Exhibit 10.5

 

CREDIT AGREEMENT

(TERM FACILITY)

 

between

 

Ark RESTAURANTS CORP.

 

and

 

bank hapoalim b.m.

 

dated as of

 

October 21, 2015

 

CREDIT AGREEMENT

(TERM FACILITY)

 

Dated as of: October 21, 2015

 

THIS CREDIT AGREEMENT (TERM FACILITY) is made and entered into as of the date
set forth above by and between ARK RESTAURANTS CORP., a New York corporation
(“Borrower”), and BANK HAPOALIM B.M. (“Bank”). For good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Borrower and Bank hereby agree as follows:

 

§1. TERMINOLOGY AND INTERPRETATION.

 

§1.1 Definitions of Capitalized Terms. When used herein, each capitalized term
listed below shall have the meaning indicated below:

 

“Advance” shall mean a loan in the amount of $5,000,000.00 made by Bank to
Borrower in a single disbursement under or pursuant to this Agreement.

 

“Agreement” shall mean this Credit Agreement, as amended from time to time.

 

“Agreement Date” shall mean the date as of which this Agreement is dated.

 

“Applicable Law” shall mean (a) all applicable common law and principles of
equity and (b) all applicable provisions of all (i) constitutions, statutes,
rules, regulations and orders of Governmental Authorities, (ii) Governmental
Approvals and (iii) orders, decisions, judgments and decrees of all courts and
arbitrators.

 

“Ark Island” means Ark Island Beach Resort, LLC.

 

“Ark Island Collateral” shall mean all of Ark Island’s tangible and intangible
personal property (including accounts, inventory, equipment, general
intangibles, documents, chattel paper, instruments, letter-of-credit rights,
investment property, Intellectual Property and deposit accounts) and fixtures,
whether now owned or hereafter acquired, whether now existing or hereafter
created or arising and wherever located, including, but not limited to, all of
the personal property and fixtures acquired by Ark Island pursuant to the Ark
Island Purchase Agreement.

 

“Ark Island Purchase Agreement” means that certain Purchase Agreement dated as
of August 10, 2015 by and between Ark Island and Island Beach Resort, Inc., a
Florida corporation, as amended from time to time.

 

“Ark Island Security Agreement” shall have the meaning given that term in §5.1.

 

“Ark Real Estate” shall mean Ark Shuckers Real Estate, LLC, a Delaware limited
liability company.

 

“Ark Real Estate Collateral” shall mean all of Ark Real Estate’s right, title
and interest in and to the Units, all equipment and fixtures at any time located
thereon or therein, all other personal property located thereon or therein or
used in connection therewith and such other

 

related collateral as Bank may require, whether now owned or hereafter acquired,
whether now existing or hereafter created or arising.

 

“Ark Real Estate Purchase Agreement” shall mean that certain Commercial Contract
and all Addendums thereto by and between Ark Real Estate and D.C. Holding
Company, Inc., a Florida corporation, as amended from time to time.

 

“Ark Shuckers” means Ark Shuckers, LLC, a Delaware limited liability company.

 

“Ark Shuckers Collateral” shall mean all of Ark Shuckers’ tangible and
intangible personal property (including accounts, inventory, equipment, general
intangibles, documents, chattel paper, instruments, letter-of-credit rights,
investment property, Intellectual Property and deposit accounts) and fixtures,
whether now owned or hereafter acquired, whether now existing or hereafter
created or arising and wheresoever located, including, but not limited to all of
the personal property and fixtures acquired by Ark Shuckers pursuant to the Ark
Shuckers Purchase Agreement.

 

“Ark Shuckers Purchase Agreement” shall mean that certain Restaurant Asset
Purchase Agreement dated as of August 10, 2015 by and between Ark Shuckers and
Ocean Enterprises, Inc., a Florida corporation, as amended from time to time.

 

“Ark Shuckers Security Agreement” shall have the meaning given that term in
§5.1.

 

“Authorized Representative” shall mean any of Borrower’s President, its Chief
Executive Officer, or its Chief Financial Officer, or any other Person expressly
designated by the Board of Directors of Borrower (or the appropriate committee
thereof) as an Authorized Representative, as set forth from time to time in a
certificate in a form provided or approved by Bank.

 

“Beginning Cash on Hand” shall mean with respect at any time period, Borrower’s
and the Subsidiaries’ cash on hand at the beginning of that period.

 

“Borrower Collateral” shall mean all of Borrower’s tangible and intangible
personal property (including accounts, inventory, equipment, general
intangibles, documents, chattel paper, instruments, letter-of-credit rights,
investment property, Intellectual Property and deposit accounts) and fixtures,
whether now owned or hereafter acquired, whether now existing or hereafter
created or arising and wherever located.

 

“Borrower Amended and Restated Security Agreement” shall have the meaning given
that term in §5.1.

 

“Borrower Security Agreement” shall mean that certain Security Agreement dated
as of February 25, 2013, made by Borrower in favor of Bank, as amended by that
certain Assumption Agreement dated April 22, 2013, made by Rio in favor of Bank,
by that certain Assumption Agreement dated August 16, 2013, made by AC in favor
of Bank, by Modification of Security Agreement dated as of February 24, 2014, by
and among Borrower, Rio, AC and Bank, by that certain Supplement to Letter
Agreement and Security Agreement dated in December, 2014, by and among Borrower,
Rio, AC, Las Vegas and Bank.

 

“Borrowing Account” shall mean a demand deposit account established by Borrower
with Bank (or any substitute account established by Borrower with Bank).

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“Business Day” means any day on which both (a) banks are regularly open for
business in New York, New York and (b) Bank’s office in New York, New York is
open for ordinary business.

 

“Capital Securities” shall mean, with respect to a Subsidiary, the shares of
stock, membership interests or equity interest in that Subsidiary.

 

“Cash Management Agreement” shall mean any agreement between Borrower and Bank
or any agreement between any Subsidiary and Bank pursuant to which Bank agrees
to provide cash management services, including treasury, depository, overdraft,
bank card products, electronic funds transfer or other cash management
arrangements.

 

“Change of Control” shall mean when any “person” or “group” (each as used in
§§13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934) other than the
present controlling group either (i) becomes the “beneficial owner” (as defined
in Rule 13d-3 of the Securities Exchange Act of 1934), directly or indirectly,
of Voting Securities of Borrower or any Subsidiary (or securities convertible
into or exchangeable for such Voting Securities) representing more than 50
percent of the combined voting power of all Voting Securities of Borrower or any
Subsidiary or (ii) otherwise attains the ability, through an express contractual
arrangement, to elect a majority of the board of directors of Borrower or the
board of directors of any Subsidiary that is a corporation or the manager or
managing member of any Subsidiary that is a limited liability company.

 

“Collateral” shall mean the Borrower Collateral, the Ark Island Collateral, the
Ark Real Estate Collateral and the Ark Shuckers Collateral, collectively.

 

“Commercial Units” shall mean the condominium parcels identified as Units C1,
C2, C3 and C4 on Exhibit A attached hereto.

 

“Consistent Basis” shall mean, in reference to GAAP, that the accounting
principles observed in such period are comparable in all material respects to
those applied in the preparation of the audited financial statements of Borrower
referred to in §9(a).

 

“Controlled by Borrower” shall mean, with respect to a corporation or limited
liability company, that Borrower has the power to elect or appoint a majority of
such corporation’s directors or such limited liability company’s managers.

 

“Contract” shall mean an indenture, agreement (other than this Agreement and any
other Credit Document), other contractual restriction, lease or instrument
(other than the Note).

 

“Copyright” shall mean any of the following: any copyright or general intangible
of like nature (whether registered or unregistered), any registration or
recording thereof, and any application in connection therewith, including any
registration, recording and application in the United States Copyright Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof.

 

“CPLD” shall mean, for any period, the portion of Borrower’s and the
Subsidiaries’ long-term debt which becomes due and payable during that period.

 

“Credit Documents” shall mean this Agreement, the Note, the Mortgage, the
Security Agreements, the Environmental Indemnity, any Cash Management Agreement,
and any other

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documents at any time delivered by an Obligor or Obligors to Bank in connection
with this Agreement, all as amended or restated from time to time.

 

“Credit Facility” shall mean the term loan to Borrower under or pursuant to this
Agreement effectuated by the Advance.

 

“Debt” shall mean any of the following: (i) indebtedness or liability for
borrowed money, (ii) obligations evidenced by bonds, notes, or other similar
instruments, (iii) obligations for the deferred purchase price of property
(excluding trade obligations incurred in the ordinary course of Borrower’s
business), (iv) obligations as lessee under capital leases, (v) current
liabilities in respect of unfunded vested benefits under plans covered by the
Employee Retirement Income Security Act of 1974, as amended, (vi) obligations
under letters of credit or acceptance facilities, (vii) guarantees, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, or
otherwise to assure creditors against loss, and (viii) obligations secured by
any mortgage, lien, pledge or security interest or other charge or encumbrance
on property, whether or not the obligations have been assumed.

 

“Default” shall mean any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived (or, in the case of a judgment, action or proceeding,
dismissed), become an Event of Default.

 

“Default Rate” shall mean a per annum rate equal to 2.00 percent above the
interest rate otherwise applicable to Advances hereunder from time to time.

 

“Distributions” shall mean dividends or other distributions made by Borrower to
its shareholders.

 

“Dollars” and “$” shall mean lawful money of the United States of America.

 

“EBITDA” shall mean, for any Fiscal Period, the sum of (a) the amount of Net
Income for that Fiscal Period, plus (b) the amount of Interest Expense for that
Fiscal Period (to the extent taken into account in computing that Net Income),
plus (c) the amount of Income Taxes accrued during that Fiscal Period (to the
extent taken into account in computing that Net Income), plus (d) the amount of
Borrower’s depreciation accrued during that Fiscal Period (to the extent taken
into account in computing that Net Income) determined on a consolidated basis,
plus (e) the amount of Borrower’s amortization accrued during that Fiscal Period
(to the extent taken into account in computing that Net Income), determined on a
consolidated basis.

 

“Employee Benefit Plan” shall mean any employee benefit plan within the meaning
of Section 3(3) of ERISA which (i) is maintained for employees of Borrower or
any of its ERISA Affiliates or is assumed by Borrower or any of its ERISA
Affiliates in connection with any Acquisition or (ii) has at any time been
maintained for the employees of Borrower or any current or former ERISA
Affiliate.

 

“Environmental Indemnity” shall have the meaning given to that term in §5.1.

 

“Environmental Law” shall mean any federal, state or local statute, law,
ordinance, code, rule, regulation, order, decree, permit or license regulating,
relating to, or imposing liability or standards of conduct concerning, any
environmental matters, conditions, protection or conservation, including without
limitation, the Comprehensive Environmental Response,

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Compensation and Liability Act of 1980, as amended; the Superfund Amendments and
Reauthorization Act of 1986, as amended; the Resource Conservation and Recovery
Act, as amended; the Toxic Substances Control Act, as amended; the Clean Air
Act, as amended; the Clean Water Act, as amended; together with all regulations
promulgated thereunder, and any other “Superfund” or “Superlien” law.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as in
effect from time to time.

 

“ERISA Affiliate”, shall mean, with respect to Borrower, any Person or trade or
business which is a member of a group which is under common control with
Borrower, and which, together with Borrower, is treated as a single employer
within the meaning of Section 414(b) and (c) of the Code.

 

“Equity Certificates” shall mean, with respect to any Subsidiary, the shares of
stock in, or other certificates evidencing ownership of an equity interest in,
that Subsidiary.

 

“Event of Default” shall have the meaning given that term in §10.1.

 

“Existing Term Note” shall mean that certain Amended and Restated Promissory
Note, dated February 24, 2014, made by Borrower to Bank’s order in the face
principal amount of $8,083,333.37, and any modification, renewal or
consolidation thereof or substitution therefor.

 

“Expired Building Permit” shall mean Permit No. 0507-0346 issued by the County
of St. Lucie, Florida.

 

“Fiscal Period” shall mean each quarterly period consisting of three (3)
successive calendar months of each Fiscal Year, the first of such quarterly
periods beginning on the first day of the first calendar month of each Fiscal
Year, the second of such quarterly periods beginning on the first day of the
fourth calendar month of each Fiscal Year, the third of such quarterly periods
beginning on the first day of the seventh calendar month of each Fiscal Year,
and the fourth of such quarterly periods beginning on the first day of the tenth
calendar month of such Fiscal Year.

 

“Fiscal Year” shall mean each 52-week period ending on or around September 30.

 

“Fixed Charge Coverage Ratio” shall mean, with respect to any Fiscal Period, the
ratio of (a) EBITDA for that Fiscal Period, plus the amount of Beginning Cash On
Hand for that Fiscal Period, less the amount of Unfinanced CAPEX for that Fiscal
Period, divided by (b) the amount of Fixed Charges for that Fiscal Period.

 

“Fixed Charges” shall mean, for any Fiscal Period, the sum of (a) the amount of
Interest Expense for that Fiscal Period, plus (b) the amount of CPLD for that
Fiscal Period, plus (c) the amount of Distributions made during that Fiscal
Period, plus (d) the amount of Income Taxes accrued during that Fiscal Period.

 

“GAAP” shall mean accounting principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, as in effect in the United States from time to time.

