Exhibit
      10.27


    Execution
      Copy

     

    
      

      

    

     

    $1,600,000


     

    CREDIT
      AGREEMENT

     

    between

     

    KFLG
      WATERTOWN, INC.

     

    as
      Borrower,

     

    and

     

    TD
      BANKNORTH, N.A.,

     

    as
      Lender

     

    Dated
      as
      of May 27, 2005

     

    
      

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

    

      
        	 	 	
                Page

              
	
                SECTION
                  1.

              	
                DEFINITIONS

              	
                1

              
	 	 	 
	
                1.1

              	
                Certain
                  Defined Terms.

              	
                1

              
	
                1.2

              	
                Other
                  Definitional Provisions.

              	
                11

              
	 	 	 
	
                SECTION
                  2.

              	
                AMOUNT
                  AND TERMS OF COMMITMENTS

              	
                12

              
	 	 	 
	
                2.1

              	
                Initial
                  Term Loan.

              	
                12

              
	
                2.2

              	
                Additional
                  Term Loans.

              	
                12

              
	
                2.3

              	
                Procedure
                  for Term Loan Borrowing.

              	
                12

              
	
                2.4

              	
                Fees.

              	
                12

              
	
                2.5

              	
                Repayment
                  of the Loans.

              	
                13

              
	
                2.6

              	
                Prepayment
                  Penalty.

              	
                13

              
	
                2.7

              	
                Mandatory
                  Prepayments.

              	
                13

              
	
                2.8

              	
                Interest
                  Rates and Payment Dates; Payments.

              	
                14

              
	
                2.9

              	
                Computation
                  of Interest and Fees.

              	
                15

              
	
                2.10

              	
                Requirements
                  of Law.

              	
                15

              
	
                2.11

              	
                Taxes.

              	
                16

              
	
                2.12

              	
                Indemnity.

              	
                16

              
	 	 	 
	
                SECTION
                  3.

              	
                REPRESENTATIONS
                  AND WARRANTIES

              	
                17

              
	 	 	 
	
                3.1

              	
                Financial
                  Condition.

              	
                17

              
	
                3.2

              	
                No
                  Change.

              	
                17

              
	
                3.3

              	
                Existence;
                  Compliance with Law.

              	
                17

              
	
                3.4

              	
                Power;
                  Authorization; Enforceable Obligations.

              	
                17

              
	
                3.5

              	
                No
                  Legal Bar.

              	
                17

              
	
                3.6

              	
                Litigation.

              	
                18

              
	
                3.7

              	
                No
                  Default.

              	
                18

              
	
                3.8

              	
                Ownership
                  of Property; Liens.

              	
                18

              
	
                3.9

              	
                Intellectual
                  Property; Licenses.

              	
                18

              
	
                3.10

              	
                Taxes.

              	
                18

              
	
                3.11

              	
                Federal
                  Regulations.

              	
                18

              
	
                3.12

              	
                ERISA.

              	
                18

              
	
                3.13

              	
                Investment
                  Company Act; Other Regulations.

              	
                19

              
	
                3.14

              	
                Subsidiaries.

              	
                19

              
	
                3.15

              	
                Use
                  of Proceeds.

              	
                19

              
	
                3.16

              	
                Environmental
                  Matters.

              	
                19

              
	
                3.17

              	
                Accuracy
                  of Information, etc.

              	
                20

              
	
                3.18

              	
                Security
                  Documents.

              	
                21

              
	
                3.19

              	
                Solvency.

              	
                21

              
	
                3.20

              	
                Regulation
                  H.

              	
                21

              
	
                3.21

              	
                Indebtedness
                  Outstanding.

              	
                21

              
	
                3.22

              	
                Anti-Terrorism
                  Laws.

              	
                21

              
	
                3.23

              	
                Depository
                  and Other Accounts.

              	
                22

              
	
                3.24

              	
                Obligations
                  to Seller.

              	
                22

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                SECTION
                  4.

              	
                CONDITIONS
                  PRECEDENT

              	
                22

              
	 	 	 
	
                4.1

              	
                Conditions
                  to Initial Extension of Credit.

              	
                22

              
	
                4.2

              	
                Conditions
                  to Each Extension of Credit.

              	
                24

              
	
                 

              	 	 
	
                SECTION
                  5.

              	
                AFFIRMATIVE
                  COVENANTS

              	
                24

              
	 	 	 
	
                5.1

              	
                Financial
                  Statements; Field Audits.

              	
                24

              
	
                5.2

              	
                Certificates;
                  Other Information.

              	
                26

              
	
                5.3

              	
                Payment
                  of Obligations.

              	
                26

              
	
                5.4

              	
                Maintenance
                  of Existence; Compliance.

              	
                27

              
	
                5.5

              	
                Maintenance
                  of Property; Insurance.

              	
                27

              
	
                5.6

              	
                Inspection
                  of Property; Books and Records; Discussions.

              	
                27

              
	
                5.7

              	
                Notices.

              	
                27

              
	
                5.8

              	
                Compliance
                  with Laws.

              	
                28

              
	
                5.9

              	
                Additional
                  Collateral; Subsidiaries; New Units.

              	
                28

              
	
                5.10

              	
                Depository
                  Accounts; Additional Accounts.

              	
                28

              
	
                5.11

              	
                Communications
                  with Accountants.

              	
                28

              
	 	 	 
	
                SECTION
                  6.

              	
                NEGATIVE
                  COVENANTS

              	
                28

              
	 	 	 
	
                6.1

              	
                Financial
                  Condition Covenants.

              	
                29

              
	
                6.2

              	
                Indebtedness.

              	
                29

              
	
                6.3

              	
                Liens.

              	
                30

              
	
                6.4

              	
                Fundamental
                  Changes.

              	
                30

              
	
                6.5

              	
                Disposition
                  of Property.

              	
                30

              
	
                6.6

              	
                Restricted
                  Payments.

              	
                31

              
	
                6.7

              	
                Stock.

              	
                31

              
	
                6.8

              	
                Investments.

              	
                31

              
	
                6.9

              	
                Modifications
                  of Certain Debt Instruments.

              	
                31

              
	
                6.10

              	
                Transactions
                  with Affiliates and Insiders.

              	
                31

              
	
                6.11

              	
                Sales
                  and Leasebacks.

              	
                32

              
	
                6.12

              	
                Changes
                  in Fiscal Periods.

              	
                32

              
	
                6.13

              	
                Negative
                  Pledge Clauses.

              	
                32

              
	
                6.14

              	
                Clauses
                  Restricting Subsidiary Distributions.

              	
                32

              
	
                6.15

              	
                Lines
                  of Business; Location of Business.

              	
                32

              
	
                6.16

              	
                Use
                  of Proceeds.

              	
                32

              
	
                6.17

              	
                Full
                  Funding.

              	
                32

              
	 	 	 
	
                SECTION
                  7.

              	
                EVENTS
                  OF DEFAULT

              	
                32

              
	 	 	 
	
                SECTION
                  8.

              	
                MISCELLANEOUS

              	
                35

              
	 	 	 
	
                8.1

              	
                Amendments
                  and Waivers.

              	
                35

              
	
                8.2

              	
                Notices.

              	
                35

              
	
                8.3

              	
                No
                  Waiver; Cumulative Remedies.

              	
                35

              
	
                8.4

              	
                Survival
                  of Representations and Warranties.

              	
                36

              
	
                8.5

              	
                Payment
                  of Expenses and Taxes.

              	
                36

              
	
                8.6

              	
                Successors
                  and Assigns; Participations and Assignments.

              	
                36

              
	
                8.7

              	
                Adjustments;
                  Set-off.

              	
                37

              
	
                8.8

              	
                Counterparts.

              	
                37

              


      

       

      
        
          
          

        

        
          -
            ii -

          
            

          

        

        
          
          

        

      

       

      
        	
                8.9

              	
                Severability.

              	
                37

              
	
                8.10

              	
                Integration.

              	
                37

              
	
                8.11

              	
                Governing
                  Law.

              	
                38

              
	
                8.12

              	
                Submission
                  To Jurisdiction; Waivers.

              	
                38

              
	
                8.13

              	
                Acknowledgements.

              	
                38

              
	
                8.14

              	
                WAIVERS
                  OF JURY TRIAL.

              	
                38

              
	
                8.15

              	
                USA
                  Patriot Act Notice.

              	
                38

              
	
                8.16

              	
                Replacement
                  Note.

              	
                39

              


      

    

     

    
      
        
        

      

      
        -
          iii -

        
          

        

      

      
        
        

      

    

     

    
      	
              SCHEDULES:

            
	 	 
	
              3.4

            	
              Consents,
                Authorizations, Filings and Notices

            
	
              3.6

            	
              Litigation

            
	
              3.14

            	
              Subsidiaries
                and Capital Stock

            
	
              3.18

            	
              UCC
                Filings

            
	
              3.21(a)

            	
              Indebtedness
                to Remain Outstanding

            
	
              3.21(b)

            	
              Indebtedness
                to be Paid

            
	
              3.21(c)

            	
              Liens
                to be Terminated

            
	
              3.21(d)

            	
              Liens
                to Remain Outstanding

            
	
              3.23

            	
              Deposit
                Accounts

            
	
              6.2(c)

            	
              Existing
                Indebtedness

            
	
              6.3(e)

            	
              Existing
                Liens

            
	 	 
	
              EXHIBITS:

            
	 	 
	
              A

            	
              Form
                of Security Agreement

            
	
              B

            	
              Form
                of Guarantee and Security Agreement

            
	
              C

            	
              Form
                of Compliance Certificate

            
	
              D

            	
              Form
                of Closing Certificate

            
	
              E

            	
              Form
                of Term Note

            
	
              F

            	
              Form
                of Subordination Agreement

            
	
              G

            	
              Form
                of Notice of Borrowing

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    CREDIT
      AGREEMENT (this “Agreement”),
      dated
      as of May 27, 2005, between KFLG WATERTOWN, INC., a Massachusetts corporation
      (the “Borrower”),
      and
      TD BANKNORTH, N.A., as lender (the “Lender”).

     

    WHEREAS,
      the Borrower and the Lender wish to enter into this Agreement to establish
      the
      credit facilities described herein, and to set forth the terms, conditions
      and
      covenants to apply to the Borrower and any subsidiary or subsidiaries the
      Borrower may form or acquire after the date hereof,

     

    NOW,
      THEREFORE, the parties hereto hereby agree as follows:

     

    SECTION
      1. DEFINITIONS

     

    1.1
       Certain
      Defined Terms. As
      used
      in this Agreement, the terms listed in this Section 1.1 shall have the
      respective meanings set forth in this Section 1.1.

    


    “Additional
      Term Loans”:
      as
      defined in Section 2.2.

     

    “Affiliate”:
      as to
      any Person, any other Person that, directly or indirectly (including through
      any
      Relative (as defined below)), is in control of, is controlled by, or is under
      common control with, such Person and, in the case of a Person who is a natural
      person, any spouse, child, grandparent, or grandchild (each, a “Relative”)
      of
      such Person. For purposes of this definition, “control” of a Person means the
      power, directly or indirectly, either to (a) vote 10% or more of the securities
      having ordinary voting power for the election of directors (or persons
      performing similar functions) of such Person or (b) direct or cause the
      direction of the management and policies of such Person, whether by contract
      or
      otherwise. 

     

    “Applicable
      Margin”:
      the
      Applicable Margin will be determined pursuant to the table set forth
      below:

    

      
        	
                Before
                  New Equity Date, as to Prime Rate Loans:

              	 	 	
                
                

                1.5

              	
                
                

                %

              
	
                On
                  and after New Equity Date, as to Prime Rate Loans:

              	 	 	
                
                

                0

              	
                
                

                %

              
	
                Before
                  New Equity Date, as to COF Loans:

              	 	 	
                
                

                4.0

              	
                
                

                %

              
	
                On
                  or after New Equity Date, as to COF Loans:

              	 	 	
                
                

                2.5

              	
                
                

                %

              


      

    

     

    Changes
      in the Applicable Margin resulting from the contribution of the New Equity
      shall
      become effective on the date (the “Adjustment
      Date”)
      that
      is three Business Days after the date on which financial statements are
      delivered to the Lender reflecting such new cash equity. 

     

    “Asset
      Purchase Agreements”:
      the
Asset
      Purchase Agreement dated as of August 11, 2004, by and among the Guarantor
      and
      the Seller, as assigned to Borrower by Guarantor as of August 11, 2004, and
      the
      Asset Purchase Agreement dated as of January 28, 2005 by and among the Guarantor
      and the Seller, each as assigned to Borrower by Guarantor as of January 28,
      2005.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Board”:
      the
      Board of Governors of the Federal Reserve System of the United States (or any
      successor).

     

    “Borrowing
      Date”:
      any
      Business Day specified by the Borrower in its Notice of Borrowing as a date
      on
      which such Borrower requests the Lender to make Loans hereunder.

     

    “Business”:
      as
      defined in Section 3.16(b).

     

    “Business
      Day”:
      a day
      other than a Saturday, Sunday or other day on which commercial banks in Boston,
      Massachusetts are authorized or required by law to close.

     

    “Capital
      Expenditures”:
      for
      any period, with respect to any Person, the aggregate of all expenditures by
      such Person and its Subsidiaries for the acquisition, rental, construction,
      use,
      leasing (pursuant to a capital lease) of fixed or capital assets or additions
      to
      equipment (including replacements, capitalized repairs and improvements during
      such period) that should be reflected in the category of property, plant or
      equipment or intangibles under GAAP on a consolidated balance sheet of such
      Person and its Subsidiaries, but excluding expenditures for equipment installed
      at the site of, and leased to, any customer of such Person or any of such
      Person’s Subsidiaries.

     

    “Capital
      Lease Obligations”:
      as to
      any Person, the obligations of such Person to pay rent or other amounts under
      any lease of (or other arrangement conveying the right to use) real or personal
      property, or a combination thereof, which obligations are required to be
      classified and accounted for as capital leases on a balance sheet of such Person
      under GAAP and, for the purposes of this Agreement, the amount of such
      obligations at any time shall be the capitalized amount thereof at such time
      determined in accordance with GAAP.

     

    “Capital
      Stock”:
      any
      and all shares, interests, participations or other equivalents (however
      designated) of capital stock of a corporation, any and all equivalent ownership
      interests in a Person other than a corporation and any and all warrants, rights
      or options to purchase any of the foregoing.

     

    “Cash
      Equivalents”:
      (a)
      marketable direct obligations issued by, or unconditionally guaranteed by,
      the
      United States Government or issued by any agency thereof and backed by the
      full
      faith and credit of the United States, in each case maturing within one year
      from the date of acquisition; (b) certificates of deposit, time deposits or
      overnight bank deposits having maturities of six months or less from the date
      of
      acquisition issued by the Lender; (c) commercial paper of an issuer rated at
      least A-1 by Standard & Poor’s Ratings Services (“S&P”)
      or P-1
      by Moody’s Investors Service, Inc. (“Moody’s”),
      or
      carrying an equivalent rating by a nationally recognized rating agency, if
      both
      of the two named rating agencies cease publishing ratings of commercial paper
      issuers generally, and maturing within six months from the date of acquisition;
      or (d) money market mutual or similar funds that invest exclusively in assets
      satisfying the requirements of clauses (a) through (c) of this
      definition.

     

    “Change
      of Control”:
      the
      occurrence of any of the following: 

     

    (a)
      (i)
      George Naddaff and Eric Spitz directly and Tim Kurtz directly or indirectly
      through Seller (which is controlled by Tim Kurtz) shall cease to own,
      beneficially and of record, in the aggregate not less than the shares such
      individuals own on the Closing Date, and George Naddaff, Eric Spitz and Gary
      Jacobus directly and Tim Kurtz directly or indirectly through Seller (which
      is
      controlled by Tim Kurtz) shall cease to own not less than 40% of all of the
      outstanding Capital Stock of the Guarantor entitled to vote for the Board of
      Directors (or other major decision) on a fully diluted basis, or (ii) any Person
      shall acquire a Lien on any Capital Stock of the Guarantor if a Change of
      Control under the foregoing clause (i) would result from the ownership by such
      Person of such Capital Stock;

     

    
      
        
        

      

      
        -
          2 -

        
          

        

      

      
        
        

      

    

     

    (b)
      during any period of up to 24 consecutive months, commencing after the date
      of
      this Agreement, individuals who at the beginning of such 24-month period were
      directors of the Borrower or the Guarantor shall cease for any reason to
      constitute a majority of the board of directors of the Borrower or the
      Guarantor, as applicable; or 

     

    (c)
      any
      Person or two or more Persons acting in concert other than George Naddaff and
      Eric Spitz shall have acquired by contract or otherwise, or shall have ventured
      into a contract or arrangement that, upon consummation, will result in its
      or
      their acquisition of the power to exercise, directly or indirectly, a
      controlling influence over the management or policies of the Borrower or the
      Guarantor or to control voting interests of the Borrower or the Guarantor
      representing 30% or more of the combined voting power of all voting interests
      of
      the Borrower or the Guarantor; or

     

    (d)
      George Naddaff or Eric Spitz shall cease to (i) exercise the primary management
      functions of the Guarantor and the Borrower and (ii) make all significant
      decisions for the Guarantor and the Borrower, each as determined by the Lender,
      unless in the case of the death or permanent disability of either such
      individual another individual satisfactory to Lender in writing has replaced
      any
      such individual; or

     

    (e)
      the
      Guarantor shall fail to own 100% of the issued and outstanding Capital Stock
      of
      the Borrower, free and clear of all Liens (other than Liens of the Loan
      Documents), or shall otherwise fail to control the Borrower.

