<PAGE>   1
                                                                   Exhibit 10.12


                                CREDIT AGREEMENT



                                  by and among



                        P.F. CHANG'S CHINA BISTRO, INC.,
                                  as Borrower,


                             BANK OF AMERICA, N.A.,
                             as Agent and as Lender

                                       and

                   THE LENDERS PARTY HERETO FROM TIME TO TIME



                                December 3, 1999


                         BANK OF AMERICA SECURITIES LLC,
                   as Sole Lead Arranger and Sole Book Manager
<PAGE>   2
                                TABLE OF CONTENTS

                                                                            Page


                                    ARTICLE I

                              Definitions and Terms

1.1.         Definitions...................................................   2
1.2.         Rules of Interpretation.......................................  25

                                   ARTICLE II

                              The Credit Facilities

2.1.         Loans.........................................................  27
2.2.         Use of Proceeds...............................................  29
2.3.         Notes.........................................................  30

                                   ARTICLE III

                                Letters of Credit

3.1.         Letters of Credit.............................................  31
3.2.         Reimbursement and Participations..............................  31

                                   ARTICLE IV

                   Loan Funding, Fees, and Payment Conventions

4.1          Interest Rate Options.........................................  35
4.2          Conversions and Elections of Subsequent Interest Periods......  35
4.3          Payment of Interest...........................................  36
4.4          Prepayments of Eurodollar Rate Loans..........................  36
4.5          Manner of Payment.............................................  36
4.6          Fees..........................................................  37
4.7          Pro Rata Payments.............................................  37
4.8          Computation of Rates and Fees.................................  38
4.9          Deficiency Advances; Failure to Purchase Participations.......  38
4.10         Intraday Funding..............................................  38
<PAGE>   3
                                    ARTICLE V

                                    Security

5.1.         Security......................................................  40
5.2.         Further Assurances............................................  40
5.3.         Information Regarding Collateral..............................  41

                                   ARTICLE VI

                             Change in Circumstances

6.1.         Increased Cost and Reduced Return.............................  42
6.2.         Limitation on Types of Loans..................................  43
6.3.         Illegality....................................................  43
6.4.         Treatment of Affected Loans...................................  44
6.5.         Compensation..................................................  44
6.6.         Taxes.........................................................  45

                                   ARTICLE VII

            Conditions to Making Loans and Issuing Letters of Credit

7.1.         Conditions of Initial Advance.................................  47
7.2.         Conditions of Loans and Letter of Credit......................  49

                                  ARTICLE VIII

                         Representations and Warranties

8.1.         Organization and Authority....................................  51
8.2.         Loan Documents................................................  51
8.3.         Solvency......................................................  52
8.4.         Subsidiaries and Stockholders.................................  52
8.5.         Ownership Interests...........................................  52
8.6.         Financial Condition...........................................  52
8.7.         Title to Properties...........................................  53
8.8.         Taxes.........................................................  53
8.9.         Other Agreements..............................................  53
8.10.        Litigation....................................................  54
8.11.        Margin Stock..................................................  54
8.12.        Investment Company............................................  54
8.13.        Intellectual Property.........................................  54
8.14.        No Untrue Statement...........................................  54
8.15.        No Consents, Etc. ............................................  55


                                       ii
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8.16.        Employee Benefit Plans........................................  55
8.17.        No Default....................................................  56
8.18.        Environmental Laws............................................  56
8.19.        Employment Matters............................................  56
8.20.        RICO..........................................................  57
8.21.        Year 2000 Compliance..........................................  57
8.22.        Operating Facilities..........................................  57

                                   ARTICLE IX

                              Affirmative Covenants

9.1.         Financial Reports, Etc. ......................................  58
9.2.         Maintain Properties...........................................  59
9.3.         Existence, Qualification, Etc. ...............................  59
9.4.         Regulations and Taxes.........................................  59
9.5.         Insurance.....................................................  60
9.6.         True Books....................................................  60
9.7.         Year 2000 Compliance..........................................  60
9.8.         Right of Inspection...........................................  60
9.9.         Observe all Laws..............................................  60
9.10.        Governmental Licenses.........................................  60
9.11.        Covenants Extending to Other Persons..........................  61
9.12.        Officer's Knowledge of Default................................  61
9.13.        Suits or Other Proceedings....................................  61
9.14.        Notice of Environmental Complaint or Condition................  61
9.15.        Environmental Compliance......................................  61
9.16.        Indemnification...............................................  61
9.17.        Further Assurances............................................  62
9.18.        Employee Benefit Plans........................................  62
9.19.        Continued Operations..........................................  63
9.20.        New Subsidiaries..............................................  63
9.21.        Post-Closing Mortgages........................................  66
9.22.        Certain Notices...............................................  66
9.23.        New Restaurants...............................................  67

                                    ARTICLE X

                               Negative Covenants

10.1.        Financial Covenants...........................................  68
10.2.        Acquisitions..................................................  68
10.3.        Capital Expenditures..........................................  68
10.4.        Liens.........................................................  68
10.5.        Indebtedness..................................................  69


                                       iii
<PAGE>   5
10.6.        Transfer of Assets............................................  70
10.7.        Investments...................................................  71
10.8.        Merger or Consolidation.......................................  71
10.9.        Restricted Payments...........................................  71
10.10.       Transactions with Affiliates..................................  71
10.11.       Compliance with ERISA, the Code and Foreign Benefit Laws......  72
10.12.       Fiscal Year...................................................  72
10.13.       Dissolution, etc..............................................  73
10.14.       Limitations on Sales and Leasebacks...........................  73
10.15.       Change in Control.............................................  73
10.16.       Rate Hedging Obligations......................................  73
10.17.       Negative Pledge Clauses.......................................  73
10.18.       Prepayments, Etc. of Indebtedness.............................  73
10.19.       Amendments to Operating Agreements............................  73

                                   ARTICLE XI

                       Events of Default and Acceleration

11.1.        Events of Default.............................................  74
11.2.        Agent to Act..................................................  77
11.3.        Cumulative Rights.............................................  77
11.4.        No Waiver.....................................................  77
11.5.        Allocation of Proceeds........................................  78

                                   ARTICLE XII

                                    The Agent

12.1.        Appointment, Powers, and Immunities...........................  79
12.2.        Reliance by Agent.............................................  79
12.3.        Defaults......................................................  80
12.4.        Rights as Lender..............................................  80
12.5.        Indemnification...............................................  80
12.6.        Non-Reliance on Agent and Other Lenders.......................  81
12.7.        Resignation of Agent..........................................  81
12.8.        Sole Lender...................................................  81


                                       iv
<PAGE>   6

                                  ARTICLE XIII


13.1.        Assignments and Participations................................  82
13.2.        Notices.......................................................  83
13.3.        Right of Set-off; Adjustments.................................  85
13.4.        Survival......................................................  85
13.5.        Expenses......................................................  85
13.6.        Amendments and Waivers........................................  86
13.7.        Counterparts..................................................  86
13.8.        Termination...................................................  86
13.9.        Indemnification; Limitation of Liability......................  87
13.10.       Severability..................................................  87
13.11.       Entire Agreement..............................................  88
13.12.       Agreement Controls............................................  88
13.13.       Usury Savings Clause..........................................  88
13.14.       Payments......................................................  88
13.15.       GOVERNING LAW; WAIVER OF JURY TRIAL...........................  89
13.16.       CONFIDENTIALITY ..............................................  90

EXHIBIT A         Applicable Commitment Percentages......................    A-1
EXHIBIT B         Form of Assignment and Acceptance......................    B-1
EXHIBIT C         Notice of Appointment (or Revocation) of Authorized
                  Representative.........................................    C-1
EXHIBIT D         Form of Borrowing Notice...............................    D-1
EXHIBIT E         Form of Interest Rate Selection Notice.................    E-1
EXHIBIT F         Form of Note...........................................    F-1
EXHIBIT G         Form of Opinion of Borrower's Counsel..................    G-1
EXHIBIT H         Compliance Certificate.................................    H-1
EXHIBIT I         Form of Facility Guaranty..............................    I-1
EXHIBIT J         Form of Security Agreement.............................    J-1
EXHIBIT K         Form of Pledge Agreement ..............................    K-1
EXHIBIT L         Form of LC Account Agreement...........................    L-1

Schedule 5.3      Information Regarding Collateral.......................    S-1
Schedule 5.4(b)   Leased Properties to be Mortgaged......................    S-2
Schedule 8.4      Subsidiaries and Investments in Other Persons..........    S-3
Schedule 8.6      Indebtedness...........................................    S-4
Schedule 8.7      Liens..................................................    S-5
Schedule 8.8      Tax Matters............................................    S-6
Schedule 8.10     Litigation.............................................    S-7
Schedule 8.22     Operating Facilities...................................    S-8


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<PAGE>   7
                                CREDIT AGREEMENT


         THIS CREDIT AGREEMENT, dated as of December 3, 1999 (the "Agreement"),
is made by and among P.F. CHANG'S CHINA BISTRO, INC., a Delaware corporation
having its principal place of business in Phoenix, Arizona (the "Borrower"),
BANK OF AMERICA, N.A., a national banking association organized and existing
under the laws of the United States, in its capacity as a Lender ("Bank of
America"), and each other financial institution executing and delivering a
signature page hereto and each other financial institution which may hereafter
execute and deliver an instrument of assignment with respect to this Agreement
pursuant to Section 13.1 (hereinafter such financial institutions may be
referred to individually as a "Lender" or collectively as the "Lenders"), and
BANK OF AMERICA, N.A., a national banking association organized and existing
under the laws of the United States, in its capacity as agent for the Lenders
(in such capacity, and together with any successor agent appointed in accordance
with the terms of Section 12.7, the "Agent");

                              W I T N E S S E T H:

         WHEREAS, the Borrower has requested that the Lenders make available to
the Borrower a revolving credit facility of up to $15,000,000, the proceeds of
which are to be used for general corporate purposes and which shall include a
letter of credit facility of up to $2,000,000 for the issuance of standby
letters of credit; and

         WHEREAS, the Lenders are willing to make such revolving credit and
letter of credit facilities available to the Borrower upon the terms and
conditions set forth herein;

         NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as
follows:


                                        1
<PAGE>   8
                                    ARTICLE I

                              Definitions and Terms

         1.1. Definitions. For the purposes of this Agreement, in addition to
the definitions set forth above, the following terms shall have the respective
meanings set forth below:

                  "Acquisition" means the acquisition of (i) a Controlling
         equity interest in another Person (including the purchase of an option,
         warrant or convertible or similar type security to acquire such a
         controlling interest at the time it becomes exercisable by the holder
         thereof), whether by purchase of such equity interest or upon exercise
         of an option or warrant for, or conversion of securities into, such
         equity interest, or (ii) assets of another Person which constitute all
         or any material part of the assets of such Person or of a line or lines
         of business conducted by such Person; provided, however, that the
         repurchase of the Management Securities of chefs, managers and/or
         regional managers shall not constitute Acquisitions hereunder.

                  "Advance" means a borrowing under the Revolving Credit
         Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan.

                  "Affiliate" means any Person (i) which directly or indirectly
         through one or more intermediaries Controls, or is Controlled by, or is
         under common Control with the Borrower; or (ii) which beneficially owns
         or holds 10% or more of any class of the outstanding voting stock (or
         in the case of a Person which is not a corporation, 10% or more of the
         equity interest) of the Borrower; or 10% or more of any class of the
         outstanding voting stock (or in the case of a Person which is not a
         corporation, 10% or more of the equity interest) of which is
         beneficially owned or held by the Borrower.

                  "Allowable Distributions" means (a) distributions to the
         Borrower or holders of Management Securities issued by partnership or
         limited liability company Subsidiaries of the Borrower (each, a
         "Reporting Entity") on or about 15 days prior to the due date for any
         tax return (including quarterly tax estimates) for each fiscal year in
         amounts sufficient to enable each such holder to discharge any Federal,
         state and local income tax liability of such minority investor arising
         as a result of the operations of the Reporting Entity in which it owns
         such minority interest, determined by assuming the applicability to
         each minority investor of the highest combined effective marginal
         Federal, state and local income tax rates; provided that if any
         Reporting Entity is not a partnership or a limited liability company
         classified for taxation purposes as a "partnership" within the meaning
         of the Code as of the last day of such fiscal year, then Allowable
         Distributions attributable to the operations of such Reporting Entity
         during such fiscal year shall be equal to zero and (b) distributions to
         the Borrower or holders of Management Securities issued by a Reporting
         Entity representing the distribution of Net Cash Flow (as defined in
         the Operating Agreement) to the holders of Management Securities in
         accordance with the Operating Agreement of such Reporting Entity.


                                        2
<PAGE>   9
                  "Applicable Commitment Fee" means that percent per annum set
         forth below, which shall be based upon the Consolidated Leverage Ratio
         for the Four-Quarter Period most recently ended as specified below:

<TABLE>
<CAPTION>
                                                                      Applicable
                           Consolidated Leverage                      Commitment
                  Tier            Ratio                                  Fee
<S>                        <C>                                        <C>
                  I        Greater than or equal to 1.00 to 1.00         .50%

                  II       Less than 1.00 to 1.00                       .375%
</TABLE>

         The Applicable Commitment Fee shall be established at each
         Determination Date. Any change in the Applicable Commitment Fee
         following each Determination Date shall be determined based upon the
         computations set forth in the certificate furnished to the Agent
         pursuant to Section 9.1(a)(ii) and Section 9.1(b)(ii), subject to
         review and approval of such computations by the Agent and shall be
         effective commencing on the fifth Business Day following the date such
         certificate is received until the fifth Business Day following the date
         on which a new certificate is delivered or is required to be delivered,
         whichever shall first occur; provided however, if the Borrower shall
         fail to deliver any such certificate within the time period required by
         Section 9.1, then the Applicable Commitment Fee shall be Tier I from
         the date such certificate was due until the appropriate certificate is
         so delivered. From the Closing Date to the first Determination Date,
         the Applicable Commitment Fee shall be Tier II.

                  "Applicable Commitment Percentage" means, for each Lender at
         any time, a fraction, with respect to the Revolving Credit Facility and
         the Letter of Credit Facility, the numerator of which shall be such
         Lender's Revolving Credit Commitment and the denominator of which shall
         be the Total Revolving Credit Commitment, which Applicable Commitment
         Percentage for each Lender as of the Closing Date is as set forth in
         Exhibit A; provided that the Applicable Commitment Percentage of each
         Lender shall be increased or decreased to reflect any assignments to or
         by such Lender effected in accordance with Section 13.1.

                  "Applicable Lending Office" means, for each Lender and for
         each Type of Loan, the "Lending Office" of such Lender (or of an
         affiliate of such Lender) designated for such Type of Loan on the
         signature pages hereof or such other office of such Lender (or an
         affiliate of such Lender) as such Lender may from time to time specify
         to the Agent and the Borrower by written notice in accordance with the
         terms hereof as the office by which its Loans of such Type are to be
         made and maintained.

                  "Applicable Margin" means that percent per annum set forth
         below, which shall be based upon the Consolidated Leverage Ratio for
         the Four-Quarter Period most recently ended as specified below:


                                        3
<PAGE>   10
<TABLE>
<CAPTION>
                                                        Applicable
                                                           Margin
                                                        ----------
                Consolidated Leverage            Base                 Eurodollar
         Tier          Ratio                     Rate                    Rate
         ----   ----------------------------    -----                 ----------
<S>             <C>                             <C>     <C>           <C>
         I      Greater than or equal to        1.50%                   2.25%
                1.50 to 1.00

         II     Less than 1.50 to 1.00
                but greater than or equal to
                1.00 to 1.00                    1.00%                   1.875%

         III    Less than 1.00 to 1.00          0.50%                   1.50%
</TABLE>

         The Applicable Margin shall be established at the end of each fiscal
         quarter of the Borrower (each, a "Determination Date"). Any change in
         the Applicable Margin following each Determination Date shall be
         determined based upon the computations set forth in the certificate
         furnished to the Agent pursuant to Section 9.1(a)(ii) and Section
         9.1(b)(ii), subject to review and approval of such computations by the
         Agent, and shall be effective commencing on the fifth Business Day
         following the date such certificate is received until the fifth
         Business Day following the date on which a new certificate is delivered
         or is required to be delivered, whichever shall first occur; provided
         however, if the Borrower shall fail to deliver any such certificate
         within the time period required by Section 9.1, then the Applicable
         Margin shall be Tier I for Base Rate Loans and for Eurodollar Rate
         Loans from the date such certificate was due until the appropriate
         certificate is so delivered. From the Closing Date to the first
         Determination Date, the Applicable Margin shall be Tier III for Base
         Rate Loans and Tier III for Eurodollar Rate Loans.

                  "Applications and Agreements for Letters of Credit" means,
         collectively, the Applications and Agreements for Letters of Credit, or
         similar documentation, executed by the Borrower from time to time and
         delivered to the Issuing Bank to support the issuance of Letters of
         Credit.

                  "Asset Disposition" means any voluntary disposition, whether
         by sale, lease or transfer, of (a) any of the assets, excluding cash
         and cash equivalents, of the Borrower or its Subsidiaries, and (b) any
         of the capital stock, or securities or investments exchangeable,
         exercisable or convertible for or into, or otherwise entitling the
         holder to receive any of the capital stock, of any Subsidiary (other
         than a disposition to a Guarantor).

                  "Assignment and Acceptance" shall mean an Assignment and
         Acceptance in the form of Exhibit B (with blanks appropriately filled
         in) delivered to the Agent in connection with an assignment of a
         Lender's interest under this Agreement pursuant to Section 13.1.

                  "Assignment of Trademarks" means, collectively (or
         individually as the context may indicate) (i) the Assignment of
         Trademarks dated as of the date hereof by the

                                       4
<PAGE>   11
         Borrower to the Agent, substantially in the form of Exhibit L, and (ii)
         any additional Assignment of Trademarks delivered to the Agent pursuant
         to Section 9.20, as hereafter amended, supplemented or replaced from
         time to time.

                  "Authorized Representative" means any of the President or any
         Vice President of the Borrower or, with respect to financial matters,
         the chief financial officer of the Borrower, or any other Person
         expressly designated by the Board of Directors of the Borrower (or the
         appropriate committee thereof) as an Authorized Representative of the
         Borrower, as set forth from time to time in a certificate in the form
         of Exhibit C.

                  "Bank of America" means Bank of America, N.A.

                  "BAS" means Banc of America Securities LLC and its successors.

                  "Base Rate" means, for any day, the rate per annum equal to
         the sum of (a) the higher of (i) the Federal Funds Rate for such day
         plus one-half of one percent (0.5%) and (ii) the Prime Rate for such
         day plus (b) the Applicable Margin. Any change in the Base Rate due to
         a change in the Prime Rate or the Federal Funds Rate shall be effective
         on the effective date of such change in the Prime Rate or Federal Funds
         Rate.

                  "Base Rate Loan" means a Loan for which the rate of interest
         is determined by reference to the Base Rate.

                  "Base Rate Refunding Loan" means a Base Rate Loan made to
         satisfy Reimbursement Obligations arising from a drawing under a Letter
         of Credit.

                  "Board" means the Board of Governors of the Federal Reserve
         System (or any successor body).

                  "Borrower's Account" means a demand deposit account number
         3751410250 or any successor account with the Agent, which may be
         maintained at one or more offices of the Agent or an agent of the
         Agent.

                  "Borrowing Notice" means the notice delivered by an Authorized
         Representative in connection with an Advance under the Revolving Credit
         Facility in the form of Exhibit D.

                  "Business Day" means, (i) except as expressly provided in
         clause (ii), any day which is not a Saturday, Sunday or a day on which
         banks in the States of Arizona, New York and North Carolina are
         authorized or obligated by law, executive order or governmental decree
         to be closed and, (ii) with respect to the selection, funding, interest
         rate, payment, and Interest Period of any Eurodollar Rate Loan, any day
         which is a Business Day, as described above, and on which the relevant
         international financial markets are open for the transaction of
         business contemplated by this Agreement in


                                       5
<PAGE>   12
         Phoenix, Arizona, London, England, New York, New York and Charlotte,
         North Carolina.

                  "Capital Expenditures" means, with respect to the Borrower and
         its Subsidiaries, for any period the sum of (without duplication) (i)
         all expenditures (whether paid in cash or accrued as liabilities) by
         the Borrower or any Subsidiary during such period for items that would
         be classified as "property, plant or equipment" or comparable items on
         the consolidated balance sheet of the Borrower and its Subsidiaries,
         including without limitation all transactional costs incurred in
         connection with such expenditures provided the same have been
         capitalized, excluding, however, the amount of any Capital Expenditures
         paid for with proceeds of casualty insurance as evidenced in writing
         and submitted to the Agent together with any compliance certificate
         delivered pursuant to Section 9.1(a) or (b), and (ii) with respect to
         any Capital Lease entered into by the Borrower or its Subsidiaries
         during such period, the present value of the lease payments due under
         such Capital Lease over the term of such Capital Lease applying a
         discount rate equal to the interest rate provided in such lease (or in
         the absence of a stated interest rate, that rate used in the
         preparation of the financial statements described in Section 9.1(a)),
         all the foregoing in accordance with GAAP applied on a Consistent
         Basis.

                  "Capital Leases" means all leases which have been or should be
         capitalized in accordance with GAAP as in effect from time to time
         including Statement No. 13 of the Financial Accounting Standards Board
         and any successor thereof.

                  "Change of Control" means, at any time:

                           (i) any "person" or "group" (each as used in Sections
                  13(d)(3) and 14(d)(2) of the Exchange Act) either (A) becomes
                  the "beneficial owner" (as defined in Rule 13d-3 of the
                  Exchange Act ), directly or indirectly, of Voting Securities
                  of the Borrower (or securities convertible into or
                  exchangeable for such Voting Securities) representing 33-1/3%
                  or more of the combined voting power of all Voting Securities
                  of the Borrower (on a fully diluted basis) or (B) otherwise
                  has the ability, directly or indirectly, to elect a majority
                  of the board of directors of the Borrower; or

                           (ii) any Person or two or more Persons acting in
                  concert shall have acquired by contract or otherwise, or shall
                  have entered into a contract or arrangement that, upon
                  consummation thereof, will result in its or their acquisition
                  of the power to exercise, directly or indirectly, a
                  controlling influence on the management or policies of the
                  Borrower.

                  "Closing Date" means the date as of which this Agreement is
         executed by the Borrower, the Lenders and the Agent and on which the
         conditions set forth in Section 7.1 have been satisfied.



                                       6
<PAGE>   13
                  "Code" means the Internal Revenue Code of 1986, as amended,
         and any regulations promulgated thereunder.

                  "Collateral" means, collectively, all property of the
         Borrower, any Subsidiary or any other Person in which the Agent or any
         Lender is granted a Lien as security for all or any portion of the
         Obligations under any Security Instrument.

                  "Consistent Basis" in reference to the application of GAAP
         means the accounting principles observed in the period referred to are
         comparable in all material respects to those applied in the preparation
         of the audited financial statements of the Borrower referred to as of
         the Closing Date in Section 8.6(a).

                  "Consolidated EBITDA" means, with respect to the Borrower and
         its Subsidiaries for any Four-Quarter Period ending on the date of
         computation thereof, the sum of, without duplication, (i) Consolidated
         Net Income, (ii) Consolidated Interest Expense, (iii) taxes on income,
         (iv) amortization, and (v) depreciation, all determined on a
         consolidated basis in accordance with GAAP applied on a Consistent
         Basis; provided, however, that with respect to an Acquisition that is
         accounted for as a "purchase", for the four Four-Quarter Periods ending
         next following the date of such Acquisition, Consolidated EBITDA shall
         include the results of operations of the Person or assets so acquired,
         which amounts shall be determined on a historical pro forma basis as if
         such Acquisition had been consummated as a "pooling of interests".

                  "Consolidated EBITR" means, with respect to the Borrower and
         its Subsidiaries for any Four-Quarter Period ending on the date of
         computation thereof, the sum of, without duplication, (i) Consolidated
         Net Income, (ii) Consolidated Interest Expense, (iii) taxes on income
         paid during such period, (iv) Consolidated Lease Payments made during
         such period, and (v) all Allowable Distributions made during such
         period; provided, however, that with respect to an Acquisition that is
         accounted for as a "purchase", for the four Four-Quarter Periods ending
         next following the date of such Acquisition, Consolidated EBITR shall
         include the results of operations of the Person or assets so acquired,
         which amounts shall be determined on a historical pro forma basis as if
         such Acquisition had been consummated as a "pooling of interests".

                  "Consolidated Fixed Charge Ratio" means, with respect to the
         Borrower and its Subsidiaries for any Four-Quarter Period ending on the
         date of computation thereof, the ratio of (i) Consolidated EBITR for
         such period less (without duplication) cash taxes paid during such
         period, to (ii) Consolidated Fixed Charges for such period.

                  "Consolidated Fixed Charges" means, with respect to the
         Borrower and its Subsidiaries for any Four-Quarter Period ending on the
         date of computation thereof, the sum of, without duplication, (i)
         Consolidated Interest Expense, (ii) current maturities of the principal
         amount of Consolidated Indebtedness, (iii) Consolidated Lease Payments
         for such period, and (iv) all Allowable Distributions for such period
         all determined on a consolidated basis in accordance with GAAP applied
         on a Consistent Basis; provided,


                                       7
<PAGE>   14
         however, that with respect to an Acquisition that is accounted for as a
         "purchase", for the four Four-Quarter Periods ending next following the
         date of such Acquisition, Consolidated Fixed Charges shall include the
         results of operations of the Person or assets so acquired, which
         amounts shall be determined on a historical pro forma basis as if such
         Acquisition had been consummated as a "pooling of interests".

                  "Consolidated Indebtedness" means all Indebtedness for Money
         Borrowed of the Borrower and its Subsidiaries, all determined on a
         consolidated basis.

                  "Consolidated Interest Expense" means, with respect to any
         period of computation thereof, the gross interest expense of the
         Borrower and its Subsidiaries, including without limitation (i) the
         current amortized portion of debt discounts to the extent included in
         gross interest expense, (ii) the current amortized portion of all fees
         (including fees payable in respect of any Rate Hedging Obligation)
         payable in connection with the incurrence of Indebtedness to the extent
         included in gross interest expense and (iii) the portion of any
         payments made in connection with Capital Leases allocable to interest
         expense, all determined on a consolidated basis in accordance with GAAP
         applied on a Consistent Basis.

                  "Consolidated Lease Payments" means the gross amount of all
         lease or rental payments, whether or not characterized as rent, without
         duplication, of the Borrower and its Subsidiaries, excluding payments
         in respect of Capital Leases constituting Indebtedness, all determined
         on a consolidated basis in accordance with GAAP applied on a Consistent
         Basis.

                  "Consolidated Leverage Ratio" means, as of the date of
         computation thereof, the ratio of (i) Consolidated Indebtedness
         (determined as at such date) to (ii) Consolidated EBITDA (for the
         Four-Quarter Period ending on (or most recently ended prior to) such
         date).

                  "Consolidated Net Income" means, for any period of computation
         thereof, the gross revenues from operations of the Borrower and its
         Subsidiaries (including payments received by the Borrower and its
         Subsidiaries of (i) interest income and (ii) dividends and
         distributions made in the ordinary course of their businesses by
         Persons in which investment is permitted pursuant to this Agreement and
         not related to an extraordinary event), less all operating and
         non-operating expenses (including all cash amounts added to reserves
         for charges in respect of closing under-performing restaurants) of the
         Borrower and its Subsidiaries including taxes on income, all determined
         on a consolidated basis in accordance with GAAP applied on a Consistent
         Basis; but excluding (for all purposes other than compliance with
         Section 10.1(a) hereof) as income: (i) net gains on the sale,
         conversion or other disposition of capital assets, (ii) net gains on
         the acquisition, retirement, sale or other disposition of capital stock
         and other securities of the Borrower or its Subsidiaries, (iii) net
         gains on the collection of proceeds of life insurance policies, (iv)
         any write-up of any asset, (v) one time non-cash charges associated
         with closing under-performing restaurants and (vi) any other net gain
         or credit


                                        8
<PAGE>   15
         of an extraordinary nature (other than proceeds of business
         interruption insurance) all as determined in accordance with GAAP
         applied on a Consistent Basis; provided, however, that for purposes of
         determining compliance with the provisions of Section 10.1(a) hereof,
         there shall be disregarded any increase in Consolidated Net Income upon
         giving effect to any Acquisition which results from the treatment of
         such Acquisition as a "pooling of interests".

