Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 23, 2015



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission file number 0-1667

Bob Evans Farms, Inc.

(Exact name of registrant as specified in its charter)



Delaware		31-4421866
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

8111 Smith’s Mill Road, New Albany, Ohio 43054

(Address of principal executive offices Zip Code)

(Registrant’s telephone number, including area code): (614) 491-2225

Not applicable

(Former name, former address and formal fiscal year, if changed since last report):

_______________________________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large Accelerated Filer	x	Accelerated Filer	¨
Non-Accelerated Filer	¨ (Do not check if a smaller reporting company)	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of November 27, 2015, the registrant had 20,869,296 shares of its common stock, $.01 par value, outstanding.

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BOB EVANS FARMS, INC.

TABLE OF CONTENTS




PART I – FINANCIAL INFORMATION	3
ITEM 1. UNAUDITED FINANCIAL STATEMENTS	3
CONSOLIDATED BALANCE SHEETS	3
CONSOLIDATED STATEMENTS OF NET INCOME	4
CONSOLIDATED STATEMENTS OF CASH FLOWS	5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30
ITEM 4. CONTROLS AND PROCEDURES	30
PART II—OTHER INFORMATION	31
ITEM 1. LEGAL PROCEEDINGS	31
ITEM 1A. RISK FACTORS	31
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	31
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	32
ITEM 4. MINE SAFETY DISCLOSURES	32
ITEM 5. OTHER INFORMATION	32
ITEM 6. EXHIBITS	32
SIGNATURES	33
INDEX TO EXHIBITS	34

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PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BOB EVANS FARMS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value amounts)



	Unaudited October 23, 2015			April 24, 2015
Assets
Current Assets
Cash and equivalents	$	5,361		$	6,358
Accounts receivable, net	31,697			26,100
Inventories	29,178			24,620
Deferred income taxes	16,117			16,117
Federal and state income taxes receivable	12,957			23,722
Prepaid expenses and other current assets	6,171			5,035
Current assets held for sale	17,327			22,243
Total Current Assets	118,808			124,195
Property, Plant and Equipment	1,552,357			1,585,882
Less accumulated depreciation	786,858			756,015
Net Property, Plant and Equipment	765,499			829,867
Other Assets
Deposits and other	5,502			3,756
Notes receivable	19,780			18,544
Rabbi trust assets	29,849			32,302
Goodwill and other intangible assets	19,908			19,986
Non-current deferred tax assets	2,326			2,326
Long-term assets held for sale	—			1,611
Total Other Assets	77,365			78,525
Total Assets	$	961,672		$	1,032,587
Liabilities and Stockholders’ Equity
Current Liabilities
Current portion of long-term debt	$	415		$	409
Accounts payable	38,473			30,019
Accrued property, plant and equipment purchases	5,477			4,820
Accrued non-income taxes	17,023			14,951
Accrued wages and related liabilities	21,918			34,529
Self-insurance reserves	20,804			18,900
Deferred gift card revenue	11,920			13,714
Current reserve for uncertain tax provision	1,582			1,594
Other accrued expenses	43,961			34,156
Total Current Liabilities	161,573			153,092
Long-Term Liabilities
Deferred compensation	17,740			22,481
Reserve for uncertain tax positions	2,733			2,767
Deferred income taxes	17,986			17,825
Deferred rent and other	8,155			5,755
Credit facility borrowings and other long-term debt	474,253			450,676
Total Long-Term Liabilities	520,867			499,504
Stockholders’ Equity
Common stock, $.01 par value; authorized 100,000 shares; issued 42,638 shares at October 23, 2015, and April 24, 2015	426			426
Capital in excess of par value	240,047			235,958
Retained earnings	832,819			836,362
Treasury stock, 21,259 shares at October 23, 2015, and 19,231 shares at April 24, 2015, at cost	(794,060		)	(692,755		)
Total Stockholders’ Equity	279,232			379,991
Total Liabilities and Stockholders' Equity	$	961,672		$	1,032,587

The accompanying notes are an integral part of the financial statements.

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CONSOLIDATED STATEMENTS OF NET INCOME

UNAUDITED

(in thousands, except per share amounts)



	Three Months Ended				Six Months Ended
	October 23, 2015		October 24, 2014		October 23, 2015		October 24, 2014
Net Sales	$	325,021	$	333,279	$	646,734	$	659,619
Cost of sales	102,709		116,012		199,030		230,180
Operating wage and fringe benefit expenses	104,403		105,613		209,287		210,042
Other operating expenses	56,181		54,195		107,815		107,909
Selling, general and administrative expenses	29,902		28,972		70,361		61,387
Depreciation and amortization expense	20,107		19,475		40,260		39,448
Impairments	285		—		285		1,577
Operating Income	11,434		9,012		19,696		9,076
Net interest expense	2,883		2,203		5,489		3,819
Income Before Income Taxes	8,551		6,809		14,207		5,257
Provision for income taxes	2,120		770		3,496		234
Net Income	$	6,431	$	6,039	$	10,711	$	5,023
Earnings Per Share — Net Income
Basic	$	0.29	$	0.26	$	0.48	$	0.21
Diluted	$	0.29	$	0.25	$	0.47	$	0.21

Cash Dividends Paid Per Share	$	0.31	$	0.31	$	0.62	$	0.62

Weighted Average Shares Outstanding
Basic	22,115		23,509		22,421		23,467
Dilutive shares	118		226		151		231
Diluted	22,233		23,735		22,572		23,698

The accompanying notes are an integral part of the financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

(in thousands)



	Six Months Ended
	October 23, 2015			October 24, 2014
Operating activities:
Net income	$	10,711		$	5,023
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	40,260			39,448
Impairments	285			1,577
Loss (Gain) on disposal of fixed assets	1,603			(376		)
Loss (Gain) on rabbi trust assets	2,453			(1,233		)
(Gain) Loss Deferred compensation	(1,462		)	880
Share based compensation	3,329			1,888
Accretion on long-term note receivable	(1,011		)	(903		)
Deferred income taxes	161			—
Amortization of deferred financing costs	1,336			448
Cash provided by (used for) assets and liabilities:
Accounts receivable	(5,597		)	106
Inventories	(4,558		)	(2,734		)
Prepaid expenses and other current assets	(1,136		)	(1,453		)
Accounts payable	8,454			3,837
Federal and state income taxes	10,719			627
Accrued wages and related liabilities	(7,710		)	(1,600		)
Self-insurance	1,904			745
Accrued non-income taxes	2,072			(2,732		)
Deferred gift card revenue	(1,794		)	(1,775		)
Other assets and liabilities	6,332			(1,932		)
Net cash provided by operating activities	66,351			39,841
Investing activities:
Purchase of property, plant and equipment	(26,667		)	(36,955		)
Proceeds from sale of property, plant and equipment	58,451			1,108
Deposits and other	(566		)	(261		)
Net cash provided by (used in) investing activities	31,218			(36,108		)
Financing activities:
Cash dividends paid	(14,040		)	(14,468		)
Gross proceeds from credit facility borrowings and other long-term debt	380,192			211,072
Gross repayments of credit facility borrowings and other long-term debt	(356,610		)	(202,101		)
Payments of debt issuance costs	(2,517		)	(1,279		)
Purchase of treasury stock	(104,929		)	—
Proceeds from share-based compensation	214			239
Cash paid for taxes on share-based compensation	(1,007		)	(1,768		)
Excess tax benefits from stock-based compensation	131			483
Net cash used in financing activities	(98,566		)	(7,822		)
Net decrease in cash and equivalents	(997		)	(4,089		)
Cash and equivalents at the beginning of the period	6,358			7,826
Cash and equivalents at the end of the period	$	5,361		$	3,737

The accompanying notes are an integral part of the financial statements.

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BOB EVANS FARMS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Summary of Significant Accounting Policies

Unaudited Consolidated Financial Statements: The accompanying unaudited consolidated financial statements of Bob Evans Farms, Inc. (“Bob Evans”) and its subsidiaries (collectively, Bob Evans and its subsidiaries are referred to as the “Company,” “we,” “us” and “our”) are presented in accordance with the requirements of Form 10-Q and, consequently, do not include all of the disclosures normally required by U.S. generally accepted accounting principles or those normally made in our Form 10-K filing. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of our financial position and results of operations have been included. The consolidated financial statements are not necessarily indicative of the results of operations for a full fiscal year. No significant changes have occurred in the financial disclosures made in our Form 10-K for the fiscal year ended April 24, 2015 (refer to the Form 10-K for a summary of significant accounting policies followed in the preparation of the consolidated financial statements). Throughout the Unaudited Consolidated Financial Statements and Notes to the Consolidated Financial Statements, dollars are in thousands, except share amounts.

Description of Business: As of October 23, 2015, we operated 547 full-service Bob Evans Restaurants in 18 states. Bob Evans Restaurants are primarily located in the Midwest, mid-Atlantic and Southeast regions of the United States. In the BEF Foods segment we produce and distribute pork sausage and a variety of complementary home-style, refrigerated side dish convenience food items under the Bob Evans ®, Owens ® and Country Creek ® brand names. These food products are delivered to our customers throughout the United States and Canada. We also manufacture and sell similar products to food-service accounts, including Bob Evans Restaurants and other restaurants and food sellers.

Reporting Segments: We have two reporting segments: Bob Evans Restaurants and BEF Foods. The revenues from these two segments include both net sales to unaffiliated customers and intersegment net sales, which are accounted for on a basis consistent with net sales to unaffiliated customers. Intersegment net sales and other intersegment transactions have been eliminated in the consolidated financial statements. Operating income represents earnings before interest and income taxes. Certain costs related to corporate and other functions are not allocated to our reporting segments. Prior to the first quarter of fiscal 2016, we allocated these costs to our reporting segments. This change in reporting was made to present our results in line with the changes made during the first quarter in how our Chief Operating Decision Maker measures results of operations and allocates resources. We have adjusted the prior year amounts to reflect this change in presentation. See Note 9 for detailed segment information.

Revenue Recognition: Revenue in the Bob Evans Restaurants segment is recognized at the point of sale, other than revenue from the sale of gift cards, which is deferred and recognized upon redemption. Our gift cards do not have expiration dates or inactivity fees. Revenue in the BEF Foods segment is recognized when products are received by our customers. All revenue is presented net of sales tax collections.

In addition, we recognize income on unredeemed gift cards (“gift card breakage”) based on historical redemption patterns, referred to as the redemption recognition method. Gift card breakage is recognized proportionately over the period of redemption in net sales in the Consolidated Statements of Net Income. The liability for unredeemed gift cards is included in deferred revenue on the Consolidated Balance Sheets, and was $11,920 and $13,714 at October 23, 2015, and April 24, 2015, respectively.

Promotional (Trade) Spending: We engage in promotional (sales incentive / trade spend) programs in the form of promotional discounts and coupons at Bob Evans Restaurants, and off-invoice deductions, billbacks, and cooperative advertising at BEF Foods. Costs associated with these programs are classified as a reduction of gross sales in the period in which the sale occurs. Promotional spending at Bob Evans Restaurants, primarily comprised of discounts taken on dine-in sales, was $9,504 and $13,256 for the three months ended October 23, 2015, and October 24, 2014, respectively, and $18,253 and $29,791 for the six months ended October 23, 2015, and October 24, 2014, respectively. Promotional spending at BEF Foods, primarily comprised of off-invoice deductions and billbacks, was $15,655 and $12,481 for the three months ended October 23, 2015, and October 24, 2014, respectively, and $30,408 and $21,160 for the six months ended October 23, 2015, and October 24, 2014, respectively.

Shipping and Handling costs: Expenditures related to shipping our BEF Foods products to our customers are expensed when incurred. Shipping and handling costs were $3,322 and $3,973 for the three months ended October 23, 2015, and October 24, 2014, respectively, and $7,191 and $8,291 for the six months ended October 23, 2015, and October 24, 2014, respectively, and are recorded in the other operating expenses line of the Consolidated Statements of Net Income.

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Accounts Receivable: Accounts receivable represents amounts owed to us through our operating activities and are presented net of allowance for doubtful accounts. Accounts receivable for Bob Evans Restaurants consist primarily of credit card receivables, while accounts receivable for BEF Foods consist primarily of trade receivables from customer sales. We evaluate the collectability of our accounts receivable based on a combination of factors. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations to us, we record a specific allowance for bad debts against amounts due to reduce the net recognized receivable to the amount we reasonably believe will be collected. In addition, we recognize allowances for bad debts based on the length of time receivables are past due with allowance percentages, based on our historical experiences, applied on a graduated scale relative to the age of the receivable amounts. If circumstances such as higher than expected bad debt experience or an unexpected material adverse change in a major customer’s ability to meet its financial obligations to us were to occur, the recoverability of amounts due to us could change by a material amount. We had allowance for doubtful accounts of $392 and $542 as of October 23, 2015, and April 24, 2015, respectively. Accounts receivable included credits of $5,211 and $3,671 as of October 23, 2015, and April 24, 2015, respectively, related to promotional incentives that reduce what is owed to the Company from certain BEF Foods customers.

Notes Receivable: As a result of the sale of Mimi’s Café to Le Duff America, Inc. ("Le Duff"), we received a Promissory Note ("the Note") for $30,000. The Note has an annual interest rate of 1.5%, a term of seven years and a principal and interest payment due date of February 2020. Partial prepayments are required prior to maturity if the buyer reaches certain levels of EBITDA during specified periods. Our right to repayment under the Note is subordinated to third-party lenders as well as other funding that may be provided by the parent company. In the event of a sale or liquidation of the Mimi’s Café restaurant chain or the entity that owns it by its parent company, our right to repayment may be subordinated to payments owed to the parent company and / or potentially reduced based on the funds available for repayment. The note was originally valued using a discounted cash flow model. The Company recognized accretion income on the Note of $513 and $458 for the three months ended October 23, 2015, and October 24, 2014, respectively, and $1,011 and $903 for the six months ended October 23, 2015, and October 24, 2014, respectively. These gains are reflected within the Net Interest Expense caption of the Consolidated Statements of Net Income.

Inventories: We value our Bob Evans Restaurants inventories at the lower of first-in, first-out cost (“FIFO”) or market and our BEF Foods inventories at an average cost method which approximates a FIFO basis due to the perishable nature of that inventory. Inventory includes raw materials and supplies ($14,980 at October 23, 2015, and $12,898 at April 24, 2015) and finished goods ($14,198 at October 23, 2015, and $11,722 at April 24, 2015).

Property, Plant and Equipment: Property, plant and equipment is recorded at cost less accumulated depreciation. The straight-line depreciation method is used for nearly all capitalized assets, although some assets purchased prior to fiscal 1995 continue to be depreciated using accelerated methods. Depreciation is calculated at rates adequate to amortize costs over the estimated useful lives of buildings and improvements (5 to 50 years) and machinery and equipment (3 to 10 years). Improvements to leased properties are depreciated over the shorter of their useful lives or the initial lease terms. Total depreciation expense was $20,067 and $19,436 in the three months ended October 23, 2015, and October 24, 2014, respectively, and $40,181 and $39,370 for the six months ended October 23, 2015, and October 24, 2014, respectively.

During the three and six months ended October 23, 2015, we capitalized internal labor costs of $548 and $1,052 primarily for our enterprise resource planning system ("ERP") and other IT projects. During the three and six months ended October 24, 2014, we capitalized internal labor costs of $1,490 and $2,396, which included $1,757 of capitalized costs for ERP and $640 for new restaurant construction on a year to date basis. The first phase of our ERP system was put in service on April 25, 2015, and has an expected useful life of 10 years. We are working to implement the second phase of our ERP system, which is expected to go live in fiscal 2017.

We evaluate property, plant and equipment held and used in the business for impairment whenever events or changes in circumstance indicate that the carrying amount of a long-lived asset may not be recoverable. Impairment is determined by comparing the estimated fair value for the asset group to the carrying amount of its assets. If impairment exists, the amount of impairment is measured as the excess of the carrying amount over the estimated fair values of the assets. See Note 5 for further information. Assets for 15 Bob Evans Restaurants' nonoperating locations and our former Richardson, Texas, plant location totaling $17,327 are classified as current assets held for sale in the Consolidated Balance Sheet as of October 23, 2015. Assets for 19 Bob Evans Restaurants' locations, as well as our Richardson, Texas, location totaling $22,243 are classified as current assets held for sale in the Consolidated Balance Sheet as of April 24, 2015. Assets for two Bob Evans Restaurants' locations totaling $1,611 are classified as long-term assets held for sale in the Consolidated Balance Sheet as of April 24, 2015.

Rabbi Trust Assets: The rabbi trust assets line on the Consolidated Balance Sheets is comprised entirely of assets held under Company sponsored deferred compensation and supplemental retirement plans and represents the cash surrender value of company-owned life insurance policies. These life insurance policies are intended to be used as a source of funds to match respective funding obligations in our nonqualified deferred compensation plans. See Note 7 for additional information on our

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nonqualified deferred compensation plans. The cash surrender value of company-owned life insurance policies totaled $29,849 and $32,302 as of October 23, 2015, and April 24, 2015, respectively, and are restricted to their use as noted above. The cash receipts and payments related to these company-owned life insurance proceeds are included in cash flows from operating activities on the Consolidated Statements of Cash Flows and changes in the cash surrender value for these assets are reflected within the selling, general, and administrative ("S,G&A") line in the Consolidated Statements of Net Income.

Goodwill and Other Intangible Assets: Goodwill, which represents the cost in excess of fair market value of net assets acquired, was $19,634 as of October 23, 2015, and April 24, 2015. Other intangible assets were $274 and $352 as of October 23, 2015, and April 24, 2015, respectively. The goodwill and other intangible assets are related to the BEF Foods segment. Other intangible assets represents definite-lived non-compete agreements that are amortized on a straight-line basis over the estimated economic life of five years. Goodwill is tested for impairment during the fourth quarter each year, or on a more frequent basis when indicators of impairment exist.

Goodwill impairment testing involves a comparison of the estimated fair value of reporting units to the respective carrying amount. If the estimated fair value exceeds the carrying amount, then no impairment exists. If the carrying amount exceeds the estimated fair value, then a second step is performed to determine the amount of impairment, if any. We perform our impairment test using a combination of income based and market-based approaches. The income based approach indicates the fair value of an asset or business based on the cash flows it can be expected to generate over its remaining useful life. Under the market-based approach, fair value is determined by comparing our reporting segments to similar businesses or guideline companies whose securities are actively traded in public markets.

Earnings Per Share ("EPS"): Our basic EPS computation is based on the weighted-average number of shares of common stock outstanding during the period presented. Our diluted EPS calculation reflects the assumed vesting of restricted shares and market-based performance shares, the exercise and conversion of outstanding employee stock options and the settlement of share-based obligations recorded as liabilities on the Consolidated Balance Sheet (see Note 7 for more information), net of the impact of anti-dilutive shares.

The numerator in calculating both basic and diluted EPS for each period is reported net income. The denominator is based on the following weighted-average shares outstanding:



	Three Months Ended		Six Months Ended
(in thousands)	October 23, 2015	October 24, 2014	October 23, 2015	October 24, 2014
Basic	22,115	23,509	22,421	23,467
Dilutive shares	118	226	151	231
Diluted	22,233	23,735	22,572	23,698

In the three and six months ended October 23, 2015, 251,799 and 241,445 shares of common stock, respectively, were excluded from the diluted EPS calculations because they were anti-dilutive. In the three and six months ended October 24, 2014, 42,354 and 43,953 shares of common stock, respectively, were excluded from the diluted EPS calculations because they were anti-dilutive.

Dividends: In the three months ended October 23, 2015, and October 24, 2014, the Company paid a quarterly dividend equal to $0.31 per share on our outstanding common stock. In the six months ended October 23, 2015, and October 24, 2014, the Company paid dividends equal to $0.62 per share on our outstanding common stock. Individuals that hold awards for unvested and outstanding restricted stock units, market-based performance share units and vested deferred stock units are entitled to receive dividend equivalent rights equal to the per-share cash dividends paid on outstanding units. Dividend equivalent rights are forfeitable until the underlying share-units from which they were derived vest. Share based dividend equivalents are recorded as a reduction to retained earnings, with an offsetting increase to capital in excess of par value. Refer to table below:



	Six Months Ended
(in thousands)	October 23, 2015		October 24, 2014
Cash dividends paid to common stockholders	$	14,040	$	14,468
Dividend equivalent rights	213		186
Total dividends	$	14,253	$	14,654

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Stock-based Employee Compensation: The Stock Compensation Topic of the FASB ASC 718 ("ASC 718") requires that we measure the cost of employee services received in exchange for an equity award, such as stock options, restricted stock awards, restricted stock units and market-based performance share units, based on the estimated fair value of the award on the grant date. The cost is recognized in the income statement over the vesting period of the award on a straight-line basis with the exception of compensation cost related to awards for "Retirement Eligible" (as defined in the applicable plan) employees, which is recognized immediately on the grant date. Compensation cost recognized is based on the grant date fair value estimated in accordance with ASC 718. See Note 6 for more information.

Financial Instruments: The fair values of our financial instrument approximate their carrying values as of October 23, 2015, and April 24, 2015. We do not use derivative financial instruments for speculative purposes. See Note 2 for more information.

Accrued Non-Income Taxes: Accrued non-income taxes primarily represent obligations for real estate and personal property taxes, as well as sales and use taxes for Bob Evans Restaurants. Accrued non-income taxes were $17,023 and $14,951 as of October 23, 2015, and April 24, 2015, respectively.

Self-Insurance Reserves: We record estimates for certain health, workers’ compensation and general insurance costs that are self-insured programs. Self-insurance reserves include actuarial estimates of both claims filed, carried at their expected ultimate settlement value, and claims incurred but not yet reported. Our liability represents an estimate of the ultimate cost of claims incurred as of the balance sheet date. Self-insurance reserves were $20,804 and $18,900 as of October 23, 2015, and April 24, 2015, respectively.

Advertising Costs: Media advertising is expensed at the time the media first airs. We expense all other advertising costs as incurred. Advertising expense was $10,033 and $8,079 in the three months ended October 23, 2015, and October 24, 2014, respectively, and $19,026 and $17,201 for the six months ended October 23, 2015, and October 24, 2014, respectively. Approximately 80% of year to date advertising costs were incurred in the Bob Evans Restaurants segment. Advertising costs are classified as other operating expenses in the Consolidated Statements of Net Income.

Commitments and Contingencies: We rent certain restaurant facilities and, effective the second quarter of fiscal 2016, two of our manufacturing facilities (refer to Note 11 for additional information) under operating leases having initial terms that primarily expire 20 years from inception. The leases typically contain renewal clauses of 5 to 30 years exercisable at our option. Most leases contain either fixed or inflation-adjusted escalation clauses.

We occasionally use purchase commitment contracts to stabilize the potentially volatile pricing associated with certain commodity items.

We are self-insured for most casualty losses and employee health-care claims up to certain stop-loss limits per claimant. We have accounted for liabilities for casualty losses, including both reported claims and incurred, but not reported claims. We have accounted for our employee health-care claims liability through a review of incurred and paid claims history. We do not believe that our calculation of casualty losses and employee health-care claims liabilities would change materially under different conditions and/or different methods.

Reclassifications and corrections: Certain prior period amounts have been reclassified or adjusted to conform to the current presentation.

We reclassified $3,973 and $8,291 of BEF Foods shipping and handling costs from the S,G&A line to the other operating expenses line on the Consolidated Statements of Net Income for the three and six months ended October 24, 2014, respectively. We believe these costs are better reflected as other operating expenses.

We reclassified $1,319 of Bob Evans Restaurants impairment charges related to impairments on long-lived assets classified as held-and-used from the S,G&A line to the impairments line on the Consolidated Statements of Net Income for the six months ended October 24, 2014. Formerly, we only separately presented impairments on assets classified as held-for-sale.

We reclassified $661 and $1,254 of BEF Foods advertising costs from the S,G&A line to the other operating expenses line on the Consolidated Statements of Net Income for the three and six months ended October 24, 2014, respectively. We believe these costs are better classified as other operating expenses rather than S,G&A. Advertising costs for both Bob Evans Restaurants and BEF Foods are now classified as other operating expenses.

We corrected an error in classification related to Bob Evans Restaurants' management training wages of $2,828 on the Consolidated Statements of Net Income for the three and six months ended October 24, 2014. These wages were classified in the S,G&A line and should have been classified as operating wages.

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These reclassifications and corrections had no impact on operating income for the three or six months ended October 24, 2014.

New Accounting Pronouncements: In the normal course of business, management evaluates all new accounting pronouncements issued by the FASB, the Securities and Exchange Commission (“SEC”), the Emerging Issues Task Force, the American Institute of Certified Public Accountants or any other authoritative accounting body to determine the potential impact they may have on the Company’s consolidated financial statements.

In May 2014, the FASB and the International Accounting Standards Board ("IASB") issued new joint guidance surrounding revenue recognition. Under U.S. generally accepted accounting principles ("US GAAP"), this guidance is being introduced to the ASC as Topic 606, Revenue from Contracts with Customers ("Topic 606"), by Accounting Standards Update No. 2014-09 ("ASU 2014-09"). The new standard supersedes a majority of existing revenue recognition guidance under US GAAP, and requires companies to recognize revenue when it transfers goods or services to a customer in an amount that reflects the consideration to which a company expects to be entitled. Companies may need to use more judgment and make more estimates while recognizing revenue, which could result in additional disclosures to the financial statements. Topic 606 allows for either a "full retrospective" adoption or a "modified retrospective" adoption. The standard is effective for us in fiscal 2018. We are currently evaluating which method we will use and the revenue recognition impact this guidance will have once implemented.

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements - Going Concern ("ASU 2014-15") to provide guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern. The guidance requires management to assess whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity's ability to continue as a going concern within one year after the date that the financial statements are issued. When management identifies such conditions or events, a footnote disclosure is required to disclose their nature, as well as management's plans to alleviate the substantial doubt to continue as a going concern. We do not expect this update to have an impact on the consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, to ASC 835-30 "Interest - Imputation of Interest." ASU 2015-03 will require that debt issuance costs related to a recognized term-debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. We adopted ASU 2015-03 in the first quarter of fiscal 2016. This update did not have an impact on the consolidated financial statements.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. ASU 2015-11 simplifies the subsequent measurement of inventory by replacing today's lower of cost or market test with a lower of cost and net realizable test, which is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The standard is effective for us in fiscal 2018. We do not expect this update to have a material impact on the consolidated financial statements.

2. Debt

As of October 23, 2015, long-term debt was comprised of the outstanding balance on our Revolving Credit Facility Amended and Restated Credit Agreement ("Credit Agreement") of $471,377, a portion of a $3,000 Research and Development Investment Loan ("R&D Loan") with the State of Ohio totaling $2,426, and an interest-free loan of $1,000, due 10 years from the date of borrowing, with imputed interest, which as a result is discounted to $865. Refer to the table below:



(in thousands)	October 23, 2015			April 24, 2015
Credit Agreement borrowings (1)	$	471,377		$	447,599
R&D Loan (1)	2,426			2,631
Interest-free loan (1)	865			855
Total borrowings	474,668			451,085
Less current portion	(415		)	(409		)
Long-term debt	$	474,253		$	450,676

⁽¹⁾The Credit Agreement, R&D Loan and Interest-free loan mature in fiscal 2019, 2021, and 2022, respectively

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On January 2, 2014, we entered into the Credit Agreement, which represents a syndicated secured revolving credit facility. We incurred financing costs of $2,064 associated with this Credit Agreement, which are being amortized over the remaining term of the agreement. As a result of the Third Amendment to the Credit Agreement, effective October 21, 2015, and discussed further below, up to $650,000 of borrowings are available, including a letter of credit sub-facility of $50,000, and an accordion provision that permits the Company to request an additional $300,000 for certain transactions, increasing the revolving credit commitment to $950,000. It is secured by the stock pledges of certain material subsidiaries. This Credit Agreement replaced our existing variable-rate revolving credit facility. Borrowings under the Credit Agreement bear interest, at Borrower’s option, at a rate based on LIBOR or the Base Rate, plus a margin based on the Leverage Ratio, ranging from 1.00% to 2.75% per annum for LIBOR, and ranging from 0.00% to 1.75% per annum for Base Rate. The Base Rate means for any day, a fluctuating per annum rate of interest equal to the highest of (i) the Federal Funds Open Rate, plus 0.5%, (ii) the Prime Rate, or (iii) the Daily LIBOR Rate, plus 1.0%. We are also required to pay a commitment fee of 0.15% per annum to 0.25% per annum of the average unused portion of the total lender commitments then in effect.

In the first quarter of fiscal 2015, we entered into a First Amendment to the Credit Agreement dated July 23, 2014. The terms of the Credit Agreement that were amended related to: (a) an increase to the Maximum Leverage Ratio for the period starting July 25, 2014, through July 22, 2016, (b) certain restricted payment requirements related to share repurchases, and (c) an update to the Pricing Grid, which determines variable pricing and fees, to reflect changes in the allowable Maximum Leverage Ratio. We incurred financing costs of $1,279 associated with this amendment, which are being amortized using the straight line method, which approximates the effective interest method.

In the first quarter of fiscal 2016, we entered into a Second Amendment to the Credit Agreement dated May 11, 2015, with an effective date of April 24, 2015. The terms of the Credit Agreement were amended related to: (a) an increase to the Maximum Leverage Ratio for the period starting April 24, 2015, through the remaining term of the agreement, (b) a change in the restrictions related to payments for share repurchases, and (c) a change in the definition of the LIBOR and Daily LIBOR rates that are used to calculate interest on outstanding borrowings. We incurred and paid fees of $1,705 associated with this amendment, which will be amortized over the remaining term of the Credit Agreement using the straight line method, which approximates the effective interest method.

In the second quarter of fiscal 2016, we entered into a Third Amendment to the Credit Agreement dated and effective as of October 21, 2015. The terms of the Credit Agreement were amended related to: (a) an increase of the level of permitted indebtedness in connection with sale and leaseback transactions of assets from $100,000 to $300,000, (b) a removal of the $150,000 share repurchase restriction during the 2016 fiscal year, (c) a decrease of the size of the facility from $750,000 to $650,000 (d) a modification of the definition of the leverage ratio to account for rent expense from leases, so that the leverage ratio will be calculated as consolidated indebtedness plus 600% of annual rent expense versus consolidated EBITDAR, and (e) an inclusion of an add back to the leverage ratio calculation for costs related to the settlement of a class action lawsuit. We incurred and paid fees of $812 associated with this amendment, which will be amortized over the remaining term of the Credit Agreement using the straight line method, which approximates the effective interest method. In addition, as a result of lowering the borrowing capacity on the credit facility, we wrote off $480 of previously unamortized deferred financing costs related to the agreement.

Our Credit Agreement contains financial and other various affirmative and negative covenants that are typical for financings of this type. Our Credit Agreement contains financial covenants that require us to maintain a specified minimum coverage ratio and maximum leverage ratio at October 23, 2015, of (1) a minimum coverage ratio of not less than 3.00 to 1.00; and (2) a maximum leverage ratio that may not exceed 4.50 to 1.00. As of October 23, 2015, our minimum coverage ratio was 12.08, and our leverage ratio was 3.12, as defined in our Credit Agreement. A breach of any of these covenants could result in a default under our Credit Agreement in which all amounts under our Credit Agreement may become immediately due and payable and commitments under the Credit Agreement to extend further credit, terminated. We were in compliance with the financial covenant requirements of our Credit Agreement as of October 23, 2015. The Credit Agreement also allows for the incurrence of additional indebtedness of up to $300,000 and mortgage indebtedness on our corporate headquarters of up to $50,000.

Our effective interest rate for the Credit Agreement was 1.97% and 2.06% for the three months ended October 23, 2015, and October 24, 2014, respectively, and 2.09% and 1.84% for the six months ended October 23, 2015, and October 24, 2014, respectively.

As of October 23, 2015, we had outstanding letters of credit that totaled approximately $12,418, of which $12,117 is utilized as part of the total amount available under our Credit Agreement. The letters of credit are used primarily to satisfy insurance-related collateral requirements.

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As of October 23, 2015, we had $471,377 outstanding on the Credit Agreement. The primary purposes of the Credit Agreement is to fund working capital, capital expenditures, stock repurchases, joint ventures and acquisitions and other general corporate purposes as well as for trade and standby letters of credit.

3. Income Taxes

The provision for income taxes is based on a current estimate of the annual effective income tax rate adjusted to reflect the impact of discrete items. The Company’s effective income tax rate was 24.8% for the three months ended October 23, 2015, as compared to 11.3% for the corresponding period a year ago. The Company’s effective income tax rate was 24.6% for the six months ended October 23, 2015, as compared to 4.5% for the corresponding period a year ago. The increase in tax rate for the three and six months ended October 23, 2015, was driven primarily by discrete items recorded in the second quarter of fiscal year 2015 related to the work opportunity tax credit, plus the impact of yearly variances in the forecasted annual rate related to wage credits and officers' life insurance.

4. Restructuring and Severance Charges

In fiscal 2013, we began a strategic organizational realignment including a closure of production facilities and a reduction of personnel at Bob Evans Restaurants, BEF Foods and at our corporate headquarters, as part of our comprehensive plan to reduce S,G&A expenses. In the second quarter of fiscal 2014, we closed our BEF Foods production plant in Richardson, Texas, and in the third quarter of fiscal 2014, we closed our BEF Foods production plants in Springfield and Bidwell, Ohio. The actions to close these food production facilities was intended to increase efficiency by consolidating production to our high capacity food production facility in Sulphur Springs, Texas. In the fourth quarter of fiscal 2014 we recorded charges related to a reduction of personnel at our corporate headquarters. In the fourth quarter of fiscal 2015 management approved a plan to further reduce headcount as part of the overall S,G&A cost reduction initiative. Additionally in the fourth quarter of fiscal 2015, management committed to a plan to close 16 owned and four leased under-performing restaurants in fiscal 2016. As of October 23, 2015, all 20 of these restaurants have been closed. We believe these closures strengthen our restaurant portfolio by improving overall returns and freeing up resources for other uses.

We recorded $140 of pretax restructuring charges in the six months ended October 23, 2015, as compared to $950 of pretax restructuring charges in the six months ended October 24, 2014. These costs, reflected primarily in S,G&A, related to the organizational realignments discussed above.

Liabilities related to restructuring charges as of October 23, 2015, were $696, and relate to corporate severance charges primarily recorded in the fourth quarter of fiscal 2015.

See tables below for detail of restructuring activity for the six months ended October 23, 2015, and October 24, 2014, respectively:



(in thousands)	Bob Evans Restaurants			BEF Foods			Corporate and Other			Total
Balance, April 24, 2015	$	1,105		$	481		$	2,040		$	3,626
Restructuring and related severance charges incurred	112			28						140
Amounts paid	(1,086		)	(488		)	(1,150		)	(2,724		)
Adjustments	(131		)	(21		)	(194		)	(346		)
Balance, October 23, 2015	$	—		$	—		$	696		$	696



(in thousands)	Bob Evans Restaurants		BEF Foods			Corporate and Other			Total
Balance, April 25, 2014	$	—	$	553		$	674		$	1,227
Restructuring and related severance charges incurred	—		528			422			950
Amounts paid	—		(895		)	(712		)	(1,607		)
Balance, October 24, 2014	$	—	$	186		$	384		$	570

5. Impairments

We measure certain assets and liabilities at fair value on a nonrecurring basis, including long-lived assets that have been reduced to fair value when they are held for sale and long-lived assets that are written down to fair value when they are impaired.

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We evaluate the carrying amount of long-lived assets held and used in the business periodically and when facts and circumstances indicate that an impairment may exist. A long-lived asset group is considered impaired when the carrying value of the asset group exceeds its fair value. The impairment loss recognized is the excess of carrying value above its fair value. The estimation of fair value requires significant judgment regarding future restaurant performance and market-based real estate appraisals. To estimate fair value for locations where we own the land and building, we obtain appraisals from third-party real estate valuation firms based on sales of comparable properties in the same area as our restaurant location, which we believe approximates fair value. We use discounted future cash flows to estimate fair value of long-lived assets for our leased locations. Our weighted average cost of capital is used as the discount rate in our fair value measurements for leased locations, which is considered a Level 3 measurement. A reasonable change in this discount rate would not have a significant impact on these fair value measurements.

Impairment charges of $285 were recorded in the three months and six months ended October 23, 2015, and related to two nonoperating restaurant properties where the respective fair values were determined to be lower than the carrying value. We recorded $1,577 of impairment charges in the six months ended October 24, 2014, a result of adverse performance in the first quarter of fiscal 2015 and a reassessment of expected future cash flows at five operating and one nonoperating restaurant properties.

The following table represents impairments for those assets remeasured to fair value during the three and six months ended October 23, 2015, and the corresponding period last year.



	Three Months Ended					Six Months Ended
(in thousands)	October 23, 2015			October 24, 2014		October 23, 2015			October 24, 2014
Bob Evans Restaurants
Assets held and used	$	147	(1)	$	—	$	147	(1)	$	1,319	(3)
Assets held for sale	138		(2)	—		138		(2)	258		(4)
Total Impairments	$	285		$	—	$	285		$	1,577

⁽¹⁾ Relates to one nonoperating location

⁽²⁾ Relates to one nonoperating location

⁽³⁾ Relates to five operating locations

⁽⁴⁾ Relates to one nonoperating location

6. Stock-Based Compensation

As of October 23, 2015, there were equity awards outstanding under the Amended and Restated Bob Evans Farms, Inc. 2010 Equity and Cash Incentive Plan (the “2010 Plan”), as well as previous equity plans adopted in 2006, 1998 and 1993. The types of awards that may be granted under the 2010 Plan include: stock options, stock appreciation rights, restricted stock awards ("RSAs"), restricted stock units ("RSUs"), cash incentive awards, performance share units ("PSUs"), and other awards. During the three months ended October 23, 2015, and October 24, 2014, the Company granted approximately 48,000 and 26,000 RSAs and RSUs under the 2010 Plan. During the six months ended October 23, 2015, the Company granted approximately 115,000 RSAs and RSUs and 70,000 PSUs under the 2010 Plan, while during the six months ended October 24, 2014, we granted approximately 39,000 RSAs and RSUs under the 2010 Plan.

The PSUs granted under the 2010 Plan have market-based vesting conditions, while RSAs and RSUs granted under the 2010 Plan vest ratably, primarily over three years for employees, and one year for nonemployee directors of the Company. The PSUs awarded in the first quarter of fiscal 2016 vest at the end of a three-year performance period if they achieve the market-based vesting conditions.

Stock-based compensation expense, included primarily within the S,G&A line on the Consolidated Statements of Net Income, was $1,281 and $1,037 for the three months ended October 23, 2015, and October 24, 2014, respectively, and $3,329 and $1,888 for the six months ended October 23, 2015, and October 24, 2014, respectively.

7. Other Compensation Plans

We have a 401(k) retirement savings plan that is available to substantially all employees who have at least 1,000 hours of service. We also have nonqualified deferred compensation plans, the Bob Evans Farms, Inc. Executive Deferral Plan ("BEEDP") and the Bob Evans Farms, Inc. Director Deferral Plan ("BEDDP"), which provide certain executives and members of the Board of Directors, respectively, the opportunity to defer a portion of their current income to future years. A third-party manages the investments directed by the employees and board members who participate in the plans. Gains and losses related to investment results of these deferrals are recorded within the S,G&A line in the Consolidated Statements of Net Income.

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Obligations to participants who defer equity compensation through our deferral plans are satisfied only in Company common stock. There is no change in the vesting term for equity awards that are deferred into these plans. Obligations related to these deferred equity awards are treated as "Plan A" instruments, as defined by ASC 710. These obligations are classified as equity instruments within the Capital in excess of par value line of the Consolidated Balance Sheets. No subsequent changes in fair value are recognized in the Consolidated Financial Statements for these instruments. Participants earn share-based dividend equivalents in an amount equal to the value of per-share dividends paid to holders of our common stock. These dividends accumulate into additional shares of common stock, and are recorded through retained earnings in the period in which dividends are paid. Deferred shares that vest are included in the denominator of basic and diluted EPS in accordance with ASC 260 - Earnings per Share. The dilutive impact of unvested, deferred stock awards is included in the denominator of our diluted EPS calculation. Refer to Note 6 for additional information on stock-based compensation.

Participants who defer cash compensation into our deferral plans have a range of investment options, one of which is Company stock. Obligations for participants who choose this investment election are satisfied only in shares of Company stock, while all other obligations are satisfied in cash. These share-based obligations are treated as "Plan B" instruments as defined by ASC 710, and are recorded as liabilities on the Consolidated Balance Sheets, in the deferred compensation line. We record compensation cost for subsequent changes in the fair value of these obligations. Participants earn share-based dividend equivalents in an amount equal to the value of per-share dividends paid to holders of our common stock. These dividends accumulate into additional shares of common stock, and are recorded as compensation cost in the period in which the dividends are paid. The dilutive impact of these shares is included in the denominator of our diluted EPS calculation.

The Supplemental Executive Retirement Plan ("SERP") provides awards to a limited number of executives in the form of nonqualified deferred cash compensation. Gains and losses related to these benefits and the related investment results are recorded within the S,G&A caption in the consolidated statements of net income. The SERP is frozen and no further persons can be added as participants and funding was reduced to a nominal amount per year.

Deferred compensation liabilities expected to be satisfied within the next 12 months are classified as current liabilities within the Accrued wages and other liabilities line of the Consolidated Balance Sheets. Our deferred compensation liabilities as of October 23, 2015, and April 24, 2015, consisted of the following:



(in thousands)	October 23, 2015			April 24, 2015
Liability for deferred cash obligations in BEEDP and BEDDP Plans	$	13,089		$	17,904
Liability for deferred cash obligations in SERP plan	6,534			9,198
Liability for deferred share-based obligations in BEEDP and BEDDP Plans	728			2,676
Other noncurrent compensation arrangements	1,675			958
Total deferred compensation liabilities	22,026			30,736
Less current portion (1)	(4,286		)	(8,255		)
Noncurrent deferred compensation liabilities	$	17,740		$	22,481

⁽¹⁾ Current portion of deferred compensation is included within the accrued wages and related liabilities line on the Consolidated Balance Sheets

8. Commitments and Contingencies

We are from time-to-time involved in ordinary and routine litigation, typically involving claims from customers, employees and others related to operational issues common to the restaurant and food manufacturing industries, and incidental to our business. Management presently believes that the ultimate outcome of these proceedings, individually or in the aggregate, will not have a material adverse effect on our financial position, cash flows or results of operations.

Class Action Litigation: In August 2012, a former Bob Evans Restaurant employee filed an action against the Company in the United States District Court for the Southern District of Ohio, styled David Snodgrass v. Bob Evans Farms, LLC, Case No. 2:12-cvg-00768 (“Snodgrass”). The lead plaintiff alleged that the Company violated the Fair Labor Standards Act by misclassifying assistant managers as exempt employees and failing to pay overtime compensation during the period of time the employee worked as an assistant manager. The plaintiff seeks an unspecified amount of alleged back wages, liquidated damages, statutory damages and attorneys’ fees. The lead plaintiff sought to maintain the suit as a collective action on behalf of other similarly situated assistant managers employed at Bob Evans Restaurants between August 2009 and present. In December 2013, the Court in Snodgrass granted conditional certification of those assistant managers that elected to opt-in to the collective action.

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In May 2014, the same plaintiffs’ counsel in the Snodgrass matter filed essentially duplicative claims under the overtime laws of the State of Ohio and Commonwealth of Pennsylvania, styled Utterback v. Bob Evans Farms, LLC Case No. CV14826909 in the Court of Common Pleas of Cuyahoga County, Ohio (“Utterback”) and Mackin v. Bob Evans Farms, LLC Case No. 2:14-cv-450 in the United States District Court for the Southern District of Ohio (“Mackin”), respectively. Neither the Utterback nor Mackin proceedings have been certified for class status at this time.

While we continue to believe that our assistant managers were properly classified as exempt from the respective Federal and State overtime requirements and that we have meritorious defenses to the claims in each of the Snodgrass, Utterback and Mackin matters, as previously reported in our Annual Report in Form 10-K for the fiscal year ended April 24, 2015, in the fourth quarter of fiscal 2015 we received an unfavorable ruling related to the Snodgrass litigation and determined a settlement of all three matters was in the best interest of the Company.

In June 2015, counsel for all parties attended the second mediation in the Snodgrass matter in an attempt to resolve each of the Snodgrass, Utterback and Mackin litigation matters. On July 31, 2015, the Company and counsel for the plaintiffs reached an agreement in principle to resolve all claims presented in the Snodgrass, Mackin and Utterback cases for the total sum of up to $16,500 on a claims made basis. A Settlement Agreement was executed by the parties on October 2, 2015, and the Court provided preliminary approval on October 23, 2015.

In connection with the unfavorable ruling, we recorded a charge of $6,000 in the fourth quarter of fiscal 2015. As a result of the agreement in principle, we recorded an additional charge of $10,500 in the first quarter of fiscal 2016. This expense was recorded to the Bob Evans Restaurants segment and in the S,G&A line of the Consolidated Statements of Net Income.

Other Matters: The Division of Enforcement of the SEC is conducting a formal investigation relating to disclosures set forth in our filings on Form 8 - K and Form 10 - Q/A both filed on December 3, 2014. Those filings addressed the correction of our error in the classification of our borrowings under our credit agreement as a current liability rather than as a long-term liability, as reported in our Form 10 - Q filed on August 27, 2014. We are cooperating fully with the SEC in this matter. The Company cannot predict the duration, scope or outcome of the SEC’s investigation.

9. Reporting Segments

We have two reporting segments: Bob Evans Restaurants and BEF Foods. We determine our segments on the same basis that the Company's Chief Operating Decision Maker uses to allocate resources and assess performance. We evaluate our segments based on operating income, excluding expenses and charges from corporate and other functions which we consider to be overall corporate costs, or costs not reflective of the reporting segment’s core operating businesses. This includes corporate functions such as information technology, finance, legal, human resources, supply chain and other corporate functions, and includes costs such as ongoing IT infrastructure costs, certain legal and professional fees, depreciation on our corporate assets and other costs. Prior to the first quarter of fiscal 2016, we allocated these costs to our reporting segments. This change in reporting was made to present our results in line with the changes made during the first quarter in how management measures results of operations and allocates resources. We have adjusted the prior year amounts to reflect this change in presentation. Operating income represents earnings before interest and income taxes.

Information on our reporting segments is summarized as follows:



	Three Months Ended						Six Months Ended
(in thousands)	October 23, 2015			October 24, 2014			October 23, 2015			October 24, 2014
Net Sales:
Bob Evans Restaurants	$	230,741		$	241,151		$	469,410		$	481,302
BEF Foods	99,480			97,761			185,528			188,557
Intersegment net sales of food products	(5,200		)	(5,633		)	(8,204		)	(10,240		)
Subtotal of BEF Foods	94,280			92,128			177,324			178,317
Total	$	325,021		$	333,279		$	646,734		$	659,619
Operating income (loss):
Bob Evans Restaurants	$	13,323		$	20,627		$	23,132		$	35,555
BEF Foods	13,997			6,356			29,834			9,401
Corporate and Other	(15,886		)	(17,971		)	(33,270		)	(35,880		)
Total	$	11,434		$	9,012		$	19,696		$	9,076

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(in thousands)	October 23, 2015		April 24, 2015
Identifiable Assets:
Bob Evans Restaurants	$	634,324	$	665,910
BEF Foods	148,763		179,137
General corporate assets	178,585		187,540
Total	$	961,672	$	1,032,587

Discussion of segment results is included within Management's Discussion and Analysis of Financial Condition and Results of Operations.