     

    “Closing
      Date”:
      the
      date on which the conditions precedent set forth in Section 4.1 shall have
      been
      satisfied.

     

    “Code”:
      the
      Internal Revenue Code of 1986, as amended from time to time.

     

    “COF
      Loan”:
      any
      Loan the interest on which is calculated by reference to the COF
      Rate.

     

    “COF
      Rate”:
      the
      per annum rate of interest, as quoted and offered by the Lender to the Borrower
      from time to time, which the Lender is required to pay, or is offering to pay,
      for wholesale liabilities of the like tenor (including for any
      regularly-scheduled principal amortization with respect thereto) for the
      remaining term of the Loan, adjusted for reserve requirements and requirements
      of such other local government and regulatory agencies, all as conclusively
      determined by the Lender, as quoted and offered by the Lender to the Borrower
      from time to time.

     

    “Collateral”:
      all
      property, now owned or hereafter acquired, upon which a Lien is purported to
      be
      created by any Security Document.

     

    “Commitment”:
      the
      Lender’s commitment to make the Initial Term Loan and the Additional Term Loans
      in an aggregate principal amount not to exceed $1,600,000.

     

    “Commonly
      Controlled Entity”:
      an
      entity, whether or not incorporated, that is under common control with any
      Borrower within the meaning of Section 4001 of ERISA or is part of a group
      that
      includes any Borrower and that is treated as a single employer under Section
      414
      of the Code.

     

    “Compliance
      Certificate”:
      a
      certificate duly executed by a Responsible Officer substantially in the form
      of
      Exhibit C.

     

    
      
        
        

      

      
        -
          3 -

        
          

        

      

      
        
        

      

    

     

    “Consolidated
      Capital Expenditures”:
      for
      any period, the consolidated Capital Expenditures of the Borrower and its
      Subsidiaries for such period, determined in accordance with GAAP.

     

    “Consolidated
      Debt Service”:
      for
      any period, the sum (without duplication) of (a) all amounts paid or payable
      in
      respect of principal, interest and fees on Indebtedness (other than Subordinated
      Debt) of the Borrower and its Subsidiaries during such period, on a consolidated
      basis, and (b) Capitalized Lease Obligations of the Borrower and its
      Subsidiaries for such period.

     

    “Consolidated
      Debt Service Coverage Ratio”:
      at any
      date, the ratio of (a) Consolidated Operating Cash Flow for the four-quarter
      period ending on the last day of the fiscal quarter most recently ended to
      (b)
      Consolidated Debt Service for such period.

     

    “Consolidated
      EBITDA”:
      for
      any period, Consolidated Net Income for such period plus,
      without
      duplication and to the extent reflected as a charge in the statement of such
      Consolidated Net Income for such period, the sum of (a) income tax expense,
      (b)
      interest expense, (c) depreciation and amortization expense, (d) expenses
      constituting Specified Consulting Fees paid to the Seller for consulting
      services and, (e) to the extent approved by the Lender, extraordinary, unusual
      or non-recurring expenses or losses, and mus,
      to the
      extent included in the statement of such Consolidated Net Income for such
      period, the sum of (i) interest income, (ii) any extraordinary, unusual or
      non-recurring income or gains (including, whether or not otherwise includable
      as
      a separate item in the statement of such Consolidated Net Income for such
      period, gains on the sales of assets outside of the ordinary course of business)
      and (iii) any other non-cash income, all as determined on a consolidated basis
      in accordance with GAAP.

     

    “Consolidated
      Maintenance Capital Expenditures”:
      for
      any period, the Consolidated Capital Expenditures for the maintenance of
      Existing Units.

     

    “Consolidated
      New Unit Capital Expenditures”:
      for
      any period, the Consolidated Capital Expenditures for the building or purchasing
      or maintaining of new Units prior to their becoming Existing Units.

     

    “Consolidated
      Net Income”:
      for
      any period, the consolidated net income (or loss) of the Borrower and its
      Subsidiaries, determined on a consolidated basis in accordance with GAAP;
provided
      that
      there shall be excluded (a) the income (or deficit) of any Person accrued prior
      to the date it becomes a Subsidiary of the Borrower or is merged into or
      consolidated with the Borrower or any of its Subsidiaries, (b) the income (or
      deficit) of any Person (other than a wholly-owned Subsidiary of the Borrower)
      in
      which the Borrower or any of its Subsidiaries has an ownership interest, except
      to the extent that any such income is actually received by the Borrower or
      such
      Subsidiary in the form of dividends or other distributions and (c) the
      undistributed earnings of any Subsidiary of the Borrower to the extent that
      the
      declaration or payment of dividends or other distributions by such Subsidiary
      is
      not at the time permitted by the terms of any Contractual Obligation (other
      than
      under any Loan Document) or Requirement of Law applicable to such
      Subsidiary.

     

    “Consolidated
      Operating Cash Flow”:
      for
      any period, Consolidated EBITDA for such period minus,
      the sum
      of (i) cash taxes paid in such period, (ii) any Restricted Payments or loans
      by
      the Borrower to the Guarantor (except for those expressly permitted hereunder)
      and (iii) Consolidated Maintenance Capital Expenditures for such
      period.

     

    “Consolidated
      Senior Funded Debt”:
      at any
      date, the consolidated Indebtedness of the Borrower and its Subsidiaries less,
      Subordinated Debt at such date and less at any date prior to September 30,
      2006,
      Consolidated Unrestricted Cash at such date.

     

    
      
        
        

      

      
        -
          4 -

        
          

        

      

      
        
        

      

    

     

    “Consolidated
      Senior Funded Debt to EBITDA Ratio”:
      at any
      date, the ratio of (a) the Consolidated Senior Funded Debt at such date to
      (b)
      Consolidated EBITDA for the four-quarter period ending on the last day of the
      fiscal quarter most recently ended.

     

    “Consolidated
      Unrestricted Cash”:
      all
      cash and Cash Equivalents of the Borrower and the Guarantor, excluding any
      cash
      or Cash Equivalents subject to any Lien or other restriction or the use
      thereof.

     

    “Consulting
      Agreements”:
      the
      Management Consulting Agreement dated as of August 11, 2004, by and among the
      Borrower and the Seller and the Management Consulting Agreement dated as of
      January 28, 2005 by and among the Guarantor and the Seller, as assigned to
      Borrower by Guarantor as of January 28, 2005.

     

    “Contractual
      Obligation”:
      as to
      any Person, any provision of any security issued by such Person or of any
      agreement, instrument or other undertaking to which such Person is a party
      or by
      which it or any of its property is bound.

     

    “Covered
      Parties”:
      the
      Guarantor, the Borrower and any Subsidiaries of either thereof formed or
      acquired by the Borrower after the date hereof. “Covered
      Party”
shall
      have a corresponding meaning.

     

    “Default”:
      any of
      the events specified in Section 7, whether or not any requirement for the
      giving of notice, the lapse of time, or both, has been satisfied.

     

    “Disposition”:
      with
      respect to any property, any sale, lease, sale and leaseback, assignment,
      conveyance, transfer or other disposition thereof. The terms “Dispose”
and
      “Disposed
      of”
shall
      have corresponding meanings.

     

    “Dollars”
and
      “$”:
      dollars in lawful currency of the United States.

     

    “Drawdown
      Period”:
      within
      one year of the Closing Date.

     

    “Environmental
      Laws”:
      any
      and all foreign, Federal, state, local or municipal laws, rules, orders,
      regulations, statutes, ordinances, codes, decrees, requirements of any
      Governmental Authority or other Requirements of Law (including common law)
      regulating, relating to or imposing liability or standards of conduct concerning
      protection of human health or the environment, as now or may at any time
      hereafter be in effect.

     

    “ERISA”:
      the
      Employee Retirement Income Security Act of 1974, as amended from time to
      time.

     

    “Event
      of Default”:
      any of
      the events specified in Section 7, provided
      that any
      requirement for the giving of notice, the lapse of time, or both, has been
      satisfied.

     

    “Existing
      Unit”:
      any
      Unit that has been operating for six months or more.

     

    “Facility”:
      each
      of the Initial Term Loan and the Additional Term Loans made
      thereunder.

     

    
      
        
        

      

      
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          5 -

        
          

        

      

      
        
        

      

    

     

    “GAAP”:
      generally accepted accounting principles in the United States as in effect
      from
      time to time, except that for purposes of Section 6.1, GAAP shall be determined
      on the basis of such principles in effect on the date hereof and consistent
      with
      those used in the preparation of the most recent reviewed financial statements
      referred to in Section 3.1. In the event that any accounting change shall occur
      and such change results in a change in the method of calculation of financial
      covenants, standards or terms in this Agreement, then the Borrower and the
      Lender agree to enter into negotiations in order to amend such provisions of
      this Agreement so as to reflect equitably such accounting changes with the
      desired result that the criteria for evaluating the Borrower’s financial
      condition shall be the same after such accounting changes as if such accounting
      changes had not been made. Until such time as such an amendment shall have
      been
      executed and delivered by the Borrower and the Lender, all financial covenants,
      standards and terms in this Agreement shall continue to be calculated or
      construed as if such accounting changes had not occurred

     

    “Governmental
      Authority”:
      any
      nation or government, any state or other political subdivision thereof, any
      agency, authority, instrumentality, regulatory body, court, central bank or
      other entity exercising executive, legislative, judicial, taxing, regulatory
      or
      administrative functions of or pertaining to government, any securities exchange
      and any self-regulatory organization.

     

    “Guarantee
      and Security Agreement”:
      the
      Guaranty and Security Agreement, to be executed by the Guarantor, substantially
      in the form of Exhibit B.

     

    “Guarantee
      Obligation”:
      as to
      any Person (the “guaranteeing
      person”),
      any
      obligation of (a) the guaranteeing person or (b) another Person (including
      any
      bank under any letter of credit) to induce the creation of which the
      guaranteeing person has issued a reimbursement, counterindemnity or similar
      obligation, in either case guaranteeing or in effect guaranteeing any
      Indebtedness, leases, dividends or other obligations (the “primary
      obligations”)
      of any
      other third Person (the “primary
      obligor”)
      in any
      manner, whether directly or indirectly, including any obligation of the
      guaranteeing person, whether or not contingent, (i) to purchase any such primary
      obligation or any property constituting direct or indirect security therefor,
      (ii) to advance or supply funds (1) for the purchase or payment of any such
      primary obligation or (2) to maintain working capital or equity capital of
      the
      primary obligor or otherwise to maintain the net worth or solvency of the
      primary obligor, (iii) to purchase property, securities or services primarily
      for the purpose of assuring the owner of any such primary obligation of the
      ability of the primary obligor to make payment of such primary obligation or
      (iv) otherwise to assure or hold harmless the owner of any such primary
      obligation against loss in respect thereof; provided,
      however,
      that
      the term Guarantee Obligation shall not include endorsements of instruments
      for
      deposit or collection in the ordinary course of business. 

     

    “Guarantor”:
      Knowfat Franchise Company, Inc.

     

    “Indebtedness”:
      of any
      Person at any date, without duplication, (a) all indebtedness of such Person
      for
      borrowed money, (b) all obligations of such Person for the deferred purchase
      price of property or services (other than current trade payables incurred in
      the
      ordinary course of such Person’s business), (c) all obligations of such Person
      evidenced by notes, bonds, debentures or other similar instruments, (d) all
      indebtedness created or arising under any conditional sale or other title
      retention agreement with respect to property acquired by such Person (even
      though the rights and remedies of the seller or lender under such agreement
      in
      the event of default are limited to repossession or sale of such property),
      (e)
      all Capital Lease Obligations of such Person, (f) all obligations of such
      Person, contingent or otherwise, as an account party or applicant under or
      in
      respect of acceptances, letters of credit, surety bonds or similar arrangements,
      (g) all Guarantee Obligations of such Person in respect of obligations of the
      kind referred to in clauses (a) through (f) above and (h) all obligations of
      the
      kind referred to in clauses (a) through (g) above secured by (or for which
      the
      holder of such obligation has an existing right, contingent or otherwise, to
      be
      secured by) any Lien on property (including accounts and contract rights) owned
      by such Person, whether or not such Person has assumed or become liable for
      the
      payment of such obligation. The Indebtedness of any Person shall include the
      Indebtedness of any other entity (including any partnership in which such Person
      is a general partner) to the extent such Person is liable therefor as a result
      of such Person’s ownership interest in or other relationship with such entity,
      except to the extent the terms of such Indebtedness expressly provide that
      such
      Person is not liable therefor.

     

    
      
        
        

      

      
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    “Indebtedness
      to be Paid”:
      as
      defined in Section 3.21.

     

    “Initial
      Term Loan”:
      as
      defined in Section 2.1.

     

    “Insolvent”:
      with
      respect to any Multiemployer Plan, the condition that such Plan is insolvent
      within the meaning of Section 4245 of ERISA, and “Insolvency”
shall
      have a corresponding meaning.

     

    “Intellectual
      Property”:
      all
      rights, priorities and privileges relating to intellectual property, whether
      arising under United States, multinational or foreign laws or otherwise,
      including copyrights, copyright licenses, patents, patent licenses, trademarks,
      trademark licenses, technology, know-how and processes, and all rights to sue
      at
      law or in equity for any infringement or other impairment thereof, including
      the
      right to receive all proceeds and damages therefrom.

     

    “Interest
      Payment Date”:
      as to
      any Loan, the first day of each calendar month to occur while such Loan is
      outstanding and the final maturity date of such Loan, and the date of any
      repayment or prepayment made in respect thereof.

     

    “Investments”:
      as
      defined in Section 6.8.

     

    “Leased
      Properties”:
      the
      real properties from time to time leased by the Covered Parties.

     

    “Leasehold
      Security Document”:
      with
      respect to any Leased Property, such leasehold mortgage, landlord consent and
      waiver, leasehold assignment or similar document as the Lender may
      require.

     

    “Lien”:
      any
      mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
      lien (statutory or other), charge or other security interest or any preference,
      priority or other security agreement or preferential arrangement of any kind
      or
      nature whatsoever (including any conditional sale or other title retention
      agreement and any capital lease having substantially the same economic effect
      as
      any of the foregoing).

     

    “Liens
      to be Terminated”:
      as
      defined in Section 3.21.

     

    “Loan”:
      as
      defined in Section 2.2.

     

    “Loan
      Documents”:
      this
      Agreement, the Security Documents, the Subordination Agreement, any other
      subordination agreement executed in connection with any Subordinated Debt,
      the
      Notes, any interest rate hedging agreement entered into by the Borrower and
      the
      Lender (or any Affiliate of the Lender) and each other certificate, document
      or
      instrument executed and delivered in connection with any of the
      foregoing.

     

    “Loan
      Party”
or
      “Loan
      Parties”:
      each
      Covered Party or Affiliate thereof that is a party to a Loan Document, or all
      of
      them, as the case may be.

     

    
      
        
        

      

      
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          7 -

        
          

        

      

      
        
        

      

    

     

    “Material
      Adverse Effect”:
      a
      material adverse effect on (a) the business, assets, liabilities (actual or
      contingent), operations, condition (financial or otherwise), profits or
      prospects of any Loan Party or (b) the validity or enforceability of this
      Agreement or any of the other Loan Documents, the ability of any Loan Party
      to
      perform hereunder or thereunder, or the rights or remedies of the Lender
      hereunder or thereunder.

     

    “Materials
      of Environmental Concern”:
      any
      gasoline or petroleum (including crude oil or any fraction thereof) or petroleum
      products or any hazardous or toxic substances, materials or wastes, defined
      or
      regulated as such in or under any Environmental Law, including asbestos,
      polychlorinated biphenyls and urea-formaldehyde insulation.

     

    “Maturity
      Date”:
      the
      fifth anniversary of the Closing Date.

     

    “Mortgage”:
      as
      defined in Section 5.9.