                  "Consolidated Shareholders' Equity" means, as of any date on
         which the amount thereof is to be determined, the sum of the following
         in respect of the Borrower and its Subsidiaries (determined on a
         consolidated basis and excluding any upward adjustment after the
         Closing Date due to revaluation of assets): (i) the amount of issued
         and outstanding share capital, plus (ii) the amount of additional
         paid-in capital and retained earnings (or, in the case of a deficit,
         minus the amount of such deficit), plus (iii) the amount of any foreign
         currency translation adjustment (if positive, or, if negative, minus
         the amount of such translation adjustment), minus (iv) the amount of
         any treasury stock, all as determined in accordance with GAAP applied
         on a Consistent Basis.

                  "Consolidated Tangible Net Worth" means, as of any date on
         which the amount thereof is to be determined, Consolidated
         Shareholders' Equity minus (without duplication of deductions in
         respect of items already deducted in arriving at surplus and retained
         earnings) (i) all reserves (other than contingency reserves not
         allocated to any particular purpose), including without limitation
         reserves for depreciation, depletion, amortization, obsolescence,
         deferred income taxes, insurance and inventory valuation , and (ii) the
         net book value of all assets which would be treated as intangible
         assets, such as (without limitation) goodwill (whether representing the
         excess of cost over book value of assets acquired or otherwise),
         capitalized expenses, unamortized debt discount and expense,
         consignment inventory rights, patents, trademarks, trade names,
         copyrights, franchises and licenses, all as determined on a
         consolidated basis in accordance with GAAP applied on a Consistent
         Basis.

                  "Contingent Obligation" means, as to any Person, any direct or
         indirect liability of that Person with respect to any Indebtedness,
         lease, dividend, guaranty, letter of credit or other obligation (each a
         "primary obligation") of another Person (the "primary obligor"),
         whether or not contingent, (a) to purchase, repurchase or otherwise
         acquire any such primary obligation or any property constituting direct
         or indirect security therefor, or (b) to advance or provide funds (i)
         for the payment or discharge of any such primary obligation, or (ii) to
         maintain working capital or equity capital of the primary obligor in
         respect of any such primary obligation or otherwise to maintain the net
         worth or solvency or any balance sheet item, level of income or
         financial condition of such primary obligor, or (c) 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 thereof to make payment of such primary obligation, or (d)
         otherwise to assure or hold harmless the owner of any such primary
         obligation against loss or failure or inability to perform in respect
         thereof. The amount of any Contingent Obligation shall be deemed to be
         an amount equal to the stated or determinable amount of the primary
         obligation in respect of


                                       9
<PAGE>   16
         which such Contingent Obligation is made or, if not stated or
         determinable, the maximum reasonably anticipated liability in respect
         thereof.

                  "Continue", "Continuation", and "Continued" shall refer to the
         continuation pursuant to Section 4.2 hereof of a Eurodollar Rate Loan
         of one Type as a Eurodollar Rate Loan of the same Type from one
         Interest Period to the next Interest Period.

                  "Control"or "Controlled" or "Controlling" means the
         possession, directly or indirectly, of the power to direct or cause the
         direction of the management and policies of a Person, whether through
         ownership of voting stock or by contract.

                  "Convert", "Conversion", and "Converted" shall refer to a
         conversion pursuant to Section 4.2 of one Type of Loan into another
         Type of Loan.

                  "Credit Parties" means, collectively, the Borrower, each
         Guarantor and each other Person providing Collateral pursuant to any
         Security Instrument.

                  "Default" means any event or condition which, with the giving
         or receipt of notice or lapse of time or both, would constitute an
         Event of Default hereunder.

                  "Default Rate" means (i) with respect to each Eurodollar Rate
         Loan, until the end of the Interest Period applicable thereto, a rate
         of two percent (2%) above the Eurodollar Rate applicable to such Loan,
         and thereafter at a rate of interest per annum which shall be two
         percent (2%) above the Base Rate, (ii) with respect to Base Rate Loans,
         Reimbursement Obligations, fees, and other amounts payable in respect
         of Obligations or (except as otherwise expressly provided therein) the
         obligations of any other Credit Party under any of the other Loan
         Documents, a rate of interest per annum which shall be two percent (2%)
         above the Base Rate, and (iii) in any case, the maximum rate permitted
         by applicable law, if lower.

                  "Determination Date" shall have the meaning given to such term
         in the definition of "Applicable Margin".

                  "Direct Foreign Subsidiary" means a Subsidiary other than a
         Domestic Subsidiary a majority of whose Voting Securities, or a
         majority of whose Subsidiary Securities, are owned by the Borrower or a
         Domestic Subsidiary.

                  "Dollars" and the symbol "$" means dollars constituting legal
         tender for the payment of public and private debts in the United States
         of America.

                  "Domestic Subsidiary" means any Subsidiary of the Borrower
         organized under the laws of the United States of America, any state or
         territory thereof or the District of Columbia.



                                       10
<PAGE>   17
                  "Eligible Assignee" means (i) a Lender, (ii) an affiliate of a
         Lender, and (iii) any other Person approved by the Agent and, unless an
         Event of Default has occurred and is continuing at the time any
         assignment is effected in accordance with Section 13.1, the Borrower,
         such approval not to be unreasonably withheld or delayed by the
         Borrower and such approval to be deemed given by the Borrower (in the
         absence of notice to the contrary, effective upon receipt) within five
         Business Days after notice of such proposed assignment has been
         received by the Borrower from the assigning Lender; provided, however,
         that neither the Borrower nor an affiliate of the Borrower shall
         qualify as an Eligible Assignee.

                  "Eligible Securities" means the following obligations and any
         other obligations previously approved in writing by the Agent:

                           (a) Government Securities;

                           (b) obligations of any corporation organized under
                  the laws of any state of the United States of America or under
                  the laws of any other nation, payable in the United States of
                  America, expressed to mature not later than 92 days following
                  the date of issuance thereof and rated in an investment grade
                  rating category by S&P and Moody's;

                           (c) interest bearing demand or time deposits issued
                  by any Lender or certificates of deposit maturing within one
                  year from the date of issuance thereof and issued by a bank or
                  trust company organized under the laws of the United States or
                  of any state thereof having capital surplus and undivided
                  profits aggregating at least $400,000,000 and being rated "A"
                  or better by S&P or "A" or better by Moody's;

                           (d) Repurchase Agreements;

                           (e) Municipal Obligations;

                           (f) Pre-Refunded Municipal Obligations;

                           (g) shares of mutual funds which invest in
                  obligations described in paragraphs (a) through (f) above, the
                  shares of which mutual funds are at all times rated "AAA" by
                  S&P;

                           (h) tax-exempt or taxable adjustable rate preferred
                  stock issued by a Person having a rating of its long term
                  unsecured debt of "A-" or better by S&P or "A-3" or better by
                  Moody's; and

                           (i) asset-backed remarketed certificates of
                  participation representing a fractional undivided interest in
                  the assets of a trust, which certificates are rated at least
                  "A-1" by S&P and "P-1" by Moody's.


                                       11
<PAGE>   18
                  "Employee Benefit Plan" means (i) any employee benefit plan,
         including any Pension Plan, within the meaning of Section 3(3) of ERISA
         which (A) is maintained for employees of the Borrower or any of its
         ERISA Affiliates, or any Subsidiary or is assumed by the Borrower or
         any of its ERISA Affiliates, or any Subsidiary in connection with any
         Acquisition or (B) has at any time been maintained for the employees of
         the Borrower, any current or former ERISA Affiliate, or any Subsidiary
         and (ii) any plan, arrangement, understanding or scheme maintained by
         the Borrower or any Subsidiary that provides retirement, deferred
         compensation, employee or retiree medical or life insurance, severance
         benefits or any other benefit covering any employee or former employee
         and which is administered under any Foreign Benefit Law or regulated by
         any Governmental Authority other than the United States of America.

                  "Environmental Laws" means any federal, state or local
         statute, law, ordinance, code, rule, regulation, order, decree, permit
         or license regulating, relating to, or imposing liability or standards
         of conduct concerning, any environmental matters or conditions,
         environmental protection or conservation, including without limitation,
         the Comprehensive Environmental Response, Compensation and Liability
         Act of 1980, as amended; the Superfund Amendments and Reauthorization
         Act of 1986, as amended; the Resource Conservation and Recovery Act, as
         amended; the Toxic Substances Control Act, as amended; the Clean Air
         Act, as amended; the Clean Water Act, as amended; together with all
         regulations promulgated thereunder, and any other "Superfund" or
         "Superlien" law.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended from time to time, and any successor statute and all
         rules and regulations promulgated thereunder.

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

                  "Eurodollar Rate Loan" means a Loan for which the rate of
         interest is determined by reference to the Eurodollar Rate.

                  "Eurodollar Rate" means the interest rate per annum calculated
         according to the following formula:

                  Eurodollar  =  Interbank Offered Rate     +    Applicable
                  Rate          ------------------------         Margin
                                 1- Reserve Requirement

                  "Event of Default" means any of the occurrences set forth as
         such in Section 11.1.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
         amended, and the regulations promulgated thereunder.


                                       12
<PAGE>   19
                  "Facility Guaranty" means each Guaranty Agreement between one
         or more Guarantors and the Agent for the benefit of the Agent and the
         Lenders, delivered as of the Closing Date and otherwise pursuant to
         Section 9.20, as the same may be amended, supplemented or replaced.

                  "Facility Termination Date" means such date as all of the
         following shall have occurred: (a) the Borrower shall have permanently
         terminated the Revolving Credit Facility by payment in full of all
         Revolving Credit Outstandings and Letter of Credit Outstandings,
         together with all accrued and unpaid interest thereon, except for the
         undrawn portion of Letters of Credit as have been fully cash
         collateralized in a manner consistent with the terms of Section
         11.1(B), (b) all Swap Agreements shall have been terminated, expired or
         cash collateralized, (c) all Revolving Credit Commitments and Letter of
         Credit Commitments shall have terminated or expired, and (d) the
         Borrower shall have fully, finally and irrevocably paid and satisfied
         in full all Obligations (other than Obligations consisting of
         continuing indemnities and other contingent Obligations of the Borrower
         or any Guarantor that may be owing to the Lenders pursuant to the Loan
         Documents and expressly survive termination of this Agreement);

                  "FASB 133 Adjustments" means entries on or adjustments to any
         balance sheet or statement of income in respect of derivatives or
         hedging instruments as required or permitted by Statement of Financial
         Accounting Standards No. 133.

                  "Federal Funds Rate" means, for any day, the rate per annum
         (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
         the weighted average of the rates on overnight Federal funds
         transactions with members of the Federal Reserve System arranged by
         Federal funds brokers on such day, as published by the Federal Reserve
         Bank of New York on the Business Day next succeeding such day; provided
         that (a) if such day is not a Business Day, the Federal Funds Rate for
         such day shall be such rate on such transactions on the next preceding
         Business Day as so published on the next succeeding Business Day, and
         (b) if no such rate is so published on such next succeeding Business
         Day, the Federal Funds Rate for such day shall be the average rate
         charged to the Agent (in its individual capacity) on such day on such
         transactions as determined by the Agent.

                  "Fiscal Year" means the twelve month fiscal period of the
         Borrower and its Subsidiaries commencing on January 1 of each calendar
         year and ending on December 31 of each calendar year.

                  "Foreign Benefit Law" means any applicable statute, law,
         ordinance, code, rule, regulation, order or decree of any foreign
         nation or any province, state, territory, protectorate or other
         political subdivision thereof regulating, relating to, or imposing
         liability or standards of conduct concerning, any Employee Benefit
         Plan.

                  "Four-Quarter Period" means a period of four full consecutive
         fiscal quarters of the Borrower and its Subsidiaries, taken together as
         one accounting period.



                                       13
<PAGE>   20
                  "GAAP" or "Generally Accepted Accounting Principles" means
         generally accepted accounting principles, being those principles of
         accounting set forth in pronouncements of the Financial Accounting
         Standards Board, the American Institute of Certified Public
         Accountants, or which have other substantial authoritative support and
         are applicable in the circumstances as of the date of a report.

                  "Government Securities" means direct obligations of, or
         obligations the timely payment of principal and interest on which are
         fully and unconditionally guaranteed by, the United States of America.

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

                  "Guarantors" means, at any date, the Subsidiaries who are
         required to be parties to a Facility Guaranty at such date.

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

                  "Indebtedness" means as to any Person, without duplication,
         (a) all Indebtedness for Money Borrowed of such Person, (b) all Rate
         Hedging Obligations of such Person, (c) all indebtedness secured by any
         Lien (other than Liens securing repayment of tenant improvement
         allowances) on any property or asset owned or held by such Person
         regardless or whether the indebtedness secured thereby shall have been
         assumed by such Person or is non-recourse to the credit of such Person,
         and (d) all Contingent Obligations of such Person.

                  "Indebtedness for Money Borrowed" means with respect to any
         Person, without duplication, all indebtedness in respect of money
         borrowed, including without limitation, all obligations under Capital
         Leases, the deferred purchase price of any property or services, and
         payment and reimbursement obligations in respect of surety bonds,
         letters of credit, and bankers' acceptances, whether or not matured,
         evidenced by a promissory note, bond, debenture or similar written
         obligation for the payment of money (including reimbursement agreements
         and conditional sales or similar title retention agreements), other
         than trade payables, tenant improvement allowances and accrued expenses
         incurred in the ordinary course of business.



                                       14
<PAGE>   21
                  "Intellectual Property" means for any Person all patents
         (including all applications, renewals, reissues, extensions, divisions,
         continuations and extensions thereof), trademarks (including both
         registered and unregistered trademarks and applications therefor),
         service marks, trade names, copyrights (including all registrations,
         renewals, modifications and extensions thereof), know-how and trade
         secrets of material importance to the conduct of such Person's
         business.

                  "Interbank Offered Rate" means, with respect to any Eurodollar
         Rate Loan for the Interest Period applicable thereto, the rate per
         annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
         appearing on Telerate Page 3750 (or any successor page) as the London
         interbank offered rate for deposits in Dollars at approximately 11:00
         A.M. (London time) two Business Days prior to the first day of such
         Interest Period for a term comparable to such Interest Period. If for
         any reason such rate is not available, the term "Interbank Offered
         Rate" shall mean, with respect to any Eurodollar Rate Loan for the
         Interest Period applicable thereto, the rate per annum (rounded
         upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
         Screen LIBO Page as the London interbank offered rate for deposits in
         Dollars at approximately 11:00 A.M. (London time) two Business Days
         prior to the first day of such Interest Period for a term comparable to
         such Interest Period, provided, however; if more than one rate is
         specified on Reuters Screen LIBO Page, the applicable rate shall be the
         arithmetic mean of all such rates (rounded upwards, if necessary, to
         the nearest 1/100 of 1%).

                  "Interest Period" means, for each Eurodollar Rate Loan, a
         period commencing on the date such Eurodollar Rate Loan is made or
         Converted or Continued and ending, at the Borrower's option, on the
         date one, two, three or six months thereafter as notified to the Agent
         by the Authorized Representative in accordance with the terms hereof;
         provided that,

                            (i) if an Interest Period for a Eurodollar Rate Loan
                  would end on a day which is not a Business Day, such Interest
                  Period shall be extended to the next Business Day (unless such
                  extension would cause the applicable Interest Period to end in
                  the succeeding calendar month, in which case such Interest
                  Period shall end on the next preceding Business Day); and

                           (ii) any Interest Period which begins on the last
                  Business Day of a calendar month (or on a day for which there
                  is no numerically corresponding day in the calendar month at
                  the end of such Interest Period) shall end on the last
                  Business Day of a calendar month.

                  "Interest Rate Selection Notice" means the written notice
         delivered by an Authorized Representative in connection with the
         election of a subsequent Interest Period for any Eurodollar Rate Loan
         or the Conversion of any Eurodollar Rate Loan into a Base Rate Loan or
         the Conversion of any Base Rate Loan into a Eurodollar Rate Loan, in
         the form of Exhibit E.



                                       15
<PAGE>   22
                  "Issuing Bank" means Bank of America as issuer of Letters of
         Credit under Article III.

                  "LC Account Agreement" means the LC Account Agreement dated as
         of the date hereof between the Borrower and the Agent, substantially in
         the form of Exhibit M, as amended, modified or supplemented from time
         to time.

                  "Letter of Credit" means a standby letter of credit issued by
         the Issuing Bank pursuant to Article III hereof for the account of the
         Borrower in favor of a Person advancing credit or securing an
         obligation on behalf of the Borrower.

                  "Letter of Credit Commitment" means, with respect to each
         Lender, the obligation of such Lender to acquire Participations in
         respect of Letters of Credit and Reimbursement Obligations up to an
         aggregate amount at any one time outstanding equal to such Lender's
         Applicable Commitment Percentage of the Total Letter of Credit
         Commitment as the same may be increased or decreased from time to time
         pursuant to this Agreement.

                  "Letter of Credit Facility" means the facility described in
         Article III hereof providing for the issuance by the Issuing Bank for
         the account of the Borrower of Letters of Credit in an aggregate stated
         amount at any time outstanding not exceeding the Total Letter of Credit
         Commitment minus outstanding Reimbursement Obligations.

                  "Letter of Credit Outstandings" means, as of any date of
         determination, the aggregate amount available to be drawn under all
         Letters of Credit plus Reimbursement Obligations then outstanding.

                  "Lien" means any interest in property securing any obligation
         owed to, or a claim by, a Person other than the owner of the property,
         whether such interest is based on the common law, statute or contract,
         and including but not limited to the lien or security interest arising
         from a mortgage, encumbrance, pledge, security agreement, conditional
         sale or trust receipt or a lease, consignment or bailment for security
         purposes. For the purposes of this Agreement, the Borrower and any
         Subsidiary shall be deemed to be the owner of any property which it has
         acquired or holds subject to a conditional sale agreement, financing
         lease, or other arrangement pursuant to which title to the property has
         been retained by or vested in some other Person for security purposes.

                  "Loan" means any borrowing pursuant to an Advance under the
         Revolving Credit Facility in accordance with Section 2.1.

                  "Loan Documents" means this Agreement, the Notes, the Security
         Instruments, the Facility Guaranties, the LC Account Agreement, the
         Applications and Agreements for Letter of Credit, and all other
         instruments and documents heretofore or hereafter executed or delivered
         to or in favor of any Lender or the Agent in connection with the Loans
         made



                                       16
<PAGE>   23
         and transactions contemplated under this Agreement, as the same may be
         amended, supplemented or replaced from the time to time.

                  "Management Agreements" means each management agreement,
         whether now existing or hereafter entered into, by and between the
         Borrower and any Subsidiary pursuant to which the Borrower agrees to
         manage certain restaurants in which such Subsidiaries have an interest,
         each as from time to time amended, supplemented or replaced.

                  "Management Securities" means, with respect to any Subsidiary
         that has an interest in a restaurant facility, up to 20% of the issued
         and outstanding Subsidiary Securities of such Subsidiary owned
         beneficially and of record by the individual chefs or managers
         operating such restaurant facility or by the regional manager of the
         restaurants owned or operated by such Subsidiary.

                  "Material Adverse Effect" means a material adverse effect on
         (i) the business, properties, operations, prospects or condition,
         financial or otherwise, of the Borrower and its Subsidiaries, taken as
         a whole, (ii) the ability of any Credit Party to pay or perform its
         respective obligations, liabilities and indebtedness under the Loan
         Documents as such payment or performance becomes due in accordance with
         the terms thereof, or (iii) the rights, powers and remedies of the
         Agent or any Lender under any Loan Document or the validity, legality
         or enforceability thereof.

                  "Moody's" means Moody's Investors Service, Inc.

                  "Mortgage" means, collectively, all mortgages, deeds of trust,
         deeds to secure debt and/or similar document or instrument granting a
         Lien to the Agent (or a trustee for the benefit of the Agent) for the
         benefit of the Lenders in Collateral constituting fee title real
         property of the Borrower or any Subsidiary acquired after the Closing
         Date, as such documents may be amended, modified or supplemented from
         time to time.

                  "Mortgaged Property" means, collectively, the real property,
         improvements, fixtures and other items of real property related thereto
         and the products and proceeds thereof fee title to which is hereafter
         acquired by the Borrower or any Subsidiary that is or is required to
         become a Guarantor after the Closing Date pursuant to Section 9.20 and
         in which the Agent elects pursuant to Section 9.21 to obtain a Lien
         thereon for the benefit of the Agent and the Lenders pursuant to a
         Mortgage.

                  "Mortgaged Property Support Documents" means, for each
         Mortgaged Property, (i) the Title Policy pertaining thereto, (ii) such
         surveys, flood hazard certifications, appraisals, and environmental
         assessments thereof as the Agent may require prepared by recognized
         experts in their respective fields selected by the Borrower and
         reasonably satisfactory to the Agent, (iii) as to Mortgaged Properties
         located in a flood hazard area, such flood hazard insurance as the
         agent may require, (iv) with respect to facilities leased or subleased
         to third parties, such lessees' estoppel, waiver and consent
         certificates and

                                       17
<PAGE>   24
         subordination, nondisturbance and attornment agreements, (v) such
         owner's or lessee's affidavits as the agent may require, (vi) such
         opinions of local counsel with respect to the Mortgages as the agent
         may require, and (vii) such other documentation as the Agent may
         reasonably require, in each case as shall be in form and substance
         reasonably acceptable to the Agent.

                  "Multiemployer Plan" means a "multiemployer plan" as defined
         in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
         Affiliate is making, or is accruing an obligation to make,
         contributions or has made, or been obligated to make, contributions
         within the preceding six (6) Fiscal Years.

                  "Municipal Obligations" means general obligations issued by,
         and supported by the full taxing authority of, any state of the United
         States of America or of any municipal corporation or other public body
         organized under the laws of any such state which are rated in the
         highest investment rating category by both S&P and Moody's.

                  "New Subsidiary" shall have the meaning given to such term in
         Section 9.20 hereof.

                  "Notes" means, collectively, the promissory notes of the
         Borrower evidencing Loans executed and delivered to the Lenders as
         provided in Section 2.3 substantially in the form of Exhibit F, with
         appropriate insertions as to amounts, dates and names of Lenders.

                  "Obligations" means the obligations, liabilities and
         Indebtedness of the Borrower with respect to (i) the principal and
         interest on the Loans as evidenced by the Notes, (ii) the Reimbursement
         Obligations and otherwise in respect of the Letters of Credit, (iii)
         all liabilities of Borrower to any Lender (or any affiliate of any
         Lender) which arise under a Swap Agreement, and (iv) the payment and
         performance of all other obligations, liabilities and Indebtedness of
         the Borrower to the Lenders, the Agent or BAS hereunder, under any one
         or more of the other Loan Documents or with respect to the Loans.

                  "Operating Documents" means with respect to any corporation,
         limited liability company, partnership, limited partnership, limited
         liability partnership or other legally authorized incorporated or
         unincorporated entity, the bylaws, operating agreement, partnership
         agreement, limited partnership agreement or other applicable documents
         relating to the operation, governance or management of such entity.

                  "Organizational Action" means with respect to any corporation,
         limited liability company, partnership, limited partnership, limited
         liability partnership or other legally authorized incorporated or
         unincorporated entity, any corporate, organizational or partnership
         action (including any required shareholder, member or partner action),
         or other similar official action, as applicable, taken by such entity.



                                       18
<PAGE>   25
                  "Organizational Documents" means with respect to any
         corporation, limited liability company, partnership, limited
         partnership, limited liability partnership or other legally authorized
         incorporated or unincorporated entity, the articles of incorporation,
         certificate of incorporation, articles of organization, certificate of
         limited partnership or other applicable organizational or charter
         documents relating to the creation of such entity.

                  "Outstandings" means, collectively, at any date, the Letter of
         Credit Outstandings and Revolving Credit Outstandings on such date.

                  "Participation" means, with respect to any Lender (other than
         the Issuing Bank) and a Letter of Credit, the extension of credit
         represented by the participation of such Lender hereunder in the
         liability of the Issuing Bank in respect of a Letter of Credit issued
         by the Issuing Bank in accordance with the terms hereof.

                  "PBGC" means the Pension Benefit Guaranty Corporation and any
         successor thereto.

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

                  "Permitted Liens" has the meaning given to such term in
         Section 10.4.

                  "Person" means an individual, partnership, corporation,
         limited liability company, limited liability partnership, trust,
         unincorporated organization, association, joint venture or a government
         or agency or political subdivision thereof.

                  "Pledge Agreement" means, collectively (or individually as the
         context may indicate), (i) that certain Securities Pledge Agreement
         dated as of the date hereof between the Borrower and the Agent for the
         benefit of the Agent and the Lenders, (ii) any additional Securities
         Pledge Agreement delivered to the Agent pursuant to Section 5.1 and
         9.20, and (iii) with respect to any Subsidiary Securities issued by a
         Direct Foreign Subsidiary, any additional or substitute charge,
         agreement, document, instrument or conveyance, in form and substance
         acceptable to the Agent, conferring under applicable foreign law upon
         the Agent for the benefit of the Agent and the Lenders a Lien upon such
         Subsidiary Securities as are owned by the borrower or any Domestic
         Subsidiary, in each case as hereafter amended, supplemented (including
         by Pledge Agreement Supplement) or replaced from time to time.



                                       19
<PAGE>   26
                  "Pledge Agreement Supplement" means, with respect to each
         Pledge Agreement, the Pledge Agreement Supplement in the form affixed
         as an Exhibit to such Pledge Agreement.

                  "Pledged Interests" means the Subsidiary Securities required
         to be pledged as Collateral pursuant to Article V or the terms of any
         Pledge Agreement, and shall include (i) 65% of the Subsidiary
         Securities (other than Management Securities) of each Direct Foreign
         Subsidiary and (ii) 100% of the Subsidiary Securities (other than
         Management Securities) of each Domestic Subsidiary.

                  "Pre-Refunded Municipal Obligations" means obligations of any
         state of the United States of America or of any municipal corporation
         or other public body organized under the laws of any such state which
         are rated, based on the escrow, in the highest investment rating
         category by both S&P and Moody's and which have been irrevocably
         called for redemption and advance refunded through the deposit in
         escrow of Government Securities or other debt securities which are (i)
         not callable at the option of the issuer thereof prior to maturity,
         (ii) irrevocably pledged solely to the payment of all principal and
         interest on such obligations as the same becomes due and (iii) in a
         principal amount and bear such rate or rates of interest as shall be
         sufficient to pay in full all principal of, interest, and premium, if
         any, on such obligations as the same becomes due as verified by a
         nationally recognized firm of certified public accountants.

                  "Prime Rate" means the per annum rate of interest established
         from time to time by Bank of America as its prime rate, which rate may
         not be the lowest rate of interest charged by Bank of America to its
         customers.

                  "Principal Office" means the principal office of Bank of
         America, presently located at 101 North Tryon Street, 15th Floor, NC1
         001-15-04, Charlotte, North Carolina 28255, Attention: Agency Services,
         or such other office and address as the Agent may from time to time
         designate.

                  "Rate Hedging Obligations" means, without duplication, any and
         all obligations of the Borrower or any Subsidiary, whether absolute or
         contingent and howsoever and whensoever created, arising, evidenced or
         acquired (including all renewals, extensions and modifications thereof
         and substitutions therefor), under (i) any and all agreements, devices
         or arrangements designed to protect at least one of the parties thereto
         from the fluctuations of interest rates, exchange rates or forward
         rates applicable to such party's assets, liabilities or exchange
         transactions, including, but not limited to, Dollar-denominated or
         cross-currency interest rate exchange agreements, forward currency
         exchange agreements, interest rate cap or collar protection agreements,
         forward rate currency or interest rate options, puts, warrants and
         those commonly known as interest rate "swap" agreements; (ii) all other
         "derivative instruments" as defined in FASB 133 and which are subject
         to the reporting requirements of FASB 133; and (iii) any and all
         cancellations, buybacks, reversals, terminations or assignments of any
         of the foregoing.



                                       20
<PAGE>   27
                  "Registrar" means, with respect to any Subsidiary Securities,
         any Person authorized or obligated to maintain records of the
         registration of ownership or transfer of ownership of interests in such
         Subsidiary Securities, and in the event no such Person shall have been
         expressly designated by the related Subsidiary, shall mean (i) as to
         any corporation or limited liability company, its Secretary (or
         comparable official), and (ii) as to any partnership, its general
         partner (or managing general partner if one shall have been appointed).

                  "Regulation D" means Regulation D of the Board as the same may
         be amended or supplemented from time to time.