10. Supplemental Cash Flow Information

Cash paid for income taxes and interest for the six months ended October 23, 2015, and October 24, 2014, is summarized as follows:



	Six Months Ended
(in thousands)	October 23, 2015			October 24, 2014
Income taxes paid	$	354		$	4,652
Income taxes refunded	(7,664		)	(5,531		)
Income taxes (refunded) paid, net	(7,310		)	(879		)
Interest paid	$	5,338		$	4,611

11. Sale and Leaseback Transaction

In the second quarter of fiscal 2016, we entered into an agreement pursuant to which we sold our BEF Foods industrial properties located in Lima, Ohio, and Sulphur Springs, Texas, for $51,600. We received net proceeds of $50,017, after consideration of closing and other transaction costs. In conjunction with the sale, assets with a net book value of $22,415 and $29,142 for the Lima and Sulphur Springs properties, respectively, were retired. The transaction resulted in a deferred gain of $2,305 for the Lima facility which is recorded in the deferred rent and other line on the Consolidated Balance Sheets, and a pretax loss on disposal of $3,432, recognized in the three months ended October 23, 2015, for the Sulphur Springs facility, which is recorded within the S,G&A line on the Consolidated Statements of Net Income and in the BEF Foods segment. Concurrent with the sale, the Company also entered into a master lease agreement with the same party that purchased the assets, pursuant to which we leased both the Lima and Sulphur Springs properties for an initial 20-year term at an annual, straight-line rent expense of $4,127, inclusive of the amortized deferred gain for the Lima property. The master lease agreement provides for two ten-year renewal options. Refer to the table below for a summary of the sale and leaseback transaction:



(in thousands)	Lima, Ohio			Sulphur Springs, Texas
Selling price	$	25,284		$	26,316
Direct transaction costs	564			606
Net book value of assets sold	22,415			29,142
Net gain (loss) on sale	$	2,305	(1)	$	(3,432	)

⁽¹⁾ The gain on the sale of our Lima facility is deferred and will be recognized over the lease term

12. Subsequent Events

On November 14, 2015, the Company entered into an employment agreement with Saed Mohseni. Mr. Mohseni will serve as the Company’s President and Chief Executive Officer, with a start date effective January 1, 2016. Mr. Mohseni is also expected to be appointed to the Company’s Board of Directors effective January 1, 2016. The three year employment agreement with Mr. Mohseni will expire on December 31, 2018. The initial three-year term will be automatically extended unless either Mr. Mohseni or the Company gives notice of non-extension.

On November 19, 2015, the Board of Directors approved an additional $100,000 share repurchase program. The program authorizes the Company to repurchase its outstanding common stock pursuant to plans approved by the Board under SEC Rules 10b-18 and 10b5-1, and in the open market or through privately negotiated transactions. The share repurchase authorization expires on December 31, 2016.

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On November 19, 2015, the Board of Directors approved a quarterly cash dividend of $0.34 per share, payable on December 14, 2015, to shareholders of record at the close of business on November 30, 2015.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General Overview

In this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), we use the terms “Bob Evans,” “company,” “we,” “us” and “our” to collectively refer to Bob Evans Farms, Inc., a Delaware corporation, and its subsidiaries. This MD&A may contain forward-looking statements that set forth our expectations and anticipated results based on management’s plans and assumptions. These statements are often indicated by words such as “expects,” “anticipates,” “believes,” “estimates,” “intends” and “plans.” Actual results may differ materially from those predicted by the forward-looking statements because of various factors and possible events, including the assumptions, risks and uncertainties discussed in our Annual Report on Form 10-K for the fiscal year ended April 24, 2015, under the heading “Item 1A. Risk Factors,” and as supplemented in our other filings with the SEC.

The following terms are the principal trademarks and registered trademarks of Bob Evans, many of which are used herein: Get in on Something Good™, BE Express ®, BE Fit ®, BE Mail ®, BEST Bob Evans Special Touch ®, Big Farm Burgers ®, Bob Evans ®, Bob Evans Express ®, Bob Evans Oven Bake ®, Bob Evans Restaurants ®, Bob Evans Wildfire ®, Country Creek Farm ®, Discover Farm-Fresh Goodness ®, Farm-Fresh Goodness ®, Farmhouse Feast ®, Fit From the Farm ®, Kettle Creations ®, and Owens ®. Bob Evans uses additional registered trademarks and proprietary marks in its business.

As part of our Broasted Chicken® platform, we have licensed the use of the Broasted ®, Broaster Chicken ®, Genuine Broaster Chicken ®, and Broasted Chicken ® trademarks from The Broaster Company. Our Development Agreement provides us with limited exclusivity rights to use these licensed trademarks and proprietary Broaster equipment for a period of 10 years within the domestic family dining segment.

We have two reporting segments, Bob Evans Restaurants and BEF Foods, which is reflected in management's discussion and analysis of financial condition and result of operations. As of October 23, 2015, we operated 547 full-service Bob Evans Restaurants in 18 states. Bob Evans Restaurants are primarily located in the Midwest, mid-Atlantic and Southeast regions of the United States. In the BEF Foods segment we produce and distribute pork sausage and a variety of complementary home-style, refrigerated side dish convenience food items under the Bob Evans, Owens and Country Creek brand names. These food products are delivered to our customers throughout the United States and Canada. We also manufacture and sell similar products to food-service accounts, including Bob Evans Restaurants and other restaurants and food sellers.

Effective with the first quarter of fiscal year 2016, the results of operations of our reporting segments exclude expenses from certain corporate and other functions which we consider overall corporate costs, or costs not reflective of the reporting segment’s core operating business. Prior year amounts have been adjusted to reflect the change in presentation. Refer to Note 9 for additional reporting segment information.

Results: Three Months Ended October 23, 2015, as Compared to Three Months Ended October 24, 2014

Bob Evans Farms, Inc. Consolidated Overview

Net sales were $325.0 million in the three months ended October 23, 2015, a decrease of $8.3 million as compared to the corresponding period last year. Operating income was $11.4 million for the three months ended October 23, 2015, an increase of $2.4 million as compared to the corresponding period last year. The increase in operating income as compared to the prior year was due to lower cost of sales of $13.3 million and lower operating wages of $1.2 million, partially offset by lower sales, higher other operating expenses of $2.0 million, higher S,G&A of $0.9 million, higher depreciation costs of $0.6 million and current quarter impairment charges of $0.3 million.

Pretax net income in the three months ended October 23, 2015, was $8.6 million as compared to a pretax income of $6.8 million in the corresponding period last year. The provision for income taxes was $2.1 million in the three months ended October 23, 2015, as compared to $0.8 million in the corresponding period last year. Earnings per diluted share was $0.29 per share in the three months ended October 23, 2015, as compared to $0.25 in the corresponding period last year. Refer to the sections below for analysis on our second quarter fiscal 2016 operating results as compared to the comparable prior year period.

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	Three Months Ended
	Consolidated Results								Bob Evans Restaurants
(in thousands)	October 23, 2015				October 24, 2014				October 23, 2015				October 24, 2014
Net Sales	$	325,021			$	333,279			$	230,741			$	241,151
Cost of sales	102,709		31.6	%	116,012		34.8	%	61,725		26.8	%	64,165		26.6	%
Operating wage and fringe benefit expenses	104,403		32.1	%	105,613		31.7	%	93,460		40.4	%	94,834		39.3	%
Other operating expenses	56,181		17.3	%	54,195		16.3	%	42,984		18.6	%	42,290		17.5	%
Selling, general and administrative expenses	29,902		9.2	%	28,972		8.7	%	5,433		2.4	%	5,572		2.3	%
Depreciation and amortization expense	20,107		6.2	%	19,475		5.8	%	13,531		5.9	%	13,663		5.7	%
Impairments	285		0.1	%	—		—	%	285		0.1	%	—		—	%
Operating Income	$	11,434	3.5	%	$	9,012	2.7	%	$	13,323	5.8	%	$	20,627	8.6	%



	Three Months Ended
	BEF Foods								Corporate and Other
(in thousands)	October 23, 2015				October 24, 2014				October 23, 2015			October 24, 2014
Net Sales	$	94,280			$	92,128			$	—		$	—
Cost of sales	40,984		43.5	%	51,847		56.3	%	—			—
Operating wage and fringe benefit expenses	10,943		11.7	%	10,779		11.7	%	—			—
Other operating expenses	13,197		14.0	%	11,905		12.9	%	—			—
Selling, general and administrative expenses	10,964		11.6	%	6,918		7.5	%	13,505			16,482
Depreciation and amortization expense	4,195		4.4	%	4,323		4.7	%	2,381			1,489
Impairments	—		—	%	—		—	%	—			—
Operating Income	$	13,997	14.8	%	$	6,356	6.9	%	$	(15,886	)	$	(17,971	)

These tables reflect data for the three months ended October 23, 2015, compared to the three months ended October 24, 2014. The consolidated information is derived from the accompanying Consolidated Statements of Net Income. The tables also include data for our two reporting segments, Bob Evans Restaurants and BEF Foods, and unallocated corporate and other costs. The ratios presented reflect the underlying dollar values expressed as a percentage of the applicable net sales amounts.

Sales

Consolidated net sales decreased 2.5% to $325.0 million, for the three months ended October 23, 2015, compared to $333.3 million in the corresponding period last year. The net sales decrease was comprised of a decrease of $10.4 million in Bob Evans Restaurants, partially offset by an increase of $2.2 million in BEF Foods.

Bob Evans Restaurants’ net sales decreased $10.4 million, or 4.3%, for the three months ended October 23, 2015, compared to the corresponding period last year. Same-store sales declined 3.2%, primarily the result of a 3.9% decline in on-premise dining, including a 7.6% decline in our dinner daypart. The impact of declining dine-in sales was partially offset by continued growth in off-premises sales, which comprise approximately 15% of total restaurant net sales. Additionally there was a $4.8 million net reduction of sales due to the impact of closing 20 restaurants in the first six months of fiscal 2016, partially offset by $2.4 million of sales from six restaurants that opened in the second half of fiscal 2015.

Same-store sales computations for a given period are based on net sales of restaurants that are open for at least 18 months prior to the start of that period. Net sales of closed restaurants are excluded from the same-store sales computation in the period in which the restaurants are closed.

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The following chart summarizes the restaurant openings and closings during the last six quarters for Bob Evans Restaurants:



	Beginning	Opened	Closed	Ending
Fiscal 2016
1st quarter	567	—	18	549
2nd quarter	549	—	2	547
Fiscal 2015
1st quarter	561	1	—	562
2nd quarter	562	—	—	562
3rd quarter	562	2	—	564
4th quarter	564	4	1	567

BEF Foods net sales increased $2.2 million, or 2.3%, for the three months ended October 23, 2015, compared to the corresponding period last year. Total pounds sold increased by 5.1%, including a 14.2% increase in refrigerated side dish products and a 15.1% increase in sausage products, partially offset by a 26.8% decrease in food service. The increase in pounds sold was partially offset by lower net sausage pricing. Average sow costs in the second quarter of fiscal 2016 were lower than the prior year, which drove a $3.2 million increase in trade spending offered to customers, reducing our net sales and allowing us to maintain competitive position on shelf pricing. The following chart summarizes pounds sold by category in the three months ended October 23, 2015, and the corresponding period last year.



	Three Months Ended
(in thousands)	October 23, 2015			October 24, 2014
Category
Refrigerated Sides	28,086	54.3	%	24,590	49.9	%
Sausage	12,387	23.9	%	10,760	21.9	%
Food Service	6,908	13.3	%	9,434	19.1	%
Frozen	2,502	4.8	%	2,606	5.3	%
Other	1,891	3.7	%	1,879	3.8	%
Total	51,774			49,269

Cost of Sales

Consolidated cost of sales was $102.7 million, or 31.6% of net sales, in the three months ended October 23, 2015, compared to $116.0 million, or 34.8% of net sales, in the corresponding period a year ago. The 320 basis points ("bps") decrease in the cost of sales ratio was driven by a 20 bps weighted increase in Bob Evans Restaurants and a 340 bps weighted decrease in BEF Foods.

Bob Evans Restaurants’ cost of sales, predominantly food costs, was $61.7 million, or 26.8% of net sales, for the three months ended October 23, 2015, compared to $64.2 million, or 26.6% of net sales, in the corresponding period a year ago. The increase in the food cost rate as compared to last year was driven by an increase in food costs, primarily due to rising egg prices and partially offset by a reduction in discounting and a shift towards breakfast, which typically has lower ingredient costs, as a larger percentage of total daypart sales.

BEF Foods’ cost of sales was $41.0 million, or 43.5% of net sales, in the three months ended October 23, 2015, compared to $51.8 million, or 56.3% of net sales, in the corresponding period a year ago. The decrease in cost of sales as a percentage of sales was primarily due to the $6.5 million benefit of lower sow costs as compared to the prior year. Sow costs averaged $53.31 per hundredweight in the second quarter of fiscal 2016, compared to $78.82 per hundredweight in the corresponding period last year. Second quarter sow costs in fiscal 2016 were more in line with historical levels whereas fiscal 2015 sow costs were unusually high. The impact of lower cost of materials was partially offset by a $3.2 million increase in trade spending, primarily on sausage products as a result of lower sow costs. Margins were also positively affected by a $6.5 million impact from an increase in sales mix of our higher margin refrigerated side dish products and by improved production yields.

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Operating Wage and Fringe Benefit Expenses

Consolidated operating wage and fringe benefit expenses (“operating wages”) were $104.4 million, or 32.1% of net sales, in the three months ended October 23, 2015, compared to $105.6 million, or 31.7% of net sales, in the corresponding period last year. The 40 bps increase in operating wages ratio was driven by a weighted bps increase in Bob Evans Restaurants.

Bob Evans Restaurants’ operating wages were $93.5 million, or 40.4% of net sales, in the three months ended October 23, 2015, compared to $94.8 million, or 39.3% of net sales, in the corresponding period last year. The increase in wages as a percentage of sales resulted from sales deleverage related to the 3.2% decline in same-store sales. The decrease in total operating wages as compared to the prior year was the result of $2.5 million lower operating wages, primarily driven by the impact of closing of 20 restaurants in the first six months of fiscal 2016, partially offset by $1.1 million of operating wages for stores that opened in the second half of last year.

In BEF Foods, operating wages were $10.9 million, or 11.7% of net sales, for the three months ended October 23, 2015, compared to $10.8 million, or 11.7% of net sales, in the corresponding period last year. Higher employee benefit costs, including incentive compensation, offset a decrease in production wages of $0.5 million.

Other Operating Expenses

Consolidated other operating expenses were $56.2 million, or 17.3% of net sales, for the three months ended October 23, 2015, compared to $54.2 million, or 16.3% of net sales, in the corresponding period last year. The 100 bps increase in other operating expenses ratio was driven by 80 bps weighted increase in Bob Evans Restaurants and a 20 bps weighted increase from BEF Foods. The most significant components of other operating expenses are utilities, advertising costs, repairs and maintenance, restaurant supplies, BEF Foods shipping and handling costs, credit and gift card processing fees and non-income based taxes.

Bob Evans Restaurants’ other operating expenses were $43.0 million, or 18.6% of net sales, for the three months ended October 23, 2015, compared to $42.3 million, or 17.5% of net sales, in the corresponding period last year. The increase in other operating expenses is primarily due to a $1.4 million increase in repairs and maintenance and service contract costs, partially offset by $0.7 million of lower occupancy and utility costs.

BEF Foods’ other operating expenses were $13.2 million, or 14.0% of net sales, for the three months ended October 23, 2015, compared to $11.9 million, or 12.9% of net sales, in the corresponding period last year. The increase in the other operating expenses is primarily due to a $1.8 million increase in advertising expense, partially offset by a $0.7 million reduction in shipping and handling costs, primarily driven by lower fuel costs.

Selling, General and Administrative Expenses

Consolidated S,G&A expenses were $29.9 million, or 9.2% of net sales, for the three months ended October 23, 2015, compared to $29.0 million, or 8.7% of net sales, in the corresponding period last year. The 50 bps increase in the S,G&A ratio was driven a weighted bps increase from BEF Foods.

S,G&A expenses incurred by Bob Evans Restaurants include restaurant management and restaurant executive leadership. Bob Evans Restaurants' S,G&A was $5.4 million, or 2.4% of net sales, for the three months ended October 23, 2015, compared to $5.6 million, or 2.3% of net sales, in the corresponding period last year. The decrease of $0.2 million is primarily due to a $1.0 million increase in gains related to the sale of nonoperating restaurant properties, partially offset by a $0.8 million increase in expense associated with the Company's 401(K) match.

S,G&A expenses incurred by BEF Foods include costs of our BEF Foods sales organization, and BEF Foods executive leadership. BEF Foods' S,G&A was $11.0 million, or 11.6% of net sales, for the three months ended October 23, 2015, compared to $6.9 million, or 7.5% of net sales in the corresponding period last year. The increase in BEF Foods S,G&A is primarily the result of the $3.4 million loss on the sale of our Sulphur Springs, Texas, manufacturing plant which the Company sold and leased back during the quarter. Additionally, we incurred $0.6 million of higher selling costs, primarily related to increased performance based compensation.

Corporate and other costs that are not allocated to our reporting segments include information technology, finance, legal, human resources, supply chain and other corporate functions, and includes costs such as ongoing IT infrastructure costs, third-party legal and professional fees and other costs. Corporate and other costs that are not allocated to our reporting segments were $13.5 million for the three months ended October 23, 2015, as compared to $16.5 million in the corresponding period last year. The decrease in corporate and other S,G&A was primarily the result of a $3.6 million decrease in third-party legal and professional fees, incurred last year in response to shareholder activism, partially offset by $0.6 million higher IT costs to support our new ERP system, which was put in service in the first quarter of fiscal 2016. Corporate wages and benefits

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decreased by $1.4 million as a result of headcount reductions and other benefit reductions, however these savings were offset by losses on investments held by our rabbi trust.

Depreciation and Amortization

Consolidated depreciation and amortization expenses (“D&A”) were $20.1 million, or 6.2% of net sales, for the three months ended October 23, 2015, compared to $19.5 million, or 5.8% of net sales, in the corresponding period last year. The 40 bps increase in the D&A ratio was driven primarily by higher depreciation and amortization on unallocated corporate assets.

Bob Evans Restaurants’ D&A expenses were $13.5 million, or 5.9% of net sales, for the three months ended October 23, 2015, compared to $13.7 million, or 5.7% of net sales, in the corresponding period last year. The decrease was primarily driven by the impact of stores that were closed in the first quarter of fiscal 2016 and are classified as held for sale on our Consolidated Balance Sheet.

BEF Foods’ D&A expenses were $4.2 million, or 4.4% of net sales, for the three months ended October 23, 2015, compared to $4.3 million, or 4.7% of net sales, in the prior year period. The decrease is a result of the sale of our Lima, Ohio, and Sulphur Springs, Texas, production facilities in the second quarter of fiscal 2016.

D&A expenses for unallocated corporate assets were $2.4 million for the three months ended October 23, 2015, compared to $1.5 million, in the corresponding period last year. The increase is primarily driven by depreciation and amortization on our ERP system, which was put in service on the first day of fiscal 2016.

Interest

Net interest expense for the three months ended October 23, 2015, compared to the corresponding period last year, is as follows:



	Three Months Ended
(in thousands)	October 23, 2015			October 24, 2014
Gross interest expense:
Variable-rate debt	$	2,614		$	2,575
Amortization of deferred financing costs and other	938			322
Capitalized interest	(39		)	(91		)
Total interest expense	3,513			2,806
Gross interest income:
Accretion	(513		)	(458		)
Other	(117		)	(145		)
Total interest income	(630		)	(603		)
Net interest expense	$	2,883		$	2,203

The increase in amortization of deferred financing costs was primarily driven by a $0.5 million write off of previously unamortized deferred financing costs related to the third amendment to our Credit Agreement, which was effective October 21, 2015.

Income Taxes

The provision for income taxes is based on our current estimate of the annual effective income tax rate adjusted to reflect the impact of discrete items. The Company’s effective income tax rate for the three months ended October 23, 2015, was 24.8% compared to 11.3% in the corresponding period a year ago. The higher tax rate for the three months ended October 23, 2015, was driven primarily by discrete items booked in the second quarter of fiscal year 2015 related to the work opportunity tax credit and officers life insurance.

Results: Six Months Ended October 23, 2015, as Compared to Six Months Ended October 24, 2014

Bob Evans Farms, Inc. Consolidated Overview

Net sales were $646.7 million in the six months ended October 23, 2015, a decrease of $12.9 million compared to the prior year. Operating income was $19.7 million for the six months ended October 23, 2015, an increase of $10.6 million as compared to the corresponding period last year. The increase in operating income as compared to the corresponding period last year was due to lower cost of sales of $31.2 million, lower operating wages of $0.8 million, lower other operating expenses of

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$0.1 million and lower impairment charges of $1.3 million. Offsetting these expense improvements were lower sales, higher S,G&A costs of $9.0 million and higher depreciation and amortization expenses of $0.8 million.

Pretax net income in the six months ended October 23, 2015, was $14.2 million as compared to a pretax income of $5.3 million in the corresponding period last year. The provision for income taxes was $3.5 million in the six months ended October 23, 2015, as compared to $0.2 million in the prior year. Earnings per diluted share was $0.47 per share in the six months ended October 23, 2015, as compared to $0.21 per share in the corresponding period last year. Refer to the sections below for analysis on our year to date fiscal 2016 operating results as compared to the comparable prior year period.



	Six Months Ended
	Consolidated Results								Bob Evans Restaurants
(in thousands)	October 23, 2015				October 24, 2014				October 23, 2015				October 24, 2014
Net Sales	$	646,734			$	659,619			$	469,410			$	481,302
Cost of sales	199,030		30.8	%	230,180		34.9	%	123,192		26.2	%	127,376		26.5	%
Operating wage and fringe benefit expenses	209,287		32.4	%	210,042		31.8	%	188,922		40.2	%	189,675		39.4	%
Other operating expenses	107,815		16.7	%	107,909		16.4	%	83,001		17.7	%	84,795		17.6	%
Selling, general and administrative expenses	70,361		10.9	%	61,387		9.3	%	23,868		5.1	%	14,426		3.0	%
Depreciation and amortization expense	40,260		6.2	%	39,448		6.0	%	27,010		5.8	%	27,898		5.8	%
Impairments	285		—	%	1,577		0.2	%	285		0.1	%	1,577		0.3	%
Operating Income	$	19,696	3.0	%	$	9,076	1.4	%	$	23,132	4.9	%	$	35,555	7.4	%



	Six Months Ended
	BEF Foods								Corporate and Other
(in thousands)	October 23, 2015				October 24, 2014				October 23, 2015			October 24, 2014
Net Sales	$	177,324			$	178,317			$	—		$	—
Cost of sales	75,838		42.8	%	102,804		57.7	%	—			—
Operating wage and fringe benefit expenses	20,365		11.5	%	20,367		11.3	%	—			—
Other operating expenses	24,814		14.0	%	23,114		13.0	%	—			—
Selling, general and administrative expenses	17,880		10.1	%	14,032		7.9	%	28,613			32,929
Depreciation and amortization expense	8,593		4.8	%	8,599		4.8	%	4,657			2,951
Impairments	—		—	%	—		—	%	—			—
Operating Income	$	29,834	16.8	%	$	9,401	5.3	%	$	(33,270	)	$	(35,880	)

These tables reflect data for the six months ended October 23, 2015, compared to the six months ended October 24, 2014. The consolidated information is derived from the accompanying Consolidated Statements of Net Income. The tables also include data for our two reporting segments, Bob Evans Restaurants and BEF Foods, and unallocated corporate and other costs. The ratios presented reflect the underlying dollar values expressed as a percentage of the applicable net sales amounts.

Sales

Consolidated net sales decreased 2.0% to $646.7 million, for the six months ended October 23, 2015, compared to $659.6 million in the corresponding period last year. The net sales decline was comprised of decreases of $11.9 million in Bob Evans Restaurants and $1.0 million in BEF Foods.

Bob Evans Restaurants’ net sales decreased $11.9 million, or 2.5%, for the six months ended October 23, 2015, compared to the corresponding period last year. Same-store sales declined 1.7%, primarily the result of a 3.0% decline in on-premise dining attributable to lower transaction volumes in our dinner daypart. The impact of declining dine-in sales was partially offset by a 6.9% growth in off-premises sales, which comprise approximately 15% of total restaurant net sales. Additionally there was an $8.3 million net reduction of sales driven by the impact of closing 20 restaurants in the first six months of fiscal 2016, partially offset by the impact of $5.1 million in sales from seven restaurants that opened in the prior year.

BEF Foods net sales decreased $1.0 million, or 0.6%, for the six months ended October 23, 2015, compared to the corresponding period last year. As total pounds sold increased by 2.7%, the decline in net sales is primarily the result of lower net sausage pricing. Average sow costs in the first half of fiscal 2016 were lower than the prior year, which drove a $9.2 million increase in trade spending offered to customers, reducing our net sales and allowing us to maintain a competitive position on shelf pricing. The increase in total pounds sold as compared to last year is a function of increased refrigerated side

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dish and sausage pounds sold, offset by lower food service pounds sold. The following chart summarizes pounds sold by category in the six months ended October 23, 2015, and the corresponding period last year.



	Six Months Ended
(in thousands)	October 23, 2015			October 24, 2014
Category
Sides	52,010	53.6	%	45,002	47.6	%
Sausage	23,011	23.7	%	20,025	21.2	%
Food Service	13,674	14.1	%	20,989	22.3	%
Frozen	4,743	4.9	%	4,803	5.1	%
Other	3,582	3.7	%	3,626	3.8	%
Total	97,020			94,445

Cost of Sales

Consolidated cost of sales was $199.0 million , or 30.8% of net sales, in the six months ended October 23, 2015, compared to $230.2 million, or 34.9% of net sales, in the corresponding period a year ago. The 410 bps decrease in the cost of sales ratio was driven by a 20 bps weighted decrease in Bob Evans Restaurants and a 390 bps weighted decrease in BEF Foods.

Bob Evans Restaurants’ cost of sales, predominantly food costs, was $123.2 million, or 26.2% of net sales, for the six months ended October 23, 2015, compared to $127.4 million, or 26.5% of net sales, in the corresponding period a year ago. Margin improvements as compared to last year were primarily driven by a decline in food cost rate resulting from lower discounting, favorable commodities costs and a sales mix increase of breakfast items, which typically have lower ingredient costs.

BEF Foods’ cost of sales was $75.8 million, or 42.8% of net sales, in the six months ended October 23, 2015, compared to $102.8 million, or 57.7% of net sales, in the corresponding period a year ago. The decrease in cost of sales as a percentage of sales was primarily due to the $16.5 million benefit of lower sow costs as compared to the prior year, which were partially offset by a $9.2 million increase in trade spending, primarily on sausage as a result of lower sow costs, resulting in a positive $7.3 million impact on margins. Sow costs averaged $46.92 per hundredweight in the first six months of fiscal 2016, compared to $83.03 per hundredweight in the corresponding period last year. Margins were also positively impacted by a $13.2 million impact from a higher sales mix of our higher margin refrigerated side dish products.

Operating Wage and Fringe Benefit Expenses

Consolidated operating wage and fringe benefit expenses (“operating wages”) was $209.3 million, or 32.4% of net sales, in the six months ended October 23, 2015, compared to $210.0 million, or 31.8% of net sales, in the corresponding period last year. The 60 bps increase in operating wages ratio was driven by a weighted bps increase in Bob Evans Restaurants.

Bob Evans Restaurants’ operating wages were $188.9 million, or 40.2% of net sales, in the six months ended October 23, 2015, compared to $189.7 million, or 39.4% of net sales, in the corresponding period last year. The decrease in operating wages as compared to the prior year was the result of $4.1 million in lower restaurant wages, due to the closing of 20 restaurants in the first six months of fiscal 2016. This decrease was partially offset by $2.4 million higher restaurant wages related to seven stores that opened in fiscal 2015, as well as higher wages rates and other employee benefit costs, including health insurance.

BEF Foods' operating wages were $20.4 million, or 11.5% of net sales, for the six months ended October 23, 2015, compared to $20.4 million, or 11.3% of net sales, in the corresponding period last year. Production wages decreased by $0.7 million as compared to the prior year, the result of improved plant efficiencies, and were offset by higher employee benefit costs, including incentive compensation.

Other Operating Expenses

Consolidated other operating expenses were $107.8 million, or 16.7% of net sales, for the six months ended October 23, 2015, compared to $107.9 million, or 16.4% of net sales, in the corresponding period last year. The 30 bps increase in other operating expenses ratio was driven by 10 bps weighted increase in Bob Evans Restaurants and a 20 bps weighted increase from BEF Foods. The most significant components of other operating expenses are utilities, advertising costs, repairs and maintenance, restaurant supplies, BEF Foods shipping and handling, credit and gift card processing fees and non-income based taxes.

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Bob Evans Restaurants’ other operating expenses were $83.0 million, or 17.7% of net sales, for the six months ended October 23, 2015, compared to $84.8 million, or 17.6% of net sales, in the corresponding period last year. The decrease in other operating expenses is primarily due to a $1.4 million reduction in occupancy costs including real estate taxes and insurance, a $1.1 million reduction in utilities and a $0.7 million reduction in advertising costs, partially offset by a $1.5 million increase in repairs and maintenance and service contract costs.

BEF Foods’ other operating expenses were $24.8 million, or 14.0% of net sales, for the six months ended October 23, 2015, compared to $23.1 million, or 13.0% of net sales, in the corresponding period last year. The increase in the other operating expenses is primarily due to a $2.6 million increase in advertising expense, partially offset by a $1.1 million reduction in shipping and handling costs, primarily driven by lower fuel costs.

Selling, General and Administrative Expenses

Consolidated S,G&A expenses were $70.4 million, or 10.9% of net sales, for the six months ended October 23, 2015, compared to $61.4 million, or 9.3% of net sales, in the corresponding period last year. The 160 bps increase in the S,G&A ratio was driven by a 90 bps weighted increase from Bob Evans Restaurants, a 90 weighted bps increase from BEF Foods and a 20 bps decrease related to corporate and other costs.

S,G&A expenses incurred by Bob Evans Restaurants include restaurant management and restaurant executive leadership. Bob Evans Restaurants' S,G&A was $23.9 million, or 5.1% of net sales, for the six months ended October 23, 2015, compared to $14.4 million, or 3.0% of net sales, in the corresponding period last year. The increase of $9.5 million is primarily due to a $10.5 million charge for a settlement of a class action lawsuit in the current year, partially offset by a $1.0 million increase in gains related to the sale of nonoperating restaurant properties.

S,G&A expenses incurred by BEF Foods include costs of our BEF Foods sales organization, and BEF Foods executive leadership. BEF Foods' S,G&A was $17.9 million, or 10.1% of net sales, for the six months ended October 23, 2015, compared to $14.0 million, or 7.9% of net sales in the corresponding period last year. The increase in BEF Foods SG&A costs is primarily driven by the $3.4 million loss recorded on the sale and subsequent leaseback of our Sulphur Springs, Texas, manufacturing facility, as well as higher selling costs, including higher performance based incentive compensation.

Corporate and other costs that are not allocated to our reporting segments include information technology, finance, legal, human resources, supply chain and other corporate functions, and includes costs such as ongoing IT infrastructure costs, including certain costs related to our new ERP system, third-party legal and professional fees and other costs. Corporate and other costs that are not allocated to our reporting segments were $28.6 million for the six months ended October 23, 2015, as compared to $32.9 million in the corresponding period last year. The $4.3 million decrease in corporate and other S,G&A was primarily the result of a $5.5 million decrease in third-party legal and professional fees, incurred last year in response to shareholder activism and strengthening the Company's internal controls over financial reporting, partially offset by a $1.4 million increase in IT costs related to support of our new ERP system, which was put in service in the first quarter of fiscal 2016. Wages for employees not directly associated with one of our reporting segments decreased by $1.6 million, a result of headcount reductions and other corporate savings initiatives. These savings were offset by higher other employee benefit costs, including a $1.7 million increase in expenses related to losses on our rabbi trust investments.

Depreciation and Amortization

Consolidated depreciation and amortization expenses (“D&A”) were $40.3 million, or 6.2% of net sales, for the six months ended October 23, 2015, compared to $39.4 million, or 6.0% of net sales, in the corresponding period last year. The 20 bps increase in the D&A ratio was driven by higher depreciation and amortization on unallocated corporate assets.

Bob Evans Restaurants’ D&A expenses were $27.0 million, or 5.8% of net sales, for the six months ended October 23, 2015, compared to $27.9 million, or 5.8% of net sales, in the corresponding period last year. The decrease was primarily driven by stores that were closed in the first six months of fiscal 2016 and are classified as held for sale on our Consolidated Balance Sheet, and the impact of assets on accelerated depreciation methods.

BEF Foods’ D&A expenses were $8.6 million, or 4.8% of net sales, for the six months ended October 23, 2015, compared to $8.6 million, or 4.8% of net sales, in the prior year period.

D&A expenses for unallocated corporate assets were $4.7 million for the six months ended October 23, 2015, compared to $3.0 million, in the corresponding period last year. The increase is primarily driven by depreciation and amortization on our ERP system, which was put in service on the first day of fiscal 2016.

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Interest

Net interest expense for the six months ended October 23, 2015, compared to the corresponding period last year, is as follows:



	Six Months Ended
(in thousands)	October 23, 2015			October 24, 2014
Gross interest expense:
Variable-rate debt	$	5,408		$	4,654
Amortization of deferred financing costs and other	1,375			485
Capitalized interest	(50		)	(147		)
Total interest expense	6,733			4,992
Gross interest income:
Accretion	(1,011		)	(903		)
Other	(233		)	(270		)
Total interest income	(1,244		)	(1,173		)
Net interest expense	$	5,489		$	3,819

The increase in variable-rate debt was primarily driven by higher average borrowings on our Credit Agreement during the six months ended October 23, 2015, as compared to the corresponding period last year. The increase in amortization of deferred financing costs is driven by the additional deferred costs incurred as part of our second and third amendments to the Credit Agreement as well as a $0.5 million write off of previously unamortized deferred financing fees associated with the third amendment to our Credit Agreement, which was effective October 21, 2015.

Income Taxes

The provision for income taxes is based on our current estimate of the annual effective income tax rate adjusted to reflect the impact of discrete items. The Company’s effective income tax rate was 24.6% for the six months ended October 23, 2015, as compared to 4.5% for the corresponding period a year ago. The higher tax rate for the six months ended October 23, 2015, was driven primarily by discrete items booked in the second quarter of fiscal year 2015 related to the work opportunity tax credit and officers' life insurance.

Liquidity and Capital Resources

Our primary sources of liquidity are cash generated from operating activities, the borrowing capacity under our Credit Agreement and our ability to incur sale leaseback indebtedness of up to $300 million.

Historically, our working capital requirements have been minimal; overall, our current liabilities have generally exceeded our current assets (excluding cash and equivalents). This favorable working capital position results from transacting substantially all of our Bob Evans Restaurants sales for cash or third-party credit or debit cards; the relatively short trade credit terms with our BEF Foods customers as well as most of our major suppliers and distributors; and the quick turnover of our inventories in both of our reporting segments.

Capital expenditures were $26.7 million and $37.0 million, respectively, for the six months ended October 23, 2015, and October 24, 2014. In the six months ended October 23, 2015, capital expenditures primarily related to our ERP system, other IT infrastructure projects and general restaurant improvements. In the six months ended October 24, 2014, capital expenditures primarily related to new restaurant construction and our ERP system. In fiscal 2016, capital expenditures are expected to approximate $78.0 million to $82.0 million and include expenditures for a new restaurant point-of-sale system and general restaurant improvements, adding an additional refrigerated side dish production line at our Lima, Ohio, plant and other production facility upgrades, the next phases of our ERP system and other IT infrastructure.

During each of the first and second quarters of fiscal years 2016 and 2015, we paid cash dividends of $0.31 per share. While we expect to continue paying regular quarterly cash dividends, the declaration, amount and timing of future dividends are at the discretion of our Board of Directors.

On August 20, 2014, the Board of Directors increased the authorization of our stock repurchase program for up to $150.0 million through fiscal 2016. The program authorizes the Company to repurchase its outstanding common stock pursuant to plans approved by the Board under SEC Rules 10b-18 and 10b5-1, and in the open market or through privately negotiated transactions. The ability to repurchase stock and complete the repurchase program is dependent upon our having available

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funds and complying with the financial covenants and other restrictions contained in our Credit Agreement and the repurchase authorization. In the first two quarters of fiscal 2016 we repurchased approximately 2.3 million shares for $104.9 million. The repurchases were funded primarily through additional borrowings on our Credit Agreement, cash from operations and the $50.0 million of proceeds from the plant sale lease back transaction. We expect to repurchase additional shares of our common stock with the remaining authorized $45.1 million before the end of fiscal 2016.

On November 19, 2015, the Board of Directors approved an additional $100.0 million share repurchase program. The program authorizes the Company to repurchase its outstanding common stock pursuant to plans approved by the Board under SEC Rules 10b-18 and 10b5-1, and in the open market or through privately negotiated transactions. The share repurchase authorization expires on December 31, 2016. We expect to repurchase shares through this program after we complete the initial $150.0 million of authorized repurchases. The additional repurchase program will be funded in part through the net proceeds from the expected sale leaseback of restaurant properties (see below for additional information).

On January 2, 2014, we entered into the Credit Agreement, which represents a syndicated secured revolving credit facility. We incurred financing costs of $2.1 million associated with this Credit Agreement, which are being amortized over the remaining term of the agreement. As a result of the Third Amendment to the Credit Agreement, effective October 21, 2015, and discussed further below, up to $650 million of borrowings are available, including a letter of credit sub-facility of $50 million, and an accordion provision that permits the Company to request an additional $300 million for certain transactions, increasing the revolving credit commitment to $950 million. It is secured by the stock pledges of certain of our material subsidiaries. Borrowings under the Credit Agreement bear interest, at our option, at a rate based on LIBOR or the Base Rate, plus a margin based on the Leverage Ratio, ranging from 1.00% to 2.75% per annum for LIBOR, and ranging from 0.00% to 1.75% per annum for Base Rate. The Base Rate means for any day, a fluctuating per annum rate of interest equal to the highest of (i) the Federal Funds Open Rate, plus 0.50%, (ii) the Prime Rate, or (iii) the Daily LIBOR Rate, plus 1.00%. We are also required to pay a commitment fee of 0.15% per annum to 0.25% per annum of the average unused portion of the total lender commitments then in effect. Our effective interest rate for the Credit Agreement was 2.09% during the six months ended October 23, 2015. As of October 23, 2015, we had outstanding borrowings of $471.4 million under our credit facility and $12.4 million was reserved for certain standby letters of credit.

In the first quarter of fiscal 2015, we entered into a First Amendment to the Credit Agreement dated July 23, 2014. The terms of the Credit Agreement that were amended related to: (a) an increase to the Maximum Leverage Ratio for the period starting July 25, 2014, through July 22, 2016, (b) add certain restricted payment requirements related to share repurchases, and (c) an update to the Pricing Grid, which determines variable pricing and fees, to reflect changes in the allowable Maximum Leverage Ratio. We incurred financing costs of $1.3 million associated with this amendment, which are being amortized using the straight line method, which approximates the effective interest method.

In the first quarter of fiscal 2016, we entered into a Second Amendment to the Credit Agreement dated May 11, 2015. The amendment has an effective as date of April 24, 2015. The terms of the Credit Agreement were amended related to: (a) an increase to the Maximum Leverage Ratio for the period starting April 24, 2015, through the remaining term of the Credit Agreement, (b) a change in the restrictions related to payments for share repurchases, and (c) a change in the definition of the LIBOR and Daily LIBOR rates that are used to calculate interest on outstanding borrowings. We incurred and paid fees of $1.7 million associated with this amendment, which will be amortized over the remaining term of the Credit Agreement using the straight line method, which approximates the effective interest method.

We entered into an Agreement Regarding Financial Covenant Calculation ("Agreement") on August 10, 2015, with an effective as date of April 24, 2015, in which the terms of the Credit Agreement were clarified regarding the treatment of certain noncash charges in the calculation of our Maximum Leverage Ratio. The Agreement had no impact on our financial covenants.

In the second quarter of fiscal 2016, we entered into a Third Amendment to the Credit Agreement dated and effective as of October 21, 2015. The terms of the Credit Agreement were amended related to: (a) increase the level of permitted indebtedness in connection with sale and leaseback transactions of assets from $100 million to $300 million, (b) removal of the $150 million share repurchase restriction during the 2016 fiscal year, (c) decrease the size of the facility from $750 million to $650 million, (d) modification of the definition of the leverage ratio to account for rent expense from leases so that the leverage ratio will be calculated as consolidated indebtedness plus 600% of annual rent expense versus consolidated EBITDAR, and (e) inclusion of an add back to the leverage ratio calculation for costs related to the settlement of a class action lawsuit. We incurred and paid fees of $0.8 million associated with this amendment, which will be amortized over the remaining term of the Credit Agreement using the straight line method, which approximates the effective interest method.

Our Credit Agreement contains financial and other various affirmative and negative covenants that are typical for financings of this type. It requires us to maintain a specified minimum coverage ratio and maximum leverage ratio at October 23, 2015, of (1) a minimum coverage ratio of not less than 3.00 to 1.00; and (2) a maximum leverage ratio that may not exceed

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4.50 to 1.00. As of October 23, 2015, our leverage ratio was 3.12, and our coverage ratio was 12.08, as defined in our Credit Agreement. Our Credit Agreement also limits repurchases of our common stock and the amount of dividends that we pay to holders of our common stock in certain circumstances. The Credit Agreement also allows for the incurrence of additional indebtedness of up to $300 million, a sale leaseback of our real estate of up to $300 million and mortgage indebtedness on our corporate headquarters of up to $50 million. A breach of any of these covenants could result in a default under our Credit Agreement, in which all amounts under our Credit Agreement may become immediately due and payable, and all commitments under our Credit Agreement to extend further credit, terminated. We were in compliance with the financial covenant requirements of our Credit Agreement as of October 23, 2015.

We believe that our cash flow from operations as well as the available borrowings under our Credit Agreement and our ability to incur additional sale leaseback indebtedness, will be sufficient to fund anticipated capital expenditures, working capital requirements, dividend payments and share repurchases during fiscal 2016.

Beginning in fiscal 2015, management has worked closely with the Board of Directors and its strategic advisers to assess various alternatives to increase shareholder value. In particular, the Company has determined it will pursue several transactions with respect to its real estate assets. In the second quarter of fiscal 2016, we entered into an agreement pursuant to which we sold our manufacturing properties located in Lima, Ohio, and Sulphur Springs, Texas, for $51.6 million. We received net proceeds of $50.0 million, after consideration of closing and other transaction costs. Concurrent with the sale, we entered into a lease agreement pursuant to which we leased both the Lima and Sulphur Springs manufacturing properties for an initial 20-year term at an annual, straight-line rent expense of $4.1 million, inclusive of the amortized deferred gain on the Lima, Ohio, location. The lease agreements each include two ten-year renewal options. Additionally the Company has completed its review of alternatives concerning a strategic transaction for our owned restaurant properties and determined that a sale leaseback transaction of up to $200 million of restaurant properties is the most appropriate transaction given our current business and market conditions. The Company continues to evaluate a sale leaseback or mortgage our corporate headquarters property located in New Albany, Ohio. We expect to utilize proceeds from the restaurant and corporate headquarters transactions to pay down debt and to repurchase shares, while maintaining prudent leverage.

Operating activities

Net cash provided by operating activities was $66.4 million and $39.8 million for the six months ended October 23, 2015, and October 24, 2014, respectively. The increase in cash provided by operating activities as compared to a year ago is primarily due to an increase in net income from operations and improved working capital management.

Investing activities

Cash provided by investing activities was $31.2 million for the six months ended October 23, 2015, while cash used in investing activities was $36.1 million for the six months ended October 24, 2014. The increase in cash provided by investing activities was primarily due to an increase in proceeds from sale of property, plant and equipment of $57.3 million, which includes $50.0 million of net proceeds from the sale of our Lima, Ohio, and Sulphur Springs, Texas, facilities as well as proceeds from the sale of nonoperating restaurant properties. In addition, there was a decrease in capital expenditures of $10.3 million compared to the prior year, as the Company completed the first phase of our ERP system in the fourth quarter of fiscal 2015.

Financing activities

Cash used in financing activities was $98.6 million for the six months ended October 23, 2015, as compared to cash used in financing activities of $7.8 million for the six months ended October 24, 2014. The increase in cash used by financing activities was primarily due to the $104.9 million of repurchases of our common stock in the first and second quarter of fiscal 2016, partially offset by $23.6 million of incremental borrowings on our Credit Agreement and other long-term debt in the current year as compared to just $9.0 million of incremental borrowings on our Credit Agreement and other long-term debt in the corresponding period last year.

Contractual obligations

Other than the amendment to our Credit Agreement, discussed in Note 2, and the sale leaseback transaction discussed in Note 11, there have been no significant changes in our contractual obligations and outstanding indebtedness as disclosed in our Annual Report on Form 10-K, for the fiscal year ended April 24, 2015.

Off-Balance Sheet Arrangements

As of October 23, 2015, we have not entered into any “off-balance sheet” arrangements with unconsolidated entities or other persons, as that term is defined in rules issued by the SEC.

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Critical Accounting Policies and Estimates

As discussed in Note 1 to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, the preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of commitments and contingencies at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. We base these estimates and judgments on our historical experience and other factors we believe to be relevant, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The process of determining significant estimates is fact-specific and takes into account factors such as historical experience, current and expected economic conditions, product mix, and in some cases, actuarial and appraisal techniques. We routinely re-evaluate these significant factors and make adjustments where facts and circumstances dictate. Our critical accounting policies have not changed materially from those previously reported in our Annual Report on Form 10-K for the fiscal year ended April 24, 2015.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not currently use derivative financial instruments for speculative or hedging purposes. We maintain our cash and cash equivalents in financial instruments with maturities of three months or less when purchased.

Interest Rate Risk

At October 23, 2015, our outstanding debt included $471.4 million outstanding on the credit facility, and $3.3 million of other outstanding long-term notes. A change in market interest rates will impact our Credit Agreement when there is an outstanding balance. For example, a one percent increase in the benchmark rate used for our credit facility would increase our annual interest expense by approximately $4.8 million, assuming the $471.4 million outstanding at October 23, 2015, was outstanding for the entire year.

Commodities Prices

We purchase certain commodities such as beef, pork, poultry, seafood, produce and dairy products. These commodities are generally purchased based upon market prices established with suppliers. These purchase arrangements may contain contractual features that fix the price paid for certain commodities. We do not use financial instruments to hedge commodity prices because these purchase arrangements help control the ultimate cost paid. Most commodity price aberrations are generally short-term in nature and for some commodities, such as sows, hedge instruments are not available.

ITEM 4. CONTROLS AND PROCEDURES

Changes in Internal Control Over Financial Reporting

On April 25, 2015, we implemented the first phase of an enterprise resource planning (“ERP”) system on a company-wide basis, which is expected to improve the efficiency of certain financial and related transaction processes. The implementation resulted in business and operational changes, which required changes to our internal controls over financial reporting. We believe we have designed adequate controls into and around the new ERP system, which includes performing significant procedures, both within the ERP and outside the ERP, to monitor, review and reconcile financial activity for the second quarter of fiscal 2016 to ensure ongoing reliability of our financial reporting.