     

    “Multiemployer
      Plan”:
      a Plan
      that is a multiemployer plan as defined in Section 4001(a)(3) of
      ERISA.

     

    “Net
      Cash Proceeds”:
      (a) in
      connection with any Recovery Event, the proceeds thereof in the form of cash
      and
      Cash Equivalents of such Recovery Event, net of amounts required to be applied
      to the repayment of Indebtedness secured by a Lien expressly permitted hereunder
      on any asset that is the subject of such Recovery Event (other than any Lien
      pursuant to a Security Document) and other customary fees and expenses actually
      incurred in connection therewith and net of taxes paid or reasonably estimated
      to be payable as a result thereof (after taking into account any available
      tax
      credits or deductions and any tax sharing arrangements) and (b) in connection
      with any incurrence of Indebtedness or issuance of any new equity or additional
      capital contributions, the cash proceeds received from such incurrence or
      issuance, net of attorneys’ fees, accountants’ fees, commissions and other
      customary fees and expenses actually incurred in connection
      therewith.

     

    “New
      Equity”:
      new
      equity of the Guarantor, consisting of either common or preferred stock, or
      additional capital contributions, in either case resulting in the receipt by
      the
      Guarantor of unrestricted Net Cash Proceeds of at least $3,000,000.

     

    “New
      Equity Date”:
      the
      date on which the Borrower has received the Net Cash Proceeds of the New Equity
      required by Section 6.1(a).

     

    “Note”:
      the
      promissory note, in substantially the form of Exhibit E hereto evidencing the
      Loans.

     

    “Notice
      of Borrowing”:
      as
      specified in Section 2.3.

     

    “Obligations”:
      the
      unpaid principal of and interest on (including interest accruing after the
      maturity of the Loans and interest accruing after the filing of any petition
      in
      bankruptcy, or the commencement of any insolvency, reorganization or like
      proceeding, relating to the Borrower, whether or not a claim for post-filing
      or
      post-petition interest is allowed in such proceeding) the Loans and all other
      obligations and liabilities of the Borrower to the Lender, whether direct or
      indirect, absolute or contingent, due or to become due, or now existing or
      hereafter incurred, which may arise under, out of, or in connection with, this
      Agreement, any other Loan Document, or any other document made, delivered or
      given in connection herewith or therewith, whether on account of principal,
      interest, fees, indemnities, costs, expenses (including all fees, charges and
      disbursements of counsel to the Lender that are required to be paid by the
      Borrower pursuant hereto) or otherwise.

     

    
      
        
        

      

      
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          8 -

        
          

        

      

      
        
        

      

    

     

    “Operating
      Account”:
      the
      Borrower’s operating account with the Lender as designated by the Lender,
      established for the purpose of effecting Loans hereunder.

     

    “Other
      Taxes”:
      as
      defined in Section 2.11(b).

     

    “PBGC”:
      the
      Pension Benefit Guaranty Corporation established pursuant to Subtitle A of
      Title
      IV of ERISA (or any successor).

     

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

     

    “Plan”:
      at a
      particular time, any employee benefit plan that is covered by ERISA and in
      respect of which the Borrower or a Commonly Controlled Entity is (or, if such
      plan were terminated at such time, would under Section 4069 of ERISA be deemed
      to be) an “employer” as defined in Section 3(5) of ERISA.

     

    “Prime
      Rate”:
      for
      any day, the rate per annum established by the Lender from time to time as
      its
“prime rate”. Any change in the Prime Rate shall be effective as of the opening
      of business on the effective day of such change in the Prime Rate.

     

    “Prime
      Rate Loan”:
      any
      Loan the interest on which is calculated by reference to the Prime
      Rate.

     

    “Properties”:
      as
      defined in Section 3.16(a).

     

    “Recovery
      Event”:
      any
      settlement of or payment in respect of any property or casualty insurance claim
      or any condemnation proceeding relating to any asset of any Covered
      Party.

     

    “Regulation
      U”:
      Regulation U of the Board as in effect from time to time.

     

    “Reinvestment
      Deferred Amount”:
      with
      respect to any Reinvestment Event, the aggregate Net Cash Proceeds received
      by
      any Covered Party in connection therewith that are not applied to prepay the
      Loans as a result of the delivery of a Reinvestment Notice.

     

    “Reinvestment
      Event”:
      any
      Recovery Event in respect of which the Borrower has delivered a Reinvestment
      Notice.

     

    “Reinvestment
      Notice”:
      a
      written notice executed by a Responsible Officer certifying that no Event of
      Default has occurred and is continuing and that the Borrower intends and expects
      to use all or a specified portion of the Net Cash Proceeds of a Recovery Event
      to acquire or repair assets replacing or repairing those that were subject
      to
      the applicable Recovery Event.

     

    “Reinvestment
      Prepayment Amount”:
      with
      respect to any Reinvestment Event, the Reinvestment Deferred Amount relating
      thereto less any amount expended prior to the relevant Reinvestment Prepayment
      Date to acquire or repair assets useful in the applicable Covered Party’s
      business.

     

    “Reinvestment
      Prepayment Date”:
      with
      respect to any Reinvestment Event, the earliest of (a) the date occurring 90
      days after such Reinvestment Event, (b) any date on or following the date of
      the
      applicable Reinvestment Notice on which any Event of Default shall have occurred
      and be continuing, designated as a Reinvestment Prepayment Date in a notice
      by
      the Lender to the Borrower, and (c) the date on which the Borrower shall have
      determined not to, or shall have otherwise ceased to, acquire or repair the
      assets subject to the applicable Recovery Event with all or any portion of
      the
      relevant Reinvestment Deferred Amount.

     

    
      
        
        

      

      
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    “Reorganization”:
      with
      respect to any Multiemployer Plan, the condition that such plan is in
      reorganization within the meaning of Section 4241 of ERISA.

     

    “Reportable
      Event”:
      any of
      the events set forth in Section 4043(c) of ERISA, other than those events as
      to
      which the thirty day notice period is waived under subsections .27, .28, .29,
      .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

     

    “Requirement
      of Law”:
      as to
      any Person, the Certificate of Incorporation and By-Laws or other organizational
      or governing documents of such Person, and any law, treaty, rule or regulation
      or determination of an arbitrator or a court or other Governmental Authority,
      in
      each case applicable to or binding upon such Person or any of its property
      or to
      which such Person or any of its property is subject.

     

    “Responsible
      Officer”:
      a
      Chief Executive Officer, Chief Financial Officer, President or Controller of
      the
      Borrower.

     

    “Restricted
      Payments”:
      as
      defined in Section 6.6.

     

    “Satisfactory
      Equity Commitment”:
      a
      commitment by a Person to purchase Capital Stock of the Guarantor, such
      commitment (and the terms thereof) and Person to be in all respects satisfactory
      to the Lender in its sole discretion.

     

    “Security
      Agreement”:
      the
      Security Agreement to be executed and delivered by the Borrower and the Lender,
      substantially in the form of Exhibit A.

     

    “Security
      Documents”:
      the
      Security Agreement, the Guarantee and Security Agreement, any Mortgage, any
      Leasehold Security Document, and all other security documents hereafter
      delivered to the Lender granting a Lien on any property of any Person to secure
      the obligations and liabilities of any Loan Party under any Loan Document,
      collectively.

     

    “Seller”:
      Low
      Fat No Fat Gourmet Café, Inc., a Massachusetts corporation.

     

    “Seller
      Debt”:
      the
      regularly scheduled payments owed by Borrower to Seller pursuant to the Asset
      Purchase Agreements and the Consulting Agreements.

     

    “Single
      Employer Plan”:
      any
      Plan that is covered by Title IV of ERISA, but that is not a Multiemployer
      Plan.

     

    “Solvent”:
      when
      used with respect to any Person, means that, as of any date of determination,
      (a) the amount of the “present fair saleable value” of the assets of such Person
      will, as of such date, exceed the amount of all “liabilities of such Person,
      contingent or otherwise”, as of such date, as such quoted terms are determined
      in accordance with applicable federal and state laws governing determinations
      of
      the insolvency of debtors, (b) the present fair saleable value of the assets
      of
      such Person will, as of such date, be greater than the amount that will be
      required to pay the liability of such Person on its debts as such debts become
      absolute and matured, (c) such Person will not have, as of such date, an
      unreasonably small amount of capital with which to conduct its business, and
      (d)
      such Person will be able to pay its debts as they mature. For purposes of this
      definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any
      (x) right to payment, whether or not such a right is reduced to judgment,
      liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
      undisputed, legal, equitable, secured or unsecured or (y) right to an equitable
      remedy for breach of performance if such breach gives rise to a right to
      payment, whether or not such right to an equitable remedy is reduced to
      judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
      or unsecured.

     

    
      
        
        

      

      
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          10 -

        
          

        

      

      
        
        

      

    

     

    “Specified
      Consulting Fees”:
      amounts paid to the Seller under the Consulting Agreement that constitute
      Subordinated Debt, as defined under the Subordination Agreement.

     

    “Subordinated
      Debt”:
      Indebtedness of the Borrower approved by the Lender and subject to a written
      subordination agreement in favor of, and in all respects satisfactory to, the
      Lender, each in the sole discretion of the Lender, including without limitation
      the Indebtedness owed to Seller subordinated pursuant to the Subordination
      Agreement.

     

    “Subordination
      Agreement”:
      shall
      mean the subordination agreement to be executed by the Seller, the Borrower
      and
      the Lender, substantially in the form of Exhibit F.

     

    “Subsidiary”:
      as to
      any Person, a corporation, partnership, limited liability company or other
      entity of which shares of stock or other ownership interests having ordinary
      voting power (other than stock or such other ownership interests having such
      power only by reason of the happening of a contingency) to elect a majority
      of
      the board of directors or other managers of such corporation, partnership or
      other entity are at the time owned, or the management of which is otherwise
      controlled, directly or indirectly through one or more intermediaries, or both,
      by such Person. Unless otherwise qualified, all references to a “Subsidiary” or
      to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries
      of the Borrower. Until the Borrower shall have any Subsidiaries, references
      to
      the Borrower and its Subsidiaries shall be construed as references to the
      Borrower.

     

    “Taxes”:
      as
      defined in Section 2.11(a).

     

    “Unit”:
      a
      singular restaurant in which the Guarantor or the Borrower has any equity
      interest direct or indirect.

     

    “United
      States”:
      the
      United States of America.

     

    1.2
       Other
      Definitional Provisions.

     

    (a)
      Unless otherwise specified therein, all terms defined in this Agreement shall
      have the defined meanings when used in the other Loan Documents or any
      certificate or other document made or delivered pursuant hereto or
      thereto.

     

    (b)
      As
      used herein and in the other Loan Documents, and any certificate or other
      document made or delivered pursuant hereto or thereto, (i) accounting terms
      relating to any Covered Party not defined in Section 1.1 and accounting terms
      partly defined in Section 1.1, to the extent not defined, shall have the
      respective meanings given to them under GAAP, (ii) the words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
      limitation”, (iii) the word “incur” shall be construed to mean incur, create,
      issue, assume, become liable in respect of or suffer to exist (and the words
      “incurred” and “incurrence” shall have correlative meanings), (iv) the words
“asset” and “property” shall be construed to have the same meaning and effect
      and to refer to any and all tangible and intangible assets and properties,
      including cash, Capital Stock, securities, revenues, accounts, leasehold
      interests and contract rights, and (v) references to agreements or other
      Contractual Obligations shall, unless otherwise specified, be deemed to refer
      to
      such agreements or Contractual Obligations as amended, supplemented, restated
      or
      otherwise modified from time to time.

     

    
      
        
        

      

      
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          11 -

        
          

        

      

      
        
        

      

    

     

    (c)
      The
      words “hereof”, “herein” and “hereunder” and words of similar import, when used
      in this Agreement, shall refer to this Agreement as a whole and not to any
      particular provision of this Agreement, and Section, Schedule and Exhibit
      references are to this Agreement unless otherwise specified.

     

    (d)
      The
      meanings given to terms defined herein shall be equally applicable to both
      the
      singular and plural forms of such terms.

     

    SECTION
      2. AMOUNT
      AND TERMS OF COMMITMENTS

     

    2.1
       Initial
      Term Loan. Subject
      to the terms and conditions hereof, the Lender agrees to make a term loan in
      the
      principal amount of $1,000,000 on the Closing Date (the “Initial
      Term Loan”).
      

     

    2.2
       Additional
      Term Loans. Subject
      to the terms and conditions hereof, the Lender agrees to lend to Borrower
      additional term loans, in minimum increments of $100,000, in an amount not
      to
      exceed $600,000, which together with the Initial Term Loan does not exceed
      the
      Commitment (the “Additional
      Term Loans”
and,
      together with the Initial Term Loan, the “Loans”),
      provided
      that (i)
      such Additional Term Loans shall be advanced only during the Drawdown Period;
      (ii) the Borrower shall be in compliance with this Agreement before and after
      the funding of the requested Additional Term Loan and shall have supplied the
      Lender a certificate detailing such compliance; and (iii) if such Additional
      Term Loan is requested prior to the [New Equity Date], the Borrower shall have
      obtained Satisfactory Equity Commitments in an amount not less than ten times
      the aggregate principal amount of all Additional Term Loans outstanding after
      giving effect to the advancement of such Additional Term Loans.

    


    2.3
       Procedure
      for Term Loan Borrowing. The
      Borrower shall give the Lender irrevocable notice in the form of Exhibit G
      (a
“Notice
      of Borrowing”),
      which
      notice must be received by the Lender prior to 11:00 A.M., Boston time, on
      the
      Borrowing Date as to the Initial Term Loan or on the fifth Business Day prior
      to
      the Borrowing Date as to Additional Term Loans. The Notice of Borrowing will
      specify the amount of Loan to be borrowed and the requested Borrowing
      Date.

     

    2.4
       Fees.

     

    (a)
      The
      Borrower agrees to pay to the Lender a closing fee of $15,000 on the Closing
      Date. Such fee shall be earned in full when paid and shall not be refundable
      under any circumstances. 

     

    (b)
      On
      any Borrowing Date in which Borrower requests that Lender make an Additional
      Term Loan, Borrower shall pay an administrative fee of $250 upon the closing
      of
      such Additional Term Loan.

     

    
      
        
        

      

      
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          12 -

        
          

        

      

      
        
        

      

    

     

    (c)
      The
      Borrower agrees to pay a fee to the Lender on the seventh day after the New
      Equity Date, calculated as follows based on the aggregate principal amount
      of
      Loans advanced prior to such date:

     

    
      	
              Total
                Amount Borrowed

            	 	
              Fee
                Owed to Lender

            	 
	 	 	 	 
	
              $1,000,000
                or less

            	 	
              $

            	
              0

            	 
	
              $1,000,001
                to $1,150,000

            	 	
              $

            	
              20,000

            	 
	
              $1,150,001
                to $1,300,000

            	 	
              $

            	
              40,000

            	 
	
              $1,301,000
                to $1,450,000

            	 	
              $

            	
              55,000

            	 
	
              $1,451,000
                to $1,600,000

            	 	
              $

            	
              70,000

            	 


    

    


    Such
      fee
      shall be earned in full when paid and shall not be refundable under any
      circumstances.

    


    2.5
       Repayment
      of the Loans. The
      Loans
      shall be payable in consecutive monthly installments of $33,333.33 commencing
      on
      June 1, 2006 and on the first Business Day of each calendar month thereafter.
      The remaining outstanding principal amount of the Loan shall be payable in
      full
      on the Maturity Date. Amounts paid or prepaid with respect to the Loans may
      not
      be reborrowed. The amount of any principal prepayment of the Loans shall be
      applied to reduce the then remaining installments of the Loans in inverse order
      of maturity. 

     

    2.6
       Prepayment
      Penalty. The
      Borrower may at any time and from time to time prepay the Loans, in whole or
      in
      part, without premium or penalty except for any prepayment fee that may be
      due
      under the following sentence. Any such prepayment shall be made together with
      all other amounts due and owing under the Loan Documents at the time of
      prepayment (including, without limitation, any amounts owing pursuant to Section
      2.12) and, if the date of such prepayment is on or before the second anniversary
      of the date hereof, a prepayment fee in the amount of $80,000. Prepayments
      shall
      be made upon irrevocable notice by the Borrower delivered to the Lender no
      later
      than 11:00 A.M., Boston time, one Business Day prior thereto, which notice
      shall
      specify the date and amount of prepayment. If any such notice is given, the
      amount specified in such notice shall be due and payable on the date specified
      therein, together with accrued and unpaid interest to such date on the amount
      prepaid. Partial prepayments of any Loan shall be in an aggregate principal
      amount of $100,000 or a whole multiple of $50,000 in excess thereof.


