in Section 7.04), and (ii)
Executive is an active and full-time employee at the time of the Change of
Control, and (iii) within twelve (12) months following the date of the Change
of Control, Executive’s employment is involuntarily terminated for any reason
(including Good Reason (as definition Section 7.03)), other than for Cause or
death or disability.  If prior to a
Change of Control (a) Executive’s employment is involuntarily terminated by the
Company without cause or (b) Executive terminates his employment for Good
Reason, and such termination for Good Reason (x) occurred at the request of a
person who indicated an intention, or taken steps reasonably calculated, to
effect a Change of Control or (y) otherwise occurred in connection with, or in
anticipation of, a Change of Control which actually occurs, then the
termination of Executive’s employment shall be deemed to have occurred
immediately following a Change of Control; or

 

(b)                                 the employment
of Executive is terminated by the Company without Cause at any time, or the
Executive terminates his employment for “Good Reason” at any time.  For the purposes of this section (7.01(b))
such termination may occur before, on, or after the Termination Date and “Good
Reason” shall be as defined in Section 7.03, except that no “Change of Control”
need occur.

 

(c)                                  if (i) a Change
in Control (as defined in Section 7.04) occurred prior to Executive commencing
his employment with the Company, and (ii) at the time of the Change in Control
Executive had accepted employment with the Company as indicated by his
execution of this Agreement and as a result he was no longer employed by his
previous employer, and (iii) the Company decided to not commence Executive’s
employment as a result of the Change in Control.

 

Nothing in this Subsection
7.01 shall limit the authority of the Committee or Board to terminate Executive’s
employment in accordance with Section 6.03. 
Payment of the Severance Payment pursuant to Section 7.01, less customary
withholdings, shall be made in one lump sum within thirty (30) days of the
Executive’s termination or resignation; however, such payments will be delayed
for six (6) months if the Executive terminates employment due to Section 7.03(d).  In addition, the Severance Payment shall be
reduced by the amount of cash severance-type benefits to which Executive may be
entitled pursuant to any other cash severance plan, agreement, policy or
program of the Company or any of its subsidiaries; including any payment for
post-employment restrictions, provided, however, that if the amount of cash
severance benefits payable under such other severance plan, agreement, policy
or program is greater than the Severance Payment payable pursuant to this
Agreement, Executive will be entitled to receive the

 

E-3

 

amounts payable under such
other plan, agreement, policy or program which exceeds the Severance
Payment.  Without limiting other payments
which would not constitute “cash severance-type benefits” hereunder, any cash
settlement of stock options, accelerated vesting of stock options and
retirement, pension and other similar benefits shall not constitute “cash
severance-type benefits” for purposes of this Section 7.01.

 

6.             Article
7 of the Employment Agreement is amended to add Section 7.06 as follows:

 

7.06         In addition to the Severance Payment payable pursuant to Section
7.01, the Company will pay Executive a pro-rata portion of any bonus pursuant
to any bonus plan or arrangement established or mutually agreed-upon prior to
termination, to the extent earned through the date of termination, based upon
the requirements or criteria of such bonus plan or arrangement, as the Board
shall in good faith determine.  Such
pro-rated bonus, shall be payable at the time and in the manner payable to
other executives of the Company who participate in such plan or arrangement.

 

7.             Article
7 of the Employment Agreement is amended to add Section 7.07 as follows:

 

7.07         All severance payments made under this Article 7, including
those paid under Section 7.01, 7.02 and 7.06, shall be conditioned upon the
Executive’s signing and not rescinding a separation agreement and release in a
form acceptable to the Company, which agreement shall include, at a minimum, a
full and general release of all claims to the greatest extent allowed by
applicable law, a covenant not to sue, and an agreement to be reasonably
available for consultation and assistance to the Company during any period in
which severance is paid, and an agreement to return to the Company all Company
property and copies thereof in any form or media.

 

8.             Bonus or Incentive Compensation.  Executive
acknowledges that he has waived and is not entitled to any bonus payments or
Annual Incentive Compensation through the Company’s 2009 fiscal year..

 

9.             Remainder of Employment Agreement to Continue. 
Except as provided herein, the remainder of the Employment Agreement is
not affected by the foregoing amendments and shall continue in full force and
effect.

 

E-4

 

IN WITNESS WHEREAS, the parties
have executed this Agreement effective the date first above written.