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“Governmental Approval” shall mean an authorization, consent, approval, license
or exemption of, registration or filing with, or report or notice to, any
Governmental Authority, including, without limitation, any such approval
required under ERISA or by the PBGC.

 

“Governmental Authority” shall mean any Federal, state, municipal, national or
other governmental department, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof or any entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case whether
associated with the United States of America, a state thereof, or a foreign
entity or government.

 

“Hazardous Material” shall mean any pollutant, contaminant or hazardous, toxic
or dangerous waste, substance or material (including without limitation
petroleum products, asbestos-containing materials and lead) the generation,
handling, storage, transportation, disposal, treatment, release, discharge or
emission of which is subject to any Environmental Law.

 

“Income Taxes” shall mean income and franchise taxes owed by Borrower or any of
the Subsidiaries.

 

“Information” shall mean written data, services, reports, statements (including,
but not limited to, financial statements delivered pursuant to or referred to in
§9.1), opinions of counsel, documents and other written information, whether, in
the case of any such in writing, it was prepared by Borrower or any other Person
on behalf of Borrower and delivered by Borrower to Bank.

 

“Intangible Assets” shall mean those assets of Borrower which are: (a)
Intellectual Property and other similar assets which would be classified as
intangible assets on a balance sheet of Borrower prepared in accordance with
GAAP, (b) unamortized debt, discount and expense and (c) assets located outside
of the United States.

 

“Intellectual Property” shall mean all licenses, Patents, Copyrights,
Trademarks, trade names and customer lists in which Borrower has any interest
and all technology, know-how and processes relating to any inventory of
Borrower.

 

“Interest Periods” shall mean with respect to the Advance successive periods of
one month each, the first of which begins on the date of the Advance and each
subsequent one of which begins when the previous one ends.

 

“Interest Expense” shall mean, for any Fiscal Period, Borrower’s and the
Subsidiaries’ total interest expense for that Fiscal Period, whether paid or
accrued (including the interest component of capital leases), determined on a
consolidated basis in accordance with GAAP (but specifically excluding
intercompany interest expense incurred by Borrower or any of its Subsidiaries).

 

“Las Vegas” shall mean Ark Las Vegas Restaurant Corp., a Nevada corporation.

 

“Lease” shall have the meaning given to that term in §5.1.

 

“LIBOR Rate” shall mean, with respect to any Interest Period, the per annum rate
of interest (carried out to the fifth decimal if available) equal to the rate
determined by Bank to be

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the offered rate on a page or service (whether provided by Bridge Telerate,
Reuters, Bloomberg, Global-Rates.com or another comparable internationally
recognized service selected by Bank) that displays an average ICE Benchmark
Administration Limited Interest Settlement Rate for deposits in Dollars (for
delivery on the first Working Day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately 11:00 a.m.
(London time) two Working Days prior to the first Working Day of such Interest
Period. At Borrower’s request, Bank shall provide Borrower with identifying
information with respect to the page of service so used by Bank. If Bank
determines that the rate referred to in the first sentence of this paragraph is
not available, then “LIBOR” shall mean, with respect to any Interest Period, the
rate determined by Bank (a) on the basis of the offered rates and deposits in
Dollars for the term equivalent to such Interest Period which were offered by
four major banks selected by Bank in the London interbank market at
approximately 11:00 a.m. (London time) on the Working Day that is two Working
Days prior to the first Working Day of such Interest Period or (b) by applying
such other recognized source of London Eurocurrency deposit rates as Bank may
select from time to time. If the reporting service used by Bank refers to 30
days rather than one month, references in this definition to one month shall be
read as references to 30 days.

 

“Lien” shall mean, with respect to any Obligor, any lien, security interest or
other charge or encumbrance upon or with respect to any properties or assets of
such Obligor, other than the Real Property Assets, excluding liens existing as
of the date of this Agreement in an amount less than $1,000.00 in any one
instance and less than $5,000.00 in the aggregate and listed in the judgment,
tax lien and litigation search results for Borrower delivered to Bank prior to
the date of this Agreement.

 

“Margin” shall mean 3.50 percent per annum.

 

“Material Adverse Effect” shall mean any material and adverse effect (whether
occasioned by one or a number of concurrent events) upon (a) one or more
Obligors’ assets, business operations, properties or condition, financial or
otherwise or (b) the ability of Borrower to make payment as and when due of all
or any part of the Obligations.

 

“Material Management Change” shall mean any material change in Borrower’s
Authorized Representatives or in the president, chief executive officer, chief
financial officer, manager or managing member of any Subsidiary which Bank
judges to be material.

 

“Maturity” shall mean that date which is five (5) years after the date of this
Agreement.

 

“Mortgage” shall have the meaning given that term in §5.1.

 

“Net Income” shall mean, for any Fiscal Period, the net income (loss) of
Borrower and the Subsidiaries (inclusive of net income attributable to
non-controlling interests) for such Fiscal Period, determined on a consolidated
basis in conformity with GAAP.

 

“Net Income Attributable to Borrower and Subsidiaries” shall mean, for any
Fiscal Period, the net income (loss) of Borrower and Subsidiaries (exclusive of
net income attributable to non-controlling interests) for such Fiscal Period
determined in conformity with GAAP.

 

“Note” shall mean the Term Promissory Note, of even date herewith, made by
Borrower to Bank’s order in the face principal amount of $5,000,000.00 and any
modification, renewal or consolidation thereof or substitution therefor.

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“Obligations” shall mean all indebtedness, liabilities, obligations and duties
of Borrower to Bank arising under or in connection with this Agreement, the Note
or any other Credit Documents, or under or in connection with any Cash
Management Agreement, direct or indirect, absolute or contingent, due or not
due, in contract or tort, liquidated or unliquidated, arising by operation of
law or otherwise, now existing or hereafter arising, and whether or not for the
payment of money or the performance or non-performance of any act, including,
but not limited to, all actual damages which Borrower may owe to Bank by reason
of any breach by Borrower of any Representation and Warranty, covenant,
agreement or other provision of this Agreement or any of the other Credit
Documents.

 

“Obligors” shall mean Borrower, Ark Real Estate, Ark Island and Ark Shuckers.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation.

 

“Parking Agreement” shall mean that certain Parking Agreement dated as of
December 1, 2014 by and between Robert Rigel, individually and as trustee and
D.C. Holdings, Inc., as assigned to Ark Real Estate.

 

“Patent” shall mean any of the following: (a) patents and letters patent of the
United States or any other country, and all registrations and recordings thereof
and applications therefor, including registrations, recordings and applications
in the United States Patent and Trademark Office or in any similar office or
agency of the United States, any state or territory thereof, or any other
country, and (b) all reissues, continuations or extensions of any of the
foregoing.

 

“Payment Address” shall mean Bank’s offices at 1177 Avenue of the Americas, New
York, New York 10036-2790, provided that, if Bank notifies Borrower of another
address for payments hereunder to be made to Bank, it shall mean such other
address.

 

“Pension Plan” shall mean any employee pension benefit plan within the meaning
of Section 3(2) of ERISA, other than a Multiemployer Plan, which is subject to
the provisions of Title IV or ERISA or Section 412 of the Code and which (i) is
maintained for employees of Borrower or any of its ERISA Affiliates or is
assumed by Borrower or any of its ERISA Affiliates in connection with any
Acquisition or (ii) has at any time been maintained for the employees of
Borrower or any current or former ERISA Affiliate.

 

“Permitted Liens” shall have the meaning given that term in §7.4.

 

“Person” shall mean an individual, corporation, partnership, limited liability
company, trust or unincorporated organization or a government or any agency or
political subdivision thereof.

 

“Prime Rate” shall mean the Prime Rate as quoted or otherwise established by
Bank from time to time (or, if Bank fails or ceases to quote or otherwise
establish a Prime Rate, a comparable index selected by Bank) (the Prime Rate is
purely a discretionary benchmark and is not necessarily the lowest or most
favorable rate at which Bank extends credit to its customers).

 

“Prohibited Transaction” shall mean a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA.

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“Property Management Assets” shall mean the personal property and fixtures to be
purchased by Ark Island pursuant to the Ark Island Purchase Agreement.

 

“Rate Hedging Obligations” shall mean any and all obligations and liabilities of
Borrower to Bank, whether absolute or contingent and however and whenever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party’s assets, liabilities or exchange
transactions, including but not limited to Dollar-denominated or cross-currency
interest rate exchange agreements, forward currency exchange agreements,
interest rate cap or collar protection agreements, forward rate currency or
interest rate options, puts, warrants and those commonly known as interest rate
“swap” agreements; and (ii) any and all cancellations, buybacks, reversals,
terminations or assignments of any of the foregoing.

 

“Real Property Assets” shall mean the real property and personal property
purchased by Ark Real Estate pursuant to the Ark Real Estate Purchase Agreement.

 

“Representation and Warranty” shall mean each representation and/or warranty
made by Borrower pursuant to or under (a) §6 or any other provision of this
Agreement or any other Credit Document, (b) any amendment of or waiver or
consent under this Agreement, (c) any Schedule to this Agreement or any such
amendment, waiver or consent, or (d) any statement contained in any certificate,
financial statement, or other instrument or document delivered by or on behalf
of Borrower pursuant to any Credit Document, whether or not (except as expressly
provided to the contrary herein), in the case of any representation or warranty
referred to in clause (a), (b), (c) or (d) of this definition, the information
that is the subject matter thereof is within the knowledge of Borrower.

 

“Residential Units” shall mean the condominium parcels identified as Apartments
Nos. 111 and 201 on Exhibit A attached hereto.

 

“Restaurant Assets” shall mean the personal property and fixtures purchased by
Ark Shuckers pursuant to the Ark Shuckers Purchase Agreement.

 

“Revolving Credit Agreement” shall mean that certain Credit Agreement (Revolving
Facility) dated on or about the date hereof, by and between Borrower and Bank,
as amended or restated from time to time.

 

“Revolving Note” shall mean the Revolving Promissory Note, of even date
herewith, made by Borrower to Bank’s order in the face principal amount of
$10,000,000.00 and any modification, renewal or consolidation thereof and
substitution therefor.

 

“Security Agreements” shall mean the Borrower Security Agreement, the Ark Island
Security Agreement and the Ark Shuckers Security Agreement.

 

“Single Employer Plan” shall mean any employee pension benefit plan covered by
Title IV of ERISA in respect of which Borrower or any Subsidiary is an
“employer” as described in Section 4001(b) of ERISA and which is not a
Multiemployer Plan.

 

“Solvent” shall mean, when used with respect to any Person, that at the time of
determination: (a) the fair value of its assets (both at fair valuation and at
present fair saleable

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value on an orderly basis) is in excess of the total amount of its liabilities,
including contingent Obligations; (b) it is then able and expects to be able to
pay its debts as they mature; and (c) it has capital (after taking into account
proceeds available under this Agreement) sufficient to carry on its business as
conducted and as proposed to be conducted.

 

“Subsidiary” shall mean any corporation or limited liability company 50 percent
or more of the outstanding Voting Securities of which or 50 percent or more of
all the equity interests of which are owned directly or indirectly by Borrower
and/or by one or more Subsidiaries or which is otherwise Controlled by Borrower,
including, but not limited to, Ark Real Estate, Ark Shuckers and Ark Island.

 

“Tangible Net Worth” shall mean, at any date of determination, Borrower’s assets
minus Borrower’s Intangible Assets and minus Borrower’s direct (not contingent)
liabilities and minus Borrower’s non-controlling interests, all determined in
conformity with GAAP by Bank in its sole discretion based upon Bank’s review of
the statements described in §9.1(a).

 

“Tax” shall mean any federal, state or foreign tax, assessment or other
governmental charge or levy (including any withholding tax) upon a Person or
upon its assets, revenues, income or profits other than income and franchise
taxes imposed upon Bank by the federal government or the State of Florida (or
any political subdivision thereof).

 

“Termination Event” shall mean: (i) a “Reportable Event” described in Section
4043 of ERISA and the regulations issued thereunder (unless the notice
requirement has been waived by applicable regulation); or (ii) the withdrawal of
Borrower or any ERISA Affiliate from a Pension Plan during a plan year in which
it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or was
deemed such under Section 4068(f) of ERISA; or (iii) the termination of a
Pension Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA; or (iv) the institution of proceedings to terminate a Pension Plan by the
PBGC; or (v) any other event or condition which would constitute grounds under
Section 4042(a) of ERISA for the termination of, or the appointment of a trustee
to administer, any Pension Plan; or (vi) the partial or complete withdrawal of
Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302 of
ERISA; or (viii) any event or condition which results in the reorganization or
insolvency of a Multiemployer Plan under Section 4241 or Section 4245 of ERISA,
respectively; or (ix) any event or condition which results in the termination of
a Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC
of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.

 

“Term Note” shall have the meaning given that term in the Revolving Credit
Agreement.

 

“Trademark” shall mean any of the following: (a) trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), now owned or existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state or territory thereof, or any other country or
any political subdivision thereof; and (b) all reissues, extensions or renewals
thereof.

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“Treasury Obligation” shall mean a note, bill or bond issued by the United
States Treasury Department as a full faith and credit general obligation of the
United States.

 

“Unfinanced CAPEX” shall mean, with respect to any Fiscal Period, Borrower’s
capital expenditures for that Fiscal Period that were paid by Borrower or a
Subsidiary from cash flow and not through financing.

