EXHIBIT 10.5

THIRD AMENDED AND RESTATED LOAN AGREEMENT

[REVOLVING AND BULLET LOANS]

THIS THIRD AMENDED AND RESTATED LOAN AGREEMENT [REVOLVING AND BULLET LOANS]
(this “Agreement”) is made and entered into as of the 21st day of October, 2009
by and between (i) FRISCH’ S RESTAURANTS, INC., an Ohio corporation (the
“Borrower” ), and (ii) U.S. BANK NATIONAL ASSOCIATION, a national banking
association formerly known as Firstar Bank, N.A. and Star Bank, National
Association, and its successors and assigns (the “Bank”), and amends and
restates the Second Amended and Restated Loan Agreement between the Borrower and
the Bank dated as of October 15, 2004, as amended (the “Prior Loan Agreement”).

1. Representations and Warranties. To induce the Bank to enter into this
Agreement and to agree to make and/or to continue the Loans described in
Section 4 hereof, the Borrower makes the following representations and
warranties:

(a) Existence. The Borrower is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Ohio, and each
Subsidiary (as hereinafter defined) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization. The
Borrower and each Subsidiary is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction in which the failure to be so
qualified by the Borrower or the Subsidiary would have a material adverse effect
on its business, prospects or financial condition. “Subsidiary” for purposes
hereof means any corporation or other entity the majority of the voting stock of
which is owned, directly or indirectly, beneficially or of record, by the
Borrower or any Subsidiary, or which is otherwise controlled, directly or
indirectly, by the Borrower or any Subsidiary.

(b) Authority. The Borrower and each Subsidiary has full power and authority to
own its properties and to conduct its business as such business is now being
conducted, and the Borrower has full power and authority to execute, deliver and
perform under this Agreement, the Notes (as hereinafter described) and all other
documents and instruments executed in connection with or otherwise relating to
this Agreement or the Loans (as hereinafter defined) (collectively, the “Loan
Documents”).

(c) Borrowing Authorization. The execution, delivery and performance by the
Borrower of this Agreement and the other Loan Documents: (i) have been duly
authorized by all requisite corporate action; (ii) do not and will not violate
(A) any provision of any law, statute, rule or regulation, (B) any order,
judgment or decree of any court, arbitrator or other agency of government,
(C) the Articles of Incorporation or Code of Regulations or other organizational
or governing documents of the Borrower, or (D) any provision of any agreement
(including, without limitation, any agreement with stockholders) to which the
Borrower or any Subsidiary is a party or subject, or by which it or any of its
properties or assets are bound; (iii) do not and will not result in the creation
or imposition of any lien, charge or encumbrance of any nature whatsoever upon
any of the properties or assets of the Borrower or any Subsidiary; and (iv) do
not and will not require any consent, approval or other action by or any notice
to or filing with

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any court or administrative or governmental body. This Agreement and the other
Loan Documents have been duly executed and delivered on behalf of the Borrower
and constitute the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective terms.

(d) Financial Information and Reports. Exhibit A to this Agreement is a complete
list of the financial statements and projected financial statements furnished by
the Borrower to the Bank in connection with the borrowings to be made hereunder.
Each such historical financial statement fairly presents in accordance with
generally accepted accounting principles the financial condition of the Borrower
and its Subsidiaries and the results of their operations as of the date (or with
respect to the period) noted in such financial statements. Other than any
liability incident to any actions described in Exhibit B to this Agreement,
neither the Borrower nor any Subsidiary has any material contingent liabilities
required to be disclosed under generally accepted accounting principles which
are not provided for or disclosed in such financial statements. Each such
statement (including any related schedule and/or notes) is true, correct and
complete in all material respects (subject, as to interim statements, to changes
resulting from audits and year-end adjustments) and has been prepared in
accordance with generally accepted accounting principles consistently followed
throughout the periods involved. No such statement omits to state a material
fact necessary to make such statement not misleading in light of the
circumstances under which it was made. There has been no material adverse change
in the business, operations or condition (financial or otherwise) of the
Borrower or any Subsidiary since the date of such financial statements.

(e) Indebtedness. Neither the Borrower nor any Subsidiary has any Indebtedness
(as hereinafter defined) other than Permitted Indebtedness (as hereinafter
defined), or has guaranteed the obligations of any other person (except by
endorsement of negotiable instruments payable on sight for deposit or collection
or similar banking transactions in the usual course of business), and to the
best of the Borrower’s knowledge after diligent investigation, there exists no
default under the provisions of any instrument evidencing any Indebtedness of
the Borrower or any Subsidiary or of any agreement relating thereto.
“Indebtedness” as used herein means all indebtedness for borrowed money which in
accordance with generally accepted accounting principles would be considered as
a liability, all rental obligations under leases required to be capitalized
under generally accepted accounting principles, all guarantees and other
contingent obligations in respect of, or obligations to purchase or otherwise
acquire, Indebtedness of others, and Indebtedness of others secured by any lien
on property owned by the Borrower or any Subsidiary, whether or not the Borrower
or such Subsidiary has assumed such Indebtedness.

(f) Actions. There is no action, suit, investigation or proceeding pending or,
to the knowledge of the Borrower, threatened against or affecting the Borrower
or any Subsidiary before any court, arbitrator or administrative or governmental
agency except for those described in Exhibit B to this Agreement, none of which
might result in any material adverse change in the business, operations or
condition (financial or otherwise) of the Borrower or any Subsidiary, nor, to
the best of the Borrower’s knowledge after diligent investigation, is there any
basis for any such action which might result in such a material adverse change.

 

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(g) Title to Property. The Borrower and each Subsidiary has good and marketable
title to its real properties (other than properties which it leases as lessee)
and good title to all of its other properties and assets, including the
properties and assets reflected in the most recent balance sheet described in
Exhibit A hereto (other than properties and assets disposed of in the ordinary
course of business since the date thereof), free and clear of all liens,
mortgages, pledges, security interests, encumbrances or charges of any kind,
including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement or any lease in the nature thereof (each, a
“Lien”), other than the following (each, a “Permitted Lien”): (i) Liens
described on Exhibit C hereto, (ii) leases required under generally accepted
accounting principles to be capitalized on the Borrower’s or such Subsidiary’s
books (“Capitalized Leases”) so long as there is no violation of any of the
Financial Covenants set forth on Exhibit D hereto, and (iii) Liens in favor of
the Bank. The Borrower and each Subsidiary is in undisturbed possession under
all leases necessary in any material respect for the operation of its business,
and no such leases contain any unusual or burdensome provisions which might
materially affect or impair the Borrower’s or the Subsidiary’s operations
thereunder. All such leases are valid and in full force and effect.

(h) Employee Benefit Plans. To the best of the Borrower’s knowledge after
diligent investigation, no “reportable event” or “prohibited transaction,” as
defined by the Employee Retirement Income Security Act of 1974 (“ERISA”) has
occurred or is continuing, as to any plan of the Borrower or any of its
affiliates which poses a threat of taxes or penalties against or termination of
such plans (or trusts related thereto). Neither the Borrower nor any of its
affiliates has violated in any material respect the requirements of any
“qualified pension benefit plan,” as defined by ERISA and the Internal Revenue
Code of 1986, or done anything to create any material liability under the
Multi-Employee Pension Plan Amendment Act. Neither the Borrower nor any of its
affiliates has incurred any material liability to the Pension Benefit Guarantee
Corporation (the “PBGC”) in connection with such plans, including, but not
limited to, any “funding deficiency” (as defined by ERISA).

(i) Purpose of Loans. Proceeds of the Loans shall be used to fund temporary
working capital needs and to refinance certain borrowings currently outstanding
under the Revolving Note. The Loans are not and shall not be secured, directly
or indirectly, by any stock for the purpose of purchasing or carrying any margin
stock or for any purpose which would violate either Regulation U, 12 C.F.R. Part
221, or Regulation X, 12 C.F.R. Part 224, promulgated by the Board of Governors
of the Federal Reserve System.

(j) Compliance. The Borrower and each Subsidiary is in compliance in all
material respects with all laws, statutes, ordinances, rules, regulations and
orders of any governmental entity (including, but not by way of limitation, any
such laws, statutes, ordinances, rules, regulations and orders related to
ecology, human health and the environment) applicable to it.

(k) Adverse Contracts and Conditions. Neither the Borrower nor any Subsidiary is
a party to any contract or agreement, or subject to any charge, restriction,
judgment, decree or order, materially and adversely affecting its business,
property, assets, operations or condition, financial or otherwise, nor a party
to any labor dispute. There are no restrictions applicable to any Subsidiary
which might limit its ability to pay dividends or make loans to the Borrower.

 

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(l) Taxes. The Borrower and each Subsidiary has filed all federal, state and
local tax returns and other reports which it is required by law to file, has
paid all taxes, assessments and other similar charges that are due and payable,
other than taxes, if any, being contested by the Borrower or a Subsidiary in
good faith and as to which adequate reserves have been established in accordance
with generally accepted accounting principles, and has withheld all employee and
similar taxes which it is required by law to withhold. Federal income tax
returns of the Borrower and each Subsidiary have been examined by the taxing
authorities or closed by applicable statutes and satisfied for all fiscal years
prior to and including the Borrower’s 2005 fiscal year end. Federal income tax
returns of the Borrower and its Subsidiaries for the Borrower’s 2006 fiscal year
end and all years thereafter may still be examined by the taxing authorities.

2. Borrower’s Covenants. The Borrower agrees that, from the date of this
Agreement and until the Loans are paid in full and all obligations under this
Agreement are fully performed, and the commitment of the Bank to make Loans
hereunder has terminated:

(a) Financial Covenants. The Borrower shall comply with each of the financial
covenants set forth in Exhibit D to this Agreement (collectively, the “Financial
Covenants”).