                  "Reimbursement Obligation" shall mean at any time, the
         obligation of the Borrower with respect to any Letter of Credit to
         reimburse the Issuing Bank and the Lenders to the extent of their
         respective Participations (including by the receipt by the Issuing Bank
         of proceeds of Loans pursuant to Section 2.1(c)(iii)) for amounts
         theretofore paid by the Issuing Bank pursuant to a drawing under such
         Letter of Credit.

                  "Reporting Entity" shall have the meaning given to such term
         in the definition of "Allowable Distributions".

                  "Repurchase Agreement" means a repurchase agreement entered
         into with any financial institution whose debt obligations or
         commercial paper are rated "A" by either of S&P or Moody's or "A-1" by
         S&P or "P-1" by Moody's.

                  "Required Lenders" means, as of any date, Lenders on such date
         having Credit Exposures (as defined below) aggregating (i) if there
         shall be fewer than three (3) Lenders, 100% of the aggregate Credit
         Exposures of all Lenders on such date, and (ii) if there shall be three
         (3) or more Lenders, more than 50% of the aggregate Credit Exposures of
         all the Lenders on such date. For purposes of the preceding sentence,
         the amount of the "Credit Exposure" of each Lender shall be equal at
         all times (a) other than following the occurrence and during the
         continuance of an Event of Default, to its Revolving Credit Commitment,
         and (b) following the occurrence and during the continuance of an Event
         of Default, to the sum of (i) the aggregate principal amount of such
         Lender's Applicable Commitment Percentage of Revolving Credit
         Outstandings plus (ii) the amount of such Lender's Applicable
         Commitment Percentage of Letter of Credit Outstandings; provided that,
         for the purpose of this definition only, (A) if any Lender shall have
         failed to fund its Applicable Commitment Percentage of any Advance,
         then the Revolving Credit Commitment of such Lender shall be deemed
         reduced by the amount it so failed to fund for so long as such failure
         shall continue and such Lender's Credit Exposure attributable to such
         failure shall be deemed held by any Lender making more than its
         Applicable Commitment Percentage of such Advance to the extent it
         covers such failure, and (B) if any Lender shall have failed to pay to
         the Issuing Bank upon demand its Applicable Commitment Percentage of
         any drawing under any Letter of Credit resulting in an outstanding
         Reimbursement Obligation (whether by funding its Participation therein
         or otherwise), such Lender's Credit Exposure attributable to all

                                       21
<PAGE>   28
         Letter of Credit Outstandings shall be deemed to be held by the Issuing
         Bank until such Lender shall pay such deficiency amount to the Issuing
         Bank together with interest thereon as provided in Section 4.9.

                  "Reserve Requirement" means, at any time, the maximum rate at
         which reserves (including, without limitation, any marginal, special,
         supplemental, or emergency reserves) are required to be maintained
         under regulations issued from time to time by the Board of Governors of
         the Federal Reserve System (or any successor) by member banks of the
         Federal Reserve System against "Eurocurrency liabilities" (as such term
         is used in Regulation D). Without limiting the effect of the foregoing,
         the Reserve Requirement shall reflect any other reserves required to be
         maintained by such member banks with respect to (i) any category of
         liabilities which includes deposits by reference to which the
         Eurodollar Rate is to be determined, or (ii) any category of extensions
         of credit or other assets which include Eurodollar Rate Loans. The
         Eurodollar Rate shall be adjusted automatically on and as of the
         effective date of any change in the Reserve Requirement.

                  "Restricted Payment" means (a) any dividend or other
         distribution, direct or indirect, on account of any shares of any class
         of stock of the Borrower or any Subsidiary Securities of its
         Subsidiaries (other than those payable or distributable solely to the
         Borrower) now or hereafter outstanding, except a dividend payable
         solely in shares of a class of stock or units of a class of Subsidiary
         Securities to the holders of that class; (b) any redemption,
         conversion, exchange, retirement or similar payment, purchase or other
         acquisition for value, direct or indirect, of any shares of any class
         of stock of Borrower or any Subsidiary Securities of its Subsidiaries
         (other than those payable or distributable solely to the Borrower) now
         or hereafter outstanding; (c) any payment made to retire, or to obtain
         the surrender of, any outstanding warrants, options or other rights to
         acquire shares of any class of stock of Borrower or any Subsidiary
         Securities of its Subsidiaries now or hereafter outstanding; and (d)
         any issuance and sale of Subsidiary Securities of any Subsidiary of the
         Borrower (or any option, warrant or right to acquire such subsidiary
         securities) other than to the Borrower; provided, however, that for so
         long as no Event of Default has occurred and is continuing, Allowable
         Distributions and the issuance of Management Securities in compliance
         with Section 10.6(g) shall not constitute Restricted Payments
         hereunder.

                  "Revolving Credit Commitment" means, with respect to each
         Lender, the obligation of such Lender to make Loans to the Borrower up
         to an aggregate principal amount at any one time outstanding equal to
         such Lender's Applicable Commitment Percentage of the Total Revolving
         Credit Commitment.

                  "Revolving Credit Facility" means the facility described in
         Section 2.1 hereof providing for Loans to the Borrower by the Lenders
         in the aggregate principal amount of the Total Revolving Credit
         Commitment.

                  "Revolving Credit Outstandings" means, as of any date of
         determination, the aggregate principal amount of all Loans then
         outstanding.



                                       22
<PAGE>   29
                  "Revolving Credit Termination Date" means (i) the Stated
         Termination Date or (ii) such earlier date of termination of Lenders'
         obligations pursuant to Section 11.1 upon the occurrence of an Event of
         Default, or (iii) such date as the Borrower may voluntarily and
         permanently terminate the Revolving Credit Facility by written notice
         to the Agent and payment in full of all Revolving Credit Outstandings
         and Letter of Credit Outstandings and cancellation of all Letters of
         Credit, together with all accrued and unpaid interest thereon.

                  "S&P" means Standard & Poor's Ratings Group, a division of
         McGraw-Hill.

                  "Security Agreement" means, collectively (or individually as
         the context may indicate), (i) the Security Agreement dated as of the
         Closing Date by the Borrower and the Guarantors to the Agent, and (ii)
         any additional Security Agreement delivered to the Agent pursuant to
         Section 9.20, as hereafter amended, supplemented or replaced from time
         to time.

                  "Security Instruments" means, collectively, the Pledge
         Agreement, the Security Agreement, the Mortgages, if any, the
         Assignment of Trademarks, the LC Account Agreement and all other
         agreements (including control agreements), instruments and other
         documents, whether now existing or hereafter in effect, pursuant to
         which the Borrower or any Subsidiary shall grant or convey to the Agent
         or the Lenders a Lien in, or any other Person shall acknowledge any
         such Lien in, property as security for all or any portion of the
         Obligations, as any of them may be amended, supplemented or replaced
         from time to time.

                  "Solvent" means, when used with respect to any Person, that at
         the time of determination:

                            (i) the fair value of its assets (both at fair
                  valuation and at present fair saleable value on an orderly
                  basis) is in excess of the total amount of its liabilities,
                  including Contingent Obligations; and

                           (ii) it is then able and expects to be able to pay
                  its debts as they mature; and

                           (iii) it has capital sufficient to carry on its
                  business as conducted and as proposed to be conducted.

                  "Stated Termination Date" means November 30, 2002, or such
         later date as the parties may agree pursuant to Section 2.1(f).

                  "Subsidiary" means any corporation or other entity in which
         more than 50% of its outstanding Voting Securities or more than 50% of
         all equity interests is owned directly or indirectly by the Borrower
         and/or by one or more of the Borrower's Subsidiaries.



                                       23
<PAGE>   30
                  "Subsidiary Securities" means the shares of capital stock or
         the other equity interests issued by or equity participations in any
         Subsidiary (including without limitation partnership and membership
         interests), whether or not constituting a "security" under Article 8 of
         the Uniform Commercial Code as in effect in any jurisdiction.

                  "Swap Agreement" means one or more agreements between the
         Borrower and any Person with respect to Indebtedness evidenced by any
         or all of the Notes, on terms mutually acceptable to Borrower and such
         Person and approved by the Required Lenders, which agreements create
         Rate Hedging Obligations; provided, however, that no such approval of
         the Required Lenders shall be required to the extent such agreements
         are entered into between the Borrower and any Lender or any affiliate
         of any Lender.

                  "Termination Event" means: (i) a "Reportable Event" described
         in Section 4043 of ERISA and the regulations issued thereunder (unless
         the notice requirement has been waived by applicable regulation); or
         (ii) the withdrawal of the Borrower or any ERISA Affiliate from a
         Pension Plan during a plan year in which it was a "substantial
         employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
         under Section 4062(e) of ERISA; or (iii) the termination of a Pension
         Plan, the filing of a notice of intent to terminate a Pension Plan or
         the treatment of a Pension Plan amendment as a termination under
         Section 4041 of ERISA; or (iv) the institution of proceedings to
         terminate a Pension Plan by the PBGC; or (v) any other event or
         condition which would constitute grounds under Section 4042(a) of ERISA
         for the termination of, or the appointment of a trustee to administer,
         any Pension Plan; or (vi) the partial or complete withdrawal of the
         Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
         imposition of a Lien pursuant to Section 412 of the Code or Section 302
         of ERISA; or (viii) any event or condition which results in the
         reorganization or insolvency of a Multiemployer Plan under Section 4241
         or Section 4245 of ERISA, respectively; or (ix) any event or condition
         which results in the termination of a Multiemployer Plan under Section
         4041A of ERISA or the institution by the PBGC of proceedings to
         terminate a Multiemployer Plan under Section 4042 of ERISA; or (x) any
         event or condition with respect to any Employee Benefit Plan which is
         regulated by any Foreign Benefit Law that results in the termination of
         such Employee Benefit Plan or the revocation of such Employee Benefit
         Plan's authority to operate under the applicable Foreign Benefit Law.

                  "Title Policy" means, with respect to each Mortgaged Property,
         the mortgagee title insurance policy (together with such endorsements
         as the Agent may reasonably require) issued to the Agent in respect of
         such Mortgaged Property by an insurer selected by the Borrower and
         reasonably acceptable to the Agent, insuring (in an amount satisfactory
         to the Agent) the Lien of the Agent for the benefit of the Agent and
         the Lenders on such Mortgaged Property to be duly perfected and of
         first priority, subject only to such exceptions as shall be acceptable
         to the Agent.

                  "Total Letter of Credit Commitment" means an amount not to
         exceed $2,000,000.


                                       24
<PAGE>   31
                  "Total Revolving Credit Commitment" means a principal amount
         equal to $15,000,000, as reduced from time to time in accordance with
         Section 2.1(e).

                  "Type" shall mean any type of Loan (i.e., a Base Rate Loan or
         a Eurodollar Rate Loan).

                  "Voting Securities" means shares of capital stock issued by a
         corporation, or equivalent interests in any other Person, the holders
         of which are ordinarily, in the absence of contingencies, entitled to
         vote for the election of directors (or persons performing similar
         functions) of such Person, even if the right so to vote has been
         suspended by the happening of such a contingency.

                  "Year 2000 Compliant" means all computer applications
         (including those affected by information received from its suppliers
         and vendors) that are material to the Borrower's or any of its
         Subsidiaries' business and operations will on a timely basis be able to
         perform properly date-sensitive functions involving all dates on and
         after January 1, 2000;

                  "Year 2000 Problem" means the risk that computer applications
         used by the Borrower or any of its Subsidiaries (including those
         affected by information received from its suppliers and vendors) may be
         unable to recognize and perform properly date-sensitive functions
         involving certain dates on and after January 1, 2000.

         1.2.     Rules of Interpretation.

                  (a) All accounting terms not specifically defined herein shall
         have the meanings assigned to such terms and shall be interpreted in
         accordance with GAAP applied on a Consistent Basis.

                  (b) Each term defined in Articles 1, 8 or 9 of the North
         Carolina Uniform Commercial Code shall have the meaning given therein
         unless otherwise defined herein, except to the extent that the Uniform
         Commercial Code of another jurisdiction is controlling, in which case
         such terms shall have the meaning given in the Uniform Commercial Code
         of the applicable jurisdiction.

                  (c) The headings, subheadings and table of contents used
         herein or in any other Loan Document are solely for convenience of
         reference and shall not constitute a part of any such document or
         affect the meaning, construction or effect of any provision thereof.

                  (d) Except as otherwise expressly provided, references in any
         Loan Document to articles, sections, paragraphs, clauses, annexes,
         appendices, exhibits and schedules are references to articles,
         sections, paragraphs, clauses, annexes, appendices, exhibits and
         schedules in or to such Loan Document.



                                       25
<PAGE>   32
                  (e) All definitions set forth herein or in any other Loan
         Document shall apply to the singular as well as the plural form of such
         defined term, and all references to the masculine gender shall include
         reference to the feminine or neuter gender, and vice versa, as the
         context may require.

                  (f) When used herein or in any other Loan Document, words such
         as "hereunder", "hereto", "hereof" and "herein" and other words of like
         import shall, unless the context clearly indicates to the contrary,
         refer to the whole of the applicable document and not to any particular
         article, section, subsection, paragraph or clause thereof.

                  (g) References to "including" means including without limiting
         the generality of any description preceding such term, and for purposes
         hereof the rule of ejusdem generis shall not be applicable to limit a
         general statement, followed by or referable to an enumeration of
         specific matters, to matters similar to those specifically mentioned.

                  (h) Except as otherwise expressly provided, all dates and
         times of day specified herein shall refer to such dates and times at
         Charlotte, North Carolina.

                  (i) Whenever interest rates or fees are established in whole
         or in part by reference to a numerical percentage expressed as "___%",
         such arithmetic expression shall be interpreted in accordance with the
         convention that 1% = 100 basis points.

                  (j) Each of the parties to the Loan Documents and their
         counsel have reviewed and revised, or requested (or had the opportunity
         to request) revisions to, the Loan Documents, and any rule of
         construction that ambiguities are to be resolved against the drafting
         party shall be inapplicable in the construing and interpretation of the
         Loan Documents and all exhibits, schedules and appendices thereto.

                  (k) Any reference to an officer of the Borrower or any other
         Person by reference to the title of such officer shall be deemed to
         refer to each other officer of such Person, however titled, exercising
         the same or substantially similar functions.

                  (l) All references to any agreement or document as amended,
         modified or supplemented, or words of similar effect, shall mean such
         document or agreement, as the case may be, as amended, modified or
         supplemented from time to time only as and to the extent permitted
         therein and in the Loan Documents.


                                       26
<PAGE>   33
                                   ARTICLE II

                              The Credit Facilities

         2.1.     Loans.

                  (a) Commitment. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Advances to the Borrower under
the Revolving Credit Facility from time to time from the Closing Date until the
Revolving Credit Termination Date on a pro rata basis as to the total borrowing
requested by the Borrower on any day determined by such Lender's Applicable
Commitment Percentage up to but not exceeding the Revolving Credit Commitment of
such Lender, provided, however, that the Lenders will not be required and shall
have no obligation to make any such Advance (i) so long as a Default or an Event
of Default has occurred and is continuing or (ii) if the Agent has accelerated
the maturity of any of the Notes as a result of an Event of Default; provided
further, however, that immediately after giving effect to each such Advance, the
amount of Revolving Credit Outstandings plus Letter of Credit Outstandings shall
not exceed the Total Revolving Credit Commitment. Within such limits and subject
to the other terms and conditions of this Agreement, the Borrower may borrow,
repay and reborrow under the Revolving Credit Facility on a Business Day from
the Closing Date until, but (as to borrowings and reborrowings) not including,
the Revolving Credit Termination Date.

                  (b) Amounts. Except as otherwise permitted by the Lenders from
time to time, the amount of Revolving Credit Outstandings plus Letter of Credit
Outstandings shall not exceed at any time the Total Revolving Credit Commitment,
and, in the event there shall be outstanding any such excess, the Borrower,
within ten (10) Business Days after receipt of notice from the Agent, shall make
such payments and prepayments as shall be necessary to comply with this
restriction. Each Advance under the Revolving Credit Facility, other than Base
Rate Refunding Loans, shall be in an amount of at least $500,000, and, if
greater than $500,000, an integral multiple of $100,000.

                  (c) Advances. (i) An Authorized Representative shall give the
Agent (1) at least three (3) Business Days' irrevocable telephonic notice of
each Eurodollar Rate Loan (whether representing an additional borrowing or the
Continuation of a borrowing hereunder or the Conversion of a borrowing hereunder
from a Base Rate Loan to a Eurodollar Rate Loan) prior to 10:30 A.M. no later
than the third Business Day prior to such Loan and (2) irrevocable telephonic
notice of each Base Rate Loan (other than Base Rate Refunding Loans to the
extent the same are effected without notice pursuant to Section 2.1(c)(iii) and
whether representing an additional borrowing hereunder or the Conversion of
borrowing hereunder from Eurodollar Rate Loans to Base Rate Loans) prior to
10:30 A.M. on the day of such proposed Loan. Each such notice shall be effective
upon receipt by the Agent, shall specify the amount of the borrowing, the type
of Loan (Base Rate or Eurodollar Rate), the date of borrowing and, if a
Eurodollar Rate Loan, the Interest Period to be used in the computation of
interest. The Authorized Representative shall provide the Agent written
confirmation of each such telephonic notice in the form of a Borrowing Notice or
Interest Rate Selection Notice (as applicable) with appropriate insertions sent
by telefacsimile transmission but failure to provide such confirmation shall not


                                       27
<PAGE>   34
affect the validity of such telephonic notice. Notice of receipt of such
Borrowing Notice or Interest Rate Selection Notice, as the case may be, together
with the amount of each Lender's portion of an Advance requested thereunder,
shall be provided by the Agent to each Lender by telefacsimile transmission with
reasonable promptness, but (provided the Agent shall have received such notice
by 11:30 A.M.) not later than 1:00 P.M. on the same day as the Agent's receipt
of such notice.

         (ii) Not later than 2:00 P.M. on the date specified for each borrowing
under this Section 2.1, each Lender shall, pursuant to the terms and subject to
the conditions of this Agreement, make the amount of the Advance or Advances to
be made by it on such day available by wire transfer to the Agent in the amount
of its pro rata share, determined according to such Lender's Applicable
Commitment Percentage of the Loan or Loans to be made on such day. Such wire
transfer shall be directed to the Agent at the Principal Office and shall be in
the form of Dollars constituting immediately available funds. The amount so
received by the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower by delivery of the proceeds thereof
to the Borrower's Account or otherwise as shall be directed in the applicable
Borrowing Notice by the Authorized Representative and reasonably acceptable to
the Agent.

         (iii) Notwithstanding the foregoing, if a drawing is made under any
Letter of Credit, such drawing is honored by the Issuing Bank, and the Borrower
shall not immediately fully reimburse the Issuing Bank in respect of such
drawing from other funds available to the Borrower, (A) provided that the
conditions to making a Loan as herein provided shall then be satisfied, the
Reimbursement Obligation arising from such drawing shall be paid to the Issuing
Bank by the Agent without the requirement of notice to or from the Borrower from
immediately available funds which shall be advanced as a Base Rate Refunding
Loan to the Agent at its Principal Office by each Lender under the Revolving
Credit Facility in an amount equal to such Lender's Applicable Commitment
Percentage of such Reimbursement Obligation, and (B) if the conditions to making
a Loan as herein provided shall not then be satisfied, each of the Lenders shall
fund by payment to the Agent (for the benefit of the Issuing Bank) at its
Principal Office in immediately available funds the purchase from the Issuing
Bank of their respective Participations in the related Reimbursement Obligation
based on their respective Applicable Commitment Percentages of the Total Letter
of Credit Commitment. If a drawing is presented under any Letter of Credit in
accordance with the terms thereof and the Borrower shall not immediately
reimburse the Issuing Bank in respect thereof, then notice of such drawing or
payment shall be provided promptly by the Issuing Bank to the Agent and the
Agent shall provide notice to each Lender by telephone or telefacsimile
transmission. If notice to the Lenders of a drawing under any Letter of Credit
is given by the Agent at or before 12:00 noon on any Business Day, each Lender
shall either make a Base Rate Refunding Loan or fund the purchase of its
Participation as specified above in the amount of such Lender's Applicable
Commitment Percentage of such drawing or payment and shall pay such amount to
the Agent for the account of the Issuing Bank at the Principal Office in Dollars
and in immediately available funds before 2:30 P.M. on the same Business Day. If
such notice to the Lenders is given by the Agent after 12:00 noon on any
Business Day, each Lender shall either make such Base Rate Refunding Loan or
fund such purchase before 12:00 noon on the next following Business Day.


                                       28
<PAGE>   35
                  (d) Repayment of Loans. The principal amount of each Loan
shall be due and payable to the Agent for the benefit of each Lender in full on
the Revolving Credit Termination Date, or earlier as specifically provided
herein. The principal amount of any Loan may be prepaid in whole or in part on
any Business Day, upon (A) at least three (3) Business Days' irrevocable
telephonic notice in the case of each Loan that is a Eurodollar Rate Loan from
an Authorized Representative (effective upon receipt) to the Agent prior to
12:30 P.M. and (B) irrevocable telephonic notice in the case of each Loan that
is a Base Rate Loan from an Authorized Representative (effective upon receipt)
to the Agent prior to 12:30 P.M. on the day of such proposed repayment. The
Authorized Representative shall provide the Agent written confirmation of each
such telephonic notice sent by telefacsimile transmission but failure to provide
such confirmation shall not effect the validity of such telephonic notice. All
prepayments of Loans made by the Borrower shall be in the amount of $500,000 or
such greater amount which is an integral multiple of $100,000, or the amount
equal to all Revolving Credit Outstandings, or such other amount as necessary to
comply with Section 2.1(b).

                  (e) Reductions. The Borrower shall, by notice from an
Authorized Representative, have the right from time to time but not more
frequently than once each calendar month, upon not less than three (3) Business
Days' written notice to the Agent, effective upon receipt, to reduce the Total
Revolving Credit Commitment. The Agent shall give each Lender, within one (1)
Business Day of receipt of such notice, telefacsimile notice, or telephonic
notice (confirmed in writing), of such reduction. Each such reduction shall be
in the aggregate amount of $5,000,000, or such greater amount which is in an
integral multiple of $1,000,000, or the entire remaining Total Revolving Credit
Commitment, and shall permanently reduce the Total Revolving Credit Commitment.
Each reduction of the Total Revolving Credit Commitment shall be accompanied by
payment of the Loans to the extent that the principal amount of Revolving Credit
Outstandings plus Letter of Credit Outstandings exceeds the Total Revolving
Credit Commitment after giving effect to such reduction, together with accrued
and unpaid interest on the amounts prepaid.

                  (f) Extension of Stated Termination Date. At the request of
the Borrower the Lenders may, in their sole discretion, elect to extend the
Stated Termination Date then in effect for two additional periods of one year
each. The Borrower shall notify the Lenders of its request for such an extension
by delivering to the Agent and the Lenders notice of such request signed by an
Authorized Representative not more than ninety (90) days nor less than sixty
(60) days prior to the anniversary of the Closing Date next preceding the Stated
Termination Date then in effect. If the Lenders shall elect to so extend, the
Agent shall notify the Borrower in writing within fifteen (15) days of its
receipt of such request for extension of the decision of the Lenders as to
whether to extend the Stated Termination Date. Failure by any Lender to respond
to a request for an extension shall constitute a refusal of such Lender to give
its consent to such extension. Failure by the Agent to give such notice shall
constitute refusal by the Lenders to extend the Stated Termination Date.

         2.2. Use of Proceeds. The proceeds of the Loans made pursuant to the
Revolving Credit Facility hereunder shall be used by the Borrower for general
working capital needs and other corporate purposes, including the making of
Capital Expenditures permitted hereunder.


                                       29
<PAGE>   36
         2.3. Notes. Loans made by each Lender shall be evidenced by the Note
payable to the order of such Lender in the respective amount of its Applicable
Commitment Percentage of the Total Revolving Credit Commitment, which Note shall
be dated the Closing Date or a later date pursuant to an Assignment and
Acceptance and shall be duly completed, executed and delivered by the Borrower.


                                       30
<PAGE>   37
                                   ARTICLE III

                                Letters of Credit

         3.1. Letters of Credit. The Issuing Bank agrees, subject to the terms
and conditions of this Agreement, upon request of the Borrower to issue from
time to time for the account of the Borrower Letters of Credit upon delivery to
the Issuing Bank of an Application and Agreement for Letter of Credit relating
thereto in form and content reasonably acceptable to the Issuing Bank; provided,
that (i) the Issuing Bank shall not be obligated to issue any Letter of Credit
if it has been notified by the Agent or has actual knowledge that a Default or
Event of Default has occurred and is continuing, (ii) the Letter of Credit
Outstandings shall not exceed the Total Letter of Credit Commitment and (iii) no
Letter of Credit shall be issued if, after giving effect thereto, Letter of
Credit Outstandings plus Revolving Credit Outstandings shall exceed the Total
Revolving Credit Commitment. No Letter of Credit shall have an expiry date
(including all rights of the Borrower or any beneficiary named in such Letter of
Credit to require renewal) or payment date occurring later than the earlier to
occur of one year after the date of its issuance or the seventh Business Day
prior to the Stated Termination Date.

         3.2. Reimbursement and Participations.

                  (a) The Borrower hereby unconditionally agrees to pay to the
Issuing Bank immediately on demand at the Principal Office all amounts required
to pay all drafts drawn under the Letters of Credit or documents purporting to
be Letters of Credit and all reasonable expenses incurred by the Issuing Bank in
connection with the Letters of Credit, and in any event to place in possession
of the Issuing Bank (which shall include Advances under the Revolving Credit
Facility if permitted by Section 2.1) sufficient funds to pay all debts and
liabilities arising under any Letter of Credit. The Issuing Bank agrees to give
the Borrower prompt notice of any request for a draw under a Letter of Credit.
The Issuing Bank may charge any account the Borrower may have with it for any
and all amounts the Issuing Bank pays under a Letter of Credit, plus charges and
reasonable expenses as from time to time agreed to by the Issuing Bank and the
Borrower; provided that to the extent permitted by Section 2.1(c)(iii), amounts
shall be paid pursuant to Advances under the Revolving Credit Facility. The
Borrower agrees to pay the Issuing Bank interest on any Reimbursement
Obligations not paid when due hereunder either directly by the Borrower or
through Advances at the Default Rate.

                  (b) In accordance with the provisions of Section 2.1(c), the
Issuing Bank shall notify the Agent of any drawing under any Letter of Credit
promptly following the receipt by the Issuing Bank of such drawing.

                  (c) Each Lender (other than the Issuing Bank) shall
automatically acquire on the date of issuance thereof, a Participation in the
liability of the Issuing Bank in respect of each Letter of Credit in an amount
equal to such Lender's Applicable Commitment Percentage of such liability, and
to the extent that the Borrower is obligated to pay the Issuing Bank under
Section 3.2(a), each Lender (other than the Issuing Bank) thereby shall
absolutely, unconditionally and irrevocably assume, and shall be unconditionally
obligated to pay to the Issuing Bank, its


                                       31
<PAGE>   38
Applicable Commitment Percentage of the liability of the Issuing Bank under such
Letter of Credit in the manner and with the effect provided in Section
2.1(c)(iii).

                  (d) Simultaneously with the making of each payment by a Lender
to the Issuing Bank pursuant to Section 2.1(c)(iii)(B), such Lender shall,
automatically and without any further action on the part of the Issuing Bank or
such Lender, acquire a Participation in an amount equal to such payment
(excluding the portion thereof constituting interest accrued prior to the date
the Lender made its payment) in the related Reimbursement Obligation of the
Borrower. Each Lender's obligation to make payment to the Agent for the account
of the Issuing Bank pursuant to Section 2.1(c)(iii) and Section 3.2(c), and the
right of the Issuing Bank to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever and shall be
made without any offset, abatement, withholding or reduction whatsoever. In the
event the Lenders have purchased Participations in any Reimbursement Obligation
as set forth above, then at any time payment (in fully collected, immediately
available funds) of such Reimbursement Obligation, in whole or in part, is
received by the Issuing Bank from the Borrower, the Issuing Bank shall promptly
pay to each Lender an amount equal to its Applicable Commitment Percentage of
such payment from the Borrower.

                  (e) Promptly following the end of each calendar quarter, the
Issuing Bank shall deliver to the Agent a notice describing the aggregate
undrawn amount of all Letters of Credit at the end of such quarter. Upon the
request of any Lender from time to time, the Issuing Bank shall deliver to the
Agent, and the Agent shall deliver to such Lender, any other information
reasonably requested by such Lender with respect to each Letter of Credit
outstanding.