 

“Units” shall mean the condominium parcels described on Exhibit A attached
hereto and made a part hereof.

 

“Voting Securities” shall mean, with respect to any Person, Capital Securities
of such Person entitling the holder thereof to vote in the election of directors
or managers of such Person.

 

“Working Day” shall mean a Business Day on which most banks are open for
ordinary business in London.

 

§1.2 Other Definitional and Interpretive Provisions.

 

(a) When used in this Agreement, “herein,” “hereof” and “hereunder” and words of
similar import shall refer to this Agreement as a whole and not to any
particular section or subsection of this Agreement, and “Section” (and/or “§”)
or “subsection” and “Schedule” and “Exhibit” shall refer to sections and
subsections of, and Schedules and Exhibits to, this Agreement unless otherwise
specified.

 

(b) Whenever the context so requires, when used in this Agreement the neuter
gender shall include the masculine or feminine, and the singular number shall
include the plural, and vice versa.

 

(c) In this Agreement, in the computation of periods of time from a specified
date to a later specified date, the word “from” means “from and including” and
the words “to” and “until” each means “to but excluding.”

 

(d) The words “includes” and “including” when used herein are not limiting.

 

(e) When used herein, unless specifically provided herein otherwise, the phrase
“acceptable to Bank” or “satisfactory to Bank” shall mean “acceptable and
satisfactory to Bank in its reasonable discretion.”

 

§1.3 Accounting Terms and Matters. Unless the context otherwise requires, all
accounting terms herein (including capitalized terms) that are not specifically
defined herein shall be interpreted and determined under GAAP applied on a
Consistent Basis. Unless otherwise specified herein, all accounting
determinations hereunder and all computations utilized by Borrower in complying
with the covenants contained herein shall be made, and all financial statements
requested to be delivered hereunder shall be prepared, in accordance with GAAP
applied on a Consistent Basis.

 

§1.4 Representations and Warranties. All Representations and Warranties shall be
made at and as of the Agreement Date, at and as of the time of the Advance, and,
in addition, in the case of any particular Representation and Warranty, at such
other time or times as such Representation and Warranty is made or deemed made
in accordance with the

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provisions of this Agreement or the document pursuant to, under, or in
connection with which such Representation and Warranty is made or deemed made,
except to the extent that any such Representation or Warranty expressly states
that it relates to a different specified date.

 

§1.5 Captions. Section and subsection captions in this Agreement are included
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.

 

§1.6 Neutral Interpretation. This Agreement and each other Credit Document has
been thoroughly reviewed by Obligors’ counsel. No provision of this Agreement or
other Credit Document shall be construed less favorably to Bank because it was
drafted by Bank’s counsel.

 

§1.7 Severability, Conflicts, Etc. Any provision of any Credit Document which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. It is the intention
of the parties to this Agreement that if any provision of any Credit Document is
capable of two constructions, one of which would render the provision void and
the other of which would render the provision valid, the provision shall have
the meaning which renders it valid.

 

§2. COMMITMENT; PURPOSE; AND AVAILABILITY.

 

§2.1 Commitment for Advance. Bank agrees, upon and subject to the terms and
conditions hereinafter set forth, to make the Advance.

 

§2.2 Use of Advance. The Advance shall be deposited in the Borrower Account.
Borrower shall then use the funds thus deposited to pay closing costs associated
with the closing of the Credit Facility and to contribute funds to Ark Real
Estate to be used by Ark Real Estate to purchase the Real Property Assets
pursuant to the Ark Real Estate Purchase Agreement, to Ark Shuckers to be used
by Ark Shuckers to purchase the Restaurant Assets pursuant to the Ark Shuckers
Purchase Agreement, and to Ark Island to be used by Ark Island to purchase the
Property Management Assets pursuant to the Ark Island Purchase Agreement.
Borrower shall ensure that the funds thus contributed are used by Ark Real
Estate, Ark Shuckers and Ark Island for the purposes specified herein. Borrower
may request that the portion of the Advance constituting contributions of funds
to Ark Real Estate, Ark Shuckers and Ark Island be advanced directly to Ark Real
Estate, Ark Shuckers and Ark Island to facilitate the closing on the purchase of
the Real Estate Assets, the Restaurant Assets and the Property Management
Assets. Borrower represents and warrants to Bank that notwithstanding any
advance of any portion of the Advance by Bank directly to Ark Real Estate, Ark
Shuckers and/or Ark Island, if Bank elects to do so, Borrower shall be deemed to
have received that portion of the proceeds of the Advance made directly to Ark
Real Estate, Ark Shuckers and/or Ark Island and that such portion of the
proceeds of the Advance shall be evidenced by and shall constitute outstanding
principal under the Note for all purposes of the Note and this Agreement.

 

§3. PAYMENT TERMS.

 

§3.1 Interest Rates and Payments. (a) Interest shall accrue on the outstanding
principal amount of the Advance, during each Interest Period, at a per annum
rate equal to the sum of (a) the Margin plus (b) the LIBOR Rate for that
Interest Period. Borrower shall pay

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accrued interest on the Advance on the last day of each Interest Period, and at
Maturity (and, in the case of interest accruing after Maturity, on demand).
Notwithstanding the foregoing, after Maturity and, if Bank elects, while an
Event of Default exists prior to Maturity, interest shall accrue on the
outstanding principal amount of the Advance at a per annum rate equal to the
Default Rate.

 

(b) If any present or future law, governmental rule, regulation, policy,
guideline, directive or similar requirement (whether or not having the force of
law) imposes, modifies, or deems applicable any capital adequacy, capital
maintenance or similar requirement which affects the manner in which Bank
allocates capital resources to its commitments (including any commitments
hereunder), and as a result thereof, in the reasonable opinion of Bank, the rate
of return on Bank’s capital with regard to the Advance is reduced to a level
below that which Bank could have achieved but for such circumstances, then in
such case and upon notice from Bank to Borrower, from time to time, Borrower
shall pay to Bank such additional amount or amounts as shall compensate Bank for
such reduction in Bank’s rate of return. Such notice shall contain the statement
of Bank with regard to any such amount or amounts, which shall, in the absence
of manifest error, be binding upon Borrower. In determining such amount, Bank
may use any reasonable method of averaging and attribution that it deems
applicable. For the avoidance of doubt, the foregoing provisions shall apply to
all requests, rules, guidelines or directives concerning capital adequacy issued
in connection with the Dodd−Frank Wall Street Reform and Consumer Protection Act
and all requests, rules, regulations, guidelines or directives concerning
capital adequacy promulgated by the Bank for International Settlements, the
Basel Committee on Banking Regulations and Supervisory Practices (or any
successor or similar authority) or the United States financial regulatory
authorities, regardless of the date adopted, issued, promulgated or implemented.

 

(c) If at any time Bank, in the reasonable exercise of its discretion,
determines that for any period (i) Dollar deposits for the applicable Interest
Period are not available to Bank in the London interbank market, (ii) the LIBOR
Rate does not reflect the cost to Bank of maintaining the Advance, (iii) any
change in financial, political or economic conditions or the currency exchange
rates makes it impractical for Bank to accrue interest on the Advance at a rate
based upon the LIBOR Rate, or (iv) any change in Applicable Law makes it
unlawful for Bank to accrue interest on the Advance at a rate based upon LIBOR
Rate, and so notifies Borrower, thereafter the outstanding principal amount of
the Advance shall, prior to its maturity, bear interest during that period at a
per annum rate equal to 0.50 percent above the Prime Rate, with the rate
changing simultaneously with each change in the Prime Rate.

 

(d) If the adoption of or any change in any applicable law or regulation or in
the interpretation or application thereof or compliance by Bank with any request
or directive (whether or not having the force of law) from any central bank or
other governmental authority made subsequent to the date hereof, shall (a)
subject Bank to any tax of any kind whatsoever with respect to the Advance, or
change the basis of taxation of payments in respect thereof (except for changes
in the rate of tax on the overall net income of Bank), (b) impose, modify, or
hold applicable, any reserve, special deposit, compulsory loan, or similar
requirement against assets held by, deposits or other liabilities in, or for the
account of, advances, loans, or other extension of credit (including
participations therein) by, or any other acquisition of funds by, any office of
Bank which is not otherwise included in the determination of the LIBOR Rate
hereunder, or (c) shall impose on Bank any other condition, in each case to the
extent imposed on lenders generally; and the result of any of the foregoing is
to materially increase the cost to Bank of making or maintaining the Advance, or
to reduce any amount receivable hereunder,

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then, in any such case, Borrower shall promptly pay to Bank, upon its demand (a
copy of which demand shall also be delivered to Bank), any additional amounts
necessary to compensate Bank for such additional costs or reduced amount
receivable which Bank reasonably deems to be material as determined by Bank. A
certificate as to any additional amounts payable pursuant to this paragraph
submitted by Bank to Borrower shall be presumptive evidence of such amounts
owing (absent manifest error).

 

§3.2 Principal and Other Payments.

 

(a) Regular Installments. Borrower shall repay the principal of the Advance as
follows: on the last day of each Interest Period, Borrower shall make to Bank a
principal payment in an amount equal to $83,333.00; provided that on Maturity,
Borrower shall repay to Bank the entire then unpaid principal of the Advance.
Principal of the Advance that is repaid may not be re-borrowed.

 

(b) Prepayments. Borrower may on any Business Day prepay the principal amount of
the Advance in whole or in part provided, however, that (a) Borrower gives Bank
at least 2 Business Days prior written notice of such prepayment specifying the
date of prepayment and the principal amount to be prepaid, (b) each such partial
prepayment shall be in an integral amount of $100,000.00, and (c) in no event
shall any such prepayment be made on any day other than the last day of the
Interest Period unless Borrower pays to Bank with the prepayment all amounts due
and owing under §3.2(d) with respect to the prepayment. No prepayment of the
Advance shall result in a deferral or reduction of scheduled principal payments
with respect to the Advance unless and until the Advance is repaid in full.

 

(c) Breakage Costs. Concurrently with any prepayment of the Advance made on
other than the last day of an Interest Period, Borrower shall pay to Bank the
following amount: the excess, if any, of (a) the amount of interest which would
have accrued on the amount prepaid during the period from the date of such
prepayment to the last day of that Interest Period at the applicable interest
rate provided for herein over (b) the amount of interest (as reasonably
determined by Bank) which would have accrued to the holder of a Treasury
Obligation selected by Bank in the amount (or as close to such amount as
feasible) of the amount prepaid and having a maturity date on (or as soon after
as feasible) the last day of that Interest Period, would earn if the Treasury
Obligation were purchased in the secondary market on the date the prepayment is
made to Bank and were held to maturity. Borrower agrees that the aforedescribed
amount shall be based on amounts which a holder of a Treasury Obligation would
receive under the foregoing circumstances, whether or not Bank actually invests
the amount prepaid in any Treasury Obligation. Borrower acknowledges that
determining the actual amount of costs and expenses resulting from a prepayment
on other than the last day of an Interest Period may be difficult or impossible
to determine in an specific instance and that, accordingly, the amount set forth
above is a reasonable estimate of such costs and expense.

 

§3.3 Facility Fee. On or before the Agreement Date, Borrower shall pay to Bank a
non-refundable facility fee in the amount of $5,000.00.

 

§3.4 Late Charges. Without limiting or waiving any rights or remedies of Bank
contained herein or under Applicable Law, and without implying that Bank has the
obligation to declare or to notify Borrower of the occurrence of any Event of
Default, if Bank has neither declared nor notified Borrower of the occurrence of
an Event of Default, and if any amount of any required payment of principal,
interest or fees hereunder or under the Note is not paid in full

-14-

within 10 days after the same is due, then, in addition to all other interest
and other amounts due hereunder, Borrower shall pay to Bank on demand a late
charge equal to five percent (5%) of the delinquent payment. Each such late
charge is intended to compensate Bank for administrative and other costs
associated with not receiving a payment when due and is neither a penalty nor
interest.

 

§3.5 Payments and Computations.

 

(a) Borrower shall make each payment hereunder by 1:00 p.m. (New York City time)
on the day when due, in lawful money of the United States of America and
immediately available funds without setoff or deduction of any kind, to Bank at
the Payment Address.

 

(b) All computations of interest, commissions and fees hereunder shall be made
by Bank on the basis of a year of 360 days and the actual number of days
(including the first day but excluding the last day) for the period for which
such interest, commission or fee is payable. Each payment under this Agreement
or the Note shall be applied in such order and manner as Bank determines.

 

(c) Whenever any payment to be made under this Agreement or any other Credit
Document shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day (or, if the next
succeeding Business Day falls in the next calendar month, on the immediately
preceding Business Day), and such extension of time shall in such case be
reflected in the computation of interest, commissions or fees, as the case may
be.

 

(d) Bank is irrevocably authorized (but not required) to charge against any
deposit account in Borrower’s name with Bank any amount that is due under this
Agreement or other Credit Document, even if doing so creates an overdraft.

 

(e) Bank’s computation of interest and other amounts owing hereunder shall, in
the absence manifest error, be conclusive and binding on Borrower.

