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<DESCRIPTION>ASSET PURCHASE AGREEMENT

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                          ASSET PURCHASE AGREEMENT



     This ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into as

of January 5, 2001, by and among MOUNTAIN RANGE RESTAURANTS, LLC, an Arizona

limited liability company ("Buyer"), and PHOENIX RESTAURANT GROUP, INC., a

Georgia corporation ("Seller").



     A.     Seller conducts the business of the ownership and operation of

restaurants, including those 24 Denny's restaurants operated under franchises

from Denny's Inc. and/or DFO, Inc., which restaurants are more particularly

described on Schedule A to be attached hereto (the "Restaurants").



     B.     The principals of Buyer have extensive experience in the

management and operation of Denny's restaurants and are intimately familiar

with the operation of Denny's restaurants and with the type of assets to be

purchased and liabilities to be assumed under this Agreement.



     C.     Seller desires to sell to Buyer, and Buyer desires to purchase

from Seller, the Restaurants and certain of the assets associated with the

Restaurants, on an "as is" basis, and Buyer desires to assume certain

obligations associated with the Restaurants, all upon the terms and

conditions set forth in this Agreement.



     NOW, THEREFORE, in consideration of the premises and of the mutual

covenants hereinafter set forth, the parties hereto agree as follows:



     SECTION 1. SALE AND PURCHASE



          1.1 ASSETS AND PROPERTIES TO BE SOLD AND PURCHASED.  At the Closing

(as defined in Section 11), Seller shall sell to Buyer and Buyer shall

purchase from Seller, subject to all the terms and conditions of this

Agreement, the following assets and properties of Seller with respect to the

Restaurants (the "Purchased Assets") free and clear of all personal property

leases, liens, claims, and encumbrances, except as set forth in Schedule 4.2

(the "Permitted Exceptions"):



               (a) LEASED PROPERTIES AND IMPROVEMENTS.  All of the right,

title and interest of Seller in and to the use of the real estate and

buildings associated with the Restaurants (the "Leased Properties") and all

other improvements, fixtures and structure (collectively, the "Improvements")

located on, affixed to and/or appurtenant to the Restaurants or the Leased

Properties and are subject to the real property leases (the "Leases") listed

on Schedule 1.1(a).



               (b) PERSONAL PROPERTY.  All right, title and interest of

Seller in and to any and all personal property utilized by Seller in

connection with the businesses conducted in the Restaurants, including, but

not limited to the (i) mechanical systems, fixtures, and equipment owned or

leased by Seller comprising a part of or attached to or located at the

Restaurants; (ii) pylons and other signs, silverware, glassware, dishes, and

other utensils, tables, chairs, chandeliers, lamps, stained or leaded glass,

marble tops, fans, televisions, clocks, carpets, drapes, art work,

memorabilia, paintings, posters, graphics, and other furnishings owned by

Seller and







comprising a part of or attached to or located in the Restaurants including

without limitation, any furnishings located in business offices or party

rooms; (iii) maintenance equipment and tools owned or leased by Seller and

used in connection with the Restaurants; and (iv) stoves, ovens,

refrigerators, walk-in cold storage boxes and other kitchen equipment, and

other machinery, equipment, fixtures, keys, and personal property of every

kind and character owned or leased by Seller and held at the Restaurants and

which are presently located in, on or used in connection with the Restaurants

or the operations thereof or hereafter acquired in the ordinary course of

business (collectively, the "Personal Property").



               (c) FRANCHISE AGREEMENTS.  All right, title, and interest of

Seller in, to, and under the franchise agreements with respect to the

Restaurants between Seller and Denny's, Inc. and/or DFO, Inc. (the "Franchise

Agreements") as set forth on Schedule 1.1(c), provided that (i) Seller on the

one hand, and Buyer, on the other hand, shall each be responsible for and

shall pay the costs and fees of its counsel incurred in connection with the

assignment of the Franchise Agreements, and (ii) Seller shall be solely

responsible for and shall pay any and all transfer fees to be paid to

Denny's, Inc. and/or DFO, Inc. in connection with the assignment of the

Franchise Agreements.



               (d) CONTRACTS.  Except as provided in Section 1.2, all rights

and interests of Seller in, to, and under all agreements and contracts

relating to the Restaurants other than the Franchise Agreements, including

all management, maintenance, supply or service contracts, or any other

contracts, arrangements or agreements affecting the Restaurants, the Personal

Property, the Leased Properties or the Improvements pursuant to which

equipment, goods, services, supplies or any other items whatsoever are

furnished and/or are to be furnished in connection with the Restaurants, or

the repair, maintenance or operation thereof, and all warranties relating to

the Restaurants, the Personal Property, the Leased Properties, or the

Improvements, together with all other representations, contract rights, and

transferable intangible property, miscellaneous rights, benefits or

privileges of any kind or character with respect to the Restaurants

(collectively, the "Contracts"), including, but not limited to, those set

forth on Schedule 1.1(d); provided, however, that Buyer shall not be

obligated to assume or perform any obligation or liability of Seller pursuant

to any Contract or agreement except as specifically provided in Section 2 or

pursuant to the Lease Assignments/Subleases (as defined in Section 9.3).