Except as has been described above, there has been no material change in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) during the quarter ended October 23, 2015, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

With the participation of our management, including Bob Evans’ principal executive officer and principal financial officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(c) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon this evaluation, Bob Evans’ principal executive officer and principal financial officer have concluded our disclosure controls and procedures were effective.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In June 2015, counsel for all parties attended the second mediation in the Snodgrass matter in an attempt to resolve each of the Snodgrass, Utterback and Mackin litigation matters. On July 31, 2015, the Company and counsel for the plaintiffs reached an agreement in principle to resolve all claims presented in the Snodgrass, Mackin and Utterback cases for the total sum of $16.5 million on a claims made basis. A Settlement Agreement was executed by the parties on October 2, 2015, and the Court provided preliminary approval on October 23, 2015.

In connection with the unfavorable ruling, we recorded a charge of $6 million in the fourth quarter of fiscal 2015. As a result of the agreement in principle, we have recorded an additional charge of $10.5 million in the first quarter of fiscal 2016. This expense was recorded to the Bob Evans Restaurants segment and in the S,G&A line of the Consolidated Statements of Net Income.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors disclosed in Part 1, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended April 24, 2015.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On February 25, 2014, the Board of Directors authorized a stock repurchase program for up to $100.0 million. The program authorized the Company to repurchase its outstanding common stock pursuant to plans approved by the Board under SEC Rules 10b-18 and 10b5-1, and in the open market or through privately negotiated transactions. The ability to repurchase stock and complete the repurchase program is dependent upon the Company having available funds and complying with the financial covenants and other restrictions contained within the Company’s Credit Agreement and the repurchase authorization.

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On August 20, 2014, the Board of Directors increased the authorization for the current stock repurchase program to $150.0 million and extended the authorization period through fiscal 2016.

In the second quarter of fiscal 2016 we repurchased approximately 1.0 million shares for $44.4 million. The repurchases were funded primarily through additional borrowings on our Credit Agreement and cash from operations. We expect to repurchase additional shares of our common stock with the remaining authorized $45.1 million before the end of fiscal 2016.

The following table provides information regarding the purchases of shares of Common Stock of Bob Evans made by the Company during each fiscal month of the three months ended October 23, 2015:



Period (Fiscal Month)	Total Number of Shares Purchased	Average Price Paid per Share		Total Shares Purchased as part of Publicly Announced Plans or Programs	Maximum Value of Shares that May Yet be Purchased Under the Plans or Programs
July 25, 2015, through August 21, 2015	—	$	—	—	$	89,436,442
August 22, 2015, through September 18, 2015	323,387	$	46.18	323,387	$	74,502,430
September 19, 2015, through October 23, 2015	656,211	$	44.85	656,211	$	45,071,367
	979,598	$	45.29	979,598

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5. OTHER INFORMATION

Not Applicable

ITEM 6. EXHIBITS

See index to exhibits

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	BOB EVANS FARMS, INC.

Date: December 2, 2015	By:	/s/ Douglas N. Benham
		Douglas N. Benham Executive Chair (Principal Executive Officer)

Date: December 2, 2015	By:	/s/ Mark E. Hood
		Mark E. Hood* Chief Administrative Officer and Chief Financial Officer (Principal Financial Officer)

Date: December 2, 2015	By:	/s/ Sylvester J. Johnson
		Sylvester J. Johnson* Senior Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer)

* Messrs. Hood and Johnson have been duly authorized to sign on behalf of the Registrant as its principal financial officer and its principal accounting officer, respectively.

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INDEX TO EXHIBITS

Quarterly Report on Form 10-Q

Dated October 23, 2015

Bob Evans Farms, Inc.



Exhibit Number	Description	Location
3.1	Amended and Restated Certificate of Incorporation of company reflecting amendments through Aug. 20, 2014. [This document represents the Company’s Certificate of Incorporation in restated format incorporating all amendments. This compiled document has not been filed with the Delaware Secretary of State.]	Incorporated herein by reference to Exhibit 3.1 to Bob Evans Farms, Inc.’s Annual Report on Form 8-K filed September 3, 2014 (File No. 0-1667)
3.2	Amended and Restated By-Laws of Bob Evans Farms, Inc. (Effective August 20, 2014)	Incorporated herein by reference to Exhibit 3.2 to Bob Evans Farms, Inc.’s Current Report on Form 8-K filed September 3, 2014 (File No. 0-1667)
4.1	Third Amendment to $650,000,000 Revolving Credit Facility Amended and Restated Credit Agreement effective October 21, 2015 among Bob Evans Farms, LLC, as borrower; Bob Evans Farms, Inc. and its wholly-owned subsidiary, BEF Foods, Inc., as guarantors; PNC Bank, National Association, as administrative agent, and the other Lenders party thereto.	Incorporated herein by reference to Exhibit 4.1 to Bob Evans Farms, Inc.'s Form 8-K Filed October 21, 2015 (File No. 0-1667)
10.1	Purchase and Sale Agreement between BEF Foods, Inc., an Ohio corporation and Broadstone Net Lease Acquisitions , LLC, a New York limited liability company, dated October 19, 2015	Filed herewith
10.2	Lease Guaranty by Bob Evans Farms, Inc., a Delaware corporation, for the benefit of Broadstone BEF Portfolio, LLC, a New York limited liability company, dated October 23, 2015	Filed herewith
10.3	Lease Guaranty by Bob Evans Farms, LLC, an Ohio limited liability company, for the benefit of Broadstone BEF Portfolio, LLC, a New York limited liability company, dated October 23, 2015	Filed herewith
10.4	Master Lease Agreement by BEF Foods, Inc., an Ohio corporation, and Broadstone BEF Portfolio, LLC, a New York limited liability company, dated October 23, 2015	Filed herewith
10.5	Employment Agreement for Saed Mohseni dated November 14, 2015	Incorporated herein by reference to Exhibit 10.1 to Bob Evans Farms, Inc.'s Form 8-K Filed November 17, 2015 (File No. 0-1667)
10.6	Bob Evans Farms, Inc. Amended and Restated Change In Control and Severance Plan dated November 14, 2015	Incorporated herein by reference to Exhibit 10.2 to Bob Evans Farms, Inc.'s Form 8-K Filed November 17, 2015 (File No. 0-1667)
10.7	Employment Agreement for Douglas N. Benham dated August 27, 2015	Incorporated herein by reference to Exhibit 10.1 to Bob Evans Farms, Inc.'s Form 8-K Filed August 28, 2015 (File No. 0-1667)
10.8	Equity Award to Douglas N. Benham dated September 4, 2015	Filed herewith
31.1	Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer)	Filed herewith

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31.2	Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer)	Filed herewith
32.1	Section 1350 Certification (Principal Executive Officer)	Filed herewith
32.2	Section 1350 Certification (Principal Financial Officer)	Filed herewith
101.INS	XBRL Instance Document	Filed herewith
101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed herewith
101.PRE	XBRL Taxonomy Presentation Linkbase Document	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith

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Exhibit 10.1

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as of October 19, 2015 (the “Effective Date”), by and among BROADSTONE NET LEASE ACQUISITIONS, LLC, a New York limited liability company (“Buyer”), and BEF FOODS, INC., a Ohio corporation (“Seller”), BOB EVANS FARMS, INC., a Delaware corporation (“Parent Guarantor”), and BOB EVANS FARMS, LLC, a Ohio limited liability company (“Affiliate Guarantor”; Parent Guarantor and Affiliate Guarantor are at times referred to herein, collectively, as “Lease Guarantor”).

In consideration of the mutual covenants and agreements set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Buyer, Seller and Lease Guarantor hereby enter into this Agreement and covenant and agree as follows:

1.Definitions.

(a)“Affiliate” means any entity directly or indirectly controlling, controlled by or under common control with Seller or Lease Guarantor.

(b)“Affiliate Guaranty” means the lease guaranty to be executed by Affiliate Guarantor in favor of Buyer at Closing, dated as of the Closing Date, and in form and substance as that attached hereto as Exhibit E.

(c)“Agent” means any member, shareholder, equity owner, director, manager, officer, employee, or Affiliate of Seller.

(d)“Association Estoppels” means, individually and collectively, if any and as applicable to a particular Location, the one or more estoppel certificates that may be requested in writing by Buyer to confirm that each Location and Seller is in compliance with any and all obligations, covenants, conditions, assessments, restrictions or regulations created or imposed by any existing declaration of record, business/owner/condominium/industrial park association, developer agreement, mutual, shared or common maintenance, access or driveway agreements, or any other material duties or obligations encumbering such Location or imposed on the owner of such Location (that benefit other parties or lands/areas outside of such Location), and the like, if any. The form of said estoppel certificate(s) shall be reasonably acceptable to Buyer, Seller and Title Company.

(e)“Bill of Sale and Assignment” means the bill of sale and assignment that shall be delivered by Seller to Buyer at Closing, and sufficient to transfer all of Seller’s right, title and interest in and to the Personal Property and Intangible Property free and clear of all liens, security interests and other encumbrances.

(f)“Building Systems” means the mechanical, electrical, plumbing, sanitary, sprinkler, heating, ventilation and air conditioning, security, life-safety, building management, elevator and other service systems or facilities of the buildings located on each Location.

(g)“Business Day” or “business day” means any day other than a Saturday, Sunday or legal holiday under the laws of the United States or the State of New York.

(h)“Close” or “Closing” means the consummation of the transactions contemplated by this Agreement on or before the Closing Date.

(i)“Closing Date” means October 23, 2015.

(j)“Deed” or “Deeds” means, individually and collectively, as appropriate, the special warranty deeds (or the equivalent instrument under the laws of the jurisdiction where each Location is located), one for each Location, conveying fee simple marketable title to each Location to Buyer, subject only to those Permitted Encumbrances.

(k)“Due Diligence Documents” means copies of: (i) the Existing Title Documents in the possession or control of Seller or any Agent; (ii) the Existing Environmental Reports in the possession or control of Seller or any Agent; (iii) the Existing Leasing and Management Documents; (iv) the Existing Appraisal and Inspection Reports in the possession or control of Seller or any Agent; (v) the Existing Construction Documents in the possession or control of Seller or any Agent; (vi) the Warranties; (vii) the Tax Information in the possession or control of Seller or any Agent; (viii) certificates of insurance evidencing types and amounts of coverage for all existing property and liability insurance policies relating to the Property; and (ix) the Organizational Documents for Seller and Lease Guarantor, together with an organizational chart of Seller, Lease Guarantor, and Affiliates.

(l)“Due Diligence Period” means the period commencing on the Effective Date and expiring at 11:59 p.m. (eastern) on the later of (i) October 2, 2015, or (ii) the date that is ten (10) calendar days after Buyer’s receipt of the last of: (A) the Due Diligence Documents; (B) the Inspection Reports; and (C) the Surveys; provided, however, in no event shall the Due Diligence Period extend beyond the Closing.

(m)“Earnest Money Deposit” means the Initial Deposit and any Additional Deposit (as each term is defined in Section 3 of this Agreement), together with any accrued interest thereon.

(n)“Environmental Assessments” means the ASTM Phase I Environmental Site Assessments that Buyer has ordered for each Location.

(o)“Environmental Law” means all federal, state and local laws, common laws, equitable doctrine, rules, regulations, statutes, codes, ordinances, directives, guidance documents, cleanup or other standards, and any other governmental requirements or standards currently in existence or hereafter enacted or rendered which pertain to, regulate, or impose liability or standards of conduct concerning the use, storage, human exposure to, handling, transportation, release, cleanup or disposal of Hazardous Substances.

(p)“Escrow Agent” means Old Republic National Title Insurance Company, 9900 Covington Cross, Suite 290, Las Vegas, Nevada 89144, Attention: Mr. Paul J. Beever, Vice President and Underwriting Counsel, (702) 242-3141.

(q)“Existing Appraisal and Inspection Reports” means, collectively, all third-party appraisal, zoning, property inspection, property condition and/or engineering reports performed for any Location for the benefit of Seller or any Affiliate.

(r)“Existing Construction Documents” means, collectively, copies of all final plans, drawings, contracts, licenses, permits, certificates (including without limitation certificates of occupancy), licensees, approvals and other similar documentation related to the development, construction, renovation, alteration or improvement of any Location or Seller’s lawful use and occupancy of any Location.

(s)“Existing Environmental Reports” means all environmental, soils or engineering reports, assessments, studies, test results, notices, agreements and other documentation with respect to any Location, including, without limitation, all documentation with respect to any Location’s compliance with or violation of any Environmental Law.

(t)“Existing Leasing and Management Documents” means all existing leasing, licensing and management agreements or other similar agreements, which wholly or partially affect or relate to the possession, use, management, maintenance or operation of any Location, and all other agreements, instruments and documents relating or modifying such leasing, licensing and management agreements.

(u)“Existing Title Documents” means (i) all existing title insurance commitments, policies, searches and examinations relating to any Location; and (ii) all existing surveys, site plans, or other similar maps of any Location, or portion thereof.

(v)“Governmental Authority” means any federal, state, county, city, local, municipal or other governmental, regulatory or administrative agency, governmental commission, department, board, subdivision, court, tribunal, or other governmental arbitrator; arbitral body and all of their respective departments, bureaus, agencies or officers, and any insurance underwriting board or insurance inspection bureau or any other body exercising similar functions.

(w)“Hazardous Substances” means any and all toxic or hazardous substances, chemicals, materials, pollutants or other substances, of any kind or nature, which are regulated, governed, restricted or prohibited by or support a claim under any Environmental Law.

(x)“Inspection Reports” means, collectively, the Environmental Assessments, the Property Condition Assessments, and the Zoning Reports.

(y)“Intangible Property” means, collectively, all of Seller’s right, title and interest in and to (i) all architectural and engineering drawings, work product, records, licenses, permits, plans, approvals and other written authorizations used or useful solely in connection with the Property for the use, operation or ownership of any of the Property, and (ii) all Warranties, to the extent in effect and assignable.

(z)“Lease” means the Master Lease Agreement to be entered into by Seller, as tenant, and Buyer, as landlord, at Closing, dated as of the Closing Date, and in form and substance as that attached hereto as Exhibit B.

(aa)“Lease Terminations” means one or more lease terminations and/or other similar agreement as necessary to terminate all existing leasing agreements with respect to the Property, or any portion thereof, all and each of which shall be dated as of the Closing Date, and in form and substance reasonably acceptable to Buyer.

(ab)“Legal Requirements” means all laws, ordinances, statutes, rules, regulations, orders, directions and requirements of all Governmental Authorities currently in existence or hereafter enacted or rendered and of all other Governmental Authorities applicable to or claimed to be applicable to any portion of the Property or the business activities conducted thereon or therein.

(ac)“Location” means, individually, each of those certain parcels of real property listed on Schedule 1 attached hereto, as each is more particularly described in Exhibit A, together with all buildings, improvements and fixtures located thereon, now or in the future, and all rights, privileges, tenements, easements, licenses, hereditaments and appurtenances belonging or pertaining thereto.

(ad)“Memorandum of Lease” means the Memorandum of Lease to be entered into by Buyer and Seller at Closing, one for each Location, evidencing the existence of the Lease, each of which shall be dated as of the Closing Date, and in form and substance reasonably satisfactory to both Buyer and Seller, but in all events subject to local recording requirements.

(ae)“Monetary Encumbrances” means all mortgages, deeds of trust, mechanics’ liens, security interests, security instruments encumbering any of the Property, judgments and other monetary liens and encumbrances affecting title to or ownership of any of the Property, including, without limitation, liens for delinquent real estate taxes and assessments, but excluding, however, liens for taxes and assessments on the Property not yet due and payable.

(af)“Organization and Authorization Certificate” means the Organization and Authorization Certificate to be executed by Seller and each Lease Guarantor in favor of Buyer at Closing, dated as of the Closing Date, and in form and substance as that attached hereto as Exhibit C subject to reasonable revisions to reflect their respective Organizational Documents.

(ag)“Organizational Documents” means the articles of incorporation, certificate of incorporation, trust agreement, charter, bylaws, articles of formation, certificate of formation, regulations, operating agreement, certificate of limited partnership, partnership agreement and all other similar documents, instruments or certificates executed, adopted, or filed in connection with the creation, formation, or organization of an entity, including any amendments and modifications thereto, together with a complete list of all officers, directors, shareholders, members, and managers (excluding, however, the officers, directors, and shareholders of the Parent Guarantor) of such entity.

(ah)“Parent Guaranty” means the lease guaranty to be executed by Parent Guarantor in favor of Buyer at Closing, dated as of the Closing Date, and in form and substance as that attached hereto as Exhibit D.

(ai)“Permitted Encumbrances” means all of the following: (i) zoning, building and land use laws, ordinances, rules and regulations applicable to the Property; (ii) the lien of taxes and assessments on the Property not yet due and payable; (iii) the rights of Seller, as tenant only, under the Lease; and (iv) all matters enumerated in “Schedule B” of the applicable Title Commitment other than those matters specified in Section 5 that Seller is obligated to Remove at Closing and those Title Objections which Seller has elected in writing to Remove as provided in Section 5. Except as expressly agreed to in writing by Buyer, all Monetary Encumbrances are excluded from the definition of Permitted Encumbrances.

(aj)“Personal Property” means, collectively, if any, all records and files of Seller relating to the operation, maintenance, improvement and renovation of the Property.

(ak)“Property” means, collectively, (i) those certain parcels of real property located at the addresses listed on Schedule 1 attached hereto, each as more particularly described on Exhibit A, together with all buildings, improvements and fixtures located thereon, now or in the future, and all rights, privileges, tenements, easements, licenses, hereditaments and appurtenances belonging or pertaining thereto; (ii) the Personal Property; and (iii) the Intangible Property. The Property shall not include Seller’s trade fixtures, machinery, and equipment used in connection with Seller’s business; provided, however, the Property expressly includes all Building Systems.

(al)“Property Condition Assessments” means the Property Condition Assessments/Reports that Buyer intends to order for each Location promptly after the Effective Date or later execution of this Agreement.

(am)“Purchase Price” means Fifty One Million Six Hundred Thousand and 00/100 Dollars ($51,600,000.00).

(an)“Remove” means to release, correct or satisfy or, with Buyer’s prior written consent, cause the Title Company to affirmatively insure over (as applicable).

(ao)“Surveys” means the ALTA or TLTA surveys that Seller has ordered for each Location.

(ap)“Tax Information” means, collectively, copies of: (i) the real estate tax bills for the Property for the current tax year; (ii) the most recent tax assessment for each parcel comprising the Property, any current or

threatened betterment assessments; (iii) any tax abatement, economic incentive, or “PILOT” agreements; and (iv) complete files on any pending tax appeal proceedings.

(aq)“Title Commitments” means the commitments for title insurance ordered by Buyer and received from Title Company with respect to each Location.

(ar)“Title Company” means Old Republic National Title Insurance Company, 9900 Covington Cross, Suite 290, Las Vegas, Nevada 89144, Attention: Mr. Paul J. Beever, Vice President and Underwriting Counsel, (702) 242-3141.

(as)“Title Objections” shall mean any exceptions to coverage for matters set forth in the Title Commitments, any matters affecting title to the Property, and any matters shown on the Surveys, to which Buyer timely objects in accordance with the terms of Section 5.

(at)“Title Policies” means, collectively, the ALTA or TLTA title insurance policies, with an aggregate coverage amount equal to the Purchase Price, which Title Policies shall reflect that fee title to the Property is vested of record in Buyer, subject only to the Permitted Encumbrances.

(au)“Transfer Taxes” means any and all documentary transfer, stamp, sales, use, excise, privilege or similar tax, fee or charge of any Governmental Authority payable in connection with the delivery of any Deed, the Lease, any Memorandum of Lease, or any other instrument or document provided in or contemplated by this Agreement or the Exhibits hereto together with interest and penalties, if any, thereon, including any sales or similar taxes payable in connection with the transfer of any Personal Property comprising a part of the Property.

(av)“Warranties” means all right, title and interest held by Seller (or any Affiliate) in and to any and all warranties, indemnities and guaranties, if any, related to the renovation, construction, replacement, maintenance or ownership of any Location, including, without limitation, for roof, HVAC and other structural components and systems.

(aw)“Zoning Reports” means the Zoning Reports that Buyer has ordered for each Location.

2.Sale-Leaseback Transaction. In accordance with and subject to the terms and conditions of this Agreement, the following shall occur contemporaneously at Closing: (a) Seller shall sell and convey to Buyer, and Buyer shall purchase and accept from Seller, the Property; and (b) Buyer shall lease to Seller, and Seller shall accept and take from Buyer, the “Leased Premises,” as defined in the Lease; (c) Parent Guarantor shall guarantee the Lease obligations in accordance with the terms of the Parent Guaranty; and (d) Affiliate Guarantor shall guarantee the Lease obligations in accordance with the terms of the Affiliate Guaranty.

3.Earnest Money Deposit. Within three (3) business days after the Effective Date, Buyer shall deposit One Million and 00/100 Dollars ($1,000,000.00) with Escrow Agent (the “Initial Deposit”) to be held in escrow pursuant to the terms of this Agreement. In the event Buyer does not terminate this Agreement by written notice delivered to Seller prior to the expiration of the Due Diligence Period, Buyer shall deposit with Escrow Agent an additional One Million and 00/100 Dollars ($1,000,000.00) (the “Additional Deposit”) within three (3) business days after the expiration of the Due Diligence Period. All interest and other income from time to time earned on the Earnest Money Deposit shall be earned for the account of Buyer, and shall be a part of the Earnest Money Deposit. At the Closing, the Earnest Money Deposit shall be paid to Seller and applied as a credit against the cash portion of the Purchase Price.

4.Due Diligence. Prior to the Effective Date, Seller shall furnish the Due Diligence Documents to Buyer. In addition, Seller shall deliver any other documents in its possession or control relating to the Property reasonably requested by Buyer within three (3) business days following any such request. Buyer shall have the right to terminate this Agreement at any time prior to the expiration of the Due Diligence Period, for any or no reason at all, upon written notice to Seller, in which event this Agreement shall be null and void and of no further force and effect (except for rights and obligations that survive a termination of this Agreement pursuant to the express terms of this Agreement) and, notwithstanding anything in this Section 4 of this Agreement to the contrary, Escrow Agent shall immediately return the Earnest Money Deposit to Buyer. At all times prior to Closing, Buyer and its agents shall, upon reasonable notice, have the right to enter upon the Property, at their own risk and at reasonable times which do not interrupt normal business operations, to inspect the Property and conduct such due diligence investigations as Buyer deems necessary. Seller agrees to provide access to all parts of the Property and cooperate with such inspections and investigations in any way reasonably requested by Buyer. Notwithstanding the foregoing, Buyer shall not conduct any invasive testing without the prior written consent of Seller. Buyer agrees to repair any damage and to indemnify and hold Seller harmless from and against any loss, liability, mechanics’ lien, cost, damage, expense, claim or judgment incurred or suffered by Seller arising out of or related to such investigations of the Property by Buyer; excluding, however, any loss, liability, cost, damage, expense, claim or judgment resulting from any unfavorable test result or the discovery of

any undesirable existing condition on, in, under or about the Property, such exclusion including, without limitation, any loss resulting from any decrease in the fair market value of all or any portion of the Property or the inability of Seller to market the Property due to any such discovery or unfavorable test result. Buyer’s agents shall provide proof of insurance reasonably satisfactory to Seller prior to gaining access to inspect the Property. Any provision of this Agreement to the contrary notwithstanding, the repair and indemnification obligation of Buyer under this Section 4 shall survive Closing and the transfer of title or any earlier termination of this Agreement.

5.Title.

(a)Prior to the expiration of the Due Diligence Period, Buyer will give Seller written notice of any Title Objections. Seller will then respond to Buyer in writing within three (3) business days after receipt of Buyer’s notice of Title Objections indicating whether Seller elects to Remove the same. Failure of Seller to notify Buyer in writing within such three (3) business day period shall be deemed an election by Seller on the last day of such period not to Remove such Title Objections. If Seller elects not to Remove one or more Title Objections, then Buyer may either (i) terminate this Agreement by written notice to Seller, in which event the Title Company shall refund the Earnest Money Deposit to Buyer, and thereafter Seller and Buyer shall not have any further liability hereunder except for obligations which by the express terms of this Agreement survive the termination of this Agreement, or (ii) waive such Title Objections and proceed to Closing. Failure of Buyer to terminate this Agreement on or before the date that is three (3) business days after Buyer’s receipt of Seller’s response (or expiration of the three (3) business day period in which Seller is permitted to reply pursuant to this Section 5(a)) shall be deemed an election by Buyer to proceed to Closing. Any such Title Objection so waived by Buyer shall be deemed to constitute a Permitted Encumbrance, and the Closing shall occur as herein provided without any reduction of or credit against the Purchase Price.

(b)Notwithstanding anything in this Agreement to the contrary, Seller shall be obligated to Remove at Closing, to Title Company’s reasonable satisfaction, all Monetary Encumbrances, and Buyer shall not be obligated to object to any Monetary Encumbrances in its Title Objections. If this Agreement is not terminated by Buyer in accordance with the provisions hereof, Seller shall, at Closing, Remove or cause to be Removed all Monetary Encumbrances and any Title Objections which Seller elected in writing to Remove as provided above.

(c)Notwithstanding anything in this Agreement to the contrary, Buyer reserves the right to review and approve all liens, encumbrances, easements, covenants, conditions, restrictions and reservations affecting title to the Property, whether or not a matter of public record. If any of the same are first disclosed to or discovered by Buyer after receipt of the Title Commitments, then Seller shall afford Buyer the opportunity to review and object to the same in the time and manner provided by this Section 5. No title defect may be insured over or removed of record by indemnification or similar arrangement with the Title Company without Buyer’s prior written consent.

(d)At Closing, the Title Company will issue the Title Policies to Buyer insuring that fee simple title to the Property is vested in Buyer subject only to the Permitted Encumbrances. Buyer shall be entitled to request that the Title Company provide such endorsements to the Title Policies as Buyer may reasonably desire.

6.Representations and Warranties.

(a)Buyer, Seller and Lease Guarantor each represents and warrants to the others that: (i) it is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization or incorporation, and is duly licensed and qualified to transact business in and in good standing as a foreign entity in each jurisdiction wherein the nature of the business transacted by it or the nature of the property owned or leased by it makes such licensing or qualification necessary; (ii) all necessary action has been taken by it to authorize the execution, delivery and performance of this Agreement, and this Agreement is the legal, valid and binding obligation of it, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other laws of general application affecting the rights of creditors and subject to the effect of general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity; (iii) neither the entering into of this Agreement nor the consummation of the transactions contemplated by this Agreement will constitute or result in a violation or breach of any contract or any other instrument or agreement to which it or its assets may be subject to or bound; (iv) neither the entering into of this Agreement nor the consummation of the transactions contemplated by this Agreement will constitute a violation or breach by it of any judgment, order, writ, injunction or decree issued against or imposed upon it or will result in a violation of any applicable law, order, rule or regulation of any duly constituted Governmental Authority, and (v) no bankruptcy, insolvency, rearrangement or similar action or proceeding, whether voluntary or involuntary, is pending or, to its knowledge, threatened against it, nor has it any intention of filing or commencing any such action or proceeding.

(b)Seller represents and warrants to Buyer that: (i) (A) each Location is owned in fee simple by Seller, (B) except for matters of record listed in the Title Commitments which do not interfere with Seller’s ability to

operate its business, no party has any lease, license, or other right to use, occupy or possess any Location or any portion thereof, and no adverse or other parties are in possession of any Location, or any portion thereof, and (C) no party has any purchase right, right of first offer, right of first refusal or other right or interest relating to the ownership of any Location, or any portion thereof; (ii) the Personal Property is free and clear of liens, security interests and other encumbrances arising by, through or under Seller; (iii) to its knowledge, each Location, the use of each Location, and all current operations of each Location are in compliance with Legal Requirements in all material respects, and it has not received any written notice to the contrary; (iv) to its knowledge, all material permits, licenses or similar authorizations required to occupy and operate each Location with respect to its current use and in compliance with Legal Requirements have been obtained and are in full force and effect; (v) it has not received a written notice of or has any knowledge of any pending or contemplated condemnation action with respect to any Location or any improvements located thereon, or its means of ingress and egress; (vi) no litigation, action, or proceeding before any Governmental Authority is instituted, pending or, to its knowledge, threatened against or involving any Location or that would prevent or impair Seller from complying with its obligations hereunder or under the Lease or that would question the validity or enforceability of this Agreement or any action taken or to be taken by Seller as part of the transactions contemplated by this Agreement, except as has been expressly listed on Schedule 2 attached hereto; (vii) it is not a “foreign person” as defined in Internal Revenue Code Section 1445 and any related regulations and Buyer will have no duty to collect withholding taxes for it at Closing pursuant to the Foreign Investors Real Property Tax Act of 1980, as amended; (viii) except for title matters recorded in the applicable land records and/or set forth as exceptions in the Title Commitments, no written commitments to or agreements with any third party or Governmental Authority affect any Location which would be binding on Buyer after Closing; (ix) there are no delinquent bills for labor performed or materials furnished to or for the benefit of any Location for the period prior to the date of Closing and there are no mechanic’s liens or materialmen’s liens (whether or not perfected) on or affecting any Location except as has been expressly listed on Schedule 2 attached hereto and/or set forth as exceptions in the Title Commitments; (x) to its knowledge, there are no underground storage tanks at any Location; (xi) except as expressly set forth in the Existing Environmental Reports, no Location is subject to any environmental liens or active remediation and none are pending, or to the knowledge of Seller, threatened; (xii) to its knowledge, except as set forth in the Existing Environmental Reports, there are no Hazardous Substances used, handled, disposed of or otherwise released in, on, under, from or about any Location in violation of Environmental Law; and (xiii) all of the Due Diligence Documents have been delivered to Buyer, none of which have been edited or altered by Seller, and, to Seller’s knowledge, none are inaccurate or misleading in any material respect

(c)The representations and warranties made by one party in favor of another party are made as of the Effective Date and will be deemed to be remade as of the Closing Date and are a requirement of Closing.

(d)No claim for a breach of any representation or warranty made by Seller or Lease Guarantor shall be actionable or payable unless (i) the breach in question results from, or is based on, a condition, state of facts or other matter which was not actually known by Buyer prior to Closing, and (ii) written notice of such claim is sent by Buyer to Seller prior to the expiration of the Survival Period in accordance with Section 13.

(e)(i) Notwithstanding any contrary provision of this Agreement, if Seller or Lease Guarantor becomes aware between the Effective Date of this Agreement and the Closing Date of any matters that make any of its respective representations or warranties untrue, Seller or Lease Guarantor, as applicable, shall promptly disclose such matters to Buyer in a written notice that specifically references this Section 6(e). In the event that Seller or Lease Guarantor so discloses any matters that make any of its representations and warranties untrue in any material respect, Buyer shall have the right, in its sole discretion, by written notice to Seller and Lease Guarantor on or before the Closing Date, to: (A) terminate this Agreement, whereupon (x) Escrow Agent shall return the Earnest Money Deposit to Buyer, and (y) except for those provisions of this Agreement which by their express terms survive the termination of this Agreement, no party hereto shall have any other or further rights or obligations under this Agreement; (B) if applicable, exercise any of Buyer’s remedies pursuant to Section 13 below; (C) request that Seller or Lease Guarantor, as applicable, cure such breach as a condition to Closing; provided, however, that Seller or Lease Guarantor, as applicable, shall be under no obligation to cure such breach if it is unable or unwilling to cure such breach on or before the Closing Date; or (D) waive such matters and to consummate the transactions contemplated by this Agreement without reduction of the Purchase Price in accordance with the terms of this Agreement, in which case the applicable representation or warranty shall be deemed updated to include such information and Buyer shall have no further right to terminate this Agreement as a result thereof. The failure of Buyer to exercise a right provided by the foregoing

clauses (A) or (B) within five (5) business days of the receipt of the notice provided by Seller or Lease Guarantor, as applicable, shall be deemed an election by Buyer to proceed to Closing.

(ii) If Buyer elects to request that Seller or Lease Guarantor cure such breach in accordance with subsection (C) above and Seller or Lease Guarantor, as applicable, is unable or unwilling to cure such breach on or before the Closing Date, Buyer shall then have the right, in its sole discretion, by written notice to Seller and Lease Guarantor, to elect to proceed in accordance with subsection (A), (B), or (D) above.

7.Covenants.

(a)Affirmative. From and including the Effective Date until Closing or the earlier termination of this Agreement, Seller shall: (i) maintain, repair and keep the Property in good condition and repair in the ordinary course and in compliance with all Legal Requirements and matters of record; (ii) maintain the insurance coverage currently in effect for the Property, or comparable coverage, through the Closing Date; and (iii) give prompt written notice to Buyer upon: (A) receiving any written notices of default or any written notices of lawsuits affecting Seller and/or any part of the Property; (B) receiving any written notices of lawsuits affecting Lease Guarantor which could reasonably be expected to have a material adverse effect on Lease Guarantor’s ability to perform its obligations under the Parent Guaranty or Affiliate Guaranty, as applicable; (C) acquiring knowledge of any casualty or condemnation of any part of the Property, whether actual, pending or threatened; (D) acquiring knowledge of the presence of any Hazardous Substances in violation of any Environmental Law on, in, under or about any part of the Property; (E) receiving written notice from a Governmental Authority of a violation of any Legal Requirements with respect to the condition or use of any part of the Property; (F) acquiring knowledge of the conduct or occurrence of an inspection of any part of the Property by a Governmental Authority; or (G) acquiring knowledge of any fact or circumstance that renders (or is likely to render as of the Closing Date) any of Seller’s or Lease Guarantor’s representations or warranties untrue or inaccurate in any material respect, or any of the conditions of this Agreement unfulfilled.

(b)Negative. From and including the Effective Date until Closing or the earlier termination of this Agreement, neither Seller nor Lease Guarantor shall do, cause, permit or authorize any of the following, unless, in each case, Buyer’s prior written consent has been obtained: (i) enter into any new lease, contract or agreement affecting or encumbering the Property (or any part thereof); (ii) assign, transfer, convey, hypothecate, create a security interest in or lien upon, grant any easement or right-of-way, or otherwise further encumber any part of the Property or any interest therein or take any other action that would affect the title to any part of the Property as it exists as of the Effective Date; or (iii) amend or otherwise modify the Organizational Documents or structure of Seller or Lease Guarantor in a manner that is adverse to Buyer or the transactions contemplated by this Agreement, the Lease, the Parent Guaranty or Affiliate Guaranty, and provided that a copy of any such amended or modified Organizational Document be provided to Buyer at least five (5) business days prior to the Closing Date, and provided further that no amendment or modifications to the Organizational Documents or structure of Seller or Lease Guarantor shall be made after the date that is five (5) business days prior to the Closing Date.

(c)Publicity. Buyer, Seller and Lease Guarantor each hereby covenants and agrees that: (i) prior to Closing, none of Seller, Buyer or Lease Guarantor shall issue any press release or public statement with respect to any of the transactions contemplated by this Agreement without the prior consent of the others, except to the extent required by Legal Requirements, and (ii) after the Closing, any such press release or public statement issued by Buyer, Seller or Lease Guarantor shall be subject to the review and approval of the other parties (which approval shall not be unreasonably withheld, conditioned or delayed), except to the extent required by Legal Requirements, which obligations under this clause (ii) shall survive the Closing and the transfer of title to the Property. If Buyer, Seller or Lease Guarantor is required by Legal Requirements to issue a press release or public statement, such party shall, at least three (3) business days prior to the issuance of the same, deliver a copy of the proposed press release or public statement to the other party for its review.

8.Casualty. Seller agrees to give Buyer prompt notice of any material damage or destruction of any of Location or any portion thereof. In the event that prior to Closing any part of any Location is destroyed or damaged and the cost to restore the Location exceeds $250,000 (or is less than $250,000 if adequate insurance proceeds are not delivered to Buyer, and Seller does not agree to restore the Location at Seller’s sole cost and expense in accordance with the Lease), Buyer shall have the right, exercisable by giving notice to Seller within ten (10) business days after receiving written notice of such damage or destruction, to either: (a) terminate this Agreement upon written notice, in which event the Earnest Money Deposit shall be returned to Buyer; or (b) accept the subject Location in its then condition and to proceed with the Closing; provided, however, that in the event that Buyer elects to proceed under

clause (b), then any insurance proceeds related to such damage shall be made available to Seller to repair and restore the affected Location to its condition immediately prior to such damage promptly after Closing in accordance with the Lease, and Seller shall not compromise, settle or adjust any claims to such proceeds without Buyer’s prior written consent. The provisions of this Section 8 shall survive Closing and the transfer of title.

9.Condemnation. Seller agrees to give Buyer prompt notice of any taking, condemnation or eminent domain proceeding of any Location or any portion thereof. In the event that prior to the Closing, all or any portion of any Location is subject to a taking or a condemnation by public authority and the portion subject to a taking or a condemnation would, in Buyer’s good faith opinion, render the Location unusable for Seller’s use thereof or otherwise have a material adverse impact of the value of such Location, as determined by Buyer in good faith, Buyer shall have the right, exercisable by giving notice to Seller within ten (10) business days after receiving written notice of such taking or condemnation, to either: (a) terminate this Agreement upon written notice, in which event the Earnest Money Deposit shall be returned to Buyer; or (b) accept the subject Location in its then condition, without a reduction in the Purchase Price; provided, however, that in the event that Buyer elects to proceed under clause (b), then any condemnation award related to such taking shall be made available to Seller to repair, restore or reconfigure the subject Location to its condition immediately prior to such taking in accordance with the Lease, and Seller shall not compromise, settle or adjust any claims to such award without Buyer’s prior written consent The provisions of this Section 9 shall survive Closing and the transfer of title.

10.Conditions Precedent to Closing.

(a)Buyer. Unless waived in writing by Buyer, the obligation of Buyer to Close is subject to the fulfillment of all of the following conditions on or prior to the Closing Date: (i) the respective representations and warranties made by Seller and Lease Guarantor in this Agreement shall be true and correct in all material respects, and all of the terms, provisions, covenants, conditions, agreements and obligations required to be performed by Seller and Lease Guarantor under this Agreement shall have been performed, met or complied with in all material respects; (ii) Seller and Lease Guarantor shall have delivered their respective Closing documents pursuant to Section 11(c) and Section 11(d) of this Agreement; (iii) there shall be no action or proceeding, instituted, pending or threatened in writing against or involving Seller, Lease Guarantor or any Location before any Governmental Authority that could reasonably be expected to have a material adverse impact on Seller’s ability to Close, the value of any Location, Seller’s creditworthiness or ability to perform as tenant under the Lease, or Lease Guarantor’s creditworthiness or ability to perform as guarantor under the Lease Guaranty; (iv) Seller shall have delivered to Buyer copies of all Association Estoppels if any were requested in Buyer’s Title Objections; (v) Seller shall have delivered to Buyer insurance certificates confirming compliance, as of the Closing Date, with the insurance requirements of the Lease; (vi) all real estate taxes and assessments due and owing for each Location must be paid in full; (vii) any existing leases affecting the Property shall be terminated and shall be of no further force and effect; and (viii) Title Company shall be irrevocably committed to issue the Title Policies. In the event any of the conditions in this Section 10(a) have not been satisfied (or otherwise waived in writing by Buyer) on or prior to the Closing Date, then Buyer shall have the right, in its sole discretion, to either: (A) terminate this Agreement at any time by written notice to Seller, whereupon (x) Escrow Agent shall return the Earnest Money Deposit to Buyer, and (y) except for those provisions of this Agreement which by their express terms survive the termination of this Agreement, no party hereto shall have any other or further rights or obligations under this Agreement; or (B) if applicable, exercise any of Buyer’s remedies pursuant to Section 13 below.

(b)Seller. Unless waived in writing by Seller, the obligation of Seller and Lease Guarantor to Close is subject to the fulfillment of all of the following conditions on or prior to the Closing Date: (i) the representations and warranties made by Buyer in this Agreement shall be true and correct in all material respects, and all of the terms, provisions, covenants, conditions, agreements and obligations required to be performed by Buyer under this Agreement shall have been performed, met or complied with in all material respects; and (ii) Buyer shall have delivered its Closing documents and balance of the Purchase Price pursuant to Section 11(b) of this Agreement. In the event any of the conditions in this Section 10(b) have not been satisfied (or otherwise waived in writing by Seller and Lease Guarantor) on or prior to the Closing Date, Seller and Lease Guarantor shall have the right, in their sole discretion, to either: (A) terminate this Agreement at any time by written notice to Buyer, whereupon, except for those provisions of this Agreement which by their express terms survive the termination of this Agreement, no party hereto shall have any other or further rights or obligations under this Agreement; or (B) if applicable, exercise any of Seller’s remedies pursuant to Section 12 below.

11.Closing.

(a)Generally. Closing shall occur on or before the Closing Date in mail away format (the parties will not be present at Closing) with immediately available funds and closing documents delivered to Escrow Agent, in escrow, on or before the Closing Date. Escrow Agent shall serve as the closing agent and shall be responsible for preparing the closing statement, the Deeds and customary transfer documents in accordance with and subject to the terms and conditions of this Agreement.

(b)Buyer Closing Documents. Buyer shall deliver to Escrow Agent on or before the Closing Date: (i) a counterpart of the closing statement executed by Buyer; (ii) duplicate originals of the Lease executed by Buyer; (iii) one original Memorandum of Lease for each Location executed by Buyer; (iv) any other documents, instruments or agreements called for under this Agreement or applicable Legal Requirements, which have not previously been delivered or which are reasonably necessary to Close; and (v) the balance of the Purchase Price and all other funds due and owing from Buyer to Seller, after all applicable credits, adjustments and prorations called for under this Agreement.

(c)Seller Closing Documents. Seller shall deliver to Escrow Agent on or before the Closing Date: (i) a counterpart of the closing statement executed by Seller; (ii) one original Deed for each Location executed by Seller; (ii) duplicate originals of the Lease executed by Seller; (iii) one original Memorandum of Lease for each Location executed by Seller; (iv) an original Organization and Authorization Certificate executed by Seller; (v) the original Bill of Sale and Assignment; (vi) an original Indemnity Agreement to address certain open matters relating to the Texas Location, in form and substance reasonably satisfactory to Buyer (“Indemnity Agreement”), executed by Seller; (vii) a Title Affidavit in favor of Buyer confirming Seller’s knowledge with respect to certain title matters, in form and substance reasonably satisfactory to Buyer, executed by Seller; and (viii) any other documents, instruments, agreements or curatives called for under this Agreement or applicable Legal Requirements, which have not previously been delivered or which are reasonably necessary to Close, including, without limitation, such affidavits as the Title Company may reasonably require in order to issue, without additional charge, the Title Policies.

(d)Lease Guarantor Closing Documents. Lease Guarantor shall deliver to Escrow Agent on or before the Closing Date: (i) a counterpart of the closing statement executed by Lease Guarantor; (ii) an original Parent Guaranty executed by Parent Guarantor; (iii) an original Affiliate Guaranty executed by Affiliate Guarantor; (iv) an original Organization and Authorization Certificate executed by Parent Guarantor; (v) an original Organization and Authorization Certificate executed by Affiliate Guarantor; (vi) an original Indemnity Agreement executed by Parent Guarantor and Affiliate Guarantor; and (vii) any other documents, instruments, agreements or curatives called for under this Agreement or applicable Legal Requirements, which have not previously been delivered or which are reasonably necessary to Close.

(e)Costs.

(i) Buyer shall be responsible for: (A) the cost to record the Deeds; (B) the actual costs incurred by Fidelity National Title Insurance Company in preparing the existing title commitments; (C) with respect to the Ohio Location, the premiums charged for the Title Policy; (D) one-half of Escrow Agent’s closing fee; and (E) the cost of the Inspection Reports.

(ii) Seller shall be responsible for (A) any and all Transfer Taxes; (B) the cost to record each Memorandum of Lease; (C) the cost of any charges to Remove all liens, encumbrances and other exceptions to coverage required to be removed by this Agreement including, without limitation, the cost to record applicable curative documents; (D) with respect to the Texas Location, the premiums charged for the Title Policy; (E) one-half of the Escrow Agent's closing fee; and (F) the cost of the Surveys.

(iii) Buyer and Seller shall pay for their own legal fees. Any and all other closing costs not specifically addressed in this Section 11(e) shall be paid in accordance with the customs and practices of the jurisdiction where each Location is located, with Seller also being responsible for all such costs customarily paid by tenants in similar transactions.

(f)Prorations and Apportionments. As Seller will be responsible for the payment of all utilities, taxes, assessments, charges and costs of every kind and nature associated with the operation and use of the Property, as more particularly set forth in the Lease, Buyer and Seller shall not adjust, prorate or apportion any such items at Closing but rather Seller shall continue to be fully responsible for all such items. Seller shall have no claims against Buyer, and Seller hereby releases Buyer from and agrees to indemnify and hold Buyer

harmless from all claims and liability with respect to any such adjustments, prorations and apportionments. The terms and provisions of this Section 11(f) shall survive Closing and the transfer of title.

(g)Rent. The first partial payment of Base Rent due Buyer under the Lease shall be made by Seller at Closing and shall be prorated to cover the period from and including the Closing Date through and including the last day of the calendar month in which the Closing occurs. In the event the Closing occurs after the 25th day of the month, Seller shall also pay at Closing the full payment of Base Rent due Buyer under the Lease for the month following the month of Closing.

(h)Application of Proceeds. If there shall be any Monetary Encumbrances that Seller is obligated to pay and discharge in whole or part at Closing, Title Company may use the net proceeds due Seller at Closing to release and discharge the same, and Seller shall satisfy Title Company’s reasonable requirements with respect to the delivery of documents necessary for Title Company to issue the Title Policies without exception for such Monetary Encumbrances, including, without limitation, payment of the cost of recording or filing said instruments which shall be deducted from the balance of the Purchase Price payable to Seller at Closing.

(i)Possession and Condition. Seller shall deliver to Buyer full possession and occupancy of all of the Property at Closing free from all claims of occupancy or use of any kind whatsoever, except for Permitted Encumbrances and Seller’s right to occupy and use the same pursuant to the terms of the Lease. Buyer acknowledges and agrees that the Property is being purchased by Buyer in an “AS IS” and “WHERE IS” condition. Seller and Lease Guarantor acknowledge and agree that the Property is being leased to Seller in an “AS IS” and “WHERE IS” condition. Buyer and Seller shall accept the Property at the time of Closing in the same condition as the Property is in as of the Effective Date, as such condition shall have changed by reason of ordinary wear and tear.

(j)Broker’s Fees. Buyer, Seller and Lease Guarantor each represents and warrants to the others that there are no fees or commissions due as a result of their employment of any broker, except that CBRE (the “Broker”) is acting as Seller’s agent and shall be compensated at Closing by Seller pursuant to a separate written agreement. Seller and Lease Guarantor shall indemnify and hold Buyer harmless from all claims and expenses of Broker in connection with this Agreement. Buyer, Seller and Lease Guarantor each agree to indemnify and hold the others harmless for any and all claims and expenses, including legal fees, if any fees or commission is determined to be due by reason of employment of a broker other than the Broker. The terms of this Section 11(j) shall survive Closing and the transfer of title or the earlier termination of this Agreement.