 

§3.6 Evidence of Indebtedness; Impaired Note. The Advance and Borrower’s
obligations to repay it, with interest in accordance with the terms of this
Agreement, shall be evidenced by this Agreement, the records of Bank, and the
Note. The records of Bank shall be prima facie evidence (absent fraud or
manifest error) of the Advance and the other indebtedness of Borrower under this
Agreement, of accrued interest thereon, of accrued fees, and of all payments
made in respect of any thereof. Upon Borrower’s receipt from Bank of (a)
reasonably satisfactory evidence of the loss, theft, destruction or mutilation
of the Note (an “Impaired Note”) and (b) (i) in the case of mutilation, such
Impaired Note for cancellation and (ii) in all cases, indemnity reasonably
satisfactory to Borrower and reimbursement of Borrower’s reasonable
out-of-pocket expenses incidental thereto, Borrower shall make and deliver to
Bank a new replacement Note of like tenor, date and principal amount in lieu of
the Impaired Note.

 

§4. COLLATERAL.

 

§4.1 Borrower Collateral. The Obligations (together with all indebtedness,
obligations and duties of Borrower to Bank arising under or in connection with
the Existing Term Note, the Revolving Note, the Revolving Credit Agreement, any
Term Note, as that term is defined in the Revolving Credit Agreement, and any
other Credit Documents, as that term is

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defined in the Revolving Credit Agreement, all as more particularly described in
the Revolving Credit Agreement) shall be secured at all time by a perfected,
first priority security interest in all of the Borrower Collateral. Without
limiting the generality of the preceding sentence, the Obligations shall be
secured at all times by a perfected (both by filing and possession by Bank of
the related Equity Certificates), first-priority security interest in and pledge
of all of the Capital Securities of each Subsidiary.

 

§4.2 Other Collateral. The Obligations shall be secured at all times by (a) a
perfected, first priority mortgage on, collateral assignment of and security
interest in all Ark Real Estate Collateral; (b) a perfected, first priority
security interest in all Ark Shuckers Collateral; and (c) a perfected, first
priority security interest in all Ark Island Collateral, subject to any
limitations set forth in the Mortgage and the Security Agreements.

 

§5. CONDITIONS OF LENDING.

 

§5.1 Documentary Conditions Precedent to be Satisfied Before Closing. The
obligation of Bank to make the Advance is subject to the condition precedent
that Bank shall have received, on or before the Agreement Date, the following,
all in form and substance satisfactory to Bank:

 

(a) The Note duly executed by Borrower;

 

(b) An amended and restated security agreement duly executed by Borrower, which
amends and restates Borrower’s obligations and liabilities under the Borrower
Security Agreement, covering the Borrower Collateral and securing all
obligations of Borrower, Rio and AC heretofore secured by the Borrower Security
Agreement and all Obligations (the “Borrower Amended and Restated Security
Agreement”), together with (i) financing statements (form UCC-1) duly filed
under the Uniform Commercial Code of all jurisdictions as may be necessary or,
in Bank’s reasonable opinion, desirable to perfect the security interests
created by the Borrower Amended and Restated Security Agreement; and (ii)
reports acceptable to Bank listing the financing statements referred to in
clause (i) above and no other financing statements;

 

(c) Evidence of the issuance of all insurance policies and loss payee
endorsements required by the terms of the Borrower Security Agreement as
modified by the Borrower Security Agreement Modification;

 

(d) Judgment, tax lien and litigation searches in all relevant jurisdictions
showing that there are no outstanding judgments, tax liens or pending lawsuits
against Borrower or any property of Borrower except as disclosed herein;

 

(e) A certified copy of the resolutions of the board of directors of Borrower
approving and authorizing each Credit Document to which it is a party and of all
documents evidencing other necessary corporate action and Governmental
Approvals, if any, with respect to each such Credit Document;

 

(f) A certificate of the Secretary or an Assistant Secretary of Borrower
certifying the name and true signatures of its officers authorized to sign each
Credit Document to which it is a party and the other documents to be delivered
by it hereunder;

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(g) A certificate of status issued by the New York Secretary of State with
respect to Borrower; a copy of Borrower’s articles of incorporation certified by
such Secretary of State; and a copy of Borrower’s bylaws certified as true and
complete by an Authorized Representative;

 

(h) a Mortgage, Assignment of Rents and Security Agreement, encumbering the Real
Estate Collateral, duly executed by Ark Real Estate (the “Mortgage”);

 

(i) an Environmental Compliance and Indemnification Agreement duly executed by
Borrower and Ark Real Estate (the “Environmental Indemnity”);

 

(j) a true and correct copy of that certain Lease Agreement by and between Ark
Real Estate, as landlord, and Ark Shuckers, as tenant, pursuant to which Ark
Shuckers leases the Ark Real Estate Collateral from Ark Real Estate, duly
executed by Ark Real Estate and Ark Shuckers (the “Lease”);

 

(k) a subordination and attornment agreement duly executed by Ark Real Estate
and Ark Shuckers with respect to the Lease;

 

(l) evidence of completion of all recordings and filings as may be necessary,
or, in the opinion of Bank, desirable, to perfect the security interest and
liens created by the Mortgage;

 

(m) evidence of the issuance of all insurance policies and mortgagee endorsement
required by the terms of the Mortgage;

 

(n) a current, fully paid for, ALTA-Form title insurance commitment (the “Title
Commitment”) which is issued by a nationally recognized title insurance company
satisfactory to Bank (the “Title Company”), contains “GAP coverage” and binds
the Title Company to issue an ALTA-Form extended coverage mortgagee title
insurance policy (the “Title Policy”) which is in the principal amount of the
Note (or such lesser amount acceptable to Bank), which insures that the Mortgage
is a valid first lien on the Units subject only to exceptions, if any, which
Bank approves in writing and which contains a Florida Form 9 endorsement, a
variable rate endorsement, a condominium endorsement, and whatever other
endorsements are required by Bank;

 

(o) evidence that the Commercial Units are zoned so as to permit their current
use as a restaurant and the Residential Units are so zoned to permit therein
current use as a hotel for transient guests and violate no zoning, building,
safety or handicapped access codes or regulations;

 

(p) copies of all licenses and contracts relevant to the Units’ use or
operation;

 

(q) A Security Agreement (the “Ark Shuckers Security Agreement”) duly executed
by Ark Shuckers covering the Ark Shuckers Collateral and securing the
Obligations and the obligations of Ark Shuckers under any Cash Management
Agreement, together with (i) financing statements (form UCC-1) duly filed under
the Uniform Commercial Code of all jurisdictions as may be necessary or, in
Bank’s reasonable opinion, desirable to perfect the security interest created by
the Ark Shuckers Security Agreement, and (ii) reports acceptable to Bank listing
the financing statements referred to in clause(i) above and no other financing
statements;

 

(r) Evidence of the issuance of all insurance policies and loss payee
endorsements required by the terms of the Ark Shuckers Security Agreement;

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(s) A Security Agreement (the “Ark Island Security Agreement”) duly executed by
Ark Island covering the Ark Island Collateral and securing the Obligations and
the obligations of Ark Island under any Cash Management Agreement, together with
(i) financing statements (form UCC-1) duly filed under the Uniform Commercial
Code of all jurisdictions as may be necessary or, in Bank’s reasonable opinion,
desirable to perfect the security interest created by the Ark Island Security
Agreement, and (ii) reports acceptable to Bank listing the financing statements
referred to in clause (i) above and no other financing statements;

 

(t) whatever certificates, resolutions, consents and other evidence Bank may
reasonably require regarding the organization and existence of Rio, AC. Las
Vegas, Ark Real Estate, Ark Shuckers and Ark Island and regarding their
authority and power to enter into and perform the Credit Documents to which each
is a party;

 

(u) current financial statements and income verifications for Borrower;

 

(v) UCC, tax lien, bankruptcy and judgment searches in all appropriate offices
disclosing that no financing statements, bankruptcy filings, tax liens or
judgments liens are outstanding against Borrower, and a litigation search in New
York, with respect to Borrower, disclosing that Borrower is not a defendant in
any litigation and unfavorable outcome in which could have a material, adverse
effect on Borrower’s financial condition;

 

(w) Payment by Borrower (of, if already paid, reimbursement to Bank for) all
reasonable costs and expenses in connection with the preparation, execution,
delivery, filing and recording of the Credit Documents, including the reasonable
fees and out-of-pocket expenses of counsel for Bank with respect thereto, all
surveying costs, appraisal fees, environmental review costs, title insurance
premiums, collateral inspection expenses and all other costs incurred by Bank in
connection therewith;

 

(x) a favorable opinion of Davidoff Hutcher & Citron LLP, New York counsel for
Borrower, Rio, AC, Las Vegas, Ark Real Estate, Ark Shuckers and Ark Island, and
of Koeppel Law Group, P.A., Florida counsel for Ark Real Estate, Ark Shuckers
and Ark Island, covering such matters as Bank may request;

 

(y) all documents required by §5.1 of the Revolving Credit Agreement; and

 

(z) such other approvals, certificates, opinions and documents as are required
by any closing checklist regarding this Agreement or as Bank may reasonably
request.

 

§5.2 Other Conditions Precedent to Advance. The obligation of Bank to make the
Advance is subject to the fulfillment of each of the following conditions to
Bank’s satisfaction:

 

(a) Each of the Representations and Warranties shall, in the determination of
Bank in its reasonable discretion, be true and correct in all material respects
at and as of the time of the Advance, with and without giving effect to the
Advance and to the application of the proceeds thereof, except those expressly
stated to be made as of a particular date which shall be true and correct in all
material respects as of such date;

 

(b) No Default or Event of Default shall have occurred and be continuing at the
time of the Advance, with or without giving effect to the Advance and to the
application of the proceeds thereof;

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(c) Receipt by Bank, within a reasonable time after Bank’s request, of such
materials as may have been requested pursuant to §9 as, when and to the extent
required to be delivered thereunder;

 

(d) The Advance will not contravene any Applicable Law;

 

(e) All legal matters incident to the Advance and the other transactions
contemplated by this Agreement shall be reasonably satisfactory to counsel for
Bank;

 

(f) No Federal tax liens or other Liens (besides Permitted Liens) shall have
been filed against any of the Collateral;

 

(g) Each Obligor is Solvent and will be so after giving effect to the Advance.

 

§5.3 No Waiver. No failure by Bank to insist on fulfillment, before it makes the
Advance, of any condition precedent specified in §5.1 and §5.2 shall operate as
a waiver of or otherwise impair its right to insist on such condition
precedent’s fulfillment, and any failure to fulfill such condition precedent
immediately upon demand shall constitute a default of a covenant or agreement
hereunder.

 

§6. CERTAIN REPRESENTATIONS AND WARRANTIES OF BORROWER.

 

In order to induce Bank to enter into this Agreement and to make the Advance,
Borrower represents and warrants to Bank as follows (and will continue to do so
as long as this Agreement is in effect):

 

§6.1 Organization: Power; Qualification; Compliance; Approval. Each Obligor is a
corporation or limited liability company duly organized, validly existing and in
good standing under the laws of the state of its incorporation or organization,
has the corporate power and authority to own its properties and to carry on its
businesses as now being and proposed to be hereafter conducted, and is duly
qualified, in good standing, and authorized to do business, in all jurisdictions
in which the character of its properties or the nature of its businesses
requires such qualification, good standing or authorization. Each Obligor is
conducting its business in material compliance with all Applicable Law.

 

§6.2 Subsidiaries. As of the Agreement Date, the only Subsidiaries are the
companies listed in Schedule 6.2 herein. Borrower owns 50 percent or more of the
issued and outstanding Capital Securities of the Subsidiaries (and owns 100
percent of the issued and outstanding Capital Securities of Ark Real Estate, Ark
Shuckers and Ark Island), or such Subsidiaries are otherwise Controlled by
Borrower.

 

§6.3 Solvency. Each Obligor is and will be Solvent after giving effect to the
transactions contemplated by the Credit Documents.

 

§6.4 Authorization and Compliance of Agreement and Note. Each Obligor has the
corporate or limited liability company power, and has taken all necessary
corporate or limited liability company and other (including stockholder and
member, if necessary) action to authorize it to execute, deliver and perform the
Credit Documents to which it is a party in accordance with their respective
terms, to incur its other obligations under and each of the Credit Documents to
which it is a party and to borrow or guaranty (as the case may be) hereunder.
Each of the Credit Documents delivered on the Agreement Date has been duly

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executed and delivered by the Obligor party thereto and is a legal, valid and
binding obligation of such Obligor, enforceable against such Obligor in
accordance with its terms. The execution, delivery and performance of the other
Credit Documents by each Obligor party thereto in accordance with their
respective terms, and the incurring of obligations thereunder by the Obligor, do
not and will not (a) require (i) any Governmental Approval or (ii) any consent
or approval of the stockholders or members of such Obligor that has not been
obtained, or adversely affect in any way the validity or enforceability of any
Credit Document , (b) violate or conflict with, result in a breach of, or
constitute a default under, (i) any Contract to which such Obligor is a party or
by which its or any of its properties may be bound, (ii) any Applicable Law,
unless in any such case the violation would not have a Material Adverse Effect
or adversely affect in any way the validity or enforceability of any Credit
Document or (iii) such Obligor’s articles of incorporation or organization or
bylaws or operating agreement, or (c) result in or require the creation of any
Lien upon any assets of such Obligor (other than Permitted Liens).