(b) Financial Statements; Periodic Reports. The Borrower shall furnish to the
Bank: (i) as soon as practicable and in any event within ninety (90) days after
the last day of each fiscal year of the Borrower, a copy of the annual audit
report of the Borrower, prepared in accordance with generally accepted
accounting principles applied on a basis consistent with that of the preceding
fiscal year, and consisting of a consolidated balance sheet as at the end of
such fiscal year and consolidated statements of earnings, stockholders’ equity
and cash flows of the Borrower and its Subsidiaries for such fiscal year,
setting forth in each case in comparative consolidated form corresponding
consolidated figures from the preceding annual audit, certified by a
nationally-recognized firm of independent certified public accountants, whose
certificate shall be in scope and substance reasonably satisfactory to the Bank
and shall include, without limitation, a certification that in auditing the
Borrower, such accountant has obtained no knowledge of an Event of Default (as
hereinafter defined) hereunder, or if any Event of Default exists, specifying
the nature and period of existence thereof, and accompanied by such accountant’s
management letter with respect thereto; (ii) as soon as practicable and in any
event within forty-five (45) days after the last day of each of the Borrower’s
first three fiscal quarters, a copy of the Borrower’s unaudited financial
statements, prepared in accordance with generally accepted accounting principles
applied on a basis consistent with that of the preceding fiscal quarter, and
consisting of a consolidated balance sheet as at the end of such fiscal quarter
and consolidated statements of earnings, stockholders’ equity and cash flows of
the Borrower and its Subsidiaries for the period from the beginning of the
then-current fiscal year through the end of such fiscal quarter, setting forth
in each case in comparative form figures for the corresponding period in the
preceding fiscal year, and certified by an authorized financial officer of the
Borrower, subject to changes resulting from year-end adjustments; (iii) promptly
upon transmission thereof, copies of all such financial statements, proxy
statements, notices and reports as the Borrower shall send to its stockholders
and copies of all registration statements (without exhibits) and all regulatory
and periodic reports which the Borrower files with the Securities and Exchange
Commission (the “SEC”) or any governmental body or agency

 

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succeeding to the functions of the SEC; and (iv) with reasonable promptness,
such other financial data in such form as the Bank may reasonably request,
provided that the Bank shall keep such data confidential to the extent required
by applicable securities laws.

Together with each delivery of financial statements required under clauses
(i) and (ii) above, the Borrower shall deliver a certificate of its Chief
Financial Officer (A) setting forth a comparison between actual calculated
results and covenanted results for each of the Financial Covenants set forth on
Exhibit D hereto and (B) stating that, to the best of such Chief Financial
Officer’s knowledge after diligent investigation, no Event of Default hereunder
then exists, or if such an Event of Default hereunder does then exist,
specifying the nature thereof, the period of existence thereof, and the action
the Borrower proposes to take with respect thereto. The Borrower further agrees
that promptly upon the President or Chief Financial Officer of the Borrower
obtaining knowledge of an event that constitutes an Event of Default hereunder,
the Borrower shall deliver to the Bank a certificate specifying the nature
thereof, the period of existence thereof, and the action the Borrower proposes
to take with respect thereto. The Bank is authorized to deliver a copy of any
financial statement or other communication or document delivered to it pursuant
to this Section 2(b) to any regulatory body having jurisdiction over it if such
delivery is required by such regulatory body. The Borrower and each Subsidiary
shall permit the Bank and its agents and representatives, at the expense of the
Bank, to inspect its real and personal property and to verify accounts and
inspect and make copies of or extracts from its books, records and files, and to
discuss its affairs, finances and accounts with its principal officers, all at
such reasonable times and as often as the Bank may reasonably request.

(c) Insurance. The Borrower shall, and shall cause each Subsidiary to, maintain
with responsible carriers All Risk coverage for the full replacement value of
all of its real and personal property, except that the Borrower and each
Subsidiary may self-insure risks to its real and personal property in an amount
not to exceed Five Hundred Thousand Dollars ($500,000), and maintain with
responsible carriers general public liability insurance coverage including
Excess liability coverage in an amount not less than Twenty-Five Million Dollars
($25,000,000), except that the Borrower and each Subsidiary may self-insure
general public liability risks in an amount not to exceed Five Hundred Thousand
Dollars ($500,000) per occurrence during the term of this Agreement. The
Borrower shall deliver to the Bank, together with delivery of the financial
statements required under Section 2(b)(i) above, a certificate specifying the
details of all such insurance in effect. The Borrower shall cause the Bank to be
named as lender loss payee and/or additional insured, as applicable, on its
policies of insurance.

(d) Taxes. The Borrower shall, and shall cause each Subsidiary to, file all
federal, state and local tax returns and other reports it is required by law to
file, and shall pay when due all taxes, assessments and other liabilities,
except that the Borrower and any Subsidiary shall not be obligated to pay any
taxes or assessments which it is contesting in good faith, provided that
adequate reserves therefor are established in accordance with generally accepted
accounting principles, that such contests will not materially adversely affect
the Borrower’s or any Subsidiary’s operations or financial condition, and that
such taxes and assessments are promptly paid when the dispute is finally
determined.

 

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(e) Existence and Status. The Borrower shall, and shall cause each Subsidiary
to, maintain its existence in good standing under the laws of each jurisdiction
described in Section 1(a) of this Agreement, provided that the Borrower or any
Subsidiary may change its jurisdiction of incorporation if it shall remain in
good standing under the laws thereof.

(f) Maintenance of Property. The Borrower shall, and shall cause each Subsidiary
to, maintain to the extent consistent with good business practices all of its
real and personal property in good condition and repair, not commit or permit
any waste thereof, and not, except in the ordinary course of business, remove or
permit the removal of any improvement, accession or fixture therefrom that may
in any way materially impair the value of said property.

(g) Environmental Matters. The Borrower represents, warrants and covenants with
the Bank that: (i) neither the Borrower nor any of its Subsidiaries nor, to the
best of the Borrower’s knowledge, after due investigation, any other person or
entity, has used or permitted any Hazardous Substances (as hereinafter defined)
to be placed, held, stored or disposed of on any property owned or operated by
the Borrower or any of its Subsidiaries (the “Designated Properties”), in
violation of any Environmental Laws (as hereinafter defined); (ii) none of the
Designated Properties now contains any Hazardous Substance in violation of any
Environmental Laws; (iii) there have been no complaints, citations, claims,
notices, information requests, orders (including but not limited to clean-up
orders) or directives on environmental grounds made or delivered to, pending or
served on, or anticipated by the Borrower or any of its Subsidiaries, or of
which the Borrower, after due investigation, including consideration of the
previous uses of the Designated Properties and meeting the standard under 42
U.S.C. Section 9601(35)(B)(1986), is aware or should be aware (A) issued by a
governmental department or agency having jurisdiction over any of the Designated
Properties, or (B) issued or claimed by any persons, agencies or organizations
or affecting any of the Designated Properties; and (iv) neither the Borrower nor
any of its Subsidiaries, so long as any of the Indebtedness under this Agreement
remains unpaid, shall allow any Hazardous Substances to be placed, held, stored
or disposed on any of the Designated Properties or incorporated into any
improvements on any of the Designated Properties in violation of any
Environmental Laws. The term “Hazardous Substance” shall mean any solid,
hazardous, toxic or dangerous waste, substance or material defined as such in or
for the purpose of the Comprehensive Environmental Response, Compensation and
Liability Act, any so-called “Superfund” or “Super-Lien” law, or any other
federal, state or local statute, law, ordinance, code, rule, regulation, order
or decree relating to, or imposing liability or standards of conduct concerning,
any Hazardous Substance (the “Environmental Laws”, as now or at any time
hereafter in effect).

The Borrower agrees to indemnify and hold the Bank harmless from and against any
and all losses, liabilities, damages, injuries, costs, expenses and claims of
any and every kind whatsoever, paid, incurred or suffered by, or asserted
against the Bank for, with respect to, or as a direct or indirect result of, any
of the following: (i) the presence on or under or the escape, seepage, leakage,
spillage, discharge, emission, discharging or release from any of the Designated
Properties of any Hazardous Substance (including, without limitation, any
losses, liabilities, damages, injuries, costs, expenses or claims asserted or
arising under any of the Environmental Laws); or (ii) any liens against any of
the Designated Properties or any interest or estate in any of the Designated
Properties, created, permitted or imposed by the Environmental Laws, or any
actual or asserted liability of or obligations of the Borrower or any of its
Subsidiaries under the Environmental Laws.

 

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The Borrower shall immediately notify the Bank should the Borrower become aware
of any Hazardous Substance on any of the Designated Properties in violation of
any Environmental Laws or any claim that any of the Designated Properties may be
contaminated by any Hazardous Substance in violation of any Environmental Laws.
The Borrower shall, at its own cost and expense, be responsible for the cleanup
of any Hazardous Substance caused, or knowingly permitted, by the Borrower or
any of its Subsidiaries to be on any of the Designated Properties which is in
violation of any Environmental Laws including any removal, containment and
remedial actions in accordance with all applicable Environmental Laws. The
Borrower’s obligations hereunder shall not be subject to any limitation of
liability provided herein or in any of the other Loan Documents and the Borrower
acknowledges that its obligations hereunder are not conditional and shall
continue in effect so long as a valid claim may lawfully be asserted against the
Bank or for so long as this Agreement, any of the other Loan Documents or any
renewal, amendment, extension or modification thereto remain in effect,
whichever extends for a greater period of time.