                  (f) The issuance by the Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in Article VII, be
subject to the conditions that such Letter of Credit be in such form and contain
such terms as shall be reasonably satisfactory to the Issuing Bank consistent
with the then current practices and procedures of the Issuing Bank with respect
to similar letters of credit, and the Borrower shall have executed and delivered
such other instruments and agreements relating to such Letters of Credit as the
Issuing Bank shall have reasonably requested consistent with such practices and
procedures and shall not be in conflict with any of the express terms herein
contained. All Letters of Credit shall be issued pursuant to and subject to the
Uniform Customs and Practice for Documentary Credits, 1993 revision,
International Chamber of Commerce Publication No. 500 or, if the Issuing Bank
shall elect by express reference in an affected Letter of Credit, the
International Chamber of Commerce International Standby Practices commonly
referred to as "ISP98", or any subsequent amendment or revision of either
thereof.

                  (g) The Borrower agrees that the Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter of Credit,
any drafts or other documents, which on their face otherwise comply with the
terms of any Letter of Credit, which may be signed or issued by an
administrator, executor, trustee in bankruptcy, debtor in possession, assignee
for the benefit of creditors, liquidator, receiver, attorney in fact or other
legal


                                       32
<PAGE>   39
representative of a party who is authorized under such Letter of Credit to
draw or issue any drafts or other documents.

                  (h) Without limiting the generality of the provisions of
Section 13.9, the Borrower hereby agrees to indemnify and hold harmless the
Issuing Bank, each other Lender and the Agent from and against any and all
claims and damages, losses, liabilities, reasonable costs and expenses which the
Issuing Bank, such other Lender or the Agent may incur (or which may be claimed
against the Issuing Bank, such other Lender or the Agent) by any Person by
reason of or in connection with the issuance or transfer of or payment or
failure to pay under any Letter of Credit; provided that the Borrower shall not
be required to indemnify the Issuing Bank, any other Lender or the Agent for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, (i) caused by the willful misconduct or gross negligence of the
party to be indemnified or (ii) caused by the failure of the Issuing Bank to pay
under any Letter of Credit after the presentation to it of a request for payment
strictly complying with the terms and conditions of such Letter of Credit,
unless such payment is prohibited by any law, regulation, court order or decree.
The indemnification and hold harmless provisions of this Section 3.2(h) shall
survive repayment of the Obligations, occurrence of the Revolving Credit
Termination Date, the Facility Termination Date and expiration or termination of
this Agreement.

                  (i) Without limiting Borrower's rights as set forth in Section
3.2(h), the obligation of the Borrower to immediately reimburse the Issuing Bank
for drawings made under Letters of Credit and the Issuing Bank's right to
receive such payment shall be absolute, unconditional and irrevocable, and such
obligations of the Borrower shall be performed strictly in accordance with the
terms of this Agreement and such Letters of Credit and the related Application
and Agreement for any Letter of Credit, under all circumstances whatsoever,
including the following circumstances:

                           (i) any lack of validity or enforceability of the
                  Letter of Credit, the obligation supported by the Letter of
                  Credit or any other agreement or instrument relating thereto
                  (collectively, the "Related LC Documents");

                           (ii) any amendment or waiver of or any consent to or
                  departure from all or any of the Related LC Documents approved
                  in writing by the Borrower;

                           (iii) the existence of any claim, setoff, defense
                  (other than the defense of payment in accordance with the
                  terms of this Agreement) or other rights which the Borrower
                  may have at any time against any beneficiary or any transferee
                  of a Letter of Credit (or any persons or entities for whom any
                  such beneficiary or any such transferee may be acting), the
                  Agent, the Lenders or any other Person, whether in connection
                  with the Loan Documents, the Related LC Documents or any
                  unrelated transaction;

                           (iv) any breach of contract or other dispute between
                  the Borrower and any beneficiary or any transferee of a Letter
                  of Credit (or any persons or entities


                                       33
<PAGE>   40
                  for whom such beneficiary or any such transferee may be
                  acting), the Agent, the Lenders or any other Person;

                           (v) any draft, statement or any other document
                  presented under the Letter of Credit proving to be forged,
                  fraudulent, invalid or insufficient in any respect or any
                  statement therein being untrue or inaccurate in any respect
                  whatsoever; or

                           (vi) any delay, extension of time, renewal,
                  compromise or other indulgence or modification granted or
                  agreed to by the Agent, with or without notice to or approval
                  by the Borrower in respect of any of Borrower's Obligations
                  under this Agreement.


                                       34
<PAGE>   41
                                   ARTICLE IV

                   Loan Funding, Fees, and Payment Conventions

         4.1 Interest Rate Options. Eurodollar Rate Loans and Base Rate Loans
may be outstanding at the same time and, so long as no Event of Default shall
have occurred and be continuing, the Borrower shall have the option to elect the
Type of Loan and the duration of the initial and any subsequent Interest Periods
and to Convert Loans in accordance with Sections 2.1(c)(i) and 4.2, as
applicable; provided, however, (a) there shall not be outstanding at any one
time Eurodollar Rate Loans having more than four (4) different Interest Periods,
(b) each Eurodollar Rate Loan (including each Conversion into and each
Continuation as a Eurodollar Rate Loan) shall be in an amount of $500,000 or, if
greater than $500,000 an integral multiple of $100,000, and (c) no Eurodollar
Rate Loan shall have an Interest Period that extends beyond the Stated
Termination Date. If the Agent does not receive a Borrowing Notice or an
Interest Rate Selection Notice giving notice of election of the duration of an
Interest Period or of Conversion of any Loan to or Continuation of a Loan as a
Eurodollar Rate Loan by the time prescribed by Sections 2.1(c)(i) and 4.2, as
applicable, (i) if there shall be fewer than two Lenders, the Borrower shall be
deemed to have elected to Convert such Loan to (or Continue such Loan as) a Loan
of the same Type and Interest Period as the Loan to be Converted or Continued
and (ii) at such time as there are two or more Lenders, the Borrower shall be
deemed to have elected to obtain or Convert such Loan to (or Continue such Loan
as) a Base Rate Loan, in each case until the Borrower notifies the Agent in
accordance with Section 4.2. The Borrower shall not be entitled to elect to
Continue any Loan as or Convert any Loan into a Eurodollar Rate Loan if an Event
of Default shall have occurred and be continuing.

         4.2 Conversions and Elections of Subsequent Interest Periods. Subject
to the limitations set forth in the definition of "Interest Period" and in
Section 4.1 and Article VI, the Borrower may:

         (a) upon delivery of telephonic notice to the Agent (which shall be
irrevocable) on or before 10:30 A.M. on any Business Day, Convert any Eurodollar
Rate Loan to a Base Rate Loan on the last day of the Interest Period for such
Eurodollar Rate Loan; and

         (b) provided that no Default or Event of Default shall have occurred
and be continuing, upon delivery of telephonic notice to the Agent (which shall
be irrevocable) on or before 10:30 A.M. three (3) Business Days' prior to the
date of such Conversion or Continuation:

                  (i) elect a subsequent Interest Period for any Eurodollar Rate
         Loan to begin on the last day of the then current Interest Period for
         such Eurodollar Rate Loan; or

                  (ii) Convert any Base Rate Loan to a Eurodollar Rate Loan on
         any Business Day.

Each such notice shall be effective upon receipt by the Agent, shall specify the
amount of the Eurodollar Rate Loan affected, and, if a Continuation as or
Conversion into a Eurodollar Rate


                                       35
<PAGE>   42
Loan, the Interest Period to be used in the computation of interest. The
Authorized Representative shall provide the Agent written confirmation of each
such telephonic notice in the form of a Borrowing Notice or Interest Rate
Selection Notice (as applicable) with appropriate insertions but failure to
provide such confirmation shall not affect the validity of such telephonic
notice. Notice of receipt of such Borrowing Notice or Interest Rate Selection
Notice, as the case may be, shall be provided by the Agent to each Lender by
telefacsimile transmission with reasonable promptness, but (provided the Agent
shall have received such notice by 10:30 A.M.) not later than 3:00 P.M. on the
same day as the Agent's receipt of such notice. All such Continuations or
Conversions of Loans shall be effected pro rata based on the Applicable
Commitment Percentages of the Lenders.

         4.3 Payment of Interest. The Borrower shall pay interest on the
outstanding and unpaid principal amount of each Loan, commencing on the first
date of such Loan until such Loan shall be repaid, at the applicable Base Rate
or Eurodollar Rate as designated by the Borrower in the related Borrowing Notice
or Interest Rate Selection Notice or as otherwise provided hereunder. Interest
on each Loan shall be paid on the earlier of (a) in the case of any Base Rate
Loan, quarterly in arrears of the last Business Day of each March, June,
September and December, commencing on December 31, 1999, until the Revolving
Credit Termination Date, at which date the entire principal amount of and all
accrued interest on the Loans shall be paid in full, (b) in the case of any
Eurodollar Rate Loan, on last day of the applicable Interest Period for such
Eurodollar Rate Loan and if such Interest Period extends for more than three (3)
months, at intervals of three (3) months after the first day of such Interest
Period, and (c) upon payment in full of the related Loan; provided, however,
that if any Event of Default shall occur and be continuing, all amounts
outstanding hereunder shall bear interest thereafter until paid in full at the
Default Rate until paid in full or such Event of Default is waived.

         4.4 Prepayments of Eurodollar Rate Loans. Whenever any payment of
principal shall be made in respect of any Eurodollar Rate Loan hereunder,
whether at maturity, on acceleration, by optional or mandatory prepayment or as
otherwise required or permitted hereunder, with the effect that any Eurodollar
Rate Loan shall be prepaid in whole or in part prior to the last day of the
Interest Period applicable to such Eurodollar Rate Loan, such payment of
principal shall be accompanied by the additional payment, if any, required by
Section 6.5.

         4.5 Manner of Payment. (a) Each payment of principal (including any
prepayment) and payment of interest and fees, and any other amount required to
be paid by or on behalf of the Borrower to the Lenders, the Issuing Bank, the
Agent, or Bank of America with respect to any Loan, Letter of Credit, or
Reimbursement Obligation shall be made to the Agent at the Principal Office in
Dollars in immediately available funds without condition or deduction or for any
setoff, recoupment, deduction or counterclaim on or before 2:30 P.M. on the date
such payment is due. The Agent may, but shall not be obligated to, debit the
amount of such payment from any one or more ordinary deposit accounts of the
Borrower with the Agent.

         (b) Any payment made by or on behalf of the Borrower that is not made
both in Dollars in immediately available funds and prior to 2:30 P.M. on the
date such payment is to be made shall constitute a non-conforming payment. Any
such non-conforming payment shall not


                                       36
<PAGE>   43
be deemed to be received until the later of (i) the time such funds become
available funds and (ii) the next Business Day. Interest shall continue to
accrue at the applicable interest rate on any principal or fees as to which a
non-conforming payment is made from the date such amount was due and payable
until the later of (i) the date such funds become available funds or (ii) the
next Business Day.

         (c) In the event that any payment hereunder or under any of the Notes
becomes due and payable on a day other than a Business Day, then such due date
shall be extended to the next succeeding Business Day unless provided otherwise
under the definition of "Interest Period"; provided, however, that interest
shall continue to accrue during the period of any such extension; and provided
further, however, that in no event shall any such due date be extended beyond
the Revolving Credit Termination Date.

         4.6 Fees. (a) Commitment Fee. For the period beginning on the Closing
Date and ending on the Revolving Credit Termination Date, the Borrower agrees to
pay to the Agent, for the pro rata benefit of the Lenders based on their
Applicable Commitment Percentages, a commitment fee equal to the Applicable
Commitment Fee multiplied by the average daily amount by which the Total
Revolving Credit Commitment exceeds the sum of (i) Revolving Credit Outstandings
plus (ii) Letter of Credit Outstandings. Such fees shall be due in arrears on
the last Business Day of each March, June, September and December commencing
December 31, 1999 to and on the Revolving Credit Termination Date.
Notwithstanding the foregoing, so long as any Lender fails to make available any
portion of its Revolving Credit Commitment when requested, such Lender shall not
be entitled to receive payment of its pro rata share of such fee until such
Lender shall make available such portion.

         (b) Letter of Credit Facility Fees. The Borrower shall pay to the
Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a fee on the aggregate amount available to be drawn on
each outstanding Letter of Credit at a rate equal to the Applicable Margin for
Eurodollar Rate Loans on each Determination Date. Such fees shall be due with
respect to each Letter of Credit quarterly in arrears on the last day of each
March, June, September and December, the first such payment to be made on the
first such date occurring after the date of issuance of a Letter of Credit.

         (c) Letter of Credit Fronting and Administrative Fees. From and after
the date on which there is more than one Lender, the Borrower shall pay to the
Issuing Bank a fronting fee of one-eighth of one percent per annum (0.125%) on
the aggregate amount available to be drawn on each outstanding Letter of Credit,
such fee to be payable quarterly in arrears with respect to each Letter of
Credit on the dates established in Section 4.6(b) for the payment of Letter of
Credit facility fees with respect to such Letter of Credit.

         4.7 Pro Rata Payments. Except as otherwise specified herein, (a) each
payment on account of the principal of and interest on Loans, the fees described
in Section 4.6(a) and (b), and Reimbursement Obligations as to which the Lenders
have funded their respective Participations which remain outstanding, shall be
made to the Agent for the account of the Lenders pro rata based on their
Applicable Commitment Percentages, and (b) the Agent will promptly distribute


                                       37
<PAGE>   44
to the Lenders in immediately available funds payments received in fully
collected, immediately available funds from the Borrower.

         4.8 Computation of Rates and Fees. Except as may be otherwise expressly
provided, (i) the Base Rate shall be computed on the basis of a year of 365/6
days and calculated for actual days elapsed, and (ii) all other interest rates
(including each Eurodollar Rate and the Default Rate) and fees shall be computed
on the basis of a year of 360 days and calculated for actual days elapsed.

         4.9 Deficiency Advances; Failure to Purchase Participations. No Lender
shall be responsible for any default of any other Lender in respect to such
other Lender's obligation to make any Loan or Advance hereunder or to fund its
purchase of any Participation hereunder nor shall the Revolving Credit
Commitment or Letter of Credit Commitment of any Lender hereunder be increased
as a result of such default of any other Lender. Without limiting the generality
of the foregoing or the provisions of Section 4.10, in the event any Lender
shall fail to advance funds to the Borrower as herein provided, the Agent may in
its discretion, but shall not be obligated to, advance under the applicable Note
in its favor as a Lender all or any portion of such amount or amounts (each, a
"deficiency advance") and shall thereafter be entitled to payments of principal
of and interest on such deficiency advance in the same manner and at the same
interest rate or rates to which such other Lender would have been entitled had
it made such Advance under its Note; provided that, (i) such defaulting Lender
shall not be entitled to receive payments of principal, interest or fees with
respect to such deficiency advance until such deficiency advance (together with
interest thereon as provided in clause (ii)) shall be paid by such Lender and
(ii) upon payment to the Agent from such other Lender of the entire outstanding
amount of each such deficiency advance, together with accrued and unpaid
interest thereon, from the most recent date or dates interest was paid to the
Agent by a Borrower on each Loan comprising the deficiency advance at the
Federal Funds Rate, then such payment shall be credited against the applicable
Note of the Agent in full payment of such deficiency advance and such Borrower
shall be deemed to have borrowed the amount of such deficiency advance from such
other Lender as of the most recent date or dates, as the case may be, upon which
any payments of interest were made by such Borrower thereon. In the event any
Lender shall fail to fund its purchase of a Participation after notice from the
Issuing Bank, such Lender shall pay to the Issuing Bank, such amount on demand,
together with interest on the amount so due from the date of such notice at the
Federal Funds Rate on the date such purchase price is received by the Issuing
Bank.

         4.10 Intraday Funding. Without limiting the provisions of Section 4.9,
unless the Borrower or any Lender has notified the Agent not later than 1:00
P.M. of the Business Day before the date any payment (including in the case of
Lenders any Advance) to be made by it is due, that it does not intend to remit
such payment, the Agent may, in its discretion, assume that Borrower or each
Lender, as the case may be, has timely remitted such payment in the manner
required hereunder and may, in its discretion and in reliance thereon, make
available such payment (or portion thereof) to the Person entitled thereto as
otherwise provided herein. If such payment was not in fact remitted to the Agent
in the manner required hereunder, then:


                                       38
<PAGE>   45
                  (i) if Borrower failed to make such payment, each Lender shall
         forthwith on demand repay to the Agent the amount of such assumed
         payment made available to such Lender, together with interest thereon
         in respect of each day from and including the date such amount was made
         available by the Agent to such Lender to the date such amount is repaid
         to the Agent at the Federal Funds Rate; and

                  (ii) if any Lender failed to make such payment, the Agent
         shall be entitled to recover such corresponding amount forthwith upon
         the Agent's demand therefor, the Agent promptly shall notify the
         Borrower, and the Borrower shall promptly pay such corresponding amount
         to the Agent in immediately available funds upon receipt of such
         demand. The Agent also shall be entitled to recover interest on such
         corresponding amount in respect of each day from the date such
         corresponding amount was made available by the Agent to the Borrower to
         the date such corresponding amount is recovered by the Agent, (A) from
         such Lender at a rate per annum equal to the daily Federal Funds Rate
         or (B) from the Borrower, at a rate per annum equal to the interest
         rate applicable to the Loan which includes such corresponding amount.
         Until the Agent shall recover such corresponding amount together with
         interest thereon, such corresponding amount shall constitute a
         deficiency advance within the meaning of Section 4.9. Nothing herein
         shall be deemed to relieve any Lender from its obligation to fulfill
         its commitments hereunder or to prejudice any rights which the Agent or
         the Borrower may have against any Lender as a result of any default by
         such Lender hereunder.


                                       39
<PAGE>   46
                                    ARTICLE V

                                    Security

         5.1. Security. As security for the full and timely payment and
performance of all Obligations, the Borrower shall, and shall cause all other
Credit Parties to, on or before the Closing Date, do or cause to be done all
things necessary in the opinion of the Agent and its counsel to grant to the
Agent for the benefit of the Lenders a duly perfected first priority security
interest in all Collateral subject to no prior Lien or other encumbrance or
restriction on transfer (other than Permitted Liens and restrictions on transfer
imposed by applicable securities laws). Without limiting the foregoing, the
Borrower and each Domestic Subsidiary having rights in any Subsidiary Securities
shall on the Closing Date deliver to the Agent, in form and substance reasonably
acceptable to the Agent, (A) a Pledge Agreement which shall pledge to the Agent
for the benefit of the Agent and the Lenders (i) 65% of the Subsidiary
Securities (other than Management Securities) of each Direct Foreign Subsidiary,
and (ii) all of the Subsidiary Securities (other than Management Securities) of
each Domestic Subsidiary, (B) if such Subsidiary Securities are in the form of
certificated securities, such certificated securities, together with undated
stock powers or other appropriate transfer documents endorsed in blank
pertaining thereto, (C) if such Subsidiary Securities do not constitute
securities and the issuer thereof has not elected to have such interests treated
as securities under Article 8 of the Uniform Commercial Code, a control
agreement (containing the provisions described in Section 9.20(e)) from the
Registrar of such Subsidiary Securities, and (D) Uniform Commercial Code
financing statements reflecting the Lien in favor of the Agent on such
Subsidiary Securities, each in form and substance reasonably acceptable to the
Agent, and shall take such further action and deliver or cause to be delivered
such further documents as required by the Security Instruments or otherwise as
the Agent may reasonably request to effect the transactions contemplated by this
Article V. The Borrower shall, and shall cause each Domestic Subsidiary, to
pledge to the Agent for the benefit of the Agent and the Lenders (and as
appropriate to reaffirm its prior pledge of) all of the Pledged Interests of any
Subsidiary acquired or created after the Closing Date and deliver to the Agent
all of the documents and instruments in connection therewith as are required
pursuant to the terms of Section 9.20 and of the Security Instruments.

         5.2. Further Assurances. At the request of the Agent, the Borrower will
or will cause all other Credit Parties, as the case may be, to execute, by its
duly authorized officers, alone or with the Agent, any certificate, instrument,
financing statement, control agreement, statement or document, or to procure any
such certificate, instrument, statement or document, or to take such other
action (and pay all connected costs) which the Agent reasonably deems necessary
from time to time to create, continue or preserve the liens and security
interests in Collateral (and the perfection and priority thereof) of the Agent
contemplated hereby and by the other Loan Documents and specifically including
all Collateral acquired by the Borrower or other Credit Party after the Closing
Date. The Agent is hereby irrevocably authorized to execute and file or cause to
be filed, with or if permitted by applicable law without the signature of the
Borrower or any Credit Party appearing thereon, all Uniform Commercial Code
financing statements reflecting the Borrower or any other Credit Party as
"debtor" and the Agent as "secured party", and continuations thereof and
amendments thereto, as the Agent reasonably deems necessary or


                                       40
<PAGE>   47
advisable to give effect to the transactions contemplated hereby and by the
other Loan Documents.

         5.3. Information Regarding Collateral. The Borrower represents,
warrants and covenants that as of the Closing Date (i) the chief executive
office of the Borrower and each other Person providing Collateral pursuant to a
Security Instrument (each, a "Grantor") is located at the address or addresses
specified on Schedule 5.3, and (ii) Schedule 5.3 contains a true and complete
list of (a) the exact legal name, jurisdiction of formation, and address of each
Grantor and of each other Person that has effected any merger or consolidation
with a Grantor or contributed or transferred to a Grantor any property
constituting Collateral at any time since January 1, 1994 (excluding Persons
making sales in the ordinary course of their businesses to a Grantor of property
constituting inventory in the hands of such seller), (b) the exact legal name,
jurisdiction of formation, and each location of the chief executive office of
each Grantor at any time since January 1, 1994, (c) each location in which goods
constituting Collateral are or have been located since January 1, 1994 (together
with the name of each owner of the property located at such address if not the
applicable Grantor, and a summary description of the relationship between the
applicable Grantor and such Person), and (d) each trade style used by any
Grantor since January 1, 1994 and the purposes for which it was used. Borrower
shall not change, and shall not permit any other Grantor to change, its name,
jurisdiction of formation (whether by reincorporation, merger or otherwise), the
location of its chief executive office or any location specified in clause (c)
of the immediately preceding sentence, or use or permit any other Grantor to
use, any additional trade style, except upon giving not less than thirty (30)
days' prior written notice to the Agent and taking or causing to be taken all
such action at Borrower's or such other Grantor's expense as may be reasonably
requested by the Agent to perfect or maintain the perfection of the Lien of the
Agent in Collateral.


                                       41
<PAGE>   48
                                   ARTICLE VI

                             Change in Circumstances

         6.1. Increased Cost and Reduced Return.

         (a) If, after the date hereof, the adoption of any applicable law,
rule, or regulation, or any change in any applicable law, rule, or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such governmental authority, central bank, or
comparable agency:

                         (i) shall subject such Lender (or its Applicable
         Lending Office) to any tax, duty, or other charge with respect to any
         Eurodollar Rate Loans, its Note, or its obligation to make Eurodollar
         Rate Loans, or change the basis of taxation of any amounts payable to
         such Lender (or its Applicable Lending Office) under this Agreement or
         its Note in respect of any Eurodollar Rate Loans (other than taxes
         imposed on the overall net income of such Lender by the jurisdiction in
         which such Lender has its principal office or such Applicable Lending
         Office);

                        (ii) shall impose, modify, or deem applicable any
         reserve, special deposit, assessment, or similar requirement (other
         than the Reserve Requirement utilized in the determination of the
         Eurodollar Rate) relating to any extensions of credit or other assets
         of, or any deposits with or other liabilities or commitments of, such
         Lender (or its Applicable Lending Office), including the Revolving
         Credit Commitment of such Lender hereunder; or

                       (iii) shall impose on such Lender (or its Applicable
         Lending Office) or on the London interbank market any other condition
         affecting this Agreement or its Note or any of such extensions of
         credit or liabilities or commitments;

and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Loans or to reduce any sum received or receivable by such Lender
(or its Applicable Lending Office) under this Agreement or its Note with respect
to any Eurodollar Rate Loans, then the Borrower shall pay to such Lender on
demand such amount or amounts as will compensate such Lender for such increased
cost or reduction. If any Lender requests compensation by the Borrower under
this Section 6.1(a), the Borrower may, by notice to such Lender (with a copy to
the Agent), suspend the obligation of such Lender to make or Continue Eurodollar
Rate Loans with respect to which such compensation is requested, or to Convert
Loans of any other Type into Eurodollar Rate Loans, until the event or condition
giving rise to such request ceases to be in effect (in which case the provisions
of Section 6.4 shall be applicable); provided that such suspension shall not
affect the right of such Lender to receive the compensation so requested.


                                       42
<PAGE>   49
         (b) If, after the date hereof, any Lender shall have determined that
the adoption of any applicable law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank, or comparable agency, has or
would have the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.

         (c) Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 6.1 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section 6.1 shall furnish to the Borrower and the Agent
a statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.

         6.2. Limitation on Types of Loans. If on or prior to the first day of
any Interest Period for any Eurodollar Rate Loan:

                  (a) the Agent reasonably determines (which determination shall
         be conclusive) that by reason of circumstances affecting the relevant
         market, adequate and reasonable means do not exist for ascertaining the
         Eurodollar Rate for such Interest Period; or

                  (b) the Required Lenders determine (which determination shall
         be conclusive) and notify the Agent that the Eurodollar Rate will not
         adequately and fairly reflect the cost to the Lenders of funding
         Eurodollar Rate Loans for such Interest Period;

then the Agent shall give the Borrower prompt notice thereof specifying the
relevant amounts or periods, and so long as such condition remains in effect,
the Lenders shall be under no obligation to make additional Eurodollar Rate
Loans, Continue Eurodollar Rate Loans, or to Convert Loans of any other Type
into Eurodollar Rate Loans using such Interest Period and the Borrower shall, on
the last day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Rate Loans, either prepay such Eurodollar Rate Loans or Convert such
Eurodollar Rate Loans into another Type of Loan or select an alternate Interest
Period available for such Eurodollar Rate Loans all in accordance with the terms
of this Agreement.


                                       43
<PAGE>   50
         6.3. Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Rate Loans hereunder, then such
Lender shall promptly notify the Borrower thereof and such Lender's obligation
to make or Continue Eurodollar Rate Loans and to Convert other Types of Loans
into Eurodollar Rate Loans shall be suspended until such time as such Lender may
again make, maintain, and fund Eurodollar Rate Loans (in which case the
provisions of Section 6.4 shall be applicable).

         6.4. Treatment of Affected Loans. If the obligation of any Lender to
make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any other
Type into, Eurodollar Loans shall be suspended pursuant to Section 6.1 or 6.3
hereof (Loans of such Type being herein called "Affected Loans" and such Type
being herein called the "Affected Type"), such Lender's Affected Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for Affected Loans (or, in the case of a Conversion
required by Section 6.3 hereof, on such earlier date as such Lender may specify
to the Borrower with a copy to the Agent) and, unless and until such Lender
gives notice as provided below that the circumstances specified in Section 6.1
or 6.3 hereof that gave rise to such Conversion no longer exist:

                  (a) to the extent that such Lender's Affected Loans have been
         so Converted, all payments and prepayments of principal that would
         otherwise be applied to such Lender's Affected Loans shall be applied
         instead to its Base Rate Loans; and

                  (b) all Loans that would otherwise be made or Continued by
         such Lender as Loans of the Affected Type shall be made or Continued
         instead as Base Rate Loans, and all Loans of such Lender that would
         otherwise be Converted into Loans of the Affected Type shall be
         Converted instead into (or shall remain as) Base Rate Loans.

If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 6.1 or 6.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 6.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Revolving
Credit Commitments.

         6.5. Compensation. Upon the request of any Lender, the Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any actual loss, cost,
or expense (including loss of demonstrable anticipated profits) incurred by it
as a result of:


                                       44
<PAGE>   51
                  (a) any payment, prepayment, or Conversion of a Eurodollar
         Rate Loan for any reason (including, without limitation, the
         acceleration of the Loans pursuant to Section 11.1) on a date other
         than the last day of the Interest Period for such Loan; or

                  (b) any failure by the Borrower for any reason (including,
         without limitation, the failure of any condition precedent specified in
         Article VII to be satisfied) to borrow, Convert, Continue, or prepay a
         Eurodollar Rate Loan on the date for such borrowing, Conversion,
         Continuation, or prepayment specified in the relevant notice of
         borrowing, prepayment, Continuation, or Conversion under this
         Agreement.