(k)Tax Deferred Exchange. Buyer and Seller agree to cooperate with each other in effecting for the benefit of either party a tax deferred exchange pursuant to Section 1031 of the United States Internal Revenue Code and similar provisions of applicable state law; provided that: (i) neither party shall be obligated to delay the Closing; and (ii) neither party shall be obligated to execute any note, contract, deed or other document not otherwise expressly provided for in this Agreement providing for any personal liability, nor shall either party be obligated to take title to any property other than the Property as otherwise contemplated in this Agreement or incur additional expense for the benefit of the other party. Each party shall indemnify and hold the other harmless against any liability arising or is claimed to have arisen on account of any exchange proceeding which is initiated on behalf of the indemnifying party. The terms of this Section 11(k) shall survive Closing and the transfer of title.

12.Default by Buyer; Liquidated Damages. Provided that Seller and Lease Guarantor are both ready, willing and able to Close and also that neither Seller nor Lease Guarantor is in default of this Agreement, then, if any of Buyer’s representations and warranties in this Agreement prove to be untrue at Closing in any material respect, or if Buyer defaults in the performance of its obligations under this Agreement at any time after the expiration of the Due Diligence Period, and Buyer fails to cure such default or breach within ten (10) days after Seller and Lease Guarantor have provided written notice of such default to Buyer, the parties agree that, Seller and Lease Guarantor may elect one and only one of the following as their sole and exclusive remedy: (a) specific performance of this Agreement; or (b) payment of the Earnest Money Deposit. In the event that Seller and Lease Guarantor elect to be paid the Earnest Money Deposit as their sole and exclusive remedy, the parties agree that (i) the amount of the Earnest Money Deposit is a reasonable sum considering all of the circumstances existing on the date of this Agreement, including the relationship of its amount to the range of harm to Seller and Lease Guarantor that reasonably could be anticipated, and the anticipation that proving actual damage would be costly, impracticable and extremely difficult, and (ii) retention of the Earnest Money Deposit by Seller and Lease Guarantor as liquidated damages is not intended as a forfeiture or penalty, but instead is intended to constitute liquidated damages to Seller and Lease Guarantor. The election of Seller and Lease Guarantor to receive payment of the Earnest Money Deposit as set forth above shall not prohibit Seller from enforcing its indemnification rights under Section 4 against Buyer.

13.Default by Seller and/or Lease Guarantor. Prior to Closing, provided that Buyer is ready, willing and able to Close and also that Buyer is not in default of this Agreement, then, if any of Seller’s or Lease Guarantor’s representations and warranties in this Agreement prove to be untrue in any material respect, or if Seller or Lease Guarantor otherwise defaults in the performance of any of their respective obligations under this Agreement and Seller or Lease Guarantor fails to cure such default within ten (10) days after Buyer has provided written notice of such default to Seller, Buyer may elect one and only one of the following as its sole and exclusive remedy: (a) to terminate this Agreement upon written notice delivered to Seller, in which event Escrow Agent shall immediately refund the Earnest Money Deposit to Buyer, and Seller and Lease Guarantor shall reimburse Buyer for (i) all of Buyer’s reasonable out-of-pocket costs and expenses, including, but not limited to, Buyer’s reasonable attorneys’ fees, and (ii) the cost of the Inspection Reports in an amount not to exceed $50,000; or (b) to pursue the specific performance of this Agreement by Seller and Lease Guarantor. After Closing, if Buyer learns that any of Seller’s or Lease Guarantor’s representations and warranties in this Agreement were untrue in any material respect when made, then Buyer, subject to the limitations set forth in Section 6, shall have the right to pursue any remedies available at law or in equity for a breach of said representations and warranties; provided, however, in order for Buyer to pursue any such remedies, Buyer must send notice to Seller of its intent to do so prior to the expiration of the Survival Period. The provisions of this Section 13 shall survive Closing and the transfer of title or a termination of this Agreement.

14.Disposition of Earnest Money Deposit. In the event Escrow Agent is instructed by Buyer to return the Earnest Money Deposit to Buyer, or Escrow Agent otherwise intends to disburse or return all or any portion of the Earnest Money Deposit to Buyer based on Escrow Agent’s interpretation of this Agreement or otherwise, before making any such return or disbursement, Escrow Agent shall notify Seller of Buyer’s demand or Escrow Agent’s intention, and, unless Escrow Agent receives written objection from Seller within five (5) business days thereafter stating that there is a genuine dispute as to who is entitled to the Earnest Money Deposit and describing the basis of Seller’s objection, then Escrow Agent shall return the Earnest Money Deposit to Buyer. If Escrow Agent receives a written objection from Seller within said 5-business day period, Escrow Agent shall not return or disburse all or any portion of the Earnest Money Deposit to Buyer. In the event Escrow Agent is instructed by Seller to release the Earnest Money Deposit to Seller, or Escrow Agent otherwise intends to disburse all or any portion of the Earnest Money Deposit to Seller based on Escrow Agent’s interpretation of this Agreement or otherwise, before making any such disbursement, Escrow Agent shall notify Buyer of Seller’s demand or Escrow Agent’s intention, and, unless Escrow Agent receives written objection from Buyer within five (5) business days thereafter stating that there is a genuine dispute as to who is entitled to the Earnest Money Deposit and describing the basis of Buyer’s objection, Escrow Agent shall release and disburse the Earnest Money Deposit to Seller. If Escrow Agent receives a written objection from Buyer within said 5-business day period, Escrow Agent shall not release or disburse the Earnest Money Deposit to Seller. Except for the willful misconduct or gross negligence of Escrow Agent or Escrow Agent’s default of its obligations under this Agreement, Escrow Agent shall have no liability to either Buyer or Seller in acting or refraining from acting hereunder. In the event there is any dispute as to the proper disbursement of the Earnest Money Deposit, Escrow Agent shall be entitled to deposit the Earnest Money Deposit with a court of competent jurisdiction in any county of any Location, and to interplead each of Buyer and Seller in an appropriate interpleader action. Escrow Agent shall not release, return or disburse the Earnest Money Deposit or any portion thereof, except: (a) in strict compliance with the terms of this Section 14; (b) in accordance with a joint written direction signed by Seller and Buyer; or (c) in obedience to a court order issued by a court of competent jurisdiction.

15.Confidentiality. Buyer, Seller and Lease Guarantor acknowledge that any and all information that either party has heretofore furnished or hereafter furnishes to any of the others with respect to the Property, the transactions contemplated by this Agreement or other non-public proprietary or confidential information of the parties has been and will be furnished on the condition that the receiving party maintains the confidentiality thereof until Closing. Accordingly, prior to Closing, Buyer, Seller and Lease Guarantor shall not disclose, and shall prohibit their respective agents, consultants, employees, representatives and any parties identified in clause (i) below (each, a “Receiving Agent”) from disclosing, to any other person or entity without the prior written consent of the non-disclosing party: (a) the material terms of this Agreement; (b) any of the information in respect of the Property, including, but not limited to, the Due Diligence Documents and any information heretofore or hereafter obtained by Buyer or its Receiving Agents, consultants or representatives in connection with Buyer’s due diligence investigations of the Property; and (c) any other non-public proprietary or confidential information of the disclosing party. In the event the Closing does not occur or this Agreement is terminated, each party shall, upon request from the other, promptly return to the other all documents containing any of such information without retaining any copy thereof or extract therefrom.

Notwithstanding anything to the contrary hereinabove set forth, either party may disclose such information (i) on a need-to-know basis to the Title Company, to receiving party’s agents, employees, consultants, managers, investors, accountants, attorneys and contractors, to its potential lenders and subsequent purchasers, and to members of professional firms serving it or its potential lenders and (ii) as may be necessary to comply with applicable Legal Requirements or a court order. Notwithstanding the foregoing, the foregoing confidentiality obligation shall not apply to any such information that (1) is or becomes generally available to the public other than as a result of a breach of this Agreement; (2) is obtained by receiving party or its Receiving Agents on a non-confidential basis from a third-party that, to receiving party’s knowledge, was not legally or contractually restricted from disclosing such information; (3) was in receiving party’s or its Receiving Agents’ possession prior to disclosing party’s disclosure hereunder; or (4) was or is independently developed by receiving party or its Receiving Agents without using any such confidential information. The terms of this Section 15 shall survive the termination of this Agreement.

16.Attorney Fees. Except as otherwise provided in this Agreement, in a suit to enforce this Agreement or any provision contained herein, the party prevailing in such suit shall be entitled to recover, in addition to all other remedies or damages allowed pursuant to this Agreement, reasonable attorney fees and court costs incurred in such suit and any appeal thereof.

17.Notices. Any notice, request, tender, demand, delivery, approval or other communication provided for, required or arising under this Agreement shall be in writing and shall be deemed delivered: (a) if delivered in person, upon delivery to an individual or to an officer of a corporate party; (b) if mailed, three business days following deposit in the United States mail, registered or certified, return receipt requested, postage prepaid, or if delivered via overnight courier with instructions to deliver the next business day, one business day after delivery to such overnight courier, in either case, addressed to the other party or parties at the address or addresses below or at such other address or addresses of which such party may give notice in accordance with the provisions of this Section 17; or (c) if by fax or email, upon receipt of confirmation of the fax or email transmittal, transmitted to the other party or parties at the fax number or email address provided below or such other fax number or email address of which such party may give notice in accordance with the provisions of this Section 17. Any and all such notices may be given on behalf of either party by its below named attorney.

Buyer: Broadstone Net Lease Acquisitions, LLC

c/o Broadstone Real Estate, LLC

530 Clinton Square

Rochester, NY 14604

Attn: Mr. Sean Cutt

Fax: 585.760.8378

Email: sean.cutt@broadstone.com

With a copy to: Tones Vaisey, PLLC

155 Clinton Square

Rochester, NY 14604

Attn: Jeffrey A. Vaisey, Esq.

Fax: 585.486.1772

Email: jvaisey@tonesvaisey.com

Seller & BEF Foods, Inc.

Lease Guarantor: 8111 Smith’s Mill Road

New Albany, Ohio 43054

Attn: Chief Financial Officer

Email: Mark_Hood@BobEvans.Com

With a copy to: Bob Evans Farms, Inc.

8111 Smith’s Mill Road

New Albany, Ohio 43054

Attn: General Counsel

Email: Colin_Daly@BobEvans.Com

and

Bass, Berry & Sims PLC

150 Third Avenue South, Suite 2800

Nashville, Tennessee 37201

Attn: T. Todd Ervin

Fax: (615) 248-4147

Email: Tervin@bassberry.com

18.Miscellaneous.

(a)Further Assurances. Buyer, Seller and Lease Guarantor shall in good faith cooperate with each other in satisfying all conditions contained in this Agreement, including, without limitation, executing or re-executing any and all documents reasonably required to be executed by Seller as record owner of the Property to accomplish any verifications, approvals or determinations. Buyer, Seller and Lease Guarantor agree that they will, at any time and from time to time after Closing, upon request of the other party, do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, all such further acts, assignments, transfers, conveyances, and assurances as may be reasonably required in order to more fully complete the terms of this Agreement to the extent usual and customary for commercial real estate closings where the Property is located.

(b)Assignment. No party may assign this Agreement, in whole or in part, without the prior written consent of the other parties. Notwithstanding anything contained herein to the contrary, upon the expiration of the Due Diligence Period, this Agreement shall automatically be assigned by Buyer to Broadstone BEF Portfolio, LLC, a New York limited liability company to be formed by Buyer, without the need for a separate written assignment. Notwithstanding the foregoing, Buyer shall not be released and will remain responsible for the performance of all of the assignee’s obligations under this Agreement until Closing.

(c)Survival. The representations and warranties of the parties contained in this agreement shall survive the Closing and the transfer of title to the Property for a period of twelve (12) months (the “Survival Period”).

(d)Successors and Assigns. All terms of this Agreement shall be binding upon, and inure to the benefit of and be enforceable by the parties hereto and their respective legal representatives, successors and permitted assigns.

(e)Modifications. No modification, waiver, amendment, discharge or change of this Agreement, except as otherwise provided herein, shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver, amendment, discharge or change is sought. This Agreement contains the entire agreement between the parties relating to the transactions contemplated hereby, and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged herein. Without limiting the generality of the foregoing, this Agreement alone fully and completely expresses the agreement between the parties and it is specifically understood that no oral representation is binding on Buyer, Seller or Lease Guarantor.

(f)Governing Law and Venue. This Agreement shall be construed and enforced in accordance with the laws of the State of New York. Each party hereto consents to the jurisdiction of any court of competent jurisdiction for any action arising out of matters related to this Agreement. Each of the parties hereto waives the right to commence an action in connection with this Agreement in any court outside of said county.

(g)Interpretation. The principle that an agreement should be construed against the party drafting the agreement shall not apply to this Agreement as both parties hereto have contributed substantially in the negotiation and drafting of this Agreement. The captions of this Agreement are inserted for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement of any term hereof. All personal pronouns used in this Agreement, whether used in the masculine, feminine, or neuter gender, shall include all other genders. The singular shall include the plural and vice versa.

(h)Invalid Provision. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable and the remaining provisions of this Agreement shall remain in full force.

(i)Time of Essence. Time is of the essence of this Agreement. However, if the final date of any time period under or provided by this Agreement falls on a day that is not a business day, then, and in such event, the time of such period shall be extended to the next business day.

(j)Waiver. Each of the parties hereto reserves the right to waive, in whole or in part, any provision hereof which is for its benefit.

(k)Non-Recording. Neither this Agreement nor any memorandum or disclosure thereof shall be recorded without the prior written consent of all parties to this Agreement.

(l)Counterparts. This Agreement may be executed in any number of counterparts, each of which, when taken together and confirmed between the attorneys identified herein, shall constitute but one and the same fully executed instrument. Signatures on counterparts of this Agreement that are delivered via fax, email or by other electronic means are authorized and shall be acknowledged as if such signatures were an original execution.

(m)Schedules and Exhibits. The following schedules and exhibits attached hereto are hereby expressly made a part of this Agreement:

(i) SCHEDULE 1 - List of Locations

(ii) SCHEDULE 2 - List of Litigation

(iii) EXHIBIT A - Legal Description

(iv) EXHIBIT B - Master Lease Agreement

(v) EXHIBIT C - Organization and Authorization Certificate

(vi) EXHIBIT D - Parent Guaranty

(vii) EXHIBIT E - Affiliate Guaranty

[SIGNATURE PAGES FOLLOW]

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


BUYER:	BROADSTONE NET LEASE ACQUISITIONS, LLC, a New York limited liability company

By: Broadstone Net Lease, LLC,

a New York limited liability company,

its sole member

By: Broadstone Net Lease, Inc.,

a Maryland corporation,

its managing member

By: /s/ Christopher J. Czarnecki

[SELLER & LEASE GUARANTOR SIGNATURE PAGE FOLLOWS]


SELLER:	BEF FOODS, INC.,

a Ohio corporation

By: /s/ Mark E. Hood .


LEASE GUARANTOR:	BOB EVANS FARMS, INC.,

a Delaware corporation

By: /s/ Mark E. Hood .

BOB EVANS FARMS, LLC,

a Ohio limited liability company

By: /s/ Mark E. Hood .

[ESCROW AGENT SIGNATURE PAGE FOLLOWS]

Escrow Agent joins in the execution hereof solely for the purpose of evidencing its agreement to hold, administer and disburse the Earnest Money Deposit pursuant to the terms of the foregoing Agreement.


ESCROW AGENT:	OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY

By: /s/ Heather Zeisloft .

Exhibit 10.2

LEASE GUARANTY

THIS LEASE GUARANTY (this “Guaranty”) is made and given as of October 23, 2015, by BOB EVANS FARMS, INC., a Delaware corporation (“Guarantor”), in favor of BROADSTONE BEF PORTFOLIO, LLC, a New York limited liability company (“Landlord”).

W I T N E S S E T H

WHEREAS, Landlord desires to purchase those certain parcels of real property located at (i) 651 Commerce Parkway, Lima, OH 45804; and (ii) 1109 Industrial Drive East, Sulphur Springs, TX 75482, together with all buildings, improvements and fixtures located thereon, now or in the future, and all rights, privileges, tenements, easements, licenses, hereditaments and appurtenances belonging or pertaining thereto, each as more particularly described on Exhibit A (collectively, the “Property”), from BEF Foods, Inc., an Ohio corporation (“Tenant”), and, contemporaneously with the closing of the purchase of the Property, lease the Property to Tenant pursuant to that certain Master Lease Agreement (the “Lease”), dated as of even date with this Guaranty, by and between Landlord, as landlord, and Tenant, as tenant, to which reference is made for all of the terms and provisions thereof;

WHEREAS, Landlord is unwilling to purchase the Property or enter into the Lease unless Guarantor executes and delivers to Landlord this Guaranty, and, therefore, Guarantor executes and delivers this Guaranty to Landlord in order to induce Landlord to purchase the Property and to enter into the Lease;

WHEREAS, Guarantor acknowledges that, because of Guarantor’s ownership and control of Tenant, Guarantor will substantially benefit from the sale of the Property to Landlord and Landlord’s leasing of the Property to Tenant. For this and other valuable consideration, Guarantor hereby assumes the duty to perform the Guaranteed Obligations (hereinafter defined) in accordance with the terms hereof; and

WHEREAS, Guarantor has received a copy of the Lease, has examined the Lease, and is familiar with all of the terms, conditions and provisions contained in the Lease.

NOW, THEREFORE, in consideration of the foregoing and in further consideration of the sum of ten dollars ($10.00) paid to Guarantor, and for other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, Guarantor hereby agrees as follows:

1.Guarantor unconditionally guarantees to Landlord the full, faithful and punctual payment of all rental, sums, costs, expenses, charges, payments and deposits (including sums payable as damages upon a default under the Lease) (or any part thereof) which are at any time payable by Tenant under the Lease in accordance with the Lease, and the full, faithful and punctual performance, fulfillment and observance of all of each covenant, condition and obligation of the Lease to be performed, fulfilled or observed by Tenant (collectively, the “Guaranteed Obligations”).

2.This Guaranty is an unconditional, irrevocable and absolute guarantee of payment and performance. If for any reason any provision of the Lease shall not be faithfully performed or observed by Tenant as required thereby, or if the rental or any other sums, costs, expenses, charges, payments or deposits, or any part thereof, payable under the Lease shall not be paid when due in accordance with the provisions of the Lease, Guarantor will promptly perform or observe, or cause the performance or observance of each such provision, and will immediately pay such rental or other sums, costs, expenses, charges, payments or deposits then due and payable to the Person entitled thereto pursuant to the provisions of the Lease. Guarantor also agrees to pay to such Person the costs and expenses of collecting any such rental or any other sum, cost, expense, charge, payment or deposit at any time payable by Tenant under the Lease. Landlord shall have the right to enforce this Guaranty regardless of the receipt by Landlord of additional security or the enforcement of any remedies against such security or the release of such security.

3.Anything in this Guaranty to the contrary notwithstanding, Guarantor shall not take any action, or cause or permit any Person to take any action, and Guarantor hereby irrevocably waives to the extent permitted by applicable law any and all rights that it may otherwise have at law or in equity, to enjoin, interfere with, restrict or limit, in any way whatsoever, any demand or any payment to Landlord under the Lease or this Guaranty. If Guarantor,

or any Person on Guarantor’s behalf or at Guarantor’s direction, brings any proceeding or action to enjoin, interfere with, restrict, or limit, in any way whatsoever, anyone or more demands or payments under the Lease or this Guaranty, Guarantor shall be liable for any and all damages resulting therefrom or arising in connection therewith, including, without limitation, reasonable attorney’s fees and costs.

4.Guarantor’s duty to pay and perform the Guaranteed Obligations shall in no way be released, affected or impaired by reason of the happening from time to time of any of the following, whether or not Guarantor has received notice thereof or consented thereto: (a) the waiver by Landlord or its successors or assigns of the performance or observance by Tenant of any provision of the Lease; (b) the extension of the time for payment by Tenant of any rental or any sums, costs, expenses, charges, payments or deposits or any part thereof, owing or payable under the Lease, or of the time for performance by Tenant of any other obligations under or arising out of or on account of the Lease or any extension or renewal thereof; (c) the assignment, subletting or mortgaging or the purported assignment, subletting or mortgaging of all or part of Tenant’s interest in the Lease, whether or not permitted by the Lease; (d) the modification or amendment (whether material or otherwise) of any obligation of Tenant as set forth in the Lease; (e) the taking or the omission of any actions referred to in the Lease; (f) the failure, omission or delay of Landlord to enforce, assert or exercise any right, power or remedy conferred on Landlord in the Lease or by law or any action on the part of Landlord granting indulgence or extension in any form, or for failing to recognize, observe or protect any legal or equitable rights Guarantor may have with respect to Tenant, the Lease or the Property; (g) the failure of any Person to perform any obligation to Landlord; (h) the voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all of the assets, marshaling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting Tenant, Guarantor or any Person or any of their respective assets, or the disaffirmance of the Lease or any other action by a trustee or other Person in any such proceeding; (i) the release of Tenant from performance or observance of any provision of the Lease by operation of law; (j) any disability or other fact or circumstance that might give rise to a legal or equitable defense to Tenant or Guarantor; (k) the receipt and acceptance by Landlord of notes, checks or other instruments for the payment of money made by Tenant, or any extensions or renewals thereof; or (l) the renewal or extension of the term of the Lease.

5.(a) To the extent permitted by applicable law, Guarantor hereby expressly waives: (i) notice of acceptance of this Guaranty, protest, demand and dishonor, presentment, and demands of any kind now or hereafter provided for by any statute or rule of law; (ii) notice of any actions taken by Landlord or Tenant under the Lease or any other agreement or instrument relating thereto; (iii) notice of any and all obligations or liabilities contracted or incurred by Tenant and any and all defaults by Tenant in the payment of Base Rent and Additional Rent or other rent, charges or amounts, or of any other defaults by Tenant under the Lease; (iv) all other notices, demands and protests, and all other formalities of every kind in connection with the enforcement of the Guaranteed Obligations, omission of or delay in which, but for the provisions of this Section 5, might constitute grounds for relieving Guarantor of its obligations hereunder; (v) any requirement that Landlord protect, secure, perfect, insure or proceed against any security interest or lien, or any property subject thereto, or exhaust any right or take any action against Tenant or any other person or entity (including any additional guarantor or Guarantor) or against any collateral; and (vi) the benefit of any statute of limitations affecting Guarantor’s liability under this Guaranty.

(b) Guarantor shall not impose any counterclaim or counterclaims or claims for set-off, recoupment or deduction of Rent in any action brought by Landlord against Guarantor under this Guaranty. Guarantor shall not be entitled to make, and hereby expressly waives to the extent permitted by applicable law, any and all defenses against any claim asserted by Landlord or in any suit or action instituted by Landlord to enforce this Guaranty or the Lease. In addition, Guarantor hereby expressly waives to the extent permitted by applicable law, both with respect to the Lease and with respect to this Guaranty, any and all rights which are waived by Tenant under the Lease, in the same manner as if all such waivers were fully restated herein. The liability of Guarantor under this Guaranty is primary and unconditional.

(c) Guarantor hereby expressly waives to the extent permitted by applicable law any and all protections or rights afforded to it as a guarantor under the laws of the state of New York, and expressly waives to the extent permitted by applicable law any and all protections or rights afforded to it as a guarantor under the laws of any state where the Property, or any portion thereof, may be located.

(d) Guarantor hereby expressly waives to the extent permitted by applicable law any and all rights to defenses arising by reason of: (i) any “one-action” or “anti-deficiency” law or any other law that may prevent

Landlord from bringing any action, including a claim for deficiency, against Guarantor before or after Landlord’s commencement or completion of any action against Tenant; (ii) any election of remedies by Landlord (including, without limitation, any termination of the Lease) that destroys or otherwise adversely affects Guarantor’s subrogation rights or Guarantor’s rights to proceed against Tenant for reimbursement; (iii) any disability, insolvency, bankruptcy, lack of authority or power, death, insanity, minority, dissolution, or other defense of Tenant, of any other guarantor (or Guarantor), or of any other person or entity, or by reason of the cessation of Tenant’s liability from any cause whatsoever, other than full and final payment and performance of the Guaranteed Obligations; (iv) any right to claim discharge of any or all of the Guaranteed Obligations on the basis of unjustified impairment of any collateral for the Guaranteed Obligations; (v) any change in the relationship between Guarantor and Tenant or any termination of such relationship; (vi) any irregularity, defect or unauthorized action by any or all of Landlord, Tenant, any other guarantor (or Guarantor) or surety, or any of their respective officers, directors, managers, partners or other agents in executing and delivering any instrument or agreements relating to the Guaranteed Obligations or in carrying out or attempting to carry out the terms of any such agreements; (vii) any assignment, endorsement or transfer, in whole or in part, of the Guaranteed Obligations, whether made with or without notice to or consent of Guarantor; (viii) the recovery from Tenant or any other Person (including without limitation any other guarantor) becomes barred by any statute of limitations or is otherwise prevented; (ix) the benefits of any and all statutes, laws, rules or regulations which may require the prior or concurrent joinder of any other party to any action on this Guaranty; (x) any release or other reduction of the Guaranteed Obligations arising as a result of the expansion, release, substitution, deletion, addition, or replacement (whether or not in accordance with the terms of the Lease) of the Property; or (xi) any neglect, delay, omission, failure or refusal of Landlord to take or prosecute any action for the collection or enforcement of any of the Guaranteed Obligations or to foreclose or take or prosecute any action in connection with any lien or right of security (including perfection thereof) existing or to exist in connection with, or as security for, any of the Guaranteed Obligations, it being the intention hereof that Guarantor shall remain liable as a principal on the Guaranteed Obligations notwithstanding any act, omission or event that might, but for the provisions hereof, otherwise operate as a legal or equitable discharge of Guarantor. Guarantor hereby waives to the extent permitted by applicable law all defenses of a surety to which it may be entitled by statute or otherwise.

6.No waiver by Landlord of the payment by Guarantor of any of its obligations contained in this Guaranty, nor any extension of time for the payment by Guarantor of any such obligations, shall affect or impair this Guaranty or constitute a waiver or relinquishment of any rights of Landlord hereunder for the future. No action brought under this Guaranty against Guarantor and on recovery had in pursuance thereof shall be any bar or defense to any further action or recovery which may be brought or had under this Guaranty by reason of any further default of Tenant.

7.Guarantor agrees that Guarantor’s obligations under this Guaranty shall not be released, impaired or affected in any way by: (a) Guarantor’s bankruptcy, reorganization or insolvency under any law, or any action of a trustee in any such proceeding; (b) bankruptcy, reorganization or insolvency under any law of any party, or any action of a trustee in any such proceeding (c) failure of any other party to perform its obligations to Landlord; or (d) any other circumstance that might constitute a legal or equitable defense to Guarantor’s obligations under this Agreement. Further, Guarantor agrees that, in the event of the rejection or disaffirmance of the Lease by Tenant or Tenant’s trustee in bankruptcy, pursuant to bankruptcy law or any other law affecting creditors’ rights, Guarantor will, if Landlord so requests, assume all obligations and liabilities of Tenant under the Lease, to the same extent as if Guarantor was a party to such document and there had been no such rejection or disaffirmance; and Guarantor will confirm such assumption, in writing, at the request of Landlord upon or after such rejection or disaffirmance.

8.If at any time payment of any of Tenant’s obligations under the Lease is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of Tenant or any other guarantor of the Lease, the obligations of Guarantor with respect to such payment shall be reinstated at such time as though such payment had not been made.

9.The liability of Guarantor, in accordance with the other provisions of this Guaranty, is coextensive and also joint and several with that of Tenant, and any other guarantor of the Lease, and action may be brought against Guarantor and carried to final judgment either with or without making Tenant or any other guarantor a party thereto. Guarantor’s obligations hereunder shall not be assigned or delegated. If more than one Person shall constitute Guarantor hereunder or if the Lease is otherwise guaranteed by more than one Person, then the liability of each such Person shall be joint and several.

10.All of Landlord’s rights and remedies under the Lease and under this Guaranty shall be distinct, separate and cumulative, and no such right or remedy shall be exclusive of or a waiver of any of the others. Guarantor shall pay to Landlord all of Landlord’s out-of-pocket expenses incurred in enforcing this Guaranty, including, but not limited to reasonable attorneys’ fees.

11.Guarantor has made its own arrangements for keeping informed of changes or potential changes affecting Tenant including Tenant’s financial condition.

12.Without limiting the generality of the foregoing, Guarantor acknowledges and agrees to be bound by the provisions of Section 27 of the Lease with regard to delivery of financial statements and other information required therein.

13.Within ten (10) days after Landlord’s written request, Guarantor shall execute and deliver to Landlord a written statement certifying: (a) the continuing effect and enforceability of this Guaranty, and (b) any other matter concerning this Guaranty or the Lease as Landlord may reasonably request from time to time.

14.(a) Until all of the Guaranteed Obligations of Guarantor hereunder shall have been performed or satisfied in full, or Landlord has otherwise provided its prior written consent thereto, Guarantor: (i) shall not have a right of subrogation against Tenant by reason of Guarantor’s performance under this Guaranty or monies or obligations owed by Tenant to Guarantor; (ii) waives any right to enforce any remedy which Guarantor now has or may hereafter have against Tenant by reason of Guarantor’s performance under this Guaranty; (iii) subordinates any liability or indebtedness of Tenant now or hereafter held by or owed to Guarantor to Tenant’s obligations; (iv) shall pay prior to delinquency every tax, assessment, fee and charge and file each report required by any taxing authority for Guarantor or its assets; (v) shall promptly notify Landlord of any material default of the Lease, or any event or condition that might have a material adverse effect upon Guarantor’s ability to pay and perform the Guaranteed Obligations; (vi) shall, at all times, remain adequately capitalized to honor Guarantor’s obligations hereunder; (vii) shall do such further acts and execute and deliver Landlord all such additional conveyances, certificates, instruments and other assurances as Landlord may from time to time reasonably require to protect, assure or enforce its interests, rights and remedies under this Guaranty; and (viii) shall not, without the prior written consent of Landlord, in each instance, assign (whether directly or indirectly, voluntary or involuntary), in whole or in part, this Guaranty or any obligation hereunder or, through one or more transactions, do, or permit to be done, any Parent Change of Control. “Parent Change of Control” means: (A) the acquisition by any person or group (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), other than any employee benefit plan (or related trust) sponsored or maintained by Guarantor, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of fifty percent (50%) or more of the combined voting power of the then outstanding voting Equity Interests of Guarantor entitled to vote generally in the election of directors of the Guarantor; (B) the consummation of a sale by Guarantor of all or substantially all of Guarantor’s assets; (C) a liquidation, dissolution or winding-up of Guarantor; (D) the consummation of a merger, consolidation or other business combination of Guarantor with or into another entity, or the acquisition by Guarantor of assets or shares or equity interests of another entity, as a result of which the stockholders of Guarantor immediately prior to such merger, consolidation, other business combination or acquisition, do not, immediately thereafter, beneficially own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting Equity Interests entitled to vote generally in the election of directors of the entity resulting from such merger, consolidation or other business combination of Guarantor; (E) Guarantor shall cease to own beneficially and of record, directly or indirectly, eighty percent (80%) of the Equity Interests of Tenant or Bob Evans Farms, LLC; (F) any reorganization, reverse stock split or recapitalization of Guarantor that would result in a Parent Change of Control as otherwise defined herein; or (G) any transaction or series of related transactions having, directly or indirectly, the same effect as any of the foregoing. “Equity Interests” means, as applied to any Person, corporate stock and any and all securities, shares, partnership interests (whether general, limited, special or other), limited liability company interests, membership interests, equity interests, participations, rights or other equivalents (however designated and of any character) of corporate stock of such Person or any of the foregoing issued by such Person (whether a corporation, a partnership, a limited liability company or another type of entity) and includes, without limitation, securities convertible into Equity Interests and rights, warrants or options to acquire Equity Interests.

(b) Notwithstanding anything in Section 14(a) to the contrary, Guarantor shall be permitted to cause, suffer, or permit, without Landlord’s consent, any Parent Change of Control that satisfies all of the terms and conditions set forth in this Section 14(b), all of which must be satisfied on or before the effective date (or earlier closing) of such proposed Parent Change of Control (each a “Permitted Parent Change of Control”):

(i) (A) No Event of Default has occurred and is continuing both as of the date Guarantor delivers the Parent Change of Control Notice (hereinafter defined) and as of the date such proposed Parent Change of Control becomes effective; (B) no violation or default under this Guaranty has occurred and is continuing both as of the date Guarantor delivers the Parent Change of Control Notice and as of the date such proposed Parent Change of Control becomes effective; (C) the Parent Change of Control would not result in an immediate violation of a material term or condition of this Guaranty or the Lease; (D) if the Parent Change of Control is or relates to a merger or consolidation of Guarantor, then, prior to or simultaneously with its effectiveness, the surviving entity of such merger or consolidation shall assume all of the obligations of Guarantor under this Guaranty, actual, contingent and accrued, in a manner reasonably acceptable to Landlord and otherwise in accordance with the terms and conditions of this Guaranty; (E) if the Parent Change of Control is or relates to a sale or transfer of Guarantor’s assets, then, prior to or simultaneously with its effectiveness, the purchaser or transferee of such assets shall assume all of the obligations of Guarantor under this Guaranty, actual, contingent and accrued, in a manner reasonably acceptable to Landlord and otherwise in accordance with the terms and conditions of this Guaranty; (F) immediately after the Parent Change of Control, and having given effect thereto, Guarantor, if the surviving entity, remains a Credit Entity or another Person that qualifies as a Credit Entity has expressly assumed or guaranteed all of the Guaranteed Obligations, actual, contingent and accrued, in a manner reasonably acceptable to Landlord; and (G) Guarantor has delivered a Parent Change of Control Notice to Landlord not less than thirty (30) days prior to the effective date (or earlier closing) of such Parent Change of Control.

(ii) Notwithstanding anything herein to the contrary, no Parent Change of Control is permitted hereunder if it involves or would result in any of the following: (A) a Person that is the subject of any bankruptcy, insolvency, rearrangement or similar actions or proceedings, whether voluntary or involuntary, or a party to any actions, suits, or proceedings that would reasonably be expected to have a material adverse impact on Guarantor’s (or other applicable Person’s) status as a Credit Entity; (B) a Person involved in the Parent Change of Control is a Person whose property or interests are subject to being blocked under any of the OFAC Laws and Regulations and/or who is in violation of any of the OFAC Laws and Regulations; (C) a change in the nature of the business conducted at any Location that is reasonably likely to have a materially deleterious effect to the condition or value of any Location or reputation of Landlord; or (D) a Material Impact.

(iii) Prior to the effectiveness of the Parent Change of Control, any instruments and documents required under this Section 14 shall be executed and delivered by the parties thereto, as applicable, on the date of the Parent Change of Control. In addition, Guarantor shall, at Guarantor’s sole cost and expense, execute and deliver to Landlord, any other reasonable instruments and documents requested by Landlord in connection with the Parent Change of Control.

(iv) For the purposes of this Section 14, the following terms shall have the meanings set forth below:

(A) “Consolidated EBITDA” means, with respect to a Person, as of the end of any fiscal quarter (x) the sum of net income, depreciation, amortization, and, if any, all adjustments deducted in determining net income and reflected in the GAAP to non-GAAP reconciliation of operating income disclosed in such Person’s earnings releases for such periods (provided cash charges shall not exceed $15,000,000 in any trailing eighteen (18) month period), other non-cash charges to net income, interest expense, income and franchise (or similar) Tax expense, minus (y) non-cash credits to net income, in each case of such Person and its Subsidiaries determined and consolidated in accordance with GAAP for the six (6) fiscal quarters then ending; provided, that notwithstanding any provision in the foregoing definition, all non-cash charges (with no dollar limitation) to net income will be added back to net income when accrued, regardless of whether any such non-cash charge is expected to result in any future cash payment but, to the extent any such non-cash charge determined pursuant to the foregoing definition results in any future cash payment (1) in excess of an aggregate amount of $15,000,000 in any trailing eighteen (18) month period (excluding any payment relating to the Wage and Labor Dispute) or (2) in the case of the Wage and Labor Dispute in excess of an aggregate amount of $16,500,000, Consolidated EBITDA will be reduced by the amount of such excess at such future time.

(B) “Credit Entity” means any Person engaged in a business or activity in which it qualifies under at least one of the following subsections (x) or (y), each as determined in accordance with GAAP immediately after the effectiveness of the proposed Parent Change of Control (giving effect thereto) and on a consolidated basis with such Person’s consolidated Subsidiaries: (x) such Person has maintained at all times during the immediately preceding eighteen-month period (1) a tangible net worth of no less than $300,000,000, (2) a ratio of total debt to Consolidated EBITDA of less than 3.7 to 1.0, and (3) a ratio of total debt to equity of less than 1.5 to 1.0; or (y) the rating assigned to the senior unsecured long term indebtedness of such Person by Standard & Poor’s is “BB” or higher, or a comparable rating by any rating agency reasonably acceptable to Landlord.

(C) “Parent Change of Control Notice” means a written notice setting forth: (w) the date Guarantor desires the particular Parent Change of Control to be effective and a reasonably detailed description of such proposed Parent Change of Control and the Persons involved, together with supporting documentation reasonably necessary for Landlord to evaluate whether such proposed Parent Change of Control complies with the applicable terms and conditions of the Lease and this Guaranty; (x) the proposed Transfer instruments, and any other documents or agreements relating thereto or required under the Lease or this Guaranty; (y) current financial information with respect to the Credit Entity, including its most recent financial report; and (z) such other documentation and information reasonably necessary to confirm the satisfaction of the conditions precedent and other requirements of this Section 14 with respect thereto, as determined by Landlord in Landlord’s reasonable discretion. If Guarantor identifies certain information included in the Parent Change of Control Notice to be confidential, then, at Guarantor’s request, Landlord agrees to enter into a separate confidentiality agreement in form and substance reasonably acceptable to Landlord.

(D) “Wage and Labor Dispute” means those matters raised and subject to the settlement involving the Thorn v. Bob Evans Farms, Inc., Civil Action 2:12-cv-768 (S.D. Ohio) (“Snodgrass Litigation”), Utterback v. Bob Evans Farms, Case No. CV14826909 (Court of Common Pleas of Cuyahoga County, Ohio), Mackin v. Bob Evans Farms, Case No. 2:14-cv-450 (S.D. Ohio) lawsuits; whereby the claims of assistant managers employed by Bob Evans Farms LLC (dba Bob Evans Restaurants) are resolved except individuals formerly employed in the assistant manager position who had received notice of the Snodgrass Litigation and chose not to opt into that lawsuit.

15.Guarantor represents and warrants to Landlord that: (a) Guarantor is a corporation duly formed, validly existing and in good standing under the laws of the jurisdiction in which it was formed; (b) Guarantor has the requisite power and authority to enter into this Guaranty and the signatories hereto are duly authorized to execute this Guaranty and bind Guarantor to the terms and conditions hereof; (c) the execution and delivery of this Guaranty by Guarantor has been duly and validly authorized; (d) the execution and delivery of this Guaranty by Guarantor will not (i) violate any law, government regulation, decree or judgment applicable or relating to Guarantor or any of its assets, (ii) violate any provision of the charter or organization documents of Guarantor, or (iii) violate or constitute a breach under any document, agreement or instrument to which Guarantor or its assets may be subject to or bound; (e) this Guaranty constitutes the legal, valid and binding obligations of Guarantor, enforceable against Guarantor, in accordance with its terms except as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and by general equitable principles; (f) there are no actions, suits, proceedings or investigations pending or, to Guarantor’s knowledge, threatened against Guarantor, in law or in equity, before any federal, state or local governmental authority, that could, individually or in the aggregate, reasonably be expected to have a material adverse effect on Guarantor’s ability to pay and perform under the Lease or this Guaranty; (g) no bankruptcy, insolvency, rearrangement or similar action or proceeding, whether voluntary or involuntary, is pending or, to Guarantor’s knowledge, threatened against Guarantor, nor has Guarantor any intention of filing or commencing any such action or proceeding; (h) no consent, approval, license, permit or other authorization of any third-party or any governmental body or office is required for the valid and lawful execution and delivery of this Guaranty, the valid and lawful exercise by Landlord of the remedies available to it under this Guaranty or applicable law or other rights granted to the Landlord in this Guaranty; (i) all information Guarantor has provided to Landlord is accurate and complete in all material respects; and (j) Guarantor has received a copy of the Lease, has examined the Lease, and is familiar with all of the terms, conditions and provisions contained in the Lease.

16.This Guaranty shall bind Guarantor and its successors, assigns, heirs, legatees, devisees, administrators and executors. This Guaranty may be freely assigned, transferred or hypothecated by Landlord, in whole or in part, without Guarantor’s written consent unless Tenant’s consent to the transfer of the underlying Lease is required by the terms of the Lease, in which case Guarantor’s consent to the transfer or assignment of this Guaranty shall also be required and shall run in favor and inure to the benefit of Landlord, its successors and assigns, and each subsequent holder of Landlord’s interest under the Lease. References to the term “Tenant” shall be deemed to include Tenant’s successors and assigns. All personal pronouns used in this Guaranty, whether used in the masculine, feminine, or neuter gender, shall include all other genders. No attornment by Tenant in favor of any such mortgagee shall diminish any of Guaranteed Obligations, and following any such attornment, Guarantor’s obligations shall continue in full force and effect as if the mortgagee were the original Landlord pursuant to the Lease.

17.Notices from Landlord to Guarantor shall be in writing, addressed to Guarantor at Bob Evans Farms, Inc., 8111 Smith’s Mill Road, New Albany, Ohio 43054, Attn: General Counsel, and (a) personally delivered; (b) sent by a nationally recognized overnight delivery service (e.g., Federal Express) for next-day delivery, to be confirmed by such courier; or (c) mailed by United States registered or certified mail, return receipt requested, postage prepaid. Notices, demands and other communications given in the foregoing manner shall be deemed given when actually received or refused by the party to whom sent, unless mailed, in which event same shall be deemed given on the day of actual delivery as shown by the addressee’s registered or certified mail receipt, or at the expiration of the third (3rd) business day after the date of mailing, whichever first occurs. Guarantor may from time to time change its address for receiving notices under this Guaranty by providing written notice to Landlord in accordance with notice provisions of this Guaranty. Any and all such notices may be given on behalf of Landlord by its attorneys.

18.This Guaranty shall be governed by and construed in accordance with the laws of the state of New York. Guarantor agrees to be subject to the jurisdiction of the courts of New York, to accept service of process in any action brought in New York, and Guarantor waives any objection to personal jurisdiction in such action.

19.If any provision of this Guaranty or the application of any provision to any Person or any circumstance shall be determined to be invalid or unenforceable, such determination shall not affect any other provisions of this Guaranty or the application of such provision to any other Person or circumstance, all of which other provisions shall remain in full force and effect.

20.The recitals to this Guaranty are incorporated into this Guaranty for all purposes. All terms and conditions of the Lease are hereby incorporated by reference. Capitalized terms used in this Guaranty and not otherwise defined herein shall have the meanings assigned to them in the Lease.

21.The terms of this Guaranty shall not be modified, discharged, waived or terminated except by an agreement in writing signed by Guarantor and Landlord. Time is of the essence in this Guaranty and each and every provision hereof in which any date or time is specified.

22.This Guaranty may be executed in multiple counterparts, each of which shall be deemed an original for purposes of making proof, and all of which together shall constitute but one and the same instrument.

(SIGNATURE PAGE FOLLOWS)

IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the day and year first above written.

GUARANTOR: BOB EVANS FARMS, INC.,

a Delaware corporation

By: /s/ Mark E. Hood

Name: Mark E. Hood

Title: Chief Financial Officer

State of ___________________ )

County of _________________ )

On ____________________, 2015, before me, ____________________________, personally appeared _____________________________, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature_________________________________ (SEAL)

Exhibit 10.3

LEASE GUARANTY

THIS LEASE GUARANTY (this “Guaranty”) is made and given as of October 23, 2015, by BOB EVANS FARMS, LLC, an Ohio limited liability company (“Guarantor”), in favor of BROADSTONE BEF PORTFOLIO, LLC, a New York limited liability company (“Landlord”).

W I T N E S S E T H

WHEREAS, Guarantor has received a copy of the Lease, has examined the Lease, and is familiar with all of the terms, conditions and provisions contained in the Lease.

11.Guarantor has made its own arrangements for keeping informed of changes or potential changes affecting Tenant including Tenant’s financial condition.

14.(a) Until all of the Guaranteed Obligations of Guarantor hereunder shall have been performed or satisfied in full, or Landlord has otherwise provided its prior written consent thereto, Guarantor: (i) shall not have a right of subrogation against Tenant by reason of Guarantor’s performance under this Guaranty or monies or obligations owed by Tenant to Guarantor; (ii) waives any right to enforce any remedy which Guarantor now has or may hereafter have against Tenant by reason of Guarantor’s performance under this Guaranty; (iii) subordinates any liability or indebtedness of Tenant now or hereafter held by or owed to Guarantor to Tenant’s obligations; (iv) shall pay prior to delinquency every tax, assessment, fee and charge and file each report required by any taxing authority for Guarantor or its assets; (v) shall promptly notify Landlord of any material default of the Lease, or any event or condition that might have a material adverse effect upon Guarantor’s ability to pay and perform the Guaranteed Obligations; (vi) shall, at all times, remain adequately capitalized to honor Guarantor’s obligations hereunder; (vii) shall do such further acts and execute and deliver Landlord all such additional conveyances, certificates, instruments, and other assurances as Landlord may from time to time reasonably require to protect, assure or enforce its interests, rights and remedies under this Guaranty; and (viii) shall not, without the prior written consent of Landlord, in each instance, assign (whether directly or indirectly, voluntary or involuntary), in whole or in part, this Guaranty or any obligation hereunder or, through one or more transactions, do, or permit to be done, any Guarantor Change of Control. “Guarantor Change of Control” means: (A) Bob Evans Farms, Inc. shall cease to own beneficially and of record, directly or indirectly, eighty percent (80%) of the Equity Interests of Tenant or Guarantor; (B) Guarantor shall cease to own beneficially and of record, directly or indirectly, eighty percent (80%) of the Equity Interests of Tenant; (C) the consummation of a sale by Guarantor of all or substantially all of Guarantor’s assets; (D) a liquidation, dissolution or winding-up of Guarantor; (E) the consummation of a merger, consolidation or other business combination of Guarantor with or into another entity, or the acquisition by Guarantor of assets or shares or equity interests of another entity, as a result of which the equity owners of Guarantor immediately prior to such merger, consolidation, other business combination or acquisition, do not, immediately thereafter, beneficially own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting Equity Interests entitled to vote generally in the election of directors or managers of the entity resulting from such merger, consolidation or other business combination of Guarantor; (E) any reorganization, reverse stock split or recapitalization of Guarantor that would result in a Guarantor Change of Control as otherwise defined herein; or (F) any transaction or series of related transactions having, directly or indirectly, the same effect as any of the foregoing. “Equity Interests” means, as applied to any Person, corporate stock and any and all securities, shares, partnership interests (whether general, limited, special or other), limited liability company interests, membership interests, equity interests, participations, rights or other equivalents (however designated and of any character) of corporate stock of such Person or any of the foregoing issued by such Person (whether a corporation, a partnership, a limited liability company or another type of entity) and includes, without limitation, securities convertible into Equity Interests and rights, warrants or options to acquire Equity Interests.