 

	
   

  	
  GRANITE
  CITY FOOD AND BREWERY LTD

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Steven
  J. Wagenheim

  

 

E-5

Exhibit
F

 

EXECUTIVE
EMPLOYMENT AGREEMENT – AMENDMENT NO. 2

 

THIS EXECUTIVE EMPLOYMENT
AGREEMENT – AMENDMENT NO. 2 (this “Agreement”) is made
and entered into effective                        ,
2009, by and between Granite City Food and Brewery Ltd. (the “Company”) and
James G. Gilbertson (“Executive”).

 

RECITALS

 

A.                                   Executive is
employed by the Company pursuant to an employment agreement made and entered
into November 29, 2007 and pursuant to amendments thereto (the “Employment
Agreement”).  Pursuant to such Employment
Agreement, Executive is currently employed on an at-will basis and subject to
additional provision of the Employment Agreement.

 

B.                                     The Company
proposes to enter into a debt conversion transaction (the “Transaction”) with
DHW Leasing L.L.C. (“DHW”) pursuant to which DHW will be issued common stock of
the Company in exchange for the conversion of certain indebtedness, and DHW
will thereupon become the majority shareholder of the Company.

 

C.                                     It is
contemplated that Executive will continue in the employ of the Company
following the Transaction and the Company desires to secure the services of
Executive following the Transaction.

 

D.                                    It is desirable
to amend the Employment Agreement to provide for the term of Executive’s
employment and to confirm certain severance arrangements in connection
therewith.

 

NOW, THEREFORE, in
consideration of the premises, the parties hereto agree as follows:

 

1.             Defined Terms.  All capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Employment Agreement.

 

2.             Section
3.02 of the Employment Agreement is hereby amended and restated to read as
follows:

 

3.02         Executive’s employment pursuant to this Agreement shall
continue for a term ending one year following the closing of the debt
conversion transaction (the “Transaction”) by and between the Company and DHW
Leasing L.L.C. (“DHW”) pursuant to which DHW will be issued common stock of the
Company in exchange for the conversion of certain indebtedness, and DHW will
thereupon become the majority shareholder of the Company (the “Termination Date”).  The term of the Executive’s employment shall
automatically be extended for successive one-year periods unless the Company or
Executive elects not to extend employment by giving written notice to the other
not less than sixty (60) days prior to the Termination Date or the end of any
extension periods.  If Executive’s
employment continues beyond the Termination Date, it shall continue on an
at-will basis under the remaining terms and conditions of this Agreement, as
amended hereby, and as the same may be amended from time to time with 

 

F-1

 

the consent of the Company
and Executive, except that the second paragraph of Section 4.01 shall be
inapplicable and incentive compensation payable to Executive, if any, shall be
only as fixed by the Company’s Compensation Committee (“Committee”).  Executive’s base compensation under this
Agreement shall continue at Executive’s current monthly base compensation rate
for each month worked and prorated for any partial month during which
employment continues.

 

3.             Article 4 of the Employment Agreement is amended to add Section
4.05 as follows:

 

4.05         Executive agrees that any and all bonuses or equity
compensation awards paid, awarded or vested after September 21, 2009, shall be
subject to the Board of Director’s Policy on the Recoupment of Bonuses and
Incentive or Equity Based Compensation Related to Certain Financial
Restatements dated September 21, 2009, and that such policy is hereby deemed to
be incorporated by reference into this Agreement.  Executive further agrees that Company may, to
the extent permitted by applicable law, require the Executive to reimburse the
Company for any and all bonuses or equity compensation awards, severance
payments provided for under Article 7 of this Agreement, and base salary
payments provided for under Section 6.07 of this Agreement that are paid,
awarded or vested after September 21, 2009, in the event of a material breach
by Executive of his obligations under Articles 8 or 9 of this Agreement.  In the event Executive fails to make prompt
reimbursement of any such bonuses or equity compensation, severance payments or
base salary payments previously paid, awarded or vested, the Company may, to
the extent permitted by applicable law, deduct the amount required to be
reimbursed from Executive’s compensation otherwise due under this
Agreement.  The obligations contained in
this Section 4.05 shall survive the termination of this Agreement indefinitely.

 

4.             Article
6 of the Employment Agreement is amended to add Section 6.07 as follows:

 

6.07         In the event the employment of Executive is terminated prior
to the Termination Date by the Company without Cause (and other than as
outlined in Section 6.02) or by the Executive with Good Reason as defined in Section
6.04, the Company will pay Executive the remainder of Executive’s Base Salary
due through the Termination Date.  Such
payments will be made on a monthly basis commencing with the first month
following the Executive’s termination. 
Such payments shall be in addition to any payment which shall be due
Executive pursuant to Section 7.01 as amended; shall not be deemed to be “cash
severance-type benefits” under Section 7.01; and shall not reduce amounts to
which Executive is entitled upon a termination under Section 7.  Notwithstanding the above, if the Executive
terminates employment due to Section 6.04(d), payment shall be delayed for six (6)
months and the delayed payments will be paid in a lump sum without interest the
first month following such six month delay.