(h) Notice. The Borrower shall notify the Bank in writing, promptly upon the
Borrower’s learning thereof, of: (i) any litigation, suit or administrative
proceeding which may materially affect the operations, financial condition or
business of the Borrower or any Subsidiary, whether or not the claim is
considered by the Borrower to be covered by insurance, unless the applicable
insurer has agreed to defend any such claim and cover the liability therefor;
(ii) the occurrence of any material event described in Section 4043 of ERISA or
any anticipated termination, partial termination or merger of a “Plan” (as
defined in ERISA) or a transfer of the assets of a Plan; (iii) any labor dispute
to which the Borrower or any Subsidiary may become a party; (iv) any default by
the Borrower or any Subsidiary under any note, indenture, loan agreement,
mortgage, lease or other similar agreement to which the Borrower or any
Subsidiary is a party or by which the Borrower or any Subsidiary or its assets
are bound; and (v) any default by any obligor under any material note or other
evidence of debt payable to the Borrower or any Subsidiary.

(i) Liens. The Borrower shall not, and shall not permit any Subsidiary to,
create, assume or permit to exist any Lien with respect to any of its assets,
whether now owned or hereafter acquired, except Permitted Liens. Furthermore,
the Borrower shall not, and shall not permit any Subsidiary to, enter into any
agreement with any other person or entity pursuant to which the Borrower or any
Subsidiary agrees not to create, assume or permit to exist any Lien with respect
to any of its assets, whether now owned or hereafter acquired.

(j) Indebtedness. The Borrower shall not, and shall not permit any Subsidiary
to, create, incur, assume or permit to exist any Indebtedness, except the
following (each, “Permitted Indebtedness”): (i) Indebtedness incurred under this
Agreement and other Indebtedness to the Bank; (ii) outstanding Indebtedness
reflected in the historical financial statements listed in Exhibit A attached
hereto (but not any refinancing or refunding of such Indebtedness);
(iii) Indebtedness described in Exhibit E attached hereto; and (iv) Indebtedness
incurred in connection with Capitalized Leases so long as there is no violation
of any of the Financial Covenants set forth on Exhibit D hereto.

 

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(k) Loans; Investments. The Borrower shall not, and shall not permit any
Subsidiary to, make or permit to remain outstanding any loan or advance to, or
own or acquire any stock, obligations or securities of, or any other interest
in, or make any capital contribution to, any person or entity, except that the
Borrower or any Subsidiary may: (i) make or permit to remain outstanding loans
or advances to any Subsidiary or the Borrower; (ii) own or acquire stock,
obligations or securities of a Subsidiary or of a corporation which immediately
after such acquisition will be a Subsidiary; (iii) own or acquire prime
commercial paper and certificates of deposit in United States commercial banks
having capital resources in excess of Fifty Million Dollars ($50,000,000), in
each case due within one (1) year from the date of purchase and payable in
United States Dollars, obligations of the United States Government or any agency
thereof, and obligations guaranteed by the United States Government, and
repurchase agreements with such banks for terms of less than (1) one year in
respect of the foregoing certificates and obligations; (iv) make travel advances
in the ordinary course of business to officers and employees or other advances
in the ordinary course of business to officers and employees (excluding advances
to employees for relocation purposes) not to exceed One Hundred Twenty-Five
Thousand Dollars ($125,000) in the aggregate at any time outstanding for the
Borrower and all Subsidiaries; (v) make advances to employees for relocation
purposes not to exceed One Hundred Fifty Thousand Dollars ($150,000) in the
aggregate at any time outstanding for the Borrower and all Subsidiaries;
(vi) own or acquire money-market preferred stock in an amount not to exceed
Seven Hundred Fifty Thousand Dollars ($750,000); (vii) make or permit to remain
outstanding loans or advances to, or own or acquire stock, obligations or
securities of, any other person or entity, provided that the aggregate principal
amount of such loans and advances (excluding loans which are fully secured by
real estate consisting of former restaurant locations), plus the aggregate
amount of the investment (at original cost) in such stock, obligations and
securities, shall not exceed Five Hundred Thousand Dollars ($500,000) at any
time outstanding for the Borrower and all Subsidiaries; and (viii) make
investments in the Borrower’s non-qualified executive savings plan.

(l) Merger and Sale of Assets. Without the prior written consent of the Bank,
the Borrower shall not, and shall not permit any Subsidiary to, merge or
consolidate with any other corporation, or sell, lease or transfer or otherwise
dispose of any of its assets, including, without limitation, the stock of any
Subsidiary, or sell with recourse or discount or otherwise sell for less than
the face value thereof any of its notes or accounts receivable, except that
without the prior written consent of the Bank: (i) any Subsidiary may merge or
consolidate with the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with any one or more other Subsidiaries;
(ii) any Subsidiary may sell, lease, transfer or otherwise dispose of any of its
assets to the Borrower or another Subsidiary; (iii) the Borrower or any
Subsidiary may otherwise sell, lease, transfer or otherwise dispose of any of
its assets having a book value of less than One Hundred Thousand Dollars
($100,000) provided that the aggregate book value of all such assets so sold,
leased, transferred or otherwise disposed of by the Borrower and its
Subsidiaries during any fiscal year shall not exceed Five Hundred Thousand
Dollars ($500,000); and (iv) the Borrower or any Subsidiary may sell, lease,
transfer or otherwise dispose of property (as hereinafter defined) and equipment
in connection with remodelings and equipment

 

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replacements in the ordinary course of business. For purposes of this
Section 2(l), “property” shall mean those components of the real estate (such as
walls, electrical and plumbing) which are removed during a remodeling.

(m) Intentionally deleted.

(n) Restrictions on Transactions With Stockholders and Other Affiliates. Except
as otherwise expressly permitted under this Agreement, the Borrower shall not,
and shall not permit any Subsidiary to, enter into or be a party to any
transaction reportable under Item 404(a) of Regulation S-K of the Securities and
Exchange Commission, except in the ordinary course of business, pursuant to the
reasonable requirements of its business, and upon fair and reasonable terms
which are fully disclosed to the Bank and are no less favorable to the Borrower
or such Subsidiary than the Borrower or such Subsidiary could obtain in a
comparable arm’s length transaction with an unrelated third party.

(o) Books and Records. The Borrower shall, and shall cause each Subsidiary to,
keep and maintain complete books of accounts, records and files with respect to
its business in accordance with generally accepted accounting principles
consistently applied in accordance with past practices and shall accurately and
completely record all transactions therein.

(p) Business Activities. The Borrower shall, and shall cause each Subsidiary to,
continue to engage in the types of business activities in which it is currently
engaged or other activities involving food service and wholesaling food and
related products, and shall not, and shall not permit any Subsidiary to, be
engaged in any business activities other than the types in which it is currently
engaged or other activities involving food service and wholesaling food and
related products.

(q) Compliance with Law. The Borrower shall, and shall cause each Subsidiary to,
comply at all times with all laws, statutes, ordinances, rules, regulations and
orders of any governmental entity (including, but not by way of limitation, such
laws, statutes, ordinances, rules, regulations, and orders relating to ecology,
human health, and the environment) having jurisdiction over it or any part of
its assets, where such failure to comply would have a material adverse effect on
the Borrower’s or any Subsidiary’s operations or financial condition or the
ability of the Borrower to perform its obligations hereunder. The Borrower and
each Subsidiary shall obtain and maintain all permits, licenses, approvals and
other similar documents required by any such laws, statutes, ordinances, rules,
regulations or orders.

(r) Deposit Accounts. The Borrower will maintain its primary deposit accounts at
the Bank so long as any obligations to the Bank, whether under the Loans or
otherwise, remain outstanding.

(s) Waiver. Any variance from the covenants of the Borrower pursuant to this
Section 2 shall be permitted only with the prior written consent and/or waiver
of the Bank. Any such variance by consent and/or waiver shall relate solely to
the variance addressed in such consent and/or waiver, and shall not operate as
the Bank’s consent and/or waiver to any other variance of the same covenant or
other covenants, nor shall it preclude the exercise by the Bank of any power or
right under this Agreement, other than with respect to such variance.

 

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3. Closing Conditions. The obligation of the Bank to make the Loans, or any
portion thereof, and the effectiveness of this Agreement are, at the Bank’s
option, subject to the satisfaction of each of the following conditions
precedent:

(a) Default. Before and after giving effect to the Loans, or any portion
thereof, no Event of Default or any event which, with the passage of time or the
giving of notice, might mature into an Event of Default, shall have occurred and
be continuing.

(b) Warranties. Before and after giving effect to the Loans or any portion
thereof, the representations and warranties in Section 1 hereof shall be true
and correct as though made on the date of such Loans or portion thereof.

(c) Certification. The Borrower shall have delivered to the Bank a certificate
of the President or Chief Financial Officer of the Borrower dated as of the date
hereof: (i) as to the matters set forth in Sections 3(a) and 3(b) above; (ii) to
the effect that the resolutions described in Section 3(d) below have not been
amended or rescinded and remain in full force and effect; (iii) as to the
incumbency of the individuals authorized to sign this Agreement, the Revolving
Note (as hereinafter defined) and the other Loan Documents (with specimen
signatures attached); and (iv) to the effect that the Articles of Incorporation
and Code of Regulations of the Borrower are in full force and effect in the form
delivered to the Bank.

(d) Resolutions. The Borrower shall have delivered to the Bank copies of the
resolutions of the Borrower’s Board of Directors authorizing the borrowings
hereunder and the execution and delivery of this Agreement, the Revolving Note
and other Loan Documents.

(e) Articles and Regulations. The Borrower shall have delivered to the Bank true
and correct copies of its Articles of Incorporation and Code of Regulations.

(f) Revolving Note. The Borrower shall have delivered the Revolving Note to the
Bank with all blanks appropriately completed and duly executed on behalf of the
Borrower.