               (e) INVENTORY.  All inventory located at the Restaurants,

including, without limitation, all food items, food preparation items, and

guest checks, and replacements of inventory or consumables used in the

ordinary course of business, including inventories of food, beverages,

spirits, china, silver, glassware, paper goods, food preparation items,

uniforms, guest checks, and other inventory and supplies in such quality and

levels reasonably commensurate with levels as customarily maintained by

Seller.



               (f) COMPUTER SOFTWARE AND HARDWARE.  All point-of-sale

computer software and all hardware located at the Restaurants and owned,

leased or licensed by or to Seller and used by Seller in connection with the

operation of the Restaurants that is not otherwise prohibited from transfer

by contract between Seller and the owner or licensee thereof.



               (g) TELEPHONE NUMBERS.  All of Seller's telephone and

facsimile numbers presently used in connection with the operation of the

Restaurants.





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               (h) ANCILLARY ASSETS.  All permits, licenses, equipment

warranties, certificates of occupancy, governmental approvals, site plans,

surveys, plans and specifications, marketing materials and floor plans in the

possession of Seller that specifically and only relate to the Restaurants,

the Leased Properties, the Improvements or the Personal Property, to the

extent transferable (the "Ancillary Assets").



               (i) DOCUMENTS.  Copies of all information and documentation in

Seller's possession regarding the Restaurants, including, but not limited to,

the Leases, surveys, tax assessment records, engineering plans and

specifications, as-built drawings, development plans, plats, site plans,

zoning materials, and combinations to all locks on or in the Restaurants

(collectively, the "Documents").



               (j) BOOKS AND RECORDS.  All of Seller's books, records

(including those relating to financial matters involving the Purchased

Assets, the Restaurants, and the employees at the Restaurants),

correspondence and files pertaining to the ownership, management, and/or

operation of the Restaurants or to the Purchased Assets, but excluding

Seller's corporate minute books and stock books and records and any

confidential or proprietary information regarding Seller's business and not

directly related to ownership and operation of the Restaurants.



               (k) PETTY CASH.  Petty cash at each Restaurant that will be an

amount of $1,000.00 at 3:00 p.m. local time on the Closing Date (the "Petty

Cash").



               (l) GOODWILL.  All of Seller's goodwill that relates to the

Restaurants.



          1.2 ASSETS AND PROPERTIES NOT TO BE PURCHASED AND SOLD.

Notwithstanding anything to the contrary contained in this Agreement, there

is excluded from the Purchased Assets to be transferred pursuant to this

Agreement the following:



               (a) Except for Petty Cash in the amount of $1,000 at each

Restaurant location at 3:00 p.m. local time on the Closing Date, all cash,

bank accounts, notes receivable, loans receivable, certificates of deposit,

investment securities, credit card accounts receivable from sales generated

from the Restaurants prior to 3:00 p.m. local time on the Closing Date,

deposits and prepaid expenses (including utility deposits), and allowances or

credits due from vendors, suppliers, or service providers accrued prior to

3:00 p.m. local time on the Closing Date.



               (b) Except as set forth in Section 13.3 to this Agreement, the

Vending Commissions (as defined in Section 13.3).



               (c) All insurance policies, including, but not limited to,

real property insurance, liability insurance, and workmen's compensation

insurance, held by Seller.



               (d) Any corporate records, trademarks, service marks, trade

names and copyrights and other intellectual property rights not explicitly

transferred pursuant to Section 1.1 of this Agreement.





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               (e) Any escrow and impound accounts for real estate and

personal property taxes relating to the Restaurants.



               (f) Subject to Section 4.2, any other assets or properties of

Seller used in or with respect to Seller's business that are not explicitly

to be transferred to Buyer pursuant to Section 1.1 of this Agreement.



     SECTION 2. LIABILITIES



          2.1 LIABILITIES TO REMAIN WITH SELLER.  Seller shall be responsible

for and shall promptly pay or satisfy all liabilities, obligations, or

accruals relating to the operation of the Restaurants or the ownership of the

Purchased Assets that have not been expressly assumed by the Buyer, whether

such liabilities, obligations or accruals are known or discovered prior to or

after the Closing Date.