 

§6.5 Litigation. Except as set forth on Schedule 6.5 hereto, as of the Agreement
Date there are not, in any court or before any arbitrator of any kind or before
or by any governmental or non-governmental body, any actions, suits or
proceedings, pending (or to the knowledge of Borrower overtly threatened in
writing), against or in any other way relating to or affecting any Obligor or
other Subsidiary, or the business or any property of any Obligor or other
Subsidiary, except actions, suits or proceedings that, if adversely determined,
would not (i) result in liability more than $150,000.00 above the amount of
insurance coverage in effect with respect thereto or (ii) have a Material
Adverse Effect.

 

§6.6 Burdensome Provisions. No Obligor is a party to or bound by any Contract
that is likely to have a Material Adverse Effect.

 

§6.7 No Material Adverse Change or Event. Between June 27, 2015 and the
Agreement Date, no change in the business, assets, liabilities, financial
condition or results of operations of Borrower or its Subsidiaries has occurred,
and no event has occurred or failed to occur, which has had or constituted or
would reasonably be expected to have or constitute, either alone or in
conjunction with all other such changes, events and failures, a Material Adverse
Effect.

 

§6.8 No Adverse Fact. No fact or circumstance is known to Borrower as of the
date hereof which Bank could not reasonably be expected to be aware of and
which, either alone or in conjunction with all other such facts and
circumstances, has had a Material Adverse Effect that has not been set forth or
referred to in the financial statements referred to in §10(a) or in a writing
specifically captioned “Disclosure Statement” and delivered to Bank prior to the
date hereof. If a fact or circumstance disclosed in such financial statements or
Disclosure Statement, or if an action, suit or proceeding disclosed in Schedule
6.5, should in the future have or constitute a Material Adverse Effect upon
Borrower or any Subsidiary or upon this Agreement or any other Credit Document,
such Material Adverse Effect shall be a change or event subject to §6.8
notwithstanding such disclosure.

 

§6.9 Title to Properties. Borrower has, as of the date of such financial
statements or Forms 10-Q or 10-K, as the case may be, title to its properties
reflected on the financial statements referred to in §9 or its most recent Form
10-Q or Form 10-K subject to no Liens or material adverse claims except
Permitted Liens.

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§6.10 Patents, Trademarks, Etc. Borrower and Subsidiaries each owns, or is
licensed or otherwise has the lawful right to use, all Intellectual Property
used in or necessary for the conduct of its business as currently in any
material respect conducted. To Borrower’s knowledge, the use of such
Intellectual Property by Borrower or such Subsidiary does not infringe on the
rights of any Person.

 

§6.11 Margin Stock; Etc. The proceeds of the Advance will be used by Borrower,
Ark Real Estate, Ark Shuckers and Ark Island only for the purposes expressly
authorized herein. None of such proceeds will be used, directly or indirectly,
for the purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Debt which was originally incurred to purchase or carry
margin stock or for any other purpose which might constitute any of the Advances
a “purpose credit” within the meaning of Regulation U. Neither Borrower nor any
agent acting in its behalf has taken or will take any action which might cause
this Agreement or any of the documents or instruments delivered pursuant hereto
to violate any regulation of the Board of Governors of the Federal Reserve Board
or to violate the Securities Exchange Act of 1934, as amended, or the Securities
Act of 1933, as amended, or any state securities laws, in each case as in effect
on the date hereof.

 

§6.12 Investment Company. Borrower is not an “investment company,” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an
“investment company,” as such terms are defined in the Investment Company Act of
1940, as amended (15 U.S.C. §80a-1, et seq.). The application of the proceeds of
the Advance and repayment thereof by Borrower and the performance by Borrower of
the transactions contemplated by the Credit Documents will not violate any
provision of that statute, or any rule, regulation or order issued by the
Securities and Exchange Commission thereunder, in each case as in effect on the
date hereof.

 

§6.13 ERISA.

 

(a) Borrower and each ERISA Affiliate is in material compliance with all
applicable provisions of ERISA and the regulations and published interpretations
thereunder and in material compliance with all Foreign Benefit Laws with respect
to all Employee Benefit Plans except for any required amendments for which the
remedial amendment period as defined in Section 401(b) of the Code has not yet
expired and except for circumstances where the failure to comply could not
reasonably be expected to have a Material Adverse Effect. Each Employee Benefit
Plan that is intended to be qualified under Section 401(a) of the Code has been
determined to be exempt under Section 501(a) of the Code. No material liability
has been incurred by Borrower or any ERISA Affiliate which remains unsatisfied
for any taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan;

 

(b) Neither Borrower nor any ERISA Affiliate has (i) engaged in a nonexempt
prohibited transaction described in Section 4975 of the Code or Section 406 of
ERISA affecting any of the Employee Benefit Plans or the trusts created
thereunder which could subject any such Employee Benefit Plan or trust to a
material tax or penalty on prohibited transactions imposed under Internal
Revenue Code Section 4975 or ERISA, (ii) incurred any material accumulated
funding deficiency with respect to any Employee Benefit Plan, whether or not
waived, or any other material liability to the PBGC which remains outstanding,
other than the payment of premiums (and there are no premium payments which are
due and unpaid which could reasonably be expected to have a Material Adverse
Effect), (iii) failed to make a required material contribution or payment to a
Multiemployer Plan, or (iv) failed to make a material

-21-

required installment or other required payment under Section 412 of the Code,
Section 302 of ERISA or the terms of such Employee Benefit Plan;

 

(c) No Termination Event has occurred or is reasonably expected to occur with
respect to any Pension Plan or Multiemployer Plan, and neither Borrower nor any
ERISA Affiliate has incurred any unpaid withdrawal liability with respect to any
Multiemployer Plan;

 

(d) The present value of all vested accrued benefits under each Employee Benefit
Plan which is subject to Title IV of ERISA, did not, as of the most recent
valuation date for each such plan, exceed the then current value of the assets
of such Employee Benefit Plan allocable to such benefits;

 

(e) Each Employee Benefit Plan maintained by Borrower or any ERISA Affiliate,
has been administered in accordance with its terms in all material respects and
is in compliance in all material respects with all applicable requirements of
ERISA and other Applicable Law, except for circumstances where the failure to
comply or accord could not reasonably be expected to have a Material Adverse
Effect;

 

(f) The making of the Advance will not involve any prohibited transaction under
ERISA which is not subject to a statutory or administrative exemption; and

 

(g) No material proceeding, claim, lawsuit and/or investigation exists or, to
the best knowledge of Borrower after due inquiry, is threatened concerning or
involving any Employee Benefit Plan.

 

§6.14 No Default. As of the date hereof, to the best of Borrower’s knowledge,
there exists no Default or Event of Default.

 

§6.15 Hazardous Materials. Each Obligor is in compliance with all applicable
Environmental Laws in all material respects. Borrower has not been notified in
writing of any action, suit, proceeding or investigation which, and Borrower is
not aware of any facts which, (a) calls into question, or could reasonably be
expected to call into question, compliance by any Obligor with any Environmental
Laws, (b) seeks to suspend, revoke or terminate any license, permit or approval
necessary for the generation, handling, storage, treatment or disposal of any
Hazardous Material, or (c) seeks to cause any property of any Obligor to be
subject to any restrictions on ownership, use, occupancy or transferability
under any Environmental Law to which such Obligor is not currently subject,
which in the case of any matter described in items (a), (b) or (c) above would
result in a Material Adverse Effect.

 

§6.16 Employment Matters. (a) Except as set forth in Schedule 6.16, none of the
employees of Borrower or any Subsidiary is subject to any collective bargaining
agreement and there are no strikes, work stoppages, election or decertification
petitions or proceedings, unfair labor charges, equal opportunity proceedings,
or other material labor/employee related controversies or proceedings pending
or, to the best knowledge of Borrower, overtly threatened in writing against
Borrower or any Subsidiary or between Borrower or any Subsidiary and any of its
employees, other than those which would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect; and

 

(b) Except as set forth in Schedule 6.16 or to the extent a failure to maintain
compliance would not have a Material Adverse Effect, Borrower and each
Subsidiary are in

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compliance in all respects with all Applicable Law pertaining to labor or
employment matters, including without limitation those pertaining to wages,
hours, occupational safety and taxation and there is neither pending nor to
Borrower’s knowledge overtly threatened in writing any litigation,
administrative proceeding nor, to the knowledge of Borrower, any investigation,
in respect of such matters which, if decided adversely, would individually or in
the aggregate have a Material Adverse Effect.

 

§6.17 RICO. Neither Borrower nor any Subsidiary is engaged in or has engaged in
any course of conduct that would subject any of its properties to any Lien,
seizure or other forfeiture under any criminal law, racketeer influenced and
corrupt organizations law (civil or criminal) or other similar laws.

 

§7. CERTAIN GENERAL COVENANTS.

 

As long as this Agreement is in effect, unless Bank shall otherwise consent in
writing, Borrower shall perform and observe the following:

 

§7.1 Preservation of Existence and Properties, Scope of Business, Compliance
with Law, Payment of Taxes and Claims. (a) Preserve and maintain its corporate
existence and all of its other franchises, licenses, rights and privileges, (b)
preserve, protect and obtain all Intellectual Property, and preserve and
maintain in good repair, working order and condition all other properties,
required for the conduct of its business as presently conducted, all in
accordance with customary and prudent business practices, (c) engage only in the
business in which it is engaged as of the Agreement Date and related businesses
that in Bank’s reasonable judgment are closely related thereto, (d) comply with
all Applicable Laws (including all Environmental Laws and all racketeer
influenced and corrupt organizations law), (e) except to the extent permitted
otherwise in §§7.4(a) and 7.4(b), pay or discharge when due all Taxes owing by
it or imposed upon its property (for the purposes of this clause, such Taxes
shall be deemed to be due on the date after which they become delinquent), and
all liabilities which might become a Lien (other than a Permitted Lien) on any
of the Collateral, (f) take all action and obtain all Governmental Approvals
required so that its obligations under the Credit Documents will at all times be
valid and binding and enforceable in accordance with their respective terms, and
(g) obtain and maintain all licenses, permits and approvals of Governmental
Authorities and as are required for the conduct of its business as presently
conducted, except where failure to do any of the foregoing would not have a
Material Adverse Effect.

 

§7.2 Insurance. Maintain property, liability and flood insurance with
responsible insurance companies acceptable to Bank against such risks and in
such amounts as is customarily maintained by similar businesses or as may be
required by Applicable Law.

 

§7.3 Use of Proceeds. Use the Advance only for the purposes described in §2.2
and refrain from using proceeds of the Advance to purchase or carry, or to
reduce or retire or refinance any credit incurred to purchase or carry, any
margin stock (within the meaning of Regulation U) or to extend credit to others
for the purpose of purchasing or carrying any margin stock. If requested by
Bank, Borrower shall furnish to Bank statements in conformity with the
requirements of Federal Reserve Form U-1 referred to in Regulation U.

-23-

§7.4 Liens. Not incur, create or permit to exist any Lien with respect to any of
the Collateral now owned or hereafter acquired by Borrower, Ark Real Estate, Ark
Shuckers and Ark Island, other than the following (“Permitted Liens”):

 

(a) Liens imposed by law for taxes, assessments or charges of any Governmental
Authority for claims which either are not yet delinquent or which are being
contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP;

 

(b) statutory and contractual Liens of landlords, carriers, warehousemen,
mechanics or materialmen on Borrower’s equipment and inventory and other Liens
on such equipment and inventory imposed by law or created in the ordinary course
of business for amounts either which are not yet due or which are being
contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP;

 

(c) Liens incurred or deposits made in the ordinary course of business
(including without limitation surety bonds and appeal bonds) in connection with
workers’ compensation, Taxes, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids, leases,
Contracts (other than for the repayment of Debt), statutory obligations and
other similar obligations or arising as a result of progress payments under
government Contracts;

 

(d) easements (including reciprocal easement agreements and utility agreements),
rights-of-way, covenants, consents, reservations, encroachments, variations and
zoning and other restrictions, charges or encumbrances (whether or not
recorded), which do not interfere materially with the ordinary conduct of the
business of Borrower, Ark Real Estate, Ark Shuckers and Ark Island taken as a
whole and which do not materially detract from the value of the property to
which they attach or materially impair the use thereof to Borrower, Ark Real
Estate, Ark Shuckers and Ark Island;

 

(e) Liens with respect to any Collateral now owned or hereafter acquired by
Borrower for an amount less than $1,000.00 in any one instance and less than
$5,000.00 in the aggregate.

 

§7.5 Merger and Consolidation. (a) Not consolidate with or merge into any other
Person, or (b) permit any other Person to merge into it, or (c) liquidate,
wind-up or dissolve or sell, transfer or lease or otherwise dispose of all or a
substantial part of its assets; provided, however, after notice thereof to Bank,
(i) any Subsidiary may merge, sell, transfer, lease or otherwise dispose of, all
or substantially all of its assets into or consolidate with Borrower or any
Subsidiary wholly owned by Borrower, (ii) any Subsidiary may liquidate, windup
or dissolve so long as all of its assets (subject to its liabilities) are
transferred to Borrower or to another Subsidiary, (iii) any other Person may
merge into or consolidate with Borrower or any Subsidiary wholly owned by
Borrower.

 

§7.6 Debt. Not incur or allow to exist Debt (excluding Debt described on
Schedule 7.6 and Debt owed to Bank) in excess of $100,000.00 at any one time
outstanding.