(g) Term Note. The Borrower shall have delivered the Term Note to the Bank with
all blanks appropriately completed and duly executed on behalf of the Borrower.

(h) Opinion. The Borrower shall have delivered to the Bank the opinion of
outside counsel acceptable to the Bank, dated the date of this Agreement, to the
effect that: (i) the Borrower is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Ohio; (ii) the Borrower
has full power and authority to execute and deliver this Agreement, the Notes
and the other Loan Documents and to perform its obligations thereunder;
(iii) the execution and delivery by the Borrower of this Agreement, the Notes
and the other Loan Documents, and the performance by the Borrower of its
obligations thereunder, have been duly authorized by all necessary corporate
action, and are not in conflict with any provision of law or of the Articles of
Incorporation or Code of Regulations of the Borrower, nor in conflict with any

 

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agreement, order or decree binding upon the Borrower of which such counsel has
knowledge; and (iv) this Agreement, the Notes and the other Loan Documents are
the legal, valid and binding obligations of the Borrower, enforceable against
the Borrower in accordance with their respective terms, except as the same may
be affected by bankruptcy, insolvency, moratorium or similar laws now or
hereafter in effect, or by legal or equitable principles relating to or limiting
creditors’ rights generally, or other rules of law or equity limiting the
availability of specific performance or injunctive relief.

(i) Golden Corral Agreement. The Borrower shall have delivered the Golden Corral
Agreement (as defined in Section 5(e)), and all related documents and
instruments to the Bank with all blanks appropriately completed and duly
executed on behalf of the Borrower.

4. Loans.

(a) Loans.

(i) Revolving Loan. Subject to the terms and conditions of this Agreement, and
subject to there being no Event of Default (or event which might, with the
giving of notice or the passage of time, mature into an Event of Default)
hereunder, the Bank agrees to lend and relend to the Borrower, upon request by
the Borrower made to the Bank in the manner described in Sections 4(b) and
(c) below, during the period from the date hereof to the earlier of
(A) October 21, 2010, or the termination date of any extension hereof agreed to
by the Borrower and the Bank as described below, or (B) the date of the
occurrence of an Event of Default, unless waived by the Bank (the earlier of
such dates being referred to herein as the “Commitment Termination Date”), a
principal sum of up to Five Million Dollars ($5,000,000) (the “Total Commitment
Amount”), as the Borrower may from time to time request for the Borrower’s
working capital needs (the “Revolving Loan”); provided, however, that the Bank
shall not be required to make, and the Borrower shall not be entitled to
receive, any Revolving Loan if, after giving effect thereto, the aggregate
outstanding principal balance of the Revolving Loan would exceed the Total
Commitment Amount.

Each Revolving Loan hereunder shall be in the amount of Five Hundred Thousand
Dollars ($500,000) or a multiple thereof. The Revolving Loan shall be evidenced
by an Eighteenth Amended and Restated Revolving Credit Promissory Note given by
the Borrower to the Bank in substantially the form of Exhibit F attached hereto,
as amended and/or restated from time to time (the “Revolving Note”). The
Revolving Note shall mature and be payable in full on October 21, 2010, unless
accelerated or extended as described herein. The Revolving Note shall replace
the Seventeenth Amended and Restated Revolving Credit Promissory Note dated as
of December 3, 2007 given by the Borrower to the Bank (the “Prior Note”), and
amounts outstanding under the Prior Note shall not be deemed cancelled or
satisfied, but shall be evidenced by the Revolving Note instead of by the Prior
Note. If the outstanding principal balance of the Revolving Loan at any time
exceeds the Total Commitment Amount, the Borrower shall immediately, without
notice or demand, reduce the outstanding principal balance of the Revolving Loan
such that the Total Commitment Amount is not exceeded.

 

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Upon request by the Borrower, the Bank may consider extensions of the Commitment
Termination Date, but is not hereby committing in any way thereto. Upon any such
extension, at the option of the Bank, the Borrower shall execute a new
promissory note substantially identical to the Revolving Note, except reflecting
the new Commitment Termination Date, which thereupon shall be the Revolving Note
hereunder.

Notwithstanding anything to the contrary herein, the Borrower covenants and
agrees to pay down the outstanding balance of the Revolving Loan and the
Revolving Note to Zero Dollars ($0) for not less than thirty (30) consecutive
days during each of the Borrower’s fiscal years, having commenced with the
Borrower’s fiscal year beginning on June 3, 2002.

(ii) New Term Loan. Subject to the terms and conditions of this Agreement, on
the date hereof, the Bank agrees to make a term loan to the Borrower in the
amount of Four Million Dollars ($4,000,000) (the “Term Loan”) (the Term Loan,
the 2007 Term Loan (as defined below), and the Revolving Loan are sometimes
herein referred to together collectively as the “Loans” and each individually as
a “Loan”). The Term Note (as defined below) shall mature and be payable in full
on October 21, 2013, unless accelerated or extended as described herein (the
“Term Loan Maturity Date”). The Term Loan is evidenced by a Promissory Note in
substantially the form of Exhibit G attached hereto, as the same may be amended
and/or restated from time to time (the “Term Note”) (the Term Note, the
Revolving Note, and the 2007 Term Note (defined below) are sometimes hereinafter
referred to collectively as the “Notes” and each individually as a “Note”).

(iii) 2007 Term Loan. As of December 27, 2002, the Bank agreed to make to the
Borrower, and the Borrower borrowed from the Bank, a term loan in the aggregate
amount of Ten Million Dollars ($10,000,000) (the “Bullet Loan”) to finance in
part the Borrower’s working capital needs. Effective as of March 15, 2007 (the
“Term-out Effective Date”), the entire remaining unpaid principal amount of the
Bullet Loan of Three Million Dollars ($3,000,000) was converted into a term loan
(the “2007 Term Loan”). As of the date hereof, the remaining unpaid principal
amount of the 2007 Term Loan is Four Hundred Fifty Thousand Eight Hundred Sixty
Eight Dollars ($450,868). The maturity date of the 2007 Term Loan is March 15,
2010 (the “2007 Term Loan Maturity Date”). The 2007 Term Loan is evidenced by
that certain Promissory Note in the original principal amount of Three Million
Dollars ($3,000,000) dated March 15, 2007 issued by the Borrower to the Bank, as
the same may be amended and/or restated from time to time (the “2007 Term
Note”). The 2007 Term Note is subject to the terms and conditions of this
Agreement. Each of the Term Note and 2007 Term Note may be referred to herein as
“Cost of Funds Notes” and each of the Term Loan and 2007 Term Loan may be
referred to herein as “Cost of Funds Loans”. “Cost of Funds” means the rate at
which the Bank would be able to borrow funds of comparable amounts in the Money
Markets for a period equal to the remaining term of such Cost of Funds Loan,
adjusted for any reserve requirement and any subsequent costs arising from a
change in government regulation, with such rate rounded upward to the nearest
one-eighth percent, and the term. “Money Markets” refers to one or more
wholesale funding markets available to and selected by the Bank, including
negotiable certificates of deposit, commercial paper, Eurodollar deposits, bank
notes, federal funds, interest rate swaps or others.

 

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(iv) Senior Bank Debt to Adjusted EBITDA Ratio. The Borrower shall at no time
permit the ratio of (A) the sum of the outstanding principal balance of the
Loans plus all other Senior Bank Debt (as defined in Exhibit D attached hereto)
to (B) Borrower’s Adjusted EBITDA (as defined in Exhibit D attached hereto) to
exceed 2.00 to 1.0. In the event that any of the upper limits described in the
immediately preceding sentence shall at any time be exceeded, the Borrower shall
immediately, without notice or demand, prepay the outstanding principal balance
of the Loans such that the upper limits set forth in the immediately preceding
sentence are not exceeded.

(b) Interest.

(i) Revolving Loan. Interest on each advance of the Revolving Note hereunder
shall accrue at an annual rate equal to the LIBOR Rate Margin (as defined below)
plus the 1, 2, or 3 month LIBOR rate quoted by the Bank from Telerate Page 3750
or any successor thereto (which shall be the LIBOR rate in effect two New York
Banking Days prior to (i) commencement of the advance or (ii) the end of each
Loan Period (as hereinafter defined), adjusted for any reserve requirement and
any subsequent costs arising from a change in government regulation (the
“Revolving Note LIBOR Rate”).

The term “New York Banking Day” means any day (other than a Saturday or Sunday)
on which commercial banks are open for business in New York, New York.

In the event the Borrower does not timely select an interest rate option at
least two New York Banking Days before the end of the Loan Period for a Loan
bearing interest at the Revolving Note LIBOR Rate, the funds advanced under such
Loan shall, beginning on the first day of the new Loan Period, accrue interest
at the 1 month LIBOR rate in effect two New York Banking Days prior to
commencement such Loan Period.

The term “Loan Period” means the period commencing on the advance date of the
applicable Revolving Loan bearing interest at the Revolving Note LIBOR Rate and
ending on the numerically corresponding day 1, 2, or 3 months thereafter
matching the interest rate term selected by the Borrower; provided, however,
(y) if any Loan Period would otherwise end on a day which is not a New York
Banking Day, then the Loan Period shall end on the next succeeding New York
Banking Day unless the next succeeding New York Banking Day falls in another
calendar month, in which case the Loan Period shall end on the immediately
preceding New York Banking Day; or (z) if any Loan Period begins on the last New
York Banking Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of the Loan
Period), then the Loan Period shall end on the last New York Banking Day of the
calendar month at the end of such Loan Period.