          2.2 LIABILITIES TO BE ASSUMED BY BUYER.  Upon the conveyance,

transfer and assignment of the Purchased Assets to Buyer in accordance with

this Agreement, Buyer shall assume, and shall thereafter pay or satisfy, as

they become due, all non-delinquent liabilities, obligations, or accruals

first arising and relating to the operation of the Restaurants in the

ordinary course of business or the ownership of the Purchased Assets after

3:00 p.m. local time on the Closing Date (the "Assumed Liabilities") pursuant

to the terms and provisions of the Franchise Agreements, the Contracts and

the Lease Assignments/Subleases; provided that the Franchise Agreements and

Contracts have been validly assigned to Buyer.



          In addition, Buyer shall assume (a) Seller's liability arising

after the Closing Date with respect to the capitalized leases described on

Schedule 2.2 for the Tremonton, Utah Restaurant (Unit 6710) and Pavilions-

Scottsdale, Arizona Restaurant (Unit 6348) (collectively, the "Capitalized

Leases"), and (b) up to $8.6 million of the Seller's debt secured by the

Restaurants to CNL American Properties Fund and/or its affiliates. (the "CNL

Debt").



          Buyer shall not deemed by anything contained herein to have

assumed: (a) any obligation or liability of Seller arising from any tort

claims made by a third party arising from actions or failures to act by the

Seller or otherwise relating to the Restaurant prior to the Closing; or (b)

any obligation or liability of Seller relating to employees or independent

contractors accruing on or prior to the Closing Date, including, but not

limited to, accrued salaries, other compensation or benefits, severance

payments, accrued vacations, pensions, retirement plans, distributions or

bonuses accruing on or prior to 3:00 p.m. on the Closing Date; it being

understood that, at or prior to the Closing, any employment agreements

between Seller and any employees relating to the operation of the Restaurants

will be terminated on or before the Closing Date and none of the same will

prevent any of such employees from becoming employees of Buyer after the

Closing; it being further understood that Seller shall fulfill any

obligations relating to employees for accrued vacations within five days

after the Closing Date.



          2.3 ALLOCATIONS.  At the Closing Date and/or within a reasonable

period of time after the Closing Date, as the case may be, and effective as

of 3:00 p.m. local time on the Closing Date, to the extent not otherwise

provided for by any other provision of this Agreement, Buyer and Seller shall

allocate any obligations or liabilities relating to the Restaurants (such as





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equipment and other operating lease payments, real estate and personal

property tax payments, and the like) consistent with the terms of this

Agreement.



     SECTION 3. PURCHASE PRICE.



          3.1 AMOUNT AND PAYMENT.  As full and complete payment for the

Purchased Assets, Buyer shall pay Seller the aggregate sum of Twenty Million

Eight Hundred Fifty Seven Thousand Two Hundred Seventy Five Dollars

($20,857,275.00) (the "Purchase Price"), payable by Buyer at the Closing, by

Buyer delivering to Seller cash (via wire transfer) in the amount of Twenty

Million Eight Hundred Fifty Seven Thousand, Two Hundred Seventy Five Dollars

($20,857,275.00), less (a) the unamortized balance of the Capitalized Leases

(estimated to be $900,000) as of the Closing, (b) the amount of the CNL Debt

(of up to $8.6 million) as of the Closing, and (c) the principal amount of a

subordinated promissory note and warrant (the "Subordinated Note and

Warrant") from the Buyer to the Seller substantially in the form attached

hereto as Exhibit A.



          3.2 ALLOCATION OF PURCHASE PRICE.  Buyer and Seller agree that the

total Purchase Price (including liabilities assumed) shall be allocated as

set forth in Schedule 3.2 to be attached hereto, and Buyer and Seller agree

that the allocation set forth in Schedule 3.2 has been made in accordance

with the requirements of Section 1060 of the Internal Revenue Code of 1986,

as amended, and any applicable Treasury Regulations promulgated thereunder.

Buyer and Seller, each at its own expense, also agree to file appropriate

forms with the Internal Revenue Service setting forth the information

required to be furnished to the Internal Revenue Service by Section 1060 and

the applicable Treasury Regulations thereunder in a manner that is consistent

with Schedule 3.2.



     SECTION 4. SELLER'S REPRESENTATIONS AND WARRANTIES.  Seller represents

and warrants as follows:



          4.1 CORPORATE STATUS AND AUTHORITY.  Seller is a corporation duly

organized, validly existing and in good standing under the laws of the State

of Georgia, has the requisite corporate power and authority to own, operate

and lease its assets and properties with respect to the Restaurants and to

carry on its business with respect to the Restaurants as now being conducted

in all jurisdictions in which the Restaurants are located.  The execution and

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