         6.6. Taxes. (a) Any and all payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each Lender and
the Agent, taxes imposed on its income, and franchise taxes imposed on it, by
the jurisdiction under the laws of which such Lender (or its Applicable Lending
Office) or the Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities 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 under this Agreement or any other Loan Document
to any Lender or the Agent, (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 6.6) such Lender or the Agent
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law, and (iv) the Borrower
shall furnish to the Agent, at its address referred to in Section 13.2, the
original or a certified copy of a receipt evidencing payment thereof.

         (b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this Agreement
or any other Loan Document or from the execution or delivery of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter referred
to as "Other Taxes").

         (c) The Borrower agrees to indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 6.6) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.

         (d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if


                                       45
<PAGE>   52
requested in writing by the Borrower or the Agent (but only so long as such
Lender remains lawfully able to do so), shall provide the Borrower and the Agent
with (i) Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States, (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any
successor form prescribed by the Internal Revenue Service, and (iii) any other
form or certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying
that such Lender is entitled to an exemption from or a reduced rate of tax on
payments pursuant to this Agreement or any of the other Loan Documents.

         (e) For any period with respect to which a Lender has failed to provide
the Borrower and the Agent with the appropriate form pursuant to Section 6.6(d)
(unless such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 6.6(a) or
6.6(b) with respect to Taxes imposed by the United States; provided, however,
that should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.

         (f) If the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 6.6, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the reasonable judgment of such Lender, is
not otherwise disadvantageous to such Lender.

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

         (h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 6.6 shall survive the termination of the Revolving Credit
Commitments and the payment in full of the Notes and the Facility Termination
Date.


                                       46
<PAGE>   53
                                   ARTICLE VII

            Conditions to Making Loans and Issuing Letters of Credit

         7.1. Conditions of Initial Advance. The obligation of the Lenders to
make the initial Advance under the Revolving Credit Facility, and of the Issuing
Bank to issue any Letter of Credit, is subject to the conditions precedent that:

                  (a) the Agent shall have received on the Closing Date, in form
         and substance satisfactory to the Agent and Lenders, the following:

                           (i) executed originals of each of this Agreement, the
                  Notes, the initial Facility Guaranties, the Security
                  Instruments, the LC Account Agreement, the other Loan
                  Documents, together with all schedules and exhibits thereto;

                           (ii) the favorable written opinion or opinions with
                  respect to the Loan Documents and the transactions
                  contemplated thereby of counsel to the Credit Parties dated
                  the Closing Date, addressed to the Agent and the Lenders and
                  satisfactory to special counsel to the Agent, substantially in
                  the form of Exhibit G;

                           (iii) resolutions of the boards of directors or other
                  appropriate governing body (or of the appropriate committee
                  thereof) of each Credit Party certified by its secretary or
                  assistant secretary as of the Closing Date, approving and
                  adopting the Loan Documents to be executed by such Person, and
                  authorizing the execution and delivery thereof;

                           (iv) specimen signatures of officers or other
                  appropriate representatives executing the Loan Documents on
                  behalf of each of the Credit Parties, certified by the
                  secretary or assistant secretary of such Credit Party;

                           (v) the Organizational Documents of each of the
                  Credit Parties certified as of a recent date by the Secretary
                  of State of its state of organization;

                           (vi) Operating Documents of each of the Credit
                  Parties certified as of the Closing Date as true and correct
                  by its secretary or assistant secretary;

                           (vii) certificates issued as of a recent date by the
                  Secretaries of State of the respective jurisdictions of
                  formation of each of the Credit Parties as to the due
                  existence and good standing of such Person;

                           (viii) appropriate certificates of qualification to
                  do business, good standing and, where appropriate, authority
                  to conduct business under assumed name, issued in respect of
                  each of the Credit Parties as of a recent date by the
                  Secretary of State or comparable official of each jurisdiction
                  in which the failure


                                       47
<PAGE>   54
                  to be qualified to do business or authorized so to conduct
                  business could have a Material Adverse Effect;

                           (ix) notice of appointment of the initial Authorized
                  Representative(s);

                           (x) certificate of an Authorized Representative dated
                  the Closing Date demonstrating compliance with the financial
                  covenants contained in Sections 10.1(a) through 10.1(c), 10.3,
                  10.5(g) and 10.7(g) as of the end of the fiscal quarter most
                  recently ended prior to the Closing Date, substantially in the
                  form of Exhibit H;

                           (xi) certificate of an executive officer of the
                  Borrower confirming the matters set forth in Section 7.1(b);

                           (xii) evidence of all insurance required by the Loan
                  Documents;

                           (xiii) an initial Borrowing Notice, if any, and, if
                  elected by the Borrower, Interest Rate Selection Notice;

                           (xiv) evidence of the filing of Uniform Commercial
                  Code financing statements reflecting the filing in all places
                  required by applicable law to perfect the Liens of the Agent
                  under the Security Instruments as a first priority Lien as to
                  items of Collateral in which a security interest may be
                  perfected by the filing of financing statements, and such
                  other documents and/or evidence of other actions as may be
                  necessary under applicable law to perfect the Liens of the
                  Agent under the Security Instruments as a first priority Lien
                  in and to such other Collateral as the Agent may require,
                  including without limitation:

                                    (i) the delivery by the Borrower of all
                           stock certificates evidencing Pledged Interests
                           accompanied in each case by duly executed stock
                           powers (or other appropriate transfer documents) in
                           blank affixed thereto; and

                                    (ii) the delivery by the Borrower of
                           certificates of the Registrar of each partnership
                           Subsidiary evidencing the due registration on the
                           registration books of such partnership of the Lien in
                           favor of the Agent conferred under the Security
                           Instruments;

                           (xv) evidence that all fees payable by the Borrower
                  on the Closing Date pursuant to this Agreement to the Agent,
                  BAS and the Lenders have been paid in full;

                           (xvi) Uniform Commercial Code search results showing
                  only those Liens as are acceptable to the Lenders; and


                                       48
<PAGE>   55
                           (xvii) such other documents, instruments,
                  certificates and opinions as the Agent or any Lender may
                  reasonably request on or prior to the Closing Date in
                  connection with the consummation of the transactions
                  contemplated hereby; and

                  (b) In the good faith judgment of the Agent and the Lenders:

                           (i) there shall not have occurred or become known to
                  the Agent or the Lenders any event, condition, situation or
                  status since the date of the information contained in the
                  financial and business projections, budgets, pro forma data
                  and forecasts concerning the Borrower and its Subsidiaries
                  delivered to the Agent prior to the Closing Date that has had
                  or could reasonably be expected to result in a Material
                  Adverse Effect;

                           (ii) no litigation, action, suit, investigation or
                  other arbitral, administrative or judicial proceeding shall be
                  pending or threatened which could reasonably be likely to
                  result in a Material Adverse Effect; and

                           (iii) the Credit Parties shall have received all
                  approvals, consents and waivers, and shall have made or given
                  all necessary filings and notices as shall be required to
                  consummate the transactions contemplated hereby without the
                  occurrence of any default under, conflict with or violation of
                  (A) any applicable law, rule, regulation, order or decree of
                  any Governmental Authority or arbitral authority or (B) any
                  agreement, document or instrument to which any of the Credit
                  Parties is a party or by which any of them or their properties
                  is bound, except for such approvals, consents, waivers,
                  filings and notices the receipt, making or giving of which
                  will not have a Material Adverse Effect.

         7.2. Conditions of Loans and Letter of Credit. The obligations of the
Lenders to make any Loans and the Issuing Bank to issue Letters of Credit
hereunder on or subsequent to the Closing Date are subject to the satisfaction
of the following conditions:

                  (a) the Agent shall have received a Borrowing Notice if
         required by Article II;

                  (b) the representations and warranties of the Credit Parties
         set forth in Article VIII and in each of the other Loan Documents shall
         be true and correct in all material respects on and as of the date of
         such Advance or Letter of Credit issuance or renewal, with the same
         effect as though such representations and warranties had been made on
         and as of such date, except to the extent that such representations and
         warranties expressly relate to an earlier date and except that the
         financial statements referred to in Section 8.6(a) shall be deemed
         (solely for the purpose of the representation and warranty contained in
         such Section 8.6(a) but not for the purpose of any cross reference to
         such Section 8.6(a) or to the financial statements described therein
         contained in any other provision of Section 8.6 or elsewhere in Article
         8) to be those financial statements most recently delivered to the
         Agent and the Lenders pursuant to Section 9.1 from the date


                                       49
<PAGE>   56
         financial statements are delivered to the Agent and the Lenders in
         accordance with such Section;

                  (c) in the case of the issuance of a Letter of Credit, the
         Borrower shall have executed and delivered to the Issuing Bank an
         Application and Agreement for Letter of Credit in form and content
         reasonably acceptable to the Issuing Bank together with such other
         instruments and documents as it shall request;

                  (d) at the time of (and after giving effect to) each Advance
         or the issuance of a Letter of Credit, no Default or Event of Default
         specified in Article XI shall have occurred and be continuing; and

                  (e) immediately after giving effect to:

                           (i) a Loan, the aggregate principal balance of all
                  outstanding Loans for each Lender shall not exceed such
                  Lender's Revolving Credit Commitment;

                           (ii) a Letter of Credit or renewal thereof, the
                  aggregate principal balance of all outstanding Participations
                  in Letters of Credit and Reimbursement Obligations (or in the
                  case of the Issuing Bank, its remaining interest after
                  deduction of all Participations in Letters of Credit and
                  Reimbursement Obligations of other Lenders) for each Lender
                  and in the aggregate shall not exceed, respectively, (X) such
                  Lender's Letter of Credit Commitment or (Y) the Total Letter
                  of Credit Commitment; and

                           (iii) a Loan or a Letter of Credit or renewal
                  thereof, the sum of Letter of Credit Outstandings plus
                  Revolving Credit Outstandings shall not exceed the Total
                  Revolving Credit Commitment.


                                       50
<PAGE>   57
                                  ARTICLE VIII

                         Representations and Warranties

         The Borrower represents and warrants with respect to itself and to its
Subsidiaries (which representations and warranties shall survive the delivery of
the documents mentioned herein and the making of Loans), that:

         8.1. Organization and Authority.

                  (a) The Borrower and each Subsidiary is a corporation,
         partnership or limited liability company duly organized and validly
         existing under the laws of the jurisdiction of its formation;

                  (b) The Borrower and each Subsidiary (x) has the requisite
         power and authority to own its properties and assets and to carry on
         its business as now being conducted and as contemplated in the Loan
         Documents, and (y) is qualified to do business in every jurisdiction in
         which failure so to qualify would have a Material Adverse Effect;

                  (c) The Borrower has the power and authority to execute,
         deliver and perform this Agreement and the Notes, and to borrow
         hereunder, and to execute, deliver and perform each of the other Loan
         Documents to which it is a party;

                  (d) Each Credit Party (other than the Borrower) has the power
         and authority to execute, deliver and perform the Facility Guaranty,
         the Security Instruments and each of the other Loan Documents to which
         it is a party; and

                  (e) When executed and delivered, each of the Loan Documents to
         which any Credit Party is a party will be the legal, valid and binding
         obligation or agreement, as the case may be, of such Credit Party,
         enforceable against such Credit Party in accordance with its terms,
         subject to the effect of any applicable bankruptcy, moratorium,
         insolvency, reorganization or other similar law affecting the
         enforceability of creditors' rights generally and to the effect of
         general principles of equity (whether considered in a proceeding at law
         or in equity).

         8.2. Loan Documents. The execution, delivery and performance by each
Credit Party of each of the Loan Documents to which it is a party:

                  (a) have been duly authorized by all requisite Organizational
         Action of such Credit Party required for the lawful execution, delivery
         and performance thereof;

                  (b) do not violate any provisions of (i) any applicable law,
         rule or regulation, (ii) any judgment, writ, order, determination,
         decree or arbitral award of any Governmental Authority or arbitral
         authority binding on such Credit Party or its


                                       51
<PAGE>   58
         properties, or (iii) the Organizational Documents or Operating
         Documents of such Credit Party, except, with respect to clause (i)
         only, where such violation will not have a Material Adverse Effect;

                  (c) does not and will not be in conflict with, result in a
         breach of or constitute an event of default, or an event which, with
         notice or lapse of time or both, would constitute an event of default,
         under any material contract, indenture, agreement or other instrument
         or document to which such Credit Party is a party, or by which the
         properties or assets of such Credit Party are bound; and

                  (d) does not and will not result in the creation or imposition
         of any Lien upon any of the properties or assets of such Credit Party
         or any Subsidiary except any Liens in favor of the Agent and the
         Lenders created by the Security Instruments.

         8.3. Solvency. Each Credit Party is Solvent after giving effect to the
transactions contemplated by the Loan Documents.

         8.4. Subsidiaries and Stockholders. The Borrower has no Subsidiaries
other than those Persons listed as Subsidiaries in Schedule 8.4 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 9.20; Schedule 8.4 states as of the date hereof the organizational form
of each entity, the authorized and issued capitalization of each Subsidiary
listed thereon, the number of shares or other equity interests of each class of
capital stock or interest issued and outstanding of each such Subsidiary and the
number and/or percentage of outstanding shares or other equity interest
(including options, warrants and other rights to acquire any interest) of each
such class of capital stock or other equity interest owned by Borrower or by any
such Subsidiary; the outstanding shares or other equity interests of each such
Subsidiary have been duly authorized and validly issued and are fully paid and
non assessable; and Borrower and each such Subsidiary owns beneficially and of
record all the shares and other interests it is listed as owning in Schedule
8.4, free and clear of any Lien.

         8.5. Ownership Interests. Borrower owns no interest in any Person other
than the Persons listed in Schedule 8.4, equity investments in Persons not
constituting Subsidiaries permitted under Section 10.7 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 9.20.

         8.6. Financial Condition.

                  (a) The Borrower has heretofore furnished to each Lender an
         audited consolidated balance sheet of the Borrower and its Subsidiaries
         as at December 31, 1998 and the notes thereto and the related
         consolidated statements of income, stockholders' equity and cash flows
         for the Fiscal Year then ended as examined and certified by Ernst &
         Young L.L.C., and unaudited consolidated interim financial statements
         of the Borrower and its Subsidiaries consisting of a consolidated
         balance sheets and related consolidated statements of income,
         stockholders' equity and cash flows, in each case without notes, for
         and as of the end of the six-month period ending June 30, 1999.


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<PAGE>   59
         Except as set forth therein, such financial statements (including the
         notes thereto) present fairly the financial condition of the Borrower
         and its Subsidiaries as of the end of such Fiscal Year and six-month
         period and results of their operations and the changes in its
         stockholders' equity for the Fiscal Year and interim period then ended,
         all in conformity with GAAP applied on a Consistent Basis, subject
         however, in the case of unaudited interim statements to year end audit
         adjustments;

                  (b) since the later of (i) the date of the audited financial
         statements delivered pursuant to Section 8.6(a) hereof or (ii) the date
         of the audited financial statements most recently delivered pursuant to
         Section 9.1(a) hereof, there has been no material adverse change in the
         condition, financial or otherwise, of the Borrower or any of its
         Subsidiaries or in the businesses, properties, performance, prospects
         or operations of the Borrower or its Subsidiaries, nor have such
         businesses or properties been materially adversely affected as a result
         of any fire, explosion, earthquake, accident, strike, lockout,
         combination of workers, flood, embargo or act of God; and

                  (c) except as set forth in the financial statements referred
         to in Section 8.6(a) or in Schedule 8.6 or permitted by Section 10.5,
         neither the Borrower nor any Subsidiary has incurred, other than in the
         ordinary course of business, any material Indebtedness, Contingent
         Obligation or other commitment or liability which remains outstanding
         or unsatisfied.

         8.7. Title to Properties. The Borrower and each of its Subsidiaries and
each other Credit Party has good and marketable title to all its owned real
properties and owns all its personal properties, subject to no transfer
restrictions or Liens of any kind, except for the transfer restrictions and
Liens described in Schedule 8.7 and Permitted Liens. The Borrower and each of
its Subsidiaries has a valid leasehold interest in all its leased real and
personal properties.

         8.8. Taxes. The Borrower and each of its Subsidiaries has filed or
caused to be filed all federal, state and local tax returns which are required
to be filed by it and, except for (a) taxes and assessments the nonpayment of
which could not reasonably be expected to have a Material Adverse Effect and (b)
taxes and assessments being contested in good faith by appropriate proceedings
diligently conducted and against which reserves reflected in the financial
statements described in Section 8.6(a) or Sections 9.1(a) or (b) and
satisfactory to the Borrower's independent certified public accountants have
been established, have paid or caused to be paid all taxes as shown on said
returns or on any assessment received by it, to the extent that such taxes have
become due.

         8.9. Other Agreements. No Credit Party nor any Subsidiary is

                  (a) a party to or subject to any judgment, order, decree,
         agreement, lease or instrument, or subject to other restrictions, which
         individually or in the aggregate could reasonably be expected to have a
         Material Adverse Effect; or


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<PAGE>   60
                  (b) in default in the performance, observance or fulfillment
         of any of the obligations, covenants or conditions contained in any
         agreement or instrument to which such Credit Party or any Subsidiary is
         a party, which default has, or if not remedied within any applicable
         grace period could reasonably be likely to have, a Material Adverse
         Effect.

         8.10. Litigation. Except as set forth in Schedule 8.10, there is no
action, suit, investigation or proceeding at law or in equity or by or before
any governmental instrumentality or agency or arbitral body pending, or, to the
knowledge of the Borrower, threatened by or against the Borrower or any
Subsidiary or other Credit Party or affecting the Borrower or any Subsidiary or
other Credit Party or any properties or rights of the Borrower or any Subsidiary
or other Credit Party, which could reasonably be likely to have a Material
Adverse Effect.

         8.11. Margin Stock. The proceeds of the borrowings made hereunder will
be used by the Borrower only for the purposes expressly authorized herein. None
of such proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
margin stock or for any other purpose which might constitute any of the Loans
under this Agreement a "purpose credit" within the meaning of said Regulation U
or Regulation X (12 C.F.R. Part 221) of the Board. Neither the Borrower nor any
agent acting in its behalf has taken or will take any action which might cause
this Agreement or any of the documents or instruments delivered pursuant hereto
to violate any regulation of the Board or to violate the Securities Exchange Act
of 1934, as amended, or the Securities Act of 1933, as amended, or any state
securities laws, in each case as in effect on the date hereof.

         8.12. Investment Company. No Credit Party is an "investment company,"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment Company Act of
1940, as amended (15 U.S.C. Section 80a-1, et seq.). The application of the
proceeds of the Loans and repayment thereof by the Borrower and the performance
by the Borrower and the other Credit Parties of the transactions contemplated by
the Loan Documents will not violate any provision of said Act, or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder,
in each case as in effect on the date hereof.

         8.13. Intellectual Property. The Borrower and each other Credit Party
owns or has the right to use, under valid license agreements or otherwise, all
its Intellectual Property, without known conflict with any patent, license,
franchise, trademark, trade secret, trade name, copyright, other proprietary
right of any other Person, and other than the trademark "P.F. Chang's China
Bistro, Inc." (which is owned by the Borrower), neither the Borrower nor any
subsidiary owns or licenses any other registered Intellectual Property.

         8.14. No Untrue Statement. Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of the Borrower or any other Credit Party in accordance with or pursuant to any
Loan Document nor (b) any statement, representation, or warranty provided to the
Agent in connection with the negotiation or

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<PAGE>   61
preparation of the Loan Documents contains any material misrepresentation or
material untrue statement of material fact or omits to state a material fact
necessary, in light of the circumstance under which it was made, in order to
make any such warranty, representation or statement contained therein not
materially misleading.

         8.15. No Consents, Etc. Neither the respective businesses or properties
of the Credit Parties or any Subsidiary, nor any relationship among the Credit
Parties or any Subsidiary and any other Person, nor any circumstance in
connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated thereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person on the part of any Credit Party, that
has not been obtained by such Credit Party, as a condition to the execution,
delivery and performance of, or consummation of the transactions contemplated by
the Loan Documents, which, if not obtained or effected, would be reasonably
likely to have a Material Adverse Effect, or if so, such consent, approval,
authorization, filing, registration or qualification has been duly obtained or
effected, as the case may be.

         8.16. Employee Benefit Plans.

                  (a) The Borrower and each ERISA Affiliate is in compliance
         with all applicable provisions of ERISA and the regulations and
         published interpretations thereunder and in compliance with all Foreign
         Benefit Laws with respect to all Employee Benefit Plans except for any
         required amendments for which the remedial amendment period as defined
         in Section 401(b) of the Code has not yet expired. Each Employee
         Benefit Plan that is intended to be qualified under Section 401(a) of
         the Code has been determined or the Borrower or its Subsidiaries is in
         the process of obtaining a determination by the Internal Revenue
         Service to be so qualified, each trust related to such plan has been
         determined to be exempt under Section 501(a) of the Code, and each
         Employee Benefit Plan subject to any Foreign Benefit Law has received
         the required approvals by any Governmental Authority regulating such
         Employee Benefit Plan. No material liability has been incurred by the
         Borrower or any ERISA Affiliate which remains unsatisfied for any taxes
         or penalties with respect to any Employee Benefit Plan or any
         Multiemployer Plan;

                  (b) Neither the Borrower nor any ERISA Affiliate has (i)
         engaged in a nonexempt prohibited transaction described in Section 4975
         of the Code or Section 406 of ERISA affecting any of the Employee
         Benefit Plans or the trusts created thereunder which could subject any
         such Employee Benefit Plan or trust to a material tax or penalty on
         prohibited transactions imposed under Internal Revenue Code Section
         4975 or ERISA, (ii) incurred any accumulated funding deficiency with
         respect to any Employee Benefit Plan, whether or not waived, or any
         other liability to the PBGC which remains outstanding other than the
         payment of premiums and there are no premium payments which are due and
         unpaid, (iii) failed to make a required contribution or payment to a
         Multiemployer Plan, (iv) failed to make a required installment or other
         required payment under Section 412 of the Code, Section 302 of ERISA or
         the terms of such Employee

                                       55
<PAGE>   62
         Benefit Plan, or (v) failed to make a required contribution or payment,
         or otherwise failed to operate in compliance with any Foreign Benefit
         Law regulating any Employee Benefit Plan;

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

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

                  (e) To the best of the Borrower's knowledge, each Employee
         Benefit Plan which is subject to Title IV of ERISA or the funding of
         which is regulated by any Foreign Benefit Law, maintained by the
         Borrower or any ERISA Affiliate, has been administered in accordance
         with its terms in all material respects and is in compliance in all
         material respects with all applicable requirements of ERISA, applicable
         Foreign Benefit Law and other applicable laws, regulations and rules;

                  (f) The consummation of the Loans and the issuance of the
         Letters of Credit provided for herein will not involve any prohibited
         transaction under ERISA which is not subject to a statutory or
         administrative exemption; and

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

         8.17. No Default. As of the date hereof, there does not exist any
Default or Event of Default hereunder.

         8.18. Environmental Laws. Except as listed on Schedule 8.18, the
Borrower and each Subsidiary is in compliance with all applicable Environmental
Laws and has been issued and currently maintains all required federal, state and
local permits, licenses, certificates and approvals except to the extent that
any noncompliance or failure to obtain or maintain such permits, licenses,
certificates or approvals could not reasonably be expected to have a Material
Adverse Effect. Except as listed on Schedule 8.18, neither the Borrower nor any
Subsidiary has been notified in writing of any pending or threatened action,
suit, proceeding or investigation, and neither the Borrower nor any Subsidiary
is aware of any facts, which (a) calls into question, or could reasonably be
expected to call into question, compliance by the Borrower or any Subsidiary
with any Environmental Laws, (b) seeks, or could reasonably be expected to form
the basis of a meritorious proceeding, to suspend, revoke or terminate any
license, permit or approval necessary for the operation of the Borrower's or any
Subsidiary's business or facilities

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<PAGE>   63
or for the generation, handling, storage, treatment or disposal of any Hazardous
Materials, or (c) seeks to cause, or could reasonably be expected to form the
basis of a meritorious proceeding to cause, any property of the Borrower or any
Subsidiary or other Credit Party to be subject to any restrictions on ownership,
use, occupancy or transferability under any Environmental Law.

         8.19. Employment Matters. (a) None of the employees of the Borrower or
any Subsidiary is subject to any collective bargaining agreement and there are
no strikes, work stoppages, election or decertification petitions or
proceedings, unfair labor charges, equal opportunity proceedings, or other
material labor/employee related controversies or proceedings pending or, to the
actual knowledge of the Borrower, threatened against the Borrower or any
Subsidiary or between the Borrower or any Subsidiary and any of its employees,
other than employee grievances arising in the ordinary course of business which
could not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; and

         (b) Except to the extent a failure to maintain compliance would not
have a Material Adverse Effect, the Borrower and each Subsidiary is in
compliance in all respects with all applicable laws, rules and regulations
pertaining to labor or employment matters, including without limitation those
pertaining to wages, hours, occupational safety and taxation and there is
neither pending nor, to the Borrower's actual knowledge, threatened any
litigation, administrative proceeding or, to the actual knowledge of the
Borrower, any investigation, in respect of such matters which, if decided
adversely, could reasonably be likely, individually or in the aggregate, to have
a Material Adverse Effect.

         8.20. RICO. Neither the Borrower nor any Subsidiary is engaged in or
has engaged in any course of conduct that could subject any of their respective
properties to any Lien, seizure or other forfeiture under any criminal law,
racketeer influenced and corrupt organizations law, civil or criminal, or other
similar laws.

         8.21. Year 2000 Compliance. The Borrower and its Subsidiaries have (i)
initiated a review and assessment of all areas within its and each of its
Subsidiaries' business and operations (including those affected by information
received from suppliers and vendors) that could reasonably be expected to be
adversely affected by the Year 2000 Problem, (ii) developed a plan and timeline
for addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan substantially in accordance with that timetable. The
Borrower has taken all reasonable steps to insure that all computer applications
(including those affected by information received from its suppliers and
vendors) that are material to its or any of its Subsidiaries' business and
operations will on a timely basis be Year 2000 Compliant, except to the extent
that a failure to do so could not reasonably be expected to have Material
Adverse Effect.

         8.22. Operating Facilities. Schedule 8.22 contains a true and complete
list of all owned or leased restaurant, office and other operating facilities of
the Borrower and each Subsidiary (other than those acquired since the last date
on which financial statements were required to be delivered pursuant to Sections
9.1(a) or (b)) and, as to each such facility, describes (a) the type of
facility, (b) whether it is owned or leased by the Borrower or such Subsidiary,
(c) the identity


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<PAGE>   64
of such owner or lessee, and (d) as to leased facilities, (i) the name and
address of the lessor, (ii) the expiration date of the related lease, and (iii)
the rental or other payments (whether fixed or percentage) payable thereunder.
Since the Closing Date no leases have expired or been terminated or otherwise
have ceased to be in full force and effect other than expirations and
terminations in the ordinary course of business, and no default or defaults in
the performance, observance or fulfillment of any of the terms or conditions
thereof has occurred and is continuing beyond any applicable grace period, in
any case which individually or in the aggregate could reasonably be expected to
have a Material Adverse Effect.