     

    2.7
       Mandatory
      Prepayments.

     

    (a)
      Except for Indebtedness expressly permitted under Section 6.2, if any
      Indebtedness described in clause (a) or (c) of the definition of “Indebtedness”
shall be issued or incurred by any Covered Party, then, an amount equal to
      100%
      of the Net Cash Proceeds thereof shall be applied on the date of such incurrence
      toward the prepayment of the Loans.

     

    (b)
      If on
      any date any Covered Party shall receive Net Cash Proceeds from any Recovery
      Event then, unless (i) no Event of Default has occurred and is continuing and
      (ii) a Reinvestment Notice shall be delivered in respect thereof, such Net
      Cash
      Proceeds shall be applied on such date toward the prepayment of the Loans.
      In
      addition, on each Reinvestment Prepayment Date, an amount equal to the
      Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
      shall be applied toward the prepayment of the Loans.

     

    (c)
      If at
      any time the aggregate outstanding principal amount of the Loans exceeds the
      Commitment, the Borrower will immediately prepay or repay the Loans in an amount
      necessary to cause the outstanding principal amount of the Loans not to exceed
      the Commitment. 

     

    
      
        
        

      

      
        -
          13 -

        
          

        

      

      
        
        

      

    

     

    (d)
      Each
      such prepayment of the Loans under this Section 2.6 shall be accompanied by
      accrued interest to the date of such prepayment on the amount prepaid and all
      amounts due and owing in respect thereof under Section 2.12.

     

    (e)
      Any
      prepayment or repayment of COF Loans on any date other than the regularly
      scheduled payments of principal thereof on the scheduled dates due hereunder
      or
      on the Maturity Date shall also be accompanied by a fee equal to the “Yield
      Maintenance Fee” in an amount computed as follows:

     

    


    The
      current cost of funds, specifically the bond equivalent yield for United States
      Treasury securities (bills on a discounted basis shall be converted to a bond
      equivalent yield) with a maturity date closest to the remaining term of such
      COF
      Loans, shall be subtracted from the COF Rate, or default rate if applicable.
      If
      the result is zero or a negative number, there shall be no Yield Maintenance
      Fee
      due and payable. If the result is a positive number, then the resulting
      percentage shall be multiplied by the scheduled outstanding principal balance
      for each remaining monthly period of this note. Each resulting amount shall
      be
      divided by 360 and multiplied by the number of days in the monthly period.
      Said
      amounts shall be reduced to present values calculated by using the above
      reference current costs of funds divided by 12 and the COF Loan’s remaining term
      in months. The resulting sum of present values shall be the yield maintenance
      fee due to the Lender upon prepayment of the principal of the COF Loans plus
      any
      accrued interest due as of the prepayment date.

     

    Unless
      the Lender expressly agrees otherwise, partial payments will not affect the
      payment schedule required hereunder.

     

    2.8
       Interest
      Rates and Payment Dates; Payments.

     

    (a)
      Until
      the date on which the Loan is fully advanced, each Loan shall bear interest
      at a
      rate per annum equal to the Prime Rate plus the Applicable Margin. On and after
      the date on which the Loan is fully advanced, interest on the unpaid principal
      balance of the Loan shall accrue, at the Borrower’s option, at the Prime Rate
      plus the Applicable Margin or at the COF Rate, plus the Applicable Margin,
      in
      any case as selected by the Borrower pursuant to a Notice of Conversion to
      COF
      Rate, provided such Notice of Conversion to COF Rate is delivered to the Lender
      within 60 days after the date on which the Loan is fully advanced and provided
      no Event of Default then exists hereunder.

     

    (b)
      If
      any Event of Default shall have occurred and be continuing, all outstanding
      Obligations (whether or not overdue) shall bear interest at a rate per annum
      equal to the rate that would otherwise be applicable to the Loans pursuant
      to
      the foregoing provisions of this Section plus
      5.00%
      during the continuance of such Event of Default (both before and after
      judgment). 

     

    (c)
      Interest shall be payable in arrears on each Interest Payment Date, provided
      that
      interest accruing pursuant to paragraph (b) of this Section shall be payable
      from time to time on demand.

     

    (d)
      The
      Borrower hereby authorizes the Lender to charge, on each date on which any
      amount is due hereunder, the Borrower’s Operating Account or any other deposit
      accounts from time to time maintained by the Borrower with the Lender for the
      purpose of effecting payments of amounts due to the Lender
      hereunder.

     

    
      
        
        

      

      
        -
          14 -

        
          

        

      

      
        
        

      

    

     

    2.9
       Computation
      of Interest and Fees.

     

    (a)
      Interest and fees payable pursuant hereto shall be calculated on the basis
      of a
      360-day year. Any change in the interest rate on a Loan resulting from a change
      in the Prime Rate shall become effective as of the opening of business on the
      day on which such change becomes effective.

     

    (b)
      Each
      determination of an interest rate by the Lender pursuant to any provision of
      this Agreement shall be conclusive and binding on the Borrower in the absence
      of
      manifest error.

     

    2.10
       Requirements
      of Law.

     

    (a)
      If
      the adoption of or any change in any Requirement of Law or in the interpretation
      or application thereof or compliance by the Lender with any request or directive
      (whether or not having the force of law) from any central bank or other
      Governmental Authority:

     

    (i)
      shall
      subject the Lender to any tax of any kind whatsoever with respect to this
      Agreement or any Loan made by it, or change the basis of taxation of payments
      to
      such Lender in respect thereof (except for Taxes covered by Section 2.11 and
      changes in the rate of tax on the overall net income of such
      Lender);

     

    (ii)
      shall impose, modify or hold applicable any reserve, special deposit, compulsory
      loan or similar requirement against assets held by, deposits or other
      liabilities in or for the account of, advances, loans or other extensions of
      credit by, or any other acquisition of funds by, any office of the Lender;
      or

     

    (iii)
      shall impose on the Lender any other condition;

     

    and
      the
      result of any of the foregoing is to increase the cost to the Lender of making,
      converting into, continuing or maintaining Loans, or to reduce any amount
      receivable hereunder in respect thereof, then, in any such case, the Borrower
      shall promptly pay the Lender, upon its demand, any additional amounts necessary
      to compensate the Lender for such increased cost or reduced amount
      receivable.

     

    (b)
      If
      the Lender shall have determined that the adoption of or any change in any
      Requirement of Law regarding capital adequacy or in the interpretation or
      application thereof or compliance by the Lender or any corporation controlling
      the Lender with any request or directive regarding capital adequacy (whether
      or
      not having the force of law) from any Governmental Authority made subsequent
      to
      the date hereof shall have the effect of reducing the rate of return on the
      Lender’s or such corporation’s capital as a consequence of its obligations
      hereunder to a level below that which the Lender or such corporation could
      have
      achieved but for such adoption, change or compliance (taking into consideration
      the Lender’s or such corporation’s policies with respect to capital adequacy),
      then from time to time the Borrower shall pay to such Lender upon demand such
      additional amount or amounts as will compensate the Lender or such corporation
      for such reduction.

     

    (c)
      A
      certificate as to any additional amounts payable pursuant to this Section
      submitted by the Lender to the Borrower shall be conclusive in the absence
      of
      manifest error. The obligation of the Borrower pursuant to this Section shall
      survive the termination of this Agreement and the payment of the Loans and
      all
      other amounts payable hereunder.

     

    
      
        
        

      

      
        -
          15 -

        
          

        

      

      
        
        

      

    

     

    2.11
       Taxes.

     

    (a)
      Any
      and all payments by the Borrower hereunder or under the other Loan Documents
      shall be made free and clear of and without deduction for any and all present
      or
      future taxes, levies, imposts, deductions, charges or withholdings, and all
      liabilities with respect thereto, excluding taxes that are imposed on the
      Lender’s overall net income by the United States and taxes that are imposed on
      its overall net income (and franchise taxes imposed in lieu thereof) by the
      state under the laws of which the Lender is organized (all such non-excluded
      taxes, levies, imposts, deductions, charges, withholdings and liabilities in
      respect of payments hereunder or under the other Loan Documents being
      hereinafter referred to as “Taxes”).
      If
      the Borrower shall be required by law to deduct any Taxes from or in respect
      of
      any sum payable hereunder or under any other Loan Document to the Lender,
      (i) the sum payable by the Borrower shall be increased as may be necessary
      so that after the Borrower has made all required deductions (including
      deductions applicable to additional sums payable under this Section 2.11),
      the Lender receives an amount equal to the sum it would have received had no
      such deductions been made, (ii) the Borrower shall make all such deductions
      and (iii) the Borrower shall pay the full amount deducted to the relevant
      taxation authority or other authority in accordance with applicable
      law.

     

    (b)
      In
      addition, the Borrower shall pay any present or future stamp, documentary,
      excise, property or similar taxes, charges or levies that arise from any payment
      made hereunder or under the other Loan Documents or from the execution, delivery
      or registration of, performance under, or otherwise with respect to, this
      Agreement or the Notes (hereinafter referred to as “Other
      Taxes”).

     

    (c)
      The
      Borrower shall indemnify the Lender for and hold it harmless against the full
      amount of Taxes and Other Taxes, and for the full amount of taxes of any kind
      imposed by any jurisdiction on amounts payable under this Section 2.11,
      imposed on or paid by the Lender and any liability (including penalties,
      additions to tax, interest and expenses) arising therefrom or with respect
      thereto. This indemnification shall be made within 10 days from the date the
      Lender makes written demand therefor.

     

    (d)
      Within 30 days after the date of any payment of Taxes, the Borrower shall
      furnish to the Lender the original or a certified copy of a receipt evidencing
      such payment. 

     

    (e)
      The
      agreements in this Section shall survive the termination of this Agreement
      and
      the payment of the Loans and all other amounts payable hereunder.

     

    2.12
       Indemnity.
      The
      Borrower agrees to indemnify the Lender for, and to hold the Lender harmless
      from, any loss or expense that the Lender may sustain or incur as a consequence
      of default by the Borrower in making any prepayment of Loans after the Borrower
      has given a notice thereof in accordance with the provisions of this Agreement.
      If the Lender elects to declare the Loans to be immediately due and payable,
      then any amounts payable under this Section 2.12 shall become due and payable
      in
      the same manner as though the Borrower had exercised such right of prepayment.
      A
      certificate as to any amounts payable pursuant to this Section submitted to
      the
      Borrower by the Lender shall be conclusive in the absence of manifest error.
      This covenant shall survive the termination of this Agreement and the payment
      of
      the Loans and all other amounts payable hereunder.

     

    
      
        
        

      

      
        -
          16 -

        
          

        

      

      
        
        

      

    

     

    SECTION
      3. REPRESENTATIONS
      AND WARRANTIES

     

    To
      induce
      the Lender to enter into this Agreement and to make the Loans, the Borrower
      hereby represents and warrants to the Lender that:

     

    3.1
       Financial
      Condition. The
      consolidated balance sheet of the Guarantor as at December 31, 2004, and
      the related consolidated statements of income and cash flows for the fiscal
      year
      ended on such date, reviewed and accompanied by a report in form and substance
      satisfactory to the Lender from Carlin, Charron & Rosen, LLP, present fairly
      the consolidated financial condition of the Guarantor as at such date, and
      the
      consolidated results of its operations and cash flows for the fiscal year then
      ended. The unaudited consolidated balance sheets of each of the Guarantor and
      the Borrower as at March 31, 2005, and, in each case, the related unaudited
      consolidated statements of income and cash flows for the month ended on such
      date, present fairly the consolidated financial condition the Guarantor and
      the
      Borrower, as applicable, as at such date, and the consolidated results of its
      operations and its cash flows for the month then ended. All such financial
      statements have been prepared in accordance with GAAP (subject to normal
      year-end audit adjustments and the absence of footnotes) applied consistently
      throughout the periods involved (except as approved by the aforementioned firm
      of accountants and disclosed therein). The Borrower has no material Guarantee
      Obligations, contingent liabilities and liabilities for taxes, or any long-term
      leases or unusual forward or long-term commitments, including any interest
      rate
      or foreign currency swap or exchange transaction or other obligation in respect
      of derivatives, or other material obligations that are not reflected in the
      most
      recent financial statements referred to in this paragraph. During the period
      from December 31, 2004 to and including the date hereof there has been no
      Disposition by any Covered Party of any material part of its business or
      property.

     

    3.2
       No
      Change. Since
      December 31, 2004, there have been no developments or events that, individually
      or in the aggregate, have had or could reasonably be expected to have a Material
      Adverse Effect.

     

    3.3
       Existence;
      Compliance with Law. Each
      Covered Party (a) is duly organized or formed, as the case may be, validly
      existing and in good standing under the laws of the jurisdiction of its
      organization or formation, (b) has the power and authority, and the legal right,
      to own and operate its property, to lease the property it operates as lessee
      and
      to conduct the business in which it is currently engaged, (c) is duly qualified
      as a foreign corporation, partnership or limited liability company, as the
      case
      may be, and in good standing under the laws of each jurisdiction where its
      ownership, lease or operation of property or the conduct of its business
      requires such qualification and (d) is in compliance with all Requirements
      of
      Law, except to the extent that the failure to comply therewith could not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect.

     

    3.4
       Power;
      Authorization; Enforceable Obligations. Each
      Loan
      Party has the power and authority, and the legal right, to execute, deliver
      and
      perform the Loan Documents to which it is a party and, in the case of the
      Borrower, to obtain extensions of credit hereunder. Each Loan Party has taken
      all necessary organizational action to authorize the execution, delivery and
      performance of the Loan Documents to which it is a party and, in the case of
      the
      Borrower, to authorize the extensions of credit on the terms and conditions
      of
      this Agreement. No consent or authorization of, filing with, notice to or other
      act by or in respect of, any Governmental Authority or any other Person is
      required in connection with the Loans hereunder or with the execution, delivery,
      performance, validity or enforceability of this Agreement or any of the other
      Loan Documents, except (i) consents, authorizations, filings and notices
      described in Schedule 3.4, which consents, authorizations, filings and notices
      have been obtained or made and are in full force and effect and (ii) the filings
      referred to in Section 3.18. Each Loan Document has been duly executed and
      delivered on behalf of each Loan Party party thereto. This Agreement
      constitutes, and each other Loan Document upon execution will constitute, a
      legal, valid and binding obligation of each Loan Party party thereto,
      enforceable against each such Loan Party in accordance with its terms, except
      as
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or similar laws affecting the enforcement of
      creditors’ rights generally and by general equitable principles (whether
      enforcement is sought by proceedings in equity or at law).

     

    3.5
       No
      Legal Bar. The
      execution, delivery and performance of this Agreement and the other Loan
      Documents, the borrowings hereunder and the use of the proceeds thereof will
      not
      violate any Requirement of Law or any Contractual Obligation of any Loan Party
      and will not result in, or require, the creation or imposition of any Lien
      on
      any of their respective properties or revenues pursuant to any Requirement
      of
      Law or any such Contractual Obligation (other than the Liens created by the
      Security Documents). No Requirement of Law or Contractual Obligation applicable
      to any Loan Party could reasonably be expected to have a Material Adverse
      Effect.

     

    
      
        
        

      

      
        -
          17 -

        
          

        

      

      
        
        

      

    

     

    3.6
       Litigation.
      No
      litigation, action, investigation or proceeding of or before any arbitrator
      or
      Governmental Authority is pending or, to the knowledge of the Borrower or the
      Guarantor, threatened by or against any Loan Party or against any of their
      respective properties or revenues (a) with respect to any of the Loan Documents
      or any of the transactions contemplated hereby or thereby, or (b) that could
      reasonably be expected to have a Material Adverse Effect. As of the Closing
      Date, all pending or, to the knowledge of the Borrower or the Guarantor,
      threatened litigations, actions, investigations or proceedings by or against
      any
      Loan Party are listed on Schedule 3.6.

     

    3.7
       No
      Default. No
      Loan
      Party is in default under or with respect to any of its Contractual Obligations
      in any respect that could reasonably be expected to have a Material Adverse
      Effect. No Default or Event of Default has occurred and is
      continuing.

     

    3.8
       Ownership
      of Property; Liens. Each
      Covered Party has title in fee simple to, or a valid leasehold interest in,
      all
      its real property, and good title to, or a valid leasehold interest in, all
      its
      other property, including without limitation all assets covered by the Asset
      Purchase Agreements. Borrower holds title to all such assets covered by the
      Asset Purchase Agreements. None of such property is subject to any Lien except
      as would be permitted by Section 6.3.

     

    3.9
       Intellectual
      Property; Licenses. Each
      Loan
      Party owns, or is licensed to use, all Intellectual Property and other licenses
      necessary for the conduct of its business as currently conducted. No material
      claim has been asserted and is pending by any Person challenging or questioning
      the use of any Intellectual Property or the validity or effectiveness of any
      Intellectual Property, nor does any Loan Party know of any valid basis for
      any
      such claim. The use of Intellectual Property by each Loan Party does not
      infringe on the rights of any Person in any material respect.