The “LIBOR Rate Margin” is currently one hundred thirty-five (135) basis points
and shall be subject to adjustment on each March 1 for application to the period
commencing on such date in accordance with the Borrower’s ratio of Senior Bank
Debt to Adjusted EBITDA for the period commencing on the first day of the
Borrower’s then-current fiscal year and ending on the last day of the second
quarter of such fiscal year and on each September 1 for application to the
period commencing on such date in accordance with the Borrower’s ratio of Senior
Bank Debt to

 

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Adjusted EBITDA for the period commencing on the first day of the Borrower’s
immediately preceding fiscal year and ending on the last day of such fiscal
year, as follows: if the Borrower’s ratio of Senior Bank Debt to Adjusted EBITDA
is 1.50 to 1.0 or greater, the LIBOR Rate Margin shall be one hundred eighty
(180) basis points; if the Borrower’s ratio of Senior Bank Debt to Adjusted
EBITDA is less than 1.50 to 1.0 but equal to or greater than 1.00 to 1.0, the
LIBOR Rate Margin shall be one hundred fifty-five (155) basis points; and if the
Borrower’s ratio of Senior Bank Debt to Adjusted EBITDA is less than 1.00 to
1.0, the LIBOR Rate Margin shall be one hundred thirty-five (135) basis points.
Such adjustments shall be based upon the Borrower’s ratio of Senior Bank Debt to
Adjusted EBITDA as determined from the financial statements delivered to the
Bank pursuant to Section 2(b)(i) or (ii) hereof, as applicable. The foregoing
provisions are not intended to, and shall not be construed to, authorize any
violation by the Borrower of any Financial Covenant or constitute a waiver
thereof or any commitment by the Bank to waive any violation by the Borrower of
any Financial Covenant.

No Revolving Loan may extend beyond the Commitment Termination Date. In any
event, if the Loan Period (as defined below) for a Revolving Loan should happen
to extend beyond the Commitment Termination Date, such loan must be prepaid at
the Commitment Termination Date. Each Revolving Loan shall be in a minimum
principal amount of Five Hundred Thousand Dollars ($500,000) and in increments
of Five Hundred Thousand Dollars ($500,000) thereafter.

(ii) The unpaid balance of the Term Loan shall bear interest at a rate of
3.47% per annum.

(iii) The unpaid balance of the 2007 Term Loan shall bear interest at a rate of
6.13% per annum.

Interest on the Loans shall be computed on the basis of a year consisting of
three hundred sixty (360) days but applied to the actual number of days elapsed.
The Bank’s internal records of applicable interest rates shall be determinative
in the absence of manifest error.

(iv) Payments. Interest on the Revolving Loan shall be payable, in arrears, on
the last day of the Loan Period applicable thereto, and when such Revolving Loan
is due (whether by reason of acceleration or otherwise).

The principal of the Revolving Loan shall be due and payable in full on the
Commitment Termination Date.

If a Revolving Loan bearing interest at the Revolving Note LIBOR Rate is prepaid
prior to the end of the Loan Period, as defined above, for such loan, whether
voluntarily or because prepayment is required due to such loan’s maturing or
accelerating upon default or otherwise, the Borrower agrees to pay all of the
Bank’s costs, expenses, and Interest Differential (as determined by the Bank)
incurred as a result of such prepayment. The term “Interest Differential” shall
mean that sum equal to the greater of zero or the financial loss incurred by the
Bank resulting from prepayment, calculated as the difference between the amount
of interest the Bank would have earned (from like investments in the Money
Markets as of the first day of the Revolving Loan) had prepayment not occurred
and the interest the Bank will actually earn (from like

 

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investments in the Money Markets as of the date of prepayment) as a result of
the redeployment of funds from the prepayment. Because of the short-term nature
of this facility, the Borrower agrees that the Interest Differential shall not
be discounted to its present value. Any prepayment of a Revolving Loan shall be
in an amount equal to the remaining entire principal balance of such loan. The
term “Money Markets” refers to one or more wholesale funding markets available
to and selected by the Bank, including negotiable certificates of deposit,
commercial paper, Eurodollar deposits, bank notes, federal funds, interest rate
swaps, or others.

The principal balance of the Term Loan and interest accrued thereon shall be
repaid by the Borrower to the Bank by consecutive monthly payments in the amount
of $89,459.47 each on the fifteenth day of each calendar month, commencing on
November 15, 2009, and by a final payment on the Term Loan Maturity Date in the
amount of the unpaid principal and interest balance of the Term Loan. No
repayment or prepayment of the Term Loan by the Borrower shall be reason for any
relending or additional lending of Term Loan to the Borrower.

The principal balance of the 2007 Term Loan and interest accrued thereon shall
be repaid by the Borrower to the Bank by consecutive monthly payments in the
amount of $91,585.05 each on the fifteenth day of each calendar month, having
commenced on April 15, 2007, and by a final payment on the 2007 Term Loan
Maturity Date in the amount of the unpaid principal and interest balance of the
2007 Term Loan. No repayment or prepayment of the 2007 Term Loan by the Borrower
shall be reason for any relending or additional lending of 2007 Term Loan to the
Borrower.

(iv) Default/Late Payments. At the option of the Bank, (A) prior to acceleration
of the Loans, in the event that any interest on or principal of any Loan remains
unpaid past thirty (30) days of the date due, and/or (B) upon the occurrence of
any other Event of Default hereunder or upon the acceleration of the Loans,
interest (computed and adjusted in the same manner, and with the same effect, as
interest on the Loans prior to maturity) on the outstanding balance of the Loans
shall be payable on demand at the rate that would otherwise be in effect for
such Loans from time to time as set forth in Section 4(b) plus an additional
three percent (3%) per annum up to any maximum rate permitted by law, in any and
all such cases until paid and whether before or after the entry of any judgment
thereon. In addition, in the event that the Borrower should fail to make any
payment hereunder within ten (10) days of the date due, the Borrower shall pay
the Bank a fee in an amount of up to five percent (5%) of the amount of such
payment, but in no event less than Fifty Dollars ($50.00), which fee shall be
immediately due and payable without notice or demand.

(c) Making of Revolving Loans.

(i) Disbursements.

1) Loans shall be effectuated by the Bank crediting an account maintained by the
Borrower at the Bank, one of which shall be the corporate checking account,
currently account number                (the “Corporate Checking Account”).

2) The Bank may make Revolving Loans in response to any written notice delivered
by the Borrower to the Bank by 12:00 noon on the day on which

 

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it desires to obtain a Revolving Loan hereunder bearing interest based on the
Revolving Note LIBOR Rate. Such notice may be given by telephone but shall be
promptly followed by written confirmation by the Borrower to the Bank. In the
case of any Revolving Loan, such notice shall specify the amount of such
Revolving Loan.

3) Additionally, upon the mutual agreement of the Bank and the Borrower, upon
receipt of checks drawn on the Corporate Checking Account, the Bank may make
Revolving Loans when the balance in the Corporate Checking Account falls below
zero, provided that the making of such Revolving Loans will not cause the
aggregate outstanding principal balance of the Revolving Loans to exceed the
Total Commitment Amount or the occurrence of a Default or an Event of Default
hereunder. In the event that honoring such checks would cause the Total
Commitment Amount to be exceeded or the occurrence of a Default or an Event of
Default hereunder, the Bank may, in its sole discretion, elect to make or not to
make an additional Revolving Loan to the Corporate Checking Account; the Bank
will not be responsible for any checks returned for insufficient funds. Any such
Revolving Loan will be equal to the negative collected funds balance and will be
back-dated to the previous working day of the Bank to effectively credit the
Bank for the use of its funds by the Borrowers on the previous Business Day.

(ii) Minimum Balance. Notwithstanding anything to the contrary in this Agreement
or in any of the other Loan Documents, if the Bank and the Borrower agree that
disbursements shall be made in accordance with Section 4(c)(i)(3) above, then
until this Agreement is terminated and the Loans are repaid in full, the
Borrower shall always maintain a minimum balance of $50,000 in the Corporate
Checking Account, which the Bank, in its sole discretion, may apply against the
Revolving Loans at any time.

(iii) Application of Excess Funds. If the Bank and the Borrower agree that
disbursements shall be made in accordance with Section 4(c)(i)(3) above, then
any funds deposited in the Corporate Checking Account in excess of $50,000 will
be applied to obligations of the Borrower to the Bank in the order that the Bank
directs and then to the reduction of the Loans.

(d) Unused Credit Fee. The Borrower shall pay the Bank an unused credit fee in
an amount equal to one quarter of one percent (0.25%) per annum times the daily
average of the unused Total Commitment Amount (the “Unused Credit Fee”), which
fee shall be payable quarterly, in arrears, having commenced on the first day of
December, 1998, and on the first day of each March, June, September and December
thereafter, and when the Revolving Loan is due (whether by reason of
acceleration or otherwise). The Unused Credit Fee shall be computed on the basis
of a year consisting of three hundred sixty (360) days but applied to the actual
number of days elapsed.

(e) Changes in Laws and Circumstances; Illegality.

(i) In the event of (A) any change in the reserve requirements and/or the
assessment rates of the FDIC which are applicable to the Bank in making any or
all of the Loans or (B) any change in circumstances affecting the interbank
market, and the result of any such event described in clause (A) or (B) above is
to increase the costs to the Bank of making the Loans, the Borrower shall
promptly pay the Bank any additional amounts, upon demand accompanied by a
reasonably detailed statement as to such additional amounts (which statement
shall be conclusive in the absence of manifest error), which will reasonably
compensate the Bank for such costs.

 

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(ii) If by reason of circumstances affecting the interbank market adequate and
reasonable means do not exist in the reasonable judgment of the Bank for
ascertaining a rate of interest for the LIBOR rate or Cost of Funds at any time,
the Bank shall forthwith give notice thereof to the Borrower. Unless and until
such notice has been withdrawn by the Bank, the Borrower may not thereafter
elect to have any portion of the Loans bear interest at a LIBOR based rate or
Cost of Funds based rate, as applicable.