(b) Notwithstanding anything in Section 14(a) to the contrary, Guarantor shall be permitted to cause, suffer, or permit, without Landlord’s consent, any Guarantor Change of Control that satisfies all of the terms and conditions set forth in this Section 14(b), all of which must be satisfied on or before the effective date (or earlier closing) of such proposed Guarantor Change of Control (each a “Permitted Guarantor Change of Control”):

(i) (A) No Event of Default has occurred and is continuing both as of the date Guarantor delivers the Guarantor Change of Control Notice (hereinafter defined) and as of the date such proposed Guarantor Change of Control becomes effective; (B) no violation or default under this Guaranty has occurred and is continuing both as of the date Guarantor delivers the Guarantor Change of Control Notice and as of the

date such proposed Guarantor Change of Control becomes effective; (C) the Guarantor Change of Control would not result in an immediate violation of a material term or condition of this Guaranty or the Lease; (D) if the Guarantor Change of Control is or relates to a merger or consolidation of Guarantor, then, prior to or simultaneously with its effectiveness, the surviving entity of such merger or consolidation shall assume all of the obligations of Guarantor under this Guaranty, actual, contingent and accrued, in a manner reasonably acceptable to Landlord and otherwise in accordance with the terms and conditions of this Guaranty; (E) if the Guarantor Change of Control is or relates to a sale or transfer of Guarantor’s assets, then, prior to or simultaneously with its effectiveness, the purchaser or transferee of such assets shall assume all of the obligations of Guarantor under this Guaranty, actual, contingent and accrued, in a manner reasonably acceptable to Landlord and otherwise in accordance with the terms and conditions of this Guaranty; (F) immediately after the Guarantor Change of Control, and having given effect thereto, Guarantor, if the surviving entity, is a Credit Entity or another Person that qualifies as a Credit Entity has expressly assumed or guaranteed all of the Guaranteed Obligations, actual, contingent and accrued, in a manner reasonably acceptable to Landlord; and (G) Guarantor has delivered a Guarantor Change of Control Notice to Landlord not less than thirty (30) days prior to the effective date (or earlier closing) of such Guarantor Change of Control.

(ii) Notwithstanding anything herein to the contrary, no Guarantor Change of Control is permitted hereunder if it involves or would result in any of the following: (A) a Person that is the subject of any bankruptcy, insolvency, rearrangement or similar actions or proceedings, whether voluntary or involuntary, or a party to any actions, suits, or proceedings that would reasonably be expected to have a material adverse impact on Guarantor’s (or other applicable Person’s) status as a Credit Entity; (B) a Person involved in the Guarantor Change of Control is a Person whose property or interests are subject to being blocked under any of the OFAC Laws and Regulations and/or who is in violation of any of the OFAC Laws and Regulations; (C) a change in the nature of the business conducted at any Location that is reasonably likely to have a materially deleterious effect to the condition or value of any Location or reputation of Landlord; or (D) a Material Impact.

(iii) Prior to the effectiveness of the Guarantor Change of Control, any instruments and documents required under this Section 14 shall be executed and delivered by the parties thereto, as applicable, on the date of the Guarantor Change of Control. In addition, Guarantor shall, at Guarantor’s sole cost and expense, execute and deliver to Landlord, any other reasonable instruments and documents requested by Landlord in connection with the Guarantor Change of Control.

(iv) For the purposes of this Section 14, the following terms shall have the meanings set forth below:

and on a consolidated basis with such Person’s consolidated Subsidiaries: (x) such Person has maintained at all times during the immediately preceding eighteen-month period (1) a tangible net worth of no less than $300,000,000, (2) a ratio of total debt to Consolidated EBITDA of less than 3.7 to 1.0, and (3) a ratio of total debt to equity of less than 1.5 to 1.0; or (y) the rating assigned to the senior unsecured long term indebtedness of such Person by Standard & Poor’s is “BB” or higher, or a comparable rating by any rating agency reasonably acceptable to Landlord.

(C) “Guarantor Change of Control Notice” means a written notice setting forth: (w) the date Guarantor desires the particular Guarantor Change of Control to be effective and a reasonably detailed description of such proposed Guarantor Change of Control and the Persons involved, together with supporting documentation reasonably necessary for Landlord to evaluate whether such proposed Guarantor Change of Control complies with the applicable terms and conditions of the Lease and this Guaranty; (x) the proposed Transfer instruments, and any other documents or agreements relating thereto or required under the Lease or this Guaranty; (y) current financial information with respect to the Credit Entity, including its most recent financial report; and (z) such other documentation and information reasonably necessary to confirm the satisfaction of the conditions precedent and other requirements of this Section 14 with respect thereto, as determined by Landlord in Landlord’s reasonable discretion. If Guarantor identifies certain information included in the Guarantor Change of Control Notice to be confidential, then, at Guarantor’s request, Landlord agrees to enter into a separate confidentiality agreement in form and substance reasonably acceptable to Landlord.

15.Guarantor represents and warrants to Landlord that: (a) Guarantor is a limited liability company duly formed, validly existing and in good standing under the laws of the jurisdiction in which it was formed; (b) Guarantor has the requisite power and authority to enter into this Guaranty and the signatories hereto are duly authorized to execute this Guaranty and bind Guarantor to the terms and conditions hereof; (c) the execution and delivery of this Guaranty by Guarantor has been duly and validly authorized; (d) the execution and delivery of this Guaranty by Guarantor will not (i) violate any law, government regulation, decree or judgment applicable or relating to Guarantor or any of its assets, (ii) violate any provision of the charter or organization documents of Guarantor, or (iii) violate or constitute a breach under any document, agreement or instrument to which Guarantor or its assets may be subject to or bound; (e) this Guaranty constitutes the legal, valid and binding obligations of Guarantor, enforceable against Guarantor, in accordance with its terms except as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and by general equitable principles; (f) there are no actions, suits, proceedings or investigations pending or, to Guarantor’s knowledge, threatened against Guarantor, in law or in equity, before any federal, state or local governmental authority, that could, individually or in the aggregate, reasonably be expected to have a material adverse effect on Guarantor’s ability to pay and perform under the Lease or this Guaranty; (g) no bankruptcy, insolvency, rearrangement or similar action or proceeding, whether voluntary or involuntary, is pending or, to Guarantor’s knowledge, threatened against Guarantor, nor has Guarantor any intention of filing or commencing any such action or proceeding; (h) no consent, approval, license, permit or other authorization of any third-party or any governmental body or office is required for the valid and lawful execution and delivery of this Guaranty, the valid and lawful exercise by Landlord of the remedies available to it under this Guaranty or applicable law or other rights granted to the Landlord in this Guaranty; (i) all information Guarantor has provided to Landlord is accurate and complete in all material respects; and (j) Guarantor has received a copy of the Lease, has examined the Lease, and is familiar with all of the terms, conditions and provisions contained in the Lease.

terms of the Lease, in which case Guarantor’s consent to the transfer or assignment of this Guaranty shall also be required and shall run in favor and inure to the benefit of Landlord, its successors and assigns, and each subsequent holder of Landlord’s interest under the Lease. References to the term “Tenant” shall be deemed to include Tenant’s successors and assigns. All personal pronouns used in this Guaranty, whether used in the masculine, feminine, or neuter gender, shall include all other genders. No attornment by Tenant in favor of any such mortgagee shall diminish any of Guaranteed Obligations, and following any such attornment, Guarantor’s obligations shall continue in full force and effect as if the mortgagee were the original Landlord pursuant to the Lease.

(SIGNATURE PAGE FOLLOWS)

IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the day and year first above written.

GUARANTOR: BOB EVANS FARMS, LLC,

an Ohio limited liability company

By: /s/ Mark E. Hood

Name: Mark E. Hood

Title: Chief Financial Officer

State of ___________________ )

County of _________________ )

WITNESS my hand and official seal.

Signature_________________________________ (SEAL)

Exhibit 10.4

MASTER LEASE AGREEMENT

THIS MASTER LEASE AGREEMENT is made and entered into to be effective as of October 23, 2015, by and between BROADSTONE BEF PORTFOLIO, LLC, a New York limited liability company (“Landlord”), and BEF FOODS, INC., an Ohio corporation (“Tenant”).

In consideration of the rents and provisions herein stipulated to be paid and performed, Landlord and Tenant hereby covenant and agree as follows:

1.Definitions. The capitalized terms, words and phrases have the meanings set forth in Appendix 1 attached hereto and made a part hereof.

2.Demise of Leased Premises; Title and Condition.

(a)Landlord hereby demises and lets to Tenant, and Tenant hereby takes and leases from Landlord, for the Term and upon the provisions hereinafter specified, the Leased Premises. Notwithstanding any other provision of this Lease, this Lease constitutes a single and indivisible lease of all the Leased Premises, collectively, and is not an aggregation of leases for the separate Locations. Neither Landlord nor Tenant would have entered into this Lease except as a single and indivisible lease, and the rental herein has been established on the basis of the specific structure of the subject transaction and the economic benefits and risk profile of the transaction as a whole, and not based on the valuation or price of any Location. Tenant’s rights to any Location or any single portion of the Leased Premises are subject to and dependent on Tenant’s full performance of its obligations as to the other and all Locations and the Leased Premises as a whole, and the consideration supporting the promises and agreements under this Lease relating to any Location or any single portion of the Leased Premises also supports the promises and agreements under this Lease relating to all other Locations and portions of the Leased Premises.

(b)The Leased Premises are demised and let subject to: (i) the rights of any Persons in possession of the Leased Premises; (ii) the existing state of title of any of the Leased Premises, including any Permitted Encumbrances; (iii) any state of facts which an accurate survey or physical inspection of the Leased Premises might show; (iv) all Legal Requirements, including any existing violation of any thereof; and (v) the condition of the Leased Premises as of the Commencement Date, without representation or warranty by Landlord. Tenant has examined the title to the Leased Premises prior to the execution and delivery of this Lease and has found the same to be satisfactory for all purposes. Tenant acknowledges that fee simple title (both legal and equitable) is in Landlord and that Tenant has only the leasehold right of possession and use of the Leased Premises as provided herein.

(c)LANDLORD LEASES AND WILL LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES “AS IS,” “WHERE IS” AND “WITH ALL FAULTS.” TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) AND THE INDEMNIFIED PARTIES HAVE NOT MADE AND WILL NOT MAKE, NOR WILL LANDLORD OR ANY INDEMNIFIED PARTY BE DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PART OF THE LEASED PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO: (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE; (ii) THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN; (iii) THE EXISTENCE OF ANY DEFECT, LATENT OR PATENT; (iv) LANDLORD’S TITLE THERETO; (v) VALUE; (vi) COMPLIANCE WITH SPECIFICATIONS; (vii) LOCATION; (viii) USE; (ix) CONDITION; (x) MERCHANTABILITY; (xi) QUALITY; (xii) DESCRIPTION; (xiii) DURABILITY; (xiv) OPERATION, INCOME, EXPENSES, ENTITLEMENTS OR ZONING; (xv) THE EXISTENCE OF ANY HAZARDOUS SUBSTANCE, ENVIRONMENTAL VIOLATION, RELEASE, HAZARDOUS CONDITION; OR (xvi) COMPLIANCE OF THE LEASED PREMISES WITH ANY LAW OR LEGAL REQUIREMENT; AND ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE LEASED PREMISES IS OF ITS

SELECTION AND TO ITS SPECIFICATIONS AND THAT THE LEASED PREMISES HAS BEEN INSPECTED BY TENANT AND IS SATISFACTORY TO IT. TENANT FURTHER ACKNOWLEDGES THAT TENANT OR ONE OF ITS AFFILIATES WAS THE PREVIOUS OWNER AND/OR OCCUPANT OF THE LEASED PREMISES AND IS EXCEPTIONALLY KNOWLEDGEABLE ABOUT ALL ASPECTS OF THE LEASED PREMISES. IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY NATURE, WHETHER LATENT OR PATENT, LANDLORD AND ALL INDEMNIFIED PARTIES WILL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN NEGOTIATED, CONSTITUTE A MATERIAL INDUCEMENT FOR LANDLORD TO ENTER INTO THIS LEASE AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY LANDLORD OR ANY INDEMNIFIED PARTY, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES, ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR ARISING OTHERWISE.

3.Use. During the Term, the Leased Premises shall be used solely for the operation of a Permitted Facility. Tenant shall not use or occupy or permit any of the Leased Premises to be used or occupied, nor do or permit anything to be done in or on any of the Leased Premises, in a manner that will: (a) violate or be contrary to any Law, Legal Requirement, Insurance Requirement or Easement Agreement in any material respect; (b) make void or voidable or cause any insurer to cancel any insurance required by this Lease; (c) adversely affect in any material manner the ability to obtain any insurance required under Section 17 at commercially reasonable rates; (d) cause structural injury to any of the Improvements; (e) constitute a public or private nuisance or waste, or otherwise have a material adverse effect on the value of any Location; or (f) violate any certificate of occupancy, zoning compliance certificate, or equivalent certificate affecting any of the Leased Premises in any material respect.

4.Term. Tenant will have and hold the Leased Premises for an initial term of twenty (20) years from the last day of the calendar month in which the Commencement Date occurs (the “Initial Term”). Unless sooner terminated as provided in this Lease, the Initial Term may be extended, upon and subject to the same terms, covenants, conditions and rental as set forth in this Lease, for two (2) separate terms of ten (10) years each (each, an “Optional Term” and, collectively, the “Optional Terms”) if: (a) at least twelve (12), but not more than twenty-four (24) months prior to the end of the Initial Term or first validly exercised Optional Term, as applicable, Tenant delivers to Landlord a written notice that Tenant desires to exercise its right to extend the Term for the first or second Optional Term, as applicable, which upon delivery shall be irrevocable (each an “Tenant Extension Notice”) and (b) no Event of Default shall have occurred and be continuing on the date Landlord receives such Tenant Extension Notice or on the last day of the Initial Term or first Optional Term, as applicable. Except as otherwise expressly provided herein, all of the terms and conditions of this Lease for the Initial Term shall remain in full force and effect during the Optional Terms. During the last year of the Term, Landlord will have the right to advertise the availability of the Leased Premises for sale or reletting, to erect signs upon the Leased Premises indicating such availability, and to show the Leased Premises to prospective tenants, purchasers or lenders at reasonable times that do not materially interfere with the business operations of Tenant.

5.Base Rent.

(a)Base Rent for the first Lease Year of the Initial Term shall be in the amount of $3,480,781.00 and shall be increased by two percent (2%) on the first day of each subsequent Lease Year during the Initial Term, as more particularly set forth in the Base Rent Schedule attached hereto as Schedule 2.

(b)On the first day of the first Optional Term, Base Rent shall be the greater of: (i) the Fair Market Base Rent; and (ii) the Base Rent for the Lease Year immediately preceding the first Optional Term increased by two percent (2%). On the first day of the second Lease Year of the first Optional Term and each subsequent Lease Year during the remainder of the Term (including the second Optional Term if validly exercised by Tenant), the Base Rent shall be increased by two percent (2%), all as more particularly set forth in the Base Rent Schedule attached hereto as Schedule 2.

(c)Base Rent will be paid in monthly installments in advance on or before the first day of each month during the Term in the amount of the annual Base Rent then in effect divided by twelve (12); provided, that if any such day falls on a date that is not a business day, then Base Rent will be due and payable on or before the immediately succeeding business day. The first monthly installment of Base Rent for the first Lease Year will be prorated for the period from and including the Commencement Date through and including the last day of the month in which the Commencement Date occurs. All payments of Base Rent and other sums charged by or payable to Landlord under this Lease must be paid by wire transfer or automated clearing house in immediately available funds to a designated bank account of Landlord, or by check made payable to Landlord and sent or delivered to Landlord c/o Broadstone Real Estate, LLC, 530 Clinton Square, Rochester, New York 14604, or to such other place as Landlord may designate in writing, at Landlord’s election.

6.Additional Rent.

(a)Tenant shall pay and discharge, as additional rent (collectively, “Additional Rent”) the following amounts:

(i)all Impositions and, except as otherwise specifically provided in this Lease, all Costs of Tenant, Landlord and any other Persons specifically referenced herein which are incurred in connection or associated with: (A) the use, non-use, occupancy, possession, operation, condition, design, construction, maintenance, alteration, repair or restoration of any of the Leased Premises; (B) the performance of all of Tenant’s obligations under this Lease; (C) any Condemnation proceedings; (D) the adjustment, settlement or compromise of any insurance claims involving or arising from any of the Leased Premises; (E) the prosecution, defense or settlement of any litigation involving or arising from any of the Leased Premises or this Lease, except as set forth in Section 46; (F) the exercise or enforcement by Landlord, its successors and assigns, of any of its rights or remedies under this Lease; (G) any amendment to or modification or termination of this Lease made at the request of Tenant; or (H) any act undertaken by Landlord at the request of Tenant, or incurred in connection with any act of Landlord performed on behalf of Tenant. Notwithstanding the foregoing, Tenant is not responsible for the following Costs by virtue of this Section 6(a)(i) (but without prejudice to any other terms of this Lease that may provide otherwise): (1) costs of formation and operation of the business of the entity that constitutes Landlord (as distinguished from the costs of operation of the Leased Premises) including, but not limited to, Landlord’s general corporate overhead and general administrative expenses; (2) payments of principal and interest, origination fees and other scheduled payments payable by Landlord with respect to any Mortgage, as well as costs associated with the initial closing or amendment of any Mortgages, including any title insurance premiums, Lender due diligence, commitment fees, good faith deposits, attorney’s fees, appraisals, recording fees and taxes; (3) Tax Exclusions; and (4) any cost or expense that is expressly stated in this Lease to be the responsibility of Landlord.

(ii)after the date all or any portion of any installment of Base Rent is due and not paid, an amount equal to five percent (5%) of the amount of such unpaid installment or portion thereof, provided, however, that with respect to the first late payment of all or any portion of any installment of Base Rent in any consecutive twelve (12) month period, the late charge will not be due and payable unless the Base Rent has not been paid within five (5) business days following delivery of notice from Landlord to Tenant that such Base Rent is past due. Tenant agrees that the foregoing late fees are not a penalty, but represents a fair and reasonable estimate of certain costs which Landlord will incur by reason of a late payment by Tenant, and Tenant’s obligation to pay Landlord late fees as set forth above will be in addition to all of Landlord’s other rights and remedies hereunder or at law and shall not be construed as liquidated damages or as limiting Landlord’s remedies in any manner;

(iii)interest at the Default Rate on the following sums from the date when any such amount becomes overdue to the date such amount is paid in full: (A) all overdue installments of Base Rent not paid within ten (10) business days following the date when any such installment becomes overdue (provided, however, that with respect to the first late payment of all or any portion of any installment of Base Rent in any consecutive twelve (12) month period, such interest will not be due and payable unless the Base Rent has not been paid within five (5) business days following delivery of notice from Landlord to Tenant that such Base Rent is past due ; (B) all amounts of Additional Rent relating to obligations which Landlord has paid on behalf of Tenant that are not paid by Tenant within ten (10) business days after Landlord’s demand for such payment; and (C) all other overdue amounts of Additional Rent that

are payable to Landlord and are not paid within ten (10) business days following the date when any such installment becomes overdue;

(iv)concurrently with each payment of Base Rent, any rent tax, sales tax or excise tax payable with respect to real property rents (provided that Landlord may require Tenant to pay any such rent tax, sales tax or excise tax directly to the appropriate taxing authorities, with evidence of such payment being forwarded to Landlord on a monthly basis); provided, however, that in no event shall Tenant be obligated to pay for the Tax Exclusions; and

(v)any other items specifically required to be paid by Tenant under this Lease, including without limitation, utility service charges, insurance premiums, costs and deductibles, common area and maintenance charges, indemnities, and costs of maintaining, repairing and restoring the Leased Premises.

(b)Tenant shall pay and discharge: (i) any Impositions prior to delinquency, (ii) any other item of Additional Rent referred to in Section 6(a)(i) as and when the same becomes due, provided that amounts which are billed to Landlord or any third party, but not to Tenant, shall be paid within ten (10) business days after Landlord’s written demand for payment thereof; and (ii) any other Additional Rent, within ten (10) business days after Landlord’s written demand for payment thereof.

(c)Tenant acknowledges and agrees that late payment of Base Rent or Additional Rent by Tenant will cause Landlord to incur increased costs not contemplated by this Lease. The exact amount of such costs is extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges. The assessment of a late charge and/or interest at the Default Rate represents a fair and reasonable estimate of certain costs which Landlord will incur by reason of a late payment by Tenant. In no event shall amounts payable under Section 6(a)(ii) and (iii) exceed the maximum amount permitted by applicable Law.

7.Net Lease; True Lease.

(a)Tenant acknowledges and agrees that this is an absolute net lease and all Monetary Obligations shall be paid by Tenant without notice or demand (except as otherwise expressly provided herein) and without set-off, counterclaim, recoupment, abatement, suspension, deferment, diminution, deduction, reduction or defense. Except as otherwise expressly provided in this Lease, this Lease and the rights of Landlord and the obligations of Tenant hereunder shall not be affected by any event or for any reason, including the following: (i) any default by Landlord under this Lease or under any loan document or other agreement with Lender; (ii) any damage to or theft, loss or destruction of any of the Leased Premises; (iii) any Casualty or Condemnation; (iv) any action of any Governmental Authority; (v) any prohibition, limitation, interruption, cessation, restriction or prevention of Tenant’s use, occupancy or enjoyment of the Leased Premises; (vi) Tenant’s acquisition of ownership of any of the Leased Premises other than pursuant to an express provision of this Lease; (vii) any failure of the Leased Premises to comply with any Laws or Legal Requirements; (viii) any latent or other defect in any of the Leased Premises; (ix) any interference with Tenant’s use of the Leased Premises by parties other than Landlord; (x) any eviction by paramount title or otherwise; (xi) the bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution or winding-up of, or other proceeding affecting Landlord; (xii) the exercise of any remedy, including foreclosure, under any Mortgage; (xiii) construction or renovation of the Leased Premises; (xiv) market or economic changes; or (xv) any other cause, whether similar or dissimilar to the foregoing, any present or future Law to the contrary notwithstanding. The obligations of Tenant hereunder shall be separate and independent covenants and agreements, all Monetary Obligations shall continue to be payable in all events, and the obligations of Tenant hereunder shall continue unaffected unless the requirement to pay or perform the same shall have been terminated pursuant to an express provision of this Lease. All Rent payable by Tenant hereunder shall constitute “rent” for all purposes, including Section 502(b)(6) of the Bankruptcy Code. Except as otherwise expressly provided in this Lease, Tenant shall have no right and hereby waives all rights which it may have under any Law to quit, terminate or surrender this Lease or any of the Leased Premises, or to any set-off, counterclaim, recoupment, abatement, suspension, deferment, diminution, deduction, reduction or defense of any Monetary Obligations.

(b)Landlord and Tenant agree that this Lease constitutes a true lease and does not represent a financing arrangement. Landlord holds fee simple absolute title to the Leased Premises, and such title was not acquired or intended to be held as any type of mortgage or security interest. Landlord and Tenant each stipulate and agree that nothing contained in this Lease creates or is intended to create a joint venture, partnership (either de jure or de facto), equitable mortgage, trust, financing device or arrangement, security interest or the like. Landlord and Tenant covenant and agree that they will not assert that this Lease is anything but a true lease and waive any claim or defense based upon the characterization of this Lease as anything other than a true lease. In addition, so long as the substantive terms of this Lease remain unchanged, Landlord shall, at Tenant’s sole cost and expense (including reasonable attorneys’ fees), cooperate with any reasonable request made by Tenant to amend this Lease, to the extent such amendment is necessary for this Lease to be treated as an operating lease under generally accepted accounting principles.

8.Payment of Impositions.

(a)Tenant shall pay directly to the collecting authority, or otherwise discharge, prior to delinquency, all Impositions arising, used or consumed prior to or during the Term. Tenant shall make its own arrangements for all utilities and Landlord will have no obligation to furnish any utilities to the Leased Premises. If any Imposition may be paid in installments without interest or penalty, Tenant shall have the option to pay such Imposition in installments so long as each installment is timely paid and Landlord receives evidence of each such payment.

(b)Tenant shall prepare and file all tax reports required by Governmental Authorities that relate to the Impositions; provided, however, to the extent information is needed from Landlord to prepare and file such reports, Landlord agrees to reasonably cooperate (at no cost to Landlord) to provide such information to Tenant in a timely manner. Tenant shall deliver to Landlord: (i) copies of all settlements and notices pertaining to the Impositions which may be issued by any Governmental Authority within ten (10) days after Tenant’s receipt thereof; and (ii) receipts (if any) for payment of all taxes and any other Impositions required to be paid by Tenant hereunder within ten (10) days after written request of Landlord; provided, however, that the provisions of this sentence shall not require Tenant to pay any Impositions earlier than is required by Section 8(a) above. Landlord agrees to reasonably cooperate with Tenant (at no cost to Landlord) to enable Tenant to receive tax bills directly. However, in the event that the applicable taxing authority will not agree to, or shall fail to, bill Tenant directly for any Impositions, then Landlord shall provide, to the extent actually received by Landlord (with knowledge that Tenant has not also received a copy of such bill) and not otherwise publicly available to Tenant, such bills promptly to Tenant.

(c)Tenant has obtained economic incentives from various Governmental Authorities in order to induce Tenant to contribute to the economic development of the counties, cities and states, as applicable, in which the Leased Premises are located by locating or maintaining certain operations at the Leased Premises (collectively, the “Incentives”). Landlord agrees that it will execute such documents as may be reasonably be required by an applicable Governmental Authority and otherwise reasonably cooperate with Tenant’s efforts to retain and obtain the benefit of the Incentives provided that the Incentives do not impose unreasonable costs, obligations, burdens or liabilities on Landlord or the Leased Premises. In the event Tenant seeks new or additional Incentives throughout the Term of this Lease, Landlord agrees to reasonably cooperate with Tenant in connection therewith provided such new or additional Incentives do not impose unreasonable costs, obligations, burdens or liabilities on Landlord or the Leased Premises. It is understood and agreed that all costs and expenses payable by either Landlord or Tenant in connection with the Incentives shall be the sole obligation of Tenant. Tenant shall be fully responsible for all payment and performance obligations imposed upon Landlord or any of the Leased Premises related to the Incentives. Tenant agrees to indemnify and hold Landlord harmless from and against all liabilities and costs related to the Incentives. Any and all Incentives shall inure solely to the benefit of Tenant. Without limiting the foregoing, to the extent that Tenant has obtained Incentives in the form of a right to share in incremental tax revenues generated from the development or operation of the Leased Premises during the Term, then, subject to Landlord’s rights and remedies under Section 24 of this Lease, Landlord shall not interfere with Tenant’s ability to receive the full amount of such Incentives directly from the applicable Governmental Authority.

9.Permitted Contests. Tenant, upon prior written notice to Landlord and at Tenant’s sole cost and expense, may contest, by appropriate legal proceedings conducted in good faith and with due diligence, the amount, validity or application, in whole or in part, of any licensure or certification decision, Imposition, Legal Requirement, Insurance Requirement, any requirement under any Permitted Encumbrance, any action required to be taken by Tenant under Section 12(f) of this Lease or any lien, attachment, levy, encumbrance, charge or claim; provided, however, that (a) in the case of an unpaid Imposition, lien, attachment, levy, encumbrance, charge, or claim, the commencement and continuation of such proceedings shall suspend the collection thereof from Landlord and from the applicable Location, (b) neither the applicable Location nor any Rent nor any part thereof or interest therein would be reasonably likely to be in danger of being sold, forfeited, attached or lost pending the outcome of such proceedings and no interference with the use or occupancy of any Location is reasonably likely to occur, (c) in the case of a Legal Requirement, neither Landlord nor Tenant would be in any danger of civil or criminal liability for failure to comply therewith pending the outcome of such proceedings; (d) in the case of the contest of an Insurance Requirement, the coverage required by Section 17 shall be maintained and would not be in danger of cancellation, material reduction of coverage or material increase in premium amount; and (e) if such contest is resolved against Landlord or Tenant, Tenant shall pay to the appropriate payee the amount required to be paid, together with all interest and penalties accrued thereon, and otherwise comply with the applicable Legal Requirement, Insurance Requirement or other provision of this Lease. Landlord, at Tenant’s sole cost and expense, shall execute and deliver to Tenant such authorizations and other documents as may reasonably be required in any such contest, and, if reasonably requested by Tenant or if Landlord so desires, shall join as a party therein. The provisions of this Section 9 shall not be construed to permit Tenant to contest the payment of Rent or any other Monetary Obligations. Tenant shall indemnify, defend, protect and hold harmless Landlord from and against any Losses of any kind that may be imposed upon Landlord in connection with any such contest and any Losses resulting therefrom and the provisions of this Section 9 shall survive the termination or expiration of this Lease. If and to the extent required by the applicable Governmental Authority, Tenant shall post a bond or take other steps acceptable to such Governmental Authority that stays enforcement of the applicable noncompliance. Each such contest shall be promptly and diligently prosecuted by Tenant to a final conclusion, except that Tenant, so long as the conditions of this Section 9 are at all times complied with, has the right to bond around, attempt to settle or compromise such contest through negotiations. Tenant shall pay any and all Losses and Costs in connection with any such contest and shall, promptly after the final determination of such contest, fully pay and discharge the amounts which shall be levied, assessed, charged or imposed or be determined to be payable therein or in connection therewith, together with all penalties, fines, interest and Costs thereof or in connection therewith, and perform all acts the performance of which shall be ordered or decreed as a result thereof. No such contest shall subject Landlord to the risk of any civil or criminal liability. Following any contest of Impositions, any rebate applicable to any portion of the Term (or any period preceding the Term) shall belong to Tenant.

10.Compliance with Laws, Permitted Encumbrances and Easement Agreements.

(a)Tenant shall, at its sole cost and expense, promptly and faithfully comply in all material respects with and conform to, and cause the Leased Premises and any other Person occupying any part of the Leased Premises to comply in all material respects with and conform to, all Insurance Requirements and Legal Requirements. Tenant, at its sole cost and expense, shall at all times promptly and faithfully abide by, discharge and perform in all material respects all of the covenants, conditions, restrictions and agreements contained in any Permitted Encumbrance or Easement Agreement on the part of Landlord or the occupier of the Leased Premises to be kept and performed thereunder. Tenant will not alter, modify, amend or terminate any Permitted Encumbrance, give any consent, approval or waiver thereunder, or enter into any new Easement Agreement or other agreement affecting or encumbering the Leased Premises or imposing restrictions or obligations upon any part of the Leased Premises without, in each case, the prior written consent of Landlord, which consent shall not be unreasonably withheld.

(b)From and after the Commencement Date, Landlord covenants that so long as no Event of Default has occurred and is continuing and unless otherwise required by Legal Requirements, it shall not enter into or record any new Easement Agreement or otherwise modify, alter or amend any existing Easement Agreement, without Tenant’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. In the event Tenant fails to grant such consent within fifteen (15) business days after Landlord has sent a copy of any such Easement

Agreement (or modification, alteration or amendment, as applicable) to Tenant, Tenant shall be deemed to have consented thereto.

(c)Upon written request by Tenant, Landlord agrees to grant easements with respect to the Leased Premises as may be reasonably requested from time to time by the applicable utility providers provided that any such easements are acceptable to Landlord, in Landlord’s commercially reasonable discretion. Landlord shall cooperate with Tenant, at no cost or expense to Landlord, in placing of record or amending, modifying, or terminating any Easement Agreement reasonably requested by Tenant and reasonably acceptable to Landlord.

11.Environmental Covenants and Compliance.

(a)Tenant hereby covenants with Landlord that Tenant shall: (i) comply in all material respects with the Environmental Laws applicable to the Leased Premises, Tenant’s Property or the use, operation or other activity on, about or related to any of the Leased Premises; (ii) not at any time cause, permit or suffer to occur any Environmental Violation, or permit any subtenant, assignee or other Person using or occupying any of the Leased Premises under or through Tenant to cause, permit or suffer to occur any Environmental Violation; (iii) not use any Location for the storage, handling, transfer, treatment, recycling, transportation, processing, production, refinement or disposal of Hazardous Substances (except as necessary and appropriate for the operation of each Location as a Permitted Facility in which case the use, storage or disposal of such Hazardous Substances shall be performed in material compliance with applicable Environmental Laws); (iv) not install, remove or permit the installation or removal of at any Location any underground storage tanks or surface impoundments; (v) not install or permit the installation at any Location of asbestos or any asbestos-containing materials in any form that is or could be friable; (vi) cause any Alterations of the Leased Premises to be done in a way which complies with applicable Laws relating to exposure of persons working on or visiting the Leased Premises to Hazardous Substances and, in connection with any such Alteration, will remove any Hazardous Substances present upon such altered portion of the Leased Premises which are not in compliance with applicable Environmental Laws or which present a danger to persons working on or visiting the Leased Premises; and (vii) provide Landlord with information reasonably requested by Landlord concerning the types and quantities of Hazardous Substances used at any Location, regardless of whether there is an Environmental Violation.

(b)Tenant hereby covenants with Landlord that Tenant shall notify Landlord promptly after becoming aware of: (i) the commencement and completion of any Remedial Action; (ii) any Environmental Violation or Hazardous Condition or alleged Environmental Violation or Hazardous Condition; (iii) any proceeding or investigation commenced or threatened by any Governmental Authority with respect to a Release, threatened Release, the presence of any Hazardous Condition or the presence of any Hazardous Substance affecting the Leased Premises or other potential environmental problem or liability in, under, from or migrating towards any Location; (iv) other governmental or regulatory actions (excluding routine actions such as permit renewals) instituted, completed or threatened pursuant to any Environmental Laws affecting any Location; (v) any claim made or threatened by any third person against Tenant, or any Location relating in any way to a Hazardous Substance or potential Environmental Violation or Hazardous Condition; (vi) Tenant’s noncompliance with any of the covenants contained in this Section 11, and Tenant shall forward to Landlord promptly upon receipt thereof copies of all orders, reports, notices, Permits, applications or other communications relating to any such violation or noncompliance; (vii) any lien, action or notice affecting the Leased Premises, Tenant or Landlord resulting from any Environmental Violation or alleged Environmental Violation or any proceeding or investigation commenced or threatened by any Governmental Authority against Tenant or Landlord with respect to the presence, suspected presence, Release or threatened Release of Hazardous Substances from any Location; or (viii) the discovery of any occurrence, condition or state of facts with respect to the Leased Premises or written notice received by Tenant of any occurrence or condition on any real property adjoining or in the vicinity of the Leased Premises, which reasonably could be expected to lead to any Location or any portion thereof being in violation of any Environmental Laws or subject to any restriction on ownership, occupancy, transferability or use under any Environmental Laws.

(c)If, at any time during the Term, Hazardous Substances are found in, on or under any Location in violation of Environmental Laws originating from a source off such Location, then Tenant shall, promptly upon

acquiring knowledge of same, notify all responsible third parties and Governmental Authorities in accordance with Legal Requirements, and Tenant shall diligently prosecute to completion all Remedial Action required by Environmental Laws by such third parties, including, without limitation, undertaking legal action, if necessary, to enforce the performance of the obligations of such third parties. If, at any time during the Term, Hazardous Substances are found in, on or under any Location that are in violation of applicable Environmental Laws and are either caused by Tenant or arose prior to the date of this Lease, then Tenant shall, at Tenant’s sole cost and expense, promptly commence and diligently prosecute to completion all Remedial Action required by Environmental Laws, and in compliance with Environmental Laws. In no event will Landlord be required to accept any institutional control (such as a deed restriction) that restricts the permitted use of any Location or any real property as a condition to any plans to be approved by any Governmental Authority in connection with such Remedial Action. If the Leased Premises, or any portion thereof, are subject to existing contamination that is the being remediated and/or monitored, Tenant assumes full responsibility for the continuation and completion of such remediation and/or monitoring in compliance with all applicable Legal Requirements including, without limitation, all Environmental Laws, all at Tenant’s sole cost and expense, and shall indemnify and hold Landlord harmless from any and all costs and liabilities associated therewith.

(d)TENANT WILL BE SOLELY RESPONSIBLE FOR AND WILL DEFEND, REIMBURSE, INDEMNIFY AND HOLD THE INDEMNIFIED PARTIES HARMLESS FROM AND AGAINST ALL LOSSES, DEMANDS, CLAIMS, ACTIONS, CAUSES OF ACTION, ASSESSMENTS, DAMAGES, LIABILITIES, INVESTIGATIONS, WRITTEN NOTICES AND COSTS AND EXPENSES OF ANY KIND (INCLUDING WITHOUT LIMITATION, REASONABLE EXPENSES OF INVESTIGATION BY ENGINEERS, ENVIRONMENTAL CONSULTANTS AND SIMILAR TECHNICAL PERSONNEL AND REASONABLE FEES AND DISBURSEMENTS OF COUNSEL), WHETHER DIRECT OR INDIRECT, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN ARISING OUT OF, IN RESPECT OF OR IN CONNECTION WITH (i) THE OCCURRENCE OF ANY ACTIVITY REGULATED BY A GOVERNMENTAL AUTHORITY AT, ON OR UNDER THE LEASED PREMISES AT ANY TIME DURING OR PRIOR TO THE TERM OF THIS LEASE, (ii) ANY REMEDIAL ACTION REQUIRED TO BE PERFORMED WITH RESPECT TO ANY OF THE LEASED PREMISES PURSUANT TO ANY ENVIRONMENTAL LAW OR THE TERMS HEREOF WITH RESPECT TO MATTERS ARISING OR OCCURRING PRIOR TO OR DURING THE TERM, (iii) ANY ENVIRONMENTAL VIOLATION OR HAZARDOUS CONDITION WITH RESPECT TO ANY LOCATION, (iv) TENANT’S USE OF, OR ANY RELEASE OF, A HAZARDOUS SUBSTANCE IN, ON, UNDER, ABOUT OR FROM ANY PART OF ANY LOCATION; (v) ANY VIOLATION BY TENANT OF ANY ENVIRONMENTAL LAW APPLICABLE TO ANY LOCATION; AND (vi) ANY OTHER VIOLATION OR BREACH BY TENANT OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS OR OBLIGATIONS IN THIS SECTION 11.

(e)In the event Landlord or Lender has reasonable grounds to believe that Hazardous Substances are or have been released, stored or disposed of on or around any Location in violation of Environmental Laws or that any Location may be in violation of Environmental Laws, upon Landlord’s request, Tenant shall provide, at Tenant’s sole cost and expense, an inspection or audit of the Leased Premises prepared by a hydrogeologist or environmental engineer or other appropriate consultant reasonably approved by Landlord and Lender indicating the presence or absence of the suspected Hazardous Substances in, on or under the subject Location. If Tenant fails to provide such inspection or audit within sixty (60) days after such request, Landlord may order the same, and Tenant hereby grants to Landlord and Lender and their respective employees and agents access to the subject Location upon reasonable notice and a license to undertake such inspection or audit. The cost of such inspection or audit will be immediately paid by Tenant within ten (10) business days after Landlord’s demand therefor.

(f)The indemnity obligations of Tenant and the rights and remedies of Landlord under this Section 11 will survive the expiration of the Term or the earlier termination of this Lease.

12.Maintenance and Repair.

(a)Tenant shall at all times, keep and maintain the Leased Premises (including, without limitation, the roof, landscaping, parking areas, interior walls, exterior walls, subflooring, bearings, footings, foundations, other structural components of the Leased Premises, and all utility, mechanical, gas, electrical, plumbing, sanitary,

communication, heating, ventilation, air conditioning and other systems serving the Leased Premises) in good condition, repair and appearance, and shall promptly make all repairs and replacements (substantially equivalent in quality and workmanship to the original work) of every kind and nature, whether foreseen or unforeseen, which may be required to be made upon or in connection with any of the Leased Premises in order to keep and maintain the Leased Premises in good condition and repair and in compliance in all material respects with all Legal Requirements.

(b)Tenant shall do or cause others to do all shoring of the Leased Premises or of foundations and walls of the Improvements and every other act reasonably necessary or appropriate for preservation and safety thereof, by reason of or in connection with any excavation or other building operation upon any of the Leased Premises or Adjoining Property, whether or not Landlord, by reason of any Legal Requirements or Insurance Requirements, is required to take such action or is liable for failure to do so. Landlord will not be required to make any repair, whether foreseen or unforeseen, or to maintain any of the Leased Premises or Adjoining Property in any way, and Tenant hereby expressly waives the right to make repairs at the expense of Landlord, which right may otherwise be provided for in any law now or hereafter in effect. Tenant shall, in all events, promptly make all repairs for which it is responsible hereunder, and all repairs will be in a good, proper and workmanlike manner.

(c)Tenant shall from time-to-time replace with other similar operational equipment or parts any of the mechanical systems or other equipment included in the Improvements and required for the operation of the Leased Premises (but not including the Tenant’s Property) which become worn out, obsolete or unusable for the purpose for which it is intended, been taken by Condemnation, or been lost, stolen, damaged or destroyed. Tenant shall repair at its sole cost and expense all damage to the Leased Premises caused by the removal of equipment or any other personal property of Tenant at any time, including upon expiration or earlier termination of this Lease.

(d)Landlord, its contractors, subcontractors, servants, employees and agents, will have the right to enter upon the Leased Premises with reasonable prior notice (except in the event of an emergency, in which case no notice will be required) and without undue interference with Tenant’s business operation to inspect same to ensure that all parts of the Leased Premises are maintained in the repair and condition required hereunder, and Tenant will not be entitled to any abatement or reduction in rent by reason thereof. Landlord will not be required to maintain, repair or rebuild all or any part of the Leased Premises. Tenant waives the right to require Landlord to maintain, repair or rebuild all or any part of the Leased Premises or make repairs at the expense of Landlord pursuant to any Legal Requirements, agreement, contract, covenant, condition or restrictions at any time.

(e)If Tenant is in default under any of the provisions of this Section 12, then Landlord may, after thirty (30) days’ notice to Tenant and failure of Tenant to commence to cure during said period or to diligently prosecute such cure to completion once begun, but immediately upon notice in the event of an emergency (that is, imminent danger of injury to persons or property), do whatever is necessary to cure such default as may be reasonable under the circumstances for the account of and at the expense of Tenant. In the event of an emergency, before Landlord may avail itself of its rights under this subsection, Landlord must notify Tenant and any designated on-site manager identified by Tenant of the situation by phone or other available communication. All actual and reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) so incurred by Landlord will constitute Additional Rent payable by Tenant under this Lease and will be paid by Tenant to Landlord within ten (10) business days after Landlord’s demand. The foregoing provisions will in no way reduce or lessen Tenant’s responsibilities and liabilities under this Lease pertaining to the maintenance and repair of the Leased Premises.

(f)Without limiting any other provision of this Lease, if (X) any Improvement now existing or hereafter constructed by or on behalf of Tenant (i) encroaches upon any setback or any property, street or right-of-way adjoining any Location; (ii) violates the provisions of any Easement Agreement, or zoning Laws affecting any Location; (iii) hinders or obstructs any Easement Agreement to which any Location is subject; or (iv) impairs the rights of others in, to or under any of the foregoing, and (Y) a Governmental Authority, adjacent landowner or other third party (other than Landlord) that makes a written claim, demand, or commences or threatens legal proceedings seeking the removal or elimination of such encroachment or violation or seeking some other remedy at law or in equity affecting Landlord, Tenant, any Lease Guarantor, this Lease or any Location, then subject to Tenant’s right to contest under Section 9 above, Tenant shall either (A) obtain from all necessary parties waivers, variances or settlements of all claims, liabilities

and damages resulting from each such encroachment, violation, hindrance, obstruction or impairment, whether the same shall affect Landlord, Tenant or both, or (B) take such action as shall be necessary to remove all such encroachments, hindrances or obstructions and to end all such violations or impairments, including, if necessary, making Alterations. This Section 12(f) shall survive the expiration, termination, or rejection in bankruptcy of the Lease; provided, however, Tenant shall have no obligation under this Section 12(f) after the expiration or earlier termination of this Lease with respect to the condition of any Improvement that existed on the Commencement Date.

(g)Tenant acknowledges that it has received and accepts the Leased Premises in the condition disclosed by those certain Property Condition Reports listed on Schedule 3 attached hereto.

(h)To the extent assignable and permitted under applicable Laws, Landlord hereby conditionally assigns, without recourse or warranty whatsoever, to Tenant, all warranties, guaranties and indemnities, if any, express or implied, and similar rights which Landlord may have against any manufacturer, seller, engineer, contractor or builder in respect of any of the Leased Premises, including, but not limited to, any rights and remedies existing under contract or pursuant to the Uniform Commercial Code (collectively, the “guaranties”). Such assignment shall remain in effect during the Term until expiration or earlier termination of this Lease. Landlord shall also retain the right to enforce any guaranties so assigned in the name of Tenant upon the occurrence of an Event of Default hereunder. Landlord hereby agrees to execute and deliver, at Tenant’s sole cost and expense, such further documents as Tenant may reasonably request (and which in the good faith judgment of Landlord, do not adversely affect Landlord’s interest in any of the guaranties), in order that Tenant may have the full benefit of the assignment effected or intended to be effected by this Section 12(h). Upon the expiration or termination of this Lease, the guaranties shall automatically revert to Landlord. The foregoing provision of reversion shall be self-operative and no further instrument of reassignment shall be required. In confirmation of such reassignment, Tenant shall execute and deliver promptly any certificate or other instrument that Landlord may request at Tenant’s sole cost and expense. Any monies collected by Tenant under any of the guaranties shall be used to effect the replacement or repair with respect to which such monies were claimed.

13.Alterations, Replacements and Additions.

(a)Tenant may make any Alteration that is not a Structural Alteration without the prior written consent of Landlord, provided that: (i) the estimated cost of any such Alteration (or series of related Alterations) does not exceed $250,000; (ii) Tenant agrees to provide as-built plans and specifications or record drawings to Landlord upon completion to the extent required by applicable Legal Requirements, this Lease or otherwise obtained by Tenant in making any such Alteration; (iii) no Event of Default exists; and (iv) the Alteration (or series of related Alterations) would not result in a material diminution in the value of any Location.

(b)Landlord’s prior written consent (which consent will not be unreasonably withheld, conditioned or delayed) is required, in each instance, for any Alteration (or series of related Alterations) that is a Structural Alteration or is not a Structural Alteration but does not satisfy requirements (i)-(iv), inclusive, in Section 13(a) (each a “Consent Required Alteration”). All Consent Required Alterations must be performed under the supervision of a licensed architect or engineer in accordance with detailed plans and specifications that are submitted to Landlord at the time Landlord’s consent is sought.

(c)All Alterations made by Tenant shall (i) be performed in a good and workmanlike manner and expeditiously completed in compliance in all material respects with all Legal Requirements; and (ii) comply in all material respects with all Insurance Requirements; and (iii) (except for Tenant’s Property) be the property of Landlord and subject to this Lease. Tenant shall: (A) procure and pay for all Permits and licenses required in connection with any Alteration; (B) promptly pay all costs and expenses of any Alteration and must discharge (by payment, bonding or otherwise) all liens filed against the Leased Premises arising out of the same; and (C) execute and deliver to Landlord any document reasonably requested by Landlord evidencing the assignment to Landlord of all estate, right, title and interest (other than the leasehold estate created hereby) of Tenant or any other Person in or to any Alteration (other than Tenant’s Property). In addition, Tenant shall not construct upon the Land any additional buildings without having first obtained the prior written consent of Landlord, in each instance.