 

§7.7 Compliance with ERISA. With respect to any Pension Plan, Employee Benefit
Plan or Multiemployer Plan, not:

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(a) permit the occurrence of any Termination Event which would result in a
material liability on the part of Borrower or any ERISA Affiliate to the PBGC;
or

 

(b) permit the present value of all benefit liabilities under all Pension Plans
to exceed the current value of the assets of such Pension Plans allocable to
such benefit liabilities; or

 

(c) permit any material accumulated funding deficiency (as defined in Section
302 of ERISA and Section 412 of the Code) with respect to any Pension Plan,
whether or not waived; or

 

(d) fail to make any contribution or payment to any Multiemployer Plan which
Borrower or any ERISA Affiliate may be required to make under any agreement
relating to such Multiemployer Plan, or any law pertaining thereto; or

 

(e) engage, or permit Borrower or any ERISA Affiliate to engage, in any
prohibited transaction under Section 406 or ERISA or Sections 4975 of the Code
for which a civil penalty pursuant to Section 502(i) of ERISA or a tax pursuant
to Section 4975 of the Code may be imposed and which would reasonably be
expected to result in a Material Adverse Effect; or

 

(f) permit the establishment of any Employee Benefit Plan providing
post-retirement welfare benefits or establish or amend any Employee Benefit Plan
which establishment or amendment could result in liability to Borrower or any
ERISA Affiliate or increase the obligation of Borrower or any ERISA Affiliate to
a Multiemployer Plan where such establishment or amendment would reasonably be
expected to result in a Material Adverse Effect; or

 

(g) fail, or permit any ERISA Affiliate to fail, to establish, maintain and
operate each Employee Benefit Plan in compliance in all material respects with
the provisions of ERISA, the Code and all other Applicable Law and
interpretations thereof.

 

§7.8 Fiscal Year. Not change its Fiscal Year.

 

§7.9 Dissolution, etc. Not wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution.

 

§7.10 Limitations of Sales and Leasebacks. Not enter into any arrangement with
any Person providing for the leasing by Borrower or any Subsidiary of real or
personal property, whether now owned or hereafter acquired in a related
transaction or series of related transactions, which has been or is to be sold
or transferred by Borrower or any Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of Borrower or any Subsidiary.

 

§7.11 Change in Control. Not cause or permit to occur any Change of Control or
Material Management Change.

 

§7.12 Negative Pledge Clauses. Not enter into or cause, suffer or permit to
exist any agreement with any Person other than Bank pursuant to this Agreement
or any other Credit Documents which prohibits or limits the ability of Borrower
or any Subsidiary to create, incur, assume or suffer to exist any Lien upon any
of its property, except in connection with Permitted Liens.

-25-

§7.13 Intellectual Property. Not sell, assign, encumber or otherwise dispose of
any of its Intellectual Property, except for the licensing of Intellectual
Property in the ordinary course of business and sales, assignments or other
dispositions of Intellectual Property no longer used or useful in Borrower’s
business; and maintain each Trademark useful in its business.

 

§7.14 Deposit Relationship. Maintain with Bank a cash concentration account for
cash needed above regular operations plus any other amount needed for
performance of this Agreement and the Note.

 

§7.15 Expired Building Permit. Take all actions required by Governmental
Authorities with respect to the Expired Building Permit including renewal of
such permit, submission of an engineer’s report certifying compliance with
applicable building code requirements, and a surveyor’s report certifying
compliance with flood and elevation requirements, in order to cause the Expired
Building Permit to be in compliance with Applicable Laws with 120 days after the
date of this Agreement.

 

§7.16 Parking Agreement. Use commercial reasonable efforts to obtain an
agreement, in form and content reasonably satisfactory to Bank, within 60 days
after the date of this Agreement, duly executed by Robert Rigel, individually
and as trustee, conferring upon Bank the benefits of the Parking Agreement after
foreclosure of the Mortgage, or a deed in lieu of foreclosure, and if so
obtained, cause Ark Shuckers Real Estate to promptly duly execute and deliver
such agreement to Bank.

 

§7.17 Subsidiaries. Cause each Subsidiary to comply with each covenant contained
in this §7 as though references therein to Borrower were references to such
Subsidiary.

 

§8. CERTAIN FINANCIAL COVENANTS.

 

§8.1 Tangible Net Worth. As long as this Agreement is in effect, Borrower shall
maintain a Tangible Net Worth of not less than $22,000,000.00. Borrower’s
compliance or non-compliance with this covenant shall be tested at least
quarterly at the end of each Fiscal Period using the statements described in
§9.1(a) and §9.1(b).

 

§8.2 Fixed Charge Coverage Ratio. As long as this Agreement is in effect,
Borrower shall maintain a Fixed Charge Coverage Ratio of not less than 1.1:1.
Borrower’s compliance or non-compliance with this covenant shall be tested
quarterly for each Fiscal Period on a trailing 12-month basis using the
statements described in §9.1(a) and (b).

 

§8.3 Net Income. As long as this Agreement is in effect, Borrower shall maintain
a Net Income Attributable to Borrower and Subsidiaries of not less than
$2,000,000.00. Borrower’s compliance or non-compliance with this covenant shall
be tested annually for each Fiscal Year using the statements described in
§9.1(a).

 

§9. INFORMATION.

 

§9.1 Financial Statements and Information to be Furnished. As long as this
Agreement is in effect, Borrower shall deliver to Bank:

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(a) Year-End Statements; Accountants’ and Officer’s Certificates. As soon as
available and in any event no later than that date which is the later of: (x) 90
days after the end of each Fiscal Year and (y) the filing of Borrower’s Form
10-K if an extension was properly filed with the Securities and Exchange
Commission and such Form 10-K is filed within the permitted extension (or, in
the case of the certificates specified in clause (ii) below 120 days after the
end of each Fiscal Year), (i) consolidated balance sheets of Borrower and the
Subsidiaries as at the end of each Fiscal Year, and the notes thereto, and
related consolidated statements of income, shareholders’ equity and cash flow,
and the respective notes thereto, for such Fiscal Year, setting forth
comparative financial statements for the preceding Fiscal Year, all prepared in
accordance with GAAP applied on a Consistent Basis and containing, with respect
to the financial statements, opinions of independent certified public
accountants of national standing selected by Borrower and reasonably acceptable
to Bank, which are unqualified as to the scope of the audit performed and as to
the “going concern” status of Borrower and the Subsidiaries and without any
exception and (ii), within 30 days thereafter, a certificate signed by an
Authorized Representative and demonstrating compliance with §§8.1, 8.2 and 8.3
and Borrower’s other covenants herein.

 

(b) Quarterly Statements; Officer’s Certificates. As soon as available and in
any event within 45 days after the end of each Fiscal Period, (i) consolidated
balance sheets of Borrower and the Subsidiaries as of the end of such Fiscal
Period and related consolidated statements of income, shareholders’ equity and
cash flow, all prepared in accordance with GAAP (except for normal year-end
adjustments) and (ii) within 30 days thereafter, a certificate signed by an
Authorized Representative and demonstrating compliance with §§8.1 and 8.2 and
Borrower’s other covenants herein.

 

(c) Annual Projections. As soon as available and in any event within 120 days
after the end of each Fiscal Year, projections for the succeeding two (2) Fiscal
Years including a balance sheet, income statement and statement of cash flow,
all on a consolidated basis.

 

(d) Additional Materials.

 

(i) Promptly upon Borrower’s becoming aware thereof, notice of each federal
statutory Lien, tax or other state or local government Lien or other Lien (other
than Permitted Liens) filed against the property of Borrower or any Subsidiary;

 

(ii) From time to time and within a reasonable time after Bank’s request, such
data, certificates, reports, statements, or further information regarding this
Agreement, any other Credit Document, any Credit Extension, any Collateral or
any other transaction contemplated hereby, or the business, assets, liabilities,
financial condition, results of operations or business prospects of Borrower and
the Subsidiaries, as Bank may request, in each case in form and substance, with
a degree of detail, and certified in a manner, reasonably satisfactory to Bank.

 

(e) Notice of Defaults, Litigation and other Matters. Promptly after Borrower
obtains knowledge thereof, notice of: (i) any Default; (ii) the commencement of
any action, suit or proceeding or investigation in any court or before any
arbitrator of any kind or by or before any Governmental Authority or
non-governmental body against or in any other way relating adversely to or
materially adversely affecting (A) Borrower or any Subsidiary, or any of its
businesses or properties, that, if adversely determined, singly would result in
liability more than $150,000.00 above the amount covered by insurance or (2)
otherwise would, singly or in the aggregate, have a Material Adverse Effect, or
(B) in any material way this Agreement or the

-27-

other Credit Documents or any transaction contemplated hereby or thereby; (iii)
any amendment of the articles of incorporation or bylaws of Borrower or the
articles of incorporation, bylaws, certificate of formation or operating
agreement of any Subsidiary; and (iv) any significant material adverse
development in any lawsuits described in Schedule 6.5.

 

§9.2 Accuracy of Financial Statements and Information.

 

(a) Historical Financial Statements. Borrower hereby represents and warrants to
Bank: (i) that the financial statements heretofore furnished to Bank are
complete and correct and present fairly in all material respects, in accordance
with GAAP applied on a Consistent Basis throughout the periods involved, the
financial position of Borrower and the Subsidiaries on a consolidated basis as
at their respective dates and the results of operations, retained earnings and,
as applicable, the changes in financial position or cash flows of Borrower and
Subsidiaries for the respective periods to which such statements relate, and
(ii) that, except as disclosed or reflected in such financial statements,
Borrower and the Subsidiaries have no liabilities, contingent or otherwise, nor
any unrealized or anticipated losses as of the respective date(s) of such
financial statements and required to be included in such financial statements,
that, singly or in the aggregate, have had or are likely to have a Material
Adverse Effect.

 

(b) Future Financial Statements. All financial statements delivered pursuant to
§9.1, shall be complete and correct and present fairly in all material respects,
in accordance with GAAP applied on a Consistent Basis (except to the extent Bank
approves in writing any departures from GAAP), the financial position of
Borrower and the Subsidiaries, as at their respective dates and the results of
operations, retained earnings, and cash flows of Borrower and the Subsidiaries
for the respective periods to which such statements relate, and their furnishing
to Bank shall constitute a Representation and Warranty by Borrower made on the
date they are furnished to Bank to that effect and to the further effect that,
except as disclosed or reflected in such financial statements, as at the
respective dates thereof, Borrower and its Subsidiaries, to Borrower’s
knowledge, had no liability, contingent or otherwise, nor any unrealized or
anticipated loss as of the respective date(s) of such financial statements and
required to be included in such financial statements, that, singly or in
aggregate, has had or is likely to have a Material Adverse Effect.

 

(c) Historical Information. Borrower hereby represents and warrants to Bank
that, to Borrower’s actual knowledge, all Information furnished to Bank in
writing by or at the direction of Borrower prior to the Agreement Date in
connection with or pursuant to this Agreement and the relationship established
hereunder, at the time it was so furnished, but in the case of Information dated
as of a prior date, as of such date, (i) in the case of any such prepared in the
ordinary course of business, was complete and correct in all material respects
in the light of the purpose prepared, and, in the case of any such the
preparation of which was requested by Bank, was complete and correct in all
material respects to the extent necessary to give Bank true and accurate
knowledge of the subject matter thereof, (ii) did not contain any untrue
statement of a material fact, and (iii) did not omit to state a material fact
necessary in order to make the statements contained therein not misleading in
the light of the circumstances under which they were made; provided, however,
Borrower represents and warrants that all plans, projections and forecasts of
future events or future financial results were prepared to the best of
Borrower’s knowledge, but does not represent or warrant the achievement of the
future results or the occurrence of the future events.

-28-

(d) Future Information. All Information furnished to Bank in writing by or at
the direction of Borrower on and after the Agreement Date in connection with or
pursuant to this Agreement or in connection with or pursuant to any amendment or
modification of, or waiver under, this Agreement, to Borrower’s actual
knowledge, shall, at the time it is so furnished, but in the case of Information
dated as of a prior date, as of such date, (i) in the case of any such prepared
in the ordinary course of business, be complete and correct in all material
respects in the light of the purpose prepared, and, in the case of any such
required by the terms of this Agreement or the preparation of which was
requested by Bank, be complete and correct in all material respects to the
extent necessary to give Bank true and accurate knowledge of the subject matter
thereof, (ii) not contain any untrue statement of a material fact, and (iii) not
omit to state a material fact necessary in order to make the statements
contained therein not misleading, and the furnishing of them to Bank shall
constitute a Representation and Warranty by Borrower made on the date they are
furnished to Bank to the effect specified in clauses (a), (b) and (c); provided,
however, that as to all plans, projections and forecasts of future events or
future financial results Borrower does not represent or warrant the achievement
of the future results or the occurrence of the future events.

 

§9.3 Additional Agreements Relating to Disclosure. As long as this Agreement is
in effect, Borrower shall perform and observe the following:

 

(a) Accounting Methods and Financial Records. Maintain a system of accounting,
and keep such books, records and accounts (which shall be true and complete), as
may be required or necessary to permit (i) the preparation of financial
statements required to be delivered pursuant to §9.1 and (ii) the determination
of Borrower’s compliance with the terms of this Agreement and the other Credit
Documents.