(iii) If any law, rule, regulation, treaty, guideline, order or directive or any
change therein or in the interpretation or application thereof shall make it
unlawful for the Loans to bear interest at the LIBOR based rate or Cost of Funds
based rate, the Bank shall notify the Borrower thereof and no portion of the
Loans may thereafter bear interest at a LIBOR based rate or Cost of Funds based
rate, as applicable. If required by law, any portion of the Loans then bearing
interest at a LIBOR based rate or Cost of Funds based rate, as applicable, shall
cease to bear interest at the LIBOR based rate or Cost of Funds based rate, as
applicable, and shall bear interest based on the Prime Rate. The “Prime Rate” is
the rate announced from time to time by the Bank as its prime rate. The Prime
Rate is determined solely by the Bank pursuant to market factors and its own
operating needs and is not necessarily the Bank’s best or most favorable rate
for corporate, commercial, or other loans.

(f) Prepayments; Reduction of Total Commitment Amount. The Borrower may, at its
option, from time to time repay or prepay part or all of the outstanding
principal balance of the Revolving Loans bearing interest based on the Prime
Rate without premium.

If any Revolving Loan bearing interest at the Revolving Note LIBOR Rate is
prepaid prior to the end of the Loan Period for such loan, whether voluntarily
(including, without limitation, any such prepayment made in connection with a
reduction in the Total Commitment Amount, as described below) or because
prepayment is required due to such loan’s maturing or accelerating upon default
or otherwise, the Borrower agrees to pay all of the Bank’s costs, expenses, and
Interest Differential (as determined by the Bank) incurred as a result of such
prepayment. Any prepayment of a Revolving Loan shall be in an amount equal to
the remaining entire principal balance of such loan.

The Total Commitment Amount may, at the option of the Borrower, be permanently
reduced by any amount as of the last day of any of the Borrower’s fiscal
quarters, by the Borrower giving the Bank written notice thereof and paying to
the Bank any amount necessary so that the outstanding principal balance of the
Revolving Loan will not exceed the Total Commitment Amount.

 

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There shall be no prepayments of any Cost of Funds Loan, provided that the Bank
may consider requests for its consent with respect to prepayment of a Cost of
Funds Loan, without incurring an obligation to do so, and the Borrower
acknowledges that in the event that such consent is granted, the Borrower shall
be required to pay the Bank, upon prepayment of all or part of the principal
amount of a Cost of Funds Loan before final maturity, a prepayment indemnity
(“Prepayment Fee”) equal to the greater of zero, or that amount, calculated on
any date of prepayment (“Prepayment Date”), which is derived by subtracting:
(a) the principal amount of such Cost of Funds Loan or portion of such Cost of
Funds Loan to be prepaid from (b) the Net Present Value of such Cost of Funds
Loan or portion of such Cost of Funds Loan to be prepaid on such Prepayment
Date; provided, however, that the Prepayment Fee shall not in any event exceed
the maximum prepayment fee permitted by applicable law.

“Net Present Value” shall mean the amount which is derived by summing the
present values of each prospective payment of principal and interest which,
without such full or partial prepayment, could otherwise have been received by
the Bank over the remaining contractual life of such Cost of Funds Loan. The
individual discount rate used to present value each prospective payment of
interest and/or principal shall be the Money Market Rate at Prepayment for the
maturity matching that of each specific payment of principal and/or interest.

“Money Market Rate At Prepayment” shall mean that zero-coupon rate, calculated
on the Prepayment Date, and determined solely by the Bank, as the rate at which
the Bank would be able to borrow funds in Money Markets for the prepayment
amount matching the maturity of a specific prospective Cost of Funds Loan, as
applicable, payment date, adjusted for any reserve requirement and any
subsequent costs arising from a change in government regulation. A separate
Money Market Rate at Prepayment will be calculated for each prospective interest
and/or principal payment date.

In calculating the amount of such Prepayment Fee, the Bank is hereby authorized
by the Borrower to make such assumptions regarding the source of funding,
redeployment of funds, and other related matters, as the Bank may deem
appropriate. If the Borrower fails to pay any Prepayment Fee when due, the
amount of such Prepayment Fee shall thereafter bear interest until paid at the
default rate specified in this Agreement (computed on the basis of a 360-day
year, actual days elapsed). Any prepayment of principal shall be accompanied by
a payment of interest accrued to date thereon; and said prepayment shall be
applied to the principal installments in the inverse order of their maturities.
All prepayments shall be in an amount of at least $100,000 or, if less, the
remaining entire principal balance of the Cost of Funds Loan being prepaid, as
applicable.

No partial prepayment of any of the Loans shall change any due date or the
amount of any regularly-scheduled installment of principal thereof.

(g) Payments. All payments of principal and interest hereunder shall be made in
immediately available funds to the Bank at such place as may be designated by
the Bank to the Borrower in writing. The Bank is authorized by the Borrower to
enter from time to time the balance of the Loans and all payments and
prepayments thereon on the reverse of the Notes or in

 

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the Bank’s regularly maintained data processing records, and the aggregate
unpaid amount of the Loans set forth thereon or therein shall be presumptive
evidence of the amount owing to the Bank and unpaid thereon. Upon request and
payment by the Borrower of a reasonable fee which compensates the Bank for the
cost of issuing the same, the Bank shall provide the Borrower with a statement
showing all payments and prepayments on the Loans.

5. Events of Default. If any of the following events (each, an “Event of
Default”) shall occur, then the Bank may, without further notice or demand,
accelerate the Loans and declare them to be, and thereupon the Loans shall
become, immediately due and payable (except that the Loans shall become
automatically due and payable upon the occurrence of an event described in
Sections 5(j), (k) and (l) below), and, to the extent the Total Commitment
Amount has not yet been used or fully drawn on by the Borrower, terminate the
balance of same; and the Bank shall have all rights provided herein or in any of
the other Loan Documents or otherwise provided by law to realize on any
collateral or security for the Loans:

(a) The Borrower does not pay the Bank any interest on the Loans within ten
(10) days after the date due, whether by reason of acceleration or otherwise, or
does not pay or repay to the Bank any principal of the Loans or any other
obligation hereunder when due, whether by reason of acceleration or otherwise;
or

(b) The Borrower defaults in the performance or observance of any agreement
contained in Section 2(b), 2(c), 2(d), 2(e), 2(f), 2(g), 2(h) or 2(o) hereof and
such default has not been cured by the Borrower within ten (10) days after the
occurrence thereof, or the Borrower defaults in the performance or observance of
any other agreement contained in Section 2 hereof; or

(c) There shall have occurred any other violation or breach of any covenant,
agreement or condition contained herein or in any other Loan Document which has
not been cured by the Borrower within thirty (30) days after the earlier to
occur of the date the Borrower has knowledge thereof and the date the Bank gives
the Borrower notice thereof; or

(d) The Borrower does not pay when due or prior to the expiration of the
applicable cure period, if any, any principal or interest on any other
Indebtedness in excess of One Hundred Thousand Dollars ($100,000), or the
Borrower defaults in the performance or observance of any other term or
condition contained in any agreement or instrument under which such Indebtedness
is created, and the holder of such other Indebtedness declares, or may declare,
such Indebtedness due prior to its stated maturity because of the Borrower’s
default thereunder; or

(e) There shall have occurred any violation or breach of any covenant, agreement
or condition contained in any other agreement between the Borrower and the Bank
which has not been cured by the Borrower prior to the expiration of the
applicable cure period, if any, including without limitation, the Second Amended
and Restated Loan Agreement [Golden Corral] dated as of October 21, 2009 between
the Borrower and the Bank, as amended from time to time (the “Golden Corral
Agreement”); or

 

19

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(f) The Borrower does not perform its obligations under any agreement material
to its business, and the other party to such agreement declares, or may declare,
such agreement in default; or

(g) Any representation or warranty made herein or in any other Loan Document or
writing furnished in connection with this Agreement shall be false or misleading
in any material respect when made; or

(h) The Borrower is generally not paying its debts as they become due; or

(i) With respect to the plans referred to in Section 1(h) above, or any other
similar plan, a “reportable event” or “prohibited transaction” pursuant to ERISA
has occurred which results in the imposition of material taxes or penalties
against the Borrower or the termination of such plans (or trusts related
thereto), or the Borrower incurs any material liability to the PBGC in
connection with such plans; or

(j) The Borrower makes an assignment of a material part of its assets for the
benefit of creditors; or

(k) The Borrower applies for the appointment of a trustee or receiver for a
material part of its assets or commences any proceedings relating to the
Borrower under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or other liquidation law of any jurisdiction;
or any such application is filed, or any such proceedings are commenced, against
the Borrower, and the Borrower indicates its approval, consent or acquiescence
thereto; or an order is entered appointing such trustee or receiver, or
adjudicating the Borrower bankrupt or insolvent, or approving the petition in
any such proceedings, and such order remains in effect for sixty (60) days; or

(l) Any order is entered in any proceedings against the Borrower decreeing the
dissolution of the Borrower; or

(m) Any material part of the Borrower’s operations shall cease, other than
temporary or seasonal cessations which are experienced by other companies in the
same line of business and which would not have a material adverse effect on the
Borrower’s operations or financial condition or its ability to perform its
obligations hereunder; or

(n) Any final non-appealable judgment which, together with other outstanding
judgments against the Borrower, causes the aggregate of such judgments in excess
of confirmed insurance coverage satisfactory to the Bank to exceed Seven Hundred
Fifty Thousand Dollars ($750,000), shall be rendered against the Borrower; or

(o) Any event of default occurs under any other agreement to which the Borrower
and the Bank are parties or under any document or instrument running to the
benefit of the Bank from the Borrower.