     

    3.10
       Taxes. Each
      Loan
      Party has filed or caused to be filed all Federal, state and other material
      tax
      returns that are required to be filed and has paid all taxes shown to be due
      and
      payable on said returns or on any assessments made against it or any of its
      property and all other taxes, fees or other charges imposed on it or any of
      its
      property by any Governmental Authority; no tax Lien has been filed, and, to
      the
      knowledge of the Borrower or the Guarantor, no claim is being asserted, with
      respect to any such tax, fee or other charge.

     

    3.11
       Federal
      Regulations. No
      part
      of the proceeds of any Loans, and no other extensions of credit hereunder,
      will
      be used for “buying” or “carrying” any “margin stock” within the respective
      meanings of each of the quoted terms under Regulation U as now and from time
      to
      time hereafter in effect or for any purpose that violates the provisions of
      the
      Regulations of the Board. If requested by the Lender, the Borrower will furnish
      to the Lender a statement to the foregoing effect in conformity with the
      requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
      Regulation U.

     

    3.12
       ERISA.
      Neither
      a
      Reportable Event nor an “accumulated funding deficiency” (within the meaning of
      Section 412 of the Code or Section 302 of ERISA) has occurred during the
      five-year period prior to the date on which this representation is made or
      deemed made with respect to any Plan, and each Plan has complied in all material
      respects with the applicable provisions of ERISA and the Code. No termination
      of
      a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a
      Plan
      has arisen, during such five-year period. The present value of all accrued
      benefits under each Single Employer Plan (based on those assumptions used to
      fund such Plans) did not, as of the last annual valuation date prior to the
      date
      on which this representation is made or deemed made, exceed the value of the
      assets of such Plan allocable to such accrued benefits by a material amount.
      Neither the Borrower nor any Commonly Controlled Entity has had a complete
      or
      partial withdrawal from any Multiemployer Plan that has resulted or could
      reasonably be expected to result in a material liability under ERISA, and
      neither the Borrower nor any Commonly Controlled Entity would become subject
      to
      any material liability under ERISA if the Borrower or any such Commonly
      Controlled Entity were to withdraw completely from all Multiemployer Plans
      as of
      the valuation date most closely preceding the date on which this representation
      is made or deemed made. No such Multiemployer Plan is in Reorganization or
      Insolvent.

     

    
      
        
        

      

      
        -
          18 -

        
          

        

      

      
        
        

      

    

     

    3.13
       Investment
      Company Act; Other Regulations. No
      Loan
      Party is (a) an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
      as amended or (b) a “holding company” as defined in, or subject to regulation
      under, the Public Utility Holding Company Act of 1935 or the Federal Power
      Act,
      as amended. No Loan Party is subject to regulation under any Requirement of
      Law
      (other than Regulation X of the Board) that limits its ability to incur
      Indebtedness.

     

    3.14
       Subsidiaries.
      

     

    (a)
      (i)
      The Borrower has no Subsidiaries, (ii) as of the date hereof, the authorized,
      issued and outstanding Capital Stock of each of the Borrower and the Guarantor
      is as set forth on, Schedule 3.14 and (ii) the ownership interests in the
      Borrower and the Guarantor are duly authorized, validly issued, fully paid
      and
      nonassessable and, as of the date hereof, are owned beneficially and of record
      by the Persons set forth on Schedule 3.14, free and clear of all Liens other
      than Liens of the Security Documents.

     

    (b)
      Except as set forth on Schedule 3.14 or the issuance of New Equity contemplated
      hereunder, no Covered Party has issued any securities convertible into, or
      options or warrants for, any common or preferred equity securities thereof
      and
      there are no agreements, voting trusts or understandings binding upon any
      Covered Party with respect to the voting securities of any Covered Party or
      affecting in any manner the sale, pledge, assignment or other disposition
      thereof, including any right of first refusal, option, redemption, call or
      other
      right with respect thereto, whether similar or dissimilar to any of the
      foregoing.

     

    (c)
      The
      organizational documents of each Covered Party that is:

     

    (i)
      a
      corporation, business trust, joint stock company or similar Person, provide
      that
      all Capital Stock issued by it must be represented by a certificate;
      or

     

    (ii)
      a
      partnership or limited liability company, do not provide that any Capital Stock
      issued by such Subsidiary constitutes a security governed by Article 8 of the
      UCC.

     

    3.15
       Use
      of
      Proceeds. The
      proceeds of the Initial Term Loan shall be used to pay the Indebtedness to
      be
      Paid and for general corporate purposes (excluding the building of any new
      Units). The proceeds of the Additional Term Loans shall be used for general
      corporate purposes (excluding the building of new Units other than one new
      Unit)
      and, to the extent permitted herein, to make loans to the
      Guarantor.

    


    3.16
       Environmental
      Matters.

     

    (a)
      The
      facilities and properties owned, leased or operated by any Covered Party (the
      “Properties”)
      do not
      contain, and have not previously contained, any Materials of Environmental
      Concern in amounts or concentrations or under circumstances that constitute
      or
      constituted a violation of, or could give rise to liability under, any
      Environmental Law;

     

    
      
        
        

      

      
        -
          19 -

        
          

        

      

      
        
        

      

    

     

    (b)
      no
      Loan Party has received or to the knowledge of Borrower or Guarantor is aware
      of
      any notice of violation, alleged violation, non-compliance, liability or
      potential liability regarding environmental matters or compliance with
      Environmental Laws with regard to any of the Properties or the business operated
      by any Covered Party (the “Business”),
      nor
      does the Borrower or the Guarantor have knowledge or reason to believe that
      any
      such notice will be received or is being threatened;

     

    (c)
      Materials of Environmental Concern have not been transported or disposed of
      from
      the Properties in violation of, or in a manner or to a location that could
      give
      rise to liability under, any Environmental Law, nor have any Materials of
      Environmental Concern been generated, treated, stored or disposed of at, on
      or
      under any of the Properties in violation of, or in a manner that could give
      rise
      to liability under, any applicable Environmental Law;

     

    (d)
      no
      judicial proceeding or governmental or administrative action is pending or,
      to
      the knowledge of the Borrower or the Guarantor, threatened, under any
      Environmental Law to which any Covered Party is or will be named as a party
      with
      respect to the Properties or the Business, nor are there any consent decrees
      or
      other decrees, consent orders, administrative orders or other orders, or other
      administrative or judicial requirements outstanding under any Environmental
      Law
      with respect to the Properties or the Business;

     

    (e)
      there
      has been no release or threat of release of Materials of Environmental Concern
      at or from the Properties, or arising from or related to the operations of
      any
      Covered Party in connection with the Properties or otherwise in connection
      with
      the Business, in violation of or in amounts or in a manner that could give
      rise
      to liability under Environmental Laws; 

     

    (f)
      the
      Properties and all operations at the Properties are in compliance, and have
      in
      the last five years been in compliance, with all applicable Environmental Laws,
      and there is no contamination at, under or about the Properties or violation
      of
      any Environmental Law with respect to the Properties or the Business;
      and

     

    (g)
      no
      Covered Party has assumed any liability of any other Person under Environmental
      Laws.

     

    3.17
       Accuracy
      of Information, etc. No
      statement or information contained in this Agreement, any other Loan Document
      or
      any other document, certificate or statement furnished by or on behalf of any
      Loan Party to the Lender for use in connection with the transactions
      contemplated by this Agreement or the other Loan Documents contains or contained
      any untrue statement of a material fact or omitted to state a material fact
      necessary to make the statements contained herein or therein not misleading.
      The
      projections and pro forma financial information furnished to the Lender are
      based upon good faith estimates and assumptions believed by management of the
      Borrower to be reasonable at the time made, it being recognized by the Lender
      that such financial information as it relates to future events is not to be
      viewed as fact and that actual results during the period or periods covered
      by
      such financial information may differ from the projected results set forth
      therein. There is no fact known to the Borrower or the Guarantor that could
      reasonably be expected to have a Material Adverse Effect that has not been
      expressly disclosed herein, in the other Loan Documents or in any other
      documents, certificates and statements furnished to the Lender for use in
      connection with the transactions contemplated hereby and by the other Loan
      Documents.

     

    
      
        
        

      

      
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          20 -

        
          

        

      

      
        
        

      

    

     

    3.18
       Security
      Documents. Each
      of
      the Security Documents is effective to create in favor of the Lender a legal,
      valid and enforceable security interest in the Collateral described therein
      and
      proceeds thereof. When financing statements in appropriate form are filed in
      the
      offices specified on Schedule 3.18, the Security Documents shall each
      constitute a fully perfected Lien on, and security interest in, all right,
      title
      and interest of the Loan Parties in such Collateral and the proceeds thereof,
      as
      security for the Obligations, in each case prior and superior in right to any
      other Person (except, in the case of Collateral other than Pledged Stock, Liens
      permitted by Section 6.3).

    


    3.19
       Solvency.
      Each
      Loan
      Party is, and after giving effect to the incurrence of all Indebtedness and
      obligations being incurred in connection herewith and therewith will be and
      will
      continue to be, Solvent.

     

    3.20
       Regulation
      H. No
      Leased
      Property or property subject to any Mortgage involves improved real property
      that is located in an area that has been identified by the Secretary of Housing
      and Urban Development as an area having special flood hazards and in which
      flood
      insurance has been made available under the National Flood Insurance Act
      of 1968.

     

    3.21
       Indebtedness
      Outstanding. 

     

    (a)
      Set
      forth on Schedule 3.21(a) hereto is a list and description of all
      Indebtedness of the Borrower (other than the Loans) that will be outstanding
      immediately after the Closing Date.

     

    (b)
      Set
      forth on Schedule 3.21(b) hereto is a list and description of all
      Indebtedness of the Borrower that will be repaid, defeased, transferred or
      otherwise terminated on or prior to the Closing Date (the “Indebtedness
      to Be Paid”).

     

    (c)
      Set
      forth on Schedule 3.21(c) hereto is a list and description of all Liens of
      the Borrower that will be repaid, defeased, transferred or otherwise terminated
      on or prior to the Closing Date (the “Liens
      to be Terminated”).

     

    (d)
      Set
      forth on Schedule 3.21(d) hereto is a list and description of all Liens of
      the
      Borrower (other than the Liens of the Loan Documents) that will be outstanding
      immediately after the Closing Date.

     

    3.22
       Anti-Terrorism
      Laws.

     

    (a)
      No
      Loan Party and, to the knowledge of the Borrower or the Guarantor, no Affiliate
      of any Loan Party is in violation of any laws relating to terrorism or money
      laundering (“Anti-Terrorism
      Laws”),
      including Executive Order No. 13224 on Terrorist Financing, effective
      September 24, 2001 (the “Executive
      Order”),
      and
      the Uniting and Strengthening America by Providing Appropriate Tools Required
      to
      Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.

     

    (b)
      No
      Loan Party and, to the knowledge of the Borrower or the Guarantor, no Affiliate
      of any Loan Party, and none of their respective brokers or other agents acting
      or benefiting in any capacity in connection with the Loans, is any of the
      following:

     

    (i)
      a
      Person or entity that is listed in the annex to, or is otherwise subject to
      the
      provisions of, the Executive Order;

     

    
      
        
        

      

      
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          21 -

        
          

        

      

      
        
        

      

    

     

    (ii)
      a
      Person or entity owned or controlled by, or acting for or on behalf of, any
      Person or entity that is listed in the annex to, or is otherwise subject to
      the
      provisions of, the Executive Order;

     

    (iii)
      a
      Person or entity with which any Lender is prohibited from dealing or otherwise
      engaging in any transaction by any Anti-Terrorism Law;

     

    (iv)
      a
      Person or entity that commits, threatens or conspires to commit or supports
      “terrorism” as defined in the Executive Order; or

     

    (v)
      a
      Person or entity that is named as a “specially designated national and blocked
      person” on the most current list published by the U.S. Treasury Department
      Office of Foreign Assets Control at its official website or any replacement
      website or other replacement official publication of such list.

     

    (c)
      No
      Loan Party and, to the knowledge of the Borrower or the Guarantor, no Affiliate
      of any Loan Party, and none of their respective brokers or other agents acting
      in any capacity in connection with the Loans, (i) conducts any business or
      engages in making or receiving any contribution of funds, goods or services
      to
      or for the benefit of any Person described in clause (b) above, (ii) deals
      in,
      or otherwise engages in any transaction relating to, any property or interests
      in property blocked pursuant to the Executive Order, or (iii) engages in or
      conspires to engage in any transaction that evades or avoids, or has the purpose
      of evading or avoiding, or attempts to violate, any of the prohibitions set
      forth in any Anti-Terrorism Law.

     

    3.23
       Depository
      and Other Accounts. Schedule
      3.23 attached hereto lists all banks and other financial institutions and
      depositories at which the Covered Parties maintain or will maintain deposit
      accounts, trust accounts, tax or trust receivable accounts or other accounts
      of
      any kind or nature into which funds of the Covered Parties (including funds
      in
      which any Covered Party maintains a contingent or residual interest) are from
      time to time deposited, and such Schedule 3.23 correctly identifies the name
      and
      address of each depository, the name in which each account is held, the purpose
      of the account and the complete account number.

     

    3.24
       Obligations
      to Seller. Other
      than the payment of the Seller Debt subordinated pursuant to the Subordination
      Agreement, neither Borrower nor Guarantor owe any obligations or liabilities
      to
      Seller (other than in its capacity solely as a shareholder of Guarantor) and
      all
      other obligations of Borrower or Guarantor under the Asset Purchase Agreements
      have been performed in full.

    


    SECTION
      4. CONDITIONS
      PRECEDENT

     

    4.1
       Conditions
      to Initial Extension of Credit. The
      agreement of the Lender to make the Initial Term Loan requested to be made
      by it
      is subject to the satisfaction, prior to or concurrently with the making of
      such
      extension of credit on the Closing Date, of the following conditions
      precedent:

     

    (a)
      Credit
      Agreement and Other Loan Documents.
      The
      Lender shall have received (i) this Agreement, executed and delivered by
      the Borrower, (ii) the Security Agreement, executed and delivered by the
      Borrower and the Lender, (iii) the Guarantee and Security Agreement, executed
      by
      the Guarantor, (v) the Subordination Agreement, executed and delivered by the
      Borrower and the Seller, and (vi) other documents required by the Lender as
      listed on the closing agenda distributed by Lender's counsel in connection
      therewith.

     

    
      
        
        

      

      
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          22 -

        
          

        

      

      
        
        

      

    

     

    (b)
      Indebtedness
      to be Paid.
      The
      Lender shall have received satisfactory evidence that the Indebtedness to be
      Paid shall have been paid in full and that any related credit, loan or similar
      agreements, together with any related guarantees and other documentation, shall
      have been terminated, and arrangements satisfactory to the Lender shall have
      been made for the termination of all Liens to be Terminated, including without
      limitation all Liens granted in connection with the Indebtedness to be
      Paid.

     

    (c)
      Insurance.
      The
      Lender shall have received insurance certificates satisfying the requirements
      of
      the Security Agreement and the Guarantee and Security Agreement.

     

    (d)
      Financial
      Statements.
      The
      Lender shall have received (i) the financial statements referred to in Section
      3.1, (ii) a monthly budget of the Borrower and its Subsidiaries for the fiscal
      year ending December 31, 2005, (iii) satisfactory projections for the Borrower
      through the 2010 fiscal year, and (iv) a pro forma Compliance Certificate.
      The
      pro forma Compliance Certificate referred to in clause (iv) above shall give
      effect to the Initial Term Loan hereunder and the repayment of the Indebtedness
      to be Paid. All materials furnished pursuant to this Section 4.1(d) shall be
      satisfactory to the Lender.

     

    (e)
      Approvals.
      All
      governmental and material third party approvals necessary in connection with
      the
      continuing operations of the Covered Parties and the transactions contemplated
      hereby shall have been obtained and be in full force and effect.

     

    (f)
      Lien
      Searches.
      The
      Lender shall have received the results of a recent lien search in each of the
      jurisdictions where assets of the Loan Parties are located and the jurisdiction
      where each Loan Party is located under Article 9 of the UCC, and such search
      shall reveal no liens on any of the assets of the Loan Parties except for Liens
      to be Terminated and Liens that would be permitted by Section 6.3.

     

    (g)
      Fees.
      The
      Lender shall have received all fees required to be paid, and all expenses for
      which invoices have been presented (including the reasonable fees and expenses
      of legal counsel), on or before the Closing Date. All such amounts will be
      paid
      with proceeds of Loans made on the Closing Date and will be reflected in the
      funding instructions given by the Borrower to the Lender on or before the
      Closing Date.