                                   ARTICLE IX

                              Affirmative Covenants

         Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and where applicable will cause
each Subsidiary to:

         9.1. Financial Reports, Etc. (a) As soon as practical and in any event
within 90 days after the end of each Fiscal Year of the Borrower, deliver or
cause to be delivered to the Agent and each Lender (i) consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as at the end
of such Fiscal Year, and the notes thereto, and the related consolidated and
consolidating statements of income, stockholders' equity and cash flows, and the
respective notes thereto, for such Fiscal Year, setting forth (other than for
consolidating statements) comparative financial statements for the preceding
Fiscal Year, all prepared in accordance with GAAP applied on a Consistent Basis
and containing, with respect to the consolidated financial statements, opinions
of Ernst & Young LLC, or other such independent certified public accountants
selected by the Borrower and approved by the Agent (such approval not to be
unreasonably withheld), which are unqualified as to the scope of the audit
performed and as to the "going concern" status of the Borrower and without any
exception not acceptable to the Lenders, and (ii) a certificate of an Authorized
Representative demonstrating compliance with Sections 10.1(a) through 10.1(c),
10.3, 10.5(g) and 10.7(g), which certificate shall be in the form of Exhibit H;

         (b) as soon as practical and in any event within 45 days after the end
of each fiscal quarter (except the last fiscal quarter of the Fiscal Year),
deliver to the Agent and each Lender (i) consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries as at the end of such fiscal
quarter, and the related consolidated and consolidating statements of income,
stockholders' equity and cash flows for such fiscal quarter and for the period
from the beginning of the then current Fiscal Year through the end of such
reporting period, and accompanied by a certificate of an Authorized
Representative to the effect that such financial statements present fairly the
financial position of the Borrower and its Subsidiaries as of the end of such
fiscal period and the results of their operations and the changes in their
financial position for such fiscal period, in conformity with the standards set
forth in Section 8.6(a) with respect to interim financial statements, and (ii) a
certificate of an Authorized Representative containing computations for such
quarter comparable to that required pursuant to Section 9.1(a)(ii);



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<PAGE>   65
         (c) promptly upon their becoming available to the Borrower, the
Borrower shall deliver or make available to the Agent and each Lender a copy of
(i) all regular or special reports or effective registration statements which
Borrower or any Subsidiary shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange, (ii) any proxy
statement distributed by the Borrower or any Subsidiary to its shareholders,
bondholders or the financial community in general, and (iii) any management
letter or other report submitted to the Borrower or any Subsidiary by
independent accountants in connection with any annual, interim or special audit
of the Borrower or any Subsidiary;

         (d) together with each delivery of financial statements required by
Section 9.1(a) or (b), deliver to the Agent and each Lender a supplement to
Schedule 8.22 reflecting any changes to the information provided therein;

         (e) not later than the last Business Day of each Fiscal Year, deliver
to the Agent and each Lender a capital and operating expense budget and
consolidated financial projections for the Borrower and its Subsidiaries for the
next three (3) Fiscal Years prepared in good faith in accordance with prior
practice of the Borrower; and

         (f) promptly, from time to time, deliver or cause to be delivered to
the Agent and each Lender such other information regarding Borrower's and any
Subsidiary's operations, business affairs and financial condition as the Agent
or such Lender may reasonably request;

         The Agent and the Lenders are hereby authorized to deliver a copy of
any such financial or other information delivered hereunder to the Lenders (or
any affiliate of any Lender) or to the Agent, to any Governmental Authority
having jurisdiction over the Agent or any of the Lenders pursuant to any written
request therefor or in the ordinary course of examination of loan files, or to
any other Person who shall acquire or consider the assignment of, or acquisition
of any participation interest in, any Obligation permitted by this Agreement.

         9.2. Maintain Properties. Maintain all properties necessary to its
operations in good working order and condition, make all needed repairs,
replacements and renewals to such properties, and maintain free from Liens all
trademarks, trade names, patents, copyrights, trade secrets, know-how, and other
intellectual property and proprietary information (or adequate licenses
thereto), in each case as are reasonably necessary to conduct its business as
currently conducted or as contemplated hereby, all in accordance with customary
and prudent business practices.

         9.3. Existence, Qualification, Etc. Do or cause to be done all things
necessary to preserve and keep in full force and effect its existence and all
material rights and franchises, and maintain its license or qualification to do
business as a foreign corporation and good standing in each jurisdiction in
which its ownership or lease of property or the nature of its business makes
such license or qualification necessary, except (a) where the failure to
maintain such good standing or qualification would not result in a Material
Adverse Effect or (b) as otherwise expressly permitted under Section 10.8.



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         9.4. Regulations and Taxes. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien against any of its
properties except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves acceptable
to the Borrower's independent certified public accountants have been established
unless and until any Lien resulting therefrom attaches to any of its property
and becomes enforceable against its creditors.

         9.5. Insurance. (a) Keep all of its insurable properties adequately
insured at all times with responsible insurance carriers against loss or damage
by fire and other hazards to the extent and in the manner as are customarily
insured against by similar businesses owning such properties similarly situated
and otherwise as required by the Security Instruments, (b) maintain general
public liability insurance at all times with responsible insurance carriers
against liability on account of damage to persons and property and (c) maintain
insurance under all applicable workers' compensation laws (or in the
alternative, maintain required reserves if self-insured for workers'
compensation purposes) and against loss by reason by business interruption, such
policies of insurance to have such limits, deductibles, exclusions, co-insurance
and other provisions providing no less coverages than are maintained by similar
businesses that are similarly situated, such insurance policies to be in form
reasonably satisfactory to the Agent. Each of the policies of insurance
described in this Section 9.5 shall provide that the insurer shall give the
Agent not less than thirty (30) days' prior written notice before any such
policy shall be terminated, lapse or be altered in any manner.

         9.6. True Books. Keep true books of record and account in which full,
true and correct entries will be made of all of its dealings and transactions,
and set up on its books such reserves as may be required by GAAP with respect to
doubtful accounts and all taxes, assessments, charges, levies and claims and
with respect to its business in general, and include such reserves in interim as
well as year-end financial statements.

         9.7. Year 2000 Compliance. The Borrower will promptly notify the Agent
and the Lenders in the event the Borrower discovers or determines that any
computer application (including those affected by information received from its
suppliers and vendors) that is material to its or any of its Subsidiaries'
business and operations will not be Year 2000 Compliant on a timely basis,
except to the extent that such failure could not reasonably be expected to have
a Material Adverse Effect.

         9.8. Right of Inspection. Permit any Person (a) designated by any
Lender or the Agent (i) to visit and inspect any of the properties, corporate
books and financial reports of the Borrower or any Subsidiary, and (ii) to
discuss its affairs, finances and accounts with its principal officers and
independent certified public accountants, and (b) designated by the Agent to
conduct audits of the accounts receivable, inventory, payables, controls and
system of the Borrower and its Subsidiaries, which audits shall be at the
expense of the Borrower at any time a Default or Event of Default has occurred
and is continuing, and otherwise shall be at the expense of the

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<PAGE>   67
Lenders, all at reasonable times, at reasonable intervals and with reasonable
prior notice and subject to the confidentiality provisions of Section 13.16.

         9.9. Observe all Laws. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of its business.

         9.10. Governmental Licenses. Obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and as
contemplated by the Loan Documents, except to the extent the failure to obtain
or maintain any of the foregoing would not have a Material Adverse Effect.

         9.11. Covenants Extending to Other Persons. Cause each of its
Subsidiaries to do with respect to itself, its business and its assets, each of
the things required of the Borrower in Sections 9.2 through 9.10, and 9.20
inclusive.

         9.12. Officer's Knowledge of Default. Upon any executive officer of the
Borrower obtaining knowledge of any Default or Event of Default hereunder or
under any other obligation of the Borrower or any Subsidiary or other Credit
Party to any Lender, or any event, development or occurrence which could
reasonably be expected to have a Material Adverse Effect, cause such executive
officer or an Authorized Representative to promptly notify the Agent of the
nature thereof, the period of existence thereof, and what action the Borrower or
such Subsidiary or other Credit Party proposes to take with respect thereto.

         9.13. Suits or Other Proceedings. Upon any officer of the Borrower
obtaining knowledge of any litigation or other proceedings being instituted
against the Borrower or any Subsidiary or other Credit Party, or any attachment,
levy, execution or other process being instituted against any assets of the
Borrower or any Subsidiary or other Credit Party, making a claim or claims in an
aggregate amount greater than $500,000 not otherwise covered by insurance, the
Borrower shall promptly deliver to the Agent written notice thereof stating the
nature and status of such litigation, dispute, proceeding, levy, execution or
other process.

         9.14. Notice of Environmental Complaint or Condition. Promptly provide
to the Agent true, accurate and complete copies of any and all notices,
complaints, orders, directives, claims or citations received by the Borrower or
any Subsidiary relating to any (a) violation or alleged violation by the
Borrower or any Subsidiary of any applicable Environmental Law; (b) release or
threatened release by the Borrower or any Subsidiary, or by any Person handling,
transporting or disposing of any Hazardous Material on behalf of the Borrower or
any Subsidiary, or at any facility or property owned or leased or operated by
the Borrower or any Subsidiary, of any Hazardous Material, except where
occurring legally pursuant to a permit or license; or (c) liability or alleged
liability of the Borrower or any Subsidiary for the costs of cleaning up,
removing, remediating or responding to a release of Hazardous Materials, except
to the extent any of the foregoing could not reasonably be expected to have a
Material Adverse Effect.



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         9.15. Environmental Compliance. If the Borrower or any Subsidiary shall
receive any letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or any Subsidiary has violated any Environmental Law,
has released any Hazardous Material, or is liable for the costs of cleaning up,
removing, remediating or responding to a release of Hazardous Materials, the
Borrower and any Subsidiary shall, within the time period permitted and to the
extent required by the applicable Environmental Law or the Governmental
Authority responsible for enforcing such Environmental Law, remove or remedy, or
cause the applicable Subsidiary to remove or remedy, such violation or release
or satisfy such liability.

         9.16. Indemnification. Without limiting the generality of Section 13.9,
the Borrower hereby agrees to indemnify and hold the Agent and the Lenders and
any affiliate of any Lender party to a Swap Agreement, and their respective
officers, directors, employees and agents, harmless from and against any and all
claims, losses, penalties, liabilities, damages and expenses (including
assessment and cleanup costs and reasonable attorneys', consultants' or other
expert fees, expenses and disbursements) arising directly or indirectly from,
out of or by reason of (a) the violation of any Environmental Law by the
Borrower or any Subsidiary or with respect to any property owned, operated or
leased by the Borrower or any Subsidiary or (b) the handling, storage,
transportation, treatment, emission, release, discharge or disposal of any
Hazardous Materials by or on behalf of the Borrower or any Subsidiary, or on or
with respect to property owned or leased or operated by the Borrower or any
Subsidiary. The provisions of this Section 9.16 shall survive repayment of the
Obligations, or the Facility Termination Date and expiration or termination of
this Agreement.

         9.17. Further Assurances. At the Borrower's cost and expense, upon
request of the Agent, duly execute and deliver or cause to be duly executed and
delivered, to the Agent such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the reasonable opinion of
the Agent to carry out more effectively the provisions and purposes of this
Agreement, the Security Instruments and the other Loan Documents; provided that
none of the foregoing shall alter, amend or modify the express rights or
liabilities of the Borrower hereunder or under the other Loan Documents; and
provided, further, that the Borrower agrees that at such time as there shall be
more than one Lender party to this Agreement, an opinion of counsel to the
Borrower admitted to practice in the state of North Carolina (or other
jurisdiction of governing law), shall be promptly delivered to the Agent after
request therefor in the form of Exhibit G hereto.

         9.18. Employee Benefit Plans.

                  (a) With reasonable promptness, and in any event within thirty
         (30) days thereof, give notice to the Agent of (a) the establishment of
         any new Pension Plan (which notice shall include a copy of such plan),
         (b) the commencement of contributions to any Employee Benefit Plan to
         which the Borrower or any of its ERISA Affiliates was not previously
         contributing, (c) any material increase in the benefits of any existing
         Employee Benefit Plan, (d) each funding waiver request filed with
         respect to any Pension Plan and all communications received or sent by
         the Borrower or any ERISA Affiliate


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<PAGE>   69
         with respect to such request and (e) the failure of the Borrower or any
         ERISA Affiliate to make a required installment or payment under Section
         302 of ERISA or Section 412 of the Code (in the case of Employee
         Benefit Plans regulated by the Code or ERISA) or under any Foreign
         Benefit Law (in the case of Employee Benefit Plans regulated by any
         Foreign Benefit Law) by the due date;

                  (b) Promptly and in any event within fifteen (15) days of
         becoming aware of the occurrence or forthcoming occurrence of any (a)
         Termination Event or (b) nonexempt "prohibited transaction," as such
         term is defined in Section 406 of ERISA or Section 4975 of the Code, in
         connection with any Employee Benefit Plan or any trust created
         thereunder, deliver to the Agent a notice specifying the nature
         thereof, what action the Borrower or any ERISA Affiliate has taken, is
         taking or proposes to take with respect thereto and, when known, any
         action taken or threatened by the Internal Revenue Service, the
         Department of Labor or the PBGC with respect thereto; and

                  (c) With reasonable promptness but in any event within fifteen
         (15) days for purposes of clauses (a), (b) and (c), deliver to the
         Agent copies of (a) any unfavorable determination letter from the
         Internal Revenue Service regarding the qualification of an Employee
         Benefit Plan under Section 401(a) of the Code, (b) all notices received
         by the Borrower or any ERISA Affiliate of the PBGC's or any
         Governmental Authority's intent to terminate any Pension Plan or to
         have a trustee appointed to administer any Pension Plan, (c) each
         Schedule B (Actuarial Information) to the annual report (Form 5500
         Series) filed by the Borrower or any ERISA Affiliate with the Internal
         Revenue Service with respect to each Employee Benefit Plan and (d) all
         notices received by the Borrower or any ERISA Affiliate from a
         Multiemployer Plan sponsor concerning the imposition or amount of
         withdrawal liability pursuant to Section 4202 of ERISA. The Borrower
         will notify the Agent in writing within five (5) Business Days of the
         Borrower or any ERISA Affiliate obtaining knowledge or reason to know
         that the Borrower or any ERISA Affiliate has filed or intends to file a
         notice of intent to terminate any Pension Plan under a distress
         termination within the meaning of Section 4041(c) of ERISA.

         9.19. Continued Operations. Continue at all times to conduct its
business and engage principally in the same line or lines of business
substantially as heretofore conducted.

         9.20. New Subsidiaries. Simultaneously with the acquisition or creation
of any Subsidiary (each, a "New Subsidiary"), cause to be delivered to the Agent
for the benefit of the Lenders each of the following:

                  (a) if the New Subsidiary is a Domestic Subsidiary, a Facility
         Guaranty executed by the New Subsidiary substantially in the form of
         Exhibit I;

                  (b) if the New Subsidiary is a Domestic Subsidiary, a Security
         Agreement of the New Subsidiary substantially in the form of Exhibit J,
         together with such Uniform Commercial Code financing statements on Form
         UCC-1 or otherwise duly executed by such Subsidiary as "Debtor" and
         naming the Agent for the benefit of the Agent and the

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         Lenders as "Secured Party", in form, substance and number sufficient in
         the reasonable opinion of the Agent and its special counsel to be filed
         in all Uniform Commercial Code filing offices in all jurisdictions in
         which filing is necessary or advisable to perfect in favor of the Agent
         for the benefit of the Agent and the Lenders the Lien on Collateral
         conferred under such Security Instrument to the extent such Lien may be
         perfected by Uniform Commercial Code filing;

                  (c) if the Subsidiary Securities issued by the New Subsidiary
         that constitute Pledged Interests shall be owned by a Subsidiary who
         has not then executed and delivered to the Agent a Pledge Agreement
         granting a Lien to the Agent, for the benefit of the Agent and the
         Lenders, in such equity interests, a Pledge Agreement executed by the
         Subsidiary that directly owns such Pledged Interests substantially in
         the form attached hereto as Exhibit K (or, as to Pledged Interests
         issued by any Direct Foreign Subsidiary, in a form acceptable to the
         Agent), and if such Subsidiary Securities shall be owned by the
         Borrower or a Subsidiary who has previously executed a Pledge
         Agreement, a Pledge Agreement Supplement in the form required by such
         Pledge Agreement pertaining to such Subsidiary Securities;

                  (d) if the New Subsidiary is the owner of Subsidiary
         Securities that constitute Pledged Interests, a Pledge Agreement by the
         New Subsidiary granting a Lien to the Agent, for the benefit of the
         Agent and the Lenders, in such Pledged Interests, substantially in the
         form attached hereto as Exhibit K (or, as to Pledged Interests issued
         by any Direct Foreign Subsidiary, in a form acceptable to the Agent);

                  (e) if the Pledged Interests issued by the New Subsidiary, or
         by a Subsidiary owned by the New Subsidiary, constitute securities
         under Article 8 of the Uniform Commercial Code (i) the certificates
         representing 100% of such Pledged Interests and (ii) duly executed,
         undated stock powers or other appropriate powers of assignment in blank
         affixed thereto;

                  (f) (i) Uniform Commercial Code financing statements on form
         UCC-1 or otherwise duly executed by the pledgor as "Debtor" and naming
         the Agent for the benefit of the Agent and the Lenders as "Secured
         Party," in form, substance and number sufficient in the reasonable
         opinion of the Agent and its special counsel to be filed in all Uniform
         Commercial Code filing offices and in all jurisdictions in which filing
         is necessary or advisable to perfect in favor of the Agent for the
         benefit of the Agent and the Lenders the Lien on such Subsidiary
         Securities, and (ii) if the Pledged Interests issued by the New
         Subsidiary, or by a Subsidiary owned by the New Subsidiary, do not
         constitute securities and the issuer thereof has not elected to have
         such interests treated as securities under Article 8 of the applicable
         Uniform Commercial Code, a control agreement from the Registrar of the
         issuer, in form and substance acceptable to the Agent and in which the
         Registrar (1) acknowledges that the pledgor is at the date of such
         acknowledgment the sole record, and to its knowledge, beneficial owner
         of such Subsidiary Securities, (2) acknowledges the Lien in favor of
         the Agent conferred under the Pledge Agreement and that such Lien will
         be reflected on the registry for such


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<PAGE>   71
         Subsidiary Securities, (3) agrees that it will not register any
         transfer of such Subsidiary Securities nor acknowledge any Lien in
         favor of any other Person on such Subsidiary Securities, without the
         prior written consent of the Agent, in each instance, until it receives
         notice from the Agent that all Liens on such Collateral in favor of the
         Agent for the benefit of the Agent and the Lenders have been released
         or terminated, and (4) agrees that upon receipt of notice from the
         Agent that an Event of Default has occurred and is continuing and that
         the Subsidiary Securities identified in such notice have been
         transferred to a transferee identified in such notice, it will duly
         record such transfer of Subsidiary Securities on the appropriate
         registry without requiring further consent from the pledgor and shall
         thereafter treat the transferee as the sole record and beneficial owner
         of such Subsidiary Securities pending further transfer, notwithstanding
         any contrary instruction received from the pledgor;

                  (g) a supplement to the appropriate schedule attached to the
         appropriate Security Instruments listing the additional Collateral,
         certified as true, correct and complete by the Authorized
         Representative (provided that the failure to deliver such supplement
         shall not impair the rights conferred under the Security Instruments in
         after acquired Collateral);

                  (h) an opinion of counsel to the New Subsidiary and to any
         party pledging any Subsidiary Securities of the New Subsidiary, if any,
         dated as of the date of delivery of the Facility Guaranty and the other
         Loan Documents provided for in this Section 9.20 and addressed to the
         Agent and the Lenders, in form and substance reasonably acceptable to
         the Agent (which opinion may include assumptions and qualifications of
         similar effect to those contained in the opinions of counsel delivered
         pursuant to Section 7.1(a)), to the effect (as applicable) that:

                           (i) the New Subsidiary and, if applicable, such
                  pledgor is duly organized, validly existing and in good
                  standing in the jurisdiction of its formation, has the
                  requisite power and authority to own its properties and
                  conduct its business as then owned and then conducted and
                  proposed to be conducted and to execute, deliver and perform
                  the Facility Guaranty and the other Loan Documents described
                  in this Section 9.20 to which the New Subsidiary or pledgor is
                  a signatory, and is duly qualified to transact business and is
                  in good standing as a foreign corporation or partnership in
                  each other jurisdiction in which the character of the
                  properties owned or leased, or the business carried on by it,
                  requires such qualification and the failure to be so qualified
                  would reasonably be likely to result in a Material Adverse
                  Effect;

                           (ii) the execution, delivery and performance of the
                  Facility Guaranty and the other Loan Documents described in
                  this Section 9.20 to which the New Subsidiary or the pledgor
                  is a signatory have been duly authorized by all requisite
                  corporate or partnership action (including any required
                  shareholder or partner approval), each of such agreements has
                  been duly executed and delivered and constitutes the valid and
                  binding agreement of the New Subsidiary or pledgor,

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<PAGE>   72
                  enforceable against the New Subsidiary or pledgor in
                  accordance with its terms, subject to the effect of any
                  applicable bankruptcy, moratorium, insolvency, reorganization
                  or other similar law affecting the enforceability of
                  creditors' rights generally and to the effect of general
                  principles of equity (whether considered in a proceeding at
                  law or in equity);

                           (iii) the Subsidiary Securities being pledged are
                  duly authorized, validly issued, fully paid and nonassessable,
                  and free of any preemptive rights, and the applicable Security
                  Instrument (including foreign collateral documents) is
                  effective to create a valid security interest in favor of the
                  Agent for the benefit of the Agent and the Lenders in such
                  Subsidiary Securities as constitute Pledged Interests;

                           (iv) the Uniform Commercial Code financing statements
                  on Form UCC-1 delivered to the Agent by the New Subsidiary
                  and/or the pledgor in connection with the delivery of the
                  Security Instruments of the New Subsidiary and/or the pledgor
                  have been duly executed by the New Subsidiary and/or the
                  pledgor and are in form, substance and number sufficient for
                  filing in all Uniform Commercial Code filing offices in all
                  jurisdictions in which filing is necessary to perfect in favor
                  of the Agent for the benefit of the Agent and the Lenders the
                  Lien on Collateral conferred under such Security Instruments
                  to the extent such Lien may be perfected by Uniform Commercial
                  Code filing;

                           (v) if the Pledged Interests of the New Subsidiary,
                  or the Pledged Interests issued by the New Subsidiary,
                  constitute securities under Article 8 of the Uniform
                  Commercial Code, and such Pledged Interests are represented by
                  certificates, possession of such certificated Pledged
                  Interests by the Agent is sufficient to perfect in favor of
                  the Agent and the Lenders a security interest in such Pledged
                  Interests; and

                           (vi) in the event the New Subsidiary is a Direct
                  Foreign Subsidiary, that under the laws of the applicable
                  foreign jurisdiction, all agreements, notices and other
                  documents that are required to be executed, delivered, filed
                  or recorded and all other action required to be taken, within
                  or pursuant to the laws of such jurisdiction to perfect the
                  Lien conferred in favor of the Agent under the applicable
                  Security Instrument as against creditors of and purchasers for
                  value from the holder of the Pledged Interests has been duly
                  executed, delivered, filed, recorded or taken, as the case may
                  be; and

                  (i) current copies of the Organizational Documents and
         Operating Documents of the New Subsidiary and the pledgor, if any,
         certified resolutions (or duly effected consent actions) of the Board
         of Directors, partners, or appropriate committees thereof (and, if
         required by such Organizational Documents, Operating Documents or
         applicable law, of the shareholders, members or partners) of the New
         Subsidiary and the

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<PAGE>   73
         pledgor, if any, authorizing the actions and the execution and delivery
         of documents described in this Section 9.20.

         9.21. Post-Closing Mortgages. At any time after the Closing Date, upon
the written request of the Agent, the Borrower shall deliver, and shall cause
each Subsidiary that is or is required to become a Guarantor to deliver, to the
Agent for the benefit of the Agent and the Lenders as promptly as practicable
but in any event within sixty (60) days of such request, with respect to any
parcel of real property owned by the Borrower or any such Subsidiary, (a) a
Mortgage with respect to such property and (b) the Mortgage Property Support
Documents relating thereto, with the effect that the Agent shall thereby obtain
a duly perfected first priority Lien on such property for the benefit of the
Agent and the Lenders, subject only to such encumbrances as are acceptable to
the Agent.

         9.22. Certain Notices. Furnish written notice to the Agent of each of
the following events, conditions or occurrences (together in each instance with
a statement of what action, if any, the Borrower proposes to take or cause a
Subsidiary to take with respect thereto) as soon as practicable but in any event
within the time period specified.

                  (a) the receipt of notice of (i) any default in the
         performance, observance or fulfillment of any term, covenant or
         condition contained in any lease or sublease of any restaurant or other
         operating facility which default may result in the cancellation or
         termination of such lease or sublease or (ii) any termination or
         declaration of termination of any such lease or sublease by any party
         thereto, no later than five (5) Business Days after receipt of such
         notice; and

                  (b) (i) the expiration or termination of any lease or sublease
         of any restaurant or other operating facility in accordance with its
         terms and not as a result of any default or purported default in
         performance, observance or fulfillment of any term, covenant or
         condition contained therein, or (ii) any proposed amendment to the
         terms of any such lease or sublease that accelerates the termination
         date thereof, increases in any material way rental payments thereunder,
         imposes in any material way more restrictive economic or operating
         terms on the Borrower or any Subsidiary thereunder or is in the
         Borrower's reasonable judgment otherwise adverse to the Lenders'
         interest therein in any respect, not later than thirty (30) days prior
         to the proposed effective date thereof (such notice to be accompanied
         by a copy of or terms of any such proposed amendment).

         9.23. New Restaurants. Within thirty (30) days of (i) the opening of
any new restaurant, (ii) any change in ownership of any restaurant among the
Subsidiaries of the Borrower or (iii) any change in location of a restaurant,
the Borrower shall notify the Agent of such change and deliver to the Agent
additional UCC-1 financing statements with respect to such new location
sufficient in form and number to perfect the interest of the Agent in any
Collateral at such location.


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                                    ARTICLE X

                               Negative Covenants

         Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will not, nor will it permit any
Subsidiary to:

         10.1. Financial Covenants.

                  (a) Consolidated Tangible Net Worth. Permit Consolidated
         Tangible Net Worth to be less than (i) $45,000,000 from the Closing
         Date until (but excluding) the last day of the fiscal quarter that
         includes the Closing Date (the "Closing Date Quarter"), and (ii) as at
         the last day of each fiscal quarter of the Borrower ending after the
         Closing Date and until (but excluding) the last day of the next
         following fiscal quarter of the Borrower, the sum of (A) the amount of
         Consolidated Tangible Net Worth required to be maintained pursuant to
         this Section 10.1(a) as at the end of the immediately preceding fiscal
         quarter (or, in the case of the Closing Date Quarter, required to be
         maintained as of the Closing Date), plus (B) 75% of Consolidated Net
         Income (with no reduction for net losses during any period) for the
         fiscal quarter of the Borrower ending on such day (including within
         "Consolidated Net Income" certain items otherwise excluded, as provided
         for in the definition of "Consolidated Net Income"), plus (C) 100% of
         the aggregate amount of all increases in the stated capital and
         additional paid-in capital accounts of the Borrower resulting from the
         issuance of equity securities or other capital investments.

                  (b) Consolidated Leverage Ratio. Permit at any time the
         Consolidated Leverage Ratio to be greater than 2.00 to 1.00.

                  (c) Consolidated Fixed Charge Ratio. Permit at any time the
         Consolidated Fixed Charge Ratio to be less than 1.25 to 1.00.

         10.2. Acquisitions. Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition.

         10.3. Capital Expenditures. Make or become committed to make Capital
Expenditures which exceed $35,000,000 in the aggregate in any Fiscal Year of the
Borrower (on a noncumulative basis, with the effect that amounts not expended in
any Fiscal Year may not be carried forward to a subsequent period).

         10.4. Liens. Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature whatsoever with respect to any property or assets now
owned or hereafter acquired by the Borrower or any Subsidiary, other than the
following (collectively, "Permitted Liens"):



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<PAGE>   75
                  (a) Liens created under the Security Instruments in favor of
         the Agent and the Lenders, Liens reflected on the Title Policies and
         acceptable to the Agent in its discretion, and Liens otherwise existing
         as of the date hereof and as set forth in Schedule 8.7;

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

                  (c) statutory Liens of landlords and Liens of carriers,
         warehousemen, mechanics, materialmen and other Liens imposed by law or
         created in the ordinary course of business or for amounts not yet due
         or which are being contested in good faith by appropriate proceedings
         diligently conducted and with respect to which adequate reserves or
         other appropriate provisions are being maintained in accordance with
         GAAP and which Liens are not yet enforceable against other creditors;

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

                  (e) easements (including reciprocal easement agreements and
         utility agreements), rights-of-way, covenants, consents, reservations,
         encroachments, variations and zoning and other similar restrictions,
         charges or encumbrances (whether or not recorded), which do not
         interfere materially with the ordinary conduct of the business of the
         Borrower or any Subsidiary and which do not materially detract from the
         value of the property to which they attach or materially impair the use
         thereof to the Borrower or any Subsidiary; and

                  (f) purchase money Liens to secure Indebtedness permitted
         under Section 10.5(d) and incurred to purchase fixed assets, provided
         such Indebtedness represents not less than 75% and not more than 90% of
         the purchase price of such assets as of the date of purchase thereof
         and no property other than the assets so purchased secures such
         Indebtedness.