 

20

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The above recitation of Events of Default shall be interpreted in all respects
in favor of the Bank. To the extent any cure-of-default period is provided
above, the Bank may nevertheless, at its option pending completion of such cure,
suspend its obligation to consider further disbursement of the Loans hereunder.

6. General.

(a) Reasonable Actions. The Bank agrees that in taking any action which it is
permitted or empowered to take under this Agreement, it will act reasonably
under what it believes are the facts and circumstances existing at such time.

(b) Delay. No delay, omission or forbearance on the part of the Bank in the
exercise of any power or right shall operate as a waiver thereof, nor shall any
single or partial delay, omission or forbearance in the exercise of any other
power or right. The rights and/or remedies of the Bank herein provided are
cumulative, shall be interpreted in all respects in favor of the Bank and are
not exclusive of any other rights and/or remedies provided by law.

(c) Notice. Except as otherwise expressly provided in this Agreement, any notice
hereunder shall be in writing and shall be deemed to be given when personally
delivered or when sent by certified mail, postage prepaid, and addressed to the
parties at their addresses set forth below:

 

Bank:      U.S. Bank National Association           425 Walnut Street          
Cincinnati, Ohio 45202           Attention:      Shawn Masterson               
Vice President      With a copy to:      Jeffrey S. Schloemer, Esq.          
Taft, Stettinius & Hollister LLP           425 Walnut Street, Suite 1800     
     Cincinnati, Ohio 45202      Borrower:      Frisch’s Restaurants, Inc.     
     2800 Gilbert Avenue           Cincinnati, Ohio 45206           Attention:
     Mr. Donald H. Walker                Vice President - Finance      With
copies to:      Craig F. Maier, President           Frisch’s Restaurants, Inc.
          2800 Gilbert Avenue           Cincinnati, Ohio 45206     

and

 

     Donald A. Bodner          

Frisch’s Restaurants, Inc.

         

2800 Gilbert Avenue

    

.

    

Cincinnati, Ohio 45206

    

 

21

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The Borrower or the Bank may, by written notice to the other as provided herein,
designate another address for purposes hereunder.

(d) Expenses; Indemnity. The Borrower shall pay all reasonable out-of-pocket
expenses incurred by the Bank, including the reasonable fees, charges and
disbursements of outside-counsel for the Bank (determined on the basis of such
counsel’s generally applicable rates, which may be higher than the rates such
counsel charges the Bank in certain matters) and/ or the allocated costs of
in-house counsel incurred from time to time by the Bank in entering into and
closing this Agreement and preparing the documentation in connection herewith,
administering the obligations of the Borrower hereunder or under any of the
other Loan Documents, and enforcing the obligations of the Borrower hereunder or
under any of the other Loan Documents, and the Borrower agrees to pay the Bank
upon demand for the same. The Borrower agrees to defend, indemnify and hold the
Bank harmless from any liability, obligation, cost, damage or expense (including
reasonable attorneys’ fees and legal expenses) for taxes (other than income
taxes), fees or third party claims which may arise or be related to the
execution, delivery or performance of this Agreement or any of the other Loan
Documents, except in the case of negligence or willful misconduct on the part of
the Bank. The Borrower further agrees to indemnify and hold harmless the Bank
from any loss or expense which the Bank may sustain or incur as a consequence of
default by the Borrower in payment of any principal of or interest on the Loans,
including, without limitation, any such loss or expense arising from interest or
fees payable by the Bank to lenders of funds obtained by it in order to maintain
interest rates on the Cost of Funds Loans.

(e) Survival. All covenants and agreements of the Borrower made herein or
otherwise in connection with the transactions contemplated hereby shall survive
the execution and delivery of this Agreement and the other Loan Documents, and
shall remain in effect so long as any obligations of the Borrower are
outstanding hereunder or under any of the other Loan Documents.

(f) Severability. Any provision of this Agreement or any of the other Loan
Documents which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition of
enforceability without invalidating the remaining portions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction.

(g) Law. IMPORTANT: The Loans shall be deemed made in Ohio and this Agreement
and all other Loan Documents, and all of the rights and obligations of the
Borrower and the Bank hereunder and thereunder, shall in all respects be
governed by and construed in accordance with the laws of the State of Ohio,
including all matters of construction, validity and performance. Without
limitation on the ability of the Bank to initiate and prosecute any action or
proceeding in any applicable jurisdiction related to loan repayment, the
Borrower and the Bank

 

22

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agree that any action or proceeding commenced by or on behalf of the parties
arising out of or relating to the Loans and/or this Agreement and/or any of the
other Loan Documents shall be commenced and maintained exclusively in the
District Court of the United States for the Southern District of Ohio, or any
other court of applicable jurisdiction located in Cincinnati, Ohio. The Borrower
and the Bank also agree that a summons and complaint commencing an action or
proceeding in any such Ohio courts by or on behalf of such parties shall be
properly served and shall confer personal jurisdiction on a party to which said
party consents, if (i) served personally or by certified mail to the other party
at any of its addresses noted herein, or (ii) as otherwise provided under the
laws of the State of Ohio. The interest rates and all other terms of the Loans
negotiated with the Borrower are, in part, related to the aforesaid provisions
on jurisdiction, which the Bank deems a vital part of this loan arrangement.

(h) Successors. This Agreement shall be binding upon and inure to the benefit of
the Borrower and the Bank and their respective successors and assigns. The
Borrower shall not assign its rights or delegate its duties hereunder without
the prior written consent of the Bank.

(i) Amendment and Restatement. This Agreement amends and restates the Prior Loan
Agreement and amounts outstanding under the Prior Loan Agreement shall not be
deemed cancelled or satisfied, but shall be evidenced by this Agreement instead
of by the Prior Loan Agreement.

(j) Amendment. Except as otherwise expressly provided herein, this Agreement may
not be modified or amended except in writing signed by authorized officers of
the Bank and the Borrower.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly effective as of the date first set
forth above.

 

U.S. BANK NATIONAL ASSOCIATION     FRISCH’S RESTAURANTS, INC. By:  

/s/ Shawn Masterson

    By:  

/s/ Donald H. Walker

  Shawn Masterson       Donald H. Walker   Vice President       Vice
President-Finance

 

23

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LIST OF EXHIBITS

 

A   –    Financial Information and Reports B   –    Actions C   –    Permitted
Liens D   –    Financial Covenants E   –    Permitted Indebtedness F   –   
Revolving Note G   –    Term Note

 

24

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EXHIBIT 10.5

EXHIBIT A

FINANCIAL INFORMATION AND REPORTS

 

1. Annual Report for the year ended June 2, 2009.

 

2. Projections for the Borrower for the fiscal year ending June, 2010.

 

A-1

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EXHIBIT 10.5

EXHIBIT B

ACTIONS

 

B-1

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EXHIBIT 10.5

EXHIBIT C

PERMITTED LIENS

All obligations of the Borrower incurred in connection with any existing or
future lease transactions capitalized or required to be capitalized on the
Borrower’s books.

Two mortgages in favor of U.S. Bank

 

C-1

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EXHIBIT 10.5

EXHIBIT D

FINANCIAL COVENANTS

The Borrower agrees that it shall:

(a) Ratio of Senior Bank Debt to Adjusted EBITDA. Not permit the ratio of the
Borrower’s Senior Bank Debt to Adjusted EBITDA to exceed 2.00 to 1.0 at any
time.

“Senior Bank Debt” for purposes hereof shall mean the sum of all of the
Borrower’s indebtedness for borrowed money that in accordance with generally
accepted accounting principles would be considered as a liability, and all
obligations of the Borrower incurred in connection with any existing or future
lease transactions capitalized or required to be capitalized on the Borrower’s
books.

“Adjusted EBITDA” for purposes hereof shall mean the Borrower’s consolidated
gross (before interest, taxes, depreciation and amortization) earnings; plus
losses on disposition of assets (net of abandonment losses); less gains on
disposition of assets, net of abandonment losses; plus net cash proceeds from
the disposition of property; less cash and non-cash extraordinary gains; plus
cash and non-cash extraordinary losses, all calculated in accordance with
generally accepted accounting principals and consistently applied in accordance
with past practices on a rolling four (4) quarter basis.

(b) Cash Flow Coverage Ratio. Not permit the ratio of (i) the Borrower’s
Adjusted EBITDA plus operating lease payments less maintenance capital
expenditures equal to (50%) of depreciation less cash dividends to the
Borrower’s shareholders less cash income taxes paid, to (ii) the sum of the
Borrower’s scheduled principal payments on long term debt and capital lease
obligations (excluding Revolving Loan principal payments) plus interest expense
plus operating lease payments (in each case for the same period that the
Borrower’s Adjusted EBITDA is measured), calculated in accordance with generally
accepted accounting principles consistently applied in accordance with past
practices on a rolling four (4) quarter basis, to be less than 1.10 to 1.0,
measured quarterly on a rolling twelve month basis.

 

D-1

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EXHIBIT 10.5

EXHIBIT E

PERMITTED INDEBTEDNESS

 

          Balance as of
September 22,
2009

Indebtedness to US Bank NA

     

Term Loan

        539,697

Revolving Loan (up to $5,000,000 may be borrowed)

        4,000,000

Golden Corral Credit Facility

     

Construction Phase

   0   

Term Loans (up to $8,000,000 more may be borrowed)

   26,999,269      26,999,269                   $ 31,538,966          

Capitalized Leases

All obligations of the Borrower incurred in connection with any existing or
future lease transactions capitalized or required to be capitalized on the
Borrower’s books.