     

    (h)
      Closing
      Certificate; Certified Certificate of Incorporation; Good Standing
      Certificates.
      The
      Lender shall have received (i) a certificate of the Borrower, dated the Closing
      Date, substantially in the form of Exhibit D, with appropriate insertions and
      attachments, including the certificate of incorporation of the Borrower,
      certified by the relevant authority of the jurisdiction of organization of
      such
      Loan Party, and (ii) a good standing certificate for the Borrower from its
      jurisdiction of organization and each jurisdiction where it is required to
      be
      qualified as a foreign corporation.

     

    (i)
      Legal
      Opinions.
      The
      Lender shall have received a favorable legal opinion satisfactory to Lender,
      from Robinson & Cole, LLP, counsel to the Borrower and the
      Guarantor.

     

    (j)
      Pledged
      Stock; Stock Powers; Pledged Notes.
      The
      Lender shall have received (i) the certificates representing the shares of
      Capital Stock (if any) pledged pursuant to the Security Agreement and pursuant
      to the Guarantee and Security Agreement, together with an undated stock power
      for each such certificate executed in blank by a duly authorized officer of
      the
      pledgor thereof and (ii) each promissory note (if any) pledged to the Lender
      pursuant to the Security Agreement and pursuant to the Guarantee and Security
      Agreement, endorsed (without recourse) in blank (or accompanied by an executed
      transfer form in blank) by the pledgor thereof.

     

    
      
        
        

      

      
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          23 -

        
          

        

      

      
        
        

      

    

     

    (k)
      Filings,
      Registrations and Recordings.
      Each
      document (including any Uniform Commercial Code financing
      statement) required by the Security Documents or under law or reasonably
      requested by the Lender to be filed, registered or recorded in order to create
      in favor of the Lender a perfected Lien on the Collateral described therein,
      prior and superior in right to any other Person (other than with respect to
      Liens that would be expressly permitted by Section 6.3), shall be in proper
      form
      for filing, registration or recordation.

     

    (l)
      Solvency
      Certificate.
      The
      Lender shall have received a satisfactory solvency certificate from a
      Responsible Officer that shall demonstrate that, after giving effect to the
      transactions contemplated hereby, the Borrower is Solvent.

     

    (m)
      Operating
      Account.
      The
      Borrower shall have opened the Operating Account at the Lender. The Guarantor
      shall have opened an operating account at the Lender.

     

    4.2
       Conditions
      to Each Extension of Credit. The
      agreement of the Lender to make any extension of credit requested to be made
      by
      it on any date (including its initial extension of credit) is subject to the
      satisfaction of the following conditions precedent:

     

    (a)
      Representations
      and Warranties.
      Each of
      the representations and warranties made by any Loan Party in or pursuant to
      the
      Loan Documents shall be true and correct in all material respects on and as
      of
      such date as if made on and as of such date.

     

    (b)
      No
      Default.
      No
      Default or Event of Default shall have occurred and be continuing on such date
      or after giving effect to the extensions of credit requested to be made on
      such
      date.

     

    (c)
      Compliance
      Certificate.
      The
      Borrower shall have submitted to the Lender a Compliance Certificate showing
      on
      a pro forma
      basis
      the making of any Loans requested, in form required by the Lender.

     

    Each
      borrowing hereunder shall constitute a representation and warranty by the
      Borrower as of the date of such extension of credit that the conditions
      contained in this Section 4.2 have been satisfied.

     

    SECTION
      5. AFFIRMATIVE
      COVENANTS

     

    The
      Borrower hereby agrees that, so long as any Loan or other amount is owing to
      the
      Lender hereunder, the Borrower shall and shall cause each of the other Covered
      Parties to:

     

    5.1
       Financial
      Statements; Field Audits.

     

    (a)
      Furnish to the Lender:

     

    (i)
      as
      soon as available, but in any event within 120 days after
      the
      end of each fiscal year of the Borrower, a copy of the consolidated balance
      sheet of the Borrower and its Subsidiaries as at the end of such year and the
      related consolidated statements of income and of cash flows for such year,
      setting forth in each case in comparative form the figures for the previous
      year, which shall be prepared by management and accompanied by a certificate
      of
      the chief financial officer, in form and substance reasonably satisfactory
      to
      the Lender;

     

    
      
        
        

      

      
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          24 -

        
          

        

      

      
        
        

      

    

     

    (ii)
      as
      soon as available, but in any event within 120 days after the end of each
      fiscal year of the Guarantor, a copy of the consolidated balance sheet of the
      Guarantor and its Subsidiaries as at the end of such year and the related
      consolidated statements of income and of cash flows for such year, setting
      forth
      in each case in comparative form the figures for the previous year, audited
      by
      and accompanied by a report, in form and substance reasonably satisfactory
      to
      the Lender, from Carlin, Charron & Rosen, LLP, or other independent
      certified public accountants satisfactory to the Lender;

     

    (iii)
      as
      soon as available, but in any event not later than 45 days after the end of
      each
      quarterly period of each fiscal year of the Borrower, the unaudited consolidated
      balance sheet of the Borrower and its Subsidiaries as at the end of such quarter
      and the related unaudited consolidated statements of income and of cash flows
      for such quarter and the portion of the fiscal year through the end of such
      quarter, setting forth in each case in comparative form the figures for the
      previous year and the corresponding figures from the Borrower’s budget for such
      period, in each case certified by a Responsible Officer as being fairly stated
      in all material respects (subject to normal year-end audit adjustments);


     

    (iv)
      as
      soon as available, but in any event not later than 45 days after the end of
      each
      quarterly period of each fiscal year of the Guarantor, the unaudited
      consolidated balance sheet of the Guarantor and its Subsidiaries as at the
      end
      of such quarter and the related unaudited consolidated statements of income
      and
      of cash flows for such quarter and the portion of the fiscal year through the
      end of such quarter, setting forth in each case in comparative form the figures
      for the previous year and the corresponding figures from the Guarantor’s budget
      for such period together with a report on franchisee royalties received with
      respect to such quarter and a statement as to the number of franchise agreements
      in effect and whether any of such franchise agreements are then in default,
      in
      each case certified by a Responsible Officer as being fairly stated in all
      material respects (subject to normal year-end audit adjustments);

     

    (v)
      as
      soon as available, but in any event within 120 days after the end of each fiscal
      year of the Borrower and the Guarantor, a listing of the equity owners of the
      Borrower and the Guarantor and their respective ownership
      interests;

     

    (vi)
      as
      soon as available, but in any event within 120 days after the end of each fiscal
      year of the Borrower and the Guarantor, a copy of any additional leases (both
      Capitalized Lease Obligations and operating leases) entered into by the Borrower
      and the Guarantor during the fiscal year; 

     

    (vii)
      as
      soon as available, but in any event on or before April 15 of each fiscal year
      of
      the Borrower and the Guarantor (or such later date to which the filing thereof
      has been extended), a copy of the filed tax returns of the Borrower and
      Guarantor; and

     

    (viii)
      as
      soon as available, but in any event within 15 days after the end of each month,
      cash flow and income statements on a per Unit basis for the Borrower and the
      Guarantor.

     

    All
      such
      financial statements shall be complete and correct in all material respects
      and
      shall be prepared in reasonable detail and in accordance with GAAP applied
      (except as approved by such accountants or officer, as the case may be, and
      disclosed in reasonable detail therein) consistently throughout the periods
      reflected therein and with prior periods.

     

    
      
        
        

      

      
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          25 -

        
          

        

      

      
        
        

      

    

     

    (b)
      The
      Covered Parties will permit the Lender to inspect and audit the books and
      records and any of the properties or assets of the Covered Parties (in each
      instance, at the Borrower’s expense).

     

    5.2
       Certificates;
      Other Information. Furnish
      to the Lender:

     

    (a)
      concurrently with the delivery of the financial statements referred to in
      Section 5.1(a)(ii) and, if applicable, Section 5.1(a)(i), a certificate of
      the
      independent certified public accountants reviewing such financial statements
      stating that in making the examination necessary therefor no knowledge was
      obtained of any Default or Event of Default, except as specified in such
      certificate;

     

    (b)
      concurrently with the delivery of any financial statements pursuant to Section
      5.1(a)(iii) and (iv), (i) a certificate of a Responsible Officer stating that,
      to the best of each such Responsible Officer’s knowledge, each Loan Party during
      such period has observed or performed all of its covenants and other agreements,
      and satisfied every condition contained in this Agreement and the other Loan
      Documents to which it is a party to be observed, performed or satisfied by
      it,
      and that such Responsible Officer has obtained no knowledge of any Default
      or
      Event of Default except as specified in such certificate and (ii) (x) a
      Compliance Certificate containing all information and calculations necessary
      for
      determining compliance by each Covered Party with the provisions of this
      Agreement and the Guarantee and Security Agreement referred to therein as of
      the
      last day of the month, fiscal quarter or fiscal year of the Borrower, as the
      case may be, and (y) to the extent not previously disclosed to the Lender,
      a
      description of any change in the jurisdiction of organization of any Loan Party
      (or, if such Loan Party is not a registered organization (as defined in Article
      9 of the UCC as in effect in any applicable jurisdiction) its chief executive
      office) and a list of any Intellectual Property acquired by any Loan Party
      since
      the date of the most recent report delivered pursuant to this clause (y) (or,
      in
      the case of the first such report so delivered, since the Closing
      Date);

     

    (c)
      as
      soon as available, and in any event no later than 30 days before the end of
      each
      fiscal year of the Borrower, a detailed monthly budget for the Borrower (with
      Unit by Unit detail) in form and substance reasonably satisfactory to the Lender
      for the following fiscal year (including a projected consolidated balance sheet
      of the Borrower and its Subsidiaries as of the end of the following fiscal
      year,
      the related consolidated statements of projected cash flow, projected changes
      in
      financial position and projected income and a description of the underlying
      assumptions applicable thereto), and, as soon as available, significant
      revisions, if any, of such budget;

     

    (d)
      promptly upon the effectiveness thereof, copies of any formal, material
      modification to any business plan of the Borrower; and

     

    (e)
      promptly, such additional financial and other information as the Lender may
      from
      time to time reasonably request.

     

    5.3
       Payment
      of Obligations. Pay,
      discharge or otherwise satisfy at or before maturity or before they become
      delinquent, as the case may be, all its obligations of whatever nature, except
      where the amount or validity thereof is currently being contested in good faith
      by appropriate proceedings and reserves in conformity with GAAP with respect
      thereto have been provided on the books of the relevant Covered Party and except
      where the failure to do so would not, individually or in the aggregate, have
      a
      Material Adverse Effect.

     

    
      
        
        

      

      
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          26 -

        
          

        

      

      
        
        

      

    

     

    5.4
       Maintenance
      of Existence; Compliance. Preserve,
      renew and keep in full force and effect its organizational existence; maintain
      all rights, privileges and franchises necessary or desirable in the normal
      conduct of its business; and comply in all material respects with all
      Contractual Obligations and Requirements of Law, except where the failure to
      do
      so would not, individually or in the aggregate, have a Material Adverse
      Effect.

     

    5.5
       Maintenance
      of Property; Insurance. (a) Keep
      all material property useful and necessary in its business in good working
      order
      and condition, ordinary wear and tear excepted and (b) maintain with
      financially sound and reputable insurance companies insurance on all its
      property in at least such amounts and against at least such risks (but including
      in any event public liability, product liability and business interruption)
      as
      are usually insured against in the same general area by companies engaged in
      the
      same or a similar business.

     

    5.6
       Inspection
      of Property; Books and Records; Discussions. (a)
      Keep
      proper books of records and account in which full, true and correct entries
      in
      conformity with GAAP and all Requirements of Law shall be made of all dealings
      and transactions in relation to its business and activities and (b) permit
      representatives of the Lender to visit and inspect any of its properties and
      examine and make abstracts from any of its books and records at any reasonable
      time and as often as may reasonably be desired and to discuss the business,
      operations, properties and financial and other condition of the Covered Parties
      with officers and employees of the Covered Parties and with their independent
      certified public accountants. 

     

    5.7
       Notices.
      Promptly
      give notice to the Lender of:

     

    (a)
      the
      occurrence of any Default or Event of Default;

     

    (b)
      any
      (i) material default or material event of default under any Contractual
      Obligation of any Covered Party or (ii) material litigation, investigation
      or
      proceeding that may exist at any time between any Covered Party and any
      Governmental Authority;

     

    (c)
      any
      litigation or proceeding affecting any Covered Party (i) in which the uninsured
      amount involved is $50,000 or more, (ii) in which injunctive or similar relief
      is sought or (iii) which relates to any Loan Document;

     

    (d)
      the
      following events, as soon as possible and in any event within 30 days after
      any
      Covered Party knows or has reason to know thereof: (i) the occurrence of any
      Reportable Event with respect to any Plan, a failure to make any required
      contribution to a Plan, the creation of any Lien in favor of the PBGC or a
      Plan
      or any withdrawal from, or the termination, Reorganization or Insolvency of,
      any
      Multiemployer Plan or (ii) the institution of proceedings or the taking of
      any
      other action by the PBGC, any Covered Party or any Commonly Controlled Entity
      or
      any Multiemployer Plan with respect to the withdrawal from, or the termination,
      Reorganization or Insolvency of, any Plan;

     

    (e)
      the
      occurrence of any event requiring a prepayment of the Loans; 

     

    (f)
      the
      acquisition of any real or personal property, or the acquisition or formation
      of
      any Subsidiary, requiring action under Section 5.9; 

     

    (g)
      any
      development or event that has had or could reasonably be expected to have a
      Material Adverse Effect; or

     

    
      
        
        

      

      
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          27 -

        
          

        

      

      
        
        

      

    

     

    (h)
      the
      occurrence of any default under any franchise agreement or material lease or
      other material agreement.

     

    Each
      notice pursuant to this Section 5.7 shall be accompanied by a statement of
      a
      Responsible Officer setting forth details of the occurrence referred to therein
      and stating what action the relevant Covered Party proposes to take with respect
      thereto.

     

    5.8
       Compliance
      with Laws. (a)
      Comply in all material respects with all Requirements of Law, including without
      limitation all applicable health, securities and franchise laws and regulations,
      and all applicable restrictions imposed by all Governmental Authorities,
      applicable to it and its property, (b) conform with and duly observe in all
      material respects all laws, rules and regulations and all other valid
      requirements of any regulatory authority with respect to the conduct of its
      business; and (c) obtain and maintain all material licenses, permits,
      certifications and approvals of all applicable Governmental Authorities as
      are
      required for the conduct of its business as currently conducted and herein
      contemplated.

     

    5.9
       Additional
      Collateral; Subsidiaries; New Units.

     

    (a)
      With
      respect to any property (or leasehold interest therein) acquired after the
      Closing Date by any Covered Party, execute and deliver any documentation (which,
      in the case of any owned real property, may include a first priority mortgage,
      in form and substance satisfactory to the Lender (a “Mortgage”))
      as
      the Lender may deem necessary or advisable to grant to the Lender a perfected
      first priority security interest in such property (or leasehold
      interest).

     

    (b)
      Not
      form or acquire any direct or indirect Subsidiary, except the Borrower as a
      wholly-owned Subsidiary of the Guarantor.

     

    (c)
      Use
      its best efforts, before entering into any new lease with respect to any Leased
      Properties, obtain from the landlord relating thereto a lien waiver and consent
      in favor of the Lender, in form and substance satisfactory to the
      Lender.

     

    (d)
      Insure that all Units opened after the date hereof are owned by the Borrower.
      Any interest in any restaurant or Unit now or hereafter acquired by the
      Guarantor shall be an asset owned directly by the Borrower.

     

    5.10
       Depository
      Accounts; Additional Accounts. Commencing
      on the 30th day after the Closing Date, maintain all operating, depository
      and
      disbursement bank accounts with the Lender, except as otherwise permitted by
      Section 4(j) of the Security Agreement.

     

    5.11
       Communications
      with Accountants. The
      Borrower authorizes the Lender to communicate directly with the Borrower’s
      independent certified public accountants and has instructed those accountants
      in
      writing to disclose to and discuss with the Lender any and all prepared
      financial statements and all other supporting financial documents and schedules
      delivered to the Lender by any Loan Party.

     

    SECTION
      6. NEGATIVE
      COVENANTS

     

    The
      Borrower hereby agrees that, so long as any Loan or other amount is owing to
      the
      Lender hereunder, the Borrower shall not, and shall not permit any of the other
      Covered Parties to, directly or indirectly:

     

    
      
        
        

      

      
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          28 -

        
          

        

      

      
        
        

      

    

     

    6.1
       Financial
      Condition Covenants.

     

    (a)
      Minimum
      New Equity.
      Fail to
      cause the Guarantor to raise the New Equity by September 30, 2005.