         10.5. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, howsoever evidenced, except:

                  (a) Indebtedness existing as of the Closing Date as set forth
         in Schedule 8.6; provided, none of the instruments and agreements
         evidencing or governing such Indebtedness shall be amended, modified or
         supplemented after the Closing Date to

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<PAGE>   76
         change in any material respect any terms of subordination, repayment or
         rights of enforcement, conversion, put, exchange or other rights from
         such terms and rights as in effect on the Closing Date;

                  (b) Indebtedness owing to the Agent or any Lender in
         connection with this Agreement, any Note or other Loan Document;

                  (c) the endorsement of negotiable instruments for deposit or
         collection or similar transactions in the ordinary course of business;

                  (d) purchase money Indebtedness described in Section 10.4(f)
         not to exceed an aggregate outstanding principal amount at any time of
         $500,000;

                  (e) Indebtedness arising from Rate Hedging Obligations
         permitted under Section 10.11;

                  (f) unsecured intercompany Indebtedness for loans and advances
         made by the Borrower or any Guarantor to the Borrower or any Guarantor;

                  (g) additional unsecured Indebtedness for Money Borrowed not
         otherwise covered by clauses (a) through (f) above, provided that the
         aggregate outstanding principal amount of all such other Indebtedness
         permitted under this clause (g) shall in no event exceed $5,000,000 at
         any time;

                  (h) Indebtedness extending the maturity of, or renewing,
         refunding or refinancing, in whole or in part, Indebtedness incurred
         under clauses (a), (d), (e), and (g) of this Section 10.5, provided
         that the terms of any such extension, renewal, refunding or refinancing
         Indebtedness (and of any agreement or instrument entered into in
         connection therewith) are not materially less favorable to the Agent
         and the Lenders than the terms of the Indebtedness as in effect prior
         to such action, and provided further that (1) the aggregate principal
         amount of or interest rate or rates and fees payable on such extended,
         renewed, refunded or refinanced Indebtedness shall not be increased by
         such action, (2) the group of direct or contingent obligors on such
         Indebtedness shall not be expanded as a result of any such action, and
         (3) immediately before and immediately after giving effect to any such
         extension, renewal, refunding or refinancing, no Default or Event of
         Default shall have occurred and be continuing.

         10.6. Transfer of Assets. Sell, lease, transfer or otherwise dispose of
any assets of Borrower or any Subsidiary other than (a) dispositions of
inventory in the ordinary course of business, (b) dispositions of property that
is substantially worn, damaged, obsolete and, in the judgment of the Borrower,
no longer best used or useful in its business or that of any Subsidiary, (c)
dispositions of property that is substantially worn, damaged, obsolete or
inefficient that is promptly replaced in the ordinary course of business with
assets of equal or greater utility and value, (d) transfers of assets necessary
to give effect to merger or consolidation transactions permitted by Section
10.8, (e) the disposition of Eligible Securities in the ordinary course of

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management of the investment portfolio of the Borrower and its Subsidiaries, (f)
sales or transfers in connection with a sale leaseback transactions with respect
to any of the Borrower's restaurant sites, and (g) the issuance of Management
Securities in the ordinary course of the Borrower's and its Subsidiaries'
business and on substantially the same economic terms as (or other terms no less
favorable to the Borrower and its Subsidiaries than) the terms of such issuance
as of the Closing Date.

         10.7. Investments. Purchase, own, invest in or otherwise acquire,
directly or indirectly, any stock or other securities, or make or permit to
exist any interest whatsoever in any other Person or permit to exist any loans
or advances to any Person, except that Borrower may maintain investments or
invest in:

                  (a) securities of any Person acquired in an Acquisition
         permitted hereunder;

                  (b) Eligible Securities;

                  (c) investments and loans existing as of the date hereof and
         as set forth in Schedule 8.4;

                  (d) accounts receivable arising and trade credit granted in
         the ordinary course of business and any securities received in
         satisfaction or partial satisfaction thereof in connection with
         accounts of financially troubled Persons to the extent reasonably
         necessary in order to prevent or limit loss; and

                  (e) investments in Subsidiaries which are Guarantors;

                  (f) loans between the Borrower and the Guarantors described in
         Section 10.5(f);

                  (g) loans to market partners, operating partners and chef
         partners who hold Management Securities in an aggregate principal
         amount at any time outstanding not to exceed $2,000,000;

                  (h) other loans, advances and investments in an aggregate
         principal amount at any time outstanding not to exceed $2,000,000.

         10.8. Merger or Consolidation. (a) Consolidate with or merge into any
other Person, or (b) permit any other Person to merge into it, or (c) liquidate,
wind-up or dissolve or sell, transfer or lease or otherwise dispose of all or a
substantial part of its assets (other than sales permitted under Section
10.6(a), (b) and (d)); provided, however, any Subsidiary of the Borrower may
merge or transfer all or substantially all of its assets into or consolidate
with the Borrower or any wholly-owned Subsidiary of the Borrower.

         10.9. Restricted Payments. Make any Restricted Payment or apply or set
apart any of their assets therefor or agree to do any of the foregoing.


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         10.10. Transactions with Affiliates. Other than transactions permitted
under Sections 10.6(g), 10.7 and 10.8, enter into any transaction after the
Closing Date, including, without limitation, the purchase, sale, lease or
exchange of property, real or personal, or the rendering of any service, with
any Affiliate of the Borrower, except (a) that such Persons may render services
to the Borrower or its Subsidiaries for compensation at the same rates generally
paid by Persons engaged in the same or similar businesses for the same or
similar services, (b) that the Borrower or any Subsidiary may render services to
such Persons for compensation at the same rates generally charged by the
Borrower or such Subsidiary and (c) in either case in the ordinary course of
business and pursuant to the reasonable requirements of the Borrower's (or any
Subsidiary's) business consistent with past practice of the Borrower and its
Subsidiaries and upon fair and reasonable terms no less favorable to the
Borrower (or any Subsidiary) than would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate.

         10.11. Compliance with ERISA, the Code and Foreign Benefit Laws. With
respect to any Pension Plan, Employee Benefit Plan or Multiemployer Plan:

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

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

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

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

                  (e) engage, or permit any Borrower or any ERISA Affiliate to
         engage, in any prohibited transaction under Section 406 of ERISA or
         Sections 4975 of the Code for which a civil penalty pursuant to Section
         502(I) of ERISA or a tax pursuant to Section 4975 of the Code may be
         imposed; or

                  (f) permit the establishment of any Employee Benefit Plan
         providing post-retirement welfare benefits or establish or amend any
         Employee Benefit Plan which establishment or amendment could result in
         liability to the Borrower or any ERISA Affiliate or increase the
         obligation of the Borrower or any ERISA Affiliate to a Multiemployer
         Plan; or

                  (g) fail, or permit the Borrower or any ERISA Affiliate to
         fail, to establish, maintain and operate each Employee Benefit Plan in
         compliance in all material respects

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         with the provisions of ERISA, the Code, all applicable Foreign Benefit
         Laws and all other applicable laws and the regulations and
         interpretations thereof.

         10.12. Fiscal Year. Change its Fiscal Year.

         10.13. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a merger or
consolidation permitted pursuant to Section 10.8.

         10.14. Limitations on Sales and Leasebacks. Enter into any arrangement
or arrangements with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property, whether now owned or hereafter acquired
in a single transaction or series of related transactions, which has been or is
to be sold or transferred by the Borrower or any Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of the Borrower or any
Subsidiary; provided, however, the Borrower and its Subsidiaries may enter into
such arrangements for leasing of its restaurant sites.

         10.15. Change in Control. Cause, suffer or permit to exist or occur any
Change of Control.

         10.16. Rate Hedging Obligations. Incur any Rate Hedging Obligations or
enter into any agreements, arrangements, devices or instruments relating to Rate
Hedging Obligations, except pursuant to Swap Agreements in an aggregate notional
amount not to exceed at any time the Total Revolving Credit Commitment or as
otherwise agreed by the Borrower and the Agent.

         10.17. Negative Pledge Clauses. Enter into or cause, suffer or permit
to exist any agreement with any Person other than the Agent and the Lenders
pursuant to this Agreement or any other Loan Documents which prohibits or limits
the ability of any of the Borrower or any Subsidiary to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, provided that the Borrower and any Subsidiary
may enter into such an agreement in connection with, and that applies only to,
property acquired with the proceeds of purchase money Indebtedness permitted
hereunder.

         10.18. Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Indebtedness.

         10.19. Amendments to Operating Agreements. Amend the existing operating
agreement of any Subsidiary to include, or permit to exist an operating
agreement of any new Subsidiary which includes, any provision which would (a)
prohibit or restrict distributions by such Subsidiary to the Borrower under such
operating agreement in respect of the ownership interest of the Borrower in such
Subsidiary or in any restaurant or (b) decrease below 80% the percentage
ownership interest of the Borrower in such Subsidiary or in any restaurant.


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                                   ARTICLE XI

                       Events of Default and Acceleration

         11.1. Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:

                  (a) if default shall be made, and shall continue for one (1)
         day, in the due and punctual payment of the principal of any Loan,
         Reimbursement Obligation or other Obligation, when and as the same
         shall be due and payable whether pursuant to any provision of Article
         II, Article III or Article IV, at maturity, by acceleration or
         otherwise; or

                  (b) if default shall be made in the due and punctual payment
         of any amount of interest on any Loan, Reimbursement Obligation or
         other Obligation or of any fees or other amounts payable to any of the
         Lenders or the Agent on the date on which the same shall be due and
         payable and such default shall continue for a period of three (3) or
         more days; or

                  (c) if default shall be made in the performance or observance
         of any covenant set forth in Section 9.8, 9.12, 9.13, 9.20, 9.21 or
         Article X;

                  (d) if a default shall be made in the performance or
         observance of, or shall occur under, any covenant, agreement or
         provision contained in this Agreement or the Notes (other than as
         described in clauses (a), (b) or (c) above) and such default shall
         continue for thirty (30) or more days after the earlier of receipt of
         notice of such default by the Authorized Representative from the Agent
         or an officer of the Borrower becomes aware of such default, or if such
         default is of a type that cannot be cured within thirty (30) days (but
         reasonably can be cured within ninety (90) days), and the Borrower is
         diligently and in good faith attempting to cure such default, such
         default shall continue unremedied for a period of ninety (90) or more
         days after such notice or if a default shall be made in the performance
         or observance of, or shall occur under, any covenant, agreement or
         provision contained in any of the other Loan Documents (beyond any
         applicable grace period, if any, contained therein) or in any
         instrument or document evidencing or creating any obligation, guaranty,
         or Lien in favor of the Agent or any of the Lenders or delivered to the
         Agent or any of the Lenders in connection with or pursuant to this
         Agreement or any of the Obligations, or if any Loan Document ceases to
         be in full force and effect (other than as expressly provided for
         hereunder or thereunder or with the express written consent of the
         Agent), or if without the written consent of the Lenders, this
         Agreement or any other Loan Document shall be disaffirmed or shall
         terminate, be terminable or be terminated or become void or
         unenforceable for any reason

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<PAGE>   81
         whatsoever (other than as expressly provided for hereunder or
         thereunder or with the express written consent of the Agent); or

                  (e) if there shall occur (i) a default, which is not waived,
         in the payment of any principal, interest, premium or other amount with
         respect to any Indebtedness (other than the Loans and other
         Obligations) of the Borrower or any Subsidiary in an amount not less
         than $500,000 in the aggregate outstanding, or (ii) a default, which is
         not waived, in the performance, observance or fulfillment of any term
         or covenant contained in any agreement or instrument under or pursuant
         to which any such Indebtedness (other than the Loans and other
         Obligations) may have been issued, created, assumed, guaranteed or
         secured by the Borrower or any Subsidiary, or (iii) any other event of
         default as specified in any agreement or instrument under or pursuant
         to which any such Indebtedness (other than the Loans and other
         Obligations) may have been issued, created, assumed, guaranteed or
         secured by the Borrower or any Subsidiary, and such default or event of
         default shall continue for more than the period of grace, if any,
         therein specified, or such default or event of default shall permit the
         holder of any such Indebtedness (or any agent or trustee acting on
         behalf of one or more holders) to accelerate the maturity thereof; or

                  (f) if any representation, warranty or other statement of fact
         contained in any Loan Document or in any writing, certificate, report
         or statement at any time furnished to the Agent or any Lender by or on
         behalf of the Borrower or any other Credit Party pursuant to or in
         connection with any Loan Document, or otherwise, shall be false or
         misleading in any material respect when given; or

                  (g) if the Borrower or any Subsidiary or other Credit Party
         shall be unable to pay its debts generally as they become due; file a
         petition to take advantage of any insolvency statute; make an
         assignment for the benefit of its creditors; commence a proceeding for
         the appointment of a receiver, trustee, liquidator or conservator of
         itself or of the whole or any substantial part of its property; file a
         petition or answer seeking liquidation, reorganization or arrangement
         or similar relief under the federal bankruptcy laws or any other
         applicable law or statute; or

                  (h) if a court of competent jurisdiction shall enter an order,
         judgment or decree appointing a custodian, receiver, trustee,
         liquidator or conservator of the Borrower or any Subsidiary or other
         Credit Party or of the whole or any substantial part of its properties
         and such order, judgment or decree continues unstayed and in effect for
         a period of ninety (90) days, or approve a petition filed against the
         Borrower or any Subsidiary seeking liquidation, reorganization or
         arrangement or similar relief under the federal bankruptcy laws or any
         other applicable law or statute of the United States of America or any
         state, which petition is not dismissed within ninety (90) days; or if,
         under the provisions of any other law for the relief or aid of debtors,
         a court of competent jurisdiction shall assume custody or control of
         the Borrower or any Subsidiary or other Credit Party or of the whole or
         any substantial part of its properties, which control is not
         relinquished within ninety (90) days; or if there is commenced against
         the Borrower or any Subsidiary or other Credit Party any proceeding or
         petition seeking reorganization,

                                       75
<PAGE>   82
         arrangement or similar relief under the federal bankruptcy laws or any
         other applicable law or statute of the United States of America or any
         state which proceeding or petition remains undismissed for a period of
         sixty (60) days; or if the Borrower or any Subsidiary or other Credit
         Party takes any action to indicate its consent to or approval of any
         such proceeding or petition; or

                  (i) if (i) one or more judgments or orders where the amount
         not covered by insurance (or the amount as to which the insurer denies
         liability) is in excess of $500,000 is rendered against the Borrower or
         any Subsidiary, or (ii) there is any attachment, injunction or
         execution against any of the Borrower's or Subsidiaries' properties for
         any amount in excess of $500,000 in the aggregate; and such judgment,
         attachment, injunction or execution remains unpaid, unstayed,
         undischarged, unbonded or undismissed for a period of sixty (60) days;
         or

                  (j) if the Borrower or any Subsidiary shall, other than in the
         ordinary course of business (as determined by past practices), suspend
         all or any part of its operations material to the conduct of the
         business of the Borrower or such Subsidiary for a period of more than
         60 days; or

                  (k) if the Borrower or any Subsidiary shall breach any of the
         material terms or conditions of any agreement under which any Rate
         Hedging Obligations permitted hereby is created and such breach shall
         continue beyond any grace period, if any, relating thereto pursuant to
         the terms of such agreement, or if the Borrower or any Subsidiary shall
         disaffirm or seek to disaffirm any such agreement or any of its
         obligations thereunder; or

                  (l) if (a) the Borrower or any Subsidiary shall default (which
         default shall continue beyond any applicable grace period and shall not
         be effectively waived) in the performance, observance or fulfillment or
         any term, covenant or condition contained in any lease or sublease of
         restaurant or other operating facilities or any other agreement or
         commitment the expiration, termination or lapse of one or more of
         which, individually or collectively, could reasonably be expected to
         have a Material Adverse Effect (a "Material Agreement"), or there shall
         occur any other event of default specified in any Material Agreement,
         and such default or event of default shall continue for more than the
         period of grace, if any, therein specified or shall permit any other
         party to such Material Agreement to terminate its obligations under
         such Material Agreement or otherwise cause such Material Agreement to
         terminate, expire or lapse or (b) for any other reason any such
         Material Agreement shall terminate, expire or lapse other than in the
         ordinary course of business of the Borrower and its Subsidiaries; or

                  (m) if there shall occur and not be waived an Event of Default
         as defined in any of the other Loan Documents; or


                                       76
<PAGE>   83
                  (n) if the Borrower shall fail to dissolve, or fail to cause
         to be dissolved, within sixty (60) days of the date hereof each of
         Fleming PFC III Corp, P.F. Chang's VI, Inc., P.F. Chang's IV, L.L.C.
         and PFCCB Newport Beach, L.L.C.

then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived,

                           (A) either or both of the following actions may be
                  taken: (i) the Agent may, and at the direction of the Required
                  Lenders shall, declare any obligation of the Lenders and the
                  Issuing Bank to make further Loans or to issue additional
                  Letters of Credit terminated, whereupon the obligation of each
                  Lender to make further Loans and of the Issuing Bank to issue
                  additional Letters of Credit, hereunder shall terminate
                  immediately, and (ii) the Agent shall at the direction of the
                  Required Lenders, at their option, declare by notice to the
                  Borrower any or all of the Obligations to be immediately due
                  and payable, and the same, including all interest accrued
                  thereon and all other obligations of the Borrower to the Agent
                  and the Lenders, shall forthwith become immediately due and
                  payable without presentment, demand, protest, notice or other
                  formality of any kind, all of which are hereby expressly
                  waived, anything contained herein or in any instrument
                  evidencing the Obligations to the contrary notwithstanding;
                  provided, however, that notwithstanding the above, if there
                  shall occur an Event of Default under clause (g) or (h) above,
                  then the obligation of the Lenders to make Loans and of the
                  Issuing Bank to issue Letters of Credit hereunder shall
                  automatically terminate and any and all of the Obligations
                  shall be immediately due and payable without the necessity of
                  any action by the Agent or the Required Lenders or notice to
                  the Agent or the Lenders;

                           (B) The Borrower shall, upon demand of the Agent or
                  the Required Lenders, deposit cash with the Agent in an amount
                  equal to the amount of any Letter of Credit Outstandings, as
                  collateral security for the repayment of any future drawings
                  or payments under such Letters of Credit, and such amounts
                  shall be held by the Agent pursuant to the terms of the LC
                  Account Agreement; and

                           (C) the Agent and each of the Lenders shall have all
                  of the rights and remedies available under the Loan Documents
                  or under any applicable law.

         11.2. Agent to Act. In case any one or more Events of Default shall
occur and not have been waived, the Agent may, and at the direction of the
Required Lenders shall, proceed to protect and enforce their rights or remedies
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.

         11.3. Cumulative Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other

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<PAGE>   84
Loan Document, and every such right or remedy shall be cumulative and shall be
in addition to every other such right or remedy contained herein and therein or
now or hereafter existing at law or in equity or by statute, or otherwise.

         11.4. No Waiver. No course of dealing between the Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.

         11.5. Allocation of Proceeds. If an Event of Default has occurred and
not been waived, and the maturity of the Notes has been accelerated pursuant to
Article XI hereof, all payments received by the Agent hereunder, in respect of
any principal of or interest on the Obligations or any other amounts payable by
the Borrower hereunder, shall be applied by the Agent in the following order:

                  (a) the reasonable expenses incurred in connection with
         retaking, holding, preserving, processing, maintaining or preparing for
         sale, lease or other disposition of, any Collateral, including
         reasonable attorney's fees and legal expenses pertaining thereto;

                  (b) amounts due to the Lenders and the Issuing Bank pursuant
         to Sections 4.6(a), 4.6(b), 4.6(c), and 13.5;

                  (c) payments of interest on Loans and Reimbursement
         Obligations, to be applied for the ratable benefit of the Lenders;

                  (d) payments of principal of Loans and Reimbursement
         Obligations, to be applied for the ratable benefit of the Lenders;

                  (e) payments of cash amounts to the Agent in respect of
         outstanding Letters of Credit pursuant to Section 11.1(B);

                  (f) amounts due to the Issuing Bank, the Agent and the Lenders
         pursuant to Sections 3.2(h), 9.16 and 13.9;

                  (g) payments of all other amounts due under any of the Loan
         Documents, if any, to be applied for the ratable benefit of the
         Lenders;

                  (h) amounts due to any of the Lenders or their affiliates in
         respect of Obligations consisting of liabilities under any Swap
         Agreement with any of the Lenders or their affiliates on a pro rata
         basis according to the amounts owed; and

                  (i) any surplus remaining after application as provided for
         herein, to the Borrower or otherwise as may be required by applicable
         law.


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<PAGE>   85
                                   ARTICLE XII

                                    The Agent

         12.1. Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. The Agent (which term as used in this sentence and in Section 12.5 and
the first sentence of Section 12.6 hereof shall include its affiliates and its
own and its affiliates' officers, directors, employees, and agents):

                  (a) shall not have any duties or responsibilities except those
         expressly set forth in this Agreement and shall not be a trustee or
         fiduciary for any Lender;

                  (b) shall not be responsible to the Lenders for any recital,
         statement, representation, or warranty (whether written or oral) made
         in or in connection with any Loan Document or any certificate or other
         document referred to or provided for in, or received by any of them
         under, any Loan Document, or for the value, validity, effectiveness,
         genuineness, enforceability, or sufficiency of any Loan Document, or
         any other document referred to or provided for therein or for any
         failure by any Credit Party or any other Person to perform any of its
         obligations thereunder;

                  (c) shall not be responsible for or have any duty to
         ascertain, inquire into, or verify the performance or observance of any
         covenants or agreements by any Credit Party or the satisfaction of any
         condition or to inspect the property (including the books and records)
         of any Credit Party or any of its Subsidiaries or affiliates;

                  (d) shall not be required to initiate or conduct any
         litigation or collection proceedings under any Loan Document; and

                  (e) shall not be responsible for any action taken or omitted
         to be taken by it under or in connection with any Loan Document, except
         for its own gross negligence or willful misconduct.

The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.

         12.2. Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or telefacsimile) believed by it to
be genuine and correct and to have been signed, sent or made by or on behalf of
the proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any Credit Party), independent accountants, and other
experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the


                                       79
<PAGE>   86
holder thereof for all purposes hereof unless and until the Agent receives and
accepts an Assignment and Acceptance executed in accordance with Section 13.1
hereof. As to any matters not expressly provided for by this Agreement, the
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding on all of the Lenders; provided,
however, that the Agent shall not be required to take any action that exposes
the Agent to personal liability or that is contrary to any Loan Document or
applicable law unless it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking any such action.

         12.3. Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless the Agent has
received written notice from a Lender or the Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that the Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to Section 12.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the Required
Lenders, provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.

         12.4. Rights as Lender. With respect to its Revolving Credit Commitment
and the Loans made by it and Letters of Credit issued by it, Bank of America
(and any successor acting as Agent) in its capacity as a Lender hereunder shall
have the same rights and powers hereunder as any other Lender and may exercise
the same as though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. Bank of America (and any successor acting as Agent) and
its affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Credit Party or any of its Subsidiaries or affiliates as if it were not acting
as Agent, and Bank of America (and any successor acting as Agent) and its
affiliates may accept fees and other consideration from any Credit Party or any
of its Subsidiaries or affiliates for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders.

         12.5. Indemnification. The Lenders agree to indemnify the Agent (to the
extent not reimbursed under Section 13.9 hereof, but without limiting the
obligations of the Borrower under such Section) ratably in accordance with their
respective Revolving Credit Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the Agent
(including by any Lender) in any way relating to or arising out of any Loan
Document or the transactions contemplated thereby or any action taken or omitted
by the Agent under any Loan Document; provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or


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<PAGE>   87
willful misconduct of the Person to be indemnified. Without limitation of the
foregoing, each Lender agrees to reimburse the Agent promptly upon demand for
its ratable share of any costs or expenses payable by the Borrower under Section
13.5, to the extent that the Agent is not promptly reimbursed for such costs and
expenses by the Borrower. The agreements contained in this Section 12.5 shall
survive payment in full of the Loans and all other amounts payable under this
Agreement.

         12.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees that
it has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Credit Parties and their Subsidiaries and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any
Credit Party or any of its Subsidiaries or affiliates that may come into the
possession of the Agent or any of its affiliates.

         12.7. Resignation of Agent. The Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent which shall be a commercial bank
organized under the laws of the United States of America having combined capital
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges, and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article XII shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.

         12.8. Sole Lender. Notwithstanding anything to the contrary contained
herein, until there shall be two or more Lenders, all references to the Agent
herein and in the other Loan Documents shall be deemed to refer to Bank of
America as Lender.


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<PAGE>   88
                                  ARTICLE XIII

                                  Miscellaneous

         13.1. Assignments and Participations. (a) Each Lender may assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Loans,
its Revolving Note, and its Revolving Credit Commitment); provided, however,
that

                  (i) each such assignment shall be to an Eligible Assignee;

                  (ii) except in the case of an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this Agreement,
any such partial assignment shall be in an amount at least equal to $3,000,000
or an integral multiple of $1,000,000 in excess thereof;

                  (iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under this
Agreement and its Revolving Note; and

                  (iv) the parties to such assignment shall execute and deliver
to the Agent for its acceptance an Assignment and Acceptance in the form of
Exhibit B hereto, together with any Revolving Note subject to such assignment
and a processing fee of $3,500.

Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrower shall make appropriate arrangements so that, if required, new
Revolving Notes are issued to the assignor and the assignee. If the assignee is
not incorporated under the laws of the United States of America or a state
thereof, it shall deliver to the Borrower and the Agent certification as to
exemption from deduction or withholding of Taxes in accordance with Section 6.6.

         (b) The Agent shall maintain at its address referred to in Section 13.2
a copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Revolving Credit Commitment of, and principal amount of the Loans owing to, each
Lender from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.


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<PAGE>   89
         (c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit B hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the parties thereto.

         (d) Each Lender may sell participations to one or more Persons in all
or a portion of its rights, obligations or rights and obligations under this
Agreement (including all or a portion of its Revolving Credit Commitment or its
Loans); provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participant shall be entitled to the benefit of the yield protection
provisions contained in Article VI and the right of set-off contained in Section
13.3, and (iv) the Borrower shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Borrower relating to its Loans and its Note and to approve
any amendment, modification, or waiver of any provision of this Agreement (other
than amendments, modifications, or waivers decreasing the amount of principal of
or the rate at which interest is payable on such Loans or Note, extending any
scheduled principal payment date or date fixed for the payment of interest on
such Loans or Note, or extending its Revolving Credit Commitment).

         (e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its Loans and
its Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Lender from its obligations
hereunder.

         (f) Any Lender may furnish any information concerning the Borrower or
any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants).

         (g) Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors and permitted
assigns of such party and all covenants, provisions and agreements by or on
behalf of the Borrower which are contained in the Loan Documents shall inure to
the benefit of the successors and permitted assigns of the Agent, the Lenders,
or any of them. The Borrower may not assign or otherwise transfer to any other
Person any right, power, benefit, or privilege (or any interest therein)
conferred hereunder or under any of the other Loan Documents, or delegate (by
assumption or otherwise) to any other Person any duty, obligation, or liability
arising hereunder or under any of the other Loan Documents, and any such
purported assignment, delegation or other transfer shall be void.

         13.2. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of transmission to such party, in the case
of notice sent on any Business Day by telefacsimile (where


                                       83
<PAGE>   90
the proper transmission of such notice is either acknowledged by the recipient
or electronically confirmed by the transmitting device) or the next Business Day
after transmission if sent on a day other than a Business Day or after 5:00 p.m.
on any Business Day, or (iii) on the fifth Business Day after the day on which
mailed to such party, if sent prepaid by certified or registered mail, return
receipt requested, or (iv) the first Business Day following deposit with a
nationally recognized overnight courier and marked for next-day delivery, in
each case delivered, transmitted, mailed or sent, as the case may be, to the
address or telefacsimile number, as appropriate, set forth below or such other
address or number as such party shall specify by notice hereunder:

                  (a)      if to the Borrower:

                           P.F. Chang's China Bistro, Inc.
                           5090 North 40th Street, Suite 160
                           Phoenix, Arizona 85018
                           Attention:       Chief Financial Officer
                           Telephone:       (602) 381-7466
                           Telefacsimile: (602) 957-8998

                  (b)      if to the Agent:

                           Bank of America, N.A.
                           101 North Tryon Street, 15th Floor
                           NC1-001-15-04
                           Charlotte, North Carolina  28255
                           Attention: Agency Services
                           Telephone:       (704) 386-8382
                           Telefacsimile:   (704) 409-0064

                           with a copy to:

                           Bank of America, N.A.
                           100 North Tryon Street, 8th Floor
                           NC1-007-17-14
                           Charlotte, North Carolina
                           Attention: Mr. Richard G. Parkhurst, Jr.
                           Telephone:       (704) 386-1828
                           Telefacsimile:   (704) 386-3271

                  (c)      if to the Lenders:

                           At the addresses set forth on the signature pages
                           hereof and on the signature page of each Assignment
                           and Acceptance;


                                       84
<PAGE>   91
                  (d)      if to any other Credit Party, at the address set
                           forth on the signature page of the Facility Guaranty
                           or Security Instrument executed by such Credit Party,
                           as the case may be.