(d)As of the Commencement Date, Tenant desires to perform the New Line Work with respect to the Ohio Location. Landlord hereby grants permission, at Tenant’s option to complete, to Tenant’s performance of the New Line Work subject to and in accordance with the terms of this Lease.

14.Liens. Subject to Tenant’s right to contest in accordance with Section 9 of this Lease, Tenant shall not, directly or indirectly, create or permit to be created or to remain and shall promptly discharge, bond over or remove any lien, levy, encumbrance or security interest on any of the Leased Premises or on any Rent or any other sums payable by Tenant under this Lease, other than any Mortgage, the Permitted Encumbrances, any Leasehold Mortgage in favor of a Qualified Leasehold Mortgagee in (subject to and in accordance with Section 45 of this Lease, including, without limitation, the requirement that any such Leasehold Mortgage not encumber Landlord’s interest in any of the Leased Premises), and any mortgage, lien, encumbrance or other charge created by or resulting solely from any act or omission of Landlord. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR UNDER TENANT, AND THAT NO MECHANICS’ OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE LEASED PREMISES. LANDLORD MAY AT ANY TIME, AND AT LANDLORD’S REQUEST TENANT SHALL PROMPTLY, POST ANY NOTICES ON THE LEASED PREMISES REGARDING SUCH NONLIABILITY OF LANDLORD. ADDITIONALLY, LANDLORD SHALL HAVE THE RIGHT TO RECORD A NOTICE OF NON-RESPONSIBILITY (OR SUCH OTHER SIMILAR DOCUMENT) IN THE OFFICIAL RECORDS OF THE COUNTY WHERE THE LEASED PREMISES ARE LOCATED, REGARDING LANDLORD’S NON-LIABILITY FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR UNDER TENANT.

15.Indemnification. Except for the gross negligence or willful misconduct of any Indemnified Party, Tenant shall pay, protect, indemnify, defend, save and hold harmless each and every Indemnified Party from and against any and all Losses and Costs, howsoever caused, without regard to the form of action and whether based on strict liability, negligence or any other theory of recovery at law or in equity, arising from any matter pertaining to: (a) the use, non-use, occupancy, ownership, operation, condition, design, construction, alteration, improvement, maintenance, repair or restoration of the Leased Premises or any part thereof; (b) any casualty in any manner at or about the Leased Premises, whether or not any Indemnified Party has or should have knowledge or notice of any defect or condition causing or contributing to such casualty; (c) any violation, default or breach by Tenant of any provision or covenant of this Lease, any contract or agreement to which Tenant is a party, any Legal Requirement or any Permitted Encumbrance, Easement Agreement, or other encumbrance consented to by Tenant; (d) any alleged, threatened or actual Hazardous Condition or Environmental Violation; (e) any act or omission of Tenant or its agents, contractors, licensees, subtenants or invitees; (f) injury to or death of any person, or damage to or loss of property, on or about any of the Leased Premises, (g) a contest of any Imposition; or (h) liens against the Leased Premises in violation of this Lease. In case any action or proceeding is brought against any of the Indemnified Parties by reason of any such Loss, Tenant covenants upon notice from Landlord or Lender to defend the Indemnified Parties in such action, with the expenses of such defense paid by Tenant, and the Indemnified Parties will cooperate and assist in the defense of such action or proceeding at no cost to the Indemnified Parties if reasonably requested so to do by Tenant. TENANT UNDERSTANDS AND AGREES THAT THE FOREGOING INDEMNIFICATION OBLIGATIONS OF TENANT ARE EXPRESSLY INTENDED TO AND SHALL INURE TO THE BENEFIT OF THE INDEMNIFIED PARTIES EVEN IF SOME OR ALL OF THE MATTERS FOR WHICH SUCH INDEMNIFICATION IS PROVIDED ARE CAUSED OR ALLEGED TO HAVE BEEN CAUSED BY THE SOLE, SIMPLE, JOINT OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF ANY OF THE INDEMNIFIED PARTIES, BUT NOT TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THE INDEMNIFIED PARTIES. In case any action or proceeding is brought against any Indemnified Party by reason of any such Loss: (A) Tenant may, except in the event of a conflict of interest or a dispute between Tenant and any such Indemnified Party or during the continuance of an Event of Default, retain its counsel on behalf of Tenant and such Indemnified Party to defend such action (it being understood that Landlord may employ counsel of its choice to monitor the defense of any such action, at Tenant’s cost and expense); and (B) such Indemnified Party shall notify Tenant to resist or defend such action or proceeding by retaining counsel reasonably satisfactory to such Indemnified Party, and such Indemnified

Party will cooperate and assist in the defense of such action or proceeding if reasonably requested so to do by Tenant. In the event of a conflict of interest or dispute or during the continuance of an Event of Default, Landlord shall have the right to select counsel, and the reasonable cost of such counsel shall be paid by Tenant. For the purposes of this Section 15, the term “gross negligence” shall not include gross negligence imputed as a matter of law to any Indemnified Party solely by reason of Landlord’s interest in the Leased Premises or Landlord’s failure to act in respect of matters which are or were the obligation of Tenant under this Lease. All obligations of Tenant under this Section 15 shall survive any termination, expiration or rejection in bankruptcy of this Lease.

16.Release. Tenant releases all Indemnified Parties and agrees that no Indemnified Party shall be liable, under any circumstances (except in the event of, and then only to the extent directly attributable to, an Indemnified Party’s gross negligence or willful misconduct), for any loss, injury, death or damage to person or property (including but not limited to the business or any loss of income or profit therefrom) of Tenant, Tenant’s members, officers, directors, shareholders, agents, employees, contractors, customers, invitees or any other person in or about the Leased Premises, whether the same are caused by: (a) fire, explosion, falling plaster, steam, dampness, mold, electricity, gas, water, rain or other act of God; (b) breakage, leakage or other defects of sprinklers, wires, appliances, plumbing fixtures, water or gas pipes, roof, air conditioning, lighting fixtures, street improvements, or subsurface improvements; (c) theft, acts of God, acts of the public enemy, riot, strike, insurrection, war, terrorism, power failures, blackouts, energy or power shortages, court order, requisition or order of governmental body or authority; (d) any act or omission of any other occupant of the Leased Premises or any other party; (e) operations in construction of any private, public or quasi-public work; or (f) any other cause, including damage or injury which arises from the condition of the Leased Premises, from occupants of adjacent property, from the public, or from any other sources or places, and regardless of whether the cause of such damage or injury or the means of repairing the same are inaccessible to Tenant, or which may arise through repair, alteration, improvement or maintenance of any part of the Leased Premises or failure to make any such repair, from any condition or defect in, on or about the Leased Premises including any Environmental Violation, Hazardous Condition, or the presence of any mold or any Hazardous Substance, or from any other condition or cause whatsoever. For the purposes of this Section 16, the term “gross negligence” shall not include gross negligence imputed as a matter of law to any Indemnified Party solely by reason of Landlord’s interest in the Leased Premises or Landlord’s failure to act in respect of matters which are or were the obligation of Tenant under this Lease. The terms of this Section 16 shall survive any termination, expiration or rejection in bankruptcy of this Lease.

17.Insurance.

(a)Tenant shall obtain and maintain in full force and effect at all times during the Term the following insurance on or in connection with the Leased Premises:

(i)Insurance (on an occurrence basis) against loss, damage or destruction to the Leased Premises caused by any peril covered by “Causes of Loss - Special Form” policy of insurance, including, without limitation, coverage by endorsement for water damage, flood insurance (if any of the Leased Premises is in a Special Flood Hazard Area), earthquake insurance (if any of the Leased Premises is in an earthquake zone) and other risks which at the time are included under “extended coverage” endorsements, at least as broad as ISO form CP 1030 (or its current equivalent), without any exclusions other than standard printed exclusions and other exclusions acceptable to Landlord, in Landlord’s commercially reasonable discretion. The policy or policies for such insurance shall provide for loss payable to Landlord or its Lender (if Lender’s name and address have been provided to Tenant), with deductibles of not more than $500,000 per occurrence and with all co-insurance provisions waived. The amount of the insurance required by this Section 17(a)(i) shall be in an amount not less than the actual replacement cost of the Improvements (replacement cost new, including coverage for the cost of debris removal and coverage for the cost of complying with building, zoning, safety, land use and other Laws as a result of any Casualty or loss) as to prevent application of co-insurance provisions.

(ii)Business income/rental value insurance at limits sufficient to cover one hundred percent (100%) of the annual Rent payable to Landlord with a period of indemnity not less than one (1) year from time of loss.

(iii)If any boilers or other pressure vessels or systems are installed in the Buildings, boiler and machinery insurance in an amount equal to the full replacement value thereof.

(iv)Insurance (on an occurrence basis) against loss, damage or destruction to Tenant’s Property caused by any peril covered by “Causes of Loss - Special Form” policy of insurance. The amount of the insurance required by this Section 17(a)(iv) shall be in commercially reasonable amounts, as determined by Tenant.

(v)Commercial General Liability insurance and/or umbrella liability insurance (on an occurrence basis) providing coverage at least as broad as ISO form CG 00 01 12 07 (or its current equivalent), against claims for bodily injury, death or property damage occurring on, in or about the Leased Premises in the minimum amounts of $5,000,000 for bodily injury or death to any one person, $5,000,000 for any one accident and $5,000,000 for property damage to others or in such greater amounts as are then customary for property similar in use to the Leased Premises, with deletions of contractual liability exclusions with respect to personal injury and with defense to be provided as an additional benefit and not within the limits of liability and with deductibles of not more than $250,000 per occurrence.

(vi)Worker’s compensation insurance in amounts necessary to comply with applicable Legal Requirements, covering all persons employed by Tenant in connection with any work done on or about any of the Leased Premises for which claims for death, disease or bodily injury may be asserted against Landlord, Tenant or any of the Leased Premises or, in lieu of such Worker’s Compensation Insurance, a program of self-insurance or a non-subscriber system complying with all applicable Legal Requirements.

(vii)During any period in which substantial Alterations at the Leased Premises are being undertaken, builder’s risk insurance covering the total completed value including any “soft costs” with respect to the Improvements being altered or repaired (on a completed value, non‑reporting basis), replacement cost of work performed and equipment, supplies and materials furnished in connection with such construction or repair of such Improvements or Tenant’s Property, together with such “soft cost” endorsements and such other endorsements as Landlord may reasonably require and general liability, worker’s compensation and automobile liability insurance with respect to the Improvements being constructed, altered or repaired.

(viii)Automobile Liability Insurance not less than $1,000,000.00 per occurrence covering all owned and non-owned vehicles.

(ix)Such other insurance (or other terms with respect to any insurance required pursuant to this Section 17(a), including without limitation, amounts of coverage, deductibles, and form of mortgagee clause) as Landlord may reasonably require, which at the time is usual and commonly obtained in connection with properties similar in type of building size, use and location of the Leased Premises; provided, however, this clause (ix) shall not be invoked by Landlord no more than once every five (5) years during the Term.

(b)Tenant agrees that all insurance that Tenant is required to carry pursuant to this Section 17 will be written by companies authorized to do business in the state in which any Location is located and carrying a claims paying ability of at least A:XII by A.M. Best or A by Standard and Poor’s, as applicable. The insurance required under Section 17(a)(i), (ii), (iii), (v), (vii), (viii) and (ix) will name Landlord and Lender (if Lender’s name and address have been provided to Tenant) as an additional insured as their respective interests may appear. Tenant agrees that the insurance required under Sections 17(a)(i), (ii), (iii) and (vii) shall bear a loss payee endorsement in favor of Landlord or, at Landlord’s request, a mortgagee endorsement in favor of Lender under any Mortgage, and any loss under any such policy will be payable to Landlord or Lender, as applicable, to be held and applied by Landlord or Lender toward restoration pursuant to provisions and procedures of this Lease, and contain an ordinance or law coverage endorsement. Every policy referred to in Section 17(a) will provide that any loss otherwise payable thereunder will be payable notwithstanding: (i) any act or omission of Landlord or Tenant which might, absent such provision, result in a forfeiture of all or a part of such insurance payment; (ii) the occupation or use of any of the Leased Premises for purposes more hazardous than those permitted by the provisions of such policy; (iii) any foreclosure or other action or proceeding taken by Lender pursuant to any provision of any Loan document with Lender or other document

evidencing or securing the Loan upon the happening of an event of default therein; or (iv) any change in title to or ownership of any of the Leased Premises.

(c)Tenant shall promptly comply with and conform to all Insurance Requirements in all material respects. If any insurance required to be maintained by Tenant under this Lease will expire, be withdrawn, become void or voidable, for any reason, including a breach of any condition thereof by Tenant or the failure or impairment of the capital of any insurer, Tenant shall immediately obtain new or additional insurance reasonably satisfactory to Landlord. All insurance required to be maintained by Tenant under this Lease shall be primary to, and non-contributing with respect to, any insurance maintained by Landlord. Tenant shall pay as they become due all premiums and costs, including losses falling within deductibles, for the insurance required by this Section 17, shall renew or replace each policy and deliver to Landlord evidence of the payment of the full premium therefor or installment then due at least ten (10) days prior to the expiration date of such policy. Prior to the Commencement Date, and upon each renewal or replacement of such insurance, Tenant shall deliver to Landlord binding certificates of insurance in form of ACORD 28 (Evidence of Property Insurance) and ACORD 25 (Certificate of Liability Insurance) evidencing all insurance coverages required to be maintained by Tenant hereunder, together with an endorsement(s) adding Landlord and Lender (if Lender’s name and address have been provided to Tenant) as additional insureds and loss payees, as appropriate, as their respective interests mays appear, and such certificates shall confirm that Tenant has obtained all insurance required hereunder. Upon request by Landlord, Tenant shall promptly forward to Landlord copies of all original policies and endorsements.

(d)Any insurance which Tenant is required to obtain pursuant to this Lease may be carried under a “blanket” or umbrella/excess liability policy or policies covering other properties or liabilities of Tenant, provided that such “blanket” or umbrella/excess liability policy or policies otherwise comply with the provisions of this Section 17 and provided further that Tenant shall provide to Landlord a statement of values annually, amended as necessary based on replacement cost valuations. A certificate of insurance for each such “blanket” or umbrella/excess liability policy shall promptly be delivered to Landlord. Tenant will not carry separate insurance concurrent in form or contributing in the event of a Casualty with that required in this Section 17 unless: (i) Landlord’s prior written consent has been obtained; (ii) Landlord and any Lender are included therein as named additional insureds and loss payees (as applicable), with loss payable to Landlord or such Lender; and (iii) such separate insurance does not conflict and complies with the other provisions of this Section 17. Tenant will promptly notify Landlord of any such separate insurance and will deliver to Landlord the original policies thereof.

(e)The minimum policy limits for all policies required to be maintained by Tenant hereunder will not in any way affect or limit Tenant’s indemnification, defense, release and hold harmless obligations set forth in this Lease and will not limit the liability of Tenant for its acts or omissions as provided in this Lease. Any policies, including any policy now or after the Commencement Date, carried by Landlord or Lender, will serve as excess coverage. The per occurrence and annual aggregate limits for all insurance required to be maintained by the Tenant hereunder may be increased by Landlord from time to time to reflect current market conditions (not more frequently than once every five years) in a manner consistent with the provisions of Section 17(a)(ix) above.

(f)Notwithstanding anything contained in this Lease to the contrary, each party hereto hereby waives any and all rights of recovery, claim, action or cause of action, against the other party and its agents, officers, and employees, for any loss, expense, or damage that may occur to the Leased Premises, including the Improvements, regardless of cause or origin, including the negligence of the other party and its agents, officers, and employees, without prejudice to any waiver or indemnity provisions applicable to Tenant and any limitation of liability provisions applicable to Landlord hereunder, to the extent of such party’s receipt of insurance proceeds on account of such loss or damage, of which provisions Landlord and Tenant shall notify all insurers. Landlord and Tenant agree that any policies presently existing or obtained on or after the Commencement Date (including renewals of present policies) will include a clause or endorsement to the effect that any such waiver will not adversely affect or impair said policies or prejudice the right of the insured to recover thereunder and that the insurer expressly waives its rights of subrogation against Landlord or Tenant, as the case may be, with respect to any claims under any such policies.

(g)Following the occurrence of (i) the existence of an Event of Default in connection with a breach or violation of this Section 17, and (ii) delivery to Tenant of a written request therefor from Landlord, Tenant shall pay insurance premiums for the insurance policies that Tenant is required to carry under this Lease to Landlord (in lieu of Tenant’s insurance carriers) at least forty-five (45) days in advance of their respective due dates (the “Insurance Premium Reserve”). Landlord shall use the funds in the Insurance Premium Reserve to pay such insurance premiums as the same become due. Following the imposition of the Insurance Premium Reserve, in the event Tenant completes a twelve (12) month consecutive period without the existence of an Event of Default in connection with a breach or violation of this Section 17, then following written request by Tenant, Landlord shall disburse any funds in the Insurance Premium Reserve to Tenant and Tenant will no longer be obligated to pay the insurance premiums to Landlord in lieu of Tenant’s applicable insurance carrier unless Tenant again breaches or violates this Section 17.

(h)To the extent that any of the insurance required under this Section 17 cannot be obtained at commercially reasonable rates or is no longer usual or customary in connection with properties similar to the Leased Premises operating as Permitted Facilities, then Tenant may, by written notice to Landlord, propose one or more modifications to the requirements set forth in this Section 17 (each an “Insurance Change Request”). Landlord agrees to consider any Insurance Change Request in good faith and consult with any existing Lender, as necessary, and shall not unreasonably withhold or condition or delay consent. If Landlord consents to one or more such modifications proposed by Tenant, then such modifications will not take effect unless and until Landlord, Tenant and Lease Guarantor have entered into a written amendment of this Lease in accordance with this terms hereof. Notwithstanding the foregoing, Landlord and Tenant agree that Landlord shall not be required to consent to any Insurance Change Request that would conflict with any Mortgage, but, in the case of such a conflict, Landlord will use commercially reasonable efforts (at Tenant’s expense) to have the applicable Mortgage modified.

18.Casualty and Condemnation: Claims.

(a)Tenant shall promptly notify Landlord of any damage or destruction of any Location in excess of $250,000. Said notification shall include: (i) the date of the damage or destruction and the Location damaged, (ii) the nature of the damage or destruction together with a general description of the extent of such damage or destruction, (iii) a preliminary estimate of the cost to repair, rebuild, restore or replace the affected Improvements, and (iv) a preliminary estimate of the schedule to complete the repair, rebuilding, restoration or replacement of the affected Improvements. Tenant will have the right to prosecute, settle or contest any claim or adjustment under any insurance policy and Landlord shall have the right to join with Tenant therein, provided that any final adjustment, settlement or compromise of any claim under the insurance policies set forth in Section 17(a) will be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed. Following the occurrence of either (x) an Event of Default, or (y) a failure by Tenant to diligently prosecute any claim under any insurance policies set forth in Section 17, which failure remains uncured within fifteen (15) days following written notice from Landlord, then, in the event of either of the foregoing (x) or (y), Landlord will have the right to prosecute or contest, or to require Tenant to prosecute or contest any such claim, adjustment, settlement or compromise. Tenant agrees to sign, upon the request of Landlord, all proofs of loss, receipts, vouchers and releases required by applicable insurers.

(b)Promptly upon Tenant receiving notice or otherwise obtaining knowledge of the institution of or intention to institute any proceeding for Condemnation, Tenant shall notify Landlord thereof and provide copies of any written notices or other information. So long as no Event of Default exists and is continuing, Tenant is authorized to negotiate the amount of any Net Award related to such Condemnation, and Landlord will have the right to join with Tenant therein at any time; provided, however, that no agreement with any condemnor in settlement or under threat of any Condemnation will be made by Tenant without the express written consent of Landlord, which consent will not be unreasonably withheld, conditioned or delayed. If an Event of Default exists and is continuing, Landlord will be solely authorized to collect, settle and compromise the amount of any Net Award and Tenant will not be entitled to participate with Landlord in any Condemnation proceeding or negotiations under threat thereof or to contest the Condemnation or the amount of the Net Award therefor. Subject to the provisions of this Section 18(b), Tenant hereby irrevocably assigns to Landlord any award or payment to which Tenant is or may be entitled by reason of any Condemnation, whether the same will be paid or payable for Tenant’s leasehold interest hereunder (including bonus

value) or otherwise; provided, however, Tenant shall be entitled to submit its own separate claim in the event of any such Condemnation with respect to the relocation costs, business losses or the taking of Tenant’s Property incurred by Tenant as a result thereof. The rights of Landlord under this Section 18(b) will also be extended to Lender if and to the extent that any Mortgage so provides.

(c)If a Condemnation occurs that is a Taking of an entire Location or a Taking of a substantial portion of such Location so as to render the remainder of such Location unsuitable for restoration or reconfiguration for continued use as a Permitted Facility, as determined by Landlord in Landlord’s reasonable discretion, then, upon payment by Tenant of all Base Rent, Additional Rent and other sums due and payable under this Lease with respect to such Location to and including the effective date of the Taking, this Lease will be amended as of the date of the Taking to (i) reduce the then existing Base Rent of this Lease by the percentage of Base Rent allocated to the subject Location on Schedule 1, and (ii) release Tenant from its Additional Rent and other obligations and liabilities with respect to the subject Location after the date of the Taking, except with respect to all obligations and liabilities of Tenant under this Lease with respect to the subject Location, actual or contingent, which have accrued on or prior to the date of the Taking. Landlord will be entitled to and will receive any and all awards then or thereafter made in such Condemnation proceedings and Tenant will assign or, in case of any award previously made, immediately deliver to Landlord such award as may be made; provided, however, Tenant shall be entitled to submit its own separate claim in the event of any such Condemnation with respect to the relocation costs, business losses or the taking of Tenant’s Property incurred by Tenant as a result thereof.

(d)If a Casualty occurs during the last eighteen (18) months of the Term with respect to a particular Location, provided Tenant has not exercised an Optional Term and Tenant has provided Landlord with documentation from an independent, third party contractor that the restoration of the applicable Location (the “Damaged Location”) shall take more than one hundred eighty (180) days, then, upon prior written notice to Landlord (“Casualty Termination Notice”), Tenant shall be entitled to terminate this Lease with respect to such Location, effective sixty (60) days after the delivery of the Casualty Termination Notice to Landlord (the “Casualty Termination Date”), provided no Event of Default exists. Upon payment by Tenant of all Base Rent, Additional Rent and other sums due and payable under this Lease with respect to such Location to and including the Casualty Termination Date, all obligations of either party hereunder with respect to the applicable Location shall cease and this Lease will be amended as of the Casualty Termination Date to Landlord to (i) reduce the then existing Base Rent of this Lease by the percentage of Base Rent allocated to the subject Location on Schedule 2, and (ii) release Tenant from its Additional Rent and other obligations and liabilities with respect to the subject Location after the Casualty Termination Date, except with respect to all obligations and liabilities of Tenant under this Lease with respect to the subject Location, actual or contingent, which have accrued on or prior to the date of the Taking. If the Casualty Termination Date is other than the first day of a month, the Base Rent and any Additional Rent for the month in which such Casualty Termination Date occurs shall be apportioned based on the date of the Casualty Termination Date. Landlord will be entitled to and will receive any and all Net Award then or thereafter made in connection with such Casualty. This Lease shall continue in full force and effect with respect to the remaining Leased Premises.

19.Casualty and Condemnation: Restoration. Unless this Lease has been terminated with respect to the subject Location pursuant to Section 18(c) or (d) above, promptly after the applicable Casualty or Condemnation, Tenant, as required in Sections 12(a) and 13, shall commence and diligently continue to restore the applicable Location as nearly as practicable to its value, condition and character immediately prior to such event (assuming the Location to have been in the condition required by this Lease). Any Net Award up to and including $250,000 will be paid by Landlord to Tenant and Tenant shall restore the Leased Premises in accordance with the requirements of Sections 12(a) and 13 of this Lease. Landlord shall make any Net Award in excess of $250,000 available to Tenant for the restoration of the Leased Premises pursuant to and in accordance with the provisions of Section 20. Tenant shall bear all additional Costs of such restoration in excess of the Net Award. The proceeds of business interruption insurance maintained for the benefit of Tenant (expressly excluding the coverage to be maintained by Tenant for the benefit of Landlord pursuant to Section 17(a)(ii) of this Lease) shall be paid to Tenant, provided that (i) such proceeds shall be used in the first instance to timely pay any outstanding Rent and otherwise satisfy Tenant’s obligations under this Lease; and (ii) no such payments shall diminish or reduce the insurance payments otherwise payable to or for the benefit of Landlord hereunder. Except as otherwise expressly provided in Section 19, if any Casualty (whether or not insured against) or

Condemnation occurs, this Lease will continue, notwithstanding such event, and there will be no abatement or reduction of Base Rent or any other Monetary Obligations.

20.Restoration Procedures.

(a)Landlord (or Lender if required by any Mortgage) will hold any Net Award in excess of $250,000 in a fund (the “Restoration Fund”) and disburse amounts from the Restoration Fund only in accordance with the following conditions:

(i)prior to commencement of restoration, (A) the architects, contracts, contractors, plans and specifications for the restoration must be approved by Landlord, which approval will not be unreasonably withheld, delayed or conditioned but may be conditioned upon Tenant’s first obtaining additional insurance, bonds, sureties, waivers or other customary requests of Landlord; and (B) to the extent required or customary in the state in which such Location is located, appropriate waivers of mechanics’ and materialmen’s liens must be filed, if applicable;

(ii)subject to Section 9, at the time of any disbursement, no mechanics’ or materialmen’s liens must be filed against any of the Leased Premises with respect to delinquent amounts owed to a contractor that remain undischarged or unbonded;

(iii)disbursements will be made from time to time in an amount not exceeding the cost of the work completed since the last disbursement, upon receipt of (A) satisfactory evidence, including architects’ certificates, of the stage of completion, the estimated total cost of completion and performance of the work to date in a good and workmanlike manner in accordance with the contracts, plans and specifications, (B) waivers of liens, (C) contractors’ and subcontractors’ sworn statements as to completed work and the cost thereof for which payment is requested, (D) a satisfactory bringdown of title insurance and (E) other reasonable evidence of cost and payment so that Landlord can verify that the amounts disbursed from time to time are represented by work that is completed, in place and free and clear of mechanics’ and materialmen’s lien claims;

(iv)each request for disbursement must be accompanied by a certificate of Tenant, signed by an authorized officer of Tenant, describing the work for which payment is requested, stating the cost incurred in connection therewith, stating that Tenant has not previously received payment for such work and, upon completion of the work, also stating that the work has been fully completed and complies with the applicable requirements of this Lease;

(v)Landlord may retain ten percent (10%) of the Restoration Fund until the restoration is fully completed; and

(vi)such other requirements that are normal and customary practice for the payment of a general contractor in connection with construction projects similar in scope and nature to the work being performed by or on behalf of Tenant.

(b)If the Restoration Fund is held by Landlord, the Restoration Fund must not be commingled with Landlord’s other funds, must be held in accounts insured by any federal or state agency, and must bear interest at a rate agreed to by Landlord and Tenant.

(c)Prior to commencement of restoration and at any time during restoration, if the estimated cost of completing the restoration work free and clear of all liens, as reasonably determined by Landlord, exceeds the amount of the Net Award available for such restoration, the amount of such excess shall be paid by Tenant pursuant to Section 20(e) below.

(d)If any sum remains in the Restoration Fund after completion of the restoration and any refund to Tenant pursuant to Section 20(e), such sum will be disbursed to Tenant.

(e)Notwithstanding the foregoing, to the extent that there exists any insurance deductible, any self-insured retention amount, any shortfall with respect to Net Award or other similar amounts in connection with the repair or restoration of a Location, then Tenant shall be obligated to advance from its owns funds any remaining insurance deductible, self-insured retention amount, shortfall or other similar amounts prior to Landlord being obligated to make any disbursements from the Restoration Fund. In no event shall funds held in the Restoration Fund be used by Landlord for any purpose other than for the reimbursement of Tenant, whether or not an Event of Default exists and without setoff, for amounts actually and properly expended by Tenant for the repair and restoration of a Location following a Casualty or a Condemnation in accordance with this Lease. If an Event of Default exists, Landlord may, upon notice to Tenant and thereafter so long as the Event of Default exists, elect to make no further disbursements to Tenant from the Restoration Fund for work performed after the date of the Event of Default, and in such case, Landlord may use the Restoration Fund to pay such Persons engaged by Landlord to undertake such repair and restoration (provided that excess funds shall be returned to Tenant).

21.Assignment and Subletting.

(a)Tenant shall not cause, suffer or permit any Transfer to occur (including, without limitation, a Transfer of this Lease or any interest herein) unless, in each instance, Landlord’s prior written consent has been obtained, which consent shall not be unreasonably withheld by Landlord. Any purported Transfer lacking Landlord’s prior written consent shall be void and shall, at Landlord’s sole option, constitute an Event of Default giving rise to Landlord’s right, among other things, to terminate this Lease.

(b)If Tenant shall, at any time or from time to time during the Term, desire to assign this Lease, sublet any portion of the Leased Premises, or otherwise cause or permit a Transfer to occur (whether or not Landlord’s consent is required under the terms of this Lease), then, in each instance, Tenant shall deliver written notice (a “Transfer Notice”) thereof to Landlord at least thirty (30) days prior to the effective date of such proposed assignment, sublease or other Transfer, which Transfer Notice shall set forth: (i) the date Tenant desires the particular Transfer to be effective and a reasonably detailed description of such proposed Transfer and the Persons involved, together with supporting documentation reasonably necessary for Landlord to evaluate whether such proposed Transfer complies with the applicable terms and conditions of this Lease; (ii) a statement setting forth in reasonable detail the identity of the proposed assignee, subtenant or other transferee, and any desired change in the use of any Location, (iii) the proposed assignment, sublease or other Transfer instrument, and any other agreements relating thereto, and (iv) current financial information with respect to the proposed assignee or subtenant, including its most recent financial report. If Tenant identifies certain information included in the Transfer Notice to be confidential, then, at Tenant’s request, Landlord agrees to enter into a separate confidentiality agreement in form and substance reasonably acceptable to Landlord.

(c)By consenting to any assignment, sublease or other Transfer, Landlord does not acknowledge or approve or make any representations or warranties regarding the status or condition of the Leased Premises, and no such consent shall be deemed to be an authorization for or consent to any further, similar or other assignment, sublease or other Transfer. No acceptance by Landlord of rent from an assignee, sublessee or other transferee shall release Tenant from any liability under this Lease. No assignment, sublease or other Transfer, or Landlord’s consent thereto, shall release Tenant from its obligations hereunder and Tenant shall, at all times, remain fully liable for payment and performance of all obligations under this Lease, as obligations of a principal and not as obligations of a guarantor. No Transfer shall be effective and valid unless and until Tenant and the applicable transferee executes and delivers to Landlord any and all documentation reasonably required by Landlord.

(d)Whether or not Landlord consents to any proposed Transfer, Tenant shall, within ten (10) days after written request by Landlord, reimburse Landlord for all reasonable costs and expenses incurred by Landlord in connection with its review thereof. Tenant shall, within ten (10) days after the execution of any assignment, sublease or other Transfer instrument, deliver to Landlord a duplicate original copy of such assignment (in recordable form), sublease or other Transfer instrument.

(e)In no event may Tenant cause, suffer or permit a Transfer involving any Person whose property or interests are subject to being blocked under any of the OFAC Laws and Regulations and/or who is in violation of

any of the OFAC Laws and Regulations, and any such Transfer will not be effective until such Person has provided written certification to Landlord that (i) neither such Person, nor any Person who owns directly or indirectly any interest in such Person is in violation of the OFAC Laws and Regulations or has property or interests that are subject to being blocked under any of the OFAC Laws and Regulations, and (ii) such Person has taken reasonable measures to assure that no Person who owns directly or indirectly any interest in such Person has property or interests that are subject to being blocked under any of the OFAC Laws and Regulations or is otherwise in violation of the OFAC Laws and Regulations; provided, however, the covenant contained in this sentence will not apply to any Person to the extent that such Person’s interest is in or through a U.S. publicly traded entity.

(f)As a precondition to Landlord’s consent to any proposed sublease of the Leased Premises, or any part thereof, such sublease must expressly state that: (i) it does not affect or reduce any of the obligations of Tenant under this Lease, and that all the obligations of Tenant under this Lease will continue in full force and effect as obligations of a principal and not as obligations of a guarantor, as if no sublease had been made; (ii) it does not impose any additional obligations on Landlord under this Lease; (iii) it is automatically subject and subordinate to any or all Mortgages and the subtenant will execute a certificate confirming same within ten (10) days after request; (iv) the terms and conditions of the sublease are subject and subordinate to the terms and conditions of this Lease, including Landlord’s rights under this Lease, and that in the event of any conflict between the terms and conditions of the sublease and this Lease, the terms and conditions of this Lease will control; (v) it will automatically terminate and be of no further force or effect upon the scheduled expiration or, at Landlord’s election, upon the earlier termination of this Lease; and (vi) the subtenant expressly waives any and all rights at law and in equity, existing now or in the future, which may provide legal remedies to the subtenant that are contrary to the terms and conditions of this Lease. Any sublease failing to comply with the terms of this subsection (f) will be null and void. As security for performance of its obligations under this Lease, Tenant hereby grants, conveys and assigns to Landlord all right, title and interest of Tenant in and to all subleases now in existence or hereinafter entered into for any or all of the Leased Premises, any and all extensions, modifications and renewals thereof and all rents, issues and profits therefrom. Landlord hereby grants to Tenant a license to collect and enjoy all rents and other sums of money payable under any sublease of any of the Leased Premises, provided, however, that Landlord will have the absolute right at any time during the continuance of an Event of Default upon notice to Tenant and any subtenants to revoke said license and to collect such rents and sums of money and to apply the same to installments of Base Rent next due and owing. Tenant shall not accept any rents under any sublease more than thirty (30) days in advance of the accrual thereof.

(g)Notwithstanding anything in this Section 21 to the contrary, Tenant shall be permitted to cause, suffer, or permit, without Landlord’s consent, any Transfer that satisfies all of the terms and conditions set forth in this Section 21(g), all of which must be satisfied on or before the effective date (or earlier closing) of such proposed Transfer (each a “Permitted Transfer”):

(i)(A) no Event of Default has occurred and is continuing both as of the date Tenant delivers the Transfer Notice and as of the date such proposed Transfer becomes effective; (B) the proposed Transfer would not result in an immediate violation of a material term or condition of this Lease; (C) if the proposed Transfer is or relates to a merger, consolidation or other business combination of Tenant with or into another Person, then, prior to or simultaneously with its effectiveness, the surviving entity of such merger, consolidation or other business combination assumes all of the obligations of Tenant under this Lease in a manner reasonably acceptable to Landlord and otherwise in accordance with the terms and conditions of this Lease; (D) if the proposed Transfer is or relates to a sale or transfer of the assets of Tenant then, prior to or simultaneously with its effectiveness, the purchaser or transferee of such assets assumes all of the obligations of Tenant under this Lease in a manner reasonably acceptable to Landlord and otherwise in accordance with the terms and conditions of this Lease and the Lease Guaranty; (E) if the proposed Transfer is or relates to an assignment of Tenant’s entire interest in this Lease to a Person, then such Person has expressly assumed all the obligations and liabilities of Tenant under this Lease, actual, contingent and accrued, in a manner reasonably acceptable to Landlord and otherwise in accordance with the terms and conditions of this Lease; (F) immediately after the effectiveness of the proposed Transfer, either (i) Tenant is a Credit Entity, or (ii) another Person that is a Credit Entity has expressly assumed or guaranteed all of the obligations and liabilities of Tenant under this Lease, actual, contingent and accrued, in a manner reasonably acceptable to Landlord and otherwise in accordance with the terms and conditions of this Lease; (G) immediately after the effectiveness of the proposed Transfer, Tenant’s

business and operations will be managed and operated by a Person reasonably experienced in management and operation of a Permitted Facility and having a favorable business and operational reputation and character; (H) if the proposed Transfer requires or otherwise involves an additional guaranty of this Lease, then such Person shall have executed and delivered to Landlord a written guaranty of this Lease in form and substance reasonably satisfactory to Landlord whereby such Person guarantees the full payment and performance of all of the obligations and liabilities of Tenant under this Lease in a manner reasonably acceptable to Landlord and otherwise in accordance with the terms and conditions of this Lease; and (I) Tenant has delivered a Transfer Notice to Landlord not less than thirty (30) days prior to the effectiveness of the proposed assignment, which Transfer Notice shall include, without limitation, documentation and other information reasonably necessary to confirm the satisfaction of the conditions precedent set forth in this Section 21(g).

(ii)Notwithstanding anything herein to the contrary, no Transfer shall qualify as a Permitted Transfer if such Transfer involves or would result in any of the following: (A) a Person that is a party to any bankruptcy, insolvency, rearrangement or similar actions or proceedings, whether voluntary or involuntary, or a party to any material actions, suits, proceedings or investigations (pending or threatened); (B) a Person whose property or interests are subject to being blocked under any of the OFAC Laws and Regulations and/or who is in violation of any of the OFAC Laws and Regulations; (C) a change in the nature of the business conducted at any Location that is reasonably likely to have a materially deleterious effect to the condition or value of any Location or reputation of Landlord; or (D) a Material Impact.

(iii)For the purposes of this Section 21(g), the following terms shall have the meanings set forth below:

(A)“Consolidated EBITDA” means, with respect to a Person, as of the end of any fiscal quarter (x) the sum of net income, depreciation, amortization, and, if any, all adjustments deducted in determining net income and reflected in the GAAP to non-GAAP reconciliation of operating income disclosed in such Person’s earnings releases for such periods (provided cash charges shall not exceed $15,000,000 in any trailing eighteen (18) month period), other non-cash charges to net income, interest expense, income and franchise (or similar) Tax expense, minus (y) non-cash credits to net income, in each case of such Person and its Subsidiaries determined and consolidated in accordance with GAAP for the six (6) fiscal quarters then ending; provided, that notwithstanding any provision in the foregoing definition, all non-cash charges (with no dollar limitation) to net income will be added back to net income when accrued, regardless of whether any such non-cash charge is expected to result in any future cash payment but, to the extent any such non-cash charge determined pursuant to the foregoing definition results in any future cash payment (1) in excess of an aggregate amount of $15,000,000 in any trailing eighteen (18) month period (excluding any payment relating to the Wage and Labor Dispute) or (2) in the case of the Wage and Labor Dispute in excess of an aggregate amount of $16,500,000, Consolidated EBITDA will be reduced by the amount of such excess at such future time.

(B)“Credit Entity” means any Person engaged in a business or activity in which such Person qualifies under at least one of the following subsections (A) or (B), each as determined in accordance with GAAP immediately after the effectiveness of the proposed Transfer (giving effect thereto): (A) such Person has maintained at all times during the immediately preceding eighteen-month period (1) a tangible net worth of no less than $300,000,000, (2) a ratio of total debt to Consolidated EBITDA of less than 3.7 to 1.0, and (3) a ratio of total debt to equity of less than 1.5 to 1.0; or (B) the rating assigned to the senior unsecured long term indebtedness of such Person by Standard & Poor’s is “BB” or higher, or a comparable rating by any rating agency reasonably acceptable to Landlord.

(C)Wage and Labor Dispute” means those matters raised and subject to the settlement involving the Thorn v. Bob Evans Farms, Inc., Civil Action 2:12-cv-768 (S.D. Ohio) (“Snodgrass Litigation”), Utterback v. Bob Evans Farms, Case No. CV14826909 (Court of Common Pleas of Cuyahoga County, Ohio), Mackin v. Bob Evans Farms, Case No. 2:14-cv-450 (S.D. Ohio) lawsuits; whereby the claims of assistant managers employed by Bob Evans Farms LLC (dba Bob Evans Restaurants) are resolved except individuals formerly

employed in the assistant manager position who had received notice of the Snodgrass Litigation and chose not to opt into that lawsuit.

(iv)Tenant shall, at Tenant’s sole cost and expense, execute and deliver to Landlord, any other reasonable instruments and documents requested by Landlord in connection with the Permitted Transfer.

(h)Notwithstanding anything in Section 21(a) to the contrary, Tenant shall have the right at any time during the Term, without the consent of Landlord, to sublease a Location to an Affiliate of Tenant, so long as, in each instance, the following conditions precedent have all been satisfied (each an “Affiliate Sublease”): (i) no Event of Default has occurred and is continuing both as of the date Tenant delivers the Transfer Notice and as of the date such proposed Affiliate Sublease becomes effective; (ii) the proposed Affiliate Sublease is not reasonably expected to result in an immediate violation of a material term or condition of this Lease; (iii) all requirements set forth in Section 21(f) applicable to a sublease have been satisfied prior to its effectiveness; (iv) such Location remains a Permitted Facility; and (v) at least thirty (30) days prior to such subletting, Tenant furnishes Landlord with the name of such Affiliate and a written certification from a duly authorized officer of Tenant certifying to Landlord that such subtenant is an Affiliate of Tenant, together with supporting documentation reasonably necessary for Landlord to confirm Tenant’s compliance with this Section 21(h).

(i)Notwithstanding anything in Section 21(a) to the contrary, Tenant shall have the right at any time during the Term, without the consent of Landlord, to assign Tenant’s entire interest in this Lease to an Affiliate of Tenant (“Affiliate Assignee”) so long as, in each instance, all of the terms and conditions set forth in this Section 21(i) are timely satisfied (each, an “Affiliate Assignment”): (i) no Event of Default has occurred and is continuing both as of the date Tenant delivers the Transfer Notice and as of the date such proposed Affiliate Assignment becomes effective; (ii) the proposed Affiliate Assignment is not reasonably expected to result in an immediate violation of a material term or condition of this Lease; (iii) the Affiliate Assignee shall assume (jointly and severally) all of the obligations of Tenant hereunder by an instrument in writing in form and substance reasonably satisfactory to Landlord and otherwise in accordance with the terms and conditions of this Lease; and (iv) Tenant shall not be released from any of the obligations of Tenant hereunder, whether occurring prior to or after the effective date of such Affiliate Assignment, and if requested by Landlord, Tenant shall execute a written guaranty of this Lease in a form satisfactory to Landlord; (v) no Lease Guarantor shall be released of any of its obligations under any Lease Guaranty, and each Lease Guarantor shall execute a written reaffirmation of its obligations thereunder in form and substance reasonably satisfactory to Landlord and deliver the same to Landlord along with the Transfer Notice; (vi) Tenant has delivered a Transfer Notice to Landlord not less than thirty (30) days prior to the effectiveness of the proposed Affiliate Assignment notifying Landlord of Tenant’s intention to enter into such Affiliate Assignment, the effective date thereof, any proposed change in the address for notices, copies of any documents required hereunder in connection with the Affiliate Assignment, and such other supporting documentation reasonably necessary for Landlord to confirm Tenant’s compliance with this Section 21(i); and (vii) on or prior to the effective date of the proposed Affiliate Assignment, Tenant shall deliver to Landlord executed copies of the assignment, a written certification from a duly authorized officer of Tenant certifying to Landlord that such Affiliate Assignee is an Affiliate of Tenant (together with copies of the organizational documents of such Affiliate Assignee), as well as any other documents or instruments required hereunder.

(j)No assignment, sublease or other Transfer shall release, affect or reduce any of the obligations of Tenant hereunder or impose additional obligations on Landlord under this Lease, and all obligations of Tenant shall continue in full force and effect as obligations of a principal and not as obligations of a guarantor, as if no assignment or sublease had been made. Landlord’s consent to any assignment of this Lease or sublease of any Location (or any portion thereof) and/or Landlord’s acceptance of rent from an assignee, sublessee or other transferee shall in no event release Tenant from any liability under this Lease.

22.Sales by Landlord.

(a)Except as expressly set forth in Section 22(d) below and subject to Section 43 below, this Lease is fully assignable by Landlord, in whole or in part, and Landlord may sell or otherwise transfer the Leased

Premises, in whole or in part, at any time without Tenant’s consent to any third party (each a “Third Party Purchaser”). In the event of any such transfer, Tenant shall attorn to any Third Party Purchaser as Landlord so long as such Third Party Purchaser and Landlord notify Tenant in writing of such transfer. At the request of Landlord, Tenant will execute such documents confirming the agreement referred to above and such other agreements as Landlord may reasonably request, provided that such agreements do not increase the liabilities and obligations of Tenant hereunder or otherwise diminish or alter the rights of Tenant hereunder. Whenever Landlord transfers its interest in the Leased Premises (whether to a Third Party Purchaser or an Affiliate or subsidiary of Landlord), Landlord will be automatically released from further performance under this Lease and from all further liabilities and expenses hereunder, provided the transferee of Landlord’s interest assumes all liabilities and obligations of Landlord hereunder, whether arising before or after the date of such transfer.

(b)In the event that from time to time Landlord desires to partially assign its interest in the Lease in connection with a sale or transfer of one or more Locations, then Landlord shall prepare one or more individual lease agreements in the same form as and consistent with the terms of this Lease (to the extent possible and applicable) (each, an “Individual Lease Agreement”) and the Base Rent for each Individual Lease Agreement shall be set in accordance with the then existing Base Rent under this Lease and the percentage allocated to each Location on Schedule 1 attached hereto, and upon the assignment by Landlord, this Lease shall be amended to exclude any such Location(s) from this Lease, and the Base Rent of this Lease shall be reduced by the amount allocated to the Individual Lease Agreement(s) in accordance with this Section 22. In such event, the amendment to this Lease and each Individual Lease Agreement shall be executed by the parties, as applicable, within fifteen (15) business days after delivery thereof by Landlord. In addition, Tenant shall, at Landlord’s cost and expense, execute and deliver to Landlord, within fifteen (15) business days after delivery thereof by Landlord, any other reasonable instruments and documents requested by Landlord in connection with the sale or assignment. Tenant agrees to cooperate reasonably with Landlord in connection with any such sale or assignment, and Landlord agrees to reimburse Tenant for Tenant’s reasonable out-of-pocket costs and expenses, including reasonable attorneys’ fees, incurred in connection with this Section 22(b). From and after the effective date of any such Individual Lease Agreement (and provided Landlord has conveyed its interest in such Location to the new landlord named in the Individual Lease Agreement, Landlord will be released from any liability thereafter arising with respect to the Location(s) covered thereby. In no event shall Landlord have any liability under any Individual Lease Agreement.

(c)Landlord and Tenant agree that this Lease constitutes a single and indivisible lease as to all of the Leased Premises collectively, and shall not be subject to severance or division unless and to the extent, pursuant to this Section 22, Landlord elects to effect a partial assignment of this Lease. In furtherance of the foregoing, and except as may result from the amendment of this Lease to release certain properties and reduce Base Rent in conjunction with the execution of Individual Lease Agreements pursuant to the terms of this Section 22, Landlord and Tenant each: (i) waive any claim or defense based upon the characterization of this Lease as anything other than a master lease of all the Leased Premises and irrevocably waive any claim or defense which asserts that the Lease is anything other than a master lease; (ii) covenant and agree that neither Landlord nor Tenant will assert that this Lease is anything but a unitary, unseverable instrument pertaining to the lease of all, but not less than all, of the Leased Premises, (iii) stipulate and agree not to challenge the validity, enforceability or characterization of the lease of the Leased Premises as a unitary, unseverable instrument pertaining to the lease of all, but not less than all, of the Leased Premises, and (iv) shall support the intent of the parties that this Lease is a unitary, unseverable instrument pertaining to the lease of all, but not less than all, of the Leased Premises, if, and to the extent that, any challenge occurs.