     

    (b)
      Consolidated
      Debt Service Coverage Ratio.
      Commencing with the four-quarter period ending December 31, 2005 and for each
      four-quarter period thereafter, permit the Consolidated Debt Service Coverage
      Ratio at any time to be less than 1.25 to 1.0, tested on the last day of each
      fiscal quarter of the Borrower.

     

    (c)
      Consolidated
      Senior Funded Debt to EBITDA Ratio.
      Permit
      the Consolidated Senior Funded Debt to EBITDA Ratio (i) at any time during
      the
      period from December 31, 2005 to December 30, 2006 to be more than 2.5 to 1
      and
      (ii) at any time during the period after December 31, 2006 to be more than
      2.0
      to 1.0, tested, in each case, on the last day of each fiscal quarter of the
      Borrower.

     

    (d)
      Consolidated
      Maintenance Capital Expenditures.
      Permit
      the Consolidated Maintenance Capital Expenditures of the Borrower for any
      four-quarter period to exceed the product of $20,000 times the number of
      Existing Units as of the last day of such four-quarter period, tested on the
      last day of such four-quarter period; provided, however, for the purposes of
      this Section 6.1(d) there shall be excluded from the calculation of Consolidated
      Maintenance Capital Expenditures (i) the aggregate amount thereof incurred
      prior
      to the date of this Agreement on the Existing Unit in Watertown, Massachusetts
      and (ii) $50,000 per each Existing Unit existing as of the date of this
      Agreement incurred in the fiscal year ending December 31, 2005.

     

    (e)
      Consolidated
      New Unit Capital Expenditures.
      Until
      the New Equity Date, the Borrower will not make any Consolidated New Unit
      Capital Expenditures. After the New Equity Date, the Borrower will not build,
      purchase or otherwise acquire or develop new Units unless (i) all expenditures
      in connection therewith are fully funded by Borrower in a manner reasonably
      satisfactory to the Lender, (ii) both before and after giving effect to such
      activity, no Default or Event of Default shall have occurred and be continuing
      and (iii) prior to undertaking the same, the Borrower shall have supplied the
      Lender with a certificate, executed by a Responsible Officer, detailing such
      compliance. 

     

    6.2
       Indebtedness.
      Create,
      issue, incur, assume, become liable in respect of or suffer to exist any
      Indebtedness, except:

     

    (a)
      Indebtedness of any Loan Party pursuant to any Loan Document;

     

    (b)
      Indebtedness to the Borrower, provided
      that the
      aggregate principal amount of the Indebtedness of the Guarantor to the Borrower
      shall not exceed the lesser of $400,000 or the aggregate amount of Additional
      Term Loans, and the Guarantor shall have no Indebtedness to the Borrower prior
      to the New Equity Date;

     

    (c)
      Indebtedness outstanding on the date hereof and listed on Schedule 6.2(c),
      but
      not any refinancings, refundings, renewals or extensions thereof; 

     

    (d)
      Subordinated Debt;

     

    (e)
      the
      Seller Debt, in an outstanding principal amount not exceeding the outstanding
      principal amount otherwise due or to become due thereunder, as in effect on
      the
      date hereof; and

     

    
      
        
        

      

      
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          29 -

        
          

        

      

      
        
        

      

    

     

    (f)
      Indebtedness (including, without limitation, Capital Lease Obligations) secured
      by Liens permitted by Section 6.3(f) in an aggregate principal amount not to
      exceed 100,000 at any one time outstanding with respect to Existing Units
      existing as of the date hereof and $200,000 at any one time outstanding with
      respect to new Units opening after the date hereof.

     

    6.3
       Liens.
      Create,
      incur, assume or suffer to exist any Lien upon any of its property, whether
      now
      owned or hereafter acquired, except:

    


    (a)
      Liens
      for taxes not yet due or that are being contested in good faith by appropriate
      proceedings, provided
      that
      adequate reserves with respect thereto are maintained on the books of the
      Borrower or its Subsidiaries, as the case may be, in conformity with
      GAAP;

     

    (b)
      carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like
      Liens arising in the ordinary course of business that are not overdue for a
      period of more than 30 days or that are being contested in good faith by
      appropriate proceedings;

     

    (c)
      pledges or deposits in connection with workers’ compensation, unemployment
      insurance and other social security legislation, other than any Lien imposed
      by
      ERISA;

     

    (d)
      deposits to secure the performance of bids, trade contracts (other than for
      borrowed money), leases, statutory obligations, surety and appeal bonds,
      performance bonds and other obligations of a like nature incurred in the
      ordinary course of business;

     

    (e)
      Liens
      in existence on the date hereof listed on Schedule 6.3(e), securing Indebtedness
      permitted by Section 6.2(c), provided
      that no
      such Lien is spread to cover any additional property after the Closing Date
      and
      that the amount of Indebtedness secured thereby is not increased;

     

    (f)
      Liens
      securing Indebtedness of any Covered Party incurred as permitted under Section
      6.2(f) to finance the acquisition of fixed or capital assets, provided
      that (i)
      such Liens shall be created substantially simultaneously with the acquisition
      of
      such fixed or capital assets, (ii) such Liens do not at any time encumber any
      property other than the property financed by such Indebtedness, and (iii) the
      amount of Indebtedness secured thereby is not increased; and

     

    (g)
      Liens
      created pursuant to the Security Documents.

     

    6.4
       Fundamental
      Changes. Enter
      into any merger, consolidation or amalgamation, or liquidate, wind up or
      dissolve itself (or suffer any liquidation or dissolution), or Dispose of all
      or
      substantially all of its property or business.

     

    6.5
       Disposition
      of Property. Dispose
      of any of its property, whether now owned or hereafter acquired, or, in the
      case
      of any Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock
      to any Person, except:

     

    (a)
      the
      Disposition of obsolete or worn out property in the ordinary course of business;
      and

     

    (b)
      the
      sale of inventory in the ordinary course of business.

     

    
      
        
        

      

      
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          30 -

        
          

        

      

      
        
        

      

    

     

    6.6
       Restricted
      Payments.

     

    (a)
      Without the prior written consent of the Lender, declare, make, or pay any
      distribution of any kind whatsoever or dividend (other than dividends payable
      solely in common stock (or equivalent interests) of the Person making such
      dividend) on, or make any payment on account of, or set apart assets for a
      sinking or other analogous fund for, the purchase, redemption, defeasance,
      retirement or other acquisition of, any Capital Stock of any Covered Party,
      whether now or hereafter outstanding; or 

     

    (b)
      make
      any other distribution in respect thereof, either directly or indirectly,
      whether in cash or property or in obligations of any Covered Party
      (collectively, “Restricted
      Payments”),
      except that any Subsidiary of the Borrower may make Restricted Payments to
      the
      Borrower.

     

    6.7
       Stock.
      Issue
      or
      permit to be outstanding any Capital Stock not expressly provided for in its
      certificate of incorporation as in effect on the Closing Date (or, in the case
      of any Subsidiary, as approved by the Lender).

     

    6.8
       Investments.
      Make
      any
      advance, loan, extension of credit (by way of guaranty or otherwise) or capital
      contribution to, or purchase any Capital Stock, bonds, notes, debentures or
      other debt securities of, or any assets constituting a business unit of, or
      make
      any other investment in, any Person (all of the foregoing, “Investments”),
      except:

     

    (a)
      extensions of trade credit in the ordinary course of business;

     

    (b)
      Investments in Cash Equivalents;

     

    (c)
      loans
      and advances from the Guarantor to employees of Guarantor not to exceed $100,000
      in the aggregate in the ordinary course of business (including for travel,
      entertainment and relocation expenses) at any one time outstanding;
      and

     

    (d)
      in
      the case of the Borrower, loans to the Guarantor after the New Equity Date
      to
      the extent allowed under Section 6.2(b), provided
      that the
      aggregate principal amount of all loans extended by the Borrower to the
      Guarantor shall be evidenced by demand promissory notes endorsed over to the
      Lender as Collateral, in form and substance satisfactory to the Lender, and
      shall not exceed the lesser of (i) $400,000 or (ii) the aggregate principal
      amount of Additional Term Loans advanced hereunder.

     

    6.9
       Modifications
      of Certain Debt Instruments. Amend,
      modify, waive or otherwise change, or consent or agree to any amendment,
      modification, waiver or other change to, any of the terms of any
      Indebtedness.

     

    6.10
       Transactions
      with Affiliates and Insiders. Enter
      into any transaction, including any purchase, sale, lease or exchange of
      property, the rendering of any service or the payment of any management,
      advisory or similar fees, with any Affiliate (other than the Borrower or the
      Guarantor) of such Covered Party except:

     

    (a)
      normal and reasonable compensation of officers and other employees, and normal
      and reasonable reimbursement of expenses and indemnification of officers and
      directors; 

     

    (b)
      any
      consulting agreement with Seller, provided that such payments to Seller will
      be
      subordinated on the terms set forth in the Subordination Agreement;
      and

     

    
      
        
        

      

      
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          31 -

        
          

        

      

      
        
        

      

    

     

    (c)
      any
      such other transaction not covered by subsection (a) or (b) above that is
      (i) otherwise permitted under this Agreement, (ii) in the ordinary course
      of business of the relevant Covered Party, and (iii) upon fair and
      reasonable terms no less favorable, in the reasonable judgment of the Lender,
      to
      the relevant Covered Party than it would obtain in a comparable arm’s length
      transaction with a Person that is not an Affiliate.

     

    6.11
       Sales
      and Leasebacks. Enter
      into any arrangement with any Person providing for the leasing by any Covered
      Party of real or personal property that has been or is to be sold or transferred
      by such Covered Party to such Person or to any other Person to whom funds have
      been or are to be advanced by such Person on the security of such property
      or
      rental obligations of such Covered Party.

     

    6.12
       Changes
      in Fiscal Periods. Permit
      the fiscal year of the Borrower to end on a day other than December 31 or change
      the Borrower’s method of determining fiscal quarters.

     

    6.13
       Negative
      Pledge Clauses. Enter
      into or suffer to exist or become effective any agreement that prohibits or
      limits the ability of any Covered Party to create, incur, assume or suffer
      to
      exist any Lien upon any of its property or revenues, whether now owned or
      hereafter acquired, other than (a) this Agreement and the other Loan Documents
      and (b) any agreements governing any purchase money Liens or Capital Lease
      Obligations otherwise permitted hereby (in which case, any prohibition or
      limitation may only be effective against the assets financed
      thereby).

    


    6.14
       Clauses
      Restricting Subsidiary Distributions. Enter
      into or suffer to exist or become effective any consensual encumbrance or
      restriction on the ability of any Subsidiary of the Borrower to (a) make
      Restricted Payments in respect of any Capital Stock of such Subsidiary held
      by,
      or pay any Indebtedness owed to, the Borrower or any other Subsidiary of the
      Borrower, (b) make loans or advances to, or other Investments in, the Borrower
      or any other Subsidiary of the Borrower or (c) transfer any of its assets to
      the
      Borrower or any other Subsidiary of the Borrower, except for such encumbrances
      or restrictions existing under or by reason of any restrictions existing under
      the Loan Documents.

     

    6.15
       Lines
      of Business; Location of Business. Enter
      into any business, either directly or through any Subsidiary, except for those
      businesses in such Covered Party is engaged on the date of this Agreement,
      or
      conduct any part of its business outside of the United States of
      America.

     

    6.16
       Use
      of
      Proceeds. Use
      the
      proceeds of the Loans, whether directly or indirectly, and whether immediately,
      incidentally or ultimately, to purchase or carry margin stock (within the
      meaning of Regulation U of the Board) or to extend credit to others for the
      purpose of purchasing or carrying margin stock or to refund indebtedness
      originally incurred for such purpose.

     

    6.17
       Full
      Funding. Fail
      to
      satisfy the conditions to draw down or fail to draw down the entire Commitment
      by the last day of the Drawdown Period.

     

    SECTION
      7. EVENTS
      OF
      DEFAULT

     

    If
      any of
      the following events shall occur and be continuing:

     

    (a)
      the
      Borrower shall fail to pay any principal of or interest on any Loan when due
      in
      accordance with the terms hereof; or the Borrower shall fail to pay any other
      amount payable hereunder or under any other Loan Document, within three Business
      Days after any such other amount becomes due in accordance with the terms
      hereof; or

     

    (b)
      any
      representation or warranty made or deemed made by any Loan Party herein or
      in
      any other Loan Document or that is contained in any certificate, document or
      financial or other statement furnished by it at any time under or in connection
      with this Agreement or any such other Loan Document shall prove to have been
      inaccurate in any material respect on or as of the date made or deemed made;
      or

     

    
      
        
        

      

      
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          32 -

        
          

        

      

      
        
        

      

    

     

    (c)
      any
      Loan Party shall default in the observance or performance of any agreement
      contained in Section 5 or 6 of this Agreement or Section 4 of the Security
      Agreement; or

     

    (d)
      any
      Loan Party shall default in the observance or performance of any other agreement
      contained in this Agreement or any other Loan Document (other than as provided
      in paragraphs (a) through (c) of this Section), and such default shall continue
      unremedied for a period of 15 days; or

     

    (e)
      any
      Covered Party shall (i) default in making any payment of any principal of any
      Indebtedness (including any Guarantee Obligation, but excluding the Loans)
      on
      the scheduled or original due date with respect thereto; or (ii) default in
      making any payment of any interest on any such Indebtedness beyond the period
      of
      grace, if any, provided in the instrument or agreement under which such
      Indebtedness was created; or (iii) default in the observance or performance
      of
      any other agreement or condition relating to any such Indebtedness or contained
      in any instrument or agreement evidencing, securing or relating thereto, or
      any
      other event shall occur or condition exist, the effect of which default or
      other
      event or condition is to cause, or to permit the holder or beneficiary of such
      Indebtedness (or a trustee or agent on behalf of such holder or beneficiary)
      to
      cause, with the giving of notice if required, such Indebtedness to become due
      prior to its stated maturity or (in the case of any such Indebtedness
      constituting a Guarantee Obligation) to become payable; provided,
      that a
      default, event or condition described in clause (i), (ii) or (iii) of this
      paragraph (e) shall not at any time constitute an Event of Default unless,
      at
      such time, one or more defaults, events or conditions of the type described
      in
      clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be
      continuing with respect to Indebtedness the outstanding principal amount of
      which exceeds in the aggregate $25,000; or

     

    (f)
      (i)
      any Covered Party shall commence any case, proceeding or other action (A) under
      any existing or future law of any jurisdiction, domestic or foreign, relating
      to
      bankruptcy, insolvency, reorganization or relief of debtors, seeking to have
      an
      order for relief entered with respect to it, or seeking to adjudicate it a
      bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
      winding-up, liquidation, dissolution, composition or other relief with respect
      to it or its debts, or (B) seeking appointment of a receiver, trustee,
      custodian, conservator or other similar official for it or for all or any
      substantial part of its assets, or any Covered Party shall make a general
      assignment for the benefit of its creditors; or (ii) there shall be commenced
      against any Covered Party any case, proceeding or other action of a nature
      referred to in clause (i) above that (A) results in the entry of an order for
      relief or any such adjudication or appointment or (B) remains undismissed,
      undischarged or unbonded for a period of 60 days; or (iii) there shall be
      commenced against any Covered Party any case, proceeding or other action seeking
      issuance of a warrant of attachment, execution, distraint or similar process
      against all or any substantial part of its assets that results in the entry
      of
      an order for any such relief that shall not have been vacated, discharged,
      or
      stayed or bonded pending appeal within 60 days from the entry thereof; or (iv)
      any Covered Party shall take any action in furtherance of, or indicating its
      consent to, approval of, or acquiescence in, any of the acts set forth in clause
      (i), (ii), or (iii) above; or (v) any Covered Party shall generally not, or
      shall be unable to, or shall admit in writing its inability to, pay its debts
      as
      they become due; or

     

    
      
        
        

      

      
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          33 -

        
          

        

      

      
        
        

      

    

     

    (g)
      (i)
      any Person shall engage in any “prohibited transaction” (as defined in Section
      406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any
“accumulated funding deficiency” (as defined in Section 302 of ERISA), whether
      or not waived, shall exist with respect to any Plan or any Lien in favor of
      the
      PBGC or a Plan shall arise on the assets of any Covered Party or any Commonly
      Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
      proceedings shall commence to have a trustee appointed, or a trustee shall
      be
      appointed, to administer or to terminate, any Single Employer Plan, which
      Reportable Event or commencement of proceedings or appointment of a trustee
      is,
      in the reasonable opinion of the Required Lenders, likely to result in the
      termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
      Employer Plan shall terminate for purposes of Title IV of ERISA, (v) any
      Covered Party or any Commonly Controlled Entity shall, or in the reasonable
      opinion of the Required Lenders is likely to, incur any liability in connection
      with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
      Plan or (vi) any other event or condition shall occur or exist with respect
      to a
      Plan; and in each case in clauses (i) through (vi) above, such event or
      condition, together with all other such events or conditions, if any, could,
      in
      the sole judgment of the Lender, reasonably be expected to have a Material
      Adverse Effect; or