 

5.             For
clarification purposes, Section 7.01(b) of the Employment Agreement is amended
to read as follows:

 

F-2

 

(b)           if the employment of Executive is terminated by the
Company without Cause at any time, or the Executive terminates his employment
for “Good Reason” at any time.  For the
purposes of this section (7.01(b)) such termination may occur before, on, or
after the Termination Date and “Good Reason” shall be as defined in Section 6.04,
except that no “Change of Control” need occur.

 

6.             Article
7 of the Employment Agreement is amended to add Section 7.09 as follows:

 

7.09         All severance payments made under this Article 7, including
those paid under Section 7.01, 7.03 and 7.04, shall be conditioned upon the
Executive’s signing and not rescinding a separation agreement and release in a
form acceptable to the Company, which agreement shall include, at a minimum, a
full and general release of all claims to the greatest extent allowed by
applicable law, a covenant not to sue, and an agreement to be reasonably
available for consultation and assistance to the Company during any period in
which severance is paid, and an agreement to return to the Company all Company
property and copies thereof in any form or media.

 

7.             Bonus or Incentive Compensation.  Executive
acknowledges that he has waived and is not entitled to any bonus payments or
incentive compensation through the Company’s 2009 fiscal year.

 

8.             Remainder of Employment Agreement to Continue. 
Except as provided herein, the remainder of the Employment Agreement is
not affected by the foregoing amendments and shall continue in full force and
effect.

 

IN WITNESS WHEREAS, the parties
have executed this Agreement effective the date first above written.

 

	
   

  	
  GRANITE
  CITY FOOD AND BREWERY LTD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  James G. Gilbertson

  

 

F-3

 

Exhibit G

 

EMPLOYMENT
AND SEVERANCE AGREEMENT – AMENDMENT NO. 2

 

THIS EMPLOYMENT AND SEVERANCE
AGREEMENT – AMENDMENT NO. 2 (this “Agreement”) is made
and entered into effective
                          ,
2009, by and between Granite City Food and Brewery Ltd. (the “Company”) and
Darius H. Gilanfar (“Executive”).

 

RECITALS

 

A.                                   Executive is employed by the
Company pursuant to an employment agreement made and entered into December 2,
2008 and pursuant to amendments thereto (the “Employment Agreement”).  Pursuant to such Employment Agreement,
Executive is currently employed on an at-will basis and subject to additional
provision of the Employment Agreement.

 

B.                                     The Company proposes to
enter into a debt conversion transaction (the “Transaction”) with DHW Leasing
L.L.C. (“DHW”) pursuant to which DHW will be issued common stock of the Company
in exchange for the conversion of certain indebtedness, and DHW will thereupon
become the majority shareholder of the Company.

 

C.                                     It is contemplated that
Executive will continue in the employ of the Company following the Transaction
and the Company desires to secure the services of Executive following the
Transaction.

 

D.                                    It is desirable to amend the
Employment Agreement to provide for the term of Executive’s employment and to
confirm certain severance arrangements in connection therewith.

 

NOW, THEREFORE, in
consideration of the premises, the parties hereto agree as follows:

 

1.             Defined Terms.  All capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Employment Agreement.

 

2.             Section 1.01
of the Employment Agreement is hereby amended and restated to read as follows:

 

1.01         The
Company agrees to employ Executive as a full-time employee.  Executive’s employment pursuant to this
Agreement shall continue for a term ending one year following the closing of
the debt conversion transaction (the “Transaction”) by and between the Company
and DHW Leasing L.L.C. (“DHW”) pursuant to which DHW will be issued common
stock of the Company in exchange for the conversion of certain indebtedness,
and DHW will thereupon become the majority shareholder of the Company (the “Termination
Date”).  The term of the Executive’s
employment shall automatically be extended for successive one-year periods
unless the Company or Executive elects not to extend employment by giving
written notice to the other not less than sixy (60) days prior to the
Termination Date or the end of any extension periods.  If Executive’s employment continues beyond
the Termination Date, it shall continue on an at-will basis under the remaining
terms and conditions of this Agreement, as amended hereby, and as 

 

G-1

 

the same may be amended from time to time
with the consent of the Company and Executive, except that incentive
compensation payable to Executive, if any, shall be only as fixed by the
Company’s Compensation Committee (“Committee”). 
Executive’s base compensation under this Agreement shall continue at
Executive’s current monthly base compensation rate for each month worked and
prorated for any partial month during which employment continues.

 

3.             The
Employment Agreement is hereby amended to add Section 1.09 as follows:

 

1.09         Executive agrees that any and all
bonuses or equity compensation awards paid, awarded or vested after September 21,
2009, shall be subject to the Board of Director’s Policy on the Recoupment of
Bonuses and Incentive or Equity Based Compensation Related to Certain Financial
Restatements dated September 21, 2009, and that such policy is hereby
deemed to be incorporated by reference into this Agreement.  Executive further agrees that Company may, to
the extent permitted by applicable law, require the Executive to reimburse the
Company for any and all bonuses or equity compensation awards, severance
payments provided for under Section 3 of this Agreement and base salary
payments provided for under Section 2.04 of this Agreement that are paid,
awarded or vested after September 21, 2009, in the event of a material
breach by Executive of his obligations under Sections 4 or 5 of this
Agreement.  In the event Executive fails
to make prompt reimbursement of any such bonuses or equity compensation,
severance payments or base salary payments previously paid, awarded or vested,
the Company may, to the extent permitted by applicable law, deduct the amount
required to be reimbursed from Executive’s compensation otherwise due under
this Agreement.  The obligations
contained in this Section 1.09 shall survive the termination of this Agreement
indefinitely.

 

4.             Section 2.04
of the Employment Agreement is hereby amended and restated as follows:

 

2.04         In
the event the employment of Executive is terminated prior to the Termination
Date by the Company without Cause (and other than as outlined in Sections 2.01
and 2.02) or by the Executive with Good Reason as defined in Section 3.10,
the Company will pay Executive the remainder of Executive’s Base Salary due
through the Termination Date.  Such
payments will be made on a monthly basis commencing with the first month
following the Executive’s termination. 
Such payments shall be in addition to any payment which shall be due
Executive pursuant to Section 3.01 as amended; shall not be deemed to be “cash
severance-type benefits” under Section 3.01; and shall not reduce amounts
to which Executive is entitled upon a termination under Section 3  Notwithstanding the above, if the Executive
terminates employment due to Section 3.10(d), payment shall be delayed for
six (6) months and the delayed payments will be paid in a lump sum without
interest the first month following such six month delay.

 

5.             Section 3.01
of the Employment Agreement is hereby amended and restated to read as follows:

 

G-2

 

 

3.01         The
Company, its successors or assigns, will pay Executive as severance pay a lump
sum (the “Severance Payment”) amount equal to twelve (12) months of the
Executive’s monthly Base Salary for full-time employment at the time of
Executive’s termination:

 

(a)           if
(i) there has been a Change of Control of the Company (as defined in Section 3.02),
and (ii) Executive is an active and full-time employee at the time of the
Change of Control, and (iii) within twelve (12) months following the date
of the Change of Control, Executive’s employment is involuntarily terminated
for any reason (including Good Reason (as definition Section 3.10)), other
than for Cause or death or disability. 
If prior to a Change of Control (a) Executive’s employment is
involuntarily terminated by the Company without Cause or (b) Executive
terminates his employment for Good Reason, and such termination for Good Reason
(x) occurred at the request of a person who indicated an intention, or
taken steps reasonably calculated, to effect a Change of Control or (y) otherwise
occurred in connection with, or in anticipation of, a Change of Control which
actually occurs, then the termination of Executive’s employment shall be deemed
to have occurred immediately following a Change of Control; or

 

(b)           if
the employment of Executive is terminated by the Company without Cause at any
time, or the Executive terminates his employment for “Good Reason” at any
time.  For the purposes of this section
(3.01(b)) such termination may occur before, on, or after the Termination Date
and “Good Reason” shall be as defined in Section 3.10, except that no “Change
of Control” need occur; or

 

(c)           if
(i) a Change in Control (as defined in Section 3.02) occurred prior
to Executive commencing his employment with the Company, and (ii) at the
time of the Change in Control Executive had accepted employment with the
Company as indicated by his execution of this Agreement and as a result he was
no longer employed by his previous employer, and (iii) the Company decided
to not commence Executive’s employment as a result of the Change in Control.