(d)So long as this Lease is in effect, no Event of Default has occurred and is continuing and the particular Location is then being operated as a Permitted Facility, Landlord agrees not to sell, transfer or otherwise convey fee ownership of such Location to a Tenant Competitor unless Tenant reasonably approves the sale. As used herein, “Tenant Competitor” means any Person having food processing, food manufacturing or restaurant operations as a significant portion of its business, or any Subsidiary of such Person, or Affiliate of such Person that was formed for the purpose of circumventing the restriction set forth in this Section 22(d).

23.Events of Default.

(a)After expiration of any applicable cure period as provided in Sections 23(b) and 23(c), the occurrence of any one or more of the following will, at the sole option of Landlord, constitute an “Event of Default” under this Lease:

(i)a failure by Tenant to make any payment of any Monetary Obligation, regardless of the reason for such failure;

(ii)a failure by Tenant to perform and observe, or a violation or breach of, any other provision of this Lease not otherwise specifically mentioned in this Section 23(a) (but expressly excluding (A) any Parent Change of Control (as defined in the Parent Guaranty) that violates this Lease or any Lease Guaranty, after which Landlord may only declare an Event of Default on the basis of a violation of Section 23(a)(xiv) of this Lease; (B) any Transfer that consists solely of a violation of subsection (vii) of the definition of “Transfer” in Appendix 1 (i.e., doing or permitting any transaction that is reasonably likely to result in a Material Impact) after which Landlord may only declare an Event of Default on the basis of a violation of Section 23(a)(xv) of this Lease; and (C) any failure by Tenant to cause the Financial Information to comply with Section 41(f) in which case Landlord may only declare an Event of Default on the basis of a violation of Section 23(a)(xvi) of this Lease

(iii)any representation or warranty made by Tenant herein or in any certificate, demand or request made pursuant hereto proves to be incorrect when made in any material respect;

(iv)a default beyond any applicable cure period or at maturity by Tenant in any payment of principal or interest on any obligations for borrowed money having a principal balance of $10,000,000 or more in the aggregate, or in the performance of any other provision contained in any instrument under which any such obligation is created or secured (including the breach of any covenant thereunder), (A) if such payment is a payment at maturity or a final payment, or (B) if an effect of such default is to cause, or permit any Person to cause, such obligation to become due prior to its stated maturity;

(v)a default by Tenant beyond any applicable cure period in the payment of rent under, or in the performance of any other material provision of, any other lease or leases that have, in the aggregate, rental obligations over the terms thereof of $10,000,000 or more if the landlord under any such lease or leases commences to exercise its remedies thereunder;

(vi)a final, non-appealable judgment or judgments for the payment of money in excess of $10,000,000 in the aggregate (and not substantially covered by insurance) shall be rendered against Tenant which is reasonably likely to have a Material Impact and the same shall remain undischarged for a period of ninety (90) consecutive days;

(vii)Tenant shall (A) voluntarily be adjudicated a bankrupt or insolvent, (B) seek or consent to the appointment of a receiver or trustee for itself or for the Leased Premises, (C) file a petition seeking relief under the bankruptcy or other similar laws of the United States, any state or any jurisdiction, (D) make a general assignment for the benefit of creditors, or (E) be unable to pay its debts as they mature or shall admit in writing its inability to pay its debts when due;

(viii)a court shall enter an order, judgment or decree appointing, without the consent of Tenant, a receiver or trustee for Tenant or approving a petition filed against Tenant which seeks relief under the bankruptcy or other similar laws of the United States, any state or any jurisdiction, and such order, judgment or decree shall remain undischarged or unstayed ninety (90) days after it is entered;

(ix)Tenant substantially discontinues its business operations at any Location, or any Location has been vacated or abandoned for a period of one hundred eighty (180) days (excluding any period while Tenant is performing repairs or restoration work following a Casualty or Condemnation as required in Sections 12 and 13 of this Lease); provided, however, that with respect to one and only one Location, such 180-day period shall be extended to 270 days so long as Tenant has given Landlord advance written notice of Tenant’s intent to cease operations

at such Location and uses commercially reasonable efforts to arrange for a sublease of such Location subject to and in accordance with Section 21; and further provided that if during such 180- or 270-day period, as applicable, a sublease is executed in compliance with Section 21 with a Person that is not an Affiliate of Tenant or any Lease Guarantor, such period shall be further extended as may be reasonably necessary in order to afford the subtenant additional time to make any necessary Alterations (subject to the terms hereof) and to move into the Location so long as the subtenant promptly commences and diligently pursues completion of any such necessary Alterations in accordance with this Lease and provided that such additional time shall in no event exceed 120 days from the date such sublease is executed in compliance with Section 21;

(x)Tenant shall be liquidated or dissolved or Tenant or any Person holding an interest in Tenant shall file proceedings towards its liquidation or dissolution;

(xi)the estate or interest of Tenant in any of the Leased Premises shall be levied upon or attached in any proceeding and such estate or interest is about to be sold or transferred or such process shall not be vacated, bonded or discharged within ninety (90) days after it is made;

(xii)a breach or default under any Lease Guaranty, any other guaranty of this Lease or any Related Lease, after any applicable notice or cure period thereunder (but expressly excluding any Parent Change of Control (as defined in the Parent Guaranty) that violates this Lease or any Lease Guaranty, after which Landlord may only declare an Event of Default on the basis of a violation of Section 23(a)(xiv) of this Lease);

(xiii)a Transfer (other than a Permitted Transfer) occurs without the prior written consent of Landlord (except to the extent that such consent is not required and Tenant otherwise complies with the provisions of Sections 21 and 45 of this Lease) but expressly excluding (A) any Parent Change of Control (as defined in the Parent Guaranty) that violates this Lease or any Lease Guaranty, after which Landlord may only declare an Event of Default on the basis of a violation of Section 23(a)(xiv) of this Lease; and (B) any Transfer that consists solely of a violation of subsection (vii) of the definition of “Transfer” in Appendix 1 (i.e., doing or permitting any transaction that is reasonably likely to result in a Material Impact) after which Landlord may only declare an Event of Default on the basis of a violation of Section 23(a)(xv) of this Lease.

(xiv)a Parent Change of Control (as defined in the Parent Guaranty) occurs in violation of the Parent Guaranty;

(xv)a Transfer occurs without the prior written consent of Landlord (except to the extent that such consent is not required and Tenant otherwise complies with the provisions of Sections 21 and 45 of this Lease) that consists solely of a violation of subsection (vii) in the definition of “Transfer” in Appendix 1 (i.e., doing or permitting any transaction that is reasonably likely to result in a Material Impact) and not as a result of a violation of any of the other subsections (i), (ii), (iii), (iv), (v), (vi) or (viii) listed in the definition of “Transfer” in Appendix 1; or

(xvi)any failure by Tenant to cause the Financial Information to comply with Section 41(f).

(b)If the default consists of the failure to pay any Monetary Obligation under clause (i) of Section 23(a), the applicable cure period shall be five (5) days from the date on which written notice thereof is given to Tenant; provided, however, if the default consists of the failure to pay Base Rent, Landlord shall not be obligated to give notice of, or allow any cure period for, any such default more than one (1) time within any Lease Year.

(c)If the default consists of a default under subsections (ii) or (xvi) of Section 23(a), other than the events specified in Section 23(d)(ii) and (iii), the applicable cure period shall be thirty (30) days from the date on which written notice thereof is given to Tenant or, if the default cannot be cured within such thirty (30) day period and delay in the exercise of a remedy would not (in Landlord’s reasonable judgment) cause any material adverse harm to any of the Leased Premises or Landlord’s interest therein, the cure period shall be extended for the period required to

cure the default (but such cure period, including any extension, shall not in the aggregate exceed ninety (90) days), provided that Tenant shall commence to cure the default within the said thirty-day period and shall actively, diligently and in good faith proceed with and continue the curing of the default until it shall be fully cured.

(d)No notice or cure period shall be required: (i) for the occurrence of an Event of Default under Section 23(a)(iii)-(xv), inclusive; (ii) for a default that consists of a failure of Tenant to provide or maintain any insurance required by Section 17 other than de minimis non-compliance that would not result in any material gap in the insurance coverage required by Section 17, as reasonably determined by Landlord; or (iii) if the default is such that any delay in the exercise of a remedy by Landlord could reasonably be expected to cause irreparable harm to Landlord.

24.Remedies and Damages Upon Default.

(a)Upon the occurrence of an Event of Default, with or without notice or demand, except the notice prior to default required under certain circumstances by Section 23, this Section 24, elsewhere in this Lease, or such other notice as may be required by statute, Landlord shall have the right, at its sole option, then or at any time thereafter, to exercise, at its option, concurrently, successively, or in any combination, all remedies available at law or in equity, including without limitation any or all of its remedies provided in this Section 24.

(i)Landlord may give Tenant notice of Landlord’s intention to terminate this Lease on a date specified in such notice and upon such date, this Lease, the estate hereby granted and all rights of Tenant hereunder shall expire and terminate. Upon such termination, Tenant shall immediately surrender and deliver possession of the Leased Premises to Landlord in accordance with Section 31. If Tenant does not so surrender and deliver possession of all of the Leased Premises, Landlord may repossess any of the Leased Premises not surrendered, with legal process, by summary ejectment or any other lawful means or procedure.

(ii)Landlord may terminate Tenant’s right of possession (but not this Lease) and may repossess the Leased Premises by any available legal process without thereby releasing Tenant from any liability hereunder and without demand or notice of any kind to Tenant and without terminating this Lease.

(iii)Upon or at any time after taking possession of any of the Leased Premises pursuant to clause (i) or (ii) of this Section 24(a), Landlord may, by legal process, remove any Persons or property therefrom. Landlord shall be under no liability for or by reason of any such entry, repossession or removal. Notwithstanding such entry or repossession, Landlord may collect the damages set forth in Section 24(b).

(iv)After repossession of any of the Leased Premises pursuant to clause (i) or (ii) of this Section 24(a), Landlord shall have the right to relet the same to such tenant or tenants, for such term or terms, for such rent, on such conditions and for such uses as Landlord in its sole discretion may determine, and collect and receive any rents payable by reason of such reletting. Landlord may make such Alterations in connection with such reletting as it may deem advisable in its sole discretion. Notwithstanding any such reletting, Landlord may collect the damages set forth in Section 24(b).

(b)The following constitute damages to which Landlord shall be entitled if Landlord exercises its remedies under clauses (i), (ii), (iii) or (iv) of Section 24(a), as the case may be:

(i)Following the occurrence of either (A) an Event of Default described in subsections (i), (vii), (viii), (ix), (x), (xi), (xiii), (xiv) or (xv) of Section 23(a) of this Lease or (B) an Event of Default described in subsections (ii), (iii), (iv), (v), (vi), (xii) or (xvi) of Section 23(a) of this Lease if Landlord determines in good faith that material adverse harm to Landlord would occur if Landlord was not permitted to exercise the remedy set forth in this Section 24(b)(i), then, following the occurrence of either of the foregoing (A) or (B) and the exercise by Landlord of any of its remedies under Section 24(a) (or attempt to exercise its remedy under Section 24(a)(iv) but such reletting attempt is unsuccessful), then, upon written demand from Landlord, Tenant shall pay to Landlord, as liquidated and agreed final damages for Tenant’s default and in lieu of all current damages beyond the date of such demand (it being agreed that it would be impracticable or extremely difficult to fix the actual damages), an amount equal to the Present

Value of all Base Rent from the date of such demand to the date on which the Term is scheduled to expire hereunder in the absence of any earlier termination, re-entry or repossession. Tenant shall also pay to Landlord all accrued Rent then due and unpaid, all other Monetary Obligations which are then due and unpaid, all Monetary Obligations which arise or become due by reason of such Event of Default, including any Costs of Landlord in connection with the repossession of the Leased Premises and any attempted reletting thereof, including all brokerage commissions, legal expenses, reasonable attorneys’ fees, employees’ expenses, costs of Alterations (but not including Alterations beyond what is necessary to put the Leased Premises in the condition in which it is required to be surrendered by Tenant at the end of the Lease Term) and expenses and preparation for reletting (collectively, the “Accelerated Rent Amount”). Upon the full and final payment by Tenant of the Accelerated Rent Amount, this Lease shall terminate (if not previously terminated) and neither party shall have any further rights or remedies hereunder other than the Surviving Obligations.

(ii)If Landlord exercises its remedy or remedies under Section 24(a) and does not elect or is not otherwise entitled to collect the Accelerated Rent Amount pursuant to Section 24(b)(i), then Tenant shall, until the end of the Term (or until the end of what would have been the Term in the absence of the termination of the Lease, as applicable) and whether or not any of the Leased Premises shall have been relet, be liable to Landlord for, and shall pay to Landlord, on the date on which the same are due and payable under the terms of this Lease all Monetary Obligations that would be payable under this Lease by Tenant in the absence of such termination less the net proceeds, if any, of any reletting pursuant to Section 24(a)(iv), after deducting from such proceeds all of Landlord’s Costs (including the items listed in the last sentence of Section 24(b)(i) hereof) incurred in connection with such repossessing and reletting; provided, that if Landlord has not relet the Leased Premises, such Costs of Landlord shall be considered to be Monetary Obligations payable by Tenant. Landlord shall also be entitled to recover from Tenant as damages an amount equal to the sum of (A) the Present Value of the excess, if any, of (1) all Base Rent payable under this Lease from the date of termination, reentry or repossession, as the case may be, over (2) the amount of the base rent actually obtained by Landlord after reletting the Leased Premises, plus (B) all of Landlord’s Costs (including the items listed in the last sentence of Section 24(b)(i) hereof). Upon the full and final payment by Tenant of the amounts described in items (A) and (B) of this Section 24(b)(ii), this Lease shall terminate (if not previously terminated) and neither party shall have any further rights or remedies hereunder other than the Surviving Obligations. Tenant shall be and remain liable for all sums described in items (A) and (B) of this Section 24(b)(ii), and Landlord may recover such damages from Tenant and institute and maintain successive actions or legal proceedings against Tenant for the recovery of such damages. Nothing herein contained shall be deemed to require Landlord to wait to begin such action or other legal proceedings until the date when the Term would have expired by its own terms had there been no such Event of Default.

(iii)Subject to the provisions of Section 24(a) above and this Section 24(b), Landlord may recover all damages to which it is entitled herein from Tenant and institute and maintain successive actions or legal proceedings (summary or otherwise) against Tenant for the recovery of such damages. Nothing herein contained shall be deemed to require Landlord to wait to begin such action or other legal proceedings until the date when the Term would have expired by its own terms had there been no such Event of Default.

(c)Landlord may immediately or at any time thereafter, and with or without notice, except as required herein, (i) seek any equitable relief available to Landlord, including, without limitation, the right of specific performance; (ii) enforce, and Tenant does hereby consent to such enforcement, all of Landlord’s self-help remedies available at law or in equity without Landlord resorting to any legal or judicial process, procedure or action; and (iii) initiate litigation or hire legal counsel to enforce or protect its rights under this Lease, and to recover from Tenant, in addition to any other damages or relief awarded or obtained, all court costs and reasonable attorneys’ fees incurred in connection with such litigation or action by legal counsel.

(d)Notwithstanding anything to the contrary herein contained, in lieu of or in addition to any of the foregoing remedies and damages, Landlord may exercise any remedies and collect any damages available to it at law or in equity. If Landlord is unable to obtain full satisfaction pursuant to the exercise of any remedy, it may pursue any other remedy which it has under this Lease or at law or in equity, it being understood that the remedies set forth in this Lease are not exclusive and are cumulative in addition to any remedies allowed now or after the date hereof by applicable law or in equity.

(e)Landlord shall not be required to mitigate any of its damages hereunder except to the extent required by Law. If any Law shall validly limit the amount of any damages provided for herein to an amount which is less than the amount agreed to herein, Landlord shall be entitled to the maximum amount available under such Law. If Landlord commences any summary proceeding hereunder Tenant agrees that it shall not interpose any counterclaim of whatever nature or description in any such proceeding (except for any compulsory counterclaim).

(f)No termination of this Lease, repossession or reletting of the Leased Premises, exercise of any remedy or collection of any damages pursuant to this Section 24 shall relieve Tenant of any Surviving Obligations.

(g)THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EACH OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE, AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE UNDERSIGNED TO EXECUTE THIS LEASE.

(h)Upon the occurrence of any Event of Default, Landlord shall have the right (but not the obligation) to perform any act required of Tenant hereunder and, if performance of such act requires that Landlord enter the Leased Premises, Landlord may enter the Leased Premises for such purpose. Any such payment or performance by Landlord of Tenant’s obligations under this Lease shall be on Tenant’s account and at Tenant’s sole cost and expense, and as Additional Rent hereunder.

(i)No failure of Landlord: (i) to insist at any time upon the strict performance of any provision of this Lease; or (ii) to exercise any option, right, power or remedy contained in this Lease shall be construed as a waiver, modification or relinquishment thereof. A receipt by Landlord of any sum in satisfaction of any Monetary Obligation with knowledge of the breach of any provision hereof shall not be deemed a waiver of such breach, and no waiver by Landlord of any provision hereof shall be deemed to have been made unless expressed in a writing signed by Landlord.

(j)Tenant hereby waives and surrenders, for itself and all those claiming under it, including creditors of all kinds: (i) any right and privilege which it or any of them may have under any present or future Law to redeem any of the Leased Premises or to have a continuance of this Lease after termination of this Lease or of Tenant’s right of occupancy or possession pursuant to any court order or any provision hereof; and (ii) the benefits of any present or future Law which exempts property from liability for debt or for distress for rent.

(k)Except as otherwise provided herein, all remedies are cumulative and concurrent and no remedy is exclusive of any other remedy. Each remedy may be exercised at any time an Event of Default has occurred and may be exercised from time to time. Except as otherwise expressly provided herein, no remedy shall be exhausted by any exercise thereof.

(l)Tenant shall pay as Additional Rent all of Landlord’s legal costs, expenses and reasonable attorneys’ fees, expert fees and consultant fees in exercising any of Landlord’s rights and remedies against Tenant, whether set forth herein or at law or equity.

(m)In addition to the other provisions of this Lease that specifically require Tenant to reimburse, pay or indemnify against Landlord’s attorneys’ fees, Tenant shall pay, as Additional Rent, all of Landlord’s reasonable attorneys’ fees incurred in connection with the enforcement of this Lease, the review and negotiation of any consent requested by Tenant, and the collection of past due Rent.

(n)If Landlord elects to terminate this Lease on account of any Event of Default on the part of Tenant, then Landlord may: (i) terminate any sublease, license, concession, or other consensual arrangement for possession entered into by Tenant and affecting any of the Leased Premises; or (ii) choose to succeed to Tenant’s interest in such arrangement. No payment by a subtenant with respect to a sublease shall entitle such subtenant to possession of the Leased Premises after termination of this Lease and Landlord’s election to terminate the sublease by

the subtenant. If Landlord elects to succeed to Tenant’s interest in such arrangement, then Tenant shall, as of the date of notice given by Landlord to Tenant of such election, have no further right to, or interest in, any rent or other consideration receivable under that arrangement, except that the net proceeds of any such arrangement so collected by Landlord shall be applied to reduce Tenant’s Monetary Obligations.

(o)Tenant hereby (i) understands and accepts the methods of calculation set forth in this Lease for determining charges and amounts payable by Tenant as applied to the Leased Premises, (ii) acknowledges that the same are commercially reasonable, and (iii) agrees that such provisions are valid and constitute satisfactory methods for determining such charges and amounts as required by any applicable Law.

(p)Notwithstanding anything to the contrary in the Lease, the Parent Guaranty, the Affiliate Guaranty, or any other concurrent transaction documents, and for the purpose only of preserving operating lease accounting classification for this Lease pursuant to the Financial Accounting Standard Board’s Accounting Standards Codification Section 840 governing the accounting classification of operating leases in effect on the date hereof (collectively the “Operating Lease Accounting Rules”), if Landlord is exercising remedies due solely to the occurrence of an Event of Default described in subsections (iv), (v), (xiv), (xv) or (xvi) of Section 23(a) of this Lease, (each a “Limited Remedy Event of Default”), in no event shall the aggregate amount Tenant shall be required to pay to Landlord from and after the date of the occurrence of the Limited Remedy Event of Default (the “Occurrence Date”) exceed the sum of the following items (i), (ii) and (iii): (i) (A) $46,388,400.00 (which amount is 89.9% of the $51,600,000.00 price paid by Landlord for the Leased Premises), less (B) the aggregate of all Base Rent paid by or on behalf of Tenant to and received by Landlord from the Commencement Date to the Occurrence Date, as well as any Additional Rent paid to Landlord and not passed through to a third party, received by Landlord as of the Occurrence Date; (ii) any Impositions and any other amounts, liabilities, obligations, costs and expenses paid or incurred with respect to the ownership, repair, replacement, restoration, maintenance and operation of the Leased Premises (such amounts other than Impositions are hereinafter referred to as “Other Charges”) which are due and payable or have accrued under this Lease through the Occurrence Date that relate to insurance, utilities, repairs, maintenance, environmental maintenance, remediation and compliance and other customary costs and expenses of operating and maintaining the Leased Premises in substantial compliance with the terms of this Lease; and (iii) any Impositions and Other Charges due to third parties which are due and payable or have accrued under this Lease after the Occurrence Date while the Tenant remains in possession of any of the Leased Premises after any Limited Remedy Event of Default that relate to insurance, utilities, repairs, maintenance, environmental maintenance, remediation and compliance and other customary costs and expenses of operating and maintaining the Leased Premises in substantial compliance with the terms of this Lease.

25.Notices. Any notice or other communication permitted or required to be given under this Lease by one party to the other shall be effective only if in writing, addressed to the other party at its address below, and (a) personally delivered; (b) sent by a nationally recognized overnight delivery service (e.g., Federal Express) for next-day delivery, to be confirmed by such courier; or (c) mailed by United States registered or certified mail, return receipt requested, postage prepaid. Notices, demands and other communications given in the foregoing manner shall be deemed given when actually received or refused by the party to whom sent, unless mailed, in which event same shall be deemed given on the day of actual delivery as shown by the addressee’s registered or certified mail receipt, or at the expiration of the third (3^rd) business day after the date of mailing, whichever first occurs. Either Landlord or Tenant may from time to time change its address for receiving notices under this Lease by providing written notice to the other party in accordance with this Section 25. Any and all such notices may be given on behalf of either party by its attorney named below.

Landlord: Broadstone BEF Portfolio, LLC

c/o Broadstone Real Estate, LLC

530 Clinton Square

Rochester, NY 14604

Attn: Portfolio Manager

With a copy to: Tones Vaisey, PLLC

155 Clinton Square

Rochester, NY 14604

Attn: Jeffrey A. Vaisey, Esq.

Tenant: BEF Foods, Inc.

8111 Smith’s Mill Road

New Albany, Ohio 43054

Attn: Mark Hood

With a copy to: Bob Evans Farms, Inc.

8111 Smith’s Mill Road

New Albany, Ohio 43054

Attn: General Counsel

and

Bass, Berry & Sims PLC

150 Third Avenue South, Suite 2800

Nashville, Tennessee 37201

Attn: R. Todd Ervin

26.Books and Records. Tenant shall keep adequate records and books of account with respect to the finances and business of Tenant generally and with respect to the Leased Premises, in accordance with U.S. GAAP.

27.Financial Reporting.

(a)Subject to Section 27(c), Tenant shall deliver to Landlord: (i) within ninety (90) days of the close of each fiscal year, annual audited financial statements of Tenant prepared by Tenant and accompanied by an opinion of an independent certified public accountant selected by Tenant stating that there are no qualifications as to the scope of the audit; and (ii) within thirty (30) days of the close of each fiscal quarter, unaudited internal financial statements of Tenant, for the quarter then ended and the trailing twelve months.

(b)All financial statements (annual and quarterly) shall: (i) be prepared in accordance with U.S. GAAP; (ii) fairly represent the respective financial condition of the subjects thereof as of the respective dates thereof; (iii) include, at a minimum, an income statement, balance sheet, statement of cash flow; and (iv) be accompanied by a certificate of the CEO, President or Chief Financial Officer of Tenant or Parent Guarantor, dated within five (5) days of the delivery of such statement, stating that the financial statements are true, correct and complete and that no Event of Default, or event which, upon notice or the passage of time or both, would become an Event of Default, has occurred and is continuing hereunder or, if any such event has occurred and is continuing, specifying the nature and period of existence thereof and what action Tenant and Lease Guarantor have taken or proposes to take with respect thereto.

(c)Notwithstanding any of the foregoing in this Section 27 to the contrary, so long as Parent Guarantor is a public company, a party to the Parent Guaranty, and that Tenant has been a wholly owned Subsidiary of Parent Guarantor, directly or indirectly, at all times during the applicable reporting period, then Parent Guarantor may satisfy the requirements of this Section 27 with the consolidated quarterly and annual financial statements of Parent Guarantor (with no separate statements being required by Tenant) but only so long as the same are available to Landlord (at no cost to Landlord) via EDGAR or Parent Guarantor’s website, in which event Landlord agrees that it shall obtain such quarterly and annual financials through such means and that Parent Guarantor shall not be required to make the physical deliveries required hereinabove.

28.Estoppel Certificate. At any time upon not less than twenty (20) days’ prior written request by either Landlord or Tenant (the “Requesting Party”) to the other party (the “Responding Party”), the Responding Party shall deliver to the Requesting Party a statement in writing, executed by an authorized officer of the Responding Party, certifying (a) that, except as otherwise specified, this Lease is unmodified and in full force and effect, (b) the dates to which Base Rent, Additional Rent and all other Monetary Obligations have been paid, (c) that, to the knowledge of the signer of such certificate and except as otherwise specified, no default by either Landlord or Tenant exists hereunder,

(d) such other matters as the Requesting Party may reasonably request, and (e) if Tenant is the Responding Party that, except as otherwise specified, there are no proceedings pending or, to the knowledge of the signer, threatened, against Tenant before or by any court or administrative agency which, if adversely decided, would materially and adversely affect the financial condition and operations of Tenant. Any such statements by the Responding Party may be relied upon by the Requesting Party, any Person whom the Requesting Party notifies the Responding Party in its request for the Certificate is an intended recipient or beneficiary of the Certificate, any Lender or their assignees and by any prospective purchaser or mortgagee of any of the Leased Premises. Any certificate required under this Section 28 and delivered by Tenant shall state that, in the opinion of each person signing the same, he/she has made such examination or investigation as is necessary to enable him/her to express an informed opinion as to the subject matter of such certificate. In addition to the rights of Landlord and Tenant to obtain estoppel certificates, Tenant shall, upon Lender’s request at any time, and from time to time during the existence of the Loan, and upon any foreclosure of the Loan or transfer in lieu thereof, deliver to Lender an estoppel certificate executed by Tenant, which Tenant shall provide in the same manner and with the same content and effect as estoppel certificates to be delivered by Tenant to Landlord, except that the estoppel certificate to Lender shall include such additional information as Lender may reasonably request.

29.Tax Treatment; Reporting. Landlord and Tenant each acknowledge that each shall treat this transaction as a true lease for state law purposes and shall report this transaction as a Lease for federal income tax purposes. For Federal income tax purposes each shall report this Lease as a true lease with Landlord as the owner of the Leased Premises and Tenant as the lessee of such Leased Premises including: (a) treating Landlord as the owner of the property eligible to claim depreciation deductions under Section 167 or 168 of the Internal Revenue Code of 1986 with respect to the Leased Premises, (b) Tenant reporting its Rent payments as rent expense under Section 162 of the Internal Revenue Code, and (c) Landlord reporting the Rent payments as rental income.

30.Quiet Enjoyment. Landlord agrees that, subject to the terms of this Lease, so long as no Event of Default has occurred and is continuing, Tenant shall quietly hold, occupy and enjoy the Leased Premises throughout the Term, free from any hindrance or interference from Landlord or any party claiming by, through or under Landlord.

31.Surrender. Upon the expiration or earlier termination of this Lease, Tenant shall peaceably leave and surrender the Leased Premises to Landlord in the same condition in which the Leased Premises was at the Commencement Date, except as repaired, rebuilt, restored, altered, replaced or added to as permitted or required by any provision of this Lease, and except for ordinary wear and tear and any Condemnation as set forth in Section 18(c) and any Casualty resulting in a termination of this Lease pursuant to Section 18(d). Tenant shall remove from the Leased Premises all Tenant’s Property and all other personal property which is owned by Tenant or third parties other than Landlord, and repair any damage caused by such removal and restore the Leased Premises to good condition suitable for use of each Location as a Permitted Facility by another Person (including, without limitation, restoration of floor slabs, ceiling, walls, columns and other structural elements of the Improvements or building systems affected by installation or removal of any Tenant’s Property). Those items of Tenant’s Property and other personal property not so removed prior to the expiration of this Lease or thirty (30) days after an earlier termination shall be considered abandoned and shall become the sole and exclusive property of Landlord. Landlord may thereafter cause such property to be removed from the Leased Premises. The cost of removing and disposing of such property and repairing any damage to any of the Leased Premises caused by such removal shall be paid by Tenant to Landlord upon demand. Landlord shall not in any manner or to any extent be obligated to reimburse Tenant for any property which becomes the property of Landlord pursuant to this Section 31. This Section 31 shall survive the expiration or earlier termination of this Lease.

32.Holdover. If Tenant remains in possession of the Leased Premises, any Location, or any part thereof, after the expiration of the term without the prior written consent of Landlord (which consent Landlord may withhold, condition or delay in its sole discretion), Tenant, at Landlord’s option and within Landlord’s sole discretion, may be deemed a tenant on a month-to-month basis and shall comply with all the terms of this Lease and continue to pay rentals and other sums in the amounts herein provided, except that the Base Rent shall be automatically 125% of Base Rent; provided that nothing herein nor the acceptance of rent by Landlord shall be deemed a consent to such holding over. Tenant shall defend, indemnify, protect and hold the Indemnified Parties, harmless for, from and against any and all Losses resulting from Tenant’s failure to surrender possession upon the expiration of the Term, including,

without limitation, any claims made by any succeeding lessee. This Section 32 shall survive expiration, termination or rejection in bankruptcy of the Lease.

33.No Merger of Title. There will be no merger of this Lease nor of the leasehold estate created by this Lease with the fee estate in or ownership of any of the Leased Premises by reason of the fact that the same Person may acquire or hold or own, directly or indirectly, (a) this Lease or the leasehold estate created by this Lease or any interest in this Lease or in such leasehold estate and (b) the fee estate or ownership of any of the Leased Premises or any interest in such fee estate or ownership. No such merger will occur unless and until all persons and entities having any interest in (i) this Lease or the leasehold estate created by this Lease and (ii) the fee estate in or ownership of the Leased Premises including, without limitation, Lender’s interest therein, or any part thereof sought to be merged have joined in a written instrument effecting such merger and have duly recorded the same.

34.Non-Recourse to Landlord.

(a)Notwithstanding anything contained in this Lease to the contrary, Tenant agrees that the liability of the Landlord under this Lease and all matters pertaining to or arising out of the tenancy and the use and occupancy of the Leased Premises, or any portion thereof, shall be limited to Landlord’s interest in the Leased Premises and any proceeds thereof resulting from any Casualty or Condemnation, and in no event shall Tenant make any claim against or seek to impose any personal liability upon any individual, corporate officer, general or limited partner of any partnership, member or manager of any limited liability company, or principal of any firm or corporation that may now or hereafter become the Landlord.

(b)Landlord shall have no liability for consequential damages resulting from, nor may Tenant terminate this Lease as a result of, Landlord’s failure to give consent, approval or instruction reserved to Landlord. Tenant’s sole remedies in any such event shall be an action for injunctive relief or, in the alternative, an action to recover actual compensatory damages in the event that Landlord unreasonably withholds its consent or approval in cases where such Landlord is not permitted to withhold its approval in its sole and absolute discretion.

35.Financing. If Landlord desires to obtain a Loan, Tenant shall, upon request of Landlord, supply any such Lender with such notices and information as Tenant is required to give to Landlord hereunder.

36.Intentionally Deleted

37.Subordination of Lease. This Lease, any memorandum of this Lease and Tenant’s interest hereunder shall be subject and subordinate to any Mortgage or other security instrument presently recorded or hereafter placed upon the Leased Premises by Landlord, and to any and all advances made or to be made thereunder, to the interest thereon, and all renewals, replacements and extensions thereof; provided, however, that such subordination shall not be effective unless and until Landlord shall cause any such Mortgage or other security instrument (or a separate contemporaneous or subsequent instrument in recordable form duly executed by Lender and delivered to Tenant) to include commercially reasonable subordination, non-disturbance and attornment provisions (“SNDA Provisions”), which Tenant will execute and deliver, without cost to Landlord or Lender. Such SNDA Provisions shall provide, among other matters, that if any foreclosure proceedings are initiated by Lender or any other party or a deed in lieu is granted, such Lender or other party (on its own behalf and on behalf of any or purchaser at a foreclosure sale), grantee of a deed in lieu, or other successor to Landlord shall agree to accept this Lease and not disturb Tenant’s occupancy or other rights under this Lease, so long as no Event of Default exists and is continuing, and Tenant shall agree, upon written request of any such holder or any purchaser at foreclosure sale, to attorn and pay Rent to such party and to execute and deliver any instruments reasonably necessary or appropriate to evidence or effectuate such attornment. The SNDA Provisions shall also include such other commercially reasonable provisions requested by Lender. However, in the event of attornment, Lender shall not be: (a) liable for any obligations, offsets, defenses or claims accruing prior to Lender becoming landlord under this Lease pursuant to such attornment; (b) bound by any payment of Base Rent, Additional Rent or other payments, made by Tenant under this Lease for more than one (1) month in advance; (c) bound by any material amendment, modification, assignment, subletting or other Transfer of the Lease (other than a Permitted Transfer), made without the prior written consent of Lender; or (d) liable for any deposit, reserve or escrow

that Tenant may have given to Landlord which has not been transferred to Lender. Any Mortgage executed contemporaneously with this Lease shall be recorded after the recording of the Memorandum of Lease described in Section 40.

38.Subordination of Landlord’s Lien. If any lender or other person holding a lien or security interest in any or all of Tenant’s Property (each, a “Tenant Lender”) requests an access or occupancy agreement or the subordination of a “landlord lien” or any other right, title or interest Landlord may have in any of Tenant’s Property (“Landlord Agreement”), Landlord shall execute and deliver any such Landlord Agreement that is commercially reasonable in form and substance and otherwise reasonably acceptable to Landlord, and such Landlord Agreement must provide that: (a) any right of entry or occupancy by Tenant Lender after early termination of the Lease shall be for a period not to exceed sixty (60) days, provided Tenant Lender agrees to pay Base Rent and Additional Rent and complies with the terms and conditions of this Lease during such period; (b) nothing contained in this Lease, the Landlord Agreement or any loan document with Tenant shall in any way encumber or otherwise affect Landlord’s fee simple interest in and to the Leased Premises, and that none of Tenant Lender’s collateral shall include the Land or Improvements or any other real property interests owned by Landlord with respect to the Leased Premises; (c) Tenant Lender shall restore the Leased Premises to the condition in which it existed prior to Tenant Lender’s entry on the Leased Premises; (d) nothing contained in the Landlord Agreement shall in any way be deemed or construed to amend, modify or alter any of the rights or obligations of Tenant and Landlord under this Lease, as between one another, and that this Lease shall continue unaltered and in full force and effect, as between Tenant and Landlord; (e) nothing in the Landlord Agreement shall be deemed or construed to constitute or effect a release or discharge of any of the obligations of Tenant under this Lease or any other documents executed in connection with this Lease; (f) Landlord’s execution of the Landlord Agreement shall not be deemed or construed to constitute any representation or any type of joinder with any of the representations, warranties and agreements of Tenant in the loan agreements with Tenant Lender or any type of acknowledgment or representation that any such representations and warranties are true, correct or complete; (g) any Tenant’s Property shall be deemed abandoned by Tenant Lender to the extent remaining on the Leased Properties after the later of: expiration of the Term, or sixty (60) days after the earlier termination of the Lease, or Tenant Lender’s 60-day period of occupancy pursuant to this Section 38; and (h) the terms and conditions of the Landlord Agreement being otherwise commercially reasonable in Landlord’s determination.

39.Bankruptcy. As a material inducement to Landlord executing this Lease, Tenant acknowledges and agrees that Landlord is relying upon (i) the financial condition and specific operating experience of Tenant and Tenant’s obligation to use the Leased Premises specifically in accordance with the terms of this Lease, (ii) Tenant’s timely performance of all of its obligations under this Lease notwithstanding the entry of an order for relief under Title 11 of the U.S. Code of Federal Regulations (the “Bankruptcy Code”) for Tenant and (iii) all defaults under this Lease being cured promptly and this Lease being assumed within sixty (60) days of any order for relief entered under the Bankruptcy Code for Tenant, or this Lease being rejected within such sixty (60) day period and the Leased Premises surrendered to Landlord. Accordingly, in consideration of the mutual covenants contained in this Lease and for other good and valuable consideration, Tenant hereby agrees that:

(a)All obligations that accrue or become due under this Lease (including the obligation to pay rent), from and after the date that an action under the Bankruptcy Code is commenced (an “Action”) shall be timely performed exactly as provided in this Lease and any failure to so perform shall be harmful and prejudicial to Landlord.

(b)Any and all obligations under this Lease that accrue or become due from and after the date that an Action is commenced and that are not paid as required by this Lease shall, in the amount of such rents, constitute administrative expense claims allowable under the Bankruptcy Code with priority of payment at least equal to that of any other actual and necessary expenses incurred after the commencement of the Action.

(c)Any extension of the time period within which Tenant may assume or reject this Lease without an obligation to cause all obligations accruing or coming due under this Lease from and after the date that an Action is commenced to be performed as and when required under this Lease shall be harmful and prejudicial to Landlord

(d)Any time period designated as the period within which Tenant must cure all defaults and compensate Landlord for all pecuniary losses which extends beyond the date of assumption of this Lease shall be harmful and prejudicial to Landlord.

(e)Any assignment of this Lease in any Action must result in all terms and conditions of this Lease being assumed by the assignee without alteration or amendment, and any assignment which results in an amendment or alteration of the terms and conditions of this Lease without the express written consent of Landlord shall be harmful and prejudicial to Landlord.

(f)Any proposed assignment of this Lease in any Action to an assignee that does not possess financial condition, operating performance and experience characteristics capable of assuming and performing under this Lease shall be harmful and prejudicial to Landlord.

(g)The rejection (or deemed rejection) of this Lease for any reason whatsoever shall constitute cause for immediate relief from the automatic stay provisions of the Bankruptcy Code, and Tenant stipulates that such automatic stay shall be lifted immediately and possession of the Leased Premises will be delivered to Landlord immediately without the necessity of any further action by Landlord.

(h)No provision of this Lease shall be deemed a waiver of Landlord’s rights or remedies under the Bankruptcy Code or applicable law to oppose any assumption and/or assignment of this Lease, to require timely performance of Tenant’s obligations under this Lease, or to regain possession of the Leased Premises as a result of the failure of Tenant to comply with the terms and conditions of this Lease or the Bankruptcy Code.

(i)Notwithstanding anything in this Lease to the contrary, all amounts payable by Tenant to or on behalf of Landlord under this Lease, whether or not expressly denominated as such, shall constitute “rent” for the purposes of the Bankruptcy Code.

(j)For purposes of this Section 39 addressing the rights and obligations of Landlord and Tenant in the event that an Action is commenced, the term “Tenant” shall include Tenant’s successor in bankruptcy, whether a trustee, Tenant as debtor in possession or other responsible person.

40.Memorandum of Lease. Tenant shall (subject to Landlord’s prior review and execution) execute, deliver and record, file or register, at Tenant’s cost, all such instruments as may be required or permitted by any present or future Law in order to evidence the respective interests of Landlord and Tenant in the Leased Premises, and shall, at Tenant’s cost, cause a memorandum of this Lease, and any supplement hereto or thereto, to be recorded in such manner and in such places as may be required or permitted by any present or future law in order to protect the validity and priority of this Lease.

41.Tenant Representations and Warranties. As a material inducement to Landlord executing this Lease, Tenant warrants and represents as of the date hereof to Landlord as follows:

(a)Tenant is duly organized or formed, validly existing and in good standing under the laws of its state of incorporation or formation. Tenant is qualified as a corporation, partnership or limited liability company, as applicable, to do business in each state where the Leased Premises is located, and Tenant is qualified as a foreign corporation, partnership or limited liability company, as applicable, to do business in any other jurisdiction where the failure to be qualified would reasonably be expected to result in a material adverse effect upon any Location or Tenant’s ability to perform and discharge its obligations under this Lease. All necessary action has been taken to authorize the execution, delivery and performance by Tenant of this Lease and of the other documents, instruments and agreements provided for herein. Tenant is not a “foreign corporation”, “foreign partnership”, “foreign trust”, “foreign limited liability company” or “foreign estate”, as those terms are defined in the Internal Revenue Code and the regulations promulgated thereunder. The person(s) who have executed this Lease on behalf of Tenant are duly authorized to do so. None of Tenant, any Affiliate of Tenant, nor any Person owning directly or indirectly any interest in Tenant or any Affiliate of Tenant, is a Person whose property or interests are subject to being blocked under any of the OFAC Laws

and Regulations or who is otherwise in violation of any of the OFAC Laws and Regulations; provided, however, the representation contained in this sentence shall not apply to any Person to the extent such Person’s interest is in or through a U.S. publicly traded entity.

(b)Upon execution by Tenant, this Lease shall constitute the legal, valid and binding obligation of Tenant, enforceable against Tenant in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, liquidation, reorganization and other laws affecting the rights of creditors generally and general principles of equity.

(c)There are no suits, actions, proceedings or investigations pending, or, to its knowledge, threatened against or involving Tenant or the Leased Premises before any arbitrator or Governmental Authority, except for such suits, actions, proceedings or investigations which, individually or in the aggregate, have not had, and would not reasonably be expected to result in, a material adverse effect upon the Leased Premises or Tenant’s ability to perform and discharge its obligations under this Lease.

(d)Tenant is not, and the authorization, execution, delivery and performance of this Lease and the documents, instruments and agreements provided for herein will not result in, any breach or default under any document, instrument or agreement to which Tenant or any Affiliate of Tenant is a party or by which Tenant or any Affiliate of Tenant, the Leased Premises or any of the property of Tenant or any Affiliate of Tenant is subject or bound, except for such breaches or defaults which, individually or in the aggregate, have not had, and would not reasonably be expected to result in, a material adverse effect upon the Leased Premises or Tenant’s ability to perform and discharge its obligations under this Lease. The authorization, execution, delivery and performance of this Lease and the documents, instruments and agreements provided for herein will not violate any applicable law, statute, regulation, rule, ordinance, code, rule or order. No Location is subject to any right of first refusal, right of first offer or option to purchase or lease granted to any third party. Tenant has not assigned, transferred, mortgaged, hypothecated or otherwise encumbered this Lease or any rights hereunder or interest herein.

(e)All required licenses and Permits, both governmental and private, to use and operate each Location as a Permitted Facility are in full force and effect, except for such licenses and Permits the failure of which to obtain has not had, and would not reasonably be expected to result in, a material adverse effect upon any Location or Tenant’s ability to perform and discharge its obligations under this Lease.

(f)Tenant has delivered or made available to Landlord certain financial statements and other information concerning the Tenant and Lease Guarantor in connection with this Lease (collectively, the “Financial Information”). The Financial Information is true, correct and complete in all material respects; there have been no amendments to the Financial Information since the date such Financial Information was prepared or delivered to Landlord. Tenant understands that Landlord is relying upon the Financial Information and Tenant agrees that such reliance is reasonable. All financial statements included in the Financial Information fairly present as of the date of such financial statements the financial condition of each Person to which they pertain. No change has occurred with respect to the financial condition of Tenant, Lease Guarantor and/or the Leased Premises as reflected in the Financial Information which has not been disclosed in writing to Landlord or has had, or could reasonably be expected to result in, a material adverse effect upon the Leased Premises or Tenant’s ability to perform and discharge its obligations under this Lease. Any such Financial Information shall not be disclosed to any third party or governmental entity without the prior written consent of Tenant, unless such disclosure is required by law; provided, however, that Landlord shall be permitted to disclose the Financial Information: (i) on a need-to-know basis to Landlord’s agents, employees, consultants, managers, investors, accountants, attorneys and contractors, to its potential lenders and subsequent purchasers, and to members of professional firms serving it or its potential lenders (each a “Landlord Receiving Party”) so long as each Landlord Receiving Party is advised to keep such Financial Information confidential in a manner consistent with this paragraph, and (ii) as may be necessary to comply with a court order or other applicable Legal Requirements. Notwithstanding the foregoing, the foregoing confidentiality obligation shall not apply to any such information that (1) is or becomes generally available to the public other than as a result of a breach of this Section 41(f); (2) is obtained by Landlord or any Landlord Receiving Party on a non-confidential basis from a third-party that, to such Person’s knowledge, was not legally or contractually restricted from disclosing such information; (3) was in

the possession of Landlord or Landlord Receiving Party prior to disclosing party’s disclosure hereunder; or (4) was or is independently developed by Landlord or a Landlord Receiving Party without using any such confidential information.

(g)The information set forth in the schedules attached hereto is true, correct and complete in all material respects.

42.State-Specific Provisions. The provisions and/or remedies which are set forth on Appendix 2 shall be deemed a part of and included within the terms and conditions of this Lease.

43.Right of First Offer. Provided that no Event of Default has occurred and is continuing, if Landlord shall desire to sell any Location to a Person that is not an Affiliate of Landlord, then Landlord shall first give Tenant the right to purchase such Location for a price and on terms and conditions determined by Landlord and set forth in a notice given to Tenant (the “Offer”). Tenant shall have thirty (30) days from receipt of the Offer within which to elect to purchase such Location on the precise terms and conditions of the Offer. If Tenant elects to so purchase such Location, Tenant shall give to Landlord written notice thereof (“Acceptance Notice”) and the closing shall be held within ninety (90) days after the date of the Acceptance Notice or such longer period of time as is set forth in the Offer, whereupon Landlord shall convey such Location to Tenant. At the closing, Landlord shall deliver to Tenant a special warranty deed (or local equivalent) sufficient to convey to Tenant fee simple title to such Location free and clear of all easements, rights-of-way, encumbrances, liens, covenants, conditions, restrictions, obligations and liabilities, except for any such matters in effect upon the acquisition of such Location by Landlord, such matters created, suffered or consented to in writing by Tenant or arising by reason of the failure of Tenant to have observed or performed any term, covenant or agreement of this Lease to be observed or performed by Tenant, and the lien of any taxes then affecting such Location; provided, that if the Offer contemplates that such Location is to be conveyed subject to any existing financing then such Location shall be conveyed subject to such financing unless Tenant elects to pay off such financing in accordance with the terms of the applicable loan documents. At the closing, the Lease shall be amended to thereafter remove such Location and reduce the Base Rent by an amount equal to the product of (i) the percentage of Base Rent allocated to such Location on Schedule 1, and (ii) the Base Rent in effect at the time of such amendment. If Tenant does not timely elect to purchase such Location, Landlord shall be free to sell such Location to any other person within twelve (12) months of Tenant’s rejection or deemed rejection without being required to comply again with the foregoing provisions of this Section, provided, that, if Landlord intends to sell such Location (i) after such twelve (12) month period, or (ii) within such twelve (12) month period at a price less than ninety percent (90%) of the price described in the Offer, Landlord shall give Tenant written notice, setting forth the applicable purchase price and terms and conditions, and Tenant shall have thirty (30) days to elect in writing to purchase such Location at such purchase price and on such terms and conditions. The right of first offer granted by this Section 43 with respect to any Location shall not survive the expiration or earlier termination of this Lease. Notwithstanding anything to the contrary herein, Tenant’s right of first offer shall not apply to (i) any transfer of any Location to an Affiliate of Landlord, (ii) any sale or conveyance of any Location in a foreclosure sale (or similar proceeding) of a Mortgage or to any conveyance in lieu of foreclosure of such Mortgage, or (iii) as part of a Portfolio Transaction (hereinafter defined). For the purposes of this Section 43, “Portfolio Transaction” means a sale of one or more Locations, together with one or more additional properties owned by Landlord or one of its Affiliates with an aggregate purchase price not less than $100,000,000.