 

(b) Visits and Inspections. Permit representatives (whether or not officers or
employees) of Bank, from time to time during normal business hours, and as often
as may be reasonably requested, to (i) visit and, upon reasonable prior notice,
inspect any properties of Borrower and the Subsidiaries, (ii) inspect and make
extracts from the books and records (including but not limited to management
letters prepared by Borrower’s independent accountants), (iii) discuss with
principal officers of Borrower and the Subsidiaries and the independent
accountants of each the businesses, assets, liabilities, financial conditions,
results of operations and business prospects of Borrower and its Subsidiaries
and (iv) inspect the Collateral and the premises upon which any thereof is
located, and verify the amount, quality, quantity, value and condition thereof
of, or any other matter relating thereto.

 

§10. DEFAULT.

 

§10.1 Events of Default. Each of the following shall constitute an Event of
Default, whatever the reason for such event and whether it is voluntary or
involuntary, or within or without the control of Borrower, or is effected by
operation of law or pursuant to any judgment or order of any court or any order,
rule or regulation of any Governmental Authority or quasi-governmental body:

 

(a) Borrower fails to pay when due any amount in respect of principal of or
interest on the Advance; or Borrower fails to pay when due any other Obligation
which failure is not cured within any applicable cure period;

-29-

(b) Any Representation and Warranty at any time proves to have been incorrect,
misleading or incomplete when made or deemed made; or

 

(c) Borrower defaults in the performance or observance of any covenant contained
in §8 or §9 hereof; or

 

(d) Borrower defaults in the performance or observance of any term, covenant,
condition or agreement contained in this Agreement (other than a default
described in §10.1(a) or (c)) and, if the default is reasonably capable of being
cured, such default shall remain uncured for a period of 30 days after written
notice thereof to Borrower; or

 

(e) An Event of Default as that term is defined in any Credit Document occurs;
or

 

(f) Any Obligor defaults in the performance or observance of any term, covenant,
condition or agreement contained in any Credit Document (other than this
Agreement and other than as described in §10.1(e)), and, if the default is
reasonably capable of being cured, such default remains uncured for a period of
30 days after written notice thereof to Borrower or such Obligor; or

 

(g) (i) Borrower or any Subsidiary (A) commences a voluntary case under the
Federal bankruptcy laws (as now or hereafter in effect) or under any other
bankruptcy or insolvency law of any jurisdiction, (B) files a petition seeking
to take advantage of any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or composition or adjustment
of debts, (C) consents to, or fail to contest in a timely and appropriate
manner, any petition filed against it in an involuntary case under such
bankruptcy laws or other laws, (D) applies for, or consent to, or fails to
contest in a timely and appropriate manner, the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of a
substantial part of its assets, domestic or foreign, (E) admits in writing its
inability to pay, or generally not be paying, its debts (other than those that
are the subject of bona fide disputes) as they become due, (F) makes a general
assignment for the benefit of creditors, or (G) takes any corporate action for
the purpose of effecting any of the foregoing; or

 

(ii) A case or other proceeding is commenced against Borrower or any Subsidiary
in any court of competent jurisdiction seeking (A) relief under the Federal
bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or adjustment of debts, or (B) the appointment of a trustee, receiver,
custodian, liquidator or the like of Borrower or any Subsidiary of all or any
substantial part of the assets, domestic or foreign, of Borrower or such
Subsidiary or, and, in each case, such case or proceeding shall continue
undismissed or unstayed for a period of 30 days, or an order granting the relief
requested in such case or proceeding against Borrower or such Subsidiary
(including, but not limited to, an order for relief under such Federal
bankruptcy laws) shall be entered; or

 

(h) A judgment or order for the payment of money in an amount that exceeds by
$150,000.00 the amount of insurance coverage applicable thereto is entered
against Borrower or any Subsidiary by any court and either (A) such judgment or
order shall continue undischarged and/or unbonded or unstayed for a period of 30
days or (B) enforcement proceedings shall have been commenced upon such judgment
or order; or

-30-

(i) Any Obligor makes any written statement or brings any action challenging the
enforceability or binding effect of any of the Credit Documents; or

 

(j) The dissolution of any Obligor occurs except as expressly permitted herein;
or

 

(k) A Change of Control or a Material Management Change occurs; or

 

(l) Borrower or any Subsidiary engages, or is indicated for engaging, in any
conduct or activity that constitutes a felony (or the equivalent thereof under
Applicable Law); or

 

(m) All or a substantial part of the Collateral is nationalized, expropriated,
seized or otherwise appropriated, or custody or control of such property or of
any Collateral is assumed by any Governmental Authority or any court of
competent jurisdiction at the instance of any Governmental Authority and the
same has or is reasonably likely to have a Material Adverse Effect; or

 

(n) Borrower breaches any of the material terms or conditions of any agreement
under which any Rate Hedging Obligation is created and such breach continues
beyond any applicable grace period, or any action is taken by Borrower to
discontinue (except with the consent of Bank if it is a counterparty to such
agreement) or assert the invalidity or unenforceability of any such agreement or
Rate Hedging Obligation; or

 

(o) Bank fails or ceases to have a perfected, first-priority (subject to
Permitted Liens) security interest in any of the Collateral; or

 

(p) Bank determines in good faith that it is insecure, that a material adverse
change in any Obligor’s financial condition has occurred, or that any Obligor’s
ability to perform its or his obligations under any Credit Document has been
materially impaired; or

 

(q) Borrower or any Subsidiary defaults in the payment of any Debt in excess of
$150,000.00; or

 

(r) Borrower or any Subsidiary makes any transfer of assets owned by it for less
than their equivalent value; or

 

(s) An Event of Default, as that term is defined in any credit agreement, note,
security agreement or mortgage made by Borrower or a Subsidiary with or in favor
of Bank (other than a Credit Document), including, but not limited to, an Event
of Default as that term is defined in the Revolving Credit Agreement or an Event
of Default as that term is defined in the Existing Term Note, occurs.

 

§10.2 Remedies. (a) If and at any time after a Default occurs, Bank’s obligation
to the Advance hereunder shall, at Bank’s sole option, be suspended; provided,
however, if Borrower cures such event or condition to Bank’s satisfaction prior
to its becoming an Event of Default, such obligation shall be reinstated. Upon
the occurrence of an Event of Default, Bank’s obligation to make the Advance
hereunder shall, at Bank’s option, terminate.

 

(b) At any time after the occurrence of an Event of Default, Bank may, by notice
to Borrower, declare the Note and the Advance and interest accrued thereon and
all other amounts (including contingent obligations) owing under the Credit
Documents to be immediately due and payable, whereupon the Note, the Advance,
all such interest and all such other

-31-

amounts shall become and be immediately due and payable, without presentment,
demand, protest or further notice of any kind, all of which are expressly waived
by Borrower; provided, however, that upon the occurrence of an Event of Default
described in §10.1(g), such obligation of Bank shall automatically terminate,
the Note, the Advance, all such interest and all such other amounts shall
automatically become and be due and payable in full without presentment, demand,
protest or notice of any kind.

 

§10.3 No Waiver; Remedies Cumulative. No failure on the part of Bank to
exercise, and no delay in exercising, any right under any Credit Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right under any Credit Document preclude any other or further exercise thereof
or the exercise of any other right. The remedies provided in the Credit
Documents are cumulative and not exclusive of any remedies provided by
Applicable Law or the other Credit Documents.

 

§11. MISCELLANEOUS.

 

§11.1 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or other Credit Document, nor consent to any departure by Borrower therefrom,
shall in any event be effective unless the amendment or waiver is in writing and
signed by the party against whom enforcement is sought and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.

 

§11.2 Costs, Expenses and Taxes. Borrower shall pay (or, if already paid,
reimburse Bank for) on demand: (a) all reasonable costs and expenses in
connection with the preparation, execution, delivery, filing, recording and
administration of the Credit Documents, including the reasonable fees and
out-of-pocket expenses of counsel for Bank, with respect thereto, with respect
to any modifications thereof, with respect to reviewing and evaluating any
Collateral and with respect to advising Bank as to its rights and
responsibilities under the Credit Documents after an Event of Default or
Default, (b) all costs and expenses (including reasonable counsel fees and
expenses, including those incurred at the appellate level and in any insolvency
proceedings) in connection with the enforcement of the Credit Documents, and (c)
without limiting the generality of clause (a) above, all surveying costs, all
appraisal fees, all environmental review costs, all title insurance premiums,
all search costs, all filing fees, and all Collateral inspection expenses. Bank
is hereby irrevocably authorized (but not required) to deduct any of the
foregoing items from any account of Borrower with Bank; provided, that Bank
shall provide to Borrower a statement of such items before any such deduction.
In addition, Borrower shall pay on demand any and all documentary stamp,
intangibles and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing or recording of the Credit
Documents or in connection with the Advance, and agrees to indemnify and save
Bank harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.
Without limiting the force or effect of the immediately preceding sentence,
Borrower hereby authorizes Bank to deduct from the amount of the Advance that is
disbursed to Borrower the amount of any intangibles or documentary stamp tax
that may be payable in connection with the Advance.

 

§11.3 Certain Collateral. As security for all Obligations, Borrower hereby
grants Bank a continuing lien on and security interest in all deposit accounts
(whether now existing or hereafter established) of Borrower with Bank or any
affiliate thereof and all other property of Borrower that is now or hereafter
owed by or in the possession or control of any branch or affiliate of Bank. At
any time after an Event of Default, Bank may set off and apply any such

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deposit accounts against any and all obligations of Borrower under the Credit
Documents, provided Bank shall have made demand on Borrower under a Credit
Document. Bank shall endeavor to promptly notify Borrower after any such setoff
has been made but shall not be liable to Borrower for failing to do so.

 

§11.4 No Joint Venture. Nothing contained in any Credit Document shall be deemed
or construed by the parties hereto or by any third person to create the
relationship of principal and agent or of partnership or joint venture or of any
association between Bank and Borrower other than the relationship of creditor
and debtor.

 

§11.5 Survival. All covenants, agreements and Representations and Warranties
made by Borrower in this Agreement shall, notwithstanding any investigation by
Bank, be deemed material and have been relied upon by Bank and shall survive the
execution and delivery to Bank of this Agreement.

 

§11.6 Further Assurances. Borrower shall, upon the request of Bank, execute and
deliver such further documents and do such further acts as Bank may reasonably
request in order to fully effectuate the purposes of any Credit Document. In
addition, without limiting the generality of the foregoing, Borrower shall
promptly do (and shall cause any Obligor to do) whatever Bank requests to cure
any obvious error (including any omission) in any of the Credit Documents.

 

§11.7 Sovereign Immunity; Government Interference. To the extent that Borrower
or a Subsidiary has or hereafter may acquire any immunity from jurisdiction of
any court or from any legal process (whether through service or notice,
attachment in aid of execution, attachment prior to judgment, execution or
otherwise) with respect to itself or its property, Borrower hereby irrevocably
waives such immunity in respect of its obligations hereunder or any other Credit
Documents. In addition, Borrower hereby irrevocably waives, as a defense to any
action arising out of or relating hereto, the interference of any administrative
or governmental authority of the jurisdiction(s) in which Borrower is domiciled
or the impossibility of performance resulting from any law or regulation, or
from any change in the law or regulations, of such jurisdiction(s).

 

§11.8 Assignment. This Agreement may not be assigned by Borrower without Bank’s
prior written consent and any such assignment or attempted assignment without
such prior written consent shall be null and void. Bank, without Borrower’s
consent, but with prior notice, may assign, in whole or in part, this Agreement,
any other Credit Documents and the Advance and, in connection therewith, may
make whatever disclosures regarding Borrower, any Subsidiaries or any of the
Collateral it considers desirable. This Agreement shall be binding upon and
shall inure to the benefit of Borrower’s and Bank’s respective successors and
assigns. With respect to Borrower’s successors and assigns, such successors and
assigns shall include any receiver, trustee or debtor-in-possession of or for
Borrower.

 

§11.9 Notices. All notices, requests, approvals, consents and other
communications provided for hereunder shall be in writing and hand-delivered by
a reputable national courier service such as FedEx, if to Borrower, at its
address at 85 Fifth Avenue, New York, New York, Attention: Chief Financial
Officer, and if, to Bank, at its address at 1177 Avenue of the Americas, New
York, New York 10036-2790, Attention: General Counsel, or, as to each party, at
such other address as shall be designated by such party in a written notice to
the other party. All such communications shall, when hand-delivered, be
effective when

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received or refused except that notices to Bank shall not be effective unless
and until received by an officer of Bank.

 

§11.10 Taxes. All payments provided for herein or in any other Credit Documents
shall be made free and clear of any deductions for any present or future Taxes.
If any Taxes are imposed or required to be withheld from any payment, then, to
the extent such Taxes are generally paid by other borrowers of Bank, Borrower
shall (a) increase the amount of such payment so that Bank will receive a net
amount (after deduction of all Taxes) equal to the amount due hereunder and (b)
promptly pay all Taxes to the appropriate taxing authority for the account of
Bank and, as promptly as possible thereafter, send Bank an original receipt
showing payment thereof, together with such additional documentary evidence as
Bank may from time to time reasonably require. Borrower shall indemnify Bank
from and against any and all Taxes (irrespective of when imposed) and any
related interest and penalties that may become payable by Bank as a consequence
of Borrower’s failure to perform any of its obligations under the preceding
sentence.