 

Nothing in this Subsection
3.01 shall limit the authority of the Committee or Board to terminate Executive’s
employment in accordance with Section 2.03.  Payment of the Severance Payment pursuant to Section 3.01,
less customary withholdings, shall be made in one lump sum within thirty (30)
days of the Executive’s termination or resignation; however, such payments will
be delayed for six (6) months if the Executive terminates employment due
to Section 3.10(d).  In addition,
the Severance Payment shall be reduced by the amount of cash severance-type
benefits to which Executive may be entitled pursuant to any other cash
severance plan, agreement, policy or program of the Company or any of its
subsidiaries; including any payment for post-employment restrictions, provided,
however, that if the amount of cash severance benefits payable under such other
severance plan, agreement, policy or program is greater than the Severance
Payment payable pursuant to this Agreement, Executive will be entitled to
receive the amounts payable under such other plan, agreement, policy or program
which exceeds the Severance Payment. 
Without limiting other payments which would not constitute “cash
severance-type benefits” hereunder, any cash settlement of stock options, 

 

G-3

 

accelerated vesting of stock options and
retirement, pension and other similar benefits shall not constitute “cash
severance-type benefits” for purposes of this Section 3.01.

 

6.             The
Employment Agreement is hereby amended to add Section 3.09 as follows:

 

3.09         If
the Company is obligated to pay the severance payment provided in Section 3.01,
and if Executive timely elects to continue his group health and dental insurance
coverage pursuant to applicable COBRA/continuation law and the terms of the
respective benefit plans, the Company shall pay on Executive’s behalf the
premiums for such coverage for the lesser of twelve (12) months or such time as
Executive’s COBRA/continuation rights expire; and cause the immediate vesting
of any unvested stock options then held by Executive.

 

7.             The
Employment Agreement is hereby amended to add Section 3.10 as follows:

 

3.10  “Good
Reason” will be deemed to have occurred if, after a Change in Control:

 

(a)           the
Company, its successors or assigns, assigns Executive position, principal
duties, responsibilities, or status materially contrary to that provided in
Sections 1.02 or 1.03 above;

 

(b)           the
Company, its successors or assigns, relocates Executive to a location that is
more than fifty (50) miles from the Company’s current headquarters in
Minnesota;

 

(c)           the
Company, its successors or assigns, materially reduces Executive’s base salary
contrary to the provisions of section 1.05 hereof or fails to pay Executive any
material compensation or fringe benefits to which the Executive is entitled
within ten (10) business days of the due date; or

 

(d)           a
successor company fails or refuses to assume the Company’s obligations under
this Agreement;

 

(e)           the
Company, its successors or assigns, breaches any of its material obligations
under this Agreement and does not correct any such breach within thirty (30)
days of receiving notice thereof from Executive.

 

If Executive intends to
terminate this Agreement for Good Reason: 
(i) he must give the Company written notice of the facts or events
giving rise to Good Reason at least sixty (60) days prior to such termination,
and such notice must be given within ninety (90) days following the facts or
event alleged to give rise to Good Reason; and (ii) such grounds for Good
Reason must continue and not be remedied for a period of thirty (30) days or
more following the Company’s receipt of such notice.  The failure to give such notice shall be
deemed a waiver of the right to terminate this Agreement for Good Reason based
on such fact or event.

 

G-4

 

8.             Bonus or Incentive Compensation.  Executive
acknowledges that he has waived and is not entitled to any bonus payments or
incentive compensation through the Company’s 2009 fiscal year.

 

9.             Remainder of Employment Agreement to Continue. 
Except as provided herein, the remainder of the Employment Agreement is
not affected by the foregoing amendments and shall continue in full force and
effect.

 

IN WITNESS WHEREAS, the parties
have executed this Agreement effective the date first above written.

 

	
   

  	
  GRANITE
  CITY FOOD AND BREWERY LTD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Darius
  H. Gilanfar

  

 

G-5

 

EXHIBIT H

FORM OF WAIVER OF DEFAULT AND CERTAIN COVENANTS FROM HARMONY

EQUITY INCOME FUND L.L.C. AND HARMONY EQUITY INCOME FUND L.L.C. II

DATED
              
    , 2009.

 

September       ,
2009

 

VIA
FACSIMILE AND U.S. MAIL

 

Granite
City Food & Brewery Ltd.

Granite
City Restaurant Operations, Inc.

5402
Parkdale Drive, Suite 101

Minneapolis,
MN 55416

Attn:  James G. Gilbertson

 

Re:                            WAIVER OF DEFAULT — Bridge Loan Agreement, as amended, from Harmony
Equity Income Fund, L.L.C., and Harmony Equity Income Fund II, L.L.C., to
Granite City Food & Brewery Ltd. and Granite City Restaurant
Operations, Inc.

 

Ladies and Gentlemen:

 

Reference is made to that certain Bridge Loan
Agreement by and between Granite City Food & Brewery Ltd. (the “Company”),
Granite City Restaurant Operations, Inc. (along with the Company, the “Borrowers”),
Harmony Equity Income Fund, L.L.C. (the “Administrative Agent”), and
Harmony Equity Income Fund II, L.L.C. (together with Harmony Equity Income Fund
L.L.C., the “Lenders”), dated as of March 30, 2009, as amended on April 22,
2009, April 30, 2009, May 29, 2009 and July 31, 2009, and as
such may be amended from time to time (the “Loan Agreement”).  For the purposes of this letter, the Loan
Agreement shall be deemed to include the Convertible Bridge Notes, Security
Agreement, IP Agreement and Leasehold Mortgage, Investor Rights Agreement and
all other agreements and instruments entered into and binding upon the
undersigned and the Borrowers pursuant thereto. 
Capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the Agreement.

 

This letter confirms that Lenders have
previously waived certain specific defaults by letter dated August         ,
2009.

 

The Company has entered into a Debt
Conversion Agreement with DHW Leasing, LLC dated September         ,
2009 (“DHW Agreement”), an accurate and complete copy of which has been
delivered to Administrative Agent and its counsel.  Borrowers have represented that pursuant to
the DHW Agreement the equipment originally leased by Borrowers for the
Restaurant will become the property of Borrowers free and clear of any
indebtedness or encumbrances.  Borrowers
have further represented that Borrowers are current with respect to the rent
due under the real estate lease for the Restaurant.  Administrative Agent and Lenders hereby
consent to the transaction contemplated by the DHW Agreement and waive any and
all of Borrowers’ defaults under the Loan Agreement which are triggered on
account of the consummation of the transactions contemplated by the DHW
Agreement.

 

H-1

 

Administrative Agent and Lenders hereby waive
default under Section 2.5(c) of the Agreement for failure to make the
interest payment due October 1, 2009. 
Administrative Agent and Lenders have previously waived the July 1,
2009 interest payment.  Both the October 1,
2009 and July 1, 2009 interest payments shall be added to the principal
amount of indebtedness due Lenders as of the date that each interest payment
was due and shall each accrue interest from said date.

 

Administrative Agent and Lenders hereby agree
to amend Section 5.2(b) of the Loan Agreement pertaining to
maintenance of Borrowers’ net consolidated revenue.  For the quarters ending September 30,
2009 and ending December 29, 2009, Borrowers shall maintain net
consolidated revenue at a minimum of $20,264,500 and $20,556,600, respectively.

 

Administrative Agent and
Lenders hereby waive Borrowers default for failure to timely deliver various
items pursuant to Section 5.1 of the Loan Agreement through the date of
this letter; provided, that Borrowers shall hereafter be required to perform in
a timely manner the agreements contained in Section 5.1.

 

The parties hereby agree to
amend Section 2.1 of the Loan Agreement to extend the date by which
Lenders are required to make additional loans to Borrower to October 31,
2009.

 

This waiver is limited to this particular
instance.  Administrative Agent and
Lenders are not waiving any other agreement, covenant or obligation of the
Borrowers and are not waiving any default or breach of the Sections identified
herein in the future.  Except for the
deferral of the October 1, 2009 interest payment, modification of the
minimum net consolidated revenue for the quarters ending September 30,
2009 and December 29, 2009 and the extension of the lending date to October 31,
2009, this letter shall not constitute an amendment of the Agreement.

 

Signature page follows.

 

H-2

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  ADMINISTRATIVE
  AGENT:

  
	
   

  	
   

  
	
   

  	
  HARMONY
  EQUITY INCOME FUND, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Eugene E. McGowan, Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
  HARMONY
  EQUITY INCOME FUND, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Eugene
  E. McGowan, Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARMONY
  EQUITY INCOME FUND II, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Eugene
  E. McGowan, Managing Member

  
	
   

  	
   

  
	
  Agreed
  and accepted by:

  	
   

  
	
   

  	
   

  
	
  GRANITE
  CITY FOOD & BREWERY LTD.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
  James
  Gilbertson, Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
  GRANITE
  CITY RESTAURANT OPERATIONS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
  James Gilbertson, Chief Financial Officer

  	
   

  

 

H-3

 

EXHIBIT I

DHW THIRD-PARTY CONSENTS AND AGREEMENTS

 

None.