44.Miscellaneous.

(a)The intention of the parties being to conform strictly to the usury laws now in force or hereafter in effect in the states in which the Leased Premises is located, whenever any provision herein provides for payment by Tenant to Landlord of interest at a rate in excess of the legal rate permitted to be charged, such rate herein provided to be paid will be deemed reduced to such legal rate.

(b)The section headings in this Lease are used only for convenience in finding the subject matters and are not part of this Lease or to be used in determining the intent of the parties or otherwise interpreting this Lease.

(c)As used in this Lease, the singular shall include the plural and any gender shall include all genders as the context requires and the following words and phrases shall have the following meanings: (i) “including” shall mean “including without limitation”; (ii) “provisions” shall mean “provisions, terms, agreements, covenants and/or conditions”; (iii) “lien” shall mean “lien, charge, encumbrance, title retention agreement, pledge, security interest, mortgage and/or deed of trust”; (iv) “obligation” shall mean “obligation, duty, agreement, liability, or covenant”; (v) “the Leased Premises” or “any of the Leased Premises” shall mean “the Leased Premises or any part thereof or interest therein”; (vi) “the Land” or “any of the Land” shall mean “the Land or any part thereof or interest therein”; (vii) “a Location” or “any Location” shall mean “any Location or any part thereof or interest therein”; (viii) “the Improvements” or “any of the Improvements” shall mean “the Improvements or any part thereof or interest therein”; and (ix) “Tenant’s Property” or “any of the Tenant’s Property” shall mean “the Tenant’s Property or any part thereof or interest therein.”

(d)Any act which Landlord is permitted to perform under this Lease may be performed at any time and from time to time by Landlord or any person or entity designated by Landlord. Each appointment of Landlord as attorney-in-fact for Tenant hereunder is irrevocable and coupled with an interest.

(e)Time is of the essence in this Lease and each and every provision hereof in which any date or time is specified.

(f)Landlord shall in no event be construed for any purpose to be a partner, joint venturer or associate of Tenant or of any subtenant, operator, concessionaire or licensee of Tenant with respect to any of the Leased Premises or otherwise in the conduct of their respective businesses.

(g)This Lease and any documents which may be executed by Tenant on or about the Commencement Date at Landlord’s request constitute the entire agreement between the parties and supersede all prior understandings and agreements, whether written or oral, between the parties hereto relating to the Leased Premises and the transactions provided for herein. Landlord and Tenant are business entities having substantial experience with the subject matter of this Lease and have each fully participated in the negotiation and drafting of this Lease. Accordingly, this Lease shall be construed without regard to the rule that ambiguities in a document are to be construed against the drafter.

(h)This Lease may be modified, amended, discharged or waived only by an agreement in writing signed by the party against whom enforcement of any such modification, amendment, discharge or waiver is sought.

(i)Subject to the terms and provisions of Section 21 hereof, the covenants of this Lease shall run with the land and bind Tenant, its successors and assigns and all present and subsequent encumbrances and subtenants of any of the Leased Premises, and shall inure to the benefit of Landlord, its successors and assigns. If there is more than one Tenant, the obligations of each shall be joint and several.

(j)If any one or more of the provisions contained in this Lease shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Lease, but this Lease shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

(k)For all issues which are specific to any Location, this Lease shall be governed by and construed and enforced in accordance with and subject to the laws of the state in which such Location is located, and for all issues which are not specific to any Location, the internal laws, without regard to conflicts of laws, of the State of New York shall govern.

(l)Except as otherwise expressly stated in this Lease, any consent or approval required to be obtained from Landlord may be granted by Landlord in its sole discretion.

(m)Landlord and Tenant each represents to the other that no broker has been involved in this Lease. Landlord and Tenant agree that if any claim for brokerage commissions are ever made against Landlord or

Tenant in connection with this Lease, all claims shall be handled and paid by the party whose actions or alleged commitments form the basis of such claim. The terms of this Section 43(m) shall survive expiration or earlier termination of this Lease.

(n)Tenant acknowledges that, in order for Landlord and/or Landlord’s affiliates to qualify as a “real estate investment trust” under the Code, certain requirements thereunder must be satisfied, and, upon demand by Landlord, Tenant agrees to reasonably cooperate with Landlord to ensure compliance with such Code requirements provided that Tenant shall not incur any unreasonable cost or obligation related to any such Landlord request.

(o)Lender will be deemed a third party beneficiary with respect to all provisions of this Lease that purport to confer benefits upon Lender or impose obligations upon Tenant or Landlord in order to protect the interests of Lender.

(p)The exhibits, schedules and appendices attached to this Lease are hereby incorporated by reference and made a part hereof.

(q)This Lease may be executed in one or more counterparts, each of which shall constitute an original, and all of which together shall constitute one and the same instrument.

(r)Tenant shall not be liable to Landlord for any punitive damages under this Lease; provided, however, that the foregoing shall not limit Landlord’s rights or Tenant’s obligations with respect to any indemnification provisions in this Lease.

45.Leasehold Mortgage. Provided no Event of Default (or fact or circumstance that with notice or the passage of time, or both, would become an Event of Default) shall have occurred and be continuing, Tenant may grant a leasehold mortgage to a Qualified Leasehold Mortgagee to secure, and be given as security for, Tenant’s senior credit facility (each a “Leasehold Mortgage”) provided that each Leasehold Mortgage satisfies all of the following conditions: (a) any Leasehold Mortgage shall, by its express terms, (i) not encumber Landlord's interest in any of the Leased Premises or, at any time, release, affect or reduce any of the obligations of Tenant under this Lease or impose additional obligations on Landlord under this Lease, (ii) be subordinate to any Mortgage, and (iii) the Qualified Leasehold Mortgagee may only assign Tenant’s interest in this Lease upon foreclosure thereof to a Person previously approved by Landlord in writing and having not less than five (5) years’ experience as an owner or operator of a Permitted Facility and otherwise in accordance with Section 21 of this Lease; (b) Tenant shall promptly reimburse Landlord for all reasonable out-of-pocket costs and expenses incurred by Landlord in connection with such Leasehold Mortgage or any related agreements; (c) Tenant shall deliver to Landlord a fully executed copy of the Leasehold Mortgage within ten (10) days after its execution thereof and immediately notify Landlord upon the occurrence of any material default thereunder; and (d) no more than one (1) Leasehold Mortgage with respect to any Location shall exist at any time. As used herein, a “Qualified Leasehold Mortgagee” means: (x) a commercial bank or other financial institution that (1) is actively engaged in commercial real estate or corporate financing with Persons other than Tenant, Lease Guarantor or any Affiliate, (2) has a net worth or capital surplus in excess of $1,000,000,000, and (3) is not an Affiliate of Tenant, Lease Guarantor, or any of their respective Affiliates; or (y) an administrative agent or collateral agent with the characteristics described in the preceding clause (x) serving as administrative agent or collateral agent for commercial banks, financial institutions and funds that regularly make or purchase commercial loans.

46.Force Majeure. In the event that Landlord or Tenant shall be delayed or hindered in or prevented from the performance of any act required hereunder (other than Tenant’s obligations to pay Rent hereunder or any other Monetary Obligation) by reason of strikes, lockouts, labor disputes, unavailability of materials or reasonable substitutes, failure of power, restrictive governmental laws, regulations, orders or decrees, riots, insurrection, war, acts of God, or other reason beyond such party’s reasonable control, then performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period of such delay, but in no event shall any the time for performance of any such required term, covenant or condition be extended by more than ninety (90) days in the aggregate. Notwithstanding the foregoing, lack of funds shall not be deemed to be a cause beyond the reasonable control of either party.

47.Attorney’s Fees. In a suit to enforce this Lease or any provision contained herein, the party prevailing in such suit shall be entitled to recover, in addition to all other remedies or damages allowed pursuant to this Lease, reasonable attorneys’ fees and court costs incurred in such suit and any appeal thereof. The terms of this Section 47 shall survive the expiration or the earlier termination of this Lease.

48.Signs. At Tenant’s sole cost and with Landlord’s prior written consent, Tenant may install, replace and relocate in and on the Leased Premises, such signs, awnings, lighting effects and fixtures as may be used from time to time by Tenant (collectively, “Signs”). Tenant shall, at its sole expense, maintain and repair all Signs in good condition and repair at all times during the Term. Upon the expiration or earlier termination of this Lease, Tenant at its sole cost and expense shall remove all Signs and restore any Improvements damaged as a result of such removal. At Tenant’s sole cost and without liability to Landlord, Landlord agrees to reasonably cooperate with Tenant (including signing applications upon Tenant’s written request) in obtaining any necessary permits, variances and consents for Signs. All Signs of Tenant shall comply with Legal Requirements, Permitted Encumbrances and Easement Agreements.

(SIGNATURE PAGES FOLLOW)

LANDLORD SIGNATURE PAGE

TO MASTER LEASE AGREEMENT

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

LANDLORD: BROADSTONE BEF PORTFOLIO, LLC

a New York limited liability company

_________________________ By: Broadstone Net Lease, LLC

Witness a New York limited liability company,

its sole member

_________________________ By: Broadstone Net Lease, Inc.

Witness a Maryland corporation,

its managing member

By: /s/ Christopher J. Czarnecki .

Name: Christopher J. Czarnecki .

Title: President .

State of New York )

County of Monroe )

On October ___, 2015, before me, ____________________________, personally appeared _____________________________, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature_________________________________ (SEAL)

TENANT SIGNATURE PAGE

TO MASTER LEASE AGREEMENT

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

TENANT:

BEF FOODS INC.,

a Ohio corporation

_____________________________ By:/s/ Mark. E. Hood

Witness

Name:Mark E. Hood

_____________________________ Title: Chief Financial Officer

Witness

State of ____________ )

County of __________ )

Signature_________________________________ (SEAL)

SCHEDULE 1

LIST OF LOCATIONS



Location No.	Location Address	City	State	Allocated Percentage of Base Rent
1	651 Commerce Parkway	Lima	Ohio	49%
2	1109 Industrial Drive East	Sulphur Springs	Texas	51%

Bob Evans Portfolio

Master Lease Agreement Schedule 1

SCHEDULE 2

BASE RENT SCHEDULE



Term	Lease Year	Annual Base Rent	Monthly Installment	Annual Rent Increase
Initial Term	1	$3,480,781.00	$290,065.08
Initial Term	2	$3,550,396.62	$295,866.39	2.00%
Initial Term	3	$3,621,404.55	$301,783.71	2.00%
Initial Term	4	$3,693,832.64	$307,819.39	2.00%
Initial Term	5	$3,767,709.30	$313,975.77	2.00%
Initial Term	6	$3,843,063.48	$320,255.29	2.00%
Initial Term	7	$3,919,924.75	$326,660.40	2.00%
Initial Term	8	$3,998,323.25	$333,193.60	2.00%
Initial Term	9	$4,078,289.71	$339,857.48	2.00%
Initial Term	10	$4,159,855.51	$346,654.63	2.00%
Initial Term	11	$4,243,052.62	$353,587.72	2.00%
Initial Term	12	$4,327,913.67	$360,659.47	2.00%
Initial Term	13	$4,414,471.94	$367,872.66	2.00%
Initial Term	14	$4,502,761.38	$375,230.12	2.00%
Initial Term	15	$4,592,816.61	$382,734.72	2.00%
Initial Term	16	$4,684,672.94	$390,389.41	2.00%
Initial Term	17	$4,778,366.40	$398,197.20	2.00%
Initial Term	18	$4,873,933.73	$406,161.14	2.00%
Initial Term	19	$4,971,412.40	$414,284.37	2.00%
Initial Term	20	$5,070,840.65	$422,570.05	2.00%
First Optional Term	21	See Section 5(b)
First Optional Term	22			2.00%
First Optional Term	23			2.00%
First Optional Term	24			2.00%
First Optional Term	25			2.00%
First Optional Term	26			2.00%
First Optional Term	27			2.00%
First Optional Term	28			2.00%
First Optional Term	29			2.00%
First Optional Term	30			2.00%
Second Optional Term	31			2.00%
Second Optional Term	32			2.00%
Second Optional Term	33			2.00%
Second Optional Term	34			2.00%
Second Optional Term	35			2.00%
Second Optional Term	36			2.00%
Second Optional Term	37			2.00%
Second Optional Term	38			2.00%
Second Optional Term	39			2.00%
Second Optional Term	40			2.00%

Bob Evans Portfolio

Master Lease Agreement Schedule 2

APPENDIX 1

DEFINITIONS

“Additional Rent” has the meaning defined in Section 6.

“Adjoining Property” means all sidewalks, curbs, gores and vault spaces adjoining any of the Leased Premises.

“Affiliate” of any Person means any other Person which directly or indirectly Controls, is Controlled by or is under common Control with the first Person.

“Affiliate Guarantor” means Bob Evans Farms, LLC, a Ohio limited liability company.

“Affiliate Guaranty” means that certain lease guaranty made by Affiliate Guarantor in favor of Landlord, dated as of the Commencement Date.

“Alteration” or “Alterations” means any or all changes, additions, improvements, reconstructions or replacements of any of the Improvements, both interior or exterior, structural and non-structural, and ordinary and extraordinary.

“Base Rent” means the annual minimum base rent to be paid by Tenant to Landlord for the Leased Premises, as adjusted pursuant to Section 5.

“Buildings” means, collectively, the buildings located on the respective Locations.

“Building Systems” means the mechanical, electrical, plumbing, sanitary, sprinkler, heating, ventilation and air conditioning, security, life-safety, building management, elevator and other service systems or facilities of the Buildings.

“Casualty” means any loss of or damage to any property (including the Leased Premises) included within or related to the Leased Premises.

“Change of Control” means any of the following as applied to any Person: (i) fifty percent (50%) or more of the direct or indirect equity interests in such Person change ownership; (ii) fifty percent (50%) or more of the direct or indirect equity interests in such Person are pledged, mortgaged, hypothecated or otherwise encumbered except as required as security under the senior credit facility of Parent Guarantor, along with all of the other assets of Parent Guarantor and its consolidated Subsidiaries, but only for so long as Tenant remains a wholly owned Subsidiary of Affiliate Guarantor and remains under the Control of Parent Guarantor; or (iii) a change in the Person(s) that ultimately exert Control over the first Person.

“Code” the Internal Revenue Code of 1986, as amended.

“Commencement Date” means the date of this Lease.

“Condemnation” means a Taking or a Requisition, or both.

“Consent Required Alteration” has the meaning defined in Section 13.

“Consolidated EBITDA” has the meaning defined in Section 21(g).

“Control”, together with the correlative terms “Controlled” and “Controls” means, as applied to any Person, the possession, directly or indirectly, of the power to direct the management and policies of that Person, whether through ownership, voting control, by contract or otherwise.

“Costs” means all reasonable costs and expenses incurred by a Person or associated with a certain matter or transaction, including without limitation, reasonable attorneys’ fees and expenses, expert fees and expenses and court costs. For

all purposes of this Lease, “attorneys’ fees and expenses” and similar statements include those incurred out of court, at trial, on appeal or in any bankruptcy proceeding.

“Credit Entity” has the meaning defined in Section 21(g).

“Default Rate” means an annual interest rate equal to the Prime Rate plus five (5) percentage points, but in no event greater than the maximum interest rate permitted by Legal Requirements.

“Disposition”, together with the correlative terms “Dispose” and “Disposing” means, with respect to any Person, any conveyance, sale, transfer, assignment, lease, abandonment or other disposition, voluntarily or involuntarily, of any property or assets (tangible and intangible) held by such Person and/or its Subsidiaries.

“Easement Agreement” means any conditions, covenants, restrictions, easements, declarations (including but not limited to condominium declarations), licenses and other agreements listed as Permitted Encumbrances or as may hereafter benefit, burden or otherwise affect any Location. The following are deemed excluded from the definition of “Easement Agreement”: (i) any Easement Agreement entered into by Landlord after the Commencement Date in violation of this Lease and not consented to or requested by Tenant; and (ii) any Mortgage.

“Environmental Law(s)” means all federal, state and local laws, common laws, equitable doctrine, rules, regulations, statutes, codes, ordinances, directives, guidance documents, cleanup or other standards, and any other governmental requirements or standards currently in existence or hereafter enacted or rendered which pertain to, regulate, or impose liability or standards of conduct concerning the use, storage, human exposure to, handling, transportation, release, cleanup or disposal of Hazardous Substances. The term Environmental Law includes, without limitation, the federal Comprehensive Environmental Response Compensation and Liability Act of 1980 (“CERCLA”), the Superfund Amendments and Reauthorization Act, the federal Water Pollution Control Act, the federal Clean Air Act, the federal Clean Water Act, the federal Resources Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments to RCRA), the federal Solid Waste Disposal Act, the federal Toxic Substance Control Act, the federal Insecticide, Fungicide and Rodenticide Act, the federal Occupational Safety and Health Act of 1970, the federal National Environmental Policy Act and the federal Hazardous Materials Transportation Act, each as amended and as now or hereafter in effect and any similar state or local Law.

“Environmental Media” means soil, fill material, or other geologic materials at all depths, groundwater at all depths, surface water including storm water and sewerage, indoor and outdoor air, and all living organisms, including without limitation all animals and plants, whether such Environmental Media are located on or off the Leased Premises.

“Environmental Violation” means any violation of or noncompliance with any Environmental Law by any Location or any activity or condition pertaining to any Location, regardless as to whether any Hazardous Substance associated therewith was present in, on, under or about the Location prior to the Commencement Date or was caused by Tenant or any other Person.

“Event of Default” has the meaning defined in Section 23(a).

“Exterior Areas” means the paved areas, parking areas, driveways, concrete walkways, service areas, loading docks, landscaped areas, and other areas of the Leased Premises outside the interior of the Buildings.

“Fair Market Base Rent” has the meaning defined in Appendix 3 attached hereto.

“GAAP” means generally accepted accounting principles consistently applied in the United States.

“Governmental Authority” means any governmental authority, agency, department, commission, bureau, board, instrumentality, court or quasi-governmental authority having jurisdiction or supervisory or regulatory authority over the Leased Premises, Tenant or Lease Guarantor.

“Hazardous Condition” means any environmental condition in, on, under or about any Location that could reasonably be expected to form the basis of any claim or liability under any Environmental Law, regardless as to whether the condition existed prior to the Commencement Date or was caused by Tenant or any other Person.

“Hazardous Substance(s)” means: (i) any substance, material, product, petroleum, petroleum product, derivative, compound or mixture, mineral (including asbestos), chemical, gas, medical waste, or other pollutant, in each case whether naturally occurring, man-made or the by-product of any process, that is toxic, harmful or hazardous or acutely hazardous to the environment or public health or safety; (ii) those materials included within the definitions of “hazardous substances,” “extremely hazardous substances,” “hazardous materials,” “toxic substances,” “toxic pollutants,” “hazardous air pollutants,” “toxic air contaminants,” “solid waste,” “hazardous waste,” “pollutants,” “contaminants” or similar categories under any Environmental Laws; or (iii) any substance supporting a claim under any Environmental Law, whether or not defined as hazardous as such under any Environmental Law. Hazardous Substances include, without limitation, any toxic or hazardous waste, pollutant, contaminant, industrial waste, petroleum or petroleum-derived substances or waste, radon, radioactive materials, asbestos, asbestos containing materials, urea formaldehyde foam insulation, lead and polychlorinated biphenyls.

“Impositions” means all taxes, including without limitation, Real Estate Taxes, ad valorem, personal property, franchise, margin, sales, gross receipt, and rent taxes, all charges, fees, assessments and expenses in connection with any easement or agreement maintained for the benefit of any of the Leased Premises (including any Easement Agreement or Permitted Encumbrance), all general and special assessments, levies, Permit fees, inspection and license fees, all condominium assessments (including but not limited to annual assessments, individual assessments, special assessments, and capital assessments) all utility charges and all other public charges and taxes whether of a like or different nature, even if unforeseen or extraordinary, imposed upon or assessed, prior to or during the term, against Landlord, Tenant or any of the Leased Premises as a result of or arising in respect of the ownership, occupancy, leasing, use, maintenance, operation, management, repair or possession of any of the Leased Premises, or any activity conducted on any of the Leased Premises, or the Base Rent or Additional Rent, including without limitation, any sales tax, use tax or occupancy tax or excises, levies or fees charged or imposed by any Governmental Authority on or with respect to such Base Rent or Additional Rent.; provided, however, that in no event shall “Impositions” include: (i) any estate, inheritance, succession, gift or similar tax imposed on Landlord; (ii) any net income taxes imposed on Landlord or its affiliates (i.e., taxes which are determined taking into account deductions for depreciation, interest, taxes and ordinary and necessary business expenses) or corporate franchise taxes imposed on Landlord (unless imposed in lieu of other taxes that would otherwise be the obligation of Tenant under this Lease, such as, without limitation, any “gross receipts tax” or any similar tax based upon gross income or receipts of Landlord which does not take into account deductions for depreciation, interest, taxes and ordinary and necessary business expenses); or (iii) any capital gains tax imposed on Landlord in connection with the sale, exchange or other disposition, in whole or in part, of the Leased Premises or Landlord’s interest therein to any Person (collectively the “Tax Exclusions”).

“Improvements” means all of the Buildings, structures, fixtures, machinery, apparatus, equipment, fittings, appliances, paving, curbing, and other improvements and landscaping of every kind and nature presently situated on, in, or under, or hereafter erected, affixed, attached, or installed in, on, or about the Land, including, but not limited to, all gas and electric fixtures, appliances and wiring, lighting, engines, boilers, burners, blowers, coils, steam lines, compressors, elevators, escalators, incinerators, motors, dynamos, heating and air conditioning equipment, doors, windows, sinks, water closets, basins, pipes, platforms, stairwells, fences, lavatory facilities, electrical systems, faucets, fire prevention and extinguishing apparatus, central music and public address systems, burglar alarms, security systems and equipment, shades, awnings, screens, blinds, installed carpeting, spare parts, materials and supplies for the ownership, use, operation, maintenance and repair of the Land, together with all additions thereto, substitutions therefor and replacements thereof required or permitted by this Lease, but excluding, in all events, all Tenant’s Property.

“Indemnified Party” or “Indemnified Parties” means Landlord and Landlord’s directors, officers, shareholders, partners, members, employees, agents, servants, representatives, lenders, contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns of any and all of the foregoing, including, but not limited to, any successors by merger, consolidation or acquisition of all or a substantial portion of Landlord’s assets and business.

“Initial Term” has the meaning defined in Section 4.

“Insurance Premium Reserve” has the meaning defined in Section 17(g).

“Insurance Requirements” means the terms of each insurance policy required to be carried by Tenant under this Lease and the requirements of the issuer of such policy.

“Land” means those parcels of land legally described in Exhibit A and commonly known by the street addresses listed on Schedule 1, together with all of Landlord’s right, title and interest, if any, in and to all easements, rights-of-way, appurtenances and other rights, privileges and benefits associated with any and all such parcels of land and to all public or private streets, roads, avenues, alleys or pass ways, open or proposed, on or abutting any and all such parcels of land.

“Landlord Agreement” has the meaning defined in Section 38.

“Law” or “Laws” means any constitution, statute, rule of law, code, ordinance, order, judgment, decree, injunction, rule, regulation, requirement or administrative or judicial determination, even if unforeseen or extraordinary, of every duly constituted Governmental Authority, court or agency, now or hereafter enacted or in effect.

“Lease” means this Lease Agreement, as it may be supplemented and amended.

“Lease Guarantor” means, individually and collectively, Parent Guarantor and Affiliate Guarantor.

“Lease Guaranty” means, individually and collectively, the Parent Guaranty and the Affiliate Guaranty.

“Leasehold Mortgage” has the meaning defined in Section 45.

“Lease Year” means the twelve (12) month period starting on the first day of the first month following the Commencement Date and each succeeding twelve (12) month period during the Term. The first Lease Year may consist of more than twelve (12) months as the first Lease Year shall also include the period from the Commencement Date through the last day of the month in which the Commencement Date occurs.

“Leased Premises” means the Land and the Improvements.

“Legal Requirement” or “Legal Requirements” means the requirements of all present and future Laws (including but not limited to Environmental Laws, zoning and land use Laws and Laws relating to accessibility to, usability by, and discrimination against, disabled individuals) and all Easement Agreements, which may be applicable to Tenant or to any of the Leased Premises, or to the use, manner of use, occupancy, possession, operation, maintenance, alteration, repair or restoration of any of the Leased Premises, even if compliance therewith necessitates structural changes or improvements, results in interference with the use or enjoyment of any of the Leased Premises, or requires Tenant to carry insurance other than as required by the provisions of this Lease.

“Lender” means any person or entity (and their respective successors and assigns) which may, after or contemporaneously with the date hereof, make a Loan to Landlord.

“Loan” means any loan made by one or more Lenders to Landlord and secured by a note and Mortgage.

“Location” means one and “Locations” means both of those two (2) individual real property locations comprising the Leased Premises, including, where the context requires, the Land and the Improvements. The street addresses for the Locations are listed on Schedule 1.

“Loss” or “Losses” means any and all claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations, debts, damages (including consequential and punitive), losses, costs, expenses, diminutions in value, fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in settlement and damages of whatever kind or nature (including, without limitation, reasonable attorneys’ fees, court costs and other costs of defense.

“Material Impact” means any material adverse impact on (i) the validity or enforceability of this Lease, (ii) the rights and remedies of Landlord under this Lease; (iii) the ability of Tenant to perform its obligations under this Lease; or (iv) the continued operation of each Location as a Permitted Facility.

“Monetary Obligations” means Rent and all other sums payable by Tenant under this Lease to Landlord, to any third party on behalf of Landlord or to any Indemnified Party.

“Mortgage” means any mortgage, deed of trust or similar security instrument now or hereafter executed from Landlord to a Lender which encumbers the Landlord’s fee interest in any of the Leased Premises and secures Landlord’s obligation to repay a Loan, as the same may be amended, supplemented or modified.

“Net Award” means: (i) the entire award payable to Landlord or Lender by reason of a Condemnation whether pursuant to a judgment or by agreement or otherwise; or (ii) the entire proceeds of any insurance required under clauses (i), (ii), (iii), and (vii) of Section 17(a), as the case may be, less any expenses incurred by Landlord and Lender in collecting such award or proceeds and (so long as no Event of Default exists) less any expenses incurred by Tenant at the express direction of Landlord in collecting such award or proceeds.

“New Line Work” means the Alterations described on Appendix 4 attached hereto.

“OFAC Laws and Regulations” means Executive Order 13224 issued by the President of the United States of America, the Terrorism Sanctions Regulations (Title 31 Part 595 of the U.S. Code of Federal Regulations), the Terrorism List Governments Sanctions Regulations (Title 31 Part 596 of the U.S. Code of Federal Regulations), the Foreign Terrorist Organizations Sanctions Regulations (Title 31 Part 597 of the U.S. Code of Federal Regulations), and the Cuban Assets Control Regulations (Title 31 Part 515 of the U.S. Code of Federal Regulations), and all other present and future federal, state and local laws, ordinances, regulations, policies, lists (including, without limitation, the Specially Designated Nationals and Blocked Persons List) and any other requirements of any Governmental Authority (including, without limitation, the United States Department of the Treasury Office of Foreign Assets Control) addressing, relating to, or attempting to eliminate, terrorist acts and acts of war, each as hereafter supplemented, amended or modified from time to time, and the present and future rules, regulations and guidance documents promulgated under any of the foregoing, or under similar laws, ordinances, regulations, policies or requirements of other states or localities.

“Optional Term” and “Optional Terms” have the meanings defined in Section 4.

“Parent Guarantor” means Bob Evans Farms, Inc., a Delaware corporation.

“Parent Guaranty” means that certain lease guaranty made by Parent Guarantor in favor of Landlord, dated as of the Commencement Date.

“Permits” means all permits, licenses, contracts, filings, authorizations and approvals required by Legal Requirements applicable to the Leased Premises or entered into with, or obtained from, any Governmental Authority with regard to the Leased Premises, including, without limitation, all conditional use permits, licenses, building permits, zoning and land use permits and entitlements, and environmental permits and authorizations.

“Permitted Encumbrances” means (i) those covenants, restrictions, reservations, condominium declarations, liens, conditions and easements, encumbrances and all other matters of record as of the Commencement Date; and (ii) all liens for unpaid Real Estate Taxes and assessment not yet due and payable.

“Permitted Facility” means, as to each Location, a food processing plant, and the uses incidental thereto such as parking, ingress and egress, and other uses approved in advance by Landlord in writing, which approval shall not be unreasonably withheld; provided, however, the term “Permitted Facility” shall not include any use that (i) is prohibited by the certificate of occupancy pertaining to a particular Location or other Legal Requirements applicable to such Location; (ii) is prohibited by any Easement Agreement; or (iii) that would result in a material diminution in the value of any Location.

“Permitted Transfer” has the meaning defined in Section 21(g).

“Permitted Violations” has the meaning defined in Section 9.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust (including a business trust), non-incorporated organization or government or any agency or political subdivision thereof or any other entity.

“Present Value” means such amount discounted by a rate per annum which is the lower of: (i) the Prime Rate at the time such present value is determined; or (ii) eight percent (8%) per annum.

“Prime Rate” means the annual interest rate as published, from time to time, in the Wall Street Journal as the “Prime Rate” in its column entitled “Money Rate.” The Prime Rate may not be the lowest rate of interest charged by any “large U.S. money center commercial banks” and Landlord makes no representations or warranties to that effect. In the event the Wall Street Journal ceases publication or ceases to publish the “Prime Rate” as described above, the Prime Rate shall be the average per annum discount rate on ninety-one (91) day bills issued from time to time by the United States Treasury at its most recent auction, plus three hundred (300) basis points. If no 91-day bills are then being issued, the discount rate shall be the discount rate on treasury bills then being issued for the period of time closest to ninety-one (91) days.

“Real Estate Taxes” means all taxes and general and special assessments and other impositions in lieu thereof, as a supplement thereto and any other tax which is measured by the value of land and assessed on a uniform basis against the owners of land, including any substitution in whole or in part therefor due to a future change in the method of taxation, in each case assessed against, or allocable or attributable to, the Leased Premises and accruing during or prior to the Term, but excluding, in all events, the Tax Exclusions.

“Related Lease” means any lease of any other property entered into between Landlord (or an Affiliate of Landlord) and Tenant (or an Affiliate of Tenant), but only for so long as Landlord (or an Affiliate of Landlord) is the landlord pursuant to such other lease.

“Release” means any active, passive or threatened spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, migrating, leaching, dumping or disposing (including breakdown or degradation products) of any Hazardous Substance onto, into, across, from or beneath any Environmental Media, whether in a liquid, vapor or solid form, whether emanating from or to any of the Leased Premises.

“Remedial Action” means any investigation, work plan preparation removal, repair, cleanup, abatement, remediation, monitored natural attenuation, natural resource damage assessment and restoration, closure, post-closure, detoxification or remedial activity of any kind whatsoever necessary to address any Release, any Environmental Violation and/or any Hazardous Condition.

“Rent” means, collectively, Base Rent and Additional Rent.

“Requisition” means any temporary requisition or confiscation of the use or occupancy of any of the Leased Premises by any Governmental Authority, civil or military, whether pursuant to an agreement with such Governmental Authority in settlement of or under threat of any such requisition or confiscation, or otherwise.

“Structural Elements” means the structural foundation, roof and load-bearing walls of any Building and comparable structural elements of the service areas and loading docks located in the Exterior Areas.

“Structural Alteration” means any Alteration (or series of related Alterations) involving: (a) the Structural Elements; (b) the Building Systems if a Permit is required in connection therewith; or (c) any hardscaped portion of the Leased Premises outside of the interior of the Buildings if any Permit is required in connection therewith.

“Subsidiary” as to any Person, any corporation, partnership, limited liability company, joint venture, trust or estate of or in which more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class of such corporation may have voting power upon the happening of a contingency), (b) the interest in the capital or profits of such partnership, limited liability company, or joint venture or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or Controlled through one or more intermediaries, or both, by such Person.

“Surviving Obligations” means any obligations of Tenant under this Lease, actual or contingent, which arise on or prior to the expiration or prior termination of this Lease or rejection in bankruptcy, which survive such expiration, termination or rejection by their own express terms.

“Taking” means any taking or damaging of all or a portion of any Location: (i) in or by condemnation or other eminent domain proceedings pursuant to any Law, general or special, or (ii) by reason of any agreement with any condemnor in settlement of or under threat of any such condemnation or other eminent domain proceeding, or (iii) by any other means. The Taking shall be considered to have taken place as of the later of the date actual physical possession is taken by the condemnor, or the date on which the right to compensation and damages accrues under applicable Law.

“Tenant” has the meaning set forth in the opening preamble, together with any and all permitted successors and assigns of the Tenant originally named herein.

“Tenant Lender” has the meaning defined in Section 38.

“Tenant’s Property” means, collectively, any trade fixtures, machinery, equipment, furniture, furnishings, inventory and other personal property used in Tenant’s business. “Tenant’s Property” expressly excludes all Building Systems.

“Term” means and includes the Initial Term, any validly exercised Optional Term, and any other extension of this Lease pursuant to its terms.

“Transfer” means any of the following whether effectuated directly or indirectly, through one or more transactions, voluntarily or by operation of Law: (i) Disposing, pledging, mortgaging, hypothecating or otherwise encumbering or transferring all or any part of this Lease or Tenant’s leasehold estate hereunder, (ii) subletting of all or any part of the Leased Premises or any Location; (iii) merging or consolidating Tenant with any other Person; (iv) Disposing of a material portion of the assets of Tenant; (v) Disposing, pledging, hypothecating or otherwise encumbering or transferring of any stock, partnership, membership or other interests (whether equity or otherwise) in Tenant or any Person that Controls Tenant, if the same results, directly or indirectly, in a Change of Control of Tenant (or of such controlling Person); (vi) dissolving of Tenant or any Person that Controls Tenant (vii) doing or permitting any transaction that is reasonably likely to result in a Material Impact; or (viii) entering into or permitting to be entered into any agreement or arrangement to do any of the foregoing or granting any option or other right to any Person to do any of the foregoing, other than to Landlord under this Lease.

“Transfer Notice” has the meaning defined in Section 21.

“Uniform Commercial Code” means the Uniform Commercial Code as now or hereafter in effect in the state(s) where the Leased Premises is located, but only to the extent applicable to a given Location; provided that, in the event that, by reason of mandatory provisions of Law, any or all of the attachment, perfection or priority of; or remedies with respect to, the Landlord’s security interest in any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than such state, the term “Uniform Commercial Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

“Wage and Labor Dispute” has the meaning defined in Section 21(g).

[END OF APPENDIX 1]

Exhibit 10.8

BOB EVANS FARMS, INC.

AMENDED AND RESTATED 2010 EQUITY AND CASH INCENTIVE PLAN

RESTRICTED STOCK UNIT AND DIVIDEND EQUIVALENT RIGHT AWARD

Grant Date: September 4, 2015

Bob Evans Farms, Inc. (the “Company”) hereby grants the Participant an Other Stock-Based Award consisting of the following: (a) restricted stock units (“RSUs”) and (b) related dividend equivalent rights (“DERs”); subject to the terms and conditions described in the Amended and Restated Bob Evans Farms, Inc. 2010 Equity and Cash Incentive Plan (the “Plan”) and this Award (“Award”). Except as otherwise defined herein, capitalized terms used in this Award have the respective meanings set forth in the Plan.

1. Time Based Restricted Stock Units.


(a)	Grant. The Company hereby grants you the number of RSUs specified on Appendix A, subject to the terms and conditions of the Plan and this Award.


(b)	Restricted Stock Unit Account. The Company will maintain an account (the “Account”) on its books in your name to reflect the number of RSUs awarded to you. The Account is for recordkeeping purposes only, and no assets or other amounts shall be set aside from the Company’s general assets with respect to such Account.


(c)	Restricted Period. The period prior to the vesting date with respect each RSU is referred to as the “Restricted Period.” Subject to the provisions of the Plan and this Award, unless vested or forfeited earlier as described in this Award, as applicable, your RSUs will become vested and be settled as indicated on the attached Appendix A.


(d)	Disability or Death. If during the Restricted Period you have a Termination of Service by reason of Disability or death, then any unvested RSUs will become vested and be settled as indicated on the attached Appendix A.


(e)	Retirement. If you have a Termination of Service by reason of Retirement (as defined in the Plan), then any unvested RSUs will continue to vest based on the original vesting schedule unless accelerated by the Board of Directors.


(f)	Involuntary Termination of Service. If during the Restricted Period you have a Termination of Service by reason of an involuntary (as determined by the Committee) Termination of Service not for Cause, or for Good Reason, then any unvested RSUs will immediately vest on your termination date.

(g) Other Termination of Service. If during the Restricted Period you have a Termination of Service by reason of voluntary quitting, resigning or retiring (i.e., leaving to retire but not as Retirement is defined in the Plan), or if you are terminated for Cause, or if you have a Termination of Service for any reason, as determined by the Committee, then you shall thereupon forfeit any RSUs that are still in a Restricted Period on your termination date.

(h) Settlement of Vested RSUs. As promptly as practicable after the applicable Vesting Date, whether occurring upon your Separation from Service or otherwise, but in no event later than 60 days after the Vesting Date, the Company shall transfer to you one share of Common Stock for each RSU becoming vested at such time, net of any applicable tax withholding requirements in accordance with Section 7(b) below; provided, however, that, if you are a Specified Employee at the time of Separation from Service, then to the extent your RSUs are deferred compensation subject to Section 409A of the Code, settlement of which is triggered by your Separation from Service (other than for death), payment shall not be made until the date which is six

months after your Separation from Service. Fractional shares shall be settled in cash at the same time as your shares of Common Stock are delivered.


(i)	Settlement Following Change in Control. If you have a Termination of Service by reason of Change of Control (as defined in the Plan), then upon the action of the Compensation Committee or the Board of Directors at such time, any unvested RSUs will continue to vest based on the original vesting schedule.


2.	Related DERs.

(a)

Each RSU entitles the Participant to receive one DER on the date the RSU is settled, as described herein. Each DER entitles the Participant to be credited with all of the cash dividends that are or would be payable with respect to the Share represented by the RSU to which the DER relates. Accumulated dividends credited pursuant to this Award shall be payable in cash, without interest, at such time as the RSU to which the DER relates is settled pursuant to this Award.

(b)

If dividends are paid in the form of shares of Common Stock rather than cash, then your Account will be credited with one additional RSU, as applicable, for each share of Common Stock that would have been received as a dividend had your outstanding RSUs been shares of Common Stock which additional RSU shall be payable, at such time as the RSU to which the DER relates is settled pursuant to this Award.


(c)	In the event that a RSU is forfeited pursuant to this Award, the related DER shall also be forfeited and the Participant shall have no right to payment of any accumulated dividend amounts or shares.


3.	Transfer Restrictions. Until a RSU or DER becomes vested the RSU or DER may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, except by will or the laws of descent and distribution. However, as described in Section 7(a), the Participant may designate a beneficiary to receive any Shares to be settled after the Participant dies.

Award Subject to Recoupment Policy. If the Participant is an “executive officer” of the Company as defined in Rule 3b-7 under the Securities Exchange Act of 1934, then this Award is subject to the Bob Evans Farms, Inc. Executive Compensation Recoupment Policy (“Recoupment Policy”). The Award, or any amount traceable to the Award, shall be subject to the recoupment obligations described in the Recoupment Policy.


5.	Award Subject to Non-Competition and Confidentiality Policy. This Award is not subject to the Bob Evans Farms, Inc. Non-Competition and Confidentiality Policy and the Participant’s adherence to said Policy.


6.	Restrictive Covenants. Unless the Committee otherwise agrees in writing, any outstanding unvested RSUs or accruals related to the DERs under this Award will be forfeited if the Participant:

(a)

Serves (or agrees to serve) as an officer, director, manager, consultant or employee of any proprietorship, partnership, corporation or limited liability company or become the owner of a business or a member of a partnership or limited liability company that competes with any portion of the Company or an Affiliate’s business or renders any service to entities that compete with any portion of the Company or an Affiliate’s business;


(b)	Refuses or fails to consult with, supply information to, or otherwise cooperate with, the Company or any Affiliate after having been requested to do so; or


(c)	Deliberately engages in any action that the Committee concludes could harm the Company or any Affiliate.


7.	Other Terms and Conditions:


(a)	Beneficiary Designation. The Participant may name a beneficiary or beneficiaries to receive any cash or Shares to be paid or settled after the Participant’s death by completing a Beneficiary Designation Form in the form and manner required by the Committee and communicated in writing to the Participant. The

Beneficiary Designation Form does not need to be completed now and is not required to be completed as a condition of receiving this Award. However, if the Participant dies without completing a Beneficiary Designation Form or if the designation is ineffective for any reason, the Participant’s beneficiary will be the Participant’s surviving spouse or, if the Participant does not have a surviving spouse, the Participant’s estate.

(b)

Tax Withholding. The Company or an Affiliate, as applicable, shall have the power and right to deduct, withhold or collect any amount required by law or regulation to be withheld with respect to any taxable event arising with respect to this Award. To the extent permitted by the Committee, in its sole discretion, this amount may be: (i) withheld from other amounts due to the Participant, (ii) withheld from the value of any Award being settled or any Shares transferred in connection with the exercise or settlement of an Award, (iii) withheld from the vested portion of any Award (including shares transferable thereunder), whether or not being exercised or settled at the time the taxable event arises, or (iv) collected directly from the Participant. Subject to the approval of the Committee, the Participant may elect to satisfy the withholding requirement, in whole or in part, by having the Company or an Affiliate, as applicable, withhold shares having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax that could be imposed on the transaction; provided that such Shares would otherwise be distributable to the Participant at the time of the withholding if such Shares are not otherwise distributable at the time of the withholding, provided that the Participant has a vested right to distribution of such Shares at such time. All such elections shall be irrevocable and made in writing or per an online or web based system used by the Company, and shall be subject to any terms and conditions that the Committee, in its sole discretion, deems appropriate.


(c)	Governing Law. This Award will be construed in accordance with and governed by the laws (other than laws governing conflicts of laws) of the State of Ohio except to the extent that the Delaware General Corporation Law is mandatorily applicable.


(d)	Other Agreements. This Award will be subject to the terms of any other written agreements between the Participant and the Company to the extent that those other agreements do not directly conflict with the terms of the Plan or this Award.

(e)

Award Subject to the Plan. This Award is subject to the terms and conditions described in this Award and the Plan, which is incorporated by reference into and made a part of this Award. The Plan as it may be amended from time to time is incorporated into this Award by this reference. In the event of a conflict between the terms of the Plan and the terms of this Award, the terms of the Plan will govern. The Committee has the sole responsibility of interpreting the Plan and this Award, and its determination of the meaning of any provision in the Plan or this Award shall be binding on the participant. Capitalized terms that are not defined in this Award have the same meaning as in the Plan.


(f)	No Rights as Shareholder. You have no rights as a shareholder of the Company with respect to the RSUs or DERs until such time as the Common Stock issued in settlement has been recorded in your name in book entry form. Until that time, you shall not have any shareholder rights.

(g)

Rejection. The Participant may reject this Award and forfeit the Award by notifying the Company or its designee, in the manner prescribed by the Company and communicated to the Participant, within 30 days after the Grant Date. If this Award is rejected pursuant to this Section7(g), the RSUs and DERs evidenced by this Award shall be forfeited, and neither the Participant nor the Participant’s heirs, executors, administrators and successors shall have any rights with respect thereto.

APPENDIX A


1.	Name of Participant: Doug N. Benham


2.	Grant Date: September 4, 2015 (the “Grant Date”)


3.	Restricted Stock Units (RSUs): 21,000


4.	RSU Vesting Schedule:


A.	45% on August 24, 2016, being at least 9,450 shares as may be increased by dividends reinvested in shares of the Company stock (“2016 Tranche”);


B.	55% on August 24, 2017, being at least 11,550 shares as may be increased by dividends reinvested in shares of the Company stock (“2017 Tranche”);

subject, in each case, to Participant’s/Executive’s continued employment with the Company as Executive Chair through the applicable vesting date.

If Participant/Executive is Executive Chair and he dies or becomes Disabled before the 2016 Tranche vests, the 2016 Tranche would immediately vest at the time of termination, and he would forfeit the 2017 Tranche. If Participant /Executive is Executive Chair and he dies or becomes Disabled after the 2016 Tranche vests but before the 2017 Tranche vests, the 2017 Tranche would immediately vest at the time of termination.

The award is subject to the terms and conditions related to the award provided in the Employment Agreement dated August 27, 2015 between the Company and the Participant/Executive (“Employment Agreement”), and specifically, but not limited to, the provisions of Section 7 dealing with the termination of employment by Death, Disability, for Cause, Without Cause or for Good Reason, or Voluntary Termination, and the impact of such termination events on this award. The terms of the Employment Agreement are hereby incorporated by reference herein as if fully written out, and in the event of a conflict between the terms of this award and the Employment Agreement, the Employment Agreement shall control.

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) CERTIFICATION

I, Douglas N. Benham, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of Bob Evans Farms, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors:


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 2, 2015




		/s/ Douglas N. Benham
		Douglas N. Benham
		Executive Chair
		(Principal Executive Officer)

Exhibit 31.2

Rule 13a-14(a)/15d-14(a) CERTIFICATION

I, Mark E. Hood, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of Bob Evans Farms, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors:


a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 2, 2015




		/s/ Mark E. Hood
		Mark E. Hood
		Chief Administrative Officer and Chief Financial Officer
		(Principal Financial Officer)

Exhibit 32.1

SECTION 1350 CERTIFICATION*

In connection with the Quarterly Report of Bob Evans Farms, Inc. (the “Company”) on Form 10-Q for the quarterly period ended October 23, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Douglas N. Benham, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:


(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: December 2, 2015




		/s/ Douglas N. Benham
		Douglas N. Benham
		Executive Chair
		(Principal Executive Officer)

* This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

Exhibit 32.2

SECTION 1350 CERTIFICATION*

In connection with the Quarterly Report of Bob Evans Farms, Inc. (the “Company”) on Form 10-Q for the quarterly period ended October 23, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark E. Hood, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:


(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: December 2, 2015