         13.3. Right of Set-off; Adjustments. (a) Upon the occurrence and during
the continuance of any Event of Default, each Lender (and each of its
affiliates) is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender (or any of its affiliates)
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
the Note held by such Lender, irrespective of whether such Lender shall have
made any demand under this Agreement or such Note and although such obligations
may be unmatured. Each Lender agrees promptly to notify the Borrower in writing
after any such set-off and application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender under this Section 13.3 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender may have.

         (b) If any Lender (a "benefitted Lender") shall at any time receive any
payment of all or part of the Loans owing to it, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Loans owing to it, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loans owing to it, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefitted Lender to share the excess
payment or benefits of such collateral or proceeds ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest. The Borrower agrees that any Lender so
purchasing a participation from a Lender pursuant to this Section 13.3 may, to
the fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Person were the direct creditor of the Borrower in the amount of such
participation.

         13.4. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the issuance of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in full force and
effect so long as any of Obligations remain outstanding or any Lender has any
Revolving Credit Commitment hereunder or the Borrower has continuing obligations
hereunder unless otherwise provided herein.

         13.5. Expenses. The Borrower agrees to pay within ten (10) Business
Days of written demand all reasonable out of pocket costs and expenses of the
Agent in connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of


                                       85
<PAGE>   92
this Agreement, the other Loan Documents, and the other documents to be
delivered hereunder, including, without limitation, the reasonable fees and
expenses of counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities under the Loan
Documents. The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation, reasonable
attorneys' fees and expenses and the cost of internal counsel), in connection
with the enforcement (whether through negotiations, legal proceedings, or
otherwise) of the Loan Documents and the other documents to be delivered
hereunder.

         13.6. Amendments and Waivers. Any provision of this Agreement or any
other Loan Document may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower or other applicable Credit
Party party to such Loan Document and either the Required Lenders or (as to Loan
Documents other than the Credit Agreement) the Agent on behalf of the Required
Lenders (and, if Article XII or the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment or waiver shall, unless
signed by all the Lenders, (i) increase the Revolving Credit Commitments of the
Lenders or the Total Revolving Credit Commitment, (ii) reduce the principal of
or rate of interest on any Loan or any fees or other amounts payable hereunder,
(iii) postpone any date fixed for the payment of any scheduled installment of
principal of or interest on any Loan or any fees or other amounts payable
hereunder or for termination of any Revolving Credit Commitment, or (iv) change
the percentage of the Revolving Credit Commitment or of the unpaid principal
amount of the Notes, or the number of Lenders, which shall be required for the
Lenders or any of them to take any action under this Section 13.6 or any other
provision of this Agreement or (v) release any Guarantor or all or substantially
all of the Collateral except as expressly contemplated in the Loan Documents;
and provided, further, that no such amendment or waiver that affects the rights,
privileges or obligations of the Issuing Bank as issuer of Letters of Credit,
shall be effective unless signed in writing by the Issuing Bank.

         No notice to or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances, except as otherwise expressly provided herein. No delay or
omission on any Lender's or the Agent's part in exercising any right, remedy or
option shall operate as a waiver of such or any other right, remedy or option or
of any Default or Event of Default.

         13.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.

         13.8. Termination. The termination of this Agreement shall not affect
any rights of the Borrower, the Lenders or the Agent or any obligation of the
Borrower, the Lenders or the Agent, arising prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Obligations arising prior to or after such termination have been
irrevocably paid in full. The

                                       86
<PAGE>   93
rights granted to the Agent for the benefit of the Lenders under the Loan
Documents shall continue in full force and effect, notwithstanding the
termination of this Agreement, until all of the Obligations have been paid in
full after the termination hereof (other than Obligations in the nature of
continuing indemnities or expense reimbursement obligations not yet due and
payable, which shall continue) or the Borrower has furnished the Lenders and the
Agent with an indemnification satisfactory to the Agent and each Lender with
respect thereto. Notwithstanding the foregoing, if after receipt of any payment
of all or any part of the Obligations, any Lender is for any reason compelled to
surrender such payment to any Person because such payment is determined to be
void or voidable as a preference, impermissible setoff, a diversion of trust
funds or for any other reason, this Agreement shall continue in full force and
the Borrower shall be liable to, and shall indemnify and hold the Agent or such
Lender harmless for, the amount of such payment surrendered until the Agent or
such Lender shall have been finally and irrevocably paid in full. The provisions
of the foregoing sentence shall be and remain effective notwithstanding any
contrary action which may have been taken by the Agent or the Lenders in
reliance upon such payment, and any such contrary action so taken shall be
without prejudice to the Agent or the Lenders' rights under this Agreement and
shall be deemed to have been conditioned upon such payment having become final
and irrevocable.

         13.9. Indemnification; Limitation of Liability. (a) The Borrower agrees
to indemnify and hold harmless the Agent and each Lender and each of their
affiliates and their respective officers, directors, employees, agents, and
advisors (each, an "Indemnified Party") from and against any and all claims,
damages, losses, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' fees) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation, or proceeding or preparation of defense in
connection therewith) the Loan Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans, except to the
extent such claim, damage, loss, liability, cost, or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 13.9 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by the
Borrower, its directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. The
Borrower agrees that no Indemnified Party shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to it, any of its
Subsidiaries, any Guarantor, or any security holders or creditors thereof
arising out of, related to or in connection with the transactions contemplated
herein, except to the extent that such liability is found in a final
non-appealable judgment by a court of competent jurisdiction to have directly
resulted from such Indemnified Party's gross negligence or willful misconduct.
The Borrower agrees not to assert any claim against the Agent, any Lender, any
of their affiliates, or any of their respective directors, officers, employees,
attorneys, agents, and advisers, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of or otherwise
relating to the Loan Documents, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Loans.


                                       87
<PAGE>   94
         (b) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 13.9 shall survive the payment in full of the Loans and all other
amounts payable under this Agreement.

         13.10. Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more of
the parties hereto, then such provision shall remain in effect with respect to
all parties, if any, as to whom such provision is neither illegal nor invalid,
and in any event all other provisions hereof shall remain effective and binding
on the parties hereto.

         13.11. Entire Agreement. This Agreement, together with the other Loan
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals, negotiations,
representations, commitments and other communications between or among the
parties, both oral and written, with respect thereto (except that those
provisions (if any) which by the express terms of the commitment letter dated as
of July 29, 1999, executed by Bank of America and BAS and accepted by the
Borrower, survive the closing of the Revolving Credit Facility and the Letter of
Credit Facility shall survive and continue in effect).

         13.12. Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of this
Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.

         13.13. Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under applicable law shall not exceed the Highest Lawful Rate (as such term is
defined below). If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate (as defined below), the outstanding amount of the Loans made hereunder
shall bear interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at all
times been in effect. In addition, if when the Loans made hereunder are repaid
in full the total interest due hereunder (taking into account the increase
provided for above) is less than the total amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect, then to the extent permitted by law, the
Borrower shall pay to the Agent an amount equal to the difference between the
amount of interest paid and the amount of interest which would have been paid if
the Highest Lawful Rate had at all times been in effect. Notwithstanding the
foregoing, it is the intention of the Lenders and the Borrower to conform
strictly to any applicable usury laws. Accordingly, if any Lender contracts for,
charges, or receives any consideration which constitutes interest in excess of
the Highest Lawful Rate, then any such excess shall be cancelled automatically
and, if previously paid, shall at such Lender's option be applied to the
outstanding amount of the Loans made hereunder or be refunded to the Borrower.
As used in this paragraph, the term "Highest Lawful Rate" means the maximum
lawful interest rate, if any, that at any time or from

                                       88
<PAGE>   95
time to time may be contracted for, charged, or received under the laws
applicable to such Lender which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable laws now
allow.

         13.14. Payments. All principal, interest, and other amounts to be paid
by the Borrower under this Agreement and the other Loan Documents shall be paid
to the Agent at the Principal Office in Dollars and in immediately available
funds, without setoff, deduction or counterclaim.

All payments properly made to the Agent by the Borrower hereunder shall satisfy
the Borrower's payment obligations to which they relate notwithstanding any
failure by the Agent to make further payments to the Lenders required hereunder.
Subject to the definition of "Interest Period" herein, whenever any payment
under this Agreement or any other Loan Document shall be stated to be due on a
day that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time in such case shall be included in the
computation of interest and fees, as applicable, and as the case may be.

         13.15. GOVERNING LAW; WAIVER OF JURY TRIAL.

                  (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN
         THOSE SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE THAT THEY SHALL BE
         GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY, AND
         CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA
         APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
         STATE.

                  (b) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
         CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
         TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE
         INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF
         MECKLENBURG, STATE OF NORTH CAROLINA, UNITED STATES OF AMERICA AND, BY
         THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER EXPRESSLY
         WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
         VENUE IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY
         BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND THE
         BORROWER HEREBY IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO
         THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR
         PROCEEDING.

                  (c) THE PARTIES HERETO AGREE THAT SERVICE OF PROCESS MAY BE
         MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR
         OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY
         REGISTERED OR CERTIFIED MAIL

                                       89
<PAGE>   96
         (POSTAGE PREPAID) TO THE ADDRESS OF THE PARTY PROVIDED IN SECTION 13.2,
         OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE
         LAWS IN EFFECT IN THE STATE OF NORTH CAROLINA.

                  (d) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF SHALL
         PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR
         PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE
         COURTS OF ANY JURISDICTION WHERE THE BORROWER OR ANY OF THE BORROWER'S
         PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY
         THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE BORROWER HEREBY
         IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
         WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO
         THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER
         COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER
         APPLICABLE LAW.

                  (e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
         RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY
         AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
         THE FUTURE BE DELIVERED IN CONNECTION THEREWITH, THE BORROWER, THE
         AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY
         APPLICABLE LAW, THAT ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE TRIED
         BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO
         THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE
         TO TRIAL BY JURY IN ANY SUCH ACTION, SUIT OR PROCEEDING.

                  (f) EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVE ANY
         OBJECTION IT MAY HAVE THAT ANY COURT TO WHOSE JURISDICTION IT HAS
         SUBMITTED PURSUANT TO THE TERMS HEREOF IS AN INCONVENIENT FORUM.


         13.16. CONFIDENTIALITY The Agent and each Lender (each, a "Lending
Party") agrees to keep confidential any information furnished or made available
to it by the Borrower pursuant to this Agreement that is marked confidential;
provided that nothing herein shall prevent any Lending Party from disclosing
such information (a) to any other Lending Party or any affiliate of any Lending
Party, or any officer, director, employee, agent, or advisor of any Lending
Party or affiliate of any Lending Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or

                                       90
<PAGE>   97
demand of any regulatory agency or authority, (f) that is or becomes available
to the public or that is or becomes available to any Lending Party other than as
a result of a disclosure by any Lending Party prohibited by this Agreement, (g)
in connection with any litigation to which such Lending Party or any of its
affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Agreement or any other Loan Document, and (i)
subject to provisions substantially similar to those contained in this Section,
to any actual or proposed participant or assignee.


                         [Signatures on following pages]


                                       91
<PAGE>   98
         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.


                                  P.F. CHANG'S CHINA BISTRO, INC.


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



                                  [CORPORATE SEAL]



                                  BANK OF AMERICA, N.A.,
                                  as Agent for the Lenders


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



                                CREDIT AGREEMENT
                              SIGNATURE PAGE 1 OF 2
<PAGE>   99
                                 BANK OF AMERICA, N.A.


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


                                 Lending Office for Base Rate Loans:
                                          Bank of America, N.A.
                                          101 North Tryon Street, 15th Floor
                                          NC1-001-15-04
                                          Charlotte, North Carolina  28255
                                          Attention: Sheila Baggarly
                                          Telephone:        (704) 386-4198
                                          Telefacsimile:    (704) 386-9923

                                 Wire Transfer Instructions:
                                          Bank of America, N.A.
                                          ABA# 053000196
                                          Account No.: 1366212250600
                                          Reference: P.F. Chang's
                                          Attention: Sheila Baggarly


                                 Lending Office for Eurodollar Rate Loans:
                                          Bank of America, N.A.
                                          101 North Tryon Street, 15th Floor
                                          NC1-001-15-04
                                          Charlotte, North Carolina  28255
                                          Attention: Sheila Baggarly
                                          Telephone:        (704) 386-4198
                                          Telefacsimile:    (704) 386-9923

                                 Wire Transfer Instructions:
                                          Bank of America, N.A.
                                          ABA# 053000196
                                          Account No.: 1366212250600
                                          Reference: P.F. Chang's
                                          Attention: Sheila Baggarly



                                CREDIT AGREEMENT
                              SIGNATURE PAGE 2 OF 2
<PAGE>   100
                                    EXHIBIT A


                        Applicable Commitment Percentages

<TABLE>
<CAPTION>
                                                        Applicable
                             Revolving Credit           Commitment
Lender                         Commitment               Percentage
<S>                          <C>                        <C>
Bank of America, N.A.        $15,000,000                   100%

                             -----------                ----------
                             $15,000,000                   100%
</TABLE>


                                       A-1
<PAGE>   101
                                    EXHIBIT B

                        Form of Assignment and Acceptance

         Reference is made to the Credit Agreement dated as of December __ 1999
(the "Credit Agreement") among P.F. Chang's China Bistro, Inc., an Arizona
corporation (the "Borrower"), the Lenders (as defined in the Credit Agreement)
and Bank of America, N.A., as agent for the Lenders (the "Agent"). Terms defined
in the Credit Agreement are used herein with the same meaning.

         The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:

         1. The Assignor hereby sells and assigns to the Assignee, WITHOUT
RECOURSE and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents as of the date hereof equal to the
percentage interest specified on Schedule 1 of all outstanding rights and
obligations under the Credit Agreement and the other Loan Documents.* After
giving effect to such sale and assignment, the Assignee's Revolving Credit
Commitment and the amount of the Loans owing to the Assignee will be as set
forth on Schedule 1.

         2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under the Loan Documents or any other instrument or document furnished pursuant
thereto; and (iv) attaches the Revolving Note held by the Assignor and requests
that the Agent exchange such Revolving Note for new Revolving Notes payable to
the order of the Assignee in an amount equal to the Revolving Credit Commitment
assumed by the Assignee pursuant hereto and to the Assignor in an amount equal
to the Revolving Credit Commitment retained by the Assignor, if any, as
specified on Schedule 1.

         3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 9.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and

---------------
*        In the case of Bank of America as Assignor, excluding any rights,
         benefits, or duties as Issuing Bank.


                                       B-1
<PAGE>   102
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement;
(iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement as are delegated to the Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental
thereto; (v) agrees that it will perform in accordance with their terms all of
the obligations that by the terms of the Credit Agreement are required to be
performed by it as a Lender; and (vi) attaches any U.S. Internal Revenue Service
or other forms required under Section 6.6.

         4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1.

         5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.

         6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Revolving Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Revolving
Notes for periods prior to the Effective Date directly between themselves.

         7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of North Carolina.

         8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Assignment and Acceptance.

         IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.


                                       B-2
<PAGE>   103
                                   Schedule 1



<TABLE>
<S>                                                           <C>
         Percentage interest assigned:                        ________%

         Assignee's Revolving Credit Commitment:              $_______

         Aggregate outstanding principal amount
           of Loans assigned:                                 $_______

         Principal amount of Revolving Note
           payable to Assignee:                               $_______

         Principal amount of Revolving Note
           payable to Assignor:                               $_______

         Effective Date (if other than date
            of acceptance by Agent):                          *_______, ____
</TABLE>

                                       [NAME OF ASSIGNOR], as Assignor


                                       By:
                                          -------------------------------------
                                            Title:

                                       Dated:                     , 19




                                       [NAME OF ASSIGNEE], as Assignee


                                       By:
                                          -------------------------------------
                                            Title:

                                       Domestic Lending Office:

                                       Eurodollar Lending Office:


*        This date should be no earlier than five Business Days after the
         delivery of this Assignment and Acceptance to the Agent.


                                       B-3
<PAGE>   104
Accepted [and Approved] **
this ___ day of ___________, 19 _

BANK OF AMERICA, N.A., as Agent


By:
      -------------------------------------
Title:


[Approved this ____ day
of ____________, ____


P.F. CHANG'S CHINA BISTRO, INC.


By:                                         ]**
      -------------------------------------
Title:


** Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee".


                                       B-4
<PAGE>   105
                                    EXHIBIT C

       Notice of Appointment (or Revocation) of Authorized Representative

             Reference is hereby made to the Credit Agreement dated as of
December __, 1999 (the "Agreement") among P.F. China Bistro, Inc., an Arizona
corporation (the "Borrower"), the Lenders (as defined in the Agreement), and
Bank of America, N.A., as Agent for the Lenders ("Agent"). Capitalized terms
used but not defined herein shall have the respective meanings therefor set
forth in the Agreement.

             The Borrower hereby nominates, constitutes and appoints each
individual named below as an Authorized Representative under the Loan Documents,
and hereby represents and warrants that (i) set forth opposite each such
individual's name is a true and correct statement of such individual's office
(to which such individual has been duly elected or appointed), a genuine
specimen signature of such individual and an address for the giving of notice,
and (ii) each such individual has been duly authorized by the Borrower to act as
Authorized Representative under the Loan Documents:

<TABLE>
<CAPTION>
Name and Address                   Office                Specimen Signature
<S>                        <C>                       <C>
----------------------     ----------------------    --------------------------
----------------------
----------------------

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


</TABLE>


Borrower hereby revokes (effective upon receipt hereof by the Agent) the prior
appointment of ________________ as an Authorized Representative.

             This the ___ day of __________________, ____.


                                         P.F. CHANG'S CHINA BISTRO, INC.

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


                                       C-1
<PAGE>   106
                                    EXHIBIT D

                            Form of Borrowing Notice

To:          Bank of America, N.A.,
             as Agent
             101 North Tryon Street, 15th Floor
             NC1-001-15-04
             Charlotte, North Carolina  28255
             Attention: Agency Services
             Telefacsimile:  (704)386-9923

             Reference is hereby made to the Credit Agreement dated as of
December__, 1999 (the "Agreement") among P.F. Chang's China Bistro, Inc. (the
"Borrower"), the Lenders (as defined in the Agreement), and Bank of America,
N.A., as Agent for the Lenders ("Agent"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Agreement.

             The Borrower through its Authorized Representative hereby gives
notice to the Agent that Loans of the type and amount set forth below be made on
the date indicated:

<TABLE>
<CAPTION>
Type of Loan              Interest           Aggregate
(check one)               Period(1)          Amount(2)         Date of Loan(3)
<S>                       <C>                <C>               <C>
Base Rate Loan            ______             _________         ____________

Eurodollar Rate Loan      ______             _________         ____________
</TABLE>

-----------------------
(1)      For any Eurodollar Rate Loan, one, two, three or six months.

(2)      Must be $500,000 or if greater an integral multiple of $100,000, unless
         a Base Rate Refunding Loan.

(3)      At least three (3) Business Days later if a Eurodollar Rate Loan;

         The Borrower hereby requests that the proceeds of Loans described in
this Borrowing Notice be made available to the Borrower as follows: [insert
transmittal instructions] .

         The undersigned hereby certifies that:

         1. No Default or Event of Default exists either now or after giving
effect to the borrowing described herein; and



                                       D-1
<PAGE>   107
         2. All the representations and warranties set forth in Article VIII of
the Agreement and in the Loan Documents (other than those expressly stated to
refer to a particular date) are true and correct as of the date hereof except
that the reference to the financial statements in Section 8.6(a) of the
Agreement (solely for the purpose of the representation and warranty contained
in such Section 8.6(a) but not for the purpose of any cross reference to such
Section 8.6(a) or to the financial statements described therein contained in any
other provision of Section 8.6 or elsewhere in Article 8) to those financial
statements most recently delivered to you pursuant to Section 9.1 of the
Agreement (it being understood that any financial statements delivered pursuant
to Section 9.1(b) have not been certified by independent public accountants).

         3. All conditions contained in the Agreement to the making of any Loan
requested hereby have been met or satisfied in full .

                                      P.F. CHANG'S CHINA BISTRO, INC.

                                      BY:
                                         --------------------------------------
                                               Authorized Representative

                                      DATE:
                                           ------------------------------------


                                       D-2
<PAGE>   108
                                    EXHIBIT E

                     Form of Interest Rate Selection Notice

To:          Bank of America, N.A., as Agent
             101 North Tryon Street, 15th Floor
             NC1-001-15-04
             Charlotte, North Carolina  28255
             Attention:  Agency Services
             Telefacsimile:  (704) 386-9923

             Reference is hereby made to the Credit Agreement dated as of
December __, 1999 (the "Agreement") among P.F. Chang's China Bistro, Inc. (the
"Borrower"), the Lenders (as defined in the Agreement), and Bank of America,
N.A., as Agent for the Lenders ("Agent"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Agreement.

             The Borrower through its Authorized Representative hereby gives
notice to the Agent of the following selection of a type of Loan and Interest
Period:

<TABLE>
<CAPTION>
Type of Loan                    Interest         Aggregate
(check one)                     Period(1)        Amount(2)       Date of Loan(3)
<S>                             <C>              <C>             <C>
Base Rate Loan                  ______           _________       ____________

Eurodollar Rate Loan            ______           _________       ____________
</TABLE>

-----------------------
(1)      For any Eurodollar Rate Loan, one, two, three or six months.

(2)      Must be $500,000 or if greater an integral multiple of $100,000, unless
         a Base Rate Refunding Loan.

(3)      At least three (3) Business Days later if a Eurodollar Rate Loan.

                                          P.F. CHANG'S CHINA BISTRO, INC.

                                          BY:
                                             ----------------------------------
                                                   Authorized Representative

                                          DATE:
                                               --------------------------------


                                       E-1
<PAGE>   109
                                    EXHIBIT F

                                  Form of Note

                                 Promissory Note




$
 --------------
                                                      ---------, --------------

                                                                ------ --, ----


         FOR VALUE RECEIVED, P.F. CHANG'S CHINA BISTRO, INC., an Arizona
corporation having its principal place of business located in Phoenix, Arizona
(the "Borrower"), hereby promises to pay to the order of
_______________________________________________ (the "Lender"), in its
individual capacity, at the office of BANK OF AMERICA, N.A., as agent for the
Lenders (the "Agent"), located at 101 North Tryon Street, NC1-001-15-04,
Charlotte, North Carolina 28255 (or at such other place or places as the Agent
may designate in writing) at the times set forth in the Credit Agreement dated
as of December __, 1999 among the Borrower, the financial institutions party
thereto (collectively, the "Lenders") and the Agent (the "Agreement" -- all
capitalized terms not otherwise defined herein shall have the respective
meanings set forth in the Agreement), in lawful money of the United States of
America, in immediately available funds, the principal amount of ___________
DOLLARS ($__________) or, if less than such principal amount, the aggregate
unpaid principal amount of all Loans made by the Lender to the Borrower pursuant
to the Agreement on the Revolving Credit Termination Date or such earlier date
as may be required pursuant to the terms of the Agreement, and to pay interest
from the date hereof on the unpaid principal amount hereof, in like money, at
said office, on the dates and at the rates provided in Articles II and IV of the
Agreement. All or any portion of the principal amount of Loans may be prepaid or
required to be prepaid as provided in the Agreement.

         If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and accrued
but unpaid interest thereon evidenced by this Revolving Note shall become
immediately due and payable, without presentation, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.

         In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees, and
interest due hereunder thereon at the rates set forth above.

         Interest hereunder shall be computed as provided in the Agreement.

         This Note is one of the Notes in the aggregate principal amount of
$__________ referred to in the Agreement and is issued pursuant to and entitled
to the benefits and security of the Agreement to which reference is hereby made
for a more complete statement of the terms and conditions upon

                                      F-1-1
<PAGE>   110
which the Loans evidenced hereby were or are made and are to be repaid. This
Revolving Note is subject to certain restrictions on transfer or assignment as
provided in the Agreement.

         All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the full extent permitted by law all defenses based on suretyship or
impairment of collateral and the benefits of all provisions of law for stay or
delay of execution or sale of property or other satisfaction of judgment against
any of them on account of liability hereon until judgment be obtained and
execution issued against any other of them and returned satisfied or until it
can be shown that the maker or any other party hereto had no property available
for the satisfaction of the debt evidenced by this instrument, or until any
other proceedings can be had against any of them, also their right, if any, to
require the holder hereof to hold as security for this Revolving Note any
collateral deposited by any of said Persons as security. Protest, notice of
protest, notice of dishonor, diligence or any other formality are hereby waived
by all parties bound hereon.


                            [SIGNATURE PAGE FOLLOWS.]


                                      F-1-2
<PAGE>   111
         IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
made, executed and delivered by its duly authorized representative as of the
date and year first above written, all pursuant to authority duly granted.


                                            P.F. CHANG'S CHINA BISTRO, INC.
WITNESS:

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


                                      F-1-3
<PAGE>   112
                                    EXHIBIT G

                      Form of Opinion of Borrower's Counsel


                                  See Attached.




                                       G-1
<PAGE>   113
                                    EXHIBIT H

                             Compliance Certificate

Bank of America, N.A.,
as Agent
101 North Tryon Street, 15th Floor
NC1-001-15-04
Charlotte, North Carolina  28255
Attention: Agency Services
Telefacsimile:  (704) 386-9923

Bank of America, N.A.,
as Agent
Bank of America Corporate Center, 8th Floor
100 North Tryon Street
NC1-007-08-07
Charlotte, North Carolina 28255
Attention:   Richard Parkhurst
Telefacsimile:    (704) 386-1270


         Reference is hereby made to the Credit Agreement dated as of December
__, 1999 (the "Agreement") among P.F. Chang's China Bistro, Inc., an Arizona
corporation (the "Borrower"), the Lenders (as defined in the Agreement) and Bank
of America, N.A., as Agent for the Lenders ("Agent"). Capitalized terms used but
not otherwise defined herein shall have the respective meanings therefor set
forth in the Agreement. The undersigned, a duly authorized and acting Authorized
Representative, hereby certifies to you as of __________ (the "Determination
Date") as follows:

1.       Calculations:

                                [TO BE PROVIDED]

2.       No Default

                           A. Since __________ (the date of the last similar
                  certification), (a) the Borrower has not defaulted in the
                  keeping, observance, performance or fulfillment of its
                  obligations pursuant to any of the Loan Documents; and (b) no
                  Default or Event of Default specified in Article XI of the
                  Agreement has occurred and is continuing.

                           B. If a Default or Event of Default has occurred
                  since __________ (the date of the last similar certification),
                  the Borrower proposes to take the following action with
                  respect to such Default or Event of Default:_________________


                                       H-1
<PAGE>   114
                  ______________________________________________________________
                  _____________________.
                           (Note, if no Default or Event of Default has
                           occurred, insert "Not Applicable").

         The Determination Date is the date of the last required financial
statements submitted to the Lenders in accordance with Section 9.1 of the
Agreement.


IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, ____.


                                            By:
                                                  ------------------------------
                                                     Authorized Representative

                                            Name:
                                                  ------------------------------

                                            Title:
                                                  ------------------------------


                                       H-2
<PAGE>   115
                                    EXHIBIT I

                            Form of Facility Guaranty


                                  See Attached.



                                       I-1
<PAGE>   116
                                    EXHIBIT J

                           Form of Security Agreement


                                  See Attached.



                                       J-1
<PAGE>   117
                                    EXHIBIT K

                            Form of Pledge Agreement


                                  See Attached.



                                       K-1
<PAGE>   118
                                    EXHIBIT L

                          Form of LC Account Agreement


                                  See Attached.



                                       L-1
<PAGE>   119
                                  Schedule 5.3

                        Information Regarding Collateral


                                  See Attached.




                                       S-1
<PAGE>   120
                                 Schedule 5.4(b)

                        Leased Properties to be Mortgaged


                                  See Attached.






                                       S-2
<PAGE>   121
                                  Schedule 8.4

                  Subsidiaries and Investments in Other Persons


                                  See Attached.





                                       S-3
<PAGE>   122
                                  Schedule 8.6

                                  Indebtedness


                                  See Attached.



                                       S-4
<PAGE>   123
                                  Schedule 8.7

                                      Liens


                                  See Attached.



                                       S-5
<PAGE>   124
                                  Schedule 8.8

                                   Tax Matters


                                  See Attached.





                                       S-6
<PAGE>   125
                                  Schedule 8.10

                                   Litigation


                                  See Attached.



                                       S-7
<PAGE>   126
                                  Schedule 8.22

                              Operating Facilities


                                  See Attached.