 

I-1

 

Exhibit J

 

MASTER AMENDMENT TO LEASES

 

THIS MASTER AMENDMENT TO
LEASES (the “Master Amendment”) entered into effective the                 day
of
                               ,
2009 (the “Execution Date”), by and among GC Omaha Limited Partnership, Dunham
Capital Management, L.L.C., GC Rosedale, L.L.C., GC Lincoln Limited
Partnership, GC Olathe Limited Partnership, GC Eagan Limited Partnership, GC
Cedar Rapids/Davenport Limited Partnership, GC Des Moines Limited Partnership,
GC Holdings Limited Partnership and GC Wichita Limited Partnership (each, a “Dunham
Landlord”, collectively, the “Dunham Landlords”), and Granite City Food &
Brewery, Ltd. (“GCFB”).

 

WITNESSETH:

 

WHEREAS, one of the Dunham
Landlords is the landlord under each lease agreement with GCFB described on the
attached Exhibit A for the location indicated on Exhibit A
for the applicable lease (the “Leases”), and

 

WHEREAS, GCFB and DHW
Leasing, L.L.C., have entered into a Debt Conversion Agreement and the Dunham
Landlords have agreed in connection therewith to amend the terms of the Leases;

 

NOW, THEREFORE, in
consideration of the above recitals that by this reference are incorporated
herein, the mutual covenants and conditions contained herein and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties have agreed to amend the Leases as set forth below.

 

1.             Deferred Rent System.  For all rent payments due on and after June 1,
2009 under the Leases, the Dunham Landlords agree to defer each payment of rent
once for one month (the “Deferred Rent System”).  For example, each rent payment due on October 1,
2009 shall be payable on November 1, 2009.

 

2.             Reduced Rent System  For all rent payments due on and after June 1,
2009 under the Leases, the Dunham Landlords agree to reduce each rent payment
by thirty percent (30%) (the “Reduced Rent System”).  The total amount of rent reductions granted
under this Section 2 shall be payable by GCFB as described in Section 3
below.

 

3.             Duration of Rent Deferrals and
Reductions; Repayment.  The Deferred
Rent System and the Reduced Rent System shall be in effect until the earlier
of: (i) the date GCFB closes on aggregate net proceeds to GCFB of at least
$2,000,000 from any combination of debt or equity financings (the “Financing
Date”) or (ii) the first anniversary of the Execution Date.  At the earlier of the Financing Date or the
first anniversary of the Execution Date, GCFB shall (i) pay each Dunham
Landlord the total amount of rent reductions and unpaid deferred rent granted
in Sections 1 and 2 above by such Dunham Landlord in one lump sum, without any
accrued interest, and (ii) make the rent payments for the remainder of the
Leases in the amounts and at the times required by the Leases.

 

J-1

 

4.             Defaults.  The Dunham Landlords hereby waive all
defaults or events of default under the Leases existing as of the Execution
Date.

 

5.             Authority.  Each signatory of this Master Amendment
represents hereby that he or she has the authority to execute and deliver the
same on behalf of the party hereto for which such signatory is acting. This
Master Amendment shall be binding upon and inure to the benefit of each Dunham
Landlord and GCFB and their respective successors, assigns and related
entities.

 

6.             Miscellaneous.  The parties are also subject to the following
miscellaneous provisions: (a) this Master Amendment is governed by and
shall be construed in accordance with the laws of the state of Minnesota; (b) captions
used in this Master Amendment are for convenience only and are not a part of
the agreement; (c) time is of the essence; (d) if any provision of
this Master Amendment is invalid or unenforceable to any extent, the remainder
of this Master Amendment shall continue in effect and be enforceable to the
fullest extent permitted by law; (e) this Master Amendment may be modified
only by a writing executed and delivered by all parties; and (f) nothing
contained in this Master Amendment shall be deemed or construed to create a
partnership or joint venture of or between any Dunham Landlord and GCFB.

 

7.             Counterparts.  This Master Amendment may be executed in any
number of counterparts, all of which together shall constitute one and the same
instrument, and any party or signatory hereto may execute this Master Amendment
by signing any such counterpart. 
Delivery of a facsimile or digital copy (pdf) of an executed copy of
this Master Amendment shall be effective to bind the executing party.  Each party so executing this Master Amendment
shall promptly deliver an original executed counterpart to the other
signatories.

 

WITH RESPECT TO ANY ACTION OR PROCEEDING ARISING IN
CONNECTION WITH THIS MASTER AMENDMENT, EACH PARTY HERETO (I) WAIVES ITS
RIGHT TO A TRIAL BY JURY IN ANY SUCH ACTION, (II) CONSENTS TO ANY SUCH
ACTION BEING VENUED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN
MINNEAPOLIS OR ST. PAUL, MINNESOTA AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH
FORUMS IS NOT CONVENIENT.

 

J-2

 

IN WITNESS WHEREOF, the Dunham Landlords and GCFB have executed this
Master Amendment as of the day and year first above written.