Contingent liability as assignor/guarantor of the following leases:

 

Location

       

Assignee

   Remaining
Lease Term

Covington, KY (Riverview Hotel) (renewal options aggregating 50 years)

   $ 48,072 per year    Remington Hotel Corporation    04/30/2020

Lease liability for closed restaurants & other non-operating property (lease not
presently assigned)

 

Location

   Remaining
Lease Term    Rent Per
Month

None

     

 

E-1

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EXHIBIT 10.5

EXHIBIT F

EIGHTEENTH AMENDED AND RESTATED

REVOLVING CREDIT PROMISSORY NOTE

 

$5,000,000.00

      Cincinnati, Ohio       October 21, 2009

FRISCH’S RESTAURANTS, INC., an Ohio corporation (the “Borrower”), for value
received, hereby promises to pay to the order of U.S. BANK NATIONAL ASSOCIATION,
a national banking association formerly known as Firstar Bank, N.A. and Star
Bank, National Association (the “Bank”), or it successors or assigns, on or
before October 21, 2010, the principal sum of FIVE MILLION DOLLARS ($5,000,000),
or such portion thereof as may be outstanding from time to time, together with
interest thereon as hereinafter provided.

This is the Revolving Note referred to in, was executed and delivered pursuant
to, and evidences indebtedness of the Borrower incurred under, that certain
Second Amended and Restated Loan Agreement [Revolving and Bullet Loans] dated as
of October 15, 2004 between the Borrower and the Bank, as the same has been
and/or may be amended, restated, supplemented, renewed, or otherwise modified
and in effect from time to time (the “Loan Agreement”), to which reference is
hereby made for a statement of the terms and conditions under which the
Revolving Loan evidenced hereby was made and is to be repaid and for a statement
of the Bank’s remedies upon the occurrence of an Event of Default. Capitalized
terms used herein, but not otherwise specifically defined, shall have the
meanings ascribed to such terms in the Loan Agreement.

The Borrower further promises to pay interest on the outstanding unpaid
principal amount hereof from the date hereof until payment in full at the rate
or rates from time to time applicable to the Revolving Loan as determined in
accordance with the Loan Agreement; provided, however, that upon the occurrence
and during the continuance of an Event of Default, the Borrower shall pay
interest on the outstanding principal balance of this Revolving Note at the rate
of interest applicable following the occurrence of an Event of Default as
determined in accordance with the Loan Agreement.

Interest on this Revolving Note shall be payable, at the times and from the
dates specified in the Loan Agreement, on the date of any prepayment hereof, at
maturity, whether due by acceleration or otherwise, and as otherwise provided in
the Loan Agreement. From and after the date when the principal balance hereof
becomes due and payable, whether by acceleration or otherwise, interest hereon
shall be payable on demand. In no contingency or event whatsoever shall interest
charged hereunder, however such interest may be characterized or computed,
exceed the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that such a court determines that the Bank has received interest hereunder
in excess of the highest rate applicable hereto, such excess shall be applied in
accordance with the terms of the Loan Agreement.

 

F-1

--------------------------------------------------------------------------------

The indebtedness evidenced by this Revolving Note is secured pursuant to the
terms of the Loan Documents.

The Borrower hereby waives demand, presentment, and protest and notice of
demand, presentment, protest, and nonpayment.

The Borrower further agrees, subject only to any limitation imposed by
applicable law, to pay all expenses, including attorneys’ fees and legal
expenses, incurred by the Bank in endeavoring to collect any amounts payable
hereunder which are not paid when due, whether by acceleration or otherwise.

IMPORTANT: This Revolving Note shall be deemed made in Ohio and shall in all
respects be governed by and construed in accordance with the laws of the State
of Ohio, including all matters of construction, validity and performance.
Without limitation on the ability of the Bank to initiate and prosecute any
action or proceeding in any applicable jurisdiction related to loan repayment,
the Borrower and the Bank agree that any action or proceeding commenced by or on
behalf of the parties arising out of or relating to this Revolving Note shall be
commenced and maintained exclusively in the District Court of the United States
for the Southern District of Ohio, or any other court of applicable jurisdiction
located in Cincinnati, Ohio. The Borrower and the Bank also agree that a summons
and complaint commencing an action or proceeding in any such Ohio courts by or
on behalf of such parties shall be properly served and shall confer personal
jurisdiction on a party to which said party consents, if (a) served personally
or by certified mail to the other party at any of its addresses noted herein, or
(b) as otherwise provided under the laws of the State of Ohio. The interest
rates and all other terms of this Revolving Note negotiated with the Borrower
are, in part, related to the aforesaid provisions on jurisdiction, which the
Bank deems a vital part of this loan arrangement.

This Note amends and restates the Seventeenth Amended and Restated Revolving
Credit Promissory Note dated as of December 3, 2007 given by the Borrower to the
Bank, and evidences all amounts outstanding as of the date hereof under said
Seventeenth Amended and Restated Revolving Credit Promissory Note.

Presentment for payment, notice of dishonor, protest and notice of protest are
hereby waived.

 

FRISCH’S RESTAURANTS, INC. By:  

 

    Donald H. Walker, Vice President-Finance

Address:

   

2800 Gilbert Avenue

Cincinnati, Ohio 45206

 

F-2

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EXHIBIT 10.5

EXHIBIT G

TERM PROMISSORY NOTE

 

$4,000,000.00

     Cincinnati, Ohio      October 21, 2009

FRISCH’S RESTAURANTS, INC., an Ohio corporation (the “Borrower”), for value
received, hereby promises to pay to the order of U.S. BANK NATIONAL ASSOCIATION,
a national banking association formerly known as Firstar Bank, N.A. and Star
Bank, National Association (the “Bank”), at the office of the Bank at 425 Walnut
Street, Cincinnati, Ohio 45202, or at such other place as the holder of this
Term Promissory Note (this “Term Note”) may from time to time designate in
writing, in lawful money of the United States of America and in immediately
available funds, the principal sum of FOUR MILLION DOLLARS ($4,000,000.00), at
such times as are specified in Section 4(b)(iii) of the Loan Agreement described
below.

This is the Term Note referred to in, was executed and delivered pursuant to,
and evidences indebtedness of the Borrower incurred under, that certain Third
Amended and Restated Loan Agreement [Revolving and Bullet Loans] dated as of
October 21, 2009 between the Borrower and the Bank, as the same has been and/or
may be amended, restated, supplemented, renewed, or otherwise modified and in
effect from time to time (the “Loan Agreement”), to which reference is hereby
made for a statement of the terms and conditions under which the Term Loan
evidenced hereby was made and is to be repaid and for a statement of the Bank’s
remedies upon the occurrence of an Event of Default. Capitalized terms used
herein, but not otherwise specifically defined, shall have the meanings ascribed
to such terms in the Loan Agreement.

The Borrower further promises to pay interest on the outstanding unpaid
principal amount hereof from the date hereof until payment in full at the rate
or rates from time to time applicable to the Term Loan as described in
Section 4(b)(iii) of the Loan Agreement; provided, however, that upon the
occurrence and during the continuance of an Event of Default, the Borrower shall
pay interest on the outstanding principal balance of this Term Note at the rate
of interest applicable following the occurrence of an Event of Default as
determined in accordance with the Loan Agreement.

Interest on this Term Note shall be payable, at the times and from the dates
specified in the Loan Agreement, on the date of any prepayment hereof, at
maturity, whether due by acceleration or otherwise, and as otherwise provided in
the Loan Agreement. From and after the date when the principal balance hereof
becomes due and payable, whether by acceleration or otherwise, interest hereon
shall be payable on demand. In no contingency or event whatsoever shall interest
charged hereunder, however such interest may be characterized or computed,
exceed the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that such a court determines that the Bank has received interest hereunder
in excess of the highest rate applicable hereto, such excess shall be applied in
accordance with the terms of the Loan Agreement.

 

G-1

--------------------------------------------------------------------------------

The indebtedness evidenced by this Term Note is secured pursuant to the terms of
the Loan Documents.

The Borrower hereby waives demand, presentment, and protest and notice of
demand, presentment, protest, and nonpayment.

The Borrower further agrees, subject only to any limitation imposed by
applicable law, to pay all expenses, including attorneys’ fees and legal
expenses, incurred by the Bank in endeavoring to collect any amounts payable
hereunder which are not paid when due, whether by acceleration or otherwise.

IMPORTANT: This Term Note shall be deemed made in Ohio and shall in all respects
be governed by and construed in accordance with the laws of the State of Ohio,
including all matters of construction, validity and performance. Without
limitation on the ability of the Bank to initiate and prosecute any action or
proceeding in any applicable jurisdiction related to loan repayment, the
Borrower and the Bank agree that any action or proceeding commenced by or on
behalf of the parties arising out of or relating to this Term Note shall be
commenced and maintained exclusively in the District Court of the United States
for the Southern District of Ohio, or any other court of applicable jurisdiction
located in Cincinnati, Ohio. The Borrower and the Bank also agree that a summons
and complaint commencing an action or proceeding in any such Ohio courts by or
on behalf of such parties shall be properly served and shall confer personal
jurisdiction on a party to which said party consents, if (a) served personally
or by certified mail to the other party at any of its addresses noted herein, or
(b) as otherwise provided under the laws of the State of Ohio. The interest
rates and all other terms of this Revolving Note negotiated with the Borrower
are, in part, related to the aforesaid provisions on jurisdiction, which the
Bank deems a vital part of this loan arrangement.

Presentment for payment, notice of dishonor, protest and notice of protest are
hereby waived.

 

FRISCH’S RESTAURANTS, INC. By:  

 

    Donald H. Walker, Vice President-Finance

Address:

   

2800 Gilbert Avenue

Cincinnati, Ohio 45206

 

G-2