 

§11.11 Entire Agreement. This Agreement and the other Credit Documents supersede
all prior negotiations, communications and agreements (written or oral),
discussions and correspondence concerning the subject matter hereof. Borrower
and Bank agree that any inconsistency or discrepancy between the provisions of
this Agreement and any other documentation evidencing the Obligations of
Borrower to Bank shall be resolved in the manner most favorable to Bank.

 

§11.12 Counterparts; Electronic Transmission. This Agreement may be executed in
any number of counterparts, each of which, when so executed, shall be deemed to
be an original and all of which, taken together, shall constitute one and the
same Agreement. Delivery of any executed counterpart of this Agreement by
electronic transmission shall be effective as delivery of a manually executed
counterpart hereof. Borrower acknowledges that information and documents
relating to this Agreement and the credit accommodations provided for herein may
be transmitted through electronic means.

 

§11.13 Patriot Act Notice; OFAC. Bank hereby notifies Borrower and the
Subsidiaries that pursuant to the requirements of the USA Patriot Act (Title III
of Pub. L. 107-56, signed into law October 26, 2001), as amended (the “Patriot
Act”), and Bank’s policies and practices, Bank is required to obtain, verify and
record certain information and documentation that identifies Borrower and the
Subsidiaries, which information includes the name and address of Borrower and
the Subsidiaries and such other information that will allow Bank to identify
Borrower and the Subsidiaries in accordance with the Patriot Act. Borrower
represents and covenants that neither it nor any Subsidiary will knowingly
become a person (individually, a “Prohibited Person” and collectively
“Prohibited Persons”) listed on the Specially Designated Nationals and Blocked
Persons List maintained by the Office of Foreign Asset Control, U.S. Department
of the Treasury (the “OFAC List”) or otherwise subject to any other prohibitions
or restriction imposed by laws, rules, regulations or executive orders,
including Executive Order No. 13224, administered by OFAC (collectively the
“OFAC Rules”). Borrower represents and covenants that neither it nor any
Subsidiary (a) is or will become directly or indirectly owned or controlled by a
Prohibited Person, (b) is acting or will knowingly act for or on behalf of a
Prohibited Person, (c) is (to Borrower’s knowledge) otherwise associated with or
will knowingly become associated with a Prohibited Person, (d) is providing or
will knowingly provide any material, financial or technological support for or
financial or other service to or in support of acts of terrorism or a Prohibited
Person. Borrower will not knowingly transfer any interest in

-34-

Borrower to a Prohibited Person and will ensure no Subsidiary does so. Borrower
shall immediately notify Bank if Borrower or any Subsidiary has knowledge that
any member or beneficial owner of Borrower or a Subsidiary or any constituent
entity thereof is or becomes a Prohibited Person or (i) is indicted on or (ii)
arraigned and held over on charges involving money laundering or predicate
crimes to money laundering. Borrower will not enter into any transaction or
undertake any activities related to the Credit Extensions in violation of the
federal Bank Secrecy Act, as amended (“BSA”), 31 U.S.C. §5311, et seq. or any
federal or state laws, rules, regulations or executive orders, including, but
not limited to, 18 U.S.C. §§1956, 1957 and 1960, prohibiting money laundering
and terrorist financing (collectively, “Anti-Money Laundering Laws”) and will
ensure no Subsidiary does so. Borrower shall (A) not use or knowingly permit the
use of any proceeds of the Credit Extensions in any way that will violate either
the OFAC Rules or Anti-Money Laundering Laws and will ensure no Subsidiary does
so, (B) comply and cause all of the Subsidiaries to comply with applicable OFAC
Rules and Anti-Money Laundering Laws, (C) provide information as Bank may
require from time to time to permit Bank to satisfy its obligations under the
OFAC Rules and/or the Anti-Money Laundering Laws and (D) not knowingly engage in
or conspire to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the foregoing,
and ensure that no Subsidiary does so.

 

§11.14 Severability. The provisions of this Agreement and each other Credit
Document are severable and if any provision shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall not in any manner affect or invalidate such provision in
any other jurisdiction or any other provision of any of the Credit Documents in
any jurisdiction.

 

§11.15 No Third-Party Reliance; Not a Fiduciary, Etc. (a) The agreements of Bank
hereunder are made solely for the benefit of Borrower and the benefit of Bank,
as applicable, and may not be relied upon or enforced by any other person.

 

(b) Borrower hereby acknowledges that Bank is acting pursuant to a contractual
relationship on an arm’s-length basis, and the parties hereto do not intend that
Bank act or be responsible as a fiduciary to Borrower, Borrower’s management,
stockholders, creditors or any other person. Borrower and Bank hereby expressly
disclaim any fiduciary relationship and agree each party is responsible for
making its own independent judgments with respect to any transactions entered
into between the parties. Borrower also hereby acknowledges that Bank has not
advised and is not advising Borrower as to any legal, accounting, regulatory or
tax matters, and that Borrower is consulting its own advisors concerning such
matters to the extent Borrower deems it appropriate.

 

§11.16 Further Assurances; Corrections of Defects. Borrower intending to be
legally bound hereby, agrees to promptly correct any defect, error or omission,
upon the request of Bank, which may be discovered in the contents of any of the
Credit Documents, or in the execution or acknowledgement hereof, and Borrower
shall execute, or re-execute, acknowledge and deliver such further instruments
and do such further acts as may be necessary or as may be reasonably requested
by Bank to satisfy the terms and conditions of the Credit Documents, and all
documents executed in connection therewith, including but not limited to the
recording, filing or perfecting of any document given for securing and
perfecting liens, mortgages, security interests and interests to secure the
obligations evidenced by the Credit Documents, and shall cause each Subsidiary
to do so.

-35-

§11.17 Usury Savings Clause. Borrower and Bank intend that interest not be
charged at a rate or in an amount exceeding the maximum rate or amount permitted
by Applicable Law. Should any interest or other charges paid or payable
hereunder result in the computation or earning of interest in excess of the
maximum rate or amount of interest permitted by Applicable Law, such excess
interest and charges shall be (and the same hereby are) waived by Bank, and the
amount of such excess paid shall be automatically credited against, and be
deemed to have been payments in reduction of, the principal then due hereunder,
and any portion of such excess paid which exceeds the principal then due
hereunder shall be paid by Bank to Borrower.

 

§11.18 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to any
conflicts-of-law rule or principle that would give effect to the law of another
jurisdiction.

 

§11.19 Jurisdiction. Borrower hereby irrevocably agrees that any action or
proceeding relating to any Credit Document that is brought by Bank may be tried
by the courts of the State of New York sitting in or for New York County, New
York, or the United States district courts sitting in or for such county.
Borrower hereby irrevocably submits, in any such action or proceeding, to the
non-exclusive jurisdiction of each such court and irrevocably waives the defense
of an inconvenient forum with respect to any such action or proceeding.

 

§11.20 Approvals and Consents. Bank may grant or deny any approval or consent
contemplated hereby in its reasonable discretion, except as otherwise provided
herein.

 

§11.21 Indemnification; Limitation of Liability. Borrower shall indemnify and
hold harmless Bank and each of its affiliates and their respective officers,
directors, employees, agents and advisors (each, an “Indemnified Party”) from
and against any and all claims, damages, losses, liabilities, costs and expenses
(including without limitation reasonable attorneys’ fees) that may be incurred
by or asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including without limitation in
connection with any investigation, litigation, or proceeding or preparation of
defense in connection therewith) the Credit Documents, any Collateral, any of
the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advance or the manufacture, storage, transportation, release or
disposal of any Hazardous Material on, from, over or affecting any of the
Collateral or any of the assets, properties or operations of Borrower, any
Subsidiary or any predecessor in interest, directly or indirectly, except to the
extent such claim, damage, loss, liability, cost or expense results from such
Indemnified Party’s gross negligence or willful misconduct or willful breach of
this Agreement. In the case of an investigation, litigation or other proceeding
to which the indemnity in this §11.21 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by
Borrower, its directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. Borrower
hereby waives and agrees not to assert any claim against Bank, any of its
affiliates, or any of their respective directors, officers, employees,
attorneys, agents and advisers, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of or otherwise
relating to the Credit Documents, any of the transactions contemplated herein or
therein or the actual or proposed use of the proceeds of the Advance. To the
extent that any of the indemnities required from Borrower under this §11.21 are
unenforceable because they violate any Applicable Law or public policy, Borrower
shall pay the maximum amount which it is permitted to pay under Applicable Law.

-36-

§11.22 Jury Trial Waiver. BORROWER AND BANK HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY AND ALL RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION (INCLUDING BUT NOT LIMITED TO ANY CLAIMS, CROSS CLAIMS
OR THIRD PARTY CLAIMS) ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENTS TO WHICH EITHER IS A PARTY. BORROWER
HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF BANK NOR BANK’S COUNSEL HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT, IN THE EVENT OF SUCH
LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
BORROWER ACKNOWLEDGES THAT THE PROVISIONS OF THIS §11.22 HAVE BEEN A MATERIAL
INDUCEMENT TO BANK TO ENTER INTO THIS AGREEMENT AND TO MAKE ADVANCES HEREUNDER.

 

(Signature page follows)

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date hereof.

 

  ARK RESTAURANTS CORP.       By:  /s/: Robert Stewart   Name: Robert Stewart  
Title: President       BANK HAPOALIM B.M.      

  By:     Name:      Title:           By:     Name:      Title:  

-38-

EXHIBIT A

 

UNITS

 

Units C1, C2, C3 and C4 and Apartments Nos. 111 and 201, ISLAND BEACH CLUB, A
CONDOMINIUM, according to the Declaration of Condominium recorded in Official
Records Book 343, at Page 372, and all exhibits and amendments thereof, Public
Records of St. Lucie County, Florida, together with the undivided share of
common elements and the limited common elements appurtenant thereto.

-39-

SCHEDULE 6.2

 

SUBSIDIARIES

 

Subsidiary Trade name(s) Jurisdiction of
Incorporation 1. Ark AC Burger Bar LLC Broadway Burger Bar and Grill Delaware  
    2. Ark Atlantic City Corp. Gallagher’s Burger Bar Delaware       3. Ark
Atlantic City Restaurant Corp. Gallagher’s Steakhouse Delaware       4. Ark
Basketball City Corp.   New York       5. Ark Boston RSS Corp. Durgin Park and
Blackhorse Tavern Delaware       6. Ark Bryant Park LLC Bryant Park Grill & Café
Delaware       7. Ark Connecticut Corp.   Delaware       8. Ark Connecticut
Branches Corp. The Grill at Two Trees Delaware       9. Ark Connecticut
Investment LLC   Delaware       10. Ark Connecticut Pizza LLC   Delaware      
11. Ark Connecticut Poker LLC   Delaware       12. Ark Fifth Avenue Corp.   New
York       13. Ark D.C. Kiosk, Inc. Center Café District of Columbia       14.
Ark Hollywood/Tampa Corp.   Delaware       15. Ark Hollywood/Tampa Investments
LLC   Delaware       16. Ark Hollywood LLC   Delaware       17. Ark Jupiter RI,
LLC   Delaware       18. Ark Las Vegas Restaurant Corp.   Nevada       19. Ark
Mad Events LLC   Delaware       20. Ark Meadowlands LLC   Delaware       21. Ark
Museum LLC Robert Delaware       22. Ark Operating Corp. El Rio Grande New York
      23. Ark Potomac Corporation Sequoia District of Columbia

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24. Ark Rio Corp. El Rio Grande New York       25. Ark Rustic Inn LLC   Delaware
      26. Ark Rustic Inn Real Estate LLC   Delaware       27. Ark Southwest D.C.
Corp. Thunder Grill District of Columbia       28. Ark Union Station, Inc.
America District of Columbia       29. ArkMod, LLC   New York       30. Chefmod,
LLC   New York       31. Clyde Ark LLC Clyde Frazier’s Wine and Dine New York  
    32. Las Vegas America Corp. America Nevada       33. Las Vegas Festival Food
Corp. (1) Gonzalez y Gonzalez (2) Village Eateries (New York-New York Hotel Food
Court) (3) Broadway Burger Bar Nevada       34. Las Vegas Planet Mexico Corp.
Yolos Nevada       35. Las Vegas Steakhouse Corp. Gallagher’s Steakhouse Nevada
      36. Las Vegas Venice Deli Corp. Towers Deli (Venetian Food Court) (closed)
Nevada       37. Las Vegas Venice Food Corp. Shake N Burger (Venetian Food
Court) Nevada       38. Las Vegas Whiskey Bar, Inc. VBAR (closing 10/31/15) Las
Vegas       39. MEB on First LLC Canyon Road Grill New York       40. Rio
Restaurant Associates, L.P.   New York       41. Rio Restaurant Associates
Holdings, L.P.   New York       42. Ark Bryant Park Southwest LLC Southwest
Porch Delaware       43. Ark 37 38 Events, LLC   Delaware       44. Ark Shuckers
LLC   Delaware       45. Ark Shuckers Real Estate LLC   Delaware       46. Ark
Island Beach Resort LLC   Delaware

-41-

SCHEDULE 6.5

 

LITIGATION

-42-

SCHEDULE 6.16

 

EMPLOYMENT MATTERS

-43-

SCHEDULE 7.6

 

PERMITTED DEBT

-44-