 

DUNHAM
LANDLORDS

 

	
  GC
  Omaha Limited Partnership

  	
   

  	
  Dunham
  Capital Management, L.L.C.

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name
  :

  	
   

  	
   

  	
  Name
  :

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
  GC
  Rosedale, L.L.C.

  	
   

  	
  GC
  Lincoln Limited Partnership

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name
  :

  	
   

  	
   

  	
  Name
  :

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
  GC
  Olathe Limited Partnership

  	
   

  	
  GC
  Eagan Limited Partnership

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name
  :

  	
   

  	
   

  	
  Name
  :

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
  GC
  Cedar Rapids/Davenport Limited Partnership

  	
   

  	
  GC
  Des Moines Limited Partnership

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name
  :

  	
   

  	
   

  	
  Name
  :

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
  GC
  Holdings Limited Partnership

  	
   

  	
  GC
  Wichita Limited Partnership

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name
  :

  	
   

  	
   

  	
  Name
  :

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  

 

J-3

 

	
  TENANT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Granite
  City Food & Brewery, Ltd.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  	
   

  
							

 

J-4

 

EXHIBIT A

 

List of Leases

 

	
   

  	
   

  	
  Location

  	
   

  	
  Title of Lease

  	
   

  	
  Current Landlord

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Omaha

  	
   

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated May 17, 2006 (as later amended and
  assigned).

  	
   

  	
  GC
  Omaha Limited Partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Madison

  	
   

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated May 31, 2006 (as later amended and
  assigned).

  	
   

  	
  Dunham
  Capital Management, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Roseville

  	
   

  	
  Sublease
  Agreement by and between GC Rosedale, L.L.C. and Granite City Food &
  Brewery Ltd. dated May 11, 2006 (as later amended and assigned).

  	
   

  	
  GC
  Rosedale, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Lincoln

  	
   

  	
  Sublease
  Agreement by and between Donald A. Dunham, Jr. and Granite City
  Food & Brewery Ltd. dated August 6, 2003 (as later amended and
  assigned).

  	
   

  	
  GC
  Lincoln Limited Partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Rockford

  	
   

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated November 9, 2006 (as later amended
  and assigned).

  	
   

  	
  Dunham
  Capital Management, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Creve
  Coeur

  	
   

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated June 19, 2007 (as later amended and
  assigned).

  	
   

  	
  Dunham
  Capital Management, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Ft.
  Wayne

  	
   

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated September 12, 2006 (as later amended
  and assigned).

  	
   

  	
  Dunham
  Capital Management, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Maumee

  	
   

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated August 7, 2007 (as later amended and
  assigned).

  	
   

  	
  Dunham
  Capital Management, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Mishawaka-South
  Bend

  	
   

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated March 17, 2008 (as later amended and
  assigned).

  	
   

  	
  Dunham
  Capital Management, L.L.C.

  

 

 

	
  10.

  	
   

  	
  Carmel-Indianapolis

  	
   

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated March 17, 2008 (as later amended and
  assigned).

  	
   

  	
  Dunham
  Capital Management, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Rogers

  	
   

  	
  Sublease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated June 7, 2007 (as later amended and
  assigned).

  	
   

  	
  Dunham
  Capital Management, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Olathe

  	
   

  	
  Lease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated June 3, 2005 (as later amended and
  assigned).

  	
   

  	
  GC
  Olathe Limited Partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Eagan

  	
   

  	
  Lease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated June 1, 2005 (as later amended and
  assigned).

  	
   

  	
  GC
  Eagan Limited Partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Davenport

  	
   

  	
  Lease
  Agreement by and between Donald A. Dunham, Jr. and Granite City
  Food & Brewery Ltd. dated April 3, 2003 (as later amended and
  assigned).

  	
   

  	
  GC
  Cedar Rapids/ Davenport Limited Partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Clive-Des
  Moines

  	
   

  	
  Lease
  Agreement by and between Donald A. Dunham, Jr. and Granite City
  Food & Brewery Ltd. dated February 7, 2003 (as later amended
  and assigned).

  	
   

  	
  GC
  Des Moines Limited Partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Zona
  Rosa-Kansas City

  	
   

  	
  Lease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated March 29, 2005 (as later amended and
  assigned).

  	
   

  	
  GC
  Holdings Limited Partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  Wichita

  	
   

  	
  Lease
  Agreement by and between Dunham Capital Management, L.L.C. and Granite City
  Food & Brewery Ltd. dated October 22, 2004 (as later amended
  and assigned).

  	
   

  	
  GC
  Wichita Limited Partnership

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]