     

    (h)
      one
      or more judgments or decrees shall be entered against any Covered Party
      involving in the aggregate a liability (not paid or fully covered by insurance
      as to which the relevant insurance company has acknowledged coverage) of $50,000
      or more, and all such judgments or decrees shall not have been vacated,
      discharged, stayed or bonded pending appeal within 30 days from the entry
      thereof; or

     

    (i)
      any
      of the Security Documents shall cease, for any reason, to be in full force
      and
      effect, or any Loan Party or any Affiliate of any Loan Party shall so assert,
      or
      any Lien created by any of the Security Documents shall cease to be enforceable
      and of the same effect and priority purported to be created thereby;
      or

     

    (j)
      the
      guarantee contained in the Guarantee and Security Agreement or in any other
      guarantee of the Obligations shall cease, for any reason, to be in full force
      and effect or any Covered Party shall so assert; or

     

    (k)
      any
      Change of Control shall occur; or 

     

    (l)
      any
      obligations subordinated pursuant to any Subordination Agreement or any other
      subordination agreement executed in favor of the Lender shall cease, for any
      reason, to be validly subordinated to the obligations of the Loan Parties under
      the Loan Documents as provided in the applicable Subordination Agreement or
      other subordination agreement or any Covered Party or Person who is a party
      to
      it shall so assert; or

     

    (m)
      the
      Landlord under any real property lease for any Unit shall take any action to
      terminate such lease, without the prior written consent of Lender;

     

    then,
      and
      in any such event, (A) if such event is an Event of Default specified in clause
      (i) or (ii) of paragraph (f) above with respect to the Borrower, automatically
      the Loans shall immediately terminate (with accrued interest thereon) and all
      other amounts owing under this Agreement and the other Loan Documents shall
      immediately become due and payable, and (B) if such event is any other Event
      of
      Default, either or both of the following actions may be taken: the Lender may,
      by notice to the Borrower declare the Loans (with accrued interest thereon)
      and
      all other amounts owing under this Agreement and the other Loan Documents to
      be
      due and payable forthwith, whereupon the same shall immediately become due
      and
      payable. Except as expressly provided above in this Section, presentment,
      demand, protest and all other notices of any kind are hereby expressly waived
      by
      the Borrower.

     

    
      
        
        

      

      
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    SECTION
      8. MISCELLANEOUS

     

    8.1
       Amendments
      and Waivers. Neither
      this Agreement, any other Loan Document, nor any terms hereof or thereof may
      be
      amended, supplemented, waived or modified except by a writing duly executed
      by
      the Borrower and the Lender. 

     

    8.2
       Notices.
      All
      notices, requests and demands to or upon the respective parties hereto to be
      effective shall be in writing (including by telecopy), and, unless otherwise
      expressly provided herein, shall be deemed to have been duly given or made
      when
      delivered, or three Business Days after being deposited in the mail, postage
      prepaid, or, in the case of telecopy notice, when received, addressed as follows
      in the case of the Borrower or the Lender, or to such other address as may
      be
      hereafter notified by the parties hereto:

     

    
      	
              Borrower:

            	
              KFLG
                Watertown, Inc.

            
	 	
              20
                Guest Street, Suite 450

            
	 	
              Brighton
                Landing East

            
	 	
              Brighton,
                MA 02135

            
	 	
              Attention:
                Eric Spitz

            
	 	
              Telecopy:
                617-787-6010

            
	 	
              Telephone:
                617-787-6000

            
	 	 
	
              Lender:

            	
              TD
                Banknorth, N.A.

            
	 	
              370
                Main Street

            
	 	
              Worcester,
                MA 01608

            
	 	
              Attention:
                Douglas Bulfinch

            
	 	
              Telecopy:
                978-524-2071

            
	 	
              Telephone:
                978-524-2075

            
	 	 
	
              With
                a copy to:

            	
              Edwards
                & Angell, LLP

            
	 	
              101
                Federal Street

            
	 	
              Boston,
                Massachusetts 02110

            
	 	
              Attention:
                Susan E. Siebert, Esq.

            
	 	
              Telecopy:
                (888) 325-9131

            
	 	
              Telephone:
                (617) 951-2220

            


    

     

    provided
      that any
      notice, request or demand to or upon the Lender shall not be effective until
      received. 

     

    The
      Lender or the Borrower may, in their discretion, agree to accept notices and
      other communications to it hereunder by electronic communications pursuant
      to
      procedures approved by it; provided
      that
      approval of such procedures may be limited to particular notices or
      communications.

     

    8.3
       No
      Waiver; Cumulative Remedies. No
      failure to exercise and no delay in exercising on the part of the Lender any
      right, remedy, power or privilege hereunder or under the other Loan Documents
      shall operate as a waiver thereof; nor shall any single or partial exercise
      of
      any right, remedy, power or privilege hereunder preclude any other or further
      exercise thereof or the exercise of any other right, remedy, power or privilege.
      The rights, remedies, powers and privileges herein provided are cumulative
      and
      not exclusive of any rights, remedies, powers and privileges provided by
      law.

     

    
      
        
        

      

      
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    8.4
       Survival
      of Representations and Warranties. All
      representations and warranties made hereunder, in the other Loan Documents
      and
      in any document, certificate or statement delivered pursuant hereto or in
      connection herewith shall survive the execution and delivery of this Agreement
      and the making of the Loans and other extensions of credit
      hereunder.

     

    8.5
       Payment
      of Expenses and Taxes. The
      Borrower agrees (a) to pay or reimburse the Lender for all its
      out-of-pocket costs and expenses incurred in connection with the development,
      preparation and execution of, and any amendment, supplement or modification
      to,
      this Agreement and the other Loan Documents and any other documents prepared
      in
      connection herewith or therewith, and the consummation and administration of
      the
      transactions contemplated hereby and thereby, including the reasonable fees
      and
      disbursements of counsel to the Lender and filing and recording fees and
      expenses, with statements with respect to the foregoing to be submitted to
      the
      Borrower prior to the Closing Date (in the case of amounts to be paid on the
      Closing Date) and from time to time thereafter on a quarterly basis or such
      other periodic basis as the Lender shall deem appropriate, (b) to pay or
      reimburse the Lender for all its costs and expenses incurred in connection
      with
      the enforcement or preservation of any rights under this Agreement, the other
      Loan Documents and any such other documents, including the fees and
      disbursements of counsel (including the allocated fees and expenses of in-house
      counsel) to the Lender, (c) to pay, indemnify, and hold the Lender harmless
      from, any and all recording and filing fees and any and all liabilities with
      respect to, or resulting from any delay in paying, stamp, excise and other
      taxes, if any, that may be payable or determined to be payable in connection
      with the execution and delivery of, or consummation or administration of any
      of
      the transactions contemplated by, or any amendment, supplement or modification
      of, or any waiver or consent under or in respect of, this Agreement, the other
      Loan Documents and any such other documents, and (d) to pay, indemnify, and
      hold
      the Lender and its respective officers, directors, employees, affiliates, agents
      and controlling persons (each, an “Indemnitee”)
      harmless from and against any and all other liabilities, obligations, losses,
      damages, penalties, actions, judgments, suits, costs, expenses or disbursements
      of any kind or nature whatsoever with respect to the negotiation, execution,
      delivery, enforcement, performance and administration of this Agreement, the
      other Loan Documents and any such other documents, including any of the
      foregoing relating to the use of proceeds of the Loans or the violation of,
      noncompliance with or liability under, any Environmental Law applicable to
      the
      operations of any Covered Party or any of the Properties and the reasonable
      fees
      and expenses of legal counsel in connection with claims, actions or proceedings
      by any Indemnitee against any Loan Party under any Loan Document (all the
      foregoing in this clause (d), collectively, the “Indemnified
      Liabilities”),
      provided,
      that
      the Borrower shall have no obligation hereunder to any Indemnitee with respect
      to Indemnified Liabilities to the extent such Indemnified Liabilities are found
      by a final and nonappealable decision of a court of competent jurisdiction
      to
      have resulted from the gross negligence or willful misconduct of such Indemnitee
      under the Loan Documents. Without limiting the foregoing, and to the extent
      permitted by applicable law, the Borrower agrees not to assert and to cause
      its
      Subsidiaries not to assert, and hereby waives and agrees to cause its
      Subsidiaries to waive, all rights for contribution or any other rights of
      recovery with respect to all claims, demands, penalties, fines, liabilities,
      settlements, damages, costs and expenses of whatever kind or nature, under
      or
      related to Environmental Laws, that any of them might have by statute or
      otherwise against any Indemnitee. All amounts due under this Section 8.5 shall
      be payable not later than 30 days after written demand therefor. The agreements
      in this Section 8.5 shall survive repayment of the Loans and all other amounts
      payable hereunder.

     

    8.6
       Successors
      and Assigns; Participations and Assignments.

     

    (a)
      The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the parties hereto and their respective successors and assigns permitted hereby,
      except that the Borrower may not assign or otherwise transfer any of their
      respective rights or obligations hereunder without the prior written consent
      of
      the Lender (and any attempted assignment or transfer by the Borrower without
      such consent shall be null and void).

     

    
      
        
        

      

      
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          36 -

        
          

        

      

      
        
        

      

    

     

    (b)
      (i)
      The Lender may assign to one or more assignees (each, an “Assignee”)
      all or
      a portion of its rights and obligations under this Agreement (including Loans
      at
      the time owing to it); provided, however in the event the Assignee is not a
      financial institution and no Event of Default then exists hereunder, the Lender
      shall obtain Borrower's consent to such Assignee (which consent shall not be
      unreasonably withheld or delayed). 

     

    (ii)
      The
      Lender may sell participations to one or more participants (each, a
“Participant”),
      all
      or a portion of its rights and obligations under this Agreement. The Borrower
      agrees that each Participant shall be entitled to the benefits of this Agreement
      to the same extent as if it held its interest directly.

     

    (c)
      The
      Lender may at any time pledge or assign a security interest in all or any
      portion of its rights under this Agreement to secure obligations of the Lender,
      including any pledge or assignment to secure obligations to a Federal Reserve
      Bank, and this Section shall not apply to any such pledge or assignment of
      a
      security interest; provided
      that no
      such pledge or assignment of a security interest shall release the Lender from
      any of its obligations hereunder or substitute any such pledgee or Assignee
      for
      the Lender as a party hereto. The Borrower, upon receipt of written notice
      from
      the Lender, agrees to issue Notes to the Lender to facilitate transactions
      of
      the type described in this Section.

     

    8.7
       Adjustments;
      Set-off. In
      addition to any rights and remedies of the Lender provided by law, the Lender
      shall have the right, without prior notice to the Borrower, any such notice
      being expressly waived by the Borrower to the extent permitted by applicable
      law, upon any amount becoming due and payable by the Borrower hereunder (whether
      at the stated maturity, by acceleration or otherwise), to set off and
      appropriate and apply against such amount any and all deposits (general or
      special, time or demand, provisional or final), in any currency, and any other
      credits, indebtedness or claims, in any currency, in each case whether direct
      or
      indirect, absolute or contingent, matured or unmatured, at any time held or
      owing by the Lender, any of its affiliates or any branch or agency of either
      thereof to or for the credit or the account of any Covered Party, whether or
      not
      the Lender is otherwise fully secured. The Lender agrees promptly to notify
      the
      Borrower after any such setoff and application made by the Lender, provided
      that the
      failure to give such notice shall not affect the validity of such setoff and
      application.

     

    8.8
       Counterparts.
      This
      Agreement may be executed by one or more of the parties to this Agreement on
      any
      number of separate counterparts, and all of said counterparts taken together
      shall be deemed to constitute one and the same instrument. Delivery of an
      executed signature page of this Agreement by facsimile transmission shall be
      effective as delivery of a manually executed counterpart hereof.

     

    8.9
       Severability.
      Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other jurisdiction.

     

    8.10
       Integration.
      This
      Agreement and the other Loan Documents represent the entire agreement of the
      Borrower and the Lender with respect to the subject matter hereof and thereof,
      and there are no promises, undertakings, representations or warranties by the
      Lender relative to the subject matter hereof not expressly set forth or referred
      to herein or in the other Loan Documents.

     

    
      
        
        

      

      
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          37 -

        
          

        

      

      
        
        

      

    

     

    8.11
       Governing
      Law.  This
      Agreement and the rights and obligations of the parties under this Agreement
      shall be governed by, and construed and interpreted in accordance with, the
      laws
      of The Commonwealth of Massachusetts.

     

    8.12
       Submission
      To Jurisdiction; Waivers. The
      Borrower hereby irrevocably and unconditionally:

     

    (a)
      submits for itself and its property in any legal action or proceeding relating
      to this Agreement and the other Loan Documents to which it is a party, or for
      recognition and enforcement of any judgment in respect thereof, to the
      non-exclusive general jurisdiction of the courts of The Commonwealth of
      Massachusetts, the courts of the United States for the District of
      Massachusetts, and appellate courts from any thereof;

     

    (b)
      consents that any such action or proceeding may be brought in such courts and
      waives any objection that it may now or hereafter have to the venue of any
      such
      action or proceeding in any such court or that such action or proceeding was
      brought in an inconvenient court and agrees not to plead or claim the
      same;

     

    (c)
      agrees that service of process in any such action or proceeding may be effected
      by mailing a copy thereof by registered or certified mail (or any substantially
      similar form of mail), postage prepaid, to the Borrower at its address specified
      hereunder;

     

    (d)
      agrees that nothing herein shall affect the right to effect service of process
      in any other manner permitted by law or shall limit the right to sue in any
      other jurisdiction; and

     

    (e)
      waives, to the maximum extent not prohibited by law, any right it may have
      to
      claim or recover in any legal action or proceeding referred to in this Section
      any special, exemplary, punitive or consequential damages.

     

    8.13
       Acknowledgements.
      The
      Borrower hereby acknowledges that:

     

    (a)
      it
      has been advised by counsel in the negotiation, execution and delivery of this
      Agreement and the other Loan Documents;

     

    (b)
      the
      Lender has no fiduciary relationship with or duty to the Borrower or any other
      Covered Party arising out of or in connection with this Agreement or any of the
      other Loan Documents, and the relationship between the Lender, on one hand,
      and
      the Covered Parties, on the other hand, in connection herewith or therewith
      is
      solely that of debtor and creditor; and

     

    (c)
      no
      joint venture is created hereby or by the other Loan Documents or otherwise
      exists by virtue of the transactions contemplated hereby among Covered Parties
      and the Lender.

     

    8.14
       WAIVERS
      OF JURY TRIAL. THE
      BORROWER AND THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL
      BY
      JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
      LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

     

    8.15
       USA
      Patriot Act Notice. The
      Lender hereby notifies the Borrower that pursuant to the requirements of the
      USA
      Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
      (the “Act”), it is required to obtain, verify and record information that
      identifies the Borrower, which information includes the name and address of
      the
      Borrower and other information that will allow the Lender to identify the
      Borrower in accordance with the Act.

     

    
      
        
        

      

      
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          38 -

        
          

        

      

      
        
        

      

    

     

    8.16
       Replacement
      Note. Upon
      receipt of an appropriate and reasonably acceptable affidavit of an officer
      of
      the Lender as to the loss, theft, destruction or mutilation of any Note or
      of
      any other Loan Document which is not of public record and, in the case of any
      such mutilation, upon surrender and cancellation of such Note or other Loan
      Document and receipt of the indemnity described below, the Borrower will, and
      will cause other Loan Parties to, issue, in lieu thereof, a replacement Note
      or
      other Loan Document in the same principal amount (as to any Note) and in any
      event of like tenor and upon such issuance the original Note or other Loan
      Document shall be deemed cancelled. In connection with any such issuance of
      a
      replacement Note or other Loan Document, the Lender shall issue a written
      indemnification (which need not be secured) in favor of the Loan Parties with
      respect to such lost, stolen or destroyed Note or other Loan Document in form
      and substance reasonably satisfactory to the Loan Parties.

     

    
      
        
        

      

      
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          39 -

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed and delivered by their proper and duly authorized officers as of the
      day and year first above written.

    

      
        	 	
                KFLG
                  WATERTOWN, INC.

              
	 	 
	 	 
	 	
                By:

              	 
	 	 	
                Name:

              
	 	 	
                Title:
                  

              
	 	 
	 	 
	 	
                TD
                  BANKNORTH, N.A.

              
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	 	
                Name:

              
	 	 	
                Title: